Government Endorses Vodafone’s Coding Programme

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Accra, 24 August 2018 - Government has endorsed a National Coding Programme recently launched by Vodafone Ghana to benefit 10,000 Ghanaian youth in the next five years.

The telecommunications company on Friday August 24th, announced that the coding programme is part of a unique strategy to ignite Ghana’s digital revolution.
Globally, digital coders are reshaping the world – disrupting and demystifying previously existing myths in technology and innovation. It has become an empowerment tool; changing the way businesses operate. Vodafone, through the Foundation, is bringing this closer to the Ghanaian youth in every corner of the country in order to equip them to be competitive in the changing global world of technology.

Deputy Communications Minister, Honourable Vincent Sowah-Odotei, speaking at the launch of the programme, said:

“When we can transform the lives of the Ghanaian youth through coding; our future world of technology as a country is in safe hands. It is fulfilling that our youth can get this opportunity to become change makers with coding. Inasmuch as it is comforting for us that Vodafone is taking the lead in this, we want to also pledge that we are committed to ensuring that they will be given flexible room to operate efficiently; imbibing the latest technology and innovation to succeed whilst bringing immense benefits to our youth.”

Yolanda Cuba, Chief Executive of Vodafone Ghana said:

“We are confident that this initiative will start a revolution that will elevate Ghana from our current normal technological status to a force to be reckoned with in the future. There’s so much coders can do to change the world and today, right here, we are developing the next generation of world changers inspired by Vodafone.”

The programme, which uses Vodafone’s employees as trainers, is targeted at Ghanaian youth aged between 14 and 18 years who have a passion for technological innovation and will typically last for five days in each region.
The Central Region is the next stop for the initiative; beginning on Monday August 27th to 31st at Adisadel College. A total of 50 youth are expected to take part. Interested participants should call 0503635266 or email This email address is being protected from spambots. You need JavaScript enabled to view it.

Source: vodafone.com.gh.

Taxing mobile money decreases usage

2.2 MoMo Tax Story Graphix

This story from Uganda holds great lessons for Ghana that I believe culling it from the Monitor of Uganda and relating it to the progress we have made in Ghana is very important
Over the last 18months, there has been a consistent attempt by many Governments within Sub Saharan Africa to tax mobile money and other ICT related programs and services.

Well some governments have put their tax thirst into action by the introduction of excise taxes as we have seen imposed in Kenya, Tanzania and the most recent one is Uganda. President Museveni signed into law on June 21st 2018, the Excise Duty Amendement Act 2018, which brought in the place the mobile money tax and an determined extension to social media, also called Over the Top (OTT) tax.

The law passed by the Ugandan parliament, imposed a 1 per cent tax on mobile-money transactions, including depositing, sending, receiving and withdrawal, as well as a daily Ush200 ($0.05) over-the-top tax on social media services.

After pressure from consumers, Kampala dropped three of the four levies it had imposed on mobile money transactions, and now maintains only a 0.5 per cent charge on cash withdrawals.
Impact of Mobile Money
Mobile money contributes to financial inclusion and East Africa is one of the largest mobile money markets, accounting for 56.4 per cent of total users in Sub-Saharan Africa. The service enables more efficient payments for goods and services, reduces the informal economy, creates employment and protects vulnerable segments of society from financial shocks.

The positive externalities of mobile money also drive other sectors, such as agriculture, healthcare and education and many more. In short, there are strong incentives for the Governments to support the growth of mobile money, which is the opposite of what an excise duty is typically designed to achieve. Mobile money has increased financial inclusion, particularly amongst the marginalized segments of society.

2.3 MoMo Tax Story Graphix

The Excise Tax (Taxation)

Excise taxes, such as those imposed in Kenya, Tanzania and Uganda, are typically used to address negative externalities. They are, for example, imposed on tobacco sales to discourage people from smoking and by driving businesses to raise the price of cigarettes. As the mobile sector is associated with overwhelmingly positive externalities, the same rationale cannot and should not apply.
In Tanzania, for example, 46% of mobile money users are below the poverty line. The negative impact of taxing mobile money transactions is likely to fall most heavily on these individuals.

Tax Impact for Uganda

Officials from the Bank of Uganda, this week have called the tax discriminative following their engagement with the Finance Committee on Parliament to update legislators on the performance of the mobile money tax.

The officials explained that the mobile money tax, within the first two weeks of implementation has recorded a decline in mobile money transactions with an associated value loss of $182million.

Director of statistics at the Bank of Uganda, Mr. Charles Abuka explained that comparing June against July performance speaks to the loss impact they have recorded in monetary terms. He further proposed that the tax policy, in general, be reviewed by making it broad-based to encourage sectors that are growth points like mobile money.

“It is not always the case that high taxes helps to generate revenue; it might be the case that when you lower them, you get more advantages that can have positive impacts on government revenue,” Mr Abuka said.

Mobile Network operators and mobile money agents have kicked against the policy since March 2018, citing that the tax will make their business extinct. The CEO of MTN Uganda, Mr. Wim Vanhelleputte has said “the MTN business dropped by 30% following the tax introduction on Mobile Money. Our estimations are that if the existing tax regime remains unchanged, we will continue going down further maybe even 35 per cent or even 40 per cent by the end of the year.”

MTN Uganda has said mobile money agents who number about 150,000 in the country are getting 40% less of what they used to earn, and that they now have to pay a 10% withholding tax, which was not the case before.

Financial experts have said, taxing the movement of money discourages trade and commerce, it discourages the formalization of the economy and it interferes with financial intermediation.

