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issue 548 | 02 Jun 2024

Africa

AfDB Annual Meetings 2024: AfDB secretary general joins South African leaders to highlight investment opportunities of enlarging the BRICS alliance

The BRICS Alliance, together with the new member additions, provides immense trade and investment opportunities for the African continent, Prof Vincent O. Nmehielle, Secretary General of the African Development Bank (AfDB) Group, said at an event on the sidelines of the AfDB’s 2024 Annual Meetings in Nairobi on Monday, 27 May. "These countries are emerging economies with a growing middle class and a substantial consumer market; expanding into these markets will lead to growth opportunities for the continent," Nmehielle said. The BRICS Business Breakfast, hosted by the South African Chapter of the BRICS Business Council and Brand South Africa, brought together key leaders and policymakers to discuss trade and investment opportunities for Africa, with a special focus on the role of the BRICS nations and their potential partnerships with African countries. BRICS, a grouping of Brazil, Russia, India, China, and South Africa, has recently expanded its membership, to take in new African members Egypt and Ethiopia, as well as Iran and Argentina, among others. The expansion, known as BRICS Plus, is strengthening the ties between BRICS and Africa.

Source: AfDB

Africa

AfDB Group Annual Meetings 2024: Climate Action Window launches second call for mitigation project proposals in 37 low-income African countries

The African Development Fund (ADF) has launched the second call for proposals through its Climate Action Window (CAW) on the sidelines of the 59th Annual Meetings of the Board of Governors of the African Development Bank (AfDB) Group in Nairobi. The window was created during the 16th replenishment of the ADF (ADF-16) to support 37 low-income and vulnerable African countries in accelerating and scaling up access to climate finance for actions addressing the impacts and shocks of climate change. Speaking on Monday, 27 May during a special session of donors to the CAW, AfDB Vice President for Power, Energy, Climate and Green Growth Kevin Kariuki said the second call would focus on climate mitigation projects aimed at reducing or avoiding greenhouse gas emissions. The goal is to promote approaches that support achieving net-zero emissions. Kariuki spoke of the effects of climate change across the continent – floods in Kenya and Tanzania earlier this month, cyclone Freddy’s devastating impact in South Africa last year and current droughts in the southern Africa region. Africa’s massive climate financing needs – currently standing at around USD277-billion – can only be met with innovative tools.

Source: AfDB

Africa

Improving connectivity and accelerating economic growth across Africa with new investments

On 23 May 2024, Google announced new investments in digital infrastructure and security initiatives designed to increase digital connectivity, accelerate economic growth, and deepen resilience across Africa. To help increase the reach and reliability of digital connectivity for Africa, Google announced Umoja, the first ever fiber optic route to directly connect Africa with Australia. Anchored in Kenya, the Umoja cable route will pass through Uganda, Rwanda, the Democratic Republic of the Congo, Zambia, Zimbabwe, and South Africa, including the Google Cloud region, before crossing the Indian Ocean to Australia. Umoja’s terrestrial path was built in collaboration with Liquid Technologies to form a highly scalable route through Africa, including access points that will allow other countries to take advantage of the network. Umoja, which is the Swahili word for unity, joins Equiano in an initiative called Africa Connect. Umoja will enable African countries to more reliably connect with each other and the rest of the world. Establishing a new route distinct from existing connectivity routes is critical to maintaining a resilient network for a region that has historically experienced high-impact outages.

Source: Google Africa Blog

Benin

Benin joins 16 other countries to accede to the establishment agreement for Afreximbank’s impact investment subsidiary, FEDA

Benin has become the latest African nation to accede to the Fund for Export Development in Africa (FEDA), the impact investment subsidiary of the African Export-Import Bank (Afreximbank). With Benin’s accession to the FEDA Establishment Agreement, the total number of participating African countries has risen to 17, following Nigeria’s accession earlier this month. The accession to the agreement demonstrates Benin’s support for Afreximbank’s efforts to broaden FEDA’s effectiveness by mobilising its member states to sign and ratify the FEDA Establishment Agreement and to support the organisation’s impact investing objectives. The onboarding of new members expands the reach of FEDA’s interventions and reflects the fund’s unwavering commitment to its mandate of providing long-term capital to African economies, with a focus on industrialisation, intra-African trade and value-added exports.

