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Africa Business in Brief


issue 514 | 17 Sep 2023


WHO, WIPO, WTO renew commitment to support integrated solutions to global health challenges

At their third meeting since the onset of the COVID-19 pandemic, the directors general of the World Health Organization (WHO), the World Intellectual Property Organization (WIPO) and the World Trade Organization (WTO) agreed to shift the focus of trilateral cooperation from the response to the COVID-19 pandemic to increasing and broadening support for more effective and sustainable use of flexibilities in the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to increase access to health technologies and to be better prepared for future pandemics. While acknowledging the critical role of intellectual property (IP) to incentivise innovation, WHO director general Dr Tedros Adhanom Ghebreyesus, WIPO director general Daren Tang and WTO director general Dr Ngozi Okonjo-Iweala recognised the challenges faced by members to fully implement at domestic level the wide range of available options to secure timely and equitable access to health technologies. This included the TRIPS COVID-19 Vaccines Decision adopted at the WTO's 12th Ministerial Conference in June 2022 as well as flexibilities generally available under the TRIPS Agreement. They agreed that trilateral cooperation should address these challenges by intensifying activities to provide tailored support and information to members, including through joint technical seminars for delegates handling health, trade and IP issues.

Source: WTO


AfDB unveils new initiative to cushion farmers from climate change effects

The African Development Bank (AfDB) has unveiled the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA). The initiative is aimed at insulating countries against catastrophic weather-related events. The facility, which will be hosted by the bank, expands its pioneering Africa Disaster Risk Insurance Program into a facility that will develop insurance to help African countries, specifically, their agriculture sectors, prepare for, adapt and build resilience against adverse effects of climate change such as flooding and drought. AfDB Group president Akinwumi Adesina announced the new adaptation facility on Tuesday, 6 September, at a side event held at the Africa Climate Summit in Nairobi. He said it would raise an initial USD1-billion of concessionary high-risk capital and grants to catalyse the development and uptake of insurance solutions to help countries, businesses and communities adapt to climate change. “This is our effort to scale up support to insure countries, households against extreme weather patterns,” Adesina told attendees at the event. ACRIFA will also extend credit insurance to investment portfolios related to climate, agri-food system and enterprise development, as well as engage primary insurers across Africa to ensure business opportunities flow through them to continental and international re-insurers. In addition, it will support national governments to more efficiently manage climate disasters.

Source: AfDB


African leaders commit to pursue green and inclusive growth – Nairobi Declaration

African leaders ended the three-day Africa Climate Summit with a call to the global community to act with urgency in reducing emissions, honour a commitment to provide USD100-billion in annual climate finance to developing countries, and swiftly operationalise the loss and damage facility agreed at last year’s COP27 in Sharm El Sheikh, Egypt. On their part, African leaders committed to developing and implementing policies, regulations and incentives aimed at attracting local, regional and global investment in green growth and inclusive economies. In their African Leaders Nairobi Declaration on Climate Change and Call to Action, they undertook, among other aims, to: further accelerate the operationalisation of the Africa Continental Free Trade Area; advance green industrialisation across the continent by prioritising energy-intense industries to trigger a virtuous cycle of renewable energy deployment and economic activity, with a special emphasis on adding value to Africa’s natural endowments; and redouble efforts to boost agricultural yields through sustainable agricultural practices, to enhance food security while minimising negative environmental impacts. 

Source: AfDB


EIB announces USD50-million support for climate finance in Africa at summit

The European Investment Bank (EIB) has announced USD50-million of support to climate finance through partnerships with two equity funds operating in Africa at the recently concluded Africa Climate Summit. A commitment of USD40-million was to Acre Impact Capital’s Export Finance Fund I to support renewable power, health, food and water scarcity; sustainable cities; and green transport. Export finance delivers long-term debt financing guaranteed by official export credit agencies (ECAs). This allows project sponsors to significantly reduce the cost of debt by both obtaining very attractive funding on the ECA-backed financing and obtaining long-term financing. The event also showcased confirmed support of USD10-million to Camco Management Limited which invests in clean energy deployment across Africa. The company is working to respond to the climate challenge by supporting a just energy transition with localised impacts through the deployment of fully financed on-site renewable energy and energy efficiency initiatives among local commercial and industrial businesses, with a particular focus on the small and medium-sized enterprise segment. 

