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issue 519 | 24 Oct 2023

Africa

AfDB Group chief economist urges Nordic and Irish entrepreneurs to make Africa their business and investment destination

The African Development Bank (AfDB) Group’s chief economist, Professor Kevin Chika Urama, has urged entrepreneurs in Nordic countries and Ireland to make Africa their business and investment destination. Professor Urama, on an official visit to Denmark, Finland, Ireland, Norway and Sweden from 25-29 September, said Africa’s population boom – projected to make it the world’s most populous region by the end of the century, with up to 3.4 billion people – offers huge business and investment opportunities to the rest of the world. “With a population of more than 1.3 billion [currently], a youthful population of 600 million, rapid urbanisation and rising incomes of the middle class, Africa is the leading emerging market frontier,” said Professor Urama, who was accompanied on the trip by Ms Mette Knudsen, executive director for the Nordic-Indian-Irish Constituency at the AfDB. According to Urama, agriculture and energy in Africa offer huge opportunities for trade and investment with Nordic countries, as the size of the food and agriculture market in Africa will rise to USD1-trillion by 2030 from USD300-billion in 2022. Africa has 65% of the world’s uncultivated arable land with vast potential for sustainable agriculture and agribusiness. 

Source: AfDB

Africa

ECA and Transsion sign agreement to foster and accelerate digital transformation in Africa

The United Nations Economic Commission for Africa (ECA) and Shenzhen Transsion Holdings Co., Ltd. (Transsion) have signed a landmark memorandum of understanding (MoU) to foster and accelerate digital transformation in Africa. The partnership is founded on the complementary expertise and strengths of both parties, with a primary focus on fostering collaboration in research and analytical studies. The shared goal of the two institutions is to provide valuable insights and policy recommendations in key areas of the digital ecosystem in Africa, including electronic commerce, financial technology, digital payments, financial inclusion, digital trade and more. Both organisations intend to harness the power of emerging technologies, big data, innovative tools and platforms to achieve these objectives. Acting director of the Technology, Climate Change, and Natural Resource Management Division at ECA, Nassim Oulmane appreciated Transsion's pivotal role in enhancing access to affordable and high-quality digital technology for African citizens and commended Transsion's proactive involvement with various stakeholders, including ECA, in driving Africa's digital transformation forward. 

Source: ECA

Africa

International day for disaster risk reduction – why climate insurance matters!

Climate change is one of the most significant challenges facing Africa today, with severe implications for the continent's food security, livelihoods, and economic growth. Many African governments, struggling to cope with the COVID-19 pandemic recovery, rising food and fuel prices, and impacts of the war in Ukraine on their food import-dependent economies, have limited resources for climate disaster risk – and often act after disaster strikes. The African Development Bank (AfDB) believes climate risk management, through instruments like risk insurance or contingent credit lines that help governments secure funds in advance of a disaster, can help African countries provide more timely disaster relief and a quicker, more sustainable path to recovery, enhancing the resilience of their climate-vulnerable sectors and communities. Against this background, the AfDB teamed up with the African Risk Capacity Group to establish the Africa Disaster Risk Financing Programme in 2018. Building on the success of the programme, the AfDB announced the Africa Climate Risk Insurance Facility for Adaptation at the Africa Climate Summit last month. This facility aims to raise USD1-billion in concessional, high-risk capital and grants to stimulate the development and uptake of climate risk insurance.

Source: AfDB

Africa

More than USD16.8-million for clean cooking in sub-Saharan Africa

The Modern Cooking Facility for Africa (MCFA) will launch its second funding round in response to significant demand for financial support from private sector companies working within the clean cooking and renewable energy sector in sub-Saharan Africa. This new funding round will open at the end of November, supporting access to and scale-up of high-technology clean cooking solutions in the Democratic Republic of the Congo, Kenya, Malawi, Mozambique, Tanzania, Zambia and Zimbabwe. The new MCFA funding round will be divided into two funding windows combining results-based financing and catalytic grant financing. The total available funding for both windows will be up to EUR16-million (nearly USD16.9-million) and the individual ticket sizes will vary from EUR500 000 to EUR2.5-million (around USD527 000 to USD2.6-million). “Building on an external evaluation of the first MCFA funding round, we are seeking to offer more opportunities for clean cooking companies by making a number of changes to the eligibility criteria and streamlining the application process. This will make MCFA funding more accessible to earlier-stage companies,” commented Ash Sharma, vice president at Nefco and head of MCFA.

