issue 496 | 14 May 2023
AfricaAfrica needs USD700-billion of finance for green energy and metals
Africa will need more than USD700-billion in finance over the next decade to develop renewable power and mines to extract the metals required for the green energy transition, according to Standard Bank Group. The continent’s financial institutions will not be able to provide even half of that and most of the money will need to come from investors from elsewhere, Kenny Fihla, CEO of Standard Bank’s corporate and investment banking unit, said. “Many of the minerals that are required to build solar panels, lithium batteries, wind turbines and so on, are found in sub-Saharan Africa,” Fihla said. “Our team has also quantified the amount of investment that is required in that space as in the order of hundreds of billions of dollars.” African governments are under pressure to extend power supply to the 600-million people – about half of the continent’s population –who currently do not have access to electricity. At the same time, copper and cobalt deposits in the Democratic Republic of the Congo and Zambia, lithium reserves in Zimbabwe and platinum and manganese seams in South Africa are seen as key to providing the materials needed for everything from solar panels to electric vehicle batteries.
Source: Engineering News
AfricaAfrican maritime leaders debate their role in decarbonising shipping
Recently, the International Maritime Organization (IMO ) and the umbrella body of African maritime regulators, the Association of African Maritime Administrations (AAMA), held deliberations aimed at accelerating shipping decarbonisation in Africa. While green shipping is a complex matter globally, developing nations face a bigger challenge due to limited fiscal space to support maritime decarbonisation. Additionally, some African countries are yet to include the maritime industry in their national development action plans. This is a huge barrier in investing in projects such as green ports and national single window systems, which are key in cutting carbon emissions for the shipping sector. In fact, the AAMA Secretariat contended that lack of defined maritime policies is locking out some African ports from accessing climate resilience financing from multilateral lenders. Government ministries specifically involved with the blue economy could be an important front to cure policy inconsistencies, which are derailing development of shipping in Africa.
Source: The Maritime Executive
AfricaDigital technologies key to inclusive growth in Africa - African Union Commissioner
Digital technologies could offer Africa a great chance to unlock new pathways for rapid, inclusive economic growth and job creation, according to Ambassador Albert Muchanga, the African Union Commissioner for Economic Development, Trade, Tourism, Industry and Minerals. In an address to the recent 55th Conference of African Ministers of Finance, Planning and Economic Development, Ambassador Muchanga said the continent needed to raise the requisite funding to develop its digital knowledge base to achieve growth. “Mobilisation of domestic resources should be prioritised with a particular emphasis on fighting illicit financial flows, which deprive the continent of approximately USD90-billion annually,” he said at the conference organised by the United Nations Economic Commission for Africa (UNECA). Speaking on the theme Fostering recovery and transformation in Africa to reduce inequalities and vulnerabilities, commissioner Muchanga recognised the continent’s successes in adapting some of these technologies, particularly in mobile money services.
AfricaInclusive growth and sustainable development in Africa: a major task for regional development banks
The average annual GDP growth in Africa was 3.4% between 2010 and 2021, according to African Development Bank (AfDB) data. This is well below the targeted yearly average growth of 7%. Combined with population growth, GDP per inhabitant has barely changed. At the same time, average purchasing power in Africa has deteriorated due to inflation, which has accelerated over the last 10 years. As well as the challenges of governance, the reality of African economies means that periods of optimism have often been disrupted by external shocks such as COVID-19, and the Russian war in Ukraine, resulting in lower GDP growth rates over the last few years. The issue has raised questions in the region. The African Union Commission (AUC), the AfDB and the African Union Development Agency – New Partnership for Africa’s Development (AUDA-NEPAD) jointly conducted a study to identify the key actions needed to put every African country on the path to steady growth from 7% to 10% over the next 40 years. The preliminary report of the study will be discussed at the Annual Meetings of the AfDB Group from 22 to 26 May 2023 in Sharm el-Sheikh, Egypt.
