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Business (5)

Safaricom PLC and parent company Vodacom Group Ltd plan a joint bid for one of the two telecommunications licences that is expected to cost $1.5 billion. 

Safaricom confirmed this and is gearing up to bid with other foreign firms.

In June 2019 Addis announced that the country will be liberalising its telecommunications sector. The 100 million Ethiopians have been served by the state-owned Ethio Telecom. 

Safaricom is one of the frontrunners and with its array of products and services hope to do business in Ethiopia one of the few countries yet to open up its telecommunications sector. 

With it mobile money transfer Mpesa, Safaricom plans to turn the service into 'Africa Largest Unbanked Bank'

Last year Safaricom core earnings rose 13.1% to Kenya shillings 89.6 billion ($889.33 million). 

On the 1st of July 2020 a Digital Tax will come to effect in Kenya on technology companies doing business in country.

In his budget statement for the financial year of 2020/2021, Kenya Finance Minister Ukur Yatani announced this new tax in a bid to squeeze out more money as the country battles with the effects of COVID19.

Kenya joins a list of countries that have imposed tarrifs on big tech giants such as Google, Netflix and Facebook. 

The US is opposed to digital taxation saying it unfairly targets American firms. 

Kenya may risk its existing duty free exports deal to the US under Agoa. 

In the budget statement Ukur put emphasis on the government's stimulus package for the post COVID19 recovery worth $540 million. 

The package includes 5 billion shillings on rural infrastructure, 6.5 billion shillings for the Ministry of Education on hiring part time teachers and interns. Also 10 billion on pending bills with 3 billion for soft loans to SMEs.

Tourism will also get some stimulus of 4 billion with farmers getting e-vouchers worth 3 billion. 

The iconic Norfolk Hotel in Nairobi has closed its doors and fired all the employees due to the coronavirus pandemic. 

Owned by the Fairmont Group of Hotels, the country manager Mehdi Morad said through a memo issue on Wednesday 27th 'that the uncertainty in the direction of the global pandemic has forced it to terminate all the employees contracts and close its properties. 

All the employees were advised to collect their termination letters on June 4th 2020.

The Fairmont Norfolk Hotel joins Tribe Hotel, Ole Sereni and DusitD2 hotels which had already stopped their operations in early March. 

Most of the five star hotels in Kenya have already been shut down. 

About 5.6 million Kenyans in the hospitality, retail and sales are likely to loose their jobs by the end of the year a government report says.

Courtesy Daily Nation

East African Community countries will have huge drops in their economic growth rates this year as a direct result of the global coronavirus crisis

The International Monetary Fund’s latest World Economic Outlook projections for 2020 pegs Kenya and Tanzania’s respective GDP growth rates at one per cent and two per cent respectively in 2020, down from 5.6 and 6.3 per cent respectively in 2019.

Uganda will maintain a 3.5 growth rate this year, compared with 4.9 per cent in 2019. Africa’s cities are home to 600 million people and account for more than 50% of the region’s GDP. This is even higher at more than 70% for countries such as Botswana, Uganda, Tunisia and Kenya.  Nearly a third of national GDP (31%) comes on average from the largest city in African countries. As such, the economic contribution of cities in the region is far higher than their share of population.

Rwanda’s predicted decline from 10 per cent in 2019 to 3.5 per cent this year is the steepest drop in the region, comparable only with Ethiopia’s new 3.2 per cent projection from nine per cent in 2019.

But the outlook for 2021 is slightly better for Uganda, Kenya and Tanzania, with Nairobi’s growth rate expected to shoot back up to 6.1 per cent (higher than 2019) while Tanzania and Uganda also recover to 4.6 and 4.3 per cent respectively.

The IMF said the Covid-19 pandemic will cause a three per cent contraction in the global economy in 2020, much worse than during the 2008-2009 global financial crisis.

“In a baseline scenario, which assumes that the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound, the global economy is projected to grow by 5.8 per cent in 2021 as economic activity normalises. The risks for even more severe outcomes, however, are substantial,” it added.

For Tanzania, the new IMF projection represents a sharp change from early last month—after completing its latest mission to the country—when it reported that the economy had rebounded to an estimated annual growth rate of six per cent in 2020, up from four per cent projected in early 2019.

That projection was still below the seven per cent growth rate quoted by the government, a contradiction that caused some friction between Tanzania and the IMF last year.




 Kenya’s economic growth will slow to 3% or less this year from an earlier forecast of about 6% due to the effects of the novel coronavirus, its finance minister said on Tuesday.

The finance ministry had earlier given a 6.1% growth forecast for 2020.


“This will drastically drop to about 3% or even less, but we are going to give a firm figure when we will have taken on board the impact of this, maybe in the next one month,” Ukur Yatani said in comments broadcast on privately-owned Citizen Television

About 20 million jobs are at risk in Africa as the continent's economies are projected to shrink this year due to the impact of the coronavirus pandemic, according to an African Union (AU) study.

So far, Africa accounts for just a fraction of total cases of the disease which has infected more than one million people worldwide, according to a Reuters tally.

But African economies are already facing an impending global economic downturn, plummeting oil and commodity prices and an imploding tourism sector.

Before the onset of the pandemic, continent-wide gross domestic product (GDP) growth had been projected by the African Development Bank to reach 3.4% this year.

However, in both scenarios modelled by the AU study – seen by Reuters and entitled "Impact of the coronavirus on the Africa economy" – GDP will now shrink.

Under what the AU researchers deemed their realistic scenario, Africa's economy will shrink 0.8%, while the pessimistic scenario said there would be a 1.1% dip.

Up to 15% of foreign direct investment could disappear.

The impact on employment will be dramatic.

"Nearly 20 million jobs, both in the formal and informal sectors, are threatened with destruction on the continent if the situation continues," the analysis said.

Exports, imports projected to drop

African governments could lose up to 20 to 30% of their fiscal revenue, estimated at 500 billion in 2019, it found.

Exports and imports are meanwhile projected to drop at least 35% from 2019 levels, incurring a loss in the value of trade of around $270 billion. Africa's oil producers, which have seen the value of their crude exports plunge in past weeks, will be among the worst hit.

Sub-Saharan Africa's biggest oil producers Nigeria and Angola alone could lose $65 billion in income. African oil exporters are expected to see their budget deficits double this year while their economies shrink 3% on average.

Tourism-dependent economies could shrink

African tourist destinations will also suffer.

Africa has in recent years been among the fastest growing regions in the world for tourism. But with borders now closed to prevent the disease's spread and entire airlines grounded, the sector has been almost entirely shut down.

Countries where tourism constitutes a large part of GDP will see their economies contract by an average of 3.3% this year. However, Africa's major tourism spots Seychelles, Cape Verde, Mauritius and Gambia will shrink at least 7%.

"Under the average scenario, the tourism and travel sector in Africa could lose at least $50 billion due to the covid-19 pandemic and at least 2 million direct and indirect jobs," the AU study said.

Remittances from Africans living abroad – the continent's largest financial inflow over the past decade – are unlikely to cushion the blow.

"With economic activity in the doldrums in many advanced and emerging market countries, remittances to Africa could experience significant declines," the analysis found.

courtesy France 24

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