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African governments are trying to collect more tax - THE ECONOMIST

FEBRUARY 01, 2020

They can no longer rely on aid or natural resources

WHAT IS IT like being a taxman in Africa? “A lot of sleepless nights,” says Yankuba Darboe, the Gambia’s top revenue official, describing the pressure to meet targets. Politicians across Africa are asking ever more of their tax collectors, with good reason. The biggest hole in public coffers is not money squandered or stolen, but that which is never collected in the first place.

Government revenues average about 17% of GDP in sub-Saharan Africa, according to the IMF. Nigeria has more than 300 times as many people as Luxembourg, but collects less tax. If Ethiopia shared out its tax revenues equally, each citizen would get around $80 a year. The government of the Democratic Republic of Congo is so penurious that its annual health spending per person could not buy a copy of this newspaper.

Governments once turned to aid and natural resources to stay afloat. Historically “we relied on oil,” says Babatunde Fowler, until last month the head of Nigeria’s Federal Inland Revenue Service. “Nobody took taxation seriously.” Lower oil prices are now forcing a rethink, he explains. So too are shifts in foreign aid. As a proportion of Africa’s income, aid flows have halved since the 1990s. Measured as dollars per person, they peaked in 2011 and then fell. Public debt has risen sharply.

Since the 1980s governments have followed an IMF-inspired recipe: slashing trade taxes, reducing top rates on personal and corporate income, and embracing value-added tax. Data from the OECD for 26 African countries show that over half of their tax revenues come from taxes on goods and services. Only a quarter comes from personal income tax and social-security contributions (about the same as in Latin America, but much less than in the rich world). From 2008 to 2017 the ratio of tax receipts to GDP rose by 1.5 percentage points, but in many countries this was offset by falls in non-tax revenues, such as fines, rents and royalties from resource extraction.

Large firms grumble that they are footing the bill. Just 6% of tax-paying firms generate 78% of receipts, according to the African Tax Administration Forum (ATAF), a club of taxmen. But that statistic gives only a partial picture. Analysis of corporate tax returns in Ethiopia by Giulia Mascagni of the International Centre for Tax and Development and Andualem Mengistu of the Ethiopian Development Research Institute reveals that small firms pay the highest effective rate, perhaps because they lack accountants to find gaps in the tax code. In many countries firms which are considered “informal”—because they are not registered, or do not pay income tax—still cough up for licence fees and market dues.

Ordinary Africans complain the system is rigged. Some 56% of those surveyed by Afrobarometer, a pollster, considered it “very likely” that a rich person could pay a bribe or use personal connections to dodge taxes. They are probably right. When Ugandan tax collectors examined records for 71 government officials in 2013/14, they found that just one had paid any personal income tax. Only 5% of directors at leading companies were paying income tax themselves.

Authorities try to manage such tax-dodging through dedicated units that focus on, say, wealthy individuals or large corporations. In Uganda officials built on their earlier research by drawing up a list of 117 rich folk, then meeting them personally. At the time only 13% were filing tax returns; a year later 78% were. One pastor on the list even started preaching about paying taxes. The taxmen also chased government agencies. “It’s a tax morale issue if you ask people to pay their tax and then the government is not paying its taxes,” says Doris Akol, the country’s top revenue official.

Technocratic tax talk often centres on such administrative reforms, which also include things like strengthening IT systems or adopting taxpayer identification numbers. Yet this package only goes so far. “It says build a good tax register, go to electronic filing, and so on,” says Logan Wort, the executive secretary of ATAF. “Those are all right. But you know what the problem in Africa is? It has signed away its tax base.”

One example is bilateral tax treaties. Originally intended to eliminate double taxation, and later to attract investment, their practical effect is to limit taxation of cross-border income, such as royalties or service fees. The IMF estimates that signing treaties with so-called “investment hubs”, like Mauritius, costs African countries an average of 15% of their corporate tax revenue without increasing investment. Some governments, such as Rwanda’s, have wisely renegotiated terms.

Governments also erode the tax base by dishing out generous exemptions. Estimates of “tax expenditures”, or deviations from usual tax rates, put the cost at up to 40% of revenues that African governments collect. Those figures include some sensible allowances, like tax relief on medicines, as well as questionable ones, such as tax holidays for investors. Most businesses say that tax breaks do not affect their decision to invest; in surveys, they tend to put greater weight on things like stability and roads, which a little extra tax might fund.

How much more could African governments collect? The best estimates are that they lose revenues worth 2% of GDP through corporate-tax avoidance, of all kinds, and perhaps another 1-2% through individual wealth stashed offshore. The revenue forgone through tax expenditures is roughly 5% of GDP. It is neither feasible nor desirable to close all those gaps, so the realistic gains are smaller. Other measures, such as increasing compliance or expanding property taxes, could also add a few percentage points.

The IMF models the “tax capacity” of a country using variables such as average incomes, trade openness, and governance. On that basis it thinks that African governments could increase their revenues by 3-5% of GDP, which is more than they receive in aid (see chart). But in the past few years “there has been little progress,” says Papa N’Diaye of the IMF. The challenge is not starting tax reform, he adds, but sustaining it. Africa’s taxmen are in for a few more sleepless nights.

Africa’s largest economy braces for big hit as oil prices plummet - CNBC

MARCH 13, 2020


  • The International Monetary Fund (IMF) on Thursday said it will be working closely with the Nigerian authorities in the coming days to assess any vulnerabilities which may be exposed by the sharp decline in crude prices.
  • Nigerian dollar bonds sank to record lows stocks on Thursday hit a new four-year low, as fears grow over the devaluation of the naira currency.

