issue 479 | 15 Jan 2023
WorldSharp, long-lasting slowdown to hit developing countries hard
Global growth is slowing sharply in the face of elevated inflation, higher interest rates, reduced investment, and disruptions caused by Russia’s invasion of Ukraine, according to the World Bank’s latest Global Economic Prospects report. Given fragile economic conditions, any new adverse development – such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic, or escalating geopolitical tensions – could push the global economy into recession. This would mark the first time in more than 80 years that two global recessions have occurred within the same decade. The global economy is projected to grow by 1.7% in 2023 and 2.7% in 2024. The sharp downturn in growth is expected to be widespread, with forecasts in 2023 revised down for 95% of advanced economies and nearly 70% of emerging market and developing economies. Over the next two years, per capita income growth in emerging market and developing economies is projected to average 2.8% – a full percentage point lower than the 2010-2019 average. In sub-Saharan Africa – which accounts for about 60% of the world’s extreme poor – growth in per capita income over 2023-24 is expected to average just 1.2%, a rate that could cause poverty rates to rise, not fall. Growth in advanced economies is projected to slow from 2.5% in 2022 to 0.5% in 2023.
Source: World Bank
Africa / United StatesAfrica seeks bigger US trade slice for AGOA to make sense
Countries in Africa may need more trade privileges with the United States (US) even as Washington reviews the African Growth and Opportunity Act (AGOA) meant to expand what the continent will export. At the end of the US-Africa summit in December, Washington pledged to renew AGOA, bringing clarity to uncertainties that had befell exporters from countries such as Kenya. But now experts say the narrow view of AGOA should be expanded to allow them to export more goods and hence benefit more countries that are able to make a diversified list of goods. “AGOA has to be expanded in two ways; expanded in its product coverage and in terms of country coverage,” said Melaku Desta, coordinator of the African Trade Policy Centre, United Nations Economic Commission for Africa (UNECA). “AGOA also excludes processed products as Africa is allowed to export iron ore but not steel products.” AGOA’s legislation was first passed by the US Congress in 2000. It expires in 2025, having been extended four times before. Initially, it was meant to last until 2007 but was amended to clarify on preferential treatment of African goods and other standards required of goods. It offers almost 6 500 products duty-free access to US markets.
Source: The EastAfrican
GhanaNuclear power ambitions in Ghana receive boost with disposal facilities
Ghana has joined a pilot project run by the International Atomic Energy Agency (IAEA) for the disposal of sealed radioactive sources. The disposal facilities will bring the country closer to its nuclear power ambitions. The IAEA is providing technological and engineering support for the first-of-a-kind construction and implementation of borehole disposal facilities for radioactive waste. This is part of a pilot project underway in Malaysia and Ghana, funded by Canada. Disposal is the final phase for sealed radioactive sources when they have reached their end of life and are declared radioactive waste. Ghana is at an advanced stage of implementing its borehole project, with significant progress having been made in the regulatory authorisation processes. The borehole facility construction is expected to begin as soon as the licensing review process is completed. The completion of borehole disposal facilities in Ghana aims to significantly reduce the risks related to the disused radioactive sources. “The impact will go beyond the borders of Ghana and in the long term this will be a model for other countries to follow. It is a major milestone for safety and security of disused sources,” said Anna Clark, head of the IAEA of the Waste and Environmental Safety Section.
Source: ESI Africa
KenyaBetting firms to pay taxes daily as KRA tightens noose
Betting companies must now pay taxes daily by 01:00 in far-reaching changes that have seen the taxman plug into their platforms to allow real-time computation of taxes, as the government moves to tame rogue entities in the sector. The Kenya Revenue Authority (KRA) has completed a pilot that saw it interlink its tax system with the betting sector to track the 15% tax on betting, gaming and lottery as well as the 20% withholding tax on winnings collected from punters every day. The integration of the systems was one of the reforms under the revenue administration, said Treasury Principal Secretary Chris Kiptoo. Speaking on the first day of a public hearing on the financial year 2023/24 budget, Dr Kiptoo said that the KRA had made these improvements on tax administration for optimal collection. Dr Kiptoo said these improvements include “implementation of a new web-based improved value-added tax (VAT) system; integration of the KRA system with the betting sector; and mapping of rental properties.” With the Treasury projecting to collect KES15-billion from betting this year, this means that the KRA targets to haul KES500-million from betting firms every day.
