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issue 385 | 31 Jan 2021

Africa

African trade ministries urged to provide adequate information on AfCFTA

The executive director of the African Continental Free Trade Area (AfCFTA) Policy Network, Louis Yaw Afful, has called on various Ministries of Trade and trade establishments of party states of the AfCFTA to publish their tariff offers, which are the list of products that each country says it is ready to liberalise under the 90% tariff liberalisation. He believes this will keep businesses abreast of products that fall within the 10% exclusive or sensitive categories and will attract duties when exported. “Local businesses should know what products have been liberalised so that when products are coming from other countries, they can be able to identify the products which are under the exclusives and, therefore, know whether they will be allowed into the country.” Speaking on Eye on Port, the executive director revealed that trading has commenced in the much-touted African continental free trade area with the rules of origin, which is the criteria needed to determine the nationality of a product, being 82% complete.

Source: GhanaWeb

Central Africa

IMF expects Central African regional GDP to rebound in 2021; medium-term growth projected to average 3.5%

The International Monetary Fund (IMF) expects the regional gross domestic product (GDP) to rebound in 2021, growing at 2.7%. Adverse Coronavirus (COVID-19)-related impacts are likely to have long-lasting economic effects, with medium-term economic growth forecast at just 3.5%, as reforms targeted to improve governance and the business environment begin to yield positive results. After deteriorating to an estimated deficit of 6.5% of GDP in 2020, the external current-account gap is forecast to improve to around 4.8% of GDP in 2021, driven by the anticipated pick-up in oil exports. The IMF expects that a sustained recovery in oil exports and imports substitution measures will help bring the current-account deficit back to around 3% of GDP by 2023. Annual inflation in the region is expected to accelerate to an average of 2.8% in 2021, driven by both demand and supply side pressures on the back of COVID-19-related disruptions. The IMF envisages that fiscal consolidation efforts, mostly through expenditure compression, would support the reduction of the overall fiscal deficit to 3.4% of GDP (excluding grants) in 2021. In the medium term, it foresees balanced consolidation efforts to increase non-oil revenues and contain expenditure. Accordingly, the IMF expects the public-debt-to-GDP ratio to gradually fall to about 50% of GDP in 2024.

Source: IHS Markit

West Africa

ECOWAS caps COVID-19 PCR tests for intra-regional travellers at USD50

The Economic Community of West African States (ECOWAS) has capped at USD50 the cost of COVID-19 polymerase chain reaction (PCR) tests for nationals travelling within the region. This was agreed at the 58th Ordinary Session of the Authority of Heads of State and Government of ECOWAS held on Saturday, 23 January 2021 via video conferencing. A communiqué issued after the meeting said, “The Authority approves the harmonised ECOWAS Protocol for cross-border movement of persons and goods during the pandemic and caps the cost of COVID-19 PCR test for travel within the region by ECOWAS nationals at a maximum of USD50.” Currently, the different countries within the ECOWAS region charge different amounts for COVID-19 tests for travellers within the region. The ECOWAS meeting, chaired by Ghana’s President Nana Akufo-Addo, also agreed to set up a fund, called the Vaccine Revolving Fund, to receive contributions from governments, development banks, the private sector and partners for the purpose of securing “anti-COVID vaccines in the region through short-term pooled procurement and medium-to-long-term regional manufacture.” ECOWAS also agreed to establish a COVID-19 Donor Working Group who will campaign to raise additional funds.

Source: BusinessGhana

Eswatini

Central Bank of Eswatini maintains base interest rate at 3.75% despite rising inflation expectations for 2021

The Central Bank of Eswatini (CBE), in consultation with the Monetary Policy Consultative Committee (MPCC), has decided to leave the policy rate unchanged at 3.75% during its January meeting. Inflation expectations for 2021 have increased because of an anticipated recovery in global oil prices and increases in domestic administered prices. Although the latest inflation results published by the Central Statistics Office of Eswatini show that consumer prices were down by 4.6% year-on-year (y/y) in December 2020, compared with 4.9% y/y in November, the CBE expects the general price level to rise to an annual average of 5.42% in 2021, driven by rebounding global oil prices and increases in domestic administered prices. Inflation is, however, forecast to marginally moderate to 5.25% in 2022, thanks to “the expected appreciation of the exchange rate and the prospects of a successful roll out of the COVID-19 vaccine which would normalise global economic activity”.

