issue 402 | 30 May 2021
AfricaAfrican countries show significant progress on tax transparency – 2021 Tax Transparency report
African countries strengthened their ability to recover funds held offshore, directly boosting national tax revenues, according to the latest ‘Tax Transparency in Africa’ report released on Wednesday, 26 May. The trend signals continuing progress in the fight against illicit fund flows out of Africa, worth an estimated USD50-billion each year. The Global Forum for Transparency and Exchange of Information for Tax Purposes, the African Union and the African Tax Administration Forum produced the report, in close partnership with the African Development Bank (AfDB). The report provides comparable tax transparency statistics to aid decision makers to address illicit fund flows. Thirty-four countries completed the survey for the 2021 edition, including six non-members of the Global Forum: Angola, Democratic Republic of the Congo, Sierra Leone, The Gambia, Zambia and Zimbabwe. It noted progress on two core tax transparency pillars: political awareness and commitment, and capacity to advance tax transparency and the exchange of information.
AfricaAfrican ministers of finance and central bank governors support integrated value chains for sustainable economies
African ministers of Finance, Economic Planning and Integration and central bank governors have adopted rich recommendations that would enable the continent to realise the vision to have regional value chains that boost intra-African trade and enhance Africa’s share of global trade. The recommendations reinforce the need for an improved business and investment climate especially for micro, small and medium-sized enterprises (SMEs) to promote innovation through start-ups, investing in innovative business models and production revolution that diversify Africa’s exports through sustainable value chains. At the recently concluded Ministerial and Governors meeting of the Specialized Technical Committee (STC) on Finance, Monetary Affairs, Economic Planning and Integration, convened to focus on “developing integrated and complementary value chains for sustainable recovery and reinforcing operationalization of the AfCFTA”, the ministers and governors also deliberated on effective ways to strengthen domestic resource mobilisation through continental capital markets, functional African financial institutions, and conclusively addressing illicit financial flows.
Source: African Union
AfricaSEFA extends grant to speed countries’ energy transition ahead of COP26
The Sustainable Energy Fund for Africa (SEFA) has extended a USD1-million grant to help accelerate African countries’ transition to flexible green grids and other clean power solutions ahead of the 2021 United Nations Climate Change Conference, COP26, scheduled to be held later this year. The technical assistance grant, sourced through a SEFA Rapid Response Facility, will enable up to five African countries participating in a COP26 Energy Transition Council process to assess potential gaps in policy, regulatory and institutional frameworks; develop approaches to increase the contribution of grid-connected renewable energy generation; as well as identify financing mechanisms. The United Kingdom established the COP26 Energy Transition Council in September 2020 to drive the shift to clean energy ahead of COP26. Members include multilateral development banks, international financial institutions, technical cooperation organisations and donor governments. A Special Fund managed by the African Development Bank (AfDB), SEFA provides catalytic finance for renewable energy. The overarching goal is to contribute to universal access to affordable, reliable, sustainable, and modern energy services for all in Africa, in line with the Bank’s New Deal on Energy for Africa and United Nations Sustainable Development Goal 7.
Southern AfricaSADC member states agree to work together to unlock funding for regional energy projects
Southern African Development Community (SADC) member states have agreed to work together to address policy challenges affecting funding for regional energy infrastructure projects and to find innovative ways to unlock projects from a funding and compliance point. This came out of a virtual workshop held by the SADC Secretariat, in collaboration with the Southern African Power Pool (SAPP) through the Accelerating Regional Energy Projects (SAPP AREP) programme from 27 to 28 April 2021 to validate the findings of a report on policy-related critical gaps, risks and challenges affecting development of regional energy infrastructure projects. The SADC SAPP AREP aims to establish a sustainable framework of designing, preparing and financing regional generation and transmission infrastructure projects in SADC member states that would increase the number of projects undergoing construction phase with clear targeted commissioning dates. Directors of Energy and experts in energy infrastructure project development from SADC member states discussed risk management to financial closure of 19 identified power projects, and critical success factors required over the next 10 months to accelerate power projects to bankability stage.
