issue 392 | 21 Mar 2021
AfricaAfDB launches USD2.5-billion 0.875% Global Benchmark due 23 March 2026
The African Development Bank (AfDB), rated Aaa/AAA/AAA/AAA (Moody’s/S&P/Fitch/Japan Credit Rating, all stable), has launched and priced a USD2.5-billion five-year Global Benchmark bond due 23 March 2026, its first dollar benchmark of the year. The new transaction represents AfDB’s largest five-year dollar Global Benchmark ever issued, as well as its largest order book achieved for a five-year benchmark transaction. With the final order book closing in excess of USD3.6-billion (excluding Joint Lead Managers (JLM) interest), and 72 investors participating, the success of this five-year transaction is a clear vote of confidence from investors in AfDB’s AAA credit. The transaction is yet another demonstration of AfDB’s extremely broad and high-quality investor base, with this bond well allocated across different geographies and investor types. Accounts from the Americas received 50% of allocations, Europe 36%, Asia 10% while investors from Africa and Middle East rounded out the remainder of the book with 4% of the allocations. By investor type, asset managers/insurance/pension funds led the book with 37% of allocations, followed by banks with 36%, while central banks/official institutions took 27%.
AfricaCOM2021: Africa still lags behind in trading within its borders
African countries continue to trade more with the outside world than among themselves, according to findings of an Economic Commission for Africa (ECA) assessment report on progress made on regional integration in the context of the Coronavirus (COVID-19) pandemic. The report was presented during the 39th ECA Committee of Experts of the Conference of African Ministers of Finance, Planning and Economic Development that opened in Addis Ababa on Wednesday, 17 March 2021. The European Union, the report says, is taking the largest share of the market accounting for 29.8% of total trade in 2018. The trend is, however, changing following Brexit and also due to increasing trade between China and Africa. Stephen Karingi, director of Regional Integration and Trade Division at the ECA, while presenting the report findings said COVID-19 had severely disrupted the implementation of regional integration initiatives, including the African Continental Free Trade Area (AfCFTA), particularly trade through national border closures. The report shows that in 2018, Africa accounted for only 2.6% of global trade which is a slight increase from 0.2% in 2017. Intra-African trade increased to 16.1% in 2018 (USD159.1-billion), up from 15.5% in 2017. Globally, output slightly decreased to 3.6% in 2018 from 3.8% in 2017.
AfricaVaccines change outlook for African economies
This year looks positive for African economies, compared to the devastating impact of the COVID-19 pandemic in 2020, an expert said at the virtual conference of African Ministers of Finance which runs from 17 to 23 March. “The positive outlook is attributable mainly to the availability of vaccines and improved economic activity in the fourth quarter of 2020, holiday and travel expenditure,” said Hopestone Kayiska Chavula, in charge of the macroeconomic analysis at the Economic Commission for Africa (ECA). Chavula said intra-Africa trade is expected to increase with the implementation of the African Continental Free Trade Area (AfCFTA). He, however, underlined that the second wave of infections, expansionary fiscal measures and rising debt levels could pose risks to growth in many African countries. Africa’s debt management and innovative finance for fiscal sustainability, the role of the private sector and vaccine financing are also on the agenda. The cost of vaccinating 60% of the African population will be between USD10-billion and USD15-billion – covering the purchase and the rollout of vaccination programs, according to the Africa Centres for Disease Control and Prevention. The continent needs about 1.5 billion doses to be able to use a double shot regime.
Source: Anadolu Agency
West AfricaAfDB Group supports domestic debt market development in The Gambia, Sierra Leone, Guinea and Liberia
The African Development Bank (AfDB) Group has launched a project to support the development of domestic debt markets and financial systems in four West African Monetary Zone (WAMZ) countries: The Gambia, Sierra Leone, Guinea and Liberia. The Bank had earlier approved a grant of UA1.5-million (about USD2-million) for the project. The project, funded from the Bank’s Transition Support Facility, will provide technical assistance and capacity building to develop domestic debt markets in the four countries. Specifically, it will support the deepening of primary debt markets, improvement of debt market infrastructure, enhancement of institutional capacity in relevant agencies and authorities and a broadening of the investor base. Developing debt markets will underpin the emergence of effective capital markets in the region – a driver of investment and economic growth. The West African Monetary Institute (WAMI) will cooperate closely with the participating countries to implement the project, which builds on the Bank’s earlier WAMZ payment systems project to support the upgrade of central bank payment systems in the four countries.