Source: IHS Markit

Ghana

Ghana receives EUR9.7-million EU grant to improve access to power in sub-region

The European Union (EU), through the French Development Agency – Agence Française de Développement (AFD) – has approved a new EUR9.7-million grant for the Ghana Grid Company (GRIDCo) to boost infrastructure works on the interconnection line between Ghana and Burkina Faso. This is expected to increase electricity access in Northern Ghana and exporting capacity to the sub-region, especially Burkina Faso. The EU grant facility will be used to finance the upgrade of an 18 kilometres long 161kV transmission line located between Ahodwo and Anwomaso substation in Ghana’s second largest city, Kumasi. It will also support power transfer capacity from the south of the country up to Burkina Faso, through the 330kV line from Kumasi to Bolgatanga as well as reductions in transmission losses. The 330kV line project was initially financed with a USD174-million loan from AFD to GRIDCo and a EUR4.8-million technical assistance grant from the EU.

Source: GhanaWeb

Guinea-Bissau

IMF Executive Board approves a USD20.47-million emergency assistance for Guinea-Bissau to address the COVID-19 pandemic

The Executive Board of the International Monetary Fund (IMF) approved a disbursement under the Rapid Credit Facility (RCF) equivalent to SDR14.2-million (about USD20.47-million, or 50% of quota) to help Guinea-Bissau meet urgent balance of payments and fiscal needs stemming from the COVID-19 pandemic. The pandemic has had a significant impact on Guinea-Bissau’s economy. It has disrupted economic activity and led to a deterioration in the external and fiscal position as a result of the lower external demand for cashew nuts and the domestic measures to contain the spread of the disease. The effects of these shocks are expected to persist in 2021, reflecting the need to sustain imports for essential consumption and investment to strengthen health sector capacities and infrastructure, which was further weakened by severe floods in September.

Source: IMF

Ivory Coast

EU urges Ivory Coast to comply with new sustainable cocoa laws

The European Union (EU) on has urged Ivory Coast to prepare for stricter cocoa laws, which the body hopes to ratify later this year, aimed at protecting forests, curbing child labour and ending farmer poverty. In September 2020, the EU launched an initiative to improve sustainability in the cocoa industry in collaboration with officials from the world’s top cocoa producers in Ivory Coast and Ghana, as well as member states, cocoa growers and civil society. The EU represents the leading destination for Ivorian beans, accounting for 67% of the country’s cocoa exports. Ivory Coast’s government called for increased support from the EU and other donors to help implement the proposed legislation, including a request for more than EUR2-billion (USD2.44-billion) to fight deforestation. Ivory Coast’s cocoa industry employs nearly one million small farmers and represents 25% of the economy and 40% of export earnings.

Source: Reuters

Kenya

Agency goes online to track FDI deals

Kenya Investment Authority (KenInvest) has set up a web-based Foreign Direct Investment (FDI) tracking tool enabling it to generate reliable and timely investment statistics for investors and to guide marketing strategies. The FDI tool, developed by KenInvest through technical and financial support of Partnership for Investment and Growth in Africa (PIGA), will indicate the status of foreign and domestic direct investments, source countries and metrics of preferred sectors. KenInvest managing director, Moses Ikiara said creation of an investment database will also be availed to investors, enabling them to match their investments to existing opportunities. The first set of data from the FDI tool will be published in the investment promotion agency’s upcoming publication titled ‘State of Investment Report (SIR)’, with contact information of the investors being made available to customers, public agencies and related businesses to enable business transactions. KenInvest also collaborates with the Kenya National Bureau of Statistics and the Central Bank of Kenya to track foreign capital inflows through periodic surveys. There have been six surveys done since 2010.

