issue 395 | 11 Apr 2021
AfricaAfrica bets on digital COVID-19 passports to boost air travel
Air travellers across Africa can now enjoy faster clearances at airports, thanks to a common continental Coronavirus (COVID-19) digital passport innovation developed by the African Union (AU) through its lead health agency, the Africa Centres for Disease Control and Prevention (Africa CDC), and private sector technical partners PanaBIOS and Econet. Delays and long queues at airports are gradually becoming a thing of the past for passengers boarding Kenya Airways, Ethiopian Airlines and Asky Airlines. Passengers in the continent are now finding it more convenient travelling within and outside their countries, as the AU’s innovation dubbed ‘Trusted Travel Pass’ enables them to securely and easily verify compliance with COVID-19 test or vaccine travel requirements of their destination of choice. The platform has been designed to be incorporated into the airlines' own applications so air travellers can easily understand what they need before they fly.
Source: The EastAfrican
AfricaAfrican fisheries need reforms to boost resilience after COVID-19 – study
The African fisheries sector could benefit substantially from proper infrastructure and support services, which are generally lacking. The sector currently grapples with fragile value chains and marketing, weak management institutions and serious issues relating to the governance of fisheries resources. These were the findings of a study that the African Natural Resources Centre conducted from March to May 2020. The centre is a non-lending department of the African Development Bank (AfDB). The study focuses on the impact of the COVID-19 pandemic in four countries – Morocco, Mauritania, Senegal and Seychelles. The study discusses appropriate and timely measures that the four countries have taken to avoid severe supply disruptions, save thousands of jobs and maintain governance transparency amid the ongoing global uncertainty and crisis. Infrastructure shortcomings include landing facilities, storage and processing capacity, social and sanitary equipment, water and power, ice production, and roads to access markets. Based on the findings, researchers made recommendations to strengthen the resilience of Africa’s fisheries sector in the context of a prolonged crisis, and looking ahead to a post-COVID-19 recovery.
AfricaAmid recession, sub-Saharan Africa poised for recovery
Economic growth in sub-Saharan Africa is estimated to have contracted by 2.0% in 2020, closer to the lower bound of the forecast in April 2020, and prospects for recovery are strengthening amid actions to contain new waves of the pandemic and speed up vaccine rollouts, according to the World Bank’s biannual economic analysis for the region. The latest ‘Africa’s Pulse, The Future of Work in Africa: Emerging Trends in Digital Technology Adoption’, notes that economic recovery hinges on countries deepening reforms that create jobs, encourage investment, and enhance competitiveness. Growth in the region is forecast to rise between 2.3% and 3.4% in 2021, depending on the policies adopted by countries and the international community. Real gross domestic product (GDP) growth for 2022 is estimated at 3.1%. For most countries in the region, activity will remain well below the pre-COVID-19 projections at the end of 2021, increasing the risk of long-lasting damage from the pandemic on people’s living standards. Sub-Saharan Africa’s recovery is expected to vary across countries.
Source: World Bank
AfricaECA working with African countries to increase investment in infrastructure, energy and agriculture
The United Nations Economic Commission for Africa (ECA) is working with African countries to increase investment in infrastructure and agriculture on the continent. In a presentation during the ECA’s first quarter Accountability and Programme Performance Review Meeting (APPRM), Habiba Ben Barka, Economic Affairs officer with the Private Sector Development and Finance Division, said the ECA was working to strengthen the private sector business environment in energy and infrastructure development, and increasing the use of public-private partnerships (PPPs) as one of the means to scale-up investment in infrastructure, especially in the context of COVID-19. To achieve this specific outcome, the ECA has identified three key strategic activities which are; supporting a number of member-states to implement infrastructure planning tools, focusing on energy and transport, and apply methodologies developed by the ECA for increased private sector participation in road safety; bringing more countries to adopt policies that will attract more private sector investment through the use of PPP frameworks and other means for scaling-up infrastructure investment; and fostering more engagements between actors in the aviation industry and financial institutions within the context of COVID-19 economic recovery on the continent.
