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issue 360 | 12 Jul 2020

Coronavirus (COVID-19)

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

Africa: Africa’s economic growth could rebound in 2021, provided that governments manage the COVID-19 infection rate well, according to updated forecasts from the African Development Bank (AfDB), released on Tuesday, 7 July. In a comprehensive socio-economic assessment of the pandemic’s impact, the AfDB said growth was now projected to rebound to 3% in 2021 from -3.4% in the worst-case scenario for 2020. The predictions are contained in a supplement to the AfDB’s African Economic Outlook, which was released on 30 January. At the time, Africa’s growth was forecast at 3.9% in 2020 and 4.1% in 2021.

Source: African Development Bank Group

Eastern / Southern Africa: A number of countries have started gradual relaxation of the strict measures they have had in place even as COVID-19 cases continue to rise in the Common Market for Eastern and Southern Africa (COMESA) region. Some like Mauritius, Tunisia and Seychelles have managed to contain the spread of the virus thus necessitating review of the measures. Others, such as Egypt, Kenya, Rwanda, have continued strengthening surveillance, testing and increased bed capacities at county levels even as they relax other measures. Further, citizens of two COMESA member states, Tunisia and Rwanda, are among a few that the European Union has lifted travel restrictions.

Source: Common Market for Eastern and Southern Africa

Eastern / Southern Africa: In a report by the team leader of the Common Market for Eastern and Southern Africa (COMESA) Trade Facilitation Programme funded under the 11th European Development Fund, Mr Charles Chaitevzi, he notes that it has increasingly become apparent that embracing technology in various trade facilitation instruments can unlock the COVID-19-induced restrictions and help accelerate the much needed cross-border trade and investment even during such difficulties. The report recommends for upgrading of the information and communications technology (ICT) systems with connectivity among government agencies coupled with the application of the principles of risk management and reducing physical inspections.

Source: Common Market for Eastern and Southern Africa

Ethiopia: Ethiopian Airlines is resuming service to Dubai further to the ending of the lockdown and its opening for leisure travellers as of 8 July. Djibouti has also announced that it will end lockdown on 17 July. As a result, Ethiopian will resume normal service to Djibouti on 17 July. These resumptions will bring the total number of destinations to be served by Ethiopian with enhanced safety measures to 40.

Source: Africa Business Communities

Ethiopia: On 3 July 2020, the Board of Directors of the African Development Fund (ADF) approved a grant of USD165.08-million to support Ethiopia’s response to the health and economic impacts of the COVID-19 pandemic, including helping to ease fiscal pressures on the economy. The grant, awarded from the country’s ADF-15 Performance-Based Allocation, will help bolster Ethiopia’s COVID-19 National Emergency Response Plan (NERP). The NERP outlines a reliable, multi-sector approach to tackling the pandemic. It aims to expand social protection coverage for the most vulnerable, enhance capacity to contain the virus outbreak, and address macro-fiscal imbalances as well as cushioning the effects of the crisis on the private sector.

Source: African Development Bank Group

Ghana: Government on Tuesday, 7 July announced that the nation is ready to host the African Continental Free Trade Area (AfCFTA) despite the COVID-19 pandemic. The COVID-19 pandemic had affected the start of operations of the AfCFTA Secretariat in Accra, which was scheduled for the end of March 2020 as well as the commencement of trading under the AfCFTA on 1 July 2020.

Source: Ghana News Agency

Kenya: Bus operators, airlines, hotels and cross-border traders look set to be the biggest beneficiaries of President Uhuru Kenyatta’s phased reopening of the country from a COVID-19 lockdown, lifting restrictions on movement in and out of the capital Nairobi and allowing air travel to resume. Mr Kenyatta said the country had reached a reasonable level of preparedness for a partial loosening of restrictions but urged caution and warned of a return to lockdown should the COVID-19 cases escalate. Domestic commercial and passenger flights are scheduled to restart on 15 July, the President said, while international travel will resume from 1 August, offering a boost to Kenya Airways, which had lost an estimated KES10.6-billion in revenues at the end of June.

Source: Business Daily

Rwanda: The Rwandan government has announced it will reopen airports for commercial flights on 1 August, following the closure of all borders in March due to the COVID-19 outbreak. The Ministry of Infrastructure announced Saturday, 4 July that the airports, including Kigali International Airport (KIA) will reopen, weeks after the country reopened tourism and hospitality services.

Source: KT Press

Uganda: The Stamp Duty Amendment Act 2014, has been amended by the Stamp Duty Amendment Act of 2020 with effect that from 1 July 2020, debentures, equitable mortgages and further charges which previously incurred stamp duty ranging from 0.5% to 1% of the secured amount, will now incur nil stamp duty. This is a much welcome incentive given the uncertainties and the financial burden occasioned on businesses by COVID-19 and is evidence of government’s commitment to put in place initiatives to enable businesses recover from the effects of the pandemic.

