issue 401 | 23 May 2021
AfricaAfDB Board approves water policy
The Board of Directors of the African Development Bank (AfDB) Group has approved a new policy on water, prioritising water security and the transformation of water assets to foster sustainable, green and inclusive economic growth in regional member countries. “This new policy on water provides a general framework for the African Development Bank Group to expand its role as the continent’s partner promoting the integrated development and management of Africa’s water sector for inclusive and sustainable growth in Africa,” said Atsuko Toda, the AfDB’s acting vice president for Agriculture, Human and Social Development. The policy aims to promote Africa-wide attainment of a minimum platform of water security, with a special focus on areas of fragility, as well as to assist African countries and sub-regional groups to harness and sustain water resources productivity potential to support development. The new Water Policy is anchored around four principles.
AfricaAfDB, EBRD partner to unlock additional sustainable investment opportunities in Africa
The African Development Bank Group (AfDB) and the European Bank for Reconstruction and Development (EBRD) on Monday, 17 May 2021 signed a Memorandum of Understanding (MoU) to promote sustainable private sector development in Africa. The MoU will help catalyse new sources of financing to help bridge the USD2.5-trillion annual financing gap for development in Africa. This gap requires that development finance institutions work in partnership. Under this partnership, the AfDB and the EBRD will capitalise on their respective expertise and experience, with a particular focus on climate change, green and resilient infrastructure and capital markets development. They will also work on improving business environments, bolstering the real economy and mobilising private sector investment. Coronavirus (COVID-19) is threatening progress made towards the United Nations Sustainable Development Goals and is exacerbating debt vulnerability of many African countries. Sustainable private sector development will be key to recovery and prosperity across the continent. This new partnership will enable the two institutions to strengthen the potential for joint projects and activities, unlocking investment opportunities in their common countries of operations.
AfricaAGF receives USD20-million capital to facilitate green SME financing in Africa
The African Guarantee Fund (AGF), received a capital increase of USD20-million from the Danish Investment Fund for Developing Countries (IFU) to facilitate green small and medium enterprises (SMEs) financing in Africa. The capital increase is partially financed by the Danish Government, as part of the Danish “COVID-19 development assistance” package. Including the additional USD20-million, the total Danish investment in AGF amounts to USD72-million. The capital increment into the AGF will increase the Fund’s capacity to unlock financing for SMEs in Africa. SMEs in the continent have experienced a deterioration in their credit-worthiness as a result of the economic impact of COVID-19. The United Nations Economic Commission for Africa 2020 survey reports business closure, lack of operational cash flow and a drop in demand as the top challenges facing African SMEs as a result of the pandemic. AGF’s key objective is to reduce the SME financing gap currently estimated at more than USD300-billion. With IFU’s capital increase, AGF will be able to achieve even more economic and social impact, given the investment will unlock more than USD400-million of financing for SMEs.
Source: Africa Business Communities
Central AfricaEmployers' grouping UNIPACE requests a six-month grace period for the implementation of the new foreign exchange regulation
On 11 May 2021, the Central African Employers' Union (UNIPACE) held an extraordinary meeting to review the problem caused by the new foreign exchange regulation in force in the Central African Economic and Monetary Community (CEMAC) region since December 2018. The notable point discussed was the processing of import domiciliation files. “UNIPACE members note that on 14 April 2021, Equatorial Guinea obtained a 6-month grace period from the Central Bank of Central African States (BEAC) for the implementation of the said regulation. Due to the similarity of the problems encountered and to ensure fairness, the members are asking for the same grace period for all the countries in the sub-region,” the UNIPACE writes in the minute of that meeting. The problems referred to by the UNIPACE are notably the collection of the receipts required by banks for operations that should be settled, receipts from various administrations, the non-justifications of some cancelled transactions even though all the required paperwork are provided, as well as the transfer of some archived paperwork. According to BEAC, the problems encountered by companies in the implementation of the new requirements are caused by banks that request unreasonable documentation that is sometimes unrelated to the purpose of the fund transfers. Meanwhile, banks also claim that they are just applying the new regulation in force in the CEMAC region.
