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Africa Business in Brief


issue 389 | 28 Feb 2021


IFC invests in Liquid Telecom Bond to support broadband connectivity in Africa

The International Finance Corporation (IFC), a member of the World Bank Group, invested in a bond issued by a subsidiary of Liquid Telecommunications Holdings Ltd., which will allow the telecoms and technology solutions company to expand access to broadband Internet and digital and cloud services across Africa, further facilitating the growth of the continent's digital economy. Proceeds from the bond issued by Liquid Telecommunications Financing PLC, a wholly-owned subsidiary of Liquid Telecommunications Holdings Ltd, will enable the company to refinance existing debt and free up funds to expand its digital infrastructure network across Africa, including in markets with low broadband penetration. By developing digital infrastructure, Liquid Telecommunications, Africa's largest independent fiber, data centre and cloud technology provider, aims to increase digital connectivity and inclusion in Africa and support the region's growing digital ecosystem. IFC played an anchor role and subscribed to 16% of the bond, equivalent to USD100-million, which was listed on Euronext Dublin, Ireland's main stock exchange, on 25 February 2021. The issuance raised USD620-million.

Source: IFC

East Africa

Waving or drowning? The impact of COVID-19 pandemic on East African trade

Despite the severe economic and social repercussions of the Coronavirus (COVID-19) pandemic, the East African Community (EAC) economies (Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda) have, by global standards, proven to be relatively resilient. This report focuses on providing an analysis of the region’s merchandise trade performance during this unprecedented period of disruption to global commerce. Among the principal findings, the report highlights the following: Exports have mostly recovered to pre-crisis levels. Aggregate exports from the region declined sharply in April 2020 but picked up again in the ensuing months. By the third quarter, most of the EAC partner states’ exports surpassed their 2019 levels. Intra-EAC trade exhibited greater resilience than the extra-EAC trade. Given the fragility of supply chains and the global trading system during the pandemic, extra-regional trade was generally more impacted than intra-regional trade. But the picture was mixed, with some extra-regional exports, such as minerals, doing exceedingly well.

Source: United Nations Economic Commission for Africa

Southern Africa

SADC executive secretary urges region’s private sector to enhance manufacturing capabilities

The executive secretary of the Southern African Development Community (SADC), Dr Stergomena Lawrence Tax, has urged the region’s private sector, through the SADC Business Council, to enhance manufacturing capabilities through building a strong portfolio in pharmaceuticals and prioritising industrialisation. Dr Tax said this during a virtual meeting with the chairperson of the SADC Business Council, Eduardo Sengo, and the chief executive officer of the Council, Peter Varndell, on 19 February 2021. The objective of the meeting was to discuss operationalisation of the Business Council and progress on activities in support of the SADC industrialisation and regional integration agenda. Dr Tax said dialogue would result in huge progress in the operations of the Business Council and called upon the parties to concretise the partnership between the private and public sectors, effectively operationalise the Council and build a strong network linkage with its affiliates.

Source: Namibia Economist


Angola’s ANPG moves to make 2020 bid round more transparent

Angola’s National Agency for Oil, Gas and Biofuels (ANPG) now allows those interested in partaking in the ongoing 2020 licensing round for oil blocks in the onshore Kwanza and Lower Congo Basins to consult the available data packages before purchasing them. The ANPG hopes this will increase transparency in the process, as intended by the governing legal framework. It will ensure that qualified participants engage with the necessary confidence needed to start the process and secure agreements at the end of the process. This will significantly reduce the risk of companies entering the process with many uncertainties. Interested companies simply need to register their interest with the ANPG either via letter or email, requesting a free data consultation session. The session can either be provided virtually or in person. The ongoing licensing round is in line with Presidential Decree 52/19, which foresees yearly bid rounds until 2025.

