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issue 404 | 13 Jun 2021

Africa

Airline sector in Africa soaks up USD10-billion loss

The airline industry in Africa recorded a passenger revenue loss of about USD10.21-billion for the year 2020, with passenger numbers dropping from 95 million in 2019 to 34.7 million in 2020, representing a year-on-year decline of 63.7%. The African Airlines Association published its impact assessment analysis on 2 June 2021, giving an in-depth analysis of the continent’s air industry performance for 2020, showing that the carriers will continue to lose money in 2021, although it is expected to reduce to about USD8.35-billion. From the end of March, the majority of carriers grounded their aircraft, causing a drastic seat and revenue per kilometre drop of 85% and 94% respectively in April. The reduction in traffic continued until June, before reversing with the gradual opening of borders. The survey also found that African airlines carried more domestic traffic in 2020, making 43% of their total traffic. “The leading carriers in terms of domestic traffic are airlines like Safair, Ethiopian Airlines, Mango Airlines, and Air Algérie. Those five airlines carried 4.8 million passengers on domestic routes during the year. International traffic represented 57% breaking down into 19% of intra-African and 38% of intercontinental passengers.”

Source: The EastAfrican

Africa

'USD15-billion needed to upgrade oil refineries in Africa'

Oil refineries in Africa will require approximately USD15.7-billion to upgrade the existing 36 facilities to produce petroleum products that will conform to the planned level of sulphur content, the African Refiners and Distributors Association (ARDA) has said. The organisation noted that the amount is what a refinery may need to be upgraded from the Engineering, Procurement and Construction (EPC) stage, with its AFRI-6 initiative, aimed at reducing sulphur content in fuels to 10 parts per million (ppm) in the coming years. Speaking at a workshop organised by ARDA on ‘Upgrading African Refineries to Produce Cleaner Fuels’, executive secretary of the organisation, Mr Anibor Kragha revealed that North Africa with 17 refineries would require capital expenditure of USD5.955-billion for refineries upgrade. According to him, West and Central Africa with 12 refineries would need USD6.285-billion, while East and Southern Africa with 7 refineries would need USD3.415-billion. He noted that without urgent steps on adopting uniform fuel specifications across the continent, health and environmental challenges could worsen existing problems on the continent even as the continent's population projection is expected to grow exponentially.

Source: This Day

Africa / United Kingdom

UK-Africa Forum on Trade, Policy and Reform to examine the future of trade and avenues for policy reform

Invest Africa, a Pan-African business and investment platform, aims to build constructive dialogue between policymakers and business leaders from the United Kingdom (UK) and Africa during the Forum. The Forum comes at an opportune time as trading under the African Continental Free Trade Area commenced on 1 January 2021, accelerating intra-African trade, and boosting Africa’s trading position in the global market. As of June this year, the UK Government website lists over 15 trade agreements that the government has concluded in Africa. Where the agreement has not yet been ratified, provisional application or bridging mechanisms have been put in place to ensure continuity of trade. African countries with deals in place come from across the continent, including Egypt and Morocco in the North, Botswana and Lesotho in the South, Kenya in the East, and Ghana in the West. Intra-African trade optimism is tempered by an acknowledgement of the challenges that investors face, ranging from logistical issues to regulatory frameworks. These challenges – and opportunities – will be discussed in the Invest Africa UK-Africa Forum.

Source: Africanews

East Africa

EAC partner states encouraged to exploit potential for export of raw cotton

East African Community (EAC) partner states have been called upon to exploit the huge potential for export of raw cotton to the world market. Kenya’s principal secretary for the EAC, Dr Kevit Desai, said that the region produces 100,000 metric tonnes of cotton compared to an existing export potential of 400,000 metric tonnes. Dr Desai said that the EAC exports to the world market currently stands at 8% adding that to increase the volume of exports, value chains such as textiles need to be promoted to boost exports. “We need to harness science, technology and innovation to boost exports by investing in greater capacity to produce leather and textiles, and turn a crop like pyrethrum into aerosols,” said the principal secretary. Dr Desai said that increased investment in the leather and textile sectors would cater for the growing demand in the region for locally manufactured high quality clothes and leather products. The principal secretary disclosed that intra-EAC trade currently stands at 15%, which he described as being very low compared to other regional economic communities like the European Union and the Southern African Development Community (SADC).

