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issue 527 | 17 Dec 2023

Africa

A breakthrough for African vaccine manufacturing

The Africa Centres for Disease Control and Prevention (Africa CDC) has welcomed the announcement from the Global Vaccine Alliance Board for the establishment of the African Vaccine Manufacturing Accelerator (AVMA). The AVMA is a financing mechanism aimed at creating a sustainable vaccine manufacturing industry in Africa and will make up to USD1-billion available to support vaccine manufacturing in Africa. In 2021, the African Union Heads of States and Governments established the Partnerships for African Vaccine Manufacturing (PAVM) under the Africa CDC. The goal of the PAVM is to enable the African vaccine manufacturing industry to develop, produce, and supply over 60% of the total vaccine doses required on the continent by 2040. This is up from less than 1% today, with interim goals of 10% by 2025 and 30% by 2030. The collaboration has seen several vaccine manufacturing projects taking shape, and others are in the works to guarantee self-reliance in Africa should any health emergency or outbreak hit the continent.

Source: Africa CDC

Africa

Africa Visa Openness Index 2023: Progress in visa openness in Africa to ease cross border travel, boost trade, investment and regional integration

Africa is making strides in its visa openness policies boding well for cross border travel, ease of movement, and trade in 2024 and beyond. The Africa Visa Openness Index 2023, published recently, reveals much progress since the seventh edition of the report was published in December 2022. The visa openness achieved its highest score ever in 2023, surpassing levels last seen prior to the COVID-19 pandemic. The Africa Visa Openness Index measures the extent to which African countries are open to visitors from other African countries. Over the period 2020-21, massive border closures to curb the spread of COVID-19, affected land and air travel, with additional restrictions due to screening measures, bans on gatherings, quarantines and such, causing stagnation in 2022. In 2023, data from the report shows that 50 countries improved or maintained their 2022 score, with only four countries scoring lower. Since the first report was published in 2016, 36 countries have improved their score on the index. Forty-two) countries extend visa-free entry to citizens from at least five other African countries, while 33 countries do so to citizens of at least 10 countries. Four countries - up from three last year - have eliminated all visa requirements for African travellers. They are Rwanda, Benin, The Gambia, and Seychelles.

Source: AfDB

Africa

COP28: AfDB, international partners commit to climate resilient debt clauses

The African Development Bank (AfDB) Group has announced its adoption of climate resilient debt clauses (CRDCs), joining major creditors and international development banks at a 2023 United Nations Climate Change Conference (COP28) session organised by the United Kingdom (UK), Barbados and the InterAmerican Development Bank under the auspices of the Bridgetown Initiative. Borrowing nations will get a debt payment respite up to two years when disasters strike. Seventy-three countries worldwide, including many of the most climate vulnerable, now urge all creditors to adopt urgently CRDCs terms to provide financial security against accelerating climate impacts. “We now have five multilateral development banks on board,” said UK Minister of State for International Development and Africa Andrew Mitchell. “I look forward to how other multilateral development banks will match this offer next year,” Mitchell added. AfDB president Akinwumi Adesina announced the AfDB Group will begin incorporating CRDCs into future sovereign lending in 2024, starting with the African Development Fund, its concessional arm.

Source: AfDB

Africa / United Kingdom

COP28: UK commits GBP7.4-million additional funding to AfDB’s Africa Disaster Risk Financing Programme

The United Kingdom’s (UK) Foreign, Commonwealth and Development Office has announced nearly USD10-million in additional funding to the African Development Bank’s (AfDB) programme assisting African countries to strengthen resilience and enhance their response to climate shocks. The financial commitment of GBP7.4-million (USD9.63-million) for the Multi-Donor Trust Fund of the Africa Disaster Risk Financing Programme will bolster sovereign drought insurance protection, with a particular focus on Somalia, over the next three years. The announcement comes after officials from the UK and AfDB met on the sidelines of the 2023 United Nations Climate Change Conference (COP28) in Dubai. "Somalia faces one of the worst humanitarian crises in the world, with the devastating effects of climate change hitting the most vulnerable the hardest. Extreme weather can be catastrophic – and it [is] vital that Somalian communities are protected and prepared," said UK Minister of State for International Development and Africa, Andrew Mitchell.

