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issue 468 | 02 Oct 2022

Africa

Global Environment Facility, AfDB’s SEFA provide USD20-million to expand COVID-19 Off-Grid Recovery Platform

The Board of Directors of the African Development Bank (AfDB) Group has approved a USD20-million concessional investment to support the second phase of the COVID-19 Off-Grid Recovery Platform (CRP). The CRP is a blended finance initiative to unlock private capital for energy access companies to mitigate the negative impacts of the pandemic while advancing access to clean electricity and ensuring a green economic recovery. The Sustainable Energy Fund for Africa (SEFA), a multi-donor fund managed by the AfDB, will provide USD7-million in financing for the expansion; the remaining USD13-million will come from the Global Environment Facility (GEF), a multilateral environmental fund. The second phase will help create an additional USD70-million in funding for the energy access sector to cushion the pandemic’s persistent impacts on supply chains, inflation, the rising cost of capital, and the effects of the conflict in Ukraine. Alix Graham, fund lead of the Off-Grid Energy Access Fund, said: “With the SEFA concessional funding under the CRP, the Off-Grid Energy Access Fund was able to offer affordable financing solutions in markets such as Malawi and Sierra Leone that helped companies to reduce the impact of increased currency volatility and rising logistics costs.” 

 

Source: AfDB

Central Africa

BEAC raises key rates again in an attempt to curb inflation

Following the third 2022 meeting of its Monetary Policy Committee (MPC) recently held in Yaoundé, the Bank of Central African States (BEAC) announced it has once again increased its two benchmark rates. The Tender Interest Rate (TIAO), which represents the remuneration it receives for providing liquidity to commercial banks, was increased from 4% to 4.5% (up by 0.5 points) while the Marginal Lending Rate was raised from 5.75% to 6.25%, also up by 0.5 points. This rate is the remuneration BEAC obtains when it provides liquidity to commercial banks, for a period not exceeding 24 hours. Like the first time it raised its key rates in 2022, the central bank seeks through this second move to make liquidity more expensive for commercial banks, thus increasing the cost of bank credit and making it less accessible. Subsequently, money creation will drop within the region and inflation will slow down. The MPC forecasts inflation to be 5.2% by the end of the year (from 4.2% at the end of September 2022), or 2.2% higher than the tolerance threshold of 3% accepted in the region.

Source: Business in Cameroon

East Africa

EA businesses call for lower money transfer charges, forex commission

Businesses in the East Africa region are asking governments to consider lowering money transfer charges, which they say are adding to costs in the absence of stable exchange rates. Private sector players are particularly troubled by rising fees on mobile money transfers and the cost of remittances and payments. Remittances, non-commercial transfer of money by foreign workers for household use, are especially important for low-income countries and account for nearly 4% of their GDP, compared with about 1.5% of GDP for middle-income countries. “I urge [East African Community (EAC)] partner state governments to pursue initiatives to reduce currency exchange fees during transaction as an interim solution in the absence of a single currency,” said John Bosco Kalisa, chief executive of the East African Business Council (EABC). Speaking in Dar es Salaam at a webinar to discuss the harmonisation of payment systems, Kalisa called for full interoperability of mobile money networks and cross-border transaction/payments at the EAC level. At the meeting, which brought together central banks from the seven EAC partner states, participants asked the ministries of finance to harmonise legal procedures to facilitate remittances.

Source: The EastAfrican

East Africa

EABC board outlines new business priorities for intra-EAC trade growth and economic resilience

The Board of the East African Business Council (EABC) during its 84th meeting outlined priorities set to boost intra-East African Community (EAC) trade and investments. In her speech to the 84th EABC Board Meeting, the chairperson, Ms Angelina Ngalula, lauded the EABC Secretariat for championing the adoption of 35% as the fourth band of EAC Common External Tariff by EAC partner states which will promote industrialisation. Chairperson Ngalula stated that the board is steadfast in steering high-level policy advocacy through dialogue with the EAC heads of state to unlock non-tariff barriers (NTB), restrictions to free movement of services, double taxation, open skies, telecommunications and infrastructure development in order to boost intra-EAC trade and economic resilience amid the global crisis. Half of the countries in the eastern Africa sub-region are net food importers thus extremely vulnerable to higher global food and energy prices, rising inflation and food insecurity in the EAC bloc.

