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issue 351 | 10 May 2020

Coronavirus (COVID-19)

updates

A non-exhaustive list of recent measures aimed at curbing the spread of coronavirus (COVID-19)

Africa: The secretariat of the African Continental Free Trade Area is exploring the feasibility of moving talks involving more than 50 countries and real-time translation into four languages online. However, full border closures by about 30 nations aimed at limiting the spread of COVID-19 is likely to restrict trade flows over the coming months, Wamkele Mene, the secretary-general, said in an interview. While the agreement entered into force legally in 2019, protocols for trade in goods, including tariff concessions, need to be agreed for its implementation and commerce to start on 1 July. Disruptions caused by the COVID-19 pandemic have set negotiations back by two and a half months.

Source: Business Day

Botswana: Botswana will begin a gradual lifting of a five-week lockdown to slow the spread of COVID-19 on Friday, 8 May. Vice President Slumber Tsogwane said that based on the government's response to the COVID-19 outbreak and the current trajectory of the disease, the administration decided to open the economy albeit incrementally, while observing the disease patterns.

Source: Voice of America (VOA)

Ethiopia: The Ministry of Revenues has announced details of the recent tax cancellation and deduction decision passed by the Council of Ministers. The decision is passed with the view to ensuring quick economic recovery from the adverse effects of COVID-19 pandemic, it was noted. Accordingly, taxes owed between 2005 and 2014 fiscal years and interests as well as penalties are totally scrapped; while those from 2015 and 2018 are deducted and interests as well as penalties cancelled. Revenues Minister Laqe Ayalew called on tax payers to apply and benefit from the decision within the coming 30 days. 

Source: Ethiopian News Agency

Ethiopia: The International Monetary Fund (IMF) has approved USD411-million in emergency assistance for Ethiopia to help fight the COVID-19 pandemic. It also approved Ethiopia’s request for a suspension of debt service payments of about USD12-million to the IMF under the IMF's Catastrophe Containment and Relief Trust.

Source: International Monetary Fund

Equatorial Guinea: The Ministry of Mines and Hydrocarbons announced that it will extend exploration licenses for two years and relax capital expenditure requirements for E&P companies amid the low-price climate and reduction in oil demand caused by COVID-19.

Source: ESI Africa

Ghana: President Akufo-Addo has extended the closure of Ghana’s borders by another month following the increase in the number of confirmed cases of COVID-19. Speaking at a closed-door celebration of Labour Day, the president disclosed that the extension will be effected on Monday, 4 May.

Source: GhanaWeb

Kenya: Kenya’s private sector activity plunged in March to its lowest level since November 2017 as the global COVID-19 pandemic hit consumer demand and forced businesses to shed jobs and cut back on their operations. The Market Stanbic Bank Kenya Purchasing Managers’ Index (PMI) – which tracks business performance in the manufacturing and services sector – fell to 34.8 in April from 37.5 in March from 49.0 in February. Readings above 50.0 signal growth in business and the latest data is just shy of the record low of 34.4 reported in October 2017, just weeks after Kenya had come out of two presidential elections. April’s number was the second-lowest in the survey’s history, highlighting the impact of COVID-19 on business and the economy.

Source: Business Daily

Kenya: The Executive Board of the International Monetary Fund (IMF), on 6 May, approved the disbursement of SDR542.8-million (100% of quota, about USD739-million) to be drawn under the Rapid Credit Facility (RCF). This will help to meet Kenya’s urgent balance of payments need stemming from the outbreak of the COVID-19 pandemic.

Source: International Monetary Fund

Malawi: The Executive Board of the International Monetary Fund (IMF), on 1 May, approved a disbursement under the Rapid Credit Facility (RCF) equivalent to SDR66.44-million (USD91-million or 47.9% of quota) to help Malawi meet the urgent balance of payment needs stemming from the COVID-19 pandemic.

Source: International Monetary Fund

Nigeria: Nigeria will extend a ban on all flights by four weeks as part of measures to prevent the spread of COVID-19, a government official told reporters on Wednesday, 6 May. Boss Mustapha, secretary to the government of the federation, said Thursday would mark the last day for the enforcement of the current ban.