Source: Business in Cameroon
CameroonAnglophone regions’ reconstruction plan: GICAM pledges XAF1.2-billion support but issues conditions
On 18 May 2021, Prime Minister Joseph Dion Ngute met with the Inter-Patronal Grouping of Cameroon (GICAM) to encourage local business owners to invest in the presidential plan for the reconstruction of the Northwest and Southwest regions ravaged by the socio-political crisis that started in late 2016. During the meeting, the prime minister presented a comprehensive overview of the presidential plan and the private sector’s role in it. “The private sector contributes close to 70% of our country’s fiscal earnings. In 2019, those contributions were covering about 40% of the state budget. All those indicators prove the weight of the private sector in national wealth creation. They also demonstrate the significant role private companies can play in the reconstruction of disaster-stricken areas in our country,” he explained. At the end of the meeting, the volume of investment pledges received by the prime minister was XAF1.2-billion, which is really low compared with the XAF89.7-billion needed for the plan (10% of that envelope has already been provided by the government but the private sector and international financial partners are expected to contribute portions of it).
Source: Business in Cameroon
EthiopiaEthiopia's Prime Minister Abiy Ahmed inaugurates third Integrated Agro-Industrial Park
The Bulbula Integrated Agro-Industrial Park, which occupies 271 hectares of land in Western Oromia Regional State, has been inaugurated in the presence of Abiy Ahmed, Prime Minister of Ethiopia, Shimelis Abdissa, President of Oromia Regional State, and Melaku Alebel, Federal Minister of Trade and Industry. The inauguration ceremony was also attended by Vera Songwe, United Nations Economic Commission for Africa executive secretary, Abdul Kamara, country manager of the Africa Development Bank Group, and Ousmane Dione, country representative of the World Bank Group, as well as senior government officials, UN representatives, diplomats, potential investors, construction companies, and members of the local community, including Jarso elders and farmers’ unions. The Bulbula Integrated Agro-Industrial Park, strategically located between Lake Langano and Lake Abiyata in the heart the Great Rift Valley of Ethiopia, includes a bank, a waste treatment plant, a health clinic, a police station, training centres and managerial facilities.The park will enable the processing of agro-value chains that include, among others, fruits and vegetables, dairy, honey and poultry. Once the park is fully operational, it is estimated that it will create jobs for more than 100,000 people drawn from local communities.
Source: United Nations Industrial Development Organization
EthiopiaGlobal Partnership for Ethiopia awarded nationwide telecom licence
The Council of Ministers has given the green light to the Ethiopian Communications Authority to grant a new nationwide telecommunications licence to the Global Partnership for Ethiopia, a consortium of telecommunications operators made up of Vodafone, Vodacom, Safaricom, Sumitomo Corporation and the CDC Group. The Global Partnership for Ethiopia offered the highest licensing fee and a very solid investment case, it was learned. After an in-depth discussion, the Council of Ministers decided to grant the licence to the Global Partnership for Ethiopia by considering its experience in the sector to render quality services and its advantages to the Ethiopian economy, the council stated. The Global Partnership for Ethiopia is expected to investment USD8-billion in the sector and create more than 1.5 million jobs for citizens. Prime Minister Abiy Ahmed wrote on Facebook that the unanimously-made decision is historic and thanked all who have taken part in this and for pulling off a very transparent and effective process.
GhanaGhana selected as promising manufacturing hub for vaccines in Africa
Ghana has been selected as a possible manufacturing hub for COVID-19 vaccines in Africa, said a statement issued on Friday, 21 May by the Jubilee House, Ghana's presidential palace. "At a meeting with the Vice President of the European Commission, Valdis Dombrovskis, the European Commission indicated the selection of Ghana as a possible manufacturing hub for COVID-19 vaccines in Africa," the statement said. The statement followed a recent meeting in Belgium between Ghanaian President Nana Addo Dankwa Akufo-Addo and Dombrovskis. Taskforce teams from the European Union and Ghana will meet in due course to discuss ways of realising the initiative, the statement said.
