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issue 558 | 11 Aug 2024

East Africa

EAC member states move to review fees in fresh push for intra-bloc trade

East African Community (EAC) member states are moving towards the tail end of reviewing fees, levies and charges imposed by members on essential goods and services in the transport and agriculture sectors, which have frequently sparked trade wars and choked intra-regional trade in the eight-member economic bloc. The streamlining of trading costs in the transport and agriculture sectors, forms the initial phase of a mega plan by the regional authorities to harmonise some levies and fees and completely remove those which they consider ‘inflated’ and ‘discriminatory’ in seven key sectors in the region including transport, agriculture, environment, trade, finance, energy and tourism. The plan which kicked off in 2021, targets to review additional costs impacting the trading poultry products, day-old chicks, hatching eggs, table eggs, fish and fish products, dairy, veterinary medicine products, pesticides, human and veterinary drugs in Kenya, Uganda, Rwanda, Burundi, Tanzania, South Sudan, Somalia, and the Democratic Republic of Congo.

Source: The EastAfrican

East Africa

ENS and Legal 500 to host inaugural GC Powerlist

ENS, together with The Legal 500, will host the inaugural GC Powerlist: East Africa 2024 Awards at Villa Rosa Kempinski in Nairobi, Kenya on Wednesday, 14 August 2024. The first of its kind in East Africa, the GC Powerlist: East Africa 2024 will recognise and celebrate individuals in the East African legal community, bringing together prominent in-house counsel in the region. “This prestigious event which highlights the role of general counsel in fostering innovation in East African business, is fitting, as these individuals are crucial for business success. They provide strategic guidance, help mitigate risks, and seize new growth opportunities,” said Mzi Mgudlwa, ENS Chief Executive. “Given the current growth trajectory of the East African region and the unique opportunities in this highly attractive market, these individuals deserve to be celebrated as they have proven track records in providing guidance and conducting business in this dynamic region” adds Mgudlwa.

Source: ENS

Southern Africa

SACU countries to launch dedicated cross-border payment system

The Common Monetary Area (CMA) is set to introduce a dedicated retail payment system for cross-border transactions. CMA countries, comprising South Africa, Eswatini, Lesotho and Namibia, are also part of the Southern African Customs Union (SACU). The cross-border payment system aims to improve investment flows among member countries. The decision to develop a specialised payment system comes as the existing cross-border payment system, which relies on South Africa’s domestic retail payment system, has been identified as inadequate for handling the region’s growing transaction volume and complexity. According to the CMA’s Cross-border Payments Oversight Committee position paper titled Processing of Cross-Border Low-Value Electronic Funds, the new system aims to enhance the efficiency, speed and security of cross-border payments within the CMA. “By 1 April 2027, all cross-border low-value electronic fund transfers (EFTs) within the CMA region must be processed through a retail payment system designated for cross-border EFTs, such as the Transactions Cleared on an Immediate Basis system, which can be repurposed by banks as they may require,” notes the paper. The paper further notes that until March 2027, banks are advised to utilise the Southern African Development Community real-time gross settlement system for low-value cross-border payments.

Source: The Namibian

Cameroon

Bold fiscal reforms can unlock Cameroon’s full potential

On Tuesday, 6 August, the World Bank launched two flagship economic reports: the Cameroon Economic Update June 2024: Fiscal Instruments for Sustainable Forestry and the Cameroon - Public Finance Review: Collect More, Spend Better to Achieve Vision 2035 Goals. The Cameroon Economic Update analyses recent economic developments and presents the country’s medium-term outlook. Cameroon’s economic growth decelerated to 3.3% in 2023 from 3.6% in 2022, affecting all economic sectors due to lower-than-expected public investment, rising prices, and ongoing internal conflicts. Inflation rose to 7.4% in 2023 from 6.3% in 2022, driven by high food prices and transportation costs. Cameroon's real GDP growth is estimated at 4.0% in 2024 and projected to reach on average 4.5% over 2025-2027, driven by improved energy supply and stronger public investment. Inflation is expected to slow down to 3.0% by 2027, and the fiscal deficit is anticipated to remain around 1.0% of GDP in the medium-term, with public debt declining to 36.3% of GDP by 2027. The second report, the Cameroon Public Finance Review, provides recommendations to enhance tax collection while spending better and in a more effective and equitable way.

