African blocs discuss challenges to realising single currency territories
Africa’s main regional economic blocs say monetary unions will raise the value of trade and shield them from fluctuating exchange rates and are pushing to establish single currency territories. Gathering in Nairobi under the African Union (AU), representatives from various member states of regional economic communities (RECs) said exchange rates should be considered a barrier to trade and addressed with urgency. Some of the RECs such as the East African Community (EAC) have identified a monetary union and a single currency as one way of boosting integration and eliminating the exchange shortfalls that routinely befall traders across the borders. Kenya’s Industry, Trade and Investment Cabinet Secretary Moses Kuria told the meeting that seven in 10 African economies face serious challenges related to foreign exchange, but blamed part of the problem on procrastination. EAC secretary general, Dr Peter Mathuki, said the bloc is working hard to remove non-tariff barriers (NTBs) to regional trade. “They have now dropped from almost 250 last year to four, and we shall work to see how to remove the remaining ones to ease trade between countries,” he said.
Source: The EastAfrican
Gabriel Lima provides update on planned Central African Pipeline System
During a roundtable organised by the African Energy Chamber this month, Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea, provided an exclusive update on the project timeline and implementation of the Central African Pipeline System (CAPS). Last September, a coalition of Central African nations including Angola, Cameroon, Chad, the Republic of the Congo, the Democratic Republic of the Congo (DRC), Equatorial Guinea and Gabon signed a memorandum of understanding (MoU) for the construction of a 6 500 km regional oil and gas pipeline. The pipeline system and hub infrastructure will include storage depots, liquefied natural gas (LNG) terminals, refineries and gas-fired power plants and aims to service regional demand for refined petroleum products. According to Minister Mbaga Obiang Lima, the project is currently on track, with “Cameroon and Equatorial Guinea working on the first phase, which includes connection through Chad,” adding that “2022 was the year that we needed to inform everyone and ensure that it is not a dream, but something that will be executed. The African Petroleum Producers’ Organization is already working with a consultancy for the entire study of the project and our next meeting will be in Chad in November to get more countries involved.”
Source: Energy Capital & Power
Easier tariffs increase trade across the East African region
A reduction of non-tariff barriers (NTBs) and easing of COVID-19 restrictions are combining well to boost commerce in East Africa, as seen by the continued growth of the economies. This year, East African Community (EAC) economies are expected to grow at 5.6%, compared with 5.1% last year. Intra-EAC trade grew from USD7.1-billion in 2019 to USD9.5-billion in 2021. By September 2022, of the EAC trade value was recorded at USD10.17-billion, representing a 20% share of the global trade. “Despite the devastation by the COVID-19 pandemic, East Africa was the only region in Africa that escaped a recession in 2020,” said John Bosco Kalisa, CEO of the East African Business Council (EABC). “There has been significant reduction of NTBs, and our agriculture sector demonstrated a high level of resilience and performance is positive across the region.” EABC says opening up the borders, especially between Uganda and Rwanda and Rwanda and Burundi, and efforts by Tanzania and Kenya to iron out trade disputes has helped increase movement of goods and people within the EAC.
Source: The EastAfrican
East / Southern Africa
Tripartite Free Trade Area – taking stock of progress
Trade experts from 17 countries under the Common Market for Eastern and Southern Africa-East African Community-Southern African Development Community (COMESA-EAC-SADC) Tripartite Agreement met in Nairobi, Kenya on 23 and 24 January 2023 for the Tripartite Trade Negotiation Forum (TTNF) where they reviewed progress made on various thematic areas needed to make the Tripartite Free Trade Area (TFTA) operational and unlock enhanced trade and investment opportunities. This is intended to benefit the 29 COMESA-EAC-SADC Tripartite member states. The 21st meeting of the TTNF discussed matters from the previous conference which included the exchange of tariff offers, signature and ratification of the TFTA Agreement, the Tripartite Resource Mobilisation Strategy, establishment of the Simplified Trade Regime and the study on trade in services. They also received reports from the Technical Working Groups on the Rules of Origin, Customs Cooperation, Documentation, Procedures and Transit Instruments, Competition Policy and the Technical Barriers to Trade, Sanitary and Phytosanitary matters and the non-tariff barriers (NTBs) among other issues.
