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Africa Business in Brief


issue 541 | 14 Apr 2024


World must prioritise productivity reforms to revive medium-term growth

The world economy faces a sobering reality. The global growth rate – stripped of cyclical ups and downs – has slowed steadily since the 2008-09 global financial crisis. Without policy intervention and leveraging emerging technologies, the stronger growth rates of the past are unlikely to return. Faced with several headwinds, future growth prospects have also soured. Global growth will slow to just above 3% by 2029, according to five-year ahead projections in the International Monetary Fund’s (IMF) latest World Economic Outlook. The IMF’s analysis shows that growth could drop by about a percentage point below the pre-pandemic (2000-19) average by the end of the decade. This threatens to reverse improvements to living standards, and the unevenness of the slowdown between richer and poorer nations could limit the prospects for global income convergence. A persistent low-growth scenario, combined with high interest rates, could put debt sustainability at risk – restricting the government’s capacity to counter economic slowdowns and invest in social welfare or environmental initiatives. Moreover, expectations of weak growth could discourage investment in capital and technologies, possibly deepening the slowdown.

Source: IMF Blog


Investing in Africa | Africa's data protection landscape: Legislation, enforcement, and best practices

Africa's data protection landscape is rapidly evolving due to increased digital connectivity, technological progress, advocacy for privacy, and international compliance pressures. Since the 2000s, African nations have been enacting or updating data protection laws, with regulatory bodies stepping up enforcement efforts. These laws aim to establish secure data environments but pose challenges for businesses navigating the complex regulations. Non-compliance risks include fines, reputational harm, and imprisonment. On Wednesday, 3 April, ENS hosted a webinar in the Investing in Africa series, where ENS data protection experts from South Africa, Mauritius, Ghana, and Uganda covered the legal frameworks, compliance requirements, consequences of breaches, and best practices for data protection across the continent. 

Source: ENS


African economies projected to grow by 3.4% in 2024, but faster and more equitable growth needed to reduce poverty

Increased private consumption and declining inflation are supporting an economic rebound in sub-Saharan Africa. However, the recovery remains fragile due to uncertain global economic conditions, growing debt service obligations, frequent natural disasters, and escalating conflict and violence, according to the World Bank’s latest Africa’s Pulse report. Transformative policies are needed to address deep-rooted inequality to sustain long-term growth and effectively reduce poverty. The report projects that growth will rebound in 2024, rising from a low of 2.6% in 2023 to 3.4% in 2024, and 3.8% in 2025. However, this recovery remains tenuous. While inflation is cooling across most economies, falling from a median of 7.1% to 5.1% in 2024, it remains high compared to pre-COVID-19 pandemic levels. Additionally, while growth of public debt is slowing, more than half of African governments grapple with external liquidity problems, and face unsustainable debt burdens.

Source: World Bank


Policy harmonisation key to accelerating growth of Africa’s digital economy

African information and communications technology (ICT) ministers, policymakers and stakeholders have been urged to institute policy reforms within Africa’s ICT sector with a view to harmonise better ICT policies for the continent’s digital economy. Kenya’s Information, Communications and the Digital Economy Cabinet Secretary (CS) Eliud Owalo said that outdated policies are limiting investment in the continent’s ICT sector. Owalo speaking during the unveiling of the Connected Africa Summit 2024 singled out policies such as the 30% local shareholding rule for foreign companies to invest in Kenya’s ICT sector as a hindrance to foreign direct investment. “Anything and everything that we are doing as African countries must be aligned to the African Union’s (AU) Agenda 2063. We need to think together as Africa while aligning to the overall policy framework, which is the AU agenda 2063. Africa can be transformed when leveraging technology into a continental digital marketplace, which is boundless once we have good enabling policies, laws and regulations that facilitate the database,” said CS Owalo. 

Source: Kenya News Agency

East Africa

EA stock market chiefs mull issuing dollar-denominated securities to cushion investors

The East African (EA) stock market chief executives are considering a policy shift to allow them to issue debt instruments in hard currency to open competition with commercial banks over the issuance of foreign currency denominated loans to companies largely involved in international trade. The proposal which regional central banks are still jittery to approve, seeks to allow companies to raise fresh capital from the capital markets by issuing bonds denominated in hard currency and particularly the United States dollar. The East African Stock Exchanges Association (EASEA) says this will cushion issuers and investors from massive exposure on local currency risks where foreign investors and companies dealing in international trade absorb exchange rate risks. “For capital markets instruments I do believe that (issuance of capital markets instruments in hard currency) all of us in EASEA are discussing that and [I am] sure we are even going to be discussing that in our technical committee of the African Securities Exchange Association of which [I am] the vice-president. We have been discussing that but most countries are jittery, central banks are reluctant,” EASEA Chairman Celestin Rwabukumba told The EastAfrican.