Source: Business Daily Africa
KenyaEconomic woes force NSE to wipe off USD6-billion
Investors on the Nairobi Securities Exchange (NSE) lost KES777.83-billion (USD6.37-billion) of wealth in nine months as the value of listed firms plunged by 28% between January and September amid a persistent bear run on the struggling bourse. The Central Bank of Kenya’s (CBK) monthly economic data shows that the bourse’s market capitalisation fell to KES2-trillion (USD16.39-billion) from KES2.77-trillion (USD22.7-billion) during the period under review, with the situation compounded by massive exits by foreign investors. According to the CBK’s Monthly Economic Indicators: September 2022 report foreign investors’ participation on the bourse fell to 35.92% from 49.92%. The NSE is bearing the brunt of rising inflation, growing interest rates, depreciating shilling, general investor apathy, lack of new listings, poor performance of listed firms and the massive selloffs by international investors. Foreigners are liquidating their investments in emerging and frontier markets as a result of rising interest rates in the United States and Europe, and the geopolitical tensions brought about by the on-going war between Russia and Ukraine.
Source: The EastAfrican
KenyaESIA report submitted for Kenya’s Lokichar-Lamu pipeline
The Energy and Petroleum Regulatory Authority (EPRA) of Kenya has announced that the development of the 852 km Lokichar-Lamu pipeline – linking the processing facilities at the Lokichar oilfields in Turkana County to the Lamu Port – has reached its next stages with the submission of the Environmental and Social Impact Assessment (ESIA) report to the National Environment Management Authority (NEMA). According to the Energy & Petroleum Statistic Report published by EPRA, “The Front Energy Engineering Design is already complete, and the ESIA report submitted to NEMA for approval,” marking a critical step towards the country’s ambitions of becoming a net exporter of crude oil. The pipeline will be operated by Tullow Kenya and is expected to transport up to 120 000 barrels per day (bpd) of crude oil to Lamu Port, enabling the country to export to regional and international markets. Currently, Tullow is seeking strategic partners to fund the pipeline’s development. Building on the momentum of the Lokichar-Lamu project, the government is looking at ramping up exploration and production in a bid to position Kenya as a competitive oil and gas producer.
Source: Energy Capital & Power
Kenya / TanzaniaKenya and Tanzania resolve 23 trade barriers after President Samia's visit
Kenya and Tanzania resolved 23 restrictive regulations that had impeded trade between the two countries, following President Samia Suluhu Hassan’s Nairobi visit in May 2021, a government paper shows. The new paper shows that Kenya had initially targeted to resolve about seven non-tariff barriers (NTBs) – restrictive regulations which licenses, quotas, embargoes, foreign exchange restrictions, and import deposits – in the financial year 2021/22 but this jumped to 31, reflecting a warm relationship between the two countries. The drop in the number of these trade barriers, which pushed the cumulative NTBs resolved and eliminated to 256 by end of June last year, came moments after the visit to Kenya by President Suluhu who had just replaced the late John Pombe Magufuli. “The over achievement was as a result of collaborations between Kenya and Tanzania to resolve NTBs to create market access,” reads part of the Report for General Economic and Commercial Affairs Sector, a sector working group for the budget preparation, which also includes the Treasury.
Source: The EastAfrican
Kenya / UgandaKenya agrees to remove NTBs on Uganda’s exports
Kenya and Uganda have agreed to focus on industrial policy at regional level instead of engaging in “unnecessary and costly competition”, the Ministry of Finance Permanent Secretary and Secretary to the Treasury, Mr Ramathan Ggoobi has said. The move is expected to relax trade tensions between Ugandan and Kenyan authorities, in which Ugandan exporters have, in the last four years, suffered numerous losses through unexplained blockades and non-tariff barriers (NTBs). A number of Ugandan products, including sugar, milk, poultry and beef products, sugarcane and maize have for a long time been subject to blockades, occasioning huge losses to exporters. However, President William Ruto has indicated that his administration would eliminate any NTBs that had been instituted under former President Uhuru Kenyatta. Uganda is one of Kenya’s biggest export market, earning the country in the excess of USD1-billion annually. Data from the Bank of Uganda indicate that Kenyan exports to Uganda during pre-COVID-19 years had been growing, increasing from USD1.1-billion in 2017 to USD1.2-billion in 2018. However, whereas Kenya continues to benefit from Uganda’s open trade policies, blockades have as a result, cost Uganda more than 114 810 jobs, particularly in manufacturing and the agricultural value chain.
