issue 522 | 12 Nov 2023
Africa / BrazilBrazil-Africa Forum 2023: AfDB Group calls for increased Brazilian investment in infrastructure and logistics
An African Development Bank (AfDB) delegation to the 11th edition of the Brazil-Africa Forum has stressed the need to strengthen collaboration with Brazil through the multi-partner Lusophone Compact, to attract more private capital and co-financing for private sector transactions. The delegation from the continent’s premier multilateral development bank attended the forum, held in São Paulo, Brazil from 31 October to 1 November, under the theme Investment and Development: Brazil and Africa Engaging with the World. The Lusophone Compact was launched in December 2018 as a cooperative platform for investment between the AfDB Group, Portugal, and six African countries - Angola, Cabo Verde, Equatorial Guinea, Guinea-Bissau, Mozambique, and São Tomé and Príncipe, known as the PALOPS. Its objective is to attract substantial investment, design bespoke solutions for small island states and unlock private sector development and trade in, and among, the Lusophone nations.
East AfricaBuilding a blue economy strategy for the EAC
The blue economy is a vital area of activity for the East African Community (EAC), as it offers opportunities for sustainable economic, social and ecological development and growth. To harness its full potential, the EAC needs a coherent and coordinated strategy and action plan that aligns with the African Union’s strategy, the national priorities and aspirations of its partner states, along with the other overlapping regional commitments of the latter. The office for Eastern Africa of the United Nations Economic Commission for Africa (ECA) and the EAC organised a two-day regional consultation meeting in Mombasa, Kenya, from 30-31 October 2023, to discuss the roadmap for an EAC Blue Economy Strategy and Action Plan. The meeting brought together experts, policymakers, and stakeholders from the EAC partner states. The objectives of this regional meeting were to acquire a baseline understanding of the blue economy in the EAC, including its challenges and opportunities, agree on how to harmonise existing continental, regional and national blue economy strategies with the EAC Blue Economy Strategy, ensure coherence, complementarity, and synergy; note the global best practices in blue economy strategy and implementation; and attain a common regional understanding of how to proceed with the formulation of the EAC Blue Economy Strategy and Action Plan, including the vision, goals, objectives, indicators, and implementation mechanisms.
East AfricaECA and IGAD join forces to promote sustainable tourism in eastern Africa
The office for Eastern Africa of the United Nations Economic Commission for Africa (ECA) and the Intergovernmental Authority on Development (IGAD) jointly organised a three-day meeting in Mombasa, Kenya from 24 to 27 October 2023 to discuss the development of a Sustainable Tourism Master Plan for the IGAD region. The main objective of the meeting was to develop a regional framework for sustainable tourism development that will foster socio-economic development, poverty reduction and regional integration in the IGAD member states. The tourism sector is a strategic sector at the national, regional and continental levels in Africa, as it is one of the five services priority sectors under the African Continental Free Trade Area. According to Ms Mama Keita, director of the ECA in Eastern Africa, the tourism sector accounts for an average of 8.7% of GDP in the eastern Africa region and has a huge potential to create more income, jobs and opportunities for the people. Ms Keita praised the constructive work done by tourism experts from the IGAD member states and said that the roadmap agreed upon will guide the preparation and validation of the Sustainable Tourism Master Plan for the region.
Cabo VerdeIMF reaches staff-level agreement with Cabo Verde on a RSF and the third review under the ECF arrangement
An International Monetary Fund (IMF) team led by Mr Justin Tyson held meetings with the Cabo Verdean authorities from 24 October to 2 November 2023, for the third review under the Extended Credit Facility (ECF) arrangement. Access under the existing ECF is 190% of quota (SDR45.03-million, approximately USD63.3-million) and completion of the third review, subject to approval by the IMF Executive Board, will make available SDR4.5-million (approximately USD6.3-million). The team also discussed the authorities’ request to access financial resources under the Resilience and Sustainability Facility (RSF) in the amount of 100% of quota (SDR23.69-million, approximately USD31.69-million). At the conclusion of the mission, Mr Tyson issued the following statement, in part: “The IMF team and the Cabo Verdean authorities reached staff-level agreement on the policies needed to complete the third review under the ECF-supported programme as well as on the request to access financial resources from the RSF. The IMF’s Executive Board will discuss these requests in the coming weeks. Despite a challenging global environment, Cabo Verde’s economy rebounded strongly in 2021 and 2022, the economy is expected to grow 4.5% in 2023, and the near-term outlook is favourable despite some downside risks.”