PREMIUM: Nigeria oil 180514 EU The Egina floating production storage and offloading vessel, the largest of its kind in Nigeria, is berthed in Lagos harbor on February 23, 2017. Stefan Heunis | AFP | Getty Images

With oil prices plunging amid concerns over a price war between Russia and Saudi Arabia, and the coronavirus outbreak obliterating stock markets, Africa’s largest economy is in a precarious position.

The International Monetary Fund (IMF) on Thursday said it will be working closely with the Nigerian authorities in the coming days to assess any vulnerabilities which may be exposed by the sharp decline in crude prices, as Nigerian and Angolan dollar bonds sank to record lows.

Nigerian stocks on Thursday headed for their fifth straight day of losses to a new four-year low, and a fall in oil prices to just over $30 per barrel, rising external debt and a depreciating currency pose a threat to economic stability in the country of more than 190 million people. Nigeria is Africa’s largest economy in terms of GDP (gross domestic product).

While markedly lower oil prices will undoubtedly have broad adverse consequences for the Nigerian economy, the country is not quite as dependent on oil exports as the likes of Angola, which analysts expect to suffer a substantial blow this year.

Currency concerns

However, a prime concern for economists is Nigeria’s managed naira exchange rate, since even prior to the fallout from OPEC’s failure to reach an agreement with Russia on oil production cuts, the country’s foreign exchange reserves were in steady decline.

After the official exchange rate was devalued in 2016, foreign exchange reserves were approaching $25 billion, and the move failed to stop the slide of the parallel market exchange rate, which meant the Central Bank of Nigeria (CBN) was forced to act again the following year when the Nafex (Nigerian Autonomous Foreign Exchange Rate) was implemented. Reserves held just below $30 billion during this period.

“Extrapolating the trajectory observed thus far this year (the foreign exchange buffer shrunk by $2.3 billion during the first two months of 2020) suggests reserves could fall below the $30 billion mark by Q3 (the third quarter) and end the year just above $25 billion,” NKC African Economics Chief West Africa Economist Cobus de Hart said in a note earlier this week.

Oil dependent countries facing fiscal and social strain, IEA’s Birol says

Capital Economics Senior Emerging Markets Economist John Ashbourne on Wednesday echoed this projection, suggesting that reserves will soon fall below the $30 billion mark, which Nigerian policymakers had identified as a key benchmark.

Ashbourne predicted that the naira will end the year down 8% to 400 NGN against the U.S. dollar. He added that in Nigeria’s case, a weaker currency will not provide a boost to competitiveness, since the country does not have significant non-oil exports or the “domestic manufacturing base needed to substitute for imported goods.”

Reuters reported Thursday afternoon that the naira was being quoted at 370 to the dollar on the over-the-counter spot market.

‘Severe adverse consequences’

Parliament recently green lighted President Muhammadu Buhari’s request for $22.7 billion in foreign borrowing, but while external debt accumulation would usually be expected to support reserves, de Hart suggested that the sharp fall in global oil prices could potentially “more than offset” the boost.

“Firstly, should Brent crude oil prices average roughly $40pb (per barrel) for the remainder of the year, it would reduce Nigeria’s goods export receipts by roughly $14 billion (as opposed to our February baseline for oil prices to average $62.4 billion in 2020) — this may also be a conservative estimate, as it does not take into account any adverse impact on non-oil exports,” he said in the note Monday.

What’s more, Nigeria may have difficulty accumulating external debt following the fall in oil prices and its impact on the macroeconomic outlook, while the jittery investment environment raises the risk of a capital flight, de Hart highlighted.

GP: Trading At The Nigeria Stock Exchange Bloomberg | Getty Images

Having previously backed the authorities to ride out the storm and maintain its foreign exchange rate at current levels in the immediate future, NKC analysts now believe that the naira’s prospects have “deteriorated markedly” and remains set for a “sharp fall” this year if current conditions persist.

The CBN will again be faced with the choice of whether to let the Nafex buckle or continue to artificially prop it up.

“We believe the CBN will continue to provide support in the near term, with a more drastic adjustment more likely in Q3,” de Hart projected.

“If the Nafex is not permitted to buckle, then the black-market rate should, and this might hold more severe adverse consequences for an economy that is now facing a gloomier outlook on multiple fronts.”

Buyers crash Nigeria’s multi-million dollars liquefied gas demand - NEW TELEGRAPH

MAY 16, 2020

BY  Adejumo kabir

Buyers at the weekend deferred deliveries of multi- million dollars Liquefied Natural Gas (LNG) from Nigeria, one of Europe’s key LNG suppliers. This cause by crater in the coronavirus pandemic has seen demand for Nigeria’s cargoes in Europe crash, which has created a fleet of tankers carrying LNG that are now just floating storage, according to commodity tracking firm Kpler, cited by an online news portal, Bloomberg.

Over the past two months, Nigeria continued to send LNG cargoes to one of its main markets, Europe, but with many major European economies in lockdown, demand has plunged, and customers with options to defer have been postponing the offloading of the cargoes.

LNG prices at their lowest in years have forced traders to keep LNG on the tankers, waiting for demand to improve. But prices are not set to improve in the summer, according to Manas Satapathy, managing director for energy at Accenture. “The worst is yet to come, we will likely see super low prices in late June, July, August,” Satapathy told Bloomberg.

