issue 400 | 16 May 2021
AfricaUK pledges GBP22-million to support cyber capacity building in vulnerable countries
The United Kingdom’s (UK) Foreign Secretary, Dominic Raab, has announced GBP22-million of new investment to build cyber security resilience in developing countries and globally, particularly in Africa and the Indo-Pacific. According to a statement sent by the British Embassy in Addis Ababa, the UK, jointly with INTERPOL, is setting up a new cyber operations hub in Africa, working across Ethiopia, Ghana, Kenya, Nigeria and Rwanda to support joint operations against cybercrime. Speaking at the National Cyber Security Centre’s CYBERUK conference, he outlined the UK’s vision of being a leading responsible cyber power, working with partners to shape cyberspace according to the UK’s values. By creating a central coordination desk within INTERPOL that law enforcement across Africa can use, the UK hopes to improve collaboration across borders to advance intelligence sharing, and ultimately stop the perpetrators of cybercrime in Africa.
East AfricaEAC secretary general promises to increase intra-regional trade from below 20% to 50% in the next five years
The East African Community (EAC) secretary general, Dr Peter Mathuki, has promised the business community in the region that he will do everything within his power to address the vice of Non-Tariff Barriers to trade and trade wars, and work towards raising the volume of intra-regional trade from the current level of below 20% to more than 50% over the next five years. Addressing the private sector community during a CEO’s Breakfast Roundtable meeting organised by the East African Business Council in Kampala, Uganda, Dr Mathuki highlighted different areas that will help increase intra-regional trade including, reviewing the Common External Tariff (CET) on imports into the region; accelerating the harmonisation of domestic taxes; fast-tracking the domestication of the EAC Common Market Protocol commitments; and promoting investment and value addition across the region. In addition, Dr Mathuki pledged to involve the private sector in infrastructure development through public-private partnerships. Further, he promised to work with partner states to establish ways of reducing the high energy costs in order to improve the EAC’s attractiveness as an investment destination.
East AfricaEAC to provide hotline for cross-border traders to report challenges
The East African Community (EAC) will have a hotline through which traders crossing partner states’ borders can register their challenges and get prompt feedback, EAC secretary general Dr Peter Mathuki has said. “There is need to resolve persistent Non-Tariff Barriers (NTBs) and reduce the time spent in the movement of goods and persons, hence increasing intra-EAC trade, which currently stands at 15%,” said Dr Mathuki when he visited the Kenya-Tanzania border at Namanga. “This emergency number will be set up for feedback and follow-up on trade issues, and we hope it will provide an avenue for traders to register their challenges.” The EAC secretary general urged government agencies at the Namanga border to hold regular consultative meetings with traders to identify and address factors that affect intra-regional trade.
Source: The EastAfrican
Southern AfricaSADC begins to implement programme to support productive sectors in the region
The Southern African Development Community (SADC) Support to Industrialisation and Productive Sectors (SIPS) programme is now operational. The SIPS programme is targeting to up-scale grant awards for the development of the leather, antiretroviral drugs, medical supplies and associated value chains. Through the SIPS programme, SADC member states have begun implementing national leather development strategies under the leather value chain of the programme. The SIPS programme aims to assist SADC’s industrialisation and regional integration agenda, and is supported by funding from the European Union and the Federal Ministry for Economic Cooperation and Development (BMZ). The programme, is estimated to cost EUR18-million over the period 2019-2023, and will address key concerns of the private sector that hinder investments and industrialisation in SADC by facilitating the expansion of regional value chains and promoting dialogue between the private and public sectors. The SIPS programme will address policy, regulatory and business environment constraints affecting the development of the targeted value chains.
