Africa is open for business – continent’s leaders tell investors as Africa Investment Forum kicks off
African leaders have laid out the continent’s vast potential and invited global investors to seize investment opportunities. Speaking during the 2022 Africa Investment Forum Market Days in Abidjan, Côte d'Ivoire’s economic capital, the leaders vowed to continue working to strengthen the economic resilience of their countries against external shocks. The three-day forum has drawn project sponsors, investors, and heads of state from around the world to participate in boardroom sessions that could lead to transactions worth billions of dollars. President of Côte d'Ivoire Alassane Ouattara expressed the hope that Market Days 2022 would break the USD100-billion threshold in investment interest. The Market Days 2022 theme, Building Economic Resilience through Sustainable Investments, reflects these realities. The priority investment sectors for 2022 include renewable energy, hydropower, gas infrastructure, railways, road, water transport, agriculture, health, mining, fertiliser manufacturing, port infrastructure, and urban green transport. The Africa Investment Forum is an initiative of the African Development Bank (AfDB) and seven partners. The African leaders present had the opportunity to pitch their countries as investment destinations.
Afreximbank co-hosts webinar on intra-African trade and investment with the EABC
African Export-Import Bank (Afreximbank) hosted a webinar on intra-African trade and investment on 20 October 2022, alongside the East African Business Council (EABC). The conversation addressed key challenges confronting African businesses when approaching intra-African trade, recognising that 80% of Africa’s small businesses have no access to trade finance and over USD5-billion is lost due to currency conversion during transactions. Afreximbank described the innovative products offered by the bank to boost access to finance and cross-border payments under the African Continental Free Trade Area (AfCFTA). Dr Gainmore Zanamwe, head of Intra-African Trade Bank, Afreximbank, also praised public-private partnerships in East Africa, and called on this model of cooperation to be replicated across the continent. The EABC-Africa Trade and Investment Council (EATIC) – launched in June 2022 by both Afreximbank and the EABC – was cited as a key driver of opportunities generated by the AfCFTA, creating intelligence on markets and investment opportunities across the continent.
Afreximbank signs MoU with the African Energy Chamber to promote the growth of Africa’s energy sector
African Export-Import Bank (Afreximbank) has entered into a memorandum of understanding (MoU) with the African Energy Chamber (AEC). The agreement provides a framework for collaboration to facilitate the harmonisation of the two institutions’ mutual efforts in support of the African energy sector. The MoU was signed by both Professor Benedict Oramah, president and chairman of the Board of Directors of Afreximbank, and NJ Ayuk, executive chairman of the AEC, at the opening ceremony of the African Energy Week on 18 October in Cape Town, South Africa. The agreement outlines key areas of collaboration and mutual interest, primary among these being capacity building, advocacy and financing of African companies and infrastructure projects in the energy sector. Speaking at the signing ceremony, Afreximbank president Professor Benedict Oramah, commented “We are very pleased to conclude this MoU with the AEC… As we launch the African Energy Transition Bank, we also look forward, through this MoU, to the AEC becoming part of the instruments that will allow us to use finance to change the course of history in terms of energy access on the continent.”
Digitalised customs could boost intra-African trade, tax officials say
Digitalising the customs operations has potential to boost intra-African trade and ensure effective revenue collection, tax authorities have observed. At a high-level customs digitalisation forum in Kigali, delegates said that for the African Continental Free Trade Area (AfCFTA) to succeed, countries need to integrate information and communications technology (ICT) in their customs administration. The forum, held from 3 to 4 November, under the theme Leveraging on ICT to Boost Intra-African Trade, has been attended by customs and excise officials from 30 countries from eastern and southern Africa and across the world. Though all countries in the eastern and southern Africa region have digitalised their customs services, according to the World Customs Organization (WCO), only a few of them have advanced systems. These are South Africa, Mauritius, Kenya and Rwanda. However, there remain challenges that hamper digitalisation of customs operations in Africa. “The main challenges have been low trade volumes as a result of different non-tariff barriers and the low level of technology in eastern and southern Africa caused by low budget funding,” said Larry Liza, the director of the WCO Eastern and Southern Africa.
Source: The New Times
Enlisting the media in raising public awareness on regional infrastructure programmes
In an initiative aimed at strengthening air travel and information and communications technology (ICT) connectivity, five regional economic communities and the European Union (EU) have enlisted the regional media to raise public awareness on the implementation of two projects. These are Support to the Air Transport Sector Development (SATSD) and the Enhancement of Governance and Enabling Environment in the ICT Sector (EGEE-ICT). Both programmes are funded by the EU through grant contribution agreements each amounting to EUR8-million. They cover regional economic communities (RECs) in the Eastern Africa, Southern Africa and the Indian Ocean (EA-SA-IO) namely, the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), Inter-Governmental Authority on Development (IGAD), Southern Africa Development Community (SADC) and Indian Ocean Commission (IOC) which is the implementing lead. SATSD is a four-year programme aimed at supporting the operationalisation of the Single African Air Transport Market (SAATM); strengthening the regulatory and institutional capacity of civil aviation institutions; and improving air navigation efficiency in the EA-SA-IO region.
