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issue 443 | 10 Apr 2022

Africa

Afreximbank launches USD4-billion Ukraine Crisis Adjustment Trade Financing Programme for Africa

The Board of Directors of African Export-Import Bank (Afreximbank) on 31 March 2022 approved the launch of the Ukraine Crisis Adjustment Trade Financing Programme for Africa (UKAFPA), a programme of credit facilities that the bank has developed to manage the impacts of the Ukraine crisis on African economies and businesses. The programme amounts to USD4-billion. The Russia-Ukraine crisis which escalated on 24 February 2022 has had a significant effect on the global economy. Given the importance of both Russia and Ukraine as sources of crude oil and gas, raw materials and grains, the outbreak of the conflict has wider repercussions on a global scale, including adversely affecting African economies, especially those that rely heavily on grain, fertilizer and fuel imports.

Source: Afreximbank

East Africa

Manufacturers check their readiness to compete under the AfCFTA

The East African Business Council is calling upon the business community especially manufacturers to emphasise quality and value addition if they are to achieve their dream of competing under the Africa Continental Free Trade Area (AfCFTA). This follows a recent engagement of CEOs from various companies across the country. The meeting organised by the Uganda Manufacturers Association aimed at deliberating on the readiness as East African companies to compete with other African countries under the AfCFTA. Simon Kaheru the chairperson of the East African Business Council is, however, concerned that most businesses in Uganda compromise value and quality which he says has to be empasised if we have to get a market share in the continental market, especially agricultural products which are on high demand. The manufacturing sector, which is one of the key drivers of economic growth through the accumulation of capital and labour, accounts for about 10% of GDP in Africa. Also, more than 60% of the value of manufacturing production in Africa stems from four countries: Egypt, Nigeria, South Africa and Morocco. 

Source: Capital Radio

West Africa

ECOWAS holds consultative meetings on Regional AfCFTA Implementation Strategy

The Economic Community of West African States (ECOWAS) Commission continued its consultations with state and non-state actors on the formulation of the ECOWAS Regional Implementation Strategy for the Agreement of the African Continental Free Trade Area (AfCFTA) on 22 March 2022. With a view to ensuring that the AfCFTA outcomes are consistent with regional advancements and that the agreement builds on the ECOWAS acquis, the commission is accelerating the development of a regional implementation strategy taking a participatory and inclusive approach. To date, 12 ECOWAS member states have developed or are in the process of developing their national AfCFTA implementation strategies. In his opening remarks, Mr Mickson Opoku, Director of Bilateral, Regional and Multilateral Trade at the Ministry of Trade of the Republic of Ghana, thanked the ECOWAS Commission for its continuous effort to ensure a harmonised implementation of various commitments by member states. He stressed on the importance of the regional AfCFTA Implementation Strategy, which will ensure that ECOWAS benefit from the continental market as a region.

Source: ECOWAS

West Africa

The 1 000km road that will reshape the African economy

Africa is ramping up efforts to upgrade connections between its main cities and hubs, through ambitious infrastructure projects led by regional blocs, with the latest project due to reach completion in 2025. The African Development Bank (AfDB) recently announced it had secured the USD15.6-billion necessary to fund a “game-changing” West African highway. The East African Community has six cross-border road projects, totalling 1504 km, while the Central African Economic and Monetary Community (CEMAC) and the Southern African Development Community (SADC) also have similar programmes. Meanwhile, West Africa is gaining momentum thanks to the 1 081km highway that will soon link Abidjan and Lagos. Bingerville in Abidjan and Mile 2 in Lagos will be the locations for the two ends of the large dual, 3-lane road. The highway has three parts, the Abidjan – Takoradi section of 295km; the Takoradi – Akanu (both in Ghana) section of 466km; and the Noepe (in Togo) – Cotonou – Lagos section, of 320km. The facility will ease transportation between the most dynamic seaport cities and most populated hubs of the West African part of the Gulf of Guinea, including Abidjan, Takoradi, Accra, Cotonou and Lagos. The five countries that the highway passes through have a combined GDP of USD589-billion and a population of 284 million, according to World Bank figures.

