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issue 379 | 22 Nov 2020

Coronavirus (COVID-19)

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

Africa: Greater investments in evidence-based research, technology and innovation should inform efforts to hasten post-COVID-19 recovery of African economies and livelihoods, scientists said on Thursday, 19 November. The African scientists and policymakers who attended a virtual summit in Nairobi agreed that leveraging home-based research and innovation has the potential to boost pandemic recovery in the continent. Dozens of African policymakers, scientists and health advocates attending the three-day virtual summit said that collaborative research and innovation could help place the continent on a sustainable pandemic recovery pathway.

Source: Xinhua

Southern Africa: The United Nations Economic Commission for Africa (ECA) Sub-Regional Office for Southern Africa (SRO-SA), in collaboration with the SADC Business Council, organised a virtual Sensitization Forum for the private sector to stimulate discussions and facilitate dialogue on ‘Post-COVID Recovery Strategies and Regional Integration in Southern Africa: Challenges and Opportunities’. In his official opening statement, the acting director of SRO-SA, Mr Sizo Mhlanga alluded to the need for countries to create conditions for the private sector to be more effective drivers of industrialisation, economic diversification, trade and investment in the region which would result in reinvigorated economic growth and decent jobs. He further advised that the COVID-19 crisis presented opportunities for member states to rethink their development strategies and take advantage of science, technology and innovation, digitalisation, sustainable and inclusive industrialisation, climate-friendly strategies and regional integration as pathways for building economic resilience against any future shocks. “The private sector should be the natural partners to enable this – policy makers should therefore ensure that there is greater participation by the private sector in policy development processes and the attendant implementation in the region. Creating space for public-private sector dialogue and exchanges is therefore critical for policy effectiveness”, Mr Mhlanga emphasised.

Source: ECA

West Africa: Countries that are not facing a new wave of the epidemic are committed to economic recovery after COVID-19. In West Africa, the French Development Agency (AFD) and the West African Development Bank (WADB) are advocating climate finance for recovery “in order to make the alignment of WADB members with the Paris Agreement effective”. The two financial institutions have thus, strengthened their partnership which covers areas that are essential to the economies of the member countries of the West African Economic and Monetary Union (WAEMU), particularly energy, urban development, financial engineering, agriculture and food security.

Source: AFRIK 21

Cameroon: Société Générale and the European Investment Bank (EIB) confirmed agreement of a new joint initiative to support economic development across Cameroon. The new financing is part of the European Investment Bank’s broader support for private sector development and help to increase the economic resilience of companies across Africa and around the world facing economic, social and health challenges, as well as the COVID-19 pandemic. The new scheme is available immediately and will be managed by Société Générale in Cameroon. The F.CFA10-billion will enable increased backing for investment projects and include working capital and more flexible disbursement conditions to reflect the acute and sudden challenges facing African businesses. Companies involved in manufacturing, commerce, agriculture, tourism and transport will be able to benefit from the new cooperation between Société Générale and the European Investment Bank.

Source: EIB

Cape Verde: The International Monetary Fund (IMF) on 10 November released its Second Review Under the Policy Coordination Instrument report for Cape Verde. The report highlights that the banking sector is "stable and well capitalised”, but indicates concerns about poor asset quality in view of deteriorating macroeconomic conditions. As a result, the IMF has recommended the Bank of Cape Verde’s (BCV) authorities to enhance its non-performing loan (NPL) reporting and monitoring mechanisms during this challenging period. Because of a build-up in government arrears to the banking sector through interest subsidies and other debts, the Cape Verdean banking sector suffers from poor asset quality. The NPL ratio peaked at 22.3% in 2014, but declined to 10.1% in March 2020, an elevated level. IHS Markit expects the NPL ratio to further increase as a result of the COVID-19 outbreak, which will exert pressure on the sector’s capital buffers, profitability, and credit growth. Although the sector’s capital adequacy ratio (CAR) stood at 18.6%, well above the regulatory requirement of 12%, it is a moderately vulnerable level given the high stock of NPLs and the expected upsurge in NPLs as economic hardship ripples through key sectors such as trade, tourism and financial services.

