This website uses cookies to ensure you get the best experience. If you continue to use this site without changing your cookie settings we assume you consent to the use of cookies on this site.

find an article

issue 362 | 26 Jul 2020

Africa Business in Brief

 


Coronavirus (COVID-19)

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

Africa: Increased and decisive investment will be the channel for Africa’s economic recovery post COVID-19, partners of the Africa Investment Forum said, expressing confidence in the continent’s potential to rebound from the ongoing health and economic crises. In a virtual marketplace which mirrored typical sessions of its annual Market-Days, the Africa Investment Forum convened over 190 participants including current and prospective partners, investors and project sponsors. During the meeting, the Africa Investment Forum revealed 15 projects identified across five sectors for priority funding consideration under its Unified COVID-19 Response. The sectors include agriculture and agro-processing, energy, health, information and communications technology (ICT) and telecommunications, and industrial and trade. Collectively, these 15 deals which are from the Forum’s current portfolio, amount to USD3.79-billion and will help increase the continent’s self-sufficiency and resilience against future shocks.

Source: African Development Bank Group

Africa: The world is increasingly going digital but much still need to be done on the continent to increase internet penetration. According to the International Telecommunication Union, in 2019 only 28% of Africans used the internet and online shoppers are relatively still few. Experts say that in the wake of COVID-19, there is an urgent need for African enterprises to digitalise and tap into enormous opportunities offered by e-commerce. For example, Kenya, Mauritius, Namibia and South Africa are the only countries where the share of online shoppers exceeds 8%. In most other countries, it is below 5%.

Source: United Nations Economic Commission for Africa

Democratic Republic of Congo: The Democratic Republic of Congo has lifted the “state of health emergency” introduced on 24 March 2020 to curb the spread of COVID-19 in the country. In a televised address, President Felix Tshisekedi announced that from 22 July, shops, banks, restaurants, cafés, bars and businesses will resume in accordance with health measures. Schools, universities and other educational establishments will reopen on 3 August, while places of worship, stadiums, airports and international borders will be reopened from 15 August.

Source: Africanews

Ghana: The Finance minister, Mr Ken Ofori Atta has said the government will soon announce a stimulus package for large scale businesses in the country in the wake of the COVID-19 pandemic. Already, President Nana Addo Dankwa Akufo-Addo, on 5 April, announced a soft loan scheme of up to GHS600-million for small and medium-sized enterprises (SMEs). The package is expected to sustain the country’s affected industries and address the disruption in economic activities caused by the COVID-19 pandemic.

Source: GhanaWeb

Kenya: Hotels ravaged by the COVID-19 crisis will access cheap loans at interest rates of between 5% and 7% under a KES10-billion state-backed credit scheme. Tourism cabinet secretary, Najib Balala announced that the scheme will offer affordable credit to hotels and firms operating in the tourism sector, especially small and medium-sized enterprises (SMEs). The loans will run for 10 years, lowering the monthly obligations, and borrowers will start repaying the debt after two years.

Source: Business Daily

Kenya: Kenya Airways will drop direct flights to the United States (US) and China when it resumes international flights from August in a shift that has seen the national carrier cut the routes it serves by half. The airline says it has halved its routes to 27 and cut the frequency of flights to some destinations with passenger demand expected to remain depressed for at least 18 months. US-bound passengers from Kenya must now change planes in Europe or the Gulf on a journey that can take 20 hours or more.

Source: Business Daily

Kenya: On 22 July 2020, the International Finance Corporation (IFC), a member of the World Bank Group, announced a USD50-million loan to Equity Bank Kenya to help it increase working capital and trade-related lending to its small and medium-sized enterprise (SME) clients, especially those facing COVID-19 related challenges. The loan, which will ultimately support hundreds of Kenyan businesses in the manufacturing, health, trade, transport, and consumer goods sectors, is part of the IFC’s global USD8-billion fast-track COVID-19 facility, announced in March and designed to help businesses maintain operations and jobs during and after the COVID-19 crisis.

Source: International Finance Corporation

Kenya: Passengers arriving on late-night international flights will be exempted from the nationwide 21:00 to 04:00 curfew which is aimed at curbing the spread of COVID-19 in the country. President Uhuru Kenyatta on 6 July announced a phased reopening of the country from a COVID-19 lockdown, lifting restrictions on travel in and out of the capital Nairobi and Mombasa and allowing air travel to resume. The easing out saw domestic commercial and passenger flights restart on 15 July, while international travel is scheduled to resume from 1 August.

