AfricaGood start to African private equity investments for 2019
Private equity activity in Africa totalled USD1.7-billion in final closes and USD0.9-billion in interim closes during the first half of 2019, according to data released by the African Private Equity and Venture Capital Association (AVCA). The African Private Equity Data Tracker revealed that there has been a move towards specialisation among private equity fund managers and investors, with 70% of the funding coming from sector-specific funds. Africa saw 79 deals during the first six months of the year. South Africa was the source of 28% of the deals, making it the most successful region, with North Africa next with 19%. However, deal value was dominated by deals that spanned multiple regions, accounting for 51%, while 60% of total deal value came from deals worth less than USD50-million. Financials, consumer discretionary and consumer staples and industrials were the biggest sectors for the first half of this year, combining for 58% of deal volume.
Source: African Law and Business
AfricaUS energy department ready to advise Africa on liquefied natural gas opportunities
The United States (US) administration launched its Prosper Africa initiative in 2018, with the vision to open markets for American businesses, grow Africa’s middle class, and promote youth employment opportunities. The initiative also aims to improve the business climate and enable the US to compete with China and other nations who have business interests in Africa. The USD50-million programme will offer technical help to companies looking to enter or grow in Africa, which is urbanising more rapidly than anywhere else on Earth. The region is projected to have 1.52 billion consumers by 2025 — nearly five times the size of the US population. A continued priority for the US Department of Energy is now looking towards Africa to develop opportunities in the exploration, production and monetisation of liquefied natural gas (LNG).
Source: ESI Africa
AngolaGeneral Tax Administration introduces new goods control system
The General Tax Administration (AGT) showed on Thursday, 24 October, a new electronic monitoring system that monitors goods in road traffic from Angola to neighboring countries (Congo, Zambia, the Democratic Republic of the Congo and Namibia). The system, which could be launched by January 2020, aims to facilitate the control of lorries transporting goods to neighboring countries and to prevent them from changing their declared destinations. Such control will consist of the attachment of a GPS-enabled electronic device to lorries transporting goods to those destinations. According to Santos Musamu, Director of AGT Customs Services, the control of goods, for example, those entering the country by land, are currently still accompanied by the Tax Police. However, with this system, this will no longer be required.
Source: Governo de Angola
AngolaAfrican Development Bank approves USD165-million for economic diversification
The Board of Directors of the African Development Bank Group approved a USD165-million loan to finance part of Angola’s three-year economic diversification support program intended to restore the country’s macroeconomic stability. The Angolan government is implementing reforms to diversify its oil-dependent economy and has adopted measures to improve human and social development to restore fiscal balance after the economy was hit by a global slump in oil prices and repeated droughts. The program aims to prioritise and promote the production and export of non-oil products and to start to substitute imports through diversification. It forms part of the country’s 2018-2022 national development plan. There are three main components in the plan; advancing fiscal consolidation through improved public financial management and tax reforms; accelerated implementation of the diversification program; and improving governance in natural resource management and state-owned enterprise reform.
Source: African Development Bank Group
GhanaWindfall at 2020/21 cocoa sale: Ghana bags extra USD40-million
Ghana has earned USD40-million extra revenue from the sale of cocoa beans for the 2020/21 crop season to be distributed to cocoa farmers. The amount was grossed from the sale of 100,000 tonnes of next season’s cocoa beans, according to data sighted by the Daily Graphic. The earnings are the fruits from the living income differential (LID) on the sale of Ghana's cocoa beans which was introduced in July this year. The data showed that the beans were sold under the forwards contracts – a special arrangement that the Ghana Cocoa Board (COCOBOD) uses to sell the country’s cocoa beans well before they are harvested. A source at the Cocoa Marketing Company Limited (CMC), a subsidiary of COCOBOD, confirmed the development in an interview. It further explained that realising USD40-million from 100,000 tonnes so far showed that the country was well on course to earning a total of USD360-million from the LID, should it meet its 2020/21 production target. COCOBOD is targeting 900,000 tonnes of cocoa beans for the 2020/21 crop season.
GhanaMining local content rules being reviewed
Recognising the need for a comprehensive development policy framework in the mining sector, a new local content law is currently being worked on to complement the existing legislation. This is under the auspices of the Ministry of Lands and Natural Resources, Minerals Commission, the Ghana Chamber of Mines and various key stakeholders in the mining industry. According to the Ministry, the review of the existing local content law has become imperative in the sense that even though the current Minerals and Mining Regulations, 2012 (Legislative Instrument 2173) specify certain aspects of local content, including local procurement of mining inputs and local employment planning, the regime falls short of specified levels of local equity participation among others. While stakeholders assert that the implementation of the existing local content provisions in the mining sector have yielded some significant results, they realise that a lot more initiatives need to be done.
