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issue 506 | 23 Jul 2023

Africa

Africa CDC, WHO and RKI launch a Health Security Partnership to Strengthen Disease Surveillance in Africa

The Africa Centres for Disease Control and Prevention (Africa CDC), the World Health Organization (WHO) and the Robert Koch Institute (RKI) have launched a Health Security Partnership to Strengthen Disease Surveillance and Epidemic Intelligence in Africa. The partnership aims to strengthen Africa’s health security capabilities in the areas of biosecurity, integrated disease surveillance, event-based surveillance, genomic surveillance, and epidemic intelligence. The partnership seeks to encourage strong country leadership and the first phase will be implemented in six African Union (AU) member states including The Gambia, Mali, Morocco, Namibia, Tunisia, and South Africa and will later be expanded to more countries in the subsequent phase. With a shared commitment to supporting African countries to strengthen health systems and safeguard public health, WHO’s Regional Offices for Africa and the Eastern Mediterranean have been working closely with Africa CDC under the Joint Emergency Action Plan (JEAP) framework to strengthen public health surveillance, promote regional cooperation, and address health challenges in Africa.

Source: Africa CDC

Africa

ASEA and UNECA sign agreement to strengthen development and integration of Africa’s financial markets

The African Securities Exchanges Association (ASEA) and the United Nations Economic Commission for Africa (UNECA) have signed a landmark memorandum of understanding (MoU) with the aim of strengthening collaboration and driving the development and integration of Africa's financial markets for sustainable growth. The recently signed MoU represents a significant milestone in the efforts to develop Africa's capital markets, enhance market capacity, boost investor confidence, facilitate peer-learning, and promote regional integration. The partnership will focus on key areas of cooperation, including conducting studies and research on financial market development and integration, providing training and capacity-building at national, sub-regional, and continental levels, and engaging in policy dialogues and advocacy for African countries. The signing ceremony, attended by Mr Thapelo Tsheole, president of ASEA and CEO of Botswana Stock Exchange, highlighted the importance of the partnership in creating an enabling environment for businesses, fostering investor confidence, and contributing to the overall economic growth and prosperity of the continent.

Source: UNECA

Africa

Should oil companies pay carbon tax?

As the world draws closer to cleaner energy sources beyond oil and gas amid the demand for a low carbon future; tax experts argue that African governments should involve oil companies in paying carbon tax to offset and compensate for environmental damages. A carbon tax is a specific excise tax – charged as a price per tonne of carbon, usually applied by weight or volume. The most common form of carbon taxation used worldwide is a tax focused on specific fossil fuels which are primarily oil, gas and coal and their derivative products. Often referred to as the fuels approach, this method applies a tax at the earliest opportunity based on the fossil fuel’s production chain: either at (or close to) extraction, if the jurisdiction in question is resource rich or upon importation into a jurisdiction. The African Tax Administration Forum (ATAF) in a published policy brief, Carbon Taxation in Africa argues that a carbon tax can encourage a positive change in consumer behaviour. This is to the extent that it provides an incentive for the consumer to acquire the least carbon-intensive product. That is because the tax would apply to a greater or lesser extent, depending on the carbon intensity of the product, resulting in a higher tax burden on more carbon-intensive products. 

Source: Monitor

Benin

AfDB Group extends EUR80-million loan for Port of Cotonou upgrading

The Board of Directors of the African Development Bank (AfDB) Group on Friday, 14 July 2023 approved a loan of EUR80-million to Benin to upgrade and extend the Port of Cotonou, one of the main maritime access points for landlocked countries in West Africa. The loan comprises EUR55-million from the AfDB and EUR25-million from Africa Growing Together Fund (AGTF), a special fund co-financed by the AfDB and the People’s Bank of China. Commenting on the approval, Joseph Ribeiro, deputy director general for West Africa at the AfDB, said the investment would strengthen the bank group’s operations in Benin. Ribeiro said: “The board of directors has approved a capital investment for Benin because the Port of Cotonou is a major source of revenue for the country. By expanding and renovating its infrastructure, the port’s capacity and operational efficiency should improve significantly.” The AfDB’s funding will enable the construction of a new container terminal and expand the port area to 20 hectares for bulk and miscellaneous cargo. The project also entails the creation of a central access point with automated gantries, a 14-hectare parking area for heavy-duty vehicles equipped with an integrated, digitised management system linked to the port’s database, and an integrated centre for faster foreign trade and freight processing. 

