AfricaInternational Monetary Fund: World Economic Outlook, October 2019
In sub-Saharan Africa, growth is expected at 3.2% in 2019 and 3.6% in 2020, slightly lower for both years than in the April 2019 World Economic Outlook (WEO). Higher, albeit volatile, oil prices earlier in the year have supported the subdued outlook for Nigeria and some other oil-exporting countries in the region, but Angola’s economy – because of a decline in oil production – is expected to contract this year and recover only mildly next year. In South Africa, despite a moderate rebound in the second quarter, growth is expected to be weaker in 2019 than projected in the April 2019 WEO following a very weak first quarter, reflecting a larger-than-anticipated impact of labor strikes and energy supply issues in mining, together with weak agricultural production. While the three largest economies of the region are projected to continue their lackluster performance, many other economies – typically more diversified ones – are experiencing solid growth. About 20 economies in the region, accounting for about 45% of the sub-Saharan African population and 34% of the region’s GDP (1% of global GDP), are estimated to be growing faster than 5% this year while growth in a somewhat larger set of countries, in per capita terms, is faster than in advanced economies.
Source: International Monetary Fund
East AfricaBoreal Light to launch largest solar water desalination project in East Africa
GreenTec Capital announced the launch of Boreal Light's largest decentralised solar water desalination project in Eastern Africa in partnership with WaterKiosk LTD, Atmosfair GmbH and the Bilal Sustainable Development Project. The project’s genesis can be traced to an industry event organised by the AHK Eastern Africa’s Competence Center for Energy and Environment in 2017 which was implemented by the AHK Eastern Africa, where Boreal Light was introduced to key personnel that make up the current WaterKiosk team. The partnership consortium of Boreal Light, WaterKiosk LTD, Atmosfair, and the Bilal Sustainable Development Project plans to deploy solar water desalination systems. The project is financed by Atmosfair, with WaterKiosk LTD acting as the implementing partner, and Boreal Light as a manufacturing partner, and sustainability management and auditing by the Bilal Sustainable Development Project.
Source: Africa Business Communities
AngolaFitch downgrades Angola’s credit risk rating to B-
International ratings agency Fitch Ratings has downgraded Angola’s foreign-currency issuer default rating to B- on the generic scale (Very High Payments Risk), from B previously, with the outlook set at Stable. Although the Angolan government has made significant progress under an International Monetary Fund (IMF)-supported macroeconomic programme, Fitch warns that lower oil production combined with lower global oil prices and a sharper depreciation in the kwanza’s exchange rate have increased public-sector debt levels and external debt-servicing obligations. International reserves holdings also remain fragile. Angola’s external liquidity conditions are expected to show a mild improvement during 2020. Fitch expects Angola’s GDP growth rate to recover to 1.0% in 2020 and then to accelerate further to reach 2.5% in 2021. Increased oil production at the Agogo-1 offshore well is expected to arrest the structural slide in oil production during 2020 and stabilise Angola’s oil output levels at an estimated 1.4 million barrels per day. The mild recovery in external liquidity (foreign exchange, FX) availability is, furthermore, supported by the National Bank of Angola’s (BNA’s) decision in October 2019 to increase banks’ reserve requirement from 17% to 22% and also to lower the limits on banks’ net open foreign-currency position to 2.5% of capital, from 5.0% previously.
Source: IHS Markit
EthiopiaUSA ready to invest USD5-billion in several areas in Ethiopia, including geothermal energy
The United States of America (USA) is preparing to invest USD5-billion in Ethiopia over the next three to five years. These funds will be used to support the country’s efforts to develop the private sector, but also to counter China’s growing influence, reports the Financial Times. They will be invested through the International Development Finance Corporation (DFC) recently installed by the United States. The American financial institution has expressed interest in the telecoms, geothermal energy, logistics and sugar production sectors. “We are working in partnership with Ethiopia to implement reforms that will attract more capital from the private sector. If adopted, these reforms will make the country eligible for a significant commitment from the DFC which will mobilize several billion dollars from the private sector ”, said Adam Boehler, executive director of the DFC.
Source: Agence Ecofin
GhanaBoG extends minimum capital requirement for PSP to December
The Bank of Ghana (BoG) has extended the deadline of meeting the minimum capital requirement for Payment System Providers (PSPs) from June to December 2020, after consultation with relevant stakeholders. In September 2019, the Central Bank increased the minimum capital requirement for Mobile Money companies by 300% from GHS5-million to GHS20-million and gave nine months to meet the deadline. However, Dr Settor Kwabla Amediku, the Director and Head of Payment Systems Department of the Central Bank, speaking at the opening of the maiden Mobile Technology for Development (MT4D) Conference in Accra, announced the extension, which attracted thunderous applause from financial stakeholders at the meeting. He said all lenders are to use 50% of their existing assets as part of the paid-up capital and should lodge the rest of the 50% at the Bank of Ghana. In addition, the governance framework and infrastructure requirement for PSPs has also been extended to December 2020.
