News (1795)
With the global development of tech giants like Amazon, Facebook, and Netflix, the importation of digital services has significantly increased in Africa in recent years. To enable every country to benefit from the development, a global tax framework was elaborated. It is expected to become enforceable in January 2024.
Kenya will align its digital tax with the inclusive framework spearheaded by the Organization for Economic Cooperation and Development (OECD). President William Ruto (photo, center) announced this to investors on Thursday, March 30, at the American Chamber of Commerce Regional Business Summit.
“Following discussions with players in this sector, we have committed to review this tax regime and align it with the two-pillar solution currently being developed by the OECD inclusive framework,” President Ruto said.
The OECD finalized the reform of the international tax system aimed at solving tax base erosion and multinationals’ profit-shifting problems. The framework is based on two pillars, the first of which is to align tax rates more closely with local market engagement. To date, 138 jurisdictions have approved it.
Under the former administration, Kenya suspended its support for the global minimum tax rate, which would have seen the government suspend the collection of the digital services tax from tech giants such as Google, Facebook, and Amazon.
At the time, the country expressed its uneasiness with the terms of the agreement that would have seen the end of the digital services tax, which is currently 1.5% of sales made by foreigners in the country. After several negotiations, Kenya finally decided to align itself and sign the pact before its implementation on January 1, 2024.
According to OECD estimates, if Kenya joins, the tax authorities could collect between 3.3 billion shillings ($25 million) and 5.3 billion shillings in taxes, more than 10 times the 400 to 500 million shillings they currently collect each year in digital services tax.
In addition to Kenya, three other countries, namely Nigeria, Pakistan, and Sri Lanka have not yet signed the declaration.
Samira Njoya
In 2019, the Moroccan government launched a national strategy to improve financial inclusion across the country. To achieve the objectives set in that strategy, the executives are working with public and private partners.
Last Friday, the World Bank’s board of directors approved a third Development Policy Loan (DPL) of $450 million for Morocco.
According to an IMF release dated April 3, 2023, this DPL aims to support the Moroccan government in the implementation of reforms to improve financial inclusion, digital entrepreneurship, and individuals and businesses’ access to infrastructure and digital services.
“This third financing is in line with the recommendations of the New Development Model (NDM), which emphasizes the need for a paradigm shift to promote inclusive, private sector-led growth to improve public services and reduce social and spatial disparities,” indicated Jesko Hentschel, Country Director for the Maghreb and Malta at the World Bank.
The first DPL, amounting to $500 million, was approved in 2020. In June 2021, a second one -$450 million- was approved. Combined with the new one, the total DPL secured by Morocco amounts to $1.4 billion.
It is a continuation of the $700 million financing the World Bank approved, in 2019, to support financial inclusion and the digital economy in Morocco.
The various funding enabled Morocco to significantly push back the barriers to financial and digital inclusion. Today, 44% of Moroccans have a bank account compared to 29% in 2017, and 30% of them use digital payments compared to 17% in 2017, the IMF release reported.
“The infrastructure for digital payments has expanded with 31% of rural districts now covered by mobile payment networks and 19 mobile payment providers in operation,” the IMF indicates.
Samira Njoya
Government-owned postal company SOPECO wants to become a leading player in the digitization of the country’s services. To achieve that goal, it is joining forces with technology partners specialized in the field.
The Indian group ATDXT will support the Congolese Posts and Savings Company (SOPECO) in the digitization of its activities. A partnership agreement was signed, Thursday, March 29, to this effect between the two companies to create a digital finance platform promoting savings and microlending.
"We aim to popularize these inclusive products that range from digital savings and wallets to micro-loans, through a digital platform [that can be used from] a telephone. This will allow consumers to for instance make purchases without using cash and resell services, generating additional income to sustain their business,” said Ludovique Mbossa (photo, right), SOPECO’s general manager.
Thanks to that agreement, SOPECO joins the Senegalese and Djiboutian state postal companies that have already taken steps to digitize their activities. Under that deal, a digital savings platform, "Nova digitale", will be set up for SOPECO to improve financial inclusion by promoting access to financing for individuals and SMEs that are still left behind.