Source: IHS Markit

Kenya: The Central Bank of Kenya (CBK) is likely to retain its benchmark lending rate at 7% when its Monetary Policy Committee (MPC) meets on Thursday, analysts said. The analysts agree that the CBK rate-setting team is likely to remain neutral as they take a wait-and-see approach over fears of a second COVID-19 wave. “We expect the MPC to take a wait-and-see approach to monitor economic developments as reported COVID-19 cases escalate. A policy rate cut is unlikely at this point in time and might be ineffective in increasing private sector credit due to poor asset quality,” said Sterling Capital in a research note. The CBK has cut the rate twice this year from 8.25% to 7.25% in January and down to 7% in April, arguing this had helped boost private sector credit.

Source: Business Daily

Kenya: The value of building approvals in Nairobi dipped by KES55.67-billion in the nine months to September amid an economic disruption caused by the COVID-19 pandemic in the construction sector. The Kenya National Bureau of Statistics (KNBS) data shows that the value of approvals dipped to KES120.78-billion in the nine months to September, compared to KES176.5-billion over a similar period in 2019. There were, however, no approvals made in June and July following COVID-19 lockdown restrictions. “Value of residential approvals fell by KES30.5-billion from KES114.6-billion during the period,” the KNBS data shows. This is as commercial segments fell from KES61.9-billion in 2019 to KES36.7-billion in the same period this year.

Source: Business Daily

Rwanda: The Government is reviewing the terms and conditions for local firms eligible to receive the Economic Recovery Fund to increase the number of local businesses eligible for the support. The RWF100-billion Economic Recovery Fund was launched in June to aid the recovery of local businesses significantly affected by the COVID-19 pandemic. The fund was in two portions; hotel refinancing which was to enable the restructuring of loans held by hotels and working capital for businesses most affected by COVID-19 to keep them operational and avoid lay-offs. However, in August, it emerged that there was relatively low uptake of the fund especially for working capital. Five months into the implementation of the fund, the National Bank of Rwanda said that the uptake remains lower than was expected.

Source: The New Times

Sudan: The Board of the African Development Fund approved grants worth USD28.233-million to Sudan to shore up the country’s health system to effectively respond to and contain the COVID-19 pandemic, mitigate its social and economic impacts and build resilience to future pandemics, including climate-induced outbreaks. The funding will take the form of an African Development Fund grant of USD26.47-million and a USD1.764-million grant sourced from the Bank’s Transitional Support Facility Envelope. The grants are being provided under the African Development Bank’s COVID-19 Response Facility. The COVID-19 pandemic and its effects are expected to undo economic gains the country has made over the last five years as well as slow its economic recovery. Growth in 2020 is projected to contract by as much as 8.9% owing to the pandemic.

Source: AfDB

Uganda: Uganda's economy is on a recovery trend from the downturn caused by the COVID-19 pandemic, a new report by the Ministry of Finance showed. The monthly performance report for October showed that for the fourth consecutive month, the Purchasing Managers' Index (PMI) has stayed above the 50-mark threshold. Readings above 50.0 signal an improvement in business conditions while those below 50.0 show deterioration. The PMI rose to 55.8 in October from 54.5 in September, according to the report. "This gives an indication of further recovery in economic activity, from the downturn caused by the COVID-19 pandemic," the report said. The ministry attributes the recovery to increase in demand following the easing of restrictions, leading to further expansions in output, new orders and employment.

Source: Xinhua

Zambia: Zambia, Africa's second-largest copper producer, saw an increase in copper production in the first half of 2020 compared to the same period last year, figures released by its mines ministry on Thursday, 19 November have shown. The southern African nation says prospects for the mining sector look positive despite the COVID-19 pandemic. According to the figures, copper production from large scale mines rose to 646,111.25 tonnes in the first half of this year compared to 590,321.13 tonnes during the same period last year. Minister of Mines and Minerals Development, Richard Musukwa said commodity prices on the international market have started making positives gains, a situation that may encourage mining companies to further increase production.

