issue 386 | 07 Feb 2021
Africa4IR a key driver for mining value chain transformation
The Fourth Industrial Revolution cannot only benefit mining companies but also small, medium, and micro enterprises (SMMEs) and the entire mining value chain. This was one of the key takeaways from a panel discussion at the ‘Investing in African Mining Indaba’ virtual event. The topic of discussion centred on how African mining can harness technology and automation in a pandemic to help grow economies. It also focused on how labour and industry can work together to ensure that Africa’s mining sector does not fall behind while safeguarding employees. Nicky Black, director of the Social and Economic Development Programme at the International Council on Mining and Metals, stated that technology has innovated the way that companies engage with mining companies during the pandemic. “This has been done in three ways. Firstly, we are seeing mining companies financing state-of-the-art testing facilities… We are also seeing the use of logistics tracking systems for the transportation of medical supplies and also in the sharing of public health messages.” Black concluded that technology is also used to engage communities in consultation, project development and approval processes.
Source: Mining Review Africa
AfricaHawilti launches new gas coalition in partnership with the African Energy Chamber
The African Energy Chamber has announced the launch of the African Coalition for Trade & Investment in Natural Gas (ACTING), a non-profit initiative jointly managed with Hawilti Ltd. ACTING will act as the central platform advocating for natural gas across Africa and will leverage on the core strengths of both the Chamber and Hawilti to promote natural gas as a transition fuel, attract capital in the African gas value-chain and engage stakeholders and societies on the benefits of natural gas consumption. The work of the Coalition will particularly focus on the collection of key market data and the distribution of high-quality information on opportunities, companies and projects shaping up the future of African gas. By offering the most comprehensive platform on African energy, Hawilti will be dedicating a substantial part of its investment research activities to natural gas in West, Central, East and Southern Africa. The Coalition will annually publish a State of Play report providing key market data on African gas. With its partners, it will be supporting a broad range of gas industries, including liquefied natural gas (LNG), liquefied petroleum gas (LPG), compressed natural gas (CNG), piped natural gas (PNG), gas-to-power and hydrogen.
Source: African Energy Chamber
AfricaNew sanitation and wastewater management benchmark tool highlights opportunities to boost health and economic growth in Africa
The African Development Bank (AfDB), the United Nations Environment Programme (UNEP) and GRID-Arendal have released the inaugural ‘Sanitation and Wastewater Atlas of Africa’, a tool to benchmark and propel Africa’s progress towards Sustainable Development Goals on safe sanitation and wastewater management. The Atlas aims to help policymakers accelerate change and investment in the sector. The result of four years of collaboration, the Atlas assesses progress and highlights opportunities where investment in sanitation and wastewater management can improve health and spur economic growth. “In the past 10 years, the African Development Bank has invested more than USD6-billion in sanitation and hygiene improvements, but much more financing is needed from the private sector, development finance institutions, governments and other sources. The new Sanitation and Wastewater Atlas of Africa can inform strategic investment going forward,” said Wambui Gichuri, the AfDB’s acting vice president for Agriculture, Human and Social Development.
AfricaS&P Global affirms African Development Bank’s AAA rating with stable outlook
Ratings agency S&P Global has affirmed its “AAA/A-1+” foreign currency issuer credit rating of the African Development Bank (AfDB) with a stable outlook. The ratings agency said its outlook reflected the expectation that the AfDB would, over the next two years, “prudently manage its capital while maintaining solid levels of high-quality liquidity assets and a robust funding profile. We also assume extraordinary shareholder support to the bank will remain unchanged.” In a letter, dated 29 January 2021, S&P Global noted the Bank’s USD115-billion capital increase, approved by its shareholders in October 2019. S&P Global said “Our ratings on AfDB reflect its important role in Africa, marked by a long track record of fulfilling its policy mandate through economic cycles, combined with robust shareholder support.” The ratings agency added: “We expect the capital increase will enable AfDB to continue expanding its reach, particularly in light of the renewed focus on infrastructure financing and private-sector lending. The bank has already been growing steadily over the years. The bank is in a good position to support increasing mobilisation efforts and crowd-in additional private-sector funds.”
