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issue 535 | 03 Mar 2024

World

New disciplines on good regulatory practice for services trade enter into force

The entry into force of new disciplines on services domestic regulation, announced at the 13th Ministerial Conference (MC13) in Abu Dhabi on 27 February, is expected to lower trade costs by over USD125-billion worldwide. The announcement was made at an event attended by World Trade Organization (WTO) Director-General, Ngozi Okonjo-Iweala, MC13 Chair and United Arab Emirates Minister of State for Foreign Trade, Thani bin Ahmed Al Zeyoudi, and participating members in the Joint Initiative on Services Domestic Regulation, represented by Costa Rica’s Foreign Trade Minister, Manuel Tovar, and the European Commission’s Vice-President Valdis Dombrovskis. WTO members participating in the initiative began incorporating the new disciplines on good regulatory practice into their existing services commitments once the disciplines were successfully concluded in December 2021. The certification process for these disciplines has now been completed for 52 WTO members, with more expected to be finalised in the coming weeks. The disciplines seek to mitigate unintended trade-restrictive effects of measures relating to licensing requirements and procedures, qualification requirements and procedures and technical standards.

Source: WTO

World

Uganda exits FATF grey list, bolstering global financial reputation

Uganda has been officially delisted from the Financial Action Task Force’s (FATF) grey list, a catalogue of jurisdictions under scrutiny for inadequate measures against money laundering and terrorist financing. This development comes more than four years after the country was initially included in the list in February 2020, attributed to identified shortcomings in its anti-money laundering (AML) and counter-terrorism financing (CTF) frameworks. On 23 February 2024, the Paris-based watchdog said the fourth-largest economy in East Africa would no longer be subject to its “increased monitoring process.” Barbados, Gibraltar and the United Aran Emirates are also no longer on the grey list, while Kenya and Namibia are new additions. Kenya and Namibia now join Tanzania, South Sudan, South Africa, Nigeria, Burkina Faso, Mali, Mozambique and Senegal. “The FATF plenary congratulated Barbados, Gibraltar, Uganda and the United Arab Emirates for their significant progress in addressing the strategic AML/CFT deficiencies previously identified during their mutual evaluations,” the FATF said.

Source: The Independent

Africa

AU emphasises role of private sector in climate investments at AGES

“To be able to attract private sector finance, which is what we need to be able solve the issues of climate change, we need to create conducive environments,” says Harsen Nyambe, Director, Sustainable Environment and Blue Economy Directorate at the African Union Commission (AUC), who delivered the keynote address on the opening day of Africa’s Green Economy Summit (AGES) in Cape Town. “According to the African Development Bank, private sector financing for climate action and green growth in Africa will require approximately USD213-billion annually to be able close the financing gap by 2030. That is no small figure,” Nyambe added. The AUC representative said the continent had to ensure that policies were in place “that have stable, economic conditions that will be able to guarantee security to these investments. We also need to make sure that we de-risk and incentivise climate compatible and green growth investment through blended finance and other options that are available to us.” According to the AUC director, one of the major challenges the continent faces is the inability to access climate funds. It is for this reason that the AU established a Climate Finance Unit with the sole mandate to support and assist states in accessing climate funds and attracting investment.

Source: ESI Africa

Africa

The AUC and World Bank seal a new grant agreement to foster regional integration

The African Union Commission (AUC) and the World Bank have marked a significant milestone in their partnership with the recent signing of a grant agreement to support the implementation of the Africa Think Tank Platform Project aimed to help think tanks across the continent to produce policy-relevant research on critical cross-border priority issues. The USD50-million project will enable the AUC to create and set up the structures and systems necessary to operate a continent-wide platform for effective cooperation and harmonisation on regional policy issues among country-level policymakers, regional associations, and think tanks. Additionally, it will facilitate resource mobilisation and the creation of facilities to attract funds from various stakeholders to support the platform's operations. This new project brings the total value of World Bank-supported projects, approved by its board of directors in the past six months, to USD131-million, all aimed at supporting the implementation of AUC’s strategic priorities.

Source: World Bank

East Africa

High cost of intra-East African cash transfers slows the common market

East Africans are still struggling to find cheap options to send money from one country to another within the region, making it one of the greatest barriers to trade and slowing the implementation of the Common Market Protocol. Latest data from the World Bank shows that some money remittance corridors in the region are among the most expensive in the world, and much higher than the global average, despite efforts to bring down transaction costs to ease trade. Scholars and business leaders say this has remained one of the biggest impediments to the full realisation of the common market pillar of East African Community integration, in turn, delaying other pillars of the union. According to the data collected between August and September 2023, Tanzania remains the most expensive country to send money from, with some payment options charging as high as 65% of value sent as transaction cost. On average, one will have to pay 35% to send USD200 from Tanzania to Kenya, 30% to Uganda, and 20% to Rwanda – much higher than the 12.5% global average, according to the International Monetary Fund.