Source: Africa Oil & Power


IMF backs Ethiopia’s plan to rework debt under G20 framework

The International Monetary Fund (IMF) backed Ethiopia’s plan to rework its debt under the Group of 20 common framework as it reached a staff-level agreement with the government on credit facilities. “To strengthen debt sustainability, the authorities aim to lower the risk of debt distress rating to moderate by re-profiling debt service obligations,” the lender said in an emailed statement. “In this context, the fund welcomes Ethiopia’s request for debt treatment under the G20 Common Framework.” Ethiopia had announced plans to rework its liabilities under the G20 program that seeks to include private creditors into an agreement on debt relief for countries that need it following the fallout from the COVID-19 pandemic. The nation’s Eurobonds plunged the most on record following the revelation, and then partly recovered after the government said it would only approach private creditors as a last resort. The IMF reached a staff-level agreement with Ethiopia on policy measures for the completion of the first and second reviews under the Extended Credit Facility and Extended Fund Facility arrangements, according to the statement. “Risks to the economic outlook are tilted to the downside,” the IMF said, projecting economic growth of 2% in 2020-21 and 8.7% in the following fiscal year.

Source: Bloomberg


Nation issues quality standards to 11,487 domestic products, services

Quality standards have been granted to 11,487 goods and services produced in Ethiopia in a bid to enhance domestic consumption and export trade, according to the Ethiopian Standard Agency. Director-general of the Agency, Endalew Mekonen told ENA that some 285 products and services are certified for their quality standard within six months of this Ethiopian budget year, out of which 256 are compulsory standards. The compulsory standards include products and services related to public health and safety, agricultural products, construction, food and drinks as well as medicines, the director-general pointed out. He said the government has been taking measures focusing on research and development activities in order to tackle quality standards-related challenges in the country. In this regard, the Agency has been establishing a state-of-the-art academy with an outlay of ETB300-million in Addis Ababa, Endalew said. The construction of the academy will be completed soon to undertake research and studies aimed at enhancing the overall inspection and evaluation capacity of the country to ensure quality standards of domestic products and services, he added.

Source: ENA


Trade CS gives roadmap on Kenya, UK trade deal

Kenya will start to gradually cut duty on goods from the United Kingdom (UK) seven years after the post-Brexit trade agreement with Europe’s second largest economy is enforced, giving time for domestic firms to enhance their competitive advantage. The trade deal, which is awaiting approval from lawmakers of both countries, will eventually see duty on 82.6% of products originating from the UK abolished after 25 years. The document shows the 10% duty on intermediate goods will start reducing after seven years from the time the trade pact is ratified, resulting in its abolishment eight years later. Kenya will, on the other hand, start phasing down the duty on finished products (currently billed from 25%) after 12 years, leading to its elimination 13 years later. “The moratorium (of seven years), together with the phased reduction of duties, is considered necessary to protect Kenya’s industry, particularly the manufacturing sector, which is less developed and competitive than the UK industry,” Industrialisation and Trade secretary Betty Maina said in a statement.

Source: Business Daily


MRA summoned over solar products tax

The Renewable Energy Industries Association of Malawi (REIAMA) took to task officials from the Malawi Revenue Authority (MRA) and Malawi Bureau of Standards (MBS) to explain the tariff regime change. This followed complaints from industry players that they are still paying import duty and value added tax (VAT) on renewable energy technologies despite being removed by government. During the meeting in Lilongwe, the association complained that contrary to the existing tax policy in force which zero rates import duty, import excise and VAT on all imported renewable energy products, MRA is still taxing the products, thereby suffocating industry players. In the 2019/20 National Budget, government announced tax incentives for solar lighting products and other renewable technologies by scrapping off duty, excise and VAT to make solar lights affordable and accessible to Malawians. In response, an MRA official from the customs and excise division (technical) Ephraim Munthali explained that some tariff codes had changed since the country’s migration to the Common Market for Eastern and Southern Africa (COMESA) in 2018. “As a way forward, I suggest that you write to Treasury and specifically mention the change in the codes from 94054030 to 94052030. This issue is hinging on duty rates other than tax classification. Classification is the mandate of the MRA, but in terms of duty rates, that is the duty of Treasury,” he said.

