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issue 504 | 09 Jul 2023

Africa

Africa CDC and USP launch MoU to advance regional manufacturing and strengthen regulatory and laboratory systems in Africa

On Friday, 20 June, alongside the Africa Health Business Symposium, the Africa Centres for Disease Control and Prevention (Africa CDC) launched a Memorandum of Understanding (MoU) with the United States Pharmacopeia Convention (USP) to expand access to quality-assured medical products in Africa by increasing regional manufacturing, strengthening enabling regulatory and market environments, and bolstering clinical and public health laboratory networks. A driving force behind the African Union’s (AU) New Public Health Order and serving as a major continental convener through the Partnership for African Vaccine Manufacturing and other initiatives, Africa CDC is at the forefront of advancing production of vaccines, diagnostics, and therapeutics. Through this MoU, USP commits to supporting Africa CDC’s efforts to improve health equity through expanded manufacturing and strengthened health systems. This collaboration will leverage USP’s decades-long work in both areas which has resulted in more than 70 products achieving World Health Organization (WHO) prequalification or other internationally recognised regulatory approvals and supporting 34 laboratories to receive global accreditations. 

Source: Africa CDC

Africa

AfDB, ASEA sign agreement for USD600 000 grant to expand network of linked African stock exchanges to 15

The African Securities Exchanges Association (ASEA) and the African Development Bank (AfDB) Group on Wednesday, 28 June signed an agreement for a USD600 000 grant to expand the number of linked African exchanges from seven to 15 under the second phase of the African Exchanges Linkage Project (AELP). The funds will come from the Korea African Economic Cooperation Fund (KOAFEC) Trust Fund, managed by the AfDB. The AELP is a flagship project of ASEA and the AfDB to link African capital markets, thereby promoting cross-border securities trading, increasing liquidity and diversifying investment opportunities for investors. The AELP’s second phase will provide investors access to over 2 000 securities listed on up to 15 capital markets through a cross-border securities trading platform tailored to the needs of regulators, central depositories, policymakers, and stockbrokers. Participating stock exchanges include the Botswana Stock Exchange, where the grant signing took place; the Ghana Stock Exchange and six other stock exchanges. The grant will also support capacity building of institutional investors and capital market operators. 

Source: AfDB

Africa

Africa50 invests in infrastructure worth over USD6.6-billion in six years

In just six years of operation, Africa50 has invested in critical infrastructure with a total value of more than USD6.6-billion, African Development Bank (AfDB) Group president, Dr Akinwumi Adesina said during the recent Africa50 Infra Forum and General Shareholders Meeting in Togo’s capital Lomé. The event was attended by Togolese President Faure Gnassingbé. Africa50 is an investment platform established by African governments and the AfDB to mobilise financing for mega infrastructure projects with significant development impact. Adesina chairs the Africa50 board of directors. Prominent African and global institutional investors attending the meeting signed subscription agreements and letters of intent to commit funds to the USD500-million African Infrastructure Acceleration Fund – the first private vehicle infrastructure platform launched by Africa50. The fund will catalyse further investment flows to invest in the development of critical infrastructure across the African continent. 

Source: AfDB

Africa

AfDB teams up with airplane manufacturers Airbus, ATR to boost African commercial aviation

The African Development Bank (AfDB) has held workshops with aircraft manufacturers Airbus and ATR to explore ways of strengthening access to finance for African airlines. The sessions, held on 14 and 15 June, will support the bank’s efforts to develop and adapt financing instruments to the continent’s aviation needs, boosting its air transport market. The workshops featured discussion of bank financing instruments, including guarantee products, the bank’s approach to credit risk assessments and the outlook for Africa’s aircraft market. The bank is studying the feasibility of setting up an aircraft leasing platform. Operating leases account for more than 45% of operational fleets worldwide. Representatives of the AfDB and the manufacturing firms also discussed sources of financing that included export credit agencies, multilateral development banks, non-payment insured financing and sovereign support. Air travel on the continent has been hard hit by the COVID-19 pandemic. Before its onset, African aviation represented a roughly 3% share of the global market, although the continent has 17% of the world’s population.

Source: AfDB

Africa

AfDB’s SEFA provides USD7.88-million grant for the African JET programme

The African Development Bank (AfDB) Group’s Board of Directors has approved a USD7.88-million grant from the Sustainable Energy Fund for Africa (SEFA) for the Africa Energy Transition Catalyst Programme (AETC), which aims to increase renewable energy generation across the continent. The AETC, consolidates the bank’s support for the acceleration of a Just Energy Transition (JET) for Africa, defined as a low-carbon transition that is fair, inclusive, creates decent work opportunities and leaves no one behind. The programme works at national and regional levels, by facilitating the large-scale integration of renewable energy generation, thus increasing its share of the energy mix. The AETC consolidates six identified energy transition projects that will be implemented in two phases. The AETC programme sets out to accomplish multiple objectives. These include conducting a Regional Market Study to facilitate the export of renewable energy from Botswana and Namibia as part of the 2-5 (gigawatt) GW Mega Solar initiative. The Mega Solar initiative is Southern Africa’s largest solar power programme and the first of its kind on the continent. 