KenyaIMF team clears Kenya for KES43.9-billion loan
Kenya is set to receive USD410-million (KES44-billion), being the second payment of the overall USD2.34-billion International Monetary Fund (IMF) loan approved in April. Staff at the IMF cleared Kenya for the second phase of the Extended Fund Facility (EFF). This is after the team led by Mary Goodman conducted a virtual mission to Kenya from 29 April to 14 May to discuss progress on reforms. They also looked at the government's policy priorities within the context of the first review of Kenya’s economic program supported by the IMF. “The IMF staff team and the Kenyan authorities have reached a staff-level agreement on the first review of Kenya’s economic program under the EFF and Extended Credit Facility,'' the mission statement read in part. The staff-level agreement is subject to approval by the IMF management and board in the coming weeks. Early last month, the IMF made an initial disbursement of KES34-billion immediately after the board approved the 38-month programme, promising to send the second tranche before the close of the current financial year. The IMF team that met Kenya's top National Treasury and Central Bank of Kenya officials hailed the government's decisive policy actions to contain the COVID-19 outbreak.
Source: The Star
KenyaKenya's debt burden to hit 72.6% of GDP by 2023 – Moodys
Kenya's debt ratio compared to the value of goods and services produced in the country is fast rising, a trend that credit rating firm Moodys says raises concern. It projects the country's debt and interest burdens to peak to 72.6% of gross domestic product (GDP) and around 28% of revenue by 2023, up from 65% in 2020. This, the firm said, could increase financing risks unless Kenya delivers on its set ambitious fiscal consolidation targets as part of the International Monetary Fund program. The projection is an indication that the country's debt will continue to balloon, having crossed the KES7-trillion mark in 2020 up from KES5.81-trillion in 2019. It has been rising by almost KES1-trillion annually in the last six years, having jumped to KES5.04-trillion in 2018 from KES4.41-trillion in June 2017. Kenya plans gradual fiscal consolidation that will limit the deterioration in the sovereign's debt and interest burdens. The report indicates that in the near term, fiscal consolidation will rest primarily on the efficacy of tax measures already taken by the government and the withdrawal of pandemic-related spending. Moody's observes that the removal of several value added tax exemptions and the introduction of a minimum alternative tax will boost corporate income tax collection, further broadening the tax base.
Source: The Star
MalawiMalawi Revenue Authority introduces withholding VAT
The Malawi Revenue Authority (MRA) will start implementing the withholding value added tax (VAT) system from 1 June 2021 when some institutions will be remitting VAT on behalf of suppliers. Previously, suppliers would remit the tax to the MRA after dealing with the institutions. According to MRA Corporate Affairs manager Steven Kapoloma, the arrangement created problems for the tax collecting body as some suppliers would fail to remit taxes as the MRA was unable to track them. Kapoloma said the new system will enable the revenue collection body to properly account for revenues. “We expect to increase VAT inflows because we have created a system in which all the revenue will be accounted for. We expect an increase in revenue since we have closed the loophole,” he said.
Source: The Times
MozambiqueUK pledges support to Mozambique in developing renewable energy
The United Kingdom’s (UK) minister for Investment at the Department for International Trade and the Department for Business, Energy and Industrial Strategy, Lord Gerry Grimstone, has expressed the UK’s readiness to help Mozambique in the development of clean energy, a statement from the British High Commission in Maputo reveals. Lord Grimstone conveyed the UK’s commitment during a meeting in London with Mozambique’s minister of Mineral Resources and Energy, Max Tonela. “Lord Grimstone reaffirmed to Minister Max Tonela the firm commitment of the Government of the United Kingdom to work with the Government of Mozambique in its vision for accelerating the energy transition,” the press release says. The UK, the statement continues, intends to share with its African partner, knowledge and capabilities in renewable energy, green financing, energy storage, wind energy and technical assistance. “Mozambique’s transition to stable energy sources will enable the gradual integration of renewable energy sources in the country, such as wind and solar power, into the national energy grid,” the UK minister for Development said in the statement.
