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Africa Business in Brief

 

issue 459 | 31 Jul 2022

Africa

AfDB, AfCFTA Secretariat sign USD11-million Institutional Support Grant Agreement

The African Development Bank Group (AfDB) and the Secretariat of the African Continental Free Trade Area (AfCFTA) have signed a protocol of agreement for a USD11.24-million support package to enhance the secretariat’s effective implementation. The signing took place on Monday, 25 July 2022, on the margins of the Ninth Meeting of the AfCFTA Council of Ministers Responsible for Trade, held in Accra, Ghana. The AfCFTA Secretariat, currently in phase II of its implementation phase, will benefit from this support package, which aims to boost sustainable intra-Africa trade and to augment the number of participating African member states. The funds are intended to move the African trade integration agenda forward. The grant, approved in July by the Board of Directors of the African Development Fund, will focus on three areas: institutional strengthening of the AfCFTA Secretariat; private sector support to implement the AfCFTA; and support of climate-resilient regional and continental value chains to boost intra-Africa trade.


Source: AfDB

Africa

Africa CDC receives USD100-million boost from the World Bank to strengthen continental public health preparedness

The World Bank has approved a USD100-million support programme for the Africa Centres for Disease Control and Prevention (Africa CDC) that will help enhance the institution’s technical capacity and strengthen its institutional framework to intensify support to African countries in preparing for, detecting, and responding to disease outbreaks and public health emergencies. Today the African continent is addressing several infectious disease outbreaks in addition to COVID-19 and there are growing risks looking ahead. Recent assessments have revealed widespread gaps in the preparedness capacities of African countries that disproportionately impact the poorest and more vulnerable. Regional approaches to health policies and interventions in complementarity with country and global efforts underscore the value of a strong Africa CDC geared towards safeguarding the health of the continent. The project will help to cultivate regional capabilities critical to ensuring a resilient and prepared continent. It will do this by helping to build and maintain a robust public health workforce across countries’ health systems. This includes investments to increase the number of epidemiologists and outbreak responders at the sub-regional and member state level. 


Source: World Bank

Africa

IFC provided a record USD9.4-billion financing in Africa in the 2022 fiscal year

The International Finance Corporation (IFC) provided record financing in Africa over the 2022 fiscal year, making USD9.4-billion in investments between 1 July 2021 and 30 June 2022 across 36 countries, the largest ever annual commitment for the continent. The funding helped to develop regional pharmaceutical manufacturing, increase intra-Africa trade, expand access to climate financing and strengthen food security among many other pressing development needs. The investments include USD3-billion in trade financing unlocking intra-Africa trade for thousands of small businesses, USD2.1-billion supporting the continent’s green transition – from increasing access to climate finance to funding renewable energy projects – and USD861.7-million that is supporting increased digital connectivity. The IFC also provided USD603-million in agriculture financing, helping to strengthen food security during a turbulent global economic period. “While the effects of the COVID-19 crisis persist, new challenges are also looming, including from rising global inflation,” said Sérgio Pimenta, IFC vice president for Africa. 


Source: ESI Africa

East Africa

EAC launches KES1.3-trillion funding for businesses

The East African Community (EAC) has launched a KES1.3-trillion revolving fund targeting micro, small and medium-sized enterprises in the region. The programme, which is a partnership with Equity Bank Group and the MasterCard Foundation, seeks to also offer capacity building to traders within the regional bloc. EAC secretary general Dr Peter Mathuki has inked the deal with Equity Bank CEO James Mwangi at the two-day East Africa Heads of State Summit in Arusha, Tanzania. The KES1.3-trillion funding portfolio represents Equity Group’s entire balance sheet and is also contributed to by other 16 financing partners including the African Development Bank, Bill and Melinda Gates Foundation, the International Finance Corporation, and the Warren Buffet Foundation. The deal aims to spread risks and mitigate any business mortality and cover non-performing loans. The financing seeks to empower the agriculture-dependent EAC which has not been spared by the disruptions in the supply of key goods in the global market. 


Source: The Standard

East Africa

EAC, Equity Bank USD13-billion deal to promote trade, integration

Regional lender Equity Bank is seeking to piggyback on the protocols of the East African Community (EAC) to implement its ambitious Africa Resilience and Recovery Plan which targets small businesses in East Africa. The bank has signed a memorandum of understanding (MoU) with the EAC, on the sidelines of the 21st Ordinary Heads of State Summit, to help fast-track the plan. Equity Group CEO James Mwangi and EAC secretary general Peter Mathuki said the MoU is a vehicle for financial support and development financing using the infrastructure of the Common Market. It targets farmers, manufacturers, energy and social services providers and aims to stimulate intra-continental trade, something the bloc says is pursuing. Equity Bank is making available a part of its USD13-billion balance sheet for the region’s entrepreneurs while development financiers International Finance Corporation, African Development Bank and European lenders are to bring in more for lending. Mr Mwangi said at the signing ceremony in Arusha that the USD2-billion is already available for borrowers. Of the money available for lending, food and agriculture will take 30% and manufacturing 15%.


