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Africa Business in Brief

 

issue 374 | 18 Oct 2020

Coronavirus (COVID-19)

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

World: It has been a tumultuous year for the global energy system. The COVID-19 crisis has caused more disruption than any other event in recent history, leaving scars that will last for years to come. But whether this upheaval ultimately helps or hinders efforts to accelerate clean energy transitions and reach international energy and climate goals will depend on how governments respond to today’s challenges. The World Energy Outlook (WEO) 2020, the International Energy Agency’s (IEA) flagship publication, focuses on the pivotal period of the next 10 years, exploring different pathways out of the crisis. The new report provides the latest IEA analysis of the pandemic’s impact: global energy demand is set to drop by 5% in 2020, energy-related CO2 emissions by 7%, and energy investment by 18%. The WEO’s established approach – comparing different scenarios that show how the energy sector could develop – is more valuable than ever in these uncertain times.

Source: IEA

East / Southern Africa: A report from the Fifth Trade and Trade Facilitation Sub-Committee meeting of the Common Market for Eastern and Southern Africa (COMESA) which was held virtually has indicated that the region’s average growth slowed down in 2019 to 5.2% from 6% in 2018 and is projected to decrease to 0.6% in 2020. The slowdown in growth was experienced in most COMESA member countries except Egypt, Ethiopia, Malawi, Rwanda and Seychelles that registered improved economic growth in 2019 compared to 2018. The impressive growth of above 5% in both years in these countries, reflected among others, improving growth fundamentals, with a gradual shift from private consumption toward investment and exports. The COMESA region experienced a slowdown in growth in 2019 as compared to 2018. This is largely attributed to lower commodity prices over the period. The region is currently going through an unprecedented economic and health crisis following the spread of COVID-19 pandemic to the region since the beginning of 2020. The contraction is attributed to among others: the impact of containment measures that includes quarantine, lockdowns, travel restrictions and border closures, among others.

Source: COMESA

East / Southern Africa: There has been a notable increase in the number of non-tariff barriers during the COVID-19 pandemic period as countries increasingly took discretionary measures to contain the spread of the virus. Common Market for Eastern and Southern Africa (COMESA) director of trade, Dr Chris Onyango told delegates attending the fifth Meeting of the COMESA Trade and Trade Facilitation Sub-Committee, 6-8 October 2020, that during the COVID-19 era, measures put in place by member states have disrupted global value chains, radically reduced dependency on imports and rallied states towards the path of protectionism. He implored countries to continue reviewing and improving existing regulations and mechanisms taking into account changing ecosystems, understanding key causes, analysing regulatory regimes, production techniques and technological advancements.
 
Source: COMESA

Cameroon: Cameroon national airline Camair-co announced on Monday, 12 October that it will soon resume flight operations on its domestic routes amid the COVID-19 pandemic. Camair-co officials told reporters that the first flight would take off on Friday, 16 October and domestic routes will, for now, cover cities of Douala, Yaounde and Garoua.

Source: Xinhua

Uganda: Despite taking the most hit due to COVID-19 and the subsequent containment measures instituted by the government to suppress the spread of the pandemic, some segments of the services sector rose against the tide to register impressive revenue returns in the last three months. According to the Uganda Revenue Authority (URA) performance report for the period July to September – the first quarter of the Financial Year 2020/21 – 75% per cent of the revenue was collected from five out of the 21 key economic sectors. The five sectors of the economy include: wholesale and retail sector which contributed 30% to the revenue kitty, the manufacturing sector came second with a contribution of 23%. The information and communication sector came third, contributing 9% of the revenue to the national coffers. Taking the fourth and fifth positions, respectively in terms of revenue contribution is the financial and insurance services, posting a revenue contribution of 7% and finally public administration sector, registering a 5% contribution.

Source: Daily Monitor

Africa

Do you really know all 54? Antitrust law in Africa

Africa’s competition regulatory environment is as unique as it is diverse, with 54 countries and five regional bodies. Jocelyn Katz, ENSafrica’s head of Competition/anti-trust, joins the conversation on the key issues of African competition law in episode 81 of the American Bar Association’s Our Curious Amalgam.

