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Africa Business in Brief

 

issue 398 | 02 May 2021

Africa

ATO Steering Committee lays the ground for the launch of the final online dashboard

The African Union (AU), European Union (EU), and International Trade Centre (ITC) continue their engagement through the African Trade Observatory (ATO) to support and monitor the effective implementation of the African Continental Free Trade Area (AfCFTA). To ensure that the ATO reaches its full potential through a coordinated response from international and regional agencies, a Steering Committee (SC) meets regularly to assess progress and coordinate efforts. At the second SC meeting, held on 26 April, Pamela Coke-Hamilton commended the enhanced transparency and wealth of accessible information made available to African entrepreneurs on regional opportunities, thanks to the release of the beta version of the online ATO dashboard (ato.africa). The beta version was launched on 5 December 2020 and the ITC executive director further noted that more improvements were on the way given that the dashboard will be enriched by an analytical module dedicated to African policymakers and expected to be launched on Africa Integration Day on 7 July 2021. Since its release, more than 3,700 users visited the beta version of the ATO dashboard, with particularly strong interest from entrepreneurs in South Africa, Nigeria, Kenya, Ghana and Ethiopia.
 
Source: AfCFTA Secretariat

Africa

New reports from AfDB, FAO and CGIAR showcase digital agriculture opportunities

Drones, satellites, geographic information systems, weather stations and advanced analytics are some of the most promising technologies for providing solutions to Africa’s agricultural challenges, according to the joint Digital Agricultural Profiles carried out by the African Development Bank (AfDB), the Food and Agriculture Organization of the United Nations (FAO) and CGIAR in three countries. The profiles, covering Ivory Coast, Rwanda and South Africa, map the challenges and opportunities to scale the adoption of innovative digital technologies in the agriculture sector. These include national digital technology and the policy landscape, user demands along the value chain and available digital agriculture services and applications. The profiles also examine the main barriers to adoption as well as the digital technologies with the greatest potential to transform the sector. “The Digital Agriculture Profiles provide a snapshot of how a country is positioned in that transformational process,” said Dr Martin Fregene, director for Agriculture and Agro-industry at the AfDB.

Source: AfDB

Africa

Vaccine troubles may set Africa back five years, UN body says

A slow rollout of Coronavirus (COVID-19) vaccines and a lack of funding to bridge the gap between poor and rich countries could set Africa back two to five years, according to the head of the United Nations Economic Commission for Africa (UNECA). “The fact that Africa isn’t going to get vaccinated as fast is going to clearly slow growth,” Vera Songwe, executive secretary of UNECA, said in an interview. A lack of access to vaccines that will keep barriers to travel and business in place will also slow trade and hamper investments that could set back economic growth and prevent the creation of 26 million jobs, she said. World output is predicted to expand at the fastest pace in at least four decades in 2021. However, economic growth in sub-Saharan African, forecast at 3.4%, is set to lag other regions, according to International Monetary Fund (IMF) estimates. Poorer countries will need to deploy USD450-billion to rebuild over the next five years and accelerate their income convergence with advanced economies, according to the IMF. While some African economies may have access to funds through the USD650-billion in special drawing rights that the Washington-based lender is planning to give emerging and low-income nations to deal with COVID-19 and mounting debt, a failure to secure enough money could set the continent back, she said.

Source: Bloomberg

East Africa

EAC and EU set to align development priorities for 2021-2027

The East African Community (EAC) secretary-general, Dr Peter Mathuki, has undertaken his first assignment as the sixth secretary-general of the EAC in a virtual meeting with the European Commission (EC). The meeting provided the platform to review what is envisaged in the European Union (EU) Multiannual Indicative Programme (MIP) for sub-Saharan Africa 2021-2027. Dr Mathuki, reaffirmed the EAC’s commitment to the partnership with the EU, and expressed his anticipation to establishing the areas of cooperation between the two blocs for the next six years. The programme will provide support through actions at national, multi-country, sub-regional, cross-regional and continental level in sub-Saharan Africa on the basis of three main principles: policy first, geographisation and subsidiarity. It is expected that only initiatives with a clear added value to address an issue from a regional perspective will be supported under the regional programme. Priority areas for cooperation include; human development; governance, peace and security; culture; green and climate transition; digital and science, technology and innovation; sustainable growth and decent jobs; and migration and forced displacement.

