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issue 396 | 18 Apr 2021

Africa

Sub-Saharan Africa: Navigating a long pandemic

Sub-Saharan Africa’s economic growth is set to recover in 2021. Yet, the path to recovery, and overcoming the long-lasting effects of the pandemic will be difficult. Policymakers must strive to deliver vaccines, while restoring the health of public balance sheets harmed by the crisis. Transformative reforms and renewed external support are more important than ever to rekindle the region’s growth, the International Monetary Fund (IMF) said in its latest ‘Regional Economic Outlook for sub-Saharan Africa’. “Sub-Saharan Africa is continuing to grapple with an unprecedented health and economic crisis,” stressed Abebe Aemro Selassie, director of the IMF’s African Department. “The pandemic has had a devastating impact on the region’s economy. The estimated  1.9% contraction in 2020 is somewhat less severe than anticipated last October, but it is still the worst year on record. While the region is projected to grow by 3.4% in 2021, per capita output is not expected to return to 2019 levels until after 2022.”

Source: IMF

East / Southern Africa

AfCFTA, COMESA to establish cooperation framework

The African Continental Free Trade Area (AfCFTA) Secretariat and the Common Market for Eastern and Southern Africa (COMESA) will establish a partnership framework to support the implementation of the continental trade regime. Technical teams from the two organisations are expected to start working immediately on the framework by establishing committees to deal with specific aspects of the partnership. This was said during the first visit by the secretary general of the AfCFTA Secretariat, Mr Wamkele Mene, to the COMESA Secretariat in Lusaka, Zambia. Mr Mene was received by his COMESA counterpart Ms Chileshe Kapwepwe and senior members of staff. Secretary general Kapwepwe called for the extension of the piloting of the Pan African Payment System from the Economic Community of West African States (ECOWAS) region to the rest of Africa as one way that the two organisations could begin to collaborate. Other cooperation areas could include partnerships with COMESA institutions such as the Trade and Development Bank, the African Trade Insurance Agency, the COMESA Competition Commission and the COMESA Business Council.

Source: COMESA

East / Southern Africa

Over four million seed labels developed and ready for use

The Common Market for Eastern and Southern Africa (COMESA) Seed Programme through the Alliance for Commodity Trade in Eastern and Southern Africa (ACTESA) has developed over four million physical seed labels that are ready for use by seed companies in the region. The labels will enable companies to engage in regional seed trade for large cross-border seed consignments and in-country seed trade in smaller packages. ACTESA/COMESA Seed Expert Dr John Mukuka revealed in Lusaka that the Seed Labels can be stuck on different sizes of bags including 1kg, 2kg, 5kg, 10kg, 20kg and 25kg bags within a 30 to 40 metric tonnes COMESA certified seed lot. ACTESA, a specialised agency of COMESA, manages the Seed Development Programme which is implemented within the guidelines of the COMESA Seed Harmonisation Implementation Plan (COMSHIP). In line with COMSHIP, the programme has developed the COMESA Variety Catalogue, a platform that contains seed varieties.

Source: COMESA

Southern Africa

Private sector plays a vital role in implementation of AfCFTA – SACU Secretariat

With an enormous market presented by the African Continental Free Trade Area (AfCFTA), it is incumbent upon the Southern African Customs Union (SACU) private sector to seize and capitalise on the opportunities to grow their business through regional value chains and cross-border trade, SACU executive secretary, Paulina Elago, said. Elago said this when SACU member states, Botswana, Eswatini, Lesotho, Namibia and South Africa came together for the first time since the launch of the AfCFTA on 1 January 2021, to discuss issues related to the implementation of the trade bloc. During the virtual meeting attended by representatives from member states, the private sector and the secretary general of the AfCFTA Secretariat, Wamkele Mene, Elago said without the participation of the business sector, efforts made towards increasing cross-border trade will be meaningless. She said the SACU Council of Ministers has agreed to prioritise industrialisation through the development of regional value chains, export and investment promotion.

Source: Namibia Economist

Angola

Angola mine to produce 20,000 carats of diamonds monthly

The Lunhinga mine in Angola's eastern province of Lunda Norte is expected to produce 20,000 carats of diamonds per month, the coordinator of the Lunhinga project told the press recently. Aderito Gaspar said the mine, located in Xa-cassau commune in the municipality of Lucapa, will double its production from the current 10,000 carats monthly to 20,000 carats from the second half of this year. He said that the increase in diamond production is due to the entry into operation of a new treatment plant, which is scheduled for the second half of 2021. The project, which has a concession area of 32,500 hectares, will be explored over a period of five years. The mine produced 322,730 carats of diamonds from 2017 to 2020, Gaspar said.

