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issue 551 | 23 Jun 2024

Africa

AfDB launches the African Debt Managers Initiative Network to spur home-grown solutions to debt challenges

The African Development Bank's (AfDB) African Development Institute recently launched the African Debt Managers Initiative Network, a new programme to provide home-grown solutions to Africa's debt challenges. The inauguration and first peer learning event took place in Addis Ababa under the theme Developing and Deepening Domestic Debt Markets in Africa. AfDB, Director Coulibaly Abdoulaye said the network would provide tailored and home-grown solutions to the continent's debt challenges. He said the network would also strengthen the debt management capacity of African countries' officials and institutions to rapidly resolve the debt challenges faced by these countries, restore macroeconomic stability and support inclusive growth, as well as promoting the exchange of experiences among debt managers in regional member countries. African Development Institute Director, Eric Ogunleye, said that the growing financing needs for infrastructure development, poverty reduction, mitigating climate change, and tackling insecurity are driving African countries to increase their borrowing, further increasing debt vulnerability.

Source: AfDB

Africa

Afreximbank and Africa CDC join hands to strengthen health systems in Africa

On 4 June 2024, the African Export-Import Bank (Afreximbank) entered into a cooperation agreement with the Africa Centres for Disease Control and Prevention (Africa CDC) to leverage their strengths in boosting health systems across Africa and improving the livelihoods of African citizens. This milestone agreement underscores the commitment of both institutions to enhance regional vaccine research, development, and sustainable manufacturing capabilities. The agreement will see Afreximbank and Africa CDC collaborate on various strategic initiatives, including the operationalisation of the Africa Pooled Procurement Mechanism in close cooperation with the United Nations Economic Commission for Africa. They will develop and implement priority initiatives to advance Africa’s unique healthcare manufacturing sector and promote innovative financing mechanisms to support health research and development initiatives in African countries. Both institutions aim to leverage gains made in implementing the African Continental Free Trade Area Agreement. Recognising the critical role of Africa CDC in ensuring African health security, Afreximbank will support Africa CDC in achieving financial sustainability.

Source: Afreximbank

East Africa

High taxes and debt threaten East Africa’s growth

East Africa’s finance ministers recently tabled a raft of measures for expanded expenditure plans for the 2024/2025 fiscal year with a keen eye on debt repayment and reliance on domestic revenues to run government operations. These measures effectively set the stage for increased taxation, which will potentially choke economic growth in the region. East Africa’s economic growth is projected to pick up from 3.5% in 2023 to 5.1% in 2024 and 5.7% in 2025, according to the African Development Bank, buoyed by infrastructure development and increased regional trade.

Source: The EastAfrican

East / Southern Africa

ACTESA and ISAAA AfriCenter sign MoU

The Alliance for Commodity Trade in Eastern and Southern Africa (ACTESA) has signed a memorandum of understanding (MoU) with the Acquisition of Agri-biotech Applications (ISAAA AfriCenter) to implement the Common Market for Eastern and Southern Africa (COMESA) Biotechnology Implementation Plan (COMBIP). The MoU signed in Lusaka on 5 June 2024 outlines several areas where ISAAA AfriCenter and COMESA-ACTESA will work together which includes rolling out a communications strategy on agricultural biotechnology and biosafety to raise awareness and address misinformation through facilitating appropriate stakeholder engagement platforms. They will also build capacity of media practitioners to objectively and accurately communicate biotechnology and biosafety to the general public. Other areas include supporting sharing of biosafety regulatory experiences among COMESA member states by creating a one-stop source of biotech approvals and regulatory systems. Speaking at the signing ceremony, COMESA-ACTESA CEO Dr John Mukuka said the institution is looking forward to the collaborative effort that the MoU brings as the two parties are ready to work together and implement the activities. 

