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

The Tragedy and Reliability of Zambian Trade Data

Trade is an essential engine of growth and poverty reduction. Yet trade data suffers from poor quality and inconsistencies. There are several reasons for this: trade data is collected with little coordination between the reporting agencies and the central statistical offices, inadequate resources located to the data gathering agencies undermines archival process of good data, normal statistical errors of measurement and observation, and various complexities associated with international trade such as trade misinvoicing. This study explored the poor quality and inconsistencies in Zambian trade data which might render efforts at policy formulation to boost intra-regional trade and resolve issues of growth and poverty intractable. The study computed an index to depict the extent of trade misinvoicing and hence the quality of Zambia’s trade statistics in comparison with other African countries. The study documented the tendency to over-invoice exports and under-invoice imports. This is of great concern; particularly in the trade liberalisation era where the need for high quality trade data to inform constantly evolving regional and continental trade arrangements is more urgent than ever. Plausible interventions include, but are not limited to: increasing intra-country coordination between statistical and other data reporting agencies, increasing collaboration between local and partner country level data collection agencies, and encouraging open collaboration between data collection agencies and users. __________________________________________________________________________

Industrial Policy in Context: Comparative Experiences from Chile and Zambia

This article tries to draw lessons from Chile for Zambia on innovative industrial policy and strategies that lead to industrial transformation and job creation. The creation of quality jobs for the increasingly skilled youth requires significant efforts. Industrial policy has been argued to have the potential to contribute to the creation of employment through support for new and old initiatives in the economy. In the case of Zambia, the economy has mainly been dominated by the mining sector, where the creation of jobs has been very small, whereas the comparator country Chile developed an institutional framework for industrial policy that addressed market failures and encouraged innovation concentrated in specific sectors. These were attainable given the country’s existing or potential comparative advantage and therefore had strong growth prospects and impacted on job creation. The study finds that Chile provides a rich experience that Zambia can learn from in creating labour intensive job opportunities especially for youths

Industrial Policy in Context: Comparative Experiences from Chile and Zambia

This article tries to draw lessons from Chile for Zambia on innovative industrial policy and strategies that lead to industrial transformation and job creation. The creation of quality jobs for the increasingly skilled youth requires significant efforts. Industrial policy has been argued to have the potential to contribute to the creation of employment through support for new and old initiatives in the economy. In the case of Zambia, the economy has mainly been dominated by the mining sector, where the creation of jobs has been very small, whereas the comparator country Chile developed an institutional framework for industrial policy that addressed market failures and encouraged innovation concentrated in specific sectors. These were attainable given the country’s existing or potential comparative advantage and therefore had strong growth prospects and impacted on job creation. The study finds that Chile provides a rich experience that Zambia can learn from in creating labour intensive job opportunities especially for youths

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

The Global Financial Crisis and Developing Countries: Phase 2 Synthesis

When the global financial crisis broke out in earnest in September 2008, it quickly became clear that developing countries would also be affected, but that the impacts would vary markedly. The Overseas Development Institute (ODI) coordinated a multi-country study over January-March 2009 involving developing country teams in 10 countries. This showed that, while the transmission mechanisms were similar in each (trade, private capital flows, remittances, aid), the effects varied by country, and much was not yet visible. As such, further country-specific monitoring was required. Most findings suggested that, as a result of time lags, the worst effects were yet to come. This synthesis of the effects of the global financial crisis on developing countries updates the description of the economic and social situation during the course of the crisis in 11 countries

Exchange rate policy and the auction system in Zambia, 1985 - 1987

Meeting: African Economic Research Consortium (AERC) Workshop, 27-31 May 1990, Nairobi, K

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