The crash in LNG demand in Europe during the pandemic and the high storage levels will likely mean that the continent will struggle to act as a sponge to absorb excess LNG supply this year as it did in 2019, Rystad Energy said in an analysis last week. Last year, Europe became the “de facto global LNG sink,” when milder winter in Northeast Asia slowed down LNG demand growth there, the energy research firm said.

In 2019, Europe’s total LNG imports surged by 80 per cent compared to 2018, while in January and February 2020 – before the European lockdowns and when the coronavirus hit Asia – Europe’s LNG imports jumped 35 per cent, thanks to the UK, Spain, and Belgium.

“We still don’t have an end date for when Europe will completely re-emerge from lockdown, and the impact will probably be deeper coming into the summer months. “With gas storage tanks already almost filled to the brim, Europe’s capacity to import and actually use the same amount of LNG as in 2019 seems like a tall order, especially if we see another mild winter,” Rystad Energy said.

Diplomatic intrigues stall evacuation of Nigerians from Canada - THE GUARD

MAY 16, 2020

By Wole Oyebade, Bridget Chiedu Onochie and Joke Falaju, Abuja

• May Arrive Monday 

• Evacuees From Thailand To Pay N162.3million For Hotel Accommodation, Feeding 

• ‘Govt. Does Not Have Capacity To Foot The Bill’

Diplomatic intrigues and conflict of interest over the choice of operating carrier might explain why the scheduled evacuation of 200 Nigerians from Canada was stalled last Wednesday.    While the Nigerian government-designated local carrier, Air Peace, for the special operation, the Canadian government preferred Ethiopian Airlines, though at more expensive fares for the travellers. 

Meanwhile, Nigerian evacuees from Thailand are expected to pay about N162.3million for hotel accommodation and feeding. The Guardian learnt that each of the evacuees was expected to pay N240, 000 as hotel accommodation for the period of 16 days and N57, 600 for feeding for the same period, making a total of N297, 600.

The federal government, after the arrival of the evacuees at the Nnamdi Azikiwe International Airport in Abuja, had handed them over to the Nigeria Centre for Disease Control (NCDC) to properly quarantine for 14 days period to ensure they are COVID-19 free. 

Although the government did not disclose where the evacuees were being quarantined, The Guardian learnt that the federal government had negotiated with some hotels in the Federal Capital Territory (FCT) to accommodate them, including Bolingo Hotel (300 rooms); Apo Apartments (61 rooms); Chida International Hotel (200 rooms); Belvior Hotel (30 rooms) and Barcelona Hotels (300 rooms).

The evacuees had been concerned about who was to pay their hotel bills, but a letter by the Nigerian Embassy in Bangkok, Thailand, dated May 14, this year and signed by the Head of Chancery, Nicholas Uhomoibi, read: “I am directed to bring to your attention that due to the measure that are beyond control of the COVID-19 local organising team in Nigeria, all evacuees going to Nigeria henceforth are to now pay for the quarantine, isolation, accommodation centre or hotel before departure and arrival in Nigeria. 

“In this regard, all prospective evacuees are to take note of the negotiated rate- accommodation, N15, 000 for 16 days, equals N240, 000; feeding is N3, 600 multiplied by 16 days, making N57, 600, making a total of N297, 600.”

The letter urged the evacuees to be informed that the embassy had been instructed not to airlift any evacuees who did not pay the fees. The Ministry of Foreign Affairs, which confirmed the government position yesterday in Abuja, stated that the decision was due to its inability to foot the bill.    “The explanation for that is that the government does not have the capacity to foot the bill,” stated a ministry source, who confirmed the amount.The ministry, however, said the government was still negotiating to see how the amount could be reduced, as it was seeking cheaper hotels for the prospective evacuees.

The Guardian yesterday reported that Air Peace was denied landing right permits; hence had to delay the evacuation exercise till Nigerian and Canadian governments resolved the grey areas.   But sources from the Ministry of Foreign Affairs yesterday disclosed that the Canadian High Commission had opened talks with Ethiopian Airlines for the evacuation of Nigerians. Ethiopian Airlines (ET) has been airlifting Canadian citizens from different parts of Africa lately.   The federal government, through the ministries of Aviation and Foreign Affairs, has, however, waded into the matter, insisting that the Nigerian carrier has to operate the flight, in tandem with its new position that all evacuation flights must be conducted by Nigerian carriers.   It was learnt that ET is charging $2, 500 per voluntary returnee for the flight already planned for Monday, May 18, while Air Peace charged $1,134 for the same trip. To date, 319 passengers have paid to the Nigerian airline, which has concluded plans to operate full flight to the North American country.

Some of the Nigerians, who had booked and paid Air Peace for the flight, were already complaining about the insistence of the Canadian High Commission to choose a foreign airline over a Nigerian carrier.
Shocked by the decision of the Canadian High Commission, an official of the Nigerian carrier said Air Peace had successfully flown to 40 countries, including Canada, the United States (US) and the United Kingdom (UK), noting that it was the airline that evacuated Israeli citizens from Nigeria in March. 2
The official added: “We have done many international flights, including landing in Canada. We have made 19 flights to the US since 2014. We have flown to Tel-Aviv several times and in March, we evacuated over 200 Israelis from Nigeria back during this COVID-19 lockdown. We have scheduled flight operations to United Arab Emirates (UAE), UK, Ireland, China, Turkey, Germany, Iceland, Switzerland and other countries.
“We have IATA Operational Safety Audit (IOSA) certification and we are a member of IATA. We have also evacuated Nigerians from South Africa during the xenophobic attack of Africans there.”
Reacting to the incident, former director general of the Nigerian Civil Aviation Authority (NCAA), Benedict Adeyileka, described the action of the Canada High Commission as political, urging the federal government to stand firmly on its position that a Nigerian carrier should conduct the airlift.