Source: The EastAfrican


AI to be applied to Botswana diamonds’ database

London and Botswana-listed diamond company Botswana Diamonds is going to apply artificial intelligence (AI) techniques to its Botswana database, the company said on Tuesday, 9 April. Involved are 380 GB of data and 260 000 files in what is described as the country’s second largest diamond exploration information set. “This is an excellent foundation to incorporate AI to assist in a comprehensive search for new diamond deposits and potentially other minerals,” the company, headed by Chairperson John Teeling, stated in a release to Mining Weekly. Botswana Diamonds’ database has 95 000 km2 of information, including 375 000 km of airborne geophysical input, 606 ground geophysical surveys, 228 000 soil sample results, and 32 000 drill hole logs. Botswana Diamonds’ geologist Managing Director James Campbell, a Fellow of the Geological Society of South Africa, who has 38-years-plus diamond sector experience, has given his nod to the release. Being deployed is Planetary AI Ltd Xplore mineral prospectivity technology, developed in collaboration with International Geoscience Service. Xplore is described as a system that uses semantic technology with machine learning that allows computers to grasp the meaning and context of geological data in much the same way as a geologist. While the system acts much like a geologist, it can work through vast datasets quicker in an exercise that is expected to yield new insights that will offer drillable targets previously unseen.

Source: Mining Weekly

Central African Republic

AfDB and CAR forge stronger alliance to tackle fragility and drive sustainable development

The African Development Bank (AfDB) and the Central African Republic (CAR) have reinforced their partnership during an official visit by Marie Laure Akin-Olugbade, Vice President for Regional Development and Business Delivery, from 25-27 March. Akin-Olugbade engaged with key stakeholders and government leaders, including President Faustin-Archange Touadéra and Prime Minister (PM) Félix Moloua, reaffirming the AfDB’s commitment to advancing CAR’s development agenda. She also met with development partners and beneficiaries of AfDB-funded projects. PM Moloua expressed satisfaction with the fruitful cooperation with the AfDB, emphasising its pivotal role in advancing national objectives. “The bank's support has been instrumental in advancing our national development agenda and addressing key challenges, and we look forward to continued collaboration to further drive progress and prosperity for our nation," he said. The AfDB’s current partnership with CAR focuses on two primary pillars: supporting agricultural development and infrastructure for social inclusion and enhancing institutional capacity building and governance. 

Source: AfDB

Côte d'Ivoire

IMF reaches staff level agreement with Côte d’Ivoire on the second review of the EFF/ECF arrangements and the first review of the RSF arrangement

An International Monetary Fund (IMF) staff team, led by Mr Olaf Unteroberdoerster, held discussions with the Ivoirian authorities from 25 March to 6 April on progress under both the authorities’ economic programme supported by the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF), and the climate reform programme supported by the Resilience and Sustainability Facility (RSF). The EFF/ECF arrangements for an amount of about USD3.5-billion and the RSF arrangement for an amount of about USD1.3-billion were approved by the IMF Executive Board respectively on 24 May 2023, and 15 March 2024. Mr Unteroberdoerster issued the following statement, in part: “I am pleased to announce that performance under the programmes has been satisfactory so far and that we reached staff-level agreement on all policies and reform measures in line with the programmes’ objectives. On the EFF/ECF arrangement, the authorities and staff agreed on key policy parameters including further revenue-based fiscal consolidation to reduce the fiscal deficit to 3% of GDP by 2025 and on structural reforms which will continue to further strengthen domestic revenue mobilisation, public financial management, and governance. On the RSF, the authorities are on track in implementing the reform measures expected to become effective over the coming months in 2024. The completion of the programmes’ reviews and disbursement of the next tranches for a total of about USD574-million will be subject to approval of the IMF’s Executive Board.”

Source: IMF


Ethiopian securities exchange raises targeted USD11-million capital

The recently established Ethiopian Securities Exchange (ESX) has realised its initial capital raise target of USD11.07-million (KES1.45-billion) needed to fund the start of operations. The exchange said the cash raise was oversubscribed by more than two times, receiving offers of USD26.6-million (KES3.49-billion) in new capital, although it did not state the amount it was taking up from the offers. The exchange tapped the capital from 48 domestic and foreign commercial investors, having held roadshows in Addis Ababa, Nairobi, and London to market the cash raise. The Ethiopian Finance Ministry, Ethiopian Investment Holdings (EIH) and FSD Africa signed a cooperation agreement in May 2022 to set up the stock exchange. The exchange was subsequently established in October 2023 as a public-private partnership, where 25% is held by the government’s strategic investment arm EIH and its subsidiaries such as Ethio telecom and the Commercial Bank of Ethiopia. The remaining 75% is earmarked for private sector investors, led by Nairobi-based FSD Africa, the Trade and Development Bank and the Nigeria Exchange Group. Others include 16 domestic private commercial banks, 12 private insurance companies, as well as 17 other private domestic investors.

