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issue 465 | 11 Sep 2022

Africa

AfDB’s EPSA to Central African region to strengthen engagement with private sector

Following the announcement of an additional USD5-billion to the African Development Bank’s (AfDB) Enhanced Private Sector Assistance (EPSA) programme from the government of Japan, the bank’s Central Africa Regional Development and Business Delivery Office is seeking to engage with private sector organisations from the region with economically viable projects for investment. Serge N’Guessan, AfDB’s director general for the region, said: “The bank is very keen to support private promoters’ investments in Central Africa since they are critical for the economic growth and job creation in this important region of the continent. The EPSA programme financing will contribute tremendously to achieving this noble development objective.” The announcement, made in Tunis during the Eighth Tokyo International Conference on African Development (TICAD8), comprises USD4-billion under EPSA 5 (2023-2025), and is complemented by USD1-billion for a new special window to support African countries that undertake reforms to foster debt transparency and sustainability. EPSA 5 aims to address four key priorities: power, connectivity, health and agriculture, and nutrition.

Source: AfDB

Africa

Tighten tax on international trade – Government advised

The executive secretary of the African Tax Administration Forum (ATAF), Logan Wort, is pressing on African governments to tighten tax on international trade and increase investments in digital tax collection systems. According to him, this has become necessary due to the gradual shift in the use of technology over the years, which is partly attributed to the COVID-19 pandemic. Logan Wort spoke with Joy Business after addressing members of the forum at the annual congress which sought to come up with strategies to deal with the revenue shortfalls expected in the implementation of the continental free trade agreement [FTA]. “You [have to] introduce and tighten up your taxes on international trade. You [have to] tighten up taxes on your digital economy.” “The digital economy in Ghana has exponentially increased over the last decade by about USD3-billion annually, but what is the domestic tax take from there? So, you need to invest in the digitalisation of your tax administration, advance policies for taxing multinational enterprises, and bring more of the middle class into the tax net. This is what the conference will seek to do through well-researched documents from experts and analysts who hail from the continent,” he said. 

Source: MyjoyOnline.com

Africa / Portugal

AfDB and Portugal sign EUR400-million guarantee agreement to underpin Lusophone Compact

The African Development Bank (AfDB) and the Portuguese government have signed a guarantee agreement to be extended to the AfDB under the Lusophone Compact. The compact offers a big boost to business development initiatives for the bank’s non-sovereign portfolio in its Portuguese-speaking African member countries. President of Mozambique, Filipe Nyusi, Prime-Minister of Portugal, António Costa, and other members of their respective delegations witnessed the signing, during a business and investment forum organised as part of the 5th Luso-Mozambican Summit, held on Friday, 2 September. Under the agreement, Portugal will provide guarantees of up to EUR400-million exclusively to the AfDB-financed projects approved under the arrangement. The compact targets the private sector in Portuguese-speaking African member countries (Países Africanos de Língua Oficial Portuguesa (PALOP)), notably Angola, Cabo Verde, Equatorial Guinea, Guinea-Bissau, Mozambique, and São Tomé and Príncipe. The programme is designed for new, non-sovereign operations in these Lusophone countries and will enable the bank to optimise allocation of its risk capital to these countries.

Source: AfDB

East Africa

Private sector stakeholders call for harmonisation and adoption of East African standards to boost intra-EAC trade

The East African private sector has urged governments to fast-track harmonisation of East African standards during the East African Business Council (EABC) - TradeMark East Africa (TMEA) Regional Public Private Engagement on Standards held in Dar es Salaam, Tanzania. Evidence shows harmonisation of standards has increased in intra-trade by 10%, reduced inspection and clearance costs at the border from USD500 to USD400 and clearance days from 10 days to 0.5 days. Harmonisation of standards significantly contributes to growth of intra-regional trade, competitiveness, protection of consumers and environment, and overall trade facilitation. To date a total of 624 indigenous standards have been adopted by the East African Community (EAC) partner states and a total of 1 880 standards have been earmarked for harmonisation at the EAC level. Other notable reforms include: the establishment of the Regional Standards Plan (RSP) and an online catalogue of harmonised standards which has been developed since 2021. The National Standards Bureaus in the EAC partner states are at different levels of harmonisation of standards ranging from 65% to 90%. 

