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issue 556 | 28 Jul 2024

Africa

AfDB’s Akinwumi Adesina briefs African leaders on bank’s progress in mobilising financial resources for the continent

The President of the African Development Bank (AfDB) Group, Dr Akinwumi Adesina, has outlined the bank’s successes in mobilising financial resources for the continent’s development needs at the African Union (AU). Addressing heads of state and government at the 6th Mid-Year Coordination Meeting of the AU in Accra, Ghana, Adesina highlighted the AfDB’s recent general capital increase from USD201-billion to USD318-billion, approved by the board of governors during its Annual Meetings in Nairobi last May. The approval will enable Africa’s only AAA-rated financial institution to preserve its status and meet the continent’s urgent and increasing development needs. Other highlights included joint efforts by the AfDB and the Inter-American Development Bank in developing a new financial model that enables the International Monetary Fund’s Special Drawing Rights to be channeled through multilateral development banks.

Source: AfDB

Africa

AUC and UN Global Compact partner up to boost the Global Africa Business Initiative

The African Union Commission (AUC), and the United Nations (UN) Global Compact will partner up on the Global Africa Business Initiative. Through this collaboration they will seek to amplify the impact of sustainable business practices across Africa through the UN Global Compact's Africa Strategy which aims to build a cohort of accountable and ambitious African companies to seize the continent's opportunities. Building on the African Union (AU)-UN framework for the implementation of the AU Agenda 2063 and the Sustainable Development Goals (Agenda 2030), the partnership will support the next phase of Agenda 2063's Second Ten-Year Implementation Plan (2023-2032), a comprehensive roadmap for Africa's development. The UN Global Compact will engage businesses across the continent to support the AUC's goals and mandate.

Source: AU

Africa

Charting Africa's economic transformation future: Unveiling the AIDA/AfCFTA Standard Impact Assessments Guide

In a significant step towards driving economic growth and transformation across Africa, the African Union Development Agency - New Partnership for Africa's Development (AUDA-NEPAD) has partnered with the African Continental Free Trade Area (AfCFTA) Secretariat, the African Union Commission, and the Japan International Cooperation Agency to launch the "Standard Assessment Guide for Accelerated Industrial Development for Africa (AIDA) and the AfCFTA." This landmark achievement took place during the African Union (AU) Mid-Year Coordination Meeting in Accra, Ghana, on 17 July 2024, following the directives of the 17th Extraordinary Assembly of the AU Heads of State and Government on Industrialization and Economic Diversification, held on 25 November 2022 in Niamey, Niger. The mandate came in response to the slow progress in implementing programmes relevant to industrialisation, structural economic transformation, and development towards the AU aspirations in Agenda 2063. The guide, designed with four key principles, is a practical, user-friendly tool that delivers actionable insights for policymakers. It continuously engages with stakeholders, builds on AU initiatives and global benchmarks, and ensures seamless linkages between AfCFTA, AIDA, and other continental frameworks. This indispensable tool leverages best practices to revolutionise Africa's industrial and trade policy integration.

Source: AUDA-NEPAD

Africa

Hydrogen Summit aims to drive critical investments

The Global African Hydrogen Summit 2024 set for September aims to drive critical investments and financing into bankable green energy projects across Africa. The International Energy Agency estimates that Africa will need to double its electricity generation capacity by 2040 to meet growing demand with more than 600 million people across Africa lacking access to electricity. The continent has been identified as a prime source for renewable energy exports to regions seeking to reduce reliance on fossil fuels and meet net-zero targets. Global African Hydrogen Summit Head of Marketing Roshan Jan-Mahomed says most development banks, bilateral aid, export credit agencies and development finance institutions have a clear mandate to facilitate the energy transition. “Many of these institutions offer preferable terms to projects that help achieve net-zero targets. Additionally, numerous climate investment funds and venture capital funds are dedicated to green energy investments, including throughout the development stage,” he says. The summit is held in conjunction with the government and endorsed by the Ministry of Mines and Energy and will take place from 3 to 5 September in Windhoek, Namibia.

