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Africa Business in Brief


issue 489 | 26 Mar 2023


Tracking Africa's progress on the AfCFTA

On the sidelines of the 55th session of the Economic Commission for Africa in Addis Ababa, Ethiopia, the United Nations Economic Commission for Africa (UNECA) communications team interviewed Stephen Karingi, director of the Regional Integration and Trade Division on the progress of the African Continental Free Trade Area (AfCFTA), three years since its launch. When asked about progress on the implementation of the AfCFTA, Dr Karigi said “Over and above, strong progress has been made with the private sector maximising on the benefits of the AfCFTA. We have concluded the protocols that make the market function and the investment policy, intellectual property (IP) rights and competition policy have been endorsed… With IP rights, countries can patent their products and extract more value. So far 47 countries have ratified their instruments of the AfCFTA Agreement, 46 have ratified and deposited their instruments of ratification, seven countries have signed but yet to ratify and only one country is yet to sign.”

Source: AfDB

East Africa

Factors behind EAC region’s 4.5% economic expansion

The services sector and industry played a key role in 4.5% growth in the East African Community (EAC) bloc last year. Continued public investments and easing of the global supply chain and COVID-19-related constraints were other contributing factors. This emerged during the recent 26th meeting of the EAC Monetary Affairs Committee in Bujumbura, Burundi. The meeting, which was attended by central bank governors, was told that the economic performance of the region remained strong last year. A GDP growth of 4.5% was recorded in 2022 which was supported by a strong growth of the services and industry sectors. “The easing of COVID-19 related restrictions, easing of global supply chain constraints and continued public investment perfected the growth,” said the EAC in a dispatch. The committee further noted that the growth in the seven-nation bloc was expected to improve this year. It is anticipated that the recovery efforts would be spearheaded “and strong performance of the services sector”. However, the Monetary Affairs Committee maintained that despite optimism, down- side risks may continue to hit the EAC economies.

Source: The Citizen

East Africa

President Ruto wants EAC treaty amended to reflect current status

Kenyan President William Ruto wants the treaty establishing the East African Community (EAC) amended to reflect current status of the bloc including its membership. At a meeting with the speaker of the East African Legislative Assembly (EALA) Mr Joseph Nkakirutimana, President Ruto said it was inappropriate to use a formative law created in 1999 to manage an expanded membership. He says the bloc must adapt to the needs of new members including language needs as well as openness to admit new members without restrictions used more than 24 years ago. When it was formed in 1999, the EAC was recreating the collapsed bloc in 1977 where Kenya, Uganda and Tanzania were members. It later expanded to include Rwanda as well as Burundi in 2007 and later South Sudan in 2016 before the Democratic Republic of the Congo (DRC) joined last year. Somalia is currently being assessed on eligibility. “Somalia is likely to join after an assessment is completed. There is also a possibility that Ethiopia and Sudan could join the EAC,” the president said at State House, Nairobi. 

Source: The EastAfrican

Southern Africa

SADC Council of Ministers discusses programmes, policies and interventions to consolidate regional integration and development

The Council of Ministers of the Southern African Development Community (SADC) met on 18-19 March 2023 in Kinshasa, the Democratic Republic of the Congo (DRC) to deliberate on issues aimed at consolidating regional integration, cooperation and development. The meeting was held under the 42nd SADC Summit Theme, Promoting industrialization through agro-processing, mineral beneficiation, and regional value chains for inclusive and resilient economic growth, which takes into account the urgent need to enhance the roll out of the SADC industrialisation and market integration programmes in the SADC Regional Indicative Strategic Development Plan (RISDP) 2020-2030. The meeting was officially opened by Mr Jean-Michel Sama Lukonde Kyenge, the Prime Minister of the DRC. In his opening statement, the prime minister reiterated the DRC’s commitment to SADC's programmes and projects aimed at achieving the region’s development objectives outlined in the RISDP 2020-2030 and the SADC Vision 2050. The prime minister highlighted the need for enhanced peace, stability and security to create an enabling environment for sustainable investment and economic growth in the SADC region. 