Source: EABC

Southern Africa

FAO and SADC launch regional Agricultural Information Management System

Unreliable and unharmonised data in the agricultural sector in Southern Africa has always been a set-back for policymakers, resulting in considerable delays in planning processes for implementation of well-coordinated regional responses to curb threats that include transboundary pests and diseases such as the Fall Armyworm and Foot and Mouth Disease that negatively impact on productivity and trade in the region. To mitigate this, the Food and Agriculture Organization of the United Nations (FAO) in collaboration with the Southern African Development Community (SADC) launched the inaugural SADC Agricultural Information Management System (AIMS), a platform to generate agricultural data for evidence-based decision-making for the region. The AIMS platform was developed through the project ‘Support Towards Operationalization of the SADC Regional Agricultural Policy’ (STOSAR) funded by the European Union (EU). “The SADC AIMS is an integrated and multilingual system providing policymakers with access to reliable and timely data on which to base policies, resource allocations, and emergency interventions. 

Source: SADC

Chad

A grant of more than EUR8-million from the ADF aims to strengthen economic governance and the extractive sector

The Board of Directors of the African Development Fund (ADF), the concessional window of the African Development Bank (AfDB) Group, awarded a grant of EUR8.8-million to Chad in Abidjan on 22 September. The aim is to enable the Sahelian oil-producing country to reduce its fragility, particularly economic fragility, which has been accentuated by the effects of the COVID-19 pandemic and the war in Ukraine. The grant is intended to implement the Economic Governance and Extractive Sector Support Project. This project, which will be implemented over 48 months, aims to strengthen the technical capacities of several public structures: Ministry of Economy, Development Planning and International Cooperation, Ministry of Petroleum and Energy, Ministry of Mines, National Commission for the Management of Public Investments, General Directorate of Taxes, National Agency for Financial Investigation, Chamber of Accounts, Public Procurement Regulatory Authority and the National Society of Mines and Geology. Upon completion, the project is expected to contribute to improving the fiscal policy effectiveness of Chad, which has been an oil exporter since 2003. 

Source: AfDB

Côte d’Ivoire

AfDB signs grant agreement for USD400 000 with Caisse des Dépôts to support micro-enterprises

The African Development Bank (AfDB) has signed a grant agreement for USD400 000 with the Caisse des Dépôts et Consignations de Côte d'Ivoire (CDC-CI). The funds will support CDC-CI to accelerate its activities to assist Ivorian small and medium-sized enterprises (SMEs). The agreement was signed on 27 September 2022 in Abidjan. CDC-CI is a state bank that handles official deposits. The grant will be sourced from the Capital Markets Development Trust Fund, a multi-donor fund administered by the AfDB. “We are delighted with this first collaboration between the bank group and the [CDC-CI]," said Ahmed Attout, head of the AfDB’s Capital Markets Development Division. “By strengthening the capacity of the [CDC-CI], this project will help broaden the long-term investor base in [Côte d’Ivoire] and diversify the sources of financing for Ivorian [SME’s].” The Director General of the CDC-CI, Lassina Fofana, said: "Contributing to the financing of [SMEs] is one of the missions of the [CDC-CI] in its capacity as an investor of general interest.”

Source: AfDB

Eswatini / Namibia

Eswatini, Namibia talk environmental sustainability

Officials from the Eswatini Environmental Fund (EEF) have concluded a visit to its Namibian counterpart where they discussed the possibility of future agreements geared toward ensuring environmental sustainability. In their discussions, the EEF and the Environmental Investment Fund of Namibia (EIF) emphasised the importance of protecting the environment and how to ensure that citizens of the two countries use their resources productively. The sessions provided a platform for the two institutions to network and engage on the opportunities and challenges pertaining to their respective institutional set-ups with a view toward documenting best practices and lessons learned. The two entities also emphasised the need for EEF and EIF to form a partnership so that the shared resources can be mutually beneficial. The head of the delegation of the EEF stated they are here to learn from Namibia because EIF is better resourced and better managed – and it is one of the best examples to learn from, further urging that Africans do not always have to go outside the continent to benchmark.