Botswana / ZambiaUSD259-million Kazungula Bridge and One Stop Border Post commissioned
The USD259-million Kazungula Bridge over the Zambezi River and One Stop Border Post (OSBP) facilities connecting Botswana and Zambia were commissioned on 10 May 2021, paving the way for enhanced Southern African Development Community (SADC) integration and development. The bridge and state-of-the-art facilities were officially commissioned by the President of Botswana, Mokgweetsi Masisi, and the President of Zambia, Edgar Lungu, at a colourful ceremony at the quadriphonic point across the Zambezi River where Botswana and Zambia meet Namibia and Zimbabwe. The Kazungula Bridge is expected to link the port of Durban in South Africa to the Democratic Republic of the Congo and Tanzania through the North-South Corridor to facilitate the seamless and efficient movement of goods and persons, and in doing so reduce the cost of doing business, contribute to industrialisation, and enhance trade and SADC regional integration. President Lungu reiterated that the development would give impetus to the implementation of the SADC-East African Community (EAC)-Common Market for Eastern and Southern Africa (COMESA) Tripartite Free Trade Area and the African Continental Free Trade Area.
Ethiopia / KenyaEthiopia makes U-turn on blocking M-Pesa bid
Ethiopia on Wednesday, 12 May made a U-turn and allowed foreign telecommunications companies to launch mobile phone-based financial services, setting the stage for Safaricom to introduce its popular M-Pesa in the market of 110 million people. Ethiopian Prime Minister Abiy Ahmed said the mobile financial services in the country will be opened to competition from next May, with foreign firms free to battle with state-run Ethio Telecom. This marks a departure from last year’s directive that only allowed locally-owned non-financial institutions to offer mobile money services, dimming the hopes of foreign firms like Safaricom that are seeking a presence in Kenya’s neighbouring country. Prime Minister Abiy Ahmed said at a launch ceremony for telebirr that the government had foregone USD500-million (about KES53-billion) by denying bidders for two licences, including Safaricom, the right to roll out mobile financial services. The prime minister said, however, that mobile financial services would be opened up to competition after a year of telebirr operations.
Source: Business Daily
GhanaGEPA launches technology-driven export trade information centre
The Ghana Export Promotion Authority (GEPA) has launched a technology-driven export trade information centre to serve as a one-stop shop for up-to-date export related information for the exporter community. Dubbed the GEPA Impact Hub, the centre would provide value-added services to exporters in a bid to meet the ultimate goal of the National Export Development Strategy, which is to attain USD25.3-billion in non-traditional export earnings by 2029. The GEPA Impact hub is an information technology-enabled hub with computers, online resources and a library at the Africa Trade House where clients can access export-related information. In addition to the services that the GEPA Impact Hub would offer, the export sector regulatory agencies, the Ghana Standards Authority, the Food and Drugs Authority and the Plant Protection and Regulatory Services Directorate (PPRSD) of the Ministry of Food and Agriculture would provide part of their services from the hub to curtail the time and effort spent by clients moving from one office to another in search of relevant information.
KenyaKenya Airways, Airlink ink interim agreements to connect Eastern and Southern African nations
Kenya Airways and Airlink have inked an interline agreement that will extend the airlines’ reach in the Southern Africa region via Johannesburg and Cape Town. The new agreement will offer customers seamless travel of over 40 cities across Africa. Under this latest agreement, Kenya Airways customers flying to South Africa will be able to connect with Airlink-operated flights to Windhoek, Durban, Gaborone, Maseru, Pemba, Maputo and Port Elizabeth, among others. It will also enable Airlink passengers to book a ticket to Nairobi and enjoy connections to the rest of Kenya Airways destinations within Africa, including Entebbe, Kigali, Dar es Salaam, Bujumbura, Kinshasa and more. The agreement presents new growth opportunities for both airlines and will strengthen aviation ties between Kenya and Southern Africa. “As global economies continue to reel from the effects of the pandemic, such strategic partnerships are critical. These new routes will positively impact the flow of trade and tourism across the region by offering our customers convenient travel around the continent,” said Julius Thairu, Kenya Airways’ acting chief commercial officer.