Southern AfricaIRENA and SACREEE to accelerate renewables deployment in Southern Africa
The International Renewable Energy Agency (IRENA) and the Southern African Development Community’s (SADC) Centre for Renewable Energy and Energy Efficiency (SACREEE) signed a Memorandum of Understanding to work together on accelerating the deployment of renewable energy solutions in Southern African countries. Under the agreement, the two organisations will also cooperate on decentralised technologies, policy development, capacity building programmes and regional events aimed at attracting investments to the region. The two organisations will conduct joint activities under the Africa Clean Energy Corridor (ACEC) in the areas of renewable energy resource assessment, long-term planning, as well as investments, policy, regulatory and institutional frameworks. IRENA and SACREEE will also work together to accelerate renewable energy investments through the implementation of the Southern African Investment Forum that will facilitate access to sustainable finance in the region. The forum is part of IRENA’s contribution to the Climate Investment Platform (CIP), designed to advance sustainable energy projects to investment maturity and facilitate their access to finance.
AngolaAngolan Central Bank keeps policy rate unchanged at January meeting
The Monetary Policy Committee (MPC) of the National Bank of Angola (BNA) decided to keep the key interest rates unchanged at its January meeting, having last cut the rates in May 2019. The MPC met from 28 to 29 January 2021 to discuss the latest developments in the domestic economy. The MPC highlighted that the Coronavirus (COVID-19) pandemic has been the key force keeping disinflation efforts initiated in 2018 abated. Furthermore, in its official release, the MPC emphasised the need to keep the inflation target around one basis point in 2022, as well as the need for the implementation of a prudent, restrictive monetary policy during 2021. At the meeting, the MPC decided once more to maintain the BNA’s key policy rates, with the basic rate at 15.5%, after last lowering its key policy rate by 25 basis points to 15.5% during its May 2019 meeting, which brought the cumulative reduction in the BNA's policy rate to 250 basis points since June 2018. The coefficients of mandatory reserves in national and foreign currency also remained at 22% and 17%, respectively.
Source: IHS Markit
BotswanaBotswana intensifying effort to attract non-diamond exploration
Botswana has intensified efforts to digitise and make geoscience information readily available to local and international potential investors in an effort to encourage prospecting for non-diamond minerals, Botswana’s President Mokgweetsi Masisi told the virtual 2021 ‘Investing in African Mining Indaba’. Masisi said that Botswana’s over-dependence on diamonds had more than ever made it imperative for the country to urgently expand its revenue base to other minerals. While the diamond sector has played a pivotal role in the socioeconomic development of Botswana, he drew attention to the country’s copper, nickel, silver, soda ash and gold endowments, among others. “The development of the minerals industry in Botswana is in full steam, as evidenced by several ongoing exploration projects and the issuance of mining licences to private companies,” he told the conference covered by Mining Weekly. Another key project intended to encourage mineral prospecting was the identification of cement-grade calcrete and limestone deposits. Mines and metals policy was being reviewed to guide expedited growth of the minerals sector. The policy would aim to maximise economic benefits and facilitate private sector involvement in minerals developments.
Source: Mining Weekly
EswatiniEswatini revamps tax system, cuts debt arrears amid virus crisis
The southern African Kingdom of Eswatini is overhauling its tax system and reducing its debt arrears as it seeks to shore up its finances amid the COVID-19 pandemic. The landlocked nation intends to introduce new levies to increase its tax take and bring more individuals and entities into the net, Finance minister Neal Rijkenberg said in an interview. Consumption taxes, which limit the scope for evasion, are on the cards. The government is also considering imposing turnover duties and using indirect means to assess how much smaller firms should pay, rather than relying on their annual financial statements. The maximum marginal income tax rate is likely to be raised to 36% from 33%, and the minimum tax threshold increased – a move seen as necessary to address yawning income inequality. The government previously announced plans to lower the corporate tax rate to 12.5%, from 27.5%, to attract investment and create jobs. Enabling legislation will be presented to parliament within the next few months, but a four-year timeline for reducing the rate may be extended due to the adverse effect COVID-19 has had on state revenue, according to the finance minister.
GhanaBoG keeps policy rate at 14.5% after January 2021 MPC meeting
The Bank of Ghana (BoG) has maintained its monetary policy rate at 14.5%. This comes after the Monetary Policy Committee (MPC) of the BoG held its first deliberations of the year from 26 to 29 January 2021 to review economic developments of the country. In a statement issued on Monday, 1 February, Governor of the Central Bank, Dr Ernest Addison explained that the decision was based on growth indicators rebounding and headline inflation returning to target in the second quarter of 2021. “In the domestic economy, growth has picked up since the sharp contraction in the second quarter. All the high frequency indicators of economic activity have rebounded, consumer and business confidence levels are back at pre-lockdown levels, and there are indications of steady growth in private sector credit,” the governor said. “However, the Central Bank projects headline inflation to return to target in the second quarter of 2021. Risks to inflation in the near-term are broadly contained, but short to medium-term risks emanating from the fiscal expansion and rising crude oil prices are emerging. Under the circumstances, and given the balance of risks to inflation and growth, the Committee decided to keep the policy rate at 14.5%,” he added.
