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issue 463 | 28 Aug 2022

Africa

Survey announcement: Formulation of the AfDB Group’s new TYS

The African Development Bank (AfDB) Group has launched preparations for a new Ten-Year Strategy (TYS) 2023-2032, which will supersede its current TYS (2013-2022). The next TYS is expected to provide a vision for how the bank plans to build on its significant achievements over the last decade to accelerate Africa’s inclusive, green and resilient growth and development. As part of the formulation of its new TYS, the bank is conducting external consultations to ensure that the specific needs and expectations of its clients are well understood and captured. The consultations will also provide an opportunity for stakeholders to offer a variety of perspectives to shape the bank’s strategy to transform Africa. The consultations will also offer opportunities to deepen existing partnerships and establish new ones, as the continent faces an unprecedented set of challenges in the coming decade. To that effect, an online survey has been designed to elicit valuable insights from a wide range of stakeholders. The targeted respondents are multilateral development banks, the private sector, civil society organisations, and academic and applied research institutions. Stakeholders are kindly requested to complete the survey by 30 August 2022.

Source: AfDB

Africa / China

China to waive some Africa loans, offer USD10-billion in IMF funds

China, the largest government creditor to emerging economies, said it will forgive 23 interest-free loans to 17 African countries and redirect USD10-billion of its International Monetary Fund (IMF) reserves to nations on the continent. Foreign Minister Wang Yi announced the cancellations in a recent meeting of the Forum on China-Africa Cooperation, according to a post on the ministry’s website. It did not provide details on the value of the loans which it said matured at the end of 2021, nor did it state which nations owed the money. Since 2000, Beijing has announced multiple rounds of debt forgiveness of interest-free loans to African countries, cancelling at least USD3.4-billion of debt through 2019, according to a study published by Johns Hopkins University School of Advanced International Studies. The cancelled debt was limited to mature, interest-free foreign aid loans, with Zambia receiving the most cancellations over that period. However, the vast majority of China’s recent lending in Africa such as concessional loans and commercial loans have never been considered for cancellation, the report added, though some of it has been restructured.

Source: Bloomberg

East / Southern Africa

Building member states’ institutional capacity to eliminate trade barriers

Four member states of the Common Market for Eastern and Southern Africa (COMESA) have received capacity building support to their institutional frameworks for elimination of non-tariff barriers (NTBs) on common goods, in compliance with the requisite COMESA regulations. The regulations define the roles and responsibilities of the NTBs institutions to deliver on the intended objective to eliminate barriers across the COMESA region and increase intra-COMESA trade. Madagascar is the latest member state to receive training to support the development of a National Strategy for Elimination of Non-Tariff Barriers. Similar trainings have been conducted in Zambia, Zimbabwe and Malawi while Egypt and Tunisia are the next in line. The trainings follow an earlier decision by the COMESA Council of Ministers to the COMESA Secretariat to provide technical support to member states to implement national NTBs elimination programmes which are premised on sound national NTBs elimination strategies. COMESA Regulations for the Elimination of NTBs provide legally constituted tools for reporting, monitoring and addressing NTBs, the institutional arrangements to manage the NTBs elimination process as well as procedures followed to tackle situations that create NTBs.

Source: COMESA

East Africa / United Kingdom

How Kenya will gain from UK trade pact

The United Kingdom (UK) has opened a window for Kenyan goods such as apparel and agricultural products to enjoy lower or zero tariffs despite being a lower middle-income economy. The UK recently listed Kenya’s neighbours among them Uganda, Ethiopia, Rwanda and South Sudan including other 65 developing countries as beneficiaries of a new bilateral trade deal that cuts import taxes on hundreds of products from some of the world's developing countries to boost trade links. But it left out Kenya since it was upgraded from the group of the least developed countries (LDCs). But the new pact under the Developing Countries Trading Scheme (DCTS) has allowed the three countries including Uganda which is Kenya’s regional top trading partner, to import goods from Kenya and re-export them duty-free into the UK. Under the deal, Kenya’s neighbours which are classified as LDCs will be able to buy goods in Kenya and export the finished goods to the UK. “This means that LDCs are able to participate in value chains involving materials from 95 countries and still export their final products to the UK duty-free,” said the UK.