Source: EABC

East Africa / Southern Africa

EAC-COMESA-SADC Tripartite not ratified seven years on

The East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA) and the Southern Africa Development Community (SADC) Tripartite Free Trade Area Agreement has not been put into force despite member countries signing it seven years ago. According to a document seen by East African Business Week (EABW) NEWS, the delay in ratification is due to a slow response from member countries that have not yet signed the ratification treaty. “Most of the remaining countries indicate that the process to ratify is still in progress. “So, the process is on course, but the pace is slow,” said Mwangi Gakunga the COMESA communications manager. The EAC-COMESA-SADC Tripartite Free Trade Area Agreement has a total of 29 member countries representing 53% of the African Union (AU) membership and more than 60% of the African continent’s GDP (USD1.88-trillion) with a population of over 800 million people. In 2015, 22 of the 29 member countries signed in acceptance of the treaty but only 11 have ratified it. “For the agreement to go into full force or be implemented, at least 14 member countries have to ratify,” added Gakunga. 

Source: EABW NEWS

Southern Africa

SADC takes an important step towards facilitating intra-regional trade, as it launches e-Certificate of Origin

The Southern African Development Community (SADC) has taken an important step towards enhancing seamless flow of intra-regional trade following the launch of the electronic Certificate of Origin (e-CoO) in Blantyre, Malawi, on Wednesday, 7 September 2022, under the theme Enhancing trade facilitation through the SADC Electronic Certificate of Origin. The recently launched e-CoO is intended to address the challenges encountered with the use of manual Certificate of Origin by simplifying customs procedures, enhancing e-commerce, eliminating fraud, improving record management and statistical data, reducing cross-border certificate verification time as well as reducing the cost of doing business. Speaking at the launch of the SADC e-CoO commissioner general of the Malawi Revenue Authority (MRA), Mr John Biziwick, said the e-CoO will improve the way business is conducted in the region because the challenges that were associated with the manual processing of the certificate will be eliminated. He said the electronic system will allow manufacturers, producers and exporters to electronically register their products for preferential treatment and apply for e-CoOs whenever there is an export shipment.

Source: SADC

Angola

Angola deposits two legal instruments with the AU

Angola recently deposited with the African Union (AU) headquarters, the letter of adhesion to the Agreement on the Constitution of the African Trade Insurance Agency (ATI) and the instrument of ratification of the African Charter on Statistics. The two legal instruments were delivered to the legal office of the African Union (AU), in Addis Ababa, Ethiopia, by the Permanent Representative of Angola to the AU, Francisco José da Cruz. ATI is a multilateral financial institution that provides export credit, political risk, investment insurance and other financial products to help reduce the risks and costs of doing business in Africa. Created in 2001 by seven member countries of the Common Market for Eastern and Southern Africa (COMESA) with technical and financial support from the World Bank, ATI facilitates exports, foreign direct investment and trade flows within the continent. Affiliation with ATI will allow Angola to attract long-term financing at competitive rates, while Angolan entrepreneurs will more easily benefit from credit insurance, political risk, coverage against insolvency and investment protection.

Source: Angop

Botswana

BPC signs PPA for construction of 50 MW solar PV facility

The Botswana Power Corporation (BPC) has signed a binding 25-year power purchase agreement (PPA) to construct a solar photovoltaic (PV) facility with a contracted capacity of 50 megawatts (MW) in the former mining town of Selebi Phikwe. This is a significant development for Botswana and sub-Saharan Africa’s green energy transition. Botswana is rich in natural resources and has vast solar energy potential, receiving over 3 200 hours of sunshine annually. The solar power plant will ensure that approximately 48 000 tonnes of CO2 emissions will be avoided and power approximately 20 000 households annually. Even though Botswana possesses 66% of Africa’s coal resources, the nation’s ambitions to drive a renewable energy transformation are evident. The neighbouring country, South Africa, has shown that the transition to renewables can be cost-effective and sustainable – whilst aligning with global carbon emission reduction goals. Botswana’s Vision 2036 calls for 50% renewable energy allocation by 2036. So far, the country is on track for renewables to account for 15% of Botswana’s energy mix by 2030.

