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Africa Business in Brief

 

issue 406 | 27 Jun 2021

Africa

Africa Renewable Energy Fund II secures EUR130-million first close with SEFA and CTF investments

The Africa Renewable Energy Fund (AREF) II has achieved its first close at EUR130-million, following a joint investment of EUR17.5-million from the Sustainable Energy Fund for Africa (SEFA) and the Climate Technology Fund (CTF) through the African Development Bank (AfDB). AREF II, a successor to the original Fund, is a 10-year closed-ended renewable energy Private Equity Fund with a USD300-million target capitalisation. The AREF II, managed by Berkeley Energy, invests in early-stage renewable energy projects, thereby not only de-risking the most uncertain phase of power projects, but also promoting increased green baseload in Africa’s generation mix. The SEFA and the CTF will each contribute roughly EUR8.7-million to mobilise private-sector investment into Africa’s renewable energy sector. The SEFA will also contribute financing to the AREF II Project Support Facility, which funds technical assistance and early-stage project support to improve bankability. Other investors include the United Kingdom’s CDC Group, Italy’s CDP, the Netherlands Development Finance Company and SwedFund.

Source: AfDB

Africa

Foreign direct investment in Africa fell by 16%

Foreign direct investment (FDI) in Africa saw a decline of 16% in 2020 according to the recently published United Nations Conference on Trade and Development’s (UNCTAD) World Investment Report 2021. Coronavirus (COVID-19) had a significant impact on FDI on the continent, which dropped from USD47-billion in 2019 to USD40-billion in 2020. Cascading economic and health challenges due to the pandemic combined with low prices of energy commodities weighed heavily on foreign investment to the continent, according to the report. The report shows that commodity-dependent countries were affected more severely than non-resource-based economies. “The challenging environment affected all aspects of foreign investment,” said UNCTAD’s director of Investment and Enterprise, James Zhan. Greenfield project announcements, a measure of investor sentiment and future FDI trends, dropped by 62% to USD29-billion, from USD77-billion in 2019. Cross-border mergers and acquisitions, fell by 45% to USD3.2-billion, from USD5.8-billion in 2019. International project finance announcements, especially relevant for large infrastructure projects, plummeted by 74% to USD32-billion.

Source: ESI Africa

East Africa

EIB approves USD95-million for geothermal power in East Africa

The European Investment Bank (EIB) has approved USD4.9-billion financing for renewable energy, clean transport, COVID-19 recovery, social housing and education. Of this amount, USD95-million will be allocated to the East Africa Rift Geothermal Project. The operation is an envelope for financing individual private sector investments into geothermal power generation projects in different countries in the East African Rift region. Sub-operations under the envelope will undergo individual project appraisals and be separately approved for bank financing. Funding is available for Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Mayotte, Mozambique, Reunion, Rwanda, Seychelles, Somalia, South Sudan, Tanzania and Uganda. The proposed envelope will allow the EIB to provide financing to several projects implemented by promoters active in the geothermal power sector in the region (individual private sector investments into geothermal power generation). Eligible projects will typically include greenfield development and brownfield expansions, with proven geothermal resources.

Source: ESI Africa

Cameroon

Cameroon signs pact with Fortescue Metals for the production of green hydrogen

Green hydrogen, also considered the new oil, is a gas produced entirely from renewable energies. It is obtained only from water, via a process of electrolysis of electricity produced by wind turbines, a hydroelectric dam or solar panels. In the presence of the Prime Minister, Joseph Dion Ngute, the Cameroonian minister of Economy, Alamine Ousmane Mey, signed on 11 June 2021, an agreement with the heads of the Australian firm Fortescue Future Industries Ltd, a 100% subsidiary of Fortescue Metals Group. The agreement concerns conducting a technical study, with a view to the development of the very first green hydrogen production project in Cameroon. One kilogram of green hydrogen produces about three times the energy produced by 1 kg of gasoline, without emitting greenhouse gases. Thus, a car adapted to green hydrogen can drive continuously for 600 km compared to 150 km for current electric cars. Africa, with its immense potential in renewable energies (solar, wind and hydroelectric), is ideally positioned to become the world’s leading producer of green hydrogen. That is why announcements of projects of this type have multiplied in recent months on the continent.

