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issue 567 | 13 Oct 2024

East / Southern Africa

COMESA Secretariat is set to modernise Rules of Origin Protocol amid regional integration milestones

The Common Market for Eastern and Southern Africa (COMESA) Secretariat convened a technical workshop in Zambia from 23 to 25 September 2024 to review the COMESA Protocol on Rules of Origin (RoO) with the support of the European Union (EU) – World Customs Organization (WCO) – RoO Africa Programme. This meeting brought together key stakeholders from across the region, marking a significant moment for regional trade. The workshop is timely as it coincides with several regional milestones, including implementing the COMESA – Southern African Development Community – East African Community Tripartite Free Trade Area (TFTA) and the first general review of the African Continental Free Trade Area (AfCFTA). Assistant Secretary-General, Dr Mohamed Kadah, highlighted that the COMESA RoO review comes at a significant time, coinciding with the 30th anniversary of COMESA’s regional integration efforts. He emphasised the crucial role of the RoO in deepening economic integration and facilitating trade within the COMESA Free Trade Area. Given the complexities of compliance across 369 regional trade agreements worldwide, simplifying and modernising these rules has become essential to reduce business costs. He acknowledged the collaboration with the WCO and EU, under the EU-WCO RoO Africa Programme, in revising the RoO to align with regional frameworks like the AfCFTA and the TFTA.

Source: WCO

Botswana

Non-mining supports GDP as diamond slump persists

All non-mining sectors of the economy recorded positive growth in the second quarter of the year, helping to limit the impact of the protracted diamond slump, as the country continues to hope for a recovery. Statistics Botswana figures released recently indicate that real GDP, a measure of economic activity, slowed to a -0.5% year-on-year in the second quarter, after a -5.3% performance in the first quarter. Two successive quarters of negative economic activity are a technical recession, but for Botswana, the impact could have been steeper without the contribution of the non-mining sector. According to the data agency, the contribution of mining and quarrying activities contracted by 16.5% in the second quarter, weighed down by base metals as well as diamonds. “Diamond production in carats decreased by 18.7% in the second quarter of 2024,” Statistics Botswana researchers stated. “The diamond market appetite has affected the commodity demand across the world. This, therefore, impacts negatively on the production and sale of diamonds. Plant refurbishment affected the production of copper and nickel.”

Source: Mmegi Online

Burkina Faso

IMF staff concludes visit to Burkina Faso

An International Monetary Fund (IMF) staff team led by Martin Schindler visited Ouagadougou from 30 September – 9 October to discuss macroeconomic policies in the context of the second review of the authorities’ four-year programme supported by the Extended Credit Facility (ECF) arrangement. Staff met with the Minister of Economy and Finance, Aboubakar Nacanabo; the Central Bank of West Africa States National Director, Armand Badiel; and other senior government officials. The team also met with private sector representatives and development partners. At the conclusion of the mission, Mr Schindler issued the following statement, in part: “An IMF team visited Ouagadougou for discussions on the second review of the IMF-supported four-year programme, which aims at creating fiscal space for priority spending, strengthening social protection, advancing good governance, and promoting sustainable growth. We had constructive discussions on the evolution and prospects of the programme in the context of a volatile security situation. They focused on macroeconomic and fiscal developments, improving fiscal transparency and governance, reducing fiscal risks, and enhancing efficiency in the energy sector.”

Source: IMF

Burkina Faso

New mining code enacted in Burkina Faso: Major changes to reinforce local regulation, ownership and transformation

After several months of discussions, a new Mining Code was adopted by the Transitional National Assembly of Burkina Faso on 18 July 2024 and promulgated as the Act No 016-2024/ALT enacting Mining Code in Burkina Faso on 31 July 2024 (new Mining Code). This new Mining Code will gradually replace the one from Act No 036-2015/CNT of 26 June 2015 as amended by Law No. 012-2023/ALT of 25 July 2023 (2015 Mining Code), since the 2015 Mining Code still applies to mineral permits that were granted prior to the enactment of the new Mining Code, at least during a transitional phase. As is often the case, this new piece of legislation is actually not codified and not a code per se, in that it does not include the multiple implementation regulations it refers to, which have not yet been adopted. Further, another “Legislation on Local Content in the Mineral Sector” has also been adopted and promulgated in parallel, instead of being integrated into the new Mining Code. It was adopted on 18 July 2024 and promulgated as the Act No 017-2024/ALT, relating to local content in the mineral sector in Burkina Faso on 31 July 2024.