Source: World Bank

Cameroon

Cameroon is on its way to developing 4 GW of renewable energy by 2035

Cameroon is on its way to developing up to 4 GW of renewable energy across a range of technologies by 2035. A renewable energy provider has signed a Memorandum of Understanding with the Cameroon West Region that will see the country develop multiple projects located across the Western Region of Cameroon. The projects will be developed in phases and will likely include solar, battery storage, wind, hydropower, and biomass plants. These initiatives aim to generate clean, renewable energy for domestic consumption in Cameroon, addressing the country’s critical power needs. Nayer Fouad, CEO, of Infinity Power said that the facility, which will utilise wind and solar power among other technologies “has the potential to transform energy provision in the area, help bolster Cameroon’s economy, and deliver huge benefits to local communities.” According to Dr Vincent Kitio, Lead of Urban Energy Solutions at UN-Habitat, the Western Region of Cameroon has an abundant renewable energy potential, exceeding 6 GW. Despite this, the region receives only 100 MW of electricity from the national grid for a population of more than 2 million people, resulting in a huge energy deficit. However, this energy project will go a long way toward impacting the lives of more than 5 million Cameroonians.

Source: ESI Africa

Comoros

AfDB approves nearly USD6-million to improve financial governance and public electricity supply

The Board of Directors of the African Development Bank (AfDB) Group has approved a USD5.94-million grant to Comoros to support financial governance reforms and enhance electricity supply in the country. The funding, approved on 19 July 2024, will enhance the Energy Sector Reform and Financial Governance Support Programme. It will be financed from the Transition Support Facility, an AfDB Group funding mechanism designed for countries in transition. In addition to the grant, the programme has secured contributions from strategic partners, including the World Bank Group, the International Monetary Fund, the Agence française de développement and the European Union. Nnenna Nwabufo, AfDB Group’s Director General for East Africa, highlighted the initiative's objective. “The programme is a budget support operation aiming to contribute to improving the economic and financial performance of Comoros through enhanced economic and financial governance and a better public electricity supply,” she stated. The programme assumes that improved financial governance and enhanced energy sector performance will boost the financial resilience and economic stability of Comoros, Nwabufo noted.

Source: AfDB

Comoros

ADF grants Comoros USD135-million to develop its ports and facilitate regional trade

The Board of Directors of the African Development Bank (AfDB) Group has approved a USD135-million package to Comoros – its largest ever to the Indian Ocean archipelago – to finance a major maritime and regional trade project. The support for the Maritime Corridor and Regional Trade Facilitation Project will enable the extension and modernisation of two ports essential to the economic development of the islands of Comoros and the establishment of a special economic zone. The project is financed by a USD133-million grant from the African Development Fund (ADF), the concessional window of the AfDB Group, and another grant of USD2-million from the Transition Support Facility, an AfDB Group facility for transition states. Comoros has three ports located in Moroni (Grande Comores), Mutsamudu (Anjouan) and Boingoma (Mohéli). Around 90% of freight to and between the three islands of the Comoros archipelago is transported by sea. The country has an enormous potential for the blue economy – fisheries, agriculture and tourism sectors. However, the development of this potential is hampered by major structural challenges, notably the poor quality of port infrastructure which leads to high costs of doing business and increased vulnerability to external shocks.

Source: AfDB

Eswatini

Eswatini joins CMA 2024, following launch of Critical Mineral Mapping Program

Following the launch of the second phase of its Critical Mineral Mapping Program, Eswatini is seeking foreign partners to support mineral exploration and extraction activities. To showcase opportunities across the sector, Prince Lonkhokhela, Eswatini’s Minister of Natural Resources and Energy, will speak at the upcoming Critical Minerals Africa (CMA) 2024 Summit in Cape Town, joining African ministers including Martin Gama Abucha, Minister of Mining of South Sudan; Monica Chang’anamuno, Minister of Mining of Malawi; and Louis Kabamba Watum, Minister of Industry and the Development of SMEs of the Democratic Republic of the Congo. As a frontier mining market, Eswatini is currently engaged in various programmes to accelerate the exploration of its critical minerals. In December 2023, the Geological Survey of Eswatini, in partnership with South Africa’s Council for Geoscience, launched the second phase of a joint geoscience mapping programme. The initiative, which leverages AI-based techniques, aims to locate and map the country’s critical mineral resources, marking a significant milestone in regional collaboration to advance sector growth. To date, the country produces minor quantities of aggregate, coal, gold and iron ore.