Source: Afreximbank

Comoros

IMF reaches staff-level agreement on the second review of the ECF with Comoros

An International Monetary Fund (IMF) team, led by Ms Suchanan Tambunlertchai, held meetings in Moroni from 24 April – 7 May, to discuss progress on economic and financial policies and reforms in the context of the second review of the four-year Extended Credit Facility (ECF)-supported programme. The staff-level agreement is subject to approval by the IMF’s Management and Executive Board. Completing the review will make available SDR3.56-million (about USD4.7-million) to Comoros, bringing total disbursements under the arrangement to about USD14.1-million. On 24 May 2024, Ms Tambunlertchai issued the following statement, in part: “Performance under the ECF-supported programme has been generally good. Four out of five quantitative performance criteria at end-December 2023 were met. The ceiling on the accumulation of new external arrears was breached due to delays in debt repayments, highlighting weaknesses in liquidity management capacity. The authorities are working to ensure the clearance of all these external arrears prior to the executive board meeting scheduled for June.”

Source: IMF

Gabon

IMF Executive Board concludes 2024 Article IV consultation with Gabon

On 24 May 2024, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Gabon. Gabon’s post-COVID-19 pandemic recovery held up well in the face of recent shocks. The economy hit a soft patch in 2023, following a series of logistics disruptions, political uncertainty, and high fuel prices for businesses, but it is set to resume its potential growth of around 3% this year as shocks dissipate. Inflation has receded to below the 3% regional ceiling by the Bank of Central African States and should remain within target in the absence of further shocks. Tailwinds from robust oil prices in the last few years have also supported the external position. At the same time, fiscal imbalances widened significantly: large non-oil deficits in 2022-23 led to a rapid accumulation of arrears, pushed public debt to an estimated 70.5% of GDP, above the Central African Economic and Monetary Community ceiling, and weighed down on reserve accumulation. Going forward, the outlook will face significant headwinds. The prospect of gradually declining oil wealth is weighing on the long-term outlook for growth and the external position given a still moderate diversification away from oil.

Source: IMF

The Gambia

Gradual recovery signals: The Gambia’s economy shows resilience amid global challenges

The Gambia's economy has shown a remarkable resilience in the face of heightened global and regional uncertainties, according to The Gambia’s Fourth Economic Update – Spring 2024. Despite a sluggish global environment, the country's real GDP grew by 5.3% in 2023, signalling a continued recovery from the COVID-19 pandemic and persistent external headwinds. "We are pleased to see the Gambia’s economic activity improved”, said Feyi Boroffice, World Bank Resident Representative. "The improved agricultural production and increased public consumption as well as private and public investment drove this positive growth. However, challenges such as higher inflation, monetary tightening and economic slowdown in advanced economies disrupted the tertiary sectors and slowed private consumption, all of which tempered the country's overall performance”. Inflation pursued its uptrend throughout 2023 to reach even higher levels in decades, mainly due to global prices of commodities. Looking ahead, the economic outlook for The Gambia remains favourable, with GDP projected to grow by 5.6% over the period of 2024-2026.

Source: World Bank

Ghana

Ghana receives approval to trade 700 products under the AfCFTA

Ghana has received approval from the authority of the African Continental Free Trade Area (AfCFTA) to trade 700 local products within the African continent, a senior official said. Minister of Trade and Industry Kobina Tahir Hammond made the announcement on the first day of the Made-in-Ghana Bazaar, saying the government has been taking a number of steps aimed at making Ghanaian products competitive domestically and abroad under the AfCFTA. The minister said the government took advantage of the AfCFTA Guided Trade Initiative and facilitated market exploratory missions for 63 companies to Kenya and 52 companies to Tanzania. "As a result, a total of 700 products have received Rules-of-Origin certification to trade under the AfCFTA," he said. Hammond reiterated the government's resolve to continue to create a conducive environment for the development of small and medium-sized enterprises (SMEs) and other manufacturing concerns in Ghana, urging the private sector to take advantage of the enabling environment to invest in local manufacturing.

Source: Xinhua

Ghana

Ghana signs MoU to restructure USD5.4-billion debt

Ghana has signed a memorandum of understanding (MoU) with its bilateral creditors, including China and France, to restructure USD5.4-billion of debt. This agreement is a crucial step towards securing USD360-million from the International Monetary Fund (IMF) under Ghana’s USD3-billion bailout programme, expected next month. The MoU provides a framework for restructuring loans from official creditors, following an agreement by the Paris Club in January. Ghana defaulted on most of its USD30-billion external debt during the COVID-19 pandemic. Since then, inflation has dropped from 54.1% in December 2022 to 25% in April 2024, with GDP growth reaching 2.9% in 2023. The IMF has declared Ghana's debt unsustainable, aiming to reduce the public debt-to-GDP ratio from 88.1% in 2022 to 55% by 2028. Terms with official creditors are crucial for bondholders, who seek equitable treatment under the Group of 20 Common Framework for debt restructuring. Ghana completed a domestic debt restructuring in October, saving GHS61-billion (USD17.5-billion). The government continues to work towards meeting IMF requirements for its debt restructuring programme.