West AfricaIndia’s slowing crude purchases put West Africa oil exports at risk
West African crude sellers have been dealt a big blow by their key buyer, India, with the country slowing down its purchases as the Coronavirus (COVID-19) pandemic continues to ravage the world’s third-largest oil consumer. India’s state-owned refiners typically issue tenders for a large proportion of their crude requirements, but with the latest wave of the pandemic in the country still raging, no new tenders have been issued since late April, according to trading sources. Refiners such as the Indian Oil Corporation (IOC), Hindustan Petroleum Corp. Limited (HPLC) and Bharat Petroleum Corp. Limited usually buy significant amounts of Middle Eastern and West African crudes through regular tenders. The IOC last bought crude loading mid-to-late June in a tender that closed on 15 April and the refiner has since cut run rates across its refineries to an average of 88%, cutting rates across its nine refineries to 96%-98% in the first half of April. S&P Global Platts Analytics expects India’s oil demand woes to worsen in May but forecasts a slight recovery in the second half of the year, with the country’s oil demand in April already down 300,000 barrels per day (b/d) and another likely 365,000 b/d decline expected in May.
Source: This Day
CameroonCameroon amends the 2021 financial law to allow room for additional non-concessional loans
On 26 May 2021, President Paul Biya signed an ordinance that amends and supplements some of the provisions of the 2021 Finance Law voted by the national assembly in December 2020. The ordinance amends Article 49 of the Finance Law by stating that “the government is authorized to negotiate and possibly conclude… concessional and non-concessional loans of total amounts of CFAF350 billion and CFAF750 billion respectively” for “safeguarding the financial interests of the State as well as its economic and political sovereignty”. Before that amendment, the non-concessional loans authorised for the 2021 financial year were XAF300-billion. This means that the country can now raise an additional XAF450-billion in concessional loans under the new terms. According to the presidential ordinance, the additional margin is for the issuance of public securities on the international market to raise XAF450-billion for the “partial or total redemption of the current Eurobond [the Eurobond issued in 2015].” The ordinance signed by the president is necessary to legalise the Eurobond refinancing operation as the operation mainly consists of incurring new debt to refund an older one.
Source: Business in Cameroon
GhanaCOCOBOD urges businesses to invest in processing sector
The Ghana Cocoa Board (COCOBOD) has urged businesses to invest in the country’s cocoa processing sector to boost earnings in the cocoa value chain. According to the CEO of COCOBOD, Mr Joseph Boahen Aidoo, there were many investment opportunities in Ghana’s cocoa value chain that remained untapped. The CEO, who was speaking at the maiden cocoa value chain investment meeting in Accra on 27 May, expressed concern over the fact that Ghana earned less than 6% of its entire cocoa value chain of about USD110-billion. The event, organised by the Ghana Investment Promotion Centre (GIPC), in collaboration with COCOBOD and other partners, was held under the theme: ‘Ghana’s brown gold: Sustaining investments and leveraging AfCFTA’. Participants included stakeholders in the cocoa value chain, such as manufacturers, investors and consumers, who deliberated on investment opportunities in the country’s cocoa value chain. The CEO of the GIPC, Mr Yofi Grant, said Ghana had not harnessed the full potential of the cocoa industry due to over-concentration on the production and export of cocoa beans, with little focus on value addition. He said the establishment of the African Continental Free Trade Area (AfCFTA) offered investors and businesses an opportunity to broaden their horizon to include the cocoa sector.