Source: The EastAfrican

East / Southern Africa

COMESA, World Bank launch USD50-million project to promote energy access

The Common Market for Eastern and Southern Africa (COMESA) and the World Bank are set to implement a USD50-million regional platform to support COMESA member states and other participating countries to promote sustainable energy access investments. This is part of a new World Bank USD5-billion programme designed to accelerate sustainable and clean energy access and provide life-transforming opportunities for 100 million people across countries in eastern and southern Africa over the next seven years. The Accelerating Sustainable and Clean Energy Access Transformation programme will be a game-changer in a region where only 48% of the overall population, and just 26% in rural areas, has access to electricity. The new regional platform, under the supervision and implementation of COMESA, will support participating countries through various initiatives designed to fill the technical gaps identified in the energy sector, particularly with regards to project preparation, investment readiness, technical know-how and energy access.

Source: COMESA

Southern Africa

SADC shares its economic priorities to EU in the context of the AfCFTA

Ms Angele Makombo N'tumba, the Deputy Executive Secretary responsible for Regional Integration for the Southern African Development Community (SADC) on 22 February 2024 shared the economic opportunities available in the SADC region to the European Union (EU) in the context of the African Continental Free Trade Area (AfCFTA) during the annual EU-Africa Regional Trade Seminar. The seminar was held in a hybrid format at the EU delegation offices in Gaborone, Botswana, with other participants taking part from the European Commission headquarters in Brussels, Belgium. The EU-Africa Regional Trade Seminar was aimed at assessing the future trade policy direction of the EU with Africa, considering key factors such as the AfCFTA, the climate and food crisis, the growing significance of critical raw materials in EU-Africa relations, the impact of the EU Green Deal policy, the requirement for infrastructure value chains and connectivity for the continent’s development, and the evolution of economic partnership agreements in Africa. 

Source: SADC

Ghana

Ghana aims to complete external debt restructuring as soon as possible – president

Ghana aims to finish restructuring its external debt as soon as possible so it can emerge from its worst economic crisis in a generation, President Nana Akufo-Addo has said. The West African country, which defaulted on most of its overseas debt in December 2022 after servicing costs soared, restructured most of its local debt and is pushing for a deal with holders of about USD13-billion in international bonds. "We are committed to concluding the external debt restructuring process as soon as possible, so we move past the crisis," President Akufo-Addo said in a state of the nation address in Parliament. He added that the recent replacement of Ghana's finance minister in a reshuffle would not affect the government's commitment to implement its International Monetary Fund (IMF) programme. The IMF has expressed its support for the new minister. Ghana's economy has started to recover since the government last year secured a USD3-billion loan programme with the IMF, and in January reached a deal to restructure USD5.4-billion of loans with its official creditors. 

Source: Reuters

Guinea/ Mali / Niger / Burkina Faso / Senegal

ECOWAS lifts sanctions on Guinea

The Economic Community of West African States (ECOWAS) has decided to lift sanctions on Guinea. The closing statement of ECOWAS’s leaders' summit held in the Nigerian capital, Abuja, to discuss the decision last month by Niger, Mali and Burkina Faso to withdraw from the West African regional bloc and political developments in Senegal has been published. According to the statement, the economic sanctions imposed on Guinea after its military coup in September 2021 and the restrictions on Malian citizens working at ECOWAS institutions have been lifted. Regarding the political crisis in Senegal following the postponement of its presidential elections scheduled for 25 February, the parties were called upon to prioritise reconciliation to safeguard the country's democratic gains. In addition, ECOWAS announced the lifting of sanctions imposed on Niger.

