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issue 346 | 05 Apr 2020
Coronavirus (COVID-19) updates
A non-exhaustive list of recent measures aimed at curbing the spread of coronavirus (COVID-19)Africa: For more information on coronavirus (COVID-19), or for support and advice should you experience symptoms, please consult local resources.
Source: ENSafrica
Africa: Initial United Nations Economic Commission for Africa estimates suggest Africa will face an immediate decline in GDP growth from 3.2% to 1.8% in 2020 as a result of COVID-19, but with a further adverse impact if COVID-19 is not contained in the short-term. Trade is a significant conduit for this negative impact through three transmission channels: compressed demand, falling prices and disrupted supply chains.
Source: United Nations Economic Commission for Africa
Africa: Vital Capital, a pioneering impact investor focused on companies in sub-Saharan Africa, which typically takes equity stakes, has launched the Vital Impact Relief Facility, to offer businesses immediate access to capital in anticipation of a severe economic crisis that could result from the rapid spread of COVID-19 in the region.
Source: Africa Business Communities
Central Africa: The Bank of Central African States (Banque des États de l'Afrique Centrale: BEAC) cut its key policy rate by 25 basis points to 3.25% during its monetary policy committee (MPC) meeting held on 27 March 2020. The MPC also reduced the marginal loan facility by 100 basis points to 5.0% and increased liquidity injections to XAF500-billion (USD0.85-billion), signalling monetary easing in response to the COVID-19 outbreak.
Source: IHS Markit
Botswana: On Tuesday, 31 March 2020, President Mokgweetsi Masisi declared a state of emergency from midnight on 2 April 2020 until further notice. Whilst the state of emergency is in place, there shall also be extreme social distancing commencing on 2 April 2020 at midnight, for a period of 28 days.
Source: Mmegi Online
Cabo Verde: Individuals and companies in Cabo Verde with bank loans, who have been affected by the new COVID-19 pandemic will benefit from a moratorium that will postpone payments until 30 September, the deputy prime minister and minister of Finance said in Praia.
Source: Macauhub
Ethiopia: Ethiopian Airlines (Ethiopian) announced that it has suspended flights to more than 80 international destinations as of 29 March 2020, due to the COVID-19 global pandemic. According to its statement, the national flag carrier will continue to provide cargo services to all served cargo deviations.
Source: Fana Broadcasting Corporate
Ghana: Hotel operators in the Western Region have called on the government to consider giving them tax rebate as the spread of the COVID-19 pandemic was having a toll on their operations.
Source: Ghana Business News
Kenya: All goods manufactured in the country’s special economic zones (EPZs) can now be sold locally in a bid to cushion the industry from losses inflicted by the COVID-19. This is after Treasury temporarily lifted the restriction that compelled EPZs to sell only 20% of the annual production in the local market to 100%.
Source: Business Daily
Kenya: Kenya is among member countries allowed to tap a KES319-billion (USD3billion) emergency fund set up this week by the African Export Import Bank (Afreximbank) to help African countries alleviate sudden economic disruptions caused by the COVID-19 outbreak. Afreximbank, which finances and promotes African trade, said the kitty named Pandemic Trade Impact Mitigation Facility (PATIMFA) will support its member country central banks, and other financial institutions to meet trade debt payments that fall due and to avert trade payment defaults.
Source: Business Daily
Kenya: Speaker Justin Muturi has said the National Assembly will speed up the parliamentary stages needed to effect changes to the law that will translate the President's economic stimulus package into a reality. Initially, the need for public participation had clouded the proposed implementation of tax incentives announced by President Uhuru Kenyatta to protect Kenya’s economy against shocks caused by the COVID-19 pandemic.
Source: Business Daily
Kenya / Tanzania: Demand for locally produced ethanol is set to rise after Tanzania banned all exports to Kenya to facilitate manufacture of sanitisers and disinfectants.
Source: Business Daily
Eswatini: Prime Minister Ambrose Mandvulo Dlamini announced in a statement, dated 27 March 2020, that the Kingdom of Eswatini joined the rest of the world and more than 2.5 billion people globally to observe a partial lockdown.
Source: Africanews
Lesotho: Prime Minister Thomas Thabane has ordered a total lockdown from midnight on Sunday, 29 March 2020 until 21 April 2020 to stop the spread of the COVID-19.
