issue 494 | 30 Apr 2023
WorldData show private infrastructure investment continues to improve following pandemic slump
New World Bank data finds that infrastructure investments in low- and middle-income countries continued to rebound in 2022. Private participation in infrastructure (PPI) commitments reached USD91.7-billion across 263 projects, marking a 23% increase from 2021. The total number of projects, however, was still below pre-COVID-19 pandemic levels. “As the world is staggering out of multiple crises, we are pleased to see that early signs of investment recovery continue to hold,” said Imad Fakhoury, the World Bank’s global director for Infrastructure Finance, PPPs and Guarantees. Sub-Saharan Africa saw a 15% decrease in investments compared to the past five-year average. Nevertheless, the number of projects and countries in the region with PPI transactions were the highest in the past decade. When it comes to the world’s poorest countries, 18 countries that are members of the International Development Association (IDA), received investment commitments amounting to USD4.7-billion across 30 projects in 2021. This represents a more than 26.1% increase in investment levels compared to 2021, but also a 22% lower investment level than the past five-year average of USD6.1-billion.
Source: World Bank
WorldWorld Bank releases Logistics Performance Index 2023
On Friday, 21 April, the World Bank released its Logistics Performance Index 2023 report, a measure of countries’ ability to move goods across borders with speed and reliability. The seventh edition of the Connecting to Compete, the Logistics Performance Index (LPI) report comes after three years of unprecedented supply chain disruptions during the COVID-19 pandemic, when delivery times soared. The LPI, which covers 139 countries, measures the ease of establishing reliable supply chain connections and the structural factors that make it possible, such as the quality of logistics services, trade and transport-related infrastructure, and border controls. “Logistics are the lifeblood of international trade, and trade in turn is a powerful force for economic growth and poverty reduction,” said Mona Haddad, global director for Trade, Investment, and Competitiveness at the World Bank. “The Logistics Performance Index helps developing countries identify where improvements can be made to boost competitiveness.” On average across all potential trade routes, 44 days elapse from the time a container enters the port of the exporting country until it leaves the destination port, with a standard deviation of 10.5 days.
Source: World Bank
AfricaAfCFTA: Remove visas, reduce customs process to ease logistics
The umbrella bodies of the African Continental Free Trade Area (AfCFTA) private sector have called for the removal of visas and the reduction of custom processes to ease movement of goods within the African continent. The African Business Council (AfBC) that brings together regional economic communities (RECs) decried inconsistent and inadequate freight and logistics at the borders saying they have long hindered intra-African trade. Speaking during the official opening of the AfCFTA Business Forum held recently at the Cape Town International Convention Centre in South Africa, the African Union Commission (AUC) deputy chairperson Monique Nsanzabaganwa disclosed that so far, 47 member states had ratified the agreement but decried the existence of many non-tariff barriers (NTBs) to trade, especially transport logistics. African countries are facing high custom delay periods due to visa challenges, shortages of paved roads upon which freight can be transported and a higher loss of goods due to limited cold chains compared to other regions globally.
Source: The EastAfrican
AfricaClimate finance facing global macroeconomic challenges, time for private sector support
Africa, the continent that pollutes the planet the least, is today one of the world’s most vulnerable to climate risks. While nations across the continent grapple with financing constraints, resources from the international private sector, including multilateral development financiers such as the African Development Bank (AfDB) , are helping to catalyse climate action and green growth. For the AfDB, greater involvement of the private sector is crucial to closing the gap in climate finance flows into Africa, which until recently, was dominated by non-private actors. For example, of the USD29.5-billion invested in African climate finance in 2020, only 14% was from private actors. This is significantly lower than comparable regions such as Latin America and the Caribbean (49%), East Asia and the Pacific (39%) and South Asia (37%). Besides, these limited funds covered a small number of African countries with relatively developed financial markets, such as South Africa, Nigeria, Kenya, Morocco, and Egypt, which alone attracted USD4.2-billion. It is the reason the AfDB has made mobilising private sector financing for climate and green growth the centrepiece of its 2023 annual meetings scheduled from 22-26 May in Sharm El Sheikh, Egypt.
AfricaPrivate sector crucial to overcoming Africa’s critical investment gaps – AfDB
The African Development Bank (AfDB) Group’s governors will address three strategic challenges when they meet in May for the group’s annual meetings, the group’s secretary general Vincent Nhemielle said during a news conference held on Thursday, 20 April. The challenges confronting Africa in the coming year are financing a low carbon development path that delivers growth and inclusivity and the continent’s climate goals; placing climate adaptation at the heart of economic policies; and unleashing Africa’s potential to address food insecurity and feed itself, he said. The conference took place to give participants an idea of the agenda of the annual meetings. The statutory annual meetings are the AfDB Group’s most important events of the calendar year, attracting around 3 000 participants. The 58th Annual Meetings of the Board of Governors of the AfDB and the 49th Meetings of the Board of Governors of the African Development Fund will take place in the Sharm El-Sheikh International Conference Centre from 22-26 May. The theme of the 2023 annual meetings is Mobilizing Private Sector Financing for Climate and Green Growth in Africa.
