Saturday, February 6, 2010
Country Insight - Rwanda
The Rwanda Development Board (RDB) announced that total investment rose by 41% to USD 1.11 billion in 2009, despite the shortage of international capital caused by the global economic downturn. The RDB argued that Rwanda's ranking as top global reformer in the World Bank's "Doing Business" Report last year had boosted investor confidence and helped mitigate the worst effects of the crisis. Rwanda was the first sub-Saharan country to win the award, based on reforms in 2008, including simplifying laws for starting up businesses, increasing shareholder access to information and improving regulations on corporate disclosure, director liability and access to credit.
Friday, February 5, 2010
Country Insight
Rwanda: The Government reported that its plan to sell a 25% stake in local beer manufacturer BRALIRWA had reached an advanced stage. The sale would be the first IPO (Initial Public Offering) for Rwanda’s stock market. The government is also hinting at possible sales of its stock in other companies such as mobile operator MTN Rwanda, cement producer CIMERWA, BCR, and insurance company SONARWA. The Social Security Fund of Rwanda also announced that it wants to increase its investment portfolio, currently dominated by real estate investments. The fund will continue to target the housing and mortgage industries, while also venturing into the capital markets, as well as leisure, infrastructure and ICT.
Kenya: The Government will sell a 51% stake in five sugar companies (Sony, Chemelil, Nzoia, Muhoroni and Miwani milling companies) to strategic investors, reserving another 30% for farmers. The government will then sell the remaining 19% stake in an IPO once the factories are profitable. The Government expects the targeted strategic investors will bring in private sector skills on modernising technology and investing in the expansion of the existing mills. The millers owe the Government (and the Kenya Sugar Board) 42 billion Kenya shillings (or USD 530 million). About 80% of the debt will be written off by the Government and the balance will be converted into equity. Investors from Brazil, Mauritius and Turkey have shown interest in bidding for the factories.
Morocco: The Government will invest 60 billion Dirham (about USD 7.5 billion) on low-cost housing projects between 2010 and 2020. These projects are part of the government's efforts to make up for the deficit in housing services for low income families.
South Africa: The Government plans to introduce a new tax on vehicles designed to curb carbon dioxide emissions, despite concerns that this could hamper the ailing auto sector's recovery. The motor industry is struggling to get back on its feet after being hit by the global economic crisis and depressed local demand with new vehicle sales falling to 6-year lows in 2009. The new tax, mooted last February 2009, is part of government efforts to limit greenhouse gas emissions as well as increase tax revenues that have declined sharply as the economy grappled with its first recession in 17 years.
Zambia, Tanzania and Kenya: The three countries year start work on a 400 Megawatt power line to boost trade in electricity between them and ensure security of power supply. The countries were preparing formal proposals for funders and donors for the project, which would begin in 2011. The provisional cost estimate for the project is USD 860 million.
Kenya: The Government will sell a 51% stake in five sugar companies (Sony, Chemelil, Nzoia, Muhoroni and Miwani milling companies) to strategic investors, reserving another 30% for farmers. The government will then sell the remaining 19% stake in an IPO once the factories are profitable. The Government expects the targeted strategic investors will bring in private sector skills on modernising technology and investing in the expansion of the existing mills. The millers owe the Government (and the Kenya Sugar Board) 42 billion Kenya shillings (or USD 530 million). About 80% of the debt will be written off by the Government and the balance will be converted into equity. Investors from Brazil, Mauritius and Turkey have shown interest in bidding for the factories.
Morocco: The Government will invest 60 billion Dirham (about USD 7.5 billion) on low-cost housing projects between 2010 and 2020. These projects are part of the government's efforts to make up for the deficit in housing services for low income families.
South Africa: The Government plans to introduce a new tax on vehicles designed to curb carbon dioxide emissions, despite concerns that this could hamper the ailing auto sector's recovery. The motor industry is struggling to get back on its feet after being hit by the global economic crisis and depressed local demand with new vehicle sales falling to 6-year lows in 2009. The new tax, mooted last February 2009, is part of government efforts to limit greenhouse gas emissions as well as increase tax revenues that have declined sharply as the economy grappled with its first recession in 17 years.
Zambia, Tanzania and Kenya: The three countries year start work on a 400 Megawatt power line to boost trade in electricity between them and ensure security of power supply. The countries were preparing formal proposals for funders and donors for the project, which would begin in 2011. The provisional cost estimate for the project is USD 860 million.
Tuesday, February 2, 2010
Country Insight
Burundi: The Government reported that revenues rose by 38% to 325 billion Burundi francs (USD 258 million) in 2009 from a year earlier, partly due to higher value added tax collections and new tariffs from the EAC (East African Community) trade bloc. The Government argued that both business people and the government benefited from the new tax system such as 18% VAT and the EAC common external tariff (10-30%) since July 2009. The government expects domestic revenues to rise to 367 billion Burundi francs (USD 291 million) this year thanks to the tax reforms and a new centralised revenue board expected to be operational by March 2010.
Ghana: The Government launched the Ghana Revenue Authority, the integration of the three revenue agencies, to enhance efficiency and cut out tasks which are presently duplicated. The Government reported that it would continue to undertake tax reforms such as stepping up tax revenues from rental income, and undertaking a nationwide automation of revenue system. It also announced that revenues recorded 1.8 billion new cedi (USD 1.2 billion) in 2009, exceeding by 14% the target of 1.5 billion new cedi (USD 1.1 billion), and is expected to rise to 2.2 billion new cedi (USD 1.6 billion) in 2010.
The DRC: The Government announced that it would amend its 2010 draft budget (of USD 5.3 billion) to control spending as a measure to ensure it qualifies for more debt relief under the HIPC (Heavily Indebted Poor Countries) scheme. The decision came after the International Monetary Fund (IMF) announced that the country's external debt was unsustainable even after obtaining a USD 550 million loan, urging it to take extra measures to qualify for further debt relief.
Ghana: The Government launched the Ghana Revenue Authority, the integration of the three revenue agencies, to enhance efficiency and cut out tasks which are presently duplicated. The Government reported that it would continue to undertake tax reforms such as stepping up tax revenues from rental income, and undertaking a nationwide automation of revenue system. It also announced that revenues recorded 1.8 billion new cedi (USD 1.2 billion) in 2009, exceeding by 14% the target of 1.5 billion new cedi (USD 1.1 billion), and is expected to rise to 2.2 billion new cedi (USD 1.6 billion) in 2010.
The DRC: The Government announced that it would amend its 2010 draft budget (of USD 5.3 billion) to control spending as a measure to ensure it qualifies for more debt relief under the HIPC (Heavily Indebted Poor Countries) scheme. The decision came after the International Monetary Fund (IMF) announced that the country's external debt was unsustainable even after obtaining a USD 550 million loan, urging it to take extra measures to qualify for further debt relief.
