Developing countries cannot afford to miss out on the green technology revolution
One of the main takeaways of the United Nations Conference on Trade and Development's (UNCTAD) Technology and Innovation Report 2023, is that national governments and the international community must act now to avoid leaving developing countries out of the green technological revolution that is quickly unfolding. Green technologies are those related to the production of goods and services with lower carbon footprints. We are at the beginning of a green technological wave in which early adopters of new technologies can rapidly move ahead and create lasting advantages in related economic sectors. Therefore, favourable conditions to catch up technologically and economically are available only for a short time. Countries that miss these early stages, on the other hand, will face gaps that are hard to close later. To avoid that, national governments and the international community must take decisive action soon. Not being part of the green technological revolution would mean missing opportunities in a market expected to grow fast in the coming years. Green frontier technologies alone are expected to have a fourfold increase compared to what they are valued today, reaching a market size of up to USD2.1-trillion in 2030.
Afreximbank’s insurance subsidiary, AfrexInsure, secures its first transaction
Afreximbank Insurance Management Company (AfrexInsure) – a wholly owned subsidiary of African Export-Import Bank (Afreximbank) – has completed its first insurance policy, facilitating the issuance of all-risk construction insurance cover to Oman Shapoorji Company (a Shapoorji Pallonji group company), in relation to the construction of the Afreximbank Africa Trade Center in Harare, Zimbabwe. AfrexInsure, an insurance management services company forming part of Afreximbank Group, was established in late 2021 to facilitate access to specialty insurance solutions for trade and trade-related investments across Africa. The completion of this first transaction signals a successful start of its commercial operations and is a launching pad for the company’s business growth. Commenting on this important milestone in AfrexInsure’s operations, Professor Benedict Oramah, president and chairman of the Board of Directors of Afreximbank, observed that it is a clear demonstration that the business model of Afreximbank Group’s second subsidiary works. “Afreximbank created AfrexInsure to facilitate the insurance of specialty risks to support businesses in our member countries.”
Member states urged to institute debt management strategies to boost economic growth
African countries should institute effective debt management strategies to boost economic growth and avoid falling into the debt trap, the United Nations Economic Commission for Africa (UNECA) director for Macroeconomics and Governance Division, Adam Elhiraika, has urged. Opening a peer learning workshop on debt management strategies for member states being held in Lusaka, Zambia from 3-6 April 2023, Mr Elhiraika said debt management was a challenge for African countries as debt becomes a significant source of funding for their economic growth and development. “However, this provides an opportunity to effectively enact budgetary protection for various events more apparent in the foreseeable future,” Mr Elhiraika said, adding that, “Efficient and effective debt management will allow debtor countries to take action to avoid the legacy of ‘too little, too late’ sovereign debt management and restructuring.” The workshop aimed to assist delegates from Ethiopia, Sierra Leone, South Africa, Sudan and Zambia share information, experiences and best practices on debt management strategies, policies and operations to enable them to implement viable debt management procedures and strategies.
EACOP financing to conclude by end of 2023
A significant amount of the capital requirements for the development of the East African Crude Oil Pipeline (EACOP) has been raised to date, with the debt financing on track for conclusion by the end of 2023. Speaking during a meeting with the Ugandan Investment Authority – organised for the receiving of an investment licence for pipeline activities – EACOP deputy managing director, John-Bosco Habumugisha stated that the government has “made good progress” to raise 60% of the debt capital (approximately USD2.4-billion) in international markets. With the project costing between USD3.5-billion and USD4-billion, of which 60% comprises debt raising and 40% equity, that leaves approximately USD1.6-billion to be financed by shareholders. The EACOP represents the largest pipeline project in the region at a length of 1 443 km. Shareholders include TotalEnergies (62%), the Uganda National Oil Company (15%), the Tanzania Petroleum Development Corporation (15%) and the China National Offshore Oil Corporation (8%).
Source: Energy Capital & Power
Recent bilateral agreements driving Angola’s O&G industry growth
Angola has signed various bilateral agreements to boost the flow of energy investment, technology and skills in the country as well as to accelerate infrastructure development and project deployment for the sustainable growth of the energy industry. With energy demand increasing and Angola seeking to maximise the development and monetisation of its hydrocarbons – the country has an estimated 13 trillion cubic feet of gas and 7.2 billion barrels of oil reserves – these agreements are crucial for helping the country achieve energy self-sufficiency and socioeconomic development targets. With Angola positioning itself as a regional fuel hub, a deal signed in January 2023 with neighbouring Zambia for the provision of petroleum products will boost the country’s fuel exports and revenue generation. The deal follows Zambia acquiring a stake in Angola’s Lobito Refinery in 2022, an agreement which paved the way for the Zambian government to direct investment towards boosting the refinery capacity of the facility. Additionally, Zambia and Angola signed a USD5-billion deal to develop a pipeline which will transport petrol, kerosene, diesel and gas from the Lobito Refinery to Zambia.