KenyaOil dealers now prefer Dar es Salaam over Mombasa port
The USD60 (KES6,000) tariff per 1,000 litres of transported fuel through the Kenyan oil pipeline is costing the country revenue as landlocked countries turn to Tanzania’s central corridor. The value of Kenyan petroleum exports has dropped by 43% from KES2.1-billion in the first six months of 2018 to KES1.2-billion in the first half of 2019. Balance of payment data by the Kenya National Bureau of Statistics shows the exports are also lower than the KES2.4-billion export for petroleum products in 2017. Oil marketers say they pay on average of USD80 (KES8,000) to ferry oil from Dar es Salaam using trucks but pay USD60 (KES6,000) tariff when using the pipeline to Kisumu and a further USD35 (KES3,500) on trucks to buying countries. Kenya Pipeline Company (KPC) Chairman, John Ngumi, said the tariff is under review by Energy and Petroleum Regulatory Authority (EPRA). “They are aware we are in the process of a review and if it is an issue, it will be reduced. If there are other issue of efficiencies, we will also look into that,” Mr Ngumi said.
Source: Daily Nation
LiberiaGovernment of Liberia amends the New Petroleum (Exploration and Production) Reform Law, 2014
The President of the Republic of Liberia has signed into law an amendment to the New Petroleum Reform Law of 2014 removing structural inconsistencies and unconventional practice for the purpose of optimising performance within the sector. Additionally, the amendment conforms to best international practice and responds to the national circumstances. The new law, titled, “An Act to Amend Certain Provisions of the New Petroleum (Exploration And Production) Reform Law of Liberia, 2014” integrates key administrative and operational changes affecting the structure of the Board of Directors of the Liberia Petroleum Regulatory Authority (LPRA), configuration of block sizes, Liberian citizen participation, and systems/forms of granting petroleum rights. Specifically, the amended version of the law increases the board members of the Authority from three to five. In addition, the amended Act requires that “the surface of offshore blocks shall not exceed 3,500 sq.km and the surface of onshore blocks shall not exceed 2,000 sq.km.” This is a change from the previous size allowing for a maximum of 2,000 sq.km for offshore and maximum of 1,000 sq.km for onshore areas.
Source: Front Page Africa
MadagascarMadagascar economic update: new start?
Growth reached a decade-high of 5.1% in 2018, driven by robust activity in export-oriented sectors, but slowed in the first half of 2019 due to a combination of weakening external demand from key trading partners and the slow execution of public spending. In particular, as the new government took office following the presidential election end-2018, the establishment of the new administration and the revision of the 2019 budget were associated with slower budget execution, particularly for public investments. Export revenues and industrial activity were also adversely affected by a significant deceleration in major export markets, which coincided with the flare-up of trade tensions between the United States and China. These two countries absorb 25% of Malagasy exports. This has put downward pressure on both the demand and price of Madagascar’s key export goods and was associated with a dip in industrial sales and order books at the start of the year. Weakening export revenues, including from cash crops and nickel, and sustained imports were reflected in a deteriorating current account balance.
Source: World Bank Group
MauritiusChina and Mauritius sign huge free trade agreement
Covering trade in goods, services and as well as investment protection matters, the China-Mauritius Free Trade Agreement (FTA) was signed seeking to achieve the goal of a comprehensive, high-level and mutually beneficial partnership. Through the Free Trade Area, Mauritius-based businesses will be able to access a huge market of 1.4 billion people, providing a welcome boost to enterprises engaged in the export of special sugars, rum, black tea, tuna, horticultural products, processed food, handicrafts, high-end textiles and apparels, cut diamonds, etc. Apart from opening up tremendous opportunities for business enterprises with substantive activities in Mauritius and exporting to the immense Chinese market, the China-Mauritius FTA, by raising the competitiveness of Mauritian products with China-sourced components in their value chain, will boost their export potential in other markets. The FTA further provides new opportunities for Mauritius to spur its important tourism sector and transform itself into a shopping paradise for Africa, Asia and the Indian Ocean.
Source: East African Business Week
MoroccoMorocco, UK sign deal to maintain post-Brexit trade flow
Morocco and the United Kingdom (UK) signed an association agreement that would ensure the continuity of the current trade terms under the EU-Morocco Free Trade Agreement without additional tariff barriers. This agreement, also called continuity agreement, was signed in London by Morocco’s Foreign Minister, Nasser Bourita and UK Minister of State for the Middle East and North Africa, Andrew Murrison. The deal replicates the effects of the existing EU-Morocco Association Agreement, both the trade related aspects and the broad scope of the political and cooperation provisions, to ensure continuity in the trading and wider bilateral relationship between Morocco and the UK. Bourita said, at the signing ceremony, that the deal aims at maintaining trade momentum with the UK after its exit from the EU. The deal ensures the continuity of trade flows unhindered between the two countries and covers all Moroccan territories including the Sahara.