East AfricaEAC commends AfDB for the financial support on COVID-19 response in the region
The East African Community (EAC) has commended the African Development Bank (AfDB) for the support extended to the region that facilitated the bloc’s regional COVID-19 response efforts. The AfDB support was directed towards the set up of coordination systems for testing; test results verification; training of health workers and procurement of personal protective equipment (PPEs), test kits and laboratory consumables. Speaking on behalf of the EAC secretary general, Dr Peter Mutuku Mathuki during a workshop of Technical Working Group on Communicable and Non-communicable Diseases held in Moshi, Tanzania, EAC director of Social Sectors, Dr Irene Isaka acknowledged the contribution of the AfDB as a game changer in the implementation of the EAC COVID-19 Regional Recovery Plan. She disclosed that the COVID-19 pandemic hit the region hard, with an estimated output loss of between USD37 and USD79-billion. This led to reductions in household income and business disruption of supply chains for tradable goods and services especially in the aviation, tourism and hospitality industries, where entire sector value-chains were rendered dysfunctional, added the director.
East / Southern AfricaEAC, SADC, COMESA closer to harmonising cross-border transport policies
The regional economic blocs in Africa have agreed to harmonise regional and national road transport regulatory instruments in Africa, as they bid to reduce transport costs. At a four-day workshop in Johannesburg, South Africa organised by the African Union Commission (AUC), the regional economic communities (RECs) examined how closely related and harmonised Africa’s cross-border road transport regulatory frameworks were. The event supported by the European Union (EU)-funded Tripartite Transport and Transit Facilitation Programme, (TTTFP) also analysed best practices on policies and standards on road transport regulation. They also analysed proposals for developing a Vehicle Load Management (VLM) strategy aimed at ensuring harmonised vehicle overload controls over the roads within the entire continent. They noted that harmonising road transport regulatory instruments is crucial for increased regional integration in Africa and a key step for the effective implementation of the African Continental Free Trade Area (AfCFTA). Efforts to ease transport and transport costs have met challenges, with even individual RECs themselves yet to achieve internal harmonisation.
Source: The Independent
Côte d'IvoireFirst private sector-financed hydropower plant nearing completion
West Africa’s first private sector-financed hydropower plant is nearly 80% complete and is expected to be in operation next year. The Singrobo-Ahouaty power plant is expected to supply electricity to up to 100 000 households and reduce greenhouse gas emissions. Three years after construction began, the 44 megawatts (MW) Singrobo-Ahouaty hydropower plant project in Côte d’Ivoire achieved a completion rate of 78.93% as of end of March 2023. It is located some 150 km north of Abidjan. The African Development Bank (AfDB) Group described the project as “symbolic of private sector mobilisation for climate and green growth.” “(It) is the first private sector-funded climate action operation in West Africa,” said the bank, which is co-financing the project. IHE, the Ivorian investment company and project implementing partner, said work is progressing steadily at the plant, with the last structures being installed. These include the cofferdams and the sluice gates for closing the dam. Installation of the power turbines and alternators will begin within a few weeks, said IHE. “Other significant works currently in progress are the construction of the spillway and the tailrace, including digging one million cubic metres into the rock and pouring 85 000 cubic metres of concrete.”
Source: ESI Africa
Democratic Republic of the Congo / ZambiaDRC and Zambia to establish SEZs for electric vehicle production
The African Export-Import Bank (Afreximbank) and the United Nations Economic Commission for Africa (UNECA) have signed a framework agreement with the Democratic Republic of the Congo (DRC) and Zambia for the establishment of special economic zones (SEZs) for the production of electric vehicles and batteries as the continent looks to add value to surging demand for its critical minerals. Both countries have major reserves of some of the critical minerals needed to produce batteries for electric vehicles and other technologies key to the green energy transition: the DRC accounts for approximately 70% of global cobalt supply and 88% of cobalt exports, and the two countries collectively contribute 11% of all copper supply globally. Both countries also possess reserves of lithium, a key ingredient in electric vehicle batteries. But until now both nations been relegated to the role of suppliers of unprocessed critical minerals to foreign manufacturers. In order to ensure that the countries move higher up in the value chain, Afreximbank and UNECA will lead the establishment of an operating company in consortium with public and private investors and Afreximbank’s impact fund subsidiary, the Fund for Export Development in Africa.