Source: COMESA

Southern Africa

Despite challenges, Southern Africa has improved financial inclusion with adoption of digital financial services

Southern African countries performed well on their financial inclusion, between 2011 and 2021. Progress is partly attributed to rapid adoption of digital financial services including mobile money, according to financial experts at a webinar on the African Financial Sector Southern Africa. Organised by the United Nations Economic Commission for Africa (ECA) in partnership with the West African Economic and Monetary Union, the webinar is part of a series themed, Regional Dialogues on the African Financial Sector - regional profile. The aim of the regional profiles is to provide detailed information on the countries' financial sectors, documenting recent trends, progress, challenges, and opportunities for a deeper financial sector. In her opening remarks Eunice Kamwendo, ECA’s Director of the Subregional Office for Southern Africa noted the potential for growth, innovation and sustainable investments in the financial sector in Southern Africa. “Southern African region’s financial sector faces financial challenges that include liquidity issues, debt distress, limited access to financial services, high levels of informality and regulatory constraints. Despite these challenges, it is important to prioritise the development of the financial sector to create stability, mobilise domestic resources and foster a stable environment for investment,” said Ms Kamwendo.

Source: ECA

Angola / Italy

Italy to invest USD320-million in Angola’s Lobito Corridor

Italy is investing USD320-million in the development of rail infrastructure associated with the Lobito Corridor – a 1 300 km railway line connecting the copper belts in Zambia and the Democratic Republic of the Congo to international markets via Angola’s Lobito Port. The funds will support the development of core rail infrastructure and aligns with the Alliance for Green Infrastructure in Africa (AGIA) – an initiative to generate, finance and execute projects with the private sector in Africa. AGIA serves as a bridge between the global north and south and mobilises capital for infrastructure projects in Africa. The investment is part of Italy’s Mattei Plan for Africa – an initiative that aims to make Italy an energy hub to transport natural gas and energy from Africa to Europe. Italy joins global partners the United States and the European Union (EU), both of which have already invested in the project. Italy’s USD320-million investment represents an additional financial commitment beyond the EU funds and aims to support the development of economic corridors in Africa. 

Source: Energy Capital & Power

Burkina Faso

IMF Executive Board completes first review under the ECF arrangement and concludes 2024 Article IV consultation

The Executive Board of the International Monetary Fund (IMF) has concluded the Article IV consultation with Burkina Faso. The board also completed the first review of the 48-month Extended Credit Facility (ECF) arrangement, approved on 21 September 2023. The approval of the first review enables the immediate disbursement of about USD31.7-million (SDR24.08-million), bringing total IMF financial support under the arrangement to about USD63.4-million (SDR48.16-million). The board also completed the financing assurances review. In January 2024 the authorities decided to exit the Economic Community of West African States but reaffirmed their commitment to their membership in the West African Economic and Monetary Union, which should help support domestic and regional economic stability. The authorities are also committed to a capacity development agenda supported by the IMF and other partners to further enhance fiscal governance and transparency. 

Source: IMF

Cabo Verde

Cabo Verde must invest in the blue economy for growth and sustainability

Cabo Verde has shown resilience in the post-COVID-19 pandemic recovery, but the crisis highlighted vulnerabilities such as dependence on tourism and risks from underperforming state-owned enterprises (SOEs). Climate change is exacerbating these weaknesses. In its report, Cabo Verde Economic Update 2024, the World Bank analyses the state of the Cape Verdean economy in 2023, projects scenarios for 2024, and presents policy options to accelerate fiscal consolidation, reduce debt vulnerabilities, and foster the sustainable growth of the blue economy, thus strengthening resilience to climate and economic shocks. In 2023, economic growth decelerated to 5.1%, with tourism returning to pre-pandemic levels. Inflation fell to 3.7% due to lower fuel and food prices. Tourism continues to be the main driver of growth in Cabo Verde, but poverty remains above pre-pandemic levels. The fiscal position has improved, with the deficit decreasing to -0.3% of GDP, driven by an increase in tax revenues. However, fiscal risks related to the performance of SOE are persistent concerns. Real GDP growth is expected to remain stable in 2024 at 4.7%. However, significant risks persist, including possible increases in commodity prices, weaker external demand in tourism markets, and limited progress on the SOE reform agenda.