Harnessing Angola’s solar power potential
The Angolan government is supporting the development of several new solar power projects, in an effort to accelerate the country’s energy transition and reduce reliance on diesel- and coal-fired power generation. From a regulatory perspective, Angola’s Ministry of Energy and Water (MINEA) is responsible for supervising the development of renewable energy projects and promoting rural electrification initiatives in the country. Solar photovoltaic (PV) development aligns with the Angola Energy 2025 long-term plan, whose primary goal is to foster inclusive and sustainable growth of the country and provide basic energy services to the entire Angolan population. It also falls under Angola’s Action Plan of the Energy and Water Sector 2018-2022, which targets the establishment of an additional 500 megawatts (MW) of renewable energy by 2022, with a focus on utility-scale solar projects. Following the United Nations (UN) Climate Change Conference that took place in November 2021, the Angolan authorities have set an ambitious target to derive 70% of its energy matrix from renewable sources by 2025.
Source: Energy Capital & Power
Private sector investment key to unlocking Burundi’s economic potential
According to a new report by the International Finance Corporation (IFC) and the World Bank, Burundi could grow its economy through increased private sector investment. By strengthening its private sector and improving its business environment, Burundi has the opportunity to create more jobs, accelerate economic growth and attract more foreign direct investment. Reforming the country’s state-owned enterprises would also create space for more private actors and support for startups and smaller businesses. The Burundi Country Private Sector Diagnostic (CPSD), jointly prepared by the IFC and World Bank, explores the challenges and opportunities for private sector development across Burundi’s economy, particularly in areas that could drive economic transformation. It comes as the country is working to recover from the economic effects of the COVID-19 pandemic and new challenges, including rising global inflation and higher prices for food and fuel. Malick Fall, IFC country manager for Burundi said the country’s economic potential could be unlocked through a series of key reforms that provide the foundations for private sector-led investment.
Source: ESI Africa
Democratic Republic of the Congo
Statement at the conclusion of an IMF Mission
The International Monetary Fund’s (IMF) Mission chief for the Democratic Republic of the Congo (DRC) Mercedes Vera-Martin has issued the following statement, in part: “[From] 19 October – 2 November, an IMF staff team met with the Congolese authorities in Kinshasa in the context of the third review under the Extended Credit Facility (ECF). The mission discussed its findings with President Félix Antoine Tshisekedi Tshilombo, Prime Minister Jean-Michel Sama Lukonde, State Minister for Budget Aimé Boji, Minister of Finance Nicolas Kazadi, and the Banque Centrale du Congo Governor Malangu Kabedi Mbuyi. Despite the challenging domestic and external environment, including the repercussions of the war in Ukraine and raising tensions in the east of the country, the economy is showing resilience, with real GDP growth forecast at 6.6% in 2022. The inflation rate reached 11.7% year-on-year at end-September 2022, mainly driven by high global food and energy prices.
Kenya to fall short of COMESA sugar import quota on biting global crisis
Kenya will fall short of meeting its sugar import quota from the Common Market for Eastern and Southern Africa (COMESA) due to an acute shortage of the commodity in the world market, a move that will further subject local consumers to high prices. Kenya was allocated a quota of 180 000 tonnes of sugar by the COMESA Secretariat, which it has to import this year from the member states. However, Kenya has imported 48% of the total allocation with only two months to the end of the year. Head of the Sugar Directorate Wilice Audi says Kenya might not get all the required sugar by end of December because of a tight supply of the commodity at the global market. “There is a shortage of sugar in our source markets and this, coupled with prevailing high prices has seen traders lag in imports,” said Mr Audi. He said the shortage may have an impact on consumers given that local factories are grappling with a shortage of cane. The price of the sweetener has so far hit a high of KES312 for a two-kilogramme packet from KES230 in June. Sugar production in August dropped by 34% as most factories closed for maintenance amid a scarcity of mature cane. Total sugar production in August was 46 459 tonnes from the 70 278 tonnes recorded a month earlier.
IMF staff reaches staff-level agreement on the second review of the ECF for Niger and conducts the 2022 Article IV consultation
An International Monetary Fund (IMF) staff team led by Mr Antonio David held meetings from 5 October to 2 November 2022, on the second review of the three-year arrangement with Niger supported by the Extended Credit Facility (ECF). The team also conducted the 2022 Article IV consultation. At the end of the mission, Mr David issued the following statement, in part: “The Nigerien authorities and the IMF team reached a staff-level agreement on the second review of Niger’s economic programme under the [ECF]. The staff-level agreement is subject to IMF management and executive board approval. The board meeting is expected to take place in December. The review’s completion would allow the disbursement of SDR39.48-million (about USD 50.7-million, (or 30% of Niger’s quota) to Niger to cover external financing needs. The ongoing recovery in agriculture and private investment are expected to boost GDP growth to 7.1% in 2022, while inflationary pressures from food prices have eased, resulting in year-on-year inflation of 3.2% at end-September. The impact of the war in Ukraine was mostly felt through higher global food, petroleum, and fertiliser prices, given limited direct trade links.”