Source: EAC

East Africa

Secretary-General Mathuki to rid EAC of hurdles stifling business

Creating a conducive business environment will be top on the priority list of the new East African Community (EAC) secretary-general Peter Mathuki. Dr Mathuki said this will be achieved by eliminating non-tariff barriers, adopting business-friendly legal regimes and fast-tracking the Common External Tariff (CET). “I firmly believe that we cannot attain a sustainable regional integration, if partner states do not urgently remove non-tariff barriers and other inconsistent laws that frustrate intra-regional trade and investments,” Mathuki said at the handover ceremony in Arusha. “I look forward to facilitating the operationalisation of the amended EAC Elimination of Non-Tariff Barriers Act and the EAC Trade Remedies Committee to handle trade disputes in the region.” He said the finalisation of the comprehensive review of the EAC CET and its uniform application in the bloc is long overdue, “hence I will be keen to fast-track the process by the end of this year.”

Source: The EastAfrican

Southern Africa

Southern Africa taps USD380-million in World Bank financing to facilitate regional trade and investment for more inclusive growth

On 27 April 2021, the World Bank approved USD380-million in financing from the International Development Association (IDA) to support Malawi and Mozambique increase regional trade coordination, reduce trade costs and time, develop regional value chains and improve access to infrastructure. The new Southern Africa Trade and Connectivity Project (SATCP) will benefit both countries and local communities through investments that will facilitate trade, strengthen regional coordination and increase diversified economic opportunities along the Nacala and Beira corridors, connecting Mozambique to Malawi, and along the Maputo Corridor, connecting Mozambique to South Africa through Ponta Do Ouro. The project will ensure that youth and women are well represented among its beneficiaries. Project activities also integrate an immediate response to the COVID-19 crisis, and support will be provided to keep borders open during the crisis while modernising border practices, policies, procedures, systems and facilities that will ensure process integrity during climate, health and other emergencies. The coordination activities between the countries can also be used to develop standard operating procedures for future emergencies and pandemics.

Source: World Bank

Botswana

Moody’s downgrades Botswana’s credit rating on deterioration in fiscal strength

On 23 April 2021, Moody’s downgraded Botswana’s long-term sovereign risk rating to A3, citing deterioration in the country’s fiscal accounts, worsened by the disruptive impact of the COVID-19 pandemic. Moody’s switched the outlook on the rating to Stable from Negative following the downgrade, indicating that the likelihood of any rating action is minimal within the coming 12-18 months. According to Moody’s, the Stable outlook reflects broadly balanced risks at this rating level. Moody’s, however, noted that the rating and/or outlook could be upgraded if there was enhanced resilience to shocks supported by higher buffers or reduced vulnerabilities of the budget structure to sudden declines in Southern African Customs Union (SACU) revenues and/or mineral revenues. On the other hand, Moody’s would consider downgrading Botswana’s rating in the event of a marked deterioration of fiscal metrics beyond current projections, a significant increase in financial support to state-owned enterprises, or markedly weaker growth outlook. Furthermore, any indication pointing to increased vulnerability due to a deterioration of the external position or to higher liquidity risk could also lead to a downgrade.

Source: IHS Markit

Botswana / Namibia

Major milestone agreement reached for Mega Solar in Southern Africa

The Biden-Harris Administration selected Power Africa’s climate positive, energy prosperity-producing Mega Solar project as a deliverable from the Leaders Summit on Climate. Mega Solar is a partnership between Power Africa and the governments of Botswana and Namibia, the International Finance Corporation (IFC), the International Bank for Reconstruction and Development and the African Development Bank to support the development of Southern Africa’s largest solar-generation project, which is estimated to result in two to five gigawatts of solar power. A Memorandum of Intent was signed between all partners in April. Mega Solar’s initial goal is to provide additional power from solar photovoltaic and concentrated solar thermal technologies to meet local demand, an ultimate benefit of the collaborative efforts of the Mega Solar partners in strengthening the institutional and technical capacity as well as legal and regulatory frameworks of the focal countries. Under the Power Africa Initiative, USAID commits to transforming the Southern Africa region’s reliance on fossil fuels, enabling a path to decarbonisation.