Source: The EastAfrican


“Over 700 Ghanaian products absorbed under the AfCFTA’s Guided Trade Initiative” – President Nana Addo Dankwa Akufo-Addo

The President of Ghana, Nana Addo Dankwa Akufo-Addo, has during the state visit of the President of Guinea-Bissau Umaro Mokhtar Sissoco Embaló, announced the giant strides being made by Ghanaian products under the Guided Trade Initiative (GTI) of the African Continental Free Trade Area (AfCFTA). Following the maiden roll out of the GTI, President Akufo-Addo said over 700 AfCFTA self-defined products from Ghana such as cosmetics, processed foods, coconut oil, shea butter and garments, have been rolled out and targeted by the AfCFTA market under the GTI which was launched in October 2022. Speaking at a joint press conference at the close of bilateral engagements with President Embaló and his ministerial team from Guinea-Bissau, President Akufo-Addo said such transformative showing, “will give us the best opportunity to derive maximum benefit from our abundant natural resources and from our participation in the AfCFTA, and help bring progress and prosperity to our people”. He was confident that, the participation of Ghana, and seven other countries in the GTI of the AfCFTA will stimulate intra-Africa trade, amplify the competitive advantage of participating countries and solidify their status within the global market. 

Source: Office of the President, Republic of Ghana


Countdown to ending era of commercial banks holding Kenyan taxpayers’ money

Commercial banks in Kenya have about two weeks to disclose details of government accounts they are holding as part of a bigger plan to consolidate public funds from multiple bank accounts into a single account. National Treasury’s Director General in-charge of Accounting Services and Quality Assurance Bernard Ndung’u said the banks should submit details such as the number of government accounts, identities of accountholders, the types of the accounts and the value of the accounts. These disclosures will help the government decide how these public funds will be mopped up from the banking system. “First step is to undertake a detailed analysis of the accounts in banks and other financial institutions. This exercise is underway, which will provide visibility of the bank accounts and balances held by banks and financial institutions,” Mr Ndung’u told The EastAfrican in an interview last month. “Once the baseline is established a decision will be taken on the way forward, taking into account the views of the stakeholders including banks and financial institutions to avoid unintended and/or negative consequences [of the weaning].”

Source: The EastAfrican


Afreximbank takes financing roadshow to Liberia as it seeks to boost trade and Investment

African Export-Import Bank (Afreximbank) has concluded a three-day roadshow in Liberia in collaboration with the Ministry of Commerce and Industry of Liberia, Oakwood Green Africa, Loita Capital Partners International and Havit Inc., aimed at bolstering Liberia’s efforts to grow trade. This follows a prior edition of the roadshow held in 2023. Afreximbank’s Anglophone West Africa Regional COO, Eric Monchu Intong led a high-powered delegation to meet with the newly elected President, Joseph Nyumah Boakai and other government officials to understand the country’s vision and how Afreximbank can support through promoting, facilitating and financing intra and extra-African trade. The roadshow themed Advancing Economic Development in Liberia through Trade saw the bank hold bilateral meetings with government officials. The second roadshow focused on presentations to the Government and Liberia’s private and public sectors with the aim of highlighting the Afreximbank’s mandate, programmes and facilities which the country and businesses could leverage to achieve their trade and economic objectives.

Source: Afreximbank


The AfDB and the LERC launch Regulatory Information Database Management System

The African Development Bank (AfDB) and the Liberia Electricity Regulatory Commission (LERC) have jointly launched a cutting-edge Regulatory Information Database Management System (RDBMS) to address regulatory bottlenecks through digitalisation. The RDMBS, a product of the AfDB’s Africa Energy Sector Technical Assistance Program, is designed to streamline regulatory processes, enhance operational efficiency, and promote transparency within the electricity sector. By automating key performance indicators, the system will enable real-time monitoring of the regulator’s service delivery and its financial, technical and commercial performance. The initiative aligns with broader digitalisation efforts spearheaded by the bank across the continent. Similar interventions are underway in Ghana, Guinea, Nigeria, Tanzania, Uganda, and regional bodies such as the Common Market for Eastern and Southern Africa, the Economic Community of West African States, the Southern African Development Community, and the Economic Community of Central African States. The aim is to foster regional electricity trade and exchanges, in line with the African Union’s vision of an integrated African Single Electricity Market.

