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Africa Free trade deal set for take-off following Gambian ratification

Its promotion of tariff-free movement of goods, people and services across the continent is also expected to favour SMEs

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Photo credit: QZ Africa

Gambia became the 22nd African country to ratify the African Continental Free Trade Area agreement (AfCFTA), meaning the bill now has the minimum number of ratifications needed to come into effect.

On March 21, Ethiopia became one of the last African nations to ratify the AfCFTA, bringing the tally of endorsing countries to 21.

The trade bloc spanning 49 countries with a combined GDP of $3trn, will facilitate inter-regional trade, boost growth and help to alleviate poverty, its supporters say.

The news was tweeted by the African Union Commissioner for Trade and Industry, Albert Muchanga:

“Good news! The Parliament of The Gambia has APPROVED ratification of #AfCFTA Agreement making us meet the minimum threshold.

“The AfCFTA market is being born and is one step ready for launch of its operational phase in July this year.

The agreement, signed by 49 of the 55 African Union nations in March last year, will dodge a patchwork of trade regulations and tariffs that make intra-African commerce costly, time-consuming and cumbersome.

Its promotion of tariff-free movement of goods, people and services across the continent is also expected to favour SMEs, who account for 80% of Africa’s employment and 50% of its GDP, according to the World Bank.

Skeptics have highlighted the impending challenges of uniting countries with the greatest level of income disparity between them, under the umbrella of one trade bloc.

For example, over 50 percent of Africa’s cumulative GDP is contributed by Egypt, Nigeria and South Africa, while Africa’s six sovereign island nations collectively contribute just 1 percent.

The motion was brought before Gambia’s parliament by Lamin Jobe, Gambia’s trade minister who highlighted the trade benefits of deeper regional integration:

“This document will definitely serve as a take-off point to enhance the free movement of people, good and services. By using this, there are a lot of advantages that we can gain from the implementation of this agreement,” he said.

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South Africa’s Foschini to halt Kenya, Ghana operations

South African retailers have recorded poor performance in the last year, due to slow economic growth and currency devaluations

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South Africa's Foschini to halt Kenya, Ghana operations
(File photo)

South African fashion retailer, the Foschini Group is considering shutting down its Kenya and Ghana businesses.

The firm’s Chief Executive Officer, Anthony Thunstrom, affirms that at least, six stores will be affected in both countries.

South African retailers have recorded poor performance in the last year, due to slow economic growth and currency devaluations that had hit sales.

In July, department store chain, Woolworths pulled out from West Africa for a second time.

The Foschini Group will review economic growth, legislature and lease negotiations in Kenya and Ghana before making its decision.

Come September, in its home market, Thunstrom says The Foschini Group will launch a smaller format Sportscene store that will enjoy entertainment features such as a basketball court and a DJ booth, in an effort to lure millennials into its stores and away from online players such as Naspers’ majority-owned Superbalist.

The store will be launched in September in Johannesburg’s upscale Sandton shopping and financial district.

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Total Mozambique gas project will go on despite insurgency

Total will also acquire US energy giant Anadarko’s assets in Algeria, Ghana, Mozambique and South Africa

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Energy major Total on Friday said it remained committed to a Mozambique liquefied natural gas project on the country’s northern coast despite deadly Islamist insurgent attacks.

Total will become the operator of the $25 billion Rovuma LNG Project whose construction began on August 5 in the Afungi Peninsula.

The company is also set to acquire US energy giant Anadarko’s assets in Algeria, Ghana, Mozambique and South Africa, strengthening Total’s position in Africa.

But the area where the project is located has been targeted by jihadists since October 2017, claiming more than 300 lives.

Attackers in February launched an assault on a convoy of vehicles from an Anadarko contractor, killing one worker and injuring others. 

This led to the suspension of operations for a few months, with activities only resuming after the government announced the deployment of armed forces.

Several hundred suspected attackers have been arrested, according to authorities, but sporadic assaults continue.

On Friday Total’s CEO Patrick Pouyanne reaffirmed Total’s commitment to the LNG project saying it “is a unique asset which perfectly fits our strategy and our skills.

“Please be assured of the commitment of Total to bring the best of our human, technical and financial capacities to further strengthen the project execution … in the interests of all those involved, including the government and people of Mozambique,” he said in a statement.

The project is expected to be transformational for Mozambique, creating an estimated 5,000 direct jobs and 45,000 indirect jobs.

The country’s gas deposits are estimated at 5,000 billion cubic metres and would make Mozambique a major exporter of liquefied natural gas.

The use of natural gas is on the rise globally as countries struggle to meet energy demands and shift away from using coal.

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Kenya plans to tax OTT services like Youtube, Netflix

The over-the-top services (OTT) will soon be required to declare the incomes they derive from Kenyan consumers

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Kenya plans to tax OTT services like Youtube, Netflix

Kenya’s Information Communication and Technology (ICT) ministry is working on completing a new tax scheme.

This framework, reports say, will be used to tax foreign online streaming media services such as YouTube and Netflix.

The over-the-top services (OTT) will soon be required to declare the incomes they derive from Kenyan consumers.

OTT services include all applications that offer voice, video and messaging services over the internet.

Communications Authority Director-General, Francis Wangusi says online content providers exploit the Kenyan industry. Yet, neither the government nor artistes benefit from them.

According to Wangusi, “many countries have policies that guide these services and that is where we are heading as a country”.

He adds that technologies that will facilitate taxation of OTT services are available.

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