Source: Business Daily

Rwanda: Rwanda will fully open aviation activities on 1 August under very strict conditions and measures to ensure safety of passengers, the Prime Minister Dr. Edouard Ngirente has said. In the re-opening plan, the prime minister said that COVID-19 tests for air travel will come with a cost of USD50 (RWF50,000) for foreigners and USD40 (RWF40,000) for nationals since the government is already incurring the cost to conduct free tests locally.

Source: KT Press

South Sudan: Plans by the Republic of South Sudan’s Ministry of Petroleum to launch a new licensing round earlier this year have been derailed. Hon. Eng. Awow Daniel Chuang, undersecretary at the Ministry of Petroleum says, “Unfortunately, the Coronavirus pandemic has forced us to postpone the launch. Hopefully we can possibly launch the licensing round early next year. The pandemic has caused the delay as no-one would have been interested in the launch if we had continued with it.” The licensing round aims to attract diverse foreign investors to the oil sector. Currently there are investors from China and Malaysia, and South Sudan is now hoping to encourage more investment from the West.

Source: Africa Business Communities

Tanzania: After Tanzanian President John Magufuli declared the country free from COVID-19, the government has now issued new guidelines for obtaining COVID-19 clearance certificates. The certificates will be available to both citizens and foreigners living in the country who plan to travel to countries where the documents are required. According to a statement issued by the minister of Health, Ummy Mwalimu, the fee for screening is TZS40,000 for Tanzanians, TZS60,000 for foreigners who are residents and USD100 for visitors in the country.

Source: Daily Nation

Zambia: The Bank of Zambia is inviting applications for the issuance of the COVID-19 bond, whose proceeds will be used to mitigate the negative impact of the pandemic on economic activities. According to a statement, the amount of bonds available on offer is ZMW2.6-billion and will be issued by opening a five-year bond, seven-year bond, 10-year bond and 15-year bond.

Source: Zambia Daily Mail

Zambia: Zambia’s cabinet recently approved the establishment of an economic stimulus package that will be financed through the issuance of a COVID-19 bond. This is in addition to other economic measures instituted by the government such as the availing of ZMW2.5-billion in financial relief for businesses, and the Bank of Zambia’s ZMW10-billion Medium-Term Refinancing Facility made available to eligible commercial banks and non-bank financial institutions to access in order to restructure, refinance or extend credit to businesses and households impacted by COVID-19 on more favourable terms while ensuring that financial institutions adhere to set objectives.

Source: Lusakatimes

Zimbabwe: Zimbabwean President Emmerson Mnangagwa announced a raft of stricter lockdown measures including imposing a curfew to curb rising cases of COVID-19. In an address to the nation, Mnangagwa said the curfew will run from 18:00 to 06:00, although essential services are exempted from the curfew. "With effect from Wednesday, 22 July 2020, all our security services must enforce a dusk-to-dawn curfew set to come into force daily between 1800 hours and 0600 hours," Mnangagwa said.

Source: Xinhua

Africa

Fitch rating agency affirms triple A (AAA) rating of the African Development Bank, with stable outlook

Fitch Ratings, the global credit rating agency, has affirmed the African Development Bank’s (AfDB) Long-Term Issuer Default Rating (IDR) at ‘AAA’, with stable outlook. According to the agency, “the ‘AAA’ rating of the AfDB is driven by extraordinary support it receives from its shareholders, which Fitch Ratings assesses at ‘aaa’”. It judged the Bank’s risk management policies as conservative and excellent in line with ‘AAA’ rated regional peers. Fitch Ratings assessed “the Bank’s liquidity profile at ‘aaa’, reflecting an ‘excellent’ liquidity buffer and quality of liquid assets”, while “the bank’s capitalization is judged strong reflecting strong equity-to-assets ratio”. The ‘AAA’ rating with a stable outlook of the African Development Bank by Fitch Ratings follows an earlier affirmation of the ‘AAA’ rating of the Bank, with stable outlook, by Standard and Poor’s Global Ratings. 

