The world’s largest cocoa producers are studying a way to be paid for the burden of having to setup systems to comply with new EU regulations on deforestation and child labor.
(Bloomberg) — The world’s largest cocoa producers are studying a way to be paid for the burden of having to setup systems to comply with new EU regulations on deforestation and child labor.
Ivory Coast and neighboring Ghana, which account for about two-thirds of global output, are in talks with industry players and experts about the pricing mechanism, Alex Assanvo, executive secretary of the Ivory Coast-Ghana Cocoa Initiative, said in an interview at the Africa CEO Forum in Ivory Coast’s capital, Abidjan.
Read More: World’s Largest Cocoa Producers Mull New Pricing Mechanism
African Wireless Operators Tap Huawei (June 6, 9:16 p.m.)
African wireless operators continue to use technology components from Huawei Technologies Co. to build their 5G capabilities despite US accusations that the company poses a national security risk for any country that use them. Huawei has denied the claims.
“We still have plenty of customers who continue to work with us across the continent” because they believe in our technology and we offer them the best long-term partnership, Tonny Bao, vice president of Huawei said in an interview at the forum.
“Africa has a big potential for growth with a huge market space to develop and that is an advantage,” Bao said.
Coca-Cola Tax Woes (June 6, 3:49 p.m.)
Excessive taxes in a number of African countries are eroding businesses’ profit margins and deterring investment, according to Jacques Vermeulen, the chief executive officer of Coca-Cola Co.’s African beverages unit.
“One of the countries requires 50% of our revenue in taxes; in some others, we see taxes imposed to monitor the tax that they have already allocated,” he said in an interview at the forum. “It’s double taxation, which is an additional cost to our bottom line and drives corporations like us to think differently. In reality, we’ve reduced some of our investments because of the excesses of taxes.”
Vermeulen called on governments to be more transparent and forward-looking in their planning, and work with companies that invest for the long term to create employment and drive economic growth.
Gabon Targets Mining, Agriculture Investment (June 6, 1 p.m.)
Gabon is targeting investment in several priority industries, including mining, agribusiness and green energy, Prime Minister Alain Claude Bilie-By-Nze said.
“We’re looking for inclusive growth that’s more redistributive,” he said at the forum.
Gabon’s Economy and Recovery Minister Lydie Roboty Mbou told delegates that the nation’s gross domestic product is expected to expand about 3% this year and each of the next few years.
Lack of Access to Dollars in Kenya Spooks Investors (June 6, 1:06 p.m.)
A lack of access to US dollars in Kenya and a slump in the value of the shilling is deterring investors and weighing on the stock market, according to James Mworia, the CEO of Centum Investment Co., Kenya’s second-largest publicly traded investment firm.
Investors are “not sure if they’re able to exit,” he said in an interview at the forum. “You’re also not sure as an investor at the point of exit where the currency will be.”
Foreign investors account for a majority of the trading volumes on the Nairobi Stock Exchange. With medium-term bonds offering double-digit returns, Mworia sees little incentive for them to put their money into stocks.
“Do I go to the NSE, where we have not had capital gains for a long time and you actually lost money, or do I go invest my money in a 3-year bond at 14%?” he said.
Kenya’s New Tax Law Under Fire (June 6, 1 p.m.)
Kenya’s plans to raise the maximum personal income tax rate to 35%, double the value-added tax rate on fuel to 16% and make it mandatory for employers and workers to contribute to an affordable housing fund will place an additional burden on already struggling households if approved by lawmakers, Mworia warned.
“Households have been stretched through inflation, real wages have fallen and post Covid, unemployment has increased,” he said. “Households with disposable incomes have shrunk and those with income have shrunk even further. The new Finance Bill, which outlines the new levies, will shrink “disposable income even further through direct increased taxation and taxation on basic goods and services, which compounds the inflationary impact that has been there.”
Average real wages fell 5.6% in the 5 years to 2022, data from the national statistics bureau show. The country’s tax-GDP ratio peaked at 17.4% of gross domestic product in 2017 and has been in decline since then.
Ghana Vote to Test Government Commitment to Reforms (June 6, 12:23 p.m.)
Ghana’s next presidential elections will test the government’s commitment to implementing economic reforms that are required under a $3 billion International Monetary Fund bailout program.
The West African nation is scheduled to hold elections in December 2024. That’ll be midway through the three-year package approved last month. It provided an immediate disbursement of $600 million, with further payments to be made subject to regular reviews by the fund.
“One of the weaknesses in Ghana over the years has been these election-related spending cycles,” Abebe Aemro Selassie, who heads the IMF’s Africa Department, said in an interview at the forum. “That I think has done a lot to undermine confidence in public accounts in Ghana.”
Read More: Ghana Elections May Test Fiscal Discipline Under New IMF Program
–With assistance from Ramah Nyang, Paul Richardson and Rob Dawson.
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