Source: Xinhua

Zambia: Zambia has defaulted on its USD42.4-million coupon payment due on a Eurobond, days after the Group of 20 (G20) leading economies agreed on a common framework for restructuring government debt. Zambia became the first country in the sub-Saharan African region to default on its external debt obligations due to COVID-19 pandemic-related fiscal pressures. This follows the 30-day grace period for a USD42.5-million coupon payment on a Zambian bond that expired on 13 November. On 20 October, the Zambian authorities approached bondholders to freeze debt obligations on three Eurobonds. Uncertainty over how Chinese private creditors will be treated, the release of a relatively scant 2021 national budget ahead of national elections scheduled for next year, and lack of a comprehensive International Monetary Fund (IMF) financially supported programme that could result in debt sustainability over the medium term resulted in an underwhelming outcome at the bondholders’ negotiations.

Source: IHS Markit

World

Global sustainability standard for hydropower on the cards

Hydropower projects around the world could soon be independently rated and certified for their sustainability performance, following a public consultation open to all stakeholders. The International Hydropower Association (IHA), on behalf of a multi-stakeholder coalition of industry, civil society, governments and financial institutions, has published a consultation paper on the development of a global sustainability standard for hydropower. If adopted, the Hydropower Sustainability Standard would apply a rating, or label, to projects of any size or stage of development. This would incentivise and recognise responsible project developers, and help investors, governments and communities understand which schemes meet international environmental, social and governance (ESG) performance requirements. The rating and certification system would build on the Hydropower Sustainability Tools, a set of guidelines and assessment tools used by developers, operators and financiers. The Hydropower Sustainability Standard would be governed by the multi-stakeholder Hydropower Sustainability Assessment Council. The public consultation seeks comments from hydropower stakeholders, including operators and developers, governments, financial institutions, NGOs and civil society. Comments on the consultation paper are welcome by 8 February 2021. Comments are requested on the aim of the standard, rating system, certification process and other design aspects. After receiving feedback, the working group will finalise the design proposal of the standard and provide recommendations to the council. If accepted, the launch of the standard is expected in the first half of 2021.

Source: ESI Africa

Africa

African Trade Statistics 2020 Yearbook

The African Trade Statistics Yearbook, which is now available on the African Union (AU) website, was prepared by the African Union Institute for Statistics (STATAFRIC) of the AU Commission (AUC) using data provided AU member states’ national statistical offices, customs authorities or institutions responsible for the production and dissemination of trade statistics. The Trade Yearbook is the result of close collaboration between STATAFRIC, statistics departments and divisions of the Regional Economic Communities (RECs), national statistical offices and customs authorities of AU member states. The following six countries couldn’t provide their data: Chad, Equatorial Guinea, Eritrea, Sahrawi Arab Democratic Republic, Somalia and South Sudan. Compilation of trade aggregates for the AU is a first step towards harmonisation of practices and methodologies for preparation of trade statistics across AU member states.

Source: AU

Africa

Moody’s Investor Service affirms African Development Bank’s AAA credit rating

Moody’s Investor Service (Moody’s) has affirmed the African Development Bank’s AAA credit rating, with a stable outlook. “The credit profile of the African Development Bank (AfDB) is supported by the bank’s robust capital buffers and superior risk management, which mitigate risks,” Moody’s said in an annual credit analysis dated 27 October 2020. Moody’s added: “An ample liquidity buffer and unfettered access to international capital markets also support its ability to meet its debt-service obligations. Moreover, the Bank has a long track record of being the premier development institution in Africa and benefits from shareholders’ ability and willingness to support its development objectives, exemplified by the significant contributions of highly rated non-regional member countries.” The ‘AAA’ rating from Moody’s follows earlier affirmations of the ‘AAA’ rating of the Bank, with a stable outlook, by other leading rating agencies, namely Fitch Ratings, Standard and Poor’s Global Ratings and Japan Credit Rating Agency.