Source: EAC

Angola

Angola bid round deadline extended and entry fee reduced

The deadline for the submission of proposals for the bid round of blocks located in Angola’s Lower Congo and Kwanza onshore basins, which was initially scheduled for 9 June 2021, has been extended until 9 July 2021. Simultaneously Agência Nacional de Petróleo, Gás e Biocombustíveis (ANPG) has decided to reduce the amount of the entry fee for the referred bid round. ANPG´s decision to extend the deadline is based on the fact that various interested companies have requested an additional period for better understanding of all information regarding the blocks, as well as more time for further clarification on the bid round process. Consequently, ANPG has decided to extend the deadline for the submission of proposals for the referred bid round, for an additional 30 days. ANPG has also decided to reduce the entry fee, which will grant access to the data package needed to support the decision of companies to participate in the process. The reduction is justified by the fact that the bid round pertains to onshore exploration, where historically, smaller companies and national companies are interested in participating in prospecting, exploration, development and production of hydrocarbons in Angola.

Source: Petroleum Africa

Ethiopia

HPR approves proclamation for establishment of capital market

The House of People’s Representatives (HPR) has approved unanimously the Proclamation for the Establishment of Capital Market. Revenues, Budget and Finance Affairs Standing Committee chairperson, Yayesh Tesfahunegn, told Parliament that the capital market will serve the public as an alternative means of saving. She added that it will also have a significant impact on supporting large government and private investments, besides reducing dependency on foreign aid. Furthermore, the chairperson emphasised that it is critical for the implementation of the 10-year perspective plan.

Source: ENA

Ghana

About 75% of agribusiness firms not aware of AfCFTA – GSS

The Ghana Statistical Service (GSS) has revealed that about 75% of firms in Ghana are not aware of the African Continental Free Trade Area (AfCFTA) agreement. This was contained in the GSS’s latest report which assessed the impact of Coronavirus (COVID-19) on agribusinesses in Ghana. The AfCFTA started trading on 1 January 2021. However, when firms were asked whether they are aware of the AfCFTA agreement, only 25.6% of agribusiness firms across all sectors are aware of it. Agribusinesses comprise firms in the agriculture sector and those in the industry and service sectors that contribute to the agriculture production value chain. Relatively, agribusiness firms in the agriculture sector are the highest (31.2%) in terms of those not aware of the agreement, followed by those in the industry sector (23.9%) and the services sector with 23.2%.

Source: GhanaWeb

Ghana

IFC recommits to assisting Ghana’s private sector

The International Finance Corporation (IFC) has recommitted to working with government on the reforms that are needed for the private sector to deliver and thrive. Mr Sergio Pimenta, IFC vice president for the Middle East and Africa, expressed optimism about the relations between Ghana and the IFC in the years ahead. He said the IFC would ensure that its programmes are focused on bringing the support that the Ghanaian economy needed. At the closing of the two-day Ghana Coronavirus Alleviation and Revitalization of Enterprises Support (CARES) Obaatanpa Programme strategy retreat in Accra, Mr Pimenta said “Out of these two days we have come out with a much deeper understanding and knowledge of where Ghana is and where Ghana wants to go and where the Cares programme will take us.” The meeting revealed a lot of opportunities available to be explored in Ghana, which the IFC wanted to work on, together with the government and the private sector, Mr Pimenta said. However, open discussions on both the opportunities and challenges that the private sector faced in terms of accessing finance, the cost of energy and access to land were also held.

Source: GhanaWeb

Kenya

Budget committee calls for study on export markets

The Budget and Appropriation Committee wants Kenya to conduct a study on key existing and potential export markets, to drive growth of the sector. The State Department for Trade has been tasked to undertake the survey, which will also look into the need to establish trade offices or logistical centres in various regional economic blocks and countries with bilateral relationships with Kenya. This is in order to focus on international export opportunities that match Kenya's current and potential business capability, the members of Parliament (MPs) say, noting the country's exports fall way below the potential. “The study should be completed by December 31,” the committee, led by Kieni MP Kanini Kega, has said. Kenya's export quality has largely remained unchanged with the country exporting mostly raw, primary products as opposed to manufactured goods, the committee has further observed. “Our export volumes have remained below potential mainly due to failure to meet the market phytosanitary requirements and quality standards. The country is also underrepresented in terms of trade representative offices in key existing and potential export markets,” the MPs have noted in their report on the 2021/2022 financial year budget.