Source: The Namibian

East / Southern Africa

COMESA-EAC-SADC TFTA comes into force on 25 July 2024

The Common Market for Eastern and Southern Africa (COMESA) - East African Community (EAC) - Southern African Development Community (SADC) Tripartite Free Trade Area (TFTA) Agreement, came into force on 25 July 2024 following the attainment of the required threshold. For the Agreement to take effect, at least 14 out of the 29 member/partner states needed to deposit their Instruments of Ratification. The entry into force of the Agreement follows the depositing of Instrument of Ratification by Angola on 25 June 2024, bringing the total number of the Instruments of Ratification deposited to 14, the number required for the Agreement to enter into force. This update was announced during the 37th Tripartite Task Force Meeting, which took place on 20 July 2024, on the sidelines of the 6th African Union Mid-Year Coordination Meeting in Accra, Ghana. The meeting was attended by the CEOs of the three Regional Economic Communities Elias Mpedi Magosi, Executive Secretary of SADC and Chairperson of the Tripartite Task Force; Veronica Nduva, Secretary General of the EAC and Chileshe Mpundu Kapwepwe, Secretary General of COMESA.

Source: EAC

West Africa

Relevant resolutions adopted to promote development and trade in the ECOWAS space

The 4th Annual General Meeting of the Economic Community of West African States (ECOWAS) Trade Promotion Organization Network ended on Thursday, 18 July 2024, in Banjul, The Gambia, with a series of resolutions designed to further boost trade in West Africa. To ensure better promotion of trade within the community, the participants decided to organise regular trade fairs to boost intra-regional trade. ECOWAS member states are encouraged to take an active part in these fairs, in order to foster collaboration and economic growth in the region. They also decided on the inclusive selection of value chains with the potential to stimulate economic development, create jobs and improve competitiveness in West Africa. Another resolution concerns the implementation of measures to improve infrastructure and logistics services in the region, with particular emphasis on reducing trade barriers, streamlining customs procedures and improving transport networks to facilitate trade operations and make them more efficient.

Source: ECOWAS

Central African Republic

IMF staff concludes visit to CAR

An International Monetary Fund (IMF) team, led by Mr Albert Touna Mama, visited Bangui from 10-17 July 2024, to take stock of the recent macroeconomic developments and the implementation of structural reforms, as well as to discuss the major budget allocations for the upcoming revised 2024 Finance Law. Mr Touna Mama issued the following statement, in part, at the end of the discussions: “The positive progress in domestic revenue mobilisation since the start of the Extended Credit Facility programme continued, reaching a record level of F.CFA80-billion during the first half of this year. The prospects for budget financing also continue to improve, aided by ongoing discussions with technical and financial partners, which could lead to new budget support programmes. Likewise, fiscal reform has gained momentum, as illustrated by the strategic orientations resulting from the recent seminar on digital reforms organised by the Ministry of Finance and Budget. However, significant challenges continue to weigh on the economic outlook and public finances. A first major and recurring challenge concerns the fuel supply campaign via the Ubangi River which is still struggling to get started. A failure of this campaign, for the third consecutive year, would contribute to slowing down economic activity, hampering government revenues, and delaying macroeconomic stabilisation by at least two semesters given the Central African Republic’s (CAR) import structure.”

Source: IMF

Equatorial Guinea

IMF management approves a Staff Monitored Program for Equatorial Guinea

Management of the International Monetary Fund (IMF) approved a 12-month non-financing Staff Monitored Program (SMP) for Equatorial Guinea on 24 June 2024. Hydrocarbon production in Equatorial Guinea has fallen 56% since its peak in 2008 and is expected to fall a further 32% by 2029. Driven by a contraction in hydrocarbon production, Equatorial Guinea re-entered recession in 2023, with real GDP estimated to have contracted by 5.8%. The persistent decline in hydrocarbon production has put Equatorial Guinea’s fiscal and external accounts under strain. The economy is expected to stagnate in the medium term, reinforcing the urgent need for economic diversification. The objective of the SMP with Equatorial Guinea is to deliver stronger, sustainable, and more inclusive growth in the face of a contracting hydrocarbon sector. The key pillars of the SMP supporting this objective are ensuring fiscal sustainability, restoring the soundness of the banking sector, undertaking structural reforms to facilitate economic diversification, improving social outcomes, and promoting better governance.