Source: Power Africa

Ethiopia

Ethiopia Economic Update: Ensuring Ethiopia’s full recovery from COVID-19

While external demand remains weak a year into the COVID-19 pandemic, Ethiopia seems to have been spared from the worst outcomes and is showing some signs of recovery, according to the latest World Bank economic analysis for the country. The eighth ‘Ethiopia Economic Update: Ensuring Resilient Recovery from COVID-19’, finds that despite the 4.1% decline in merchandise exports, excluding gold, during the first half of the current fiscal year, most items (except garments) started to recover during October-December 2020. Services exports started to recover as well, and remittances rebounded strongly during the first half of the fiscal year, the report says, while foreign direct investment inflows continue to decelerate due to uncertainty. Response measures introduced by the government, including tax deferrals and waivers, liquidity provision to commercial banks, measures to ease access to credit and loan refinancing, logistics facilitation and food distribution measures, have contributed to cushioning some of the impacts from the crisis. However, the report notes that a 5% decrease in payment collection by commercial banks during the first half of the fiscal year suggests some firms and households continue to struggle to repay their loans and more needs to be done.

Source: World Bank

Ethiopia

Ethiopia receives two bids for two telecoms operating licences

Ethiopia's Ministry of Finance said on Monday, 26 April it had received two bids, from South Africa's MTN and a consortium including Kenya's Safaricom, for new telecommunications operating licences. The announcement is the latest step in the Horn of Africa nation's efforts to liberalise its economy. Vodafone, Vodacom, the United Kingdom's CDC Group and Japan's Sumitomo Corp are also part of the consortium, the Ministry of Finance said in a post on Twitter announcing the two bids it had received. Brook Taye, a senior advisor at the Ministry of Finance, told Reuters that it should not take more than a week for the winners of the licences to be announced. "We will select the winners after technical and financial evaluation is completed," Balcha Reba, director general of the Ethiopian Communications Authority, said at a news conference on Monday. The government may award one or two licences and has the right to cancel the bidding process, he added.

Source: Reuters

Ghana

Berlin subsidises renewable energy and energy efficiency

Germany is providing a grant of EUR20-million to Ghana. The funding is intended to strengthen technical cooperation between the two countries in the fields of agribusiness, renewable energy and energy efficiency. The grant agreement was signed by Christoph Retzlaff, the German Ambassador to Ghana, and Patrick Nomo, the director general of the Ghanaian Ministry of Finance. The funding will be provided by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the German international development cooperation agency. “Our aim is to create jobs and protect the environment. This grant is part of our development cooperation, which amounts to EUR130-million per year,” says Christoph Retzlaff. Technical support will be provided for the development of renewable energy and energy efficiency projects for industry, public buildings and households.

Source: AFRIK 21

Kenya

Importers face KES13,000 cargo breach penalty

Importers face a surcharge of up to KES13,020 for every cargo container inspected and confirmed to be in breach of tax regulations by the Kenya Revenue Authority (KRA), the Mombasa port manager said. A schedule that the Kenya Ports Authority (KPA) released on Monday, 26 April showed that importers would pay KES8,680 (USD80) for a 20-foot container verified to be non-compliant with tax rules, while 40-foot containers would each attract a fee of KES13,020. “In addition to this, a penalty fee on misdeclaration as per the prevailing tariff shall be imposed,” KPA acting managing director, Rashid Salim, said. Containers that are subjected to verification and found to be compliant and with no penalty imposed on them by the taxman shall however be exempted from the charges that took effect on Sunday, 25 April 2021. “No charges will be applied to containers targeted for sight and release” Mr Salim further said, adding that the order does not affect transit-bound containers.