Source: Energy Mix Report

Cameroon

Telecom regulator ART announces new regulatory model to become highly efficient by 2025

The Telecommunications Regulatory Board (ART) said that it is currently elaborating a new regulatory model to become a robust, innovative and performing institution by 2025. In a note published in early June 2021, the ART indicated that with this fundamental transition, it would be able to optimally contribute to the achievement of President Paul Biya’s ambitions for “the strategic sector of electronic communications” during the current presidential term. The new regulatory model is being elaborated in a context where the country needs to prepare for the integration of 5G technology, which is 10 to 100 times faster than 4G, and efficiently anticipate the emergence of new technological innovations, we learn. As the regulator explains, it has become apparent that there is a big gap between the current regulatory model and the innovation dynamic ongoing in the telecommunications sector. That gap can significantly impede the harmonious development of electronic communications in Cameroon, the ART concluded. Hence the new model.

Source: Business in Cameroon

Ghana

Ghana Cocoa Board, Bühler sign agreement to build local processing capacity

The Ghana Cocoa Board (COCOBOD), signed an agreement with Bühler to build Ghana’s local cocoa processing and value addition capacity through training, product development and technology guidance. The partnership is in line with the government’s plan to significantly increase the portion of Ghana’s cocoa which is processed locally to meet both the sub-regional and international consumption demands. The agreement will deepen the strong relationship that COCOBOD already has with Bühler, both of which are significant players in the world’s cocoa trade environment. Heiko Feuring, the president of Bühler Middle East and Africa said, ''We hope this Memorandum of Understanding will be the landmark of a new fruitful and long-lasting collaboration to unlock the Ghanaian cocoa value chain potential. We want to support Ghana in its march towards a higher value creation in the country for the benefit of all Ghanaians.'' Feuring assured that Bühler will offer its expertise to Ghana in aid of the effort to build a solid local processing industry to capture a higher share of USD100-billion cocoa and chocolate industry.

Source: Africa Business Communities

Kenya

1.4 million taxpayers yet to file returns ahead of June 30 deadline

About 70% of taxpayers have filed tax returns ahead of the 30 June deadline with millions of workers and businesspersons risking fines for default. Kenya Revenue Authority (KRA) data show that 3.82 million Kenyans had filed their tax returns by 20 June against a target of 5.5 million taxpayers. Failure to meet the deadline is an offence which attracts a KES10,000 fine or 25% of salaried workers’ tax bill, KES5,000 in the case of small and medium enterprises which are subject to turnover tax, and KES20,000 or 5% of tax liability on other business incomes. “About 3.82 million taxpayers had filed their tax returns as at June 20 compared to 3.14 million taxpayers as at the same time last year. We expect daily filings to increase as deadline approaches,” said KRA’s manager for Taxpayer Services Wanja Wang’ondu. Under the Tax Procedures Act of 2015, the KRA has powers to order employers to deduct the penalties and tax dues from workers’ salary.

Source: Business Daily

Kenya

EU now to hold direct talks with Kenya on trade deal

The European Union (EU) will engage Kenya directly in signing the Economic Partnership Agreement (EPA) following the failure by other East African Community (EAC) members to endorse the deal. EU executive vice-president and commissioner for trade Valdis Dombrovskis said the bloc will engage Kenya after the EAC members allowed individual countries that are ready to enter into agreement with the EU to proceed. The negotiations for the EPA were concluded in 2014 but the agreement has not entered into force pending signatures and ratification by all EAC members. “The EU will now engage with Kenya, which has already signed and ratified the regional EPA, on the modalities towards its implementation. The EPA is an important trade and development tool and its implementation with Kenya would be a building block towards regional economic integration,” said Mr Dombrovskis. The official said the EU is now looking forward to other members of the EAC signing and ratifying the EPA after it concludes the deal with Kenya.