Source: AfDB


Unlocking opportunities: Mozambique’s new Investment Law and Regulations

As one of Africa's emerging economies, Mozambique offers abundant opportunities for domestic and foreign investors alike. In a bid to enhance a conducive environment for investment to continue fostering economic growth and development, Mozambique has recently updated its investment legislation and implemented Law No. 8/2023 of 9 June 2023 (Investment Law), effective since September 2023, and Decree No. 8/2024 of 7 March (Investment Regulations), which regulates the Investment Law. The Investment Law and Investment Regulations apply to all projects of an economic nature that are executed in Mozambique and are eligible to benefit from the significant fiscal and non-fiscal incentives and guarantees provided under the Investment Law. Domestic and foreign investments, as well as public-private partnership ventures, large-scale projects and business concessions, are subject to the provisions of the Investment Law and Investment Regulations. 

Source: ENS


Nigeria sets sights on sustainable blue economy development with AU support

Nigeria’s Blue Economy Strategy aims to unlock economic value from the sea, promoting fisheries, aquaculture, tourism, and renewable energy. The federal government in collaboration with the African Union (AU) through the AU – Interafrican Bureau for Animal Resources is set to develop a National Blue Economy Strategy for Nigeria. This was revealed recently by the Minister of Marine and Blue Economy, Adegboyega Oyetola at a stakeholders consultative workshop to define priority issues for the development of a National Blue Economy Strategy for Nigeria in Abuja. Speaking at the event, Oyetola hinted that considering the huge potential of the national marine resources, the institutionalisation of the expanded partnership committee on sustainable blue economy in Nigeria was approved with the view to develop a strategic plan for the national blue economy. This, he revealed, was what has eventually resulted in the creation of the Ministry of Marine and Blue Economy. He stressed that the event marked a significant milestone to review the draft strategy document for the Marine and Blue Economy sector.

Source: Arise News


Tanzania private sector lines up 50 proposals on tax reforms

The Tanzania Private Sector Foundation (TPSF) has listed about 50 consolidated proposals for tax and other charges reforms in an attempt to reduce operating costs, stimulate investment, and increase the competitiveness of local products. The proposals, which cut across key economic sectors, will be discussed by different stakeholders, including business leaders, investors, tax policy experts and practitioners, research institutions, and others, before submission to the government taskforce on tax reforms. TPSF's Executive Director, Mr Raphael Maganga named the focus areas as agriculture, manufacturing, banking and financial services, tourism and hospitality, trade and commerce, construction, mining, and transport and logistics. “We are proposing a reduction in production costs to increase the competitive edge of our local strategic products against imported products,” he said. 

Source: The Citizen


Ugandan foreign exchange reserves drop 12% due to debt payments

Uganda's foreign exchange reserves fell by about 12% between June 2023 and January this year because of external debt payments and the central bank's inability to buy foreign currency due to a slide in the Ugandan shilling. Reserves dropped from USD4.07-billion in June to about USD3.58-billion at the end of January, reaching 3.4 months of import cover excluding oil project-related imports, the central bank has said in its State of the Economy report. The Bank of Uganda targets foreign exchange cover of four months of imports, excluding oil projects, an International Monetary Fund staff report published in March said. Uganda's rising public debt, more than half of which is external, has been eating up a growing share of revenues and hitting other spending priorities like education and health. Total public debt stood at USD24.7-billion, 60% of which was external, at the end of 2023, finance ministry   figures show. The Bank of Uganda said foreign reserves could rise due to expected inflows from budget support loans, but that the outlook for the country's balance of payments was fragile.

Source: Reuters


Uganda proposes new taxes on fuel, building materials

Uganda is proposing a raft of taxes on key products such as fuel and building materials in the next financial year, raising fears of an increase in the already high cost of living. The government terms the proposals necessary to cover a revenue shortfall expected as it plans to cut down on borrowing. The proposals recently tabled before Parliament by the State Minister of Finance in charge of General Duties Henry Musasizi are in five sets of Tax Bills: Excise Duty Amendment Bill 2024, Stamp Duty Amendment Bill 2024, Income Tax Bill 2024, Value Added Tax Bill 2024 and Tax Procedures Amendments Bill 2024. The proposals seek to impose a UGX500 (USD0.12) on each 50 kg bag of cement, adhesive, grout, white cement or lime. They also seek to introduce a UGX1 550 (USD0.39) charge on every litre of gasoline, UGX1 230 (USD0.31) on each litre of gas oil and UGX1 550 (USD0.39) on every litre of paraffin. Other areas where the government is proposing new taxes are bottled mineral water with 10% or UGX75 per litre whichever is higher, 12% or UGX150 per litre of opaque beer whichever is higher and 5% withholding tax on gains earned from the sale of land in cities and municipalities, sale of rental property and sale of share of a private company.