Source: Xinhua

Cameroon

Fitch switches Cameroon’s rating outlook to Stable

Rating agency Fitch has revised the outlook on Cameroon’s credit rating from Negative to Stable, reflecting a milder-than-anticipated deterioration in public finances due to the Coronavirus (COVID-19) pandemic shock. The rating agency confirmed Cameroon’s medium-term sovereign rating at B and decided to switch the outlook back to Stable from Negative. Fitch had changed the rating outlook to Negative in April 2020 owing to mounting medium-term liquidity risks due to the COVID-19 pandemic and the sharp decline in global oil prices. According to Fitch, the pandemic shock did not hit the country’s public finances as much as initially anticipated. Fitch assesses that medium-term debt service and refinancing risks will likely be constrained, with the government expected to unlock sufficient funding. Fitch expects Cameroon to renew its Extended Credit Facility (ECF) with the IMF before end-June 2021, which should unlock further official creditor support to fully cover funding needs in 2021 and ease funding conditions over the medium term. In terms of gross domestic product (GDP), general government debt ratio is forecast to rise mildly from 42% in 2019 to 44% in 2022, according to Fitch, driven by recovering GDP, improving external accounts, and the narrowing fiscal deficit.

Source: IHS Markit

Cameroon

ITFC and Cameroon sign USD750-million three-year framework agreement to support Cameroon's key sectors

The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank Group (IsDB) and Cameroon have on 12 April 2021 signed two agreements in a virtual signing ceremony. The first signing is a three-year framework agreement amounting to USD750-million under which ITFC will provide to Cameroon a financing envelop of USD250-million annually over a period of three years to facilitate the import of key commodities in the strategic energy, mining, and health sectors. It will also sustain its already strong support to the agriculture sector. The agreement also enshrines Cameroon’s membership to ITFC's flagship program, the Arab-Africa Trade Bridges (AATB) program, which aims to facilitate trade and investment flows between Arab and African regions. The second signing is related to a EUR98-million Murabaha Financing agreement in favour of Société de Développement du Coton (SODECOTON) to facilitate the purchase of agricultural inputs such as fertilizers, pesticides and herbicides, seed cotton, and soybeans. ITFC has a long-standing relationship with Cameroon and SODECOTON.

Source: Africanews

Ethiopia

First drilling for Tulu Moye geothermal project in Ethiopia complete

Kenya Electricity Generating Company (KenGen), the leading electric power generating company in East Africa that is based in Nairobi, Kenya, has completed drilling of the first well for the Tulu Moye Geothermal project in the Oromia region of southwest Ethiopia. According to Rufat Maina, the project site manager, drilling for the second well is ongoing and more than 1,000 meters of the planned 2,500 meters have been drilled and excavated. The project plans to drill up to 10 wells for the initially planned two phases of development under a USD52-million contract which also includes the provision of geoscientific surveys at the project site. The Tulu Moye geothermal project is developed by Tulu Moye Geothermal Operations (TMGO) that is owned by Meridiam and Reykjavík Geothermal Ltd with KenGen as joint construction partner. TMGO plans to commission the first phase of the project that will generate approximately 50 MW of electricity in 2023 followed by the second phase that will increase the capacity to 150 MW in 2025.

Source: Construction Review Online

Ghana

President commissions USD80-million steel plant

President Nana Akufo-Addo has commissioned a USD80-million steel plant at Prampram, near Accra. The B5 Plus Steel Plant, an enterprise operating under the government’s ‘One District, One Factory’ flagship programme, will convert scrap metal sourced across the country into materials for the construction industry. With an initial installed capacity of 250,000 tonnes per annum, the plant, West Africa’s biggest fabrication plant, and the third biggest in Africa, will manufacture iron rods, wire rods, round bars and general steel products for both the Ghanaian and West African markets. Commissioning the first phase of the plant, President Akufo-Addo noted that policies initiated and being implemented by his administration to advance Ghana’s industrial transformation had begun yielding dividends. He restated government’s commitment to enhancing the existing business operating environment to provide incentives to strategic investments being made by companies to advance Ghana’s transformation agenda.