Source: Namibia Economist
KenyaPrivate sector credit growth slumps to 13-month low
Credit to the private sector dropped to a 13-month low in March, reflecting the persistent uncertainty in the business environment as the Coronavirus (COVID-19) pandemic continues to take its toll on the economy. A depository-corporation survey by the Central Bank of Kenya (CBK) shows that private sector credit grew at an annualised rate of 7.65% in March – the slowest since February last year’s 7.60%. Analysts project that the growth in private sector credit could remain subdued in the quarter from April on the risk of non-performing loans (NPLs) and preference to lend to the state through government securities. “There may be a risk of higher NPLs impacting robust credit mediation. Credit to the private sector may also decline with crowding out by government debt with expectations of increasing domestic borrowing. Banks may prefer lending to private sector and more cautious on risky lending,” Genghis Capital head of research, Churchill Ogutu said. The CBK data shows that the private sector loan book between February and March stood at KES2.947-trillion, dropping by KES532-million, after a KES27.74-billion growth from January.
Source: Business Daily
MalawiGreenbelt Authority outlines PPP plans
State-owned Greenbelt Authority (GBA) has unveiled plans to partner with willing private local and international investors in the implementation of massive irrigation and agro-processing projects, a move experts say is a game-changer. In a statement, GBA, trading under the GBI Holdings Limited (GBIHL), said it is exploring joint venture projects that could spur economic development. The plan is in line with Malawi 2063 (MW2063), the country’s long-term development blueprint, which puts agricultural production and productivity among key pillars. To fulfil the plans, GBA said it is seeking local and international investors with over MWK500 000 capital to apply for the public-private partnership (PPP) joint venture irrigation projects. The projects include the rice irrigation scheme, cannabis (industrial and medicinal) irrigation scheme, bamboo plantation irrigation scheme, legumes irrigation scheme, livestock project and wheat irrigation scheme. Agriculture experts have described the move as long overdue, saying it will revolutionise the agriculture sector and transform the economy.
Source: The Nation
NamibiaStrategy to increase tariff-free exports to the United States
Launched on 10 May 2021, the African Growth and Opportunity Act (AGOA) Utilization Strategy seeks to increase Namibia’s exports under the AGOA programme, which allows Namibia to export over 6,400 products tariff-free to the United States (US). The AGOA strategy is a collaboration between the Ministry of Industrialisation and Trade and other stakeholders, including the Namibian private sector, with support from the U.S. Agency for International Development. The strategy provides a prioritised roadmap on how Namibia can increase its exports to the US under AGOA duty-free market access and recommends steps to address the policy, supply and market challenges faced by potential Namibian exporters. A body composed of private and public sector representatives will drive the implementation of the AGOA strategy.The strategy identifies priority sectors and categorises them into short-term, medium-term and long-term export potential. US Ambassador Lisa Johnson affirmed the US’ commitment to helping Namibia achieve the economic growth goals espoused in Namibia’s 5th National Development Plan.
Source: Namibia Economist
NigeriaNigeria’s oil output drops by 30% in four years – investigation
In an apparent reflection of the measures taken to achieve stability in the global market by the Organization of the Petroleum Exporting Countries (OPEC), pipeline vandalism and oil theft in the Niger-Delta, Nigeria’s oil production has fallen by 30% in the last four years to 1.423 million barrels per day (mb/d) in 2020 from 2.041 mb/d in 2017. The figure excludes 2020 condensate production, according to the data obtained by Vanguard Energy from OPEC’s monthly market reports between 2017 and 2020. According to the African Development Bank (AfDB), the limited output and relatively low crude prices have impacted negatively on the nation’s gross domestic product. In its latest Nigeria Economic Outlook, the AfDB stated: “Nigeria’s economy entered a recession in 2020, reversing three years of recovery, due to a fall in crude oil prices on account of falling global demand and containment measures to fight the spread of COVID-19.” Commenting on the outlook and risks, it stated: “The economy is projected to grow by 1.5% in 2021 and 2.9% in 2022, based on an expected recovery in crude oil prices and production.”