Source: AfDB

East Africa

Complaints about NTBs still stands at 43.75% in the regional bloc – EAC

The East African Community (EAC) Secretariat has said it still has unresolved complaints of the non-tariff barriers (NTBs) standing at 43.75% by June 2023, which still affects the follow-up trade in the regional bloc. The NTBs pose a major problem for traders and producers, as they can reduce profits and limit market access. NTBs include issues that can hinder trading effectively such as discriminatory requirements for special licences and permits, excessive paperwork, complicated customs procedures, and bureaucratic delays at borders. “A significant number of NTB complaints were addressed (56.25%) and resolved within the given timeframe. However, a notable portion of complaints, specifically (43.75%) were still in progress by the end of June 2023," the EAC said in a press statement. The EAC secretariat said a recent EAC Regional Meeting Committee report (2023) estimated the direct costs of NTBs at USD16.7-million and total trade impact at USD94.9-million decreasing trade by an average of 58%. However, on the other hand in the press statement, the EAC said since 2017, it has resolved 89.5% of the reported NTBs (EAC Time Bound Programme report, 2023). 

Source: Monitor

West Africa

AfDB signs EUR70-million financing agreement with BOAD to strengthen support for the private sector in West Africa

The African Development Bank (AfDB) Group and the West African Development Bank (BOAD) signed an agreement on granting a EUR70-million line of credit to strengthen BOAD’s support to the private sector in the West African Economic and Monetary Union (WAEMU), which comprises eight countries in the West African franc zone. The agreement was signed in Lomé on 8 December 2023, after it was approved by the AfDB Group’s Board of Directors in December 2021 with a 10-year maturity. The project will also benefit from joint funding from an Italian public organisation, Cassa Depositi e Prestiti, which is providing EUR60-million, and the Development Finance Institute Canada, which is contributing EUR20-million. Wilfrid Abiola, AfDB’s representative in Togo, and Moustapha Ben-Barka, vice-president of BOAD in charge of Financing and Investment, signed the agreement on behalf of their respective institutions. The AfDB will support BOAD in its strategy of providing its member states with the medium- and long-term resources they need for their development. The line of credit will also strengthen the resilience of the private sector, which is the main driver for economic growth and development in the WAEMU zone.

Source: AfDB

Benin

Benin can create opportunities for a just energy transition and green inclusive growth: World Bank report

While high growth over the past decade has helped Benin reduce poverty, the country’s development gains are threatened by the impact of climate shocks, according to the new Country Climate and Development Report (CCDR) released on Thursday, 7 December 2023. Bold actions are needed to promote sustainable and inclusive growth, seizing opportunities for greater forest and land management, resilient urban infrastructure, and energy transition to achieve universal access to electricity. Benin has amongst the lowest greenhouse gas emissions globally, yet it remains one of the most vulnerable countries to climate change, ranking 152 out of 181 countries for extreme climate vulnerability. Floods are increasingly severe and pose significant challenges to the inadequate water supply, sanitation, and waste collection systems. In addition to increased deforestation, the country's 125 km of coastline is suffering from severe coastal erosion, which is likely to worsen if nothing is done. “The issue raised by the report is how to reconcile development with the challenge of climate change in order to protect the poor and vulnerable," said Nathalie Picarelli, World Bank Senior Economist, and principal author of the report.

Source: World Bank

Botswana

Bank of Botswana, ECA, and Frontclear strive to create a dynamic interbank money market

The United Nations Economic Commission for Africa (ECA) in collaboration with Bank of Botswana and Frontclear have launched a Money Market Diagnostic Framework (MMDF) to boost the country’s financial system. The MMDF provides critical insights for the holistic development of the money and interbank market, while identifying impediments and making sequential recommendations. The framework was launched at a workshop organised by the ECA, Bank of Botswana and Frontclear. The Bank of Botswana and Frontclear signed a memorandum of understanding, reflecting a shared commitment to developing the country’s money market, including a more participatory interbank market and secondary bond market. Speaking at the launch, Kealeboga Masalila, Bank of Botswana Deputy Governor, noted that a stable and inclusive money market was a prerequisite to increasing depth in local currency bond markets. Mr Masalila acknowledged the role of interbank lending as the nucleus of the money market, where banks borrow and lend to each other using financial instruments such as repurchase agreements (repos) and hedge balance sheet risks through derivatives.

