In a desperate move to save an ailing economy closing in on a Ksh9 trillion ($90 billion) debt ceiling, with the risk of debt distress rising to ‘high’ from ‘moderate,’ Kenya has terminated part of the tax relief measures extended to cushion households and businesses from the adverse impact of the Covid-19 global pandemic.

Kenya’s National Treasury Cabinet Secretary Ukur Yatani on Friday issued a statement saying the corporate tax rate also reverts to 30 percent from 25 percent while the value added tax (VAT) reverts to 16 percent from 14 per cent.

The treasury clarified that “these are not new tax rates but just a return to the prevailing tax rate before the pandemic.”

However, the government will continue to cushion low-income earners by retaining 100 percent tax exemption/relief for those earning monthly incomes of Ksh24,000 ($240) and below.

The announcement comes as it emerged that Kenya’s risk of debt distress increased from moderate to high as the government’s debt accumulation closes in on the Ksh9 trillion ($90 billion) ceiling, breaching several debt sustainability indicators and narrowing the space for additional borrowing.

Read also: Kenya’s debt repayment to India and China is piling up

With close to half of the total revenue collections going towards debt repayment, Yatani faces a difficult task in financing government operations and infrastructure development projects.

Kenya’s apex bank says the country’s risk of debt distress has been exacerbated by the impact of the pandemic.

“The rapid pace of debt accumulation has resulted in increased interest and principal repayments in the past six years. However, revenues and export earnings have not increased in tandem with debt service. As a result, the ratio of debt service to exports and debt service to total revenue increased, signalling potential debt distress,” according to the Central Bank of Kenya in its Financial Stability Report (2019) released last week.

Also, data from Kenya’s Treasury shows that as at August this year, the country’s stock of public debt stood at Ksh7.06 trillion ($70.6 billion), accounting for 69.2 per cent of the gross domestic product, compared to the East African Community convergence criteria of 50 percent.

This $70.6 billion, together with committed undisbursed debt of Ksh1.35 billion ($13.5 million) translates to a stock of public debt of Ksh8.41 trillion ($84.1 billion) against a ceiling of Ksh9 trillion ($90 billion) implying limited space for additional borrowing, according to the National Treasury’s Post-Covid-19 Economic Recovery Strategy (2020-2022).

Kenya has already breached the solvency indicator; present value of the external debt-to-exports ratio and the liquidity indicator; external debt service-to-exports ratio, which are already above the thresholds, according to the NationalTreasury’s Quarterly Economic and Budgetary Review report.

The African Development Fund, which is a part of the African Development Bank Group has approved a $71.5 million loan for the improvement of roads in one of Uganda’s high-end tourist destinations in the south-western districts of Kabale and Kisoro.

The African Development Fund (ADF) Board said in a statement that the loan was approved on December 3, to pave sections of two roads which will improve road transport in the area as well as boost

The money will finance the upgrading of roads and ease movement and connectivity to the popular tourist destinations Lake Bunyonyi and Mgahinga National Park.

Lake Bunyonyi is the second deepest lake in Africa, and also known for luxury island holiday resorts, while Mgahinga Park is famous for mountain gorillas and golden monkeys.

Related: AfDB approves $1 million grant to help Uganda fight Ebola

The Fund explains that the central element of the project is to upgrade and pave 34km of the Kabale-Lake Bunyonyi-Kabeho circuit and the Kisoro-Mgahinga Park Gates road, as well as construct two roadside markets, farm produce holding facilities, and four ferry landing sites on Lake Bunyonyi.

AfDB’s Bank Director of Infrastructure and Urban Development Amadou Oumarou said “This innovative and integrated infrastructure development project is poised to increase market development, widen business opportunities and scale up food productivity, enhancing income levels in South-western Uganda.”

The financing will be sourced under ADF-15, the most recent replenishment of the Fund, which is the concessional lending window of the African Development Bank Group.

The loan represents roughly 86 percent of the project’s total costs and the government of Uganda will fund the remaining $11.9 million.

Read also: Uganda Safeguards Financial Stability Amid COVID-19

The funds will also underwrite the provision of two ferries with navigational aids and the provision of technical assistance to the government to strengthen road safety regulations and support implementation of inland water transport aspects of the project.

The project also makes provision for relocation and compensation of those affected.

Through this approach, blending investment in road renewal with investment in farming and other infrastructure, ADF aims to increase market access for farm produce, increase productivity in a rural part of the country, and strengthen social welfare.

Expected outcomes include improved tourism earnings, higher farm gate prices for commodities, increased school enrolment, and stronger hospital attendance in the project area.

The loan aligns with the government of Uganda’s third National Development Plan 2020/21-2024/25 under its Vision 2040. It is also consistent with the AfDB Group’s 10-year strategy 2013-22, Pillar I of ADF-15 strategic priorities as well as two of the High-5s operational priorities, namely, feed Africa and improve the quality of life for the people of continent.

Prominent Nigerian businessman and former presidential aspirant, Chief Harry Ayoade Akande, is dead. He was aged 77.

A statement issued by his son, Mr. Olumide Akande, on behalf of the family said he died in the early hours of Saturday following a brief illness.

”In the early hours of Saturday, December 5, 2020, our patriarch Chief Harry Ayodele Akande passed away following a brief illness,” the statement read.

”Chief Harry Akande was an astute businessman of international repute whose legacy and influence cut across continents.

”But by far his greatest passion was for a better Nigeria that guaranteed equity and justice for all. It is our fervent hope that this will be a reality in the not too distant future.

”His passing is a huge shock to his immediate & extended family, friends & associates. We are all grappling to make some sense of it.

”As we seek the repose of his gentle soul, we ask you to in turn to uphold us in your prayers while we pass through this very turbulent period of our lives occasioned by the loss of someone as dear as him.”

Akande, who held the chieftaincy title of Agba Oye of Ibadanland, was born on March 3, 1943. He attended the Olivet Heights in Ibadan for his secondary education, before proceeding to the United States where he bagged his BSc in Accounts and Finance at Hampton University in 1967, and his MBA at the Northwestern University, Kellogg’s School of Management

Akande was one of the founding fathers of the then All Peoples Party (APP) which was the second largest political party at the beginning of the present democratic dispensation. He served as Chairman of the APP Board of Trustees.

Akande later ran for President on the platform of ANPP.