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issue 536 | 10 Mar 2024

Africa

Africa needs effective policies and infrastructure to prosper from AI, experts say

Africa needs supportive policies and robust infrastructure to tap the limitless opportunities of artificial intelligence (AI) to leapfrog its development, experts have said. Speaking at a panel discussion on Fostering prosperity through policies on artificial intelligence in Africa, on the sidelines of the 56th Session of the Economic Commission for Africa Conference of African Ministers of Finance, Planning and Economic Development, experts agreed that AI presented massive development opportunities for Africa if the right policies and infrastructure were in place. Ousman Bah, Minister of Communications and Digital Economy in The Gambia, said it was important to have the right policies to regulate the use of AI and also avert its risks, but Africa should not wait to have the regulations in place to embrace the technology. AI, a fast-evolving technology that taps the intelligence of machines or software is transforming all social spheres globally. Research shows that the technology has the potential to contribute up to USD15.7-trillion to the global economy by 2030, of which USD1.2-trillion could be generated in Africa, representing a 5.6% increase in the continent’s GDP by 2030.

Source: United Nations Economic Commission for Africa

Africa

President Emmerson Mnangagwa calls for innovative, green investment strategies to foster Africa’s economic growth

For African countries to benefit from the transition to sustainable green economies, which is estimated to generate USD3-trillion by 2030, innovative instruments to foster climate action and address the current debt crisis are needed. Government and institutional representatives at the opening of the Ministerial segment of the 56th Session of the Conference of Ministers of Finance, Planning and Economic Development in Victoria Falls, Zimbabwe made a resounding call for a broad range of innovative instruments such as debt-for-nature swaps, regional blue bonds, regional carbon markets and the use of natural capital accounting. Emmerson Mnangagwa, President of Zimbabwe, said, “The effects of climate change are increasingly constraining African countries from exploiting their rich natural resource endowments, in a sustainable manner, leading to diminishing returns along economic value chains. The adoption of multi-pronged pathways is thus crucial for inclusive green economies. These must not only aid in poverty eradication, but also safeguard ecological thresholds that support human development, health and well-being.”

Source: United Nations Economic Commission for Africa

Africa

The ADF commits USD12-million to the rapid operationalisation of the African Pharmaceutical Technology Foundation

The Board of Directors of the African Development Fund (ADF) approved, in Abidjan on 27 February 2024, USD11.96-million grant to speed up the establishment of the African Pharmaceutical Technology Foundation (APTF), headquartered in Kigali, Rwanda. The financial support from the African Development Bank (AfDB) Group’s Regional Public Good window, together with a contribution of USD1.93-million from the Rwandan Government, is intended to implement the Regional Pharmaceutical Sector Support Project in Rwanda. “The project should produce considerable benefits (outputs and outcomes) throughout Africa,” stated Aissa Touré Sarr, Head of AfDB’s Rwanda country office. “The leading-edge research and technological innovations of the APTF should improve health care outcomes by providing access to advanced medicines and treatments, tackling prevalent diseases and contributing to the continent’s overall health resilience.” The support from the ADF should help improve access to advanced pharmaceutical technologies and strengthen the regulatory framework of the pharmaceutical industry in Africa.

Source: AfDB

East / Southern Africa

Aviation experts push for a model Bilateral Air Services Agreement

Aviation officials from the Eastern Africa, Southern Africa, and Indian Ocean region are making steady progress in reviewing and having a model Bilateral Air Services Agreement (BASA) that conforms with the provisions of the Yamoussoukro Decision of 1999. Once fully adopted and implemented, the model BASA will clear the way for a single African Air Transport Market which will boost the sector. Experts have long called for a Single African Air Transport Market contending that it would strengthen intra-regional connectivity between the capital cities of African countries. A single unified air transport market would be an impetus to the continent’s economic integration and growth agenda. As part of the process to activate this, representatives from 10 countries in eastern and southern Africa and the Indian Ocean met in Kampala, Uganda from 26 – 28 February 2024 for the second consultative workshop on the model BASA. Uganda’s Minister of Works and Transport General Edward Katumba Wamala who opened the meeting said one of the immediate measures required by member states is to review their BASAs by removing all restrictions on traffic rights under the third, fourth and fifth freedoms, frequencies, fares and capacity.