Source: Reuters

Rwanda:  The Ministry of Finance and Economic Planning Monday, 4 May signed a financing agreement with the World Bank worth USD100-million (RWF93.1-billion) to support Rwanda’s COVID-19 response in energy. The latest financing signed on Monday is part of the World Bank’s existing three-year financing support towards the country’s energy sector, worth USD375-million.

Source: The New Times

Rwanda: Rwanda has partially lifted the national lockdown, allowing businesses to operate from Monday, 4 May. The new measures will be reviewed after 15 days upon a health assessment, the Prime Minister’s Office announced.

Source: The EastAfrican

Rwanda: The National Bank of Rwanda has slashed its lending rate to 4.5% from 5%, to stimulate economic growth amid the COVID-19 pandemic that has halted economic activity. This decision, along with other implemented policy measures taken in March, will support commercial banks to continue financing the economy, a statement from the central bank reads.

Source: The EastAfrican

Rwanda: The Private Sector Federation on Monday, 4 May, signed a Memorandum of Understanding with Access to Finance Rwanda in a new initiative aimed at supporting entrepreneurs in Rwanda to adjust to economic realities of COVID-19. The parties to the deal, as noted, seek to share their respective strengths, experiences, technologies, including technical assistance to facilitate Small and Medium Enterprises (SMEs) during the COVID-19 pandemic.

Source: The New Times

Uganda: The Executive Board of the International Monetary Fund (IMF), on 6 May, approved a disbursement of SDR361-million (about USD491.5-million or 100% of quota) for Uganda under the Rapid Credit Facility (RCF). It will help finance the health, social protection and macroeconomic stabilisation measures, meet the urgent balance of payments and fiscal needs arising from the COVID-19 outbreak and catalyse additional support from the international community.

Source: International Monetary Fund

World

Applications to fund sustainable hydropower projects close in June

The deadline for the Hydropower Sustainability ESG Assessment Fund announced in February has been extended to 1 June 2020. The decision comes as a response to the general disruption caused by the COVID-19 pandemic. All criteria of the initial Call for Proposal are upheld, and assessments can be conducted any time up to 31 December 2021. The fund was launched to aid hydropower project developers and operators in Africa, Asia, Europe and the Americas to benchmark and raise their social and environmental performance. Under the initiative, a total of CHF1-million (USD1.02-million) will be awarded to 40 or more projects between 2020 and 2024. Successful recipients will receive a grant to part-finance the cost of commissioning an independent project assessment using the Hydropower Sustainability ESG Gap Analysis Tool (HESG), a tool based on the Hydropower Sustainability Assessment Protocol and governed by a multi-stakeholder coalition of NGOs, governments, banks and multilateral institutions. The scheme is managed by the International Hydropower Association’s sustainability division and funded by Switzerland’s State Secretariat for Economic Affairs (SECO). Projects under preparation and development, as well as those already in operation, are all eligible for the grant.

Source: ESI Africa

Angola

Investment Report examines Angola Oil and Gas Projects

Africa Oil & Power (AOP) launched its Africa Energy Series Special Report: Angola 2020 on Thursday, 7 May. The report provides the status of several investment projects in development in Angola, including its 2020 licensing round, construction of gas processing facilities in Soyo, and more. The publication follows the announcement of the new dates for the Angola Oil & Gas 2020 Conference & Exhibition, which will now take place in Talatona from 14-15 October. In line with Angola’s aim to drive capital inflows into its bankable oil and gas projects, AOP has launched the Africa Energy Series Special Report: Angola 2020 as a resource for investors entering or expanding their presence in the country’s energy sector. Available for free download on AOP’s website, the report provides a concise look at Angola’s investment opportunities still on track for development in the face of project delays caused by COVID-19.