Source: SADC


Angola’s Lifua marginal field begins production

Global oil and gas major Chevron has commenced production at the Lifua-A project, a marginal field located in Block 0 offshore Angola. The announcement was made by Angola’s national concessionaire and oil and gas regulatory body, the National Oil, Gas and Biofuels Agency (ANPG) on 13 March. According to the ANPG, development of the field will be phased, with the installation of the fixed metallic platform, stacked template structure platform as well as six production wells and four injectors representing the project’s first of three ongoing phases. “The Lifua-A platform is interconnected with the existing facilities in the Takula Area and is expected to produce a total of 6 500 barrels of oil per day from the Vermelha and Likouala reservoirs,” the ANPG indicated in a statement. Situated in Block 0 at a water depth of 70 metres, located approximately 23 km off the coast of Angola’s Cabinda Province and in proximity to the Cabinda Gulf Oil Company (CABGOC)-operated Malongo crude oil and liquefied petroleum gas (LPG) terminal, the development strategy for the oil field will make use of existing facilities and services to reduce development and operational costs. 

Source: Energy Capital & Power


Market Report: ANPG increases Namibe Basin competitiveness

Angola’s National Oil, Gas and Biofuel’s Agency (ANPG), ExxonMobil and state-owned Sonangol signed an addendum to Blocks 30, 44, and 45 in the Namibe Basin to make exploration in the area more competitive. According to the ANPG, ExxonMobil will pursue a potential exploration well in 2024 due to improved fiscal terms. The ANPG further added that the move represents part of efforts by the Angolan government to attract investment into the oil sector, which accounts for more than 90% of the country’s exports, even as it privatises state-owned enterprises in a bid to diversify the economy. The group managing director of the Nigerian National Petroleum Corporation (NNPC) Limited, Mele Kyari, announced that NNPC Limited has approximately 2.1 billion litres of premium motor spirit (petrol) in stock which would ensure a robust nationwide supply of the product for at least 35 days. Kyari added that the company plans to close the month of April with about 2.8 billion litres, which is equivalent to 47 days of sufficiency and that operations have fully resumed at the various depots in the country with trucks being dispatched to various parts of the country.

Source: Energy Capital & Power

Cabo Verde

Cabo Verde launches tender for solar energy project

The government of Cabo Verde has launched a call for expressions of interest for a solar energy project. Cabo Verdean government’s Special Projects Management Unit (UGPE) launched the tenders of the project which involves construction of four solar photovoltaic (PV) power plants on four islands of the archipelago. The project aims to increase energy production capacity in the country. They will be developed as part of a project co-financed by several development partners. Interested companies have until 30 March 2023 to apply. The scope of work includes the construction of a 1.3 megawatt peak (MWp) solar park in Fogo, an island in the south of the archipelago. Another solar power plant (1.2 MWp) will be built on Santo Antão. Two solar power plants of 0.4 megawatt (MW) capacities each will be constructed in the islands of São Nicolau and Maio. The solar PV systems will be built under Cabo Verde’s Renewable Energy and Improved Utility Performance Project (REIUP). The initiative is co-financed by two World Bank subsidiaries, the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD). It is also funded by the Canadian Clean Energy and Forest Climate Facility (CCEFCF) and the Global Infrastructure Facility (GIF).

Source: Pumps Africa

Central African Republic

IMF staff concludes working visit to the Central African Republic

An International Monetary Fund (IMF) team led by Albert Touna Mama, IMF mission chief for the Central African Republic (CAR), carried out a working visit to Bangui from 27 February to 3 March 2023. This mission afforded IMF staff the opportunity to review recent economic developments with the CAR authorities and to wrap up the discussions on priority structural reforms begun during the December 2022 Article IV mission. Mr Touna Mama made the following statement, in part, at the end of the working visit: "The economic situation in [CAR] remains challenging and the outlook uncertain, given the precarious humanitarian and social context and the tightening of financial conditions. In these circumstances, the need for humanitarian aid, concessional budget support, and the acceleration of reforms is more urgent than ever. Boosting revenue and improving public financial management and fiscal transparency remain key to ensuring that priority public expenditures, especially for health and education and public debt servicing, can be financed. In the short term, the IMF mission recommends full implementation of the measures adopted in the 2023 budget law, particularly raising the floor prices of tobacco products or implementing the Central African Economic and Monetary Community’s (CEMAC) common external tariff.”