KenyaRelief for financial institutions lending in Kenya as proposed law affecting guarantees falls away
The Law of Contract (Amendment) Bill, 2019 (the “bill”), which was aimed at amending section 3 of the Law of Contract Act, Cap. 23 of the Laws of Kenya, has collapsed after the quorum required to overturn President Uhuru Kenyatta’s reservations to the bill was not present on voting day. The bill, which was passed by Kenya’s National Assembly on 18 September 2019, provided that, in the case of a default by the principal borrower, the lender should first realise the securities (we understand this was later amended to “assets”) of the principal borrower. After being passed, the bill was sent to the president for assent into law. In declining to assent to the proposed law, President Kenyatta stated that the proposed law would “negate a long standing principal of contract law, prejudice the financial sector and adversely affect credit advanced to micro, small and medium enterprises”. He also objected to the proposed law on the ground that it would “interfere with the operations of the capital markets in Kenya.”
KenyaKenya’s new Companies (Beneficial Ownership Information) Regulations
A 2019 amendment to the Kenyan Companies Act, 2015 introduced a requirement for every company to keep a register of its beneficial owners and submit a copy of this register to the Registrar of Companies (the “Registrar”) within 30 days of preparation. In order to put the above statutory requirements into action, the Attorney-General published the Companies (Beneficial Ownership Information) Regulations, 2020 (the “Regulations”) with effect from 28 February 2020. These Regulations apply in any situation where ownership or control in a company structure is exercised through a direct or indirect chain of ownership or control. Companies will now need to keep records of all their beneficial owners through the chain of ownership or control in order to identify the natural person(s) who have the ultimate beneficial ownership or control. A company is required to take reasonable steps to identify its beneficial owners and to enter the required particulars, which include personal information, in the register. In addition, except in the case of listed companies, any subsequent changes in beneficial ownership information should be notified to the Registrar within 14 days by way of filing an amended register of beneficial owners. Failure to comply with these requirements is deemed an offense and the company and every officer who is in default will each be liable on conviction to fines of up to KES500 000 for a first offense and an additional fine of KES50 000 each per day for continuing non-compliance.
KenyaImports sourcing talks to start as virus cuts off China
Top government and private sector officials are holding a series of meetings in the week starting 9 March to explore alternative source markets for supplies in the wake of deadly Covid-19 outbreak that has cut off imports from China. Trade and Finance ministries will lead the talks. Kenya’s market is shielded by, among other things, tariffs and import quotas that may need to be reviewed to make imports from alternative sources such as African markets affordable. Asked whether the Treasury will consider waiving duty on imports from alternative markets, Julius Muia, the Treasury principal secretary said: “We haven’t decided how the government will come in. What we will come up with will be in the best interest of our local industry in terms of ensuring we have inputs at best prices possible. Manufacturers have started feeling the cost pressures as a result of shortages of raw materials and intermediate goods after China put factories on a lockdown to manage the highly contagious disease, according to a closely watched monthly survey. Part of the reason we are holding the meeting is to ask ourselves those very questions: What’s the alternative source of some of the materials that we may be getting from China? What’s does the government need to do to stimulate the economy in the face of this obvious economically challenging situation that’s facing us?” Mr Kagwe told journalists in Nairobi.
Source: Business Daily
MauritiusRegulations in respect of the Portable Gratuity Retirement Fund published
In view of the impending implementation of the Portable Gratuity Retirement Fund (“PRGF”), the Minister of Labour, Human Resource Development and Training has issued The Workers’ Rights (Portable Retirement Gratuity Fund) Regulations 2020 (the “PRGF Regulations”), deemed effective as from January 1, 2020. The implementation of the PRGF was, by a decision of Cabinet on December 13, 2019, postponed from 1 January 2020 to 1 April 2020. At the time of their retirement, workers in respect of whom contributions have been made to the PRGF will be entitled to a gratuity payable from the PRGF itself. Should there be a shortfall in the individual account of a worker, the employer will be required to make further contributions. For private sector employees for whom no contributions to the PRGF were required to be made, gratuity upon retirement is still payable under section 109 of the Workers’ Rights Act. The quantum of the gratuity is set at 15 days’ remuneration for each period of 12 months of continuous employment. If the employer has been making contributions to a private pension scheme or any other fund, it will be entitled to make the appropriate level of deductions from the gratuity payable by having regard to the contributions it made. We have however been made aware of a letter dated 5 March 2020 emanating from the Ministry of Labour, Human Resource Development and Training to the effect that administrative arrangements have been made at the level of the Mauritius Revenue Authority for payments which may have been made in terms of a settlement agreement and/or in respect of severance allowance to be deducted from amounts payable as gratuity under the PRGF.