This partnership comes four months after the agreement signed between the Indian group ATDXT and the Congolese Minister of Digital Economy, Léon Juste Ibombo, to support the country in the realization of several projects, the most important of which is the digitization of SOPECO.
Samira Njoya
In Nigeria, only a few states have access to reliable and affordable Internet. To address this deficit, the federal government is stepping up actions such as setting up and funding digital projects.
The Nigerian government on Wednesday (March 29) agreed to provide free broadband Internet access in 75 public places, including 20 airports, several tertiary institutions, and six marketplaces in the 36 states of the Federation. The Federal Executive Council of Nigeria (FEC) approved two contracts worth N24.20 billion ($52.5 million) for that purpose.
According to Digital Minister Isa Ali Pantami, the cost of providing broadband infrastructure to tertiary institutions and airports is N18.95 billion, while the second approval to provide broadband to selected markets is N5.25 billion.
“We want to ensure that students and staff benefit from unlimited internet. For airports, we know the difficulty when you land without any connectivity,” said Isa Ali Pantami.
“[...] for markets, it’s to support innovation-driven enterprises that are being championed by the Massachusetts Institute of Technology, where we try to give global visibility to our innovators, to our micro, small and medium enterprises, so that their market is not going to be narrowed and restricted only to our local communities,” he added.
The funding will finance the 2nd and 3rd phases of a broadband infrastructure project launched by the federal government. In 2019, the FEC approved a memo for the unlimited provision of Internet in 18 universities under the first phase of the project.
The said project is in line with the Nigerian National Broadband Plan 2020-2025, which aims to increase broadband penetration to 70% nationwide.
Samira Njoya
In Africa, poor access to financing remains an obstacle to the development of startups operating on the continent. VC Funds are being launched to address that issue and help them grow in underserved markets.
Dutch investment firm Goodwell Investments and Dutch foundation Oxfam Novib announced, Friday, the launch of "Pepea", a joint €20 million ($21.7 million) fund focused on financing early-stage East African startups, specifically in Kenya, Uganda, and Ethiopia.
According to the statement released by Goodwell Investments, the fund will focus on companies in the sustainable agriculture, energy, mobility, logistics, and waste management sectors.
"We acknowledge the challenges faced by SMEs in the region (especially those that are women-owned) in accessing fine-tuned patient capital and we now want to play a role to address those needs," said Tamara Campero, investment manager at Oxfam Novib.
In an analysis published on June 14, 2022, Africa: The Big Deal informed that East Africa was one of the regions with a sufficiently developed venture capital ecosystem on the continent. It attracted nearly 23% of the funds raised by African startups since 2019. Kenya alone attracted most of the funding, nearly $1.9 billion in two and a half years.
By launching "Pepea," Goodwell Investments and Oxfam Novib want to further develop the region and support startups that are generating revenue but have not yet raised funds. Pepea will ensure that the companies it selects have the right structures and systems to attract more financing.
Samira Njoya
With African countries progressively moving towards the fourth industrial revolution, businesses need to adopt digital solutions in their development strategies since such tools are crucial to making them sustainable.
IT solutions provider ZTE Corporation and South African systems integrator BCX recently signed a strategic cooperation agreement to promote the deployment of digital solutions in South Africa.
The agreement, signed on the sidelines of the Mobile World Congress 2023 (MWC 2023), was disclosed in a release published by ZTE last Thursday.
“BCX takes a deep dive into Africa and the Middle East, and has made great achievements in regional digitalization. The strategic cooperation between ZTE and BCX can achieve complementary advantages. ZTE and BCX will bring about more changes and market opportunities in the industry’s expansion and help accelerate the regional digitalization process,” said Zhang Wanchun, SVP and General Manager of the Wireless Product Operation Division at ZTE.
In recent years, digital solutions have become essential to pinpoint consumers’ interests and developing businesses. According to a McKinsey & Company report on the future of work, “digitization and automation could result in a net gain of up to 1.2 million jobs in South Africa by 2030.”
Through their strategic agreement, BCX and ZTE aim to cooperate to further develop the digital infrastructure in South Africa, including servers, storage, private 5G, data center infrastructure, and private clouds. With this agreement, BCX becomes an official channel partner of ZTE in the South African enterprise network market.
