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issue 552 | 30 Jun 2024

Africa

AfDB secures USD18-million GEF funding for Zambezi Basin and e-waste projects

The African Development Bank (AfDB) has secured more than USD18-million in funding from the Global Environment Facility (GEF) for two major projects aimed at bolstering environmental sustainability and resilience across Africa. The first project, "Strengthening Zambezi River Basin Management towards Climate Resilience and Ecosystem Health," has been allocated USD10.57-million. This initiative aims to improve the collaborative management of water, energy, food, and environmental resources within the Zambezi River Basin, which spans eight southern African countries: Angola, Botswana, Malawi, Mozambique, Namibia, Tanzania, Zambia, and Zimbabwe. The second project, the "Global Electronics Management programme (Horn of Africa Regional Child Project)," has received USD7.83-million to address the growing challenge of electronic waste (e-waste) in Somalia, Djibouti and Ethiopia. GEF approved the funding during its 67th Council meetings held in Washington D.C., from 17-20 June 2024. Established ahead of the 1992 Rio Earth Summit, the facility is the largest source of multilateral funding for biodiversity, addressing interrelated environmental challenges globally. The AfDB is one of its implementing agencies with direct access to its resources.

Source: AfDB

Africa

African states turn to information exchange to boost tax revenues

Amid increasing fiscal pressures and debt sustainability in African countries, governments are now making use of exchange of information (EOI) agreements available to them more than ever. Last year, the amount of tax revenue raised by countries on the continent from EOI requests increased steeply from USD71.5-million in 2022 to hit USD2.3-billion, the highest level in over 10 years, according to the Tax Transparency in Africa Report 2024 published by the Africa Initiative recently. This was a result of increased use of EOI and automatic EOI between countries to net tax cheats stashing money and other assets in offshore accounts to evade taxes in their home countries. In 2023, the number of EOI requests sent to other jurisdictions around the globe by African countries increased by 67% to 888, up from only 531 in 2022. While the data on how much each country raised in additional revenue from EOI is not disclosed, the Global Forum has previously disclosed that four countries – Kenya, Tunisia, Algeria, and Nigeria – dominate the requests made, accounting for over 90% of all the requests.

Source: The EastAfrican

Africa

DP World to invest USD3-billion in African transport infrastructure

Emirati multinational logistics company DP World plans to invest USD3-billion in upgrading and modernising transportation infrastructure across Africa over the next three to five years. The announcement comes as the company aims to cater to increasing demand for logistics services, driven by growing global appetite for African critical minerals. Home to 15 of the world’s fastest-growing economies in 2024, the African continent also holds over 30% of global critical mineral reserves. “The logistics opportunity is huge in Africa,” stated Mohammed Akoojee, CEO of DP World. “[We have] seen demand [for port services] increasing over the last few years, largely driven by electrification drive globally, and the demand for commodities like cobalt, lithium, and [we have] been beneficiaries.” Up to USD2-billion will be allocated to port projects, while USD1-billion will go towards enhancing logistics businesses, including road and rail infrastructure and services.

Source: Energy Capital & Power

Central Africa

Afreximbank and BDEAC sign MoU strengthening their cooperation

African Export-Import Bank (Afreximbank) and the Development Bank of the Central African States (BDEAC), the regional development finance institution established to promote the development of the Central African Economic and Monetary Community (CEMAC), have entered into a memorandum of understanding (MoU) formalising their cooperation and collaboration in promoting trade and economic development. Under the terms of the MoU signed at the recently concluded Afreximbank Annual Meetings in the Bahamas, the two institutions, which already enjoy a close and long-standing relationship, will expand and strengthen their collaboration and cooperation by joining forces to support the economic development agenda of Africa. The institutions will also collaborate through a range of interventions and initiatives, including equity participation, facilitation of the identification, preparation and co-financing of projects, capacity building and consultation and exchange of information. According to the MoU, the new cooperation framework will pave the way for a programme of structural transformation in the CEMAC region through a combination of infrastructure development, sustainability-linked interventions and trade finance.

