Anticipation, and many other emotions had run wild among South Africans before Finance Minister, Tito Mboweni read out the 2021 budget proposal. Even organised labour prepared for a showdown protest.

What was the reason for sigh of the relief? South Africa’s government will not increase the personal income tax. Although, the rainbow nation will miss out on $3 billion over the next four years. And, now the South Africa Treasury Department will pay for the COVID-19 vaccination.

But Finance Minister Tito Mboweni announced a 1 percentage point cut in corporate tax from April 2022.

 “We are allocating more than R10-billion ($708 million) for the purchase and delivery of vaccines over the next two years,” Mboweni told the National Assembly.

A further 9 billion rand could be drawn from contingency reserves and emergency allocations, if needed, as the final costs remain uncertain for the vaccines.

However, Mboweni cautioned that the roll-out was likely to gather pace only in the second half of the year, hence the threat of further waves of infection continues to cloud the treasury’s forecast on key indicators.

It is predicted that the country will experience real economic growth of 3.3% in the current year, off the low base of last year’s historic lockdown shrinkage, followed by 1.9% in the outer years.

Meanwhile, the government will increase the excise duties on alcohol and tobacco products by 8%, the National Treasury said on Wednesday.

This comes as the Treasury took a decision to reverse its earlier announcement of additional tax measures that would have raised R40 billion amid a revenue shortfall.

In order to make up for some of the revenue lost by the now-canceled income tax increases, the government will jack up taxes on tobacco products and hard liquor.

A packet of cigarettes will cost R1.39 more. Cigar prices were raised by R7.71 per 23g of a rolled cigar.

Fans of vodka, gin, brandy and whisky will have to dig a little deeper into their pockets as the price of a 750ml bottle is going up by R5.50.

A can of malt beer rises by 14c per 340ml can.

After an estimated 7.2% GDP contraction last year, the prospects of cultivating growth depend on the success of economic stimulus measures and the country’s COVID-19 vaccine roll-out — and the extent to which it allows a full reopening of the economy, the minister said.

The news helped send the South African rand to its highest levels since January 2020. The rand strengthened as much as 1% versus the dollar to 14.3950.

Ten-year local government bond yields rallied to an eight-day low of 8.545%, while some sovereign dollar bonds gained more than 2 cents, according to Tradeweb data.

Malawi’s Ministry of Agriculture spokesperson, Gracian Lungu, says the country’s cotton production will see a 70% decline in 2021 with attendant impacts on the country’s forex.

In the recently released crop production estimates, production of cotton which is an important cash crop in Malawi is expected to significantly drop from around 65,000 tons last year to 20,000 tons this year. Apart from cotton, legumes will also see a slight decrease in production.

Since 1980’s cotton production has declined largely because of mixing of different grades, polypropylene contamination, limited grading by farmers, low Ginning – Out – turn (GOT) among others.

Lately, the decline in cotton cultivation has been mostly due to inclement weather, usage of low quality and unsuitable seed varieties, low usage of inputs, lack of credit available to farmers, shift from cotton production to other crops because of reduced international pricing and the inefficiencies in the sector.

The study report attributes the drop to last year’s market challenges which were most impacted by pesticides like Jassids, high moisture levels due to heavy rains, and the effects of the Covid-19 pandemic.

Although Malawi’s estimated production capacity is 600,000 metric tonnes of seed cotton, it couldn’t produce 100,000 metric tonnes of seed cotton despite various government interventions in 2019 its production fell below 20,000 metric tonnes this year.

The state-owned Agriculture Development Marketing Corporation (ADMARC) which had provided inputs, expertise, and markets since 1964 has since shifted focus to other crops like rice, groundnuts, maize, beans, and pigeon peas.  

Funding for African start-ups has declined for the first time after nearly 10 years of growth as investors in the new tech scene continue to be repelled by the Covid-19 pandemic, according to venture capital firm Partech Partners.

In a report, Partech Partners said start-up companies on the continent raised $1.43 billion in 2020, down by 29% from a year ago, which was just two deals above $50 million closed last year compared with 10 in 2019.

“There were hardly any mega-rounds within the African tech ecosystem,” the Paris-based firm wrote in its annual survey of start-ups that have most of their operations in, or get the bulk of their revenue from Africa. “This sharp drop clearly marks the impact of the pandemic and subsequent lockdowns.”

According to a Pricewaterhouse Coopers/CB Insights report, Africa is now showing a reverse trend to much of the rest of the world, including the US where start-up investing reached a record high of $130 billion in 2020, up 14% from the previous year.

Data from Pitchbook pointed out that in Europe and Israel, overall funding increased although in fewer companies.

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Africa’s technology sector, though relatively small, represents one of the highest-growth areas for venture capital investment. Investment into the region increased 74% in 2019, and more than doubled in 2018.

Companies that have performed very well include those whose aim is to fill gaps such as payment platforms that make up for a lack of access to conventional banking and businesses that take advantage of increasing internet access as more people acquire smartphones.

According to Partech Africa General Partner Tidjane Deme, he said: “2021 may see a return of big deals. “Many start-ups who deferred fundraising to wait for better market conditions will be fundraised. So, the deal-flow at growth stage should be quite larger than the usual.”

Still, the region attracted some funding, despite investors’ unwillingness to chip in on larger rounds. The total number of deals rose 44% in 2020 from a year ago, according to the report. Four African countries, including South Africa and Kenya, received 80% of the funds, while Nigeria got the bulk of the equity, and Egypt signed the most deals.

Deals last year, where venture capitalists take returns, included WorldRemit Ltd.’s $500 million acquisition of Sendwave, a money transfer service founded by Somalian Ismail Ahmed. Network International Holdings Plc signed a $288 million-agreement to acquire DPO Group and Stripe Inc. acquired Nigeria’s Paystack for $200 million.