Source: Mail & Guardian

Comoros

ADF commits USD21.6-million to upgrade national road network

The Board of Directors of the African Development Fund (ADF) recently approved in Abidjan USD21.6-million in grants for the third phase of the National Road Network Rehabilitation Programme in the Union of Comoros. The grants comprise USD14.1-million from the ADF, the concessional window of the African Development Bank (AfDB) Group, and USD7.5-million from the Transition Support Facility, a special purpose entity within the AfDB Group that provides funding complementary to its other instruments. The project’s third phase will focus on improving the RN2 (Ourovéni-Foumbouni) in Grand Comores, the main island, the RN21 (Domoni-Mrémani) roadway on Anjouan island and Mwali’s RN32 (Wallah-Nioumachoua) roadways. All three are located in areas with substantial economic and tourist potential. “These road improvements will increase access to inland regions of the country and promote economic growth that is hindered by the deplorable nature of the country's transport infrastructure," said Pamphile Codo, the programme team leader.

Source: AfDB

Ghana

Agricultural Water Management Project to bolster green growth in Ghana

Funds have been made available to build and rehabilitate a total of 35 irrigation schemes in North-Western Ghana. The government of Ghana, Agence Française de Développement (AFD) and the European Union (EU) have signed the Agriculture Water Management Project valued at USD49.1-million. The project, to be implemented by the Ministry of Food and Agriculture and the Ghana Irrigation Development Authority, aims at stimulating green and inclusive growth, reducing inequalities and improving Ghana’s food security. Held at the Ministry of Finance, the ceremony saw the exchange of signatures between the Minister of Finance, Ken Ofori-Atta, and the AFD country director, Christophe Cottet. The agreement was co-signed by the European Commissioner for International Partnerships, Jutta Urpilainen, and the French Ambassador to Ghana, Anne-Sophie Avé. The Minister of Agriculture, Dr Owusu Afriyie Akoto, and the EU Ambassador to Ghana, Irchad Razaaly, were also present.

Source: ESI Africa

Ghana

EU to invest EUR203-million in Ghana’s economy from 2021 to 2024

European Commissioner for International Partnerships, Ms Jutta Urpilainen, and the Minister of Finance, Mr Ken Ofori-Atta, officially launched the Multiannual Indicative Programme for Ghana for 2021-2027 on 31 March 2022. The ceremony took place during the commissioner’s visit to Ghana on 30 and 31 March. A representative from the Ministry of Agriculture, Ambassadors of European Union (EU) member states and Switzerland, and the regional director of the European Investment Bank (EIB) were also in attendance. This new programming falls under the EU’s new Global Europe financing instrument and will provide EUR203-million for the period 2021-2024 to support green growth for jobs; smart and sustainable cities; and good governance and security. These priorities were jointly determined with Team Europe partners and in close consultation with Ghanaian authorities, civil society and other relevant stakeholders. “Ghana is a strategic partner for the EU in West Africa, as an economic powerhouse and an anchor of stability in the region. The EU sees concrete opportunities to deepen our partnership by working together on Ghana’s green and digital transition, security situation, and at multilateral level by promoting our common values,” said Commissioner Urpilainen.

Source: EU

Kenya

CBK sees current account deficit rising to 5.9%

The Central Bank of Kenya (CBK) has revised its projection of this year’s current account deficit to 5.9% of GDP from 5.2% previously, citing the higher price of crude which has raised Kenya’s petroleum import bill. This points to a tighter dollar supply in the market as the gap between outflows and inflows widens, which will put the shilling under further pressure and raise the cost of living for Kenyans. The current account measures the difference between a country’s foreign exchange inflows and outflows, falling into deficit when outflows are higher. The prevailing cost of crude is a major factor in determining the directing of the current account, given that petroleum products account for 17.5% of the country’s total import bill. Oil prices, which had fallen to decade lows of USD19 per barrel at the height of the COVID-19 pandemic in 2020, have now gone up to USD105.30, with a significant gain coming after Russia invaded Ukraine in late February, causing supply jitters. “The change to 5.9% is entirely driven by the higher oil prices that we are expecting. If we abstract from the higher oil prices we would be exactly where we projected before at 5.2%,” said CBK governor Patrick Njoroge after the Monetary Policy Committee (MPC) meeting recently.