Source: IMF

Equatorial Guinea / Cameroon

Equatorial Guinea, Cameroon bilateral agreement signals new era of cross-border cooperation in Africa

The respective Presidencies of Equatorial Guinea and Cameroon have signed a bilateral cooperation agreement, unlocking a new phase of energy security and economic expansion on the back of gas monetisation and cross-border collaboration. Teodoro Obiang Nguema Mbasogo, President of Equatorial Guinea and Paul Biya, President of Cameroon have signed a bilateral treaty that would see the two West African countries cooperate on cross-border oil and gas development and monetisation. The agreement was signed during the heads of state summit of the Central African Economic and Monetary Community (CEMAC) countries recently held in Cameroon and is set to bring with it new opportunities for oil field development and regional energy security. For its part, the agreement paves the way for the joint development and monetisation of cross border hydrocarbon fields, and more specifically, the Chevron-operated Yoyo (Cameroon) and Yolanda (Equatorial Guinea) oil and gas fields, which are located along the maritime borders of the two countries. Following Chevron’s acquisition of Noble Energy in 2020, the energy major has been committed to developing the promising fields, seeking to acquire a gas sharing agreement for the Yoyo and Yolanda discoveries with the aim of fast-tracking resource development.

Source: African Energy Chamber


IMF staff reach staff-level agreement on first review of the ECF arrangement with Guinea-Bissau

A team from the International Monetary Fund (IMF) led by Jose Gijon, mission chief for Guinea-Bissau, held virtual meetings from 8-13 March 2023, and meetings in Guinea-Bissau from 14-20 March 2023, to discuss the assessment of the first review of the Extended Credit Facility (ECF) arrangement. The arrangement was approved for a total amount of SDR28.4-million (about USD37.9-million) on 30 January 2023. At the conclusion of the mission, Mr Gijon issued the following statement, in part: “The mission team reached staff-level agreement with the authorities on economic and financial policies that could support the approval of the first review of the ECF-supported programme. This agreement is subject to approval by the IMF Executive Board, which is tentatively scheduled for May 2023. Upon completion of the executive board review, Guinea-Bissau would have access to SDR2.37-million (around USD3.16-million), bringing the total IMF financial support disbursed under the arrangement to SDR4.74-million (about USD6.32-million). In context of a very complex economic environment, the review focused on assessing progress in programme implementation, updating the macroeconomic framework, and reaching understandings on a strong policy package to durably ensure fiscal sustainability.” 

Source: IMF


Kenya's Privatisation Bill 2023: Streamlining public entity transfers and bolstering national productivity

With an aim of improving the efficiency and competitiveness of Kenya's productive resources, the Privatisation Bill, 2023 aims to replace the current Privatisation Act, 2005. President William Ruto has to privatise six to 10 state corporations to ease the burden on the exchequer and to raise financing for government projects through the Nairobi Securities Exchange (NSE) instead of seeking financing from external markets. The Bill establishes a Privatisation Authority which will advise the government on the privatisation of public entities, including facilitating government privatisation policies and implementing the privatisation programme. The Privatisation Authority is proposed to be managed by a board and its daily affairs overseen by a managing director. Through the Bill’s proposed privatisation programme, the Cabinet will identify and approve public entities for privatisation. The Bill also proposes various methods of privatisation including initial public offering (IPO) of shares, sale of shares by public tendering, sale resulting from the exercise of pre-emptive rights, and any other methods that the Privatisation Authority shall propose and Cabinet will approve. 