Southern AfricaHS 2022 amendments to SACU Common External Tariff published for consultation
In an effort to strengthen the inclusive and transparent character of the process of implementation of the Harmonized System (HS), the Southern African Customs Union (SACU) has recently made available the HS 2022 amendments to its Common External Tariff for public consultation. All SACU member states - Botswana, Eswatini, Lesotho, Namibia and South Africa - have simultaneously placed draft tariff amendments on their official websites, inviting comments and feedback from the public. Public consultation on draft tariff amendments is part of the SACU strategy to improve the process of migration of its Common External Tariff to new versions of the HS. The strategy intends to ensure that the process is handled in a meaningful and transparent fashion, creating a level playing field for all stakeholders wishing to contribute to this work. The publication of draft tariff amendments is one of the initial phases in the process of implementation of the HS 2022 amendments. Comments and feedback received from the public will be discussed at a regional workshop to be held later in the year, which will be followed by further consultations before the amended tariff is finalised.
Source: World Customs Organization
AngolaNew discoveries in Angola’s Prolific Basins fuel interest in ongoing bid round
ENI announced on Tuesday, 6 April, that it had made a new discovery in Angola. The Italian Major’s latest oil discovery in its Block 15/06 concession offshore Angola underlines why Angola’s Prolific Basins and conducive regulatory framework continue to prove attractive despite stiff competition from new frontiers like Guyana and Suriname. It is also for this reason that the current bid round for three onshore blocks in the Lower Congo Basin, and six onshore blocks in the Kwanza Basin, run by the National Agency of Petroleum, Gas and Biofuels (ANPG) is attracting a lot of interest from the industry. According to an evaluation of its oil and gas prospects last November, Angola is estimated to hold up to 57 billion barrels of oil and 27 trillion cubic feet of gas – a substantial increase from previous estimates of 8.2 billion barrels and 13.5 trillion cubic feet – which would afford the country the largest oil reserves on the continent. To drive continued investment into frontier exploration, ANPG recently released the timeline for the evaluation of its 2020 oil and gas licensing round. The ongoing bid round is part of a revised Hydrocarbon Exploration Strategy 2020-2025.
Source: Africa Oil & Power
BotswanaBotswana’s economy contracts 7.9% in 2020 with activities severely constrained by COVID-19 pandemic
Preliminary estimates from Statistics Botswana indicate that the country’s real GDP fell by 7.9% year-on-year (y/y) in 2020, ending a streak of four consecutive years of expansion. Although the outlook for domestic diamond production and global diamond demand is somewhat improving, the tourism sector’s continued halt and uncertainty linked to the COVID-19 pandemic developments render 2021 a challenging year for the economy. Real output continued to recover in the fourth quarter of 2020, contracting by 4.1% y/y, compared with a decline of 6.0% y/y recorded in the third quarter. In 2020, the contraction in economic activity was most pronounced in the mining sector, which shrunk by 26.2% y/y. Construction activity fell by 11.0% y/y, however, the industry is showing signs of recovery from the consequences of the pandemic as building constructions resume. On the expenditure front, total final consumption expenditure decelerated markedly but stayed in positive territory, growing by 1.4% y/y in 2020. Real exports of goods and services decreased by 21.4% y/y, led by a 16.8% y/y contraction in merchandise exports. Real imports of goods and services rose by 4.3% y/y as merchandise imports grew by 8.8% y/y in 2020.