GhanaADF approves USD102.59-million grant for government’s Fiscal Consolidation and Economic Recovery Program
The Board of Directors of the African Development Bank (AfDB) Group has approved a USD102.59-million grant in budget support to the Ghana Government’s Fiscal Consolidation and Economic Recovery Program, aimed at boosting recent fiscal consolidation and economic recovery reforms. The programme is expected to enhance fiscal consolidation measures in the West African nation and contribute to increasing resource mobilisation intended to create more financial capacity for the government’s investments in the country. In addition, it will strengthen the financial sector to attract private investment into critical sectors of the economy, including the agricultural sector. Overall, the programme will facilitate the government’s economic recovery reforms through enhanced public finance, increased productivity, and job creation. The grant, from the African Development Fund (ADF), the group’s concessionary lending arm, was approved on Tuesday, 31 October. The ADF provides concessional funding for projects and programme that promote economic and social development in 37 eligible African countries. The programme will be implemented over a two-year period from 2023 to 2024 by the Ghanaian Government in close collaboration with the AfDB.
GhanaGhana to fight e-commerce and digital fraud in support of the AfCFTA
The Ministry of Communications and Digitalisation has observed that many logistics companies and digital platform operators are flouting the law by facilitating courier services without complying with the country’s licensing regulations. Section 10 of the Postal and Courier Services Regulatory Commission Act, Act 649, makes goods delivery and courier activities in Ghana a regulated service; and sections 47 to 49 of the Electronic Transactions Act, Act 772 also specify minimum compliance standards for e-commerce operators. The ministry has therefore directed all such companies and the couriers/drivers operating on their networks to register with the Postal and Courier Services Regulatory Commission (PCSRC) for an e-certificate and for an African Continental Free Trade Area (AfCFTA) Number by 19 December 2023. After this date, no new goods delivery and courier service provider can register with any digital platform or delivery service without a valid PSCRC e-certificate. Existing operators must comply by 24 January 2024.
Source: Ministry of Communications and Digitalisation
KenyaExchange secures KES905-million for digital carbon financing
The Carbon Value Exchange (CAVEX) has secured KES905.15-million (USD6-million) in seed capital to scale its digital carbon financing platform. The transaction was led by E3 Capital, a Nairobi-based investor in early-stage businesses and FSD Africa Investment to help CAVEX's existing and future portfolio companies access carbon markets. The platform will connect buyers of carbon credits with projects from the Global South by leveraging digital technology to enable validation of the integrity of project data, introduce visibility and traceability in project activities, and increase pricing transparency. “This investment will help us prove how digital technology can open up climate finance for many people, communities and projects that are displacing or removing carbon,” said Nick Hughes, the CEO and co-founder of CAVEX. Carbon credit markets have gained some momentum across the world, and now roughly 23% of global emissions are covered by some form of carbon credit pricing, with the value of traded carbon dioxide permits at 475 million carbon credits in 2022, according to the World Bank. The bank has attributed the decline in carbon credits issued by 22% from the year before to the relatively adverse macroeconomic environment, which impacted the performance of businesses globally.