GhanaContainer shortage pushes freight rates through the roof
Ghanaian importers are now paying more than double the amount they paid for freight pre-COVID-19 as a global shortage of shipping containers has drastically shot up the cost of moving goods from various parts of the world to Ghana’s ports, Business24 has gathered. Transporting a 20-footer container from the point of origin to the nation’s ports now costs the importer about USD6,000 from USD2,400 pre-COVID-19. Freight charge for a 40-footer container has more than doubled to between USD10,000 and USD13,000 from the previous rate of USD4,400. “It’s true that freight has gone up; it is a global increment, but it is going to affect pricing of goods and, by extension, the consumer,” Samson Asaki Awingobit, president of the Importers and Exporters Association of Ghana, confirmed in an exclusive interview. The scarcity of shipping boxes or containers has become a major threat to the shipping business, with dire cost implications, specifically the sharp rise in freight rates. A number of importers have said the increase in freight rates has negatively impacted their capacity to import more goods into the country.
KenyaCAK relaxes business competition rules to spur COVID-19 recovery
Companies will be allowed to temporarily collaborate in their business operations to aid recovery from the disruption caused by the COVID-19 pandemic. The Competition Authority of Kenya (CAK) said it would relax its laws on restrictive trade practices to spur recovery in certain critical economy sectors including manufacturing, private healthcare and research services, horticulture, aviation and tourism. Section 30(2) of the Competition Act allows for exemptions from restrictive trade practices with the approval of the Finance cabinet secretary. CAK said it has prepared Draft Block Exemption Guidelines for the post-COVID-19 economy and eyes approval by the cabinet secretary. Under the stop-gap deal, firms in the manufacturing, healthcare, logistics and aviation sectors will be able to share strategic market information, carry out joint distribution and supply agreements, marketing, sales and research into new markets.
Source: Business Daily
KenyaNew dairy rules to set minimum farmers price
Dairy farmers are set to enjoy better returns from their produce following the adoption of the regulations that will set a minimum price for their produce, denying processors the liberty of lowering prices at will. Agriculture cabinet secretary, Peter Munya said the draft regulations have been completed and are now in the office of the Attorney-General waiting to be gazetted. Processors are currently paying on average KES40 per litre, with Mr Munya saying the prices are good and were arrived at in a bid to control the influx of the commodity from neighbouring countries. The cabinet secretary added that under the new regulations, the minimum price of milk will be reviewed every six months to ensure farmers get the most from their enterprises. Other reforms introduced by the dairy regulator include capping the amount that cooperative societies can deduct from farmers to KES2 per litre to protect producers’ earnings.
Source: Business Daily
MalawiMalawi’s Central Bank holds policy rate at 12.0% amid impending inflationary pressures
The Reserve Bank of Malawi kept its key interest rate unchanged at 12.0% in its January Monetary Policy Committee (MPC) meeting, despite anticipating rising inflation expectations. The liquidity reserve requirement (LRR) ratio on domestic- and foreign-currency deposits was maintained at 3.75% and the Lombard rate was held at 20 basis points above the policy rate. According to the Central Bank’s MPC, the latest policy decision was viewed as appropriate “to contain the impending inflationary pressures while at the same time providing space for supporting recovery of the economy in the wake of the second-wave of the COVID-19 pandemic”. The MPC also noted that there was a need to allow the effect of the last rate cut to diffuse through the economy. The key rate was last revised in November 2020, when a 150-basis-point cut was implemented to support economic recovery and job creation. Headline inflation accelerated marginally with a 7.6% print in December 2020, from 7.3% in the previous month, thanks to relatively higher food and non-food prices. Non-food inflation ticked up in the quarter ending December 2020 “due to effects of the upward adjustment in domestic fuel pump prices effected in mid-December 2020”. Overall, the Reserve Bank of Malawi projects headline inflation to average 7.8% in 2021.
