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Senegal joins tax reform train as Sall vows to remove ‘difficult’ rules

Published

10 months ago

July 8, 2023

Following his recent announcement not to run in next year’s presidential election, Senegalese President, Macky Sall has vowed to remove “difficult and repressive” customs and tax rules to enhance foreign direct investment.

President Sall made the position known while addressing over 50 foreign delegations at an investment forum in the capital, Dakar, promising to simplify its administrative processes to make its business climate more attractive.

“The fiscal environment is purposely set up in a way that it is not understood,” he said in an opening speech.

“We also need to reform the customs code, which honestly is also difficult and repressive, the tax code, and the civil procedure code.

“Senegal stands out in a continent where doing business can be challenging,” he said at the forum.

UK-Senegal trade ties were growing thanks to various projects including BP’s (BP.L) involvement in Senegal’s first natural gas projects, he added.

According to the World Bank, foreign investment in Senegal was flat year-on-year in 2022 at around $2.5 billion, while its real GDP growth fell to 4.2% in 2022 from a robust recovery of 6.5% of GDP in 2021 as a result of a fall in private investment, exports, and industrial production.

The term “foreign direct investment” refers to net investments made to purchase a long-term management stake in a company that operates in a country other than the investor’s own. Africa’s economy depends largely on investment outside its space. According to UNCTAD’s World Investment Report, 2022 FDI to African countries hit a record $83 billion in 2021. The 2023 report published on Wednesday shows that FDI flows to Africa declined to $45 billion in 2022 from the record height of 2021.

Tax regimes across the continent have been observed as possible factors for the decline in investment, particularly in cases of multiple taxation. Like President Sall’s promised tax reforms, his Kenyan and Nigerian counterparts have already announced reforms. In the case of Nigeria, its president, Bola Tinubu on Monday signed four Executive Orders, which include the suspension of the five per cent Excise Tax on telecommunication services, as well as the Excise Duty on locally manufactured products.

Related Topics:Featured President Macky Sall Tax reforms

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Nigeria’s Petroleum Regulator begins bidding round for 12 oil blocks

Published

22 hours ago

May 14, 2024

Ifeoluwa Dada

The Nigerian Upstream Petroleum Regulatory Commission has announced the start of the bidding process for 12 oil blocks recently put up for sale. It also marks the beginning of the 2024 Nigeria Petroleum Licensing Round and the continuation of the 2022/2023 mini-bid round.

This was stated in a press release issued by the commission’s CEO, Gbenga Komolafe, on Monday in Abuja. Last month, the commission made the first announcement about the bidding process.

It also waived the signing bonus requirement throughout the bidding process to entice investors to bid on the auctioned oil blocks.

He said, “On behalf of the Federal Government of Nigeria, the Nigerian Upstream Petroleum Regulatory Commission is pleased to announce the commencement of the 2024 Petroleum Licensing Round.”

On the number of blocks for the offer, Komolafe noted, “We have identified 12 blocks that cut across deep offshore, shallow water and onshore terrains to be made available to interested investors.”

According to him, this licensing round represents a key milestone in our commitment to supporting long-term growth and innovation in the energy sector, as well as creating economic prospects for investment to stimulate new exploration and development activities in our petroleum landscape.

He explained that the 2024 Licensing Round will provide an opportunity for domestic and foreign parties to participate in the exploration and development of Nigeria’s hydrocarbon resources. He emphasized that having access to high-quality geological and geophysical data is important to this approach.

Komolafe stated that the National Data Repository of NUPRC, in partnership with multi-client partners, is committed to providing prospective bidders with access to broad and strong datasets to help them make better decisions.

Commenting on the 12-block offer, he stated that it is consistent with the licensing round’s objectives and includes a varied range of exploratory possibilities and discoveries with varying technical and operational preferences.

Komolafe added, “Our goal for this licensing round is to harness innovative exploration techniques and foster partnerships that will enhance our production capabilities and ensure environmental sustainability.

“We anticipate that this initiative will not only expand our operations but also significantly contribute to the global energy supply, aligning with international energy security goals.”

VenturesNow

Ecobank’s $183 million impairment losses highlight hazards in sovereign bonds

Published

22 hours ago

May 14, 2024

Ifeoluwa Dada

Ecobank, a pan-African banking group, has more than doubled its impairment losses on Ghana’s problematic Eurobonds to $183 million, highlighting the extent of risk that African lenders face when investing in state bonds.

The Lome-based lender also stated that it had removed around $39 million in interest income collected on the $13 billion Ghanaian Eurobonds from its 2023 financial statements due to continuing and yet-to-be-completed restructuring discussions with commercial bondholders.

The latest impairment losses represent a 144% increase from $75 million in 2022.

“As of year-end 2023, the total impairment charges on Government of Ghana Eurobonds are estimated at $183 million, a significant rise from $75 million in year-end 2022,” the lender says in its audited financial statement for 2023.

“Additionally, $26 million of modification losses were incurred on the GoG debt net of impairment charge releases due to the final settlement of the old bonds for the new bonds in February under the Domestic Debt Exchange Programme.

Ecobank operates in 35 African nations, including Kenya, Burundi, the Democratic Republic of the Congo, Ethiopia, Ghana, and Cote d’Ivoire. Moody’s Investor Service, a global rating organization, has previously urged banks against excessive lending to governments, warning that their credit profiles risk being lowered alongside those of governments facing liquidity constraints.

Zambia secured an agreement with its creditors in March to restructure $3.5 billion Eurobonds, bringing respite to Lusaka, which has been grappling with a long-running debt problem. As part of the agreement, bondholders agreed to extend payment dates, allowing Lusaka to continue receiving funding from a $1.3 billion International Monetary Fund (IMF) project.