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issue 339 | 16 Feb 2020

Africa Business in Brief

 


Africa / Middle East

Africa and Middle East add 894 MW of wind energy capacity in 2019

The latest data released by the Global Wind Energy Council (GWEC) shows Africa and the Middle East installed 894 MW capacity of wind power in 2019, a decrease of 7% on the previous year which saw 962 MW installed. However, faster growth is on the horizon with GWEC Market Intelligence’s preliminary forecasts expecting 10.7 GW of wind energy capacity to be installed between 2020 and 2024, an increase of 167% on current market status. In 2019, the leading countries in the region for wind power capacity include: Egypt (262 MW), Morocco (216 MW), Jordan (190 MW), and Ethiopia (120 MW). Over the next five years, South Africa will be leading the growth trend in the region with an additional 3.3 GW of wind energy capacity installed by 2024. Considering other countries in sub-Saharan Africa, the significant potential for wind energy remains clear, with the SADC region alone accounting for 18 GW of wind energy potential in emerging markets such as Zambia, Tanzania, Namibia, and Mozambique. Ben Backwell, CEO of GWEC says “[c]hallenges such as policy and power market frameworks, transmission infrastructure bottlenecks, and off-taker risk must be overcome in order for Africa and the Middle East to take full advantage of their wind potential.”

Source: Mining Review Africa

Africa / Ethiopia

Africa Business Forum opens in Addis Ababa

The 3rd Africa Business Forum (ABF) kicked off in Addis Ababa with the theme; ‘Investing in People, Planet and Prosperity’. The event, which aims to promote an ongoing dialogue between Africa’s private and public sectors, was opened by Dr. Vera Songwe, Executive Secretary of the United Nations Economic Commission for Africa (UNECA). The forum will foster opportunities for the private sector to contribute towards the continent’s collective efforts in addressing some of the key issues that have an impact on people, planet and prosperity. Key topics under the spotlight include challenges and impacts of climate change, energy sustainability and efficiency, healthcare-renewable energy nexus, pharmaceuticals manufacturing, innovative financing mechanisms, governance and responsible investments, and sustainable development in Africa. ABF is an annual event that brings together Heads of States, policymakers, industry leaders, thinkers and private businesses to discuss the role of private sector in Africa’s development; cutting edge and innovative ideas for financing sustainable development; and partnerships between the private and public sectors.

Source: Fana Broadcasting Corporate

Angola

Angola's ANPG to bid for 50 new blocks for oil prospecting

The National Agency of Petroleum, Gas and Biofuels (ANPG) plans to bid, by 2025, 50 new blocks for oil exploration in Angola, within the scope of the strategy of relaunching and increasing national oil production, the president of Angola said on 6 February. Paulino Jerónimo underlined that the idea is not to bid on all blocks at the same time, taking into account negotiations with some companies. "Only after drilling can it be said whether there was success or not, and if so, then the exploration process begins," he said. In 2019, ANPG put 10 blocks from the Namibe and Benguela basins to the international tender, where it is estimated that there are reserves of approximately seven billion barrels of oil. The bidding program for new concessions takes place at a time when the country's production is in decline with a daily average of 1.4 million barrels per day, making Angola the second largest producer in sub-Saharan Africa, behind Nigeria, with 1.7 million barrels per day.
 
Source: Macauhub

Ethiopia

Ethiopia establishes Private Sector Advisory Council

Ethiopia has established a 12-member independent Private Sector Advisory Council to enhance the role of the private sector in the economy. In her remark at the establishment of the Council, Dr Fitsum Assefa, Commissioner of Planning and Development Commission, said the home-grown economic reform agenda initiated by the government has given attention to the private sector. The ten-year perspective development plan, which will be announced soon by the government, requires the real involvement of the private sectors, the Commissioner added. Stating that the previous working system will no longer continue, she said, the government will remain supportive of the private sector, ensure rule of law and fulfill demands for infrastructure.

