South African based Pick n Pay Stores Ltd. announced plans to enter Nigeria after posting a 26 percent increase in full-year profit.
The company said it agreed to partner with Nigeria Stock Exchange listed AG Leventis & Co. to enter the Nigerian market because of its over 90 years’ experience doing business in Nigeria.
“A key part of the group’s strategy is to establish a second engine of growth in markets in the rest of Africa,” the company said in a statement on Tuesday. Pick n Pay will hold 51 percent of the operation in Nigeria, “which will roll out a combination of large and smaller formats to meet consumer needs.”
Currently, South African retailers are experiencing weak domestic consumer confidence, a weak currency and rising interest rates. The central bank cut economic growth forecast for South Africa to 0.8 percent this year, the slowest pace since the 2009 recession.
While speaking to the press after the company’s year-end results, CE Richard Brasher said:
“The opportunity presented by Nigeria is well-known: a population of 180m, an economy worth US$500 billion, and GDP growth of around 5% a year. Some analysts forecast that by 2030 Nigeria could have 160m households with sufficient incomes for discretionary spending, and a consumer goods market worth more than US$1 trillion.
“The development of modern shopping malls since 2005 in a few major cities reflects rising incomes and changing lifestyle options enjoyed by middle class Nigerians. Existing formal players in this market have relatively little scale.
“Nigeria is a country and a market which Pick n Pay cannot ignore in its quest for long-term sustainable growth. The challenge of course is how to succeed in Nigeria. We can all point to examples which have not worked.
“I set three pre-conditions for success in the Nigerian market:
- First, we need to understand local consumer needs and how these are evolving in the country. We have done an enormous amount of research on-the-ground over the past two years to get this right.
- Secondly, given the complexities of the Nigerian market, we believe a joint venture with an experienced local partner is the right approach. I am delighted with our decision to enter Nigeria with AG Leventis, which has nearly 90 years’ trading experience in the country. AG Leventis has huge expertise in supply chain logistics from their activities in the FMCG, motor vehicle, logistics and real estate sectors, and notable FMCG capabilities through Leventis Foods.
- Thirdly, as elsewhere in Africa, our growth must take place in a deliberate, planned, and unhurried way, without putting the business under undue risk.
“Leventis is a family business with a similar operating ethos to that of Pick n Pay and I am confident that we have the right decision, the right partner and the right plan.”
AG Leventis Group Executive Vice Chairman and CEO Michael Economakis said:
The Highest Corporation Taxes Around the World and the Main Drivers Behind them
Taxes Pay by Corporation Around the World and the Main Drivers Behind them
While corporation tax rates are influenced by the country’s definition, there’s clearly a pattern with developing countries and emerging economies paying higher rates to sustain the country.
The top five richest countries in the world’s corporation tax are relatively varied, with Luxemburg standing at 27.08%, Norway at 22%, Iceland at 20%, Switzerland at 18% and Ireland at 12.5%. It would appear that some countries’ cultures factor into how much tax they pay. For example, Scandinavian countries are proud to pay higher taxes to contribute to social welfare.
On average, Africa has the highest corporation tax rate throughout the world’s continents at 28.45% and South America, the second highest with an average rate of 27.63%. However, Europe stands at the lowest rate of 20.27%. Does this contradict the claim that developed countries pay higher tax?
OECD explained that corporation tax plays a key part in government revenue. This is particularly true in developing countries, despite the global trend of falling rates since the 1980s. Let’s take a closer look at two continents, South America and Africa, paying the highest corporation tax rates in the world.
South America has most countries in highest corporation tax top 10
According to data analysed, Brazil and Venezuela have the highest corporation tax at 34%, followed closely by Colombia at 33%, and Argentina at 30%, making South America the continent with the most countries in the top 10 who pay the highest corporation tax.
It is unclear whether South America, as an emerging continent, is charging higher taxes in order to raise government revenue or to benefit from businesses that are looking to expand internationally and enter new markets. According to research, South America is becoming a popular choice for business to enter, with strong trade links and an advantageous geographic location. Indeed, South America is a large continent where some countries are business friendly and others are harder to penetrate.
Africa: the continent with the highest average corporation tax
Being the poorest continent in the world, Africa unsurprisingly has the highest average corporation tax at 28.45%. With the highest in this data being Zambia at 35% and the lowest being Libya and Madagascar at 20%, South Africa stands roughly in the middle at 28%, slightly above average for Africa overall. Does this mean that South Africa is the safest bet for business?