Source: ENSafrica

Africa

Digital Energy Festival to exhibit wireless transmission project

The world’s first-ever long-range wireless power transmission project will be showcased at the Digital Energy Festival on 21 October 2020. The Africa Energy Forum will host a special presentation by Emrod CEO and founder Greg Kushnir, demonstrating the wireless transmission project, currently operating in New Zealand. Emrod has developed the world’s first commercially viable long-range, high-power, wireless power transmission as an alternative to existing copper line technology. Emrod’s technology works by utilising electromagnetic waves to safely and efficiently transmit energy wirelessly over vast distances. “Being able to transmit high-power electricity without any cables is game-changing for the continent. It means barriers to energy-access are smashed and Africa could be fully electrified within ten years. This is the technology millions of people have been waiting for,” said Simon Gosling, EnergyNet’s managing director. By significantly reducing infrastructure costs, Emrod says the wireless power transmission has the capacity to support remote communities such as in Africa and the Pacific Islands by providing access to cheap, sustainable energy to power schools, hospitals and economies.

Source: ESI Africa

Africa

Unlocking Africa’s ESG potential

The adoption of Environmental, Social and Governance (ESG) criteria is on the rise, unlocking capital for ESG compliant projects and investment in companies that have integrated ESG into their business. Despite Africa’s diverse natural resources, renewable energy potential, human capital and significant development opportunities, connecting investors (many situated offshore) with investees on the continent is not straight forward. This gives rise to missed opportunities and stifles the ability of ESG investment to flow into projects in Africa that would otherwise support ESG investment mandates. The European Union has taken many steps in recent years to promote ESG in regulatory environments and markets. In contrast, when looking at the country-by-country analysis of voluntary or mandatory measures to incorporate a consideration of ESG factors (as set out on the Principles for Responsible Investment’s website), Africa is far behind. To benefit from ESG and impact investing, African companies need to position themselves to take advantage of new funding opportunities as the world seeks to build back better.

Source: ENSafrica

Botswana

Draft law to tax tech giants released

The quest to tax global digital giants by African countries, Botswana included, has grown thicker as the African Tax Administrators Forum (ATAF) launched and released a roadmap of taxing the tech giants on 30 September 2020. Botswana is an active member of ATAF, a group of African tax administrators, which intends to close any tax leakages and enhance tax corporation amongst member states. The roadmap titled, ‘Suggested Approach to Drafting Digital Services Tax Legislation’ comes in the form of a pre-drafted legislation, which member states simply need to add their names in certain spaces and then enact the same as a new tax law. ATAF proposes that a tax of between 1% and 3% of the annual revenue derived in member countries be subjected to a Digital Sales Tax. The tax is targeted at, amongst other revenue streams, online advertising, online gaming services and services delivered through online marketplaces. According to ATAF, other African countries such as Kenya and Nigeria have already enacted laws to collect the tax.

Source: Mmegi

Cameroon

Urgent measures needed for private sector to green Cameroon's economy

Cameroon’s private sector is currently ill-prepared to leverage a spate of opportunities offered by the green economy but a comprehensive set of measures which government should spearhead, can turn the issue around, says a new study being finalised by the United Nations Economic Commission for Africa (ECA). The ‘Study on Leveraging the Potential of the Private Sector to Stimulate Green Growth and Job Creation in Cameroon’ explores five sectors in which both government and the private sector should focus for maximum results. They are: energy, agriculture, and manufacturing, waste treatment and forest resource management. The core content of the draft report was validated on Tuesday, 13 October 2020 in Yaounde by a multidisciplinary array of external reviewers. It reveals that apart from the demands of the international market for sustainable products, such as the certification of all timber products exported to European Union markets, and the awareness of eco-responsible consumption at the national level, there are no real pull factors in Cameroon’s business climate to encourage the private sector to make the necessary investments in green economy ventures.

Source: ECA

Ghana

ACEP launches Ghana Contract Monitor Platform

The Africa Centre for Energy Policy (ACEP) has launched an online platform to monitor petroleum contracts in Ghana to ensure accountability in the petroleum sector. The launch was also used to call on the Ghana government to review existing petroleum agreements and sanction non-compliant contractors as a way of raking in needed revenue to the state. In a statement before the launch in Accra, the head of the policy unit of ACEP, Ms Pauline Anaman, observed that gaps existed in the enforcement of existing petroleum agreements, which was robbing the nation of huge sums of money. The Ghana Contract Monitor Platform is an online tool that provides updates on work progress of non-producing extractive sector companies who have valid agreements with the Government of Ghana to explore, develop, and produce petroleum and mineral resources in the country. The Ghana Contract Monitor Platform started in 2017 as a simple study into the challenges and causes of inactivity in non-producing oil blocks in the country contrary to the contractual and legal obligations on contractors to make minimum financial and technical investments within specified periods. The platform currently reports work progress of 14 operators in Ghana’s upstream oil and gas industry.

