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issue 456 | 10 Jul 2022

East Africa

Tax disputes, trade wars headache for new EABC board

The East African Business Council (EABC), which recently elected a new executive committee, says it will expedite the formation of a trade remedy committee to deal with disputes and cut disruptions in the East African Community (EAC) Common Market. The team, elected on the sidelines of the Commonwealth Heads of Government Meeting in Kigali, comes at a crucial time when the EAC partners are squabbling over trade rules, and Rwanda and the Democratic Republic of the Congo have all but closed borders to trade over security concerns in the face of violence blamed on the resurgence of the Mouvement du 23 mars (M23) rebel group. The new team for the private sector lobby, led by Tanzanian Angelina Ngalula, is expected to decisively deal with tariff and non-tariff barriers that hinder regional trade. The executive committee was scheduled to meet Ugandan President Yoweri Museveni on 30 June, amid threats by Kampala to withdraw duty remission in retaliation to a trade war with Kenya involving agricultural products, and blamed on Nairobi’s persistent introduction of tax measures on Uganda’s exports. 

Source: The EastAfrican

Southern Africa

SADC developing measures to ease trade facilitation in the region

The Southern African Development Community (SADC) is developing and implementing customs instruments to tackle challenges that contribute to higher transaction costs in order to ease trade among countries in the region. The customs instruments include logistics, simplification and harmonisation of documentation associated with cross-border trade, improving transparency in operations of regulatory agencies, harmonisation of standards and technical regulations, harmonisation of sanitary and phytosanitary measures, monitoring and resolution of non-tariff barriers, as well as improving the business environment in which transactions take place. SADC is also conducting Time Release Studies (TRSs) along its corridors to assess bottlenecks and efficiency in the clearance of goods crossing the border posts. TRS is a method endorsed by the World Customs Organization for assessing a country's trade facilitation performance. It does so by measuring the average time from arrival of goods at the border until permission is given for the goods to enter home consumption. 

Source: SADC

Southern Africa

SADC to increase renewable energy generation to reduce carbon emissions

The Southern African Development Community (SADC) is developing the Regional Gas Masterplan to enable the utilisation of the abundant gas reserves in the region to reduce its reliance on coal in the wake of the global commitment, including the Paris Agreement's ambition to decrease carbon emissions and maintain global temperatures below 1.5°C. This was said by Dr Thembinkosi Mhlongo, the SADC deputy secretary for Regional Integration, on 23 June 2022 in Gaborone, Botswana, during a meeting with Ms Yuka Fujino, the Chargé d'Affaires of the Japanese Embassy in Botswana. The purpose of the meeting was to discuss the Eighth Tokyo International Conference on African Development, as well as other issues of mutual interest to the two parties. Dr Mhlongo highlighted SADC’s efforts to expand solar energy generation output in order to increase its power generation capacity, corridor involvement, and economic prosperity while also reducing the region’s carbon footprint. 

Source: SADC

Angola / Namibia

Angola, Namibia to open new border posts this year

Angola and Namibia plan to open, later this year, new official border posts at their common border, with a view to increasing trade and consolidating solidarity ties. The new posts may be opened in the provinces of Cunene, Namibe and Cuando-Cubango (Angola) and Ruacaná, Oshikango and Rundu (Namibia), according to the director for Institutional Communication and Press of the Angolan Migration and Foreigners Service (SME), Simão Milagres. Speaking to the press on Tuesday, 5 July, in Lubango, during the opening of the 2nd bilateral meeting between the SME and the Directorate for Migration Control and Citizenship of the Republic of Namibia, Mr Milagres stressed that the intention was a result of the existing cooperation between the two countries in the context of migration. He said there were population clusters on both sides that needed to make their lives easier and find a common understanding, based on Articles 2 and 3 of the current Protocol on Visa Facilitation and Exemption between Angola and Namibia. 

Source: Angop

Cameroon

IMF staff completes mission for the Second Reviews of the ECF and EFF for Cameroon

An International Monetary Fund (IMF) staff team led by Amadou Sy, concluded hybrid discussions with the Cameroonian authorities from 15 – 29 June, on the Second Review under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) arrangements. At the conclusion of the discussions, Mr Sy, issued the following statement, in part: “The IMF team has reached a staff-level agreement with the Cameroonian authorities on the economic and financial policies that could support the approval of the Second Review of the programme under the ECF and EFF arrangements. The agreement is subject to approval of the IMF Executive Board in late July 2022, which would enable the disbursement of SDR55.2-million (about USD73.6-million). Economic growth slowed to 0.5% in 2020 affected by the COVID-19 pandemic and security tensions in the region. Growth rebounded in 2021 and reached 3.6% for the year, supported by a domestic recovery and the general global economic recovery. Inflation for the year averaged 2.3% and the current account deficit (including grants) widened to 4.0% of GDP. The economic outlook for 2022 remains positive and the economy is expected to grow by 3.8%.”

