Transfer Mispricing in Africa: Contextual Issues

Transfer pricing is a significant tax issue and lies at the core of international trade and globalisation. This brief raises contextual issues and challenges surrounding the experience of transfer mispricing in Africa. The brief comes at a time when African countries have consistently exhibited high real Gross Domestic Product (GDP) growth rates in the past two decades, and increased FDI inflows and technological upgrades have aided their high participation in global trade. Despite the profitability of MNEs operations in Africa, the investing firms are paying less in terms of tax. This has created a problem for African countries to raise their revenue base for financing development and poverty reduction programmes. Therefore it is important for Africa to stay abreast with transfer pricing rules and issues worldwide. The brief recommends the way forward for African countries in developing capacity to understand and resolve transfer pricing issues and disputes

Transfer Mispricing in Africa: Contextual Issues

Transfer pricing is a significant tax issue and lies at the core of international trade and globalisation. This brief raises contextual issues and challenges surrounding the experience of transfer mispricing in Africa. The brief comes at a time when African countries have consistently exhibited high real Gross Domestic Product (GDP) growth rates in the past two decades, and increased FDI inflows and technological upgrades have aided their high participation in global trade. Despite the profitability of MNEs operations in Africa, the investing firms are paying less in terms of tax. This has created a problem for African countries to raise their revenue base for financing development and poverty reduction programmes. Therefore it is important for Africa to stay abreast with transfer pricing rules and issues worldwide. The brief recommends the way forward for African countries in developing capacity to understand and resolve transfer pricing issues and disputes

Resource Nationalism and Zambia’s Oscillating Mining Taxation Regime

The parcelling and privatisation of the large state-owned mining conglomerate Zambia Consolidated Copper Mines (ZCCM) involved the signing of Development Agreements (DAs) between the Zambian government and the new private investors. These DAs were concessionary to the new investors, offering low taxation rates, tax exemptions and deductions. But in 2008, under political pressure from the opposition, then President Mwanawasa abrogated the DAs with a new Mines and Minerals Act, removing exemptions and deductions and increasing taxation rates. This action set in motion a decade long period of contestation over mining taxation in Zambia, with the introduction and retraction of numerous mining taxation policies. This paper endeavours to explore the motivations, constraints, and economic and political implications of these oscillating mining taxation policies, in an effort to better understand the dynamics of resource nationalism in Zambia

Risk Perception, Behavioural Response to COVID-19, and the Mediating Role of Information Sources in Zambia

The role of information sources in mediating the relationship between behavioural responses to COVID-19 and its determinants has hardly been studied. This study fills the knowledge gap with a focus on Zambia, a middle-income country. Data was collected using an online questionnaire. The key independent variables were risk perception of COVID-19, risk perception of the health care system (local and global), and risk perception of the big five global health problems (HIV/AIDS, cancer, injury from road traffic accidents, influenza, and diabetes). Risk perception of the health care system was measured by looking at whether or not the respondents trust the World Health Organisation (WHO) and Ministry of Health (MoH) backed COVID-19 vaccines. The three Independent Variables (IV) of risk perception predicted behavioural response as a Dependent Variable (DV). The behavioural response was found as an average of responses on a five-point Likert scale of questions, relating to safety measures taken by respondents against COVID 19. The relationship between IVs and the DV was hypothesised to be mediated by information sources. Information sources were measured by the frequency with which respondents obtained information about COVID-19 from various sources. A statistically significant positive relationship was found between risk perception of the health system and information sources. The same was not true for the other two independent variables. Further, a statistically significant indirect effect was found between risk perception of health systems and behavioural responses (mediated by information sources). Our findings can be used to influence policy, practice, and scholarship on sources of information for COVID-19 and expected behavioural responses. It is recommended that policy on sources of public health information be directed towards enhancing credible sources of information. Future studies must consider using longitudinal data. The big five health risks should include malaria and tuberculosis (TB), making it the big seven. Corruption’s role in risk perception of health systems should also be explored

Risk Perception, Behavioural Response to COVID-19, and the Mediating Role of Information Sources in Zambia

The role of information sources in mediating the relationship between behavioural responses to COVID-19 and its determinants has hardly been studied. This study fills the knowledge gap with a focus on Zambia, a middle-income country. Data was collected using an online questionnaire. The key independent variables were risk perception of COVID-19, risk perception of the health care system (local and global), and risk perception of the big five global health problems (HIV/AIDS, cancer, injury from road traffic accidents, influenza, and diabetes). Risk perception of the health care system was measured by looking at whether or not the respondents trust the World Health Organisation (WHO) and Ministry of Health (MoH) backed COVID-19 vaccines. The three Independent Variables (IV) of risk perception predicted behavioural response as a Dependent Variable (DV). The behavioural response was found as an average of responses on a five-point Likert scale of questions, relating to safety measures taken by respondents against COVID 19. The relationship between IVs and the DV was hypothesised to be mediated by information sources. Information sources were measured by the frequency with which respondents obtained information about COVID-19 from various sources. A statistically significant positive relationship was found between risk perception of the health system and information sources. The same was not true for the other two independent variables. Further, a statistically significant indirect effect was found between risk perception of health systems and behavioural responses (mediated by information sources). Our findings can be used to influence policy, practice, and scholarship on sources of information for COVID-19 and expected behavioural responses. It is recommended that policy on sources of public health information be directed towards enhancing credible sources of information. Future studies must consider using longitudinal data. The big five health risks should include malaria and tuberculosis (TB), making it the big seven. Corruption’s role in risk perception of health systems should also be explored