Source: Business Daily

Kenya

Court extends freeze on KRA’s higher tax for used cars

The Court of Appeal has extended a freeze on Kenya Revenue Authority's (KRA) move to raise taxes on used motor vehicle imports by adjusting the base on which various levies are computed. The taxman had in July 2020, published a new Current Retail Selling Price (CRSP) – a database of prices of new vehicles in the country that forms the basis of taxing second-hand units after taking into account depreciation. Car Importers Association of Kenya, which represents 80 dealers of used vehicles, moved to court and got orders suspending the implementation of the new catalogue. Justices Patrick Kiage and Roselyn Nambuye declined to lift the order stating that the KRA would impose the higher taxes after the conclusion of the suit. "The loss to be suffered by the public and the upsetting of good order override any loss apprehended to be suffered by the applicants. It is a loss that can be recovered as the government has sufficient machinery to do so," Justice Kiage said in the ruling. The dealers argue that the new CRSP is inflated and has the potential to increase the final prices of some car models by hundreds of thousands of shillings.

Source: Business Daily

Kenya

State to penalise fuel dealers for hoarding as crisis persists

The state will fine fuel marketers accused of hoarding petrol and diesel as it released KES8.2-billion subsidy arrears to petrol retailers to ease nationwide fuel shortage and forestall a crisis. Petroleum Principal Secretary Andrew Kamau said recently that investigations into the shortage were being finalised, setting the stage for financial penalties and licence withdrawals. He added that the supply hitches that caused the nationwide fuel shortage are expected to ease soon after oil marketers steeped supplies to stations from depots. The marketers are said to have gone slow in evacuating their products from the depots to protest delays in the payment of subsidies to the companies. The government says it owes the companies KES13-billion and recently released KES8.2-billion to the dealers, who claim to be owed in excess of KES20-billion.

Source: Business Daily

Malawi

MBS urges businesses to get certified

The Malawi Bureau of Standards (MBS) has urged businesses to certify their products if they are to benefit from local and international markets. MBS board member Anthony Lwanda said this in Lilongwe recently during a presentation of certificates to businesses that passed the standards certification. He said: “It is very important for the local private sector to work hand-in-hand with the MBS in strengthening standardisation and quality assurance initiatives in Malawi.” MBS director of metrology services Thom Malunje said they are working hard to help small and medium enterprises with certification information and offering subsidised standards training for businesses and registered associations. He urged businesses to continue improving their standards as the certificates are renewed every two years and “could be withdrawn anytime that you prove that you can no longer comply with standards”. Salima-based Safari Beach Lodge manager Richard Malumba said being certified by the MBS gives customers confidence to do business with the lodge. It is expected that at the end of this year’s first certification awards, the MBS will have issued 346 certificates out of which 174 will be new certificates and 172 renewed certificates.

Source: The Nation

Mozambique

Renewable energy will account for 20% of energy mix

Mozambican President Filipe Nyusi has reaffirmed that renewable energy will account for 20% of the country’s energy mix, within the next 25 years, as well as boost efforts to reach the government’s goal to ensure universal access to electricity by 2030. President Nyusi reiterated this commitment at the recent inauguration of the Metoro Solar Power Plant, in Ancuabe district of the northern province of Cabo Delgado, budgeted at USD56-million, of which USD40-million was disbursed, as a loan, by the French Development Agency (AFD) and its subsidiary, Proparco. The Metoro complex, the country’s second largest solar power station, stretching over 138 hectares, consists of 121 500 solar panels and has an installed capacity to generate 41.310 kilovoltage peak (kVp). It will annually generate 69 gigawatt hours (GWh) ensuring enough electricity for nearly 140 000 people, around 75% of the residents of Pemba, the provincial capital. The energy generated by the power station will be delivered to the national power grid under the management of the publicly owned electricity company, Electricidade de Moçambique (EDM). 