AfricaMaximising revenues from natural resource wealth could yield big fiscal and environmental dividends for African countries
In a time of energy transition and rising demand for metals and minerals, resource-rich governments in sub-Saharan Africa have an opportunity to better leverage their resources to finance their public programmes, diversify their economy, and expand energy access. Africa’s Resource Future, a World Bank report launched on Wednesday 10 May 2023, finds that on average countries capture only about 40% of the revenue they could potentially collect from natural resources. In other words, at a time when countries are burdened by slow growth and high debt, governments could more than double revenues from natural resources such as minerals, oil, and gas by adopting a better set of policies, implementing reforms, and investing in better fiscal administration and promoting good governance. Full taxation of natural resources is also important to charge the full cost of environmental and social impacts not always fully covered by producers, including petroleum resources. Failing to do so can act as an implicit production subsidy and raise carbon emissions.
Source: World Bank
Central AfricaBEAC guides its member states towards sustainable finance
Green or sustainable finance aims to promote the real economy and long-term projects. This type of financing favours financial operations that take into account extra-financial criteria, commonly known as environmental, social and governance (ESG) criteria. These criteria include carbon emissions, biodiversity protection, waste management and societal impacts. It is towards this ecological model of finance that the member countries of the Central African Economic and Monetary Community (CEMAC) are oriented, through an international forum on the theme Trajectories towards sustainable finance. Held on 8 and 9 May 2023 in Douala, Cameroon, this initiative of the Bank of Central African States (BEAC) was organised in partnership with the International Finance Corporation (IFC) of the World Bank Group and the Sustainable Banking and Finance Network (SBFN). The objective of this meeting was to develop a common vision of sustainable finance for the countries of the CEMAC zone, says the BEAC.
Source: AFRIK 21
East / Southern AfricaCOMESA Commission urges vigilance in companies' mergers
The Common Market for Eastern and Southern Africa Competition Commission (CCC) is urging vigilance to build on its 10 years of saving consumers from unscrupulous companies, and ensuring services promised are actually rendered without cutting corners. “The commission has played an important role in curbing unfair practices by unscrupulous businessmen in the region and has protected consumers on matters of cross-border dimension,” said COMESA secretary general Chilleshe Kapwepwe at the anniversary in Lilongwe, Malawi. The CCC says there have been 369 company mergers since it was formed in 2013, all of which it verified before transactions were endorsed. Half of the funds collected by the CCC go to 20 member states of COMESA, to strengthen their capacity building and boost their budgets, CCC officials said at a ceremony. The energy sector had the lion’s share of mergers at 18% followed by the banking and insurance industry at 15% and then agriculture at 13%, according to the CCC. The CCC chief executive Willard Mwemba said the total turnover of the merged entities in the regional market stands at USD210-billion.
Source: The EastAfrican
West AfricaECOWAS agrees on USD187-million capital base for regional central bank
Member countries of the Economic Community of West African States (ECOWAS) have agreed to put forward USD187-million as capital base for the proposed Central Bank of West Africa. This would make funds available for infrastructure development and solid liquidity of the region. The president of the ECOWAS Commission, Dr Omar Alieu Touray, disclosed this while presenting the status of the community at the ongoing First Ordinary Session of the ECOWAS Parliament in Abuja. He said studies on the size and distribution of the capital and reserve pooling had been finalised, explaining however that, “the criteria for pooling reserve, the voting system and establishment of the solidarity and stabilisation fund for ECOWAS are still in progress.” Touray, lamented that the region is still grappling with the negative effects of the COVID-19 pandemic in terms of macroeconomic convergence. He said: “The performance in terms of macroeconomic convergence of the member states, the preliminary data from member states in 2022 showed negative impact of lingering effects of the COVID-19 pandemic, the Russian-Ukraine war, which have put more pressure on member states’ performance in terms of macroeconomic convergence.”
