issue 447 | 08 May 2022
East AfricaPoor, congested roads erect more hurdles on cargo routes from ports
Ports in East Africa continue to struggle to be efficient with traders saying they are frustrated by bottlenecks that seem to promote inaccessibility for a region that is a net importer. At a meeting on logistics for regional trade in Mombasa, examples were rife. Kenya’s second commercial port in Lamu was meant to boost operations but 11 months after launch, the facility has only been able to handle 11 vessels, with throughput of 1 821 twenty-foot equivalent units, according to Kenya Port Authority’s (KPA) data. KPA officials attribute this to unfinished roads and for the port of Mombasa, they cite a crowded Northern Corridor. At the 26th Intermodal Africa Exhibition and Conference in Mombasa, KPA acting managing director John Mwangemi said they expect the port in Lamu to pick up after an improvement of infrastructure. “The first phase of Lamu port is complete and we hope to partner with the private sector to make the port more viable,” he said.
Source: The EastAfrican
West AfricaAfDB launches stakeholder consultations for updated Integrated Safeguards System
The African Development Bank (AfDB) has kicked off virtual consultations on its Integrated Safeguards System to adequately address emerging environmental and social issues. The session for Anglophone West African countries, held on 21 April 2022, registered participants from Nigeria, Ghana and Sierra Leone. Opening the event, the director general of the Nigeria Country Department, Lamin Barrow, underscored the importance of these stakeholder consultations, noting that: “These consultations are being held in view of the significant importance of soliciting their perspectives, insights and learning lessons from their experience to inform the update of the Integrated Safeguards System.” As part of its commitment to continuously improve environmental and social management and governance, the bank has prepared a draft of its updated Integrated Safeguards System, which is being consulted upon with external stakeholders, including representatives from key government agencies in regional member countries, staff of project implementing units for bank-financed operations and civil society organisations. These consultations are intended to solicit feedback and inputs from stakeholders to put in place relevant systems that fit with the policies and standards of peer institutions.
GhanaE-Levy: Revenue target revised down to GHS4.5-billion
The government has cut the revenue target from the Electronic Transactions Levy (E-Levy) to GHS4.5-billion in line with developments following the proposal of the levy in November last year. The Commissioner-General of the Ghana Revenue Authority (GRA), Dr Ammisshaddai Owusu-Amoah, told Graphic Online recently that the revision followed the reduction in the rate from 1.75% to 1.5%, the delay in implementing the levy and the negative sentiments that heralded the proposal of the levy last year. Dr Owusu-Amoah added that the GRA’s internal survey had indicated that electronic transactions would slow down in the first days of the levy's implementation before picking up. He was, however, optimistic that transactions would stabilise in the medium term as people get used to the levy. He said the various exemptions provided by the government were boosters to the usage of electronic transactions and thus urged the public to look at the convenience provided by digital transactions. He also called on the public to take the levy as one of their little contributions to nation building.
Source: Graphic Online
GhanaGhana government pledges protection for bilateral investors on AfCFTA
The government of Ghana has pledged to protect Bilateral Investment Treaties (BITs) for countries that sign agreement with it for reciprocal foreign direct returns on the African Continental Free Trade Area (AfCFTA). The pledge comes in the wake of growing appetite for multilateral agreements. The government has indicated that even as multilateral agreements continued to grow, BITs were still critical for country-to-country investments and pledged to protect countries that entered into BIT arrangements with Ghana on the AfCFTA. Mr Yaw Afriyie, deputy chief executive officer, Ghana Investment Promotion Centre, told investors during an Economic Counsellors Dialogue in Accra that Ghana would protect and ensure that BITs were of mutual benefits to its partners. He said: “We continue to negotiate new BITs with our key partners actively, and for the old generation BITs, we are committed to renegotiations towards making them compliant with best practices and our current investment regulatory framework.”
Source: Ghana Business News
GhanaGhana to offer oil blocks in Western, Eastern Basins – Dr Adam
Ghana will soon offer new oil blocks in the Western and Eastern Basins for exploration through direct negotiations, Dr Mohammed Amin Adam, the Deputy Minister of Energy has said. The offer, he said, was part of enhanced exploration strategies aimed at accelerating extraction to generate revenue, create jobs and support economic growth. Dr Amin said this on the sidelines of the 2022 Offshore Technology Conference, in Houston Texas, the United States, monitored by the Ghana News Agency. He stated that Ghana was seeking to maximise resources and that the ministry would not relent on efforts to create an enabling environment for investments through legal and regulatory reforms. “For example, the government over the last two years amended petroleum regulations to allow for exploration in production and development areas without a requirement for a new petroleum agreement,” he said. “We also provided flexibility in determining the size of a development and production area to prevent potential assets near the field from being stranded.”