Source: Club of Mozambique

Mozambique

Zambezi Valley Development Agency has MZN700-million for SMEs

The Zambezi Valley Development Agency has around MZN700-million available to support small and medium-sized enterprises (SMEs), within the scope of the second tranche of Catalytic Fund disbursements in the country. The initiative is financed by the World Bank and aims to connect small producers and SMEs to agricultural value chains by strengthening their knowledge and creating market opportunities. The Secretary of State for Manica province, Edson Macuácua, recently encouraged companies in the province to apply for funding, helping them integrate into the regional market and contribute to the development of the province. The acting coordinator of the Catalytic Fund, Gerson Nunes, said that the initiative aimed to improve the ability of national companies to access global markets. Mozambique’s Innovation and Demonstration Catalytic Fund covers the Zambezi Valley region, the Beira corridor, the Nacala corridor and the Maputo corridor on the Ponta do Ouro route.

Source: Club of Mozambique

Nigeria

FSD Africa, NAICOM partner to expand African insurance market

The Financial Sector Deepening Africa (FSD Africa) funded by UK Aid in collaboration with the National Insurance Commission (NAICOM) has introduced the Risk, Resilience and Regulatory Laboratory (R3Lab), an initiative that would improve Africa’s insurance industry. Speaking at the Declaration on Insurance Conference held in Lagos, the Commissioner for Insurance, Sunday Thomas, said the R3Lab is set up to explore ways in which collaboration, technology and insurance supervisory capacity building could improve regulatory effectiveness in Africa’s insurance industry. Thomas maintained that collaboration in technology and insurance supervisory is capable of mitigating the impact of specific challenges experienced in the regulatory environment. He said the stakeholders are aware of the evolving risks in the African economic space such as climate change, pandemics, digitalisation, inadequate understanding and lack of confidence in the insurance industry. He said the R3Lab will facilitate the design of customised capacity-building programmes and set up peer-to-peer exchange platforms. It will also set up comprehensive learning toolkits, a resource centre for data collection and reporting, topical task forces and forums for insurance supervisors in Africa. 

Source: The Guardian

Nigeria

Nigeria to leverage Dangote Refinery’s crude storage as strategic reserve

With limited capacity to build reserves via deadweight tonnage of tanker fleets through Very Large Crude Carriers (VLCC), the federal government may leverage the 2.4 billion litre crude storage facility by Dangote Refinery to serve as the country’s strategic reserve. Strategic petroleum reserves are stockpiles of crude oil maintained by countries for release in the event of a supply disruption. Nigeria’s oil reserves, less than 40 billion barrels, are mostly untapped and sold on the spot, thus weakening its capacity to get good deals compared with countries with strategic inventories. According to the executive director, Strategy Capital Projects and Portfolio Development, Dangote Group, Devakumar Edwin, the refinery, which boasts of 4.742 billion litres storage capacity, will serve as a strategic reserve for the country. A breakdown of the storage capacity showed that 2.4 billion litres would be assigned to crude while the remaining would be used as storage for refined fuels. Edwin said 75% of the products of the refinery (petrol, kerosene, aviation fuel and diesel) will be dispatched through the sea, by which products could be transported to Calabar, Warri, Lagos and Port Harcourt. 