Source: Ghana News Agency

Ghana

SDG Investment Platform for Ghana launched

The ‘SDG Investment Platform’ has been launched to provide market intelligence on investment opportunities in Ghana and beyond. The Ghana Investment Promotion Centre (GIPC) joined the United Nations Development Programme’s (UNDP) Sustainable Development Goals (SDGs) Impact and Global Investor for Sustainable Development (GISD) Alliance to launch the platform. The platform has also been identified as “an exciting prospect to assuage the GIPC’s efforts in raising GHS100-billion through investments, as envisaged in the country’s Coronavirus Alleviation and Revitalization of Enterprises Programme (Ghana CARES).” A statement copied to the Ghana News Agency said the SDG Investment Platform offered insight, data and impact measurement tools to both local and foreign investors, with the purpose of fast-tracking attainment of the SDGs. It said the SDG investor map, a key feature of the platform, provided market intelligence for private sector investors by translating country-level SDG gaps and priorities into investment opportunities.

Source: Ghana News Agency

Kenya

KenInvest wants clear work permit rules for investors

The Kenya Investment Authority (KenInvest) wants clear timelines set for approval of work permits for foreign investors to enable better planning for firms setting up locally. KenInvest says a time-bound work permit approval framework is part of a draft legal change that the investment promotion agency is writing for consideration by the Interior ministry and the Treasury. “We have to streamline the process of getting work permits because that’s one of the areas which has got a bit of delay and uncertainty (for foreign investors). So we will do a paper, then take it to the CSs to sponsor it through the Cabinet,” said managing director Moses Ikiara. Kenya’s immigration laws allow investors with proof of USD100,000 (KES10.7-million) investment cash and certificate of company registration, among other requirements, to obtain annual work permits under Class G at slightly more than KES100,000.

Source: Business Daily

Kenya

KEPSA joins Canada-Africa business lobby to boost trade

The Kenya Private Sector Alliance (KEPSA) has inked a deal with the Canada-Africa Chamber of Business (CACB) to boost bilateral trade and investment opportunities. The two signed the renewable, three-year Memorandum of Understanding (MoU) which will provide KEPSA members access to the Canadian market for investment and trade as well as CACB memberships in the country. “This MoU will solidify the existing trade relations between Kenya and Canada and establish strong bonds between the two countries that will go a long way to boost private sector trade and investment,” said KEPSA chief executive officer Carole Karuga. “It will also enable us to exchange business information with CACB which is critical especially to our members who wish to expand their coverage to international markets.” The agreement was signed during the second session of the Binational Commission meeting between the Kenyan and Canadian governments. The pact now paves way for a virtual trade mission to Kenya from Canada in May.

Source: Business Daily

Kenya

Tax, costs ‘bigger threat to businesses than COVID-19’

A majority of company chief executives in Kenya believe the high cost of doing business and taxation posed the biggest threat to their operations over the next 12 months, dwarfing the financial fallout of the COVID-19 pandemic, a new survey by the Central Bank of Kenya (CBK) shows. The survey found that although most business leaders projected a substantial economic rebound in the second quarter of the current fiscal year on improving orders and sales, a challenging business environment posed the biggest threat to progression. “The effects of the COVID-19 pandemic were a lesser concern compared to taxation issues like withholding tax/VAT refunds and excise duty on fast-moving consumer goods, and the introduction of new taxes,” CBK stated in the CEOs survey report. “Businesses were also concerned about the effects of the third wave of the COVID-19 pandemic, particularly the success or otherwise of the vaccine rollout and the general decreased economic activity due to the pandemic.” The government earlier this year reversed a series of relief measures that it had put in place to cushion households and businesses from the economic fallout of the pandemic – raising concerns of a possible fresh slowdown in economic performance.

Source: Business Daily

Malawi

PPPC courts private sector on airports

The Public Private Partnership Commission (PPPC) has courted the private sector to explore construction of modern airports under a public-private partnership (PPP) arrangement. The move comes as experts have long decried that the country’s airport facilities are not up to standard to attract modern and direct flights, leaving the country less attractive to tourists and foreign direct investment. In an interview in Lilongwe on the sidelines of a World Bank-funded specialised PPP expert training course for technocrats in selected ministries, departments and agencies (MDAs), PPPC chief executive officer Patrick Kabambe said that they are undertaking feasibility studies that will culminate into practical investment decision-making in the aviation sector. He said: “We are doing some pre-feasibility studies in the aviation sector to see if we can involve the private sector as a way of addressing airport challenges in Malawi. “The study is currently ongoing and its outcomes will determine and advise us on the best way of getting the private sector into the aviation industry.”