Côte d'IvoireDigital certification makes cocoa traders in Côte d'Ivoire more competitive
The cocoa bean’s long journey from the farms of Côte d’Ivoire to the chocolate factories of Europe is getting shorter – thanks to a new digital system for certifying that the beans are free of pests and disease. The system automates the certification process, significantly cutting the time and cost of exporting a crop that provides an income for one-fifth of the West African country’s population of 28 million. Around the world, exporters of agricultural goods must obtain a government-issued document called a phytosanitary certificate, which assures trading partners that consignments meet the expected quality standards. In 2017, the International Plant Protection Convention (IPPC) developed its electronic phytosanitary certificate (ePhyto) Solution, which replaced paper certificates with electronic ones. It has been implemented by 123 countries, including the 27 members of the European Union (EU). ePhyto is part of Côte d’Ivoire’s plan to modernise its agricultural sector, cocoa in particular.
Source: World Bank Blog
Democratic Republic of the Congo / UgandaDRC in discussions with Uganda over use of crude pipeline
The Democratic Republic of the Congo (DRC) is in discussions with neighbouring Uganda for possible use of the East African country's planned crude oil pipeline to export petroleum, DRC’s Ministry of Hydrocarbons (MoH) said. Uganda is developing the USD3.5-billion 1 445 km East African Crude Oil Pipeline (EACOP) that will start from the oil fields in its Albertine rift basin on its western border with DRC to Tanzania's Indian Ocean seaport of Tanga. The pipeline is for transporting Uganda's crude to international markets when the country starts production in 2025. The DRC’s MoH said in a Twitter statement recently that its Minister Didier Budimbu met Uganda's energy Minister Ruth Nankabirwa Ssentamu, with discussions involving access to the pipeline. "Uganda acknowledged the crucial requirement of [the] DRC to access [EACOP] for the transport of crude oil to be produced from the oil exploration blocks located in the Albertine Graben in the [DRC]," the statement read. The DRC and Uganda share the oil-rich basin of Albertine Graben.
EswatiniAfCFTA Agreement provides opportunities for Eswatini to expand her intra-African trade beyond the traditional markets
The Ministry of Commerce, Industry and Trade of Eswatini, in collaboration with the United Nations Economic Commission for Africa (UNECA) held a Validation Workshop for Eswatini’s National African Continental Free Trade Area (AfCFTA) Implementation Strategy on 4 May 2023. The validation workshop was preceded by two build-up events; a sensitisation presentation of the Draft Strategy on AfCFTA implementation to Cabinet Ministers and a sensitisation workshop for Parliamentarians on 2 and 3 May 2023, respectively. Officiating at the meeting, the Minister of Commerce, Industry and Trade Manqoba Khumalo emphasised Eswatini’s need to develop a practical and effective strategy and action plan for the private sector, including micro-small and medium-sized enterprise (MSMEs), “to be better positioned to take advantage of the available market access opportunities presented by the AfCFTA.” The minister said: “The AfCFTA Agreement opens up new market access opportunities for Eswatini to expand her intra-African trade beyond the traditional markets… Accessing the wider African market to export its goods and services on duty free market access will bring about more revenues for our country’s development.”
EthiopiaSafaricom gets licence to launch M-Pesa services in Ethiopia
Ethiopia has granted Safaricom a licence to launch M-Pesa services in the populous nation that is largely unbanked. The telecommunications company expects to roll out the mobile money services before the end of the year, which is set to lift M-Pesa’s profile since its launch in Kenya in 2007. “Safaricom Ethiopia has officially been granted the licence to operate mobile money. We look forward to launching M-Pesa in the coming weeks,” CEO Peter Ndegwa said during a recent investor briefing. The Safaricom-led consortium in Ethiopia has paid USD150-million (KES20.5-billion at the current exchange rates) as licence fees to the National Bank of Ethiopia (NBE). The banking sector regulator has issued the mobile money service permit to Safaricom M-Pesa Mobile Financial Service, a new subsidiary that is the first foreign-owned unit to be granted the licence. “We welcome this shift to the use of digital financial services so as to bring greater efficiency, safety and transparency to the country's rapidly growing financial system,” NBE said in a statement. Safaricom Ethiopia grew its customer numbers to three million users seven months after its entry into the country.