Samira Njoya
The Ugandan government has decided to digitize key economic sectors to combat widespread poverty. In that bid, it is supported by various partners.
The Uganda Development Bank (UDB), fintech company Ensibuuko, the European Union, the United Nations Capital Development Fund (UNCDF), and the Food and Agriculture Organization of the United Nations (FAO) recently launched "AgriConnect," a fintech solution aimed at facilitating access to digital finance for smallholder farmers in Uganda.
“The world is fast evolving, a result of the advancements in technology, and it is key that as a development finance partner, we recognize such changes and make a deliberate effort to back inventions that influence the growth of key sectors of the economy like Agriculture, which employs 68% of the country’s population,” said Patricia Ojangole, managing director of the Uganda Development Bank.
According to the UN Food and Agriculture Organization, Uganda's fertile agricultural land has the potential to feed 200 million people. Eighty percent of Uganda's land is arable, but only 35 percent is under cultivation. This is due to several reasons, including a lack of funding for farmers.
AgriConnect is set up to address the funding issue. It will provide both savings and loan options for Ugandan smallholder farmers. The platform will allow Village Savings and Loan Associations (VSLAs) to digitally access short-term seasonal loans and savings products at affordable prices.
For Evelyn Anite, Minister of State for Investment and Privatization, AgriConnect will reinvigorate and reshape Uganda. "With services like this, Uganda is indeed on a good trajectory to achieve its goals as stipulated in the National Development Plan and Vision 2040," she said.
Samira Njoya
The digital revolution offers great opportunities for Africa. However, to capitalize on those opportunities for socioeconomic progress, the continent needs to develop its digital ecosystem.
Egypt and Germany plan to enhance their digital cooperation. The issue was discussed by the Egyptian Minister of Communications and Information Technology, Amr Talaat, and the German Ambassador in Cairo, Frank Hartmann, during a meeting between the two parties in Cairo last Tuesday.
According to a release from the Egyptian Ministry of Communications and Information Technology (MCIT), the two parties discussed current and future ICT cooperation projects, including the "Supporting e-Government and Innovation in the Public Administration (InnoPA)" project, being implemented in partnership with the German Agency for International Cooperation (GIZ).
“During the meeting, the ICT Minister highlighted MCIT's keenness to leverage the distinguished expertise of the German side in IT and research and development (R&D) based on modern technologies, such as Artificial Intelligence (AI) and digital transformation,” the release informs.
Indeed, for some years now, Germany has been one of the most technologically advanced countries. According to the Digital Quality of Life Index (DQL Index), the global ranking of countries according to digital quality of life published in October 2022, Germany was the 3rd just behind Israel, and Denmark. The DQL index took into account 5 criteria, namely the quality of the Internet connection, e-government, cyberinfrastructure, Internet accessibility, and cybersecurity capabilities.
By strengthening its digital cooperation with such a country, Egypt wants to capitalize on Germany’s experience to successfully implement the projects planned in its 2022-2026 Country Strategy Paper while selling its outsourcing services and building a “talent pool capable of exporting ICT services.”
Meanwhile, the German ambassador to Egypt, Frank Hartmann said that his country wants to open its market to benefit from the pool of Egyptian freelancing talent working in the IT sector.
Samira Njoya
The Kenyan government has embarked on a vast digital project to let the population benefit from information technologies. To quickly achieve its objectives, it needs as many partners as possible.
Kenyan ICT Minister Eliud Owalo recently called private investors to join the government to modernize digital infrastructures.
While chairing a sector consultative meeting with the country's ICT community on Monday, March 27 in Mombasa, Eliud Owalo said the government has enough pilot projects that need funding to become operational.
The government official explained that the meeting was organized to facilitate discussions between the government and stakeholders on strategies to implement to boost ICT adoption and identify opportunities in the sector.
He indicated that several digital projects were underway in the country in partnership with the private sector. Such projects include the local manufacturing of smartphones and the construction of a smart university to train tech graduates.
To achieve all the initiatives planned in the "digital highway project", the state will have to rely on partnerships with the private sector and other development partners, he said.