Source: Business Daily

Kenya

Kenya shrugs off inflation fears to retain benchmark loans rate

The Central Bank of Kenya (CBK) has retained the base lending rate at 7% for the sixth time in a row shrugging off rising concerns over inflation. The Monetary Policy Committee (MPC) said it held the key rate – effectively sparing borrowers higher cost of loans – in an environment where inflation expectations were within the target range and the economy was on the road to recovery following initial disruption brought about by the COVID-19 pandemic. "The Committee noted that the package of policy measures implemented since March 2020 were having the intended effect on the economy, and are being augmented by implementation of the announced fiscal measures in the financial year 2020/21 Budget", MPC chairman and CBK governor Patrick Njoroge said. "The MPC concluded that the current accommodative monetary policy stance remains appropriate, and therefore decided to retain the Central Bank Rate (CBR) at 7.0%."

Source: The EastAfrican

Kenya

What landowners need to do ahead of Kenya’s land title conversion process

A new land registration process in Kenya is underway which means that affected landowners will need to make sure that details captured against their land is correct and that any complaints are lodged by the 1 April 2021 deadline. Land registration in Kenya has previously been highly complex given that title deeds have been issued under various statues. This has also made the process susceptible to fraud. In a bid to harmonise the land registration process, as is mandated by the Constitution, on 31 December 2020, a special issue of the Kenya Gazette announced the conversion of land reference numbers to new parcel numbers for certain properties in Nairobi. The conversion of land reference numbers will result in all title deeds issued under the repealed laws cancelled and replaced with titles under a new register as prescribed by the Land Registration Act, 2012. Ownership, size and any interests registered against respective old titles will not be affected.

Source: ENSafrica

Malawi

Marketers push for industry regulation

The Institute of Marketing in Malawi (IMM) has revealed that it has submitted to the government the IMM Bill which aims at regulating the marketing profession in Malawi. According to IMM public relations director, George Damson, the marketing profession has been unregulated and without the backing of Parliament for so long such that, once the Bill comes into force, things will improve. Damson was also hopeful that the Bill would pass through Parliament and be assented to and gazetted in good time “considering its importance to the marketing profession and the country at large”. “The Bill is with the government and we are just waiting for it to be passed by Parliament once it is tabled. We have made strides in terms of making sure that it is in good shape and we believe government will do its part in taking it to Parliament, which will pass it into law,” he said. Renowned marketer, Widdy Nsona, expressed joy at the news, saying once it is passed by Parliament and assented to by the President, the new law would protect the marketing profession in Malawi. “The law will also enhance marketing training, regulate and raise marketing standards which in turn will be good for the economy and organisations that rely on marketing to survive,” he said.

Source: The Times Group

Malawi

Treasury rebuffs MCCCI on stimulus package

The Ministry of Finance says it does not have the capacity to provide fiscal stimulus packages to the private sector because it does not have the financial muscle to do so. The ministry’s spokesperson Williams Banda was reacting to calls from the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) to consider providing targeted monetary and fiscal incentives to sustain the core economic activities in the private sector to ensure household food, nutritional, and income security. The call for the stimulus package is contained in the recently published MCCCI’s 2020 Assessment of Business Environment, which among others, outlined that due to escalating cases of COVID-19, the business environment has been subdued following measures instituted to ensure that the pandemic is contained. In an e-mail response, Banda admitted that such stimulus packages have played a significant role in keeping economies and businesses afloat in times of pandemics and economic recessions, but indicated that for a government to use fiscal stimulus packages in this way, it requires availability of money. To strike a balance, Banda said government plans to speed up the repayment of arrears it owes the private sector to pump into the economy some needed resources.