Source: SowetanLIVE
Malawi: Reserve Bank of Malawi (RBM) has formed a special taskforce to monitor possible impacts of COVID-19 to the country’s economy. RBM Spokesperson Mbane Ngwira said the central bank is aware of possible threats of the disease’s spread to the national economy.
Source: BusinessMalawi™
Mauritius: The COVID-19 outbreak is disrupting businesses across industry sectors and jurisdictions. ENSafrica has highlighted a few considerations that are relevant to listed issuers.
Source: ENSafrica
Mauritius: Following a previous ENSight on the assistance scheme announced by the Mauritian Prime Minister, the government has decided to extend its scheme to the informal sector, including self-employed individuals and micro, small and medium enterprises, and take general measures aiming to facilitate the life of everyone during this crisis.
Source: ENSafrica
Mozambique: Mozambique went into a state of emergency from 00:00 on 1 April 2020 for a period for 30 days, as decreed by the President of the Republic, Filipe Nyusi, given the spread and need to control the new COVID-19 pandemic. Read more in ENSafrica's ENSight.
Source: Macauhub
Mozambique: The Confederation of Mozambique Economic Associations (CTA) suggested the suspension of employment contracts for six months, with the replacement of salaries by subsidies, to support the companies most affected by the COVID-19 pandemic.
Source: Club of Mozambique
Mozambique: The Confederation of Economic Associations of Mozambique (CTA) has carried out a study on the impact of COVID-19 on the Mozambican business sector, and proposes a drastic cut in the benchmark interest rate (monetary policy interest rate, MIMO) to 6.55%. The country’s largest business association further estimates that the COVID-19 pandemic will cost USD355-million.
Source: Club of Mozambique
Rwanda: In an extraordinary cabinet meeting held via video conference on Wednesday, 1 April 2020 and chaired by President Paul Kagame, Cabinet extended the lockdown for an additional two weeks until 23:59 on Sunday, 19 April 2020. The initial two-weeks lockdown took effect from 23:59 on Saturday, 21 March 2020.
Source: The New Times
Rwanda: On 2 April 2020, the Executive Board of the International Monetary Fund (IMF) approved the disbursement of SDR80.1-million (about USD109.4-million) to be drawn under the Rapid Credit Facility (RCF). This will serve to meet Rwanda’s urgent balance of payment needs stemming from the outbreak of the COVID-19 pandemic.
Source: International Monetary Fund
São Tomé and Príncipe: The government of São Tomé and Príncipe plans to propose an extension of the State of Emergency in the country for a further two weeks due to the COVID-19 pandemic, Prime Minister Jorge Bom Jesus said on Friday, 27 March 2020 in São Tomé.
Source: Macauhub
Uganda: President Yoweri Museveni on Monday, 30 March 2020 announced a ban on all people-to-people movements for 14 days as Uganda enhanced stricter guidelines to stem the COVID-19 spread. The president also announced a shutdown of government services, except for the army, police, health services and essential services.
Source: PML Daily
Uganda: The Bank of Uganda has reduced the working hours of the commercial banks, credit institutions and microfinance deposit-taking institutions. In a new circular issued on 27 March 2020, these banking institutions have been ordered to open at 9.00am and close at 3.00pm, as a measure of minimising the spread of the COVID-19.
Source: Daily Monitor
Zambia: Zambia’s finance minister, Bwalya Ng’andu, on 27 March 2020 presented to parliament an update on the economic impact of the COVID-19 outbreak and measures the government is taking to mitigate its impact. The government has suspended both import and export duties on mineral concentrates and precious metals as part of the measures taken to provide relief to businesses.
Source: IHS Markit
Zimbabwe: Zimbabwean authorities on Monday, 30 March 2020 began enforcing a three-week lockdown, in its fight against the spread of COVID-19 after the disease left one person dead and infected six others. President Emmerson Mnangagwa declared a 21-day “total” lockdown from Monday curtailing movement within the country, shutting most shops and suspending flights in and out of Zimbabwe.