Source: IMF

Democratic Republic of the Congo

IMF Executive Board concludes 2022 Article IV consultation and Second Review under ECF arrangement for the DRC

The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation and the Second Review of the Extended Credit Facility (ECF) arrangement for the Democratic Republic of the Congo (DRC). The completion of the Second Review allowed an immediate disbursement equivalent to SDR152.3-million (about USD203-million) to support balance-of-payment needs, bringing the aggregate disbursement to date to SDR456.9-million (about USD653-million). The DRC’s macroeconomic environment has improved since the last Article IV consultation in 2019. The authorities have adopted prudent macroeconomic policies, most visibly by halting central bank financing to the government. Despite the COVID-19 pandemic, considerable macroeconomic gains were achieved in 2021 and reform momentum under the ECF arrangement was sustained. The economy rebounded more than envisaged with growth at 6.2%, supported by non-extractive growth. Consumer price index inflation declined to 5.3% year-on-year, accompanied by a stable exchange rate as the central bank stopped providing financing to the government growth.

Source: IMF

Kenya

AfDB approves EUR89-million loan to bolster economic recovery

The Board of Directors of the African Development Bank (AfDB) Group has approved an EUR89-million loan to boost the Kenyan government’s economic recovery efforts. The loan will provide funding for the second phase of Kenya’s Competitiveness and Economic Recovery Support Programme (CERSP) that was approved by the bank in June 2021 and will help the country to free up fiscal space to address other priorities in one of the region’s largest economies. CERSP supports reforms under three components: (i) attaining fiscal sustainability by enhancing anti-money laundering and e-procurement frameworks and oversight over the operations of state-owned enterprises; (ii) strengthening industrial development and competitiveness to deepen the contribution of the manufacturing sector in line with the “Big Four” agenda while fostering climate resilience and green growth; and (iii) enhancing economic and social inclusion by furthering the social protection system and universal health coverage. The CERSP is taking place in tandem with similar operations by the World Bank and the International Monetary Fund.

Source: AfDB

Kenya

Kenya signs treaty to establish African Medicines Agency

Kenya has become the latest member state of the continental body – the African Union (AU) – to ratify a treaty that will pave way for the establishment of an African Medicines Agency (AMA). The specialised agency that will help state parties and regional economic communities enhance its capacity to regulate medical products is born out of the AU’s accord which came into force in November last year. “It will help the parties improve access to quality, safe and efficacious medical in the continent,” the memorandum from the Ministry of Foreign Affairs reads in part. In her recommendation to the House dated 30 May, Cabinet Secretary Raychelle Omamo wants the legislators to consider and approve the action and further direct the cabinet secretary to prepare and deposit the relevant instruments to the AU chairperson. Already 17 other AU member states, which include Algeria, Benin and Burkina Faso, have ratified the agreement while 26 others among them Tanzania, Uganda, Rwanda, Ghana and Cameroon have signed it. The document tabled in parliament seeking the country’s nod shows that the ratification process was approved by the cabinet during its meeting on 12 May this year.

Source: The Star

Kenya / United Kingdom

Kenya, United Kingdom business lobby sign deal to fight corruption

The government has signed a memorandum of understanding (MoU) with the British Chamber of Commerce Kenya (BCCK) to promote business climate reforms, including the fight against corruption. BCCK’s Business Integrity Initiative and the Department of Business Reforms and Transformation (DBRT) under the Ministry of East African Community (EAC) and Regional Development will establish a joint programme to identify and recommend areas for reform, host public-private workshops, and build private sector capacity. Speaking during the signing of the MoU, Principal Secretary in the State Department for the EAC Kevit Desai said business integrity is the foundation of international trade. “While corruption is a global issue, it is a concern that has been raised in our discussions with businesses and international investors. This MoU will create a platform to reaffirm Kenya’s commitment to strengthening the business climate," he said. "It will also build private sector participation in the digitisation and automation of government services in procurement, revenue collection and cross-border trade.”

Source: The Standard

Liberia

EU provides EUR28-million to improve Liberia’s maritime security

The Liberian National Coast Guard is to receive two specialised boats to enhance its maritime security through the Economic Community of West African States (ECOWAS) Support to West African Integrated Maritime Security (SWAIMS) project financed by the European Union (EU) next year. With a budget of EUR28-million (close to USD30-million), SWAIMS is the largest initiative on maritime security in the ECOWAS region. The programme provides material support to the 12 ECOWAS coastal member states, as well as training and legal strengthening to all 15 ECOWAS member states (including the three landlocked countries), plus Mauritania. Under the largest EU-funded SWAIMS component, implemented by the Camões I.P., the capacities of the Liberian National Coast Guard and related entities to carry out patrolling and evidence collection at sea will be strengthened with the supply of rigid-hull inflatable boats and relevant training of its personnel. The delegation of the EU to Liberia hosted the signing ceremony of the memorandum of understanding between the government and the Camões I.P. in the context of the EU-funded regional programme. 