Luanda wants to produce 80% of its electricity from renewable sources
As the third largest oil-producing country on the African continent, Angola is dreaming of a greener future. By 2025, the Central African country wants to produce 80% of its electricity from renewable sources. Among the African heads of state invited to the Abu Dhabi Sustainability Week, which ended on Thursday, 19 January 2023, was João Lourenço. Speaking in the United Arab Emirates (UAE) recently, the Angolan president announced his country’s ambitions for sustainable development. Among other things, Angola wants to produce 80% of its electricity from renewable sources by 2025. A reasonable ambition. Because, despite its status as the third largest oil producer on the African continent (with 1.11 million barrels of crude produced in 2021, according to the German portal Statista), Angola already produces 56% of its electricity from renewable sources. The clean electricity is produced exclusively by hydroelectric dams, notably the Laùca (2 070 megawatts (MW)), Cambambe (960 MW), Capanda (520 MW) on the Kwanza River and Matala (40 MW) on the Cunene River. The production capacity of hydroelectric power should increase over the next few years with the commissioning of the Caculo Cabaça hydroelectric power station (2 172 MW) planned for 2024, or the Baynes power station (600 MW) which will be put into operation before 2030.
Source: AFRIK 21
Angola / Uganda / Zambia
5 GW of renewable energy agreements signed with Angola, Uganda and Zambia
Abu Dhabi-based renewable energy company Masdar has signed agreements with Angola, Uganda and Zambia to develop renewable energy projects with a combined capacity of up to 5 gigawatts (GW). Dr Sultan Al Jaber, the United Arab Emirates (UAE) Minister of Industry and Advanced Technology and chairman of Masdar, said: “These landmark agreements, which aim to deliver up to 5 GW of energy to Angola, Uganda and Zambia, follow last year’s signing of a 2 GW agreement for renewable energy projects in Tanzania. These further agreements will be transformative to local communities and will help African nations to drive economic growth for their people while still meeting net-zero objectives.” The agreements were signed under the umbrella of the Etihad 7 initiative, a UAE-led initiative that aims to raise public and private sector funds to invest in the development of Africa’s renewable energy sector. Etihad 7 was launched at Abu Dhabi Sustainability Week (ADSW) 2023, with the aim of achieving 20 GW capacity to supply 100 million people across the continent with clean energy by 2035.
Source: ESI Africa
Kenya Power loses KES3.7-billion in unrecovered fuel cost charge
Utility firm Kenya Power lost KES3.7-billion from the freeze on surcharges including the fuel cost charge and the foreign exchange rate fluctuation adjustment across six months to last June. The additional losses for the electricity distributor reveal the financial burden the firm faces in supporting the government’s 15% reduction in electricity costs last year. According to the audit of the utility’s books in the year ended June 2022, Kenya Power had revenues of KES7.3-billion and KES24.4-billion in relation to foreign cost adjustment and fuel cost charge respectively. The revenues were, however, against corresponding foreign exchange costs and fuel costs amounting to KES9.1-billion and KES26.4-billion. “The foreign exchange costs and fuel costs are passed to the customers, hence expected to match. Management has indicated that the variance was due to actual recovery rates approved by the Energy and Petroleum Regulatory Authority for billing to customers, being lower than the actual rates applied at the point of purchasing power from the producers,” noted the auditor general.
Source: Business Daily Africa
Kenyan SACCOS join national payment system to lower cost of credit
Kenyan Savings and Credit Co-operative Societies (SACCOS) are set to join the national payment system (NPS), which will allow them to clear cheques and begin lending to one another in a bid to lower the cost of credit. The plan, which has been adopted by President William Ruto’s administration as part of its financial inclusion agenda, seeks to reduce SACCOS’ over-reliance on banks for funding and other commercial services such as cheque processing and issuance. If successful, the policy shift would impact banking institutions, which have relied heavily on SACCOS for third party business such as issuing of cheque books, processing of personal cheques and trade finance services. SACCOS also rely on banks for treasury management, electronic funds transfer (EFTs) and real time gross settlements (RTGS). Banks will also face a hit on their loan books as SACCOS begin lending to each other through the central liquidity facility (CLF), an equivalent of the interbank market. According to Kenya’s SACCO Societies Regulatory Authority (SASRA), externally borrowed funds are often expensive and subject to changes in interest rates.
Source: The EastAfrican
New Bill eliminates Parliament’s nod in sale of parastatals
The Treasury is seeking to exclude Parliament from approving the sale of state-owned firms in proposed changes aimed at shortening the approval process for the sale of government assets. The state-backed Privatisation Bill, which seeks to replace the 2005 law, will offer Treasury more powers in the sale of parastatals as the new administration moves to sell scores of government-owned companies. The cabinet secretary for the National Treasury will approve the sale of state-owned firms together with the board of the Privatisation Authority, which is currently the Privatization Commission. President William Ruto’s administration has set a target surpassing the number of state-owned firms that the Mwai Kibaki administration sold, promising a flurry of deals. Presently, the Treasury cabinet secretary is required to submit a report in the form of a sessional paper on a privatisation proposal approved by the Cabinet to the National Assembly for consideration. The report is reviewed by a parliamentary committee before its tabling in the National Assembly for approval. Under the new proposals, however, the Treasury cabinet secretary is expected to take the mantle of the privatisation process, including identifying and determining entities to be included in the programme.