Source: The EastAfrican


Uganda taps into Islamic banking market with entry of Salaam Bank

The Ugandan Government’s move to pass legislation allowing Islamic banking, and the subsequent licensing of Salaam Bank, show a growing demand for Sharia-compliant financial services. Salaam, a subsidiary of a Djibouti-based lender by the same name, opened doors formally in Kampala last month, underscoring what officials said was to serve a growing niche of clients. Uganda now joins other regional peers such as Kenya and Tanzania, which have opened a window for the issuance of financial services and investment products based on Sharia principles. The two countries are among a growing list of sub-Saharan African states placing greater emphasis on Sharia-compliant financial products as alternative financing, according to a report by the Singaporean Nanyang Technical University dated March 2022. Others include Nigeria, Egypt, The Gambia, Senegal, Ethiopia and South Africa. Ugandan President Yoweri Museveni last month officially launched the operations of Salaam Bank, the first Islamic lender in the country, after more than 20 years of waiting, giving Ugandans a chance to access both Islamic and conventional banking products. 

Source: The EastAfrican


2024-2029 development priorities for Zambia: Infrastructure and agricultural value chain

The Board of Directors of the African Development Bank (AfDB) Group has approved the Country Strategy Paper (CSP) for Zambia for 2024-2029, which sets out two priority intervention areas: Boosting the development of the private sector through investments in infrastructure and developing the country’s agricultural value chain. “The aim of this new CSP is to support Zambia’s vision of speeding up its socioeconomic transformation to improve livelihoods,” comments Raubil Durowoju, Head of the AfDB Group’s Country Office in Zambia. “The first area emphasises infrastructure development with the aim of increasing productivity, strengthening commercial competitiveness, diversifying the economy, and improving people’s lives. The second supports value addition and job creation and is targeted at women and young people,” he adds. The bank’s interventions will be designed to help expand the road and rail network and to make access easier and to unblock the development opportunities envisaged in other sectors of the economy. They will also support the creation of climate-resilient infrastructure and the development of transport resources to further strengthen regional trade, especially along the regional transport and trading corridors.

Source: AfDB


Zambia’s Mining Regulations foster critical mineral production

Zambia has set a target for its mining sector, aiming to achieve three million tonnes of copper production annually by 2031. To support this expansion, the country has implemented numerous policies that aim to incentivise investment and support project development. The Ministry of Mines and Minerals Development introduced the National Mineral Resources Development Policy in November 2022. This comprehensive strategy aims to fill regulatory voids and encourage investment from both domestic and international sources. The cornerstone of Zambia’s mining sector regulation is the Mines and Minerals Development Act (No. 11 of 2015), which has been enhanced by subsequent amendments including those outlined in the National Mineral Resources Development Policy. This Act makes provision with respect to prospecting for and mining minerals in Zambia and covers aspects such as the tax regime, licensing procedures, and framework for mining activities.

Source: Energy Capital & Power


Zimbabwe’s new gold-backed currency starts trading

Zimbabwe's gold-backed currency has started trading following the announcement of the new currency by the central bank. The Zimbabwe Stock Exchange (ZSE) announced that effective from 8 April 2024, the trading currency is the Zimbabwe Gold (ZiG). "All share prices will now be denominated in ZiG, therefore the opening prices for the trading session effective from 8 April will reflect the ZiG currency," said ZSE CEO Justin Bgoni in a statement. Zimswitch, a national payment platform, also announced that ZiG had gone live. The introduction of the new currency by the central bank comes in response to the rapid depreciation of the old Zimbabwe dollar. According to Reserve Bank of Zimbabwe Governor John Mushayavanhu, the new structured currency will be backed by a basket of foreign exchange reserves and precious metals, mainly gold, being held by the central bank. Mushayavanhu said the central bank was starting with total reserves of USD285-million to back up the new currency. Zimbabwe adopted a multi-currency regime in 2009 to stabilise the economy following years of hyperinflation. The government in 2019 outlawed the multiple currency regime and re-introduced the Zimbabwe dollar as the sole legal tender. In 2020, the government reintroduced the multi-currency regime. Since then, the use of the United States dollar (USD) has grown in the economy, with the national statistics agency ZimStat saying that over 85% of international transactions are in USD.

Source: Xinhua