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issue 450 | 29 May 2022

Africa

Afreximbank signs MoU with APPO to establish an African Energy Transition Bank

The African Export-Import Bank (Afreximbank) has signed an agreement with the African Petroleum Producers Organization (APPO) according to which both parties will collaborate on the establishment of an African Energy Transition Bank in support of an Africa-led energy transition strategy. The new institution will accelerate Africa’s economic development, while ensuring this progress is compatible with, and complementary to, the Sustainable Development Goals as well as the continent’s long-term social and environmental objectives as set out in African Union’s Agenda 2063: The Africa We Want. The African Energy Transition Bank addresses an urgent and existential need on the continent. While Africa’s transition towards alternative energy sources presents great opportunities for the continent, this transition must be carefully managed to minimise the short-term adverse impacts of the transition while maximising its longer-term benefits. The new bank’s responsibilities would include the management and encouragement of such a productive transition.

Source: Afreximbank

Africa

Africa’s leading financial institution will avert looming food crisis

The African Development Bank (AfDB) Group’s Board of Directors has approved a USD1.5-billion Emergency Food Production Facility to help tackle the global food crisis sparked by the Russian-Ukraine conflict. The funds will help 20 million African farmers produce an extra 38 million metric tonnes of food to address growing fears of starvation and food insecurity on the continent. The bank, which is Africa’s only AAA-rated financial institution, has consistently maintained this credit rating by all major global credit rating agencies. The emergency food production package comes as the AfDB gathers in the Ghanaian capital of Accra for its 2022 annual meetings this week. Delegates will take stock of the bank’s projects, which have impacted the lives of 335 million Africans in the last five years, while looking ahead to new challenges and opportunities. Overcoming Africa’s challenges includes building back from COVID-19. Early in the pandemic, the bank provided a crisis response facility of up to USD10-billion to African countries to help overcome its social and economic impacts. 

Source: AfDB

Africa

ECA launches Africa Trade Exchange platform to facilitate trading under AfCFTA

The Africa Trade Exchange (ATEX), a business-to-business (B2B) e-commerce platform, was launched during the official opening of the 54th Conference of African Ministers of Finance, Planning, and Economic Development (CoM2022) on 16 May in Dakar, Senegal. The launch took place in the presence of Senegal’s President, Macky Sall, who is also the chairperson of the African Union (AU). The platform was developed by the United Nations Economic Commission for Africa (ECA) and the African Export-Import Bank (Afreximbank), in collaboration with the AU and the African Continental Free Trade Area (AfCFTA) Secretariat to serve as a B2B and business-to-government (B2G) digital marketplace. ATEX will enable pooled procurement of basic commodities to ensure countries have access to scarce supplies in a transparent manner. ATEX is connected to the digital ecosystem to support the implementation of the AfCFTA Agreement and provide buyers and member states with quality products from verified suppliers in a more efficient way at an average cost, thereby improving cross-border trade.

Source: Ghana Business News

Comoros

WTO accession for the Comoros moves towards final stages

World Trade Organization (WTO) members noted the substantial progress which has been made by Comoros towards concluding the WTO accession negotiations, especially in the bilateral market access pillar, at the seventh meeting of the Working Party on the Accession of the Union of the Comoros on 19 May. The government of Comoros stressed its determination to join the multilateral trading system as a key element in the future economic and social development of the country. Under the chairmanship of Ambassador Omar Zniber of Morocco, the working party welcomed a high-level delegation from Comoros led by Mr Mzé Abdou Mohamed Chanfiou, Minister of Economy, Industry and Investment, and WTO chief negotiator. Mr Chanfiou noted that despite the recent successive external shocks suffered by his country, which is a net importer of more than 60% of its basic necessities, Comoros remains committed to the bilateral and multilateral aspects of negotiations, with a view to concluding the accession process in a timely manner.

Source: WTO

Côte d'Ivoire

Biovea biomass power plant

The Biovea power project is a 46-megawatt (MW) biomass power plant under construction in the Aboisso region of Côte d'Ivoire. It is the largest biomass power plant in West Africa and will be fuelled by agricultural waste. Biovea Energie, a joint venture of Electricité De France (EDF, 40%), Meridiam (36%) and SIFCA’s subsidiary Biokala (24%), is responsible for the design, construction and operation of the project. The biomass power plant will be constructed with an estimated investment of EUR232-million (USD276-million) and will be transferred to Côte d'Ivoire after the conclusion of the 25-year concession tenure. Construction on the project was initiated with the commencement of excavation works in February 2022 and the power plant is expected to be completed by 2024.