Source: AfDB

Africa

Over 70 regional infrastructure projects lined up for second phase of PIDA

The Programme for Infrastructure Development in Africa (PIDA) focal points drawn from African Union member states, Regional Economic Communities (RECs), and continental institutions met virtually for the PIDA Continental Technical Validation Workshop. The workshop presented the process, outcome, and the draft priority list of projects for the second phase of the PIDA Priority Action Plan (PIDA PAP2), which entered an active consultation phase in November 2019. Seventy-one regional infrastructure projects in the four PIDA sectors: energy, transport, trans-boundary water, and information and communications technology (ICT) have been prioritised from a long list of over 240 projects proposed by the member states, RECs and specialised institutions. The balance projects will constitute a reserve list that will serve to replenish the priority list at planned reviews during the 10-year implementation time frame (from 2021 to 2030). PIDA is a continental strategic framework to address infrastructure bottlenecks through cross-border infrastructure development in the areas of transport, energy, ICT and transboundary water management.

Source: AU

Angola

New exploration contracts can be signed in H2 2021

Paulino Jerónimo, president of the Angolan Agency for Oil, Gas and Biofuels (ANPG), was a guest at a CERAWeek session entirely dedicated to Angola. In this session, entitled ‘Angola’s New Upstream: Increasing Competitiveness, Repositioning for the Future’, Paulino Jerónimo recalled the changes introduced in the national oil sector over the past two years, under the guidance of the President of the Republic, anticipating the second half of 2021 as a probable date for the signing of new oil concession contracts. He also assured that, together with the operators and service providers, Angola, with the active intervention of ANPG, has been taking concrete steps towards the sustainability of oil exploration and production.

Source: Petroleum Africa

Ghana

Strategy for achieving USD25.3-billion by 2029 under NEDS outlined

The Ghana Export Promotion Authority has outlined an integrated list of 17 existing high-performing and industrial priority products that could catapult the projected Non-Traditional Export (NTEs) revenue from the current total earnings of USD2.9-billion to USD25.3-billion by 2029. The move forms part of strategic efforts under the ambitious National Export Development Strategy (NEDS) being implemented by the Authority and key stakeholders that also seeks to energise the private sector to take optimum advantage of the Africa Continental Free Trade Area (AfCFTA). In effect, the NEDS has adopted a priority products selection approach for concentrating resources on a limited number of products for development and marketing. The 17 existing high-performing and industrial products include processed cashew, horticultural products, processed oil seeds, textiles and garments, plastic articles, pharmaceutical products, iron and steel products, automobiles, industrial salt, and machinery and components, among a few others.

Source: GhanaWeb

Malawi

Malawi prepares free trade area instruments

The Ministry of Trade in collaboration with the Ministry of Justice is preparing instruments to be deposited with the African Union (AU) for the ratification of the African Continental Free Trade Area (AfCFTA). Ministry of Trade spokesperson confirmed the development on Tuesday, 17 November 2020. “We are proceeding with ratification after successful consultations with key stakeholders. We will do so before the year ends,” he said. The AfCFTA is expected to be rollout on 1 January 2021. A recently published World Bank report, titled ‘The African Continental Free Trade Area: Economic and Distributional Effects’, found that if implemented fully, the AfCFTA could boost regional income by USD450-billion, bringing 30 million people out of extreme poverty and raising the incomes of 68 million others who live on less than USD5.50 a day.

Source: The Nation

Malawi

MRA pursuing MWK50-billion transfer pricing cases

The Malawi Revenue Authority (MRA) is pursuing transfer pricing cases at the newly established Revenue Court where it projects to recover in excess of MWK50-billion, if the cases were to go in the revenue collection body’s favour. MRA has been missing its monthly revenue targets in recent months, except in October, when it collected over MWK120-billion. Speaking in an interview after minister of Finance, Felix Mlusu toured the revenue collection body’s offices, MRA head of corporate affairs, Steve Kapoloma said the timeframe for the cases is not known. He said executing such cases has been a challenge as there was no specific court to handle them but the establishment of the Revenue Court would help speed the wheels of justice. “All the cases are in court. So, it is difficult to put a timeline on the trial or when judgement will be passed. The processes are now faster because Revenue Court was established,” Kapoloma said. Last year, the Reserve Bank of Malawi (RBM) indicated that it was investigating over 11 multinational companies and individuals for possible transfer pricing.

