issue 416 | 05 Sep 2021
WorldGlobal fines for anti-money laundering breaches drop
Financial institutions around the world paid in the first two quarters of this year more than USD937-million in penalties for breaching anti-money laundering (AML) procedures. This was reported by the Dublin-based fintech company, Fenergo, and shows that penalties for non-compliance with AML and know-your-customer requirements fell by 40% in comparison to the same period last year, according to data released recently. The United States (US), Switzerland, Norway, the United Kingdom and the United Arab Emirates top Fenergo's list of 31 countries that had issued most of the fines. The US collected USD711-million, Switzerland USD85-million, Norway USD48-million, the United Kingdom USD32-million and the United Arab Emirates USD12-million, according to the report. Fenergo's global director of Financial Crime Rachel Woolley said enforcement proceedings were at an all-time high in recent years, as regulators probed and concluded a number of significant scandals. “This year [we are] seeing something markedly different, with the total value of fines issued at the halfway point of the year much lower than last year,” she said.
Source: The Namibian
AfricaAfDB to launch new initiative to integrate natural capital into finance in Africa
On 9 September, the African Development Bank (AfDB) Group, Green Growth Knowledge Platform (GGKP), and other partners will launch a new initiative on integrating natural capital into development finance in Africa. This initiative, called the Natural Capital for African Development Finance Programme NC4-ADF, is supported by the World Wide Fund for Nature (WWF), the German Federal Ministry for Economic Cooperation and Development (BMZ) through its dedicated agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the United Nations Environment Programme (UNEP), the MAVA Foundation, the International Institute for Sustainable Development (IISD) and the Economics for Nature (E4N) partnership, with the goal of giving a central economic role to natural capital. Natural capital, which includes land or carbon storage resources such as water and fisheries, accounts for between 30% and 50% of the total wealth of African countries, although it is often not included in economic measures such as gross domestic product. Moreover, international development institutions take little account of natural capital in development financing projects. In the face of climate change, natural capital is a key asset supporting inclusive and green growth.
AfricaJapan Credit Rating Agency reaffirms AfDB’s AAA rating with a stable outlook
Japan Credit Rating Agency (JCR) has affirmed the African Development Bank’s (AfDB) long-term rating at AAA with a stable outlook. The agency commended the AfDB for its strong member-country support, as evidenced by the seven general capital increases it has carried out to date. The report reflected on the institution’s financial structure, risk management and funding, noting that JCR monitors whether multilateral development banks are financially viable enough to sustain their business in terms of financial structure, profitability and risk management. Although the bank’s equity investment remained limited in volume, its risks have been growing due to the impact of the Coronavirus (COVID-19) pandemic. The Bank responded rapidly to cushion the impact of the pandemic on its member countries by establishing a COVID-19 Response Facility. The report notes that the bank’s “treasury investment is aimed to ensure ample liquidity and efficient management of assets, the [b]ank manages it in a conservative manner, limiting its investment to counterparties that have high credit standings.” Benefiting from its high credit standing, JCR said the bank has been raising funds from international capital markets on favourable terms.
East AfricaEast African firms to get access to Afreximbank due diligence data
The East African Business Council (EABC) has signed a Memorandum of Understanding with the African Export-Import Bank (Afreximbank) on rolling out the African customer due diligence platform, Mansa digital, in the region. EABC chief executive John Bosco Kalisa told a virtual forum on Wednesday, 1 September that the partnership will boost East African companies and small and medium-sized enterprises (SMEs) to enable them to take advantage of the African Continental Free Trade Area through accessing a centralised source of due diligence information. The Mansa digital platform will provide a single primary source of know-your-customer data required to conduct customer due diligence checks on counterparties in Africa, focusing on African corporates, SMEs and financial institutions. The digital platform is expected to unlock the flow of capital, which will help expand the scale of business in Africa through accessibility of trade finance.