“I am a nationalist to the core. Anything Nigerian is good enough as long as it is qualified to carry out the operation, and Air Peace has international operation experience.

“I insist that the Nigerian government should put its foot down on this. Nigerian carriers should not be stopped from conducting international operations,” he said

Private Creditors Form Group to Negotiate Africa Debt Relief - BLOOMBERG

MAY 16, 2020


  •  Creditors warn against blanket approach to relief on continent
  •  Group represents $9 trillion of assets under management

Private creditors representing more than $9 trillion of assets under management formed a group to negotiate debt relief for African nations, warning of the risks of a blanket approach to the process.

The so-called Africa Private Creditor Working Group will assist African countries and other debt providers to cushion the economic impact of the coronavirus pandemic on the continent, it said in a statement Friday. The group represents 25 asset managers and institutions that financed countries and corporates via Eurobond, syndicated loans and trade finance.

African countries are asking official and private creditors to temporarily suspend $44 billion in debt payments this year in order to channel scarce resources to contain the spread of the coronavirus. Some investors are concerned that countries could unilaterally halt payments, locking them out of debt markets and hurting creditors as well, said Lars Bane, director of Farallon Capital Europe LLP and a member of the group.

“There is a bit of concern in terms of a growing narrative pushing for this blanket standstill and even more concerning, debt forgiveness in Africa,” Bane said in a phone interview. “There is genuine consensus that you do have to have a case-by-case approach to have the best outcome for both the borrowers and lenders.”

The group’s members include Aberdeen Asset Management Plc, Amia Capital LLP, Ninety One U.K. Ltd., Pharo Management LLC and Greylock Capital Management LLC.

An understanding with investors that clarifies debtors’ positions on future payments could reduce sovereign-bond yields and help governments return to international capital markets soon. “Until this issue is clarified, none or very few African issuers will have market access in the near future,” Bane said.

Specter of Default

The pandemic has raised the specter of a slew of debt defaults in developing countries that had to shut down their economies to try and stop the spread of the virus. Demand for the raw materials many of the nations produce has plummeted.

For debt-relief advocacy group Jubilee Debt Campaign, private creditors will have to take losses as poor countries ramp up spending on health and social protection measures.

“Private creditors lent at high interest rates to poor countries because they claimed loans were high-risk,” said Tim Jones, head of policy at the campaign. “The risk has come home to roost and lenders need to accept they cannot make large profits from these loans.”

China to allow limited US passenger flights - THE GUARDIAN

JUNE 04, 2020

China on Thursday said foreign airlines blocked from operating in the country over virus fears would be allowed to resume limited flights, lifting a de facto ban on US carriers, a day after Washington ordered the suspension of all Chinese travel into and out of the US.

The apparent decision to step back by Beijing comes as tensions between the world’s two superpowers are sent soaring by a series of issues including Donald Trump’s accusations over China’s handling of the pandemic, Hong Kong and Huawei.

The latest spat was rooted in the Civil Aviation Authority of China (CAAC) deciding to impose a limit on foreign airlines based on their activity as of March 12. Because US carriers had suspended all flights by that date their cap was set at zero, while Chinese carriers’ flights to the US continued.

On Wednesday the US said it would block Chinese passenger flights from June 16, raising concerns of another front being opened up in the economic titans’ standoff.

But the CAAC on Thursday said all foreign airlines not listed in the March 12 schedule would now be able to operate one international route into China each week.

Relations between Washington and Beijing have become increasingly strained in recent months after Trump accused China of causing the virus intentionally, while a plan to impose a strict security law on Hong Kong has increased tensions substantially.

The US has also imposed restrictions on Chinese telecom giant Huawei and ordered a probe into the actions of Chinese companies listed on American financial markets.

For its part, Beijing has mocked the US stance on Hong Kong in light of civil rights protests across the US following the police killing in Minneapolis of George Floyd, an unarmed African-American man.

At the same time, China has gradually relaxed strict air travel caps on some foreign firms as the coronavirus outbreak in the country appears to be under control.

Beijing said last week it would almost triple the number of permitted flights to and from China in June following an outcry from Chinese stranded abroad.

China has also set up fast-track entry procedures for business travellers from several other countries, including Singapore and South Korea.

Passengers must be tested for COVID-19 upon arrival in China.

The CAAC said Thursday that routes whose passengers all test negative for three consecutive weeks will be allowed to operate an additional flight each week.

Routes with five or more passengers testing positive will be suspended for at least one week, CAAC said.

10 Ways to invest in stocks while on a budget - THE GUARDIAN

JUNE 04, 2020

The purpose of investing in stocks is centred around the accumulation of wealth while the investor is busy with life and to have money that works for the investor with minimal effort so that the benefits can be reaped at a later stage.

Money is put away in investments with the hope that it can be grown over time, but to achieve this, investors will need some capital to start off with and when preparing to invest in stocks, setting a budget is one of the crucial steps.