Source: AfDB

Africa

ESG: The growing relevance in Africa

The concept of Environmental, Social, and Governance (ESG) has gained significant attention in recent years, and Africa is no exception, writes Joshua Low, founder of Envision SA. Companies increasingly recognise the importance of adopting sustainable business practices, especially as the world faces escalating environmental risks and social challenges. ESG refers to a set of non-financial factors that companies use to evaluate their impact on society and the environment. These factors include climate change, social inequality, employee relations, and corporate governance. By incorporating ESG principles into their operations, companies can improve their long-term performance and mitigate risks associated with environmental and social issues. In Africa, there is a growing awareness of the importance of ESG. As one of the most resource-rich continents in the world, Africa is home to numerous industries that are reliant on natural resources such as mining, agriculture and energy. These industries have a significant impact on the environment and communities in which they operate, and there is an expanding need to ensure that they are managed sustainably.

Source: ESI Africa

Burkina Faso

IMF staff reaches staff-level agreement on USD305-million, four years, ECF with Burkina Faso

An International Monetary Fund (IMF) team led by Mr Martin Schindler, mission chief for Burkina Faso, visited Ouagadougou from 20 – 29 June 2023, to discuss with the Burkinabè authorities IMF's support for their policy and reform plans. At the end of the mission, Mr Schindler issued the following statement, in part: “I am pleased to announce that the IMF team reached staff-level agreement with the Burkinabè authorities on a four-year programme supported by an arrangement under the Extended Credit Facility (ECF) in the amount of SDR228.76-million, or about USD305-million. The economic programme aims to restore macroeconomic stability and debt sustainability while laying the foundation for stronger and more inclusive growth. The staff-level agreement is subject to IMF Management and Executive Board approval and sufficient financing assurances by Burkina Faso’s development partners. The Burkinabè authorities have committed to a wide-ranging economic reform programme, which builds on the government’s Action Plan for Stabilization and Development (PA-SD) and tackles the challenges facing the country.”  

Source: IMF

Cameroon

IMF Executive Board completes fourth reviews of ECF and EFF arrangements for Cameroon and approves USD73.6-million disbursement

The Executive Board of the International Monetary Fund (IMF) has completed the fourth reviews of Cameroon’s fund-supported programme. The three-year blended arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) approved on 29 July 2021 seek to support the country’s economic and financial reform programme. The completion of the reviews allows for the immediate disbursement of SDR55.2-million (about USD73.6-million) bringing the total disbursements under the arrangements to SDR372.6-million (around USD493.6-million). Cameroon is showing resilience in an uncertain domestic and global environment. Growth is estimated at 3.8% in 2022, supported by non-oil production. Headline inflation is estimated at 7.3% at end-2022 year-on-year. The overall fiscal deficit improved from 3% of GDP in 2021 to around 1.1% of GDP in 2022 reflecting higher oil and non-oil revenues. The non-oil primary deficit remained unchanged at around 3.9% of GDP in 2022 owing to an increase in expenditure on fuel subsidies. The medium-term outlook remains positive, provided reforms continue and the external environment becomes more supportive. 

Source: IMF

Democratic Republic of the Congo

IMF Executive Board concludes the fourth review under the ECF arrangement with the DRC

The Executive Board of the International Monetary Fund (IMF) has concluded the fourth review of the Extended Credit Facility (ECF) arrangement for the Democratic Republic of the Congo (DRC) approved on 15 July 2021. The completion of the fourth review allowed an immediate disbursement equivalent to SDR152.3-million (about USD203.3-million) to support balance-of-payment needs, bringing the aggregate disbursement to date to SDR761.5-million (about USD1 017-million). The DRC’s macroeconomic performance is showing resilience despite elevated uncertainty, heightened by the escalation of the armed conflict in eastern DRC and the upcoming end2023 elections. At the conclusion of the executive board’s discussion, Mr Kenji Okamura, deputy managing director, and acting chair, made the following statement, in part: “The [DRC’s] economy has shown resilience, despite the escalating conflict in the east and the lingering effect of past shocks. Growth is estimated at 8.9% in 2022, with higher-than-projected inflation as rapid public spending accelerated exchange rate depreciation.” 

