issue 388 | 21 Feb 2021
WorldDFI Working Group launches report on blended concessional finance for private sector projects
The report measures private investment in development projects in which Multilateral Development Banks (MDBs) and Development Finance Institutions (DFIs) also make investments or have otherwise provided deal structuring or other support. These investments support global sustainable development goals by promoting inclusive and sustainable growth, tackling poverty and inequality, and mitigating climate change, among other impacts. Key highlights from the 2019 report include: DFIs financed projects with a total volume of more than USD10.4-billion; the private sector mobilised more than USD3.1-billion; institutions mobilised over USD3-billion for projects in Africa; and investments were mobilised primarily in the climate finance and agribusiness sectors and to support small and medium enterprises.
Source: African Development Bank
WorldHydropower Sustainability Fund open for applications until May 2021
A sustainability fund to help hydropower developers and operators assess their environmental, social and governance (ESG) performance is now open to more than 40 countries in Africa, Asia, Europe and the Americas. The Hydropower Sustainability ESG Assessment Fund will award a total of CHF1-million (USD1.02-million) to 40 or more hydropower projects over four years. The initiative is managed by the International Hydropower Association’s (IHA) non-profit sustainability division and funded by the Swiss government’s State Secretariat for Economic Affairs (SECO). Recipients will receive a grant to part sponsor the cost of commissioning an independent project assessment using the Hydropower Sustainability ESG Gap Analysis Tool (HESG), one of the internationally recognised hydropower sustainability tools. Joao Costa, head of Sustainability at IHA, said: “This fund aims to increase the number of sustainability assessments globally and advance the development of climate-friendly sustainable hydropower.” Following the first call for proposals in 2020, the fund part sponsored six assessments, including the Stortemelk project in South Africa. Hydropower project developers and operators can apply before the May 2021 deadline.
Source: ESI Africa
AfricaAAAM and Afreximbank sign an MoU to drive automotive investment in Africa
The African Export-Import Bank (Afreximbank) and the African Association of Automotive Manufacturers (AAAM) have entered into a Memorandum of Understanding (MoU) for the financing and promotion of the automotive industry in Africa. Prof Benedict Oramah, president of Afreximbank and Mike Whitfield, president of AAAM and managing director of Nissan Africa, signed the MoU in early February, formalising the basis for a partnership aimed at boosting regional automotive value chains and financing for the automotive industry while supporting the development of enabling policies, technical assistance, and capacity-building initiatives. Under the terms of the MoU, Afreximbank and AAAM will work together to foster the emergence of regional value chains with a focus on value-added manufacturing created through partnerships between global Original Equipment Manufacturers (OEMs), suppliers, and local partners. To support the emergence of the African automotive industry, they will collaborate to provide financing to industry players along the whole automotive value chain. The potential interventions include lines of credit, direct financing, project financing, supply chain financing, guarantees and equity financing, amongst others.
Source: Engineering News
AfricaAFSIA report dissects why African solar sector is growing
The Africa Solar Industry Association (AFSIA) has released its first annual Africa Solar Outlook. The report is a country-by-country review of the key drivers of successful solar development. It aims to provide solar decision-makers with clear and concise information about solar dynamics in each country in Africa. In addition to country vignettes, the report looks at some of the main segments of the solar industry such as large-scale projects, the commercial and industrial sector, minigrids and solar home systems. The report points out that 37 countries in the world have joined the Gigawatt Club (installed more than 1GW of solar energy) but only two of those are in Africa, namely South Africa and Egypt. It posits that nine African countries could soon join the club, based on announcements by governments and private developers. While Algeria and Morocco could be the first two to reach this goal, there are some surprises on the “bubbling under” list such as Zimbabwe, Zambia, Democratic Republic of the Congo, Angola, Namibia, Ethiopia and Botswana. These are due to a mix of private players charting their own course and governments inviting private developers to pursue direct contracts.