Source: The Nation

Malawi

Tobacco Commission moves to review Act

Barely a year after its implementation, the Tobacco Commission (TC) says it is reviewing the Tobacco Industry Act to iron out emerging grey areas which are a bone of contention with stakeholders. Since the implementation of the law started last season, the tobacco regulatory body has been facing challenges, including being dragged to court over the implementation of some sections of the Act. In an interview, TC chief executive officer Joseph Chidanti Malunga said the review of the Act will help to align contentious issues with stakeholders’ expectations. He said: “As a commission, we are in the process of reviewing the Act, we are soliciting comments from stakeholders, we want to relook at the law and once we complete compiling the comments we will send them to government.” The new law, which was in its first year of implementation last growing season, was enacted to bring sanity in the tobacco industry and ensure that growers benefit from their toil. Some of the contentious issues include how the law recognises associations, provisions on fines issued by courts, and the barring of buyers from participating in the production of tobacco.

Source: The Nation

Namibia

Namibia to lead economic recovery through three key goals – president

Namibia will lead the country's economic recovery by pursuing three key goals, the country's President Hage Geingob said on Thursday, 15 April 2021. Geingob said the goals will include: firstly, the updating of the national fixed asset register; secondly, the completion of the State-Owned Enterprises (SOE) reform process; and thirdly, the implementation and seeding of a Sovereign Wealth Fund to better steward natural and public resources. According to Geingob, a well-defined partnership between the public and private sector is essential to fully unleash the country's potential. "The Public-Private-Partnership framework of 2018 will be a key instrument to preparing projects in excess of NAD27-billion (USD1.9-billion) over the period, with an ambition to create more than 42,000 jobs," he added. Geingob meanwhile said with the mass employment-generating sectors of agriculture, tourism, hospitality and aviation, construction and retail, and trade hard hit by the drought and COVID-19 pandemic, Namibia must pursue opportunities to foster new engines of growth.

Source: Xinhua

Nigeria

FG unveils compendium on states’ economies

The Federal Government has unveiled a publication, ‘Book of States’, detailing the economic potential of states and their performances in internally-generated revenues (IGRs). In his keynote address at the launch, the minister of Industry, Trade and Investment, Adeniyi Adebayo, said the document captures the competitive advantages and key investment opportunities in each state. He said the publication would help investors to appreciate and understand the investment potentials of various states. He explained that the work was fully supported and endorsed by all the 36 governors, stating: “This only shows how we are all collectively working together to ensure that Nigeria is properly positioned to provide first-hand information on the abundant opportunities and advantages available in the country. “This will help us attract the right investments to Nigeria and improve our productivity as a nation, create jobs for our people, and increase revenue generation for the country.”

Source: The Guardian

South Sudan

South Sudan prioritises infrastructure development

While several African countries saw significant delays to infrastructure projects due the COVID-19 pandemic, South Sudan has been committed to dramatically raising its living standards, spurring industrialisation and generating economic benefits through large-scale infrastructural investments. South Sudan’s new administration is focused on improving infrastructure to stimulate growth and investment across energy and non-energy sectors. Accordingly, the country is prioritising significant improvement of roads, the revitalisation of power generation infrastructure and the development of improved water and sanitation infrastructure, supported by a new Infrastructural Development Plan and the establishment of foreign partnerships. Notably, South Sudan is concentrating on the construction of major in-country road networks, including the Juba-Bahr El-Ghazal Highway, the Juba-Bor-Malakal Highway, the Juba-Yambio Highway and the Juba-Nadapal Highway. In addition to local networks, South Sudan is improving regional networks with neighbouring countries through the development of key projects such as the Kenya-South Sudan Highway, a 248 kilometres highway linking Kenya to South Sudan.