AngolaAfDB funds USD530-million electricity project to expand renewable energy and regional connectivity
The African Development Bank (AfDB) has committed USD530-million to finance the construction of a 343 km, 400 kV central-south transmission line that will connect the north and south transmission grids in Angola and allow for the distribution of clean energy between the two regions. The north of Angola has a surplus of more than 1,000 MW of mostly renewable power, whereas the south relies on expensive diesel generators, supported by government subsidies. Transmission capacity will increase by 2,250 MW and eliminate the need for polluting, diesel-powered generators in southern provinces. The project, once operational in 2023, will avert the consumption of 46.8 billion litres of diesel per year in the south, cutting 80 megatonnes of CO2 emissions. The government of Angola will save more than USD130-million per year in diesel subsidies. The finance package, approved in December 2019 by the Board of Directors of the AfDB, consists of USD480-million in financing from the Bank, along with USD50-million from the Africa Growing Together Fund, a USD2-billion facility sponsored by the People’s Bank of China and administered by the AfDB.
AngolaWorld Bank provides USD700-million to support Angola’s sustainable and inclusive growth agenda
The World Bank Board of Executive Directors approved a USD700-million Development Policy Operation (DPO) in support of the government of Angola’s efforts to bolster financial and social inclusion and strengthen the country’s macro-financial and institutional environment for increased private sector-led growth. This DPO provides much-needed financing in support of the government’s response to the COVID-19 pandemic and its socioeconomic impacts. In addition, the operation supports the government’s structural reform agenda. The operation is organised around two pillars, each including several policy areas. Pillar 1, strengthening the macro-financial and institutional environment, includes a focus on strengthening debt and natural resource management for fiscal sustainability, strengthening financial sector resilience, strengthening management and commercial viability of state-owned enterprises, supporting pricing and subsidy reform for financial sustainability and effective service provision, and levelling the playing field for private investment. Pillar 2 focuses on protecting the poor and vulnerable from shocks and increasing access to finance.
Source: World Bank
CameroonCameroonian GDP rebounds in Q3 2020 on strong investment demand
Cameroon's gross domestic product (GDP) grew by 1.0% year-on-year (y/y) in real terms during the third quarter of 2020, after suffering a modest contraction of 1.0% y/y in the second quarter. The growth rebound in the third quarter was spurred by strong investment, which expanded by 18.5% y/y owing to the public investment component, which grew by 25.6% y/y. Private investment also remained resilient, registering growth of 8.8% y/y. Final consumption rebounded with an increase of 1.1% y/y in the third quarter of 2020, compared with the revised 2.6% y/y contraction in the second quarter. The uptick was driven by private final consumption, which rose by 1.4% y/y, benefiting from the upsurge in demand for products from the chemical industry, other manufacturing industries, agricultural processing, as well as telecommunications services. Net exports continued to hinder growth in the third quarter of 2020. Imports of goods and services grew by 14.2% y/y, supported by higher foreign purchases of manufactured furniture, chemicals, textiles, manufactured paper, electrical appliances, and agro-food. Exports of goods and services fell by 7.6% y/y in the third quarter because of poor performance of exports of logs, sawn timber, as well as crude oil and natural gas.
Source: IHS Markit
EthiopiaEthiopian joins African Union to launch Trusted Travel Pass program
Ethiopian Airlines has partnered with the Africa Centres for Disease Control and Prevention (Africa CDC) for the implementation of the African Union Trusted Travel Pass to make continental travel easier and safer amid the COVID-19 pandemic. Africa CDC has mobilised a broad multi-stakeholder public-private partnership with the help of its strategic partners, the PanaBIOS Consortium and Econet, with the objective of addressing current challenges posed by citizens' and institutions' difficulty in accessing accurate health information, high costs and inconvenience in cross border travel, and poor data for health policy and biosecurity planning. The Trusted Travel Pass solution will help to validate test and vaccination certificates and verify that they are sufficient for their route, and share testing or vaccination certificates with airlines and authorities to facilitate travel. The solution will also avoid fraudulent documentation and make air travel more convenient.
