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issue 439 | 13 Mar 2022

Africa

AfDB grant to improve governance of natural resource outflows in six African countries

Six African countries will soon benefit from a grant from the Transitional Support Facility (TSF) of the African Development Fund, through a project designed to strengthen national capacity for governing natural resource outflows in Africa. The African Development Fund is the concessional lending arm of the African Development Bank (AfDB) Group. The Transitional Support Facility has awarded a USD2.8-million grant for the Governing Natural Resource Outflows for Enhanced Economic Resilience in Fragile and Transitional Countries (GONAT) project in the selected fragile and transitional countries: the Central African Republic, Chad, Democratic Republic of the Congo, Mozambique, Sierra Leone and Zimbabwe. The project was approved in February this year and is expected to be completed by the end of 2023. The project will be implemented by the AfDB’s African Natural Resources Centre, building on its ongoing work around illicit trade in Africa’s natural resources and resource-backed loans. It will strengthen the capacity to analyse, monitor, and govern natural resource outflows. In addition, the project will provide policymakers with technical assistance and policy advice.

Source: AfDB

Africa

AfricaGoGreen Fund receives over USD30-million investments from AfDB, SEFA, NDF

The African Development Bank (AfDB) and the bank’s Sustainable Energy Fund for Africa (SEFA) have approved a combined-equity investment of USD20-million in the AfricaGoGreen Fund, a debt fund established to promote private investments in energy-efficient technologies and business models, with the objective of decarbonising African economies and accelerating the energy transition. These new investments come on top of USD11.5-million equity contribution approved by the Nordic Development Fund (NDF) in December 2021. NDF provides financing to climate change mitigation and adaptation activities within the nexus of climate change and development. NDF is also a donor to SEFA, thus reinforcing the close partnership to advance the transition to cleaner and greener solutions for the continent while encouraging the participation of the private sector. “This combined Bank investment will lead to increased financing of emerging projects and businesses in the areas of industrial appliances, electric mobility and green buildings, which are key to the decarbonisation of African economies and to a just energy transition”, said Dr. Kevin Kariuki, AfDB vice president for Power, Energy, Climate and Green Growth. 

Source: AfDB

Africa

Intra-Africa trade in need of more investment to move cargo

Lack of infrastructure is a bigger hurdle to trade within Africa than uncertain non-tariff barriers, eating up close to 40% of logistics expenses and affecting free movement of goods, officials have warned. Amani Abou-Zeid, the commissioner for Infrastructure and Energy at the African Union Commission, has urged countries to embrace transnational projects to facilitate the movement of cargo, noting that no meaningful development can take place without significant investment in infrastructure. “We need to invest in infrastructure to boost our intra-trade on the continent. This can only be achieved by increasing budgetary allocation toward infrastructure projects,” said Dr Abou-Zeid in a speech during the official launch of the Programme for Infrastructure Development in Africa (PIDA) Week in Nairobi, organised by the African Union Development Agency (AUDA-NEPAD). The African Union high representative for Infrastructure Development Raila Odinga noted that while countries have increased budgetary allocations to infrastructure projects, funding from private and institutional investors was missing to bridge the continent’s infrastructure deficit.

Source: The EastAfrican

Africa

AfDB Group approves a borrowing policy to strengthen debt sustainability in low-income countries

The Board of Directors of the African Development Bank (AfDB) Group has approved a new policy that aims to strengthen debt sustainability among low-income African countries. The board approved the Sustainable Borrowing Policy on 23 February 2022. The new policy primarily targets recipients of the African Development Fund, the concessional window of the AfDB Group. The fund caters to low-income and transitional countries on the continent. In recent years, low-income countries have gained access to new sources of finance, including private creditors and creditors outside the Paris Club. Although this access has allowed them to finance important development needs, it has also increased their public debt. The Sustainable Borrowing Policy introduces two pillars to manage debt. The first pillar emphasises debt management and transparency through agreed policy actions and technical assistance. A second pillar will rely on coordination and partnerships with other multilateral development banks, development partners and lenders. The Sustainable Borrowing Policy replaces the Non-Concessional Debt Accumulation Policy, adopted in 2008 and revised in 2011.