NigeriaWorld investors gather in London to tap into Nigeria's ICT potentials
The Nigerian Diaspora Direct Investment Summit (NDDIS) in London has announced its next ‘face-to-face’ summit under the theme: ‘“Computer Village” and Information Communication Technology Summit’. At an online meeting of the organisation, the Trade and Investment minister of the Nigerian High Commission, Mr Oludare Folowosele, said: “We believe this summit will be very beneficial to the ICT [information and communications technology] sector in Nigeria and will be a boost to the Nigerian economy.” The founder of NDDIS, Otunba Bimbo Roberts Folayan announced that NDDIS had entered into collaboration with the Computer Village Market Management Board and is in talks with several stakeholders, including the Nigerian High Commission, the Office of the Prime Minister’s Trade envoy to Nigeria, the Department for International Trade and the Nigerians in Diaspora Commission to organise a world class investment summit in London to attract international investors, computer accessories manufacturers, suppliers, exporters and information technology experts to invest in the Computer Village in Nigeria.
Source: Africa Business Communities
RwandaA glance at the new corporate forms and compliance obligations under the new Companies Act
On 8 February 2021, a new Companies Act (law n° 007/2021 of 05/02/2021 governing companies) was gazetted, repealing and replacing its predecessor (law n°17/2018 of 13/04/2018). This has resulted in considerable changes and improvements, including those related to new corporate forms, compliance obligations and shareholder decision making arrangements. The changes brought about by the new Companies Act are generally commendable as they are in line with how Rwanda is positioning itself as a hub for various companies including charitable and philanthropic corporations. Nevertheless, further actions such as clarification of the concept of beneficial ownership for the purpose of application of the new law, and tax treatment of community benefit companies (CBCs) and protected cell companies need to be taken.
SudanIMF managing director welcomes progress toward securing a financing plan for debt relief for Sudan
Ms Kristalina Georgieva, managing director of the International Monetary Fund (IMF), issued the following statement following approval by the IMF Executive Board on a financing package for Sudan: “Today [10 May 2021], the IMF Executive Board approved a financing plan that will help mobilize the resources needed for the IMF to cover its share of debt relief to Sudan. This financing plan relies on a broad effort of IMF member countries, including cash grants and contributions derived from IMF internal resources. This marks a critical step in helping Sudan advance the process of normalizing relations with the international community and make progress towards achieving debt relief under the Heavily-Indebted Poor Country (HIPC) Initiative… The HIPC Decision Point, at which time debt relief will begin to be delivered, would be reached as soon as our members have provided the necessary financial commitments, assuming the authorities continue their strong reform efforts and meet the other requirements stipulated under the HIPC process. This would help unlock significant new financial resources to address Sudan’s large development needs and poverty reduction.”
UgandaDoes a foreign lender to a Ugandan business require a licence from the Bank of Uganda?
The Ugandan Court of Appeal, (in Diamond Trust Bank (Kenya)/Diamond Trust Bank (Uganda) vs Ham Enterprises Civil Appeal No, 262 of 2020), has set aside a decision that declared loans made by Diamond Trust Bank (Kenya) to Ugandan businesses to be illegal on the grounds that the lender required and had not obtained a licence from the Bank of Uganda under the Financial Institutions Act 2004. The Appeal Court set aside the judgment and has sent the matter back to the High Court for retrial before another judge. In its decision, the Court of Appeal disagreed with the trial judge’s conduct of proceedings in striking out the Bank’s defence for illegality followed by an immediate entry of judgment against the Kenyan Bank. The Appeal Court determined that it was wrong for the trial judge to make such a finding without hearing evidence. Ham Enterprises has since issued statements on its dissatisfaction with the result and expressing their intention to appeal to the Supreme Court. The banking industry (borrowers and lenders alike) were disappointed that the Appeal Court did not answer the big question at the heart of the dispute: does a foreign lender to a Ugandan business require a licence from Bank of Uganda? Only one judge of the panel of three mentioned the issue.