Source: GhanaWeb

Ghana

BoG revamped supervision to avert banking failures again – Elsie Addo Awadzi

To mitigate the risk of reoccurrence of mass failures in the Specialised Deposit-Taking Institutions (SDI) sector, the Bank of Ghana (BoG) has revamped its supervision of the sector and is working on new rules on corporate governance and risk management to guide operators in the sector, Elsie Addo Awadzi, second deputy governor of BoG has said. Following the cleanup of the SDI sector, she said, there are currently 25 savings and loans companies, 15 finance houses/leasing companies, 137 micro finance companies, and 144 rural and community banks, currently operating. The operationalisation of the Ghana Deposit Protection Scheme in October 2019 will also help to protect small depositors of SDIs if they fail. She further indicated that the BoG continues to engage with SDI Associations to explore how best to reposition the sector going forward. “In the meanwhile, we expect SDIs to refine their business models and ensure that they are aligned to the policy objective for which the sector was created.”

Source: GhanaWeb

Kenya

Kenya approves move to set up EAC seamless airspace

Kenya has moved the region closer to achieving an open airspace following the decision by the cabinet to approve establishment, implementation and management of the East African Community (EAC) Seamless Upper Airspace. The development, which has been elusive for many years, comes at a time the call for creation of a common airspace has been getting louder from different stakeholders who have argued that the move will lower high cost of air transport in the region. If implemented, the move will enable interoperability and foster seamlessness for the Air Navigation Services (ANS) and enhancement of collaborative activities in the provision of ANS in member states. This will also lead to implementation of national aeronautical information databases development and operationalisation of the centralised regional aeronautical information database. The cabinet, led by President Kenyatta, approved the memorandum of understanding on the establishment of the seamless upper space.

Source: Business Daily

Kenya

Kenya’s first Data Protection Commissioner now nominated

Kenya is one step closer to appointing its first Data Protection Commissioner, a mission that has been met with some obstacles. On 13 October 2020, the President of Kenya, in compliance with the provisions of the Data Protection Act, 2019 (DPA), nominated current director of voter education, partnerships and communications at the Independent Electoral and Boundaries Commission (IEBC), Ms Immaculate Kassait, for appointment to the position of Commissioner. Speaker, Hon. Justin Bedan Muturi announced the president’s nomination to the National Assembly. The National Assembly departmental committee on communication, information and innovation will now consider the suitability of Ms Kassait for the Commissioner position and table its report to parliament for debate and decision within the next 14 days. Following this nomination, its subsequent approval by parliament, and final appointment of the Commissioner, we should expect that the office of the Commissioner will speedily work to put in place structures and systems for the registration of data processors and data controllers to facilitate the effective regulation of data processing operations conducted in Kenya.

Source: ENSafrica

Nigeria

NITDA to tighten nose on data protection through new Bill

The National Information Technology Development Agency (NITDA), is to send a new Bill on data protection to the National Assembly, and if passed into law, would ensure stringent protection of personal data and regulation of the processing of personal information. This comes as the Federal Government said it earned NGN12.650-million from the Data Protection Compliance Organisation’s (DPCO) Licensing and Audit report filing, while over 2,686 new jobs have been created. Director-General of NITDA, Kashifu Inuwa Abdullahi, who disclosed this at the presentation of the Nigeria Data Protection Regulation Performance Report 2019-2020, in Abuja, noted that on 25 May 2018, the General Data Protection Regulation (GDPR) of the European Union came into force. The GDPR impacted small and medium-sized enterprises, who hitherto supplied goods and services to European-affiliated businesses and/or individuals, which shut out thousands of Nigerians. He said NITDA felt the need to use its mandate as provided in the NITDA Act, 2007 to issue a national regulation that meets the basic tenets of data protection law while also providing a framework to catalyse compliance.

Source: The Guardian

Rwanda

Rwanda approves cannabis production for export

Rwanda has approved the cultivation and export of cannabis even as the use of the stimulant for medical or recreational purposes remains illegal in the country. The government is targeting to grow its export earnings from the global cannabis market valued at the USD345-billion according to analysts New Frontier Data. The decision has caused confusion with some warning it could be detrimental to the youth if tough controls are not enforced. Rwanda’s minister of Health, Dr Daniel Ngamije said that despite the government’s intention to profit from the production and export of marijuana, its use in the country is prohibited. A cabinet meeting, chaired by President Paul Kagame, approved regulatory guidelines on cultivation, processing, and export of “high-value therapeutic crops”. Analysts say that the government’s latest stance causes confusion and will require an amendment of the Penal Code as well as public sensitisation.