Source: AfDB

Botswana

IMF staff completes 2023 Article IV mission to Botswana

An International Monetary Fund (IMF) team, led by Mr Luc Eyraud, division chief in the IMF African Department and mission chief for Botswana, visited Gaborone, and held discussions on the 2023 Article IV consultation from 4-14 July 2023. At the conclusion of the discussions, Mr Eyraud issued the following statement, in part: “Following a strong recovery of almost 12% growth in 2021, Botswana’s economy grew by 5.8% in 2022, significantly above the long-run average of 4%. The recovery from the COVID-19 pandemic primarily reflects elevated mining production, but also robust manufacturing and construction. After peaking at 14.6% in August 2022, inflation has fallen gradually to 4.6% in June 2023, with lower oil prices delivering a steep decline in transport inflation. This has helped return inflation to the Bank of Botswana’s medium-term objective range of 3 – 6%. The budgetary position improved from a 2.4% of GDP deficit in FY2021 to a balanced budget in FY2022, mainly due to measured expenditure growth and higher mineral revenue. On the monetary policy side, the Bank of Botswana has maintained its policy rate at 2.65% since August 2022, after raising it by a combined 151 basis points between April and August 2022. Going forward, growth is projected to slow to 3.8% in 2023.”

Source: IMF

Burundi

IMF Executive Board approves a USD271-million 38-month arrangement under the ECF for Burundi

The Executive Board of the International Monetary Fund (IMF) approved a 38-month arrangement under the Extended Credit Facility (ECF) for Burundi with access of 130% of quota, equivalent to SDR200.2-million (about USD271-million). The decision allows an immediate disbursement of SDR46.2-million (about USD62.6-million). The arrangement will help Burundi address its protracted balance of payments needs, reduce debt vulnerabilities, and cope with the effects of recent domestic and external shocks. Domestic shocks, including delayed rainfall, limited availability of fertiliser, and outbreaks of livestock fevers have impacted Burundi’s primary sector. External imbalances have heightened, with a widening current account deficit, low foreign exchange (FX) reserves, and a still large parallel FX market premium. Higher spending needs, including on fertilisers, social programmes, and vaccines have deteriorated the fiscal path and raised fiscal financing needs. The ECF arrangement will cushion Burundi’s policy recalibration and economic adjustment, while supporting the authorities’ policy agenda. 

Source: IMF

Cabo Verde

Cabo Verde’s sustainable growth relies on economic diversification and resilience to external shocks

In 2022, Cabo Verde witnessed strong economic growth, led by the sectors of tourism, transport, and commerce. This surge in economic activity boosted the country's GDP and contributed to poverty reduction. However, the need for economic diversification and for resilience to external shocks, particularly climate related, posed significant threats to the sustainability of growth. These are the key issues tackled by the 2023 Country Economic Memorandum (CEM) and the 2023 Cabo Verde Economic Update, two new reports published by the World Bank. Cabo Verde has achieved significant social and economic progress since its independence in 1975, despite its geographical challenges and limited resources. However, there are still challenges that need to be addressed to ensure sustainable and inclusive long-term economic growth. Three priorities discussed in the CEM are (i) the importance of increasing firm-level productivity to generate more and better jobs; (ii) the need to reduce economic fragmentation by reduction transportation costs among islands; and (iii) the significance of building economic resilience to climate shocks. The Cabo Verde Economic Update report provides a clear understanding of the economic context and challenges faced by the country in the short term, facilitating the implementation of necessary reforms moving forward.

Source: World Bank

Djibouti

Afreximbank leads USD155-million strategic facility to Djibouti Ports and Free Zone Authority

The African Export-Import Bank (Afreximbank) has announced the disbursement of a USD120-million financing facility to Djibouti’s Great Horn Investment Holding (GHIH) for the execution of a series of development projects in the country’s Damerjog Industrial Development Free Trade Zone. The deal, announced after a meeting between Afreximbank president Professor Benedict Oramah and Omar Guelleh, President of Djibouti, on the sidelines of the Summit of Heads of State of the African Union, is part of a total facility amount of USD155-million for work on the free trade zone. The remaining USD35-million is being financed through Banque pour le Commerce et l’Industrie Mer Rouge (BCIMR) of Djibouti. Proceeds of the facility will be used for the completion of the Damerjog Oil Jetty, which will provide marine connectivity to the free trade zone, and for the construction of a 150 000m³ first storage depot/oil tank farm, as well as for other costs related to the projects. The deal, which is Afreximbank’s first in Djibouti in collaboration with GHIH and the government, is targeted at supporting the development of a trade-enabling infrastructure to assist Djibouti in achieving its plan to become a regional trans-shipment and logistics hub. 