Source: Afreximban

Cabo Verde

IMF Executive Board completes fourth review of the arrangement under the ECF and the first review of the arrangement under the RSF for Cabo Verde

The Executive Board of the International Monetary Fund (IMF) completed the fourth review of Cabo Verde’s performance under the 36-month Extended Credit Facility (ECF) arrangement that was approved on 15 June 2022. The completion of the review allows the authorities to draw the equivalent of SDR4.5-million (19% of quota or about USD5.94-million), bringing total disbursement to SDR36.02-million (152% of quota or about USD48.17-million). The executive board also completed the first review under the 18-month Resilience and Sustainability Facility (RSF) arrangement that was approved on 11 December 2023. The completion of the review allows the authorities to draw the equivalent of SDR5.264-million (22.22% of quota or about USD6.94-million). The executive board’s decision was taken on a lapse-of-time basis. In completing the fourth review under the ECF arrangement, the executive board approved the authorities’ request for modification of the end-June and end-December 2024 performance criteria. The executive board approved the authorities’ request to rephase the availability dates under the RSF arrangement.

Source: IMF

Central African Republic

IMF Executive Board completes the second review under the ECF arrangement for CAR and approves USD25-million disbursement

On Monday, 24 June the Executive Board of the International Monetary Fund (IMF) completed the second review of the Extended Credit Facility (ECF) arrangement of SDR147.48-million (about USD197-million) for the Central African Republic (CAR). The ECF was approved by the IMF Executive Board in April 2023. The completion of this review allows for the immediate disbursement of SDR18.60-million (about USD25-million) bringing total disbursements under the ECF to SDR49.07-million (around USD65-million). In completing the review, the executive board also approved the authorities’ request for a waiver for nonobservance of the performance criterion of non-accumulation of external arrears. Further, the executive board completed the financing assurances review under the ECF. The executive board also approved the augmentation of access under the ECF to enable CAR to meet the additional balance of payment needs caused by delayed capital expenditure decisions in 2023. The ECF has allowed to anchor important governance-related initiatives, including the ongoing strengthening of the Court of Audit and the Financial Intelligence Unit. The authorities have committed to further strengthen governance, transparency, and financial integrity frameworks.

Source: IMF

Comoros

IMF Executive Board completes the second review under the ECF arrangement with Comoros

On Friday, 21 June the Executive Board of the International Monetary Fund (IMF) completed the second review under Comoros’ Extended Credit Facility (ECF) arrangement. The executive board’s decision allows for an immediate disbursement of SDR3.56-million (about USD4.68-million). The four-year ECF arrangement was approved on 1 June 2023, with an access of SDR32.04-million (about USD43-million). In completing the review, the executive board also approved the authorities’ request for a waiver of nonobservance of the continuous performance criterion on the non-accumulation of new external arrears, based on strong corrective actions taken by the authorities. Comoros’ economic reform programme supported by the ECF arrangement seeks to reduce fragility and increase economic resilience by building fiscal buffers, reducing debt vulnerabilities, and strengthening the financial sector and governance. Key policy priorities under the programme include: (i) mobilising domestic revenue through reforms to strengthen tax and customs administration and streamline tax exemptions; (ii) strengthening the financial sector including through the completion of the restructuring of the state-owned postal bank SNPSF and enhancing the central bank’s banking supervision and resolution capacities; and (iii) strengthening governance through public financial management and anti-corruption reforms.