Source: Club of Mozambique
NamibiaNamibia to lose NAD7.5-billion from SACU receipts
For the financial year 2021/22, Namibia’s share of the Southern African Customs Union (SACU) receipts will decline by about 34% to NAD14.8-billion, down from NAD22.3-billion in 2020/21. The SACU decline was underpinned by the collapse in imports into SACU and mainly imports into South Africa, which fell to 2012 levels, and import duty collections were estimated to be as bad as in the worst year after the global financial crisis. According to the Bank of Namibia governor Johannes !Gawaxab in the bank’s annual report for last year, Namibia’s current account recorded a surplus during 2020, contributing to an increase in foreign exchange reserves. The current account recorded a surplus balance of NAD3.4-billion during 2020, translating into a surplus of 1.9% of gross domestic product. “This was partly due to the narrowing of the merchandise trade deficit on the back of lower imports as the COVID-19 pandemic resulted in reduced domestic demand. Although the value of merchandise exports also declined, as earnings from rough diamonds, food and live animals, and manufactured products fell, the decline in imports was bigger, hence the improvement in the trade deficit,” he said.
Source: New Era
NigeriaFG aggressively implementing gas infrastructure blueprint – Sylva
Minister of State for Petroleum Resources, Timipre Sylva has said that the federal government was aggressively implementing the nationwide gas infrastructure blueprint to deepen gas utilisation in Nigeria. Sylva made this known while delivering a keynote address at the 5th Edition of the Sub-Saharan African International Petroleum Exhibition and Conference organised by the Petroleum Technology Association of Nigeria (PETAN). According to the minister, as the world is transitioning to cleaner sources of energy, Nigeria’s focus would be to use its vast natural gas resources to help battle global warming and foster national development. He said: “As you are aware, we recently declared 2021 to 2030 ‘the Decade of Gas’ development in Nigeria after making laudable achievements and successes in 2020 ‘the Year of Gas’. This represents another formidable opportunity point post-COVID-19, for industry players to add significant value for sustained growth and development.” Sylva said developing domestic gas utilisation would not only cushion the effects of deregulation of the downstream sector, but also stimulate economic growth.
Source: The Sun
NigeriaPenOp partners with AVCA on development of private equity in Nigeria
The Pension Fund Operators Association of Nigeria (PenOp) has partnered with the African Private Equity and Venture Capital Association (AVCA) to empower local investors and develop private equity as an asset class in Nigeria. Domestic capital plays a vital role in accelerating economic growth in Nigeria and across the continent in general. Over the past five to 10 years, the value of Nigerian pension funds has grown markedly to peak at over USD25-billion in December 2020, of which 0.03% has been allocated to private equity. The partnership between PenOp and AVCA will focus on training and networking, including an introduction to development finance institutions (DFIs), fund managers and other stakeholders within the global private equity ecosystem, to ensure the growth of private equity in Nigeria, especially for pension operators. As part of this collaboration, PenOp will also support AVCA’s research and advocacy by providing insight into pension fund investments in private equity and their impact.
Source: Africa Business Communities
SeychellesSeychelles becomes first country in the world to avail report on transparency in fisheries
Seychelles, a member state of the Southern African Development Community (SADC), has attained the status of being the first country in the world to submit its report to the Fisheries Transparency Initiative (FiTI). Seychelles has been collaborating with the FiTI since 2015, leading regional efforts to promote the sustainable management of fisheries. Transparency has become a cornerstone of Seychelles’ endeavours to transit towards a sustainable ocean economy; and it is a core principle of the country’s ‘Blue Economy: Strategic Policy Framework and Roadmap (2018-2030)’. The country is a major player in the global tuna industry, with Port Victoria one of the busiest industrial fishing ports in the Western Indian Ocean. FiTI is a global multi-stakeholder partnership that defines for the first time the information that national authorities must publish on the fisheries sector.