Source: ECA

Burundi

AfDB presents health infrastructure strategy for Africa

The Burundian Minister of Public Health and AIDS Prevention and the African Development Bank’s (AfDB) office in Burundi met in Bujumbura on 27 October with managers of health infrastructure and sectoral partners in the country to work on the AfDB Group’s Strategy for Quality Health Infrastructure in Africa 2020-2030. “The [AfDB] Group’s Strategy for Quality Health Infrastructure in Africa 2020-2030 aims to develop the infrastructure needed for high-quality care for people in Africa, thus limiting the need for medical evacuations. This strategy is one of the knowledge products that the Bank has developed based on the lessons learned from the COVID-19 pandemic,” explained Jean-Claude Nsabimana, a specialist in the social sector at AfDB’s Country Office in Burundi. The COVID-19 pandemic showed that investments in high-quality infrastructure in African countries, including Burundi, were still not enough to fill the gaps and build robust, high-performance health systems, continued Mr Nsabimana. The budgets allocated to the health sector fall short of covering the massive investments needed to develop pharmaceutical infrastructure, manufacture vaccines, and diagnose and treat diseases on the continent, he said.

Source: AfDB

Burundi / Tanzania

AfDB approves USD696.41-million of financing for Burundi and Tanzania to build 650 km of rail infrastructure to develop the Central Corridor network

The Board of Directors of the African Development Bank (AfDB) Group has approved various financing structures valued at USD696.41-million for Burundi and Tanzania to start Phase II of the Joint Tanzania-Burundi-Democratic Republic of Congo Standard Gauge Railway (SGR) Project. The AfDB Group's financing is intended to construct 651 km on the Tanzania-Burundi railway line. The work will consist of the development of a single electrified standard gauge track. This will be subdivided into three lots: Tabora – Kigoma (411 km) and Uvinza – Malagarasi (156 km) sections in Tanzania; and the Malagarasi – Musongati section (84 km) in Burundi. This standard gauge railway project will be connected to the existing railway network of Tanzania, providing access to the port of Dar es Salaam. In total, 400 km of rail infrastructure has already been built in Tanzania from Dar es Salaam to Dodoma since the start of the first phase of the project. The rest of the section from Dodoma to Tabora is under construction. The AfDB Group will provide USD98.62-million to Burundi in the form of grants and USD597.79-million to Tanzania in the form of loans and guarantees.

Source: AfDB

Cabo Verde

IMF Executive Board concludes the third review of the ECF arrangement and approves USD31.45-million under the RSF for Cabo Verde

The Executive Board of the International Monetary Fund (IMF) completed the third Review of Cabo Verde’s performance under the 36-month Extended Credit Facility (ECF) arrangement that was approved on 15 June 2022, and approved the request for an 18-month arrangement under the Resilience and Sustainability Facility (RSF). The completion of the review allows the authorities to draw the equivalent of SDR4.5-million (about USD6-million). The arrangement under the RSF is in the amount of 100% of quota (SDR23.69-million, approximately USD31.45-million). In completing the third review, the executive board approved the authorities’ request for modification of the end-December 2023 and end-June 2024 performance criteria. Cabo Verde’s performance under the ECF is strong. The economy rebounded strongly in 2022 with real GDP growing 17.1% but is projected to moderate to 4.5% in 2023 as export growth normalises. Inflation is projected at 3% by end 2023, as fuel and food prices decline. The current account deficit is expected to widen in 2023 as exports of goods and services, tourism and remittances grow more slowly than imports.

Source: IMF

Côte d'Ivoire

World Bank channels USD300-million to support Côte d'Ivoire's growth

On Friday, 8 December 2023, the World Bank announced a significant operation of USD300-million for Côte d’Ivoire to accelerate the country’s economic growth. The reforms supported by this budget support financing, the second in a series of three, aligns with Côte d'Ivoire's National Development Plan 2021-2025 and is designed to champion key reforms that will help the country achieve its medium-term goal of becoming an upper middle-income economy by 2030. Despite being one of the fastest-growing economies in sub-Saharan Africa before COVID-19, Côte d’Ivoire faces persistent growth challenges, further exacerbated by recent global crises. Limited competition in key sectors, such as transport, financial services, and telecommunications, hinders private sector investment. Additionally, there is a need to improve service delivery and build human capital, reduce spatial disparities, and address environmental concerns, including coastal erosion and deforestation. The current operation, in the short term, will also provide essential support to maintain fiscal and debt sustainability. This comes at a critical time as the country continues its fiscal consolidation by spending more efficiently and pursues ambitious reforms to improve domestic revenue mobilisation.