What you should know about Rwanda’s new income tax law
On 28 October 2022, Rwanda’s new income tax law came into effect, repealing its predecessor, Law No. 016 / 2018 of 13/04/2018, which has been in force since 2018. The new law seems to overhaul the Rwandan income tax system as it introduces various significant changes. One of the key changes introduced by the new law relates to tax treatment of partnerships. These will be treated as tax transparent with their income being taxable at a partners’ level. The new law also deals with the taxation of business structures that are new in Rwanda such as: foundations; trusts; investment special purpose vehicles (SPVs); and protected cells companies and/or their cells. The new law also extends the application of thin capitalisation restrictions to realised foreign exchange losses which will (in the same way as interest on related-party funding transactions) be subject to a 4:1 debt-to-equity ratio limitation.
Banks can de-risk lending to SMEs
In partnership with corporates, banks can de-risk lending into the small and medium-sized enterprise (SME) sector and use a forward-looking, cash flow-based lending model to unlock unsecured lending to SMEs. This lending is conducted on the strength of confirmed contracts between the SME (borrower) and corporate (anchor) where the bank is able to leverage on the cash flows from the contract proceeds for debt repayment. Government and large corporates have a role in making this financing form accessible to many SMEs within their value chains. Entering into a partnership with a bank can enable SMEs in their supply and distribution chains secure funding without the need for collateral. It may also result in negotiated rates for all SMEs within its value chain. The partnership between the bank and the corporate does not make the corporate a guarantor for the SME but spells out the responsibilities of the corporate and the financial institution in the financing arrangement. Prioritising this and other innovative financial instruments will help support the growth of Uganda's indigenous private sector, increase exports, create jobs, and improve local content as outlined in the government's National Development Plan III and the 'Buy Uganda Build Uganda' agenda.
ECA and Frontclear support Ugandan banking sector to increase interbank trading and market liquidity
The Innovative Finance and Capital Markets Section of the Private Sector Development and Finance Division at the United Nations Economic Commission for Africa (UNECA) and Frontclear conducted a training programme to bolster the Ugandan banking sector’s capacity to participate in Tradeclear. Tradeclear Uganda is a Frontclear umbrella guarantee facility which aims to increase interbank trading and market liquidity in Uganda. The training programme consists of two Applied Frontclear Academy workshops, which were held in Kampala, Uganda, from 20 - 21 September and 24 - 25 October. The training workshops focused on two main instruments traded in the money market: repo and swaps. Experts delivered trainings on both the concepts and practices of such transactions, including legal documentation, pricing, execution, settlement, accounting, collateral management, and system booking. The workshops were designed to fill knowledge and skill gaps among market participants in the area of trading money market instruments. As a result, participants have been able to gain a better understanding and confidence in trading repos and swaps, as well as in the use of Tradeclear to boost market liquidity.
Zambia central bank launches “Go Cashless" campaign
Zambia's central bank has launched a "Go Cashless" campaign aimed at encouraging people to adopt digital means of accessing and using financial services in a safe and secure manner. Denny Kalyalya, the Governor of the Bank of Zambia (BoZ), said during the launch that the use of digital financial services will translate into tangible improvements in the welfare of consumers and contribution to economic growth. "Over the last two decades, financial inclusion has been a central theme for many financial sector regulators the world over, due to the benefits of a financially included society," he said. The central bank chief said the mobile phone has become a tool that not only facilitates communication but was also a means of accessing financial services. The central bank, he said, working in collaboration with its partners, will embark on a number of activities aimed at promoting digital financial services such as roadshows as well radio and television programmes, among others. "As people migrate towards digital financial services, it is important that they are aware of some key safeguards to enable them to use the services in a safe and secure manner," he added.
Zambia finalises measures for visa-entry waiver for eligible foreign nationals
The Zambian government said it has finalised measures aimed at facilitating visa-free entrances for the nationals of selected countries. During the unveiling of the 2023 national budget, the Finance minister announced waiver of visa requirements for China and other countries, including the United Kingdom, Canada, and European Union (EU) countries. The waiver was supposed to come into effect on 1 October 2022. But Jack Mwiimbu, the Minister of Home Affairs and Internal Security, said the ministry needed to put in place measures to ensure its effective implementation. "As you may be aware, policy changes as this one require putting in place a legislative framework to ensure that their implementation is within the confinement of the law," he told reporters during a press briefing. He said the department in charge of immigration has been working on preparing for the new visa policy which included re-configuration of the immigration management system as well as developing post-entry management measures to ensure that the new visa regime does not compromise internal security. The department, he said, has also embarked on the recruitment of new staff to enforce compliance with the immigration law and other regulations.