Source: ENS

Equatorial Guinea

Equatorial Guinea Economic Update: Designing Fiscal Instruments for Sustainable Forestry

On 8 October 2024, the World Bank issued the Equatorial Guinea Economic Update 2024: Designing Fiscal Instruments for Sustainable Forestry - Second Edition which analyses the country’s recent economic developments and outlook and highlights the importance of designing effective fiscal instruments for sustainable forestry and economic diversification. Following two years of recovery, the economy of Equatorial Guinea contracted by 5.7% in 2023, driven by a decline in the hydrocarbon sector. Inflation decreased to 2.4% in 2023 compared to 4.9% in 2022, partly due to tight monetary policies pursued by the Bank of Central African States, the agreement to import food from Serbia, and the reduction of some import tariffs. The report underscores the need to design effective fiscal instruments for sustainable forestry and the country’s diversification efforts. Forests in Equatorial Guinea are estimated to cover about 87% of its territory and play a vital role as an essential ecosystem. However, the country’s deforestation and forest degradation rates have increased in recent years. The share of the forestry sector to GDP has declined substantially since the 1990s, partly due to the country’s lack of ability to process wood products locally. Equatorial Guinea's economy, once dependent on agriculture and timber, is now heavily reliant on the hydrocarbon sector.

Source: World Bank

Ghana

IMF reaches staff-level agreement on the third review of the ECF with Ghana

An International Monetary Fund (IMF) staff team, led by Mr Stéphane Roudet, Mission Chief for Ghana, held meetings in Accra from 24 September to 4 October 2024, to discuss progress on reforms and the authorities’ policy priorities in the context of the third review of Ghana’s three-year programme under the Extended Credit Facility (ECF). The arrangement was approved by the IMF Executive Board for a total amount of SDR2.242-billion (USD3-billion) on 17 May 2023. At the end of the mission, Mr Roudet issued the following statement, in part: “The IMF staff and Ghanaian authorities have reached a staff-level agreement on the third review of Ghana’s economic programme under the [ECF] arrangement. This staff-level agreement is subject to IMF Management approval and executive board consideration. Upon completion of the executive board review, Ghana would have access to SDR269.1-million (about USD360-million), bringing the total IMF financial support disbursed under the arrangement, since May 2023, to SDR1 441-million (about USD1 920-million).”

Source: IMF

Kenya

Foreign inflows in Kenya double in 12 months

Foreigners’ portfolio investments in Kenya more than doubled in the 12 months to June this year, reflecting an improving investor sentiment about the country. Portfolio investment liabilities are assets such as stocks, government or corporate bonds, and other financial instruments held by foreign nationals in Kenya, and generally reflect the country’s attractiveness to overseas investors. As of June, such investments hit KES6.4-billion (USD49.5-million), a 121% rise from the negative value of KES32.6-billion (USD233.4-million) in June last year, latest data from the Central Bank of Kenya shows. Experts say this is a sign of improving investor confidence in the Kenyan market, and an indication that the country’s economic situation appears promising to far-away investors, at least in the short-term.

Source: The EastAfrican

Mauritius

Think green, think tax: Mauritius’ Corporate Climate Responsibility Levy

The introduction of a Corporate Climate Responsibility Levy (CCR Levy) was announced as part of the Mauritius National Budget 2024/2025. This measure calls on the business community to actively contribute to the fight against the effects of climate change in Mauritius. The CCR Levy was subsequently codified on 27 July 2024 and applies as from the year of assessment, starting 1 July 2024. Key facts: the levy is calculated at 2% of chargeable income; it applies to companies and sociétés with a turnover exceeding MUR50-million; it includes companies with a global business licence; and it is applicable as from the year of assessment starting 1 July 2024. The CCR Levy applies to companies that are tax resident in Mauritius.