Source: Business Daily

Kenya

MPs reject bid to stop annual beer, fuel taxes

Parliament has rejected a bid to change the law and stop the annual review of prices of at least 31 products including fuel, bottled water, juice and beer through an inflation tax. The MPs overruled the push to have the Kenya Revenue Authority (KRA) review the prices every two or three years to cushion consumers and firms from rising product costs. Soft drinks giant Coca-Cola had petitioned Parliament to have the review in tandem with the average annual inflation to be done every three years. Beer maker East Africa Breweries Limited unsuccessfully lobbied lawmakers to have the price reviews done every two years. The National Assembly Committee on Finance and National Planning rejected the push to change the law, arguing that checks were introduced last year to ensure the price review factors in other economic indicators beyond inflation. Manufacturers affected by the excise taxes have opposed the annual inflation adjustments, arguing that it leads to price instability and distort the overall inflation. They have proposed that the increment be spread over three years to give them enough time to adjust. The firms have also argued that uncertainty around the rate of annual changes would make it difficult for them to make long-term investment decisions.

Source: Business Daily

Malawi

SACCOs want Financial Cooperative Act revised

The Ministry of Trade says it will facilitate the revision of the Financial Cooperative Act of 2011 to conform to the current situation following calls from Savings and Credit Cooperatives Organisations (SACCOs). Speaking during the Dwangwa Sacco Annual General Meeting in Nkhotakota on Tuesday, 22 June the ministry’s registrar of cooperatives Wiskes Mkombezi said representatives from his ministry, the Malawi Union of Savings and Credit Cooperatives and the Reserve Bank of Malawi (RBM) will be meeting next month on the same. He said SACCOs feel that the reporting requirements and registration processes in the Act were hampering their growth. Mkombezi said: “You have to be aware that before operating, Sacco’s need to register with the Ministry of Trade and be licensed by the RBM. What the Saccos want is a provisional period where they can operate before registering so that they can grow capital, among others.” “We want to look at those areas and see how they can be changed to foster growth of the Sacco movement. At the end of that process, we shall have a new Cooperative Development Policy, once that policy is approved, we will go into looking at the Cooperative Society Act and how it should respond to what the new policy is saying.”

Source: The Nation

Malawi

Tobacco rakes in USD111-million

Malawi’s single top export crop, tobacco, has raked in USD111.6-million nine weeks into this year’s selling season, latest figures from AHL Group show. This comes amid pessimism by some industry stakeholders that the earnings would not surpass that of last year. Figures further show that the amount was realised after the country sold 67.9 million kg of tobacco types at an average price of USD1.64 per kg. The revenue represents a 26% growth from USD88.6-million realised during the same time last year. The average price on the other side is 8.6% higher than the USD1.51 kg that the leaf was fetching during the same time last season. The revenue realised thus far is only 35% shy of the total USD173.5-million earned at the end of sale last year, while the volume sold thus far stands at 39% lower than last year’s total 112.89 million kg. The trend has prompted debate among stakeholders in the sector where some feel that the earnings could rise this season, evidenced by a slight rise in average prices, while others project a possible drop in total income that the green gold could fetch.
 
Source: The Times Group

Mozambique

Mozambique to sell majority stake in USD2.4-billion hydropower dam

Mozambique plans to sell a majority stake in the planned USD2.4-billion Mphanda Nkuwa hydropower dam that will be one of the biggest in southern Africa, according to Carlos Yum, the director in charge of the project. The government will issue a request for proposals this year, and will take up to four months to select the winner and another six weeks to negotiate the joint development agreement, Yum said during an interview in Maputo, on 15 June. The goal is to reach financial close by 2024 on the 1,500-megawatt (MW) facility and an associated transmission line that could increase the total project cost to as much as USD4.4-billion, he said. Mphanda Nkuwa will be about 60 km downstream the Zambezi River from the Cahora Bassa hydropower dam that has the capacity to generate 2,075 MW of power. Mozambique sells most of the electricity from that dam to neighbouring South Africa, where there have been shortages for more than a decade. In addition to exporting power, the new project will sell electricity to Mozambicans, said Yum. About one-third of Mozambicans have access to power, and President Filipe Nyusi plans to increase this to 100% by the end of the decade.