Source: Energy Capital & Power

Kenya

Kenya's debt sustainable amid growth in exports, CBK says

Kenya's debt remains sustainable in the medium to long term supported by sustained policy actions and expected strong export growth, the Central Bank of Kenya (CBK) said in a quarterly economic report recently. In the report for the period ending in March released in Kenya's capital, Nairobi, the apex bank said that the country's debt burden indicators have improved supported by a stronger fiscal effort. However, the overall and external ratings for risk of debt distress remain high, according to the bank. It noted that the country's Debt Sustainability Analysis shows that Kenya is susceptible to export, exchange rate and primary balance shocks. "In view of this, efforts aimed at boosting exports and revenues would strengthen external debt sustainability," the CBK said, adding that the country's exports to Africa have been on the rise, with the value of goods exported rising in the first quarter of 2024 to hit a new high of USD1.81-million. Kenya's public and publicly guaranteed debt stood at KES10.3-trillion (USD79.3-billion) at the end of March, representing 67% of the GDP. Domestic debt comprises 50.3% of the total debt, while external debt denominated mainly in dollars and euros makes up the rest. According to the apex bank, Kenya fully repaid its USD2-billion Eurobond debt before the June 24 deadline., but intra-export trade in maize increased by 63% to USD187.1-million from USD114.6-million.

Source: The EastAfrican

Kenya / Uganda

Kenya, Uganda renew pipeline extension talks

Kenya and Uganda have resumed discussions to extend a petroleum products pipeline from Eldoret, Kenya to Kampala, Uganda. The project involves the construction of a multi-product oil pipeline from Eldoret to Malaba at the Kenya-Uganda border. Uganda will then build an extension from Malaba to Kampala, with a potential expansion to Kigali, Rwanda under consideration. Recently, Uganda’s Minister of Energy and Mineral Development Ruth Ssentamu met with Kenya’s State Department for Petroleum Principal Secretary Mohamed Liban and other Ministry of Energy and Petroleum officials to launch project planning and preparation, as well as evaluate Kenya’s existing operations, infrastructure and human capacity. The project was revived in May 2024 following a feasibility study funded by the European Investment Bank, which confirmed its viability, as well as a recent agreement between Kenyan and Ugandan presidents to expedite the project and mobilise resources, with a progress report to be issued by the end of 2024.

Source: Energy Capital & Power

Madagascar

Economic outlook: The AfDB forecasts growth for Madagascar of 4.5% in 2024 and 5.3% in 2025

The African Development Bank (AfDB) Group’s Country Report 2024 forecasts vigorous economic activity for Madagascar, with expected growth of 4.5% in 2024, climbing to 5.3% in 2025. Growth on the Grande Île was 4.4% in 2023, compared with 4.3% in 2022. The report, entitled Driving change in Madagascar by reforming the global financial architecture, was published in Antananarivo by AfDB’s Country Office in conjunction with the Government of Madagascar, on Wednesday, 31 July 2024. Government representatives, including the Minister of the Environment and Sustainable Development, Max Andonirina Fontaine, the Chief of Staff of the Minister of the Economy and Finance, Florence Andrianaivohery and others from the public authorities, the private sector, civil society and development partners of the Grande Île, all contributed to wide-ranging and constructive discussions around the report. Kevin Chika Urama, Chief Economist and Vice-President of the AfDB Group, responsible for Economic Governance and Knowledge Management, spoke by video message. He emphasised the importance of country reports, which shed light on national policies and feed into political dialogue between the authorities and the private sector and development partners on structural transformation.

Source: AfDB

Mozambique

Cabinet approves resolution on AfCFTA Agreement

Mozambique’s Government recently approved the resolution on Mozambique’s tariff offer for the implementation of the African Continental Free Trade Area (AfCFTA) Agreement and the national strategy for its implementation. The decision was taken by the Cabinet, which met in Maputo for its 24th Ordinary Session, according to a final communiqué that explains that the two resolutions will allow Mozambique to “access the AfCFTA Adjustment Fund”. The fund “aims to assist state parties implement the AfCFTA Agreement, to limit possible negative impacts that may result from the implementation of the agreement,” the communiqué said. It will also allow Mozambique to start using the Pan-African Payment and Settlement System, “which will be made available jointly” by the African Export-Import Bank and the AfCFTA Secretariat, “to be used by African companies in intra-African commercial transactions”. He added that Mozambique will “be part of the Guided Intra-African Trade Initiative for Goods”, which “aims to create real opportunities in Africa through economic operators from countries that have already submitted their tariff offers and are carrying out commercial transactions”, in this case in value chains such as ceramic tiles, batteries, vegetables, avocados, flowers, pharmaceuticals, palm oil, tea, rubber and air conditioning components.