Source: Common Market for Eastern and Southern Africa

East / Southern Africa

Three states ready to pilot the COMESA electronic Certificate of Origin

Three Common Market for Eastern and Southern Africa (COMESA) member states, Eswatini, Malawi, and Zambia, have successfully integrated and interfaced their national systems with the COMESA electronic Certificate of Origin (e-CO) system. They are now poised to commence the first phase of piloting its implementation. The COMESA e-CO is a vital component of the COMESA Digital Free Trade Area (DFTA) Action Plan, which includes e-Trade, e-Logistics, and e-Legislation. The development and implementation of the COMESA e-CO fall under e-Logistics, aimed at facilitating intra-regional trade. This initiative will eventually replace the manual Certificate of Origin procedures currently in use by member states. It comes with a web-based e-CO system accessible via web browsers, aligning with the COMESA Protocol on Rules of Origin and its implementation guidelines. The COMESA Secretariat is overseeing the e-CO implementation through the Divisions of Trade and Customs, and Information and Networking. From 19 – 21 February 2024, e-CO national focal persons were in Lusaka, Zambia, to meet with the COMESA Project Implementation Team for joint testing of the system integration and exchange of e-CO through the platform.

Source: COMESA

Southern Africa

SADC continues to register good progress in the trade, industry, finance and investment sector

The Southern African Development Community (SADC) continues to register good progress on implementation of its programmes to deepen regional economic integration, in particular in the area of Trade, Industry, Finance, and Investment (TIFI). This emerged from the TIFI Thematic Group meeting held on 29 February 2024 at the SADC headquarters in Gaborone, Botswana. The meeting was co-chaired by Mr Sadwick Mtonakutha, Director of Finance, Investment and Customs at the SADC Secretariat, and Ms Annelene Bremer, Counsellor for Development Cooperation from the Embassy of Germany to Botswana and SADC. Steady progress has been made on capacity building on industrialisation as well as in enhancing private sector participation in regional value chains. For instance, following the capacity building through the Enhancing the Quality of Industrial Policies methodology, Eswatini, Zimbabwe, and Malawi have launched their new industrial policies aligned with the regional strategy.

Source: SADC

Southern Africa

SADC fortifies the region against money laundering and terrorism financing

The Southern African Development Community (SADC) established the inaugural Anti-Money Laundering and Combating of Financing Terrorism (AML/CFT) Committee to facilitate harmonisation of AML/CFT policies, laws and regulatory practices of SADC member states, in line with international standards including the Financial Action Task Force (FATF) recommendations. Ministers of Finance and Investment recommended the operationalisation of this AML/CFT Committee to support effective and proportional action against money laundering and financing of terrorism in the region as guided by Annex 12 of the Protocol on Finance and Investment. 13 member states gathered in Johannesburg, South Africa for three days, from 21-23 February 2024 to partake and deliberate at this auspicious occasion where they elected Mr Clement Kapalu, Director General of the Financial Intelligence Centre in Zambia as the first chairperson of the SADC AML/CFT Committee. In his maiden speech, Mr Kapalu underlined that this inaugural committee will herald an era to combat the infestation of financial vices which inhibit the development of the SADC region through coordination and cooperation.

Source: SADC

Democratic Republic of the Congo

AfDB to lend USD117-million to support agricultural transformation

Meeting in Abidjan on 14 February 2024, the Board of Directors of the African Development Bank (AfDB) Group approved a loan of USD117.9-million to the Democratic Republic of the Congo (DRC) to implement the Project to Support Governance and Skills Development in support of the Agriculture Transformation Programme. The financial support comes from the African Development Fund, the AfDB Group's concessional lending window, and includes USD78.6-million from the Transition Support Facility – a financing instrument of the AfDB aimed at countries in fragile and conflict situations. "This project is to support agricultural transformation in the DRC through the improvement of sectoral governance and the quality of labour and by promoting entrepreneurship in agricultural value chains to support the agricultural transformation programme,” explained AfDB Director-General for Central Africa, Serge N'Guessan. He added that, “The project will promote the private sector and encourage foreign direct investment and the creation of decent jobs in the agricultural sector, whose contribution to the economy remains low despite its considerable potential.”

Source: AfDB

Ghana

Sovereign fund to back EV and battery production

Ghana’s minerals sovereign fund is looking to position the country as an e-mobility leader through investment in electric vehicle (EV) and battery production. It wants to leverage the government’s Automobile Development Policy to “support the automobile sector in developing EVs serving the entire sub-Saharan region.” The Minerals Income Investment Fund (MIIF) also announced at the end of January that it closed the acquisition of 19.25 million shares in London and Australian listed Atlantic Lithium. The MIIF said it paid USD5-million for a 3.06% stake in the parent company of Atlantic Lithium, which is on track to develop its first lithium mine, the Ewoyaa Lithium Project in Ghana in early 2025. “Subject to the execution of an already inked binding agreement, MIIF will transact a significant stake in the Ghana-based project by investing a further USD27.9-million in the local project to acquire a 6% portfolio in the operations of the Ewoyaa mine and other tenements referred to as the Cape Coast Portfolio in Ghana.”