 
Source: ESI Africa

Kenya

KRA locks 540 firms out of tax amnesty programme

The Kenya Revenue Authority (KRA) has rejected applications from at least 540 firms seeking waivers under the amnesty programme that has so far recovered KES8.54-billion from defaulters and tax cheats. The applications worth KES287-million were rejected because the income declared was reportedly earned outside the qualifying period of 1 July 2015 to 30 June 2020, for the Voluntary Tax Disclosure Programme (VTDP). Some applicants also failed to disclose some material facts while others were under investigation for other crimes. “(We also rejected the applications) where an applicant was under audit or investigation; had been notified of an audit or investigation; or was a party to an ongoing litigation in relation to the tax liability,” the KRA told the Business Daily Africa on email. The taxman revealed it had recovered KES8.54-billion from businesses and individuals since the start of the amnesty programme that cushions tax defaulters from penalties and legal suits. “As of 30 June 2022, KES9.561-billion had been declared under the [VTDP]. Out of this, KES8.546-billion had been paid as at 30 June 2022,” the KRA said.

Source: Business Daily Africa

Kenya

Meta targets Kenyans with KES6-billion training programme

Kenyan innovators will benefit from a KES6-billion programme launched by global technology firm Meta aimed at enhancing the continent’s capacity in innovative technologies. The two-year programme – augmented and virtual reality (XR/VR) Africa Metathon – seeks to build a community and continue to support the African extended reality (XR) ecosystem. This is through training, capacity-building initiatives and the provision of resources needed to build innovative solutions for the continent, covering 16 African countries. Consequently, Meta has called for applications from African XR talents including developers, programmers, UI/UX designers, artists, animators, storytellers, professionals and students. The firm is partnering with Imisi 3D, an extended reality ecosystem developer, and BlackRhino VR, a Kenyan-based virtual reality production company located in Nairobi. Mr Phil Oduor, Policy Programmes lead for Africa at Meta, said the AR/VR Metathon will feature three major components including a training programme and an Africa-wide hackathon which will take place across 16 countries in Africa physically and virtually.

Source: Business Daily Africa

Kenya

What regulated mobile digital lending market will look like

Players in the digital loans industry now have two weeks left to apply for licences as consumers move into a new era where their friends and relatives will no longer be hounded by intrusive phone calls when in default. The Central Bank of Kenya (CBK) is expected to issue a list of compliant players by 17 September and shut down digital lenders that fail to meet strict consumer protection rules introduced under the Digital Credit Providers Regulations, 2021. Mobile phone lenders will also be required to disclose the total charges for their loans, including interest rates, late payment and rollover fees, before disbursing credit to customers. Digital Lenders Association of Kenya (DLAK) chair Kevin Mutiso said Kenyans should expect better services, stronger customer protection laws and fewer compliant players in two weeks. “Most people have applied and there is just a bit of small documents being asked for. We expect in the two weeks a memorandum from the CBK with a list, some names will be there, others will drop off,” he said. President Uhuru Kenyatta last December approved a change in law that allowed the central bank to regulate digital lenders, a move that gave the bank power to rein in lenders who violate consumer privacy.