Source: Club of Mozambique

Mozambique / Malawi

Mozambique-Malawi power link nearing completion

The Mozambique-Malawi electricity interconnection project has made further progress and could be completed by December of this year. After successive extensions of the project deadline, due to various difficulties, the contractor has now given a guarantee that the work in progress will be completed. Construction of the Matambo substation is currently around 60% complete, and it is expected that it will be commissioned in the next two to three months, for later delivery. One hundred of the 304 pylons needed to carry the power transmission line across the 141 km of Mozambican territory have already been erected. Yang Yanlong, representative of the company SIinohydro, which is responsible for the construction of the Matambo substation, recently announced the new deadline to the Malawian press. “The deadline for completion of the project was reiterated by the civil works inspector, Firmino Langa, who anticipates the supply of materials within the current dynamic, so that this new deadline will not be exceeded once again,” Yang said. The project employs around 1 000 workers, including Mozambicans, Chinese, Zimbabweans and Zambians. The substation under construction will have an installed capacity of 400 MW, of which Malawi will import 120 MW.

Source: Club of Mozambique

Nigeria

Digital economy: ITU urges Nigeria to streamline NCC, NITDA’s functions

The International Telecommunications Union (ITU) has advised the Nigerian Government to streamline the regulatory roles of the Nigerian Communications Commission (NCC) and the National Information Technology Development Agency (NITDA) to address multiple regulations in the digital space. The global telecommunications body stated this in its report on Nigeria titled, Collaborative Regulation: Accelerating Nigeria’s Digital Transformation, which was recently launched in Abuja. According to the report, areas of overlapping functions of the two agencies include responsibility for developing sector-specific information and communications technology (ICT) policies, data protection, and content regulation, among others. It added that with increasing convergence between telecommunications, information technology, and ICTs generally, there is a need for a clear understanding of where the delineation of the roles of NITDA and NCC lies. While noting that there are also some overlaps between the mandate of NITDA with NCC, the National Office for Technology Acquisition and Promotion and potentially other entities, the ITU said the NITDA Amendment Bill, which is before the National Assembly should clarify the mandate and role.

Source: Nairametrics

Nigeria

Nigerian businesses establish coalition to boost AfCFTA implementation

Thirty-six Nigerian business associations, with support from the Center for International Private Enterprise (CIPE), have established the Trade in Services Coalition to support the implementation of the Trade in Services Protocol under the African Continental Free Trade Area (AfCFTA). A statement by the center stated that the coalition aims to bring together players in Nigeria’s trade in services industry. It will be led by a five-member coordination committee that will steer the coalition’s activities in business, communication, finance, tourism, travel, and transport. “One of the aims of this coalition is to help businesses in Nigeria take advantage of the opportunities offered by the AfCFTA. This offers significant opportunities for trade and innovation in goods and services across Africa and globally,” Lars Benson, Regional Director of CIPE Africa, said. He stated that the coalition’s objectives are to support the implementation of the AfCFTA Trade in Services Protocol in Nigeria, collaborate and advocate on trade-related issues, and foster a united front for impactful change. He said, “To achieve these objectives, the coalition will focus on addressing the need to integrate Nigeria into the five priority sectors of the AfCFTA Trade in Services.

Source: Businessday

Republic of the Congo / Kazakhstan

Republic of the Congo, Kazakhstan target oil and gas sector cooperation

The Republic of the Congo has signed multi-sectoral agreements with Kazakhstan to boost bilateral cooperation in the fields of oil and gas, information and communications technology and cybersecurity, among other strategic sectors. The agreements were signed during a recent state visit by Congolese President Denis Sassou Nguesso to Astana. President Nguesso met with his Kazakhstani counterpart President Kassym-Jomart Tokayev to identify pathways to increasing collaboration across extractive sectors. “The economy of my country, like that of Kazakhstan… is essentially based on the oil sector. In this area, Kazakhstan, a country with proven experience, is able to benefit Congo, through stakes taken by its operators,” said President Nguesso. “Our country is endowed with other resources, particularly mining, with deposits that are still little exploited or awaiting development, such as phosphates and potash, which are so abundant in the maritime region of Pointe-Noire,” he added.

Source: Energy Capital & Power

Tanzania / Europe

Five sectors in Tanzania to benefit from TZS100-billion EU reform support

The European Union (EU) has outlined five areas where EUR33.12-million (about TZS100-billion) will go towards supporting Tanzania's ongoing reforms. The budget support aims to foster socio-economic development and enhance the resilience of Tanzanian citizens, the EU said in a statement issued recently. "We are pleased to continue our support for Tanzania's growth and development. The funds are not just an investment in the present but a commitment to the country's future,” said the EU Ambassador to Tanzania, Ms Christine Grau. “By focusing on areas such as the blue economy, urban development, gender equality, digitalisation, and financial growth, we are helping to build a more resilient and prosperous Tanzania,” she added. The focus areas include the blue economy in which the financing targets to develop a climate-resilient blue economy along Tanzania's coastal regions, including Zanzibar and the Indian Ocean. The funds will support governance reforms, capacity building, and enhance inter-ministerial coordination, the EU said. Another area is green and smart cities in which the support focuses on promoting sustainable urban development in Mwanza, Tanga and Pemba. The financing aims to improve living standards by enhancing environmental sustainability, creating economic opportunities, and improving public services, especially for women and youths.