Source: The EastAfrican

South Sudan

South Sudan abandons plans to introduce new currency

South Sudan said it has reversed its plans to introduce a new currency as the Pound continues to depreciate against the US Dollar and other major currencies due to the economic crisis. Michael Makuei Lueth, minister of Information and Broadcasting, said the move to change the local currency was only a mere proposal by the economic crisis management committee as a means to salvage the economy from further collapse but was not agreed and passed by the cabinet. "The change of the national currency (South Sudanese Pound) was brought in the discussion of previous cabinet meetings as one of the long-term economic measures, but it was not agreed and passed by the council that time," Makuei told the reporters in Juba. In September, President Salva Kiir established an economic cluster committee to investigate mismanagement of non-oil revenue and also to come up with recommendations to revive the falling economy. Makuei also said the government is in the final process of acquiring a loan that would be injected into the market to stabilise the deteriorating economy.

Source: Xinhua

Tanzania

Barrick deal, smuggling crackdown revive Tanzania gold industry

Tanzania’s gold mining industry is showing signs of a renaissance following a crackdown on smuggling and the settlement of a long-running dispute with Barrick Gold Corp. Gold has overtaken tourism as the East African nation’s biggest foreign exchange earner, while Barrick’s joint venture with the Tanzanian government paid its first cash dividend of USD250-million. Earnings from gold exports surged 43% in the year through August as bullion rallied. Now Tanzania wants to double the contribution of mining to 10% of the economy over the next five years, Mining minister, Doto Biteko said in an interview. Barrick chief executive officer, Mark Bristow has said the Tanzanian operations could eventually rank as a so-called tier-1 asset, producing more than 500,000 ounces a year. At the same time, Tanzania plans to use Barrick as a model to structure other ownership deals with miners, including with AngloGold Ashanti Ltd.

Source: Bloomberg

Tanzania / Malawi

Tanzania investors study Malawi’s investment, trade potentials

Members of the business community in Tanzania are working on a special strategy that would enable the country to best utilise the trade and investment opportunities that are available in neighbouring Malawi. Grouped under the auspices of Tanzania Private Sector Foundation (TPSF), the business community believes Malawi has numerous untapped potentials in the areas of commercial agriculture, manufacturing and mining that could be utilised for the benefit of the peoples of both countries. The strategy, according to the acting TPSF chairperson, Ms Angelina Ngalula, would take into account the business environment in Malawi and come up with a database of potential business and investment areas. "The strategy will make it easy for Tanzanians to understand the business environment there. It will entail potential areas of doing business, including costs of establishing a business or factory, taxes and other matters," she said. In a joint press conference, President John Magufuli and President Lazarus Chakwera said they had agreed to strengthen bilateral cooperation in a number of areas, including trade, transport, communications, energy and democracy.

Source: The Citizen

Uganda

Does a foreign lender to a Ugandan business require a licence?

The recent controversial decision in Ham Enterprises v Diamond Trust Bank (U) and Diamond Trust Bank (K) Ltd has shaken up Uganda’s banking and finance sector, with many foreign lenders demanding clarity on the matter. This is a classic case of borrowing in sunny times, then defaulting and a bitter court battle ensuing when the lender tries to take back its proverbial umbrella during the storm. The plot thickens here. Diamond Trust Bank (K) Ltd, (DTBK) is a Kenyan financial institution and parent company to its co-lender, Diamond Trust Bank (U) Ltd. (DTBU). Ham Enterprises (the borrower) had enjoyed a long relationship with DTBU but due to regulatory restrictions on lending limits, DTBU could no longer meet the borrower’s financing needs. In 2017, the borrower flew to Nairobi and obtained new financing from DTBK. However, the borrower alleged it was illegal for the Kenyan bank to lend money to a Ugandan borrower without being licensed by the Bank of Uganda under the Financial Institutions Act, 2004. This ENSafrica ENSight briefly outlines the bone of contention in this case, the court’s ruling, the error of the court and what the Ham decision means for the banking and finance industry.

Source: ENSafrica