Source: ESI Africa
AfricaPrivate sector firms join push for AfCFTA agenda
Private sector lobbies in Africa’s six regional trading blocs have formed the African Business Council, a continental umbrella body to spearhead the business agenda for the African Continental Free Trade Area (AfCFTA). The council – with its headquarters at the African Union offices in Addis Ababa, Ethiopia – has been carved out of the six regional trading blocs, these are the East African Community (EAC), Southern African Development Community (SADC); Common Market for Eastern and Southern Africa (COMESA); Southern African Customs Union (SACU); Economic Community of West African States (ECOWAS), and the Economic and Monetary Community of Central Africa (CEMAC). According to East African Business Council (EABC) chief executive, Dr Peter Mathuki, the council has been long in the making. “We are in discussion with the AfCFTA Secretariat with the aim of strengthening the role and mandate of the private sector in driving the continent’s business agenda through the six regional blocs.” “During the last AU summit in Niger, EABC proposed that we needed to have this kind of structure. We then co-ordinated with other regions to form the African Business Council,” said Dr Mathuki.
Source: The EastAfrican
West AfricaWest African gold production to bounce back this year, says GlobalData
After strong growth in 2019, West Africa’s gold production was badly hit by the Coronavirus (COVID-19) pandemic in 2020, owing to the temporary suspension of mines such as Hounde, in Burkina Faso, and Fekola, in Mali. The pandemic had a significant impact on African operations, mainly during the early part of the second quarter of 2020, when, at one point, over one-quarter of the region’s gold mines were on hold owing to COVID-19 lockdowns, says data and analytics company GlobalData. Gold production in West Africa’s leading markets – Ghana, Burkina Faso and Mali – is expected to increase by 2.7% in 2021 to eight million ounces and is expected to grow to 8.4 million ounces by 2024 – a 1.6% compound annual growth rate (CAGR). The majority of this growth is expected to originate from Ghana, where production is expected to reach 3.9 million ounces in 2024 from a forecast 3.6 million ounces in 2021. Production in Mali fell by 5.6% in 2020, owing to the COVID-19 operational disruptions across several mines, including the closure of the Morila and Sadiola mines. In contrast, production in Burkina Faso is estimated to have grown by 2.1% in 2020. Gold production in Burkina Faso is expected to grow at a CAGR of 3.8%, supported by 460,000 of new gold production capacity.
Source: Mining Weekly
EthiopiaEthio Telecom Ptl privatisation to conclude in 5 months, sugar estates privatization progressing
In an exclusive interview with ENA, senior advisor, Biruk Taye, said partial privatisation of Ethio Telecom and full privatisation of the sugar estates have been among the major activities given priority. “The next major deliverable would be to complete the partial privatisation of Ethio Telecom and that should be done within the next five to six months,” he confirmed. Before that, the issuance of two new telecommunications licenses would be concluded on 5 April 2021, the senior advisor stated. “We will be able to identify the two new telecommunications operators that join the Ethiopian market by April.” Regarding the full privatisation of 10 sugar estates in the first phase, the technical documentation, valuation and marketing strategy, proclamation and policy documents were either completed or at final stages, it was learned. According to Biruk, the Public Enterprises Holding and Administration Agency (PEHAA) has already shortlisted six companies and a transaction advisor will be designated through a competitive tendering process in a month and a half. The shortlisted companies are all international major auditing firms.
GhanaEngineering Council and GSA explore ways to improve standards
The Ghana Standards Authority (GSA) has engaged the Engineering Council of Ghana on the need to use its advocacy power to help enforce the Authority's mandate of checking and sanctioning manufacturers of sub-standard products. Specifically, building, electrical and other products manufacturers who do not adhere to standards or go through the process of certification would be targeted. This was made known when the Technical Committee on Standards and Professional Practice of the Engineering Council (EC) paid a familiarisation tour to the GSA to discuss and share ideas on how the two bodies could collaborate to ensure the strict adherence to standards in the engineering industry. As part of the deliberations, a consensus was reached that a Memorandum of Understanding (MoU) would be signed by the two institutions to initiate a longstanding partnership to promote adherence to the standards developed by the Authority in the engineering sector. Sir. Fredric Akwaboah, who is the chairman of the Standards and Professional Practice and the Public and International Affairs committees of the EC, expressed the Council’s readiness to partner with the GSA in line with the Authority’s 2021 ‘Year of Enforcement’ vision.
KenyaIMF and Kenyan authorities reach staff-level agreement on a three-year, USD2.4-billion financing package
A staff team from the International Monetary Fund (IMF) led by Mary Goodman conducted virtual missions to Kenya from 9 to 17 December 2020 and from 4 to 15 February 2021 to undertake negotiations on a combined 38-month program under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements. At the end of the mission, Ms Goodman made the following statement: “I am pleased to announce that the Kenyan authorities and the IMF mission team have reached agreement on economic and structural policies that would underpin a 38-month program under the EFF and ECF arrangements for about USD2.4-billion. The staff-level agreement is subject to IMF management approval and Executive Board consideration, which is expected in the coming weeks. The program will support the next phase of the country’s COVID-19 response and the authorities’ plans for a strong multi-year effort to stabilise and begin reducing debt levels relative to GDP (gross domestic product), laying the ground for durable and inclusive growth over the years to come.”