Source: Club of Mozambique

Namibia

Windhoek seeks IPP to generate 25 MWp of solar power

The Windhoek municipality is moving forward with its plans to build a solar photovoltaic (PV) plant in the Namibian capital. Following the recent City Council meeting, the city launched a tender for the implementation of the clean energy project. The municipality intends to rely on an Independent Power Producer (IPP) to install a solar photovoltaic plant in a public-private partnership with the city. IPPs interested in the call for expressions of interest have until 19 August 2021 to submit their proposals. The selected company will finance, build and operate the solar power plant for 25 years. The power purchase agreement that will be signed for this project is in line with the provisions of the modified single buyer rule (MSB). This provision enacted in 2019 allows large electricity consumers to source 30% of their requirement directly from IPPs or generate it themselves. The Windhoek solar plant will have a capacity of 25 megawatts. The Windhoek municipality estimates that the project will require an investment of NAD420-million.

Source: AFRIK 21

Nigeria

FG seeks amendment of NEPZA Act to ease operations at FTZs

The federal government has called for the amendment of the Nigeria Export Processing Zones Authority (NEPZA) Act to address issues affecting seamless operations of Free Trade Zones (FTZs) across the country. Chairman, Senate Committee on Trade and Investment, Francis Fadahunsi, made the call during an oversight visit, alongside board members of the NEPZA to the Snake Island Integrated Free Zone (SIIFZ) in Lagos. He said the amendment of the NEPZA Act would close up on all issues for easy operations of FTZs. While appreciating the various free zone enterprises and the huge revenue generated for the government through agencies stationed in the zone, he specifically commended SIIFZ’s contribution to the growth of the NEPZA in supporting a single free zone authority over the years. One of the directors, SIIFZ, Yusufu Abdullahi, as a matter of urgency, tasked the committee to put an end to the confusion on free zone regulatory issues. This, he said, was to assure investors of the safety of their investment “by protecting the current Free Zone Scheme under NEPZA.”

Source: The Guardian

Rwanda

2021/22 budget seeks to fuel recovery, industrialisation

There is optimism that Rwanda’s economy will rebound to a strong growth rate this years, Uzziel Ndagijimana, the minister for Finance and Economic planning told Parliament as he presented the national budget for the fiscal year 2021/2022. Due to the COVID-19 pandemic, the economy witnessed a 3.4% recession in 2020 compared to a 9.5% growth in 2019. However, government economic recovery strategies, which included stimulus packages for the most-hit businesses helped the economy to grow by 3.5% in the first quarter of 2021. Now the government is optimistic that public spending which is set to increase by 9.8% in the coming fiscal year will propel economic growth to 5.1%. “Despite worries over the pandemic that continues to ravage the world and our country, it is expected that our economy will grow by 5.1% in 2021,” Ndagijimana told both chambers of Parliament during a virtual presentation of the budget. He disclosed that going forward, the economy is expected to grow by 7% in 2022 and 7.8% in 2023 before rebounding to the pre-COVID-19 growth rates in 2014.

Source: The New Times

South Sudan

Ministry of Petroleum launches first oil licensing round

The Ministry of Petroleum (MoP) of South Sudan, has announced the launch of the country’s first oil licensing round. The MoP has identified new exploration blocks with potential hydrocarbons and has compiled crucial data to provide to interested investors, operators and counterparties. According to the new analysis commissioned by the ministry, approximately 90% of South Sudan’s oil and gas reserves remain unexplored, providing unprecedented opportunities to international investors. The oil licensing round aims to attract interest from a diverse group of foreign investors to a region that is already home to oil and gas majors from China and Malaysia. The country is hoping to welcome back experienced partners and operators following significant progress in returning to peace and stability. With the new data, analysis, and government mechanisms, the ministry seeks to attract high-quality investors and partners. This bidding round is for a number of selected blocks, which will be facilitated and evaluated based on set criteria by the MoP. The available blocks range between 4,000 and 25,000 square kilometres (km2), with most comprising between 15,000 and 20,000 km2.

Source: Africa Business Communities

Sudan

IMF managing director Kristalina Georgieva announces financing milestone on debt relief for Sudan

International Monetary Fund (IMF) managing director Kristalina Georgieva on Tuesday, 22 June 2021, announced that the IMF has secured sufficient financing pledges to allow the Fund to provide comprehensive debt relief to Sudan. 101 IMF member countries have pledged to provide more than SDR992-million (USD1,415.7-million) in financing. This will enable the clearance of Sudan’s arrears to the IMF, allow for the provision of new Fund financing, and facilitate the delivery of the Heavily Indebted Poor Countries Initiative and other debt relief to Sudan. This will also help unlock significant amounts of development assistance and create the conditions for higher and more inclusive growth in Sudan. Ms Georgieva welcomed this important breakthrough, noting: “Today’s financing milestone marks a historic opportunity for Sudan to move toward comprehensive debt relief from the IMF and the international community. The Fund will continue to support Sudan in its recovery from a long period of instability and economic hardship.”

