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Zambia’s Finance Minister, Musokotwane, calls for IMF programme to restructure international debt

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In the latest push to ease state’s debt burden, Zambia’s Finance Minister, Situmbeko Musokotwane has called for an orderly debt restructuring process for the country.

The minister insisted that a restructuring will be hard to achieve without an International Monetary Fund (IMF) programme.

Finance Minister Situmbeko Musokotwane said on Friday, as he confirmed China and bondholders would join negotiations.

The country’s debt profile has been spiraling in recent years owing to issues predating the pandemic, leaving creditors wrangling over who should take losses on loans.

Zambia opted to bow out of a $42.5 million eurobond repayment in 2020, becoming the first African nation to default on its debt in the Covid-19 era. The country was struggling with a debt burden of almost $32 billion, around 120% of its gross domestic product.

The Zambian President Hakainde Hichilema revealed last month during the first quarter 2022 Economic Conference in Lusaka, that China had come on board to commit and join other creditors in the country’s debt restructuring process.

By that, China, which holds $5.78 billion of Zambia’s debt, has offered to co-chair Zambia’s creditor committee at the meetings. South Africa and France have also offered to co-chair, South Africa’s finance ministry said.

The country’s creditors must now sit down together to agree on the debt relief they will offer, Musokotwane said.

“China finally agreed to come on board, to be part of the Common Framework. The other category of creditors, namely the bond holders have also expressed readiness to engage,” Musokotwane said.

Secretary to the Treasury, Felix Nkulukusa also revealed to journalist that Zambia is expecting a total of $564 million from the World Bank, of which $275 million in budget support will only be released when the IMF board approves Zambia’s programme,

Nkulukusa said Zambia expected further $654 million from the World Bank under another three-year programme starting in July this year.

Musokotwane had said Zambia’s debt restructuring process was “stalled” at IMF meetings last month, after the country secured a staff-level agreement on a $1.4 billion three-year credit facility with the fund in December.

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Kenya, Uganda settle oil import dispute

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In an effort to patch things up between the two neighbours, Kenya will permit Uganda’s landlocked state oil company to import petroleum products through its port of Mombasa, the country’s energy ministry said on Thursday.

After decades of receiving their cargo through affiliated firms in Kenya, Uganda has been looking for alternative ways to import petroleum products, including through a port in Tanzania. According to Solomon Muyita, a spokesman for Uganda’s ministry of minerals and energy, the first shipment under the new arrangement is scheduled for May.

“Kenya has agreed to give us a licence, UNOC (Uganda National Oil Company) is now free to import through Mombasa,” he said.

According to reports, UNOC would use the Kenya Pipeline Company to transport the goods, so Kenya would still profit from the agreement, according to Kenyan Energy Minister Davis Chirchir.

In 2022, Uganda imported petroleum products valued at $1.6 billion, the majority of which came from the Gulf. Kenya serves as the import gateway for about 90% of the goods.

It declared in November that it would transfer all exclusive petroleum product supply rights to a division of the international energy trader Vitol, which would subsequently supply UNOC.

According to what the government said at the time, using Kenyan companies to import oil had “exposed Uganda to occasional supply vulnerabilities” whereby Ugandan retail companies were viewed as secondary whenever there were supply disruptions changing retail prices.

The two African nations that make up the Great Lakes are partners in a variety of fields, including trade, infrastructure, energy, education, agriculture, and military security.

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No plan to increase taxes, Nigeria’s revenue chief says

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The head of Nigeria’s revenue agency, Zacch Adedeji, has reaffirmed that there is no plan for the introduction of new taxes in the country.

Adedeji, who is the Chairman of the Federal Inland Revenue, made the position known when the Chief Executive Officer of Guinness Nigeria Plc, Adebayo Alli, led the management team of the company on a visit to the Revenue House in Abuja.

He was quoted as saying, “the President gave a directive that he wants a single digit tax in the country, meaning that the maximum number of taxes we will have after the work of the Presidential Committee on Fiscal Policy and Tax Reforms will be nine taxes,” in a statement signed by the Special Adviser on Media to the FIRS chairman, Dare Adekanmbi.

“For us at FIRS, we have responded to that directive. We want to grow the pie such that even if we are taking the same percentage of the bigger pie, the result will be huge.

“By God’s grace, we will not introduce additional taxes nor increase any form of tax. We are only determined to increase the pie. We have restructured our operations at FIRS in such a way that we are now effectively carrying out our duty of assessing, collecting and accounting for taxes. We used to have functional types of taxes, but we have identified that the only customers we have are the taxpayers.”

He stated that by restructuring “our operations based on our customers, using their turnover as the basis to categorise them into large, medium, and small,” FIRS has enhanced its customer relations. He continued by saying that President Bola Tinubu wanted to increase Nigerians’ purchasing power in order to promote growth and increase businesses’ capacity for productivity through the recently implemented consumer credit scheme.

The Nigerian government has been working to overhaul the nation’s monetary and fiscal policies since the start of the Bola Tinubu administration. This has resulted in the central bank and the Oyedele-led tax advisory council implementing daring new policies.

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