MauritiusFinancial sector is the new emerging pillar of the Mauritian economy, says Minister Seeruttun
The financial sector is an emerging important pillar which can contribute significantly to the Mauritian economy in the years to come, stated the Minister of Financial Services and Good Governance, Mr Mahen Kumar Seeruttun, on Wednesday, 11 January, in Ebène. He was speaking at a press conference during which he gave an overview of the sector’s accomplishments in 2022 and the ministry's strategic plans for 2023 to further consolidate the sector and to project Mauritius as a regional reliable financial centre. The minister highlighted that the 'financial and insurance activities' sector performed relatively well compared to other sectors of the economy in 2022 while indicating that the Financial Services Commission had issued 9 471 licences to global business institutions. He enunciated several projects launched and implemented to combat money laundering and terrorist financing and conform to the recommendations of the Financial Action Task Force (FATF) as well as promote the country internationally.
Source: Government of Mauritius
MauritiusMedical cannabis in Mauritius
In November 2022, Mauritius joined a growing number of African countries, such as South Africa, Rwanda and Ghana among others, who have legalised the dispensing of cannabis or its extracts to people suffering from a range of medical conditions. The Dangerous Drug Act 2000 (the Amended DDA) was amended to decriminalise the use of cannabis for medical purposes in Mauritius and, more specifically, it provides clarity on how medical cannabis will be regulated and dispensed. The Amended DDA provides that no person shall use and/or import medical cannabis unless he has been authorised to do so by the Ministry of Health and Wellness. At first instance, medical cannabis will be available to patients who suffer from specific therapeutic conditions and who failed to respond to a more conventional treatment. The Amended DDA also provides that patients suffering from other therapeutic conditions may have access to medical cannabis subject to prior authorisation of the Medicinal Cannabis Therapeutic Committee based on therapeutic evidence. An interesting point to note is that a person travelling to Mauritius may be able to bring medical cannabis with them to the country, provided that they have a prescription to that effect and have been authorised by the ministry.
MozambiqueMozambique: Electricity production will fall 12% in 2023 – PESOE
Mozambique’s electricity production will fall by 12% in 2023 compared to forecasts for 2022, in which production fell by 1%. The decline is influenced by the downward forecast for production at the Cahora Bassa Hydroelectric Plant (HCB), which will account for 77% of the production and export structure. The information is contained in the Economic and Social Plan and State Budget (PESOE) 2023 approved by the Assembly of the Republic on 9 December 2022. The document states that “for the year 2023, HCB foresees a reduction in the production and sale of energy in the months of April and May, due to the need for intervention works in the return channel, which is shared by generator sets 1, 2 and 3, an intervention that constitutes a fundamental activity to guarantee the safe operation of these generator sets, in addition to being included in the scope of the ‘Read Sul II’ project, which aims at the rehabilitation and modernisation of equipment to maximise installed capacity”. The PESOE forecasts that Electricidade de Moçambique (EDM) hydropower will increase by 18% compared to projections for 2022, influenced by the substantial increase in the production of the Corumana, Mavuzi and Chicamba hydro-electric plants due to the rehabilitation of the Moamba-Major dam, which increased the flow of water to the Corumana dam and therefore also electricity generation.
Source: Club of Mozambique
NigeriaAfreximbank opens first African Quality Assurance Centre in Nigeria
The African Export-Import Bank (Afreximbank), on 21 December 2022, opened the first African Quality Assurance Centre (AQAC) in Ogun State, Nigeria, as part of its initiative to develop world-class quality assurance centres across Africa. The initiative is aimed at ensuring that Made-in-Africa products comply with international standards and technical regulations in order to promote exports and facilitate intra and extra-African trade. The Ogun State AQAC is a state-of-the-art centre with the capacity to offer testing and certification of products for both export and domestic consumption. Its laboratories and modern instruments offer the requisite testing services, including physical and chemical testing, contaminant analysis (such as pesticides and heavy metals), microbiological testing, water analysis, soil analysis, plant analysis and organic substrate analysis. The centre also offers inspection and training services, covering the food and agricultural value chain to transfer know-how and improve technical capacities in the conformity assessment field in Nigeria and West Africa.