KenyaKenya drops in Africa online shopping score on cybercrime
Kenya has dropped three places in Africa on facilitating online shopping after the score on security of the servers dropped marginally, pointing to rising risks of cybercrime such as hacking. The United Nations Conference on Trade and Development’s (UNCTAD) Business-to-Consumer (B2C) E-commerce Index 2020 has positioned Nairobi seventh on the continent in supporting online transactions, a drop from position four a year earlier. Tunisia, Algeria, Ghana and Libya leapfrogged Kenya to occupy third, fourth, fifth and sixth positons in the index that UNCTAD uses to gauge a country’s readiness to support secure online shopping. Mauritius and South Africa retained their respective top two positions in Africa, according to the report, while Nigeria dropped from third in 2019 to eighth last year. “To facilitate more inclusive e-commerce, African countries would benefit from catching up in all policy areas,” UNCTAD analysts wrote in the report. Switzerland leapfrogged the Netherlands to top the global e-commerce ranking with a score of 95.9 against Amsterdam’s 95.8, with both countries dropping 0.1 and 0.7 points, respectively.
Source: Business Daily
KenyaKonza lays 500km underground ICT cables
The laying of 500km of information and communications technology (ICT) cabling in Konza city has been done, stepping up efforts to open up the technopolis for private companies seeking to set up in the Greenfield city. The infrastructure is meant to attract investment by providing a ready-to-plug backbone ICT network. Konza has also completed phase 2 – Tier III National Data Centre – with smart city facilities and services to support Konza technopolis, e-government as well as the small and medium enterprises services. The project has also installed 40km of power lines, one main electrical station and 50 substations. The technology city plans to complete horizontal infrastructure by February 2022. The hub will host private business complexes and office spaces, mixed use developments, schools, research institutions, ICT hub and residential space. The government has constructed an office building at a cost of KES1.9-billion as part of the KES3-billion facility expected to host investors at the planned Konza techno city.
Source: Business Daily
KenyaNairobi Securities Exchange expects four new company listings in 2021 – CEO
The Nairobi Securities Exchange expects new listings to pick up this year, with four new companies expected to list, plus a cross-listing from another market, its chief executive officer said. The exchange serves as an entry point for foreign investors looking for exposure to East Africa’s fast-growing economies, and is among the continent’s fifth biggest by market capitalisation alongside South Africa, Egypt, Nigeria and Morocco’s bourses. The exchange is also among the top three constituents of the MSCI’s Frontier Markets Index. Chief executive officer Geoffrey Odundo said the exchange expects to list two companies from Ibuka, its incubator platform that prepares young firms for listing. He said the companies are in manufacturing and financial services. Odundo said the Nairobi bourse also expects to cross-list one more firm this year. The exchange currently has 66 listed companies, two of which are cross-listed from Rwanda and Uganda.
MadagascarIMF mission reaches staff-level agreement with Madagascar on an Extended Credit Facility arrangement
In response to a request from the Malagasy authorities, an International Monetary Fund (IMF) mission led by Charalambos Tsangarides, Mission Chief for Madagascar, held virtual meetings between 18 January and 12 February 2021 to discuss IMF financial support to the authorities’ economic reform program. At the end of the mission, Mr Tsangarides issued the following statement: “IMF staff completed policy discussions with the authorities on a new medium-term program that could be supported by IMF resources of about USD320-million under the Extended Credit Facility (ECF)… GDP is estimated to have contracted by more than 4% in 2020 due to the interruption of tourism and reduced exports, notably in the mining and textile sectors, and lower domestic demand. The fiscal situation has been affected through a large reduction of tax revenue, turning the domestic primary balance from a small surplus in 2019 to a deficit of about 3% of GDP in 2020, while the current account deficit widened to 6% of GDP. The two disbursements under the Rapid Credit Facility (RCF) in April and July 2020 and additional support from other development partners helped close financing needs and support mitigation measures, but substantial fiscal and external financing needs remain over the medium-term.”