Source: BusinessDay
West Africa
World Bank to fund strengthening of data and statisticsThe World Bank has allocated a total of USD379-million in International Development Association (IDA) credits and grants to help harmonise and strengthen statistical systems in seven West African countries. The seven countries are Burkina Faso, Cabo Verde, Côte d'Ivoire, Ghana, Liberia, Sierra Leone and Togo. The funding will also be allocated to support the African Union (AU) and the Economic Community of West African States (ECOWAS) in their efforts to deepen regional integration in Africa. The new project, Harmonizing and Improving Statistics in West Africa (HISWA), aims to strengthen the statistical systems of participating countries and regional and sub-regional bodies, in order to help them harmonise, produce, disseminate and enhance the use of core economic and social statistics. “Through its regional approach, the HISWA will allow for more cost-effective data and harmonisation of data across countries, which is instrumental in key areas such as promotion of free trade, convergence of economic policies, and many others”, says Deborah Wetzel, World Bank Director of Regional Integration for Africa.
Source: ESI Africa
West Africa
Solar emerging as best bet for West Africa’s future energy mixThe countries of West Africa should make solar PV the “prime source” in their future energy systems as they decarbonize in the decades leading up to 2050, according to a newly published study by a team of researchers in Finland. The Economic Community of West African States (ECOWAS) needs to substantially ramp up generating capacity over the next three decades to keep pace with an anticipated surge in electricity demand. But there is no need for member states to build new nuclear plants and coal-fired facilities, as solar PV is ideally positioned to serve as the “prime source” of the region’s future energy mix through 2050, said researchers from LUT University in Lappeenranta, Finland. In particular, hybrid PV battery systems will be the most affordable option to ECOWAS through 2050. The researchers claimed that the ECOWAS region can facilitate “substantial” renewables deployment in the decades ahead without the need to rely on state funding. Under their “best policy scenario” leading up to 2050, they foresee solar PV potentially fulfilling 81% to 85% of total energy demand by 2050. They also expect the cost of electricity in the region to drop from EUR70/MWh in 2015 to EUR36/MWh by 2050 with interconnection, and to EUR41/MWh without interconnection.
Source: Africa Energy Portal
Angola
Moody’s places Angola’s B3 ratings on review for downgradeMoody’s Investors Service (Moody’s) has today placed Angola Government’s B3 long-term issuer ratings and senior unsecured rating and its (P)B3 senior unsecured MTN rating under review for downgrade. The short-term issuer rating is affirmed at Not Prime (NP). The decision to place Angola’s ratings on review for downgrade is prompted by the magnitude of the shock from the sharp drop in oil prices and an acute tightening in global financing conditions on Angola’s already weak public finances and external position, and elevated government gross borrowing requirements. The review period will allow Moody’s to assess the overall policy response to the shock and the capacity of the authorities to manage: the additional stress on public finances and the government’s balance sheet driven by the significant loss of oil-related revenues and a potential further depreciation of the currency; the severity of the increase in external vulnerability given the expected sharp drop in oil export receipts putting pressure on foreign currency reserves; and the rising risks associated to large domestic and external debt service payments in a currently dislocated credit market.
Source: CNBC Africa
Angola
Angola prepares creation of duty-free areasThe minister for Economy and Planning, Sérgio Santos, said on Friday, 27 March 2020 in Luanda that the government is preparing to set up duty-free areas, and companies that operate within them will benefit from incentives for a renewable period of 25 years. These will be tax, exchange rate, financial, working and migration incentives, the minister said at the end of a meeting of the Council of Ministers, according to Angolan news agency, Angop. Santos also said that the initiative is intended to stimulate the customs regime of providing tax breaks and encouraging investors (both national and foreign) to conduct their business in Angola. The draft bill, which was discussed during the meeting before being submitted to parliament, sets out the aims, general principles, incentives and facilities to be granted by the state to investors and to companies. The document also includes the possibility of establishing free-trade areas in certain regions, by the state or by private enterprise.