Source: World Bank

Côte d'Ivoire

Côte d'Ivoire receives USD35-million payment for verified reduction of carbon emissions

Côte d'Ivoire has received USD35-million from the World Bank for successfully reducing seven million tonnes of carbon emissions. This payment, part of the Emission Reductions Payment Agreement with the World Bank’s Forest Carbon Partnership Facility, directly benefits local communities and forest conservation stakeholders who have played a key role in reducing pollution by fixing damaged forests, planting crops and trees, and preserving existing forests. The amount granted is part of a larger agreement aiming for a total emission reduction of 10 million tonnes, (10 million “carbon credits”) valued at USD50-million. This first payment is based on the verified reduction of carbon emissions, confirmed by an independent third-party process. Proceeds will be distributed according to a robust benefit sharing plan designed through a consultative, participatory, and transparent process and will directly benefit those who played a crucial role in reducing carbon emissions between 30 October 2020 and 31 December 2021. The transaction underscores the importance of international cooperation and financial mechanisms in enhancing sustainable environmental practices, serving as a replicable model for rehabilitation through forest replanting, agroforestry techniques, and forest conservation efforts worldwide.

Source: World Bank

Liberia

Reforms to improve service delivery, boost tax revenues, and strengthen accountability and transparency in Liberia

The World Bank has approved financing for the Governance Reform and Accountability Transformation (GREAT) Project. This flagship project, funded by an International Development Association credit of USD30-million, will enhance access to selected digitally provided public services, raise tax revenues, and improve the openness and accountability of institutions. It will also strengthen the use of country systems and sustainably build the capacity of civil servants to implement reform programmes. “The GREAT project will support the government’s Agriculture, Roads, Rule of Law, Education, Sanitation, and Tourism agenda of achieving greater transparency, accountability, and efficiency in public institutions. It will accelerate efforts to rebuild and transform key institutions while delivering tangible results for the people of Liberia – including those in hard-to-reach areas,” said World Bank Liberia Country Manager Georgia Wallen. The project will address three key challenges in Liberia: a weak system for delivering administrative services due to low state presence and infrastructure constraints across the country; a strained fiscal outlook due to low domestic resource mobilisation; and limited accountability for managing public resources, with uneven service delivery results. Insufficient revenues undermine the ability of the state to provide services, while taxes are particularly difficult to mobilise in an environment of low accountability. 

Source: World Bank

Mozambique

IMF reaches staff-level agreement on the fourth review of the ECF with Mozambique

An International Monetary Fund (IMF) team, led by Mr Pablo Lopez Murphy, held in-person discussions with the Mozambican authorities in Maputo from 2-15 May 2024, on the fourth review under the Extended Credit Facility (ECF) arrangement. After the visit, discussions continued virtually. This staff-level agreement is subject to IMF Management approval and Executive Board consideration. The arrangement was approved by the IMF Executive Board for SDR340.8-million (about USD456-million) on 9 May 2022. At the conclusion of the discussions, Mr Lopez Murphy issued the following statement, in part: “The Mozambican authorities and the IMF team have reached a staff-level agreement on economic policies to complete the fourth review of Mozambique’s ECF arrangement. Once approved by IMF Management and completed by the Executive Board, Mozambique will have immediate access to SDR45.44-million. Mozambique’s economic growth is projected at 4.3% in 2024. Non-mining GDP growth is expected to accelerate from 2.2% in 2023 to 3.5% in 2024, a moderate level, as tight financial conditions continue to weigh on economic activity. The medium-term outlook for the extractive sector is strong as large [liquefied natural gas] projects are expected to resume activities.”