Source: African Development Bank Group

East Africa

East African oil pipeline talks in the offing

The construction of East African Crude Oil Pipeline (EACOP) will soon take shape going by Tanzania’s allocation of a budget to fast track deliberations on four key areas and compensations for the implementation of the project. Tanzania has set aside about USD430,000 from its 2020/21 budget to finance the said tasks. Tanzanian minister of Energy, Dr Medard Kalemani, recently stated that the priorities at hand before April 2021 will be to complete the host government agreements (HGA), shareholders’ agreement (SHA), land lease agreement (LLA), the port agreement (PA) and the compensation for the affected people whose lands the project will pass through. Conclusion of the four agreements will lead to arriving at Final Investment Decision (FID) which would set the path for the project development phase. Once FID is undertaken, the construction will start and will take about 3 years to complete. Dr Kalemani revealed that the construction may start in April 2021 to which oil production may start in 2024. The environmental impact study has been conducted and communities sensitised. The EACOP will create exploration opportunities for the East African region with potential investments.

Source: Pumps Africa

Chad

Tender: 32MW solar project subcontractors in Chad

A tender seeking an engineering company for a planned 32 MW solar plant in Chad has been published by United Kingdom (UK)-based Private Infrastructure Development Group (PIDG) and French company Smart Energies International. The Chadian solar plant is the first phase of the 60 MW Djermaya Solar project being developed by the Aldwych Africa Developments unit of UK-based InfraCo Africa – itself part of PIDG – and French renewables developer Smart Energies International. Development of the project will be phased to gradually integrate renewable power into Chad’s national grid. The project is under a 25-year power purchase agreement (PPA) with the Société Nationale d’Electricité (SNE), Chad’s national utility company. The project will be the first privately owned utility-scale renewable energy project in Chad and will play a leading role in achieving the country’s national development goals, liberalising the energy sector, mobilising private investment, and promoting the development of renewable energy. The African Development Bank is backing the project with an EUR18-million loan and a partial risk guarantee.

Source: ESI Africa

Ethiopia / Egypt / Sudan

Ethiopia, Egypt, Sudan reach 'major common understanding' on dam

Ethiopia's prime minister said his country, Egypt, and Sudan reached a "major common understanding which paves the way for a breakthrough agreement" on a significant dam project that has led to sharp regional tensions and fears of military confrontation. Egypt and Sudan view the dam as a serious threat to vital water supplies, while Ethiopia considers it essential for its electrification and development. Ethiopia had said it would begin filling the reservoir of the dam, Africa's largest, this month even without a deal as the rainy season floods the Blue Nile. But the new statement said the three countries' leaders have agreed to pursue "further technical discussions on the filling ... and proceed to a comprehensive agreement". The statement did not give details on discussions, mediated by current African Union chair and South African President Cyril Ramaphosa, or what had been agreed upon. But the talks among the country's leaders showed the critical importance placed on finding a way to resolve tensions over the storied Nile River, a lifeline for all involved.

Source: Al Jazeera

The Gambia

Petroleum minister: establishment of Petroleum Commission is central in sector’s reform agenda

Fafa Sanyang, the Energy and Petroleum minister, said the establishment of an independent Petroleum Commission, is central in the reform agenda of the sector. He said this will ensure effective, transparent and good governance in the upstream and midstream petroleum sector. Sanyang said this while moving a motion for the second reading of the bill entitled Petroleum Commission Bill 2020, for legislative consideration and enactment. He said the key mandate of the commission, is to regulate upstream and midstream petroleum activities in the Gambia and that such autonomous commission, will ensure good governance, transparency and efficiency. He added currently: “The Petroleum Ministry provides policy direction as its core mandate and facilitates licenses as well as the regulation of the upstream activities, through the commission as a unit within the Ministry.” He said this is not in line with best practices and, as such, makes it prudent to separate policy regulation and operation.

Source: Foroyaa

Ghana

GIPC boss calls for financial investment in railway sector

Mr Yofi Grant, chief executive officer of the Ghana Investment Promotion Centre (GIPC), called for financial investments in Ghana's railway sector to boost its development for enhanced transportation. Mr Grant, in a statement copied to the Ghana News Agency, said a robust railway system would facilitate smooth and easy transportation of goods and persons not only within the country but through the sub-region towards the creation of jobs and economic vibrancy. "Urban rail on the continent is vital in providing a very efficient alternative to transporting large volumes of passengers and freight at high frequencies and reasonable cost,” he said. “Rallying with this notion, Ghana has embarked on intense rehabilitation and development of its national rail network."