Buying stocks cannot be compared to purchasing items such as a home, or a car, there is no significant down payment involved but with constantly changing economies and financial markets, investors with small budgets may seem intimidated.

It may require that some investors take some time in saving up cash that can be put towards investing in stocks and it will take a considerable amount of discipline and patience, and despite a very tight budget, anyone can put capital towards stocks.

  1. Determine how much you currently have to invest Traders will need to evaluate their finances in great detail to determine how much they can invest, keeping in mind different prices on stocks along with fees pertaining to brokers along with compensating for any losses incurred. It is imperative for investors to consider whether they will be managing their own investments, or whether they will need someone to aid them in doing so. Despite the prices on shares, investors will need to evaluate different brokers to determine which brokers cater for their budgetary limitations.
  2. Create a budget Investors can create a budget along with a budget sheet to have a clearer idea of what they can put towards investment in addition to having a comprehensive layout of expenses. The importance of this is to be able to see what funds can be put towards investment and if the investor is serious about investing, what can be done and where to minimize expenses in an effort to add onto existing capital.
  3. Every penny counts To manage existing capital and to save towards larger investments over time, investors can consider opening an automatic savings account, which is offered by an array of banks and financial institutions. While doing routine banking, the banking institution rounds every purchase made with a debit card to the nearest dollar, or currency equivalent, with the change being deposited into the savings account.

    It may seem like an insignificant notion but keeping in mind that small amounts contribute to more substantial ones that can be added to the investor’s investment pool which can be used in the foreseeable future towards buying larger stocks.

  4. Conduct research on companies A crucial step towards investment is to research companies to get an idea of their financial and stock performance, to determine whether it would be a good investment and whether the investor will get sufficient return on their investments. By finding several companies that seem favourable to the investor, the investor can contact their investor relations department, or view their investor relations section on their website for e.g. MTN. Through this, the investor can obtain information pertaining to sales, the company’s cash on hand, debt, the history on stock prices along with dividend pay-outs. Working on a limited budget will mean that the investor cannot afford to make the wrong investment choice by choosing a company that offers little return on dividends.
  5. Companies that offer stocks below $100 When investing at stocks, to start off, the investor will have to work with the budget that they have while working on an investment pool that will allow them larger investments, or investments in larger companies. Some popular companies that have stocks at $100 per share include, but is not limited to: CVS Health Corporation (CVS) – $66.56 Ford Motor Co. (F) – $5.85 Express Scripts Holding Co. (ESRX) – $70.37 HP Inc. (HPQ) – $15.01 Newell Brands Inc. (NWL) – $13.58 Share prices indicated are as per the NASDAQ Stock Exchange on the date and at the time that this article was written.
  6. Get some professional help Investors who are unsure about investing on a budget can consult professional stock and investment experts on how they can go about investing, which companies to start off with and how they can build towards a larger investment pool. Being on a budget should not stop investors from buying stocks, it should be seen as an early lesson in managing funds with smaller capital so that investors will more efficiently manage their money as their capital increases.
  7. Making an initial investment A lot of companies have an investment program in which investors can enrol once they have decided on a company with stocks that suit their budget, alternatively, investors can buy stocks by using a stockbroker. Investors need to keep in mind that stockbrokers have their set fees with regards to minimum account deposits, fees pertaining to investments, deposit, withdrawals, and other fees.

    When working on a budget, it may be more cost-effective to enrol in investment programs as they are still done through brokerages, but the company normally covers the brokerage and administrative fees for stock purchases.

  8. Consider investing in ETFs Exchange traded funds, or ETFs, trade a lot more like stocks and it may seem a lot less intimidating to investors who are not yet quite prepared, skilled, or experienced enough to select several individual stocks on their own. ETFs also provide investors with the chance to diversify their portfolio and mitigate risks simultaneously. Due to diversification, should the stock of one company within the ETF perform poorly, it will not affect the investor’s entire portfolio so significantly.
  9. Make use of Robo-Advisors Robo-Advisors help to simplify investments along with providing more accessibility. It may help the investor who is investing on a budget cancel out unnecessary fees and minimize potential losses that they cannot compensate for with their limited capital. Automated financial planning platforms are driven by algorithms with the benefit of extraordinarily little to no human contact. The companies behind Robo-Advisors work to collect the investor’s information, goals, and budget, and then offer advice. Should the investor be happy with the offer and the parameters set based on their investment needs, the Robo-Advisor invests assets automatically while tracking the investments in the background, eliminating additional fees.
  10. Pay attention to your investment Should the investor prefer to handle their own investment, it is necessary to track them. Any investments made in the stock market should be done with a long-term goal in mind, for a minimum of three years. Over this course of time, investors will need to track the progress of their investment, monitor stock market conditions, and identify potential events that may impact on their investment so that they can take the necessary steps to avoid losses. Should any events or circumstances indicate a direct impact on the investment, the investor will have to decide whether to keep their investment or sell it and invest somewhere else.

Final Thoughts Despite working with financial constraints that limit the capital that can be invested, with little effort and some diligence, anyone can invest and be successful in doing so. The importance is to get started, conduct research and not to settle for the first, best share that may present itself. The aim is to get a start on the investment, and to grow capital slowly and steadily, some of which can be used towards larger investments.