Source: CNBC Africa

Cameroon

Cameroon to construct transmission line from Nachtigal hydroelectric plant

Cameroon plans to construct a 400 kV electricity transmission line from Nachtigal hydroelectric plant to Bafoussam which will eventually connect to the neighbouring Federal Republic of Nigeria. This was revealed by Gaston Eloundou Essomba, the Minister of Water and Energy through a tender notice he published asking for applications for the project manager position. The line will link the 420 MW Nachtigal hydroelectric plant and its construction is set to be commissioned between October 2022 and October the following year, about the same time when the Nachtigal hydroelectric plant will be commissioned. Other than the construction of the 400 kV transmission line, the project also includes the development of a 400/225/30/15 kV transformer substation, extension of the Nachtigal Bafoussam substations, construction of 90 kV lines between Nachtigal-Bafia, Bafoussam-Baganté, Bafoussam-Foumbam and Bachtigal-Nkometou as well as construction of 90, 30, 15 kV substations in Bafia, Bagangté and Foumbam. According to the Minister of Water and Energy, the government of Cameroon has already appointed Kalpataru Power Transmission Ltd, an Indian company, to carry out the technical studies and the construction of the infrastructure.

Source: Construction Review Online

Djibouti

MIGA supports Djibouti’s first utility-scale wind project

The Multilateral Investment Guarantee Agency (MIGA) has issued guarantees that will support the design, development, construction, operation, and maintenance of Djibouti’s first utility-scale wind project. The guarantees amount to USD91.6-million and cover up to 90% of investments made and future earnings in the project for up to 20 years. The guarantees will provide protection against currency inconvertibility and transfer restriction, expropriation, breach of contract, and war and civil disturbance. The guarantees were issued to Djibouti Wind Company Ltd to benefit Africa Finance Corporation and Construction Equity Fund, a blended finance facility managed by Climate Fund Managers. The project, which represents the country’s first independent power producer (IPP), consists of a 58.9 MW wind farm in Ghoubet, along with interconnection facilities located in the Arta Region (between Lake Assal and Djibouti City). Once operational, all electricity generated will be sold by the Red Sea Power Limited SAS to the Djiboutian state-owned national electricity utility, Electricite de Djibouti, under a 25-year Power Purchase Agreement.

Source: ESI Africa

Gabon

Gabon focused on natural gas development

Petroleum has been the economic driver of Gabon since the first petroleum operations began in the first half of the 20th century. In recent years, natural gas has become increasingly important, thanks to various discoveries and the development of petrochemical and fertiliser-producing plants. According to statistics from the International Energy Agency, Gabon has gas resources close to 28.3 billion cubic meters, which makes it a potential major player in liquefied natural gas exports. Gabon’s gas resources are mainly associated with petroleum, which require an additional stage of treatment during extraction. The country has a growing domestic demand for energy and the planned expansion of fertiliser and petrochemical activities will translate into a significant increase in the need for natural gas, a fossil fuel appreciated by an increasingly environmental sensitive international community. The development of natural gas is becoming a major topic for African countries due increasing interior demand for energy combined with international pressure towards a green transition. Equatorial Guinea, a neighbouring country, is developing its Gas Megahub project, which consists of creating interconnections and synergies between the different countries of the region in order to accelerate the exploitation of gas resources.

Source: Africa Oil & Power

Kenya

Western Kenya gold company Barrick to finalise deal by June

London AIM-listed East Africa-focused gold producer Shanta Gold plans to complete acquisition of Canadian miner Barrick Gold's assets in Kenya by June. The firm says it will consequently move to fast-track gold production in Kenya once it completes the transaction. The Canadian miner Barrick Gold Corporation announced early this year it was selling its seven Western Kenya gold mining licences to the Guernsey-incorporated Shanta Gold in a cash-and-stock transaction worth a total of USD14.5-million (KES1.4-billion). “The company's acquisition of Barrick Gold's assets in Kenya is expected to conclude in mid-2020. Shanta is focused on unlocking value and progressing the project,” said the buyer in a statement. Shanta also plans to establish a centre of excellence at the New Luika Gold Mine to boost the western project and revamp its staff capacity in Kisumu. Under the deal, Barrick will take USD7-million (KES700-million) in cash and a 6.4% stake or 54.6 million shares of Shanta valued at USD7.5-million (KES753-million). This will see Barrick become the fifth largest shareholder in Shanta. Shanta has also agreed to pay Barrick a 2% royalty rate, based on actual gold production in the future.