Source: ENSafrica 


Public debt office set to get more powers in new law

The Public Debt Management Office (PDMO) is expected to play a bigger role in the management of the country’s runaway debt under proposed amendments to the Public Finance Management Act No.18 of 2012. In the new Treasury proposals of the Public Finance Management (Amendment) Bill, 2023, the PDMO is set to earn additional powers including providing advisory on sustainable debt levels. “The Bill seeks to amend the Act by adding functions of the PDMO to include advising Parliament and the Cabinet Secretary on the sustainable levels of public debt and the annual borrowing limit,” Treasury Cabinet Secretary Professor Njuguna Ndung’u said in a recent notice. Currently, functions of the PDMO, which is headed by Dr Haron Sirima are limited to preparing key debt documents and policies such as updating the annual medium-term debt management strategy and acting as the principal in the issuance of government debt securities on behalf of the exchequer. The PDMO is a directorate at the National Treasury headed by a director general reporting to the Treasury Cabinet Secretary and whose main objectives are minimising the cost of public debt management and borrowing over the long-term taking account of risk.

Source: Business Daily Africa


10 GW green hydrogen project to be set up in Mauritania

A complex capable of converting 10 gigawatts (GW) of clean electricity into green hydrogen is set to be developed in Mauritania. Energy company Infinity Power has joined forces with the German company Conjuncta and signed an agreement with the Mauritanian Ministry of Petroleum, Mines and Energy towards the development. The project will be set up in in the north-east of Nouakchott, the capital of Mauritania, and will be implemented in several phases. This clean electricity will be converted into green hydrogen via electrolysis. In order to realise its project, Chariot has obtained a 14 400 square kilometre (km2) plot of land from the Mauritanian government, on which pre-feasibility and feasibility studies will first be conducted. Phase one will have an electrolysis capacity of 400 megawatts (MW) and is expected to be operational in 2028. The two partners will then build a complex capable of converting 10 GW of clean electricity into green hydrogen and its derivatives, including ammonia and other fuels. According to Infinity, the project is expected to create 3 000 jobs during the construction phase and a further 1 000 during the operation phase. 

Source: Pumps Africa


Namibia's green hydrogen strategy: a catalyst for local value addition and socio-economic development?

Namibia’s emerging green energy industry has the potential to create thousands of jobs and contribute billions to the country’s GDP. In November 2022, the Namibian government released the Namibia Green Hydrogen and Derivatives Strategy Report (GH2 Strategy Report) which drew significant attention from locals, who are anticipating the development of legislation for Namibia’s green hydrogen sector. The Namibia GH2 Strategy Report captured ambitious local content aspirations, such as creating local employment of up to 80 000 additional jobs and creating local manufacturing industries that will produce the components required to produce and transport hydrogen and CO2, together contributing up to USD6-billion to GDP, 30% more than 2030 GDP estimates. Despite its expressed political willingness and expressed local content aspirations, if the current local content policies (LCPs) - which comprise all legislative and regulatory instruments, policy tools, contracts and licensing arrangements imposed by the government that require firms to purchase and to use of input goods and services available locally in that country - is not investigated, then the current LCPs will not yield the expected socio-economic returns.

Source: ENSafrica


AfCFTA Secretariat and Afreximbank sign AfCFTA Adjustment Fund Host Country Agreement with Rwanda

The AfCFTA Secretariat and the African Export-Import Bank (Afreximbank), on 10 March 2023 in Kigali, signed the Host Country Agreement for the African Continental Free Trade Area (AfCFTA) Adjustment Fund with Rwanda. The agreement, signed by Wamkele Mene, secretary-general of the AfCFTA Secretariat; Mrs Kanayo Awani, executive vice president, Intra-African Trade Bank at Afreximbank; and Dr Vincent Biruta, Minister of Foreign Affairs, and International Cooperation of Rwanda, paves the way for the operationalisation of the AfCFTA Adjustment Fund. The USD10-billion fund, headquartered in Kigali, Rwanda, is a critical instrument in the realisation of the AfCFTA. It will help countries to implement agreed protocols and support African companies to retool for effective participation in the new trading regime. The AfCFTA Adjustment Fund will support AfCFTA state parties to adjust smoothly to the new liberalised and integrated trading environment established under the AfCFTA Agreement by mitigating the potential adverse impacts of AfCFTA-induced tariff revenue losses. 