Exchange Rate Passthrough to Sectoral Prices: Evidence from Zambia

The objective of the study was to examine the exchange rate pass through (ERPT) to sectoral prices in Zambia. We look at the agriculture, manufacturing and services sectors. For analysis, we use the SVAR model with annual data from 1983 to 2017. The results from the study showed that the ERPT is less than complete in the three sectors but highest in the services sector followed by manufacturing and agriculture sectors respectively. High ERPT in the services sector might be because the services sector is dominated by final consumer services such as wholesale and retail trade, transportation and tourism industry which might be sensitive to exchange rate movements. High ERPT in the manufacturing sector could be because most of the raw materials that are used in the manufacturing sector are imported. Lower ERPT in the agriculture sector might suggest that items in this sector are less sensitive to exchange rate movements. Keywords: ERPT, sectoral price inflation, Forecast error variance decomposition DOI: 10.7176/JESD/13-22-07 Publication date: November 30th 202

An Ethnological Analysis of the Influence of Mobile Money on Financial Inclusion: The Case of Urban Zambia

The issue of access to financial products has been a public policy issue since 2005 when the first FinScope Zambia study was conducted. The 2015 study indicated that 40.7% of adults were financially excluded. This article investigates the influence of mobile money on financial inclusion using urban Kitwe and Kalulushi as case studies. We employ an ethnographic methodology to understand the extent to which mobile money has encouraged the unbanked population to access financial products and services. The findings indicate that mobile money has a positive influence on financial inclusion. It is easier to open accounts with mobile money kiosks than with formal banks. Mobile money services are conveniently located where the unemployed, aged and other segments of the unbanked population are found. They use mobile money services to send and receive money, pay utility bills and purchase airtime. Since mobile money services positively influence financial inclusion in urban settings, we recommend that they should be made widely available in rural areas. Furthermore, there is need to increase financial education and knowledge about mobile money systems and operations across populations in both urban and rural areas

Transfer Mispricing in Africa: Contextual Issues

Transfer pricing is a significant tax issue and lies at the core of international trade and globalisation. This brief raises contextual issues and challenges surrounding the experience of transfer mispricing in Africa. The brief comes at a time when African countries have consistently exhibited high real Gross Domestic Product (GDP) growth rates in the past two decades, and increased FDI inflows and technological upgrades have aided their high participation in global trade. Despite the profitability of MNEs operations in Africa, the investing firms are paying less in terms of tax. This has created a problem for African countries to raise their revenue base for financing development and poverty reduction programmes. Therefore it is important for Africa to stay abreast with transfer pricing rules and issues worldwide. The brief recommends the way forward for African countries in developing capacity to understand and resolve transfer pricing issues and disputes

Resource Nationalism and Zambia’s Oscillating Mining Taxation Regime

The parcelling and privatisation of the large state-owned mining conglomerate Zambia Consolidated Copper Mines (ZCCM) involved the signing of Development Agreements (DAs) between the Zambian government and the new private investors. These DAs were concessionary to the new investors, offering low taxation rates, tax exemptions and deductions. But in 2008, under political pressure from the opposition, then President Mwanawasa abrogated the DAs with a new Mines and Minerals Act, removing exemptions and deductions and increasing taxation rates. This action set in motion a decade long period of contestation over mining taxation in Zambia, with the introduction and retraction of numerous mining taxation policies. This paper endeavours to explore the motivations, constraints, and economic and political implications of these oscillating mining taxation policies, in an effort to better understand the dynamics of resource nationalism in Zambia

Risk Perception, Behavioural Response to COVID-19, and the Mediating Role of Information Sources in Zambia

The role of information sources in mediating the relationship between behavioural responses to COVID-19 and its determinants has hardly been studied. This study fills the knowledge gap with a focus on Zambia, a middle-income country. Data was collected using an online questionnaire. The key independent variables were risk perception of COVID-19, risk perception of the health care system (local and global), and risk perception of the big five global health problems (HIV/AIDS, cancer, injury from road traffic accidents, influenza, and diabetes). Risk perception of the health care system was measured by looking at whether or not the respondents trust the World Health Organisation (WHO) and Ministry of Health (MoH) backed COVID-19 vaccines. The three Independent Variables (IV) of risk perception predicted behavioural response as a Dependent Variable (DV). The behavioural response was found as an average of responses on a five-point Likert scale of questions, relating to safety measures taken by respondents against COVID 19. The relationship between IVs and the DV was hypothesised to be mediated by information sources. Information sources were measured by the frequency with which respondents obtained information about COVID-19 from various sources. A statistically significant positive relationship was found between risk perception of the health system and information sources. The same was not true for the other two independent variables. Further, a statistically significant indirect effect was found between risk perception of health systems and behavioural responses (mediated by information sources). Our findings can be used to influence policy, practice, and scholarship on sources of information for COVID-19 and expected behavioural responses. It is recommended that policy on sources of public health information be directed towards enhancing credible sources of information. Future studies must consider using longitudinal data. The big five health risks should include malaria and tuberculosis (TB), making it the big seven. Corruption’s role in risk perception of health systems should also be explored