Source: IMF

Côte d’Ivoire

IMF Executive Board completes the second reviews of the EFF/ECF arrangements and the first review of the RSF arrangement for Côte d’Ivoire

The Executive Board of the International Monetary Fund (IMF) completed the second reviews of the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements and the first review of the Resilience and Sustainability Facility (RSF) arrangement for Côte d’Ivoire on 25 June 2024, and endorsed the staff appraisal without a meeting on a lapse-of time basis. The EFF/ECF-supported programme approved in May 2023 in the amount of SDR2 601.6-million (equivalent to 400% of quota or about USD3.4-billion), has helped to safeguard macroeconomic stability, as well as a moderate risk rating of debt distress, while growing challenges from climate change are being addressed under the recently approved RSF arrangement for a total amount of SDR975.6-million (equivalent to 150% of quota or about USD1.3-billion). The authorities’ ongoing commitment to reforms under both programmes should support Côte d’Ivoire’s transformation towards upper middle-income status over the medium-term and enhance its resilience to climate change. Programme implementation has been strong thus far, with all end-December performance criteria and end-December and end-May structural benchmarks met. The completion of the reviews allows for an immediate disbursement of about USD570-million under the multi-year fund arrangements.

Source: IMF

Equatorial Guinea

Equatorial Guinea digital economy country diagnostic: Bridging the gaps to develop a safe and inclusive digital transformation

In the wake of new challenges and a prolonged oil-dependency, Equatorial Guinea’s Government is aiming for economic diversification as a key course of action for growth and stability. Digital transformation could play a critical role to drive diversification, financial inclusion, poverty reduction, and job creation. In 2021, the National Development Plan 2035 introduced technology and innovation as a cross-cutting theme, putting the digital economy at the centre of the diversification strategy. The government is also implementing the Digital Agenda for Equatorial Guinea, a strategic plan with four objectives: (i) universalisation of access to telecommunications services; (ii) digitise administrative procedures; (iii) supporting and enhancing the information and communications technology sector; and (iv) empower citizens to use digital tools. As a result, the Digital Economy Country Diagnostic for Equatorial Guinea was developed by the World Bank and the Government of Equatorial Guinea to identify key challenges and opportunities facing the country along the five foundations of the digital economy: digital infrastructure, digital public platforms, digital financial services, digital businesses, and digital skills.

Source: World Bank

The Gambia

Bridging progress: AfDB powers The Gambia’s leap into the future

The African Development Bank’s (AfDB) investments in The Gambia’s energy sector have significantly improved access to affordable and reliable electricity, with at least 70% of Gambians projected to have power by the end of 2024 (50% in rural areas), according to a recent AfDB country progress report. Notable projects include an interconnection with Senegal, which provides 50 MW of power to augment The Gambia’s bulk supply system. The report, approved by the AfDB Group’s Board on 13 June 2024, reflects results obtained halfway through the execution of the AfDB’s 2021-2025 Country Strategy Paper (CSP) for The Gambia. It highlights remarkable achievements in the country’s energy, agriculture, and transport sectors. The AfDB's assistance to the agricultural sector has boosted productivity, increased production and attracted private investment. Rice yields have risen from 2.2 to 4 tonnes per hectare thanks to the implementation of the AfDB’s flagship Technologies for African Agricultural Transformation initiative and the Rice Value Chain Transformation Program. Yields of maize, groundnut, cowpea and sorghum also improved during the first period of CSP implementation. Enhanced irrigation on 4 369 hectares increased rice production by 27 828 tonnes, and support for local seed producers has ensured sustainable supplies of seeds.

Source: AfDB

Guinea-Bissau

IMF reaches staff-level agreement with Guinea-Bissau on sixth review of ECF arrangement