Source: The EastAfrican

East / Southern Africa

Steps towards establishing an Electronic Single Window System

The Electronic Single Window System (eSW) is one of the key trade and transport facilitation instruments prioritised by most of the Common Market for Eastern and Southern Africa (COMESA) member states to improve the ease of doing business environment and to enhance intra-regional trade in the region. From 18 – 21 July 2022 in Addis Ababa, Ethiopia, the Technical Working Group on Customs (TWG) conducted its first meeting to review various reports that have been prepared towards the development of the eSW. Among them were the Situational Assessment Study Report on Implementation of the eSW, the Draft Legal Framework and the Draft Strategy for Development and Implementation of the eSW. Addressing the delegates, Ethiopia’s State Minister for Trade Integration and Export Promotion Kassahun Gofe noted that more than half of the member states are already implementing the electronic single window while the remaining are at different planning phases. The development of the eSW is one of the instruments under the COMESA Digital Free Trade Area Action Plan. It includes developing and implementing the system at national and regional levels. 


Source: COMESA

Angola / Egypt

Angola, Egypt strengthen bilateral cooperation

Angola is pursuing improved cooperation with Egypt as the country looks at strengthening trade and investment within the energy, industry and commercial sub-sectors. Leveraging Egypt’s expertise, particularly within oil, gas, renewable energy and industrial engineering, the Southern African country has prioritised foreign investment, intra-African trade and economic diversification. Speaking during the opening of an economic forum between the two countries, Angola’s Ambassador to Egypt, Nelson Manuel Cosme, emphasised that the country is officially open to foreign investment. The ambassador stated that, “We will continue to promote joint actions to attract investments, [and] favour other sectors such as renewable energy, textiles, agriculture, oil and gas. Angola is seeking international partnerships to address the need for economic and social stability. Only with the help of the business class, particularly foreign business, can we achieve that goal.”


Source: Energy Capital & Power

Burkina Faso / Guinea

IFC, Vista Bank partner to improve trade finance in West Africa

The International Finance Corporation (IFC), through its Global Trade Finance Program, has partnered with Vista Bank to improve the availability of financing for the importation of refined oil products, food, raw materials, equipment and consumer goods to meet demand in Guinea and Burkina Faso. With the partnership, Vista Bank will have access to up to USD24-million in IFC funding which will enable the bank’s subsidiaries to finance commodity imports across the West African countries. Vista Bank will also leverage the IFC’s technical support to improve its corporate governance and risk management capabilities to better serve small and medium-sized enterprises which are undergoing growth, innovation and global market challenges in Burkina Faso and Guinea. According to Simon Tiemtoré, chairman of Vista Group, “IFC’s investment is critical to help increase access to trade finance for our customers. On the market side, it will further connect Vista Bank’s cross-border connections, increasing countries’ integration through both financial and real sector channels. It will also help link more traders to other countries and connect Burkinabe and Guineans financial markets more deeply.”


Source: Energy Capital & Power

Cameroon

IMF Executive Board concludes Second Reviews of ECF and EFF arrangements for Cameroon

The Executive Board of the International Monetary Fund (IMF) has concluded the Second Reviews of the Extended Credit Facility (ECF) arrangement and the extended arrangement under the Extended Fund Facility (EFF) for Cameroon. The completion of the Second Reviews enables the disbursement of SDR18.4-million (about USD24.3-million) under the ECF arrangement, and purchases of SDR36.8-million (about USD48.6-million) under the EFF arrangement, bringing total access under the arrangements to SDR262.2-million (about USD346.1-million). The executive board also approved the authorities’ request for a waiver of applicability for the end-June 2022 performance criteria. Cameroon’s three-year ECF-EFF arrangements were approved on 29 July 2021. The economic outlook for 2022 remains positive, but with great uncertainties. Real GDP growth is projected at 3.8% in 2022, down from 4.5% at the time of the programme’s First Reviews. Inflation is projected to rise to 4.6% in 2022, but to remain below 3% in the medium term.