TanzaniaTanzania can be lead in agriculture
The World Bank placed Tanzania among three African nations whose agriculture needs transformation to become the continent’s agriculture powerhouse, with economists saying the sector’s local policy needs to reflect global views. In its recent journal dubbed Putting Africans at the Heart of Food Security and Climate Resilience the World Bank said at least one in five Africans goes to bed hungry, with 140 million individuals facing acute food insecurity. Moreover, the journal sees that Tanzania, Angola, and Zambia have the potentials to be agricultural powerhouses in Africa, though the sector should be transformed to meet the needs of people, the economy, and the environment. “The [World Bank] is ramping up its efforts and joining forces with partners across the food system landscape to help these countries and others prepare and implement this critical transformation,” reads the journal in part. Prof Haji Semboja, senior lecturer at Zanzibar University, said: “The aforesaid countries are among Africa’s richly-resource countries; they have massive productive land fit for agriculture, and they have manpower.”
Source: The Citizen
Uganda / United KingdomUganda Airlines mulls UK flights through Nairobi
Uganda Airlines is reactivating plans to start flights to Heathrow, after getting an indication from authorities in the United Kingdom (UK) that it can operate the service through an intermediate airport. The Ugandan carrier has been given intermediate airports in six countries in Africa and Europe, whose airports have a UK Civil Aviation Authority (UKCAA) security clearance. These are Kenya, Algeria, Egypt, Ghana, Tunisia and Turkey. This follows the carrier’s application for services to the UK, receiving preliminary approval, while it would take the better part of two years for the UKCAA to complete its security vetting of Entebbe International Airport. “At the airline level, we are cleared,” Uganda Airlines chief executive Jenifer Bamuturaki, told The EastAfrican. “In principle, we have two options – to wait until Entebbe International Airport has gone through a security audit by the UKCAA so that we can fly direct from there, or go through a third country whose airport already has the necessary clearances.” She added that they have held internal meetings to see which of the third-country options suits their operations best and were now activating the arrangements they had previously made on the ground in the UK for a possible launch of services during the summer of 2023.
Source: The EastAfrican
Zambia / AngolaZambia eyes fuel imports from neighbouring Angola
Zambia plans to import fuel from its oil-producing neighbour Angola in the government’s push to lower pump prices and stem supply shocks. Zambia has agreed to buy a stake in Angola’s Lobito refinery in Benguela Province along the Atlantic coast. President Hakainde Hichilema, during his three-day visit to Angola, assured his host that his country would invest in the Lobito refinery that is under construction. "It makes no sense to import fuel from other parts of the world when we have a neighbouring producer," President Hichilema told journalists at a press conference in the capital Luanda after a meeting with President João Lourenço. President Lourenço said the refinery construction is expected to be concluded in 2026. “It is very natural that Zambia, as our neighbour, has a great interest in acquiring these fuels in Angola, in the neighbouring country, especially when Angola has a greater capacity to refine the crude oil it extracts,” President Lourenço said. The refinery is projected to process up to 200 000 barrels per day (bpd) when completed. According to a proposed governance structure, private investors, including Zambia, will own 70% of the refinery, with Angola state oil firm Sonangol controlling a 30% stake.
Source: The EastAfrican
ZimbabweZimbabwe has banned the export of raw lithium from its globally important reserves
Zimbabwe has banned the export of raw lithium as it seeks at least first-stage processing within the country for the critically important metal. Any export of lithium ore will now require special permission, under a new statutory instrument regulation, with exporters required to show "exceptional circumstances" before moving lithium out of the country. Even samples sent for assay in other countries will require government permission. The high price of lithium has attracted artisanal miners who target abandoned mines in search of rock that is then exported, Zimbabwean President Emmerson Mnangagwa previously said. Companies based in China – itself a huge producer of lithium – have recently secured the rights to mine and process large quantities of lithium in Zimbabwe. Such operations, which process raw hard-rock lithium ore that contain little of the metal into lithium concentrate, will not be affected by the ban. But Zimbabwe hopes to go beyond that, with local manufacture of the lithium batteries that power cellphones and electric vehicles. Zimbabwe is the sixth-largest producer of lithium in the world, and growth in its output could be crucial over the next decade.
Source: Business Insider