Source: Business Daily
KenyaKenya National Assembly directs BAK to prepare crypto bill
On 6 November, the Blockchain Association of Kenya (BAK) announced that the National Assembly’s Departmental Committee on Finance and National Planning has directed it to prepare the first draft of a Virtual Asset Service Provider’s Bill for regulating crypto in Kenya. BAK appeared before the committee on 31 October to discuss digital asset regulation. The agenda of the discussion was to develop a collaborative approach to how BAK can work with the national government in developing favourable policies for digital assets. The BAK team presented to the committee some crucial areas to be kept in focus to establish a sound crypto regulatory framework. The areas included licensing, taxation, consumer protection, anti-money laundering and counter-terrorism financing, and implementation of a regulatory sandbox. To underscore the necessity of a clear regulatory framework in the country, BAK pointed to Kenya’s global adoption index rank of 19 (by analysis firm Chainalysis) and its USD19-billion crypto volume between July 2021 and June 2022. In response, the parliamentary committee requested BAK to draft and submit a bill for digital assets regulations within two months.
Source: Forbes India
Kenya / EthiopiaElectricity imports from Ethiopia halve on drought
Kenya is importing just half of the contracted electricity capacity from Ethiopia due to a biting drought that has reduced dam water levels in the Horn of Africa country. Energy Cabinet Secretary Davis Chirchir has revealed that Kenya has been tapping 100 MW of electricity from Ethiopia, which is only half the capacity of 200 MW that the two countries inked last year. “Drought has had a major effect on the cost of electricity. Even Ethiopia, which we contracted 200 MW has only been supplying 100 MW because of the drought that they have been experiencing,” he said. The minister made the disclosure in his submissions at the ongoing National Dialogue Committee hearings on government interventions that could lower the cost of living. Mr Chirchir added that the Masinga Dam, which is owned by KenGen, has not supplied any electricity to the grid for the past two months due to low hydrology caused by drought. Masinga is one of the 16 hydroelectricity power dams supplying electricity to the grid in Kenya and is part of the Seven Forks Scheme Dams along the Tana River. “We have gotten zero megawatts from Masinga in the last two months because the dam has no water.
Source: Business Daily
MauritiusSDGs: Mauritius-UN partnership consolidated through the signing of new UNSDCF
The United Nations Sustainable Development Cooperation Framework (UNSDCF) for the period 2024-2028, aiming to support the transformative journey of Mauritius towards achieving the Sustainable Development Goals (SDGs), was recently signed by Mauritius and the UN, at the Château Mon Désir, Maritim Resort & Spa Hotel in Balaclava. Signatories were the Attorney General, Minister of Foreign Affairs, Regional Integration and International Trade, Mr Maneesh Gobin, and the UN Resident Coordinator for Mauritius, Ms Lisa Simrique Singh. The new Cooperation Framework sets out the collective response of the UN System to support the Republic of Mauritius in addressing its national priorities and creating a more inclusive, resilient, and sustainable future around the themes of People, Planet and Prosperity.
Source: Government of Mauritius
NamibiaBank of Namibia introduces new rules to facilitate home purchases
In a bid to reduce financial risks associated with purchasing multiple homes through mortgage bonds, the Bank of Namibia, acting on the recommendation of the Minister of Finance and Public Enterprises, has implemented amended regulations on loan-to-value (LTV) ratios. These new rules, effective from 31 October 2023, provide greater flexibility for prospective homeowners, the central bank announced in a statement on Wednesday. Replacing the previous Regulations on Restrictions on LTV ratios established in 2019, the updated regulations focus on the future LTV ratio. This ratio signifies the amount of money a banking institution lends to a borrower to buy a property about the property’s price or value, along with the deposit required from the borrower. According to the central bank, one of the key changes involves a relaxation of LTV ratios for additional property purchases. Now, a mortgage loan for a second residential property no longer necessitates any deposit. For third and subsequent residential properties, a 10% deposit is required. These alterations were prompted by recent shifts in economic conditions and the Namibian property market. In response, banking institutions are now required to establish comprehensive policies and procedures to ensure compliance with the loan-to-value restrictions outlined in the new regulations.