Source: IMF

Equatorial Guinea / Nigeria

Nigeria, Equatorial Guinea kickstart discussions on gas cooperation

Equatorial Guinea and Nigeria have initiated talks to expand bilateral cooperation on gas market optimisation, stated Gabriel Obiang Lima, Equatorial Guinea’s Minister of Mines and Hydrocarbons, during the recent launch of the Nigerian National Petroleum Company Limited in Lagos. The minister’s announcement follows the two countries’ signing of a memorandum of understanding to cooperate on gas processing in early March 2022 as part of Equatorial Guinea’s Gas Mega Hub initiative, which is designed to position the country as a regional energy processing and transportation hub. Minister Lima revealed that the discussions will enable exploitation of Nigeria’s 200 trillion cubic feet (Tcf) and Equatorial Guinea’s 1.5 Tcf of natural gas reserves to eradicate energy poverty locally and regionally, at both a continental and international level. While the two countries have vast gas resources, energy access and security remain low due to limited investments across upstream, midstream and downstream sectors. Nigeria, for instance, has over 85 million people living without access to electricity, while Equatorial Guinea’s energy access rate remains at 67%.


Source: Energy Capital & Power

Ethiopia

African Development Fund approves USD4.3-million grant to fund capacity building, boost economic resilience

The Board of Directors of the African Development Fund has approved a USD4.3-million grant to fund capacity building within Ethiopia’s Finance Ministry and related government departments, to enable the country to tackle declining growth and other economic challenges. The Ministry of Finance will implement the project. The African Development Fund is the concessional lending arm of the African Development Bank Group (AfDB). The board’s approval came on Friday, 15 July. The project will support capacity strengthening of the government of Ethiopia in research and policy analysis, underpinned by a well-managed public investment programme. It will support Ethiopia’s goal of developing a cadre of government staff with stronger capacity in research as well as policy analysis and formulation to facilitate the implementation of the country’s Ten Year Development Plan and Homegrown Economic Reform Agenda. The project will support capacity strengthening of officials in the Ministry of Finance, the National Bank of Ethiopia, Ministry of Development Planning and the recently-established Capital Markets Authority.


Source: AfDB

Kenya

CBK sees inflation easing on state subsidies, retains base loans rate

The Central Bank of Kenya (CBK) expects inflation to ease in the short term on state subsidies on flour and fuel, electing to hold the base lending rate at 7.5% in a recent Monetary Policy Committee meeting. The CBK had been tipped to implement further tightening of its monetary policy by the likes of the International Monetary Fund (IMF) in order to tame further price pressures, which saw inflation breach its upper preferred limit of 7.5% after rising to a 58-month high of 7.9% in June. The apex bank, however, opted to soften its outlook on inflation, noting that high global prices of oil, wheat, and edible oils are now easing and that the 0.5 percentage point rate increase announced in the May meeting is still transmitting through the economy and has been complemented by the government’s package of fiscal measures to moderate the prices of specific items. “The recent waiver of import duties and levies on white maize, the subsidy on retail prices of sifted maize flour, and the recent reduction in value-added tax on liquefied petroleum gas will further moderate domestic prices,” said the CBK. 


Source: Business Daily

Kenya

Kenya launches carbon emission reduction tool

Kenya has become the first country in East Africa to launch a climate change calculator with the aim of measuring the country’s carbon footprint. Funded by the United Kingdom’s (UK) International Climate Finance and developed by engineering consultancy firm Mott MacDonald, Imperial College London and climate change consultancy firm Ricardo as part of the UK government’s International 2050 Calculator Programme, the Kenya Carbon Emission Reduction Tool (KCERT 2050) will enable the East African country to track emissions from the energy sector and formulate reduction mechanisms to fast-track the country’s transition to net-zero. With Kenya targeting to achieve net-zero emissions from the energy industry by 2050, the KCERT 2050 will enable the government to develop and implement policies and energy efficiency models. By leveraging the tool, regulators, energy producers and consumers in Kenya are expected to have a better understanding of energy emissions as well as the role they themselves can play to fast-track the country’s decarbonisation efforts.