Source: The EastAfrican
Ethiopia / Uganda / Tanzania / KenyaEthiopia topples Uganda, Tanzania for Kenya investments abroad
Ethiopia has toppled Tanzania and Uganda as the leading destination of Kenya’s investment abroad, buoyed by the expansion of local firms in the giant neighbouring market. Direct investment abroad-also referred to as outward direct investment – is a category of cross-border investment associated with a resident in one economy having control or a significant degree of influence on the management of an enterprise that is resident in another economy. As well as the equity that gives rise to control or influence, direct investment also includes investment associated with that relationship, including investment in indirectly influenced or controlled enterprises, investment in fellow enterprises, debt (except selected debt), and reverse investment. The newly released Economic Survey 2023 shows that although Tanzania was the leading destination for Kenya’s investment abroad at the start of 2015, the table has since tilted in favour of Addis Ababa.
Source: Nation Africa
Ghana / MaliGhana deepens petroleum trade ties with Mali
The National Petroleum Authority (NPA) has initiated moves to promote fuel trade and investment between Ghana and Mali. The NPA’s strategy is to continuously engage the Malian authorities and importers to achieve the objective of increasing fuel supply to the Sahelian region. Consequently, a delegation from the NPA led by deputy chief executive, Linda Asante, paid a four-day working visit to Mali. The team held meetings with key stakeholders including the regulators, Office Malien des Produits Petoliers (OMAP), the Malian Customs, and the directorate in charge of trade – Direction Generale Commerce de la Consommation et de la Concurrence (DGCCC) – and Malian petroleum importers operators. Mrs Asante said the visit was part of the NPA’s strategy to deepen economic relations between Ghana and Mali, and other countries in the sub-region, particularly in the area of fuel trade. “It was also to discuss matters on trade facilitation and the signing of a trade cooperation agreement between Ghana and Mali,” she added. The deputy chief executive stated that the idea was to collaborate with key Malian institutions to develop export protocols and sign a trade cooperation agreement to promote fuel trade and investments between the countries.
MalawiGreen financing for Malawi to fight climate change effects
Climate change-related disasters continue to hamper growth in Malawi, but private sector participation through green financing could help mitigate these challenges. Speaking at the recent opening ceremony of the 8th edition of the Green Finance Conference in Lilongwe, Malawi’s Minister of Energy Ibrahim Matola said climate change is a development issue that needs to be dealt with “holistically”. “Climate change affects the budget negatively in the sense that the Ministry of Finance has to come in with budgetary resources to implement mitigation and response mechanisms designed to minimise negative effects of climate change. Apart from budgetary allocation, climate change affects growth prospects either through drought-induced shocks or flooding as has been the case with Cyclone Idai, Gombe, Ana and recently Freddy.” The African Guarantee Fund (AGF), in partnership with the Nordic Development Fund (NDF), kicked off the conference. Key players in the Malawi finance and energy sectors, regulatory-policy stakeholders and green small and medium-sized enterprises (SMEs) highlighted the contribution of the country’s private sector in terms of the 2015 Paris Climate Agreement.
Source: ESI Africa
MalawiMalawi takes critical step towards the validation of a successor Industrial Policy
“Industrialisation is central to the government agenda of structural transformation of the economy. It is envisaged that industrialisation will transform Malawi from a predominantly consuming and importing country to a predominantly producing and exporting country, thereby reducing the overriding trade deficit” says Ms Sphiwe Mauwa, director of Administration, Ministry of Trade and Industry (MoTI). She was speaking on behalf of the Permanent Secretary (MoIT) Ms Christina Zakeyo at a validation meeting on the successor National Industrial Policy (NIP), held in collaboration with the United Nations Economic Commission for Africa Sub-regional Office for Southern Africa (UNECA SRO-SA) in Lilongwe. Ms Mauva lauded UNECA SRO-SA for supporting the comprehensive analysis and review of the newly drafted National Industrial Policy so that it is aligned to the regional industrial policies as well as aligning the Industrial Policy to the Malawi 2063 Agenda. UNECA SRO-SA supported the development of the new NIP that is aligned to the Southern Africa Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) Industrialization Strategies and the Malawi 2063 agenda and its first implementation plan (MIP1), the National Export Strategy II and other relevant polices and strategies of the Government of Malawi.
