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issue 478 | 11 Dec 2022

Africa

ADF invests more than USD6-million to strengthen public finance governance in African countries

The Board of Directors of the African Development Fund (ADF) has approved a grant of USD6.12-million to help strengthen public finance governance in low-income African countries. The funding is for Phase II of the Regional Institutional Support Project in Public Finance Governance (RISPFG) which will be implemented by two pan-African institutions, the African Tax Administration Forum (ATAF) and the Collaborative Africa Budget Reform Initiative (CABRI). The grant, which was formally approved on 3 November 2022, will be distributed as follows: USD3.90-million to support Africa’s tax administration reforms and domestic resource mobilisation efforts through support to ATAF and USD2.22-million to support budget reforms and strengthen public finance management through CABRI. This project is a follow-on to a first phase approved by the African Development Bank (AfDB) in 2016 and successfully closed in September 2021 with both institutions (ATAF and CABRI). The project’s overall objective is to improve domestic resource mobilisation and public financial management in recipient countries, and help strengthen their efforts towards sustainable, inclusive growth and development.

Source: AfDB

East Africa

EAC member states not ready yet for single currency rollout

East African Community (EAC) member states will have to wait longer for a monetary union. A taskforce looking into the matter has proposed to delay the implementation of the East African Monetary Union (EAMU) until 2031 from initial date of 2024, saying it is too soon considering members have not attained all requirements. The proposed delay is an indictment on the members’ commitment to achieve the EAMU, a key pillar of integration. The EAMU is the third pillar of the EAC, others being the Customs Union and the Common Markets Protocol. The region, under the EAMU, is expected to adopt a single currency by 2024. “We have a roadmap that was supposed to be implemented between 2013, when the Monetary Union Protocol was signed, and 2024. But we did not manage to implement most of the activities in that roadmap,” said Dr Pantaleo Kessy, principal economist, EAC Secretariat. “According to the roadmap, the EAC convergence criteria were to be attained by 2021 and be maintained for three years in the run-up to the establishment of the monetary union in 2024.” However, going through each activity, shows that all the partner states – Burundi, Kenya, Uganda, Tanzania, Rwanda and South Sudan – are behind schedule.

Source: The EastAfrican

East / Southern Africa

New frameworks to harmonise tariffs and standards for energy products in the region

The Common Market for Eastern and Southern Africa (COMESA) has developed regional policy frameworks that will assist member states to improve the quality of solar products that are allowed into the region and achieve the ease of doing business across borders due to predictable duty regimes. This is intended to address the proliferation of low-quality solar energy products which have eroded confidence in reliability of solar energy as a viable solution to electrification challenges in the COMESA region. Studies have also revealed that the high level of variances in customs duties across the region has been a hindrance to trade and adoption of off grid renewable technologies. The frameworks so far developed are the COMESA Model Solar Standards, the COMESA Model Common Customs Tariff Framework for Solar Products and the COMESA Model Energy Policy. These were presented to experts in energy, customs and standards from member states for validation in a workshop held in Lusaka, Zambia, from 5 – 7 December 2022. The model solar standards and customs tariffs are intended to promote common standards across the region to spur trade among the member states. This will enable manufacturing of products in any country for sale anywhere without fear of standards incompatibility.

Source: COMESA

Southern Africa

Heads of SADC anti-corruption agencies resolve to strengthen fight against graft

Corruption continues to inflict significant damage to economic and social development of the Southern African Development Community (SADC) region and undermine transparency, accountability and the rule of law, the Acting Director of the SADC Organ on Politics, Defence and Security Affairs, Ms Kealeboga Moruti, has said. Speaking at the opening of the meeting of heads of SADC anti-corruption agencies in Johannesburg, South Africa, Ms Moruti said the nexus between corruption and peace and security in the region cannot be overlooked. The SADC heads of anti-corruption agencies met from 23 - 25 November 2022, hosted by the Special Investigating Unit (SIU), under the theme Strengthening Regional Co-operation and capacity to address corruption. Ms Moruti said corruption has the potential to undermine peace and stability of SADC member states and exacerbate inequalities as it leads to unequal distribution of wealth and capacity of member states to deliver socio-economic development equitability to secure a better life for all citizens. She, however, noted that progress continues to be made at the regional level to strengthen cooperation and capacity to address corruption within the framework of the Strategic Anti-Corruption Action Plan for 2018 - 2022 which will soon be succeeded by the 2023 - 2027 plan. 