Source: IMF

Eswatini

IMF staff completes 2024 Article IV mission to Eswatini

An International Monetary Fund (IMF) staff team, led by Mr Jaroslaw Wieczorek, IMF Mission Chief for Eswatini, visited Mbabane from 11-24 July 2024, to conduct discussions for the 2024 Article IV Consultation with Eswatini. At the conclusion of the mission, Mr. Wieczorek made the following statement, in part: “Eswatini experienced a strong post-pandemic rebound, but potential growth remains uncertain. Growth is estimated to have reached 4.9% in 2023, driven by exports of sugar and soft drink concentrates, tourism, and the communication sector, and is poised to remain in the 4.5 to 5.0% range in 2024, before returning to its historical average of about 2.5% in the medium term. High capital investment, energy projects, and expansion in the mining sector can spur growth but concrete measures and a well-defined investment programme to raise potential growth need to be articulated. Inflation in Eswatini has been lower than in South Africa. In May 2024, the difference exceeded one percentage point, some of which could be accounted for by administrative prices on utilities and staple goods.”

Source: IMF

Ghana

Ghana’s economic prospects on track amid reforms

The World Bank’s 8th Economic Update for Ghana titled Strengthening Domestic Revenue Systems for Fiscal Sustainability notes that despite recent increases in the pace of exchange rate depreciation and slower-than-expected inflation reduction, Ghana’s economic indicators remain on track for 2024 and beyond. The report highlights the steady progress Ghana has made over the past year in addressing severe macroeconomic imbalances that emerged in 2022. The economic situation has been improving in line with targets due to efforts to restore fiscal and debt sustainability, reduce inflation, and strengthen financial stability. Due to the lingering effects of the macroeconomic challenges, growth in 2023 was low at 2.9% albeit higher than initial projections, while inflation declined to 23.2% in December 2023 from a peak of 54.1% in December 2022. This progress is attributed to the Bank of Ghana’s firmer monetary policy and more stable exchange rates.

Source: World Bank

Malawi

A refreshed Competition Act ushers in a new dawn for competition law in Malawi

On 1 July 2024, the Minister of Trade and Industry in Malawi gazetted the notice bringing into effect the new Competition and Fair Trading Act No. 20 of 2024 (the New Competition Act). The New Competition Act repeals the previous Competition and Fair Trading Act No. 43 of 1998 (the Old Competition Act). The Competition and Fair Trading Commission of Malawi (CFTC) has stated that the New Competition Act is aimed at filling the existing gaps not addressed by the Old Competition Act and enhancing effective enforcement. A more general observation with respect to the amendments in the New Competition Act is the specific mention of digital products and accompanying references throughout such as by way of an expanded definition of “turnover” to include “the amounts accrued from the sale of goods, digital products or services”. Given the digital and technological developments globally, this key feature shows the forward-looking mindset of the CFTC.

Source: ENS

Malawi

Malawi Economic Monitor: Reforming with Urgency – Malawi’s Path to Economic Stability Investing in Adaptive Safety Nets

A drought and an incomplete reform agenda undermine prospects for a rapid economic recovery in Malawi. Economic growth in Malawi fell short of expectations in 2023 and is projected to remain subdued in 2024. While implementation of planned macroeconomic and structural reforms is expected to boost GDP growth over the medium term, an El Niño-induced drought has worsened the near-term growth outlook. The drought has compounded longstanding macroeconomic imbalances, with large fiscal deficits, balance-of-payments challenges, unsustainable debt, and price instability weighing on economic activity since 2020. As a result, the growth projection for 2024 has been revised downward to 2%. This is according to the recently launched Malawi Economic Monitor, 19th Edition titled Reforming with Urgency – Malawi’s Path to Economic Stability with a special topic, Investing in Adaptive Safety Nets. A weak harvest has intensified food insecurity. The production of staple foods has fallen behind national needs, preventing a large share of households from accessing sufficient nutrition. Many households are expected to enter the 2024/25 lean season with limited food stocks, depleted finances, and precarious health conditions.

Source: World Bank

Nigeria / Libya

Nigeria's Dangote refinery in talks with Libya to secure oil

Nigeria's Dangote refinery is in talks with Libya to secure crude for the 650 000 barrels per day (bpd) plant and will also seek Angolan oil, a senior executive said, as it seeks to overcome problems with domestic supplies. The USD20-billion refinery, built by Africa's richest man Aliko Dangote on the outskirts of Lagos is Africa's largest, and is designed to end Nigeria's dependence on imported fuels because of insufficient refining capacity. Since Dangote began operations in January, it has been unable to get adequate crude supplies in Nigeria, which, although Africa's biggest oil producer, is struggling with theft, pipeline vandalism and low investment. Dangote has resorted to importing crude from as far as Brazil and the United States. "We are talking to Libya about importing crude," Dangote refinery Senior Executive Devakumar Edwin told Reuters recently. "We will talk to Angola as well and some other countries in Africa." He declined to give detail about the talks, but said international traders and oil companies were among the biggest buyers of Dangote's gasoil, much of which was being exported.