Source: IHS Markit
Equatorial GuineaEquatorial Guinea’s economy shrinks by 5.0% in Q4 2020 – authorities expect 2.8% growth during 2021
According to the latest data release from the country’s national statistics office, Instituto Nacional de Estadística de Guinea Ecuatorial (INEGE), real GDP declined 2.8% quarter-on-quarter (q/q) in the fourth quarter of 2020. The fall in economic activity is explained by a contraction of oil GDP of 3.2% q/q and of non-oil GDP of 2.2% q/q. On a yearly basis, the drop in GDP of 5.0% year-on-year (y/y) in the fourth quarter was driven by declines in oil GDP of 5.9% y/y and in non-oil GDP of 3.9% y/y. The fall in oil GDP reflected a contraction in hydrocarbon production of 15.1% y/y on the back of COVID-19-related restrictions and weak output from maturing oil fields. The contraction in non-oil GDP was largely due to a fall in public spending. INEGE forecasts Equatorial Guinea’s GDP will trend between a decline of 3.2% y/y and growth of 0.7% y/y in the first quarter of 2021. Oil GDP is expected to evolve between a contraction of 3.1% y/y and growth of 1.6% y/y, while non-oil GDP will range between a contraction of 3.3% y/y and 0.3% y/y. According to INEGE projections, Equatorial Guinea’s GDP is expected to be 2.8% in 2021.
Source: IHS Markit
EthiopiaNation committed to diversify energy sources to attain development plan – ministry
Ethiopia remains steadfast in its course to diversify the energy mix and utilise all energy sources to attain economic development objectives, according to the Ministry of Finance. The country plans to increase total energy generation until 2030 by diversifying the abundant sources of energy. Despite the different exploitable energy sources, Ethiopia has been solely engaged on hydropower generation, which could not meet the growing development demands, the statement indicated. After the reform, the government is encouraging the engagement of the private sector in the energy sector, especially in the form of public-private partnership (PPP) projects, it stated. Currently, there are 23 large PPP projects that have sites identified, feasibility studies done and ready for procurement processing, it said. These include eight solar photovoltaic, five hydroelectric, five wind, three roads, one housing, and one petroleum depot which have been approved by the PPP Board. According to the ministry, Ethiopia has huge solar energy potential due to its geographical location near the equator. The eight PPP solar energy projects are anticipated to generate 798 MW of electricity.
GhanaGIPC moves to curb technology transfer contract breaches
The Ghana Investment Promotion Centre (GIPC) is seeking to administer hefty sanctions to businesses that fail to register their technology agreements. The sanctions, according to the GIPC, will be tough and strongly enforced and could see the investment agency liaising with the Bank of Ghana to suspend remittances by companies that do not have relevant Technology Transfer Agreement (TTA) registration and certification. The head of the Legal Division and Board Secretary of the GIPC, Naa Lamle Orleans-Lindsey, who was speaking at the 1st CEO’s Breakfast Meeting this year, said aside from fines, there are other options open to the centre, such as the suspension of registration and the ordering of repayment of any incentives that have been extended to companies. The meeting was geared towards sensitisation of the investor and business communities on the GIPC’s TTA registration. Key partners, including the Ghana Revenue Authority, the Bank of Ghana, and the Ministry of Finance and Economic Planning, discussed issues relating to TTA applications. The meeting also highlighted the benefits of TTAs to both foreign and local businesses.
GhanaGPHA to introduce additional e-payment platform
Ms Esther Gyebi-Donkor, general manager, Marketing and Corporate Affairs at the Ghana Ports and Harbours Authority (GPHA), said the authority had created an e-payment platform to allow clients to make transactions through mobile money, Visa and Mastercard. Gyebi-Donkor noted that the move was part of efforts to increase automation at the ports and make doing business faster, easy, secure and convenient. She said the platform was piloted on some port clients and is expected to be rolled out soon. The mobile application would also afford clients the opportunity to easily validate invoices and calculate port charges. She said the port automation, including the Paperless Port clearance process and the Integrated Customs Management System (ICUMS), had streamlined the activities of statutory agencies operating in the clearance chain and impacted positively on the cost of doing business at the ports.