Source: Ghana Business News
KenyaBanks plan greater technology uptake in online payments fraud fight
The Kenya Bankers Association (KBA) is seeking to increase the implementation of a two-step verification process and contactless technology by lenders to reduce fraud, especially in online payments. The security strategy will see banks send a one-time personal identification number (PIN) to users and shoppers when transacting online. E-commerce has gained pace in the country, accelerated by the COVID-19 pandemic, with 60% of consumers estimated to engage in digital payments hence fueling card frauds. “Some banks have put multiple-factor authentication where sale and transaction are not confirmed on the internet alone,” said Fidelis Muia, technical services director at the KBA. “The banks will send a second one-time authentication password [via] message or email. We will see a reduction in fraud if all banks implement the feature.” Card usage continues to face risk of fraud through social engineering, phishing, and identity theft, among others.
Source: Business Daily
KenyaState plans KES300-million more for small factory lending
The Industrialisation and Trade Ministry plans to raise lending to small-sized factories by KES300-million in the year starting July, signalling increased funding to industrial projects in peri-urban and rural areas. The ministry is targeting to advance KES2-billion to small-scale factories largely in manufacturing through the Kenya Industrial Estates (KIE) in the 2022-2023 financial year, a 17.6% rise over the KES1.7-billion budget allocation for the year ending June. The state-backed loans are expected to create some 4 000 micro- and small-sized enterprises, a growth from the 3 400 firms it is targeting this year. KIE loans largely support firms in buying machinery and bolstering working capital in a bid to boost rural industrialisation. Leather, textiles and agro-processing sub-sectors have been mapped as low-lying fruits in a bid to revive and modernise Kenya’s cottage industries under the manufacturing pillar of the Big 4 Agenda. If achieved, this will be the largest outlay to the cash-starved entrepreneurs in more than a decade.
Source: Business Daily
MalawiBanks’ liquidity squeeze looms
The banking sector may start facing a liquidity squeeze which haunted the sector for a good part of last year as the government is expected to borrow MWK491-billion through Treasury Bills and Treasury Notes, among other tools. Last year, banks were facing tight liquidity averaging between negative MWK80-billion and negative MWK90-billion which also saw increased use of the Lombard rate facility where banks are allowed to borrow from the central bank. To ease the pressure, the Reserve Bank of Malawi (RBM) injected liquidity in the banking sector through open market operation reverse repos which have since started maturing. According to the RBM Financial Market Developments report of 29 April 2022, between last month and next month, the RBM would have sucked approximately MWK141-billion from the market through the maturity of the repos and MWK491-billion through Treasury Bills and Treasury Notes.
Source: The Times
MalawiReserve Bank of Malawi hints at tight monetary policy
The Reserve Bank of Malawi (RBM) has hinted at further tightening of the monetary policy in a bid to cushion the country from biting inflation, a move an economic expert has described as not viable for Malawi. The bank has indicated in its March 2022 Market Intelligence Report that the move would ease inflation pressure which stems from economic disruptions due to the war between Russia and Ukraine. According to the report, global economies are grappling with rising inflation and the responses by central banks have varied. While most of the central banks in advanced economies have begun to tighten their monetary policy, a majority in emerging and developing economies are yet to implement the necessary inflation control measures. This is due to considerations for several objectives including reviving economic growth and enhancing public debt sustainability. It adds that Malawi’s economy has not been spared from the economic turbulence caused by the war as evidenced by the recent increase in inflation, with domestic inflation in the recent months moving further away from the medium-term target.