Source: Afreximbank

The Gambia

World Bank Board approves additional USD4.5-million financing grant to strengthen essential health services in The Gambia

The World Bank Board has approved USD4.5-million additional financing from the International Development Association (IDA) to improve quality and utilisation of essential health services and strengthen the national system for public health preparedness in The Gambia. The board previously approved USD50-million to The Gambia Essential Health Services Strengthening Project. Further, in June 2023 a grant of USD4.33-million was also approved by the World Bank Health Emergency Preparedness and Response Program. The additional financing will support the construction of a National Food and Drug Quality Control Laboratory (NFDQCL) and capacity building to prevent and detect health emergencies including establishing an electronic case-based surveillance system to facilitate immediate reporting of priority diseases and events. Highlighting the significance of this financing Feyi Boroffice, World Bank resident representative, said: "This additional financing will play a vital role in strengthening The Gambia national system for public health preparedness."

Source: World Bank

Ghana

Ghana’s economy expected to recover its potential by 2025, says World Bank report

A combination of domestic imbalances and external shocks in 2022, led to macroeconomic challenges in Ghana. The year was marked by currency depreciation, rising inflation, and tumbling investor confidence. Pre-existing fiscal vulnerabilities such as mounting debt burden, a rigid budget weakened by high energy sector costs and chronically low public revenues, were deepened by difficult global economic conditions notes the World Bank’s latest Ghana Economic Update. The report titled Price Surge: Unraveling Inflation's Toll on Poverty and Food Security states that Ghana faces an extremely challenging outlook, and the economic situation is likely to remain challenging before it rebounds. Economic growth is projected to slow down to 1.5% in 2023 and remain depressed in 2024 at 2.8% but the economy is expected to recover to its potential growth by 2025. “As a result of efforts to address macroeconomic instability, corrective fiscal and monetary policies are expected to influence total demand and slow down non-extractive GDP growth”, said Pierre Laporte, World Bank country director for Ghana, Liberia, and Sierra Leone. 

Source: World Bank

Kenya

IMF Executive Board completed the fifth reviews of Kenya’s EFF and ECF arrangements and approves arrangement under the RSF

The Executive Board of the International Monetary Fund (IMF) has completed the fifth reviews under the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF) arrangements for Kenya. The board has also approved an extension of the EFF/ECF arrangements from the current 38 months to 48 months (through 1 April 2025) to allow sufficient time to implement the authorities’ reform agenda and realise the programme’s key objective and an augmentation of access amounting to 75% of quota (SDR407.1-million) over the extended programme duration for balance of payments support. The board’s decision allows for an immediate disbursement of SDR306.7-million (about USD415.4-million), bringing total disbursements under the arrangements so far to SDR1.51-billion (about USD2.04-billion). In completing the review, the executive board also approved modification of programme conditionalities, waivers of nonobservance of the continuous performance criteria on accumulation of external arrears and end-June 2023 tax revenue target in light of corrective measures taken by the authorities and waiver of applicability for all other end-June 2023 and continuous quantitative performance criteria. The executive board also approved Kenya’s request for an arrangement under the Resilience and Sustainability Facility (RSF) of SDR407.1-million (75% of quota; about USD551.4-million) to support Kenya’s ambitious efforts to build resilience to climate change. The RSF duration will coincide with the period remaining under the EFF/ECF arrangements, as extended.

Source: IMF

Kenya

Kenya to share tax data with 110 countries

Kenya will from next year start sharing taxpayer information automatically with at least 110 countries, marking the latest push in fighting cross-border tax evasion. Disclosures by the African Development Bank (AfDB) show that Kenya has committed to making the first exchange of taxpayer information by the end of next year alongside Tunisia and Ukraine. The move is seen as key to tackling tax evasion and inflows of dirty cash, boosting Kenya’s efforts of ramping up tax collections besides boosting the war on money laundering. Automated sharing of information is part of the Global Forum on Transparency and Exchange of Information for Tax Purposes that started six years ago. “Five more African countries are committed to implementing Automatic Exchange of Financial Account Information (AEOI) within the next three years. These are Uganda (2023), Kenya and Tunisia (2024) and Morocco and Rwanda (2025),” the AfDB says in the disclosures. Kenya has for years grappled with cases of money being illegally repatriated to other countries, denying the country the much needed cash to spur development projects.