Source: Business Daily
BotswanaBERA considers BPC’s 5% tariff increase request
The Botswana Energy Regulatory Authority (BERA) will soon decide on whether or not to grant the Botswana Power Corporation (BPC) a 5% tariff increase. The decision will be informed by suggestions, comments and consultations that BERA and BPC have been hosting. The corporation requested this from BERA last year together with proposals for another 5% increase in 2022-2023 and yet another 4% for 2023-2024. The BPC received a 22% average tariff increase in the 2020-2021 financial year, which was met with outrage by consumers who complained that the adjustment worsened the impact of COVID-19 on personal incomes. Addressing the public on Friday, 20 August, BPC CEO David Kgoboko said the BPC has suffered running operational losses as the costs of producing or buying power have far exceeded tariffs. According to the corporation, consumers are currently being charged an average of BWP1.28 per unit cost of electricity instead of the BWP1.41, which is the cost of providing the power.
BotswanaBotswana lifts 2021 economic growth forecast to 9.7%
Botswana now expects economic growth of 9.7% in 2021, compared with the 8.8% forecast in February, helped by higher diamond sales and a recent rebasing of gross domestic product (GDP) accounts, Finance minister Peggy Serame told Reuters. She added that the 2021 budget deficit was expected to widen to 3.9% from the 2.8% seen in February. In July, Botswana revised its real GDP accounts base year to 2016 from 2006, seeking to improve the accuracy of its measurement of economic growth. Due to the rebasing, last year’s economic contraction is now much deeper – at 8.5% – rather than the 7.9% originally reported, while nominal GDP is now 4.6% lower at BWP172,552-million (USD15.5-billion). "The larger than forecast contraction in 2020 is, however, expected to be offset by an improvement in growth in 2021 which has now been revised upwards to 9.7% growth for the year," Serame said in response to emailed questions. She said the upward revision was due to a combination of technical changes resulting from the rebasing of GDP by Statistics Botswana in July 2021, alongside the strong performance of the diamond sector in the first half of 2021.
BotswanaBotswana’s Minergy Coal revives LSE listing plans
Botswana’s only privately-owned coal miner Minergy Limited has revived plans to list its shares on the London Stock Exchange (LSE) to reduce debt and increase output amid a global commodities boom, said its CEO. In 2018, Minergy shelved plans for an initial public offering on London’s junior AIM stock market, as coal prices crashed in the Southern African market while uncertainty surrounding Brexit also weighed. "We are now considering listing on the London Stock Exchange Standard Market, not AIM, as we believe it is more cost efficient and less administratively onerous," Morné du Plessis told Reuters in response to emailed questions. "[The] quantum depends on market appetite but we would utilise funding to fund doubling up capacity and settle expensive debt," he added, without providing a timeline for the initial public offering (IPO). Minergy’s Masama Coal Mine, which was commissioned in 2018, has a capacity to produce 1.2 million tonnes a year and the company plans to double output if it secures a contract to supply power utility Eskom in neighbouring South Africa.
Democratic Republic of the CongoCongo reviewing USD6-billion mining deal with Chinese investors – finmin
The Democratic Republic of the Congo's government is reviewing its USD6-billion "infrastructure-for-minerals" deal with Chinese investors as part of a broader examination of mining contracts, Finance minister Nicolas Kazadi told Reuters. President Felix Tshisekedi said in May that some mining contracts could be reviewed because of concerns that they are not sufficiently benefiting Congo, which is the world's largest producer of cobalt and Africa's leading miner of copper. His government announced in August that it had formed a commission to reassess the reserves and resources at China Molybdenum's massive Tenke Fungurume copper and cobalt mine in order to "fairly lay claim to [its] rights". Kazadi said in an interview that the 2007 deal agreed with Chinese state-owned firms Sinohydro Corp and China Railway Group Limited was also being reviewed to ensure it is "fair" and "effective". Under the deal struck with the government of Tshisekedi's predecessor, Joseph Kabila, Sinohydro and China Railway agreed to build roads and hospitals in exchange for a 68% stake in the Sicomines venture.
KenyaKenya joins USTDA’s Global Procurement Initiative
The U.S. Trade and Development Agency (USTDA) welcomed Kenya as its 14th partner under the Global Procurement Initiative (GPI): Understanding Best Value. Under this partnership, the USTDA will train public procurement officials to obtain the greatest value for money for Kenya’s public infrastructure investments. Kenya’s induction into the GPI was formalised through the signing of a Memorandum of Understanding between the USTDA and the National Treasury and Planning Ministry of the Republic of Kenya. “[The] USTDA has a long history of engagement with Kenya. Our GPI partnership builds on this foundation to support the country’s efforts to ensure fair, transparent procurements and increased international competition for its public tenders,” said Enoh T. Ebong, USTDA’s acting director. “This will lead to higher-quality and more resilient infrastructure for the people of Kenya. We are excited about the positive transformations that the GPI will facilitate.” Under the partnership, the USTDA will lead trainings in the United States, Kenya and virtually on international best practices and the integration of best value methodologies in public procurement.