Source: SADC

Botswana

AfDB Group commits USD180-million to bolster post-COVID-19 economic recovery

The Board of Directors of the African Development Bank (AfDB) has approved a loan of USD179.66-million to support government reforms to restore post-pandemic fiscal stability and economic recovery. The funds for phase II of the programme will build on the successes of the first phase by supporting policy measures designed to boost economic recovery, further ease private sector participation in the economy and promote climate-smart agriculture and industrial development. These include various revenue enhancing measures, establishment of a public procurement regulatory authority and facilitation of public private partnerships. The programme will also propel private sector-led agriculture and industrial transformation. It will achieve this through the approval of a national policy on agricultural development and transformation, creation of a meat industry regulator and improvement of the investment facilitation regime. To enhance resilience and social inclusion, the programme will strengthen the policy framework for micro, small and medium-sized enterprises (MSMEs), promote the adoption of a technical and vocational training policy and roll out of a single social registry.

Source: AfDB

Djibouti

Djibouti aims to be a green hydrogen hub

Renewable Energy developer CWP Global has signed a memorandum of understanding (MoU) with the government of Djibouti to create a 10-gigawatt (GW) renewable energy and green hydrogen hub. The project will go a long way towards realising the country in the Horn of Africa’s aspirations for cleaner and more security energy supplies. It should create green jobs and generate exports to fast-emerging markets for low-carbon fuels and industrial production. CWP Global’s chairman Mark Crandall said their work with the Ministry for Energy and Natural Resources confirms their “alignment and shared vision for a pioneering 10 GW renewable energy hub with the capacity to diversify Djibouti’s energy mix, provide secure potable water supplies to local communities, further develop local and regional agriculture, and open the door to emerging international markets for green hydrogen and derivatives, including green ammonia.” “It is also critical to us that the project is aligned with Djibouti’s vision 2035 economic plan, which prioritises closer cooperation with regional neighbours, including Ethiopia, where there is great scope for collaboration on green energy, and an opportunity to build a thriving new commercial hub at the mouth of the Red Sea,” said Crandall.

Source: ESI Africa

Ethiopia

AfDB’s new 2023-2027 strategy to help spur economic transformation

On 17 November 2022, the African Development Bank (AfDB) Group Board of Directors approved the 2023-2027 Country Strategy Paper for Ethiopia. The key objective of the strategy is to support Ethiopia in expanding inclusive and sustainable growth through agro-industrialisation, improved connectivity and competitiveness and reduced vulnerability to shocks. The blueprint focuses on two priority areas, namely, improving economic and financial governance for greater resilience, enhanced service delivery and private sector growth; and developing quality and sustainable infrastructure to support Ethiopia’s agro-industrialisation. Under the first priority area, the bank will support Ethiopia to strengthen institutional and human capacity in macroeconomic and financial governance, including monetary policies and debt management. A key focus is to improve the government’s capacity to deliver quality and equitable essential social services, promote transparency and accountability, and strengthen the resilience of institutions and services.

Source: AfDB

Ghana

Supporting SMEs to recover from the COVID-19 pandemic

In Ghana, 373 small and medium-sized enterprises (SMEs) from 15 regions received USD5-million (equivalent to GHS28-million) from the Ghana Economic Transformation Project (GETP) to support their recovery from the COVID-19 crisis. Four months after receiving the grants, 93 of the 165 firms surveyed reported that they had created a total of 369 new jobs. Ghana’s micro, small and medium-sized enterprises (MSMEs) face considerable challenges in growing their businesses. They have limited access to finance and quality providers of technical assistance. They also have few skills and management capabilities. Women-owned firms face even tougher challenges, as they have limited access to land, capital, and more sophisticated business practices. The World Bank’s Business Pulse Surveys highlighted that the COVID-19 pandemic has further complicated these challenges. Thus, MSMEs have faced immediate liquidity challenges, firm closures, and widespread jobs losses.