Source: IMF

Tanzania

Tanzanian MPs approve national budget estimates

Tanzania’s members of Parliament have unanimously approved the national budget estimates. They voted on Tuesday, 22 June 2021 through open ballot as outlined in parliamentary standing procedures. The government had asked the August House to approve the TZS36.6-trillion (USD15.8-billion) which was unveiled by Finance minister Mwigulu Nchemba. The amount is slightly higher than the previous budget estimates of TZS34.5-trillion (USD14.9-billion) which was approved during the 2020/21 fiscal year which will come to an end on 30 June. Winding up a debate on results attained, the National Assembly speaker Job Ndugai said that all the 385 parliamentarians present voted to approve the proposed budget. Five MPs were not present in the House.

Source: The EastAfrican

Togo

Togo commissions first utility-scale solar plant by IPP

AMEA Power has announced the official commissioning of a 50 megawatt (MW) solar photovoltaics (PV) plant in Blitta, Togo, marking the country’s first utility-scale renewable energy project developed by an Independent Power Producer (IPP). The solar plant reached commercial operation within 18 months of signing the Power Purchase Agreement, in spite of the COVID-19 pandemic. Built by AMEA Togo Solar, a subsidiary of AMEA Power (itself a subsidiary of UAE-based Al Nowais Investment) the solar plant is officially named Sheik Mohamed Bin Zayed after the Crown Prince of Abu Dhabi. Now one of the largest solar PV IPP plants in West Africa, the power plant is located 267 km from Togo’s capital, Lomé, and has a planned production of nearly 90,255 megawatt-hour (MWh) of power a year. This will supply power to about 158,333 households a year. Around 9% of the energy generated at the plant will feed into the local Blitta distribution network, which is enough to meet demand in the area. AMEA Togo Solar will operate the plant for 25 years and it is estimated that more than 1 million tonnes of CO2 emissions will be avoided in that time.
 
Source: ESI Africa

Uganda

Coffee exports slide back after hitting highest peak

Uganda’s coffee export earnings and volume slid back from its highest record in May by 13%, the Bank of Uganda’s (BoU) monthly report has shown. According to the BoU’s monthly report export performance, in May Uganda shipped coffee worth USD47.1-million (UGX167-billion), down from USD53.5-million (UGX189-billion) earned in March. “This saw the country earn USD6.4-million (UGX22-billion) revenue less than what was earned in March when the country’s monthly receipts hit the highest peak ever,” the report showed. In the period in review, the volumes went down to 494,050 bags, down from 572,898 bags recorded in March. This indicated that the country exported 78,848 bags less compared to the previous volumes exported in March. Uganda produces and exports two brands of coffee, mainly Robusta and Arabica.

Source: Daily Monitor

Zambia / Zimbabwe

Zambia, Zimbabwe develop implementation plan for the Joint Industrialization Programme

The Zambia-Zimbabwe Technical Working Group (TWG) on the Joint Industrialization Programme has agreed on an action matrix to guide the implementation of the programme and provide a timeframe for achieving the set targets. The programme is intended to promote industrial cooperation and increase competitiveness of goods produced within the two countries. The TWG has also agreed to immediately establish committees comprised of technocrats from the ministries of industry, commerce, trade and agriculture to work jointly to advance the different pillars agreed in the Memorandum of Understanding. Speaking at the 3rd Joint TWG meeting held virtually on Friday, 18 June 2021, Common Market for Eastern and Southern Africa (COMESA) assistant secretary general for Programmes Dr Kipyego Cheluget said the Joint Zambia-Zimbabwe Industrialization Programme holds the best promise towards achieving COMESA’s industrialisation goals. Article 99 of the COMESA treaty calls for COMESA member states to cooperate in the field of industrial development and to coordinate their policies in establishing agro-industries to achieve regional sustainable and inclusive economic transformation.

Source: COMESA