Source: News Ghana
GhanaTax exemptions deny nation of billions of cedis
The International Monetary Fund (IMF) has expressed concern about the continuous granting of generous tax exemptions to companies and investors at a time when the economy needs increased revenues to navigate its way out of a debt trap. The fund said tax exemptions remained the weakest link to all efforts to improve tax collection, necessary to narrow the fiscal deficit and tame a debt burden that now requires almost half of total revenue and grants to service. The IMF’s resident representative to Ghana, Dr Albert Touna Mama, in response to Graphic Business’s questions, said that exemptions were depriving the state of billions of cedis every year, with conservative estimates showing that between 3% and 5% of GDP was lost every year to the current tax holiday regime. This translates to a loss of between GHS11.5-billion and GHS19.2-billion in taxes for 2020, using the year's GDP estimate of GHS383.3-billion. For 2021, when GDP is projected to rise to GHS433.8-billion, the IMF estimates that between GHS13-billion and GHS21.7-billion will be lost to tax exemptions. A Tax Exemptions Bill that was programmed to overhaul the system, starting from 2019, has since failed to go beyond the laying stage in Parliament.
Source: Graphic Online
KenyaIMF pushes for fuel tax rise in KES255-billion loan deal
The Treasury is under pressure from the International Monetary Fund (IMF) to double the value added tax (VAT) on all petroleum products in an effort to cut the budget deficit and tame public borrowing. The multilateral financier reckons that Kenya should impose a 16% VAT on fuels from the current 8% when crude oil prices fall. Petrol is currently retailing at a level last seen in November 2011 while diesel is selling at the highest level since December 2018. The IMF’s push for the fuel tax was revealed in an advisory to the government after the fund’s board approved a new loan for Kenya valued at USD2.34-billion to help the country continue responding to the COVID-19 pandemic and address its debt vulnerabilities. The introduction of the standard 16% VAT on fuels, which has been pushed back several times previously, is part of the latest attempts to raise state revenues.
Source: Business Daily
KenyaKenya Airways shares suspension extended for nine months
The Capital Markets Authority (CMA) has extended a share trading freeze on the national carrier, Kenya Airways (KQ), for another nine months as the airline prepares for the state takeover bid. KQ shares were initially suspended from trading on the Nairobi Securities Exchange (NSE) in July last year after Members of Parliament began to review the law that will pave the way for the government to take back full control of the airline. “Notice is hereby given on the extension of suspension from trading of Kenya Airways Plc shares. The company is yet to finalise its operational and corporate restructure for the eventual Government buy-out, following the publication of the National Management Aviation Bill, 2020, on 18th June 2020,” the NSE said in a statement. “The extension of suspension from trading the company’s shares will remain in force for an additional nine (9) months, with effect from April 5th, 2021.”
Source: Business Daily
KenyaNational AfCFTA Implementation Strategy to boost Kenyan trade and investment
Kenya’s Ministry of Industrialization, Trade and Enterprise Development, in collaboration with the United Nations Economic Commission for Africa (ECA), reviewed and finalised the country’s African Continental Free Trade Area (AfCFTA) National Implementation Strategy, a blueprint to enable the country to tap into the opportunities provided by the agreement. The finalisation of the strategy followed a one-week technical review meeting that brought together trade strategists and economists from the government, development partners, academia and non-state actors. Kenya is keen to expand its supply capacity and increase its export of goods and services across Africa, and globally in line with its economic transformation policy to expand export capacity, increase jobs and wealth creation opportunities for citizens and promote shared prosperity. The Kenya AfCFTA strategy identified key products and services as well as markets that Kenya will prioritise as it seeks to boost its exports to the rest of the continent.
MalawiGovernment borrowing pushes up bank lending rates
Increased government borrowing on the domestic market has triggered a rise in commercial banks’ reference rate for April, the Bankers Association of Malawi (BAM) has said. BAM chief executive officer Lyness Nkungula said this on Tuesday, 6 April in the context of published statements from commercial banks showing that they have raised the reference rate from 11.9% in March to 12.1% in April. She said banks experienced a greater demand for loans from the government in the past month relative to its supply of deposits, triggering a rise in reference rate. “The government has borrowed from the domestic market during the past months; hence, the slight reaction in upward increase for the reference rate as both the Treasury bills and interbank borrowing rates also reacted to the same,” said Nkungula. Treasury’s excessive borrowing from the domestic market has been an issue of concern from the various stakeholders with some projecting the borrowing could crowd out private borrowers and trigger an interest rate rise.