Source: ENSafrica 

West Africa

EAV finances SolarX to support solar energy supply to businesses

SolarX has recently completed a Class A fund raising organised by Energy Access Ventures (EAV), a seed investment fund that invests heavily in renewable energy in Africa. Based in Mali, the solar energy provider wants to conquer other markets in West Africa. The solar energy provider based in Bamako, Mali, has just completed a Series A financing. No details have been provided on the funds raised in this financing round. However, the investment is expected to enable SolarX to expand its services in West Africa with the planned development of the solar market in Mali, Burkina Faso and Côte d’Ivoire. In these countries, SolarX will finance and install solar photovoltaic systems mainly for businesses. The EAV investment fund is sponsored by the French group Schneider Electric and managed by the venture capital firm Aster Capital based in Paris, France. EAV is funded by a number of development partners.

Source: AFRIK 21

The Gambia

USD43-million grant to strengthen access to energy and water in The Gambia

The World Bank approved a USD43-million grant from the International Development Association (IDA) for The Gambia’s Electricity Restoration and Modernisation Project (GERMP). The additional financing was made available through reallocation of IDA18 balance, thus augmenting the Banks initial funding envelope for The Gambia by 20%. While the National Water and Electricity Company (NAWEC) has made significant improvements in its operational and financial performance in recent years, the utility has yet to achieve financial viability. The additional financing will further strengthen NAWEC’s transmission and distribution network, provide additional support to transform NAWEC into an efficient and credit-worthy utility, and expand the scope of the project to the water sector.

Source: ESI Africa

Ghana

Ghana’s financial intermediaries to receive USD250-million World Bank support

The country is set to receive a total of USD250-million to advance the Ghana Development Finance Project, the World Bank Group has revealed. This will involve wholesale financing to financial intermediaries such as savings and loans companies to on lend to micro, small and medium enterprises. It is, therefore, working with the Finance Ministry in consultations with the Central Bank of Ghana to conclude preparations for the project which awaits approval before September. World Bank country director for Ghana, Pierre Frank Laporte, says the project will also provide credit guarantees to encourage financial institutions to lend to Small and medium-sized enterprises (SMEs) and other borrowers who lack collateral.

Source: MyjoyOnline.com

Kenya

Safaricom reveals investors’ stake in new M-Pesa firm

Safaricom has disclosed a 50% ownership of M-Pesa after the firm and South Africa’s Vodacom acquired the mobile money platform from Britain’s Vodafone for KES2.14-billion. The Nairobi bourse-listed telecommunications firm says in its latest annual report that the two partners split the acquisition costs equally, earning each of them a 50% share in the newly created joint venture M-Pesa Global Services Limited. The two companies partnered to acquire the M-Pesa business from their parent company Vodafone Group Plc, which held the intellectual property to the lucrative financial services platform. Safaricom recently appointed the head of its financial services division, Sitoyo Lopokoiyit, interim CEO of the M-Pesa joint venture. The service has evolved from a basic mobile money transfer application into a fully-fledged financial service platform, offering loans and savings in partnership with local banks, plus merchant payment services and is eyeing the unit trust business.

Source: Business Daily

Kenya

Co-op Bank, Laikipia unveil KES300-million enterprise fund

Co-operative Bank of Kenya (Co-op) has launched a KES300-million enterprise fund with Laikipia County to offer affordable financing and business support to co-operatives and entrepreneurs. The lender said the Laikipia Enterprise Fund would be scaled up based on the need. The two parties have agreed to an interest-sharing and guarantee arrangement, meaning that the risk and return would be on shared terms. Borrowers from the kitty will enjoy a single-digit interest rate after the county offered an interest subsidy of 5%, Co-op said the arrangement amounts to a lending rate of about 7.1% given that its loans currently average 12.1%. Also, borrowers will enjoy a reduced appraisal fee at 1.5% of the loan amount.

Source: Business Daily

Malawi

National Bank of Malawi has partnered with UNDP in SMEs development

National Bank of Malawi (NBM) plc has partnered the United Nations Development Programme (UNDP) in the growth accelerator programme which seeks to support small and medium-sized enterprises (SMEs) to grow and scale up their businesses through access to risk capital. NBM plc head of Personal and Business Banking, Oswin Kasunda, said in an interview that the bank felt it was important to be a partner in the programme by providing matching funds to the SMEs. He said this is a requirement for them to access funding of up to USD40,000 from UNDP and the Royal Norwegian Embassy, the main funders of the programme.

Source: BusinessMalawi™

Mozambique

Japan to invest USD14-billion in Mozambique’s LNG production

Japan announced an investment of USD14-billion in the production of liquefied natural gas (LNG) in Mozambique. Funding will come from several Japanese banks, public and private, as well as from the AfDB. The Japanese state, in partnership with the private sector, will invest some USD14.4-billion in Mozambique, for development in LNG. According to information reported by the economic information media Nikkei Asian Review, these funds will be used to finance the exploitation of a natural gas field in the country, with the objective of an annual production of about 12 million tonnes of LNG, from 2024. This significant financing enlists a constellation of lenders including the Japan Bank for International Cooperation, the African Development Bank and four major Japanese private sector banks (MUFG Bank, Mizuho Bank, Sumitomo Mitsui Banking and Sumitomo Mitsui Trust Bank).