Source: ENS

Mozambique

FATF appreciates Mozambique’s effort to exit “grey list”

The Financial Action Task Force (FATF), a global money laundering and terrorist financing watchdog organisation, has appreciated the effort that Mozambique has been making in order to improve its financial system. In 2022, Mozambique was placed on the “grey list” of the FATF for an observation period of two years (2022-2024) for being vulnerable and presenting risks for money laundering and terrorist financing. Within this process, Mozambique is required to report within an established plan. According to the latest report, Mozambique has improved the way it conducts risk-based supervision, making significant progress in resourcing its Financial Intelligence Unit and it has strengthened its system of comprehensive statistics on the number and nature of money laundering investigations. “This is the fifth progress report for Mozambique. The country continues to show a strong commitment to dedicating resources and prioritising the actions needed to complete its Action Plan. The country has made important progress,” reads the report. According to the document, the country must present its next report on 24 November.

Source: Club of Mozambique

Nigeria

Nigeria’s FDI drops to USD29.83-million in Q2 2024, lowest level ever on record

Nigeria’s Foreign Direct Investment (FDI) for the second quarter of 2024 has dropped to USD29.83-million, marking the lowest level recorded based on available data up to 2013. This is according to data from the latest capital importation report by the National Bureau of Statistics. The FDI figure represents a steep decline of 65.33% compared to the USD86.03-million recorded in Q2 2023. It also shows a significant reduction of 74.97% from the USD119.18-million reported in the preceding quarter, Q1 2024. Nigeria’s FDI includes equity and other capital. The majority of the FDI in Q2 2024 came from equity investment, amounting to USD29.82-million. The other component of FDI, classified as “Other Capital,” recorded a minimal inflow of USD0.0085-million in Q2 2024. This is down by 33.33% from USD0.01275-million in both Q1 2024 and Q2 2023. Although this category traditionally accounts for a very small fraction of FDI, the decline indicates a further reduction in this already limited source of capital. The decline in FDI highlights the challenges Nigeria faces in attracting long-term investment amid a challenging global economic environment and domestic issues.

Source: Nairametrics

Tanzania

Tanzania to establish four new cashew processing factories by 2025/26 season

The Tanzanian Government has announced plans to build four new cashew processing factories in the southern regions by the 2025/26 season, as part of its strategy to boost local processing and add value to cashew exports. The announcement was made by Agriculture Minister Hussein Bashe during the launch of a new factory for the Tandahimba and Newala Cooperative Union (TANECU) in Mmovo Village, Newala District. The new facilities will include a factory at the Maranje Industrial Cluster in Mtwara Rural District, two additional factories in Tandahimba and Newala Districts under TANECU, and a fourth owned by the Tunduru Agricultural Marketing Cooperative Union. “This project should be completed before the 2025/26 season to fully utilise the two new warehouses, each with a 10 000-tonne capacity, at Maranje Industrial Cluster,” said Minister Bashe. The new TANECU factory, a TZS3.4-billion investment in Newala, has a processing capacity of 3 500 tonnes of raw cashew nuts annually. Mr Bashe also called for an additional factory to be built in Tandahimba District and emphasised the importance of increasing cashew processing capacity to raise export value.

Source: The Citizen

Togo / Ghana

Togo and Ghana resume border demarcation talks

Togo and Ghana resumed talks on the demarcation of their land borders. The two-day meeting commenced on 8 October in Lomé, the Togolese capital. The session aimed to help both countries agree on the exact boundary line between Borne 1 and the sea. Participants reviewed previous technical commission sessions and monitoring committee meetings. The review aimed to help national coordinators agree on how to delineate the boundary. This joint initiative, which started a few years ago, aims to enhance territorial protection, prevent conflicts, and resolve border disputes between Togo and Ghana. The two countries have already made progress in delineating their maritime borders, reaching an agreement on this issue in 2022.

Source: Togo First

Uganda

74 financial institutions now have access to NIRA database, says BoU

The Bank of Uganda (BoU) has indicated that at least 74 supervised financial institutions now have access to the National Identification and Registration Authority (NIRA) database. The access, which is part of the plan to enhance the Know Your Customer (KYC) strategy as mitigation against fraud and associated risks and enhance financial inclusion, was launched in 2020 by BoU in partnership with Uganda Bankers Association and Financial Sector Deepening Uganda to implement a section of the Registration of Persons Act, 2015 that provides for the use of a national ID and invariably the associated National Identification Number, to access certain services, including those of a financial nature. It authorises supervised financial institutions to collect pre-agreed customer data, which is then submitted to the e-KYC system hosted by BoU for authentication. In its annual report for the year ended June, BoU indicates that as of June 2024, there were 74 financial institutions accessing the NIRA database, 47 of which were at production and 29 at testing stage.