Source: Graphic Online
GuineaWorld Bank provides support to improve the management of mining and natural resources
The World Bank Board of Directors has approved USD65-million from the International Development Association for the Natural Resources, Mining and Environmental Management Project in Guinea. This project will support Guinea to protect and invest in its natural capital. Activities will focus on environmental management and technical assistance for a sustainable development of the mining sector. Guinea has an abundance of natural resources: it is the source of several major rivers, and has exceptional biodiversity, the third of the world’s bauxite reserves, and significant gold, diamond, and oil resources. Despite its rich endowment, Guinea’s per capita gross domestic product (GDP) of USD962 is much lower than the region’s average of USD1,600. Mining is the main driver of economic growth and contributes 35% to the GDP. The project will promote collaboration between the Ministry of Environment, Water and Forests and the Ministry of Mining and Geology in order to manage trade-offs between boosting economic development and valuing natural resources.
Source: World Bank
KenyaRevised warehousing rule good for supply chain – KAM
The lifting of restrictions on the use of customs bonded warehouses in the country will help stabilise the supply of imported goods, local manufactures have affirmed. In a gazette notice dated 15 April 2021, the Kenya Revenue Authority (KRA) revised an earlier order issued in May 2020, widening the scope of goods that were not eligible for customs bonded warehouses. A customs bonded warehouse is a warehouse licensed by the commissioner of customs for the storage of goods imported into the region, pending the payment of duties. The 2020 decision had an impact on about 17 types of products, which had been locked out of the warehousing system with importers forced to pay duty upon arrival of goods into the country. The Kenya Association of Manufacturers (KAM) chief executive, Phyllis Wakiaga, said lifting the restrictions is critical in stabilising the supply of imported finished goods and raw material, a time when the COVID-19 pandemic has disrupted the global supply chain. It will also cushion traders from the high cost of doing business (payment of duty on arrival), and boost cash flows especially during the pandemic period when businesses are struggling with low sales.
Source: The Star
KenyaUhuru pushes for fast passage of higher NHIF payments Bill
President Uhuru Kenyatta is pushing for speedy enactment of a Bill that will make it mandatory for all adults to be members of the National Hospital Insurance Fund (NHIF) and for employers to pay monthly contributions for their staff. Mr Kenyatta asked Parliament to fast-track the passage of the NHIF (Amendment) Bill 2021, which will see every Kenyan above 18 years contribute in a bid to provide healthcare for all. The government-backed Bill further seeks to compel employers to match workers’ monthly contributions to the Fund. The Bill has since faced opposition from a section of private insurers and trade unions led by the Central Organisation of Trade Unions. The NHIF (Amendment) Bill 2021 is currently before Parliament for debate after it was tabled in May by Majority Leader, Amos Kimunya. The planned mandatory NHIF membership will be an upgrade of the current scheme where only workers in the formal sector are compelled to join. The review of the law targets more than 16 million adult Kenyans who are not covered by the NHIF.
Source: Business Daily
MauritiusMauritius prepares country progress report on Africa’s Agenda 2063
Senior government officials from Mauritius convened on 20 May 2021 to prepare a comprehensive and country-driven assessment of Mauritius’ progress in realising Agenda 2063, the continent’s blueprint for inclusive growth and sustainable development. The two-day workshop, organised by the African Union Commission (AUC) and African Union Development Agency (AUDA-NEPAD), is part of a series of country and regional trainings to develop the Second Continental Progress Report on Agenda 2063 to be presented at the 36th African Union Heads of State and Government Summit in February 2022. The report is an innovative mechanism to track implementation of the 50-year roadmap, highlighting areas where progress has been made and areas where challenges remain. “It serves as important reference points for collective review, reflection, peer learning and mutual accountability among member states and RECs on the implementation of Africa’s development blueprint,” said Mr Martin Bwalya, director, Knowledge Management and Programme Evaluation on behalf of the AUDA-NEPAD’s CEO, Dr Ibrahim Mayaki.