Source: Liberian Daily Observer

Mali

West African leaders lift economic and financial sanctions on Mali

Leaders of the Economic Community of West African States (ECOWAS) have lifted economic and financial sanctions imposed on Mali, after its military rulers proposed a 24-month transition to democracy and published a new electoral law. The bloc imposed stiff sanctions on Mali in January after the junta said it would not organise democratic elections the following month as initially planned. ECOWAS commission president Jean Claude Kassi Brou told a news conference that the sanctions will be lifted immediately. Borders with Mali will reopen, and regional diplomats will return to Bamako. "However, the heads of state decided to maintain individual sanctions, and the suspension of Mali from ECOWAS, until the return to constitutional rule," Kassi Brou said. The individual sanctions targeted members of the ruling junta and the transitional council. Mali has defaulted on over USD300-million of its debt due to the sanctions, which cut it off from the regional financial market and the regional central bank. The West African leaders meeting in Accra also accepted a pledge from the junta that seized power in Burkina Faso in January to restore constitutional order in 24 months.

Source: Reuters

Namibia / Angola

Central bank and Banco Nacional de Angola strengthen ties

The Bank of Namibia (BoN) and the Banco Nacional de Angola (BNA) have agreed to collaborate on various fronts, to further their respective price and financial stability mandates as well as execution of strategies to modernise national financial systems. The excellent bilateral ties between the two neighbouring countries have cultivated a long-standing alliance between the two central banks, which has resulted in increased cooperation. In this regard, the two central banks are following the lead of their respective government’s promotion of the free movement of people, goods, and services in addition to their standard peer-to-peer cooperation. BoN governor, Johannes !Gawaxab and the bank’s management team welcomed the governor of the BNA, Jose de Lima Massano, and members of his delegation. The visit aimed at pursuing a collaboration that can assist the two countries in attaining balanced and sustainable economic growth and prosperity of both nations. Following the discussions, the two central banks decided to cooperate to promote effectively, modernised and digitally-enabled payment methods between the two countries; improve trade-friendly exchange control regimes and protect the stability and integrity of their respective financial systems. 

Source: Namibia Economist

Niger

IMF Executive Board completes First Review under ECF arrangement for Niger, and approves USD52.6-million disbursement

The Executive Board of the International Monetary Fund (IMF) has completed the First Review of Niger’s economic and financial programme supported under the Extended Credit Facility (ECF) arrangement. The completion of the review enables the disbursement of SDR39.48-million (about USD52.62-million), bringing total disbursements under the arrangement to SDR78.96-million (about USD105.24-million). Niger’s three-year ECF arrangement was approved on 8 December 2021 for SDR197.4-million (about USD275.8-million at the time of the programme approval or 150% of quota) for Niger. The arrangement is expected to catalyse additional bilateral and multilateral financial support. Following the executive board discussion, Ms Antoinette Sayeh, deputy managing director and acting chair, made the following statement, in part: “The near and medium-term economic outlook for Niger is broadly favourable with growth projected to bounce back this year and accelerate thereafter with the start of oil exports through the new pipeline. However, the country is facing an acute food crisis caused by adverse climate conditions and a deterioration of the security situation to which the authorities are responding with the support of donors.” 

Source: IMF

Nigeria

Five electricity distribution companies in Nigeria to undergo restructuring

The Nigerian government has announced that five out of the 11 electricity distribution companies in the country will be restructured. The affected companies are Port Harcourt, Kano, Kaduna, Ibadan and Benin distribution companies. The privately-owned firms have struggled to provide power since the government ceded control in 2013. The government maintains a 40% holding in the firms through the Bureau of Public Enterprise. Nigeria’s electricity sector has remained largely dysfunctional for decades, generating and sharing an average 4 000MW to about millions of people. The government said the five electricity distribution companies had been unable to repay loans taken from Fidelity Bank to acquire their assets during the 2013 privatisation and the bank has activated its right to take over the firms. The majority equity in the firms will be sold to qualified private sector investors who will re-capitalise and effectively operate the entities, heads of the Nigerian Electricity Regulatory Commission, Sanusi Garba, and the Bureau of Public Enterprise, Alex Okoh said in a joint statement.