Source: Africanews

Guinea-Bissau

A blockchain platform to strengthen wage bill management goes live

A capacity development mission led by Concha Verdugo-Yepes, Senior Economist in the International Monetary Fund (IMF) African Department and Project Manager, visited Bissau from 27-31 May, to participate in the official launch of the “blockchain solution to strengthen the transparency of the wage bill management at the Ministries of Finance and Public Administration” on 29 May. At the end of the launch event, organised in collaboration with the Court of Auditors and presided by Prime Minister Rui Duarte de Barros, and Minister of Finance Ilídio Vieira Té, Ms Verdugo-Yepes highlighted the importance of this remarkable achievement by a fragile state: “Guinea-Bissau stands up as one of the first countries in sub-Saharan Africa to use blockchain digital technology to enhance government operations in wage bill management, strengthen fiscal transparency, and tackle governance vulnerabilities. This innovation could help build trust in fiscal institutions, increase accountability and reduce any perception of public corruption. The blockchain solution detects discrepancies and raises red flags when salaries’ information is inconsistent. It reduces audit reporting and reconciliation burden; and provides reliable, timely and high-quality data to artificial intelligence models.”

Source: IMF

Kenya

The Statute Law (Miscellaneous Amendments) (No. 2) Bill, 2023 signed into law: anticipated key changes to various laws

The Statute Law (Miscellaneous Amendments) (No. 2) Bill, 2023 was assented into law on 24 April 2024 and came into force on 26 April 2024 upon gazettement in the Kenya Gazette. The Statute Law (Miscellaneous Amendments) Act, 2024 (Amendment Act) introduces changes to 16 statutes. The key highlights of the Amendment Act relate to: trusts, public finance, the Value Added Tax (VAT) Act, employment, public holidays,the Office of the Attorney-General Act, the Oaths and Statutory Declaration Act, the Advocates Act, the Notaries Public Act, the Sexual Offences Act and the Traffic Act.

Source: ENS

Lesotho

Lesotho’s updated Labour Act – Promoting fair labour practices and equitable employment relations in line with global standards

Lesotho has enacted the Labour Act, 2024 (the Act), which consolidates all labour and employment laws in the country. The Act came into force on 2 April 2024 and repeals the Labour Code Order, 1992 (the Labour Code). While it mirrors the Labour Code, it has also introduced several notable changes with the purpose of providing a comprehensive framework for regulating employment relations, promoting fair labour practices, and ensuring the welfare and rights of both employers and employees. The Act applies to employment relationships in the public and private sectors but does not apply to security agencies. By aligning national laws on working conditions, wages, and dispute resolution mechanisms with global employment and labour standards, the Act aims to establish a balance between employer and employee rights.

Source: ENS

Malawi

IMF staff completes mission to Malawi

An International Monetary Fund (IMF) staff team led by Ms Mika Saito visited Lilongwe from 12-23 May 2024 to conduct discussions on the first review of the Extended Credit Facility (ECF)-supported programme. The programme was approved by the IMF Executive Board on 15 November 2023. At the end of the mission, Ms Mika Saito issued the following statement, in part: “The Malawian authorities and the IMF team made substantial progress in discussions on the policies and reforms needed for the completion of the first review of the ECF-supported programme. We reached a common understanding on efforts needed to return to a sustainable fiscal adjustment path, rebuild external buffers, and restore debt sustainability. We also have a clear roadmap towards the completion of the review. Weather-related shocks continue to impact the Malawian economy, exacerbating food insecurity. The economic outlook for 2024 remains positive but economic growth is now projected at 2% reflecting the impact of El Niño on agricultural production and spillovers to the rest of the economy. A successful winter crop would cushion the impact of drought on the agriculture sector.”

Source: IMF

Republic of the Congo

IMF staff concludes mission for 2024 Article IV and reaches staff-level agreement on the fifth review under the ECF for the Republic of the Congo

An International Monetary Fund (IMF) team, led by Roland Kpodar, held virtual meetings from 2-16 May 2024, to conduct the 2024 Article IV consultations and discussions on the fifth review of the Republic of the Congo’s three-year programme under the Extended Credit Facility (ECF) approved by the IMF Executive Board on 21 January 2022. At the end of the mission, Mr Kpodar issued the following statement, in part: “I am pleased to announce that the Congolese authorities and the IMF team have reached a staff-level agreement on the fifth review of the Republic of the Congo’s programme under the [ECF] arrangement. This staff-level agreement is subject to continued implementation of agreed policy actions, and IMF Management and Executive Board approval. Upon completion of the executive board review, the Republic of the Congo would have access to SDR32.4-million (about USD43-million). [The Republic of the Congo’s] economic recovery softened in 2023 to reach 2%, mainly reflecting an unexpected downturn in oil production, heavy floods, power outages, and weaker public investment. Growth is expected to strengthen to 2.8% 2024, and sustain the momentum in the medium term, primarily driven by the non-oil sector as hydrocarbon production stagnates.”

