issue 446 | 01 May 2022
AfricaPAPSS, BUNA to build payment gateway for Africa, Arab region
The Pan-African Payment and Settlement System (PAPSS) operated by the African Export-Import Bank (Afreximbank) in collaboration with the African Continental Free Trade Area (AfCFTA) Secretariat, has announced the signing of a memorandum of understanding (MoU) with BUNA, the cross-border and multi-currency payment system owned by the Arab Monetary Fund (AMF). Interoperability among payment systems, as the foundation for enhancing cross-border payments, requires technical, process and business system compatibility so that end users can seamlessly transact with each other across systems. This collaboration lays the foundation for the interoperability between PAPSS and BUNA payment systems, their participants will be able to make fast, secure and affordable transactions in their local currencies between the African continent and the Arab region. PAPSS is aggressively expanding its footprints across Africa with eight central banks, six switches and about 25 of the largest commercial banks on the continent. PAPSS has signed very significant strategic relationships with other key institutions.
Source: Business Day
AfricaSub-Saharan Africa: A new shock and little room to maneuver
The recovery in sub-Saharan Africa picked up in the third quarter of 2021 and held up despite the onset of a fourth COVID-19 wave at the end of the year. Estimated growth in 2021 has been revised upward from 3.7% to 4.5%. Tragically, however, this progress has been offset by recent events. The Russian invasion of Ukraine has triggered a sharp rise in commodity prices – straining the fiscal and external balances of commodity-importing countries and increasing food-security concerns across the region. As a result, economic activity is expected to slow to 3.8% this year, and is subject to an extraordinary range of risks, the International Monetary Fund (IMF) said in its latest Regional Economic Outlook for Sub-Saharan Africa. “The war in Ukraine has already reshaped the near-term outlook for sub-Saharan Africa,” stressed Abebe Aemro Selassie, Director of the IMF’s African Department. “The shock to global commodity markets will add to inflation, hit the region’s most vulnerable households, exacerbate food insecurity, raise poverty rates, and possibly add to social tensions.
East AfricaInvestments into East African startups fall by 50% as Nigeria shines
East Africa’s investments in startups declined by more than 50% in 2021, with deal activities falling by 2%, largely due to the impact of new restrictions imposed by governments to tame the spread of the third wave of the COVID-19 pandemic. The latest Venture Capital in Africa report (April 2022) by the African Private Equity and Venture Capital Association (AVCA) shows that the value of funding raised by East African entrepreneurs as a proportion of total deal value in Africa fell by more than half to 7% (USD364-million) in 2021 from 18% (USD900-million) in the seven-year period (2014-2020). However, in the continent, the total amount raised by African startups more than quadrupled to USD5.2-billion from USD1.1-billion in 2020 helped by a surge in venture capital (VC) deal activities in Nigeria. The amount was raised from 604 unique companies, raising the average annual total deal value to USD1.3-billion between 2014 and 2021 from USD700-million between 2014 and 2020. According to the report, African startups raised a total of USD5-billion for the seven-year period to 2020. Overall, the financial sector accounted for the largest share of VC deals by both volume and value in the continent followed by information technology and consumer discretionary.
Source: The EastAfrican
BeninIMF staff reaches staff level agreement on a new 42-month ECF/EFF and 2022 Article IV consultation
An International Monetary Fund (IMF) team, led by Constant Lonkeng, held meetings with Beninese representatives in Cotonou from 4 to 13 April and in Washington DC from 19 to 22 April to negotiate a new programme in support of the authorities’ ambitious policy plans and to conduct the 2022 Article IV consultation. The agreement is subject to approval by IMF management and the executive board around mid-June 2022. At the end of the mission, Mr Lonkeng issued the following statement, in part: “I am pleased to announce that the Beninese authorities and the IMF team have reached a staff-level agreement on new 42-month blended Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements to support the authorities’ economic and financial policies. The proposed exceptional access under the ECF/EFF of SDR484.058-million (equivalent to USD658.4-million or 391% of quota) seeks to help Benin address pressing financing needs, preserve macroeconomic stability, and anchor the country’s National Development Plan centred on achieving Sustainable Development Goals (SDGs).”