Source: Business Daily

Kenya

Kenya launches nanotechnology, semiconductor factory

Kenyan President Uhuru Kenyatta on Monday, 26 April presided over the launch of a nanotechnology and semiconductor manufacturing factory in Nyeri County, central Kenya, reiterating the importance of public-private partnerships in advancing the government's manufacturing pillar of the country's development plan. The company produces integrated circuits, sensors, and related nanotechnology products for the world market. The president said such factories form the foundation of making Kenya an industrialised nation. "This is the dream some of us have for this country, our ability to become an industrialised nation, to be able to create good quality and well-paying jobs for our young people," he said in a statement issued in Nairobi after the opening ceremony. The nanotechnology and semiconductor manufacturing facility was established by Semiconductor Technologies Limited on the 177-acre Dedan Kimathi University of Technology's Science and Technology Park on a public-private partnership arrangement. Kenyatta revealed that he will soon launch a ship-building enterprise in Mombasa, adding that the country is also getting back to assembling motor vehicles locally.

Source: Xinhua

Kenya

New dawn as land register goes digital

President Uhuru Kenyatta has launched the National Land Information Management System (NLIMS), being the culmination of years of digitisation of chaotic land records. The digitisation is expected to ease title transfers and safeguard public land from grabbers. The launch of the game-changing digital land platform dubbed Ardhisasa coincided with the opening of a National Geospatial Data Centre, an online depository that will contain all the land records in the country. At the click of a button, all Kenyans, beginning with land owners and buyers in Nairobi, will now conduct land searches, apply for title deeds, sell land and do almost every transaction on land apart from solving disputes. The system went live on Tuesday, 27 April. It will be rolled out across the country in phases, with 20 additional counties set to be on the platform by the end of the year. Those intending to use the system will have to first register on the Ardhisasa website.

Source: Nation

Malawi

Experts call for inclusivity in cannabis production

Players in the cannabis production industry have called for a review of licensing fees and other requirements to enable smallholder farmers to participate in the production of the crop that is touted to complement tobacco. Speaking during a cannabis symposium organised by the Farmers Union of Malawi (FUM) in Lilongwe, the stakeholders argued that the regulatory requirements discriminate smallholder farmers, who comprise the majority of the farming population in the country. FUM chief executive officer, Jacob Nyirongo, said cannabis has emerged as an alternative crop to tobacco; hence, the need for government to ensure the value chain takes an inclusive process. A licence fee to cultivate, sell and process medicinal cannabis is pegged at USD10,000 (about MWK7.4-million) while a licence fee to cultivate and sell industrial hemp is pegged at USD2,000 (about MWK1.4-million). On the other hand, a licence to process industrial hemp is pegged at USD5,000 (about MWK3.7-million). Among other requirements, farmers should present a business plan to the Cannabis Regulatory Authority and have readily identified markets.

Source: The Nation

Malawi

Experts tip Treasury on 2021/2022 budget

Economists have tipped Treasury to develop a 2021/2022 National Budget that will spur economic development by providing private sector incentives and allocating more resources to productive sectors. The advice comes as economists have described the current 2020/2021 MWK2.33-trillion fiscal plan as consumptive, with only MWK615.8-billion, or 26% of the budget, for development. The fiscal plan also has a projected record deficit of MWK810.7-billion, representing 8.8% of the country’s gross domestic product. The deficit, according to Ministry of Finance, is expected to be covered through foreign financing of MWK246.3-billion and the balance of MWK564.4-billion through domestic borrowing. In an interview, economist Milward Tobias, who is also the executive director of the Centre for Research and Consultancy, said allocating more resources towards landmark development projects and awarding private sector incentives through the budget will present multiple benefits in terms of job creation and industrial revolution. Tobias also advised Treasury to provide tax incentives to the private sector.

