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Egypt’s Apex Bank Renews Suspension of ATM and Banking Transaction Fees Until June 2021

The Central Bank of Egypt also decided that to ease the burden on pensioners, the bank will bear the cost of cash withdrawal fees for pension payment cards

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The Central Bank of Egypt (CBE) on Monday decided that it would renew until 2021, a number of procedures which it has put in place since the beginning of the COVID-19 outbreak.

In September, Egypt’s apex bank had renewed the the measures, and they were expected to be lifted by the end of 2020.

Some of the CBE’s decision includes extending the suspension of fees on cash withdrawals from ATMs and the exemption clients from fees and commissions on banking transactions in Egyptian pounds until June 2021.

The Central Bank of Egypt also decided that to ease the burden on pensioners, the bank will bear the cost of cash withdrawal fees for pension payment cards, amounting to EGP 50 million. Added to this, the bank will continue to issue electronic portfolios and prepaid cards for individuals free-of-charge while cancelling fees and commissions on money transactions via mobile phone accounts.

The CBE has also instructed Banks to exempt private-sector vendors from fees and commissions for any transaction which is conducted via non-contact payment instruments, and to allow them to use their accounts without the need to enter a password to encourage them to increase their reliance on non-contact payment instruments and to maintain social distancing, as well as to promote the ‘Tap and Go’ culture, particularly for transactions of not more than EGP 600.

Earlier this year, The Central Bank of Egypt launched an electronic repayment initiative which targeted the distribution of 100,000 points of sale, and granting 200,000 quick response codes free-of-charge.

On 15 March, The Central Bank of Egypt announced a package of procedures which was aimed at easing banking operations during the coronavirus outbreak pandemic.

Some of these included raising the limits of daily transactions on credit cards as well as cancelling fees and commissions at points of sale and on withdrawals from ATMs for six months.

According to the CBE, these measures are part of a number of procedures which it has adopted to enable the bank cope with the pandemic and its likely consequences. These measures are in accordance with the state’s target to ensure the stability of the county’s banking sector and to support the nation’s economy.

The procedures include keeping bank deposits locally in branches as reserves and encouraging clients to make use of credit and debit cards instead of cash.

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Social Media Influencers in Kenya to Pay Digital Service Tax

Key stakeholders have since been eagerly waiting to see how the Kenya Revenue Authority would implement Digital Service Tax under the Finance Act 2020.

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Kenya Revenue Authority (KRA) has announced the introduction of a new Digital Service Taxes (DST) which all influencers doing business on digital platforms will now have to pay.

The taxman noted in a public notice, that there now are increasing numbers of influencers who do not file tax returns or pay taxes on transactions.

“Social media influencers will be liable to pay digital service tax since their income is derived from or accrued from the provision of services through a digital marketplace or by providing digital advertising services in Kenya,” the statement read in part.

The taxman described an influencer as a person who commands a large following on social media platforms through the products or services they use or engage in to drive sales or merely for fame and popularity.

The 2020 Finance Act introduced DST on income from services provided via the digital marketplace in Kenya and will be applied at 1.5 per cent on the gross transaction value (exclusive of VAT).

“Kindly note the tax will be collected and remitted by agents appointed by the commissioner of Domestic Taxes,” Kenya Revenue Authority added.

The authority said last week, that it was targeting it was targeting more than 1,000 businesses and persons under the new digital taxes, adding that the tax shall be due at the time of transfer of payment for the service to the service provider.

A person will be subject to DST if they provide or facilitate provision of a service to a user who is located in Kenya.

Key stakeholders have since been eagerly waiting to see how the Kenya Revenue Authority would implement Digital Service Tax under the Finance Act 2020.

The exact scope of the transactions that fall under the ambit of new tax and the mechanism through which KRA would collect and administer it, has since raised lots of concern among Kenyans.

According to Kenya Revenue Authority, for residents and companies which are permanently established in Kenya, the DST will be offset against the income taxes which is due in the year of income.

As for companies and non-residents without a permanent establishment in Kenya, DST will be a final tax.

The regulations have listed out a number of transactions taking place on digital platforms that attract the new tax.

Many have argued that social media influencers in Kenya are not high income earners, and in some instances push political agenda, further questioning if the tax will fall on the politicians themselves.

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Kenyans in Diaspora Make Sh329.41 billion Remittances Despite Pandemic

Kenyans living abroad made an average Sh6.33 billion weekly remittances in spite of 2020 economic lows induced by the pandemic.

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Latest data from the Central Bank of Kenya (CBK) show that diaspora remittances 2020 rose 10.7% hitting Sh329.41 billion from Sh285.23 billion that was sent home the year before.