Source: IMF

Ethiopia

Ethiopia applies to join BRICS bloc of emerging economies

Ethiopia has made an official request to join the Brazil, Russia, India, China and South Africa (BRICS) bloc of emerging economies, the Ministry of Foreign Affairs has said. "We have applied for membership and we expect BRICS to give us a positive response to the request we have made," Foreign Affairs ministry's spokesperson Meles Alem said recently. He added that Ethiopia would continue to work with international institutions that can protect its interests. "As a country that has been a founding member of global institutions like the African Union (AU) and the United Nations (UN), and as we seek to guarantee our national interests, it is important to join blocs like BRICS," he said. Ethiopia, with the second highest population in Africa, is one of the continent's fastest-growing economies, according to the International Monetary Fund (IMF). In its latest World Economic Outlook, the IMF revised its earlier forecast of Ethiopia’s GDP in 2023 from USD126-billion to USD156.1-billion. But, its economy is less than half of South Africa - the smallest of the BRICS partner states. Other countries that have sought to join the bloc include Egypt, Algeria and Bangladesh. Argentina, Iran, Indonesia, Saudi Arabia and Turkey have also expressed interest in joining the alliance. 

Source: The EastAfrican

Ghana

Ghana oil and gas outlook 2023-2027

Driven by a surge in market conditions, Ghana is expected to commence 17 oil and gas projects during the outlook period 2023-2027. The West African country’s upstream sector will see the development of three offshore fields, while its midstream landscape currently has nine projects in development, with the downstream sector involving the development of two refineries and three petrochemical processing facilities. As one of Africa’s fastest-growing hydrocarbons producers, offshore field developments in the West African country include Phase One of the Pecan Conventional Oilfield and the start of production of the Jubilee South East field and Ntomme Far West Development. Major projects in Ghana’s midstream sector during the outlook period 2023-2027 will involve the development of the Tema Floating Liquefied Natural Gas (FLNG) Plant, the Tema VI Liquids Storage Terminal, the Dixcove Oil Storage Facility, the Wa Oil Storage Facility and the Tema-Akosombo II and Tema Pipelines. Designed to encompass a floating storage and regasification unit, the USD350-million Tema FLNG Plant will be situated outside Tema Port in the Accra region of Ghana and will have the capacity to produce 83 billion cubic feet of liquefied natural gas (LNG). 

Source: Energy Capital & Power

Kenya

1.8 million digital loan defaulters get clean record

About 1.8 million digital loan defaulters have got a clean credit rating after they took advantage of a six-month credit repair backed by the Central Bank of Kenya (CBK) to reset their history. Metropol Credit Reference Bureau (CRB), which holds a database of more than 20 million borrowers, says the number of beneficiaries from the programme represents about 44% of the more than 4.2 million accounts targeted by the initiative. Last November, the CBK directed financial institutions including commercial and microfinance banks to provide a discount of at least 50% of the non-performing phone loans that were outstanding at the end of October 2022. The institutions updated the borrowers' credit standing from non-performing to performing and restructured the balance of the outstanding loans that were valued at KES15-billion after the 50% discount for a term up to 31 May 2023. Financial institutions had previously written off the balances while fully providing for the loss under International Financial Reporting Standards (IFRS) 9 standards. In the aftermath of the credit repair framework, NCBA and Absa Bank Kenya revealed write-offs amounting to KES11-billion and KES3.2-billion, respectively, from irrecoverable digital loans with the framework allowing them to recover 50% of the balances or KES7.1-billion. 

Source: Business Daily Africa

Kenya

Kenya private sector activity shrinks in June - PMI

Kenya's private sector activity fell in June, undermined by slowing business in the services, wholesale and retail sectors in an environment of high inflation and weak consumer spending power, a recent survey showed. The Stanbic Bank Kenya Purchasing Managers' Index (PMI) fell to 47.8 in June from 49.4 a month earlier. Readings above 50 signal growth. It is the fifth month in a row that the PMI has stayed below 50, signalling a contraction in activity. "Companies reported tough trading conditions influenced by high inflation in the country and a lack of client spending power," Stanbic Bank Kenya said. "Sector data revealed the services and wholesale and retail sectors as key sources of weakness." Inflation in Kenya eased to 7.9% year-on-year in June from 8.0% a month earlier, data from the statistics office showed. On the positive side, the weaker shilling provided a reprieve for exporters, the survey showed. "New export business has remained in expansionary territory for the fourth consecutive month thanks to a weaker shilling," Mulalo Madula, an economist at Stanbic Bank, said. 

Source: Reuters

Mozambique

AfDB adopts new Country Strategy Paper covering 2023-2028

The Board of Directors of the African Development Bank (AfDB) Group has endorsed the bank’s 2023-2028 Country Strategy Paper for Mozambique on 13 June 2023. The new strategy aims to promote the country's structural transformation by improving fiscal stability, creating decent jobs and generating inclusive growth. The strategy has two priority areas: fostering improved economic governance and the business environment to facilitate private sector investment and mobilise resources and transforming agricultural value chains by strengthening infrastructure sustainably. This strategy is the culmination of efforts by the government, development partners, civil society, the private sector and technical experts on the country's most critical economic reforms to implement in the coming years. The AfDB is working to support the Mozambican government in consolidating the results of previous and ongoing reforms in economic governance and the business environment. The government is also adopting new regulations and bolstering various administrative processes to improve the country’s fiscal position and stimulate private sector inflows. 