Source: AfDB

East Africa

East African apex banks optimistic of economic growth despite risks

East African Community (EAC) central bank governors said on Monday, 7 March that economic growth in the region is expected to improve despite COVID-19 pandemic and geopolitical tensions. The governors said in a joint statement issued in the Kenyan capital Nairobi that the regional economy has been on a recovery trajectory with an average growth of 4.2% posted in 2021, largely supported by easing of COVID-19 related restrictions, public investments and strong performance in the agriculture, services, construction and manufacturing sectors. The apex bank governors, however, said downside risks remain elevated due to slower global growth, rising geopolitical tensions and increasing commodity prices. The latest meeting was held against a backdrop of rising global inflation, tightening financial conditions, and worsening debt vulnerabilities for developing economies owing to the protracted COVID-19 pandemic and geopolitical tensions. To manage these developments, most EAC partner states central banks continued with an accommodative policy stance complemented by regulatory changes, including relaxation of rules on loan classification/restructuring, extended lending facilities, exceptional liquidity assistance, and reduced charges on mobile transactions to support financial intermediation and digitalisation.

Source: Xinhua

East Africa

Transporters call for easing of COVID-19 curbs to boost trade

Logistics players in East Africa want governments to ease COVID-19 test protocols in the wake of a decline in the positivity rate and vaccination rollout across the region. The stakeholders urged health officials across East Africa states to allow fully vaccinated drivers to only present 14-days negative polymerase chain reaction (PCR) tests when crossing borders as a means of reducing non-tariff barriers. “Many countries in the world have adopted this system and we view it as the best way forward under the prevailing circumstances. We should allow drivers tested within 14 days to cross the borders to reduce congestion,” said the Kenya Transporters Association (KTA) chairman Newton Wang’oo. The transporters association with more than 5 000 members in a statement addressed to Uganda, Kenya, Tanzania, Rwanda, Burundi and South Sudan authorities, said COVID-19 protocols ought to be eased to boost cross-border trade. 

Source: Business Daily

Democratic Republic of the Congo

IMF staff concludes visit to the Democratic Republic of the Congo

An International Monetary Fund (IMF) team, led by Ms Mercedes Vera Martin, visited Kinshasa during from 1 to 7 March to discuss recent economic and financial developments, policy priorities and progress with structural reforms. At the end of the visit, Ms Vera-Martin issued the following statement, in part: “Preliminary data confirm the economic rebound in 2021, with GDP growth estimated at 5.7%, supported by a recovery in mining and services. Inflation stood at 5.3% at the end of 2021. With inflation expected to remain subdued, the Central Bank of Congo (BCC) reduced the policy interest rate by 100 basis points at end-2021. Preliminary estimates suggest that the current account deficit narrowed to 1% of GDP in 2021, compared to 2.2% of GDP in 2020, thanks to high mining exports. The 2021 overall fiscal balance is estimated to have improved due to higher revenues and lower-than-projected public investment. The 2022 outlook remains favorable but increased downside risks to the outlook call for building up reserves and sustaining prudent macroeconomic policies to bolster resilience to external shocks.” 

Source: IMF

Djibouti

Djibouti shows signs of recovery, but challenges remain

Construction and public works are expected to remain the main drivers of Djibouti’s economic growth, according to the first edition of the World Bank’s Djibouti Economic Monitor. The Winter 2021 edition is the first in a series of semi-annual reports aimed at analysing development trends and constraints in Djibouti. Titled Navigating through the Pandemic and Regional Tensions, the report provides an update on the country’s recent economic developments and its macroeconomic outlook. Djibouti’s economic activity is estimated to have recovered from COVID-19 in 2021, with a projected growth of 5.1%, compared to a decade-low growth rate of 0.5% in 2020. The economic rebound, however, suffered from a fall in demand from Ethiopia for logistics services during the second half of 2021. The report estimates that a protracted conflict in Ethiopia poses one of the major risks to Djibouti’s recovery. While considerable uncertainty remains, the report considers two scenarios for the medium-term outlook: a scenario in which the conflict is resolved peacefully within six months; and a negative scenario that anticipates a prolonged conflict until December 2022. On this basis, it is estimated that Djibouti’s real GDP growth could hover between 4.3% and 2.7% in 2022. 