Source: IHS Markit
MozambiqueMozambique’s Central Bank increases policy rate by 300 basis points
The Bank of Mozambique (BM) surprised markets and hiked its monetary policy interest rate, the MIMO rate, by 300 basis points to 13.25% during its Monetary Policy Committee (CPMO) meeting on 27 January 2021. Mozambique’s inflation outlook has deteriorated significantly, the BM warns, and it now expects headline inflation to rise over the medium term due to the pass-through effect of the metical’s weaker exchange rate to domestic prices, as well as climate shocks. The BM did not publish its revised growth or inflation outlook in the CPMO statement. The Mozambican Central Bank’s current inflation target range is set at 5–6%. The risk of Mozambique’s gross domestic product (GDP) growth disappointing on the lower side has also increased due to rising numbers of COVID-19 cases, military conflict in parts of the country, and natural disaster events. Economic growth will nonetheless continue to benefit from liquefied natural gas (LNG) developments and stronger global trade flows, the BM states.
Source: IHS Markit
NamibiaNamibia to minimise agricultural imports
Namibia will minimise importing agriculture products and prioritise creating market access for locally produced goods to stimulate economic growth, minister of Agriculture, Water and Land Reform, Calle Schlettwein said. Schlettwein said the move aims to empower Namibian farmers and allow them a fair chance to supply their goods to the local market. "We have seen that the Namibia Agronomic Board (NAB) is doing a good job in minimising imports of agriculture and horticulture products that can be produced locally. We have since laid a plan to improve production in our green scheme projects by improving the irrigation systems there as a way of giving local farmers a better chance to improve their farming techniques," he said. The NAB, a regulatory body under the Ministry of Agriculture, said that they have achieved 60% local production of white maize, 40% of pearl millet and 4% of wheat, and have set plans to improve local fruit and vegetable production and reduce the country's imports.
NigeriaCBN cancels commodity exchange privatisation, invests NGN50-billion
In approximately 90 days, the Nigerian Commodity Exchange (NCX) will be repositioned to boost farmers’ production. This will give farmers direct access to the buyers at the exchange. Under the repositioning plan, the Central Bank of Nigeria (CBN), which is the majority shareholder, said it will inject NGN50-billion to bring the exchange to standard to play its role in agriculture development. The Governor of the CBN, Mr Godwin Emefiele, disclosed this at the inaugural meeting of the steering committee set up to reposition the exchange. The CBN boss said the investment would be made through the Infrastructure Corporation in collaboration with other investors such as the Nigeria Sovereign Investment Authority (NSIA) and the African Development Corporation (ADC). Emefiele also announced the approval of President Muhammadu Buhari to halt the ongoing privatisation of the exchange as the process was found to have become an obstacle rather than a solution to the problems of farmers.
Source: The Guardian
NigeriaMaritime transport policy will enhance FDI inflow – minister
Minister of State for Transportation, Senator Gbemisola Saraki, says the National Maritime Transport Policy being developed by Nigeria would lead to improved foreign direct investment (FDI) inflow and enhance the ability of the Nigerian maritime sector to compete internationally. Saraki said this in Lagos at the opening of a stakeholders’ validation forum on the draft policy. The meeting was organised by the Federal Ministry of Transportation to get stakeholders’ buy-in and input, as the policy document was being fine-tuned. The transport policy is expected to usher in a regime of robust maritime transport system in the country in line with international best practice. The minister stated in her address, which was delivered by permanent secretary, Federal Ministry of Transportation, Dr Magdalene Ajani, “The National Maritime Transport Policy is a framework that will guide and sharpen the activities, actors and modus operandi in the maritime sector. It is an all-encompassing document that will skyrocket the sector to compete favourably in the global market. That is why this document is extremely important and crucial to the development of the sector.”
NigeriaNigeria's NNPC, partners take FID on country's first methanol project
Nigeria's bid to grow its domestic gas production received a major boost after state-owned oil firm Nigerian National Petroleum Corporation (NNPC) signed a final investment decision on 29 January 2021 to build the country's first methanol-processing plant, located in the Niger Delta region. The USD3-billion plant will process about 14 Tcf of gas from oil fields scattered around the Niger Delta Brass area, minister Timipre Sylva said in a statement. The plant is to be jointly owned by NNPC, the Nigerian Local Content Management Board and indigenous engineering company DSV Engineering Ltd. Oil giant Shell will provide gas feedstock for the plant, which is expected to be completed in 2024, NNPC managing director Mele Kyari said in the statement. Nigeria has already braced itself for lower oil revenues in 2021 after the government reduced its output target to 1.86 million barrels per day and set an oil price level of USD40 per barrel in its budget. In December, the government also launched a gas-processing plant to be fed by previously flared gas from oil fields owned by state-run Nigerian Petroleum Development Company, aimed at producing liquefied petroleum gas (LPG) and compressed natural gas (CNG) for distribution across the country.