In a statement, CBK governor Patrick Njoroge said “Remittance inflows were strongly buoyant in 2020 despite the devastation by Covid-19 in the source countries,”  

“This remarkable growth of remittances has been supported by financial innovations that provided Kenyans in the diaspora more convenient channels for their transactions.”

This, in spite of coronavirus-induced disruption, the share of remittances in the country’s foreign exchange receipts show that about Sh6.33 billion was sent home every week.   The total remittances were 9.56 percent higher than the maximum of Sh300.67 billion ($2.824 billion) that Dr. Njoroge had projected in mid-2020.

The CBK projected a 12 percent fall in remittances to Sh232.2 billion due to job cuts and global economic disruptions.  

Owing to a strong recovery in June, the apex bank revised this to a growth of just one percent. The strong performance came after remittances in December hit Sh32.91 billion. This is the highest to have ever been sent home in a single month.

December is historically a strong month for remittances when Kenyans abroad send home Christmas presents, rent to support families and school fees payments.

The United states with an estimated 90,000 Kenyans is the largest country in terms of remittances. However, the country has emerged as a global hotspot for Covid-19 infections and also experienced turmoil in its recently concluded national polls.

Inflows from Germany, the United Kingdom, Saudi Arabia, and Qatar also make up a significant component.

These remittances improved with gradual recoveries of major economies abroad. Also the various methods of sending cash and mobile money transfers helped in this regard.  

Remittances to Kenya also defied the World Bank projection of about 20 percent expected to hit combined remittances across the world due to the coronavirus pandemic.

Kenya currently comes tops in diaspora remittances among East African countries. The amount the country receives is the single largest source of foreign currency ahead of major cash crops and tourism.

Since 2015 when it surpassed earnings from tea exports, foreign remittances have been Kenya’s largest source of foreign exchange. Other significant sources of foreign exchange include receipts from the hospitality as well as horticulture and coffee exports.

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Nigeria’s First Cargo of New Crude Oil Anyala, Set for Europe

This development is coming less than three months after the announcement of the commencement of oil production from the Anyala West field in Oil Mining Leases 83 and 85.

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Nigeria’s first cargo of the newest crude oil Anyala is on its way to Northwest Europe, according to trading and shipping sources.

This development is coming less than three months after the announcement of the commencement of oil production from the Anyala West field in Oil Mining Leases 83 and 85.

Oil Mining Leases 83 and 85 are in the shallow waters offshore Bayelsa State, Southern Nigeria where FIRST E&P is the operator of the two blocks, on behalf of the Nigerian National Petroleum Corporation/FIRST E&P Joint Venture.

The international oil benchmark, Brent crude, downed by $0.35 to $54.75 per barrel as of 8:15 pm Nigerian time on Monday.

The Aframax Minerva Clara loaded a 700,000-barrel stem of Anyala crude from the Abigail-Joseph floating production, storage and offloading vessel on January 10, and the tanker is on its way to the Fos-sur-Mer terminal, located at France’s Mediterranean port of Marseille, according to data intelligence firm Kpler.

S&P Global Platts quoted sources that a trading house, Vitol, had chartered this tanker, as it has a stake in indigenous producer FIRST E&P.

A market source said the cargo was likely to travel from Fos-sur-Mer to the Cressier refinery in Switzerland through the SPSE pipeline.

The 68,000 bpd Cressier is operated by Varo Energy, which is a joint venture between Vitol, a private equity fund the Carlyle Group, and private investment fund Reggeborgh.

Sources also said that a second cargo will load in March, with some Asian refiners already showing buying interest.

Furthermore, sources added that Anyala has been labelled a medium sweet crude grade, similar in quality to Nigeria’s flagship crude Bonny Light.

When refined, Anyala will produce a high yield of middle distillates, making it attractive to both simple and complex refineries.

The new crude is from Nigeria’s shallow-water Anyala West oil fields in the Niger Delta, the southern part of Nigeria which struck first oil in November.

The fields in blocks OMLs 83 and 85 are expected to reach 60,000 bpd when fully developed, according to FIRST E&P.

Anyala is Nigeria’s newest oil development since the start-up of the giant Egina field in late-2018.

Seven development wells have been planned in Phase 1 in the Anyala West field (OML 83), which will be developed along with the nearby Madu field in (OML 85). The project is estimated to contain 300 million barrels of crude oil recoverable reserves.

Nigerian oil output has fallen sharply in the past six months as it has come under pressure to adhere to its OPEC+ cut obligations. Some of the country’s key grades like Qua Iboe, Forcados, and Brass River have also recently faced outages.

Nigeria’s crude and condensate production slumped to around 1.66 million bpd in 2020 from 2.04 million bpd in 2019, according to S&P Global Platts estimates. This was its lowest annual output figure since 2016, when militancy in the Niger Delta pushed output to as low as 1.60 million bpd.

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