Source: The Times

Nigeria

FG to establish infrastructure company for critical investments in projects

President Muhammadu Buhari has approved the establishment of an infrastructure company that will be wholly focused on critical infrastructural investments in the country. This disclosure was made through a tweet post by the Presidency on its official Twitter handle on Tuesday, 17 November 2020. According to the statement, the infrastructure company is expected to raise funds for this responsibility from the Central Bank of Nigeria (CBN), the Nigeria Sovereign Investment Authority (NSIA), pension funds, as well as local and foreign private sector development financiers. The president pointed out that the initiative will bridge the infrastructure deficit and is also implementing innovative financial strategies to pull in private sector investment. He further disclosed that the company will become a world-class infrastructure development vehicle wholly focused on making critical infrastructure investments in Nigeria.

Source: Nairametrics

Republic of Congo

Total secures management of Djeno terminal in Congo for another 20 years

For the next 20 years, the Djeno terminal, where all the oil from the Republic of Congo is stored, will be managed by the French group, Total. The company managed to secure an agreement with the government, despite the latter’s desire to nationalise the terminal. The announcement was made a few days ago by Patrick Pouyanné, CEO of the French oil company. “We have agreed to renew the concession for the Djeno terminal, which is Total’s historic anchor in Congo, for 20 more years. It will be shared between various companies and Total will be one of the shareholders,” he indicated. This announcement comes after the government announced that it wants to recover this terminal 100% in order to choose its own operators. Located in Pointe-Noire, the Djeno terminal is considered to be the nerve center of oil activity in the Republic of Congo. Neither the date of the signing of the agreement nor its clauses have been specified.
 
Source: Agence Ecofin

Rwanda

New company law to boost investor appeal – RDB

A draft company law aimed at amending the existing law could help attract new investments to the country if all proposed changes by the government are approved by Parliament. The amended law seeks to improve the existing one and create an enabling legal environment for the Kigali International Financial Centre (KIFC), according to officials. The amended law is expected to allow adoption of best practices in corporate governance, and business structures. According to Richard Kayibanda, the registrar general at the Rwanda Development Board, it will also reflect the developmental strategy of the KIFC. “The proposed changes concern mostly new companies that will be registering or the existing companies that would want to change from their current structure to one of the new types introduced in the company law,” he told The New Times in an email.

Source: The New Times

Sudan

Sudan will offer 27 oil blocks through global bid

Acting Energy minister, Kheiri Abdelrahman told the Sky News Arabia TV channel that Sudan will offer 27 oil concession blocks through a global bid, of which three are offshore blocks and the rest are land blocks. According to the Sudanese Ministry of Energy and Mining, investors should make use of modern technologies in addition to matching oil production with exploration data. Abdelrahman explained that the ministry is promoting these blocks to attract investors, stressing that they are keen to attract investors with specific technology to meet the requirements of each block. He indicated that the production plan for the new companies should be consistent with exploration data, in order to reach peak production. The announcement follows a meeting between Abdelrahman and the Governor of East Darfur, Mohamed Aliu, who “emphasised the necessity that oil companies provide social services such as water, education, health projects, construct roads to connect towns and villages, and address electricity problems.” On 25 September, Sudan and South Sudan signed a draft agreement to develop oil cooperation between the two countries.

Source: Radio Dabanga

Sudan

Sudanese banks take first steps to end decades of isolation

Sudanese banks have started moves to re-establish relations with foreign banks as the United States (US) prepares to remove Sudan from its state sponsor of terrorism (SSOT) list, although bankers and analysts say the process will likely be slow. Restoring international banking links could provide a vital boost to an economy still in crisis more than 18 months into a political transition following the overthrow of former president Omar al-Bashir. Banks have been blocked from correspondence relationships involving US dollars and have had difficulty dealing in other major currencies for nearly two decades, forcing them to rely mainly on the United Arab Emirates dirham for transactions. Importers have depended on expensive brokers, mainly in Dubai, to source foreign currency, passing on the extra cost to local consumers and helping to exacerbate inflation, now running at 220%. Washington formally lifted economic sanctions against Sudan in 2017, but continued to classify the country as a state sponsor of terrorism.

