East AfricaTanzania urges private sector to spur economic development in Eastern African region
Tanzanian Minister of Foreign Affairs and East African Cooperation, Palamagamba Kabudi, has urged the private sector to take a front seat toward the economic development of the East African Community (EAC) region. Opening the two-day High-Level East African Business and Investment Summit in the safari capital Arusha, Kabudi said the EAC should be people-centred and private sector driven. The summit has brought together 500 delegates comprising captains of industry, group CEOs, investors, the diaspora, academia, development partners and high-level government officials to undertake an audit of achievements, impediments, prospects and set the economic agenda for the EAC bloc. Kabudi challenged the private sector to focus investments on infrastructure which was crucial in easing doing business in the region's market of 200 million people. Libérat Mfumukeko, the EAC secretary general, said there were vast opportunities for investing in agro-processing, pharmaceuticals, chemicals, railways, telecommunications, renewable energy and human resource development.
Cape VerdeCape Verde identifies seven projects to compete for the 1st National Blue Economy Investment Plan
A group of seven projects have already been identified to take part in or compete for the First National Blue Economy Investment Plan (PNIEA I) in Cabo Verde, including projects for coastal renewal and aquaculture, announced the national coordinator of the Blue Economy Programme. Iolanda Brites said that these seven projects, presented by city councils and the public and private sectors, are in line with the concept and principles of the blue economy to be implemented in Cabo Verde, according to the Inforpress news agency. At the end of a meeting held in Praia, the national coordinator said that the projects must respect three components – social, economic and environmental – since, with a budget, they will be ready to be submitted for funding. The transition process to the blue economy in Cabo Verde is funded by the African Development Bank and is receiving technical assistance from the United Nations Food and Agriculture Organization (FAO).
GhanaBank of Ghana’s new measures to increase competition and lending is credit positive – Moody’s
Credit rating agency, Moody’s says the new prudential and market conduct measures announced by the Bank of Ghana (BoG) to increase competition and improve commercial banks’ operational efficiency and transparency, which the central bank expects will support the availability of credit and lower its cost is credit positive. According to Moody’s, the measures, included in the BoG’s monetary policy statement, were developed after the BoG’s deep review of banks’ lending practices. The measures will support Ghanaian banks’ governance framework and strengthen the lending infrastructure to support asset quality, a credit positive, it indicated. Moody’s said in a commentary copied to ghanabusinessnews.com that, the BoG attributed limited availability and high cost of credit to banks’ operational inefficiencies and high operating costs, limited loan price transparency, high non-performing loans (NPLs) and crowding out of the private sector by the government. Among others, it said, to remedy the situation, the BoG will implement governance improvements such as scrutinise and link senior management and director compensation policies to banks’ overall performance including efficiency and asset quality, while enhancing the disclosure of such policies. To increase loan price transparency, banks will be required to develop and publish a clear framework on how they price loans relative to borrower risk levels.
Source: Ghana Business News
KenyaKenya beats Nigeria in banks’ efficiency
Kenyan banks are making more money from their customers compared with their much larger Nigerian counterparts thanks largely to technology, ratings agency Moody’s says in a new report. Deployment of mobile channels to replace brick and mortar and hiring of third party agents have helped banks cut the number of branches from 1,518 in 2017 to 1,505 in 2018 according to Central Bank of Kenya latest industry data. Last year the number of staff stood at 31,889 on increasing from 30,903 in 2017 but lower than the decade high of 36,923 in 2014. “Kenyan banks’ cost-to-income ratios averaged 49 percent over the last four years, compared with 57 percent for Nigerian banks. This, together with lower provisioning requirements, supports the higher profitability of Kenyan banks,” Moody’s said. Entry of Nigeria’s largest lender Access Bank into Kenya will give it exposure to the market that has learned to manage costs and tap into huge retail base through the mobile phone according to the agency. A number of Nigerian lenders including United Bank of Africa, Guarantee Trust Bank and lately Access Bank through purchase of Moi-linked Transnational, have a presence in Nairobi, which Moody’s analyst says has a superior cost-saving model compared to Lagos.
Source: Business Daily
Kenya/EgyptEgypt’s top lender seeks approval to buy Mayfair Bank
Egypt’s largest private lender is planning to buy a controlling stake in Kenya’s Tier III Mayfair Bank in a transaction that is set to intensify deal-making in the local banking sector. Commercial International Bank (CIB) will buy a stake in the three-year-old Kenyan bank as the launchpad for a piece of the East African banking market. The Competition Authority of Kenya confirmed it was reviewing the buyout proposal but declined to disclose the stake or size of the transaction. Mayfair Bank also declined to comment. Mayfair is Kenya’s fourth-smallest lender with a market size index of 0.16%, according to Central Bank of Kenya data. It was licensed in June 2017 and nearly doubled its loss in the nine months to September 2019 to KES250-million, making it one of the few lenders to post losses in Kenya’s banking market of 43 banks. If approved, CIB will become the first Egyptian bank to set up shop in Kenya, which has in recent years attracted interest from West African lenders. The transaction will be the latest deal among Kenyan lenders in recent months as banks target consolidation to grow and defend their market share.