Source: The Nation

Namibia

Customs and excise crucial to unlock Namibia’s competitiveness

The African Continental Free Trade Area (AfCFTA) is brim-full of opportunities to strengthen intra-Africa trade, regional and continental value chains and to create access to new markets and revenue streams. Within this context of the renewal of supply chains, customs administrations will play an integral part as they unlock and leverage Namibia’s competitiveness and enhance both continental and global trade logistics. These sentiments were recently expressed by minister of Finance, Iipumbu Shiimi during the celebration of World International Customs Day, which this year encompasses the theme: “Customs bolstering recovery, renewal and resilience for a sustainable supply chain”. Shiimi added that as part of modernising Namibia’s customs programme, the directorate is embarking on various upgrades. This includes: new clearing agent and risk management policies; establishment of the container control programme; establishment of an electronic data interchange centre; and unique consignment reference and advance ruling. “In operationalisation of these programmes, we are mindful of the advances in technology, which, if optimally used, can streamline our process and improve efficiency,” said Shiimi.

Source: New Era

Namibia

Mining underpins Namibia's export

Mining remains Namibia’s cash cow and largest foreign currency earner, raking in billions despite disruptions in production inflicted by the COVID-19 pandemic. The latest official trade statistics show that the southern African country increased its income from exports of non-ferrous metals to Belgium, China and Germany by 25.5% in the last quarter. The Namibia Statistics Agency (NSA) says the Southern African Customs Union (SACU) was the largest source of imports for Namibia, accounting for 43.8% of all imported vehicles, beverages, essential oils and various manufactured goods. The NSA said non-ferrous metals were among major high-value imports from the Common Market for Eastern and Southern Africa (31.2% of total imports). “Equally, the SADC (Southern African Development Community), excluding the SACU region, accounted for 31% of Namibia’s total import bill, followed by the EU (European Union) and BRICS in the fourth and fifth positions with 10.8% and 6.8%, respectively,” the NSA said. The statistics bureau said China maintained its position as Namibia’s largest export destination (41.3%), followed by South Africa (13.9%). Rounding out the top five export destinations were Botswana, Belgium and Germany. On imports, Namibia got most of its goods from South Africa (42.4%), followed by Zambia (26.7%), and then Bulgaria, China and Democratic Republic of Congo.

Source: The Southern Times

Nigeria

Oil firms fear Nigerian plan may deter offshore investment

International energy companies working in Nigeria are worried that proposals in the country’s long-delayed oil industry law will deter investment in new offshore projects. At least half of Nigeria’s total crude output is from offshore oilfields, helping to offset declining production from mature onshore assets. But recent discoveries have remained undeveloped in the face of regulatory and legislative uncertainty. “Our review of the Petroleum Industry Bill shows that deepwater provisions do not provide a favourable environment for future investments and for the launching of new projects,” Mike Sangster, managing director of Total SE’s Nigeria unit, told lawmakers at a hearing in Abuja. To boost new investment, the proposed law should grant deepwater oil projects full royalty relief for the first five years of production or a graduated royalty program, said Sangster, speaking on behalf of the Oil Producers Trade Section, a group of 30 producers including Total, Royal Dutch Shell Plc, Exxon Mobil Corp., Chevron Corp. and Eni SpA, which he chairs. The Bill – legislation that is two decades in the making – will streamline how Nigeria’s energy assets are operated and funded.

Source: BloombergQuint

Rwanda

With B2B global platform, Rwandan firms eye slice of Singaporean market

More than 90 local companies have been introduced to Global Connect Business to Business (GC B2B) thanks to the partnership between Rwanda and the Singapore Business Federation (SBF). GC B2B is an online marketplace that facilitates trade in the Association of Southeast Asian Nations (ASEAN) and globally. The portal links businesses and allows suppliers to view and reach out to buyers, enabling the establishment of manufacturer and reseller partnerships. With the platform, Rwandan firms will be able to directly market their products and services to other companies across sectors. “The platform is important because it ensures easy access to not only the Singapore market but also ASEAN,” Jean de Dieu Uwihanganye, Rwanda’s High Commissioner to Singapore said. So far, he added, Singapore is the 6th biggest export country to Rwanda, therefore, the entry of Rwandan business to GC B2B will ensure an increase in exports and render imports more secure. Rwanda and Singapore are currently working in different aspects, most notably in aviation, investment, and public service management. Total investments by Singapore in Rwanda amounted to USD145-million in 2018.