Ghana / Burkina FasoGhana, Burkina Faso constitute joint technical team on mining
Ghana and Burkina Faso have formed a joint technical team on mining to facilitate mining operations for their mutual advancement. Mr Samuel Abu Jinapor, minister for Lands and Natural Resources, said Ghana was prepared to collaborate with Burkina Faso for the exploitation of the natural resources in their respective countries. He said this at the signing ceremony in Accra when Dr Bashir Ismael Ouedrago, Burkinabe minister for Energy, Mining and Quarry, paid a courtesy call. The minister indicated that, “The capital flight affecting Burkina Faso and Ghana in the area of mining is disturbing and we must work together to solve it”. He stated that, the relations between President Nana Addo Dankwa Akufo-Addo and his Burkinabe counterpart, President Roch Marc Christian Kabore would further be strengthened with the signing of the bilateral ties on mining. Other issues discussed at the meeting included plans to set up a refinery in Burkina Faso to add value to its minerals and plans for the two countries to join forces to explore other key areas for mutual benefit.
KenyaKenya's GDC gets USD5-million AU grant for geothermal wells
Geothermal Development Company (GDC) has received a USD5-million (KES500-million) grant from the Geothermal Risk Mitigation Facility (GRMF) to drill two wells in Baringo County. The grant will be used to fund 40% of the costs for drilling and testing at the Paka Geothermal Project, one of three geothermal prospects in the area. The others are Silali and Korosi. About 20% of the total costs will fund infrastructure development. “The funding will go towards the cost of the exploration drilling programme for the Paka Geothermal Project in Baringo,” GDC managing director and chief executive Jared Othieno said. GRMF is a risk mitigation facility set up in 2012 by the African Union Commission (AUC). The GRMF’s key mandate is to encourage the development of geothermal energy sources in East Africa by removing the high upfront costs associated with infrastructure development in green-fields and initial exploratory drilling in geothermal fields. GDC is the first public developer to sign the grant contract with the AUC.
Source: The EastAfrican
KenyaPlatform to enhance export, import of agriculture goods
The process of licensing agricultural goods for export and import between Kenya and East African countries will now be significantly enhanced following the launch of a new digital system. Traders will now be required to register with the Agriculture and Food Authority (AFA) under the newly launched Integrated Management Information System (AFA-IMIS). The platform seeks to speed the process of certification and licensing of trade in cash crops by more than a half from the current 30 days. KenTrade chief executive officer Amos Wangora said the new single window system has created simple procedures for exporters and will be providing export information online. Mr Wangora said coffee export steps have been cut from 96 to 62 and the process to reduce redundant procedures is ongoing. More than 13,000 exporters and importers using different ports in Kenya will be expected to start using this system. The system has been integrated with the Kenya Revenue Authorities’ (KRA) Integrated Customs Management System (iCMS) for seamless exchange of cargo clearance data, including scheduling of joint verification messages with Partner Government Agencies (PGAs).
Source: Business Daily
MalawiChamber for reduced taxes in next budget
The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has urged the government to consider reviewing tax measures in the next budget. This, the industry captains say, would help accelerate growth of the private sector. The call comes after technical consultations that the Ministry of Finance has been conducting with stakeholders. MCCCI director of Business Environment and Policy Advocacy Madalitso Kazembe said the government should, for instance, consider reducing the excise tax on alcoholic beverages to help curb smuggling of beer products from neighbouring countries. She said the chamber is also lobbying for reduction of import duty on machinery. “We are also imploring the government to harmonise taxes in the telecommunications sector,” Kazembe said.
Source: The Times
MozambiqueBank of Mozambique leaves interest rates unchanged
The Monetary Policy Committee of the Bank of Mozambique (CPMO) decided to leave the bank’s key interest rates unchanged. Thus the Interbank Money Market Rate (MIMO), used by the central bank for its interventions on the interbank money market to regulate liquidity, remains at 13.25%, after it was raised by 300 percentage points in late January. Likewise, the Standing Lending Facility (the interest rate paid by commercial banks to the central bank for money borrowed on the Interbank Money Market) remains 16.25%, and the Standing Deposit Facility (the rate paid by the central bank to commercial banks on money they deposit with it) is also unchanged, at 10.25%. The CPMO also left the compulsory reserve coefficient, the amount of money that the commercial banks must deposit with the Bank of Mozambique, unchanged, at 11.5% for local currency and 34.5% for foreign currency. A statement from the CPMO justified the decision not to alter interest rates “because of the prevalence of high risks and uncertainties”.
