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issue 574 | 01 Dec 2024

Africa

Africa can benefit from AI, but must first develop its infrastructure

Africa could reap the benefits of the fourth industrial revolution, particularly AI, but only with the right infrastructure in place. The continent currently has one of the widest digital divides. Speaking on the last day of the 2024 African Economic Conference in Gaborone, Botswana, Dr Pedro Conceicao, one of the authors of the upcoming 2025 Human Development Report, said that compared to the other regions, AI in sub-Saharan Africa is more likely to augment than substitute occupations and tasks. “Instead of looking at AI and digital technologies as something that fascinates us by the extent to which it can perhaps surpass what people can do, the focus should be thinking through the institutions and the policies that we can implement to enable these technologies to augment what people can do. To augment human development,” said Dr Conceicao. The 2025 Human Development Report: Harnessing the opportunities of the digital transformation to advance human development, is one of three reports examining uncertainty arising from intensifying polarisation, destabilised planetary systems, and expanding societal transformation, namely digitalisation.

Source: AfDB

Africa

African sub-sovereign government leaders and businesses meet in Kisumu City, Kenya to discuss inclusive growth, trade decentralisation and investment opportunities

Over 250 sub-sovereign government leaders from across Africa met in Kisumu, Kenya, for the fourth edition of the African Sub-Sovereign Governments Network (AfSNET) Conference. Taking place from 25-27 November, the event provided a platform for sub-sovereign leaders and businesses to discuss how their local governments can attract investments in the region in order to foster and accelerate inclusive growth and development. Organised by the African Export-Import Bank (Afreximbank), in collaboration with the County Government of Kisumu and the United Cities and Local Governments of Africa, the conference’s overarching theme was Leveraging the AfCFTA for Sustainable Trade and Investment: A Development Pathway for African Sub-Sovereigns. The event’s main objectives included strengthening the role of Africa’s sub-sovereign governments in driving intra-African trade and investment, and the successful implementation of the African Continental Free Trade Area. Africa’s sub-sovereign governments, comprising states, counties, provinces, municipalities and regional authorities, play a critical role in economic development of African countries.

Source: Afreximbank

Africa

High costs of ICT services in Africa hinder digital access, experts warn

The high cost of information and communications technology (ICT) services in Africa is a significant barrier to achieving meaningful change in the sector, according to a recent report. The International Telecommunication Union (ITU) revealed that 63% of Africa’s population remains without internet access, with only about 37% enjoying connectivity. This stark reality underscores the urgent need for affordable ICT services across the continent. During the 13th African Internet Governance Summit held at the United Nations Economic Commission for Africa (ECA) in Ethiopia, experts called for the development of legal frameworks to address the challenges that have led to widespread exclusion from digital services. The summit, themed Building Our Multistakeholder Digital Future, brought together African parliamentarians, policymakers, and experts to discuss key issues affecting the continent’s digital landscape. With over 800 million Africans currently offline, participants emphasised that robust laws and regulations are essential to facilitate digital development and ensure that all citizens can benefit from technological advancements.

Source: Capital News

East Africa

Crude oil pipeline, a boon for East African economies

The government has underscored the significance of sustainable practices and environmental stewardship in the development of the East African Crude Oil Pipeline (EACOP), describing it as a landmark project that symbolises regional cooperation and fosters economic growth. Speaking at the Uganda-Tanzania Oil and Gas Networking Forum on 22 November 2024, in Dar es Salaam, Deputy Permanent Secretary in the Ministry of Energy, James Mataragio, said the pipeline was important in boosting regional economies, creating jobs, and supporting the growth of sustainable industries. “The [EACOP] contributes to the development of regional economies by creating jobs and building sustainable industries,” Dr Mataragio said during the event hosted by the High Commission of Uganda in Tanzania. Dr Mataragio lauded the leadership of Uganda’s President Yoweri Museveni and Tanzania’s President Samia Suluhu Hassan for their commitment to advancing bilateral cooperation in the energy sector. “The visionary leadership of our presidents has fostered a partnership that positions Uganda and Tanzania as key players in the region’s energy sector,” he noted.