Source: Monitor

Uganda

EU regulations: Government starts nationwide coffee stakeholders registration

Government, through the Ministry of Agriculture and Uganda Coffee Development Authority (UCDA), has prioritised the registration of coffee value chain actors so as to enable traceability ahead of the upcoming ban by the European Union (EU) on the export of coffee harvested from deforested areas. The move comes at a time when the EU, which provides a market for 60% of Uganda’s coffee exports, will effectively ban buying coffee from deforested areas. In February, UCDA indicated that the EU Deforestation Regulation 2023 compliance required them to collect detailed information, especially on production and locations to determine the level of risk of exported coffee to the environment. The regulation requires that coffee planted after December 2020 must prove that no deforestation took place before it was planted, which seeks to promote environmental protection. While launching the exercise in Kampala, Agriculture Minister Frank Tumwebaze, said fortunately, the newly enacted National Coffee Act, 2021 had already provided for the establishment of a national register for coffee value chain actors, noting that “this partly answers the compliance requirement of registration of coffee value chain actors, an essential precursor to the creation of a National Traceability System.”

Source: Monitor

Uganda

Government plans to cut next budget by UGX14-trillion

Government has put the 2025/26 budget projections at UGX57.4-trillion, which is UGX14.7-trillion lower than the current budget. In May, government revised the UGX58-trillion budget for the 2024/25 financial year to UGX72.1-trillion, marking a significant increase of UGX14.1-trillion, a few hours before it was presented and approved by Parliament. The House had earlier received an addendum from the Ministry of Finance, which increased the 2024/25 budget by more than 25% to UGX72.1-trillion. However, in his first budget call circular issued to accounting officers and executive directors of state-owned enterprises and public corporations to guide in the preparation of the budget frame paper, and preliminary budget estimates, Ministry of Finance Permanent Secretary and Secretary to the Treasury Ramathan Ggoobi, said the preliminary resource envelope for the 2025/26 financial year is projected to amount to UGX57.4-trillion, which would be key in launching Uganda to the 10-fold growth agenda by 2040. 

Source: Monitor

Uganda

Mining has potential to enhance Uganda’s GDP, says chamber of mines

The Uganda Chamber of Mines and Petroleum (UCMP) has projected that minerals and related economic activities’ contribution to GDP will grow to 10% by 2040. The growth will be more than thrice the current 2.2%, supported by several strategic interventions at both exploration and production levels. The projections come at a time when government has recently banned the exportation of raw minerals, a move that seeks to improve earnings from the sector. Speaking during the 13th Minerals Conference organised by the UCMP, Mr Aggrey Ashaba, the UCMP’s Governing Council Chairman, said they are working to unlock barriers that stakeholders in the mining sector continue to face. “To be able to develop the mineral sector, all stakeholders involved including government, [United Nations] agencies, civil society organisations and the private sector must work together for the wellbeing of the sector,” he said, noting that for the industrial sector to grow, there needs to be availability of minerals, thus developing the sector is crucial in spurring industrial development. 

Source: Monitor

Zimbabwe

World Bank Group unveils strategy to drive inclusive growth and resilience in Zimbabwe

The World Bank Group’s Board of Executive Directors has approved the new Country Engagement Note (CEN) for Zimbabwe (2025-2026), focused on supporting the country’s immediate development priorities. Aligned with Zimbabwe’s Vision 2030 and the National Development Strategy 2021-2025, the CEN contributes to the World Bank Group’s mission of ending extreme poverty and boosting shared prosperity. The CEN is structured around two pillars. Pillar 1 aims to support the country in reducing macroeconomic distortions, strengthening fiscal policies, and improving economic governance, while fostering a more conducive environment for private sector-led growth. Pillar 2 aims to help build resilience by boosting pro-poor social services, empowering women, and delivering more efficient assistance to vulnerable households. It also supports resilience to climate change and supports the energy transition. “Zimbabwe has significant growth potential, with its well-educated workforce, abundant natural resources, and strategic location. Sustained, inclusive, and resilient growth will require building on recent reforms and advances in economic policy. We look forward to supporting Zimbabwe on this path towards a more prosperous economy that benefits both its people and the broader region,” said Nathan Belete, World Bank Country Director for Zimbabwe.

Source: World Bank