Source: World Bank

Kenya / Morocco

KQ inks deal with Royal Air Maroc

The Royal Air Maroc (RAM) has resumed a codeshare agreement with national carrier Kenya Airways (KQ) aimed at expanding its reach in key African routes. The agreement, which was signed recently, will allow RAM passengers to travel to Nairobi, Zanzibar and Johannesburg on the KQ network, the two airlines have said. The deal will also see passengers travelling from Marrakech and Casablanca to Nairobi use KQ. A codeshare is a business deal between two or more airlines, which allows them to sell seats on each other’s flights and expand their network. Each airline publishes and markets a flight under its designator and number as part of its schedule. “This partnership strengthens our connectivity to the east and south of the African continent, thanks to a long-standing reliable partner, [KQ]. It will enable our passengers to reach Nairobi and Johannesburg, two important economic and financial capitals, as well as Zanzibar, a popular tourist destination," RAM CEO Abdelhamid Addou said in a statement. KQ and RAM first started the agreement in 2016, before it was discontinued in 2019. 

Source: Business Daily Africa

Malawi

New Malawi economic update calls for urgent implementation of macroeconomic reforms and for advancing agricultural commercialisation

The combined effects of adverse weather, acute foreign exchange shortages, disruptions to electricity, and the high rate of inflation, mean Malawi continues to face an economic slowdown, according to the latest World Bank’s Malawi Economic Monitor (MEM). It says power cuts are affecting the industrial and service sectors, and high inflation the private sector and households. The 16th edition of the MEM, titled Planning Beyond the Next Harvest: Advancing Economic Stability and Agricultural Commercialization, shows the emerging impacts of the economic crisis where higher government spending continues to widen the fiscal deficit, exerting pressure on the government’s fiscal consolidation plans. Malawi’s public debt is currently assessed to be in distress, though ongoing debt restructuring negotiations will help ensure debt sustainability over the medium term. Meanwhile, the impact of the crisis on the private sector is increasingly clear: according to a new World Bank survey of 1 200 small businesses, two-thirds report a decrease in sales compared to a year earlier, a fall driven in particular by an increase in costs for inputs. Three-quarters of businesses consider the unavailability of foreign exchange a threat to their profitability.

Source: World Bank

Mozambique

Mozambique president officially launches Coral Sul FLNG project

The President of Mozambique, Filipe Jacinto Nyusi, has inaugurated the Coral-Sul Floating Liquefied Natural Gas (FLNG) project, located in the ultra-deep waters of the Rovuma basin. The inauguration ceremony was attended by project partners Eni – as the operator – ExxonMobil, the Chinese National Petroleum Corporation, Kogas, Galp, and national oil company Empresa Nacional de Hidrocarbonetos (ENH), as well as Minister of Mineral Resources and Energy of Mozambique, Carlos Zacarias. During the launch, President Nyusi emphasised the critical role the project is set to play in ushering in a new era of energy security for the region while positioning the country as a globally competitive producer and exporter of liquefied natural gas (LNG). According to the president, the FLNG project “has raised the levels of confidence and expectations for the future so that Mozambique can occupy a significant position as an exporter of LNG in the phase of the energy transition.” The launch of the FLNG project follows Eni making its first shipment from the facility on 13 November, with the facility expected to open up new opportunities for gas monetisation in the country to support Mozambique’s GDP growth as well as the development of associated industries.