A team from the International Monetary Fund (IMF) led by Jose Gijon, Mission Chief for Guinea-Bissau, held videoconferences and meetings in Bissau from 12-24 June 2024, to discuss macroeconomic policies in the context of the sixth review of the Extended Credit Facility (ECF) arrangement. This staff-level agreement is subject to IMF management approval and executive board consideration. The initial arrangement was approved by the IMF Executive Board for a total amount of SDR28.4-million (about USD37.3-million) on 30 January 2023. The IMF Executive Board granted an augmentation of access (140% of quota or SDR39.76-million) on 29 November 2023. At the conclusion of the mission, Mr Gijon issued the following statement, in part: “I am pleased to announce that the Guinea-Bissau authorities and the IMF staff have reached a staff-level agreement on economic and financial policies that could support the approval of the sixth review of the ECF programme. Conclusion of the review by the IMF Executive Board, tentatively scheduled for end-August 2024, would enable the disbursement of SDR5.44-million (about USD7.2-million), bringing total disbursement under the arrangement to SDR24.88-million (about USD32.7-million). “Growth is expected to be around 5% in 2024 and inflation should decline significantly from last year to reach 4.2%.”

Source: IMF

Kenya

What next after Kenya withdraws Finance Bill amid protests?

In the 2024/25 Finance Bill, the Kenyan Government wanted to raise USD2.7-billion in additional taxes to reduce the budget deficit and borrowing. Kenya's public debt stands at 68% of GDP, higher than the 55% of GDP recommended by the World Bank and the International Monetary Fund (IMF). President William Ruto has been caught between the competing demands of lenders such as the IMF, which is urging the government to cut deficits to obtain more funding, and a hard-pressed population. Recently, the president withdrew the Bill, bowing to pressure from the protesters who had argued the measures would choke the economy and raise the cost of living for people already struggling to make ends meet. The proposed measures that triggered protests included new levies on basic commodities such as bread, vegetable oil and sugar and a new motor vehicle circulation tax - pegged at 2.5% of the value of a car to be paid annually. The Bill had proposed increasing existing taxes on financial transactions. The government said the tax measures were necessary to fund development programmes and cut public debt. In a televised address, President Ruto said on he will not sign the Finance Bill to law. The Bill will return to Parliament with the recommendation that all its clauses be deleted, President Ruto wrote in a document addressed to the speaker of the National Assembly. To help tackle the fiscal deficit, President Ruto said the government will work on austerity measures - beginning with cuts to the presidency's own budget.

Source: The EastAfrican

Madagascar

IMF Executive Board approves USD337-million under the ECF and USD321-million under the RSF for Madagascar

On Friday, 21 June the Executive Board of the International Monetary Fund (IMF) approved a 36-month arrangement under the Extended Credit Facility (ECF) of SDR256.62-million (about USD337-million) with Madagascar. The executive board also approved an arrangement under the Resilience and Sustainability Facility (RSF) of SDR244.4-million (about USD321-million). Furthermore, the executive board took note of Madagascar’s cancellation of the 40-month arrangement under the ECF which had been approved on 29 March 2021. The ECF-supported programme will provide critical help to increase Madagascar’s economic resilience by anchoring fiscal sustainability, strengthening governance, buttressing monetary and financial stability, and advancing reform to support industrialisation and human capital development. The RSF arrangement aims to address climate vulnerabilities through the implementation of appropriate climate policies. This decision enables an immediate disbursement equivalent to SDR36.66-million (about USD48-million) under the ECF. Madagascar’s growth eased to 3.8% in 2023, while inflation pressures have waned.

Source: IMF

Mauritania

Mauritania opts for hydrogen to decarbonise iron production

While the hydrogen sector is still in the process of being set up, Mauritania wants to take advantage of this relatively new solution to decarbonise the production and export of its iron to the world market. Under the partnership recently signed between Société Nationale Industrielle et Minière (SNIM) and Australian energy company CWP Global, Mauritania will set up a hub for the production of pre-reduced iron ore, which will then be converted into hot briquetted iron (HBI) using green hydrogen. HBI is a superior form of iron ore that has been compacted at a temperature in excess of 650°C (at the time of compaction) and has a density in excess of 5 000 kg/m3. According to the International Ferrous Metals Association, HBI was developed to overcome the problems associated with shipping and handling pre-reduced iron ore. According to CWP, the project developed with SNIM will reduce millions of tonnes of CO2 emissions per year. The green hydrogen, water and electricity that will power Mauritania’s HBI production will be supplied by CWP as part of its “Aman” project.