Source: World Bank

Ethiopia / Djibouti

Ethiopian inks partnership agreement with IDIPO, Air Djibouti for sea, air transport

Ethiopian Airlines has signed a strategic partnership agreement to jointly commence sea-air multimodal transportation with International Djibouti Industrial Park Operation (IDIPO) and Air Djibouti for an expeditious transportation of goods to Africa. Based on the agreement, the cargo will be transported from China to Djibouti Free Zone by sea and will be lifted by air from Djibouti International Airport. The synergy between air and sea transportation is highly instrumental in facilitating trade between Africa and China through fast and easy movement of cargo, Ethiopian Airlines said in a press release. The collaboration will save both time and energy in addition to stimulating the growth of cargo market in Africa. The transportation deal enables traders to order their products from China to Africa via Djibouti port and Ethiopian facilitates the air movement of goods to different parts of Africa through its vast network.

Source: ENA

Ghana

Ghana’s public debt might have exceeded 80% of GDP – World Bank country director

The World Bank says Ghana’s public debt stock as of now has exceeded the 80% of GDP mark, putting the country in a tighter corner with respect to financing and interest payments. The Bank of Ghana, in its January 2022 Monetary Policy Report, said the stock of public debt was equivalent to 78.4% of GDP at the end of 2021, compared with 76.1% of GDP at the end of 2020. The country’s total public debt stock stood at about GHS344.5-billion as of November 2021. But the country director of the World Bank, Pierre Laporte, speaking at the One Ghana Movement lecture, said the situation might have changed now as Ghana keeps borrowing. “The data as we know is close to 80% of GDP. Probably, now as we speak, it might have exceeded. The fiscal deficit [9.7% in December 2021], unfortunately, with COVID-19 needs to be urgently brought down. Inflation must also be brought down,” Mr Laporte said.

Source: MyjoyOnline.com

Guinea

IMF staff completes staff visit to Guinea

An International Monetary Fund (IMF) staff team, led by Ms Clara Mira, held a virtual staff visit from 28 February to 4 March 2022, to discuss economic developments and outlook. At the conclusion of the visit, Ms Mira made the following statement, in part: “The Guinean economy continues to show resilience, recording high and sustained mining sector growth and a gradual – moderately slower than previously projected – recovery of the non-mining sector. Growth is expected to strengthen in 2022 and could be close to 5.5%, supported by strong mining output coupled with the continuation of the recovery in the non-mining sector, reinforced by the easing of COVID-19-related disruptions and the expected settlement of government payment arrears. Risks remain tilted to the downside, and uncertainty is pronounced. The conflict in Ukraine poses a potential threat to Guinean mining production and investment. The spillovers of the conflict may also result in higher international fuel and food prices, which would negatively impact the Guinean economy, increase fiscal pressures and exacerbate the already high levels of poverty. Domestically, prolonged political uncertainty might weigh on the outlook.”

Source: IMF

Guinea-Bissau

AfDB high-level mission reviews key development programmes

A high-level multisectoral dialogue mission of the African Development Bank (AfDB) carried out a working visit to Guinea-Bissau from 28 February to 4 March. The purpose of the mission was to confirm the work programme for 2022 and to review the bank's planned interventions in the country for the period 2023-2026. The Mission held meetings with the following ministries: Agriculture, Economy, Energy and Public Works. Meetings were also held with representatives of the private sector and civil society to accelerate the formulation and implementation of projects envisaged to support the development of competitive value chains for rice, cashew, fisheries and the blue economy. The main objectives of the mission were threefold: to carry out an analysis of the country context and an assessment of recent political, social and economic developments; interact with other development partners on aid coordination, co-financing opportunities, as well as economic policy issues; and discuss the finalisation of the 2022 loan programme and the indicative operational programme for the period 2022-2024.

Source: AfDB

Kenya

Rich Lamu oil prospects fuel Kenya's economic plans dreams

Kenya is just weeks away from announcing the discovery of new oil resources in the Lamu basin, bigger than what was found a decade ago in Turkana, in what could be a turning point for the country’s dreams of reaping petrodollars. Italian oil exploration company Eni – in partnership with France-based oil and gas company TotalEnergies and Qatar’s state-owned oil and gas firm Qatar Energy – is racing to conclude a five kilometre (km) exploratory drilling deep water well that will establish the potential oil resources in the Lamu basin. The oil resources that can be recovered from Block L11B are estimated at about 700 million barrels according to early conservative estimates, more than a fifth of Turkana’s commercially extractable volume of 585 million barrels. The well is located approximately 170 km from the coast, underneath the Indian Ocean seabed where Eni has been prospecting and drilling for oil.