Source: ESI Africa

Kenya

EU lawmakers endorse economic partnership agreement with Kenya

Kenya has inched closer to concluding a preferential trade deal with the European Union (EU), preserving a long-term tax-free access of exports to the 27 countries in the bloc while gradually opening up her market for duty-free imports and investments from Europe. The European Parliament has endorsed the pact, paving the way for heads of state and government to give their final approval and complete the ratification process on the EU side. Kenyan lawmakers have also to debate and approve the document for it to become enforceable. “It is the first agreement with a developing country in which the EU's new approach to trade and sustainable development is reflected,” the European Parliament said in a press statement on its website. “The agreement includes binding and enforceable provisions on international standards and agreements on labour, gender equality, climate and the environment, and prevents both parties from lowering labour and environmental standards.”

Source: The EastAfrican

Kenya

IFC to offer climate risk advisory services to banks in KES219-million deal

The International Finance Corporation (IFC) is set to offer advisory services to Kenyan banks in a USD1.5-million deal (KES219-million) to help the lenders in climate risk mitigation. The project will see the global financier provide knowledge through training and workshops on climate risk analytics, assessments, and best management practices. The risks posed by climate change to banks and insurers include higher defaults from disruption of enterprises, a jump in insurance claims and the destruction of assets. “The objective of this project is to build resilience on the negative impact of climate change by enhancing financial institutions' capacity in climate risk assessment, management, and disclosure in line with the Paris Agreement’s mitigation and adaptation objectives,” the IFC said in its disclosures.

Source: Business Daily

Kenya

IPPs to be granted licences to sell electricity in Kenya

Kenya’s Ministry of Energy has announced it is to grant licences to independent power producers (IPPs) as part of a new electricity wholesale and retail market it wants to establish. In a Gazette Notice dated 1 March 2024, the ministry announced a plan to permit electricity retailers to sell to homes and businesses. Details are contained under the Energy (Electricity Market, Bulk Supply and Open Access) Regulations, 2024. “The electricity market shall consist of a wholesale market and a retail market. “The wholesale market shall comprise of generation licensees and other licensees who will trade through the intermediary of an operator, who shall be designated by the authority,” the ministry says in the Gazette. The retail market will purchase from the wholesale market and, in turn, supply to consumers. The ministry said the electricity market will function with the following objectives: ensure competition, transparency, fair, neutral, efficient and robust price discovery; provide extensive and quick price dissemination; and design standardised contracts.

Source: ESI Africa

Kenya

Kenya update: Banking (Penalties) Regulations, 2024

The Banking Act (Chapter 488 of the Laws of Kenya) (the Act) under section 55(2) authorises the Central Bank of Kenya (CBK) to prescribe penalties to be paid by institutions, credit reference bureaus (or any other person) that fail or refuse to comply with any directions of the CBK under the Act or Prudential Guidelines. The CBK has published a draft of the Banking (Penalties) Regulations, 2024 (the Draft Regulations) and has invited the public to comment on the Draft Regulations by 18 March 2024. If passed, the Draft Regulations will revoke the existing Banking (Penalties) Regulations, 1999 (the Existing Regulations). The purpose of the Draft Regulations is to promote compliance with and deter a violation of the Act and the Prudential Guidelines by providing a clear framework for assessing a violation and ensuring that an institution or person is penalised for a violation. Violations under the Draft Regulations attract a range of financial penalties, with the most severe penalty being KES20-million for an institution and KES1-million for an individual. These penalties are significantly higher compared to those in the Existing Regulations which are a maximum of KES1-million for an institution and a maximum of KES100 000 for an individual.

Source: ENS

Mozambique

Maputo Port Development Company signs contract addendum to invest over USD2-billion

The Maputo Port Development Company (MPDC) has signed an addendum to its contract with the Mozambican Government, under which it will invest over USD2-billion in the Port of Maputo, in the next 25 years of its concession. The investment will increase the handling capacity of the port, from the current 37 million tonnes per year to about 52 million tonnes, and from the current 270 000 containers to one million. The investment should result in a direct return to the state estimated at over USD8-billion over the next 25 years of the concession granted to the MPDC. By the end of the concession, MPDC will have invested around USD3-billion. The addendum to the contract was recently signed by the Deputy Minister of Transport, Amilton Alissone, and the Executive Director of MPDC, Osório Lucas. According to Lucas, over the course of the extension period, the company has agreed to increase the capacity of the coal terminal from eight million tonnes to 18 million, as well as to increase the capacity of the general cargo terminal from the current 10 million tonnes to over 13 million.