Source: Business Daily Africa

Kenya / United States

US guarded on Kenya trade deal past AGOA expiry

The United States (US) is non-committal about when negotiations for a free trade deal with Kenya will be concluded despite Nairobi earlier saying the talks would be finalised by December. The US Trade representative Katherine Tai, who recently concluded her three-day tour in Nairobi, indicated that the US negotiators do not have a deadline for concluding talks or signing the proposed US-Kenya Strategic Trade and Investment Partnership (STIP). “In terms of signature and when will we conclude, our focus right now is on substance as opposed to setting an actual deadline,” Ms Tai said in a media briefing in Nairobi. “There is a strong motivation on both sides to continue to build trade and economic relationships through these STIP discussions. So, I am very encouraged with the engagement that we have had here and we will see how quickly we can move things forward.” The proposed trade deal, which does not have clauses on tariffs, is expected to shield Kenya in the event that the US Congress chooses not to renew the African Growth and Opportunity Act (AGOA), which gives countries in sub-Saharan Africa duty- and quota-free access to the American market, when it expires in 2025.

Source: Business Daily Africa

Liberia

AfDB and Government of Liberia discuss major road project

A delegation from the African Development Bank (AfDB) Group recently met senior government officials in Monrovia to discuss the Government of Liberia’s request for financing of a major highway along the country’s coastline. The proposed 444 kilometre (km) coastal highway, from Bassa County to Grand Kru County, is expected to deliver significant economic benefits for Liberia and promote regional integration with neighbouring countries. The visit by the bank followed a financing request from the Government of Liberia. The bank delegation was led by its country manager Mr Benedict Kanu, Mr Jean-Noel Ilboudo, the division manager in the Infrastructure Department and the bank’s executive director for Liberia, Ghana, The Gambia, Sierra Leone and Sudan Mr Rufus Darkotey. Liberia’s government was represented by the Minister for Finance and Development Planning, Samuel D. Tweah, Junior, and Minister of Public Works, Ruth Coker-Collins. During the meeting, both sides agreed to continue to engage in active dialogue with a view to design the highway and to ensure its successful implementation, once approved by the bank’s board of directors. 

Source: AfDB

Malawi

New Malawi Economic Update calls for urgent action to address macroeconomic imbalances and increase energy access

Malawi’s path towards achieving the goals of its long-term development vision, Malawi 2063, remains feasible but narrow, according to the latest World Bank Malawi Economic Monitor (MEM). This is because a prolonged macro-fiscal crisis, exacerbated by extreme weather events, a slow debt restructuring process, and delayed governance reforms have subdued economic growth. The new MEM says improvements in political commitment and investment, and reforms in the energy sector could help growth by pushing access to electricity above 50% by 2030. The MEM provides a bi-annual analysis of Malawi’s economic and structural development issues, and in this 17th edition, Powering Malawi’s Growth: Rapidly and Sustainably Increasing Energy Access shows that the economy has had a difficult start in 2023. Economic growth is expected to increase only slightly, reaching 1.4% in 2023, its trajectory driven by longstanding macroeconomic imbalances, an ongoing debt and balance-of-payments crisis, and the impacts of Tropical Cyclone Freddy, with the energy crisis only partially offset by the resumption of electricity generation at the Kapichira hydropower plant.

Source: World Bank

Mozambique / United Arab Emirates

Mozambique and the UAE negotiate creation of free trade area

Mozambique and the United Arab Emirates (UAE) are negotiating a Comprehensive Economic Partnership Agreement (CEPA), creating a free trade area for goods, services and investment, the UAE Embassy in Maputo has announced. In a statement, the Embassy of the UAE said that the two countries are working on the “removal of trade and investment barriers in a wide range of goods and services with a view to promoting non-petroleum bilateral trade between the two. For this purpose, the Embassy of the UAE in Mozambique has added advantages to economic partnerships through ongoing negotiations which could culminate in the coming months with the signing of the CEPA which covers several economic areas that have as a vision the establishment of a free trade area that attracts opportunities for access to markets for goods, services and investment between the parties,” the statement reads. 

Source: Club of Mozambique

Nigeria

Agency wants to produce lithium batteries locally

Nigeria’s National Agency for Science and Engineering Infrastructure (NASENI) wants to produce lithium batteries and provide the country with renewable energy solutions. NASENI’s executive vice chairman, Dr Bashir Gwandu has said that the agency was ready to partner with international companies. These companies would have to be willing to set up in Nigeria and start local production of renewable energy solutions, electric vehicles parts and “other capital goods that could create jobs and foreign exchange for the country.” Gwandu said the government is “vigorously open to partnership and investment with companies and institutions toward mass local production and domestication of lithium batteries. We are giving opportunities to partners to come and establish in Nigeria. It will be more attractive to companies that want to patronise our products. It will also help in domesticating these technologies.” On the production of lithium batteries, he said the agency was ready to partner with companies willing to establish their factories in Nigeria. The CEO of LEMI Technology, Xie Feng, expressed the company’s willingness to partner with NASENI through a memorandum of understanding (MoU) on renewable energy. 