Source: The EastAfrican

Kenya / Zimbabwe

Kenya, Zimbabwe ink seven pacts to boost investments

Kenya has signed seven bilateral agreements with Zimbabwe. During the talks held at State House in Nairobi, Kenya and Zimbabwe signed the bilateral agreements, all memoranda of understanding on political and diplomatic consultations, tourism and wildlife conservation, and civil aircraft accidents and serious incidents investigations. Others were on women empowerment and community development, youth affairs, cooperatives and sports and recreation activities. President Kenyatta urged Western countries to scrap restrictions during a joint press briefing with the visiting Zimbabwean President Emmerson Mnangagwa as the two countries renew their bid to deepen trade and investment. The European Union (EU) last month renewed its two-decades-old sanctions against Zimbabwe, citing “continued human rights violations and closure of the democratic space.” Besides the EU, the United States and the United Kingdom have maintained targeted sanctions against Zimbabwe. The African Union and Southern African Development Community have clamoured for the removal of the curbs without success.

Source: Business Daily

Madagascar

IMF Executive Board completes first review of the ECF Arrangement for Madagascar, approves USD67.5-million disbursement

The Executive Board of the International Monetary Fund (IMF) completed the first review of Madagascar’s economic programme under the Extended Credit Facility (ECF) Arrangement. The completion of this review enables the immediate disbursement of SDR48.88-million (about USD67.5-million) to cover external and fiscal financing needs, bringing total disbursements under the arrangement to SDR97.96-million (about USD135-million). The 40-month ECF Arrangement was approved by the IMF Executive Board on 29 March 2021, with a total access of SDR219.96-million (about USD312.4-million at the time, or 90% of quota). The arrangement aims to support Madagascar’s recovery from the pandemic and revive the authorities’ reform momentum to raise and sustain growth and reduce poverty. Since the onset of the COVID-19 pandemic, Madagascar benefitted from two IMF Rapid Credit Facility (RCF) disbursements of SDR122.2-million (about USD165.99-million or 50% of quota) in April 2020 and SDR122.2-million (about USD171.9-million or 50% of quota) in July 2020, and received an SDR allocation of SDR234.2-million (about USD322-million) in August 2021. 

Source: IMF

Malawi

‘Industrial sites a game changer’

The government has reiterated that the establishment of industrial sites would make the country attractive to foreign direct investment and propel growth of the economy. Minister of Trade and Industry Mark Katsonga Phiri said this when he toured the Chigumula Industrial site being developed in Blantyre. He said development of industrial sites would make Malawi an easy investment destination. “For a long time, we have been losing out because of exporting raw materials. We want industries to come and process our agricultural products into finished goods. This place is almost ready. The plots are being divided, [there is water and electricity], what remains is road network,” he said. Under the project, the government acquired land in five sites; two in Blantyre, one in Lilongwe, one in Mzuzu and another one in Mangochi, which are being developed for industrial investors. Malawi Investment and Trade Centre chief executive officer Paul Kwengwere said the development will remove from investors, the hustle of looking for land and developing it before making an investment.

Source: The Times

Malawi

Reserve Bank of Malawi recounts 2021 second half gains

The Reserve Bank of Malawi (RBM) has said the economy was relatively stable in the last six months of 2021 on account of low and stable interest rates, among other factors. A December 2021 Financial Stability Report the central bank published on Friday, 4 March shows that the economy withstood risks such as the fourth wave of the COVID-19 pandemic, a modest acceleration of the inflation rate, depreciation of the exchange rate and tight liquidity conditions in capital and money markets. The RBM has since maintained its 3.9% estimate for economic growth in 2021, following subdued growth of 0.9% in the preceding year. It further projects that the domestic economy will grow by 4.1% in 2022, notwithstanding downward risks such as the uncertainty regarding the evolution of the COVID-19 pandemic and its containment measures, as well as erratic weather patterns.

Source: The Times

Namibia

Namibia accelerates implementation of tri-nation tourism visa

Namibia is accelerating the implementation of the tourism Univisa in the Kavango-Zambezi (KAZA) Transfrontier Conservation Area, a move to facilitate easy access and movement of tourists among Zambia, Zimbabwe and Namibia, an official announced on Thursday, 10 March. The tourism Univisa is expected to expand later to all partner countries of the Southern African Development Community, said Pohamba Shifeta, Minister of Environment, Forestry and Tourism, in a statement released on Thursday. "The KAZA Univisa initiative will increase visitors' experience to southern Africa's major tourist attractions such as Victoria Falls in Zambia and Zimbabwe, the Okavango Delta in Botswana and the famous wetlands of Zambezi Regions – formerly the Caprivi wetlands in Namibia," he explained. Shifeta, meanwhile, urged international tourism companies to engage their Namibian counterparts to form strategic business partnerships to optimise investment and business opportunities in the sector and other service industries.