Source: The Independent
Ghana2030 Eurobond: World Bank makes guarantee payment of USD372-million for Ghana
The International Development Association (IDA) of the World Bank has made a guarantee payment of USD372-million on behalf of the Government of Ghana for the 2030 Eurobond. This is coming after the country defaulted on its coupon payment on 14 April 2023, due to the debt moratorium announced on 19 December 2022. The payment was done on 20 April 2023. In 2015, Ghana was facing difficult market conditions. It had large financing needs, high debt levels that were maturing soon, and no access to international financial markets. The Ministry of Finance sought help from the World Bank to meet these goals, and requested a policy-based guarantee in combination with a credit from the (IDA – the World Bank’s fund for the poorest countries), to be able to mobilise the volume of financing needed to settle upcoming debt repayments. A policy-based guarantee, which is an instrument that allows a country to raise money by mitigating the risk for bond investors or commercial lenders in case of potential debt service payment defaults, was secured. In this case, Ghana issued a USD1-billion Eurobond series due in 2030. The 2030 Eurobond was backed by the IDA’s guarantee covering up to USD400-million in both principal and interest.
Mozambique / FranceLocal, French officials call for more bilateral investment, trade
The Governments of Mozambique and France have in Maputo called for the intensification and diversification of bilateral investment and trade, exploring the potential between the two countries. “The potential and competitive capacity that France offers in terms of capital, technology and experience makes it a privileged partner of Mozambique,” said Mozambique’s Minister of Industry and Trade, Silvino Moreno. Moreno was speaking during a business forum between Mozambique and France. The minister said that Mozambique is counting on investors from France to help with the industrialisation of the country, with a view to reducing its dependence on the export of raw materials, in order to sell more processed products with added value. Agriculture, energy, infrastructure, industry, mineral resources and tourism are all areas with enormous investment potential in the African country, he added. The minister stressed that the country wants to reduce the imbalance in its trade with France by selling more to the European country. Between 2018 and 2019, the minister of Industry and Trade noted, Mozambique had exports equivalent to about USD200-million (EUR181.7-million) to France and imported from it about USD700-million (EUR636-million), illustrating the huge asymmetry in trade flows between the two countries.
Source: Club of Mozambique
NamibiaNamibia’s latest oil discoveries initiate new foreign direct investment flows
Namibia’s Jonker-1X light oil discovery – made last month by partners Shell, QatarEnergy and the National Petroleum Corporation of Namibia (NAMCOR) – represents the third discovery in a string of Orange Basin exploration successes announced in the past year. Coupled with the Graff-1X and Venus-1X finds (made in 2022 merely weeks apart), leading international oil companies (IOCs) are proving the size and scope of Namibia’s deepwater hydrocarbon resources. As such, Namibia’s exploration and production (E&P) sector is expected to attract significant foreign investment, fuelling the growth of the Namibian economy in the process. Already, Namibia has seen heightened interest and commitments from IOCs in its frontier basins. QatarEnergy, for example, holds interests in three Orange Basin Exploration Licences – PEL-39 (45%), PEL-56 (30%) and PEL-91 (28.33%) – covering a total area of over 28 000 square kilometre (km²). These licences comprise just a small part of the Orange Basin’s total E&P development potential, and Qatar’s state-owned petroleum company has shown its eagerness to expand operations further.
Source: Energy Capital & Power
NamibiaTreasury considers tax lures for green, digital businesses
Local companies in the green technology and digital space have caught the eye of the taxman, and could in the future be granted favourable capital allowances for tax purposes, says Oscar Capelao, the Minister of Finance and Public Enterprises’ tax adviser. He said this recently at the Namibia Revenue Agency (NAMRA) awards held in the capital. Capelao said the Ministry of Finance and Public Enterprises is considering favourable allowances to foster investment in green technology and digital transition. The former banker said the ministry and the tax policy are considering a possible tax-relief scheme to encourage employment. The awards recognise taxpayers’ and customs traders’ contributions to the state’s revenue collection. “Taxpayers and traders play a major role in the development of our country. They are the engine of growth for socio-economic development and should therefore be appreciated,” the agency’s board chairperson, Anna Nakale-Kawana, said. She said government systems and processes function smoothly thanks to taxpayers and traders.