NigeriaHere is how Nigeria is tackling the barriers to its green energy transition
Nigeria is the largest economy in Africa, with vast natural resources, including oil and gas, and it is one of the largest oil producers in the world. As the country’s economy continues to grow rapidly, so does its demand for energy. The Government of Nigeria has set a goal to achieve universal energy access by 2030 and is implementing various policies and initiatives to increase access to clean and affordable energy for its citizens. However, the energy sector faces several challenges, including insufficient power generation, inadequate infrastructure, and a high level of energy poverty. Recently in Abuja, the World Economic Forum together with the Renewable Energy & Energy Efficiency Associations (REEEA-A) conducted a Mobilizing Investment for Clean Energy Emerging Economies Initiative deep dive roundtable that brought together over 40 stakeholders from Nigeria’s energy and finance sectors to develop energy and power priority areas, and showcase viable solutions to address the financing challenges faced by each priority area. The working group carried out a country context risk analysis that shows Nigeria’s biggest risks in scaling the sector is complications with currency convertibility, financing structures and the availability of technology supply and technical know-how in operating the equipment.
Source: World Economic Forum
RwandaRwanda eyes USD3-billion in new investments in 2023
Rwanda projects to attract total investments worth USD3-billion (approximately RWF3.3-trillion) in 2023, buoyed by services provided by the One Stop Center at the Rwanda Development Board (RDB). The forecast was highlighted in the RDB’s recently released annual report. The investments are expected to be channeled into key priority sectors including manufacturing, agro-processing, construction, information and communications technology (ICT), tourism, and mining. In 2022, the country recorded a USD1.6-billion total investment, a 26% increase from 2020 but a decline from USD3.74-billion in 2021. This can be attributed to a tough global economic environment due to inflation and the impact of the Russia-Ukraine crisis that caused governments to take monetary measures that were not conducive for investments. Despite that, sectors such as manufacturing, financial services, and insurance accounted for 45.6% of total registered investments, and are expected to create 38.5% of the total jobs to be generated from the investments.
Source: The New Times
TanzaniaFirst Tanzanian gets certificate of origin to trade on AfCFTA
The first Tanzanian received a certificate of origin recently to trade in the African Continental Free Trade Area (AfCFTA). Presenting the certificate, the acting vice president of the Tanzania Chamber of Commerce, Industries, and Agriculture (TCCIA), Mr Vicent Minja said the certificate will allow the businessman to get a reduction in customs duty from 35% to12%. “We have been educating traders about the benefits of exporting goods using certificates of origin under the AfCFTA Agreement, and we [have] handed over the certificate of origin to the first trader,” said Mr Minja. Mr Minja urged more businesspeople to take advantage of the opportunities available in the free market by accessing certificates of origin. For his part, the acting director general of the Tanzania Business Development Authority (TanTrade), Mr Fortunatus Mhambe, revealed that many traders have been ignoring certificates of origin in their business activities without realising that they would facilitate their activities by helping them access more markets. “Africa has been struggling to overcome many economic challenges, but now there is this great opportunity that we must embrace to move forward,” said Mr Mhambe.
Source: The Citizen
ZambiaZambia is ready for business – President Hichilema
President Hakainde Hichilema says Zambia is ready for business hence the country is creating strong institutions that support an enabling environment for investment. President Hichilema says government is committed to carrying out reforms that encourage economic growth and that it is fully aware of what needs to be done in order to drive the country’s economy. The Zambia News and Information Services (ZANIS) reports that the president said government will continue to do more in a bid to turn around the country’s economic fortunes. President Hichilema stated his administration is keen to work with the private sector and improve the wellbeing of the Zambian people. The president said this during the recent Zambia Investment Forum held in London. The Minister of Finance Situmbeko Musokotwane has implored the business community in London to help the government in pushing for debt relief. Minister Musokotwane said government has done its part hence the call to push for debt relief from the creditors.