Source: World Bank

Djibouti

Djibouti strengthens agri-food sector with World Bank support

On 11 December, the World Bank approved a new International Development Association credit in the amount of USD15-million to improve the competitiveness and resilience of selected agri-food value chains in Djibouti. The Djibouti Agri-Food Value Chain Development Project targets 1 500 agri-food investors, 30% of whom are women. The objective of the project is to help develop the agri-food sector all along the value chain, from producer to consumer. It will do this through a rural infrastructure programme that includes the construction of boreholes, land clearing, and the building of access roads. Additionally, the project will assist agri-food investors by helping them to formulate and implement business plans, provide them with capital endowment contributions and facilitate their access to commercial financing. “The project reflects our support for Djibouti to promote inclusive private sector-led growth, job creation, and human capital development,” said Fatou Fall, World Bank resident representative in Djibouti. “It supports the necessary technological leapfrogging through knowledge transfer and training; encourages the financial inclusion of private investors and leverages private sector funding while contributing to locally grown and produced food consumption.”

Source: World Bank

Kenya

Kenya secures support to further strengthen transparency in public finance management and enhance revenue mobilisation

Kenya’s 485 ministries, departments, and agencies, as well as 240 000 registered firms, and 18 million citizens who will be using e-services are set to benefit from a new World Bank funded operation. The USD250-million Second Strengthening Governance for Enabling Service Delivery and Public Investment Program for Results will enhance revenue mobilisation, strengthen accountability and transparency in public finance management, improve coordination of priority programmes, and promote external audit and oversight at the national government level. “The Government of Kenya needs higher revenue mobilisation to operationalise its development agenda, while efficiency in spending will be necessary for the revenue that is mobilised to deliver its intended purpose,” said Keith Hansen, World Bank Country Director for Kenya. “This new programme will incentivise the last mile of a decade of public financial management reforms in Kenya, including their full rollout across national government ministries, departments, and agencies.”

Source: World Bank

Malawi

Malawi Country Economic Memorandum calls for significant policy reforms to achieve higher rates of growth

Malawi’s per capita economic growth has been insufficient to reduce high and stubborn rates of poverty, according to the latest World Bank Country Economic Memorandum (CEM). The report argues that the pathway to achieve Malawi 2063, while achievable, is increasingly narrow and requires a fundamental shift in policy. Malawi, facing a “poly-crisis" from 2020-2023, has experienced negative per capita GDP growth, a surge in poverty levels, and severe food insecurity affecting more than one in five Malawians. CEM identifies four core challenges that have hindered growth: declining exports, low savings and investment, slow structural transformation out of subsistence agriculture, and high vulnerability to climate. The CEM, published every five years, provides a deeper analysis of Malawi’s economic situation. This edition, A Narrow Path to Prosperity highlights the urgent need for Malawi to adopt a new development model that can break this pattern and put the country back on track to achieve its development goals.

Source: World Bank

Mozambique

Mozambique signs USD5-billion hydro-project accord with EDF-led consortium

Mozambique has signed an accord with a consortium led by French power giant Electricité de France (EDF) to build the new USD5-billion Mphanda Nkuwa hydropower project, the government has said, as it seeks to harness energy from one of Africa's largest rivers. The dam and hydropower plant will be built along the Zambezi River in Tete province to the north of Mozambique, and will generate 1 500 MW of power in the first phase. “This is the first concrete step for Mozambique to capitalise on the immense hydropower potential of the Zambezi River and the country's other energy resources," Mozambique Energy Minister Carlos Zacarias said in a statement. The new dam will provide low-cost electricity to the southern African country and help position it as a regional exporter of clean, renewable energy, he added. The dam will link Tete to the capital Maputo via a transmission line of around 1 300 kms (800 miles). The first turbine is expected to operate by 2031, officials said during a signing ceremony attended by senior French and Mozambican government officials, including President Filipe Nyusi.

