The Brief: Nigeria and Ghana Sign Double Taxation Treaty, Notore Valued at $330 Million

In this week’s roundup, Ghana and Nigeria made a legally-binding commitment to avoid double taxation, the Nigerian fertiliser company, Notore, is now valued at $330 million, and Farid Fezoua is set to take over the reigns at GE Africa.

Nigeria and Ghana Sign Double Taxation Treaty

Nigeria and Ghana signed an agreement recently which aims to avoid double taxation between both nations.

According to the ACCA, “When residents (be they individuals, corporations or enterprises) of any two given countries trade or transact commercially with each other, it gives rise to international trade, or cross-border transactions…Thus, the same income item of $100 [as an example] is subject to territorial double taxation, once in Country A, then again in Country B.”  

This high level of taxation influences corporations to rely on debt financing instead of using equity financing as interest payments can be subtracted, whereas payments to shareholders cannot. Critics of this type of taxation argue that governments should join business and personal tax systems.

In practice, there is no international law forbidding double taxation. Tax treaties affect domestic as well as international law, creating issues in relation to rules of interpretation. However, this treaty could have positive repercussions for both countries. Depending on the details of the signed documents, Ghana and Nigeria’s trade relations will be less costly. The treaty fosters an environment of fiscal surety, which promotes trade as well as investments.

Ghana has signed treaties with other nations in the past. In 2017, the country made an agreement with the United Kingdom, France, Belgium, The Netherlands, Germany, South Africa, Italy, Switzerland, Denmark and very recently, with Mauritius, and the Czech Republic.

The agreement gains authority in Nigeria once both countries present it to the National Assembly for approval. Currently, South Africa is the only nation with an in-force double taxation treaty with Nigeria.

President Buhari Elected as Head of State and Government of the Economic Community of West African States

President Buhari’s colleagues elected him as the Head of State and Government of the Economic Community of West African States (ECOWAS). In a statement, he “pledge[s] to serve and work with” the institution to ensure peace and socio-economic transformation.

He will replace the President of Togo Faure Gnassingbe.

Established in 1975, The ECOWAS consists of fifteen West African countries and is concerned with promoting fiscal integration and collective self-dependence in all areas of activity of the participating countries such as transport, telecommunications and agriculture.

Jay Ireland Set to Retire From CEO Position At GE

Recently, the President and CEO of GE Africa Jay Ireland retired from his role. The retirement will be effective from September 30, 2018, and will see him replaced by Farid Fezoua, who has led GE’s Healthcare business in Africa since 2012.

Appointed to the role in 2011, Ireland has been with the company for 38 years, playing an important part in the development and success of GE. During his career at GE, Ireland led GE Asset Management (GEAM), a global investment firm with approximately $120 billion in assets.

Positive about his experience with GE, Ireland said: “The past 7 years in Sub-Saharan Africa have been the most rewarding of my 38 years…”

He continues to support investment in Africa within various roles. Currently, he is the Chair of the US President Advisory Council on Doing Business in Africa.

Superfood Boosts International Export In Senegal

Baobab is now a “superfood” in the United States and Europe. Previously, individuals in Africa used the fruit for local purposes. However, the fruit has gained an international profile, creating business for a network of producers and suppliers.

Full of vitamin C, calcium and magnesium, the fruit can be grounded into powder and added to smoothies or porridge. Brands such as Coca-Cola’s Innocent, U.K. yogurt maker, Yeo Valley, and U.S. wholesaler Costco are using baobab in various ways in their products.  

This international embracement is a major boost for trade and workers, with exports increasing from 50 tonnes to 450 tonnes between 2013 and 2017. Taerou Dieuhiou, a trader from Senegal, said: “It is a better price now. Now I make more for each sack.”

Nigerian Fertiliser Company Notore Values At $330 Million

Nigerian fertiliser maker Notore Chemical Industries gained a $330 million valuation by listing 1.61 billion shares at 62.50 naira on the Nigerian Stock Exchange. This listing increases the company’s access to capital for development plans.

The company sells fertilisers in Nigeria and exports to West Africa, Southern African, and Europe. Some of its export traders in Europe include: Helm AG, Ameropa, and Yara.

Notore’s success extends beyond the supply of premium fertilisers. They have supported an estimated 14 million farming households in Nigeria through providing appropriate education on best practices for agriculture.