Source: ESI Africa

Rwanda / Hungary

Rwanda, Hungary sign agreement to further nuclear know-how

Rwanda is looking to increase its nuclear expertise capabilities after the recent signing of an agreement between the East African country and Hungary. The agreement entails the training and educating of Rwandans in different fields, including the effective use of nuclear energy. The agreement was signed between the two countries on 16 July. This occurred during the official visit of Hungarian President Katalin Novák to Rwanda where she was hosted by President Paul Kagame. President Novák is the first Hungarian President to visit Rwanda. She said that her country is a doorway to the European Union (EU), just like Rwanda is a doorway to Africa. The two heads of state also signed a loan facility agreement on upgrading of the Karenge water treatment plant. At the 66th regular session of the general conference of the International Atomic Energy Agency (IAEA) in September 2022, the Rwandan government said it views nuclear science and technology as one of the necessary milestones to attain its Vision 2050. “It is aimed at citizen-centred prosperity and improving the quality of life for all where we have a target of achieving upper-middle income status by 2035 and high-income status by 2050.”

Source: ESI Africa

Uganda

Oil related-investments raise FDI inflows to UGX5.5-trillion

Oil-related activities have heightened in the last two years, after government and joint partners signed the Final Investment Decision in February last year. Foreign Direct Investment (FDI) increased by UGX1.55-trillion to UGX5.5-trillion between 2021 and 2022, the highest level ever, fostered by investments in greenfield oil projects. The UGX1.55-trillion investment, according to the United Nations Conference on Trade and Development (UNCTAD), was the biggest, across East Africa fuelled by injections in development of the Lake Albert oil field - a joint venture between China National Offshore Oil Corporation (CNOOC) and the Uganda National Oil Company (UNOC) for an estimated UGX23.7-trillion (USD6.5-billion). Other oil-related investments include the UGX12.8-trillion 1 440 kilometre (km) East African Crude Oil Pipeline, which will ship oil from the Lake Albert oil fields to Tanzania’s Tanga port for export. Uganda is estimated to have at least 6.5 billion barrels of oil in the Albert Graben region, of which 1.4 billion is recoverable. Over the next 25 years, oil is expected to earn Uganda UGX22.88-trillion annually, which is almost half of the current budget.

Source: Monitor

Uganda

Productive use of renewable energy roadmap for Uganda

Uganda has formally adopted a roadmap to scale up productive use of renewable energy in the country. The roadmap provides a market assessment which gives in-depth analysis of the potential, challenge and opportunities for productive use of renewable energy (PURE) in the Ugandan market. The roadmap, aligned with national government goals, shares country-specific action plans that can be implemented to scale PURE. Global Off-Grid Lighting Association (GOGLA), with financial support from the German Federal Ministry of Economic Cooperation and Development (BMZ) and the European Union (EU) through the international initiative Water and Energy for Food (WE4F) has led the development of PURE market assessments and roadmaps in Uganda, Rwanda, Kenya and Ethiopia. The report aims to inform policymakers, practitioners, and investors on the status and potential of solar energy for productive uses in Uganda. It does this by sharing: analysis of PURE products and companies in the market, an overview of PURE customer profiles, analysis of the demand, supply, and anticipated trends in productive use of solar energy, a review of current PURE business models, a review of the enabling environment, including policies, programmes and plans.

Source: ESI Africa

Zambia

IMF Executive Board concludes the 2023 Article IV consultation with Zambia and completes the first review under the ECF arrangement

The Executive Board of the International Monetary Fund (IMF) has completed the first review of the 38-month Extended Credit Facility (ECF) arrangement and the 2023 Article IV consultation with Zambia. The completion of the first ECF review allows for an immediate disbursement of SDR139.88-million (about USD189-million), bringing Zambia’s total disbursements under the arrangement to about USD374-million. Zambia’s ECF arrangement is for a total of SDR978.2-million (100% of quota) or about USD1.3-billion at the time of programme approval on 31 August 2022. It seeks to support Zambia’s homegrown economic reform plan that seeks to restore macroeconomic stability and foster higher, more resilient, and more inclusive growth. On 22 June 2023, the Zambian authorities reached an agreement with the Official Creditor Committee (OCC) on a debt treatment that is in line with the fund programme parameters. This agreement puts Zambia on the path to debt sustainability, provided the financing assurances necessary for the executive board review to be completed, and also clears the way for the authorities to focus on the growth-enhancing reforms that will create jobs and prosperity for Zambia.

Source: IMF