Source: Reuters

Tanzania

Investment, regional co-operation top Magufuli’s new goals

The Tanzania Investment Centre (TIC) will now be under the Office of the President to ensure efficiency, as President John Magufuli focuses on investment and regional co-operation in his second term. It was previously under the Office of the Prime Minister. In his inaugural address to Parliament in Dodoma, President Magufuli said his priorities are to attract foreign and local investments with a focus on industrial, agriculture, tourism, livestock and fishing development. He vowed his fight against corruption to ensure integrity of government and that economic investments will be given full support under his administration. In the past five years, the government had scrapped 168 hostile taxes and levies, 114 of them on agricultural production and 54 were imposed on trade and business.

Source: The EastAfrican

Togo

AT2ER extends its call for applications for the online management of off-grids

“Three weeks”. This is the additional time granted to entrepreneurs or companies interested in the project to create an online platform for off-grid management in Togo. The closing date for applications is thus extended from 5 November to 27 November 2020, according to the Togolese Rural Electrification and Renewable Energy Agency (AT2ER). The public body launched the call for applications in October 2020. The selected contractors or companies will provide the equipment, as well as the services of realisation, training and maintenance of the platform. Once set up, AT2ER will use the online platform to monitor the deployment and operation of clean energy off-grids in Togo. “The platform will operate according to the ‘Paygo’ commercial distribution model. The solar systems will also have to be connected to the digital space,” says AT2ER. This initiative is part of the CIZO rural electrification programme in Togo (Pravost) launched in 2017 with the aim of providing electricity to 300,000 Togolese households. Through this project, the government hopes to raise the national electricity access rate to 75% by 2025 and to 100% by 2030.

Source: AFRIK 21

Zambia

Bank of Zambia leaves policy rate unchanged at 8%

The Bank of Zambia has left its main lending rate unchanged at 8%, governor Christopher Mvunga said at a news conference adding that the Monetary Policy Committee had to balance boosting the economy with attracting inflows and supporting the Kwacha. Mr Mvunga pointed out that successfully navigating a debt restructuring following a sovereign default was essential for Zambia to return to fiscal fitness. He said while the rate of price growth is expected to moderate over the next two years, it is likely to remain above target. Mr Mvunga said risks to the inflation outlook remain tilted to the upside adding that the economy will probably contract by 4.2% this year and recover at a slower pace than previously thought due to limited fiscal space.

Source: Lusakatimes

Zambia

Cabinet approves National Nuclear Policy

Cabinet has approved the National Nuclear Policy and its Implementation Plan among many resolutions. The Policy aims to strengthen the legal, institutional and operational framework of nuclear science and technology in the country. Information and Broadcasting minister, Dora Siliya has disclosed the development to ZNBC News in a statement. Ms Siliya says although Zambia has been applying nuclear science and technology for development since 1969 when the country became a member of the International Atomic Energy Agency, the country has had no nuclear policy to guide the utilisation of nuclear science and technology. She said Cabinet also approved the commencement of the development of the Eighth National Development Plan (8NDP) for the period 2022 to 2026, that should be reform and recovery-focused, guided by the process and roadmap provided in the Concept Note. Ms Siliya said the process is important since the implementation period for the Seventh National Development Plan comes to end in 2021.

Source: ZNBC News

Zimbabwe

Mnangagwa launches new five-year economic blueprint

Zimbabwean President Emmerson Mnangagwa launched the country’s new five-year economic blueprint that is targeting an economic growth rate of 5% per annum to catapult the country into an upper middle income economy by 2030. Dubbed the National Development Strategy (NDS), the plan runs from 2021 to 2025 and succeeds the Transitional Stabilization Program (TSP) which ends this year. Its other objectives are to accelerate economic growth, improve the public sector and strategic infrastructure such as energy, information and communications technology (ICT), transport and house delivery, among others. “The NDS1 will, therefore, be rolled out under better economic conditions than the TSP and carries with it bold strategies and policies to catapult economic growth,” Mnangagwa said. Agriculture, mining, electricity and manufacturing are the top sectors expected to drive growth in the next five years, he said. Other objectives under the new economic blueprint include maintaining fiscal balance at no more than 3% of GDP, single digit inflation, increase in international reserves to at least six months import cover from the current less than a month, as well as maintaining domestic and external debt at below 70% of GDP.

Source: New Zimbabwe