Source: NS Energy

Ethiopia

As Ethiopia opens up banking sector to foreign players, there is an important caveat

One of the newly proposed rules that would guide Ethiopia's banking sector liberalisation is that foreign banks hoping to operate in the Horn of Africa country must do so in partnership with local banks. This was disclosed by the lead consultant that is overseeing the liberalisation process, who also mentioned that only regional banks are eligible to the opportunity for now. The important caveat is coming just months after the Ethiopian government announced that it had constituted a liberalisation committee whose job it is to establish the modalities that would guide the liberalisation process. The implication, therefore, is that we might be seeing some mergers and acquisitions in the Ethiopian banking sector anytime soon. Business Insider Africa reported earlier that the Ethiopian banking sector liberalisation committee has begun working towards replacing the country's decades-old financial services code with a new one. 

Source: Business Insider Africa

Ethiopia

Ethiopia is in the process of establishing its own stock exchange

The Ethiopian Investment Holdings (EIH) said it has signed an agreement with Ethiopia's Ministry of Finance and FSD Africa to establish the first stock exchange in the Horn of Africa. The new bourse would be known as the Ethiopian Securities Exchange, Business Insider Africa gathered. In a press statement that was issued via Twitter, EIH explained that the new stock exchange would play a pivotal role in facilitating investments in the country. It would also avail Ethiopian companies and entrepreneurs access to long-term financing options for their businesses. Upon the launch, nothing less than 50 Ethiopian companies are expected to list their shares on the bourse. Some of these companies would include state-owned corporations such as Ethio Telecom and Ethiopian Airways.

Source: Business Insider Africa

Ghana

GDA Bill to address current challenges of food fluctuations – MoFA

The Ministry of Food and Agriculture (MoFA) says the passing of the Grains Development Authority (GDA) Bill will address current challenges of food fluctuations in the country. The ministry said it was pushing for the immediate passage of the GDA Bill which was before parliament after cabinet approval and hoped that passing of the Bill would regulate the prices of food commodities. Mr Tanko Bagbara, the Public Relations Officer, MoFA, in an interview, said the increase in food commodities was worrying, stressing, “the ministry has no control over the prices.” “There is enough food in the market, but the causes of food inflation are fuel, and the ministry has no control over the increasing prices of food commodities,” he said. Mr Bagbara stated that unlike the Cocoa Board which had control on cocoa products and the Tree Crop Authority also controlling the cashew industry, the ministry was handicapped, until the GDA Bill was passed.

Source: News Ghana

Ghana / Mozambique

Ghana and Mozambique agree to cooperate

Ghana and Mozambique recently signed a joint permanent cooperation agreement to boost cooperation between the two countries. They also signed a visa waiver agreement for diplomatic and service passport holders. The agreements, initialed for Ghana by Shirley Ayorkor Botchway, Foreign Minister, and on behalf of Mozambique by Vereonica Macamo Dlhovo, Minister of Foreign Affairs and Cooperation. President Nana Addo Dankwa Akufo-Addo and his Mozambican counterpart, President Felipe Jacinto Nyusi, witnessed the signing of the agreement at the Jubilee House in Accra. The two countries are looking to collaborate in the areas of agriculture, tourism, oil and gas, energy, education, trade and industry, environment, as well as science and technology. At a press briefing jointly addressed by President Akufo-Addo and President Nyusi, both leaders affirmed their resolve to elevate relations between the two countries.

Source: Ghana Business News

Kenya

Appointment of tax tribunal staff to be staggered

The Judicial Service Commission (JSC) will appoint members to the Tax Appeals Tribunal (TAT) on a staggered basis in legal changes meant to avoid the lack of quorum that has in the past derailed hearing of tax disputes. This follows the coming into force of the Tax Appeals Tribunal Amendment Act, 2022 which also shifted appointment powers from the National Treasury to the JSC. The changes are aimed at stemming grounding operations of the tribunal due to the expiry of contracts for members that in 2018 delayed the hearing of cases for over a year, hurting businesses and revenue collection by the Kenya Revenue Authority (KRA). The TAT handles disputes pitting the KRA and taxpayers and is traditionally the first course of action for tax cases. “The JSC shall appoint the members of the tribunal in a staggered manner so as to ensure that, at all times, at least one-third of the members are in office,” reads the Tax Appeals Tribunal Amendment Act, 2022. 