Source: Business Daily Africa

Kenya / Democratic Republic of the Congo

DRC now third largest mover of cargo at Mombasa port

The Democratic Republic of the Congo (DRC) is now the third largest market for the port of Mombasa with a reported market share of 8.2%, Kenya Ports Authority (KPA) has said. To cement its position, Lignes Maritimes Congolaises - a DRC government-owned shipping line, began operations in June this year, becoming the latest entrant at Kenya’s biggest port. “With the formal admission of the DRC to the East African Community (EAC), more private and public organisations from the Central Africa country are setting up businesses in the country,” KPA noted in an update. A delegation from the DRC has visited the Inland Container Depot (ICD) in Nairobi to survey the facility - a key hub in the transport sector. It plays a crucial role in the effective movement of cargo locally and to the transit markets. “The team was impressed with the seamless intermodal transfer of cargo from Mombasa to ICD Nairobi via the standard gauge railway and final evacuation through the highly efficient smart gates,” KPA said. “The ICD, which was recently upgraded, now has an annual capacity of 450 000 TEUs (twenty-foot equivalent unit).” Uganda accounted for more than a quarter of the business at the port in 2018, pushing the total transit volumes up by 10% from 8.6 million tonnes in 2017 to 9.6 million tonnes.

Source: The Standard

Namibia

Grant awarded for green hydrogen pilot project in Namibia

Cleanergy Solutions Namibia has been awarded the JCOI/PTX grant to set up a Hydrogen pilot plant and refuelling station on the coast of Namibia. “Walvis Bay will become the first hydrogen port in Africa. To kickstart the hydrogen economy it is key to produce and deliver green hydrogen at an affordable cost. Thanks to the grants, it will become economically advantageous for local Namibians to use these new fuels and get acquainted with the technology,” said Roy Campe, chief technology officer of CMB Tech. The award was announced at the Namibia National Green Hydrogen Conference which was held in the capital city toward the end of August. Eike Krafft, Group director of Innovations at the O&L Group, advised that EUR30-million (USD29.76-million) had been awarded to four projects by Germany’s Federal Ministry of Education and Research (BMBF) to the Namibian government. One of these four projects includes the Cleanergy pilot plant and refuelling station, which is intended to be up and running at the end of 2023. “We are immensely proud of this initiative which is a first in Namibia. With our training centre, we want to upskill Namibians to kickstart the hydrogen economy in Walvis Bay,” said Krafft.

Source: ESI Africa

Nigeria / India

India, Nigeria increase investment in ICT, among others

Nigeria and India have strengthened collaboration in information and communications technology (ICT), green economy, artificial intelligence and entrepreneurship training as both countries boost their bilateral relations. Nigeria’s Minister of Foreign Affairs, Geoffrey Onyeama, disclosed this when he received in his office India’s Minister of State of External Affairs, Shri V. Muraleedharan, who was in Nigeria to attend the inauguration of the Nigeria-India Business Council (NIBC). Briefing journalists after a closed-door meeting, the minister said Muraleedharan’s visit shows how important Nigeria is to India. He stated that Nigeria also aspires to learn from India’s wealth of knowledge in ICT. “We have in areas of business solid and growing relations. India is one of the largest investors in Nigeria and of course India is one of the largest markets for Nigerian crude. India is a destination country for Nigerian students, for medical tourists and our cooperation is strong in many other fields, defence industry and so on,” he said. He noted the population of Indians in Nigeria is probably the highest in any West African country, which is proof of a strong relationship between the two countries.

Source: The Tide Newspaper

Rwanda

A look at new tax incentives to boost revenue collections

The government projects to spend an estimated RWF4.6-trillion in the fiscal year 2022/2023, with expenditures expected to rise by RWF217.8-billion. The government mobilises funds through different means including taxes, loans and grants. Another revenue stream is from non-tax collections such as visa charges, traffic fines and licences. For this fiscal year, it opted to make some tax policy changes expected to boost revenue collections and support businesses. Incentives to some strategic sectors are expected to promote made in Rwanda products and to boost the economy. Here, Doing Business looks at some of the tax incentives to be implemented under the East African Community Customs Act. Products or equipment will attract import duty as follows: rice, 45% (USD345 per metric tonnes (PMT)) instead of 75% or USD345 PMT; and sugar, 25% instead of 100% or USD460 PMT. Oil and soap will now attract 25% instead of 35%; and second hand clothes will attract USD2.5 per kilogramme (kg) instead of 35% while second hand shoes will attract USD5 per kg instead of USD0.4 per kg or 35%, among others. 