Source: Reuters

Seychelles / United Arab Emirates

Seychelles and the UAE sign agreements for creating framework to use local currencies in settling cross-border transactions

The Central Bank of Seychelles (CBS) and the Central Bank of the United Arab Emirates (CBUAE) recently signed two memoranda of understanding (MoUs) to enhance the use of local currencies in settling cross-border financial, commercial transactions, interlinking payment and messaging systems between the two countries. According to a joint press communique from the CBS and CBUAE, the MoUs were signed in Abu Dhabi, on 18 July, by the Governor of the CBS, Caroline Abel, and for the CBUAE, by Governor Khaled Mohamed Balama. Through the first MoU, a framework will be set up to promote the use of local currencies in settling bilateral commercial transactions, develop the exchange market, facilitate bilateral trade, and direct investment, remittance settlement, and financial market development. It will also include several elements to facilitate the settlement of commercial transactions in the United Arab Emirates (UAE) dirham and the Seychelles rupee in accordance with the laws and legislation in each country. Under the second MoU, both parties will consolidate cooperation and mutual benefit from the services of instant payment platforms, electronic switches and messaging systems, by directly linking them with the regulatory requirements in the two countries.

Source: Seychelles News Agency

Sierra Leone

Hydropower and solar energy projects for electricity-starved Sierra Leone

Sierra Leone has committed to several renewable energy projects over the past few weeks to increase its low electricity access rate, with the most notable encompassing a major hydropower and solar photovoltaic (PV) project. The country’s Presidential Initiative on Climate Change, Renewable Energy & Food Security confirmed that the memorandum of understanding for this major project outlines a phased approach including the building of a 200 MW hydro-solar plant. This is to be completed in two to three years “which will almost double the total installed capacity in the country in phase 1.” Developers Infinity Power said the project will encompass the development of 200 MW of renewable energy generation by expanding hydroelectric dam capacity. It will include the installation of floating and ground-mounted solar PV systems, with the possibility of including wind and battery storage. Overall, Infinity Power has committed to install 1 GW of renewable energy in Sierra Leone by 2033, which it will implement over different phases. Sierra Leone President Julius Maada Wonie Bio recently confirmed that his administration plans to update the Goma Hydropower Station. This power station has the potential to increase its generation capacity from 6 MW to 12 MW.

Source: ESI Africa

Tanzania / Russia

Russia and Tanzania are set to do away with the dollar for trade

Recent revelations from Tanzania's Ambassador to Russia, Andrey Avetisyan, indicate that the two countries are actively working to increase bilateral trade by using their national currencies for transactions. Banks from both nations have already begun working out the kinks. Russia has been on a mission to ensure that it can trade in Africa without depending on the dollar. Andrey Avetisyan, told the Russian newspaper, Sputnik that the shift to trading in national currencies including the currencies of China, India, and other BRICS nations is under discussion. "The prospects of transition to trade in national currencies are being discussed between our banks,” the ambassador stated on the sidelines of the Valdai Discussion Club conference in Tanzania recently. “If Tanzanians see that Russia's trade with China and India is almost entirely in national currencies, and India and China are Tanzania's largest trading partners, then there are opportunities here. Indian rupees, Chinese yuan and Russian rubles, I think, can be used by Tanzanians for offset schemes," he added. The Russian ambassador talked about the possibility of payments in other BRICS currencies. He explained that the United Arab Emirates, as a key partner of Tanzania, may also incorporate its currency, allowing the dirham, rupiah, yuan, and ruble to be mutually traded and complimented.