Under the recently-launched digital highway project, more than 100,000 kilometers of fiber optic cable will be laid across Kenya; 25,000 public Wi-Fi hotspots will be created and digital villages and studios set up in each of the country's 1,450 districts, as well as the digitization of 5,000 government services by mid-2023.
Samira Njoya
As of December 2021, the internet penetration rate was about 43% in Africa, according to the Internet Society. Some of the covered population do not even have access to quality internet. Nevertheless, telecom operators are beefing up their broadband infrastructure to better address this.
Mauritius Telecom, the largest Internet service provider and cellular service distributor in Mauritius, announced on Friday, March 24, that it has laid the T3 fiber optic submarine cable in Mauritius. The first end of the new infrastructure landed on Thursday, March 23, 2023, at the Baie-du-Jacotet landing station in the Bel Ombre region. The other end will land later this year in Amanzimtoti, KwaZulu-Natal Province, South Africa.
"With the rapid adoption of applications and services such as cloud computing, connected objects, video streaming, and others, it was essential for Mauritius Telecom to put in place the required infrastructure and capacity," said Kapil Resaul, CEO of Mauritius Telecom.
The 3,200 km long T3 cable has a capacity of 18 terabits per second, providing Mauritius Telecom with a more reliable, robust, and redundant network. It is scheduled to be commissioned by the end of 2023 and has an estimated lifespan of 25 years.
T3 is a partial takeover of the IOX submarine cable project that was to connect Mauritius to South Africa and India. First announced in 2017, it was abandoned in 2019. It will therefore join Mauritius Telecom's existing submarine cables, namely South Africa Far East (SAFE) and Lower Indian Ocean Network (LION), commissioned in 2002 and 2009 respectively.
Let’s note that Mauritius Telecom is 40% owned by Orange SA through Rimcom Ltd. Its remaining shareholders are the Mauritius government ( over 30%) and the local bank SBM (about 19%).
Samira Njoya
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Agrifoodtech: The mechanization segment raised lower funding in 2022 despite its importance (Report)
In 2020, the coronavirus pandemic highlighted problems in the African food supply chain. It then sparked strong investor interest in technology as a potential solution to satisfy consumers in an increasingly digitalized world.
In 2022, African agrifoodtech startups attracted $640 million in investment, up 22% from 2021 when the volume of funds attracted was $536 million. The figures are disclosed in a report released by venture capital fund AgFunder, in collaboration with Singaporean sovereign wealth fund Temasek.
During the period, the mechanization segment attracted the lowest amount in that category. Indeed, startups in agricultural robotics, mechanization, and equipment that integrates connected tractors, drones, and automatic agricultural machines attracted only $10 million. That is 1.56% of all investments mobilized by African agrifoodtech startups.
Investment by start-up category in 2022 ($)
Source: AgFunder
Yet, according to the Food and Agriculture Organization (FAO), agricultural mechanization is essential in Africa because it alleviates tedious tasks, increases agricultural productivity, improves income, and contributes to food security. In 2019, the organization lamented that 65% of smallholders were still using human muscle power to prepare soils while 25% of them were using animals against only 10% using mechanized means for the task.
In comparison, in South Asia, human muscle power use has already fallen to 30 percent for land preparation work, compared with 40 percent for motorized machinery, while in Latin America and the Caribbean motorized machinery was used by 50 percent of farmers.
Investment in mechanization by region in 2022 ($)
Source: AgFunder
According to AgFunder, four agrifoodtech segments captured the bulk of the sector's funding in 2022. In-Store Retail & Restaurant Tech startups attracted $197 million. Midstream Tech startups, which operate in the food safety, traceability, logistics, transportation, and processing segments, among others, have raised $170 million.
Meanwhile, start-ups offering marketplaces and financing solutions attracted $131 million, while start-ups specializing in cloud computing technologies that produce, among other things, ghost kitchens and autonomous delivery robots raised $44 million. These are much larger sums than those raised by startups that offer production improvement tools.
Muriel Edjo
To improve administrative and financial efficiency, the Seychelles public administration bets on digital transformation. To this end, it has launched projects in several sectors.
The Port of Victoria will digitize all of its services by next October for its 50th anniversary. Last Monday, Seychelles Transport Minister Antony Derjacques launched the Victoria Port Management Information System (PVMIS) project at the New Port in Victoria.