Source: S&P Global
RwandaHow can Rwanda achieve its USD1-billion target in agric exports?
Rwanda has a target to generate USD1-billion in annual agricultural exports by 2024, which is more than double the current output by the sector. However, the path to achieve this is not as smooth, at least considering the prevailing circumstances. Indeed, Rwanda’s agricultural exports amounted to over USD419.1-million (about RWF406-billion) in 2019/2020 down from USD465.4-million recorded in 2018/2019, representing a decrease of 10%, according to data from the National Agricultural Export Development Board (NAEB). Notably, the country’s agricultural export earnings had dropped by 9.7% from USD515.9-million in 2017/2018 to USD465-million in 2018/2019. NAEB communication specialist, Pie Ntwari told The New Times that to overcome the observed challenges, NAEB is putting more effort in drivers, including investing much effort in terms of [commodity] promotion and attracting a high-end market that fetches the premium prices. “NAEB will be working on market linkage with big buyers through forward contracts to ensure sustainable and well-paying markets (direct sales),” he said.
Source: The New Times
RwandaInside Rwanda’s USD175-million green urbanisation project
Rwanda Environment Management Authority (REMA) has unveiled a new USD175-million (approximately RWF173-billion) project to ‘green’ the City of Kigali and the six secondary cities. The secondary cities are Nyagatare, Muhanga, Rusizi, Rubavu, Musanze and Huye. Speaking during the wetland day celebration on 2 February, Theogene Ngaboyamahina, the environmental mainstreaming officer at REMA said that the project mainly includes rehabilitating urban wetlands and wetlands management, controlling floods, water management, upgrading unplanned settlements and building drainages, among others. Dubbed the “Rwanda Urban Development Project (RUDPII)”, the five-year project runs from December 2020 to December 2025. The green urbanisation project, Ngaboyamahina noted, will also provide technical assistance for the water management master plan and ensure floods management and upgrading of four unplanned settlements in Kigali. The unplanned settlements include Mpazi, Gatenga, Nyagatovu and Nyabisindu in the sectors of Gitega, Kimisagara, Rwezamenyo one, Kimironko and Remera of which some settlements are close to the Gikondo and Nyabugogo wetlands. “We will also encourage ecotourism investments among the private sector and accelerate progress on implementing the Kigali master plan,” he said.
Source: The New Times
South SudanSouth Sudan pursues a power sector revival
South Sudan is re-directing its focus on power sector development in a bid to dramatically transform its electricity market, which faces a deficit of approximately 170 MW and has led to one of the lowest electricity access rates globally. Through the development of several power generation projects expected to boost installed capacity, along with the implementation of the South Sudan Electricity Master Plan, the country is working to expand distribution systems and increase access to electricity nation-wide. The primary challenge facing the domestic power sector is its lack of quality infrastructure needed for power generation, transmission and distribution. In conjunction with limited financial resources and technical knowledge, development in the country has been slow and maintenance of existing infrastructure has been weak. That said, financing gaps represent a high-impact opportunity for foreign direct investment, while local capacity limitations provide the opportunity for knowledge and skills transfer. In short, South Sudan is uniquely positioned to attract investors who are looking to build the power sector from the ground up.
Source: Africa Oil & Power
TanzaniaBoT new circular weighs on addressing losses in banks
The Bank of Tanzania (BoT) wants to create a resilient and lossless banking sector in the next two years if its new circular proves a success. The Central Bank recently issued a circular directing all banks and financial institutions to maintain a cost to income ratio (CIR) of less than 55% and get the non-performing loans (NPLs) to the minimum target of less than or equal to 5.0%. “Banks and financial institutions with cost-to-income ratios above the acceptable level of 55% are granted a period of up to 31 December 2022 to regularise the ratios,” the circular said. The directive, similarly, wants banks and financial institutions to submit, by end of March, a comprehensive plan with timelines, clearly indicating how they will attain the acceptable level within the granted time period.
Source: Daily News