Source: The North Africa Post
NamibiaFarmers harness solar power to produce livestock feed from the bush
A study conducted by De-Bushing Advisory Service Namibia, has revealed that the production of animal feed from encroacher bush has the potential to transform agriculture in the country. In a country where 30 million hectares of farmland are affected by bush encroachment, bush-based animal feed production has become a viable option for Namibian farmers. The new Bos-tot-Kos (bush-to-table) methods and machinery has begun turning a threat into a valuable biomass resource. The downside to this solution, however, is that it is electricity-intensive, and that can be the stumbling block for farmers in remote locations with expensive and/or limited grid power supply. Solar energy company SolarSaver is providing a unique rent-to-own solution to address this. The company recently installed a 52kWp off-grid solar PV system with 160 solar panels, batteries and a back-up generator at Farm Otjomasso North (Bronkhorst), a cattle and sheep farm in Hochveld. The farm, located 50km from the nearest power line, now uses the off-grid solar system to successfully power the Bos-tot-Kos machinery the farm installed to produce livestock feed from the bush.
NigeriaUSD1.29-billion Zengeru hydropower project 68% completed – Ministry
The USD1.29-billion Zungeru hydropower plant being built in Niger State has reached about 68% completion level, the Ministry of Power said. The project is scheduled for completion in December 2021, with the first unit expected to start power generation to the national grid in December 2020, according to a statement. The Project Consultant, Mr Tunde Adewunmi, gave an assurance that the project would be completed on schedule, saying the contractors had no issue that might hinder its early completion, according to the Ministry. He was quoted as saying that the project, “which has the capacity to add about 700 megawatts of electricity to the national grid, is being constructed by the leading hydroelectric power contractors in China and the power plant is potentially one of the best in the country.”
NigeriaFirm to unveil water-powered generators in Nigeria
A Nigerian firm, Buserve Limited, has announced plans to introduce hydrogen-powered generators into the country to enable businesses to reduce their electricity costs. The Chief Executive Officer, Buserve Limited, Mr Laitan Aderinto, who disclosed this at a press briefing in Lagos, said the technology was being deployed in Europe. He said, “We are partnering with a German company. We are starting with the bigger generators with capacity of 500KVA and above. Our plan is to ensure that factories are back to normal; the price of diesel is killing them. “If the government is ready, we are ready to work with them. For instance, there are independent power plants in Lagos that are being powered by gas. We can have IPPs powered by water instead of having to look for gas before you can power your generators.” He explained that water-to-hydrogen gas mass production technology represented a major scientific breakthrough of the utmost importance. According to him, the patented technology is based on an advanced proprietary scientific process, which includes the invention of using thermoplasma to convert water into hydrogen gas in high volume for power generation and at much lower cost than any other hydrogen production technology.
RwandaWhy government has mixed feeling over doing business ranking
The 2020 World Bank Doing Business Report released recently was received with mixed feelings by the Government. The report saw Rwanda keep its position as the second easiest place to do business in Africa, behind Mauritius. Reforms in three indicators, as well as improvement in the implementation of several others, were recognised as having enabled the country to remain dominant in multiple aspects. However, despite the reforms and progress, the report ranked Rwanda 38th globally from 29th in its previous ranking. The drop was traced to an indicator, protecting minority investors, where Rwanda was placed 114th globally from 14th in the previous report. The drop in ranking was however not a result of performance but a change in the methodology and approach of measurement. It is this review of the methodology and approach in the process of compilation of the report that led government officials to receive it with mixed feelings.
Source: The New Times
RwandaInside Rwanda-Russia mining pact
Last week, Rwanda Mines, Petroleum and Gas Board (RMB) and a Russian state-owned firm ROSGEO, signed a mining and hydrocarbon Cooperation Agreement in Sochi, Russia. The agreement was signed on the sidelines of the Russia-Africa summit. The pact is among other things expected to increase the expertise in Rwanda’s mining sector. Among the provisions of the agreement is that the firm will provide expertise in mining in all aspects deemed necessary in terms agreeable by the two parties. The firm has over 10,000 specialists in mining who will be at the disposal of Rwanda. The development comes in at a time when the growth, projections and ambitions of Rwanda’s mining sector have been held back largely due to shortage of expertise, skills and technology. The new partnership, experts say, could also improve the confidence of firms entering the local scene as there is a guarantee that there are available expertise and insight for their operations.
Source: The New Times
SenegalSenegal on the cusp of liquified natural gas boom
On the back of some substantial deepwater finds, Senegal is predicted to become a hot spot during the next decade for relatively low-cost liquified natural gas (LNG) clusters. The West African country expects all its offshore projects to come online between 2022 and 2026. According to the International Monetary Fund, between 2014 and 2017, oil and gas reserves worth more than one billion barrels of oil and 40 trillion cubic feet of gas, most of it shared with Mauritania, were found. Two large fields in Senegal are currently being developed - Australia’s Woodside Energy is developing the SNE field and BP/Kosmos Energy the Greater Tortue Ahmeyim project.