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Opposition kicks as Kenya raises fuel VAT from 8% to 16%

Published

11 months ago

June 26, 2023

The Kenyan presidency announced on Monday the launch of a finance bill that will see an increase in tax payments in the country.

The bill will begin an increase in VAT on fuel from 8% to 16%, and a payroll levy to finance a low-cost housing programme initially set at 3% was reduced to 1.5%.

Kenya is grappling with some financial issues as its national debt has increased to a high of 65 billion dollars, or 67% of GDP, and the cost of repayment is rising as the value of the Kenyan shilling declines.

Prior to the announcement on Monday, the administration had given hints about raising taxes in response to pressure to generate more income. Notwithstanding a cash shortage that has prevented the payment of civil service salaries, it has also insisted that it will not skip out on its debt repayment responsibilities.

Meanwhile, the new tax regime and revenue drive of the government have drawn criticism from the opposition. The opposition coalition, Azimio, led by Raila Odinga, accused President William Ruto of reneging on his election promises to improve living conditions for Kenyans.

Odinga’s spokesman, Dennis Onyango told journalists on Monday that their “position remains that the Bill is a mistake and an experiment Kenyans can ill afford.”

For creditors like the International Monetary Fund, the financial reforms are commendable and “prompt” to the economic challenges. Although it warned that while the medium-term outlook is “favourable” for the Kenyan economy, “significant challenges remain against the backdrop of slow global economic growth and tight financial conditions.”

Despite its financial stress, however, the World Bank said the recent progress in the agricultural sector would likely lead to Kenya’s economic growth at a slightly faster pace than last year. The international lender in its latest biannual Kenya Economic Update report said the economy would expand by 5.0% in 2023, inching up from 4.8% last year.

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Nigeria’s inflation hits 28-year high of 33.69% in April

Published

8 hours ago

May 16, 2024

Ifeoluwa Dada

Nigeria’s consumer inflation reached a 28-year high of 33.69% in April, up from 33.20% in March, according to statistics agency figures released on Wednesday.

President Bola Tinubu’s administration has slashed petrol and energy subsidies and devalued the local naira currency twice.

To manage pricing pressures, the central bank has hiked interest rates twice this year, including the highest hike in almost 17 years. The central bank governor has stated that rates will remain high for as long as necessary to reduce inflation. The bank will host another rate-setting meeting next week.

When compared to the previous year, the inflation rate in April 2024 was 11.47 percentage points more than in April 2023, when it stood at 22.22 percent. This implies that the headline inflation rate has increased dramatically during the last year.

According to the National Bureau of Statistics, food and nonalcoholic beverages remained the largest contributor to inflation in April. Food inflation, which accounts for most of the inflation basket, rose to 40.53% yearly from 40.01% in March.

Price pressures have left millions of Nigerians facing the biggest cost-of-living crisis in decades, as they fight to satisfy their most basic necessities.

Tinubu has offered a 35% salary increase for state personnel to alleviate pressure on government workers. To assist disadvantaged households, his government has resumed a direct cash transfer program and provided at least 42,000 tons of grains such as corn and millet.

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Uganda discusses power line to South Sudan with China’s Sinohydro

Published

1 day ago

May 15, 2024

Ifeoluwa Dada

According to the president’s office, Uganda is in negotiations with Sinohydro Corporation Limited of China to build a $180 million power transmission line that would enable Uganda to export electricity to South Sudan, which is severely short on energy.

Ugandan President Yoweri Museveni received a group led by Vice President of Sinohydro Corporation Yang Yi Xin on Monday as part of the negotiations, according to a late-morning statement from Museveni’s office.

The project, according to the statement, will entail building a new substation and expanding two existing ones in addition to building a 138-kilometre high-voltage transmission line to provide power to South Sudan.

“We are very much willing to help develop this project with the required finance if needed,” Xin was quoted as telling the president.

The statement stated that Museveni endorsed Sinohydro’s proposal to carry out the project. Uganda and South Sudan inked a power sales deal in June of last year, enabling Uganda to sell electricity to South Sudan.

To enable Uganda to export electricity to South Sudan, the two nations inked a power sales deal in June of last year. The Chinese firm is completing a $1.5 billion, 600-megawatt hydropower project on the River Nile in Northern Uganda that is meant to be the source for electricity exports to South Sudan.