Source: ESI Africa


G20 admits the AU as permanent member

The African Union (AU) was made a permanent member of the Group of 20 (G20), comprising the world's richest and most powerful countries, Indian Prime Minister Narendra Modi said at the bloc's recent summit in New Delhi. The AU, a continental body of 55 member states, now has the same status as the European Union - the only regional bloc with a full membership. Its previous designation was "invited international organisation". Modi, in his opening remarks at the summit, invited the AU, represented by chairperson Azali Assoumani, to take a seat at the table of G20 leaders as a permanent member. "Honoured to welcome the [AU] as a permanent member of the G20 family. This will strengthen the G20 and also strengthen the voice of the Global South," said a message on Modi's official account on social media platform X, formerly known as Twitter. The move was proposed by Modi in June. Reuters earlier cited the draft declaration admitting the AU as a permanent member. 

Source: Reuters


New Country Policy and Institutional Assessment Report for Africa points to areas of improvement amid challenges

Despite new international challenges, poor harvests, and the price shocks of 2022, many countries in sub-Saharan Africa saw improvements in their social inclusion policies and their structural policies – both of which are reflected in the latest Country Policy and Institutional Assessment (CPIA) scores for 39 countries in the region. The CPIA is an annual diagnostic tool for countries eligible for financing from the International Development Association (IDA), the part of the World Bank that helps the world’s poorest countries. The 2023 report provides an assessment of the quality of policies and institutions in all 39 IDA-eligible countries in sub-Saharan Africa for calendar year 2022. Countries are rated on a scale of 1 (low) to 6 (high) across 16 dimensions reflecting four areas: economic management, structural policies, policies for social inclusion and equity, and public sector management and institutions. The average overall CPIA scores in sub-Saharan Africa remained stable at 3.1. While many countries made improvements in “policies for social inclusion” and “structural policies”, these improvements were offset however by stagnation in “economic management” and “public sector management and institutions.”

Source: World Bank

Africa / Germany / United States

AfDB’s SEFA welcomes USD50-million in new commitments from Germany and the US at Africa Climate Summit

The African Development Bank's (AfDB) Sustainable Energy Fund for Africa (SEFA) welcomed approximately USD50-million in new funding contributions from Germany and the United States (US). The contributions will serve to boost its position as one of the continent’s leading climate finance facilities. The funding was announced on Tuesday, 5 September, at a high-level event organised by SEFA during the Africa Climate Summit held in Nairobi, Kenya. The event showcased SEFA's role in catalysing climate action in the energy sector and accelerating Africa's just energy transition. Germany, SEFA’s largest donor, underscored its strong support for climate action in Africa and its positive experience working with SEFA, with the announcement of a new EUR40-million contribution. “With SEFA, the [AfDB] is demonstrating its commitment to seizing the opportunities presented by the energy transition and renewable energy deployment, said Dr Bärbel Kofler, Parliamentary State Secretary in the German Federal Ministry for Economic Cooperation and Development (BMZ). USAID Power Africa, reflecting on its long-standing commitment to promoting a low-carbon and climate-resilient energy sector in Africa, re-affirmed its strong partnership with SEFA.

Source: AfDB


IMF staff concludes visit to Benin

An International Monetary Fund (IMF) team, led by Mr Constant Lonkeng, visited Cotonou from 6-12 September 2023, to assess recent economic developments and gauge progress in commitments under Benin’s Fund-supported programme. The IMF Executive Board approved, on 8 July 2022, a blended arrangement under the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF) for Benin in the amount of USD638-million, equivalent of 391% of quota, to help meet pressing financing needs and support the country’s progress towards the Sustainable Development Goals. The second review of the programme was successfully completed in May 2023. At the end of the visit, Mr Lonkeng issued the following statement in part: “After strong GDP print in the first half of the year (6.3%), the Beninese economy faces headwinds from the Niger border closure amid regional sanctions following the recent coup. Pump price hikes in Nigeria have translated into significant increases in the price of smuggled gasoline in Benin (by about 60%), exerting pressure on inflation. Following policy accommodation in recent years, fiscal consolidation is underway, underpinned by tax collection. Budget support to Benin from development partners is expected to be larger than programmed this year, which could unlock additional spending under the EFF/ECF in these challenging times.”