Source: Xinhua

Nigeria / Equatorial Guinea

Nigeria to supply Equatorial Guinea with natural gas

Nigeria has agreed to supply natural gas to Equatorial Guinea at Nigeria's International Energy Summit in Abuja. African energy experts are urging quick implementation of the gas deal amid high demand and supply disruptions caused by Russia's invasion of Ukraine. This week's signing of a gas deal by Nigeria's Minister of State for Petroleum, Timipre Sylva, and his Guinean counterpart, Gabriel Lima, is a testament to Africa's untapped gas market. The deal seeks to supply Nigerian gas to Equatorial Guinea's processing site in Punta Europa. Sylva said the deal would allow much of Nigeria's unused gas to access the global market within two years – a timely development, experts said. Gbenga Komolafe, head of Nigeria's Upstream Petroleum Regulatory Commission, said, "The supply disruptions caused by Russia's invasion of Ukraine resulted in an upward surge of crude oil prices, surpassing USD100 per barrel for the first time since 2014. This development offers market potential for Nigeria to key into maximising its oil and gas assets." 

Source: VOA

Rwanda

Government pledges more investments in biogas

The Minister of Infrastructure, Ernest Nsabimana, has acknowledged that the effective implementation of the National Domestic Biogas Programme has been hindered by factors including lack of maintenance, but observed that biogas is still a relevant cooking energy that is environment friendly. He said that the government is committed to invest in resources and ensure that the biogas programme becomes a success and delivers the intended results. The Minister was on Wednesday, 9 March appearing before the Plenary Sitting of the Chamber of Deputies – held virtually – to provide responses to issues identified in the biogas programme. “The fact that some biogas plants are working offer hope that if we scale up efforts and ensure effective monitoring, it can be fully successful, hence helping reduce firewood-based fuel in line with environmental protection,” he said. His comments came in the wake of uncertainty about the fate of the biogas programme as a large number of them were not functioning, a situation that members of parliament said has discouraged residents from adopting biogas as cooking fuel. 

Source: The New Times

Tanzania

Tanzania registers 294 investment projects worth USD8.1-billion in one year

Tanzania registered 294 investment projects worth TZS18.75-trillion (about USD8.1-billion) between March 2021 and February 2022, a Cabinet minister said on Friday, 11 March. Ashatu Kijaji, the Minister of Investment, Industry and Trade, told a press conference in the capital Dodoma that such a volume of registered investment projects has never been recorded before in the history of the East African nation. Kijaji said the 294 registered investment projects are projected to create 62 301 jobs for Tanzanians. The minister attributed the achievements in the registration of the investment projects to tireless efforts by the government aimed at improving the business environment. Kijaji said the administration of President Samia Suluhu Hassan has been able to restore investors' confidence during its one year in office.

Source: Xinhua

Uganda

IMF Executive Board concludes first review under the ECF Arrangement and 2021 Article IV consultation with Uganda

The Executive Board of the International Monetary Fund (IMF) completed the first review of the Extended Credit Facility (ECF) Arrangement and 2021 Article IV Consultation with Uganda. The completion of the first review allowed an immediate disbursement equivalent to about USD125-million for budget support, bringing the aggregate disbursement-to-date to USD385-million. Uganda’s ECF Arrangement for a total of SDR722-million (200% of quota) or about USD1-billion at the time of programme approval on 28 June 2021, is aimed at supporting the near-term response to the COVID-19 pandemic and boosting more inclusive private sector-led long-term growth. Reforms focus on creating fiscal space for priority social spending, preserving debt sustainability, strengthening governance, and enhancing the monetary and financial sector frameworks. Real growth was revised down to 3.8% from 4.3% for fiscal year 2021/22. The fiscal deficit will be higher than programmed at the time of the ECF approval (7.5% of GDP, up from 6.5%) to accommodate new demands on security and social sectors approved in the supplementary budget. The social impact of the pandemic is, however, profound, with deep scars on human capital potentially persisting over the medium term.

Source: IMF