The Mozambican case of odious debt is an illustration of several similar cases around the world whereby consultants from multinational corporations identify development countries with something of value, such as minerals, and persuade the authorities of these countries to secretly take on huge development loans with banks. In most cases, the money never reaches the countries. Rather, the money is transferred directly from the banks to contractors and the countries are then left with massive debts. Resources and companies from developing countries are given as collaterals for these loans. Therefore, the resources that countries should use to invest in development are transferred to service these odious debts. In summary, this is what happened in Mozambique.

On May 8, 2020, the Mozambique Constitutional Council decided that non-concessional loans totaling 622 million USD borrowed from two London-based banks – Credit Suisse and Russian VTB - was illegal, null and void. The Mozambican borrowers were three State Owned Enterprises that at the time did not been formally constituted. The basis of the Constitutional Council’s decision was that this loan was obtained without approval of Parliament. Further, the Council held that amount was in excess of the borrowing limit permissible under the Constitution and laws of Mozambique.

World Trade Organization (WTO) member states are moving towards increased reliance on renewable energy and are enacting domestic policies to encourage investment in renewable energy technology. These domestic policies have not escaped the scrutiny of other WTO members, who in some cases have commenced dispute resolution processes to resolve claims of non-compliance with WTO Agreements. This commentary discusses relevant decisions of the WTO dispute resolution bodies and the possible effect of these decisions on renewable energy in Africa.

For decades, humans have been drawn to space exploration for scientific, security and commercial purposes. Private companies such as SpaceX and Blue Origin have undertaken daring projects to commercialize outer space, including tourism, mining space resources and establishing installations and even extra-terrestrial habitats. The allocation of the benefits from outer space is a highly disputed issue, from the early days of space exploration to date. We believe that the issue of taxation, hardly discussed so far, is vital when considering the proper distribution of space benefits

African countries would also need to ensure that the nexus-revenue threshold is as low as possible, in order to accommodate jurisdictions with a relatively small market. Other important issues that are still outstanding include i) the definition between routine and residual profits, ii) the required threshold for determining the portion of residual profits allocable, and iii) how the profits would be allocated to market jurisdictions

The quality of public service delivery has been shown to affect tax non-compliance in an important way. Among other issues that have been attributed to low tax revenues in Nigeria, the State of the fiscal social contract can be said to be the single most important underlying cause. While there remains a depth of systemic issues to be resolved in order to rebuild the broken links in the fiscal social contract properly, the predicted post-pandemic impact on digital communication and business provides Nigeria with the opportunity to leverage on digital growth and engagement to bargain a stronger social contract, particularly with its largest demographic.

The effect of COVID-19 on the developing countries and the imposition of tax on the digital economy within the context of the OECD/G-20's Negotiations on enacting appropriate global standards would include new dynamics of participation, new revenue needs, and new policy dilemmas—involving developing countries. There is the need to fully digitalize the tax filling system in Nigeria and completely jettison the mundane practice of manual tax fillings at the office of the tax authority.

For the fiscal contract to be effective post-COVID-19, all parties to the contract must actively seek to engage on fairer terms. The terms must be implemented, in good faith and, with consideration to the economic and social realities created by the pandemic. A one-sided execution of the contract either by the government or the taxpayer would not cut it. After all, it takes two to tangle, and you can’t clap with one hand.

IDLU is pleased to invite academics, researchers, industry experts, policymakers, and officials in civil society organizations and international organizations to submit abstracts for papers to be presented at the conference and included in an e-book on sovereign debt in Africa.