Source: IMF

Namibia

Bill proposed to protect consumers against rogue property agents

The Ministry of Industrialisation and Trade has proposed the establishment of a fund to compensate consumers whose money has been stolen by property agents. Trade Minister Lucia Iipumbu recently tabled the Bill in Parliament, saying the fund would act as insurance for consumers. “This part of the Bill is key and a welcome development as it aims to provide protection to consumers against the theft of money that has been entrusted to a property practitioner,” she said. She said the new Bill would require property practitioners, including property developers, auctioneers and property managers and real estate agents, to obtain a Fidelity Fund Certificate. This would require all property practitioners to have a valid Fidelity Fund Certificate before conducting and concluding any transaction. “It is worth noting that this piece of legislation is consumer centric and aims to provide protection to the consumer within the property sector,” Iipumbu said. The Bill also wants to establish the Property Practitioners Regulatory Authority to oversee the industry. The Property Practitioners Regulatory Authority would replace the Namibia Estate Agency Board. 

Source: The Namibian

Namibia

NAMFISA recovers NAD5.8-million

The Namibia Financial Institutions Supervisory Authority (NAMFISA) has recovered NAD5.8-million that was wrongfully charged to consumers in the non-banking financial sector. The authority recovered the money from January to March, which has been paid back to consumers. The non-banking financial sector is made up of microlenders, insurance companies, venture capitalists and currency exchanges. “NAMFISA is committed to resolving complaints efficiently and identifying underlying issues. Our mission is to regulate and supervise financial institutions to foster a stable and fair non-banking financial sector while promoting consumer protection,” says NAMFISA CEO Kenneth Matomola. According to Matomola, the recovery comes from complaint resolution efforts made by the institution and is a significant increase from the previous quarter. “From January to March 2024, NAMFISA’s complaints resolution interventions resulted in over NAD5.8-million being recovered and disbursed to complainants, a remarkable increase from the NAD2.4-million recovered in the previous quarter (October to December 2023),” says Matomola.

Source: The Namibian

Namibia

Revenue agency extends deadline for companies, individuals to get tax certificates

The Namibia Revenue Agency (NamRA) has decided that the current process for obtaining a tax certificate of good standing will remain in effect until 31 March 2025. According to NamRA Acting Spokesperson Victor Musiwa, the new guidelines for acquiring a tax certificate of good standing were originally scheduled to take effect from 1 June 2024. “However, we have extended the transition period to 31 March 2025 with the new guidelines coming into effect on 1 April 2025,” says Musiwa. This extension aims to provide a smoother transition for taxpayers with existing payment arrangements. “Taxpayers with payment plans can continue to obtain a certificate of good standing under the current procedures,” Musiwa says. Taxpayers who fail to comply with their Integrated Tax Administration System-recorded payment arrangements will only be issued a certificate of good standing upon paying 20% of the capital balance. “These measures are intended to simplify administration and encourage overall tax compliance,” Musiwa says.

Source: The Namibian

Nigeria

Supporting Nigeria’s homegrown reforms: New World Bank financing for inclusive growth and revenue diversification

On Thursday, 13 June the World Bank approved two operations: USD1.5-billion for the Nigeria Reforms for Economic Stabilization to Enable Transformation Development Policy Financing Program and USD750-million for the Nigeria Accelerating Resource Mobilization Reforms Program-for-Results. This combined USD2.25-billion package provides immediate financial and technical support to Nigeria’s urgent efforts to stabilise the economy and scale up support to the poor and most economically at risk. It further supports Nigeria’s ambitious, multi-year effort to raise non-oil revenues and safeguard oil revenues to promote fiscal sustainability and provide sufficient resources to deliver quality public services. Confronted with a fragile economic situation, Nigeria recognised the urgency of changing course and embarked on critical reforms to address economic distortions and strengthen the fiscal outlook. Initial critical steps to restore macroeconomic stability, boost revenues, and create the conditions to reignite growth and poverty reduction have been taken. These include unifying the multiple official exchange rates and fostering a market-determined official rate, as well as sharply adjusting gasoline prices to begin to phase out the costly, regressive, and opaque gasoline subsidy. 