Source: The Nation


PPPC cites hurdles to investments

The Public Private Partnership Commission (PPPC) has faulted lack of awareness among local investors and long processes required to procure investors for contributing to low levels of PPPs in the country. PPPC chief executive officer Patrick Kabambe said this in reaction to a recent Word Bank report, which showed that Malawi has one of the lowest ratios of PPPs among the low-income countries, averaging 0.07% of the gross domestic product (GDP) in the last two decades against an average of 0.41%. In a written response, he said the low levels of PPPs is despite the Commission getting a lot of interest from investors at the expression of interest phase, with only a few of them completing the actual bid. Kabambe said the time it takes to process a PPP transaction, limited number of PPP experts in the country and lack of financial resources are hindering the progress of the PPPs in the country. He said: “As a country, we have in place a conducive environment through a legal framework to enable private sector participation in public infrastructure and services. “PPPC is currently in the process of reviewing the PPP Act [2011] to remove hurdles that were previously hindering the progression of PPPs. We also looking at the PPP Act so that we can streamline the process and make it quicker to procure investors.”

Source: The Nation


DPR to leverage SeRAS for new oil, gas investments

The Department of Petroleum Resources (DPR) has commenced the implementation of its Search Rescue and Surveillance Programme (SeRAS) initiative in a bid to renew investors’ confidence and make Nigeria a destination for oil and gas investments. Insecurity in oil-producing areas have remained a concern for producers, costing industry operators about 7% of yearly spending. SeRAS, which is one of the five units of the Department’s National Oil and Gas Excellence Centre (NOGEC) launched by President Muhammadu Buhari early in the year, is expected to increase the level of safety; achieve cost efficiency while bringing about value addition across the oil and gas industry value chain. The director, DPR, Sarki Auwalu, at the flag-off of SeRAS, said with the initiative there is no negotiation for safety. He pointed out that the entire business is safety and revenue interest. He reaffirmed the department’s commitment to achieving a safer environment for both local and foreign investments.

Source: The Guardian


FG announces additional economic zones for agric, textile

The federal government has approved the expansion of the existing Free Trade Zones (FTZs), as well as the activation of existing ones to respond to the demands of the African Continental Free Trade Area (AfCFTA) agreement and the COVID-19 pandemic. The managing director, Nigerian Export Processing Zones Authority (NEPZA), Prof Adesoji Adesugba, further identified the new economic zones to include Funtua FTZ Katsina for textile and cotton, Lagos FTZ for medical, as well as Kwara for agriculture. Speaking while receiving the leadership of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), led by Hajiya Saratu Iya Aliyu in his office, Adesugba said the move seeks to boost the industrialisation agenda of the present administration. He said while there are several planned and ongoing strategies targeted at achieving this goal, a major strategy is the creation of a Special Economic Zones (SEZs) model of global best practice and provide an enabling environment for business in technology, agriculture, medical and mining.

Source: This Day


RwandAir to become first African airline to trial IATA Travel Pass

RwandAir, the national carrier, is set to become the first African airline to trial the innovative International Air Transport Association (IATA) Travel Pass starting April this year, following a partnership with the global body that facilitates international air travel. This was announced in a statement issued by the airline on Tuesday, 23 February. The IATA Travel Pass is a digital platform that will help passengers easily and securely verify that they comply with COVID-19 test or vaccine travel requirements, in turn giving governments the confidence to reopen borders. According to the statement, the trial will play a critical role in RwandAir’s vision to enable a safe and seamless international travel experience for its passengers. The first phase will be a three-week trial which will be done on the airline’s Kigali-Nairobi route, enabling passengers to receive COVID-19 test results and verify that they are eligible to undertake their journey. It will also allow passengers to safely and securely share their verified ‘OK to Travel’ status with the airline, before arriving at the airport. The platform is designed to be incorporated into airlines' own applications, in order for air passengers to understand what they need before they fly.