Kenya / PakistanKenya-Pakistan end tariff wars, draft MoUs for more trade
Kenya and Pakistan have ended a long-standing tariff war that hurt trade between the two countries, mainly Kenyan tea exports. On Monday, 30 August, the two countries announced the removal of the 'Attestation Fee' that was charged by the Pakistan High Commission in Nairobi. Calculated at 0.5% of the entire export volume for the tea exports from Kenya, it made Kenyan tea costlier when it landed in Pakistan compared to other teas. Pakistan slapped the fee on Kenyan tea when it initiated taxation of Pakistani rice at 75% under the East African Community (EAC) protocol in 2007. Tea exporters from Kenya were required to get their export documents confirmed and approved by the Pakistan High Commission, before shipping out consignments. “I am glad to inform the Kenyan traders today that the attestation fee has officially been removed effective 16 August 2021. And I have on record the confirmation of the removal of that gazette notice in Pakistan,” Industrialisation, Trade and Enterprise Development cabinet secretary Betty Maina said.
Source: The Star
Kenya / UgandaKenya cuts Uganda’s sugar export quota by 79%
Kenya has cut Uganda’s sugar imports by about 71,077 tonnes, which represents a massive reduction of 79%. Data from Kenya’s Sugar Directorate noted that traders would only be allowed to import 18,923 tonnes of sugar from Uganda down from 90,000 tonnes. This comes amid apprehension with Ugandan sugar manufacturers accusing authorities in Kenya of frustrating a process that has been under negotiation for almost two years now. Recently, Kenya had indicated it would open up to sugar exports from Uganda, allowing in just 90,000 tonnes. However, Uganda Sugar Manufacturers Association had then argued that even allowing in the 90,000 tonnes had been delayed contrary to an April agreement in which the two countries had discussed the relaxation of trade blockades. Mr Jim Kabeho, the Uganda Sugar Manufacturers Association chairman said the massive reduction of the quota was a disappointment, noting that this was against the 90,000 tonnes agreement that had been reached earlier. “This is a crisis, and we have to go back on the drawing board. We [do not] know why Kenya, our main trading partner has taken this direction,” he said.
Source: Daily Monitor
MalawiReserve Bank of Malawi moves to ease forex woes
The Reserve Bank of Malawi (RBM) has reintroduced the mandatory sale of export proceeds kept at exporters’ Foreign Exchange Denominated Accounts (FCDAs) to local Authorised Dealer Banks (ADB), a move which aims at addressing foreign exchange shortages in the country. The system started in 1994 when exporters were returning 90% of proceeds kept in their FCDAs but was later abolished in 2015. According to a press statement from the central bank, the system has been re-introduced with immediate effect “after noting tightness in the foreign exchange market”. It says exporters shall sell a minimum of 30% of their export proceeds. The statement, signed by RBM governor Wilson Banda, says all exporters are immediately required to liquidate 30% of what is currently in their FCDAs by selling the foreign exchange to any ADB. “Exporters are at liberty to sell the foreign exchange to any ADB, offering a better exchange rate, other than the ADB which received the export proceeds. This sale should be done within two days from the date of receipt of the proceeds,” reads the statement.
Source: The Times
NamibiaMining industry must look to building resilience in its value chains from suppliers to downstream customers, says Alweendo
The minister of Mines and Energy, Tom Alweendo believes that the country’s mining industry must look to building resilience in its value chains, from suppliers to downstream customers. Alweendo said this on the occasion of the opening of the country’s virtual Mining Expo and Conference. “If Namibia is going to continue to play an instrumental role in ensuring that the sector becomes a catalyst for economic development, we need to ask ourselves some tough, but necessary questions about our future as an industry,” he said. According to Alweendo, Namibia’s mining industry accounts for 50% of exports and the total value of goods and services procured by the mining sector during 2020 is about NAD12.3-billion. “Even though the figure looks good, there is still a difference between Namibian registered companies (foreign-owned) and Namibian owned companies. A significant portion of the local procurement amount still goes to foreign-owned Namibian registered companies. This gap needs to be breached,” he added. Alweendo said it is for this reason, the Ministry of Mines and Energy together with the Chamber of Mines is developing a database for local inputs.