Source: Namibia Economist

Ghana

Fitch downgrades Ghana to 'CC'

Fitch Ratings has downgraded Ghana's long-term local and foreign-currency issuer default ratings (IDRs) to 'CC', from 'CCC'. Fitch Ratings typically does not assign outlooks to issuers with a rating of 'CCC' or below. The downgrade reflects the increased likelihood that Ghana will pursue a debt restructuring given mounting financing stress, with surging interest costs on domestic debt and a prolonged lack of access to the Eurobond markets. There is a high likelihood that the International Monetary Fund (IMF) support programme currently being negotiated will require some form of debt treatment due to the climbing interest costs and structurally low revenue as a percentage of GDP. Fitch Ratings believes that this will be in the form of a debt exchange and will qualify as a distressed debt exchange under their criteria. The government has not confirmed or denied press reports that Ghana is preparing to negotiate a restructuring. Interest costs on external debt are lower than for domestic debt and near-term external debt amortisations appear manageable. However, Fitch Ratings believes there could be an incentive to spread a debt restructuring burden across domestic and external creditors and therefore does not have a strong basis to differentiate between foreign and local currency ratings at this time.

Source: Fitch Ratings

Kenya

Counties have a week to use new system in war on fraud

Counties had until 1 October to migrate their management systems to a Unified Human Resource (UHR) platform used across the public service in the latest effort at curbing pilferage especially in paying workers. The counties are currently using a mix of manual and Integrated Payroll and Personnel Database (IPPD) that have however been a convenient platform for fraud given that manual systems are prone to abuse. Migration to the UHR system is part of commitments that the National Treasury made to the International Monetary Fund (IMF) last year in a bid to tame graft in the payment of workers at the national and county levels. “All the county governments, including the county assemblies, are required to migrate to the [UHR] Information System for the public service by 1 October 2022, in line with the guidelines by the Head of the Public Service,” Ms Nyakango said. Ms Nyakango added that none of the counties had shifted to the unified system by close of the financial year that ended in June. The push for counties to shift to a common system that brings together all public entities comes amid increasing cases of manual payments worth billions of shillings. 

Source: Business Daily Africa

Kenya

How new inflation taxes will slash 35 000 jobs

Manufacturers estimate that Kenya will lose over 35 000 jobs and billions in taxes if the Kenya Revenue Authority (KRA) implements the 6.3% inflation adjustment on excise duty expected to push goods out of the reach of many consumers. The Kenya Association of Manufacturers (KAM) says industries will cut their workforce, terminate supply contracts and reduce remitted taxes if consumption declines as a result of higher prices. The lobby says sales have already declined due to excise tax increases on spirits and beer in July that have hit barley and sorghum-based beer sales by 21% and 32%, respectively, to COVID-19 pandemic levels in just a month and a further increase will lead to collapse as consumers turn to illicit alcohol. Oil marketers, and alcohol and cigarette manufacturers are appealing to the National Treasury to defer inflation adjustment on the excise tax, saying it will fuel price increases across the country worsening inflation that currently stands at 8.5% beyond the state upper limit target of 7.5%. “Finished goods distribution and retail trade (dominated by [micro-small and medium-sized enterprises]) will lose KES4.2-billion in reduction of raw material use, KES15.7-billion in employment income loss and 35 364 jobs will be lost,” KAM said.