MauritiusNew reforms could help Mauritius bounce back stronger from COVID-19 crisis
Mauritius’ best strategy for economic recovery post-pandemic includes both temporary support to firms and households, and comprehensive reforms to address pre-existing structural challenges, says the World Bank’s latest economic analysis for the country. The newly-released Mauritius Country Economic Memorandum, ‘Through the Eye of a Perfect Storm – Coming Back Stronger from the COVID-19 Crisis’, says the COVID-19 crisis presents policymakers with an opportunity to confront long-standing challenges. The report highlights four main pillars for a strong recovery. “This report lays out a short- and medium-term agenda to reignite inclusive and sustainable growth in Mauritius,” added Erik von Uexkull, World Bank representative for Mauritius. “While the global situation is slowly improving with the increased availability of vaccines, this is not a storm that countries can simply ride out and return to business as usual. For Mauritius, the best way forward will be to focus on its proven ability to adapt and preserve its social contract by laying the foundations for future inclusive growth. This can start now, under the new budget.”
Source: World Bank
NigeriaAfCFTA: FG working on priorities to ease export processes — NEPC
The Nigeria Export Promotion Council (NEPC) has said that the federal government, through the council, is working on some short and medium term priorities and initiatives that would ease the export processes in Nigeria to enable the country to reap the full benefit of the African Continental Free Trade Area (AfCFTA) agreement. As part of the priorities, the NEPC said it is working with the Nigerian Ports Authority (NPA) to promote the use of alternative ports around the country, as well as working on the construction of domestic export warehouses and common facility process centres for many of the export commodities. Olusegun Awolowo, the CEO of NEPC, recently stated this at a webinar with the theme: ‘AfCFTA: Revamping Nigeria’s Infrastructure for Global Trade’, organised by Arbiterz Media Limited, saying that most of the projects and initiatives would be completed and ready for take-off in the next six months. He stated that the council has identified 22 priority products for export as part of its zero oil plan to boost the country’s foreign exchange earning capacity.
Nigeria / GhanaNigeria partners Ghana’s shippers to promote trade in Africa
The Nigerian Shippers’ Council (NSC) is working with the Ghana Shippers’ Authority (GSA) to further protect shippers and promote trade in Africa. Mr Hassan Bello, the executive secretary / managing director of the NSC, told reporters in Abuja that the collaboration would allow them to do more for the region. He also said the collaboration would ensure efficient service delivery and allow the two countries to export their goods and earn foreign exchange without hindrance. “The most important thing is that we need to unite consumers of shipping services through advocacy or regulation. We have to make sure there is a balance, we have to make sure there is a level playing field. Our economies must not be strangled; we must wean ourselves from the mono-economy of the oil sector and consider an alternative or an option. And there is no more promising alternative than shipping or transportation…,” Bello said. The NSC boss said it was important for shippers regulators to ensure shippers make a profit to enable them to employ young people. Meanwhile, GSA executive director Benonita Bismarck noted that the African Shippers Council has a role in protecting Africa’s trade and that Ghana will work with Nigeria to achieve this.
Source: National Accord
RwandaRwanda extends passport phase out
Rwanda has extended the deadline for phasing out old passports by one year. The country is phasing out the old passports, and replacing them with the biometric East African e-passports. The phase-out of Rwandan passports has been pushed from 27 June 2021 to 27 June 2022, according to a communique issued by the Rwanda Directorate General of Immigration and Emigration. The announcement comes as many Rwandans abroad have been unable to travel back home to acquire new passports due to COVID-19 travel restrictions. The Machine Readable Passports will be replaced by the new East African e-passports that have been in use since June 2019. Users of the old passports were given a two-year grace period to replace them with the East African e-passports. The move to phase out Rwandan passports was in line with the country's commitment to promote regional integration with East African Community (EAC) partner states from June 2019. The decision to adopt a new generation of passports and phase out old ones was reached by the EAC heads of state in March 2016 in Arusha, Tanzania. The e-passport grants its holder access to more countries without stringent visa requirements.