MozambiqueMozambique launches tenders for hybrid solar mini-grids
A call for tenders has been launched in Mozambique for a technical and financial feasibility study for the construction of five hybrid solar mini-grids. The call was launched by the Mozambican Energy Fund (Funae) and the Belgian Development Agency (Enabel). Three of the facilities will be located in the province of Zambezia and two in Nampula. The facilities will increase access to electricity in rural areas using renewable energy. The new call for tenders is part of phase 2 of the Renewable Energy for Rural Development (RERD2), which aims to provide electricity services from renewable energy sources in rural areas, specifically hydroelectricity, solar and hybrid solar. The project will run until 2023.
Source: Alternative Energy Africa
RwandaRwanda seeks alternative sources of import
Rwanda manufacturers, producers and importers are already seeking alternative sources of raw materials with China’s production and export capacity expected to slow down due to the Coronavirus outbreak. China is one of the major sources of intermediary, capital as well as some finished products for Rwanda. An estimated 20% of Rwanda’s imports are sourced from China, according to the central bank. The imports are made up consumer goods, capital goods, intermediate goods from a number of big infrastructure projects as well as the growth of manufacturing subsector. Rwandan producers and importers said that in their search for alternative sources, they are considering costs, logistics as well as compatibility to local value-chains. Benjamin Gasamagera, the Chief Executive of Safari Centre, a local firm with operations in the production of sanitary products, animal feeds and pesticides, as well as trade logistics, said that among markets in consideration by local business people are Turkey and Egypt among others. Rwanda’s imports from China include plastics, electronics, vehicles and spare parts, textile and apparel, iron steel and related products, rubber products, furniture as well as household consumables.
Source: The New Time
RwandaA snapshot of Rwanda’s tightened financial crimes laws
The Parliament of Rwanda recently passed two key laws to counter money laundering, the financing of terrorism and the proliferation of weapons of mass destruction (“WMDs”), in an effort to strengthen and increase confidence in its financial system. Law No. 74/2019 of 29 January 2020 establishing the Financial Intelligence Centre (“Law No. 74/2019”), which came into effect on 17 February 2020, launches a Financial Intelligence Centre (“FIC”) and determines its mission, responsibilities, powers, organisation and functioning. It repeals all prior legal provisions inconsistent with it. Rather than functioning as a centre attached to the National Bank of Rwanda, the FIC has been established as an independent body under the supervision of the Ministry of Finance. On 24 February 2020, Law No. 75/2019 of 29 January 2020 on Prevention and Punishment of Money Laundering, Financing of Terrorism and Financing of Proliferation of Weapons of Mass Destruction (“Law No. 75/2019”), came into effect. It repeals Law No. 69/2018 of 31 August 2018 on Prevention and Punishment of Money Laundering and Terrorism Financing and all prior legal provisions contrary to it. Law No. 75/2019 establishes a Coordination Council to prevent and counter money laundering, financing of terrorism and financing of proliferation of WMDs and introduces severe penalties for non-compliance with it, including imprisonment of up to 25 years and fines of up to 20 times the amount granted to finance relevant illegal activities.
RwandaRwanda approves waiver of visa fees for Africans, Commonwealth
Rwandan cabinet has approved the waiver of visa fees for a broad category of visitors entering the east African country. Cabinet approved the waiver of entry visa requirements to the citizens of member states of the African Union, the Commonwealth and Francophone countries to foster the implementation of Rwanda's openness policy, minutes of cabinet meeting released Saturday, 7 March showed. The new policy means that all Africans, citizens of Commonwealth nations and the Organization Internationale de la Francophonie (OIF) can enter Rwanda without having to pay visa fees.
Source: Daily Nation
UgandaNew strategy to revamp Uganda’s textile sector completed
Uganda has completed the development of a strategy for its cotton, textiles and apparels sector that could generate 50,000 new jobs with workers earning a combined amount of USD50-million annually and USD650-million in additional export revenues over the next eight years. With only two integrated textiles and garment plants operational, Uganda earns USD20-million from lint and apparels exports annually. To meet the new set targets, Uganda will establish five new vertically integrated textile mills. The strategy seeks to stimulate large scale commercial cotton production while improving textile related infrastructure and business climate. It also aims to attract targeted foreign direct investment into the sector while supporting existing industrial players to develop into integrated value chains that export full value apparel products. Only 10% of the 30,000 tonnes of lint produced is currently processed into fabric, with production mainly serving the domestic and regional markets. Under the strategy, the proportion of processed lint would be progressively raised to 75% of production or 20,000 tonnes annually based on the current output.
Source: Africa Legal Network (ALN)