Source: The New Times

Rwanda / Burundi

Rwanda-Burundi irrigation, power project seeks USD190-million in funding

The Nile Basin Initiative Secretariat has announced that resources mobilisation is ongoing to fund the Akanyaru Multipurpose Water Resources Development project. The development was announced on Monday, 22 February, during a virtual event meant to celebrate the Nile Day. The Akanyaru project is part of the Nile River Basin investment programme – a joint initiative of Rwanda and Burundi. The process to mobilise resources for Akanyaru dam is backed by the African Development Bank (AfDB) and the New Partnership for Africa's Development (NEPAD) Infrastructure Project Preparation Facility (IPPF). In addition to power generation, water supply and irrigation, the project will contribute to the development of other auxiliary water uses such as livestock development, employment creation, flood control, environmental protection and watershed management. One of the other projects is the Rusumo Falls Hydropower plant, which will benefit Rwanda, Burundi and Tanzania. The sectors covered include hydropower development, power transmission interconnection and trade, irrigation and drainage, lakes conservation, environment management, integrated watershed management, fisheries, restoration of degraded water catchments, water resources development, flood protection and early warning and inland waterway transport.

Source: The New Times

South Sudan

South Sudan: an environmental audit of oil sites is announced

South Sudan wants to develop a sustainable and nature-friendly oil industry. At a time when international donors are abandoning investments in polluting energies, and especially in this period of post-COVID-19 economic recovery, the country is pulling out all the stops. “On behalf of the government, I am pleased to announce the complete environmental audit of all the country’s oil fields. The audit will cover the current oil fields in Blocks 3 and 7, Blocks 1, 2 and 4 and Block 5A,” said Oil minister Puot Kang Chol. “Rather than reducing or completely eliminating investment in fossil fuels, South Sudan is integrating environmental protection into the development of its oil reserves for a more prosperous future,” he said. The government of South Sudan is inviting companies to bid on this environmental audit. The results of this study will provide several key benefits for the South Sudanese energy industry, including a reduction in oil pollution, monitoring of existing management practices, assessment of environmental damage, and strengthened regulatory enforcement and monitoring, allowing the country to strengthen its environmental safeguards while capitalising on its abundant crude oil reserves. According to official figures, South Sudan has the third largest oil reserves in sub-Saharan Africa, estimated at 3.5 billion barrels.

Source: AFRIK 21


Bills amendment widens IPEC’s scope

The Insurance and Pensions Commission (IPEC) will get greater scope in the regulation of the country’s insurance and pensions sector following Cabinet’s approval of amendments to the Insurance and Provident Fund Bill and the Insurance and Pensions Commission Bill. The Pensions and Provident Fund Bill is expected to foster better corporate governance practices within the industry while adequately providing the legal basis for a troubled entities’ resolution framework as well as increasing the Commission’s enforcement powers. The latter, among other powers, will give IPEC an oversight over state-run pension fund, the National Social Security Authority (NSSA) and medical aid societies. In respect of the Insurance and Provident Fund Bill, the amendments set out the rules to be followed in merging insurance societies, in the transfer of insurance business to another registered insurer, and in the payment of premiums to the registered insurer whenever an insurance broker receives the premiums from policy holders. In approving the Bill, Cabinet stressed that in order to guard against insolvency by insurance societies, every registered insurer will now be required to maintain a prescribed level of solvency.

Source: The Herald


Government reverses mining fees hike

The government has reverted to old mining and registration fees after players in the sector engaged the authorities to review the recent increases. Recently, the Ministry of Mines and Mining Development sparked an outcry when it increased mining and registration fees by over 800% after pegging them in United States dollars. The Zimbabwe Miners Federation (ZMF) argued the development was going to cripple their operations and close out new comers. The government said the reversal to old rates has been made in terms of section 403 of the Mines and Minerals Act (Chapter 21:05). “The Minister of Mines and Mining Development . . . made the following regulations: these regulations may be cited as the Mining (General) (Amendment) Regulations, 2021 (No. 25),” it said in a latest update. The “Mining (General) (Amendment) Regulations, 2021 (No 24), published in Statutory Instrument 44 of 2021, are repealed.” The rates are now pegged in local currency.

Source: The Herald