Source: Club of Mozambique
MozambiqueFour state-owned companies may be restructured – Noticias
More state-owned companies may be subject to restructuring in the near future with a view to improving their performance, either through total or partial privatisation, or by other forms of intervention. A few days ago, the State Holdings Management Institute (IGEPE) announced the hiring of a company to conduct a study for the restructuring of four companies that are part of the state’s business sector portfolio. These are the Mozambican Insurance Company (EMOSE), the Correios de Moçambique (Post Office), the Sociedade de Gestão Imobiliária (DOMUS) and the Matola Silos and Grain Terminal (STEMA). Raimundo Matule, executive director of the Business Control department at IGEPE, says the study should be completed by December this year, though there are bureaucratic factors which may delay it. Matule explained that, depending on the results and recommendations of the study, restructuring could be undertaken in the human resources, financial or even in operational fields. “But the state could also decide to sell part or all of its participation. It could also decide to liquidate the company,” he added.
Source: Club of Mozambique
NamibiaNamibia seeks funding for economic recovery projects
Namibia is seeking funding for several infrastructure projects, including a new desalination plant as part of the government's drive to revive the economy and expand the mining sector, President Hage Geingob said Thursday, 18 March 2021. While launching his five-year economic recovery plan, Geingob said the country also plans to expand the local power generation capacity by 250 megawatts to boost the recovery, optimise the operation of the container terminal in the coastal town of Walvis Bay and establish an Economic Free Zone. "Our objective is to unlock targeted projects worth approximately NAD27-billion (USD1.8-billion)," he added. On Wednesday, 17 March Finance Minister Ipumbu Shiimi said the country would accelerate reforms to improve the domestic investment climate by tabling the reviewed Namibia Investment Promotion Bill and the National Equitable Economic Empowerment Bill this year.
NigeriaChina-Africa Business Council opens first Africa office in Lagos
The China-Africa Business Council (CABC), dedicated to the economic development of Africa, has opened its first office in Lagos. The CABC, headquartered in China, is set up to incorporate Nigerian companies as members with their representatives. This was made known at the Choice International Group headquarters in Victoria Island, Lagos, when Chief Diana Chen hosted Lagos State Governor, Babajide Sanwo-Olu and the Consul General of the PRC in Nigeria, Chu Maoming, for the commissioning of three offices, which include: the China-Africa Business Council, Nigeria; the Belt and Road Service Connections Centre; and the Belt and Road Mediation Centre. Speaking on the reason for setting up a representative office in Lagos, Chen said the purpose is to develop the membership of not only the Chinese enterprises, but also enterprises that are looking for business opportunities and investment in China.
Source: The Guardian
RwandaICT sector grew by 29% in 2020
The information and communication technology (ICT) sector grew by 29% in 2020, the latest figures from the National Institute of Statistics of Rwanda (NISR) on Thursday, 18 March, show. The statistics show that the ICT sector was one of the few sectors that registered a positive trend in the past year, owing to the COVID-19 pandemic. Gross domestic product (GDP) at current market prices of ICT activities was estimated to be RWF208-billion compared to RWF186-billion in the previous year. Overall, Rwanda’s GDP contracted by 3.4% in 2020 the figures showed. According to NISR, the agriculture sector grew by 1%, while the health sector grew by 16%. Health sector growth was largely driven by demand for medical services in response to the pandemic. The industry sector contracted by 4% while services contracted by 6%, largely due to lockdowns, limited spending as well as travel restrictions. As a result of measures set up to curb the pandemic, the most affected sectors were hotels and restaurants which contracted by 40%, while education contracted by 28%.