Central African RepublicCentral African Republic adopts bitcoin as an official currency
Central African Republic has adopted bitcoin as an official currency, the Presidency said recently, becoming the first country in Africa and only the second in the world to do so. A Bill governing the use of cryptocurrency was adopted unanimously by parliament recently, said a statement signed by Obed Namsio, chief of staff of President Faustin-Archange Touadera. "The president supports this Bill because it will improve the conditions of Central African citizens," Namsio told Reuters, without elaborating. In the statement, he called it "a decisive step toward opening up new opportunities for our country". Central African Republic is one of six nations that use the Central African CFA franc, a regional currency governed by the Bank of Central African States (BEAC). "The BEAC learned at the same time as the public of the enactment of a new law on cryptocurrency in Central African Republic," a BEAC spokesman told Reuters, adding that the bank did not have an official response yet.
Ethiopia / KenyaEthiopia changes law for M-Pesa expansion
Ethiopia has started changing its national payments law to clear the way for Safaricom to introduce its popular M-Pesa in the market of 110 million people. Ethiopia’s central bank has drafted a Bill that will allow foreign investors to offer mobile money services, boosting firms such as Safaricom that are seeking to start operations in the country this year. A consortium led by Safaricom last year secured the first private mobile telephony licence, which does not have a permit for mobile financial services such as M-Pesa. The National Bank of Ethiopia (NBE) now seeks to remove the remaining legal hurdle for Safaricom through the Bill that was made public recently. “So far, there is no law that enables foreign operators like M-Pesa to acquire a licence in Ethiopia. If the new amendment is approved, it will allow M-Pesa to get a licence in Ethiopia,” Marta Hailemariam, the head of payment settlement at the NBE, told the Ethiopian press. Ethiopia is liberalising its telecommunications sector in a bid to pivot to a modern, digital economy in line with reforms unveiled by Prime Minister Abiy Ahmed in 2018. State monopoly Ethio Telecom, which launched a new mobile financial service called Telebirr in May last year, attracted four million users within weeks, showing the potential of the market.
Source: Business Daily
Ethiopia / KenyaKenGen completes drilling of seven geothermal wells in Ethiopia
Electricity producer KenGen has completed the drilling of seven geothermal wells in Ethiopia, four at the Aluto-Langano site and three at Tule Moye. In February 2019, KenGen in a consortium with Shandong Kerui Petroleum Equipment Company and Shandong Kerui Oilfield Service Group won a joint contract worth KES7.6-billion to supply geothermal drilling services to the state-owned Ethiopian Electric Power (EEP) company. The Aluto-Langano project started in July and in November the company completed drilling the second well which became the deepest geothermal well in Ethiopia reaching a depth of 3 000 metres. “This is [now] the second 3 000-metre well we have drilled in Ethiopia so far, and I must commend our teams on the ground for successfully delivering to expectations despite the threats of COVID-19 and the security situation in Ethiopia at the time of project implementation,” said Rebecca Miano, KenGen CEO. This reaffirms the Nairobi Securities Exchange-listed company’s expertise in geothermal development in Africa, having earlier drilled the deepest geothermal well in the Horn of Africa. It was contracted to drill eight wells under the Aluto project.
Source: Business Daily
EthiopiaEthiopia signs treaty establishing the African Medicines Agency
Ethiopia has inked the African Medicines Agency (AMA) Treaty, making it the 29th African Union (AU) member state to sign the accord. Deputy chairperson of the AU Commission (AUC), Dr Monique Nsanzabaganwa has congratulated Health Minister Dr Lia Tadesse on the signing of the AMA Treaty. As per the treaty, the agency would work to harmonise regulations on products such as drugs, vaccines, medical devices, blood products, diagnostic tools and traditional medicine across Africa. “The AMA will also complement national and regional efforts in developing robust, predictable, and efficient regulatory systems for medical products that have continental public health benefit,” said Dr Lia. The treaty to establish the agency was adopted by African leaders in Addis Ababa in February 2019. The AMA came into force 30 days after the deposit of the 15th instrument of ratification of the treaty by Cameroon to the AUC last November. The regional bloc is still urging all member states to sign and ratify the treaty. Ethiopia is one of the 29 member states of the AU to sign the treaty. The next move would be to ratify the treaty and deposit the instrument of ratification to the AU.