Source: Anadolu Ajansı 

Kenya / United Arab Emirates

UAE, Kenya seal comprehensive economic partnership deal

The United Arab Emirates (UAE) and Kenya have concluded a comprehensive economic partnership agreement (CEPA), the UAE Minister of Foreign Trade Thani Al Zeyoudi has said. Kenya, East Africa's largest economy, was one of the first African countries with which the UAE launched bilateral trade deal talks in 2022 as part of a strategy to diversify its oil-based economy. Non-oil trade between the Gulf state and Kenya reached USD3.1-billion in 2023, up 26.4% on 2022, Mr Al Zeyoudi said in a post on social media platform X. "We will now look to expand across sectors from food production and mining to technology and logistics," he said of the agreement. UAE state news agency WAM quoted Kenya's Trade Minister Rebecca Miano as saying the deal would play an important role in enabling Kenyan exports to reach important markets in Asia and the Middle East and "in stimulating investment inflows that will further develop our national capabilities".

Source: Reuters

Malawi

New Malawi Economic Monitor calls for commitment to economic reforms to sustain the emerging recovery

Malawi’s medium-term growth outlook is improving because of bold reforms undertaken by the government in 2023 to stabilise the economy, although other numerous downside risks related to climate change, continued foreign exchange challenges, delays in the implementation of key macro-fiscal and structural reforms persist. Growth is therefore expected to increase only moderately in 2024, according to the latest World Bank Malawi Economic Monitor (MEM). The World Bank’s MEM provides a semiannual analysis of Malawi’s economic and structural development issues. This 18th edition, titled Turning the Corner? acknowledges that the Government of Malawi has taken an initial set of bold actions, including the adjustment of the exchange rate, monetary tightening and commitments to enhanced fiscal prudence, which paved the way for a November 2023 agreement on an Extended Credit Facility with the International Monetary Fund and the first World Bank-funded budget support operation since 2017. However, the MEM argues that both immediate actions as well as sustained commitment will be necessary if the reforms are to bear fruits for the wider economy.

Source: World Bank

Mauritius

IMF staff completes 2024 Article IV mission to Mauritius

An International Monetary Fund (IMF) mission led by Mariana Colacelli visited Mauritius from 9 to 18 January 2024, to conduct the 2024 Article IV consultation. Virtual mission discussions continued on the team’s return to Washington D.C, up to 21 February 2024. At the conclusion of the mission, Ms Colacelli issued the following statement, in part: “The Mauritian economy has rebounded strongly from the impact of the pandemic, supported by the deployment of pre-pandemic fiscal and external buffers. Real GDP growth reached 8.9% in 2022 from rebounding tourism and manufacturing. Rapid growth was sustained in 2023 – estimated at 6.9% – with output now having exceeded its pre-pandemic level. Vibrant tourism, social housing construction, and continued strong performance of transport and financial services buoyed growth.  The outlook for growth remains favourable. In 2024, real GDP growth is projected at 4.9%, driven by construction as major social housing and public transportation projects are ramped up and the recovery of tourism to pre-pandemic levels. Headline inflation is projected to ease to 4.9% on average in 2024, mainly reflecting international oil and food price dynamics. 

Source: IMF

Mauritius

Minister Ramyad aims to drive Mauritius towards a greener manufacturing era

Government is steadfast in its commitment to fostering an enabling environment for enterprises to thrive amid evolving market demands while maintaining competitiveness. The focus is on sustainable development and investing in green energy, transitioning towards a cleaner Mauritius, and safeguarding marine resources to mitigate climate change risks. This was the crux of the message of the Minister of Industrial Development, SMEs and Cooperatives, Ms Naveena Ramyad, during the recent opening of a one-day workshop on Accelerating the Transition to a Net-Zero Nature-Positive Economy in Mauritius (NZNPA) project, at the Ravenala Attitude Hotel in Balaclava. In her address, Minister Ramyad underscored the pivotal aim of the NZNPA project to accelerate the decarbonisation of the manufacturing sector in Mauritius. The project, bolstered by a grant from the Global Environment Facility, seeks to propel the sector towards a Net-zero Nature-Positive Economy, enhancing its competitiveness while fostering environmental consciousness, she highlighted. 

Source: Government of Mauritius

Nigeria

Catalysing digital innovation: AfDB commits USD80-million to Ekiti Knowledge Zone Project in Nigeria

In the heart of Nigeria’s Ekiti State, a groundbreaking initiative is taking shape – the Ekiti Knowledge Zone (EKZ), a bold step to transform the region into a hub for digital innovation and knowledge economy. The African Development Bank (AfDB) has committed USD80-million in loan financing for this state-led pioneering special economic zone project, designed to foster linkages between educators, researchers, innovators, entrepreneurs, and industries, all within one location. More than just a project, EKZ promises to be a place where ideas converge, creativity thrives, and dreams take flight. The Ekiti State Government is committing USD14.8-million in counterpart funding to complement the bank’s financing for the USD94.8-million project. In April 2023, the Federal Government of Nigeria conferred “free zone” status to the project under the Nigeria Export Processing Zones Authority Act. This designation unlocks a plethora of incentives for private investors, including rent-free land, tax holidays and import/export duty waivers, fueling an environment ripe for investment and innovation.