Source: Energy Mix Report

Mozambique

Sasol gives up licence to seek offshore gas in Mozambique

South African petrochemicals giant Sasol Ltd has opted to give up its licence to explore for gas off the Mozambique coast, the company said on Sunday, 5 July. “Sasol will return Block 16/19 in its entirety to the Government of Mozambique. To this end, a withdrawal notification has already been sent to the relevant Mozambican authorities”, the firm said in a statement. Sasol was awarded the research licence in 2005. In 2013 it abandoned the deep water part of the licence, retaining the shallow water allotment to assess its hydrocarbon potential. It is still exploring for gas onshore in the fields of Pande and Temane, in the northern province of Inhambane.

Source: Reuters

Rwanda

Rwandan government announces USD7-million for “made in Rwanda” promotion in 2020-21

The Rwandan government announced an investment of USD7-million to promote locally manufactured products over the period 2020-21. The spending is mentioned in the 2020-21 state budget presented to Parliament on 23 June 2020. As part of this project, the government wants to support the local production sector and help businesses to guarantee the security standards of their products. The new budget line will enable some 20 Rwandan factories to adopt the latest generation technologies to create new products for both the local and international markets. Six exporting companies in particular will benefit from the support of the Export Growth Fund, making them more competitive on the markets. According to authorities, the promotion of “made in Rwanda” products is expected to reduce the trade gap, which increased by 17% in 2019.

Source: Ecofin Agency

Tanzania

Government eyes Lake Tanganyika Zone as prospect economic hub

Prime Minister, Mr Kassim Majaliwa has reiterated the fifth-phase government's determination to open up the Lake Tanganyika Zone as an economic hub, by expanding and building four ports in Rukwa and Katavi regions. He stressed that the expansion and construction of new posts in the Lake Tanganyika Zone will stimulate movement of goods, services and people between Tanzania and three neighbouring countries. "The projects, upon completion will open up this zone as an important economic gateway and boost trade between Tanzania and three neighbouring countries - Democratic Republic of Congo (DRC), Zambia and Burundi," he said. To signify that this zone will transform into an economic zone, new dry ports will be built in Rukwa and Katavi regions at Karema, Kabwe, and Kasanga ports as well as in Mpanda Town, which will handle cargo destined to neighbouring DRC, Zambia, Rwanda and Burundi.

Source: Daily News

Togo

AT2ER ranked 3rd in Ashden 2020 Award for progress in renewable energy strategy

Togo’s progress in renewable energy is internationally recognised. The Togolese Rural Electrification and Renewable Energy Agency (AT2ER) is one of the 11 winners of the Ashden 2020 Award in the category “systemic innovation for energy access”. The government agency responsible for guaranteeing access to electricity in Togo was ranked third. The results of the Ashden Award were made public on 2 July 2020 by the British organisation Ashden, headed by Prince Charles. It is an annual award that has been rewarding and promoting renewable energy in parts of Europe and developing countries since 2001. Togo has great ambitions in terms of energy. As a member of the International Solar Alliance (ISA), the country plans to provide its population with 100% electricity coverage by 2030, 50% of which will be produced from renewable sources. Togo is now in the deployment phase of its programme, which combines the extension of the electricity grid, the installation of rural mini-grids and solar home systems, and the installation of solar power plants.

Source: AFRIK 21 

Uganda

UCC suspends Simcard registration for companies

Uganda Communications Commission (UCC) has suspended Simcard registration for companies, non-governmental organisations and government agencies, ministries and agencies as it investigates fraud-related claims. This means only individual Simcard will be registered until further notice. According to guidelines, corporate entities had been allowed to have unlimited Simcards registered in their name as long as the accounting officer was able to furnish the telecommunication company with relevant documents, including articles and memorandum of association. However, it is alleged that unscrupulous individuals have taken advantage to submit fake company documents to telecommunication companies against which multiple Simcards are registered.

Source: Daily Monitor

Zimbabwe

Zimbabwe’s central bank raises key interest rate to 35%, annual headline inflation reaches 786% in May

The Reserve Bank of Zimbabwe (RBZ) raised its key interest rate to 35% on 1 July, from 15% previously, to support its foreign-exchange auction system, while annual headline inflation reached 786% in May. The RBZ decided to increase its key interest rate to 35% on 1 July to curb speculative borrowing and support the 8 June updating of the formal market-based foreign exchange (forex) trading system, which came into operation on 23 June. Annual headline inflation remains at alarmingly high rates. Despite coming down on a monthly basis to 17.6% in April from 26.7% in March, average annual inflation reached 785.6% in May, up from 765.6% in April and 676.4% in March.

Source: IHS Markit