South Africa is one of Africa’s largest economies, with 54 diverse countries in terms of political stability, development, growth, and population. As South Africa has been a relatively slow growth area over the years, corporation tax dropped from 34.55% in 2012 to the current rate — but was this effective? GDP in South Africa has fluctuated quite dramatically since the 1960s. Business favours countries with political stability, which is something South Africa doesn’t currently have. Furthermore, South Africa’s government debt to GDP sits roughly in the middle of the continent’s countries — is this influencing their corporate tax rate?
|Puerto Rico||North America||37.5|
|Sri Lanka||Asia Pacific||28|
|New Zealand||Asia Pacific||28|
|South Korea||Asia Pacific||25|
|United States||North America||21|
|Saudi Arabia||Middle East||20|
|Hong Kong||Asia Pacific||16.5|
Lucy Desai is a content writer at QuickBooks, a global company offering the world’s leading accountancy software.
African Development Bank Appoints Ms. Yacine Fal as Director General, Cabinet Office of the President
Adesina Appoints Ms. Yacine Fal as Director General, Cabinet Office of the President
African Development Bank has appointed Ms. Yacine Fal as the Director General, Cabinet Office of the President, effective from November 1st 2020.
According to a statement put out by the multilateral financial institution, Ms. FaI will oversee the administrative and operational work and activities of the Cabinet Office of the President as the new Director General.
Mainly, “she will provide oversight of all units and departments directly reporting to the President. She will also ensure enhanced delivery efficiency and effectiveness for all Presidential initiatives and Bank operations, as per agreements with respective Vice Presidency Complexes. She will oversee the work of senior staff to improve overall coordination and engagement of the President and Chairman of the Board of Directors with the Board.”
Yacine Fal is a Senegalese citizen with Masters of Law degree from the University of Dakar and obtained her postgraduate degree in international law from the University of Paris X.
Commenting on her appointment, Yacine said “I am greatly honored by the confidence reposed in me by President Adesina to support him in ensuring the successful implementation of his bold vision for the Bank and the continent. I look forward to leading teams in the President’s Cabinet Office to provide managerial, administrative and operational bandwidth and to assure the success of the President’s vision and mandate following his historic re-election with 100% vote of the Bank’s shareholders.”
Speaking on her appointment, Dr. Adesina, the President, AfDB, said “Yacine is a highly capable manager. She brings vast knowledge and experience of the Bank’s legal, procurement, human resources, processes, systems, and operations to her new position. I am delighted to have Yacine lead a restructured Cabinet Office of the President that will comprehensively support the delivery of my vision and mandate to strengthen the Bank and accel erate Africa’s devel opment.”
Global Life & Health Insurance Top Industry by Revenue in 2020 at $4.4 Trillion
Global Life & Health Insurance Industry Leads in Terms of Revenue Generation in 2020 at $4.4 Trillion
According to the research data analyzed and published by ComprarAcciones, life and health insurance will be the biggest industry globally in 2020. The sector has been growing at an average rate of 2.4% from 2015 to 2020 and will surpass $4.384 trillion.
According to Global Data, the insurance sector as a whole raked in $2.611 trillion in 2019 and was the sixth largest. Notably though, an Allianz Global insurance report projects a decline of 3.8% for the industry worldwide in 2020.
Top 12 Publicly Listed Oil Companies Post $80 Billion Loss in H1 2020
2019 was a great year for insurance as premiums grew at a rate of 4.4%. However, the 2020 decline will be over three times worse than after the 2008 financial crisis. At the time, the sector only shrank 1%. An Allianz study projects that in 2021, the growth rate of insurance premiums will return to pre-pandemic levels.
Oil and gas, which was the top industry in 2019, is ranked third in 2020. It is expected to rake in $3.325 trillion in revenue in 2020. In 2019, it made over $4.797 trillion, growing 16.2% in revenue and 36.3% in profits year-on-year (YoY).
The situation in 2020 is vastly different as the top 12 publicly traded oil companies reported a collective loss of $80 billion. According to Anadolu Agency, during H1 2019, they had posted a collective net income of $46.5 million.
On the other hand, banking was the third largest industry by revenue in 2019, raking in $4.424 trillion. However, in 2020, it sits in the eight spot and is estimated to generate $2.341 trillion. Putting this in perspective, the top 5 Chinese banks reported a drop of $9.9 billion in H1 2020 profit. In the US, the top 6 banks increased loan loss provisions from $25 billion in Q1 2020 to $35 billion in Q2 2020.
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