Source: Afrik 21

Mauritius / Indonesia

Mauritius and Indonesia commit to enhancing people-to-people mobility and boost bilateral trade

A delegation led by Mr Cahyo R. Muzhar, Deputy Minister for Legal Administration, Ministry of Law and Human Rights of Indonesia held discussions with the Minister of Foreign Affairs, Regional Integration and International Trade, Maneesh Gobin, at the Ministry on Wednesday, 19 June 2024. They discussed a wide range of issues to further strengthen bilateral relations between Mauritius and Indonesia. These included easing visa requirements to facilitate tourism, trade, business, and people-to-people ties, enhancing air connectivity, and concluding a Preferential Trade Agreement between the two countries. Both sides expressed satisfaction with the progress made in easing visa conditions for Mauritian nationals travelling to Indonesia. Indonesian nationals travelling to Mauritius are granted a visa on arrival for a period of 60 days, free of charge. The question of reciprocity is currently being addressed. Mauritius and Indonesia are also actively exploring ways to enhance air connectivity between the two countries. This initiative will not only create greater tourism opportunities but also open up new avenues for cooperation by facilitating increased people mobility and strengthening business connections between the two countries.

Source: Government of Mauritius

Mozambique

Foreigners investing up to USD1-million in Mozambique will not need the central bank’s authorisation

Foreign citizens can now invest up to USD1-million in Mozambique without prior central bank authorisation. The Bank of Mozambique’s goal in the new Foreign Exchange Law is to eliminate barriers to foreign direct investment and boost the foreign exchange market. The Bank of Mozambique recently announced the removal of barriers to foreign investment and investments by residents abroad, including international trade, increasing the annual limit to USD1-million without the need for prior authorisation. According to information recently provided in Maputo, the central bank explained that the changes result from new exchange rate regulations, already in force since the publication of Notice No. 4/GBM/2024, which removes barriers to foreign investment in Mozambique and investments by residents abroad, as well as facilitating international trade, and which can be summarised as creating mechanisms to make exchange rate operations more flexible through the gradual liberalisation of the capital account. 

Source: Club of Mozambique

Nigeria

AfDB and InfraCredit sign USD15-million agreement to enhance infrastructure financing

The African Development Bank (AfDB) and Infrastructure Credit Guarantee Company Limited (InfraCredit) have signed an agreement for a USD15-million subordinated loan facility to strengthen InfraCredit's capital base and attract institutional investors’ resources to help close Nigeria's infrastructure financing gap. Lamin Barrow, Director General of the AfDB's Nigeria Country Department, and Chinua Azubike, CEO of InfraCredit, signed the agreement in Lagos on 14 June 2024. The facility will boost InfraCredit’s efforts to unlock additional long-term local currency financing through the capital markets for infrastructure projects, primarily by leveraging pools of capital from pension funds and other institutional investors in the West African country. InfraCredit is a specialised Nigerian credit guarantee company that mobilises long-term capital from institutional investors to support infrastructure projects, including green and climate-aligned developments. Barrow expressed the AfDB’s satisfaction with this operation. “Our support to institutions such as InfraCredit demonstrates the importance of promoting innovative and scalable solutions to leverage pools of capital from domestic institutional investors, and position local capital market as a viable alternative source of long-term funding to bridge the continent’s huge infrastructure deficit, he stated.”