NamibiaBIPA explains its role in the ‘Ease of Doing Business Index’
The Business and Intellectual Property Authority (BIPA), in a statement, provided clarification on its role in Namibia’s Ease of Doing Business Index, as released annually by the World Bank. According to BIPA the period of 2008 to 2020, Namibia’s aggregated average ranking stood at 91.7 on the index. “The country reached an all-time low when it ranked 108 on the index in 2016, with its best performance at position 54 in 2008 and the latest 2020 rating places Namibia in position 104 of 190 economies,” BIPA added. “The time it takes to register a business with BIPA improved from 33 days in 2019 to 21 days in 2020 and the improvement can be attributed to the Authority improving its turnaround time on name reservation approvals from 18 days in 2019 to 6 days in 2020,” the Authority explained. BIPA said it is worth considering that it plays an important, but limited role in the overall index of Namibia’s Ease of Doing Business ranking, but, it remains confident that its service delivery will further improve, thereby enhancing the country’s performance in the index.
Source: Namibia Economist
NamibiaCentral Bank maintains Repo rate at 3.75%
The Monetary Policy Committee of the Bank of Namibia has decided to keep the Repo rate unchanged at 3.75%, safeguarding the one-to-one link between the Namibia Dollar and the South African Rand. Governor of the Bank of Namibia, Johannes !Gawaxab said the rate remains appropriate to continue supporting domestic economic activity. “Domestic economic activity slowed considerably in 2020 compared to 2019. Contractions were observed in key sectors such as tourism, wholesale and retail trade, mining, manufacturing, construction, as well as transport and storage. The contraction was mainly due to the devastating effects of the COVID-19 pandemic,” !Gawaxab said. The domestic economy is estimated to have contracted by 7.3% in 2020, before returning to an expected moderate recovery of 2.6% in 2021.
Source: Namibia Economist
NigeriaStakeholders to explore funding opportunities in renewable energy
The Sustainable Use of Natural Resources and Energy Finance (SUNREF), a green financing line for businesses developed by the French Development Agency (AFD), has concluded a plan to host an investor’s conference to explore financing opportunities in the sector. Vice-president Yemi Osinbajo had earlier disclosed that Nigeria is planning to have at least 30% of its total electricity supply from renewable sources, mainly solar power in the next nine years. The country also plans to reduce carbon emission by 20% by 2030. The conference, hosted in partnership with the Nigerian Energy Support Program (NESP) and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and All-On, is aimed at attracting investment into Nigeria’s renewable energy and energy efficiency sector. SUNREF noted that the conference would bring together investors, banks technical assistance providers, renewable energy and energy efficiency project developers, government agencies and other stakeholders. Similarly, the Renewable Energy Association of Nigeria (REAN) is expected to host a matchmaking session to enable manufacturers and other businesses to connect with qualified developers.
Source: The Guardian
RwandaRwanda’s economy hit hard by lockdowns, curfews
Rwanda’s economic managers face a daunting task in the coming months to find new sources of growth to revive the economy, which is currently in recession. COVID-19 restrictions imposed by the government have had a negative impact. Faced with mounting uncertainties surrounding the duration and spread of the pandemic, analysts say the economic fallout could intensify unless the government takes additional measures to spur growth. There is now a real risk of more Rwandans falling into poverty as thousands face unemployment, contend with increasing consumer prices, and businesses record revenue losses. The pandemic has hit Rwanda's service sector, particularly retail trade, leisure and hospitality and conference tourism, which collectively account for most jobs in the country. And despite the government adopting the Economic Recovery Plan estimated at USD900-million over the two fiscal years 2019/20 and 2020/21, economic recovery remains slow in part because of the second wave of infections that recently led to a three-week lockdown in Kigali and reintroduced restrictions on movement.
Source: Rwanda Today
TanzaniaTanzania government issues permits for importation of sugar by companies
The minister for Agriculture, Prof Adolf Mkenda, disclosed that the government was issuing permits to companies to import sugar for the last time this year, urging the Sugar Board to start importing the sweetener next year. The comment signals change in the government policy, which has been allowing traders to import sugar to offset the shortages. Recent reports indicate that Tanzania’s demand for domestic sugar was 470,000 metric tonnes, while the country’s five sugar processing factories had the capacity of producing 378,000 tonnes in 2019. Prof Mkenda, who visited Kilombero Sugar and talked to farmers in Morogoro, said sugar imports were cheaper but the business had become like “drug dealing.” Commenting on the sugar shortages, he said the crisis in the country is not due to the lack of sugarcane but the lack of investors to process sugarcane. “There are a lot of farmers growing sugarcane but unfortunately the country has no sugar. Tanzanians are surprised that we have farmers producing enough sugarcane but we are importing sugar,” he said.