Source: The Namibian
NigeriaNigeria to launch cassava biomass project for renewable energy generation
A cassava biomass pilot project in Nigeria will look to be a source of renewable energy and reduce the country’s carbon footprint. Recently, the Nigerian government’s Federal Executive Council approved the concession of a cassava biomass, bio-ethanol value chain. The project is meant to “create wealth, provide jobs, reduce poverty, provide renewable energy and reduce carbon footprint.” The Infrastructure Concession Regulatory Commission (ICRC) is to provide regulatory guidance. The council had also approved the National Fire Detection and Alarm System (NAFDAS) “for the effective prevention, detection and management of fire across the country.” The ICRC said the NAFDAS project is expected to generate NGN75-billion (USD162-million) in the 15-year concession period. The cassava bio-ethanol value chain will hopefully generate a total revenue of NGN105-billion (USD227-million) within the five-year concession period. The cassava bio-ethanol value chain pilot phase will include construction of a bio-technology industrial park on 20-hectare plots across 20 universities. Five thousand hybrid cassava stems will be planted per hectare, (100 000 stems for 20 hectares), the commission said.
Source: ESI Africa
RwandaPrivate sector, trade unions upbeat about new tax reforms
The Private Sector Federation (PSF) and trade unions praised the recent tax reforms, saying they will reduce the tax burden on both business people and workers. Announced by a Cabinet meeting on Thursday, 20 April, the tax reforms include the exemption of value-added tax (VAT) on rice and maize flour, as well as the reduction of the corporate income tax statutory rate from 30 to 28%. Speaking to The New Times, Eric Nzabandora, the president of Congress of Labour and Brotherhood of Rwanda (COTRAF), an inter-professional group of trade unions in agriculture, industry, and banking, among other sectors, said such changes will not only boost the “take-home” income of the workers but will also encourage more investments from the business community, which will provide jobs to more people. “The PSF has been calling for tax reductions for the traders, and we think it is good. With reduced taxes on businesses, more people will open businesses and create more jobs. This will reduce unemployment,” he noted.
Source: The New Times
TanzaniaTanzania prepares new list of tax-free goods
The government is currently listing and verifying products and equipment eligible for tax exemptions. The lawmakers have been informed in Dodoma recently that the aim of the exercise is to ensure that citizens are benefiting from the exemptions. This was said by the Deputy Minister for Finance and Planning, Hamad Chande in Parliament when he was reacting to Kibamba Member of Parliament Issa Mtemvu who sought to know the government’s strategies in place to ensure that value-added tax (VAT) exemptions serve intended purposes. In his response, the deputy minister said the ministry is working closely with the Tanzania Revenue Authority (TRA) preparing the list in accordance with the laws of the land. “We also conduct periodic audits on exemptions granted to verify if the products or equipment granted tax exemptions are being used accordingly,” he added.
Source: Daily News
ZambiaArc Minerals, Anglo American sign JV for copper exploration in Zambia
Africa-focused exploration and development company Arc Minerals has signed a joint venture (JV) agreement with a subsidiary of Anglo American over its copper interests in the northwestern region of Zambia. As part of the agreement, Anglo American will have the right to retain a 70% stake in the JV for an aggregate investment of up to USD88.5-million, including cash consideration of up to USD14.5-million, based on exploration expenditures announced in May last year. Serving as the first new investment in Zambia in 20 years, the deal and its related investments and cash payments will be subject to Zambian regulatory approvals and further conditions being met. “This agreement represents a major turning point for Arc and follows many months of negotiations,” stated Arc minerals executive chairman, Nick von Schirnding, adding, “I am delighted to be signing this agreement with Anglo American which will, upon execution and completion of the definitive agreements, result in the potential for significant investment by a reputable major mining company in the tenements in north west Zambia and a very exciting time ahead for us.”
Source: Energy Capital & Power
ZimbabweZimbabwe strengthens global ties to boost trade
Zimbabwe will continue to strengthen its relations with the global community as part of strategies to grow international trade and open up new markets. This was said by Foreign Affairs and International Trade Deputy Minister, Dr David Musabayana at the tripartite inward trade mission for Kenya, Malawi, and Equatorial Guinea markets held by the national trade development and promotion organisation, ZimTrade. This comes after the African Continental Free Trade Area (AfCFTA) became operational in January 2021 and promises to be a game changer for the growth of trade on the continent. The platform gave Zimbabwean companies the chance to engage potential buyers and understand their buying decisions as the country thrives to grow its export market. Target sectors for the mission encompassed horticulture, fast-moving consumer goods, agricultural inputs and implements, building and construction, clothing and textiles, furniture, renewable energy, and pharmaceuticals. The initiative is informed by the dictates of the National Trade Policy (2019-2023), which is premised on growing the country’s exports through product and market diversification.
Source: The Herald