Source: The Guardian

Rwanda

Rwanda to launch USD350-million agriculture financing facility

The government is expected to start an agriculture facility with an initial investment of USD350-million (about RWF350-billion), Prime Minister Edouard Ngirente has said, indicating that it will help provide farmers with loans at less than 10% interest rate. The prime minister said that this is an initiative Rwanda is going to implement in partnership with the World Bank, indicating that it will start in the second half of this year. He made the disclosure on Monday, 4 April while responding to members of parliament’s concern that loans to agriculture were being charged at high interest rates – of around 18% per year, which is hurting the profitability of farmers. Prime minister Ngirente said that the project will help address the issue. “This is a major agriculture facility we are going to have in Rwanda,” he said. “This project will have a component to ease lending to agriculture. We set a target to ensure that loans to agriculture get charged a single-digit interest rate so that farmers get affordable loans under that programme.”

Source: The New Times

Rwanda / Zambia

Rwanda, Zambia sign seven pacts

Rwanda has signed seven agreements with Zambia as the two countries seek to deepen bilateral relations. The signing ceremony was presided over by President Paul Kagame and his host, President Hakainde Hichilema. The agreements, the Presidency said, include cooperation in taxation, immigration and health. Others are on investment promotion, agriculture, fisheries and livestock. “Zambia has signed [seven memorandums of understanding] with Rwanda focused on increasing investment, improving living standards [and] creating jobs for both our peoples through win-win partnerships,” tweeted Hichilema. The seven agreements reached during Kagame’s visit come at a time when both countries boast of cordial bilateral relations. Rwanda and Zambia have occasionally engaged in high-level consultations on issues of strategic importance to both, including on the United Nations and the African Union.

Source: The New Times

Tanzania

TICTS sets new container volume record at Dar port

Tanzania International Container Terminal Services (TICTS) handled a record-breaking container volume of more than 61 236 twenty-foot equivalent units (TEU) in March, its highest ever monthly throughput, as international trade recovers from the COVID-19 pandemic. The new record in March shatters the previous monthly highest record of 57 616 TEU which was only set in September 2020. It also comes just a month after TICTS handled the largest cargo exchange ever in Tanzania on Hapag Lloyd’s MV Mombasa Express, with more than 6 600 TEU. TICTS attributed the feat to the gradual reopening of the global economy as Tanzania’s agricultural exports reached peak season amid strong local and transit demand. With ports globally struggling to relieve COVID-19-related congestion, the workforce at TICTS rose to the enormous challenge by surpassing previous records of the highest number of container volumes handled in a single month.

Source: Daily News

Uganda

Government will not determine retail price of fuel – Regulator

The prices of fuel products in Uganda will be determined by the market forces of demand and supply even when the country starts producing its own petrol, diesel and kerosene or others. How much Ugandans buy petroleum products will, therefore, depend on what is happening around the world and, to a lesser extent, in the Ugandan economy, according to the Petroleum Authority of Uganda (PAU). It is not clear what the cost of refined fuel products will be by then compared to the current prices averaging KES5 100 a litre of petrol, and KES4 400 for diesel, and a sharp rise over two months by more than KES1 000. The PAU’s director for Legal and Corporate Affairs Ali Sekatawa says that Ugandans should tame their expectations of the benefits of the industry. He says the country will continue importing finished products depending on the need, and that because it is a global industry, what happens in the world will continue affecting the local market. The reprieve, however, will come from the fact that Ugandan products will have incurred lower costs of transportation, which could lower the cost of the final product.

Source: The Independent

Zambia

BOZ and ZICTA join hands to create awareness on digital financial services fraud activities

The Bank of Zambia (BOZ) in collaboration with the Zambia Information and Communication Technology Authority (ZICTA), have intensified awareness programmes to curb fraud activities in the country. Bank of Zambia Payment Systems Department Manager, Maria Katepa, observed that scammers have been duping customers with their hard-earned money by sending unsolicited messages asking them to reverse fake transactions. Ms Katepa said this is why teams from BOZ and ZICTA have joined hands to conduct awareness on digital financial services (DFS) and fraud activities. She noted that through sensitisation programmes, consumers will be informed and be able to protect themselves from crimes of fraud. “We have noted over time that fraudsters are engaging themselves in fraudulent activities to scam unsuspecting customers on their hard-earned money by sending those messages asking them to reverse transactions,” she said.

Source: Lusakatimes