Source: Business Daily
LesothoLesotho's central bank keeps policy rate unchanged as inflation remains contained
The Central Bank of Lesotho decided to keep its key interest rate at 6.5% during the November meeting of its monetary policy committee (MPC). Underlying domestic inflationary pressures are expected to remain contained through the short term, benefiting from subdued domestic demand growth. The Central Bank of Lesotho's MPC held its 80th meeting in November and decided to keep its policy rate unchanged at 6.5%, as consumer price inflation remains relatively contained and economic growth continues to be weak. The rate decision was also driven by major developments in the global and regional economies and financial markets conditions. Domestic consumer price inflation fell further to 4.9% year-on-year (y/y) in October, from 5.1% y/y in September, compared with 5.4% y/y in the previous month, driven by weaker prices in the food and non-alcoholic beverages; housing, electricity, gas and other fuels; and recreation and culture categories. Money supply grew by 7.3% in the third quarter of 2019 on the back of stronger growth in net foreign assets and net domestic claims. The labour market continued to exhibit weakness due to a lack of orders for some of the bigger companies.
Source: IHS Markit
LiberiaFinally, Weah signs 2019/2020 National Budget into law
President George Weah, has signed into law the National Budget for the fiscal period beginning 1 July 2019 and ending 30 June 2020, a release from the Executive Mansion has said. According to the release, the National Budget, which was signed on 28 October 2019 totals LRD110,460-billion or USD526-million provides for the expenditure or operational cost of the Government of Liberia, an Executive Mansion release said. The Legislature, following months of intensive deliberations, according to the release, forwarded the budget to the office of the President for signing into law. The 2019/20 National Budget accounts for three separate revenue envelopes, including Tax Revenue at USD378-million non-Tax Revenue at USD87,200-million as well as External Resources at USD60,800-million. It subsequently becomes law once printed into hand bills by the Ministry of Foreign Affairs.
Source: Daily Observer
MauritiusMauritian central bank holds key repo rate at 3.35% amid benign inflation outlook
The Bank of Mauritius's monetary policy committee held the central bank's main policy rate steady at 3.35% during its November meeting. Underlying domestic inflationary pressures are expected to remain contained through the short term. The monetary policy committee (MPC) of the Bank of Mauritius decided to maintain its key repo rate at 3.35% at its meeting on 27 November, amid continued benign domestic price and economic growth developments. Nonetheless, risks to the global economic environment were noted by the MPC to be elevated and were reflected by the International Monetary Fund revising its 2019 global growth estimate to 3%. Domestic headline inflation has continued to weaken, shedding 0.2 percentage point from 0.9% in June to 0.7% in July, reflecting the low global inflationary environment and the persistence of slackness in the domestic economy. The Bank of Mauritius expects annual average inflation in 2019 and 2020 to be 0.5% and 1.5% respectively. On economic activity, the Bank of Mauritius expects real GDP growth to come in at 3.7% in 2019 (down from an estimate of 3.9% in the August MPC meeting due to unfavourable external and domestic developments) and 4% in 2020. The MPC warned that downside risks to the growth outlook have increased amid a worsening external environment.
Source: IHS Markit
MozambiqueBorrowing could be cheaper in December – report
The Bank of Mozambique and the Mozambican Association of Banks (AMB) have decided to maintain the prime rate for December at 18%. This is the indicator which serves as the basis for the ‘MIMO’ (Interbank Money Market Rate) benchmark interest rate. Based on this indicator, the Bank of Mozambique forecasts a 25 basis point drop in the cost of money in commercial banking to 12.5% in December, as a result of declining inflation figures. The benchmark interest rate has been 12.75% since October. According to the Bank of Mozambique, leaving the rate unchanged is a response to fears of internal and external risks worsening, especially attacks in the centre and north of the country.