Source: Ethiopian Monitor
The GambiaNew World Bank report identifies reforms to improve state-owned enterprises
The Gambia has made significant progress in reforming state-owned enterprises (SOEs), but major efforts are still required to establish a sound, efficient and financially sustainable SOE sector, according to a new World Bank report released on 28 April 2022. The Gambia Integrated State-Owned Enterprises Framework (iSOEF) report applies the new World Bank iSOEF methodology to assess the Gambia’s SOE sector and its current reform trends. It is one of the first comprehensive applications in Africa and provides first, a landscape of SOEs in the Gambia, and then addresses key aspects for assessing SOEs, namely: “Effects on Markets”; “Fiscal Impact”; and “Corporate Governance and Accountability Mechanisms”. The report assessed 12 non-financial SOEs identified as the SOE portfolio. “This report provides a complete assessment of the SOE sector,” stated Feyi Boroffice, World Bank resident representative for the Gambia. “The recommendations are aligned with our upcoming Country Partnership Framework for The Gambia (FY22-26) and will inform and support our ongoing efforts to ensure the country’s transition out of fragility and the government’s vision of sustainable, resilient, and inclusive growth.”
Source: World Bank
GabonGabon launches new economic zone
The Gabonese government has announced the construction of a new special economic zone (SEZ), the Mpassa-Lebombi, in the south-eastern province of Haut-Ogooué. The new zone aims at attracting investment in the agricultural and forestry sectors, which respectively represented USD61-million and USD537-million of export value in 2020. The new SEZ will, like the country’s two existing zones, be a joint venture between the Gabonese government and the Singaporean commodity trading firm Olam International, which acts as the principal shareholder (40.5%). The Mpassa-Lebombi SEZ will be developed and modelled after Gabon’s first SEZ, Nkok, created in 2011, which now employs 4 000 people, of which 80% are Gabonese. Nkok accounts for nearly 40% of the country’s exports. As a condition of setting up in its SEZs, the government requires firms to commit to exporting at least three-quarters of their production. In return, the zones provide tax exemptions, efficient infrastructure and access to the country’s resources.
Source: African Business
Ghana5.4% growth rate in 2021 signals rebound of economy – Finance ministry
The Ministry of Finance (MoF) has said the 5.4% GDP achieved last year signalled a rebound of the Ghanaian economy. Data released by the Ghana Statistical Service (GSS) recently indicated that the country recorded a provisional real GDP growth of 5.4% which is 1% higher than the 4.4% projected by the government. The MoF in a statement issued in Accra said the 2021 growth rate showed that the economy had expanded more than was anticipated and exceeded the sub-Saharan Africa (SSA) average growth of 4.5% for 2021. "These developments are positive and confirm the fact that, the economy is rebounding post-COVID-19, the rate of debt accumulation is tapering off, and there is a slowdown in fiscal expansion with Ghana on track to return to the Fiscal Responsibility Act deficit threshold of 5% of GDP by 2024," the MoF said. Figures released by the GSS indicated that real GDP expanded by 7% in the fourth quarter of 2021 compared to the 4.3% growth recorded in the corresponding period in 2020. Similarly, non-oil real GDP in the fourth quarter of 2021 expanded by 7.6% compared to 5.7% for the same period in 2020.
Source: Ghanaian Times
GhanaWorld Bank provides USD200-million to accelerate Ghana’s digital transformation agenda for better jobs
The World Bank has approved USD200-million to help the government of Ghana increase access to broadband, enhance the efficiency and quality of selected digital public services, and strengthen the digital innovation ecosystem in Ghana to help create better jobs and economic opportunities. Digital is one of Ghana’s best-performing sectors and grew on average by 19% per year between 2014 and 2020. Today, Ghana is among the digital leaders in sub-Saharan Africa and the digital economy diagnostic conducted in 2020 identified key bottlenecks that need to be removed to further accelerate Ghana's digital transformation. Building on previous investments, particularly through the ongoing World Bank-supported e-Transform Ghana project, this newly approved Ghana Digital Acceleration Project is supporting a regulatory shift to create an enabling environment for digital inclusion and innovation; streamline governance and delivery of public services; and facilitate smallholder engagement in data-driven digital agriculture.