Source: Reuters

Togo

IMF team reaches staff-level agreement on a new 42-month ECF arrangement with Togo

An International Monetary Fund (IMF) team led by Mr Hans Weisfeld visited Lomé from 29 November – 8 December 2023, to discuss with the Togolese authorities IMF support for their policy and reform plans and assess recent economic developments. At the end of the mission, Mr Weisfeld issued the following statement, in part: “The IMF team is pleased to announce that we reached staff-level agreement with the Togolese authorities on a 42-month programme supported by an arrangement under the Extended Credit Facility (ECF) in the amount of SDR293.60-million, or about USD390-million. The authorities’ economic programme aims to preserve economic stability and strengthen debt sustainability while laying the foundations for stronger and more inclusive growth. The staff-level agreement is subject to IMF Management and Executive Board approval. The Togolese authorities have committed to a wide-ranging economic reform programme that builds on the government’s development plan and tackles the challenges facing the country, including pressing security concerns."

Source: IMF

Uganda

Cement producers must cut carbon from production

Uganda has outlined a comprehensive plan to completely decarbonise the manufacturing sector. It now requires cement manufacturers to substitute bioenergy for fossil fuels in all manufacturing processes. This is a component of the nation’s energy transition plan, which was recently made public by the government. By 2050, the goal is to increase the percentage of bioenergy used in cement production from the current 50% to 70%. Bioenergy refers to energy derived from organic materials, typically plants and plant-derived materials like biogas, wood and methane. The cement industry in Uganda is heavily dependent on integrated cement mills, which incorporate energy-intensive steps in cement kilns that require high temperatures. As a result, the industry has recently seen an increase in the use of fossil fuels after biomass was outpaced by growing demand coupled with seasonal variations in availability. Notable fossil fuels examples are coal, diesel, petcoke, and heavy fuel oil.

Source: Monitor

Uganda

Uganda targets to produce 100 metric tonnes of gas by 2025

By 2025, Uganda will start the production of liquefied petroleum gas (LPG) to replace wood energy, according to a top official from the Ministry of Energy and Mineral Development. The locally produced LPG is expected to be cheaper than the imported products on the market. Mr Dozith Abeinomugisha, the director midstream, at the Petroleum Authority of Uganda, says by 2025, Uganda will begin consuming LPG manufactured domestically. This development was revealed during a tour to the oil field in Hoima by members the Energy Regulators Association of East Africa. Government introduced tax reforms in the 2020/21 financial year that exempted LPG from the value-added tax to make LPG affordable. Mr Abeinomugisha explained that the LPG facility in Buliisa District is at design stage and once complete, production will start. LPG is obtained from the gas which is produced together with oil. That means oil is first extracted then the gas is also collected then used to make LPG in a different facility. “We hope when the first oil starts flowing by 2025 as scheduled, the LPG facility will also be in place and we hope it will reduce use of biomass,” Mr Abeinomugisha said.

Source: Monitor

Zimbabwe

Continued reforms to boost macro-economic stability in Zimbabwe

Economic growth is projected to slow to 3.5% in 2024, a decrease from 4.5% in 2023, as agricultural output is expected to suffer from depressed global growth and the predicted erratic and below-average rainfall caused by the El Niño weather pattern, according to the fourth World Bank Zimbabwe Economic Update (ZEU). According to the report, titled Electrifying Growth Through Reliable and Universal Energy Access, Zimbabwe’s economy has seen a strong rebound since the COVID-19 pandemic, making it one of the fastest-growing economies in the Southern African Development Community (2021, 2022, and, so far, in 2023). In previous years, Zimbabwe faced increased global turmoil, while expansionary monetary policy has put initial pressure on inflation and the exchange rate. Yet, since June 2023, the government proactively tightened monetary policy to bring down inflation and the parallel market premium. It also extended the use of the United States dollars as legal tender until 2030, further reducing policy uncertainty. The ZEU finds that while Zimbabwe’s economic outlook appears moderate, it reflects continued global headwinds, structural bottlenecks, weather-related shocks, and price and exchange rate volatility.

Source: World Bank