Source: Club of Mozambique
MozambiqueTotal and Gigajoule sign gas import agreement
The French oil and gas company Total, and the South African Gigajoules group, signed an agreement in Maputo on for the import of the liquefied natural gas (LNG) that will be needed for a major gas-fired power station planned for Beluluane, on the outskirts of the Mozambican capital. There is heavy irony in the agreement, because Mozambique has the largest natural gas reserves in southern Africa - but Mozambique's own LNG factories are still several years away from the start of production. It is the Pande and Temane gas which is currently being exploited by the South African petrochemical giant Sasol. Most of the gas extracted by Sasol is sent by pipeline to its own chemical plants in the South African city of Secunda. But some is diverted to industries in Matola, and to gas-fired power stations in the southern region. A further benefit from importing LNG will be the take-off of the Beleluane thermal power station. A pipeline will run from Matola port to the planned new power station in Beluluane, using the MGC's existing infrastructure. The investment will be more than USD2.5-billion, and the project will supply power to Botswana and Eswatini, as well as to Mozambique and South Africa. Mozambique would become hub, selling gas on to island countries such as Madagascar and Mauritius.
Source: Africa Energy Portal
NamibiaQuarter Two Trade Statistics Bulletin 2019
The overall value of exports and imports for Q2-2019 were estimated at NAD23,468-million and NAD27,247-million respectively, hence, total trade (export plus imports) amounted to NAD50,715-million from NAD49,250-million recorded in the previous quarter and NAD48,869-million registered in the corresponding period of 2018. The trade balance, measured as the difference between exports and imports for Q2-2019 amounted to a deficit of NAD3,779-million from a revised NAD5,475-million deficit in Q1-2019 and NAD1,138-million registered in Q2-2018. Subsequently, the annual merchandise trade balance showed a remarkable decline of 232%. The current dip was mainly driven by a 9% increase in imports over the course of the year as opposed to exports whose growth deteriorated by 1.7%. On the contrary, the quarterly gap between exports and imports improved, narrowing by 31% owing to a simultaneous raise (7%) in the value exports and a decline (0.4%) in the value of imports.
Source: Namibia Statistics Agency
NigeriaFederal Government currently constructing 524 roads, bridges nationwide
The Minister of Works and Housing, Mr. Babatunde Fashola SAN, has revealed that the federal government is currently constructing a total of 524 road and bridge projects across the country. While stressing that every state in the federation including the Federal Capital Territory (FCT) has at least three such ongoing projects, he said 80 of them are priority projects scheduled for completion in the 2020-2021 fiscal year. He listed those on priority to include 27 financed with Sovereign Sukuk Fund, 47 scheduled for substantial completion in 2020/2021 and other priority projects, two roads leading to the ports and four major bridges. Giving reasons for the prioritisation of the 80 projects, the minister who explained that it would improve the ease of doing business in the country, declared, “[t]he projects on completion will bring about reduced travel time, lower vehicle operating costs and improve the comfort of road users as well as improve the ease of doing business in the country and ultimately boost the Nigerian Economy.”
Source: This Day
RwandaPorts development on Lake Kivu to transform maritime transport
The Government secured funding from the Netherlands to finance the development of four ports at Lake Kivu, expected to promote maritime transport, trade and tourism. The grant arrangement will see the Netherlands co-finance 45% of the construction of the ports and their facilities which will improve ferry and cargo transport between the Rwandan ports. Rwanda currently relies heavily on road transport which weighs heavily on transport and maintenance costs, officials say. The RWF22-billion project which will be built in the four districts of Rubavu (Nyamyumba), Rusizi (Bugiki), Karongi (at the Karongi cross-border market), and Rutsiro (Nkora region), will be operational by 2022, officials say. According to the Rwanda Transport Development Agency (RTDA), there will be three major ports with a capacity of about 1.5 million passengers per year, projected to reach 2.8 million by 2036. A smaller port, the fourth planned port, in Karongi District will start with a capacity of about 300,000 passengers per year by 2020 and 400,000 passengers by 2036.
Source: The New Times
RwandaRWF14-billion power transmitter to link Rwanda to the region
Shango substation, a new power transmission facility worth RWF13.8-billion launched in Gasabo District on 5 December 2019 will connect Rwanda and the rest of the region and expand the country’s electricity market, officials said. The facility, the largest in the country so far, has the capacity to transmit 220/110 kilovolts. It will enable Rwanda to receive and share power with Uganda, Tanzania and the Democratic Republic of Congo (DRC), where there is currently poor infrastructure. Currently, the facility whose construction took seven months has two transmission lines to interconnect with Uganda through Mirama Hills, and north eastern DRC network through Rubavu substation. Two more other lines will interconnect Rwanda to the western Tanzania network and Burundi through the regional Rusumo Falls hydropower project, which is currently under development.