Source: ESI Africa

Africa

Renewable energy jobs drop in Africa

Investments in Africa’s renewable energy sector over the last five years have failed to deliver a growth in employment in the industry, deviating from trends globally. The latest annual Renewable Energy and Jobs report published by the International Labour Organization and the International Renewable Energy Agency (IRENA) reveals that in 2022, only 320 000 Africans were employed by the sector, a 0.6% drop from 2018. This is despite a consistent growth in the installed capacity of renewable energy as well as more investments over the last five years, signalling a failure of the green transition to create more jobs in Africa. Data from IRENA shows that installed capacity of renewable energy in Africa increased by 18% to 63 034 MW in 2022, while investments in the sector rose 44% in five years to USD13-billion as of 2021, but jobs dropped from the 322 000 recorded in 2018. Globally, jobs in the renewable energy sector have been rising consistently with increased investment and installed capacity, which justifies continued investments and transition to cleaner energy sources. 

Source: The EastAfrican

Southern Africa

SADC Heads of Anti-Corruption Agencies resolve to strengthen cooperation in the fight against corruption and transnational organised crime

The Heads of Anti-Corruption Agencies in the Southern African Development Community (SADC) convened in Swakopmund, Namibia, from 11 to 13 October 2023 to discuss and share experiences on emerging issues and trends in corruption in the region. During the opening session of the workshop, the director of the SADC Organ on Politics, Defence and Security Affairs, Professor Kula Ismael Theletsane, highlighted that corruption undermines the rule of law, erodes public trust which in turn can hamper peace and security in the region. He observed that the SADC region has the necessary frameworks and legal instruments to facilitate cooperation between the member states in the fight against corruption which includes the SADC Protocol Against Corruption, the Protocol on Mutual Legal Assistance, and the SADC Integrated Strategy to Combat Transnational Organised Crime.

Source: SADC

Angola

FEDA invests in Cabinda Oil Refinery, supporting Angola’s energy independence and the reduction of carbon emissions

The Fund for Export Development in Africa (FEDA), the African Export–Import Bank’s (Afreximbank) impact investment subsidiary, has announced an investment into Cabinda Oil Refinery, an integrated modular oil refining platform in Angola being developed by Gemcorp Holdings in joint venture with Sonangol. Cabinda Oil Refinery is a 60 000 barrel per day (bpd) high conversion refinery, with a first phase of 30 000 bpd, in the Cabinda Province of Angola, one of Africa’s largest crude oil producers. The refinery is targeted at processing Angola’s crude oil into a variety of petroleum products including diesel, gasoline, naphtha, and jet fuel for both local and export consumption. Upon completion, Cabinda Oil Refinery will double Angola’s refining capacity, enabling the country and the wider region to gradually reduce their reliance on the importation of refined petroleum products. With this investment, FEDA confirms its commitment to support Africa’s industrialisation and economic development, while ensuring environmental sustainability. The transaction will support Angola’s energy transition by enabling the production of cleaner, high value refined products to cater for up to 20% of the domestic demand, as well reducing emissions by decreasing the need for transportation for both the exportation of locally produced crude oil and the importation of refined products.  

Source: Afreximbank

Botswana

First PPP in solar power, Bobonong and Shakawe power stations commissioned

Large-scale production of solar energy is now a reality in Botswana. This southern African country has just installed two solar photovoltaic power plants. The largest, with a capacity of 3 MWp, is located in Bobonong, a sub-district in the east of the country. The other, with a capacity of 1 MWp, is located in the North-West district, in the town of Shakawe. Both plants are expected to generate 10 000 MWh per year in the first year of operation. The plants were built under a public-private partnership (PPP) signed in 2020 between the Botswana Government and Sturdee Energy, a company based in Johannesburg, South Africa. Sturdee Energy, an independent power producer, then enlisted the services of German company Soventix to install the panels, inverters and other equipment for the solar power plant. The electricity it produces is sold to the state-owned Botswana Power Corporation under a 25-year contract. The two plants required an investment of USD5-million, which Sturdee financed with the support of ResponsAbility, an investment company based in Zurich, Switzerland.

