13 countries urged to ratify trade deal
Countries yet to ratify the African Continental Free Trade Area Agreement (AfCFTA) have been urged to do so. Speaking virtually to Ugandan government officials, AfCFTA secretary general Wamkele Mene said that so far 41 of 54 signatories to the pact had ratified the agreement, with talks still ongoing to get the rest on board. His address was part of Uganda’s national dialogue on the AfCFTA. Kenya, Uganda, Rwanda, Burundi and recently Tanzania have ratified the agreement, potentially opening their markets and committing to reduce barriers to African trade and investment. “Regarding outstanding ratifications, the secretariat continues to engage the countries that have not yet ratified [the AfCFTA] to do so as a matter of urgency, subject to their domestic legal requirements. We do however recognise that the issue of ratification is a sensitive matter that is domestic, legal and political in nature,” Mene said. He added that the implementation of the trade agreement is challenged by lack of clarity on issues such as rules of origin, tariff schedules and services sector commitments and partner states negotiations.
Source: The EastAfrican
Afreximbank signs MoU with ARC Group to enhance resilience and disaster risk financing initiatives
The African Export-Import Bank (Afreximbank) and African Risk Capacity (ARC) Group signed a Memorandum of Understanding (MoU) to jointly enhance resilience and disaster risk financing initiatives that also impacts the trade and supply chain across the continent. The purpose of this MoU is to enable joint member states to enhance disaster response and resilience initiatives using available banking and insurance products suited for localised challenges. The MoU’s primary intervention is to provide Food Emergency Contingent Financing Facility to joint member countries that participate in ARC’s sovereign/macro disaster risk transfer programme, national capacity building and food security policy development. Professor Benedict Oramah, president of Afreximbank, commented: “This new partnership with the [ARC] Group will ensure we support member countries to be disaster aware, prepared and solutions oriented. In collaboration with the ARC, we aim to improve capacity to better plan and respond to natural and man-made disasters that may hamper trade facilitation across the continent and make available the needed support to combat disasters when they strike.”
EAC closer to finalising tariff offer with Africa trade bloc
The East African Community (EAC) is set to finalise its tariff offer with the African Continental Free Trade Area (AfCFTA) pact. The bloc’s tariff offer currently stands at 85% against AfCFTA’s modalities of 90%. A meeting of trade experts from the six EAC partner states will meet on 15 December to finalise the region’s tariff offer, the secretariat said. A recently-concluded sectoral council on Trade, Industry, Finance and Investment has been directed to revise the EAC Schedule of Specific Commitments on Trade in Services. The organ has also been tasked with reviewing the trade in services offers made by state and non-state parties of the AfCFTA. Further, the EAC Secretariat was directed to undertake an assessment of the number of additional tariff lines that have been moved by each partner state from the various categories. Speaking during the meeting held at the EAC headquarters, EAC secretary general, Peter Mathuki said that a lot needs to be done to kick off trading under the agreement. Kenya’s cabinet secretary for Trade and Industrialisation, Ms Betty Maina - who is also the current chair of the sectoral meeting - decried the persistence of non-tariff barriers in the region.
Source: The Citizen
Angola / Rwanda
Angolan businesses eye investment opportunities in Rwanda
A delegation of business actors from Angola visited Rwanda to explore potential areas of investment. Adelain Kajangwe, in charge of investment promotion at the Rwanda Development Board (RDB), said they have seen interest from Angolan companies seeking to trade or invest in Rwanda. “This is what we want to build on and see how we can bring in more investments in Rwanda, specifically in areas where they have potential,” he said. Rwanda is also keen on leveraging off Angola’s advanced level in mining for value addition. The manufacturing sector is also targeted, he disclosed. “This is a nursing sector that we are trying to promote… we are looking at construction materials, garments, assembling and agro-processing. These are key basic things we need as a country to address challenges we have today.” He said Rwanda was also looking at exporting information and technology services. “There are some key platforms that we have established that can work for Angola as well,” he added. He added that plans are underway to have a direct flight to Angola which will facilitate logistics and further collaboration.