Source: The Citizen

West Africa

ADF releases initial support of USD99-million to finance the development of rice cultivation value chains in West Africa

The Board of Directors of the African Development Fund (ADF) has approved initial funding of USD99.16-million to develop regional rice cultivation value chains as part of the Regional West Africa Rice Development project. The aim of the project is to increase food security and sovereignty in West Africa by encouraging public and private investments in rice value chains to increase self-sufficiency in rice in the region by 2030. The funding of USD99.16-million is intended for the first group of beneficiaries, which includes The Gambia and Guinea-Bissau at the national level, as well as the Economic Community of West African States (ECOWAS) and the Africa Rice Center (AfricaRice) at the regional level. It will be provided in the form of separate grants of USD15.95-million, USD43.88-million and USD19.94-million from the African Development Bank (AfDB) Group’s concessional loans window. A fourth grant from the bank, of USD19.39-million, will come from the Transition Support Facility, a bank mechanism aimed at supporting the resilience of the continent’s most fragile countries. In total, grants from the AfDB Group represent 91.2% of the total cost of the project. The Governments of The Gambia and Guinea-Bissau will each contribute 5.2%, with the beneficiaries contributing 1.7% in kind. ECOWAS and AfricaRice will contribute 1.2% and 0.8% of the total project cost, respectively.

Source: AfDB

West Africa

AfDB and partners plan to make Abidjan-Lagos corridor highway a potent economic and industrial hub

The Abidjan-Lagos corridor highway will link the cities of five major West African countries by 2030, and is set to become a powerful economic and industrial hub courtesy of the Spatial Development Initiative promoted by the African Development Bank (AfDB). This 1 028 km transnational coastal motorway will connect Côte d'Ivoire to Nigeria, while crossing through Ghana, Togo and Benin. Work is due to commence in 2026 and is earmarked for completion in 2030, the African Development Bank (AfDB) revealed at an online workshop held on 22 November with all the partners associated with the project. Under the AfDB's leadership, feasibility studies, financing options for the motorway and institutional arrangements for getting the Abidjan-Lagos Corridor Management Authority up-and-running have already been overseen. The Director of the bank's Infrastructure and Urban Development Department, Mike Salawou said the transport corridor needs to become an economic corridor: “This economic corridor approach also naturally overlaps with major urban development. It will support the growth of major economic hubs and improve links between large urban centres, secondary cities and rural areas within the five countries. The bank has launched the Spatial Development Initiative to enable transformative industrialisation right along the highway, to stimulate the growth of major economic clusters.”

Source: AfDB

Angola

AfDB approves USD162.76-million to support economic governance and resilience

The Board of Directors of the African Development Bank (AfDB) Group has approved a USD162.76-million loan to Angola to finance the first phase of the country’s Economic Governance and Resilience Support Programme. This two-year programme will accelerate Angola’s economic diversification by strengthening fiscal governance and boosting private sector participation, particularly in climate resilient agricultural transformation. Since 2017, Angola has achieved macroeconomic stability through significant economic reforms. However, challenges persist, including declining oil export revenues and high debt burden. To sustain and achieve its growth targets, Angola intends to undertake additional reforms to advance its economic diversification agenda, particularly in agriculture – a critical sector for livelihoods and food security. The programme also addresses climate vulnerabilities that pose risks to sustainable development. The initiative prioritises economic opportunities for vulnerable groups, including women, youth, persons with disabilities and low-income households, who are disproportionately affected by climate change’s impacts on agriculture and food security.