Source: GhanaWeb

Kenya

KRA starts tax returns audit to nail cheats

The Kenya Revenue Authority (KRA) is reviewing firms’ and workers’ annual income tax returns for unpaid duty, stepping up a crackdown that could see more tax cheats prosecuted. The taxman’s intelligence and enforcement unit is investigating workers’ and businessmen’s sources of income and their expenditure against their tax remittances. The audit involves matching the returns with other databases including import records, cash trail in bank accounts, motor vehicle registration details, Kenya Power data and supplier dealings. Firms and individuals doing business with the government and counties and those that declare supplier contracts to the KRA are particularly on the taxman’s radar. “Kenya Revenue Authority (KRA) is currently undertaking comprehensive compliance checks on all taxpayers,” said the KRA in a notice. “This may be done through tax returns review, comprehensive audits or investigations. The outcome of which may include additional assessments or in the case of fraud, prosecution of the offenders.” Besides prosecution, tax cheats could see their personal identification numbers (PINs) disabled and risk having their cargo blocked at the Port of Mombasa, further hurting their ability to do business.

Source: Business Daily

Mozambique

African Development Bank set to join landmark USD20-billion Mozambique LNG financing

The African Development Bank (AfDB) has concluded its bid to co-finance the construction of Mozambique's integrated Liquefied Natural Gas (LNG) plant by signing a senior loan of USD400-million for the transformational project. The Mozambique LNG Area 1 Project, estimated to cost over USD20-billion, is ranked Africa's single largest foreign direct investment to date. It comprises a global team of energy developers and operators, led by Total alongside Mitsui, Oil India, ONGC Videsh Limited, Bharat Petroleum, PTT Exploration, as well as Mozambique's national oil and gas company, ENH. With the signing on 15 July, the AfDB joins a global syndicate of commercial banks, development finance institutions and export credit agencies to provide the requisite financing for the project. Financial close is expected later in 2020.

Source: African Development Bank Group

Mozambique

African Energy Chamber and Mozambican Oil and Gas Chamber agree to work on local content development

The African Energy Chamber and the Mozambican Oil and Gas Chamber (CPGM) have signed a cooperation agreement to support the development of local content in Mozambique and the attraction of investments into key segments of the country’s energy industry. Both institutions have agreed to join their resources and efforts in order to support technology transfers, attract investments across the value-chain and promote joint-venture and partnerships between local companies and regional and international firms. As it is the case with other upcoming African producers such as Senegal or Uganda, Mozambique has a unique opportunity to propel its economic growth via the sound development of its natural resources. However, such a journey will be successful only if beneficial to the local economy, local goods and services, and local jobs creation. Only by building domestic capacity, promoting an enabling environment for investors, and adopting best industry practices can Mozambique succeed in becoming the energy frontier the continent is hoping for.

Source: African Energy Chamber

Namibia

Green bond injects NAD66-million in clean energy

Namibia's first listed green bond has raised NAD66-million, funding the generation of various types of renewable energy around the country, envisioned to reduce the country's carbon footprint. The funded renewable energy projects are expected to generate 77.9 million kilowatt-hours (kWh) of electricity in the next five years and reduce 305,710 tonnes of carbon dioxide-equivalent greenhouse gasses in the next 25 years. This was revealed by a Bank Windhoek assessment in the Green Bond Impact Report. The report indicated from the initial issuance of the green bond it raised NAD66-million from the capital market (from institutional and individual investors), which was used to fund seven solar photovoltaic-generating (S-PV) projects. Collectively, the projects have an installed power-generating capacity of 6 350,8 kW and can contribute 15.6 million kWh of electricity annually to the country's overall electricity production – which currently meets only around 40% of its local demand.