Source: The New Times
Inflation rises to 8.8%
The rate of inflation rose to 8.8% in October, from 8.4% in September, driven by the increase in fuel prices effected earlier in the month. At its latest rate, the level of inflation is the second highest this year, after the 8.9% recorded in July. Since then, inflation declined marginally to 8.8%, then 8.4% before the spike in October. Recently, Statistics Botswana reported that besides the transport sector, other pressure on inflation between September and October came from higher prices of alcoholic beverages and tobacco, food, particularly oils and fats, as well as clothing and footwear. Inflation has been trending at nine-year highs since mid-year, driven by increases in value-added tax and other administered prices from earlier this year. Inflation has risen by more than three and a half times since January, eating away at consumers’ disposable incomes. The latest trends in inflation are in line with Kgori Capital expectations that the rate would jump in October due to the fuel price increase, before continuing the deceleration seen since August. The Bank of Botswana expects inflation to return to the 3 – 6% target range by the second quarter of next year.
New amendments will allow loans from pensions
The Retirement Funds Act is being amended to allow pension fund members to get direct loans from their pension funds or to use part of the pension as security for mortgage loans, Finance Minister, Peggy Serame has said. The provision will be for pension fund members who have not yet started drawing a monthly payout from their funds, she recently said in parliament. Serame was responding to a question by Selebi Phikwe West legislator, Dithapelo Keorapetse who wanted to know how government is assisting homeowners avoid foreclosure, given the difficult economic environment caused by COVID-19. Keorapetse wanted to know the extent of mortgage foreclosure, whether banks were still helping with mortgage deferral plans introduced last year and whether government had a plan to provide homeowners with protection through mortgage assistance relief services. In response, Serame said while there was no legislation for home ownership protection, the Retirement Funds Act was being reviewed with one of the areas under consideration, being the introduction of pension-backed mortgage loans.
Charcoal export to be banned if... Jinapor
The export of charcoal faces a ban if it is found to be a major contributor to increased deforestation in the country, Minister of Lands and Natural Resources, Samuel Abdulai Jinapor, has announced. According to him, the government was currently examining the link between the export of the product and high incidents of deforestation saying "we will ban if a conclusive determination is made that charcoal export is driving deforestation." The minister was speaking at Sunyani after a meeting with the Bono Regional Security Council. The meeting formed part of the minister's four-day tour of the Bono, Bono East and Ahafo regions. Mr Jinapor noted that the ministry was aware of the available huge global market for charcoal due to its varied use in the pharmaceutical industry. "I am told of the huge market for the export of charcoal. It is a major raw material for the pharmaceutical industry of the world. It is used for the production of toothpaste as well. This has led to upsurge of the export of charcoal. So we are examining its role in driving deforestation in our country. With the concern of President Nana Akufo-Addo, we will ban it if our examination proves right," he stated.
Source: Ghanaian Times
Ghana commits to renewable energy with 8 planned solar plants
The Government of Ghana has reaffirmed its commitment to renewable energy and Sustainable Development Goal 7 (SDG 7) with Bui Power Authority (BPA) planning to construct eight solar plants in the northern part of the country. According to BPA, the earmarked sites for the project expected to begin in the first quarter of 2022 include, Yendi, Northern, Buipe and Sawla, Savannah, Zebilla, and Bolgatanga, Upper East and Tumu, Upper West. These spots are close to substations of the Ghana Grid Company (GRIDCo) in the northern part of the country, where the potential solar plants capacity is between 10MWp to 100MWp. This could successfully be tied into the National Interconnected Transmission System. The BPA chief executive officer, Samuel Kofi Dzamesi, disclosed the figures when he outlined efforts to increase the country’s renewable power generation in an exclusive interview with the Ghanaian Times. The capacity of each plant, according to Dzamesi, was dependent on the size and specifications of investors who have been engaged under an arrangement in which they would fund the construction and be paid later for the state to own the plants.