Source: Afreximbank


IMF staff completes staff-level agreement on the fifth review of the ECF arrangement for Somalia

An International Monetary Fund (IMF) team, led by Laura Jaramillo, conducted discussions with the Somali authorities in Nairobi from 7-14 March 2023 and reached a staff-level agreement on the fifth review under the Extended Credit Facility (ECF) arrangement. This agreement is subject to approval of the IMF’s Executive Board. At the conclusion of the discussions, Ms Jaramillo issued the following statement, in part: “Somalia continues to face acute food insecurity in some areas due to persistent drought. The authorities’ response has focused on identifying the most affected areas, mobilising external funding, and coordinating with the United Nations (UN) system on delivery of humanitarian assistance… Economic activity has been weighed down by the drought and slowing global growth, and risks remain elevated. The GDP growth estimate for 2022 and projections for 2023 were downgraded by 0.25% to 1.7% and 2.8%, respectively, due to the prolonged drought and subdued remittance inflows. Average inflation reached 6.8% in 2022 due to high food and fuel prices and is expected to decline to 4.2% in 2023 as commodity prices recede. Near-term risks are elevated, including a worsening of the food crisis if healthy rains do not resume in 2023 or if commodity prices rise further.”

Source: IMF

Tanzania / Burundi

Tanzania, Burundi pressured to join regional call network

The East African Community (EAC) is back to its quest for lower intra-regional roaming for data, voice calls and SMS under the One Area Network (ONA). To set off the process, the secretariat has tendered for an information, communications and technology (ICT) expert to develop a framework that will lead to eliminating charges for voice calls among partner states. A technical meeting held in Nairobi on 25 February 2023 also decided that the EAC develop the regulatory framework for mobile money for cross-border financial transactions, as Burundi and Tanzania race against time to adopt the ONA by the 30 August 2023 deadline. The roaming framework, which provides for the harmonisation of mobile calling and data charges had so far only been implemented by Rwanda, Kenya and Uganda and South Sudan. In an advert, the EAC said it is seeking to reduce the high cost of intra-regional roaming that is “detrimental to the EAC integration agenda.” “The assignment consists of developing a harmonised regional framework for roaming and traffic exchange in the EAC to support the implementation of the common market and subsequently develop a roadmap for the implementation of the frameworks for data and voice calls and SMS within the EAC region,” the advert reads.

Source: The EastAfrican


Uganda still on grey list for failure to curb money laundering

Uganda is in the crosshairs of anti-money laundering and countering the financing of terrorism (AML/CFT) agencies after failing to enforce regulations in the non-governmental organisations (NGOs) sector and slow progress on the prosecution of money laundering and corruption cases. This has seen its capital, Kampala’s efforts to exit the global grey list over the past three years fail. “The global [AML/CFT] grey list maintained by the Financial Action Taskforce (FATF) based in Paris, consists of countries with significantly weak [AML] and terrorist financing enforcement regimes; that are prone to be blacklisted in the international financial system in case of persistent compliance shortcomings,” financial experts say. A grey list status usually translates into relatively high costs incurred on electronic financial transfers carried out by commercial banks, huge costs on the processing of letters of credit, increased transaction fees incurred on overseas remittances and reduced dollar inflows. A new compliance deadline, June 2023, was issued last month after Uganda failed to fulfil the FATF requirements. 

Source: The EastAfrican


Zimbabwe's new 300 MW coal-fired plant starts feeding into grid

Zimbabwe's new 300 megawatt (MW) coal-fired power generating unit has started feeding electricity into the national grid, the state power utility said, as it moves to ease extended outages that have impacted businesses and households. The Southern African country is expanding its 920 MW Hwange thermal power station by adding two 300 MW units at a cost of USD1.4-billion, with 85% of the funding coming from China. The first of the two units built by Chinas Sinohydro was successfully synchronised into the national grid, the Zimbabwe Power Company (ZPC) said. "Power will be progressively fed into the grid until it reaches 300 MW," ZPC said in a statement. The ZPC has said it expects the second 300 MW thermal unit to start generating power in October, bringing new generation capacity to 600 MW. Zimbabwe is currently generating less than half of its 1 700 MW demand as the old thermal units at Hwange, commissioned between 1983 and 1987, frequently break down and are performing below capacity. Low water levels due to inadequate rains have seen generation from the country's other major plant, the 1 050 MW Kariba South hydro station, being capped at a third of its capacity. 

Source: Reuters