Source: The Nation
MauritiusMauritian economy contracts 14.7% in 2020 owing to impact of COVID-19 pandemic
Mauritius' seasonally adjusted data show that gross value added contracted by 10.8% year-on-year (y/y) in the fourth quarter of 2020, which translates into a decline of 14.7% y/y for the year 2020. The containment measures put in place by the government to mitigate the spread of COVID-19 domestically largely resulted in contractions across all the key sectors of the Mauritian economy. Manufacturing declined by 17.8% y/y as all major manufacturing sub-industries recorded sharp declines, with sugar manufacturing falling by 17.2% y/y, food manufacturing (excluding sugar) by 11.9% y/y, and textile manufacturing by 30.9% y/y. With the tourism sector in continued free fall and tourist arrivals virtually non-existent, accommodation and food service activities collapsed by 65.8% y/y. The arts, entertainment, and recreation industry also contracted by 31.0% y/y, while other service activities declined by 27.6% y/y. Construction activities fell by 25.2% y/y. Wholesale and retail trade and repair of motor vehicles and motorcycles also took a hit, declining by 12.0% y/y. Agriculture, forestry, and fishing was down by 2.6% y/y, weighed down by a decline of 18.1% y/y in sugarcane-related activity.
Source: IHS Markit
NamibiaDays numbered for tax dodgers
The discussion of a semi-autonomous tax body, which commenced more than 10 years ago, culminated in the official opening of the Namibia Revenue Agency (NamRA) by President Hage Geingob on Wednesday, 7 April 2021. The establishment and operationalisation of NamRA are expected to significantly improve transparency in Namibia’s tax collection efforts to increase state revenue from the NAD52-billion expected during the current financial year, which is already NAD6-billion less than the NAD58-billion collected during the 2020/21 financial year. The establishment of NamRA stems from a conscious decision by Cabinet to transform existing in-house departments of Inland Revenue and Customs and Excise within the Ministry of Finance into the semi-autonomous tax administration body. NamRA was established against Namibia’s record of an already high revenue-to-GDP collection rate by the government, averaging 32% of GDP when the Southern African Customs Union (SACU) receipts are included, or some 22% excluding SACU receipts.
Source: New Era
NamibiaNamibia ready to trade under AfCFTA banner
Namibia is ready to increase trade with other African countries under the African Continental Free Trade Area (AfCFTA) agreement following its submission of the tariff concession last month. This was said by Ndiita Nghipondoka-Robiati, the deputy executive director for International Trade in the Industrialization and Trade Ministry at a business community event organised by the Africa Economic Leadership Council (AELC) in Swakopmund. Namibia, and other Southern African Customs Union (SACU) members submitted tariff concessions as part of the 90% trade liberalisation on the continent. Nghipondoka-Robiati said Namibia is making good progress in negotiations with other signatories, after submitting its list of products. She added that the government has ensured that the private sector has access to a bigger market through negotiations and it will now be up to them to take the opportunities. Nghipondoka-Robiati further said Namibia has completed 88% (at SACU level), of the 90% of liberalisation of trade to remove duty on products as per the agreement by the heads of states. What is still outstanding is to finalise the offers, rules of origin of products and offers on trading services, she said.
Source: The Namibian
NigeriaWabote says NCDMB will not invest in competitive private businesses
The Nigerian Content Development and Monitoring Board (NCDMB) would only partner on strategic policies and projects that are promoted by the Federal Government and would not invest in private sector oil and gas businesses that are competitive, its executive secretary, Simbi Wabote, has said. Wabote revealed this when he hosted members of the Women in Energy Oil and Gas (WEOG) Nigeria, led by the president, Dr Oladunni Owo, at the board’s liaison office in Abuja. He clarified that the board would not invest in competitive businesses because such investments would compromise its position as a regulatory agency. “Our role is to act as a catalyst of strategic government policies and programmes. We exit once those businesses become successful,” he noted. He also stated that NCDMB is a regulatory agency and not an interventionist organisation and would not get involved in programmes outside its mandate.