Source: Fana Broadcasting Corporate

Ghana

Vodafone to hand management of Ghana unit to South African division

Vodafone Group Plc will hand over management of its Ghana unit to the United Kingdom (UK) carrier’s separately listed South African division in April, the latest step to bring the company’s operations on the continent under one roof. Johannesburg-based Vodacom Group Limited will take responsibility for the West African business alongside other units including Tanzania, Mozambique, the Democratic Republic of Congo and South Africa, Chief Executive Officer Shameel Joosub said in an interview. Vodafone Ghana will keep its branding and there will be no transfer of assets from the UK parent, he said. The move marks the second change by Vodafone to its Africa operations this year, part of a wider effort to simplify the sprawling global carrier and focus management attention on fiercely competitive European markets. And in 2017, Vodafone transferred a minority stake in Kenya’s Safaricom Ltd., East Africa’s biggest company, to Vodacom in an all-share deal worth about USD2.6-billion.

Source: GhanaWeb

Ghana

Government spent USD3-million on AfCFTA - Akufo-Addo

A total amount of USD3-million has been used by government to facilitate Ghana’s preparation towards the African Continental Free Trade Area (AfCFTA). According to President Nana Akufo-Addo, the money was used for the establishment and operationalisation of the AfCFTA, which he announced will take full force in March 2020. “The Government of Ghana sponsored six (6) different meetings of the AfCFTA in December 2019, in Accra. Thus far, a total amount of USD3-million has been advanced by the Government of Ghana for the establishment and operationalisation of the AfCFTA Secretariat”, President Akufo-Addo noted. He assured the Assembly of Heads of State and Governments of the African Union that the Secretariat of the African Continental Free Trade Area will be operational by 31 March 2020. The President reiterated Ghana’s determination “to establish the Secretariat by the end of March 2020, which will be of world class quality, and to help ensure that, by 1 July 2020, as mandated by the Assembly, the AfCFTA takes off without a hitch.”

Source: GhanaWeb

Kenya

Kenya’s border plan to boost trade with Ethiopia

Kenya is set to build one-stop border points (OSBPs) along its border with Ethiopia in its latest effort to boost trade with the landlocked neighbour. The Border Management Secretariat, a bilateral agency, said the OSBPs will enhance security, boost revenue collection and ease movement between the two countries. “Putting two more OSBPs in Marsabit County will greatly boost trade facilitation and seal all the porous border points that encourage illicit trades,” said Mr Kennedy Nyaiyo, director of Border Management Secretariat. Marsabit currently has only one OSBP in Moyale Town despite the fact that the Ethiopia-Kenyan border straddles over 830km of its territory. Other areas marked for OSBPs include Siftu in Wajir, Markamari, Rhamu in Mandera, and Todunyang in Turkana. During his visit to Moyale in October 2019, Treasury Secretary Ukur Yatani outlined a number of initiatives that the State planned to execute to improve the Moyale OSBPs with the aim of boosting Kenya-Ethiopia trade and relations.

Source: Business Daily

Kenya / US

Kenya, US sign deal allowing direct air cargo transport

Kenya and the United States (US) have signed an amendment to the US-Kenya Air Transport Agreement, which will see easier movement of goods between the two countries. The amendment, which adds all-cargo rights to the existing air transport agreement, is expected to offer air carriers greater flexibility to meet customers' cargo and express delivery needs more efficiently. It adds seventh-freedom traffic rights for all-cargo operations, meaning cheaper costs and efficiency in cargo movement. US Assistant Secretary of State for Economic and Business Affairs Manisha Singh and Kenya's Transport Cabinet Secretary James Macharia signed the deal at the Department of State in Washington on 6 February. Mr Macharia said the deal “will facilitate expansion of air freight services by allowing airlines from both countries to set up and operate air cargo hubs in either country”. The amendment is expected to enter into force following an exchange of diplomatic notes.