Source: IMF

Central African Republic

ADF provides USD5-million to support capacity building for public officials and improve the management of public finances

The Board of Directors of the African Development Fund (ADF) approved a donation of USD5.3-million to the Central African Republic in Abidjan on 6 September 2023 to contribute to the implementation of the Resource Mobilisation and Transparency of Development Policies Support Project. The support comes from Pillar 1 of the ADF’s Transition Support Facility, the African Development Bank (AfDB) Group’s concessional financing window. It will support capacity building for mobilising and managing internal resources, and developing and implementing more efficient, transparent public development policies. The project’s first component aims to support the tax authorities and debt department to modernise their working methods and tools. The goal is to increase resource mobilisation and make the administrative authorities more efficient in order to increase the tax base, but also to build capacity to develop a policy on debt and effective management of public debt. Its second component will focus on capacity building in external control bodies to create suitable conditions to reduce the risks of corruption, in particular through the adoption of an anti-corruption law. 

Source: AfDB


Djibouti welcomes its first-ever wind farm for clean energy

The President of Djibouti, Ismail Omar Guelleh, carried out the landmark inauguration of Djibouti’s first-ever wind farm on 10 September 2023. The 60 MW clean energy plant boosts overall energy capacity by 50% while averting 252 500 tonnes of CO2 emissions, equivalent to the pollution from over 55 000 buses. The inauguration advances the president’s stated ambition to make the nation of 1.1 million people the first in Africa to rely entirely on renewable energy sources for electricity by 2035. The Red Sea Power (RSP) wind farm, located near Lake Goubet, will spur energy security and independence, import substitution, industrialisation, job creation and economic stability in line with United Nations’ Sustainable Development Goals. Until now, Djibouti has been entirely reliant on power generated from imported fossil fuels, as well as hydrogen-generated power imported from neighbouring Ethiopia. Less than half of the 123 MW of domestic installed capacity is operational due to outdated diesel plants. As the first significant international investment in the energy sector in Djibouti, the USD122-million wind farm project creates the country’s first independent power producer and sets a template for further private investment. 

Source: ESI Africa


AfDB approves USD104-million in funding to improve power supply in eastern Ethiopia

The Board of Directors of the African Development Bank (AfDB) Group has approved USD104-million in financing to the Ethiopian Government for the financing of a transmission project to improve power supply in the eastern part of the country. The financing includes a USD52-million grant from the African Development Fund (ADF), the AfDB Group’s concessional lending arm, and a USD52-million soft loan drawn from the Republic of Korea’s Economic Development Cooperation Fund under the Korea – Africa Energy Investment Framework Agreement. The agreement was signed in June 2021 between the AfDB and the Government of the Republic of Korea with the main objective of contributing to sustainable economic and social development and promoting economic cooperation in African member countries. Batchi Baldeh, the director of Power Systems Development of the bank, said the project would improve access to clean, reliable electricity supply by increasing the capacity of the power grid in eastern Ethiopia. He emphasised that “Improving the power grid in the east of the country will address brownouts and load shedding in the region, connect more industries and households to the electricity network, and eliminate the use of diesel generators, which currently provide a basic electricity supply”. 

Source: AfDB


IFC and the Ethiopian Capital Market Authority partner increase local-currency financing in Ethiopia

The International Finance Corporation (IFC) and the Ethiopian Capital Market Authority (ECMA) have announced a programme to support the growth of the country's domestic capital markets and increase access to local currency finance. Under the four-year Ethiopia Capital Market Development Project, IFC will work with ECMA and other key stakeholders to develop capital market regulations, increase the efficiency of the government securities market, develop the domestic institutional and retail investor base, and increase the supply and issuance of capital market transactions. Capital markets in Ethiopia have the potential to support the financing of key development sectors including housing, infrastructure, agribusiness, small businesses and climate mitigation and adaptation activities. "A local currency bond market with strong participation from domestic institutional and retail investors has a significant impact on government finance and serves as an alternative source of finance for corporate entities. ECMA will work with all partners and stakeholders to develop a well-regulated capital market that will help actualise a functioning and burgeoning bond market in Ethiopia," said Dr Brook Taye, director general, ECMA.