Source: AfDB

Benin

Benin building solar power plants for energy access

Construction launched on 12 November at the 25 MWp Forsun Solar PV plant in Pobè, Benin. The project is the result of cooperation between the French Development Agency, the European Union and the Beninese Government to invest almost F.CFA16-billion (USD25.58-million) into building the solar plant. The plant is located in the town of Pobè, in Plateau Department, in southeastern Benin, close to the international border with Nigeria. The town is located approximately 34 km north of Sakété, the capital of Plateau Department. Benin’s National Electrification Strategy (SNE) is to achieve universal electricity access by 2030. In 2021, the national electrification rate was 36.5% but this hides wide disparities between access rates in urban (59.2%) and rural areas (6.5%), according to the World Bank’s Benin Country Climate and Development Report. The Benin Least-cost Electrification Master Plan (2021), which supports the SNE, expects that by 2030, 76% of the population will be connected to the Société Béninoise d’Energie Electrique – the Beninese Electrical Energy Society electricity grid, 15% connected via mini-grids and 9% via solar home kits.

Source: ESI Africa

Democratic Republic of the Congo / South Sudan

DRC, South Sudan set to integrate revenue systems

Revenue authorities in the Democratic Republic of the Congo (DRC) and South Sudan are set to integrate their systems with other countries on the Northern Corridor to speed up cargo documentation and reduce long queues on their borders. Dr John Deng Northern, the Corridor Transit and Transport Co-ordination Authority (NCTTCA) Executive Director, said the two states have agreed to adopt technology in their customs processes, which will then be linked to peers. The decision means the two countries will clear goods faster from the Port of Mombasa, easing the flow of goods to their territories. “The Kenya Ports Authority has played a big role in ensuring cargo is cleared on time, now we need to address a number of [non-tariff barriers] along the corridor with the two countries [needing] to adopt technology in paper documentation of cargo,” said Dr Deng. NCTTCA said it was working on a platform to easily translate instructions and ease the language barrier between customs authorities to enable the integration.

Source: The EastAfrican

Djibouti

Climate action can protect growth and build resilience

Increasing exposure to extreme heat, droughts, and floods pose serious risks to livelihoods in Djibouti as well as for the country’s long-term economic growth. Without swift action, Djibouti could lose up to 6% of its GDP annually by 2050, equal to nearly four years of today’s economic output, according to the World Bank Group’s first Djibouti Country Climate and Development Report. The report provides a detailed roadmap for how Djibouti can transform these climate challenges into opportunities for sustainable growth and economic diversification, highlighting the importance of infrastructure investment, action on water and food security, and energy sector reform. Djibouti shares many climate risks with other countries of the region, but Djibouti’s role as the major port for the Horn of Africa makes the resilience of its transport infrastructure important to the entire region. Also, economic activity is concentrated in low-lying coastal Djibouti City, making protection against coastal flooding from sea level rise a key priority.

Source: World Bank

Ethiopia

Ethiopia's Parliament approves extra USD4.8-billion spending in 2024/25

Ethiopian lawmakers have approved the government's plan to increase spending by an additional ETB581.98-billion (USD4.8-billion) for the 2024/25 fiscal year, a Parliament broadcast showed. The extra spending approved by Cabinet recently, supplements the already announced expenditure of ETB971.2-billion for 2024/25, marking a 21% increase from the previous year. Ethiopia's fiscal year begins on 8 July and ends on 7 July. Finance Minister Ahmed Shide told lawmakers that a portion of the additional funds would be allocated to subsidise costs of fertiliser, oil, fuel, and medicine. The East African nation is coming out of several economic shocks including the impact of the COVID-19 pandemic, a devastating two-year war in the northern Tigray region, and extreme weather events. It secured a four-year, USD3.4-billion programme from the International Monetary Fund shortly after floating its currency on 29 July. This move laid the groundwork for a long-awaited debt restructuring.