Source: The Citizen

Togo

AfDB grants a loan of over USD26-million to develop key agricultural sectors through private sector investments

The Board of Directors of the African Development Bank (AfDB) Group have approved a loan of USD26.55- million to Togo to implement the second phase of the Agro-Food Processing Zone Project. The aim is to provide the country with an industrial hub for processing agricultural products and establish a business zone to offer opportunities to young people and women in the Kara and Savanes regions, in the north and far north of the country, respectively. The project, approved in Abidjan on 19 July 2024, will also help to attract a significant level of private investment into key agricultural sectors, such as rice, maize, soya, sesame, cashew nuts and broiler chickens. The funds come from the Transition Support Facility, an AfDB Group mechanism aimed at countries in transition, and will support investments that encourage inclusive agricultural growth that creates jobs and reduces food imports into the small West African country located on the Atlantic Ocean. “As well as consolidating the achievements of the first phase of the project, it was essential to support the structure of the Togo Agro-Food Processing Zone Project with a second phase. This will focus on the construction and operationalisation of the agro-industrial park (the central hub), including building a network of infrastructure (various roads and networks, administrative buildings, electrification, water and fibre optics) to create the right conditions for establishing private businesses,” said Wilfrid Abiola, the AfDB’s Country Manager in Togo.

Source: AfDB

Uganda

Bank of Uganda exempted from blanket statutory immunity

The Minister of Finance has issued an instrument lifting the blanket immunity from execution against the assets of the Central Bank of Uganda. The exemption was given in the Public Finance Management (Exemption of Specified Protected Assets) Instrument 2024, published on 26 July 2024. In ENS’s article on The Public Finance Management (Amendment of Schedule 4) Instrument 2023, it was pointed out that the pledging of certain national assets to secure loans for the government was prohibited and that certain assets, including all financial assets of the Bank of Uganda, were protected from any form of execution. ENS further pointed out certain legal, constitutional and commercial issues which would arise from the instrument. This exemption now addresses the commercial needs of the Bank of Uganda and places it in a better position to enter into contracts where its counterparties may require assurance of recourse against its assets. It is expected that other entities like Uganda Airlines will follow suit. The broader concerns on the legality of Schedule 4 remain and will hopefully be addressed in a pending legal challenge.

Source: ENS

Uganda

Contracting with government: The prohibition on entry into multi-year expenditure commitments without parliamentary approval

The Public Finance Management Act (Cap. 171) is an important Act governing how public monies are collected, spent and accounted for. Among its numerous provisions is a prohibition on government entering into financial commitments that go beyond one financial year without the approval of Parliament. Such authorisation may be done in the annual budget. The rationale for this provision is that the power to appropriate national resources is vested in Parliament. When a government agency enters into a multi-year contract, it usurps the powers of Parliament. The courts have considered this provision twice with mixed results. In Initiative for Social Economic Rights v Attorney General, the Constitutional Court considered a challenge to the contracts between the government and Finasi for the development of a multi-million-dollar specialised hospital at Lubowa.

Source: ENS

Uganda / Kenya

Uganda, Kenya in bid to promote complementary tourism

Uganda is banking on Kenya’s coastal towns to grow its tourism numbers after it emerged that Kenya’s tourism numbers to Uganda have been increasing. Proponents say that the concept behind the partnership is to promote complementary tourism products in Kenya and Uganda. Uganda Consul General to Mombasa Ambassador Paul Mukumbya, said that the number of visitors from both destinations has been growing over the years. “In 2023 the number of Ugandans visiting Kenya rose from 150 000 in 2022 to 201 620 accounting for 10% of all arrivals in Kenya last year,” he said. Ambassador Mukumbya, who was addressing delegates from Kenya, further explained that Uganda proved to be the largest Kenyan source of visitors behind the United States. “Similarly, the number of Kenyans visiting Uganda in 2023 stood at 490 000, which made Kenya the biggest source market for Ugandan tourism industry,” he said. “The strategy is going to change, we are rolling out the Uganda-Kenya coast tourism conference, exhibition and familiarisation trips 2024; the other two were successful,” Ambassador Mukumbya said, noting that the second Uganda-Kenya Coast Tourism Conference last year attracted more than 500 participants, of which 200 were from Uganda and the rest from Kenya.

Source: Monitor