Source: Club of Mozambique

Mozambique / Malawi

Mozambique-Malawi transmission project to add 120 MW to the Malawi grid

The Mozambique-Malawi (MOMA) Power Transmission 400 kV Interconnector Project will now add 120 MW to Malawi’s national grid following the revision of the initial agreement of 50 MW. The Electricity Supply Commission’s (ESCOM) Acting Senior Project Manager for MOMA, Leonard Machonjo, said that the progress for construction works was at 48% about a month ago. During his State of the Nation Address on 9 February 2024, President of Malawi Lazarus Chakwera gave an update on the World Bank and Kreditanstalt für Wiederaufbau-funded project. “We will proceed to add 120 MW through the Mozambique-Malawi Interconnector Project following further negotiations and revision of the power purchasing agreement to increase the importation of electricity from the initial 50 MW,” President Chakwera said. The Malawi and Mozambique Governments are, through ESCOM and Electricidade de Moçambique , constructing a 218 km transmission line through Mwanza, Neno and Balaka for the project to bring 120 MW from Mozambique and other Southern African Power Pool Association members to boost power supply in the country. 

Source: ESI Africa

Namibia / United States

USAID commits NAD19-million to Namibian Hydrogen Fund for sustainable development

The United States (US) Government, through the United States Agency for International Development (USAID) Mobilizing Investment project, has pledged a grant of NAD19-million to Namibia Hydrogen Fund Managers. This grant is aimed at bolstering the NAD22-billion Sustainable Development Goals (SDG) Namibia One Fund, dedicated to green hydrogen initiatives. The announcement comes as part of the ongoing efforts to support Namibia’s vision of becoming a leader in green hydrogen development. Launched during the United Nations Climate Change Conference (COP-27) in November 2022, the SDG Namibia One Fund serves as a crucial financial vehicle for advancing the production, transportation, transmission, storage, and utilisation of green hydrogen and its derivatives. Namibia, with its ambitious Vision 2030, recognises the potential of green hydrogen to drive sustainable economic growth while mitigating environmental impacts.

Source: Namibia Economist

Nigeria

IMF staff completes 2024 Article IV mission to Nigeria

An International Monetary Fund (IMF) team, led by Axel Schimmelpfennig, IMF Mission Chief for Nigeria, visited Lagos and Abuja from 12-23 February 2024, to hold discussions for the 2024 Article IV consultations with Nigeria. The team met with Minister of Finance Adebayo Olawale Edun, Central Bank of Nigeria Governor Olayemi Cardoso, senior government and central bank officials, the Ministry of Agriculture, the Ministry of the Environment, as well as representatives from sub-national government, the private sector and civil society. At the end of the visit, Mr Axel Schimmelpfennig, issued the following statement, in part: “Nigeria’s economic outlook is challenging. Economic growth strengthened in the fourth quarter, with GDP growth reaching 2.8% in 2023. This falls slightly short of population growth dynamics. Improved oil production and an expected better harvest in the second half of the year are positive for 2024 GDP growth, which is projected to reach 3.2%, although high inflation, naira weakness, and policy tightening will provide headwinds.”

Source: IMF

Rwanda

Economic Update - Mobilizing Domestic Savings to Boost the Private Sector in Rwanda

The Rwanda Economic Update edition 22 reviews the country’s macroeconomic performance and prospects and includes a special section focusing on Mobilizing Domestic Savings to Boost the Private Sector in Rwanda. In 2023, the Rwandan economy demonstrated resilience, achieving a 7.6% growth in a challenging global environment. This growth was largely attributed to the services sector and sustained domestic demand despite agricultural setbacks and persistent inflation. However, Rwanda faces a challenge in mobilising domestic savings – critical for private sector investment and achieving the goals outlined in Rwanda’s Vision 2050. While financial inclusion has risen sharply, with significant transitions from informal to formal savings methods, Rwanda’s savings rates remain low compared to regional peers. The government has undertaken measures to incentivise savings, including tax benefits and the introduction of the Ejo Heza long-term savings scheme. These measures have been complemented by an emphasis on financial education, particularly digital literacy, to align with the expansion of digital financial services.