Source: Business Daily Africa

Kenya

Kenya exports first goods under the AfCFTA

Kenya has exported its first goods under the African Continental Free Trade Area (AfCFTA) Agreement to Ghana. Kenyan-made Exide batteries landed in the Port of Tema on 23 September, in a historic ceremony that marks Nairobi’s formal start of preferential trading under the AfCFTA Agreement. A statement from Kenya’s Ministry of Industrialization, Trade and Enterprise Development said the products were to be received by Kenya’s High Commissioner to Ghana, Ambassador Eliphas Barine. A representative of Kenya’s Associated Battery Manufacturing EA Ltd handed over the consignment to the importer, Ms Gifty Fianu of Yesudem Company Ltd, Ghana. The ceremony was witnessed by the ambassadors of other African countries to Ghana, and the AfCFTA Secretariat. “Kenya is among six countries selected to participate in the pilot phase of the AfCFTA Initiative on Guided Trade, formulated on [the] realisation that no trading was taking place one-and-a-half years after the launch of AfCFTA preferential trading on 1 January 2021,” reads a statement from Kenya’s trade ministry. The other five countries are Cameroon, Egypt, Ghana, Rwanda and Tanzania.

Source: The EastAfrican

Liberia

Liberia Economic Update: Prospects for inclusive and sustainable growth

The World Bank on 27 September, launched the third edition of the annual Liberia Economic Update with the theme: Investing in Human Capital for Inclusive and Sustainable Growth. The Liberian economy experienced strong growth in 2021. After contracting by 3.0% in 2020 due to the COVID-19 pandemic, growth recovered to 5.0% in 2021. The rebound was driven by improved external demand, higher prices for Liberia’s main exports, and the resumption of normal domestic activity. Meanwhile, growth slowed in the first half of 2022, even when mining and construction continued to perform well. In agriculture, rubber and cocoa production dropped by 13.5% and 27%, respectively. In the industrial sector, iron ore, gold, and cement production all increased, reflecting firmer international prices and an uptick in construction activity. However, services growth fell, as reflected in the decline in beverages and electricity production. Growth is projected to slow down to 3.7% in 2022, reflecting increased global uncertainties and commodity price shock, but reach an average of 5.2% over 2023-2024. 

Source: World Bank

Mauritius

ESG and the rise of sustainable finance in Mauritius

As African countries grapple with the measures necessary to meet their nationally determined commitments (NDCs) under the Paris Agreement, it is critical to be primed to attract sustainable finance, and for central banks and regulators in each country to create a fertile environment for this redirection of capital. Africa, and small island nations such as Mauritius, are the most vulnerable to the impacts of climate change, but also offer huge potential for renewable energy. Mauritius has committed to reducing its greenhouse gas (GHG) emissions by 40% by 2030 and projects that this will require funding of USD6.5-billion. While USD2.3-billion (35% of the estimated requirement) will be provided by government and the private sector, USD4.2-billion must originate from the international community and donor agencies. Recognising that sustainable finance can be a lever for change, the government of Mauritius announced in its 2020/2021 budget that it intended to develop a green finance framework for the country. This includes a regulatory and supervisory framework for the issuance of sustainable bonds and green bonds. 

Source: ENSafrica

Namibia

Consumer rights top ministry agenda

The government considers the effective protection of consumer rights as a vital component and, therefore, ranks it high on the agenda of the Ministry of Industrialisation and Trade. This was said by the Minister of Industrialisation and Trade, Lucia Iipumbu, in Windhoek recently at a meeting to create awareness, share and deliberate on issues of mutual business and entrepreneurial interests. These included the consumer protection policy and the administration of the Liquor Act. She said the ministry launched the National Consumer Protection Policy 2020-2025 in September 2021, with the main objective of seeking an effective consumer protection framework. “It was also to develop the knowledge and skills necessary for consumers to understand their rights associated with their spending and investment choices as well as to encourage fair trade in a competitive economy,” she said. The policy highlighted the need for legislation to address unfair commercial practices affecting businesses and consumers, including marketing tactics, advertising campaigns, sales promotions and other commercial practices directed at influencing consumer decisions in the marketplace. 