Source: Business Daily Africa
Collaboration between member states and development partners essential in addressing AML/CFT challenges, states Minister Seeruttun
The need for continued collaboration between member states and development partners such as the European Union (EU), the Financial Action Task Force (FATF) and the Organisation for Economic Co-operation and Development to consolidate actions in addressing good governance, anti-money laundering and countering the financing of terrorism (AML/CFT) was emphasised, recently at the Intercontinental Hotel in Balaclava, by the Minister of Financial Services and Good Governance, Mr Mahen Kumar Seeruttun. He was speaking at the opening ceremony of a workshop focusing on good governance and AML/CFT. The workshop, co-hosted by Mauritius and the Organisation of African, Caribbean and Pacific States (OACPS), was held from 26 to 30 January 2023, with the participation of representatives from around 35 countries. In this keynote address, Minister Seeruttun observed that the workshop will serve as a platform for sharing experiences and good practices; capacity building and cooperation agreements on tax governance and AML/CFT; as well as strengthening the dialogue between the OACPS Ministers and the European Commission (EC). The launch of an OACPS Virtual Platform for intra-African, Caribbean and Pacific States exchange of information on tax and AML/CFT was also highlighted by the minister.
Source: Government of Mauritius
Mohammed Bin Rashid Space Centre signs framework agreement
A framework agreement between the Mauritius Research and Innovation Council and the Mohammed Bin Rashid Space Centre of the United Arab Emirates (UAE) was recently signed in a ceremony held at the Le Labourdonnais Waterfront Hotel in Port Louis. The framework agreement for cooperation in the field of outer space and space technologies was signed by the Minister of Information Technology, Communication and Innovation, Mr Darsanand Balgobin, and the director general of the Mohammed Bin Rashid Space Centre, Mr Salem Humaid Al Marri. At the outset, Minister Balgobin put forward the flagship space programmes of the Mohammed Bin Rashid Space Centre, which he deemed impressive. The programmes range from the design, build and launch of satellites in space and sending of Emirati Astronauts to the International Space Station to the establishment of a sustainable colony on planet Mars within the next 100 years. According to Minister Balgobin, the agreement framework would enable the Mauritius Research and Innovation Council and the Mohammed Bin Rashid Space Centre to engage in discussions and working sessions to define and implement several key aspects of the Mauritius Space Programme.
Source: Government of Mauritius
Nigeria's Buhari inaugurates USD1.5-billion deep seaport to boost ailing economy
Nigerian President Muhammadu Buhari has marked the opening of a USD1.5-billion, Chinese-funded deep seaport in the commercial hub of Lagos that authorities hope will help grow the West African nation's ailing economy. The Lekki Deep Sea Port is one of the biggest in West Africa and will create hundreds of thousands of jobs in addition to easing cargo congestion that costs billions of dollars in annual revenue, Lagos Governor Babajide Sanwo-Olu said on Monday, 23 January. The port can handle at least 2.5 million 20-foot standard containers per year and will be operated as a joint venture between the Nigerian government, Singapore-based Tolaram Group and the Chinese state-owned China Harbor Engineering Company. Both foreign companies own a majority stake of 75% in the project. Although Nigeria has six major seaports, more than 80% of the country's imports are handled by just two of the ports in Lagos, where congestion has led to a massive loss in revenue as cargoes are often diverted to other West African nations. Authorities say the new deep seaport on the eastern edge of Lagos would divert traffic from congested ports and shore up earnings, with expected economic benefits of more than USD360-billion.
Nigeria to host West Africa's Digital Economy Conference
Nigeria’s Ministry of Communications and Digital Economy will host West African policymakers and stakeholders from 31 January to 1 February for the Digital Economy Regional Conference in Abuja, the nation’s capital. The director, Public Affairs of the Nigerian Communications Commission (NCC), Reuben Muoka in a statement said the event will be hosted in collaboration with the World Bank. The conference, with the theme Positioning West Africa’s Digital Economy for the Future, would provide a platform for countries in the region to discuss issues that would strengthen the digital economies in West Africa and by extension the continent. The NCC director further disclosed that the conference would also create an avenue for peer review to accelerate digital transformation and increase collaboration to secure partnerships within the region to strengthen the innovation and entrepreneurial ecosystem while intensifying regional public-private partnerships for digital economy funding, research, and development.