Source: Namibia Economist
NamibiaPaving the way forward: Legal mechanisms to promote a successful GH2 economy in Namibia
On 28 September 2023, ENS | Namibia (incorporated as Lorentz Angula Inc.) and Rand Merchant Bank (RMB) hosted their second joint event as part of the Green Hydrogen Series, which was inaugurated in January 2023. The panel comprised an all-female lineup, including, the RMB moderator, Ms Reem El Sherif, and the panellists, Ms Magano Katoole (Ministry of Justice legislative drafter), Ms Stefanie Busch (ENS) and Ms Elizabeth Ipangelwa (policy advisor). The discussion centred around legal gaps in Namibia’s current energy regime and the legislative tools that could be deployed in order to pave the way towards pioneering a formidable green hydrogen (GH2) economy in Namibia. A key question raised by the panel was whether current laws are suitable for optimum renewable energy generation. Ms Katoole indicated that the answer was mixed, and involved both ‘yes and no’. She mentioned that there are currently no dedicated laws for green hydrogen from production to exportation. Additionally, while the Environmental Management Act, 2007 is a workable piece of legislation, it is not wholly ideal for the green hydrogen industry for offtake purposes. There is also a need for the swift promulgation of the draft Synthetic Fuels Act.
Republic of the CongoAfDB's 2023-2028 Country Strategy Paper sets developing sustainable infrastructure and improving economic governance as key priorities
On 3 November 2023 in Abidjan, the Board of Directors of the African Development Bank (AfDB) Group approved the 2023-2028 Country Strategy Paper for the Republic of the Congo. Over the next five years, the institution will provide support to the country to develop sustainable infrastructure that will help strengthen value chains with high growth potential and improve human capital. In addition, it will underpin financial and economic governance, thereby enhancing the business climate in the Republic of the Congo. The AfDB Group’s support will be concentrated in four different sectors: agriculture, transport, financial and economic governance, and human capital. An emphasis will also be placed on cross-sector issues, such as employment, climate change and gender. There will be an additional focus on improving efficiency, be it in the implementation of operations, increasing the synergy between human capital reforms and business climate reforms, or private sector development within agricultural value chains.
Republic of the CongoIMF staff concludes visit to the Republic of the Congo
An International Monetary Fund (IMF) mission led by Roland Kpodar visited the Republic of the Congo from 19 October to 2 November to hold discussions under the fourth review of the authorities’ programme supported by the IMF Extended Credit Facility (ECF) approved by the IMF Executive Board on 21 January 2022. At the end of the mission, Mr Kpodar issued the following statement, in part: “The IMF team welcome the authorities’ renewed commitment to implement policies needed to maintain macroeconomic stability, promote inclusive and sustainable growth, and to safeguard fiscal and debt sustainability. Economic growth is on track to reach 4% in 2023. Production in the oil sector recovered in the first semester after three years of contraction, thanks to a new oil field, an uptick in investments, and the resolution of technical issues that were impeding production. Private investment and consumption are gaining momentum, driven by a robust performance in agriculture, food manufacturing, utilities, construction, and services. Economic growth is expected to strengthen and reach an average 4% in the medium-term, with the non-oil sector being the main driver of growth.”
Sierra LeoneIMF staff reaches staff-level agreement with Sierra Leone on the eighth review of the ECF
An International Monetary Fund (IMF) team, led by Mr Christian Saborowski, visited Freetown from 25 September to 6 October 2023, for the eighth review of Sierra Leone’s financial and economic programme supported by the Extended Credit Facility (ECF) arrangement, approved on 30 November 2018. Subject to approval by IMF Management and the Executive Board in the coming weeks, the completion of the eighth and final review under the ECF will make available SDR15.5-million (about USD20.4-million), bringing the total IMF financial support under the arrangement to SDR124.4-million (about USD163.5-million). At the conclusion of the mission, Mr Saborowski issued the following statement, in part: “Multiple external shocks and loose macroeconomic policies in recent years contributed to macroeconomic imbalances, including high inflation, a build‑up of debt, and low reserves. Increases in the cost of living worsened already high levels of food insecurity and made the poor more vulnerable. Macroeconomic conditions are expected to stabilise over the medium term, predicated on continued efforts to tighten macroeconomic policies and achieve debt sustainability.”