Source: AFRIK 21

Comoros

Comoros Country Economic Memorandum: Boosting growth by supporting investment and productivity growth

The first Country Economic Memorandum for Comoros, published on Tuesday, 17 October by the World Bank, notes that Comoros is at the crossroads to redefine its future and become an upper-middle income country by 2050, but this would require implementing an ambitious reform agenda that focuses on increasing productivity and private investment. This publication assesses the country’s economic performance and proposes priority reforms geared toward boosting growth and embracing new and greater opportunities. The report outlines pathways to unleash Comoros’ growth potential and reverse its persistent slow economic growth trajectory and provides sectoral analyses to shed light on unexploited resources such as tourism and fisheries and international trade opportunities. “Comoros has been on a low-growth path during the four past decades and has not achieved goals related to poverty reduction and inclusiveness. The effects of the COVID-19 pandemic and climate change have crystalised the need for significant policy change to accelerate inclusive growth in Comoros,” explains Steve Loris Gui-Diby, senior country economist and lead author of the report.  

Source: World Bank

The Gambia / Senegal

24-km road co-financed by AfDB and the EU game-changer for livelihoods in The Gambia

Gambian President Adama Barrow has commissioned the 24-km Senegambia Bridge access road co-financed by the African Development Bank (AfDB) and the European Union (EU), saying it is a critical link that will help boost trade between Gambians and the rest of Africa. The AfDB Group president Akinwumi Adesina toured the road during a recent visit to the West African nation. He expressed satisfaction that the bridge has increased economic integration and trade between Senegal, The Gambia, and other countries in the region. "With the completion of the construction works here, we are confident that regional trade will be enhanced and goods and services passing through this access road will reach more distant countries with ease and on time," President Barrow said during the inauguration held on Monday, 2 October. He said the Trans-Gambia Corridor Project, which included the construction of the Senegambia Bridge, had eliminated delays and difficulties in ferry crossings that had previously occurred between Yelli-Tenda and Bamba Tenda.  It used to take at least two days to get on a ferry to cross The Gambia River. Now it takes 10 minutes for vehicles to cross the river across the bridge. 

Source: AfDB

Kenya

Kenya Country Economic Memorandum: Seizing Kenya’s Services Momentum

The latest Kenya Country Economic Memorandum - Seizing Kenya’s Services Momentum, analyses the key drivers and constraints to boosting inclusive long-term growth and provides policy options for reforms. While growth in Kenya has been solid, there is a need to increase productivity and investment to create much-needed jobs. This report looks specifically at how including the services sector – a sector that is growing and becoming increasingly more traded – in Kenya’s growth strategy can contribute to long-term growth and job creation, including in non-services sectors. Policy actions are needed to seize on the potential of the services sector. This report provides directions for policies to enable long-term inclusive growth – for the benefit of both services and non-services sectors. 

Source: World Bank

Kenya

NSE investors reap KES25-billion from small-cap stocks

Stocks of Nairobi Securities Exchange (NSE) firms valued below KES4-billion dominate the list of counters that have created paper money for investors this year, defying the prevailing plunge in the equities. Fifteen of the 24 firms that have gained in value since the start of the year include Kapchorua, Kenya Orchards, Eveready, HF Group and Flame Tree in a market where top five large stocks – Safaricom, Equity, Co-operative Bank, KCB, and East African Breweries – have shed value since January. Only Umeme, BK Group and CIC with market valuations above KES4-billion are in the list of the 15 stocks whose prices have gained by more than 10% since January, showing small stocks have built paper wealth for investors than larger ones. Analysts say large stocks have been impacted by their large exposure to foreign investors in an environment where the shilling has shed more than a fifth (21.2%) of its value against the dollar since January and interest rates have been rising in developed markets. KCB Investment Bank says real returns for investors, adjusted for currency depreciation and inflation, have been hard to come by in the current environment, leaving investors with “very limited options to invest in as most counters will generate real negative returns.” 