Source: Daily Nation

Kenya / US

New US-Kenya trade deal won't undermine AfCFTA: Uhuru

President Uhuru Kenyatta has assured that a new bilateral trade deal between Kenya and the US will not undermine the African Continental Free Trade Agreement (AfCFTA). Mr Kenyatta spoke shortly after a meeting with the US President Donald Trump at the White House in Washington DC on Thursday. During the meeting the two leaders agreed to start talks leading to a trade pact between Kenya and the US. President Kenyatta said the proposed new trade arrangement with the United States of America would in no way undermine Kenya’s commitment to the AfCFTA. At the meeting, Kenyatta and Trump said a new trade agreement would help increase volumes of trade and investment between Kenya and the US. Currently, trade between Kenya and the US stands at about USD1-billion a year with over 70% of Kenya's export into the expansive American market in 2018, worth USD466-million, entering under the African Growth and Opportunity Act (AGOA). President Kenyatta pointed out that Kenya was among the first countries to sign and ratify the AfCFTA and that its commitment to the agreement is steadfast. He said Kenya needs to move faster and set the pace for other African countries in formulating new trade and investment arrangements with the US as the AGOA comes to an end in 2025.

Source: Daily Nation

Lesotho

Lesotho's central bank cuts policy rate amid benign inflation outlook and weak growth

The Central Bank of Lesotho decided to cut its key interest rate by 25 basis points to 6.25% during the 81st meeting of its monetary policy committee (MPC) in January. Underlying domestic inflationary pressures are expected to remain in check through the short term, while subdued domestic demand will drive weak economic growth. Lesotho's consumer price inflation ticked up moderately to 4.8% year on year (y/y) in December 2019, from 4.6% y/y in November, driven by stronger prices for food and non-alcoholic beverages; housing; electricity, gas and other fuels; and clothing and footwear. Money supply grew marginally by 0.3% in the fourth quarter of 2019 on the back of stronger growth of net foreign assets. Economic output growth based on the Central Bank of Lesotho's measure of economic activity continued to increase in November, but only marginally. The economy expanded 0.1% in November on the back of ongoing supply-side weakness. The trade balance weakened in the third quarter of 2019, worsening the overall external-account balance. With that, gross official reserves deteriorated to 4.2 months of import coverage in the third quarter, from 4.5 months in the second quarter.

Source: IHS Markit

Madagascar

Madagascar to receive USD72-million for Jirama Water III project

Madagascar is set to receive USD72-million grant from the European Union and European Investment Bank (EIB) to finance a major drinking water project in the capital, Tananarive. The project dubbed Jirama Water III project aims to improve access to drinking water and the quality and efficiency of the service. The agreement was signed between Richard Randriamandrato, the Malagasy Finance Minister, and Ambroise Fayolle, Vice-President of the EIB. The project will see construction of five reservoirs: one of 3000 cubic metres at Ambohitrimanjaka and four of 1000 cubic metres at Mahatazana, Alasora, Ambohimanambola and Ambohibe. It will also enable the laying of 135km of new primary and secondary pipelines throughout Greater Tananarive (town and urban area), mainly in the outlying areas. In the central districts of the Malagasy capital, at least 44km of degraded pipelines will be built. The EIB will provide USD39-million while the European Commission, USD33-million. Part of the funds will be earmarked for technical assistance for the project.

Source: Construction Review Online

Malawi

Malawi’s central bank keeps key policy rate at 13.5% as medium-term inflation expectations remain stable