Source: The Citizen
UgandaBoU maintains credit relief for borrowers as COVID-19 effects persist
The Bank of Uganda (BoU) has extended for six months, effective 1 April 2021, the Credit Relief Measures (CRM) that the banking industry offered their borrowers to help them overcome the impacts of the COVID-19 pandemic on the economy. The Bank will also extend its financial support to financial institutions that may be in distress. In April 2020, the BoU put in place the CRM aimed at maintaining financial stability, and reducing the economic impact of COVID-19, especially due to the national lockdown. This came amidst fears that the private sector would not be able to pay back the loans under the then agreed terms and conditions as business activities declined, some coming to a complete halt. Guidelines were also issued to Commercial Banks, Credit Institutions and Microfinance Deposit-taking Institutions (MDIs) on how to apply the measures. The BoU allows the regulated financial institutions to restructure any loan affected by the COVID-19 pandemic as long as this is done within one year effective 1 April 2020. As the impact of the pandemic lags, the BoU has found it necessary to continue with the measures. The “BoU will extend for six months effective from 1 April 2021 the CRM and also maintain the COVID-19 Liquidity Assistance Program (CLAP) to supervised financial institutions.”
Source: The Independent
UgandaPrivate sector seeks to partner with government to promote agrotourism
An expert in the tourism sector has called for joint efforts between government, agribusiness and tourism players to promote agrotourism. The move, according to experts, will not only earn the country foreign exchange but will help farmers earn from farming beyond actual crop sales as well as increase the number of visitors to Uganda through the creation of another tourism package. The call was made by Mr Joseph Taremwa Ruhakana, the Agro-Tourism Association’s chief executive officer, an organisation that works with close to 70 farms across the country. The call comes at a time when government is seeking ways through which it can increase tourism packages as well as grow local tourism. Government had been seeking to achieve four million tourists by 2022. However, COVID-19-related disruptions are expected to be a stumbling block in achieving this agenda. This, as a result, has forced government to build partnerships with various stakeholders as it seeks to attract new numbers.
Source: Daily Monitor
UgandaUMA signs partnership with markets authority on capital financing
The Capital Markets Authority (CMA) and the Uganda Manufacturers Association (UMA) have signed a Memorandum of Understanding (MoU) to increase access to financing from the capital markets. The MoU will enable Uganda’s manufacturing sector to take advantage of customised training on various options for raising long-term capital to bolster their uptake of non-bank, market-based financing that best fits their needs. Speaking during the MoU signing ceremony held at Golf Course Hotel in Kampala, Keith Kalyegira, the CMA chief executive officer, said the MoU will allow the CMA and UMA to consult, exchange information and cooperate closely to expose UMA members to alternative means of meeting their financial needs by tapping into both private and public markets. He notes that over the last 20 years, the capital markets have provided about 5% of the total financing to the economy, which he says is very little contribution but not unusual for many countries in sub-Saharan Africa.
Source: The Independent
ZambiaZambia scales back projects to reduce debt exposure, Central Bank says
Zambia has scaled back, postponed or cancelled projects to reduce the southern African copper producer’s debt exposure as it holds talks to secure a programme from the International Monetary Fund (IMF), the Central Bank governor said. Zambia, which became Africa’s first pandemic-era sovereign default late last year, began discussions with the IMF recently and has requested debt relief under a new common framework from the Group of 20 major economies. “Our understanding is that actions are being taken to scale down and reduce the debt exposure of the country, if not stop it for now,” Bank of Zambia governor Christopher Mvunga told journalists, adding that discussions with the IMF had been “cordial”. The bank raised lending rates by 50 basis points to 8.5%, saying it was ready to tighten policy further to tame rising consumer inflation driven by “cost-push” pressures and a sharp depreciation in the currency. Mvunga said annual overall inflation accelerated to a four-year high of 17.6% in the fourth quarter of 2020 from 15.7% the quarter before. Inflation is projected to deviate further from the 6% to 8% target range over the next eight quarters, he said.