Source: ESI Africa
Ghanaians should brace themselves: the electronic transactions tax is here to stay
Ghana’s Minister of Finance Ken Ofori-Atta has announced that the government intends to introduce an electronic transaction levy (e-levy) in the 2022 budget. He said this was to “widen the tax net and rope in the informal sector”. The proposed levy, which will come into effect on 1 February 2022, is a charge of 1.75% of the value of electronic transactions. It covers mobile money payments, bank transfers, merchant payments and inward remittances. The originator of the transactions will bear the charge except for inward remittances, which will be borne by the recipient. There is an exemption for transactions up to GHS100 (USD16) per day. According to the Finance minister, the total digital transactions for 2020 were estimated to be over GHS500-billion (about USD81-billion) compared to GHS78-billion (USD12.5-billion) in 2016. Huge growth in just five years. While the justification for this new levy is to widen the tax net, since the majority of the population makes a living in the informal sector, it seems a convenient means to increase government revenue. Initial response to the announcement of the levy has been one of displeasure and fears that it will affect the country’s current digitisation agenda.
Source: The Conversation Africa
Kenya oil dealers to get billions to keep fuel prices unchanged
Kenya will pay marketers billions of shillings through a fuel subsidy to keep pump prices unchanged and ease public anger over the rising cost of living. Marketers will be fully compensated for their margins of KES12.39 per litre of super petrol and KES12.36 for diesel. This allowed the energy regulator to keep diesel and petrol prices unchanged at KES110.60 and KES129.72, respectively. Without the subsidy, motorists would have paid a historic high of KES143.48 per litre of petrol and KES126.28 for diesel in what could have stoked pressure on inflation. “Despite the increase in the landed costs, the applicable pump prices for this cycle have been maintained as the ones in the previous cycle. The government will use the Petroleum Development Levy to cushion consumers from the otherwise high prices,” Daniel Kiptoo, the Energy and Petroleum Regulatory Authority director-general, said in a notice.
Source: The Citizen
Kenya to pay lion’s share of EAC budget in new system
Kenya will pay the lion share in financing of the East African Community (EAC) budget that will now be based on the size of a country’s economy under a new hybrid system. The EAC Sectoral Council on Finance and Economic Affairs chaired by Treasury Cabinet Secretary Ukur Yatani has agreed on a hybrid model of financing that will see countries pay an equal amount for 65% of the budget while the remaining 35% will be based on the country’s GDP. Kenya is an economic power house in the bloc with a GDP of USD100-billion followed by Tanzania at USD55-billion and Uganda at USD32-billion. Currently, partner states contribute equally to the budget of the EAC as outlined in the EAC Treaty, which further provides for sourcing of additional funding from development partners. The agreement on the new model came after the findings of a study on the required reforms to align the EAC structure, programmes and activities with the financial resources available from EAC partner states to ensure sustainability while addressing the dependency syndrome.
Source: The EastAfrican
Kenya’s economy signals recovery from pandemic slump
The Kenyan economy has shown signs of recovery from the COVID-19 pandemic after posting a 10.1% growth in the second quarter (April-June) of this year, helped by a rebound in activities in the manufacturing, financial, transport and hospitality sectors. But macroeconomic indicators are pointing to the need to cushion the economy further from shocks related to the pandemic, which has continued to ravage most sectors of the economy, according to the latest data from the Kenya National Bureau of Statistics. Government figures show that the country’s gross domestic product for the three-month period to June grew by 10.1% from a contraction of 4.7% in the same period last year. Economic growth in the first quarter (January-March) this year decelerated to 0.7% from 4.4% in the same period last year. According to the statistics body, growth in the second quarter of 2021 was supported by rebounds in most economic activities from significant contractions in the same period last year. The growth recorded was mainly as a result of easing of the COVID-19 containment measures that facilitated gradual resumption of economic activity.
Source: The EastAfrican
Kenya / China
Chinese, Kenyan traders launch chamber of commerce
Chinese and Kenyan traders have launched a chamber of commerce in Nairobi, seeking to connect their scattered operations in the two countries into a lobbying machinery. The Kenyan government says the move to create the Kenya-China Chamber of Commerce will be an arena for businesspeople to learn from one another and cut out suspicions. Trade Principal Secretary Johnson Weru said the chamber, which will include registered Kenyan and Chinese firms, will be part of a long-term goal of improving contacts between the two sides, beyond government channels. “This institution will further promote the friendship and deepen exchanges and cooperation,” he said after the organisation was launched in Nairobi on Wednesday, 17 November. “Together we have embarked on a distinctive path of win-win cooperation. Our cooperation has set a good example for building a new type of international relations.” The Chamber, which follows two other similar lobbies created between Kenya and the United States, and Kenya and the United Kingdom means trade could also boost cultural connections, according to the principal secretary.