The Reserve Bank of Malawi’s monetary policy committee (MPC) resolved to keep the policy rate at 13.5% during its meeting held on 29-30 January, citing limited risk to the medium-term inflation objective of 5.0% (with 2 percentage points around the target) by 2021. The Lombard rate was also maintained at 0.4 percentage points above the policy rate, while the liquidity reserve requirements on local currency and on foreign currency deposits were also kept at 5% and 3.75% respectively. The bank stated that consumer price inflation averaged 9.4% in 2019 (against IHS Markit’s average of 9.1%), driven by stronger food prices. With non-food inflation holding steady, supported by the stable kwacha currency and relatively tight monetary conditions, the bank expects overall headline inflation to slow to 8.8% in 2020. Private-sector credit continued to strengthen, expanding 21.3% in 2019 from 11.5% in 2018, thanks to softening interest rates and improving economic conditions. The Malawi kwacha is expected to maintain its stability through 2020, benefiting from somewhat adequate foreign-exchange reserves. Real GDP is expected to come in at 6.0% in 2020, up from an estimated 5.0% in 2019, driven by continued recovery in the agriculture sector and macroeconomic stability.

Source: IHS Markit

Nigeria

Nigeria automates ship registry, targets international trade

For more efficient registration and participation in the global shipping industry, Nigeria has adopted a software licence to commence the automation of the ship registry processes. The Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA), Dakuku Peterside, who disclosed this at the Nigerian Ship Registry Interactive Forum with Ship owners in Lagos, assured of the country’s readiness to flag vessels in international trade. He said: "We have acquired a software license to commence the automation of the Ship Registry processes as we all are aware that automation is the only way that our business processes can be quickened. Our principal aim in the near future is to achieve online electronic registration, accept electronic copies of documents and issue electronic certificates. We are upgrading the Ship Registry Filing Facility to ensure effective documents management and control. We are reviewing our ship registration requirements to ensure a harmonised process between Survey and Ship Registry Units, and also align ourselves with standard international best practices."

Source: The Guardian

Rwanda

Kagame donates RWF460-million to African women’s leadership fund

President Paul Kagame on Saturday pledged RWF460-million (USD500,000) to the newly launched African Women’s Leadership Fund (AWLF). The President made the pledge during the Gender Equality and Women Empowerment in Africa breakfast he attended alongside President Sahle-Work Zewde of Ethiopia, President Cyril Ramaphosa of South Africa, African Union Commission Chairperson Moussa Faki Mahamat, UN Secretary-General Antonio Guterres and other Heads of State and Government from Canada and Norway. The African Women’s Leadership Fund (AWLF) will prioritise the growth and success of women-owned and operated companies in Africa. “Investing in African women fund managers is a smart and innovative approach. Female investors have been found to get higher returns. So we all get better results by investing in women,” President Kagame said, adding that the fund is a statement of action towards narrowing the gender gap and inequalities that exist. President Kagame was also unanimously elected as the new chairperson for the AUDA-NEPAD Heads of State and Government Orientation Committee (HSGOC) on Saturday, 8 February.

Source: The New Times

Rwanda

Rwanda’s newly created financial centre ready for business, CEO says

With ambitions to establish itself as a financial hub by 2024 as is set out in the National Strategy for Transformation (NST1), the work to establish the Kigali International Finance Centre has kicked off. A government-owned company, Rwanda Finance Limited is spearheading the establishment of an international finance centre. Rwanda Finance Limited (RFL) CEO Nick Barigye noted that, in December 2017, the government approved a policy paper, setting out to establish the Kigali International Financial Centre as a project that is looking to do reform within the financial services sector. The reform is under three main pillars; laws and regulations within the financial service sector, the tax policy as relates to the financial sector, and skills and capacity development as relates to the financial service sector. That work is being led by the Ministry of Finance because it is responsible for policy formulation and implementation.

Source: The New Times

Rwanda

Rating agency reaffirms Rwanda’s creditworthiness

Standard & Poor’s (S&P), an international financial services company, has maintained  Rwanda’s rating at “B+” thereby boosting investor confidence in the country. S&P projected continued high economic growth primarily driven by public investment, pointing out that it would likely result in higher fiscal deficits and rising government debt levels. However, the rating agency noted that a large portion of the higher fiscal deficits will be funded through concessional sources with long maturities, keeping funding costs low. “We have revised our 2019 real GDP growth estimate upward to 9.5 per cent, from 7.5 per cent previously, on the back of stronger outcomes during the first three quarters of 2019. The key growth spurs included a ramp-up in construction projects and strong performance in manufacturing and services, with the latter supported by RwandAir and trade,” S&P’s statement read in part. S&P forecasts real GDP growth of 7.7% annually over 2020-2023, citing a strong pipeline of construction projects including roads, energy projects, stadiums, schools, health centres and private residential and commercial real estate as factors to support Rwanda's growth prospects.