Source: Business Daily Africa

East Africa / United Kingdom

UK trade scheme to sanction EAC over graft

Kenya’s partners in the East African Community (EAC) bloc will have duty-free market access to the United Kingdom (UK) suspended if they condone corruption under a new trading scheme which comes to force in early 2023. The post- Brexit Developing Countries Trading Scheme (DCTS), which has expanded goods which enter the UK duty-free, will also penalise low-income countries which violate international conventions on climate change and environmental protection. The scheme will replace the current European Union’s (EU) Generalised System of Preferences (GSP) which suspends exports from countries violating labour and human rights. “The DCTS retains powers to suspend a country on the grounds of human rights and labour rights violations and broadens these powers to include violations in relation to anti-corruption, climate change and environment conventions,” reads part of the scheme. Unlike Kenya, which trades with the UK under the strategic Economic Partnership Agreement (EPA) from January 2021, the remainder six EAC bloc members access the UK market under the UK’s GSP scheme – a copy-paste of the EU’s. 

Source: Business Daily Africa

Southern Africa

Towards deeper integration in SADC

The 42nd Southern African Development Community (SADC) Summit adopted a raft of measures to deepen regional integration and sustainable development in Southern Africa. The measures are contained in a communiqué released soon after the regional heads of state and government meeting held in Kinshasa, the Democratic Republic of the Congo (DRC), on 17 August. The theme of the summit was Promoting industrialization through, agro-processing, mineral beneficiation, and regional value chains for inclusive and resilient economic growth. On peace and security, the leaders approved the extension of the SADC Mission in Mozambique (SAMIM) to help combat instability in northern Mozambique following increased acts of extremism, terrorism and insurgency. The SAMIM was deployed in July 2021 and has assisted in restoring stability in the country, following the disturbances which had left thousands of people dead and displaced. On the situation in eastern DRC, the leaders said they will engage the United Nations (UN) to explore all avenues to support efforts towards improving the security situation. In part, the summit welcomed the establishment of the SADC Regional Counter-Terrorism Centre (SADC-RCTC).

Source: SADC

Botswana

Botswana: first grid-connected solar projects under construction

Impact investor responsAbility Investments AG has provided long-term debt financing to the first grid-connected solar photovoltaics (PV) projects in Botswana through one of its climate funds. The projects – Bobonong (3 megawatt (MW)) and Shakawe (1 MW) will set up power purchase agreements (PPAs) with state-owned utility Botswana Power Corporation (BPC) for 25 years. The signing of the PPAs marks a milestone in Botswana’s clean energy commitments as it seeks to reduce its carbon emission and reliance on fossil fuel-generated electricity. Monya Bassingthwaighte, principal at responsAbility Investment AG said they are excited to support Sturdee Energy and BPC to implement the first-of-their kind projects in Botswana. “We hope this first small step will be demonstrative and help pave the road for future projects of this nature in the country.” The solar assets will be financed on a nonrecourse project finance basis via two special purpose vehicles in Botswana. Both projects are already under construction and should reach commercial operations by the end of 2022. 

Source: ESI Africa

Burkina Faso

More than 30 000 new electricity connections in Ouagadougou and Bobo-Dioulasso established through an ADF project

The African Development Bank (AfDB)-supported Burkina Faso Electrification Project for Semi-Urban Areas of Ouagadougou and Bobo-Dioulasso, under implementation since 2017, has resulted in 32 449 new connections to the country's electric power network. According to the AfDB's implementation and results report published on 5 August 2022, the project has already exceeded its target of 17 500 connections well ahead of the expected connection date of end 2023. Much of the financing (72%) for the USD52.15-million project was provided by the African Development Fund (ADF), the AfDB's concessional window. The National Electricity Corporation of Burkina Faso provided an additional 15%, and the government of Burkina Faso contributed the remaining 13%. The project is currently at the halfway point and has facilitated the construction of 178 km of underground medium-voltage network and 177 km of overhead medium-voltage network. In addition, 191 overhead medium voltage/low voltage pole-mounted transformer substations and 153 kiosk medium voltage/low voltage substations have been constructed, a further 18 medium voltage/low voltage substations have been reinforced, and 87 kiosk medium voltage/low voltage substations renovated.