Source: AfDB

Senegal

IMF staff concludes mission to Senegal on second reviews of the EFF and ECF, and the RSF

A staff team from the International Monetary Fund (IMF) led by Mr Edward Gemayel, conducted a mission in Dakar from 6-19 June to review progress under the authorities’ economic programme supported by the IMF’s Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements of SDR1 132.6-million (about USD1.5-billion), combined with the Resilience and Sustainability Facility (RSF) of SDR242.70-million (about USD320-million). The EFF/ECF and RSF arrangements were approved by the IMF Executive Board on 26 June 2023. At the conclusion of the mission, Mr Gemayel issued the following statement, in part: “The IMF team welcomes the new authorities’ commitment to the existing IMF-supported programmes. They remain committed to implementing policies aimed at reducing debt vulnerabilities by embarking on a growth-friendly fiscal consolidation, strengthening governance, delivering a more inclusive and job-rich growth, and building resilience to climate change. Following the peaceful resolution of the March presidential election, the economic outlook has improved. Economic growth is projected at 7.1% in 2024 and 10.1% in 2025, with inflation expected to fall and remain within the [Central Bank of West African States'] target range by end-2025.”

Source: IMF

Senegal

The World Bank boosts its support for local governments and climate resilience in Senegal

The World Bank has approved an additional USD110-million in Program for Results financing for the Municipal and Agglomeration Support Program in Senegal. This additional financing will scale up efforts to local governments and improve their management of public investments. In addition to USD50-million from the International Development Association, this additional financing includes contributions from several partners, including USD33-million from the French Development Agency, and USD27-million from the Government of Senegal. This will enable the programme to continue its support in key intervention areas, such as fiscal reforms and local government transparency, accountability, and performance-based financing. The additional financing also adds climate resilience into Senegal’s regulatory framework for local government investments, their annual performance evaluation, and capacity building.

Source: World Bank

Tanzania

IMF Executive Board completes the third review of the ECF arrangement and approves an arrangement under the RSF for Tanzania

The Executive Board of the International Monetary Fund (IMF) completed the third review of the Extended Credit Facility arrangement (ECF) for Tanzania, which was approved in July 2022 for a total access of SDR795.58-million (200% of quota – about USD1 046.4-million at the time of programme approval). The completion of the third review allows the immediate disbursement of about USD149.4-million (SDR113.37-million), bringing Tanzania’s total access under the ECF to about USD606.4-million. The executive board also approved a six-month extension of the ECF to May 2026 and a rephasing of access to give sufficient time to the authorities to implement their reform agenda and realise the programme’s key objectives. The ECF aims to preserve macroeconomic stability, strengthen the economic recovery, and promote a sustainable and inclusive growth. The executive board also approved Tanzania’s request for an arrangement under the Resilience and Sustainability Facility (RSF) of about USD786.2-million (SDR596.7-million,150% of quota). The RSF will support Tanzania’s ambitious reform efforts to implement climate policy reforms that address risks and challenges associated with climate change and enhance the resilience of the Tanzanian economy. The RSF duration will coincide with the period remaining under the ECF, as extended (May 2026).

Source: IMF

Uganda / Tanzania / Kenya

Uganda, Tanzania fresh produce volume via Mombasa on the rise

The volume of fresh produce from Tanzania and Uganda exported using reefers through the port of Mombasa, Kenya has increased to 6%, compared to last year. The Mombasa port recorded 6 813 20-foot equivalent units, helped by the installation of 1 367 reefer plugging points in its port facilities since last year. Reefers are refrigerated containers. The USD380-million Business Environment and Export Enhancement Programme, implemented by TradeMark Africa to push for radical decarbonisation of value chains that deliver fresh produce is yielding fruit, with more traders preferring sea to air in transporting fresh produce. Consumers, especially in Europe, have been on the frontline in this push. Currently, perishable goods approvals through the Mombasa port are done at the point of loading, and permit approvals are granted by the KenTrade-operated National Electronic Single Window System. Kenya Ports Authority Managing Director Captain William Ruto said the agency has installed 1 367 reefer plugging points: 795 at the Mombasa port, 336 at the Inland Container Depot (ICD) in Nairobi, 216 at the Lamu port and 20 at the Naivasha ICD.

Source: The EastAfrican