UgandaMuseveni promises 10% economic growth when oil production starts
President Yoweri Museveni on Wednesday, 12 May expressed optimism that Uganda’s economy will grow in the range of 9-10% when the country starts commercial production. Speaking at Kololo ceremonial grounds after swearing in for the sixth elective term, President Museveni said: “With the activation of the oil sector, which has been dormant ever since 2006 when we discovered the petroleum and if you add the expected average growth rate of 6% per annum post COVID-19, the combination will expand the economy to an estimated USD67-billion by 2026 using the exchange rate method and USD193-billion using the PPP method; meaning that the economy will be growing at the rate of between 9-10% in the initial years of oil production.” President Museveni also used his inauguration ceremony to call for African federation and regional integration. “I would, therefore, like to use this occasion to remind the African fraternity, that economic and, where possible, political integration in Africa, is a sine qua non of the success of Africa, if we are to address the issue of the prosperity of our people and strategic security of Africa, apart from other considerations.”
Source: Daily Monitor
Uganda / BurundiUganda, Burundi agree to deepen cooperation
President Yoweri Museveni and his Burundian counterpart, Mr Évariste Ndayishimiye, have agreed to strengthen cooperation on agriculture, energy, trade, health, finance, tourism and investment. State House said the two leaders committed to work together on transport and communication, defence and security, education, culture and sports. “In this regard, they directed their respective ministers to ensure that the implementation of existing agreements, memoranda of understanding and other frameworks of cooperation is fast-tracked,” a joint communique signed by Uganda’s Foreign Minister Sam Kuteesa and his Burundian counterpart Ambassador Albert Shingiro, read in part. President Museveni and his guest, who attended the former’s inauguration for a sixth elective term on Wednesday, 12 May promised to boost the relationship between the two countries by canvassing respective private sectors to lead the identification of opportunities for trade and investment. They committed to upgrading inter-linking roads to improve connectivity and reduce transportation costs.
Source: Daily Monitor
ZimbabweGuidelines for medical cannabis
Government has announced a set of policies and operational mechanisms for investment in the production and processing of medicinal cannabis. The operational framework will be administered through the Zimbabwe Investment and Development Agency’s (ZIDA) One Stop Investment Services Centre (OSICS). According to ZIDA chief investment and corporate affairs officer Tinotenda Kambasha, investors can have 100% ownership of their investments and locate their facilities anywhere in the country without prescription. “This is a significant departure from previous policy which required investors to co-own investments in a joint venture with government or government entities and locate their investments at state prescribed locations,” he said. “To further assure investor safety and protection, the government has finalised and agreed a legal instrument called the Investment Stability Agreement (ISA), which gives investors added security.” The ISA outlines the guarantees offered by government for the protection of property rights, ring-fencing investments against expropriation and protecting investors against changes in laws. In addition, it provides a framework for monetary and fiscal incentives that are unique to the medicinal cannabis sector.
Source: The Herald
ZimbabweIPEC lobbies for removal of cap on REITs
Zimbabwe’s insurance and pensions sector regulator – the Insurance and Pensions Commission (IPEC) – says it has engaged authorities to revise the 50% participation limit for pension funds in real estate investment trusts (REITs). Local pension funds have long piled into ‘real assets’ such as property as a way to hedge their funds against inflation in the long-term. But property investments are typically illiquid assets, that is, they cannot be easily sold or exchanged for cash without a substantial loss in value. To remedy this anomaly, the regulator and financial players have pushed for the introduction of new investment assets on the market, but the industry wants greater involvement. “Section 17 of the Finance Act put a limit of 50% participation in REITs by pension funds,” said IPEC commissioner Dr Grace Muradzikwa. “We have already flagged this to Treasury as a limiting factor, hence we are in the process of engaging government to review the limit. Therefore, it is our hope that the Mid-Term Fiscal Review will take into consideration this request.”
Source: The Herald