Source: Business Daily

Kenya

Treasury woos tax cheats with 100% penalty waiver

The Treasury has offered up to 100% interest and penalties waiver on taxes that have not been paid in five years in a move to encourage firms and individuals to voluntarily declare accumulated bills. Under the voluntary tax disclosure programme, which shall run for three years with effect from 1 January 2021, the Treasury says those who declare pending liability and pay within one year shall enjoy 100% interest and penalty waiver. Those who voluntarily disclose and pay the pending tax liability within the second year of the programme will receive remission of 50% while payments that come in the third year will have 25% relief. The changes are contained in the Finance Bill 2020 that is sponsored by the parliamentary Finance and National Planning Committee chairman Joseph Limo. The Treasury has proposed changes to the Tax Procedure Act to accommodate the voluntary tax disclosure programme. “Voluntary tax disclosure programme means a programme where a person discloses the persons’ tax liabilities to the commissioner for purposes of being granted relief of penalties and interests on the tax disclosure,” the amendments to the Act states. “A person granted relief under this section shall not be prosecuted with respect to tax liability disclosed and shall be granted a remission of interest and penalty due on the tax liability.” The programme will, however, lock out taxpayers under audit, investigation or party to ongoing litigation in respect of the tax liability or any matter relating to the tax liability.

Source: Business Daily

Kenya

Why you will pay more for gas, bread, unga, milk in July

A proposal to move some basic commodities from the zero-rated to the tax-exempt category will make Kenyans pay more for them. The tax measures, to take effect in July if approved by Parliament, are meant to shore up revenues to fund the 2020-21 budget. The proposed tax changes are contained in the Finance Bill 2020 that has already been tabled in the National Assembly. If passed, President Kenyatta is expected to assent to the legislation by June 30, paving way for the Kenya Revenue Authority (KRA) to levy most of the taxes starting 1 July. Other taxes to be levied include digital service tax which will be charged at 1.5% annually, sales tax; as well as a 1% minimum gross sales tax and minimum tax to be charged on all companies - including those making losses. Specialised solar equipment and accessories, including solar water heaters and batteries exclusively used to store solar power, will also be taxed. Lawmakers debating the Tax Laws (Amendment) Bill, 2020 – now in force, suggested that Kenyans be relieved of the proposed taxes until the COVID-19 pandemic abates. The bill also spells the steps for voluntary tax declarations, a step KRA is taking to further mitigate instances of tax evasion.

Source: The Star

Mozambique

90 days for companies to claim forgiveness of fines and reduction of interest on INSS debts arrears

Mozambican companies liable for overdue contributions to the Mandatory Social Security System have 90 days, from the 23 April, to benefit from the forgiveness of fines and reduction of interest on late payment. The forgiveness and reduction regime covers small and medium enterprises linked to the National Institute of Social Security (INSS); companies that, for any reason, never enrolled in the Mandatory Social Security System; and companies with compulsory debt collection cases (currently amounting to MZN2.5-billion) pending. Decree No. 22/2020 states that the forgiveness of fines and reduction of interest on late payment “is granted on condition that the taxpayer proceeds to pay in full the outstanding contributions that gave rise to the application of fines and interest on late payment”. “The taxpayer who makes full payment of contributions benefits from total forgiveness of fines, and reduction of interest on arrears by 98 percent,” the decree to which @Verdade has had access determines, going on to reveal that the taxpayer may request payment by instalment, provided the full amount is paid by 31 December 31 2020.