Source: The EastAfrican
AfDB and Madagascar sign EUR36.5-million agreements for electricity transmission networks
The African Development Bank Group (AfDB) and the Government of Madagascar have signed financing agreements of EUR36.48-million for the implementation of the second phase of the Madagascar Electric Power Transmission Network Strengthening and Interconnection Project. The loan agreements were signed between the government and the bank at a ceremony held on the sidelines of the signing of the "BOOT" concession agreement and the power purchase agreement between the Government of Madagascar and the Themis-Eiffage-Eranove consortium. These contracts are part of the design, construction, operation and transfer of the 205MW Sahofika hydroelectric power plant on the Onive River, 100km southeast of the capital, Antananarivo. The ceremony took place at the State Palace of Iavoloha, in the presence of the President of the Republic of Madagascar, Mr Andry Nirina Rajoelina, and the vice president of the AfDB in charge of Electricity, Energy, Climate and Green Growth, Mr Kevin Kariuki.
Source: Africa Business Communities
Malawi USD1-billion energy deal to boost economy
Malawi is open for business. The East African country is pursuing various investment and trade deals to help boost its economy and in line with this has signed a USD1-billion deal with Egyptian multinational electrical company, Elsewedy Electric. Following negotiations between President Lazarus Chakwera and the president and CEO of Elsewedy Electric, Ahmed Elsewedy, the Minister of Trade, Sosten Gwengwe signed the Memorandum of Understanding on behalf of the government in Durban, South Africa. Gwengwe said Elsewedy will bring flagship investments into Malawi in sectors like energy, manufacturing, and tourism among others that will help boost the country’s economy. Malawi has also secured other trade deals within the African Continental Free Trade Area with Angola, Botswana, South Africa, South Sudan and Côte d’Ivoire. These deals were facilitated at the Intra-African Trade Fair. President Chakwera said Malawi should have a presence at such international forums because they are platforms where significant deals that can propel the country into better economic footing are signed.
Source: ESI Africa
MTC public offer falls short, returns 81%
The initial public offer (IPO) of Namibia's celebrated Mobile Telecommunications Limited (MTC) has returned with a 19% shortfall, raising about NAD2.5-billion of the NAD3.1-billion that was expected to flow into the state kitty. Analysts say the shortfall was partly due to the current harsh economic conditions in the country, and also because many Namibians are not convinced of the company's growth potential. According to a results note, 5 611 people, companies and institutions have applied for shares in MTC, and all applicants have been allocated shareholding. Over 299 million of the available 367.5 million shares that were on offer have been taken up, which leaves at least 68.5 million shares that no one was interested in. The offer was taken up dominantly by institutional investors (NAD2.4-billion) and retail only brought in NAD137.2-million. The Namibian in September reported that there would be an expected scramble for the shares, as the company was said to have already received an offer of NAD2.4-billion from investors before the public offer. Results from the offer were, however, that only about NAD137-million was drawn from the market, and that when added to the pre-commitment, makes up the NAD2.5-billion.
Source: The Namibian
Afreximbank signs USD1.04-billion deal with NNPC at IATF 2021
African Export-Import Bank (Afreximbank) has signed a USD1.04-billion facility with the Nigerian National Petroleum Corporation (NNPC) to finance the exploration of petroleum. The agreement was concluded on Tuesday, 16 November in Durban during the second Intra-Africa Trade Fair (IATF). The transaction comprises a Pre-Export/Shipment Finance Facility underpinned by a Forward Sale Agreement (FSA) and Offtake Contracts from the NNPC acting as the borrower and seller. NNPC will enter an FSA within which it shall deliver 35 000 barrels of crude oil per day. The proceeds of the facility will boost tax revenues and foreign currency receipts and create thousands of jobs in the oil and gas refining value chain, all by more than USD2.4-billion to the immediate benefit of the government, thereby improving the balance of trade and GDP in Nigeria – Africa’s largest economy. The transaction, signed by NNPC’s executive director and group CEO Mr Umor Ajia, complies with Afreximank’s mandate to promote local content in Africa’s oil and gas and other mining industries and generate foreign receivables into Africa.