Source: AfDB

Kenya

Digital lenders train sights on struggling small banks

American digital bank UMBA recently acquired a majority stake in Daraja Microfinance Bank Limited (Daraja), a deposit-taking microfinance bank, in the latest purchase that has made the loss-making industry a target for acquisitions. The Central Bank of Kenya (CBK) said the San Francisco-based firm would acquire 66.06% shareholding of Daraja for an undisclosed amount. This is the second digital bank to acquire a microfinancier that has recorded losses for the past six consecutive years amid increasing disruption by digital lenders. Daraja licensed in 2015 and whose main customers are small and medium-sized enterprises (SMEs), had a market share of below 1% (0.2%), being among the small players in the industry. The acquisition is expected to give UMBA a presence in Kenya's competitive financial sector and support the microfinance firm in offering digital loans that have grown in preference among individuals and SMEs due to penetration of mobile lenders. Kenya Bankers Association (KBA) director for research and policy, Samuel Tiriongo, said the entry of digital banks could be driven by the need to meet capital and licensing requirements.

Source: Business Daily Africa

Kenya

Hair sector scratches head on KEBS registration powers loss

Kenya has been ranked among the top three markets in Africa for haircare products, amid industry concerns that a new tariff would limit market access. A report this month by Technavio on the haircare market in Africa projects that the haircare market in the continent will increase to KES118.60-billion (USD994.06-million) by 2026 from KES39.9-billion (USD334.5-million) in 2019. The market is also expected to expand at a compound annual growth rate of 6.35% over the period. Kenya, Nigeria and South Africa are listed among the key markets for haircare driven by rising start-ups by mostly women entrepreneurs. Haco Industries, a producer of haircare products in Kenya, however, notes that new fees and regulations could hinder this growth and cut competitiveness with imported products as it targets the growing population of the East African Community (EAC) and the African Continental Free Trade Area (AfCFTA). A transition is underway for the registration of class two cosmetics products under the Pharmacy and Poisons Board (PPB) instead of the Kenya Bureau of Standards (KEBS). The directive was set for implementation in June, however, it was delayed after the Kenya Association of Manufacturers opposed the move.

Source: Business Daily Africa

Kenya / South Sudan

Two link roads connecting Kenya to South Sudan to cost KES22.6-billion

Two link roads connecting Kenya and South Sudan will cost at least KES22.6-billion as the roads agency seeks to open up the northern corridor. The Kenya National Highway Authority (KeNHA) says in documents seeking approval from the National Environment Management Authority (NEMA) that the first link road, the 142 km from Morpus to Lokichar will cost KES16-billion. The section stretching from Lesseru to Kitale, a distance of 55 km will cost KES6.6-billion. The sections form part of the 945 km Eldoret - Kitale – Lodwar – Nadapal – Kapoeta - Juba corridor interconnecting Kenya and South Sudan, and it will be built with funding from the state and development partners such as the African Development Bank (AfDB). “It’s one corridor but with different lots each with a specific length. It will be built at KES22.6-billion but the actual cost will depend on the bidders in the tender process. Engineers just give a rough estimate,” Samwel Kumba, KeNHA deputy director of corporate communication said. Improvement of the roads will significantly enhance connectivity within the eastern African region, connecting the southern regions to the northern parts of Kenya linking landlocked South Sudan to Kenya. 

Source: Business Daily Africa

Namibia

Forum aims to revive domestic aviation

The Namibia Airports Company (NAC) says it is determined to champion the narrative, lead the charge toward the transformation of the Namibian aviation industry and position itself as a driver for a thriving domestic economy. The NAC board chairperson Leake Hangala recently said the national airport operator is engaging government to see how they can improve the country’s airports infrastructure. This engagement includes looking at the aprons and taxiways at Hosea Kutako International Airport and Ondangwa airport, respectively, as well as building new terminal buildings at Katima Mulilo and Rundu airports. Hangala made these remarks during the launch of the Namibia Aviation and Connectivity Forum. The forum is slated for 16 to 18 November 2022 and is in the follow-up of this event that a white paper and subsequent structural and policy reforms will be generated. According to the NAC, the aim of the forum is to charter a new and enduring but sustainable vision for the Namibian aviation industry. “The forum will also be about remedying any past mistakes, learning from others and thinking outside the box as we map a new future for aviation and related sectors in the country,” Hangala stated.

Source: New Era

Tanzania / Uganda

Tanzania, Uganda insurance players ink deal for oil pipeline premiums

Insurers from Tanzania and Uganda have agreed to form a consortium that will ensure that 5% of premiums are retained locally under local content in the East Africa Crude Oil Pipeline (EACOP). This comes as actual construction of the EACOP was slated to begin in July, this year and first oil output is anticipated in 2025. The Uganda Association of Insurers (UAI) and Association of Tanzania Insurers (ATI) said that globally, oil firms would prefer to do everything offshore as many have their own insurance companies. “The consortium will enable us to speak the same language. We ensure oil and gas for the first time so we didn’t have enough necessary skills. The percentage agreed is 5% of retention and we will work closely together on this,” said the chairman for UAI, Mr Latimer Mukasa. Mr Mukasa was speaking in Dar es Salaam at the weekend when the two associations met for the purpose of discussing ways of working together.