Source: Energy Capital & Power

Namibia

Namibia launches electronic certificate to facilitate trade in region

The Namibia Revenue Agency (NamRA) recently launched the Southern African Development Community (SADC) Electronic Certificate of Origin (e-CoO) to facilitate the easy movement of goods and reduce the cost of doing business within the region. Speaking at the launch, Willbroad Poniso, Namibia's head of Customs and Excise, said the expected benefits from the use of the SADC e-CoO include improving intra-regional commerce, encouraging a paperless environment, improving time efficiency, and lowering the risk of origin fraud. "The certificate comes with several benefits for the exporter or manufacturer in that it allows for, among others, online registration of exporters, online submission of all required documents, and online approvals. Everything becomes electronic," he said. To reduce origin fraud, the system is equipped with security features such as online e-CoO authenticity verification, as well as optimal watermarking technology to distinguish between originals and copies of certificates of origin issued, Poniso added. According to him, the implementation of the electronic certificate will ensure that NamRA meets its strategic objective of enhancing trade facilitation and pursuing innovation, as well as improving compliance with regional and international requirements under the SADC Protocol on Trade.

Source: Xinhua

Nigeria

Nigeria validates its AfCFTA Implementation Strategy

Nigeria, with the support of the United Nations Economic Commission for Africa (UNECA) validated its National African Continental Free Trade Area (AfCFTA) Implementation Strategy at a workshop in Lagos, Nigeria, which brought together about 200 key stakeholders from different sectors who considered the eight pillars of the strategy and their relevance to Nigeria’s development agenda. The Implementation Strategy, developed by the National Action Committee (NAC) on AfCFTA, identifies priority actions to be undertaken by the government of Nigeria to effectively realise the full benefits of the AfCFTA. It was reviewed by a technical panel last month in Lagos. In his opening remarks, senior advisor in the Regional Integration and Trade Division (RITD) of UNECA, Mr Adeyinka Adeyemi, highlighted that UNECA, through its African Trade Policy Centre (ATPC) has been working with member states to deepen Africa’s trade integration and effectively implement the agreement through policy advocacy and national strategy development. “Nigeria has demonstrated high commitment to the implementation of [the] AfCFTA,” Mr Adeyemi noted, adding, “It is my conviction that the feedback from the workshop will further enrich the strategy and form the basis for an upgraded document for the government’s consideration and eventual adoption.”

Source: UNECA

Nigeria / Morocco

NNPC signs MoU with five West African NOCs for Nigeria-Morocco Gas Pipeline

The Nigerian National Petroleum Company (NNPC) has signed five memoranda of understanding (MoUs) with national oil companies (NOCs) and relevant entities of The Gambia, Ghana, Guinea, Guinea-Bissau, and Sierra Leone for the Nigeria-Morocco Gas Pipeline Project, which has the potential to improve energy infrastructure in the region and benefit 400 million people across West Africa. The signing ceremony was held on 5 December in Morocco’s capital city of Rabat. The 5 600 kilometres (km) Nigeria-Morocco Gas Pipeline will span 11 West African countries along the Atlantic coast and is expected to cost USD25-billion. With a projected capacity of approximately 3 billion cubic feet per day upon completion, the aim of the pipeline is to transport gas from Nigeria to Europe while supporting auxiliary energy infrastructure in West Africa and ensuring further integration and cooperation within the region.

Source: Energy Capital & Power

Nigeria / Vietnam

Nigeria moves to become gateway to AfCFTA, signs MoU with Vietnam

The Nigerian government, in a bid to boost trade with South East Asia and maximise the African Continental Free Trade Area (AfCFTA) agreement, has announced plans to make USD336-billion exporter, Vietnam, use Nigeria as a gateway into the African market. This was disclosed by Vice President Yemi Osinbajo in a statement recently, following his ongoing state visit to one of Asia’s largest exporters. The Nigerian government also stated it will support Vietnam’s quest to establish relations with the Economic Community of West African States (ECOWAS) and is prepared to sign trade and industry agreements. Vice President Osinbajo stated that there are vast opportunities for cooperation and collaboration between Nigeria and Vietnam, especially in the digital economy space. He said, “We have a growing [telecommunications] market, possibly one of the deepest penetrations of [telecommunications] in the developing world. A large percentage of our citizens use [telecommunications] equipment or devices. Our broadband connectivity has also vastly improved. 