TanzaniaTanzania waives import duty for leather processing machines
The Government of Tanzania has announced that it has waived import duty for leather processing machines to attract more investments in the leather industry. Kitila Mkumbo, the minister for Industry and Trade, told parliament in the capital Dodoma that the government has also waived import duty for materials used in processing leather. "The waiver of the import duty is among efforts by the government aimed at encouraging the local processing of leather products in the country," Mkumbo told the House when he tabled his ministry's budget proposals for the 2021/2022 financial year. He said his ministry has started implementing a project aimed at training 419 livestock keepers in three districts of Arusha region on how to add value on hides and skins. Mkumbo said the project is being undertaken by the state-run Tanzania Industrial Research and Development Organization and financed by the Tanzania Commission for Science and Technology.
Tanzania / UgandaTanzania signs host agreement for East African oil pipeline project
Tanzania has signed a Host Government Agreement (HGA) with a Total-led joint venture to launch the East African Crude Oil Pipeline (EACOP) Project. The EACOP project forms part of the wider USD3.5-billion Lake Albert resources development project in Uganda and Tanzania. The signing of the HGA follows the final agreements made in April 2021 by Total and its partners. These include the shareholders agreement of EACOP and the tariff and transportation agreement between EACOP and the Lake Albert oil shippers. The latest HGA establishes the legal and commercial framework for the project’s financing, construction and operation. The EACOP project aims to connect the oil fields around Lake Albert in Uganda to supply up to 216,000 barrels of crude oil a day to Tanzania’s export terminal in Tanga. Total, the government-owned Uganda National Oil Company (UNOC), the Tanzania Petroleum Development Corporation (TPDC) and China’s CNOOC will be shareholders in the EACOP project. The first oil export from the project is expected to take place in early 2025.
Source: Hydrocarbons Technology
UgandaAfDB signs USD348-million in financing agreements for the rehabilitation and upgrade of two major roads
The African Development Bank (AfDB) and the government of Uganda have signed two financing agreements totalling around USD348-million for the improvement of road transport in Uganda. The first is a USD2760-million financing agreement for the Kampala City Roads Rehabilitation Project, and the second, valued at USD71.8-million, is for upgrading the Kabale-Lake Bunyonyi / Kisoro-Mgahinga road. The agreements were signed on 11 May 2021 by Uganda's minister of Finance, Planning and Economic Development, Matia Kasaija, and AfDB Uganda country manager Augustine Kpehe Ngafuan. Minister Kasaija described the projects as "transformative" and in line with his government's national development plan as well as the AfDB’s High 5 strategic priorities. The Kampala City Roads Rehabilitation Project will ease congestion in the capital by upgrading 22 road junctions, and enhancing the drainage capacity of the city to mitigate flooding on the streets. The project will see the improvement of 67 kilometres of roads, 134 kilometres of non-motorised traffic facilities, and the provision of street lighting and scheduled eco-bus services, including bus depots and dedicated lanes.
ZimbabweZimbabwe’s mega chrome project takes shape
The government’s plans to grow mining to a USD12-billion industry by 2023 are taking shape with the rolling out of a new multimillion-dollar steel and ferrochrome project by Afrochine. Construction of the country’s single biggest production operation is underway in Chivhu, 150 kilometres south of the capital, Harare. The ferrochrome project is scheduled to commence in the second half of this year and it is expected to be the biggest operation of its kind in the country and probably in the Southern African Development Community region. The composite projects will entail a carbon steel plant, an iron ore mine and processing plant as well as a ferrochrome production plant with an annual production capacity of 500,000 tonnes. Speaking to journalists during the site visit, Mines and Mining Development minister Winston Chitando said the implementation of the project will entail multi-stakeholder engagements as the project cuts across various government ministries. The implementation of the project is also expected to transform Chivhu into a vibrant town with enhanced infrastructure such as housing. Afrochine is now the country’s biggest chrome smelter and is a subsidiary of Tsingshan which produces 25% of global steel.
Source: African Mining Market