Source: The Star

Kenya

Kisumu port, rail gives hope to industries and regional trade

The revival of the old Metre Gauge Rail to Kisumu and the link to Mombasa through the Standard Gauge Railway (SGR) is expected to boost trade in the region and with neighboring countries. Local traders and industries are hoping to benefit from the projects with the Kenya Association of Manufacturers (KAM), Kenya National Chamber of Commerce and TradeMark East Africa, terming the infrastructure as a "game-changer". It includes the upgraded Kisumu Port expected to boost exports and imports through the lake transport network mainly between Kenya, Uganda and Tanzania. According to KAM, revival of the old rail is significant for the local manufacturing sector as it opens up Rift Valley, Western and Nyanza regions, and increases connectivity with other parts of the country, particularly Nairobi and Mombasa. “The railway line shall increase the efficiency of movement of raw materials to industries in Rift Valley, Western and Nyanza. Additionally, it shall speed up the transportation of finished goods from the factory to the markets,” chief executive Phyllis Wakiaga told the Star. “We hope to see increased volumes of goods transported through Lake Victoria, into the East African Community markets,” said Wakiaga.

Source: The Star

Malawi

Malawi tax measures to spur trade

Malawi has unveiled plans to roll out tax measures that will facilitate greater regional integration and boost trade and economic growth. Among these is a duty-free week for imports not exceeding USD3,000. In the 2021/2022 national budget presentation in Parliament, Finance minister Felix Mlusu said the duty-free week was designed to primarily support small and medium enterprises. Minister Mlusu said Malawi would also increase the Common Market for Eastern and Southern Africa (COMESA) Simplified Trade Regime threshold from USD2,000 to USD3,000, to further bolster small businesses. “This trade arrangement will allow cross border traders to enjoy duty-free status when they import goods originating from other member states in the COMESA region,” he said. The initiatives follow Malawi’s ratification of the African Continental Free Trade Area (AfCFTA) agreement in January 2021. Business in the sub-Saharan region is expected to improve as the economic outlook projects a gross domestic product growth rate of 3.4% in 2021 and 4% in 2022 from the region’s largest ever contraction of -1.9% in 2020, caused by COVID-19. Malawi’s economic growth, recorded at 0.9% in 2020, is expected to jump to 3.8% in 2021 and 5.2% in 2022.

Source: The Southern Times

Namibia

National funding needs to settle at NAD29.4-billion

It appears all is not well at Treasury, as the country's borrowing needs have reached a whopping NAD29.4-billion – at least 43% of the national budget. If the budgeted interest expense to be paid on debt is removed, the ratio is even worse at 49.4%. When additional spending not featured in the budget is included, this would mean, for every Namibian dollar spent by the government, at least 36% will be borrowed. Of this amount, NAD9.2-billion has been received into the state kitty – NAD3.9-billion from the International Monetary Fund, NAD1.5-billion from the African Development Bank and NAD3.8-billion borrowed from the domestic market. The above damning statistics are calculated based on the state's borrowing strategy for the 2021/22 fiscal year, which shows that in addition to the NAD15-billion budget deficit, the government has an additional need of NAD13.5-billion for what is called “other financing requirements”. This then amasses to NAD29.4-billion. Some applauded this reining in of debt since it was below the NAD21-billion deficit announced in the 2020/21 fiscal year.

Source: The Namibian

Namibia

State buyers need more legal understanding

Officials dealing with the tendering processes in public enterprises, government agencies and local authorities require more understanding of the Public Procurement Act if disputes, which sometimes are settled in court, are to be avoided. This is one of the resolutions of the Namibia Procurement Conference held in Windhoek recently. The conference enlightened more than 60 procurement officers drawn from state-owned enterprises (SOEs) and local authorities as well as suppliers on the provisions of the Public Procurement Act. Tenders awarded by SOEs and local authorities have been a subject of many court disputes in recent years. Ester Kuugongelwa, a senior official with the Procurement Policy Unit of the Ministry of Finance, said most discussions and questions during the conference centred around the interpretation of the Procurement Act when tenders are prepared or the disputes that come after bids are awarded.

Source: The Namibian

Nigeria

NEXIM rolls out NGN500-billion for non-oil export

The Nigerian Import-Export Bank (NEXIM) is implementing a NGN500-billion Non-oil Export Stimulation Facility and a NGN100-billion Export Development Fund at a single digit interest rate to support the production and export of goods and services. Managing director and chief executive officer of the NEXIM bank, Abba Bello, disclosed this during the bank’s special day at the 42nd Kaduna International Trade Fair. Bello said the facility, which was being implemented in collaboration with the Central Bank of Nigeria (CBN), is aimed at diversifying the economy from crude oil, which currently accounts for less than 10% of Nigeria’s gross domestic product. He lamented Nigeria’s posture of a mono-product economy despite the federal government’s diversification efforts. He also disclosed that the bank was partnering with the African Export–Import Bank to establish a Project Preparation Fund (PPF) through which both institutions have agreed to raise an initial amount of USD50-million to support the pre-investment phase in a project preparation circle. Bello expressed belief that the fund will address the dearth of bankable projects and increase the flow of funds to small and medium enterprises in the country.