Source: Nairametrics

Republic of the Congo

IMF staff reaches staff-level agreement on the second review of the ECF arrangement with the Republic of the Congo

An International Monetary Fund (IMF) team led by Pritha Mitra, mission chief for the Republic of the Congo, conducted a mission in Brazzaville from 20 September to 4 October 2022, and virtual discussions from 24 - 28 October to 28 November with the Congolese authorities to discuss the second review of the three-year arrangement for the Republic of the Congo under the Extended Credit Facility (ECF) arrangement. At the end of the mission, Ms Mitra issued the following statement, in part: "The IMF team reached a staff-level agreement with the authorities of the Republic of the Congo on the completion of the second review under the [ECF], which is subject to the approval of the IMF Executive Board. Discussion by the executive board will only take place if the 2023 budget approved by Parliament is aligned with programme objectives.” “Economic recovery continues, despite the deteriorating international environment and the lingering fallout from the pandemic. Real GDP growth is expected to reach 2.8% in 2022. Renewed investment by the largest oil producers, amid high oil prices, has revived oil production. At the same time non-oil activity is benefitting from repayment of domestic arrears, government investment in agriculture and infrastructure, and steady activity in mining, manufacturing, and services.”

Source: IMF

Seychelles

IMF Executive Board completes third review under the EFF for Seychelles

The Executive Board of the International Monetary Fund (IMF) has completed the third 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 USD8.6-million), bringing total disbursements under the current EFF to SDR61-million (about USD80.6-million). The executive board’s decision was taken on a lapse-of-time basis. Seychelles’ economic recovery has remained very strong in 2022, fuelled by a faster-than-expected rebound of the tourism sector. At the end of September 2022, tourist arrivals were 125% higher than the same period in 2021, with stronger than expected demand from Europe and the Middle East. The recovery is mostly concentrated in tourism-related industries. Real GDP growth is expected to reach 10.6% in 2022, before moderating to 5.4% in 2023. Inflation has been relatively low (3.0% year-on-year at the end of September 2022), reflecting the effects of currency appreciation in 2021 and earlier this year, as well as the base effect of higher inflation in 2021. Average inflation is expected decline to 3.0% for 2022, before rising to 4.5% in 2023.

Source: IMF

Sierra Leone

World Bank approves USD100-million to strengthen transparency and accountability in public finance

The World Bank Group Board of Executive Directors has approved the second Inclusive and Sustainable Growth Development Policy Financing (DPF) – a USD100-million grant which will support the government of Sierra Leone to improve natural resource governance, enhance inclusiveness, and strengthen accountability and transparency in public finance. This DPF, the second in a series of three operations, builds on a programmatic reform plan to support sustainable, robust, and inclusive growth in the country. Sustainable and inclusive growth has been constrained by the country’s exposure to multi-dimensional exogenous shocks (economic, epidemic, climactic), pervasive governance weaknesses, and limited fiscal space and fiscal risks, which inhibit the ability to promote pro-poor growth through public investment. The DPF is aligned with the government’s Medium-Term National Development Plan (MTNDP 2019-2023). Mining reforms supported by the operation will help improve revenue collection, while reforms in auditing and state-owned enterprises’ governance will help control expenditures, easing fiscal pressures and creating space for growth-promoting investment. 

Source: World Bank

Somalia

IMF Executive Board concludes 2022 Article IV consultation and fourth review of the ECF for Somalia

On 5 December 2022, the Executive Board of the International Monetary Fund (IMF) completed the fourth review of the Extended Credit Facility (ECF) arrangement for Somalia. The board’s decision enables the immediate disbursement of SDR7-million (about USD8.9-million), bringing Somalia’s total disbursement under the ECF and the Extended Fund Facility (EFF) to SDR278.4-million (about USD393.2-million). Somalia’s ECF arrangement was originally approved by the executive board on 25 March 2020 as part of a three-year blended arrangement under the ECF and the EFF, which involved access of SDR252.86-million (155% of quota) under the ECF and SDR39.57-million (24% of quota) under the EFF. As the full amount of the EFF arrangement was made available on approval and drawn at the first purchase, the EFF arrangement lapsed immediately. The ECF arrangement supports the implementation of the authorities’ National Development Plan and anchors reforms between the Heavily Indebted Poor Countries (HIPC) Decision and Completion Points.

Source: IMF