Source: The New Times
TanzaniaDar stock market records strong activity
Activity at the Dar es Salaam stock market remained fairly stable following the formal announcement of President John Magufuli's death. Most listed firms remained resilient with no immediate dipping of share prices. The Dar es Salaam Stock Exchange (DSE) closed business on Thursday, 18 March with a total of TZS2.6-billion (USD1.13-million) from 5,002,830 shares traded in 20 deals, and TZS6.88-billion (USD2.95-million) from bonds traded in six deals. This is five times higher than the total turnover of TZS371.74-million (USD159,553) on Wednesday, 17 March before the announcement of the president’s death, and was also the highest total turnover over the past two weeks when there was increasing speculation surrounding his whereabouts and health.
Source: The EastAfrican
TanzaniaSuluhu sworn in as Tanzania's sixth president
Tanzania's former Vice President Samia Suluhu Hassan took oath on Friday, 19 March 2021, as the sixth president of her country following the passing of John Magufuli on 17 March 2021. The swearing-in ceremony took place Friday morning at State House in Dar es Salaam. She then told the nation that late President Magufuli will be buried on 25 March, in his home region of Chato in Tanzania's northwestern region of Geita. By swearing-in as the next Tanzanian leader, Suluhu, 61, has again made history by becoming the first female president in Tanzania and in the East African Community (EAC). Under the country's constitution, Suluhu will serve the remainder of Magufuli's second five-year term, which expires in 2025.
Source: The New Times
UgandaAfDB signs USD229.5-million financing agreement for the Kampala-Jinja Expressway Project
The African Development Bank and the Government of Uganda on Tuesday, 16 March signed a USD229.5-million financing agreement for the first phase of the Kampala-Jinja Expressway (KJE) Project. The Kampala-Jinja Expressway Public-Private Partnership (PPP) Project-Phase I would improve travel flow, thereby “reducing travel time from more than three hours to under one hour” between Jinja and Kampala along the northern corridor linking Uganda to neighbours Rwanda, Burundi, Democratic Republic of the Congo, South Sudan and Kenya, said Matia Kasaija, minister of Finance, Planning and Economic Development. “The [PPP] model will bring in private sector participation and financing of a key infrastructure in Uganda and will yield a significant economic return for the country with an estimated net revenue of USD2.1-billion over the 30-year concession period,” the Bank’s Country Manager for Uganda, Augustine Kpehe Ngafuan said. The KJE project would boost local industries, with the agreement stipulating that at least 30% of subcontracting in the project would be awarded to local companies under the Buy Uganda Build Uganda (BUBU) policy.
ZambiaZICTA report suggests positive outlook for Zambia’s ICT sector
The Zambia Information and Communications Technology Authority (ZICTA) has published its information and communications technology (ICT) sector annual market report for the year 2020, and many of its findings – and predictions – are positive. Among the highlights are increased access to, and utilisation of, ICT services in Zambia, including what is described as ‘a marked increase’ in active mobile telephone subscriptions – from 17.2 million reported at the end of 2019 to 19.1 million subscriptions recorded at the end of 2020. There was also improvement on the network infrastructure side of ICT. The total number of telecommunication sites in the country increased from 10,303 reported in 2019 to 10,574 sites in 2020. The largest proportion of the sites in 2020 continued to be 2G sites, accounting for 41.1%, followed by 3G sites at 32.9%. Only 26% of the telecommunication sites were 4G/LTE sites. This year should also see the passing of new legislation to support data protection, electronic transactions and cyber security, overhauling previous, presumably outdated, legislation.
Source: Developing Telecoms
ZimbabweZimbabwe signs the Treaty for the establishment of the African Medicines Agency (AMA)
The Republic of Zimbabwe becomes the 19th African Union (AU) member state to sign the Treaty for the establishment of the African Medicines Agency (AMA) on 16 March 2021, at the AU Commission in Addis Ababa, Ethiopia. The AMA Treaty was adopted by Heads of States and Government during their 32nd Ordinary Session of the Assembly on 11 February 2019 in Addis Ababa, Ethiopia. The signing of the Treaty is a step forward in realising the establishment of the AMA out of the desire of the Heads of States and Government to use continental institutional, scientific and regulatory resources to improve access to safe, efficacious and quality medicines. AMA will, among other functions, designate, promote, strengthen, coordinate and monitor Regional Centres of Regulatory Excellence (RCOREs) with a view to developing the capacity of medical products regulatory professionals. The AMA, will enter into force once ratified by 15 AU member states. To date, the instruments of ratification have been deposited by six member states at the AU Commission.