Source: Economic Confidential

Nigeria

Oil majors decry Nigeria’s fiscal regime

Major oil companies operating in Nigeria have voiced their challenges in taking key investment decisions on asset development in the oil and gas industry, saying the absence of clear fiscal policy would continue to haunt investment in the sector. Speaking during the Chief Executive Officers’ (CEO) session at the Nigeria International Petroleum Summit (NIPS) held in Abuja, they complained about contract cycle space, security and production cost issues among other challenges. In his wrap up remarks, the director of the Department of Petroleum Resources, Sarki Auwalu, assured that urgent measures would be taken to provide an enabling environment that will encourage more investment in the sector. Auwalu noted all the concerns raised by partners in the sector, adding that it is government’s desire to improve on the investment climate to boost oil and gas reserves so as to earn more royalties.

Source: Energy Mix Report

South Sudan / Malawi

South Sudan, Malawi sign pact to spur trade

South Sudan and Malawi on Thursday, 10 June 2021 signed a trade agreement that will see Lilongwe export its surplus food to Juba to help ease the widening cereal deficit in the East African nation. Kuol Athian, minister of Trade and Industry, revealed that the deal will allow Malawian businesses to export food to South Sudan which is facing this year's highest cereal deficit, estimated at 465,600 metric tonnes. Sosten Gwengwe, Malawian minister of Trade, disclosed that his country is looking forward to exporting food to offset this year's cereal surplus estimated at 1.2 million metric tonnes. Athian said that they would issue Letters of Credit to South Sudanese to facilitate their import of food from Malawi. Meanwhile, Malawi said it expects to import refined petroleum products from South Sudan to cut costs of importing from the Arab world. South Sudan is soon to complete its Tharjath refinery in Unity state that will boost its capacity to export to its neighbours like Ethiopia and Sudan.

Source: Xinhua

Tanzania

Tanzania waives custom duty on COVID-19 fighting equipment

The government has waived customs duty on raw materials used to produce equipment used in fighting against the COVID-19 pandemic, including facial masks, sanitizers, ventilators and special protective clothing used by doctors and health workers, known as personal protective equipment (PPE). This was stated on 10 June 2021 by the minister of Finance and Planning, Dr Mwigulu Nchemba while presenting to Parliament the government's proposals on revenue and expenditure estimates for the 2021/22 financial year. Dr Mwigulu made the remarks while reading a proposal to continue implementing tariff rates through the East African Community Customs Management Act of 2004. Dr Mwigulu said the exemption would be issued systematically and that the move was aimed at providing relief for the production of such equipment in the country to accelerate the fight against the pandemic.

Source: The Citizen

Togo

Togo inaugurates its first integrated industrial platform

On Sunday, 6 June 2021, Togolese President Faure Gnassingbé inaugurated the country’s first industrial platform, Plateforme Industrielle d’Adetikopé (PIA). The ceremony took place less than a year after construction work started. Developed over nearly 400 hectares, in Adetikopé (15 kilometres north of Lomé), the platform materialises a new development vision: “to produce more locally, and be more competitive in international markets.” The project was carried out by Arise Integrated Industrial Platform (IIP) under a partnership based on Gabon’s Nkok model. According to its promoters, the PIA aims to create high-added value chains (especially in the textile sector), supply raw materials, manufacture on-site and export finished products. The site includes an industrial zone, a park that can accommodate 12,500 containers, a storage platform for cotton and other agricultural commodities, a truck terminal, and an area of 200,000 square metres dedicated to other logistics activities. According to Gagan Gupta, chief of Arise IIP, Togo’s exports should, in value, jump “from USD75-million to about USD1-billion…”

Source: Togo First

Zimbabwe

Zimbabwe to become second SADC country with bus manufacturing plant

Zimbabwe is set to become the second Southern African Development Community (SADC) country and also part of a countable few in Africa with bus manufacturing and assembly plants when it launches its own in July 2021. The plant, a partnership between Amalgamated Bus Industries, Quest Motors Manufacturing, AVM Africa and China’ Zhongtong Buses, will start operating in July 2021 with a target of 500 buses per year. Speaking at a Memorandum of Understanding (MoU) signing event in Harare on Wednesday, 9 June 2021, Zimbabwe Passenger Transport Organisation spokesperson Kura Sibanda said the revival of their industry will also ignite downstream revival, save foreign currency and create employment. “We are implementing the programme from July 2021 to June 2022 with a minimum of 500 buses for the local market; then going forward, we will be looking at the regional market,” said Sibanda.

Source: New Zimbabwe