Source: ESI Africa

Nigeria

Government targets USD39-billion from public-private partnerships in two years

The federal government is hoping to generate about USD39-billion from privatisation of public institutions between 2021 and 2022, the acting director-general of the Infrastructure Concession Regulatory Commission (ICRC), Michael Ohiani has said. The ICRC boss, who disclosed this on Monday, 4 July, in Abuja, at the opening of a two-day summit of the Africa Public-Private Partnership (PPP) Network, hinted that in 2021, the ICRC published a pipeline of 51 eligible and bankable PPP projects, worth over USD17-billion. According to him, the list contained the projects from different economic sectors which have been granted the Outline Business Case Compliance Certificates, but which did not have identified bidders. He added that for 2022, ICRC intends to gazette a pipeline of 53 eligible and bankable PPP projects, worth about USD22-billion, very soon. These bring the total sum of the proposed bankable projects to USD39-billion. He further stressed that as of May 2022, there are 77 post-contract PPP projects under implementation at the ICRC Projects Disclosure Portal, which is the first disclosure portal in the world, established in collaboration with the World Bank.

Source: The Guardian

Nigeria

Nigerian Shippers’ Council urges FG to promote exportation of non-oil products

The Nigerian Shippers’ Council (NSC) has called on the federal government (FG) to provide a suitable environment for the exportation of non-oil products to boost foreign earnings through the African Continental Free Trade Areas (AfCFTA). This was contained in a communiqué issued at the end of a one-day sensitisation programme organised by the NSC South West Zone, held at Abeokuta recently, towards the promotion of AfCFTA. The communiqué emphasised the need for the government at the centre to convey on developing the infrastructural capacity to address the challenge of smuggling across the borders. It noted that smuggling activities into the country had continued to affect economic growth. It was agreed at the sensitisation programme that stakeholders in the shipping industry should key into the various services of the NSC, such as the Port Service Support Portal, the Border Information Center, the Vehicle Transit Area and the Nigerian Port Process Manual, among others for seamless trade.

Source: Tribune

Seychelles

IMF Executive Board completes Article IV and Second Review under the EFF for Seychelles

The Executive Board of the International Monetary Fund (IMF) has completed the Second Review of Seychelles’ economic performance under the 32-month Extended Fund Facility (EFF) arrangement that was approved on 29 July 2021. The completion of the review allows the authorities to draw the equivalent of SDR6.5-million (about USD8.7-million), bringing total disbursements under the current EFF to SDR54.5-million (about USD72.6-million). Seychelles’ economic recovery in 2021 vastly outperformed projections, fuelled by a faster-than-expected rebound of the tourism sector. The recovery is expected to continue in 2022 with projected real GDP growth of 7.1% as the tourism sector shows resilience to COVID-19 waves and geopolitical tensions. The recovery has been accompanied by a significant fiscal over-performance. The authorities’ near-term priorities aim at supporting the post-COVID-19 pandemic recovery and addressing the repercussions of the war in Ukraine while reducing debt vulnerabilities and creating fiscal space to address future risks.

Source: IMF

Somalia

Somalia licenses first two foreign banks since 1970

The Central Bank of Somalia (CBS) has licensed the first two foreign lenders since 1970. The CBS governor Abdirahman Mohamed Abdullahi said Egypt’s Banque Misr and Turkey’s Ziraat Katilim can now operate in the country after the board endorsed their applications. “ [The] CBS board concluded that the two banks have fulfilled all bank licensing requirements of the CBS, and their applications have been approved,” he said. “After an extensive process, we are happy that the board has approved the licensing applications of Ziraat Katilim and Banque Misr. “They are both solid banks that will add value to the development of Somalia’s financial sector and contribute to the growth of our economy,” he added. Businesspeople have welcomed the move, saying the new banks would make it easy to access capital for huge projects. 

Source: The EastAfrican

Zimbabwe

Zimbabwe to introduce gold coins as local currency tumbles

Zimbabwe's central bank said it would start selling gold coins this month as a store of value to tame runaway inflation, which has considerably weakened the local currency. The central bank governor John Mangudya said in a statement on Monday, 4 July, that the coins will be available for sale from 25 July in local currency, United States (US) dollars and other foreign currencies at a price based on the prevailing international price of gold and the cost of production. The "Mosi-oa-tunya" coin, named after Victoria falls, can be converted into cash and be traded locally and internationally, the central bank said. The gold coin will contain one troy ounce of gold and will be sold by Fidelity Gold Refinery, Aurex and local banks, it added. Gold coins are used by investors internationally to hedge against inflation and wars. Recently, Zimbabwe more than doubled its policy rate to 200% from 80% and outlined plans to make the US dollar legal tender for the next five years to boost confidence.

Source: Reuters