Source: Business Daily

Mauritius / Egypt

Fostering collaboration in renewable energy: Virtual signing of MoU between Mauritius and Egypt

A memorandum of understanding (MoU), aiming to develop a cooperation framework between the Ministry of Energy and Public Utilities of Mauritius and the Ministry of Electricity and Renewable Energy of Egypt, in the field of electricity and renewable energy, was signed on Monday, 16 October in the presence of the Attorney General, Minister of Foreign Affairs, Regional Integration and International Trade, Mr Maneesh Gobin, at the Newton Tower, Port Louis. In his address, Minister of Energy and Public Utilities, Mr Georges Pierre Lesjongard recalled that the first bilateral agreement signed with Egypt was in 1972. Since, he affirmed, Mauritius has been benefitting from numerous projects including the provision of short training courses to upgrade the know-how and skills of government officials in the energy and water sectors. The minister moreover indicated that the power sector needs to be metamorphosed into a low-carbon one to reduce Mauritius’ susceptibility to external shocks such as the surging fossil fuel prices. In the same vein, he elaborated on the country’s target to achieve 60% of its renewable energy production in the national energy mix as well as to phase out coal utilisation by 2030. Mr Lesjongard also proposed a joint collaboration to tap into the hydrogen energy.

Source: Government of Mauritius

Nigeria

Government covers USD176-million electricity tariff shortfall

The Nigeria Government has subsidised its electricity sector by around USD176-million in the second quarter of 2023 to cover tariff shortfall funding. The Nigerian Electricity Regulatory Commission (NERC) said in its recently released quarterly report that “in the absence of cost-reflective tariffs, the government undertakes to cover the resultant gap (between the cost-reflective and allowed tariff) in the form of tariff shortfall funding.” This funding is applied to the Nigerian Bulk Electricity Trading plc invoices that are to be paid by electricity distribution companies (DisCos), of which there are 11. “The amount to be covered by the DisCos is based on the allowed tariff determined by the NERC and set out as their Minimum Remittance Obligation in the periodic Tariff Orders issued by the NERC.” The NERC report said that it is important to note that due to the absence of cost-reflective tariffs across all DisCos, the government incurred a subsidy obligation of NGN135.23-billion (around USD176.8-million) in 2023/Q2. “This is an increase of NGN99.21-billion (USD129.7-million) compared to the NGN36.02-billion (USD47.1-million) incurred in 2023/Q1.” 

Source: ESI Africa

Nigeria

Partnership to tackle challenges in electricity supply industry

The Energy Transition Office in Nigeria and the African Development Bank (AfDB) will partner on an intervention programme to address issues in the country’s electricity sector. The Energy Transition Office announced on social media on Friday, 13 October, that it had met with the international AfDB mission to Nigeria led by Henry Paul Batchi Baldeh, AfDB director for Power Systems Development to discuss a USD1-billion power policy intervention. The intervention is aimed at: fostering policy to address the Nigerian Electricity Supply Industry liquidity issues; addressing metering and other infrastructure shortfalls; de-bottlenecking the tariff-related investment constraints; and catalysing the integration of renewable energy into Nigeria’s energy mix. The parties also discussed a clean cooking initiative and the proposed roll out of an electric bus mass transit. “We are excited about this partnership and we are looking forward to greater collaboration with the bank,” the Energy Transition Office said. In September, Nigeria’s Minister of Power, Adebayo Adelabu, confirmed that the AfDB will fund the Nigerian Electrification Project to the tune of USD250-million. “AfDB also confirmed readiness to disburse a previously approved USD250-million fund for the Nigeria Electrification Project under the Rural Electrification Agency and extended support to Northern Nigerian states through the USD20-billion 10 000 MW Northern Africa Desert to Power fund.”