Source: The EastAfrican
São Tomé and PríncipeWorld Bank boosts improvements in the banking system, access to finance
The World Bank approved USD7-million to support the government of São Tomé and Príncipe to continue making improvements in the banking system, access to finance and national statistics. This additional financing for the ongoing Institutional Capacity Building Project will help scale-up activities with the Central Bank of São Tomé and Príncipe and support system modernisations as part of the COVID-19 mitigation response. While digital payment systems have seen a significant improvement in recent years in São Tomé and Príncipe, coverage is still very limited, and the financial infrastructure remains underdeveloped and unreliable, constraining access to payment services, particularly in rural areas and on the island of Príncipe. This inhibits digital payment and collection of taxes, payment of utility bills, wages and pensions, and disbursement of welfare benefits. The additional financing comes at a crucial time as it will support the government’s response to COVID-19, using digital payments to scale-up social protection programs and promote financial inclusion. With this additional financing, the Bank’s overall contribution to the project will be USD19-million.
Source: World Bank
SeychellesSeychelles begins programmes to boost natural export products, beginning with cinnamon
The Government of Seychelles has started a programme to diversify its economy by exploiting its natural resources for exportation as value-added products. The first step in the programme is the revival of the cinnamon industry as a new source of income for the country, a top government official said on Tuesday, 25 May. The minister for Investment, Entrepreneurship and Industries told a press conference that one of the ministry’s strategic objectives is “to increase the country’s revenue through increasing local production for exportation, reducing importation and reducing dependence on tourism.” Devika Vidot said, “The government has started a comprehensive programme to identify natural resources that we will promote for exportation, for private investors to engage in and promote the exportation of these natural resources.” Vidot explained that the government is facilitating the revival of the industry by firstly making available land for potential Seychellois investors to harvest cinnamon. These are areas within national parks as well as state-owned land which has not been cleared yet. Private landowners who have not developed their properties are also being encouraged to consider this venture.
Source: Seychelles News Agency
TanzaniaTanzania joins One Network Area for lower cross-border call tariffs
After years of dithering, Tanzania has finally joined the East African Community (EAC) One Network Area (ONA), which promises cheaper calls across the bloc due to harmonised calling rates. This means that charges on roaming voice calls in Kenya, Rwanda, South Sudan, Uganda and Tanzania will be eliminated. The benefits include easier and cheaper communication that will promote the ease of doing business in the region. Pressure on Tanzania to join the network peaked at the June 2019 meeting of the EAC Transport, Communications and Meteorology Sector Council held in Kampala, where Dar es Salaam was given a deadline of 31 March to complete its analysis on the implementation of ONA. But it has emerged that Tanzania made the decision to join the ONA late last year, and Foreign Affairs permanent secretary Stephen Mbundi wrote to the EAC Secretariat expressing interest in the deal. During a recent private sector meeting held in Kampala, EAC director-general of Customs and Trade, Kenneth Bagamuhunda announced that Tanzania had committed to the EAC Secretariat to join the network. With Tanzania having now signed up, the focus shifts to Burundi.
Source: The EastAfrican
TanzaniaTanzania to ratify free trade area agreement
The government will ratify the African Continental Free Trade Area agreement between June and October this year, it was heard in Dar es Salaam on 25 May. The document will be taken to Parliament for ratification upon getting the endorsement of the cabinet, the director of government communications at the Ministry of Foreign Affairs and East African Cooperation, Mr Emmanuel Buhohela told The Citizen. He said preparations have already been completed. “We have taken a long time to reach this point with all the stakeholders including experts, business people being on board before heads of state approved it and for now we are waiting for Parliament to finalise,” he said. Minister for Foreign Affairs and East African Cooperation, Liberata Mulamula said negotiations on excise duty have reached 75% and discussions on the origin of goods have reached 86%. She said Tanzania has continued to participate in the talks through the East African Community and has already submitted its recommendations. “When completed, our products will be able to reach any African country easily and this step will move us further towards the goal of strengthening the African economy,” she said.