Dollar slows slide as Sino-U.S. tensions escalate - REUTERS

JULY 23, 2020

BY  Tom Westbrook

SINGAPORE (Reuters) - The dollar crept off milestone lows against other majors on Thursday, and held on to gains against the yuan, as heightened Sino-U.S. tensions kept currency markets cautious.

The United States gave China until Friday to close its consulate in Houston amid accusations of spying, and President Donald Trump said it was “always possible” other Chinese missions could be ordered to close as well.

China has vowed to respond, and the escalation in tension between the world's two largest economies sent the yuan CNH= on its sharpest slide in nearly two months on Wednesday and helped the greenback find support in Asia on Thursday.

The euro EUR=EBS sat at $1.1580, about 0.2% below a 21-month high of $1.1601, which it hit overnight in the wake of Europe's leaders agreeing on a coronavirus rescue package.

The Australian dollar AUD=D3 pulled back from a 15-month peak and drifted around $0.7151, while the kiwi NZD=D3 was a touch below Wednesday's six-month top at $0.6678.

Moves were slight and volumes were lightened by a public holiday in Japan.

“The market is still trying to ascertain whether this increase in geopolitical tension is going to be enough to derail the positive vibes we’ve been seeing,” said Rodrigo Catril, senior FX strategist at National Australia Bank in Sydney.

“Recent history will tell you that the market will tend to digest this stuff and carry on in its merry way...but a bit of caution is warranted, and the yuan moving higher is probably the canary in the coalmine that we need to keep an eye on.”

The yuan is a barometer of Sino-U.S. relations and it recovered a little from a one-week low, but kept to the weak side of the 7-per-dollar mark at 7.0030 in offshore trade.


However, dollar gains were limited with the greenback barely lifting from a four-month low against a basket of currencies =USD, sitting at 94.931. July so far is its worst month against the euro since January 2018 and that weakness is fanning out across the board.

Caution and dollar softness helped the safe-haven Swiss franc CHF= to a four-month top of 0.9281 per dollar, but the yen JPY= was rangebound at 107.13 per dollar.

U.S.-China ties have worsened sharply this year over issues ranging from the coronavirus and telecoms-gear maker Huawei, to China’s territorial claims in the South China Sea and clampdown on Hong Kong.

The U.S. State Department said the Chinese mission in Houston was being closed “to protect American intellectual property and Americans’ private information.”

Chinese state media said on Thursday that the move was a political ploy ahead of November presidential elections, and one source with knowledge of the matter told Reuters that China was considering closing the U.S. consulate in Wuhan in response.

Citi analysts expect some kind of Chinese reply, but they do not think it will derail the trade deal - which is the main focus for markets - and advise betting yuan rises.

“We think the Phase One trade deal is likely to hold into the U.S. election and the market may shift attention to China’s relative economic outperformance,” said Johanna Chua, a Citi strategist in Hong Kong, in a note.

Other threats to the global coronavirus recovery are also growing.

South Korea slipped into its first recession since 2003 as the country’s exports fell by the most since 1963, showing Asia’s fourth-largest economy has a considerable road back to recovery.

Another day with more than 1,100 U.S. coronavirus fatalities also underscored the growing risk to recovery there. Weekly jobless claims due at 1230 GMT will offer the next checkup on economic progress.

Reporting by Tom Westbrook; Editing by Sam Holmes

Trump engages Africans in diaspora for US presidential campaign - THE GUARDIAN

JULY 23, 2020

By Adaku Onyenucheya

*Assures second term in office would bring robust engagement, productive partnerships

With the United States (U.S) presidential around the corner, the Donald Trump campaign team has pledged a robust engagement and productive partnership for the development of the African continent, while urging Africans in the Diaspora to cast their votes for Trump.

The Trump campaign has adopted the Africans for Trump 2020 campaign team, as well as collaborated with Black Voices for Trump to ensure Diaspora African votes go to President Trump in the upcoming November 3, 2020, US elections.

Although there have been controversies surrounding Trump’s leadership and attitude concerning Africa, especially when he referred to Africa as “Shithole”, Trump stands a chance of winning the second term, especially with the recent Gallup poll of June, 2019 surprisingly showed that Trump’s approval rating among Africans stood at a whopping 52 per cent.

This was made known at a global zoom event tagged “MAGA Meet-UP”, hosted by the Trump Campaign’s Black Voices for Trump, which had hundreds of participants from all over the world.

The Zoom meeting hosted by the Director-General of Black Voices for Trump, Harrison Floyd, and Deputy Director, Gail Wilson, who is a senior member of Donald Trump for Resident Advisor Board and close friend of the Trumps, had Jack Brewer, who represented the president.

Brewer, who is a devoted philanthropist, whose philanthropic footprints in Malawi through Joyce Banda Foundation has seen more than one million children benefit from diverse poverty alleviation programs, eulogised diaspora Africans, highlighting their amazing achievements and immense contributions to the economic framework of the United States

The former NFL safety and 3x team captain who played for the Vikings, Giants, Eagles and Cardinals, assured that Trump is passionate about development in Africa, while he listed a plethora of President Trump’s accomplishments on the continent of Africa.

Brewer said Trump, saddened by the Chibok situation in Nigeria, reached out and ensured that the girls who were lucky to escape captivity, were brought to the United States, where his daughter, Ivanka hosted the girls at the White House as they were cleared for college education on scholarships

Listing further Trump’s achievements in Africa, Brewer noted that over 4,000 Liberians on Temporary Protected Status were recently cleared for Permanent Residency/US Citizenship under a Bill signed into law by President Trump.