Source: ESI Africa

South Sudan

World Bank partners with South Sudan to strengthen central bank's institutional capacity

A new, first of its kind project in South Sudan will support the institutional strengthening of the country’s central bank, the Bank of South Sudan (BoSS). The Strengthening South Sudan's Financial Sector Project, financed by a USD18-million International Development Association grant, aims to enhance BoSS's institutional capacity, recognising the importance of a strong central bank in addressing financial sector challenges, transforming the banking sector, and promoting private sector-led growth. Implemented by the BoSS over a five-year period, the project is crucial given the weaknesses and vulnerabilities in South Sudan's banking sector, which require a strong and a capable regulator that can fulfil its supervisory and enforcement mandates and support a well-functioning financial sector. “Through its comprehensive approach, this project aims to bolster the central bank by enhancing its institutional delivery capacity, strengthening its technical and operational capabilities, and fostering a culture of accountability. By addressing the emerging weaknesses in the financial sector, these concerted efforts will fortify and stabilise the sector, charting a strategic course for its future and ushering in the necessary reforms,” said Ousmane Dione, World Bank country director for Eritrea, Ethiopia, South Sudan, and Sudan.

Source: World Bank

Tanzania

BoT issues new regulations for Bureau de Change

The Bank of Tanzania (BoT) has issued new Foreign Exchange (Bureau de Change) Regulations, which revoke the Foreign Exchange (Bureau de Change) Regulations, 2019. The Central Bank Governor, Emmanuel Tutuba, said in a statement that the new Regulations have been issued under the Foreign Exchange Act through Government Notice No. 730 of 2023, published in the Government Gazette on 6 October 2023. “The Regulations have introduced, among other things, three classes of Bureau de Change licences, which are classes A, B, and C,” he said. He said Class A Bureau de Change shall be foreign or locally owned and allowed to open branches anywhere in the country. He said a foreign-owned class A Bureau de Change shall be required to have a minimum capital of TZS1-billion, while locally owned class A Bureau de Change shall be required to have a minimum capital of TZS500-million. He further said class B Bureau de Change is a Bureau de Change with local shareholding and shall not be allowed to open branches. It shall be required to maintain a minimum capital of TZS200-million. Regarding class C Bureau de Change, the BoT governor said they can be established in any hotel of a rank of three stars and shall be issued exclusively to a hotel or hotel owner. They shall not be required to maintain minimum capital.

Source: The Citizen

Uganda

Fintechs facing hurdles with managing e-waste

In an effort to offer cutting edge financial services to the unbanked, financial technology (Fintechs) companies are grappling to align their operations with environmental, social, and governance goals. This comes at a time when Africa, according to the African Development Bank (AfDB), has become the most vulnerable continent to climate change. “The proliferation of Fintech services generates electronic waste, including discarded mobile phones and outdated hardware, which poses environmental hazards,” the Financial Technologies Services Providers’ Association (FITSPA Uganda), notes in the Fintech Fund Feasibility Study. FITSPA also notes that the energy-intensive nature of Fintechs, such as mobile phones, data centres, and bases for internet stations, consumes significant energy resources and puts strain on the energy infrastructure, which contribute to increased carbon emissions, exacerbating climate change concerns. The study further notes that credit guarantee programmes need to encourage Fintechs to adopt e-waste disposal and recycling policies, which are crucial to reducing environmental damage and fostering a circular economy. There are at least 24 financial technology companies operating in Uganda, according to data from the Bank of Uganda.  

Source: Monitor

Zimbabwe

Zimbabwe ranks among world's top diamond producers

Zimbabwe ranks as the seventh-biggest diamond producer in the world with an annual output of over 4 million carats worth USD420-million, state-run Zimbabwe Broadcasting Corporation news has reported, citing the latest production statistics by the Kimberley Process Certification Scheme (KPCS). In terms of diamond output, the Southern African country was only behind Botswana, Russia, Angola, Canada, South Africa and Namibia, according to the KPCS, a regulator of trade and production of diamonds globally. Zimbabwe is aiming to produce 7 million carats of diamonds this year, and the sector is targeting an annual revenue of USD1-billion. The Zimbabwean Government expects the mining sector to reach a USD12-billion market value by the end of this year.

Source: Xinhua