Source: Africa Business Communities


Health, pensions, and electricity sectors are key to fiscal consolidation in Guinea-Bissau

Strengthening the pension system, improving health sector outcomes, and enhancing the performance of the electricity sector are key to consolidating fiscal space in Guinea-Bissau and accelerating development. These are some of highlights of the Public Expenditure Review (PER), a new report launched by the World Bank. The PER for Guinea-Bissau examines the efficiency and effectiveness of public expenditure and revenue mobilisation and identifies opportunities to increase the country’s fiscal space. Several recommendations emerge from the report, including the establishment of an integrated pension system that covers both public and private sector workers; improving transparency and governance in the pensions sector; enhancing budget preparation and execution in the health sector, as well as financial information technology systems, health care delivery, and human resource management; and ensuring the financial sustainability of the electricity sector while improving governance and modernising its infrastructures.

Source: World Bank


New payslip pain for workers as Treasury plans tax relief axe

Salaried employees' payslips are set to shrink further, if a proposal by the Treasury to eliminate reliefs on pay-as-you-earn (PAYE) taxes is adopted. The Treasury in its newly published medium-term revenue strategy plans to review the current tax reliefs on earnings from employment to maximise collections. “Though the tax incentives provide governments with a policy tool to influence taxpayers’ behaviour, they come at a cost in terms of forgone tax revenue. In addition, tax incentives increase the complexity of the tax system and reduce its effectiveness as an instrument to promote equity. Studies have shown that incentives may not necessarily be effective in influencing the taxpayer’s behaviour,” the Treasury said. Currently, salaried workers enjoy two types of tax reliefs on PAYE, including a KES2 400 monthly personal relief for all resident individuals which is meant to lighten the tax burden on the taxpayer. Additionally, salaried workers who have paid insurance premiums for life, health, or education policies for themselves, spouses, or children enjoy a relief of 15% paid up to a maximum of KES60 000 per year. The education and health policy must however have a maturity of at least 10 years to qualify for the tax relief. 

Source: Business Daily Africa


ADF grants over USD6-million to strengthen the private sector and the management of public finances

The Board of Directors of the African Development Fund (ADF) approved a grant of USD6.73-million to Mozambique in Abidjan on 13 September 2023 to support the implementation of the Institutional Support Project for Business Environment and Governance. The aim of the project is to increase resilience through institutional capacity building to support private-sector development and the management of public finances. Its first component is aimed at improving the business environment, including through capacity strengthening of the delivery unit at the Ministry of the Economy and Finance, which oversees implementation of reforms under the Program for Economic Acceleration. The project will help to streamline the administrative formalities imposed on businesses and investors and foster a more conducive environment for investment and business creation. It will also support the assessment of existing tax incentives and develop a conducive framework to maximise the appeal of investment, and help to attract climate-smart investments. The second component focuses on increasing the efficiency, accountability and transparency of public spending. This involves strengthening internal and external control functions and making these an absolute priority to guarantee transparency and accountability in the use of public funds.

Source: AfDB


Afreximbank signs MoU to support the development of Nigeria’s Anambra State, foresees USD200-million debt financing

The African Export-Import Bank (Afreximbank) has signed a memorandum of understanding (MoU) with Nigeria’s Anambra State Government to collaborate on state development efforts through the provision of project preparation and advisory services, including a potential debt financing programme of up to USD200-million. Under the terms of the MoU signed by Mrs Kanayo Awani, Afreximbank’s executive vice president, Intra-African Trade Bank, and Prof. Charles Soludo, Governor of Anambra State, during the Anambra Investment Summit, Afreximbank and the state government will jointly prioritise strategic projects for preparation and funding, collaboratively evaluating each project to formulate a time-bound work programme for effective execution. Afreximbank will work with the state government to establish bankability for key projects, including the Ikenga Mixed-Use Industrial City, the Anambra Export Emporium and the Akwaihedi Unubi Uga Automotive Industrial Park, as well as any other project agreed upon by the parties. Afreximbank and the Anambra State Government will also conclude all prerequisite actions necessary for securing a financing programme of up to USD200-million from Afreximbank and its affiliated entities for the projects contingent upon conclusion of a substantive agreement between the parties.