“The system will streamline processes before the vessels' arrival, optimize cargo flows, and improve the efficiency of operations by giving all stakeholders access to quality information via a single web-based application,” explained Egbert Moustache, deputy chief executive of the Seychelles Ports Authority (SPA), as reported by Seychelles News Agency.
The project is the result of a collaboration between the SPA, InfoPort and 4SH -two companies based in Reunion, a French overseas department- and the European Union under its Africa RISE initiative.
With funding from the European Union, consultants will carry out the business mapping process in the coming days to obtain information from all SPA stakeholders. They will then proceed to develop the system thanks to funding from InfoPort. According to the Seychelles News Agency, it will cost SPA €400,000 to buy the system.
Once operational, the system will allow Seychelles to comply with the FAL Convention -the International Maritime Organization (IMO) Convention for the Facilitation of International Maritime Traffic- by 2024.
The port of Victoria is Seychelles’ most important port and its main hub for trade with the rest of the world. The port handles about 95% of the country's imports.
Samira Njoya
Kenya, which is at the forefront of Africa's young technology scene, is increasingly attracting international companies looking to tap into the potential of its burgeoning IT sector. In that context, authorities are developing resources to facilitate the liaison between the various parties.
Last Friday, the Kenya National Innovation Agency (KeNIA) officially launched the Kenya Innovation Bridge, a digital marketplace to connect innovators, inventors, researchers, and start-ups with funders, customers, and users, in Mombasa.
This marketplace aims to enable as many innovations as possible to scale up by attracting appropriate funding and partnerships.
According to George Masila (photo, left), KeNIA's head of communications and partnerships, the marketplace was set up because there was a gap between innovators and people interested in their innovations.
“What we did is we developed a platform that would enable them to have that direct connection with those people who will be interested in whatever they are doing. [...] The innovation platform is just a simple interface that people of all levels of education can easily interact with. It’s almost like a LinkedIn or Facebook version,” he said.
Recently dubbed the "Silicon Savannah" because of its thriving technology ecosystem, Kenya is one of the fastest-growing economies in sub-Saharan Africa. According to the Swiss Business Hub Southern Africa, this technology ecosystem is estimated to be worth $1 billion and is an attractive environment for businesses, investors, and high-tech professionals. It is already host to subsidiaries of leading companies such as Facebook, Microsoft, IBM, and Intel.
With the launch of the Kenya Innovation Bridge, the Kenyan executive wants to further foster innovation in the country. The platform will link to investment/partnership and capacity-building opportunities that will turn innovations into commercially viable products and businesses, thereby contributing to job creation and overall economic growth in the country.
Samira Njoya
The rapidly changing world is powered by emerging technologies such as AI, 5G connectivity, and the cloud. It is, therefore, crucial to build public authorities' capacities in those technologies to enable them to participate in the ongoing digital transformation.
Last Friday, the Commonwealth Secretariat and U.S. tech company Intel launched a digital learning platform to enable public servants from the 56 Commonwealth member countries- including 21 African countries- to understand and harness emerging technologies like artificial intelligence.
The program, titled "Digital Readiness for Public Sector Leaders," aims to demystify AI for senior Commonwealth officials and raise awareness of its potential applications in various sectors, reports the release issued by the organization.
Unveiling the platform at the Commonwealth's headquarters in London, Commonwealth Secretary-General Rt. Hon. Patricia Scotland (photo) said, "this course is a new and important milestone achievement, which the Commonwealth has developed for our member countries in close collaboration with Intel. It provides a unique opportunity for public sector workers and leaders in member states to be trained in the fundamentals of Artificial Intelligence and Machine Learning."
Recent developments have forced governments to drive national digital transformation to improve services to citizens and maintain competitiveness by appropriately designing and using technology solutions. However, any digital transformation requires leadership training, and according to Gartner's "Transition to Digital Government in 2022," 80 percent of public sector leaders say they are lagging behind the private sector.
As such, the new program will enable governments to develop strategies, scalable solutions, and action plans for digital transformation in their communities. It covers topics such as digital governance, technology, infrastructure, and inclusion.
Samira Njoya