Source: Namibia Economist
NamibiaNamibia and Germany to form hydrogen partnership
Germany and Namibia have signed a Joint Communique of Intent in Windhoek and Berlin to establish a partnership in the field of green hydrogen technology. The Federal Ministry of Education and Research (BMBF) is providing funding for the identification of suitable sites for green hydrogen production in Africa within the framework of the Atlas of Green Hydrogen Generation Potentials in Africa. German Federal Research minister Anja Karliczek said the global race for the best hydrogen technologies and best sites for hydrogen production is on. “We want to take this chance together. The Federal Research Ministry will provide up to EUR40-million in funding from the economic stimulus package for cooperation within the framework of this partnership. Namibia has enormous potential for scaling up a green hydrogen industry. It has a lot of vast unused space. High wind speeds in Namibia mean that the generation of wind power is particularly profitable. Solar power harbours an even greater potential thanks to over 3,500 hours of sunshine per year. This is almost twice as much as Germany has to offer.”
Source: ESI Africa
NigeriaBuhari elated as NNPC breaks jinx, declares NGN287-billion profit, first in 44 years
President Muhammadu Buhari hailed the Nigerian National Petroleum Corporation (NNPC) for declaring a profit after tax (PAT) of NGN287-billion for the year 2020, the first in its 44-year history. President Buhari stressed that NNPC’s losses were reduced from NGN803-billion in 2018 to NGN1.7-billion in 2019. This is just as the corporation attributed the historic profit it recorded in its 2020 audited financial statement to the adoption of cost-cutting measures, which hit about 30% in the last two years. However, the president has directed the corporation’s management to ensure timely publication of its audited accounts. Special adviser to the president on Media and Publicity, Mr Femi Adesina, in a statement quoted Buhari to have said the directive was in line with an earlier pledge by the federal government to publicly announce the financial position of the NNPC. President Buhari, who doubles as minister of Petroleum Resources, disclosed that the profit was made possible by the prudent management of the country’s resources. The president said, “I am pleased to announce the declaration of profit after tax of NGN287-billion in year 2020 by the NNPC. This is sequel to the completion of the statutory annual audit exercise for year 2020.
Source: This Day
NigeriaFederal and state governments endorse Special Agro-industrial Processing Zones Programme: AfDB and partners to mobilise USD520-million for Phase 1
Nigeria’s federal and state governments have expressed overwhelming support for an initiative to create Special Agro-industrial Processing Zones (SAPZ) – public-private partnerships aimed at developing priority value chains through developing infrastructure in rural areas, focused on finishing and transforming raw materials and commodities. At a high-level briefing session held on Monday, 30 August, minister of Finance, Budget and National Planning, Dr Zainab Shamsuna Ahmed, who hosted the meeting, reaffirmed the federal government’s commitment to put in place enabling policies and incentives to attract private sector investment in the zones, to ensure successful implementation. Director general of the African Development Bank’s (AfDB) Nigeria Country Department, Lamin Barrow said the zones would be rolled out in 18 African countries, including Nigeria. “The [b]ank and its development partners are mobilising USD520-million to co-finance the first phase of the programme in Nigeria, [to] be implemented in phases across six geo-political zones,” Barrow said.
RwandaRwanda to directly export tea to Pakistani market
Members of the business community have welcomed the announcement that Pakistan will soon directly import Rwandan tea other than buying it through the Mombasa Tea Auction in Kenya. This follows the announcement by the Pakistani High Commissioner to Rwanda Amir Muhammad Khan, when he paid a courtesy call on the chairperson of the Private Sector Federation (PSF), Robert Bafakulera, at the PSF headquarters in Gikondo. The meeting took place on Tuesday, 31 August. Pakistan is one of the largest importers of Rwanda’s tea, with volumes exported to the Asian country accounting for over 40%. Current exports have been via Kenya through the Mombasa tea auction. Amir Muhammad Khan, High Commissioner of the Islamic Republic of Pakistan to Rwanda, said that there is potential for investment in each and every sector in Rwanda but they will focus on the import of tea. “We will be able to export tea from Rwanda directly, and not as a third destination, where Pakistan gets Rwandan tea from other countries and this will help boost trade between the Rwandan tea exporters and the Pakistan importers,” he said.