TanzaniaIMF staff reaches staff-level agreement with Tanzania on second review of the ECF
A staff team from the International Monetary Fund (IMF) led by Charalambos Tsangarides, IMF mission chief for Tanzania, held meetings in Dodoma and Dar es Salaam from 23 October to 3 November 2023, to discuss progress on reforms and the authorities’ policy priorities in the context of the second review of Tanzania’s 40-month programme under the Extended Credit Facility (ECF). The arrangement was approved by the IMF Executive Board on 18 July 2022, for a total amount of SDR795.58-million (USD1.046-billion at that time). At the conclusion of the mission, Mr Tsangarides issued the following statement, in part: “I am pleased to announce that we have reached a staff-level agreement on economic policies to conclude the second review of Tanzania’s economic programme under the ECF arrangement. Staff-level agreement is subject to approval of IMF Management and the Executive Board in the coming weeks. Upon completion of the executive board review, Tanzania will have access to SDR113.37-million (about USD150-million), bringing the total IMF financial support under the arrangement to SDR342.1-million (about USD452.7-million). The authorities’ reform programme aims to strengthen the economic recovery, safeguard macro-financial stability, and support a resilient, sustainable, and inclusive growth.”
TanzaniaTanzania to ban raw lithium exports from 2024
Tanzania has announced plans to ban the export of unprocessed lithium, effective from 31 May 2024. The government outlined the export license process, stating that mining companies are required to establish in-country refining facilities alongside their respective operations. Export licences will thereafter be issued once the value of mined minerals increases by at least 5%. The ban aims to maximise value addition across the country’s critical mineral industry through the development of downstream infrastructure, thereby consolidating Tanzania’s position as a prominent player in global supply chains. The development comes at a time when Tanzania’s lithium mining industry is experiencing a surge in foreign investments as the demand for critical minerals such as lithium increases rapidly in global markets.
Source: Energy Capital & Power
TogoAfDB and government agree to accelerate implementation of 2021-2026 Country Strategy Paper
The Government of Togo and the African Development Bank (AfDB) have agreed to increase the pace of ongoing projects on the structural transformation and diversification of the country's economy, while strengthening the AfDB's engagement in Togo. This strategy was reaffirmed during a dissemination workshop held from 23-27 October in Lomé on the mid-term review of the partnership between Togo and the AfDB between 2021-2026 and the performance review of the project portfolio. The two parties used this event to assess the socio-economic situation of the country, development challenges and priorities, and the implementation status of projects in Togo financed by the AfDB. The workshop involved other stakeholders, such as civil society, development partners and the private sector, to ensure the inclusiveness of the exercise. Outputs from the event included a decision to maintain the priority areas of the 2021-2026 Country Strategy Paper for the remaining period, from 2024 to 2026. These include the development of inclusive growth hubs and of social-inclusion policies, along with the strengthening of financial and sectoral governance.
UgandaThe Petroleum Supply (Amendment) Bill, 2023: Anti-competitive or not?
The Petroleum Supply (Amendment) Bill, 2023 that seeks to amend the Petroleum Supply Act, 2003 was tabled before Parliament for the first reading on 31 October 2023. The Bill aims to secure the supply of petroleum products; improve petroleum product stock holding levels within the country; and contribute to the competitiveness of consumer and retail pump prices. To achieve these objectives, the Bill seeks to designate the Uganda National Oil Company Limited (UNOC) as the main importer and supplier of petroleum products destined for the Ugandan market. All licensed oil marketing companies will be required to purchase their petroleum products from UNOC or any other person nominated by the Minister of Energy and Mineral Development to import and supply petroleum products in Uganda. In a press release dated 31 October 2023, the Ministry of Energy and Mineral Development highlighted the supply chain disruptions faced in the country that stem from changes to the existing importation structure. The ministry also stated that with the amendment to the Petroleum Supply Act, it would maintain the overall responsibility of regulating the importation of petroleum products into Uganda.