Nigeria / Morocco
Plans for Morocco-Nigeria Gas Pipeline Project concluded
The Government of Morocco announced that the new regional onshore and offshore gas pipeline intended to deliver natural gas resources from Nigeria to Morocco through 13 other countries in West and North Africa has been concluded. The country mentioned that it has set up a downstream division of Office National des Hydrocarbures et des Mines (ONHYM), a public organisation representing the interests of Morocco in the field of exploration and production of hydrocarbons and mining resources, which is also in charge of the Morocco-Nigeria Gas Pipeline Project (MNGP). The Nigerian National Petroleum Corporation and ONHYM completed the feasibility study for the construction of the pipeline in January 2019. In the same month, the two countries contracted with Penspen to conduct the first phase of front-end engineering and design. The pipeline is estimated to cost USD25-billion, and would be completed in stages over 25 years. Morocco, which has estimated its resources at some 300 trillion cubic feet of conventional and unconventional gas in place, could replace lost gas from Algeria to Spain through the Morocco-Nigeria gas pipeline.
Source: Pumps Africa
Central bank suspends COVID-19 loan relief
The National Bank of Rwanda has directed commercial banks to revert to normal regulatory guidance in loan restructuring, classification and provision. The outbreak of COVID-19 prompted policymakers to unleash a series of fiscal and monetary policy relief measures, including restructuring of loans for distressed borrowers in order to cushion Rwandans from the effects of the pandemic. However, in a memo dated 11 November, the central bank said that the period for allowing banks to restructure loans for borrowers hit by the COVID-19 pandemic ended in September 2021. In the memo, the central bank said that the decision was informed by its inspections as well as findings from various assessments on economic performance and recovery, especially of the sectors most affected by the pandemic.
Source: The New Times
Why Tanzania's TZS1.3-trillion IMF loan is now interest-free
The TZS1.3-trillion loan given to Tanzania by the International Monetary Fund (IMF) will draw no interest after the Washington-based international financial institution was satisfied with the government’s expenditure plans for the money. To help the Tanzanian economy recover from the adverse effects of the global COVID-19 pandemic, IMF extended a total of USD567-million as a loan, with USD189-million of that being under the Rapid Credit Facility (RCF) programme, while USD378-million was under the Rapid Financing Instrument (RFI). In a statement released by the IMF on 12 November 2021, Tanzania will now obtain the funds fully on the concessional terms after RFI funds - which make up 66.7% of the quota - were repurchased and disbursement made from RCF resources. “This RCF disbursement allows Tanzania to take full advantage of its new eligibility to borrow from the fund on concessional terms,” the IMF statement reads in part. The deputy IMF managing director, Mr Bo Li, stated that the fund’s emergency financing on fully concessional terms will help the country to narrow its external financing gap, support the authorities’ implementation of the Tanzania COVID-19 Socio-economic Response Plan, and help catalyse donor support.
Source: The Citizen
Zimbabwe to import 400MW to bridge power deficit
State power utility, ZESA Holdings, intends to import up to 400MW from Mozambique and Zambia as part of measures to end a debilitating power crisis, a senior executive said. This comes as Zimbabwe, blighted by long periods of load shedding, is spending up to USD20-million of scarce forex on power imports every month, ZESA executive chairman Sydney Gata revealed. Dr Gata said in an interview that Zimbabwe was importing between 200-400MW from the region and partly blamed the scenario on delays by the Treasury to sign an independent power producer (IPP) implementation agreement. The agreement would have expedited development of IPP projects, which reportedly have significant output potential. In fact, Dr Gata contends Zimbabwe should, at the very least be exporting excess power. Demand for power in Zimbabwe reaches about 2 200MW, especially during winter peak, but the country can at best only produce roughly 1 400MW due to limited installed capacity and unreliable facilities. The gap between demand and supply is now being minimised through imports, which sees the country part ways with over USD20-million each month, and load shedding, which usually stretches for 12 hours a day.
Source: The Herald