Source: Afreximbank

Nigeria / United Arab Emirates

Emirates Airlines to resume immediate flights to Nigeria

Emirates Airlines will resume immediate flight schedules to Nigeria and lift a visa ban on Nigerian travellers, following a meeting between the leaders of the two countries, the Nigerian Presidency said recently. President Bola Ahmed Tinubu and President of the United Arab Emirates (UAE) Mohamed bin Zayed Al Nahyan recently met in Abu Dhabi to lift the visa ban and agree on new investments into Africa's largest economy. President Tinubu stopped in Abu Dhabi on his way from the Group of 20 summit in India, where he wooed investors to Nigeria. Last month President Tinubu said he wanted an immediate resolution to the disagreements with Emirates Airlines and visa issues by the Arab country. The UAE stopped issuing visas to Nigerians last year after Dubai's Emirates suspended flights due to an inability to repatriate funds from Nigeria. Etihad Airlines had also stopped flights to Nigeria. "As negotiated between the two heads of state, this immediate restoration of flight activity, through these two airlines and between the two countries, does not involve any immediate payment by the Nigerian Government," the president's spokesperson Ajuri Ngelale said in a statement. Nigeria, Africa's top oil producer, faces dollar shortages which has made it difficult for some foreign airlines that sold tickets in the Nigerian naira currency to get money out of the country.

Source: Reuters


The Office of the Registrar General sets hard deadline for disclosing beneficial ownership information

In the wake of the implementation of law No. 007/2021 of 05/02/2021 governing companies, as amended, all companies and other business entities/arrangements incorporated/registered in Rwanda are required to submit their beneficial ownership information to the Office of the Registrar General. The deadline for compliance with this statutory requirement was initially set for 31 August 2023 but has since been extended by the Registrar General to 31 October 2023. Failure to comply with the extended due date will result in penalties under the applicable laws.

Source: ENS


IMF staff concludes visit to Senegal

A team from the International Monetary Fund (IMF), led by Mr Edward Gemayel, conducted a mission from 31 August to 7 September 2023, to take stock of recent economic developments and update growth and budget forecasts, and discuss the draft 2024 budget. At the conclusion of the mission, Mr Gemayel issued the following statement in part: “The tense socio-political situation took a toll on activity in the commerce and services sectors in the first half of this year, leading to a downward revision of GDP growth projection to 4.1%. Year-on-year inflation fell to 5.7% in July, but new inflationary pressures from some food staples (rice, onion, sugar) have recently emerged, and forecasts for average inflation in 2023 have been revised to 6.1%. Budget execution through end-June was broadly in line with programme objectives. However, meeting the end-December programme targets would require additional efforts in revenue collection. Despite the delay in the start of hydrocarbon production until the second half of next year, macroeconomic prospects remain favourable. In 2024, real GDP growth is projected to 8.8%, boosted by the start of oil and gas production. 

Source: IMF


BoU licenses first Islamic Banking financial institution

The Bank of Uganda (BoU) has licensed the first Islamic Banking financial institution, ending a wait of more than 20 years. The move means that Ugandans will now operate a hybrid banking system through which customers will be able to access both conventional and Islamic Banking products. Salaam Bank, which already operates in Kenya, Somalia, and Djibouti, has 12 months within which it is expected to start operating. It will be regulated by the BoU as a tier one financial institution, which brings the number of commercial banks in Uganda to 26. Speaking at the recent licence handover in Kampala, the BoU Deputy Governor Michael Atingi-Ego, warned that there were risks associated with any new venture, noting that: “I am confident that Salaam Bank has the expertise and resources to manage these risks”. Islamic Banking is governed by principles of Sharia law and forbids payment or receipt of interest, decrees that profits and losses are shared and restricts financial institutions from using derivatives because they are riddled with excessive uncertainty. Dr Atingi-Ego said because Islamic Banking prohibits charging of interest, “this makes it a more sustainable form of banking and it is well-suited to the needs of many Ugandans.” 

Source: Monitor