Source: Reuters

Ethiopia

IMF reaches staff level agreement on the second review of the ECF for Ethiopia

A staff team from the International Monetary Fund (IMF) led by Mr Alvaro Piris, visited Addis Ababa from 12 to 26 November 2024, to discuss progress on reforms and the authorities’ policy priorities in the context of the second review of Ethiopia’s economic programme supported by the IMF’s Extended Credit Facility (ECF). The arrangement was approved by the IMF Executive Board on 29 July 2024, for an initial total amount of SDR2.556-billion (about USD3.4-billion at that time). At the conclusion of the mission, Mr Piris issued the following statement, in part: “The IMF staff team and the Ethiopian authorities have reached staff-level agreement on the second review of Ethiopia’s economic programme under the ECF arrangement. The agreement is subject to approval of IMF Management and the Executive Board in the coming weeks. Upon completion of the executive board review, Ethiopia would have access to SDR191.70-million (equivalent to about USD251-million). Future reviews will be on a six-monthly schedule.”

Source: IMF

Liberia

IMF staff concludes mission to Liberia

An International Monetary Fund (IMF) staff team, led by Mr Daehaeng Kim, Mission Chief for Liberia, visited Monrovia from 6 – 19 November 2024, to conduct the first review of the Extended Credit Facility (ECF) arrangement approved on 25 September 2024. At the conclusion of the mission, Mr Kim issued the following statement, in part: “The IMF team held collaborative and constructive discussions with the authorities regarding the progress made since the approval of the ECF arrangement and the policies for the future. The team is encouraged by the robust economic activity, ongoing stability of prices and exchange rates, and the strong fiscal outturn. The team also welcomes the authorities’ steadfast commitment to the economic reforms supported by the ECF arrangement. IMF staff and the authorities have reached understandings on most macroeconomic policies under the programme. A few issues remain to be discussed further in the coming days. They look forward to continuing constructive discussion on the remaining issues, with a view to finalising the staff-level agreement in coming weeks.”

Source: IMF

Republic of the Congo

EIB, EU grant EUR51-million to the Republic of the Congo to drive digital transition

The Republic of the Congo has secured EUR36-million in funding from the European Investment Bank (EIB) and an additional EUR15-million grant from the European Union (EU) to boost digital transformation. The funding aims to support the implementation of the National Digital Transition Plan, a strategic initiative to modernise public administration and strengthen the digital economy. The funding will address challenges in modernising infrastructure, boosting digital capability and ensuring sustainable growth in the digital economy. The Republic of the Congo’s Minister of Digital Economy Léon Juste Ibombo stated, “This project will ensure sustainable digital governance, enhance human resources in the [information technology] sector, improve cybersecurity, and promote the use of information and communication technologies across all areas of administration.” The initiative aligns with Phase II of the country’s National Development Plan, which prioritises digital transformation as a cornerstone for economic diversification.

Source: Energy Capital & Power

Senegal / Guinea

ADF releases USD81-million for the construction of a road linking Guinea and Senegal to promote integration and trade

The Board of Directors of the African Development Fund (ADF) approved a loan of USD80.93-million to Senegal and Guinea for the construction of a new interstate road linking Labé and Mali in Guinea with Kédougou and Fongolembi in Senegal. The loan from the concessional window of the African Development Bank (AfDB) Group consists of USD41.47-million for Senegal and USD39.46-million for Guinea. The financing will be used for construction and asphalting of the road, which will strengthen integration and trade between the two countries, assist the livelihood of local populations and facilitate the delivery to market of forestry, agro-pastoral and mining products. The road will also offer hauliers in Mali better access to the port of Conakry using the southern Dakar-Bamako corridor, which passes through the town of Kédougou. Construction of rural roads feeding into the highway will make it easier to supply inputs and to collect and transport agricultural produce. A total of 240.71 km of road will be built, of which 178.11 km in Guinea and 62.60 km in Senegal. The road surface will be made from climate-resilient asphalt concrete with one 3.60-metre lane in each direction and hard shoulders of 1.5 metres. Construction will be co-financed by the Islamic Development Bank, the West African Development Bank and the governments of the two countries.