Brewer noted that during the former president, Barack Obama, Liberians had waited for waited 20 years, hoping it would happen under, which did not.

Also touched by the senseless killing of Ambazonians in Southern Cameroon, president Trump, through the State Department moved to cut US funding running into millions of dollars to the Republic of Cameroon until the government acted responsibly and ensured the safety of all its citizens.

According to Brewer, Trump through the US department intervened in the South Sudan catastrophe where thousands were dead and millions displaced as rival factions engaged in supremacy battles with the incumbent government.

He said Trump compelled the warring parties to make peace, by using the instrument of sanctions on the suspected officials behind the violence.

Trump administration announced a Global Alliance against Religious Persecution, involving about 19 countries including the United Kingdom, to provide logistics to mitigate future attacks on religious liberties in countries where such religious persecution inspired by the proliferation of terrorist networks and attacks on Christians are prevalent, especially in Sub-Saharan Africa.

He added that shortly after, President Trump signed a historic Executive Order that made Religious Freedom a foreign policy priority of the United States, with a $50 million per annum budget from the US government, adding that by this executive Order, the USAID will work with local governments and agencies to ensure that no Christian or anyone belonging to any religion is ever again attacked or persecuted for their faith.

Brewer further revealed that the Trump administration earmarked over $8 billion dollars for projects aimed at permanently lifting Africa and Africans out of poverty and not just stuffing them with temporary palliatives that bear no enduring fruits.

Brewer, however, assured that President Trump’s second term in office will see a more robust engagement and productive partnership with Africa, to return the continent to her pride of place.

Edith Akridge the daughter of the former and first female president of Malawi, Mrs Joyce Banda, quickly switched sides with ease when she saw the prospects of a more beneficial partnership for Africa, with the Trump team.

She worked tirelessly behind the scene to make this historic event happen.

Also speaking, Pastor Forson Swanzy, who is a Ghanaian and has been a huge influence on the efforts aimed at lifting Africa out of poverty, provided unequalled spiritual inspiration to the team.

Nollywood actor and social influencer, Joseph Okechukwu took the floor and thanked the Trump campaign for the initiative, which he had prayed and hoped for, so long.

He highlighted some of the accomplishments of President Trump on the continent that continues to endear him to the US president.

Okechukwu, who has been a Trump supporter since 2016, painted a bleak picture of what could become of Africa, with respect to terrorist attacks, if president Trump was not re-elected.

He wondered why Africans would have a problem voting for a man who is doing and has done more for Africa in three short years than a black man in the White House could in eight whole years!

Okechukwu has relentlessly debunked misconceptions about Trump on the continent, using his Social Media platforms and at times making publications on National Newspapers in Nigeria.

Recently, Okechukwu set up a campaign group, “Africans for Trump 2020” aimed at mustering Diaspora African votes for Donald Trump, a man he believes has shown more love to Africans, than any other American president in history.

Dollar hits four-month lows as Sino-U.S. tensions loom - REUTERS

JULY 23, 2020

BY  Ritvik Carvalho


LONDON (Reuters) - The U.S. dollar hit four-month lows against a basket of peer currencies on Thursday, resuming its slide as investors took a wait and see approach to tensions between the United States and China.

FILE PHOTO: 3D printed percentage symbols are seen in front of dollar banknotes in this illustration taken May 25, 2020. REUTERS/Dado Ruvic/Illustration

The United States gave China until Friday to close its consulate in Houston following allegations of spying.

China has vowed to respond, and the escalating tension between the world's two largest economies sent the yuan CNH= on its sharpest slide in nearly two months on Wednesday.

That slide reversed on Thursday, with the offshore yuan bouncing back to the weaker side of the 7 per dollar mark. CNH=

“Retaliation for the Houston closure is now widely expected - the relative severity of which will offer markets some guidance on Beijing’s engagement strategy into the 2020 elections,” said UBS strategists in a note to clients.

“U.S.-China tensions generate volatility, but it is the stimulus and recovery dynamic that we expect will prove more dominant.”

UBS forecast the yuan - a barometer of Sino-U.S. relations - would reach 6.8 per dollar by the end of 2020, and 6.7 by the first half of 2021.

The index that measures the dollar against peer currencies hit its lowest since March 9. The dollar index has lost nearly 8% since its March 20 peak, when a global dollar funding crunch saw a surge in demand. It is down 1.5% year-to-date. =USD

U.S.-China ties have deteriorated this year over issues ranging from the new coronavirus and telecoms-gear maker Huawei, to China’s territorial claims in the South China Sea and Hong Kong crackdown.

The U.S. State Department said the Chinese mission in Houston was being closed “to protect American intellectual property and Americans’ private information.”

Chinese state media said on Thursday the move was a political ploy ahead of November presidential elections, and one source with knowledge of the matter told Reuters China was considering closing the U.S. consulate in Wuhan in response.

“If China does limit its retaliation to closing the Wuhan consulate, the market will probably take it in stride, but if China instead decides to do something that escalates the tensions between the two countries, we could quickly switch to a ‘risk-off’ mood,” said Marshall Gittler, head of investment research at BDSwiss Group.

Against the safe haven Japanese yen, the dollar was flat at 107.15. JPY=

The euro EUR=EBS was at $1.1573, just below a 21-month high of $1.1601 hit earlier this week after Europe's leaders agreed a recovery fund.