Source: The New Times
UgandaUganda Airlines negotiates interline deal
Uganda Airlines (UA) is finalising interlining negotiations with two of Tanzania’s airlines in an effort to streamline travelling across the region. Speaking at the Julius Nyerere International Airport (JNIA) in Dar es Salaam, UA’s country manager, Ms Lucy Ismail, said negations with Air Tanzania Company Limited (ATCL) and Precision Air (PW) are in the final stages. An interline agreement allows airlines to handle the check-in and baggage for each other’s passengers. This means travellers only have to check in once for all the flights on their itinerary - and that their baggage will be transferred by the first airline to the second without them having to manually collect it and re-book it. UA has already inked an interlining pact with Qatar Airways, Emirates, Hahn Air and APG Airlines - and they are now at the systems testing stage. Ms Ismail was speaking during an event where UA exposed its travellers between Dar es Salaam and Entebbe to the new experience of travelling in the comfort of its newly-acquired A330-800neo as part of celebrations to mark its second year of commercial operations.
Source: The Citizen
ZambiaZambian firm to build KES1-billion gold refinery on Mombasa Road
Zambia's Alinani Precious Metals (APM) has announced plans to build a KES1-billion gold processing plant on Mombasa Road in Nairobi at a cost of KES1-billion targeting artisanal miners. APM chief executive Bupe Chipando said the gold refinery project, whose construction starts early September, will offer miners the means to extract value from their own mineral wealth rather than just exporting raw commodities. "Alinani Precious Metals will have the ability to generate and distil about 300 kilogrammes of gold per day with state-of-the-art equipment and machinery," Mr Chipando said in a statement. Small-scale or artisanal mining is popular in Siaya, Migori, Kisumu, Kakamega and Homa Bay counties and the APM refinery plant will target the processing metal produced by informal diggers in several counties in Kenya. “We will train, finance and provide machinery as well as continuous technical support to our members. The small miners in areas like Migori, Homa Bay, Siaya, Kisumu and Kakamega will be our priority,” he said.
ZimbabweFuel importers face ban over forex abuse
Companies importing fuel using foreign currency obtained from the Reserve Bank of Zimbabwe’s auction system and refusing to retail in local currency now face punitive action following a government resolution on Wednesday, 25 August. Speaking at a post-cabinet briefing, minister of Information, Publicity and Broadcasting Services Monica Mutsvangwa said government had decided to prosecute offenders and cancel fuel trading licences. “Cabinet noted with deep concern that some fuel companies are abusing the foreign currency obtained from the Reserve Bank of Zimbabwe auction to procure fuel and then sell the fuel to consumers in foreign currency. The companies are supposed to follow laid down regulations, in order to enable the general motoring public to access fuel in local currency,” said minister Mutsvangwa. She said government had been furnished with a comprehensive list of the companies and retail outlets abusing the forex facility and had directed that action be taken.
Source: The Herald
ZimbabweZimbabwe saves USD38.1-million as import bill declines
The huge import bill decline has enabled the country to save USD38.1-million, the Reserve Bank of Zimbabwe (RBZ) has said in its latest economic review report. The document, which covers the period ended 30 April 2021, says the import bill was relatively lower when compared to the previous month. “Merchandise imports eased by 7.2%, from USD528-million in March 2021 to USD489.9-million in April 2021. The decline in imports in April 2021 was largely driven by slowdowns in imports of maize, crude soya bean oil and electricity. Maize imports slumped largely on account of the current year’s bumper harvest estimated at 2.7 million metric tonnes,” the bank said, adding that the general improvement in hydroelectricity generation, following rising dam levels, accounted for the fall in the country’s energy import bill. The country’s imports for the month of April 2021 were mainly sourced from South Africa (46.1%), China (17.0%), Singapore (6.7%), Mozambique (3.7%), Zambia (2.8%), India (2.7%) and other markets. Prior to the developments, the country used to spend over USD46-million a month on the importation of maize, wheat and crude oil.
Source: New Zimbabwe