Source: Africa Oil & Power

Uganda

Bank of Uganda keeps policy rate unchanged at 7% for April

Uganda’s central bank kept its benchmark policy rate unchanged at 7% in a strategic move that promises stable lending rates amidst increased credit default levels and renewed strength in the value of the Uganda shilling against the United States dollar. Whereas a continued soft policy stance has eased pressure on lending rates charged by commercial banks since last year, a rising loan default rate, mainly caused by several cases of distressed borrowers unable to service their loans after receiving temporary credit holidays, has left average borrowing rates flat as lenders struggle to absorb huge credit loss provisions in their operations. The banking industry loan default ratio is estimated at more than 5% while average prime lending rates lie in the range of 16-18% to date, according to industry statistics. “High frequency economic indicators for the first quarter of 2021 indicate a gradual strengthening of economic activity but still at a subdued pace. Therefore, the GDP growth outlook remains unchanged at 4.0-4.5% in FY2021/22… A high degree of uncertainty surrounds the economic outlook, with many possible downside and upside risks, but with balance of risks tilted to the downside,” states the latest monetary policy statement.

Source: The EastAfrican

Uganda / Tanzania

Uganda, Tanzania, oil firms sign accords to build USD3.5-billion pipeline

Uganda, Tanzania and oil firms Total and China National Offshore Oil Corporation (CNOOC) on Sunday, 11 April 2021 signed agreements that will kickstart the construction of a USD3.5-billion crude pipeline to help ship crude from fields in western Uganda to international markets. The signatories have now agreed “to start investment in the construction of infrastructure that will produce and transport the crude oil,” said Robert Kasande, permanent secretary at Uganda’s Ministry of Energy. Ugandan President Yoweri Museveni and Tanzania’s new leader Samia Suluhu Hassan, on her first official visit, attended the signing of the three accords that included: a host government agreement for the pipeline, a tariff and transportation agreement and a shareholding agreement. The planned East African Crude Oil Pipeline (EACOP), with a length of 1,445 kilometres, will run from the oilfields to Tanzania’s Indian Ocean seaport of Tanga.

Source: Reuters

Zambia

Zambia government says upgraded Fitch rating sign of economic recovery

The Zambian government said that the upgraded rating by an international rating agency was a sign that the country's efforts to develop the economy were getting the necessary international attention. Fitch Ratings has upgraded the country's Long-term Local-Currency Issuer Default Rating from "CC" to "CCC". The rating agency said the upgrade was a sign that the government has continued to service its local debt and has made no indication that it plans to include domestic debt in any potential debt restructuring. It adds that this also means an eventual restructuring of external debt could improve the overall public finance position and support local currency debt sustainability. Chief government spokesperson Dora Siliya said it was gratifying that the upgrading of the country was coming at a time when copper prices in the international market had hit an all-time high.

Source: Xinhua

Zimbabwe

Zimbabwe approves MoU for nuclear energy cooperation with Russia

The government of Zimbabwe has approved a Memorandum of Understanding (MoU) with Russia. The Memorandum seeks to facilitate a high level of cooperation between the two countries in the use of nuclear energy by laying a foundation for the execution of the agreed areas of cooperation. Information minister Monica Mutsvangwa confirmed the development at a post-Cabinet press briefing held on Tuesday, 13 April. “Cabinet considered and approved the MoU between Zimbabwe and the Russian Federation State Atomic Energy Corporation, which was presented by the Attorney General on behalf of the chairman of the Cabinet Committee on Legislation,” she said. Joint Working Groups will be established to identify specific projects to facilitate the cooperation, including exploring the feasibility of constructing a centre for nuclear science and technology.

Source: ESI Africa

Zimbabwe

ZISCO seeks investors

The government is in a fresh hunt for strategic partners to resuscitate operations at the defunct state-owned Zimbabwe Iron and Steel Company (ZISCO). Over the years, the Redcliff-based steel manufacturing plant has been a subject of foreign investor interest with companies such as Essar Africa Holdings, a unit of India’s Essar Group having agreed to invest USD750-million in ZISCO in 2011. But the deal collapsed in 2015. Again in late 2019, negotiations for a USD1-billion revival deal between ZISCO and R & F of China, which had shown keen interest to revive operations at the steel plant also collapsed. In September last year, ZISCO acting board chair Eng Martin Manuhwa announced that his organisation had come up with a short-term revival strategy targeting resuscitation of the subsidiaries. In a letter of invitation to the tender seen by Business Chronicle, Eng Manuhwa said: “It (ZISCO) is seeking investors who would be interested in availing funds (equity/debt) to resuscitate this former iron- and steel-producing company.” The expressions of interest should be delivered at ZISCO offices in Harare by 30 April 2021.

Source: The Chronicle