Source: The Times
MozambiqueAfDB acting chief economist wraps up three-day mission to Mozambique in support of reform agenda
The African Development Bank (AfDB) Group’s acting chief economist and vice president for Economic Governance and Knowledge Management, Kevin Urama, completed a three-day official visit to Mozambique. Urama led a small team to the Southern African country in response to a request from the Mozambican government for bank support in shoring up capacity to manage public finance in the country. The team included AfDB country manager for Mozambique, Cesar Augusto Mba Abogo; Eric K. Ogunleye, Urama’s advisor; and AfDB senior country economist in Mozambique, Romulo Correa. The delegation held consultations with stakeholders on a range of issues including greater coordination on policy, effectiveness and development impact. Urama also took part in discussions on closing the infrastructure gap and incentives to boost youth and women entrepreneurship.
NigeriaMove to ban Russian oil threatens Nigeria’s fiscal stability
Nigeria may face fresh hurdles as the geo-political tension in Europe recently escalated with moves to officially ban Russian crude oil. The European Commission proposed a full ban on Russian crude oil following the continued attack on Ukraine. The proposed ban, which has sent oil prices rising by over 4% to about USD108 per barrel, means higher cost petroleum products for Nigeria, and ultimately, an increase in subsidy spending. Leading buyers of Nigerian crude, especially India and China, may dump Nigerian crude for much discounted Russian oil, reports have said. As Europe is considering its ban, India, which is the world’s third-largest oil importer and Nigeria’s largest crude buyer, is, according to Bloomberg, negotiating discounts for the Russian oil asking for below USD70 per barrel price to compensate for logistics, financing and sanctions troubles. If India and Russia agree on the discount, state-owned refiners in India could import as much as 15 million barrels of Russian oil in May, Bloomberg wrote. At the same, China bought about USD1.02 billion worth of crude oil from Nigeria in 2020, according to the United Nations trade database on international trade.
Source: The Guardian
Rwanda / BotswanaRwanda, Botswana keen to strengthen trade, investment ties
A special call for the private sector to invest in research to produce good quality products, sharing best practices and knowledge in agriculture, particularly farming, export of goods and services, was made during ‘The Trade and Investment Conference’ between Rwanda and Botswana. The two-day event was held on 28 and 29 April, where public and private sector players from both countries were given a platform to explore present trade and investment opportunities. During the conference, a memorandum of understanding was signed by Claire Akamanzi, the CEO of the Rwanda Development Board (RDB) and Keletsositse Olebile, CEO of the Botswana Investment and Trade Centre, to enhance cooperation between the two institutions. In her remarks, Akamanzi said that trade between both countries is still low and called upon the private and public sectors to utilise present opportunities.
Source: The New Times
TanzaniaFuel prices hit new highs in Tanzania
Fuel prices have hit new highs in Tanzania as tensions in eastern Europe continued to hurt the global oil market. According to the latest cap prices for May for petroleum products, announced recently by the Energy and Water Utilities Regulatory Authority (EWURA), petrol will be sold at TZS3 148 (USD1.36) and diesel at TZS3 258 (USD1.40) per litre at the pump in Dar es Salaam, up from TZS2 861 (USD1.23) and TZS2 692 (USD1.16), respectively in April. The new prices, effective Wednesday, 4 May represent an increase of 9.5% for petrol and 17.1% for diesel following hikes of 12% and 21%, respectively in April. According to EWURA, the retail price for kerosene in Dar es Salaam will be TZS3 112 (USD1.34) per litre compared to TZS2 682 (USD1.15) in April and TZS2 209 (USD0.95) in March. “Prices of each petroleum product throughout the country will be computed based on the cost of the product received through the ports and the transport costs to the respective regions,” the agency said. The most expensive selling point remains Kyerwa district in Kagera region on the border with Rwanda and Uganda where petrol now costs TZS3 385 (USD1.46), diesel TZS3 495 (USD1.51) and kerosene TZS3 350 (USD1.44) per litre.
Source: The EastAfrican
UgandaUganda losing agricultural advantage to neighbours - UN
Uganda is losing its agricultural productivity advantage to neighboring countries due to lack of sufficient development in the sector, according to the United Nations (UN) Capital Development Fund. Speaking during the Agribusiness Mkutano (conference) in Kampala, Dr Dmitry Pozhidaev, the UN Capital Development Fund country and regional head, said before the 2000s, Uganda was ahead of all East African member states in terms of agriculture productivity, but Rwanda and Kenya have since become superior. “Uganda has lost the agricultural productivity advantage [it held] over Rwanda in the early 2000s. It now lags behind Kenya and is much more behind South Africa,” he said, noting that because of low productivity, a number of people have moved to other sectors of economy, yet they have low absorption capacity thus exacerbating unemployment. Dr Pozhidaev also noted that since the 2000s, productivity in the services sector has doubled while that of manufacturing continues to fluctuate. Under the National Development Plan II, government had sought to realise a 2.2% annual increase in agricultural productivity and increase in labour productivity by 40%.