Source: The New Times

Tanzania

Tanzania reviews law on mediation for investors

The draft Bill proposes amendments covering sovereignty over Tanzania’s natural resources and public-private-partnership (PPP) ventures with foreign parties; domestic and international commercial arbitration, as well as “enforcement of foreign arbitral awards” and related matters. For example, on PPPs the draft proposes changes that would allow dispute resolution by outside arbitration bodies provided that the proceedings are held in Tanzania. The amended law will also create a Tanzania Arbitration Centre to host all mediation and deal with arbitrator accreditations. A key part of the draft Bill for the proposed 2020 Arbitration Act, tabled in parliament on 28 January, includes clauses allowing investors to access international arbitration. The draft Bill comes on the back of new arbitration announcements filed last month by several multinational mining companies over cancelled retention licences. It also coincided with a new profit-sharing deal between Tanzania and Canadian mining giant Barrick Gold Corp for the three Barrick-owned gold mines in the country.

Source: The EastAfrican

Uganda

COMESA, Middle East leading markets for Ugandan export

The Common Market for East and Southern Africa (COMESA) and the Middle East have become the leading export markets for Ugandan goods, according to the Bank of Uganda report for the year ended December 2019. According to the report, published on Wednesday, 5 February, for the period between January and December 2019, Uganda earned UGX15-trillion worth of exports up from UGX13.4-trillion. COMESA and the Middle East each fetched earnings of USD1.2-billion (UGX4.5-trillion) during the period. The report indicates that Uganda’s exports receipts from COMESA mainly came from Kenya, South Sudan and Democratic Republic of Congo (DRC). Exports to Kenya earned Uganda USD442-million (UGX1.6-trillion). However, this was lower compared to USD580-million (UGX2.1-trillion) recorded the same period in 2018. South Sudan recorded revenue worth USD351-million (UGX1.2-trillion), lower than the USD355-million (UGX1.3-trillion) that was registered in the same period in 2018. Exports to DRC grew to USD247-miilion (UGX913-billion) compared to USD204-million (UGX754-billion) earned in 2018. Europe, which was once Uganda’s leading export market, fetched earnings worth USD496-million (UGX1.8-trillion) falling to third position after COMESA and Middle East. Exports to Europe mostly went to Turkey and Switzerland with the two counties earning Uganda USD126-million (UGX466-billion) and USD34-million (UGX435-billion), respectively. Italy, Netherlands, Belgium and Germany continued to be big recipients of Uganda’s exports in the period.

Source: Daily Monitor

Zambia

Zambia is working towards ratifying the Agreement establishing the AfCFTA

Commerce, Trade and Industry Minister Christopher Yaluma says Government is working towards ratifying the Agreement establishing the African Continental Free Trade Area (AfCFTA) by May 2020. Mr. Yaluma says so far government has undertaken necessary consultations with the private sector, civil society, non-state actors, and academia among others on the implementation of the Agreement. He says government has emphasised on sensitisation to stakeholders on the value and benefits that will come because of Zambia’s participation in the AfCFTA. Mr. Yaluma, however, further said Zambia was fully aware of the potential challenges that could arise in an event that the country was not sufficiently prepared for its participation. The Minister said the AfCFTA will mainly be driven by the private sector who must have products and services to compete in a larger market. Mr Yaluma said Zambia was continuously working towards enhancing capacity of the private sector in order to ensure that their goods and services were export ready.

Source: Lusakatimes