2.4 MoMo Tax Story Graphix

Francis Kamulegeya, a UK trained Chartered Tax Adviser and Certified Public Accountant, has said that the Mobile Money tax undermines the progress and successes made in the country in respect of financial inclusion. It hurts the poorest most, and this is already evident on the basis of the impact the tax has had in just five days. It will result in massive loss of employment, both direct and indirect employment in the mobile money sector, it will discourage people from using mobile money services and it will increase the cost of doing business in Uganda

Conclusion

Lessons from Uganda clearly show consumers have lost trust in the mobile money system and are reverting to banks, or heavy use of cash transactions, which once again deepens the informal economy while discounting gains to enhance financial inclusion.

Mobile Money in many markets in Africa is at a nascent stage despite huge volumes and values recorded by Central Banks. Taxing any of these markets undermines the investment case at a time when mobile operators are already under significant cost pressure to expand networks, improve service quality, and address new regulatory requirements.

Governments will have to explore broad-based alternatives to mobile money taxation as it rather stands to deliver better results. For us in Ghana, this holds great of lessons for us. This is why Ghana Chamber of Telecommunications has always advocated caution, that as a people we need to be extremely careful and strategic when it comes to imposing new taxes on these digital services! It validates our school of thought that we should not focus on front-loading taxation but rather on encouraging the use of Mobile Financial Services to engender production and in the long term to grow revenues. It is good that the Ghanaian Government has resisted the temptation to impose taxation on mobile money, OTT or other data services.

I pray that we never end up here where Uganda, Shs672 billion in two weeks, and sacrifice all the hard work that the industry and its regulator Bank of Ghana have built, including Ghana moving to the joint third position with Tanzania who were previously way ahead of Ghana, (World Bank Findex report). If Uganda does not take steps to correct this taxation anomaly Ghana will overtake them in the near future.

It is important that we point to those fixated on taxation of MoMo and other Digital Services to see the Telecom sector rather as a Cash Horse pulling the cart of the economy up the steep hill of development that needs caring for and grooming to unleash its maximum sustainable potential, than a Cash Cow that has to be unsustainably milked to death.
Source: Article written by Ghana Chamber of Telecommunications
http://telecomschamber.com/

 

Govt, telcos urged to collaborate to meet global standards

THE Director of the Vobiss Solutions, Mr Usen Antia, has called for collaboration between the government and telecommunication companies to meet the global technological communication standards.

That, he said, would bring an improvement in technology, thereby speeding the advancement of communication in the various sectors of the economy.

He added that although some telecommunication network providers were making progress in services, there were little interventions in the form of policy implementation which enabled telcos and investors to operate in the country.

Mr Antia said this at the 2018 Furukawa Broadband Systems training and showcase of products to the Ghanaian market which was held on July 6, 2018.

Recounting similar instances in some European countries, he said there were a lot of governmental support for broadband investment since technology was the future for education, governance, as well as huge investment into the future.Mr Antia said with government’s initiatives, moderate policy implementations and advice for both the already grown companies and growing companies could help them function well to meet international standards.

That, he said, would serve as source of employment for the citizenery, improve the standard of living, reduce poverty, generate revenue for the state through taxation and reduce over-dependence on government.

With this, he said the telecommunications operators should not compromise their activities but rather develop means of adopting the fibre network system which could reach the target customers at their various homes at a higher speed.

He added that with fibre network, “data is transferred using light sent down the cable. And Fibre Optic network is often used as an alternative to copper if the data is required to travel long distance at the higher speed.”

“Fibre network connection cannot be cut off from the industry so to bridge the technological gap, Ghana should increase connections to the fibre. Currently, the country has more than half a million connected to fibre,” he said.

Mr Antia stated that with current speed to meet the growing demand of the customers, it was necessary for the Vobiss Solution and Furukawa Electrical Group to collaborate to educate the participants on the need to understand how internet service providers could engage in the huge investment from this industry.

“Our clients, stakeholders and the industry players have to know a lot about fibre network since our companies are now introduced this into the market and help them alongside”, he indicated

Futurity
He said moving forward, it was estimated that the urban population would increase from five million to 10 million; hence, if strategic measures were not put in place, access to internet service would be scarce.

“We believe that internet access is a human right that citizens should enjoy without limitation or interruptions”, he indicated.

He, therefore, appealed to the government, stakeholders, industry players and the country as a whole to do everything necessary to get connected to the fibre network system. — GB

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MTN targets $750M from Ghana IPO

MTN Logo

MTN opened an IPO for 35 per cent of its Ghana business, while separate reports emerged dampening expectations for the company’s float of its Nigeria operation.

The operator group has long been expected to IPO both its Nigeria and Ghana businesses by the end of the year, a goal said to be on track by Group CEO Rob Shuter at the company’s earnings call in early May.

Its Ghana IPO was imposed by the country’s authorities as part of the terms of its 4G licence in a bid to increase local ownership of major companies operating in Ghana.

As a result the float has been marketed to appeal to investors from within the country and just five per cent of the new shares were available to international investors, MTN Group CFO Ralph Mupita confirmed at the launch event.

MTN Ghana CEO Ebenezer Asante added the ability to buy shares through its mobile money platform would increase the appeal of the IPO to citizens, noting: “people the length and breadth of the country do not need to know where the Ghana Stock Exchange is located, they have the Ghana Stock Exchange on their phones.”

In its prospectus, the company said it was the leading operator in Ghana with 17.83 million subscribers and a market share of 55 per cent as of the end of December 2017. It hopes to receive a total of GHS3.48 billion ($747 million) for the 35 per cent stake.

Nigeria progress
In the hours prior to the launch of the MTN Ghana IPO, a spokesperson from MTN Nigeria was quoted by the News Agency of Nigeria calming expectation on the progress of its IPO in that country.

The spokesperson reportedly said the company was still “perfecting” the details and quashed earlier reports it was expecting to receive $500 million from the float – stating no value or specific timeline had been confirmed.

Source: MobileWorldLive