Source: The Citizen
TogoImproving connectivity in Togo through digital infrastructure
The World Bank has approved additional financing of USD11-million from the International Development Association to improve connectivity in Togo and develop the country’s digital economy. The additional financing for the West Africa Regional Communications Infrastructure Program (WARCIP) will strengthen the contribution to major projects launched in Togo to expand geographical coverage of broadband networks and reduce the costs of communications services. It will also facilitate the construction of the carrier-neutral colocation data centre (Carrier Hotel), which will serve as a regional hub for the purchase and resale of international bandwidth capacity on Togo’s wholesale broadband market. The funds will also be used to finalise the Togo Digital 2025 strategic plan and leverage the achievements of WARCIP in order to accelerate Togo’s digital transformation. The WARCIP-Togo Project, funded to the tune of USD30-million, is part of the second phase of the USD300-million WARCIP Program, which seeks to bridge the connectivity gaps between 16 West African countries and the rest of the world.
Source: World Bank
UgandaFunding is the challenge for Ugandan government’s stake in refinery
With the conclusion of agreements to launch the upstream and midstream segments of the Lake Albert development project, discussions are shaping up around financing close for the 60,000 barrels of oil per day. The government holds a 40% participating interest in the refinery. The Uganda National Oil Company (UNOC) is taking up the biggest shareholding in the project through one of its subsidiaries, the Uganda Refinery Holding Company (URHC), on behalf of the state. “We have a role together with the refinery consortium in ensuring that the refinery makes a final investment decision in 2022, in accordance with the timelines of the Project Framework Agreement”, says Proscovia Nabbanja, CEO of UNOC. The Albertine Graben Refinery Consortium, which holds 60% of the project, consists of General Electric (GE), Yaatra Ventures LLC, Intra-continent Asset Holdings and Saipem SPA. The refinery is expected to come on stream between 2024-2025. “There’s a lot of work being done today, such as the environmental and social impact assessment and the front-end engineering design”, Ms Nabbaja explained. “We are also working with the Ministry of Finance to secure financing for our equity in the refinery,” she noted.
Source: Africa Oil+Gas Report
ZimbabweDigital transformation core to boosting Zimbabwe’s economy, improving services
The Zimbabwe Digital Economy Diagnostic, a new report developed by the World Bank, finds that its digital financial services are the strongest foundation for the further development of the digital economy in the country. Among Zimbabwe’s key strengths is the widely-used digital payment system, through which 96% of all transactions in the country are transacted, and which government uses extensively for its core business. “We recognize the potential for digital technologies to help pave the way forward and are therefore focusing on development of the key digital pillars that will underpin the growth of our economy,” said Dr Misheck Sibanda, chief secretary to the president and cabinet. The report maps out strengths and limitations that characterise the national digital economy ecosystem. It identifies the challenges and opportunities for future growth in Zimbabwe with respect to five pillars that together form the foundation for digital transformation.
Source: World Bank
ZimbabweInflation remains high despite its significant decline – retailers
The Confederation of Zimbabwe Retailers (CZR) has noted that although the country’s annual inflation significantly dropped between July 2020 and April 2021, the rate remains “very high” and not ideal for economic stability. This is contained in the CZR’s overview of the 2021 retail environment and contained in its input into the 2021 mid-term fiscal policy review. “While annual inflation declined significantly from 838% in July 2020 to the last recorded 194% in April 2021, the rate is still very high and far from the 10% which is associated with ideal economic stability,” the retailers group said. The CZR said that it had observed the economy was affected by inflationary pressures, the decline in disposable incomes due to unemployment and underemployment, reduced incomes and COVID-19-related costs and inefficiencies. The CZR said the national COVID-19-induced lockdowns constrained prospects for the first quarter as most retail outlets were open for reduced trading hours, and demand was weak due to closure of other sectors and reduced disposable income. The overview added that many retailers were targeting volume growth balanced with competitive pricing, operating cost control and working capital management.
Source: New Zimbabwe