Source: Business Daily

Kenya

Fuel, fertiliser subsidy, polls security costs blow KES64-billion budget hole

Fuel prices and fertiliser subsidy as well as security-related expenditure in the wake of the 8 August polls have forced the Treasury to spend an additional KES64-billion of taxpayers’ cash in the budget for the financial year ending June. The Treasury has tabled second supplementary budget estimates indicating the state will spend an additional KES37.8-billion to stabilise fuel prices to 30 June. The documents show that KES15.8-billion has already been paid out to oil marketers between March and April. The Treasury is also seeking House approval to regularise expenditure of KES1-billion fertiliser subsidy, KES1-billion for Naivasha Inland Container Depot, KES8-billion for road projects and KES1.4-billion on enhanced security operation as the country prepares for the general elections. The mini-budget follows the KES108-billion first supplementary budget tabled in parliament in February. The second supplementary estimate has now pushed the unforeseen expenditure to 10.5% from the original budget presented in April last year, widening the budget deficit further.

Source: Business Daily

Malawi

Weak tobacco exports worsen trade balance

The merchandise trade balance – the difference between exports and imports – has widened to minus USD204.6-million (MWK168.9-billion) in March 2022, Reserve Bank of Malawi (RBM) figures show. During the previous month, the merchandise trade balance was recorded at USD140.4-million (minus MWK115.9-billion). In its recently published March 2022 Monthly Economic Report, the RBM said the outturn was on account of a decrease in exports by 45.2% (USD18.0-million) to USD39.9-million (MWK32.8-billion), attributed to the decrease in tobacco exports. The report reads in part: “Specifically, tobacco exports declined to USD8.4-million [MWK7-billion] in March 2022 from USD27.5-million [MWK22-billion] in February 2022, due to seasonal factors in the lean period.” Meanwhile, imports increased by 14.7% (USD35.9-million) to USD244.5-million (MWK201.7-billion) in the month following increases in fuels, vehicles and fertiliser. 

Source: The Nation

Mali

Mali economic update: Resilience in uncertain times - renewing the social contract

According to the World Bank Mali Economic Update 2022 entitled Resilience in uncertain times: renewing the social contract, the country’s growing insecurity and socio-political crisis resulted in a timid, lower than expected, economic recovery in 2021. Growth prospect for 2022 has been further undermined by the economic sanctions, regional food insecurity, and the war in Ukraine. The report points out that the Malian economy rebounded only slightly in 2021 (real growth estimated at 3.1% or 0.2% per capita) driven by the recovery in the sectors of agriculture and services, after the 2020 recession (-1.2%). The improvement in terms of trade during 2019-2020 as a result of the surge in gold prices, has considerably tampered in 2021 and removed one the main growth momentums. The economic and financial sanctions imposed by the Economic Community of West African States (ECOWAS) and West African Economic and Monetary Union (WAEMU) on 9 January 2022, have considerably clouded the economic outlook for 2022. The report conjectures that if the sanctions were to be lifted by the end of the first quarter, real GDP growth could still reach around 3% in 2022 – some two percentage points lower than what it was projected to be pre-sanctions. However, if the sanctions were to remain in place during the second quarter of the year, the economy could re-enter in recession in 2022. 

Source: World Bank

Mozambique

AfDB to serve as advisor for development of 1 500 MW Mphanda Nkuwa hydropower project

The African Development Bank (AfDB) has signed an agreement with Gabinete de Implementação do Projecto Hidroeléctrico de Mphanda Nkuwa, an implementing entity, to provide advisory services for the development of the USD4.5-billion 1 500 megawatt (MW) Mphanda Nkuwa Hydro Power Project in Mozambique. The agreement was recently signed on the side-lines of the bank’s annual meetings, taking place in Accra from 23-27 May. The agreement was signed by Mr Carlos Yum, director of Gabinete de Implementação do Projecto Hidroeléctrico de Mphanda Nkuwa and Dr Kevin Kariuki, AfDB vice president for Power, Energy Climate and Green Growth. President Filipe Nyusi of Mozambique and AfDB president Dr Akinwumi Adesina witnessed the signing. Gabinete de Implementação do Projecto Hidroeléctrico de Mphanda Nkuwa is part of the Mozambique government’s Ministry of Natural Resources and Energy. The project entails development of a hydropower plant to be located on the Zambezi River in the Marara District of the country’s Tete Province. The Mphanda Nkuwa project is expected to reach financial close by end-2024; commissioning is anticipated in 2031.