Source: Macauhub
Equatorial Guinea
Equatorial Guinea shortlists companies for key energy projectsThe Board of Directors of the Ministry of Mines and Hydrocarbons (MMH) of Equatorial Guinea has selected and revealed the key companies shortlisted for the execution of its landmark projects under its ongoing Year of Investment. The decision was adopted during a meeting on 19 March 2020. At Punta Europa, where most of Equatorial Guinea’s gas and energy activities are currently located, the country is building a modular refinery, storage tanks and a methanol-to-derivatives plant. Interested companies for the modular refinery include American oil company Marathon Oil, a Spanish-Russian consortium of Selquimica International with Engineering and Energy, and British company Rosslyn Energy. The latter is also interested in the development of the Storage Tanks, along with British company Orange Resources Worldwide and the China Communications Construction Company. Finally, the Methanol-to-Derivatives project has attracted the interest of South African company Pan African Energy, Nigerian company Bugabi Group, and Danish catalysis company Haldor Topsoe. At Kogo South of the nation’s economic capital Bata, the second Modular Refinery project has attracted the interest of Egyptian company Petrojet, British company Rosslyn Energy, the Spanish-Russian consortium of Selquimica International with Engineering and Energy, and United Arab Emirates-based SDLE International DMCC. Meanwhile, South African company Grindstone Resources and Omani company MSS LLC are both shortlisted for the gold refinery project and the Minerals Industrial Zone. While the MMH is still registering interest from additional players, including Chinese companies, these are the shortlisted potential investors for these projects so far.
Source: Petroleum Africa
Kenya
Kenyans eye cheaper fuel as crude prices crash to 18-year lowThe Energy and Petroleum Regulatory Authority (EPRA) is expected to make a significant cut in fuel prices in the next two months following the fall in the price of crude oil in the international market to an 18-year low of USD22.84 a barrel. EPRA’s most recent price review on 14 March 2020 was based on February’s crude price of USD56.10 per barrel. The April review will therefore be based on the price in mid-March, when crude was priced at around USD35, while May review is likely to go even lower should the present prices persist. Since Kenya stopped refining crude in 2013, there is usually a time lag of at least a month between the placement of import orders and delivery of the commodity at the Port of Mombasa, meaning local prices do not immediately reflect global market trends. The effect is also set to be felt on month electricity bills, given that the fuel levy is a significant factor in monthly changes in power cost. The charge for March stands at KES2.50 per unit. Stakeholders in the industry estimate the fall to be in double digits per litre of fuel but did not want to pre-empt the regulator who will be expected to announce one of the biggest pump price cuts since the price control was introduced on petrol in December 2010.
Source: Business Daily
Kenya
Kenya mobile taxes too high, says GSMAThe Treasury has been advised to cut duties on cellular services and mobile phones to boost the country’s telecommunication sector. A new study by the GSM Association (GSMA) says Kenya’s mobile industry, despite being billed as a front runner in Africa, is one the region’s most heavily taxed, inhibiting its potential to grow further and support other economic sectors. The study conducted by professional services firm EY on behalf of GSMA notes that the Kenyan mobile sector makes a large contribution in taxes and fees relative to its economic footprint. It says that while mobile market revenue accounts for 3% of Kenya’s GDP, the sector’s tax and fee payments accounts for around 6.5% of government total tax revenue. GSMA, a global trade association representing more than 680 GSM mobile phone operators across 210 countries, argues that high taxes have made mobile communications unaffordable for hundreds of millions of people, holding back social and economic development.
Source: Business Daily
Malawi
Malawi Bureau of Standards lab not readyExporters in the country will wait a little longer to start using the much-awaited MWK12.4-billion Malawi Bureau of Standards (MBS) laboratory, under construction in Blantyre. This follows revelations that the laboratory will not be opened as earlier indicated. The lab, which will be the hub of products certification in the region, is expected to help improve the country’s export business. It will help the country save foreign exchange and businesses save time when seeking certification. In an interview MBS Director General, Symon Mandala, said construction of the laboratory is not complete but they expect to have the lab operational before June 2020. South Africa and Botswana are some of the countries with similar laboratories in the region. The laboratory has been constructed under the Standardisation, Quality Assurance, Accreditation and Metrology project. The project was funded by the European Union, the United Nations Development Programme and the Malawi Government.
Source: BusinessMalawi™
Malawi
MRA, MBS sign memorandum of understandingThe Malawi Revenue Authority (MRA) on Thursday, 26 March 2020 signed a memorandum of understanding with the Malawi Bureau of Standards (MBS) aimed at enhancing border patrols. The pact is aimed at guarding against entry of uncertified products into the country and curbing illegal importation of goods. Following the signing of the agreement, the entities will be sharing information. MBS Director General, Symon Mandala, said the move will help MBS enhance its capacity in checking imports and exports. “With the signing of this memorandum and integration into the Asycuda World, it means that our issues can be dealt with by the system even if we are not physically present at some places,” Mandala said. MRA Commissioner General, Gray Thom Malata, said the partnership will not only enhance efficiency of the regulators but also consumer protection.