Source: The New Times

Senegal

Phase 2 of Senegal LNG project needs USD5-billion – president

The second phase of Senegal's Greater Tortue Ahmeyim (GTA) gas project will need investments worth around USD5-billion and could start in 2024 or 2025, Senegal's President Macky Sall has said. BP and the United States-listed Kosmos Energy are leading the development of GTA and Yakaar-Teranga, Senegal's first liquified natural gas (LNG) projects. The first phase of GTA, which straddles the border between Senegal and Mauritania, is 80% complete and expected to start delivering gas by the end of 2023. "In Phase 2, that will come immediately after Phase 1, we expect to produce 5 million tonnes of gas compared with Phase 1, with the target of hitting 10 million tonnes of gas," President Sall told a conference. A Floating Production Storage and Offloading (FPSO) is expected to sail from China to the site by the end of the year, BP executive vice-president for Production and Operations Gordon Birrell told the same conference earlier on. BP is in discussions with Senegal and Mauritania about GTA's Phase 2 and other projects in both countries, Birrell said without elaborating. "We are also working with the government of Mauritania on the most attractive development path for the BirAllah gas (field)," he said. 

Source: Reuters

Uganda

Members of parliament pass Bill promoting local content

Parliament has passed the National Local Content Bill, 2022 intended to foster promotion of local content in all but the oil, gas and petroleum sector. Among others, the Bill seeks to impose local content obligations on a person using public money or utilising Uganda’s natural resources or carrying out an activity requiring a licence to prioritise Ugandan citizens and resident companies owned by citizens in public procurement. Key among them being section 4 of the Bill that tasks a local content entity to give preference to goods which are manufactured in Uganda as well as services which are provided by Ugandan entities. The Bill was passed on Tuesday, 6 September 2022 during plenary chaired by Speaker Anita Among, following a request by the president to reconsider certain clauses to the Bill passed by the 10th Parliament. "The Bill is in conflict with the East African Monetary Union. Under Article 13 of the Customs Union Protocol, the [East African Community] (EAC) partner states agreed to remove all existing non-tariff barriers to trade and not to impose any new ones," said President Yoweri Museveni in his letter to the speaker. 

Source: ZAWYA

Zambia

IMF Executive Board approves new ECF arrangement for Zambia

The Executive Board of the International Monetary Fund (IMF) approved a 38-month arrangement under the Extended Credit Facility (ECF) in an amount equivalent to SDR978.2-million (around USD1.3-billion, or 100% of quota). The programme is based on the authorities’ homegrown economic reform plan that aims to restore macroeconomic stability and foster higher, more resilient, and more inclusive growth. The ECF-supported programme will help reestablish sustainability through fiscal adjustment and debt restructuring, create fiscal space for social spending to cushion the burden of adjustment, and strengthen economic governance, including by improving public financial management. The programme will also catalyse much needed financial support from development partners. The executive board’s decision will enable an immediate disbursement equivalent to SDR139.88-million (about USD185-million).

Source: IMF

Zimbabwe / Botswana / Mozambique

Zimbabwe, Botswana, Mozambique railway line on cards

Zimbabwe, Botswana and Mozambique are working on plans to establish a railway line to connect the three countries with a gateway to the sea, President Mnangagwa has said. Further, Zimbabwe and Botswana are working round the clock to establish a One-Stop Border Post at Plumtree-Ramokgwebana. This comes as Zimbabwe – under the Second Republic – is pushing to rejoin the Kazungula Bridge across the Zambezi River which will contribute to regional growth through increased traffic along the North-South corridor. The planned development will facilitate trade through reduced transit time for freight and passengers, reduced time-based trade and transport costs as well as improved border management operations arising from a one border facility. Speaking at a banquet hosted in honour of Botswana President Dr Mokgweetsi Masisi at the State House in Harare, President Mnangagwa said the transboundary infrastructure projects will further help unlock the economic potential of Southern African Development Community (SADC) countries while contributing to both regional and continental integration. "As we go forward, it is urgent and important to redouble our efforts to establish the One Stop Border Post at Plumtree-Ramokgwebana border.” 

Source: Bulawayo24