Source: Club of Mozambique

Mozambique

Mota-Engil, Besix score Mozambique LNG deal

A partnership consisting of Portugal’s Mota-Engil and Besix of Belgium has secured a contract for the Total-led USD20-billion Mozambique LNG export project. Under the deal, the 50/50 partnership will build a pier bridge and an offloading facility for about USD365-million, according to a Mota-Engil statement. The project covers the construction of a pier bridge and offloading facility project for CCS JV. CCS JV, a joint venture between McDermott, Saipem and Chiyoda, is the nominated EPC contractor for the Mozambique Area 1, Lda (AMA1) Mozambique Liquid Natural Gas (LNG) Project in Palma District, Cabo Delgado. Mota-Engil says the works will last 32 months, starting in the first half of 2020. Total acquired Anadarko’s 26.5% interest in the LNG project in September last year for USD3.9-billion. The project will initially consist of two LNG trains in Cabo Delgado with a capacity of 12.88 million tonnes per year to support the development of the Golfinho/Atum fields located entirely within Area 1. Area 1 contains more than 60 Tcf of gas resources, of which 18 Tcf will be developed with the first two trains.

Source: Club of Mozambique

Nigeria

Federal Government will offer small oil fields for licensing, says NNPC

The Federal Government will offer marginal oil fields for auction this year despite the crash in crude oil prices, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has said. The country has not conducted any licensing round since 2007, while a marginal fields round was last held in 2003. Kyari said the government would not be able to conduct any major licensing round as the current market realities would dampen foreign investors’ appetite. He said, “Marginal fields by their very nature, require very small-scale investment. Countries normally do this (licensing round) to encourage local participation and this local participation are usually funded by local borrowings because the scale of investment is not huge. Kyari ruled out the possibility of conducting “a substantive, full-scale licensing round, where you require foreign investments”. He said, “This is not the best time to call foreign investors to participate in any bid round. The licences will be priced very low, and even the appetite will be very low. “I know we will go ahead with the marginal fields bid round, but will have to delay the substantive bid round to a later date.”

Source: Economic Confidential

Rwanda

Report: Rwanda most committed to AfCFTA

Rwanda is the country most committed to the African Continental Free Trade Area (AfCFTA) agreement, a new report, dubbed, The AfCFTA Year Zero Report, has said. The study, which offers a baseline of the continent’s readiness for the start of trade under a continental framework, was published by The AfroChampions Initiative, which was launched by African leaders in January 2017. The initiative, also known as the Afrochampions, is a special implementation vehicle for major, innovative, public-private partnerships to harness big opportunities in Africa for transforming the continent’s best companies and institutions into globally significant players. The report shows which countries are the most committed to the AfCFTA process, and which ones have the best implementation readiness in terms of trade-infrastructure, customs efficiency and access to credit. Rwanda scored 83.93% on the commitment scale. The least committed country is Eritrea with a score of 0.85%, according to the report. Eastern and West African countries swept all the top nine positions of the most committed countries, with the highest ranked country outside the two regions coming in 10th. Apart from Rwanda, three other Eastern African countries in the top 10 include Uganda (4th), Kenya (7th), and Djibouti (9th). The five West African countries in the top 10 include Mali (2nd), Togo (3rd), Ghana (5th), Niger (6th) and Senegal (8th). São Tomé and Príncipe (10th), from Central Africa, completes the top 10. Notably, not a single country from Southern or North Africa was deemed committed enough to make the top 10.

Source: The New Times

Tanzania

Metallurgical sulphide gold testing on pipeline

Tanzanian Gold Corporation has said SGS Canada Lakefield staged to start comprehensive metallurgical testing on sulphide gold mineralisation that will warrant the design of a large gold processing plant at Buckreef project. The testing is necessary in order to finalise a flow-sheet for the design of the processing plant that will be the basis for the final feasibility study of the Buckreef Project. TGC said in statement that the new sulphide processing plant could produce in the range of 150,000 to 175,000 ounces of gold per year. "The current round of testing is expected to take approximately five to six months, following which some additional sampling and variability testing may be required that would arise from the design of a new open pit which will be initiated shortly," the firm said in statement availed to Daily News. Buckreef Gold Company is a joint venture company between Tanzania America International Development Company (TANZAM) 55% and Tanzania's State Mining Corporation (STAMICO) 45%. TANZAM is a wholly owned subsidiary of Tanzanian Gold Corporation a Toronto Stock Exchange listed company.

Source: Daily News