Source: The New Times

Tanzania

Central bank is upbeat on 2020 growth statistics

The Bank of Tanzania (BoT) has exuded confidence that economic growth targets will be realised even as COVID-19 effects posed challenges across the globe. Last year, Tanzania revised its growth targets from 6.9% to 5.5% following the pandemic which disrupted world economic activities. However, the BoT’s Monetary Policy Committee (MPC) says the 2020 targets will be realised. According to the MPC statement posted on the BoT website, gross domestic product (GDP) is expected to grow by 6% or more in 2021. The economy grew by 5.7% in the first quarter of 2020, 4.0% in the second quarter and 4.5% in the third quarter, according to the National Bureau of Statistics (NBS). During the third quarter (July to September 2020), construction activities recorded the highest growth of 17.4%, followed by transport and storage (8.8%), information and communication (8.7%), professional scientific and technical services (8.6%), water supply (7.9%), administrative support services (7.7%), agriculture (6.7%), public administration (6.6%) and human health and social services (6.4%). Private sector credit growth averaged 5.1% in the last six months of 2020, and according to the team, it is expected to regain momentum in the second half of the 2020/21 financial year as the global economy normalises. Inflation is expected to remain within the projected level of 3-5% while the exchange rate is expected to remain stable.

Source: The Citizen

Uganda

Oil final investment decision expected by end of March – minister

The minister of Energy and Mineral Development, Mary Goretti Kitutu, has disclosed that the Final Investment Decision (FID) for oil production will be taken before the end of March 2021. Kitutu made the disclosure during an interface with the Parliamentary Committee on Natural Resources that needed some clarifications on the sector’s Budget Framework Paper for the next financial year. The FID represents the point at which international oil companies (IOCs) and the Government of Uganda through the Uganda National Oil Company (UNOC) will commit to oil field development. The project execution phase should commence shortly after the FID with significant expenditure on building the production facilities. The executive director of the Petroleum Authority of Uganda (PAU), Ernest Rubondo, told members of Parliament that before the end of the first quarter of the calendar year, the FID will be taken and following this, four main projects will take shape with each of the projects costing over USD3-billion. He disclosed that oil will not begin to flow until after a three-year construction period. He listed the projects as the production in Kilenga at Buliisa operated by Total E&P and Tullow Oil, the production at the Kingfisher oil field in Kikuube district operated by CNOOC, the development of the crude oil pipeline from Hoima to Tanga and the development of the refinery.

Source: The Independent

Zimbabwe

‘Utilise ATO to gather market information’

Zimbabwe’s private sector has been urged to utilise the African Trade Observatory (ATO) to gather market intelligence and boost trade riding on the operationalisation of the African Continental Free Trade Area (AfCFTA). Speaking during the AfCFTA webinar meeting organised by the country’s national trade development and promotion agency, ZimTrade, the African Union (AU) Commission senior customs expert and advisor at the AfCFTA, Mr Willie Shumba, said “the AU Commission has established what is called the African Trade Observatory, it is a market intelligence system which tells you of the various opportunities and products which other countries might have or have interest in. “The AfCFTA is saying those who want to take advantage of the trade and economic opportunities within Africa now need to look beyond their traditional markets such as COMESA (Common Market for Eastern and Southern Africa), EAC (East African Community) and SADC (Southern African Development Community). The African Trade Observatory is a market intelligence system that the Zimbabwe private sector should make use of to secure market niches across the continent.” Mr Shumba said by ratification of the AfCFTA, government had created a platform for the private sector to look at trading with 54 other countries on the continent.

Source: The Chronicle