Tanzanian brewers have introduced new pricing and smaller packaging for their alcohol brands in response to a government decision in February 2017 to ban packaging of alcohol in sachets. The ban was effected to curb alcohol addiction and tackle tax evasion, but local producers say the policy has made business tougher in the industry.
Minister of State in the Vice President’s Office (Union Affairs & Environment), January Makamba, has said the government is preparing new legislation to further regulate the packaging of alcohol in the country and stop illegal producers who do not pay tax. This includes a proposal to compel producers to package their products in recyclable bottles with a minimum capacity of 250ml. This move is again another indication of government’s resolve to tackle littering and tax evasion, as it looks to shore up revenue to pursue fiscal goals.
Written by Songhai Analyst, Adedayo Ademuwagun (Lagos)
Songhai Advisory's raison d'etre is to provide local knowledge in support of investment in Sub-Saharan Africa.
For further information, please get in touch: firstname.lastname@example.org
Shell has admitted to dealing with former Nigerian Oil Minister Dan Etete in the purchase of Malabu’s Oil Prospecting License (OPL) 245 from the Nigerian government for US$1.3 billion in 2011. Dutch and Italian authorities are investigating the role of Shell and its partner Eni in the deal. Meanwhile, Nigeria’s Economic and Financial Crimes Commission (EFCC) is also pursuing a lawsuit in the country against both firms for alleged corruption regarding the same deal.
Investigations about OPL 245 will likely continue in the oil giants’ home countries Italy and the Netherlands. In the meantime, Nigerian authorities will press on with prosecution having already won a court injunction empowering the government to temporarily take control of OPL 245 until the case is settled. However, corruption cases have progressed slowly since 2015 and prosecutors have struggled to secure convictions. The OPL 245 case may be similarly affected, but the acquittal of a top judge separately accused of corruption was recently appealed, indicating that authorities will be unrelenting with the anti-corruption drive.
There has been no major disruption to oil output in the Niger Delta in 2017, thanks to a ceasefire in late 2016 resulting from peace talks between the federal government and local leaders. The stability and upsurge in oil revenue is helping the government deal with the struggling economy and pursue budget targets, but what is the outlook?
The present stability in the Niger Delta remains fragile, but it looks sustainable given the relatively healthier relationship between the federal government and local stakeholders. We expect peace talks will be sustained and that the present government will maintain efforts to address the region’s needs in conjunction with stakeholders on the ground. Reports from sources on the ground suggest that corruption investigations affecting top politicians from the region may be temporarily muted to pave way for more cooperation.
President Muhammadu Buhari recently launched a 2017-2020 economy recovery and growth plan (ERGP) that ultimately targets single-digit inflation, real GDP growth of 7% and an oil output of 2.5 million bpd by 2020. Given the significant role that oil revenue plays in the economy, a return to normalcy in the Niger Delta will clearly reflect positively on the investment climate and will help to steer the country towards the attainment of goals laid out under the ERGP. However, risks still remain with Nigeria’s exposure to changes in global oil prices, and from a security perspective, the various stakeholders who are delicately holding together the relative stability in the Niger Delta will be under pressure to maintain the balance and keep the peace.