Source: The Nation

Malawi

Taxes choke ICT sector

The Information and Communications Technology Association of Malawi (ICTAM) has urged government to review some of the taxes in the information and communications technology (ICT) sector to achieve universal access. ICTAM president Bram Fudzulani said levies have a huge impact on the utilisation and adoption of ICT services in Malawi. Figures compiled by the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) show that Internet providers pay annual licence fees, spectrum fees and an annual sales turnover levy of 3.5% to the Malawi Communications Regulatory Authority (MACRA). Apart from these, Internet has a 10% excise tax, 16.5% value added tax and 0.5% Malawi Bureau of Standard (MBS) levy for every ICT equipment imported. The ICT industry is also charged a 5% levy on media storage devices enforced by the Copyright Society of Malawi. Fudzulani said in other economies, governments have used universal service funds to subsidise levies and taxes to promote the use and adoption of technology.

Source: The Nation

Mozambique

Total declares force majeure on Mozambique LNG project

Considering the evolution of the security situation in the north of the Cabo Delgado province in Mozambique, Total confirms the withdrawal of all Mozambique LNG project personnel from the Afungi site. This situation leads Total, as operator of the Mozambique LNG project, to declare force majeure. Total expresses its solidarity with the government and people of Mozambique and wishes that the actions carried out by the government of Mozambique and its regional and international partners will enable the restoration of security and stability in Cabo Delgado province in a sustained manner. Total E&P Mozambique Area 1 Limitada, a wholly owned subsidiary of Total SE, operates Mozambique LNG with a 26.5% participating interest alongside ENH Rovuma Área Um, S.A. (15%), Mitsui E&P Mozambique Area1 Limited (20%), ONGC Videsh Rovuma Limited (10%), Beas Rovuma Energy Mozambique Limited (10%), BPRL Ventures Mozambique B.V. (10%), and PTTEP Mozambique Area 1 Limited (8.5%).

Source: Africa Business Communities

Nigeria

NACCIMA calls for greater private sector involvement in foreign policy

The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has called for greater involvement of the private sector in the articulation and implementation of Nigeria’s foreign policy as calls for review of Nigeria’s foreign policy gains traction. The director general of NACCIMA, Amb Ayoola Olukanni, made the call in Abuja at a conference on the review of Nigeria’s foreign policy. The conference was jointly convened by the House Committees on Foreign Affairs and Diaspora and the Ministry of Foreign Affairs. Olukanni, who made his presentation from the perspective of the private sector, averred that with the increasing role of the private sector in the Nigerian economy, the private sector should be regularly consulted in the articulation and implementation of the nation’s foreign policy. Olukanni while saying that this should be done in cooperation with the Ministry of Foreign Affairs and Nigerian Missions abroad, assured stakeholders at the conference of the readiness of NACCIMA, as the premier national chambers of commerce with members across the country, to continue to work closely with the National Assembly in this regard.

Source: The Nation

Nigeria

Taxes should support economic growth, CITN advises government

The Chartered Institute of Taxation of Nigeria (CITN) has called on the government to avoid the propensity of introducing earmarked taxes for raising revenues, stating that it hurts businesses and economic activities. The president of the CITN, Glady Simplice, who stated this at the 44th induction ceremony of the institute, argued that it was important that tax policy initiatives and reviews were well thought-out by all tiers of government. She said that taxes should be few in number, broad-based and high-revenue yielding. Noting government’s efforts in amending tax laws through the Finance Act, 2019 and the Finance Act, 2020, she urged that the administration of taxes should be simplified for ease of enforcement and compliance.

Source: The Guardian

Sudan

AfDB Group approves proposal to clear USD413-million arrears

The Board of Directors of the African Development Bank (AfDB) Group has approved a proposal for the clearance of about USD413-million in arrears on loans owed by Sudan to the institution, marking a major milestone in the country’s re-engagement with international financial institutions and the global economy. The proposal enables the Bank to proceed with clearing Sudan’s arrears with the AfDB Group, with the support of the United Kingdom (UK) and Sweden. The UK will provide bridge financing to clear Sudan’s arrears to the African Development Fund, while Sweden has committed to providing grant financing of about USD4.2-million to meet Sudan’s burden-share for the operation. Upon full clearance of the arrears to the AfDB Group, sanctions on Sudan will be lifted and a Policy-Based Operation (PBO) will be provided to the country as part of the Bank’s full re-engagement, to complement on-going Bank operations. Raubil Durowoju, the AfDB Group’s country manager for Sudan said that the arrears clearance would allow the Bank to fully re-engage with Sudan, opening up new financing opportunities for projects and programs that add further support to ongoing Bank operations.