Source: AfDB

Niger

IMF Executive Board concludes the third review of Niger’s ECF arrangement and approves USD131.5-million under the RSF arrangement

The Executive Board of the International Monetary Fund (IMF) has completed the third review of Niger’s economic and financial programme supported by the Extended Credit Facility (ECF) arrangement. The ECF supported programme aims at buttressing macroeconomic stability while laying the foundations for stronger and more inclusive growth. The completion of this review enables the disbursement of SDR19.74-million (about USD26.3-million), bringing total disbursements under the ECF to SDR138.18-million (about USD184.1-million). Niger’s three-year ECF for SDR197.4-million (about USD275.8-million at the time of the ECF approval or 150% of quota) was approved on 8 December 2021 and was extended by six months until 7 June 2025. The executive board has also approved  Niger’s request for an arrangement under the Resilience and Sustainability Facility (RSF) for SDR98.7-million (about USD131.5-million or 75% of quota). The RSF for Niger, the fourth in sub-Saharan Africa, will support the implementation of the authorities’ climate-related investments and reforms to build resilience to climate change as well as help leverage additional financing.  

Source: IMF

Republic of the Congo

Republic of the Congo Economic Update: Removing fuel subsidies can free up resources for more investments in infrastructures and human capital

A recent report shows that growth in the Republic of the Congo picked up in 2022, reaching 1.5% of GDP in 2022, and is set to accelerate to 3.5% in 2023, driven by increased investment. The Republic of Congo Economic Update highlights that inflation remained contained, but increased food prices is exacerbating socio-economic challenges. An estimated 56% of the population is already severely food insecure and poverty remains high with more than one in two Congolese living with less than USD2.15 a day in 2022. This report focuses on fuel subsidy reforms and stresses that fuel subsidies benefit mainly the richest segments of the population. In 2022, the sharp rise in global oil prices led to an increase in oil subsidies at 2.4% of GDP, which is higher than the country’s spending on social protection. While oil subsidies aim at supporting consumers’ purchasing power and, more particularly, that of the most vulnerable, these subsidies benefit the richest segments of the population, especially groups living in urban areas. According to the lead author of the report, Marilyne Youbi, economist, “Fossil fuel subsidies represent a significant fiscal burden in the Republic of the Congo. The use of public funds to freeze retail fuel prices diverts resources from alternative uses, such as public spending on infrastructures, education, health, and social services, in a country where human capital development has stagnated over the last decade.” 

Source: World Bank

Seychelles

Seychelles pioneers novel financing instruments and taps IMF climate facility

Seychelles is successfully balancing conservation and economic development by tapping into innovative financing instruments. The East African island nation relies largely on tourism and fishing for revenue and was the first country to issue a blue bond and to designate its fragile coastal areas for protection in return for a novel deal relieving it of part of its sovereign debt. It is now also the second African country, after Rwanda, to access the IMF’s Resilience and Sustainability Facility (RSF) – funding aimed at helping countries with limited room in their budget address long-term challenges, such as climate change and pandemic preparedness. In an interview with Country Focus, Naadir Hassan, Seychelles’ Minister of Finance, National Planning and Trade, and Calixte Ahokpossi, IMF mission chief, talked about the RSF and Seychelles’ innovative approach to financing its climate goals. Minister Hassan said, “The financial support provides much needed fiscal space to implement policies aimed at building resilience, mitigating climate change impacts, and promoting sustainable development. It should also help to catalyse further private financing for climate projects. The technical assistance and capacity building offered by the IMF will also help to strengthen our institutional and policy frameworks.”  

Source: IMF

Tanzania

Tanzania secures USD195-million budget support from EU

Tanzania has recently signed three grant agreements valued at EUR179.35-million (USD195-million) with the European Union (EU) to support budget operations. President Samia Suluhu Hassan, who witnessed the signing ceremony in Dodoma, said the grants would accelerate the implementation of development programmes in the country. “The money will be used to promote policy changes and industry growth in the blue economy, finance for growth, gender equity, green energy, and smart cities, as well as the renovation of rural roads in the southern highlands region,” she said. The EU head of delegation to Tanzania, Manfredo Fanti, said the funds are part of USD262-million grant budget support for Tanzania from 2021 to 2027. The money, he said, is expected to contribute to the implementation of the Global Gateway, the new EU strategy to boost smart, clean, and secure links in the digital, energy, and transport sectors and to strengthen health, education, and research systems worldwide. 

Source: The EastAfrican