The Australian dollar AUD=D3 retreated from a 15-month peak to around $0.7151, while the kiwi NZD=D3 was just below Wednesday's six-month top of $0.6678.

Reporting by Ritvik Carvalho; additional reporting by Tom Westbrook in Singapore and Barbara Lewis

Nigeria's Debt to Hit N33 Trillion As Govt Plans Fresh N4.28 Trillion Loan - DAILY TRUST

JULY 23, 2020

Abuja and Lagos — Nigeria's debt burden will hit N32.91 trillion as the federal government has notified the National Assembly of a fresh plan to borrow N4.28 trillion to fund the 2021 budget.

Daily Trust reports that the country's debt stocks currently stood at N28.63trn at the first quarter 2020.

This is even as just only about 30 percent of the 2020 budged has been implemented so far.

The planned borrowing of N4.28trn was contained in the Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) forwarded to the Senate Tuesday by President Muhammadu Buhari for approval.

The final draft of the budget would be prepared based on the parameters and fiscal assumptions of the approved 2021-2023 MTEF/FSP.

In the fiscal document, the government projected the sum of N12.65 trillion for the 2021 budget.

It also projected the sum of N5.16 trillion as budget deficit for 2021 up from N4.98trn in the 2020 budget.

The N5.16 trillion deficit represents 3.62 per cent of estimated GDP, well above the threshold of 3 per cent stipulated in the Fiscal Responsibility Act 2007, according to the document.

The government noted that the deficit would be financed by new foreign and domestic borrowing of N4.28trn; N205.15bn from privatization proceeds and N674.11bn draw-downs on existing project-tied loans.

It said that the projected debt service/revenue ratio at 47 percent (actual for 2019 was 58 per cent) raises some concern about the sustainability of FGN debt.

According to the government, the country is faced with a serious revenue problem rather than a classic debt problem.

Experts react

A political economist and faculty member at the Lagos Business School, Professor Bongo Adi, said: "It is not about borrowing money, somebody has to play, and the burden of payment will be burned by the ordinary citizens.

When the money is borrowed, we don't have the institutions to guarantee conversion to value.

"Our currency keeps losing value. We become a highly indebted country and poverty becomes endemic.

The result is that the funds that we need to provide social services will go to debt service."

According to him, the real question before the fiscal managers is: what are the options if the federal government chooses not to borrow?

He said: "If the kind of money people are wasting in government agencies is anything to go by, it means we are borrowing to waste, so how can we be justifying borrowing in the first place."

A fellow of the Institute of Chartered Accountants of Nigeria and the Chartered Institute of Taxation of Nigeria, Mustapha Hussain Olanrewaju, noted that borrowing to fund a budget is not bad in itself, it has to be a function of the nation's revenue capacity.

"A point where our revenue is unable to support our borrowing and this is largely because Nigeria borrows mostly for consumption.

"If a borrowed fund is not applied to projects that can generate revenue in return, there is no way the fund will be able to fund itself.

"So, any extra borrowing without improving on our revenue sources will amount to excessive gearing," he said.

He advised the Federal Government to expand its tax bracket by bringing more taxpayers into the tax net.

"A lot of Nigerians do not pay tax, so there is a need to drive more non-oil taxes."

Prof. Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research, University of Lagos, expressed concern over what he called "the penchant by the current administration to borrow money at the slightest provocation."

He said the government had not made serious efforts to reduce the cost of governance and block leakages.

The economist recalled that the 2020 budget had about N2.9 trn allocated for debt servicing.

He disagreed with the excuse by the government on shrinking revenue, saying, "It is only when you want to maintain your level of expenditure that the government becomes a serious problem but if you cut down on your expenditure, the revenue will not be a serious problem."

Nwokoma is also concerned about the country not getting value for money with the projects being undertaken with the loan, noting that the government in the last five years had tripled the level of public debt.

"They met about N12.1trn debt in 2015, now we are talking of over N36trn and they are borrowing more.

"But we cannot see the trickling of infrastructure," he added.

Also reacting, Muhammad Ali, an Economics lecturer at Prince Abubakar Audu University, Anyigba, Kogi State, said over the years, Nigeria's budget had always been with borrowing as part of sources of financing the budget.

He noted that 2021 budget could not have been different in view of the yawning development gaps within limited resources and the impact of the coronavirus pandemic which has slowed down economic activities and reduced global energy demand resulting in downfall in the prices of crude oil which contributes 70% of government revenue.

He said the debt component of 2021 budget has both negative and positive implications.

"Looking at the proposed debt figure, N4.28bn, that is around 33.8% of the total budget.

"The debt will be financed into the future which implies giving more burdens to posterity thereby undermining the need for sustainable development which is the development that takes care of the present without undermining the welfare of the future generation.

"It is clear that the debt being above 3% of proposed GDP has legal implications.

"But away from that, it is not the issue of debt to GDP ratio.

"It is the issue of debt sustainability ratio" he added.

"There is need for reduction of recurrent expenditure and making the informal sector a major part of the sources of national savings in Nigeria" he said.

An Abuja-based financial economist, Samson Simon Galadima, said Nigeria's level indebtedness had reached unsustainable heights stressing that the problem was not debt to GDP ratio (even though that is above the level set by the fiscal responsibility act) anymore, but a debt service to revenue ratio problem.

"And at present, debt service consumes virtually everything generated as revenue.

"If we continue to borrow ( which is clearly the case as we intend to embark on deficit spending), then our problem would likely become worse," he said.


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