Source: World Bank
KenyaCBK orders banks to ration scarce dollars
The Central Bank of Kenya (CBK) has directed commercial banks to ration dollars following a shortage of the US currency and the race to protect reserves, hitting manufacturers and general goods importers. A number of currency traders and importers say banks have imposed a daily cap on dollar purchases as firms struggle to obtain adequate foreign exchange to meet their obligations. This has forced industrialists to start seeking dollars in advance as the shortage puts a strain on supplier relations and the ability to negotiate favourable prices in spot markets. The shortage is the product of increased dollar demand being driven by increased shipments of raw materials and equipment in the wake of the recovering economy and local companies disbursing dividends to foreign investors. The CBK has also been keen to avoid huge panic buys of dollars and protect reserves amid the global outlook that has worsened in the recent months following Russia’s invasion of Ukraine, surging prices of oil and other commodities as well as lingering concerns over the resurgence of COVID-19.
Source: Business Daily
KenyaCEOs face KES1-million fine on failure to set up graft reporting lines
CEOs and top executives of firms that have not established an internal code of conduct to report and fight corruption risk a fine of KES1-million or a 10-year jail term. The penalties follow the expiry of the six months grace period for firms to set up in-house platforms that will assess risks and exposure to corruption, train staff on fighting graft and establish internal networks for workers to anonymously report suspected bribery and graft cases. The firms will also be expected to hire anti-corruption executives, have a written code to map out corruption risks and report cases to the anti-graft agency within 24 hours. Companies had six months from 14 October to comply with the stringent requirements as the state shifts focus to the private sector in the war against corruption. The regulations are anchored on the Bribery Act, 2016 which places the offence on directors and senior officials whenever their companies fail to establish internal controls and systems to fight and report corruption. High-ranking officials in the private sector have now joined state and public officers in the list of persons required to fight and report corruption, a crime that has seen taxpayers lose billions of shillings every year.
Source: Business Daily
KenyaIMF reaches staff level agreement on the third review of the EFF and ECF for Kenya
A staff team from the International Monetary Fund (IMF) led by Mary Goodman, conducted a hybrid mission to Kenya and in Washington DC from 31 March to 22 April to discuss progress on reforms and the authorities’ policy priorities in the context of the third review of Kenya’s economic programme supported by the IMF’s Extended Fund Facility (EFF) and Extended Credit Facility (ECF). The arrangements were approved by the IMF Executive Board on 2 April 2021, for a total amount of SDR1.655-billion (USD2.34-billion at that time). At the conclusion of the mission, Ms Goodman issued the following statement, in part: “The IMF staff team and the Kenyan authorities have reached a staff-level agreement on the third review of Kenya’s economic programme under the EFF and ECF arrangements. The agreement is subject to approval of IMF management and the executive board in the coming weeks. Upon completion of the executive board review, Kenya would have access to SDR179.13-million (equivalent to about USD244-million), bringing the total IMF financial support under these arrangements to SDR865.77-million (equivalent to about USD1 178-million).”
MalawiMRA starts collecting advance income tax
Cross-border traders who are not registered with the Malawi Revenue Authority (MRA) will from 1 May start paying a 3% advance customs and excise value duty on their goods at the port of entry into Malawi. This comes at a time the revenue collection body has moved to implement the Advance Income Taxation (AIT) on imports in line with the Customs and Excise (Tariffs) Amendment Order of 2021. The tax will, however, not be imposed on imports that are meant for personal use, for businesses of registered taxpayers who are already issued with a valid Tax Clearance Certificate or Withholding Tax Exemption Certificate and for government ministries, departments and agencies. Announcing the implementation of the AIT to journalists, MRA Deputy Commissioner for Customs and Excise Chimwemwe Kawalewale said the move is aimed at registering more people into the tax net and growing the tax base, apart from enhancing tax compliance. “The MRA is implementing Advance Income Tax on imports to level the playing field and ensure that all businesses are paying their fair share of taxes due.”
Source: The Times
NigeriaGovernment to end NGN200-billion yearly electricity subsidy in December
The federal government is looking at ending tariff shortfall, averaging NGN200-billion yearly, in the power sector by the end of the year. Between 2015 and 2020, the shortfall reportedly stood at about NGN2.4-trillion, averaging NGN200-billion yearly. The shortfall accrued from suppressed charges for electricity consumption. By implication, Nigerians may, from December this year, be compelled to pay the actual cost of energy consumed. This comes as the Nigerian Electricity Regulatory Commission (NERC) said emerging challenges, especially insecurity, are already frustrating the sector. The Secretariat of the Power Sector Recovery Programme (PSRP) disclosed that the government is considering that tariff shortfall comes to an end before the end of the year. The Minister of Finance, Budgets and National Planning, Zainab Ahmed, had earlier said that the federal government had quietly removed all subsidies in the power sector with a plan to gradually end subsidies on petrol.