Source: AfDB

Tanzania

Tanzania’s horticulture gets lucrative new market

The future looks bright for Tanzania’s horticulture industry as a lucrative new market in Europe beckons for produce from the country. The local horticulture umbrella body, Taha, recently sent a high-powered delegation of growers and exporters to showcase the local industry’s potential at Europe’s premier fresh produce trade show – Fruit Logistica – in Berlin. Taha’s pavilion emerged the best among its African peers, according to the organisers, pulling in hundreds of potential buyers seeking to strike purchasing deals with exporters to supply them with avocados, okra, bitter gourd and African bird’s eye chilli, among other products. One of the buyers is Frankfurt-based Daily Green Company, which showed interest in Tanzania’s okra, bitter gourd and African bird’s eye chilli. This prompted the firm to dispatch a high-ranking official to Arusha to seal an export deal with local farmers. In its engagement with the Taha management, led by Chief Development Manager Anthony Chamanga, the German firm said it requires a minimum of 2 340 tonnes of okra annually which could earn Tanzanian farmers at least TZS3.51-billion. 

Source: The Citizen

Uganda

URA increases daily import tax collections to UGX40-billion

Uganda Revenue Authority (URA) has said recent innovations have helped increase daily revenue collections at the border points from UGX26-billion to UGX40-billion. In an interview, Mr Ibrahim Bbosa, the Assistant Commissioner of corporate affairs, said the introduction of non-intrusive inspection scanners, has facilitated faster clearance of goods which has increased the volume of goods cleared. The measures include the introduction of the authorised economic operator's programme for traders who pay the right declaration of taxes for goods in transit and the introduction of electronic cargo tracking services for goods in transit to the Democratic Republic of the Congo (DRC) and South Sudan. “The non-intrusive inspection means we can now clear more volumes of goods faster. If you have all your documents, we can clear the goods in 30 minutes. We cultivated the authorised economic operator's programme for operators who pay taxes for goods on transit and make the right declarations,” he said. While closing a two-day capacity-building workshop for officials from South Sudan Revenue Authority, Mr Abel Kagumire, the URA Commissioner of domestic taxes, said since 2021 when they started tracking goods in transit to the DRC and South Sudan, they have registered an increase in daily revenue.

Source: Monitor

Zambia

Zambian president says China and India signed debt-revamp deal

China and India, the last two nations needed to sign a deal to restructure Zambia’s debt, have finally done so, President Hakainde Hichilema has said. “[We are] getting there,” he said on Zambian state-owned television. “Now we are turning our attention to the private creditors that we hope to be able to put to bed soon.” Zambia reached a memorandum of understanding with official creditors to restructure USD6.3-billion of debt in October. The government is in talks with other creditors, including the holders of USD3-billion in outstanding Eurobonds. The discussions have been deadlocked since November, when the Official Creditors Committee – co-chaired by France and China – rejected a deal in principle the administration reached with those investors. The southern African nation signed up to use the so-called Common Framework to restructure its debts three years ago, after defaulting in November 2020. 

Source: BNN Bloomberg

Zambia / Tanzania

New World Bank grant to improve transport and trade connectivity between Zambia and Tanzania

In an effort to drive greater development and trade, the World Bank is supporting improvements in transport and trade connectivity along the Dar es Salaam Corridor between Zambia and Tanzania. The six-year Transport Corridors for Economic Resilience (TRACER) project, backed by a USD270-million International Development Association grant, aims to improve the efficiency, connectivity, and climate resilience of key regional transport and trade corridors in eastern and southern Africa. "TRACER is a significant commitment to regional trade and transportation. By focusing on strategic improvements and climate resilience, we hope this will pave the way for a more robust and sustainable economic future for Zambia and its neighbours," said Achim Fock, Country Manager for Zambia. “The transport and logistics sector are expected to experience a boost from targeted activities aimed at institutional and sectoral capacity building.” The project will benefit 2.5 million people in Zambia, or approximately 13% of the population. This includes 500 000 direct beneficiaries within Zambia, with an additional 2 million people set to experience indirect advantages. The project's reach extends beyond borders, positively impacting communities in Tanzania, the Democratic Republic of the Congo, and Malawi.

Source: World Bank