Source: World Bank

Senegal

Tax reforms can boost revenues for social equity - Senegal Economic Update

According to the World Bank’s Senegal Economic Update 2024, economic growth in the country proved resilient in 2023 amid political tensions and persistent, albeit declining, inflation. The country’s vibrant primary and secondary sectors supported economic activity despite disruptions in the services sector and a slowdown in export growth. The growth rate stood at 4.3%, up from 3.8% in 2022. “The new authorities’ desire to strengthen transparency and public financial management is an opportunity to bolster Senegal’s positive medium-term economic outlook. This outlook is, however, contingent in the short term on a commitment to fiscal consolidation and the implementation of transformative reforms that underpin macroeconomic stability,” noted Keiko Miwa, World Bank Country Director for Cabo Verde, The Gambia, Guinea-Bissau, Mauritania, and Senegal. The fiscal deficit reduction target for 2023 was achieved, resulting in a deficit of 5.1% of GDP, slightly above the target of 4.9%. A number of factors, including the increase in tax revenues, contributed to the deficit. According to Wilfried A. Kouame, World Bank Lead Economist and one of the report’s authors, “Tax reforms and improved personal income tax can raise domestic revenues by broadening the tax base and enforcing the legal framework without increasing poverty or inequality.” 

Source: World Bank

Somalia

Somalia reaffirms commitment to EAC integration

Somalia has reaffirmed its commitment to integrating into the East African Community (EAC), demonstrating strong participation in a pivotal regional meeting in Nairobi, Kenya. The one-week meeting, attended by EAC partner state delegates, aims to develop a comprehensive roadmap for Somalia's integration into the EAC, marking a significant step towards bolstering regional cooperation and economic integration. Speaking during the opening ceremony, the EAC Secretary General, Ms Veronica Mueni Nduva, highlighted the historical context and importance of the roadmap for Somalia’s integration into the bloc. "[Somalia] became a full member of the EAC in March 2024, after officially depositing her instrument of ratification of the Treaty of Accession with the EAC Secretary General in Arusha, Tanzania. Today's meeting signifies a critical milestone in this journey, aligning Somalia's national processes with regional frameworks to ensure comprehensive integration,” she said. Ms Nduva said that the roadmap will incorporate activities that should be jointly undertaken by Somalia and the EAC Organs and Institutions.

Source: EAC

South Sudan

AfDB Group approves USD8.6-million grant to boost non-oil revenue mobilisation in South Sudan

The Board of Directors of the African Development Bank (AfDB) Group has approved a grant funding of USD8.6-million to South Sudan to advance the second phase of the Non-Oil Revenue Mobilization and Accountability Project (NORMA II). The African Development Fund (ADF), the AfDB Group’s concessional window, will provide USD6.62-million, while USD1.98-million will come from the ADF’s Transition Support Facility. Themba Bhebhe, the AfDB’s Country Manager for South Sudan, said NORMA II will enhance the capacity of South Sudan’s National Revenue Authority to boost non-oil revenue mobilisation and accountability. This phase complements the ongoing AfDB-supported NORMA I project and the Institutional Support Project for Strengthening Economic Governance in South Sudan. The two initiatives seek to address inefficiencies in broader public finance management, including budget framework, public sector spending efficiency, financial controls, reporting and accountability. Both projects are supported by ADF resources. 

Source: AfDB

Togo

Economy expected to grow 6.6% in 2024

Togo's economy is expected to grow 6.6% in 2024, up from the 6.4% estimated for 2023, according to the Ministry of Economy and Finance's Economic Outlook to the end of March 2024. According to the Permanent Secretariat for Monitoring Reform Policies and Financial Programs, the growth should be driven mainly by the primary sector, which is expected to grow by 4.6% due to agriculture, livestock, and fishing. The secondary and tertiary sectors are also expected to grow by 7.0% and 7.2%, respectively, driven by agrifood, building materials, electricity, gas, construction, manufacturing, trade, transport, and accommodation and catering services. The secretariat also forecasts an average annual growth of 7% between 2024 and 2026. Inflation is also expected to continue to fall, with International Monetary Fund projections indicating that it will fall to less than 2% between 2025 and 2028. This is due in part to favourable agricultural prospects, adequate supply on food markets, and government measures to contain price increases.

Source: Togo First