Source: AfDB

Nigeria

Nigeria’s economic growth to average 3.2% till 2023, says AfDB

The African Economic Outlook 2022, released by the African Development Bank (AfDB), has projected the average growth rate of Nigeria’s economy this year through to 2023 at 3.2%. The report, which was released recently at the ongoing Annual General Meeting (AGM) of the bank in Accra, Ghana, focuses on the growth prospect of the continent in the context of the COVID-19 pandemic, climate change adaptation, energy transition and other structural challenges. The report unveiled by the president of the bank, Dr Akinwumi Adesina, his team and board of governors, examines the economic outlook at regional level and country-by-country basis. The AfDB’s projection is slightly higher than the 3.11% growth rate of the first quarter as released by the National Bureau of Statistics (NBS) recently.

Source: The Guardian

Senegal

Germany is keen to pursue gas projects with Senegal, says Scholz on first African tour

Germany wants to intensively pursue gas and renewable energy projects with Senegal, Chancellor Olaf Scholz said recently during his first trip to Africa, against the backdrop of the war in Ukraine and its impact on energy and food prices. Scholz kicked off the three-day tour in Senegal, which has billions of cubic metres of gas reserves and is expected to become a major gas producer in the region. Germany is seeking to reduce its heavy reliance on Russia for gas following the Kremlin's invasion of Ukraine. It has initiated talks with the Senegalese authorities about gas extraction and liquified natural gas, Scholz said. "It is a matter worth pursuing intensively," he said at a news conference with Senegalese President Macky Sall, adding that progress in the talks was in the two countries’ common interest. Scholz said Germany was also interested in Senegalese renewable energy projects. Recently, a German government official said Germany could help explore a gas field in Senegal. President Sall said Senegal was ready to work towards supplying the European market with liquefied natural gas (LNG). He forecasts Senegal's LNG output reaching 2.5 million tonnes next year and 10 million tonnes by 2030.

Source: Reuters

Somalia

IMF Executive Board approves a three-month extension of the ECF for Somalia

On 9 May 2022, the International Monetary Fund (IMF) Executive Board approved an extension of the date on which the arrangement under the Extended Credit Facility (ECF) will automatically expire unless a review is completed to 17 August 2022. Without the extension, the ECF arrangement would have automatically expired on 17 May 2022, in line with the rule on automatic expiration of ECF arrangements if no review has been completed for 18 months. The extension will provide the time needed to confirm policy understandings with the new government and confirm financing assurances with development partners, which are required for the completion of the second and third reviews under the ECF arrangement. The ECF arrangement for Somalia in the amount equivalent to SDR253-million (155% of quota) was approved by the IMF’s Executive Board on 25 March 2020.

Source: IMF

Uganda / Democratic Republic of the Congo

Uganda – DRC trade

The Private Sector Foundation Uganda representing private sector business associations in partnership with the government of Uganda will hold the first-ever Uganda-Democratic Republic of the Congo (DRC) Business Summit between 31 May and 8 June in Kinshasa and Goma located in the DRC. The summit is expected to attract more than 200 participants from Uganda and the DRC and will open up new business frontiers as well consolidate trade relations between Uganda and the DRC through discussions of business linkages, trade fairs and engagements between governments and businesses. The minister of Trade, Industry and Cooperatives will lead the Uganda trade delegation to the DRC, which will include government officials and private sector members.

Source: The Independent

Zambia

Britain gives Zambia GBP1-billion for SMEs development

The British government says it has set GBP1-billion aside over the next five years to help boost its investment in Zambia. British High Commissioner to Zambia Nicholas Woolley says government will also help boost finance for Zambia’s small and medium-sized enterprises (SMEs) by GBP100-million. Mr Woolley says the British government has also increased investment in renewable energy by GBP500-million. He says the partnership is embodied in the United Kingdom (UK)-Zambia Green Growth Compact signed by ministers during President Hakainde Hichilema’s visit to the UK in November 2021. Mr Woolley was speaking recently in Lusaka at the occasion of Her Majesty Queen Elizabeth’s 96th birthday and 70th anniversary rule. Mr Woolley said the British government is impressed that the 2021 general election demonstrated the maturity of Zambia’s democracy because it was a peaceful transition of party.

Source: Lusakatimes