Source: AfDB

Uganda

Uganda passes National Climate Change Bill to tackle greenhouse emissions

Ugandan lawmakers have passed the National Climate Change Bill to cut greenhouse gas emissions and tackle the climate crisis, authorities said on Wednesday, 28 April. The framework Bill will provide for climate change response measures, participation in climate mechanisms, and measuring of emissions and financing for climate change actions, among others, Beatrice Atim Anywar, minister of State for Environment, told Xinhua by phone. The Bill, which now awaits presidential assent, was overwhelmingly passed at the country's Parliament. "The Bill is timely in tackling the climate crisis. It provides for institutional arrangements for coordinating and implementing climate change response measures in Uganda," said Anywar. "It provides a framework strategy to guide the government in planning and budgeting for financing and monitoring of climate change programs and activities," she added. The Bill's objective is to give force of law in the East African country to the United Nations Framework Convention on Climate Change, the Kyoto Protocol, and the Paris Agreement.

Source: Xinhua

Zambia

Zambia backs WTO call for waiving patent rights for vaccines, medicines

The Zambian government said that it was in support of views by the World Trade Organization (WTO) that patent rights for vaccines and medicines should be waived. The minister of Health, Jonas Chanda, said this was important as it will allow countries to start manufacturing vaccines and medicines to make them affordable and readily available. In remarks made during the virtual Eighth Edition of the Merck Foundation Africa-Asia Luminary being chaired by Zambia, Chanda said this should also be done so that countries bearing the burden of various infectious diseases start manufacturing the medicines locally. "We, therefore, appeal that those countries holding the patent rights should do something very humanitarian by making sure that African countries can manufacture these vaccines for malaria, COVID-19, essential antibiotics and also chemotherapy drugs," he said.

Source: Xinhua

Zimbabwe

Cabinet approves pharmaceutical strategy

A five-year strategy to capacitate the pharmaceutical industry to increase local production of essential and affordable medicines has been approved by government. Information, Publicity and Broadcasting Services minister Monica Mutsvangwa said Cabinet was aware that the major challenge affecting the pharmaceutical sector was low production due to use of obsolete and antiquated equipment, cumbersome registration procedures and limited innovation. “Implementation of the Pharmaceutical Manufacturing Strategy will not only resolve these bottlenecks, but will also result in increased production of essential medicines for both domestic and export markets,” she said. “The objectives of the strategy include the following: to increase the market share of local pharmaceutical products from the current 12% to 35% by 2025; to increase local production of essential medicines from USD31.5-million to USD150-million by 2025; to increase local production of essential medicines from 30% to 60% by 2025; and to improve exports of pharmaceutical products from 10% to 25% by 2025.”

Source: The Herald

Zimbabwe / Rwanda

ZimTrade explores opportunities in Rwanda

The national trade development and promotion organisation, ZimTrade, has embarked on a market survey in Kigali, Rwanda to identify products and services with potential for export in the East African country. The intervention buttresses the country’s continued efforts to explore opportunities presented by the African Continental Free Trade Area (AfCFTA). The Rwanda market survey follows the resolution to intensify cooperation between Rwanda and Zimbabwe that saw several Memoranda of Understanding being signed in March this year to cement bilateral relations at the inaugural virtual session of the Joint Permanent Commission on Cooperation (JPCC). “The survey will focus on processed foods, pharmaceuticals, clothing, construction, horticulture, leather and leather products, agriculture inputs and implements, and services sectors,” said ZimTrade in a press statement.

Source: The Herald