UgandaUganda's economy not ‘producing quality jobs’
Uganda’s constant economic growth of 5.4% in the past two decades has had minor impact on improving quality of jobs available in the market, says a new report by the National Planning Authority. “Working age population grew from 16.5 million between 2012-2013 to 19.1 million in 2016-2017,” the report shows. According to the report, 700 000 people enter the labour market every year but only about 238 000 or 34% are absorbed. This is expected to rise to about one million a year between 2030 and 2040, according to the World Bank. “The quality of jobs, however, is low. Only one in five workers are in waged employment, although outside of agriculture, the share is about half in waged work,” reads the report. According to International Monetary Fund, Uganda's economy will expand at 3.8% in the 2021/2022 fiscal year from a previous projection of 4.3%, thanks to effects of COVID-19. Uganda Bureau of Statistics records show 77% of the estimated 45 million people are aged below 25. The unemployment rate for young people in Uganda, aged 15-24, is 83%, the bureau says.
Source: The EastAfrican
ZambiaRefined copper exports soar
Zambia’s exports of refined copper in the first quarter increased to 464 800 metric tonnes from 463 700 metric tonnes in the same period last year. Copper is the country’s major foreign exchange earner and is currently trading at USD9 759 a tonne on the London Metal Exchange (LME). Zambia Statistics Agency (ZamStats) interim statistician general Mulenga Musepa said export earnings from refined copper in March increased by 3.8% to ZMW13.9-billion from ZMW13.4-billion in February this year. “The cumulative volume of refined copper exported for March was 230 500 metric tonnes while that of 2021 for the same period was 228 000 metric tonnes, representing a 1.1% increase,” Mr Musepa said during a recent media briefing. He said copper prices on the LME market for the corresponding months increased by 3.4% to USD10 237.6 a tonne in March from USD9 941.4 a tonne in February. Mr Musepa also said Zambia’s major export products in March were from the intermediate goods category mainly comprising copper anodes and electro-refined copper cathodes (high purity) accounting for 90.9%.
Source: Zambia Daily Mail
ZambiaState, stakeholders step up efforts to up cotton production
Doubling cotton production has potential not only to improve livelihoods, but also create employment. Thus, declining production of cotton is a genuine concern to both government and stakeholders that are interrogating causes of the steady drop in production of the cash crop. Cotton production in Zambia has slumped from 275 000 metric tonnes in 2012 to a low 350 kg in 2021. Cotton Board of Zambia executive director Sunduzwayo Banda cited loss of quality in inputs, seed quality and lack of extension services. Minister of Agriculture Reuben Mtolo has been meeting stakeholders to get to the bottom of the slump in cotton prices, which is believed to have discouraged some farmers from continuing to cultivate the crop. Mr Mtolo believes cartels are the core of the slump in production and has brought on board the Competition and Consumer Protection Commission, Zambia Cotton Ginners Association (ZCGA), and Cotton Board of Zambia (CBZ), among others. While government is playing its part, the International Cotton Advisory Committee (ICAC) has also stepped-up efforts to help cotton farmers to start doubling their production.
Source: Zambia Daily Mail
ZambiaZESCO welcomes private sector in electricity market
Minister of Energy, Peter Kapala has noted that the entry of the private sector into the Zambian electricity market will support the country’s development of a greener and diversified energy mix that supports jobs and investments. Engineer Kapala says this is the reason Africa GeenCo’s participation in the country’s energy sector is a milestone that signifies government’s efforts to create a conducive environment aimed at attracting private investment in an open, transparent and competitive electricity market. Mr Kapala was speaking in Lusaka at the launch of Africa GreenCo, an alternative off-taker for renewable energy in Zambia and the region. Mr Kapala said following the enactment of the 2019 energy sector legal framework, Africa GreenCo has been the first renewable energy buyer and trader in Zambia which seeks to enhance project bankability and reduce the risk for independent power producers.