Source: AfDB

Sierra Leone

IMF Executive Board concludes 2024 Article IV consultation with Sierra Leone and approves request for a 38-month arrangement under the ECF

On 31 October, the Executive Board of the International Monetary Fund (IMF) concluded the 2024 Article IV consultation with Sierra Leone and approved a 38-month arrangement under the Extended Credit Facility (ECF), in the amount of SDR186.663-million (about USD248.5-million). The executive board’s decision enables an immediate disbursement of SDR34.999-million (about USD46.6-million). The new arrangement supports the authorities’ National Development Plan 2024-30. It aims to restore stability by bolstering debt sustainability addressing fiscal dominance, bringing down inflation and rebuilding reserves; support inclusive growth through structural reforms and targeted social spending; and confront corruption, and strengthen governance, institutions, and the rule of law. The executive board also completed the 2024 Article IV consultation, which focused on climate vulnerabilities, gender gaps, social policies, mining revenue mobilisation, drivers of inflation, and trade facilitation. The authorities began to tackle Sierra Leone’s macroeconomic imbalances last year by notably tightening fiscal and monetary policies.                 

Source: IMF

Tanzania / Kenya / Uganda

Tanzania, Kenya, Uganda renew push for collective gains in lucrative mineral sector

East Africa is making strides to reform its mining sector, aiming at striking a balance between foreign investment and socio-economic development in respective countries. Mineral ministers from Tanzania, Kenya, and Uganda have expressed a shared commitment to ensure that the region’s vast mineral wealth benefits its citizens and drives economic growth. They shared their commitment during a recent "Minerals Night" held in Dar es Salaam, marking the conclusion of a three-day mining conference that gathered leaders from different bloc member countries. This shift in approach underscores the need for cooperation, and value addition marks a critical step towards addressing historical imbalances that have left many communities sidelined. “We must ensure that our citizens benefit from their resources,” said Tanzania’s Minerals Minister, Mr Anthony Mavunde. He elaborated that initiatives including establishing and strengthening processing zones and community-based mining cooperatives will ensure local employment opportunities and improved revenue sharing.

Source: The Citizen

Uganda

Uganda introduces interest rate cap for money lenders

The Minister of Finance in Uganda has issued a legal notice setting a maximum interest rate for money lenders at 2.8% per month (or 33.6% per annum). The legal notice, issued under the Tier 4 Micro Finance Institutions and Money Lenders Act (Cap. 61), applies to money lenders and not to other licensees under the Act such as non-deposit-taking micro-finance institutions or savings and credit cooperative organisations. Charging interest above the prescribed interest constitutes an offence, and on conviction, a money lender is liable to a fine of up to UGX1-million. Additionally, a court may order cancellation of the money lender’s licence and require that the money lender repay the borrower any excess interest charged.

Source: ENS

Zimbabwe

Time to accelerate Zimbabwe’s USD21-billion public debt and arrears resolution process, say stakeholders

After nearly two years of dialogue with development partners, Zimbabwe says it is ready to accelerate the arrears clearance and debt resolution process by working with the International Monetary Fund (IMF) for a staff monitored programme to start in January 2025. The IMF’s programme falls under the economic reforms Zimbabwe is undertaking as part of the process to clear its USD21-billion public debt and arrears. Addressing the sixth Structural Dialogue of the process hosted by the Zimbabwe Government in the capital Harare, President Emmerson Mnangagwa expressed support for the IMF programme and called for financial intervention to protect vulnerable groups of the population that will be negatively affected. “In this regard, the protection of the vulnerable groups, through effective social protection programmes is of critical importance to my government,” President Mnangagwa told creditors, development partners, private sector players, civil society organisations and farmers’ organisations at a high-level dialogue recently. The President and Chairman of the Boards of Directors of the African Development Bank (AfDB) Akinwumi Adesina termed the IMF programme “a significant milestone towards concretising the arrears clearance and debt resolution.”                 

Source: AfDB