Source: The Namibian

Nigeria

No plan to reverse privatisation of power sector – senator

The Senate has no plans to reverse the privatisation of the power sector, Gabriel Suswam, the chairman Senate Committee on Power has said. Speaking in Abuja during the committee’s oversight visit to some government structures being occupied by the Abuja Electricity Distribution Company (AEDC), Mr Suswam said the Senate is not pushing for the reversal of privatisation of the sector as that will affect the economy and create issues of trust in the international community. “We encourage the government to continue with the privatisation as far as the power sector is concerned. “There are teething problems and those problems will not be reason for the review of the privatisation that was done and people have bought. All we can do is to try to make sure there is enhanced performance in the sector to create efficiency but unfortunately, the process itself started on a faulty note. Some of the parameters used were a bit faulty so the sector has been faced with problems that ordinarily would have been avoidable. So what we are trying to do in the National Assembly is to identify the core challenges so that we can help the executive in addressing them,” he said.

Source: Premium Times

Nigeria

NSC, NAICOM to mitigate risks in ports business

The Nigeria Shippers Council (NSC) and the National Insurance Commission (NAICOM) are working on a model on how to reduce the cost of doing business with the introduction of insurance cover to mitigate risks in ports operation across the country. This was disclosed by Barrister Hassan Bello, executive secretary of NSC. The NSC executive secretary said insurance cover in ports operations has become necessary given the losses and damages that often accompany goods on transit. According to him, the cost of a container deposit at the ports ranges between NGN150,000 and NGN200,000, stressing that billions of naira are lost due to the difficulty of transporting these containers across the country because of bad roads. “As our function as ports regulator, we have our eyes on the cost of doing business in Nigeria. So, in the ease of doing business and the cost of doing business, we want to make our ports competitive and we have to moderate the cost. One of the costs is insurance deposits that shippers pay for taking the containers out of port,” said the executive secretary.

Source: Vanguard

Tanzania

Tanzania seizes eight flower farms abandoned by defaulters

The Tanzanian government is seeking new investors for eight premium horticultural farms in Arusha that it has repossessed. According to the deputy minister of Agriculture, Hussein Bashe, the farms, located on the southern slopes of Mount Meru, were once pioneer producers of barley, wheat, flowers and vegetables, but have been lying idle after being abandoned for over a decade now. To protect the already rundown farms from further damage by trespassers, the deputy minister ordered security personnel from the army's national service economic wing to be dispatched. “The repossession strategy is to see that all the farms are reallocated to more serious and creditworthy investors in the hope of a commercial resurgence,” he said during a tour of the eight estates. Horticulture is the fastest growing subsector in Tanzania's agricultural industry and an important source of foreign exchange revenues through exports. Revenues from flower and vegetable exports are growing at 11% per year, compared to about 4% annual growth in the agro sector in general.

Source: The EastAfrican

Uganda

Mobile phones start offering third party insurance

The Insurance Regulatory Authority of Uganda (IRA) in collaboration with the Uganda Revenue Authority, Ministry of Works and Transport and the Uganda Insurers Association have developed a mobile payment platform to streamline the operation of motor third party insurance, setting pace for insurance companies to invest in offering products digitally. The platform which came into operation on 1 July 2020, will see motorists purchase motor third party insurance policies via their mobile phones using mobile money. Joseph Ndiho, the project’s technical leader at IRA, said the new system which can be accessed using both smart phones and basic phones, is linked to the different government agencies to also verify the owner of the motor vehicle. “There’s going to be no room for premium negotiation between a customer and an insurance firm because the system will automatically pick data from the car registration agency indicating the car type and owner based on the registration number inserted into the mobile money platform and automatically indicates the amount of money one is supposed to pay for the policy,” he told The Independent in an interview.

Source: The Independent

Zambia

Zambia's state investment arm to be operator of mines in future, says government

Zambia’s state-owned investment arm will run mines as an operator rather than a minority investor in future investments, an executive said, as the government seeks a more active role in mining assets it holds. ZCCM-Investment Holding (ZCCM-IH), controlled by the Industrial Development Corporation (IDC), is a mining investment arm of Africa’s second largest copper producer. “What we have asked ZCCM-IH to do is too seek its own mines, do explorations and develop mining operations,” Mateyo Kaluba, chief executive of IDC, said in a statement. ZCCM-IH should have a higher stakes in mining ventures of the future, Kaluba said. Mining, which contributes more than 10% to Zambia’s economy, is also the nation’s largest foreign exchange earner.

Source: Reuters