Source: Business Insider Africa

Togo

Customs: Alliance of Sahel States wants to strengthen trade ties with Togo

The Alliance of Sahel States (AES) is working to enhance trade relations with Togo and invited the country to participate in a meeting of Customs Directors General on Tuesday, 23 July, in Niamey, Niger. During the meeting, customs officials from AES member states agreed to interconnect their customs systems, including Togo, which is crucial for regional trade. They instructed their technical teams to establish an interconnected customs area within the AES. Adama Ilboudo, Burkina Faso's Director General of Customs, stated that these measures will improve transit management and facilitate cross-border trade. Philippe Kokou Tchodie, Commissioner General of the Togolese Office of Revenue, welcomed the initiative, noting that the port of Lomé has always served as a key access point for landlocked countries. He urged customs authorities in the region to expedite the interconnection process to maximise the benefits of this initiative. This project comes at a challenging time for the region, particularly following the Economic Community of West African States economic sanctions against Sahel countries with military governments. Since these sanctions and the closure of borders between Benin and Niger, Togo has increased its efforts to strengthen trade relations with its neighbours.

Source: Togo First

Uganda

Government banks on green energy to grow electricity generation

The Ministry of Energy has said government has started developing modalities of how to achieve clean energy by 2040. The plan, Ms Irene Batebe, the Ministry of Energy Permanent Secretary, said will, apart from increasing hydro energy to 2 000 MW, see government invest in other clean sources of energy with the target of producing 52 000 MW of electricity by 2040. “Our strategy is to ensure that we continue greening our generation capacity. We will be introducing solar and geothermal on the grid. We have about 1 500 MW of geothermal and produce 24 000 MW out of the 52 000 MW target,” she said, noting that government will also exploit wind energy in Karamoja and West Nile. Ms Batebe also indicated that the Ministry of Energy, in partnership with Huawei Technologies, will hold the Uganda Future Energy Summit themed Creation of a Green Sustainable Energy Industry and Sustainable National Grid, in which usage of an energy mix to align with international protocol around environment and sustainability, will be emphasised. “We are dedicated to implement the Energy Transition Plan which seeks to ensure that most Ugandans access clean and affordable energy,” she said, noting that government will leverage digital solutions to invest in generation, transmission, distribution and last mile connectivity to enhance access to clean energy.

Source: Monitor

Uganda

Loan-related fraud doubles among financial institutions

Loan-related scams doubled in just three months to June, overtaking impersonation and identity theft as the most recorded types of fraud among financial institutions. Data by the Uganda Bankers Association (UBA) indicates that loan-related fraud grew by 23.2% in June, increasing from 23.3% in March to 46.5% in June. The fraud rate had, however, slightly reduced in the period ended March 2023 to 25.7%. UBA does not, however, indicate, who between customers and financial institutions, was the biggest victim of the fraud. Previously, there have been reports of financial institutions inflating loan deductions, while some are accused of making loan deductions even when loan payments have been completed. UBA further shows that card and mobile banking-related scams grew by 13.3% in the 12 months to March, becoming the second most recorded form of fraud among financial institutions. During the period, card (debit and credit) and mobile or digital banking-related fraud rose from 31.9% in March 2023 to 45.2% but dropped to 31.6% in the quarter to June. However, fraud resulting from impersonation, identity theft, forgeries, and cash suppression dropped from 40.4% to 31.3%, before reducing further to 29.1% in June.

Source: Monitor

Uganda / Tanzania

Gold sees value of Uganda’s imports from Tanzania soar

A report by the Ministry of Finance indicates that Uganda now sources more imports from Tanzania than any other East African Community (EAC) member state. In details contained in the June Performance of the Economy report, the Ministry of Finance indicates that during the 12 months to May, 83.9% of Uganda’s imports sourced from within the EAC were from Tanzania, making it the country’s biggest source of imports in the region. During the period, the report indicates, out of the USD532-million worth of imports sourced from within East Africa, USD446.7-million were sourced from Tanzania, primarily due to a sustained increase in gold and rice imports. However, the report does not indicate how much gold Uganda imported from Tanzania. Kenya has for years been Uganda’s largest source of imports within East Africa. However, the increase in gold imports, which was first recorded in 2021, now places Tanzania ahead of Kenya in terms of import sources. Uganda also imports gold from Zimbabwe and the Democratic Republic of the Congo, after which it is refined and re-exported. Data from Bank of Uganda indicates that during the 12 months to May, Uganda imported mineral products, of which gold is more than 90%, worth USD2.7-billion with a monthly average of USD213.8-million.

Source: Monitor