Source: IMF

Somalia

IMF Executive Board concludes the first review of the ECF for Somalia

The Executive Board of the International Monetary Fund (IMF) has completed the first review of the Extended Credit Facility (ECF) arrangement for Somalia. The board’s decision enables the immediate disbursement of SDR7.5-million (about USD10-million), which will be channeled for budget support, bringing Somalia’s total disbursement under the ECF to SDR37.5-million (about USD50-million). Somalia’s ECF arrangement was originally approved by the Executive Board on 19 December 2023. The programme supports the authorities’ reform strategy, after achieving the completion point under the Heavily Indebted Poor Countries (HIPC) initiative, to further strengthen key economic institutions and promote macroeconomic stability and growth. This is in line with Somalia’s national development plan and the government’s long-term vision to maintain economic stability, strengthen revenues and public financial management, promote financial deepening, improve governance, and enhance statistics.

Source: IMF

Tanzania / United Kingdom

Tanzania's horticulture industry poised for boom as the UK scraps tariffs

The United Kingdom (UK) has unveiled a significant package to strengthen economic ties with Tanzania, focusing on the growth of the nation’s horticulture sector. Announced recently in Arusha, the initiative promises to offer duty-free access to UK markets for Tanzanian horticultural exports, underscoring the UK’s commitment to cultivating mutually beneficial trade relations with the resource-rich nation. The announcement came during a high-profile business-to-business event that attracted 17 horticultural exporting companies, organised by the Tanzania Horticultural Association (TAHA in partnership with the UK High Commissioner, Mr David Concar. In his opening speech, the UK’s Prime Minister’s Trade Envoy, Mr Lord Wanley, affirmed the UK’s dedication to fostering robust trade links with Tanzania. “Our nation is steadfast in its commitment to establishing fair and free trade channels with Tanzania, alongside 64 other countries within our Developing Countries Trading Scheme,” Lord Wanley conveyed to the 17 horticultural exporting companies in attendance at the TAHA headquarters.

Source: The Citizen

Togo

A new chapter in the partnership between the World Bank Group and Togo

The World Bank Group (WBG) has endorsed a new Country Partnership Framework (CPF) for Togo, granted a special waiver for the country's access to the Prevention and Resilience Window, and approved three new loans from the International Development Association for a cumulative amount of over USD600-million, aimed at strengthening prevention and resilience, increase access to reliable electricity, improve the performance of public administration, and support for refugees and host communities in the northern part of the country. The new CPF is the strategy that will guide the WBG’s interventions in Togo over the next five fiscal years (2025-2029) to help meet the country's development challenges to reduce poverty, increase shared prosperity, and promote sustainable development for its population of over 8 million. It is structured around three high-level objectives, notably the creation of quality jobs by the private sector, the improvement of human capital, and the promotion of an inclusive and resilient territorial development. 

Source: World Bank

Togo

Togo adopts new strategy to fight cybercrime

Togo published its new cybersecurity strategy on 22 May 2024. The 2024-2028 plan was drawn by the National Cybersecurity Agency. It aims to enhance digital security, aligning with Togo’s goal of becoming a regional cybersecurity leader. The strategy is built on four pillars: promoting cybersecurity culture through awareness and training, protecting critical information systems, enhancing the system for responding to cyber incidents, and strengthening legal mechanisms against cybercrime. Commenting on the strategy’s adoption, Prime Minister Victoire Tomegah-Dogbe, said it "is a crucial step in the government's commitment to anticipate and address digital threats of all kinds, ensuring the protection of citizens, businesses, as well as critical infrastructure and services against digital threats." The new strategy buttresses Togo's commitment to making the digital economy a cornerstone of its development by countering cyber threats.

Source: Togo First

Zambia

Zambia to emerge from debt default as bondholders back USD3-billion restructuring

Zambia's Ministry of Finance recently said more than 90% of holders of its USD3-billion in outstanding international bonds had accepted its restructuring proposal, paving the way for it to emerge from a lengthy default. The country defaulted more than three years ago and is reworking its debt under the Group of 20 (G20) Common Framework - a platform to bring together creditors like China and developed creditor nations, known as the Paris Club, to ensure swift and smooth debt overhauls for low-income countries. Zambia was widely seen as a test case for the G20 plan but the process had been beset by delays, curbing investment and economic growth and weighing on local financial markets. A devastating drought worsened the situation. "Finalising this agreement with bondholders will create the fiscal breathing space necessary for Zambia to remain on a trajectory of sustainable economic growth," Finance Minister Situmbeko Musokotwane said in an online statement. "After nearly four years since we initially defaulted on our Eurobonds, the close of the restructuring chapter is in sight." 

Source: Reuters