Source: The Citizen

Uganda

CBR might be increased further, says Bank of Uganda

The Bank of Uganda (BoU) has said it might be forced in the near term to further tighten the monetary stance if inflationary pressures continue. The BoU’s deputy governor, Michael Atingi-Ego, said this is the only way through which they will revert inflation to the 5% target. “Going forward, [we] consider that the monetary policy will have to be tightened even further if inflationary pressures persist, to ensure that inflation reverts to its medium-term target of 5%,” Mr Atingi-Ego said in a statement. The BoU also noted that it had increased the Central Bank Rate (CBR) to 9%. This is the third month the bank is increasing the CBR as the economy continues to face strong cost-push inflation pressures from the external environment, dry weather conditions and exchange rate depreciations amid weak domestic demand. Inflation has been rising with headline inflation, which measure charges in the cost of living, increasing to 7.9% in July from 6.8% in June. 

Source: Monitor

Uganda

New digital data collection tool, RASME, will help Uganda address project delays

A new digital platform will accelerate data collection in Uganda, which could greatly speed up project implementation. The recently-launched Remote Appraisal, Supervision, Monitoring and Evaluation (RASME) tool in Uganda will improve the collection of project-related data in African Development Bank (AfDB) projects. RASME is helpful for government officials, project implementing units, beneficiaries, development partners and bank operations staff because it makes it possible to collect data in the field, throughout the life-cycle of projects, using a smartphone, tablet, or laptop, in several digital formats, including text, images, figures and videos. The launch took place in the Ugandan capital, Kampala, from 4 - 7 July. It was conducted alongside a three-day training, attended by over 70 participants, comprising government representatives, project implementing units, and staff from the World Bank and the AfDB. The RASME solution will also address travel restrictions brought on by the COVID-19 pandemic, which has limited site visits. Collins Ishimwe, Head of the Multilateral Section at the Uganda Ministry of Finance, Planning and Economic Development, said the geo-mapping aspects of RASME would give project profiles a much greater sense of life. 

Source: AfDB

Zimbabwe

Zimbabwe explores West Africa export market

Zimbabwe is keen to diversify its export market to West Africa with the national trade development and promotion organisation, ZimTrade, sending its team to explore trade opportunities in Senegal. Building on the earlier mission to explore the Ghana market in the same region, the mission outcome should determine products and services that Zimbabwe companies can export to the western African region. The market exploration is part of the country’s African Continental Free Trade Area (AfCFTA) focused efforts on reduced duty trade gains among African states. ZimTrade CEO, Mr Allan Majura, said the market survey trip was meant to study products and services that suit markets in Senegal and also utilise opportunities made available by the AfCFTA. “The purpose of the study is to determine Zimbabwean products and services with potential in Senegal, riding on opportunities that have been made available by the [AfCFTA],” he said. Targeting Senegal as a market is in line with the National Export Strategy, which seeks to diversify our markets and grow Zimbabwe’s export to non-traditional markets.” 

Source: Chronicle

Zimbabwe / Mozambique / Zambia

Zimbabwe finalises power import deals with Zambia and Mozambique

Minister of Energy and Development in Zimbabwe, Soda Zhemu, has announced that the country has finalised its power import deals with Zambia and Mozambique. Zhemu also announced that they have retained their power import deal with South Africa. Both contracts were facing termination as the nation struggled to meet payments obligations to the two neighbours. Zimbabwe’s power import contracts with Mozambique’s Electricidade de Mocambique and Zambia’s ZESCO were set to expire at the end of July after ZESA Holdings indicated it was failing to pay the required USD6.3-million. Last month, Zimbabwe signed a five-year contract to import 100 megawatts (MW) of power a day from Zambia and the deal could not be consummated as Zambia was demanding payment upfront. Giving an update to the media on the current power situation, Zhemu said the deals had been paid for, and parties were expected to meet their sides of the bargain. “With regards to the power import deal which was struck between our power utility and ZESCO of Zambia; this is a new deal, and it was supposed to fall off if ZESA had not paid by the end of July,” Zhemu said.

Source: ESI Africa