Source: The Guardian
NigeriaWe are fully ready to roll out 5G, says MTN
MTN has revealed its readiness to roll out the fifth generation (5G) network service in the country by the second half (H2) of the year. The chief executive officer, MTN Nigeria, Karl Toriola, made this known in Lagos, when he announced the partnership of the firm with Pan-Atlantic University (PAU) on the launch of the MTN Media Innovation Programme (MTN MIP), which will be run by the School of Media and Communication (SMC). On 5G rollout, Toriola said: “We are ready; we won the licence through a transparent auction process. We congratulate [the Nigerian Communications Commission (NCC)] on this. We paid the full licence fee a month ahead of schedule. Within the information memorandum that the NCC issued, there was a timeline, which indicated that we could launch in H2. We are prepared to launch on the day that the investment memorandum allows us to, and we will explore with the NCC if they allow us. It is still completely at their discretion, but we are fully ready, even now.” He disclosed that since its inception, the firm has paid NGN3.5-trillion in taxes to government and committed over NGN3.4-trillion in capital investment.
Source: The Guardian
TanzaniaRoyal Tour is good for businesses says CRDB CEO
The Royal Tour, which President Samia Suluhu Hassan inaugurated on Monday, 18 April offers a massive economic growth for Tanzania, the CRDB Bank Plc chief executive officer has stated, detailing how the lender would utilise its national and international network to rejuvenate Tanzanian businesses. Mr Abdulmajid Nsekela – who is part of the business community that has travelled with President Hassan on her trip to the United States – said the Royal Tour would boost tourism arrivals and investments. "We expect the Royal Tour will achieve its objectives of promoting Tanzania as a leading country in terms of tourist attractions globally and thus help attract tourists to Tanzania… It will also boost trade between Tanzania and other countries and attract investors to come and invest in the country," he said.
Source: The Citizen
UgandaMPs want revamp of National Seed Company
The Committee on Agriculture, Animal Industry and Fisheries has called for the revamp of the National Seed Company to curb counterfeit agricultural products on the market. Chairperson Janet Okori Moe, who presented the committee report on the Ministerial Policy Statement and Budget Estimates for Financial Year 2022/23, is cognizant of the high cost of agricultural inputs which she says has forced farmers to opt for counterfeit and low-quality inputs on the market. “The rise in prices has extended to other inputs such as seeds, pesticides and machinery repairs, which has led some farmers to look for cheap counterfeit agricultural inputs that in turn reduced productivity from farms,” Okori Moe said. The committee report, which was adopted by the House during the Wednesday, 20 April 2022 plenary sitting recommended that government revamps the National Seed Company to ensure provision of improved quality seeds and subsidised inputs to farmers throughout the country. Similarly, the committee noted a number of challenges that currently affect agro-processing industry that among others include; high cost of operation as a result of high cost of utilities like electricity and transport, insufficient supply of inputs leading to industries operating below capacity.
Source: The Independent
UgandaUganda relaxes COVID-19 restrictions for travellers
Uganda on Wednesday, 27 April relaxed COVID-19 restrictions for travellers who are fully vaccinated. Speaking to journalists, Health Minister Jane Ruth Aceng said the country has suspended the requirement of a negative polymerase chain reaction (PCR) test done within 72 hours before boarding a plane for all travellers if they are fully vaccinated. However, travellers may still be required to have the PCR test results if it is a requirement of the destination country, or the airline they are travelling with. More than 44 million doses of vaccines have been received in the country, according to Ms Aceng, with 15 million people (71% of the targeted 22 million) receiving at least one dose of vaccination. “Over 10 million people are fully vaccinated, accounting for 48% of the target population and 59 542 people have received their booster dose,” Ms Aceng said. To curb the spread of the virus, Uganda maintained a strict lockdown from 18 March 2020 that saw many businesses and schools closed for two years, dealing a heavy blow to people’s sources of livelihood.
Source: The EastAfrican