Source: The New Times
South SudanSouth Sudan launches first phase of 100MW power plant project
South Sudan has launched the first phase of a 100MW power plant project which is expected to supply electricity to Juba and other surrounding areas. The country’s President Salva Kiir performed the inauguration ceremony and said that the power plant will help the nation to embark on post-conflict recovery after more than five years of conflict. Construction by Ezra Company Limited commenced in 2017 and will supply 33MW of electricity in the first phase before completion of the entire project by 2021. About 100,000 households will benefit in the first phase. According to the project contractor, the plant will provide “much cleaner air” for residents of the capital as it displaces thousands of polluting small generators. The new power plant, which will run on diesel fuel as well and has scrubbers to reduce emissions compared to diesel-run generators. The investment cost of the project is USD290-million which the government will pay back over 17years. “Right now, every household, every business has a generator running 24 hours to supply electricity. Now bringing all these in one pool, the city will be much cleaner,” said Mr Meron Tekie Ezra, Managing Director of construction and development for Ezra Group.
Source: Africa Energy Portal
TanzaniaWorld Bank sees profound agriculture transformation in Tanzania: report
Tanzania's agriculture sector offers fresh opportunities for accelerated poverty reduction, a new World Bank report said on Tuesday. The World Bank's 13th Tanzania Economic Update report released in the commercial capital Dar es Salaam said recent signs of transformation in Tanzania's agricultural sector offered encouraging opportunities for acceleration of growth, job creation and poverty reduction. But the report urged the government of Tanzania to urgently take steps aimed at improving the sector's policy and regulatory environment and investments. Bella Bird, World Bank Country Director for Tanzania, said that "the current trends in agriculture offer a tremendous opportunity to catalyze private investment, both local and foreign, and raise the incomes of the poor." "Since agriculture already accounts for a quarter of total GDP and two-thirds of jobs, enhanced agricultural growth must be part of the strategy to create more and better jobs and alleviate poverty." She said. The report underscores the importance of having supportive public policies and spending which crowds in more private investments needed to catalyse a nascent agriculture transformation.
Tanzania/NamibiaTanzania, Namibia agree to revive commission to boost trade, investment
Tanzania and Namibia have agreed to revive the Tanzania-Namibia Joint Commission for Cooperation to boost trade and investments in the two countries. The revival of the joint commission for cooperation which had been dormant for the past 20 years was made at the end of the 2nd session of the Tanzania-Namibia Joint Commission for Cooperation in Tanzania's commercial capital Dar es Salaam. The two countries signed three Memorandums of Understanding (MoUs) on tourism, art, culture and youth development. Palamagamba Kabudi, Tanzanian Minister for Foreign Affairs and East African Cooperation, said the revival of the commission for the joint cooperation marked a new chapter toward improving trade and investments between the two countries. Kabudi said the activation of the commission will invigorate bilateral relations and friendship between the two countries.
UgandaThe Employment (Amendment) Bill, 2019
This article presents some highlights of the recently gazetted Employment (Amendment) Bill, 2019 (the Bill). The Bill seeks to amend the 2006 Employment Act (the Act) and captures some of the current issues of concern in employment matters. While the Bill addresses some loopholes in the Act, such as the severance allowance question, and introduces some beneficial provisions such as protection of domestic workers, breastfeeding mothers, migrant workers, it falls short in addressing some big challenges faced in the courts, starting with whether the prescribed limits on the award of damages for unfair termination apply to the Industrial Court. Several provisions of the Act also need to be redrafted in order to help with their interpretation, the clauses on the rate at which annual leave accrues and entitlement of sick pay being examples of such clauses. As a word of caution, the Bill has been presented by a private member and is substantially different in approach and content from a draft bill prepared by Uganda Law Reform Commission as part of its recent study on employment laws. The priority task will be reconciliation of this Bill with the far more comprehensive amendments being considered by Government.
ZimbabweZimbabwe's migration to clean energy gathers momentum
As solutions to rescue the electricity crisis in the country are increasingly thinning, local corporates are taking it upon themselves to seek alternative sources of energy to sustain operations. Interestingly, Zimbabwe is stepping up efforts to create an environmentally friendly energy system by year 2030 producing at least 1.575MW of power from solar alone – almost the equivalent of power it produces currently from a range of sources. Notably, the private sector is driving this migration to clean energy and more commendably, the government has put in place support mechanisms to attract the much needed investment through various incentives. In the 2020 National Budget for instance, the government wholly scrapped customs duty on equipment for alternative energy sources such as wind, solar and gas from 40%. In order to attract more investment into renewable energy, the country's biggest bourse, the Zimbabwe Stock Exchange has also proposed a Green Bond, an investment instrument meant to raise funds for clean projects.