Source: The Guardian
TanzaniaTCRA scouts for suitable smartphone investors
Tanzania is looking for a suitable investor to establish and operate a smartphone assembly factory under a public-private partnership (PPP) arrangement. The PPP, under the Tanzania Communications Regulatory Authority (TCRA), is expected to be revealed early next month. The TCRA re-advertised the tender notice after it failed to get the required competitive bidders for the smartphone assembly plant. TCRA director of Licensing and Monitoring, John Daffa, told Daily News that they re-advertised the tender to get more competitive bidders. “The factory will be built in Mwanza region, and initial preparations for the construction have been completed,” Mr Daffa said. Initially, the regulator wanted the factory to start operating early this year, but the number and quality of bidders backpedalled the efforts. The PPP, according to the notice, intends to have qualified, reputable and capable companies to work under a design, build and finance transfer arrangement.
Source: Daily News
TanzaniaTPDC draws strategies on LNG project pace
The Tanzania Petroleum Development Corporation (TPDC) held a meeting to brainstorm and propose the best ways of implementing President Samia Suluhu Hassan’s directives over the execution of the liquefied natural gas (LNG) project. Speaking at the swearing-in ceremony of the newly appointed permanent secretaries, their deputies and heads of public institutions at the Dar es Salaam State House, President Hassan directed the Ministry of Energy to swiftly finalise the ongoing negotiations so that execution of the multi-billion dollar project could start. She wanted the ministry to evaluate why the project was not moving at the expected pace and identify those obstructing its progress. The TPDC’s managing director, James Mataragio, told The Citizen that he decided to call the emergency meeting with his staff to come up with the best ways of implementing the order.
Source: The Citizen
UgandaFinancing pressures to push debt up to 48.8% by June
The African Development Bank (AfDB) has said an increase in financing needs will drive Uganda’s public debt to 48.8% by June 2021. The debt, the AfDB said in its country African Economic Outlook, is expected to surge further to above 50% by June 2023. The AfDB is one of Uganda’s largest multilateral lenders, coming only below the World Bank. Currently, it has a commitment of about USD1.8-billion to both government and the private sector. Much of this is held in the transport sector, which accounts for at least 63% of the bank’s portfolio. Agriculture accounts for 15% while water and sanitation accounts for 12%. Energy accounts for 7% while the social sector, and information and communications technology (ICT) account for 2% and 1%, respectively. In its outlook, the AfDB also noted that the increasing rate of interest payments, driven by growth in non-concessional borrowing was a challenge to the economy, advising that government must revert to concessional financing to avert the possibility of pushing debt to unsustainable levels. While responding to the AfDB’s concerns, Ms Maris Wanyera, acting director in the Ministry of Finance’s Directorate of Debt and Cash Management, said going forward, government would ensure that all loans are purely concessional.
Source: Daily Monitor
ZambiaMining firms in Zambia call for favourable investment climate to boost production
Mining firms in Zambia said the time was ripe for Zambia to create a favourable investment climate for the sector to accelerate production in view of increased global demand for copper. The Zambia Chamber of Mines, an association of foreign mining firms operating in Zambia, said opportunities for mining firms to expand their investment in mining countries were ripe, hence the need for the countries to provide conducive environments for investment. "In the wake of a growing demand for the metal, investors are seeing opportunities to invest if the host countries permit it. [This] comes in the form of enabling policies and legal regimes," Godwin Beene, the association's president told reporters during a press briefing. The switch to electrical vehicles further presents growth opportunities for copper mining in the long run, said Beene, noting that the association will continue engaging the government to ensure a favourable mining sector regime. The sector, he said, wanted the government to remove the non-deductibility of the mineral royalty tax, which he believed was a punitive tax deterring future investment and would change the mineral royalty sliding scale.