Source: Voice of Nigeria
Financial Action Task Force compliance: Seychelles government to survey NPOs for terrorist financing risk
A national risk assessment that started last year to identify non-profit organisations (NPOs) at risk of financing terrorism is moving to the second phase to be done through a survey. The chief executive of the Financial Intelligence Unit (FIU), Richard Rampal, told reporters that the exercise is not only to determine if the sector, in general, faces the risk of financing terrorism but to look at mitigating measures in line with international recommendations. “For the NPOs identified to be at risk, FIU is the entity that will supervise them. The intention is to assist the NPOs that are at risk and work closely with them so that they are not used as an avenue for terrorists to route their funds through. We will supervise, ask for reports and do inspections at the associations for us to be better able to support them,” he explained. Rampal said that FIU “does not have any statistics at the moment that shows that our NPOs are being used for financing terrorism. This exercise will help us collect information so that we can make policy decisions that will mitigate the risks.” The Secretary of State in the Finance Ministry, Patrick Payet, said that the first phase completed last year was to identify all entities that fall under the NPO sector and the second phase will be more in depth.
Source: Seychelles News Agency
Tanzania / India
India's investments in Tanzania hit USD3.68-billion
Tanzania received USD3.68-billion in Indian investment during the previous fiscal year, according to Prime Minister Kassim Majaliwa. Mr Majaliwa, who met a delegation of the Indian Parliament (Lok Sabha) led by the Asian country’s Speaker, Om Birla, said a total of 630 projects were registered by the Tanzania Investment Centre (TIC) during the period. “This is a result of government’s efforts, under President Samia Suluhu Hassan to improve the investment environment,” said the premier. Mr Majaliwa said India and Tanzania have close economic cooperation. According to him, India is Tanzania’s third largest trading partner, with bilateral trade worth USD4.58-billion in 2021/2022. “Our trade ratio is almost the same, so we all benefit equally,” he said. Tanzania and India cooperate in different economic aspects, including energy, water, health, trade and technology. In June 2022, Indian companies signed an agreement with the government to develop USD500-million water projects in 28 cities, which are expected to benefit over six million Tanzanians. On the other hand, Mr Birla said the Indian Parliament would promote the cooperation between the two countries for long-term benefits.
Uganda launches first oil drilling programme, targets 2025 output
Uganda has launched its first oil drilling programme, its petroleum agency said, a key milestone as the country races to meet its target of first oil output in 2025. The Kingfisher field is part of a USD10-billion scheme to develop Uganda’s oil reserves under Lake Albert in the west of the country and build a vast pipeline to ship the crude to international markets via an Indian Ocean port in Tanzania. “The President [Yoweri Museveni] has officially commissioned the start of drilling campaign on the Kingfisher oilfield,” the Petroleum Authority of Uganda (PAU) said on Twitter, describing the development as a “milestone”. The East African nation discovered commercial reserves of petroleum nearly two decades ago in one of the world’s most biodiverse regions but production has been repeatedly delayed by a lack of infrastructure like a pipeline. The Kingfisher field, operated by the state-owned China National Offshore Oil Corporation (CNOOC), is expected to produce 40 000 barrels of oil per day at its peak, PAU said.
Abu Dhabi to invest USD2-billion in solar with first 500 MWp project
An agreement was recently signed between United Arab Emirates (UAE) independent power producer (IPP) Masdar and Zambia Electricity Supply Corporation (ZESCO). The partnership aims to co-develop solar projects with an overall investment of USD2-billion over the next few years. The harvest is good for Hakainde Hichilema. The President of the Zambia, Hakainde Hichilema has returned to Lusaka after a stay in Abu Dhabi, the capital of the UAE where he participated in the Abu Dhabi Sustainability Week. On the sidelines of the event, which ended on Thursday, 19 January 2023, the state-owned Zambia Electricity Supply Corporation (ZESCO) signed a partnership with Masdar (Abu Dhabi Future Energy Company). The agreement, signed in the presence of President Hichilema, is for the investment of USD2-billion to generate at least 2 000 megawatts peak (MWp) of solar power. Initially, the two companies have agreed to start with a 500 MWp solar power plant. This is a real boost for the energy sector in Zambia, which is only just beginning to tap into its renewable energy potential.
Source: AFRIK 21