Source: World Bank

Somalia

Supporting Somalia’s shift from fragility to resilience and growth

The World Bank’s Board of Executive Directors announced a new five-year Country Partnership Framework (CPF) for Somalia. The CPF will assist Somalia in building a more stable, visible, and legitimate state able to provide basic services, foster inclusive private sector led growth, and build resilience, with a long-term view to restoring the social contract and enabling Somalia’s emergence from fragility and conflict. The CPF with Somalia is a joint strategy between the World Bank Group, and the government to reduce poverty and improve the livelihoods of the people of Somalia. The CPF will build on gains Somalia made when it reached the Heavily Indebted Poor Countries Initiative Completion Point in December 2023. This important milestone represented a new start for Somalia and has allowed the country to reengage with the international financial institutions.

Source: World Bank

Tanzania

Hydropower plant launch a boost for region’s energy supply

Operations at the Julius Nyerere Hydropower Project in Tanzania have officially been launched, with an initial supply of 235 MW injected into the national grid. The government also envisages that it will reduce power cuts in the country by 85% and be an energy boon to East Africa. At the recently held 16th Meeting of the Sectoral Council of Ministers on Energy in Arusha, East African ministers lauded the project. At the meeting, Shaib Hassan Kaduara, Tanzania’s Minister of Water, Energy and Minerals, said: “This hydropower plant has a capacity of generating 2 115 MW. The launch of this project is a milestone that will reduce the deficit of electricity not only in Tanzania but in the entire region.” During a recent site visit, Minister of Energy Doto Biteko told local media that “power rationing will be reduced by 85% with a supply of 235 MW in the national grid. We will also supply an additional 235 MW by mid-March this year to completely solve the power rationing problem.” Turbine 8 has been activated with number 9 set to go operational by mid-March. The project is part of Tanzania’s power master plan, which aims to interconnect the grids of Tanzania, Kenya, Uganda and Zambia.

Source: ESI Africa

Tanzania / Ethiopia

Tanzania and Ethiopia seal trade deals

Tanzania and Ethiopia have signed bilateral agreements targeting agriculture, trade, energy and air transport and aviation technology exchange. Tanzanian President Samia Suluhu Hassan and the visiting Ethiopian Prime Minister Abiy Ahmed witnessed the signing of agreements strengthen trade between the two countries. Ministry of Foreign Affairs and East African Co-operation said that the two leaders agreed to deepen trade and bilateral relations that would create new opportunities for trade between Tanzania, with a population of over 61 million, and Ethiopia, with a population of more than 100 million people. Tanzanian Minister for Foreign Affairs and East African Co-operation January Makamba said that the memoranda of Understanding would open up new markets, investment and trade in key sectors, especially in coffee and tea. “Ethiopia is globally renowned for coffee and tea production, Tanzania’s tea and coffee are equally popular, therefore, how to access markets together will be an integral part of bilateral agreements during this visit,” Mr Makamba said.

Source: The EastAfrican 

Togo

IMF Executive Board approves a USD390-million 42-month arrangement under the ECF for Togo

The Executive Board of the International Monetary Fund (IMF) has approved a 42-month arrangement under the Extended Credit Facility (ECF) of SDR293.60-million or about USD390-million (200% of quota), with an immediate disbursement of SDR51.380-million (about USD68.3-million). Following a series of shocks in recent years, Togo continues to face headwinds, including more difficult access to financing following monetary policy tightening in advanced economies, a challenging security situation at the northern border, and persistent food insecurity compounded by climate change. Fiscal deficits and debt have increased, reversing the debt reduction achieved during the 2017–20 ECF arrangement, eroding fiscal space and buffers to absorb shocks, and contributing to regional vulnerabilities. The authorities’ strong reform programme aims to help maintain macroeconomic stability and accelerate poverty reduction by (i) making growth more inclusive while strengthening debt sustainability; and (ii) conducting structural reforms to support growth and limit fiscal and financial sector risks.

Source: IMF

Zimbabwe

New reports identify pathways to build a climate-smart economy in Zimbabwe

Zimbabwe remains vulnerable to climatic shocks and without adaptation, climate change will impose high costs on the economy, getting progressively larger over time, and this could cost nearly 5% of GDP annually by 2050. To mitigate the impact, Zimbabwe can take immediate low-cost and 'no-regrets' climate actions to build resilience and stem emissions growth, including greening the mining industry, supporting conservation agriculture, and protecting and growing human capital, according to the World Bank. The Zimbabwe Country Climate and Development Report and the Country Private Sector Diagnostic Report launched recently by the World Bank point to Zimbabwe’s abundant natural capital (mineral and renewable) as key to driving the country’s growth potential. Furthermore, leveraging the private sector to build a climate-smart resilient economy could reap dividends for the country that has significant opportunities in several key value chains such as agribusiness, tourism, and green minerals mining.

Source: World Bank