Source: Energy Capital & Power

Kenya / Tanzania

Kenya, Tanzania struggle to run shipping lines

Plans to revive national shipping lines in East African ports are facing usual delays over lack of capacity to compete internationally. Kenya and Tanzania recently formed shipping lines but are struggling to establish themselves without own vessels. Tanzania’s bid to sell its disused vessels has been a struggle, with few people coming forth to buy, and leaving it with an unwanted burden of storage. As a result of increasing operating costs, Zanzibar Shipping Corporation, Tanzania’s shipping line is auctioning three of its vessels, leaving it with none of its own. Zanzibar Shipping Corporation, in May this year, floated a tender to dispose of three public vessels MV Maendeleo, MT Ukombozi and MV Mapinduzi 1. Those vessels are still unsold. According to documents, the assets are being disposed of through the international competitive bidding procedures specified in the public procurement and disposal of public assets. In Kenya, the government's effort to revive the Kenya National Shipping Line is not bearing many fruits, forcing it to partner with Mediterranean Shipping Corporation to handle key government cargo and operate the second container terminal at the Port of Mombasa.


Source: The EastAfrican

Nigeria

ECOWAS: Setting up off grid solar energy market in Nigeria

The Economic Community of West African States (ECOWAS) has officially launched its Regional Off Grid Electricity Access Project (ROGEAP) in Nigeria. ROGEAP formally kicked off activities in Nigeria on Tuesday, 19 July 2022, in Abuja. The event took place at a workshop attended by representatives of the ECOWAS Commission, Nigeria’s Ministry of Power, and stakeholders from the public and private sectors including civil society organisations, non-governmental organisations, and commercial banks. The primary two-fold aim of the workshop was to present the new structure of ROGEAP while rallying their active participation for the success of the project in Nigeria. Participants at the workshop discussed the status of stand-alone solar systems, the institutional and legal framework for the stand-alone solar systems sector in Nigeria, planned activities in the context of ROGEAP, involvement of private businesses in the electrification of public buildings and infrastructure, and identification of the technical assistance needs of key actors in Nigeria.


Source: ESI Africa

Nigeria

Nigeria passes electricity Bill that focuses on energy distribution

The government of Nigeria has passed an Electricity Bill to boost electricity distribution in the country’s beleaguered energy sector. The Chairman of the Committee, Senator Gabriel Suswam, said the Bill sought to provide an ideal legal and institutional framework to leverage on the modest gains of the privatisation phase of the electricity power sector in Nigeria. He added that when signed into law, the Bill would improve utilisation of generated power through increased investments in new technologies to enhance transmission and distribution of generated power to minimise aggregate value chain loses. Suswam said the Electricity Bill, when signed into law, will open the space in the power industry and allow states or individuals with capacities to generate their own power and distribute. “Since electricity is on the Concurrent [Legislative] List in the Constitution, the Bill has allowed state governments to license people who intend to operate mini grid within the state.” “The Bill also gives legal backing to renewable energy. If you decide to generate one megawatt of power using solar as energy source, that is also provided for.”


Source: ESI Africa

Somalia

Somalia to strengthen fiscal transparency and inclusive private sector growth with USD100-million from World Bank

The World Bank approved a USD100-million grant to support the continuation of Somalia’s reform efforts in reaching the completion point of the Heavily Indebted Poor Countries (HIPC) Initiative, when Somalia will be eligible for full and irrevocable debt relief. The operation supports the government’s efforts to improve fiscal transparency and increase revenues through the harmonisation of customs regimes across the federation and improve the governance of intergovernmental fiscal transfers. It will help create the building blocks for strengthening intergovernmental fiscal cooperation to enhance the ongoing state stabilisation agenda critical for stimulating inclusive economic growth by fostering trust and enhancing financial transparency between the federal government and member states. As Somalia continues to face climate-related shocks, the programme also supports actions to enhance economic resilience and investment in sectors such as fisheries and renewable energy to create jobs and spur growth.


Source: World Bank

Zimbabwe

Zimbabwe eyes rapidly growing cannabis market with new laws

Zimbabwe has cleared the way for cannabis-based medical products to be sold for the first time as the Southern African country eyes the industry valued at KES148.5-billion (USD1.25-billion). The Medicines Control Authority of Zimbabwe (MCAZ) has opened applications for cannabis and hemp producers, manufacturers, importers, exporters and retail pharmacists. The debt-ridden nation became one of the first African countries to legalise cannabis in 2018 but little has been done since to permit its commercial production. The MCAZ has now released regulations that will guide investments in the sector as the country, sanctioned by the West, banks on the growing global cannabis market. The country, which is one of the leading producers of tobacco in the world, is considering a shift from the golden leaf to cannabis as the global tobacco ban lobby continues to gather momentum. Industry players have set a target for tobacco farmers to ensure that cannabis contributes a quarter of their income by 2025. Last year, the country earned KES97.29-billion (USD819-million) from tobacco exports, which made it one of Zimbabwe’s biggest foreign currency earners. 


Source: Business Daily