Source: BusinessMalawi™
Mozambique
Mozambique launches another international tender for the Temane-Maputo transmission lineThe process of selection of companies that will build the electrical substations, included in the Temane-Maputo transmission line project, with an output of 400 Kilovolts, began formally on Wednesday, 1 April 2020, Mozambican newspaper Notícias reported. This international public tender, which has World Bank financing, is divided into three lots, which cover the substations of Vilanculos in Inhambane province, Chibuto in Gaza province and Matalane, in Maputo, in addition to the expansion of the substation of Maputo, located in the district of Boane, all in southern Mozambique. The three sections of the line have financial support from the Islamic Development Bank and the OPEC Fund for International Development (OFID). The deadline for the submission of tenders ends on 28 April 2020. In turn, the tender for the substations closes on 25 May 2020, the date on which the analysis phase of the proposals for the subsequent award is due to begin.
Source: Macauhub
Nigeria
S&P downgrades Nigeria’s credit risk rating to B-The sharp fall in global oil prices is expected to increase Nigeria’s external and fiscal financing needs, guiding the revision of S&P’s long-term foreign- and local-currency credit rating to B- on the generic scale (in the Very High Payments Risk category; equivalent to 60/100 on the IHS Markit scale) on 26 March 2020. Nigeria’s current-account deficit is expected to widen to 3.3% of GDP in 2020, S&P estimates show. Over the medium term, the current-account deficit is expected to narrow to an average of 1.1% of GDP. Foreign reserve holdings are expected to fall to USD32-billion by end-2020, edging up marginally to average USD34-billion in 2020–2023. Adverse global risk sentiment, combined with a weakening sovereign credit profile, could trigger a reduction of non-resident holdings of Central Bank of Nigeria (CBN) bills in the near term. This, combined with a widening current-account deficit and delays in the government’s international issuance plans, is expected to deplete Nigeria’s foreign reserve holdings during 2020. The fiscal deficit of the general government (federal and state government combined) is expected to widen to an estimated 5% of GDP in 2020 and average 4.2% of GDP in 2020–2023. S&P states that the government will continue its efforts to increase non-oil revenue, which include a reduction in fuel subsidies, higher electricity tariffs, and a hike in the value-added tax rate to 7.5%, from 5.0% previously.
Source: IHS Markit
Rwanda
Rwanda writes to Kenya, Uganda over Burundi cargo blockadeThe Government of Rwanda has formally notified Uganda and Kenya of the sudden decision by Burundi to block cargo trucks entering their country through Rwanda. All Burundi-bound trucks transporting cargo from the Kenyan port of Mombasa, transit through Uganda and Rwanda. However, authorities in Gitega recently decided to block trucks using the Northern Corridor, causing gridlocks at points of entry. The move has been strongly criticised by freight transporters and the business community in general, especially since it goes against a decision by a ministerial meeting from East African Community (EAC) member states. The meeting took place in the context of the coronavirus (COVID-19) outbreak in EAC member states. The ministers, who met virtually on 25 March 2020, directed all partner states to facilitate continued free movement of goods even as they take measures to limit the spread of the COVID-19 pandemic. Rwanda’s Ministry of Foreign Affairs and International Cooperation has now sent Notes Verbales to Kampala and Nairobi, informing them that Kigali has been left with no choice but not to allow in trucks headed for Burundi from the two East African neighbours.
Source: The New Times
São Tomé and Príncipe
AfDB finances energy transition programmeThe Government of São Tomé and Principe has reached an agreement with the African Development Bank Group (AfDB) for EUR12.46-million to support the Energy Transition and Institutional Support Programme (ETISP), which was launched in January 2020. This considerable support will cover the major part of the programme, which in reality costs around EUR13-million. The rest of the funding, more than EUR550, 000, will be supplemented by the Government of São Tomé and Principe. Within five years, the electricity network should be more stable in the country.
Source: Afrik 21