Source: The Namibian

Nigeria

Nigeria hikes rate to highest level to head off inflation

Nigeria's central bank on Tuesday, 27 September hiked its main lending rate by 150 basis points to 15.50%, its highest level yet and more than forecast, forging ahead with efforts to rein in inflation and ease pressure on the currency. A Reuters poll of economists had predicted a much smaller 50 basis point hike. But with inflation at its highest in 17 years, Central Bank of Nigeria Governor Godwin Emefiele said the Monetary Policy Committee (MPC) had to continue with an aggressive stance. Annual inflation rose for a seventh straight month in August to 20.52% from 19.64% in July. Tuesday's rate hike, the third in a row, means the central bank has delivered a total 400 basis-point increase this year, its most hawkish in a single cycle, analysts said. The benchmark interest rate was introduced in 2006. "The MPC noted that a tight policy stance would help consolidate the impact of the last two policy rate hikes, which is already reflected in the slowing growth rate of money supply," Emefiele told a news conference. "It also felt that an aggressive rate hike would slow capital outflows and likely attract capital inflows and appreciate the naira currency," Emefiele added. 

Source: Reuters

Rwanda

TCSPs in Rwanda are now required to have the central bank licence

On Friday, 23 September 2022, the National Bank of Rwanda for the first time issued a Regulation No. 52/2022 of 01/09/2022 to govern trust and company service providers (TCSPs). This new Regulation requires that anyone who intends to provide trust and corporate services obtain a licence from the central bank. The Regulation stipulates, among other requirements, that an applicant for a TCSP licence must have a permanent establishment in Rwanda and operate from business premises with adequate logistics and staff of adequate number, skills, knowledge, and experience to perform their duties. The applicant must also have an internal compliance system that ensures compliance with the standards of conduct issued under applicable laws and regulations, as well as a business plan that outlines the applicant's mission, vision, strategic objectives, market analysis, financial projections, and action plan. The holder of a TCSP licence would be required to maintain a professional indemnity insurance policy that is proportional with the levels of risk it is involved in and to pay an annual licence fee of RWF1-million to the central bank. 

Source: ENSafrica

Senegal / Nigeria / Mali

Decentralised solar energy systems commissioned in Senegal, Nigeria and Mali

A sustainability-driven energy service provider has successfully commissioned decentralised solar energy solutions in Senegal, Nigeria and Mali. Kowry Energy, a sustainability-driven energy service provider, focuses on power provision across sub-Saharan Africa. They announced the successful commissioning of four decentralised solar energy systems in Senegal, Nigeria and Mali within 16 months of the company’s incorporation. The successfully commissioned projects are the first of several forming portfolios in each country that will be realised within three years. The analysis of the data provided by these digitised systems can provide solutions to drive demand management while accelerating the growth of local economies. Ndiarka Mbodji, CEO and founder of Kowry Energy, said countries across Africa have resiliently emerged from the pandemic and now face the uncertainty and challenges brought about by climate change, and food and water insecurity. “We have worked closely with our customers to remove unnecessary barriers to business growth in the local communities they serve. Reliable and affordable clean electricity is the backbone of any economy, from which ever-lasting societal foundations can be built, and development can be sustainable.”

Source: ESI Africa

Tanzania

Tanzania plans to buy cargo aircraft

The government of Tanzania is set to purchase a new special cargo aircraft, with plans to use the Kilimanjaro International Airport (KIA) as a strategic airport for cargo landing. According to the Deputy Minister for Work and Transport, Mr Atupele Mwakibete, plans are aligned for the special cargo aircraft Boeing 767-300F to arrive in the country in June 2023, to boost the cargo business. Mr Mwakibete was responding to a question asked in parliament by Hai lawmaker, Saasisha Mafuwe who wanted to know why the government has not declared the KIA as a special airport to boost the country’s agribusiness by allowing cargo aircraft to land and takeoff without paying the fees. In his answer, Mr Mwakibete said in efforts to attract cargo business, the government was ready to review landing fees for all cargo aircrafts as the Hai representative had proposed it. “Currently we do not have special cargo aircraft which have specific schedules to land at KIA,” he said. He, however, insisted that the cargo that is coming to KIA was being transported by passenger aircraft.

Source: The Citizen