Source: Energy Capital & Power
Marathon Oil, Chevron ink Equatorial Guinea gas mega hub deal
Petroleum company, Marathon Oil, through its affiliated company, Marathon E.G., has signed a Heads of Agreement with Noble Energy and Equatorial Guinea to proceed with the development of the second and third phases of the gas mega hub (GMH) initiative. Announced on 30 March, the agreement builds on the success of the project’s first phase, which was achieved with the tieback of the Alen Field situated in the Gulf of Guinea to the Punta Europa liquefied natural gas (LNG) Terminal on Bioko Island, which delivered first gas in February 2021. “We are excited about this critical milestone in this ongoing development of Punta Europa as a world-class hub for the monetisation of local and regional natural gas,” stated Marathon Oil president and CEO Lee Tillman adding. “The government, represented by the Ministry of Mines and Hydrocarbons, has taken an active role in leading the successful implementation of this GMH expansion and is committed to ensuring subsequent activities and negotiations progress in a timely manner.” Phase II of the GMH expansion project will involve processing gas from the Alba Field from 1 January 2024 under new contractual terms following the expiration of the Henry Hub-linked Alba sales purchase agreement at the end of the year.
Source: Energy Capital & Power
Steps to establish Ghana’s integrated aluminium industry on course – Lands minister
The Minister for Lands and Natural Resources, Samuel A. Jinapor, says government’s quest to build an integrated aluminium industry in the country is on course and progressing steadily. He said this is in line with the Ghana Integrated Aluminium Development Corporation Act, 2018 (Act 976), which establishes the Ghana Integrated Aluminium Development Corporation (GIADEC) to promote and develop an integrated aluminium industry in the country. The minister said this on Wednesday, 29 March 2023, when he opened a two-day workshop on the downstream aluminium industry in Akosombo in the Eastern Region. The workshop, which was organised by GIADEC, in partnership with the Strategic Anchor Industries Unit of the Ministry of Trade and Industry and the ODI (formerly Overseas Development Institute), with funding from the United Kingdom Government’s Foreign, Commonwealth and Development Office (FCDO), brought together stakeholders in the aluminium industry to deliberate on policy options and implementation plan for the downstream aluminium industry.
Company secretaries face KES1-million fines in new certification
Persons practising as governance professionals will be required to register with a new Institute of Certified Governance Secretaries or risk KES1-million fines if proposals in a Bill are adopted. They include governance secretaries, auditors, share registrars, company secretaries, board secretaries or governance officers. The institute, proposed under the 2023 Certified Governance Draft Bill, will provide quality assurance for the practice of the certified governance secretary and train, certify and ensure continuous professional development. Firms offering certified governance secretary services shall also be required to seek out a licence with the new entity. Licences issued under the law proposed by Treasury shall have a validity of one year running to 31 December. The institute shall have powers to issue guidelines, standards, codes of practice and conduct in the certified governance secretary profession, and set levy fees and subscriptions.
Source: Business Daily Africa
Kenya / Republic of the Congo / Chad
Kenya, Republic of the Congo and Chad accede to Afreximbank’s Fund for Export Development in Africa Establishment Agreement
Kenya, the Republic of the Congo and Chad are the latest signatories to the Establishment Agreement of the Fund for Export Development in Africa (FEDA), the development impact-oriented subsidiary of the African Export-Import Bank (Afreximbank). These successive accessions provide positive momentum for FEDA and demonstrate a shared commitment from Afreximbank member countries to support the organisation’s impact investing objectives. It creates a powerful catalyst to increase equity and equity-like funding for African companies that promote industrialisation, intra-africa trade and value-added export development. FEDA already has strategic investments in the Republic of the Congo and Chad via its investment in Arise IIP, which is developing industrial platforms including ‘Plateformes Industrielles du Congo’ and Laham Tchad. In Kenya, discussions have already commenced on strategic investment projects.
Kenya / United States
President Ruto’s basket of goodies for US investors in Kenya
Kenya is considering tax relief measures to attract reluctant investors from the West. This week, Nairobi recently rolled out the red carpet for American investors even as the United States (US) government complained that corruption and lack of a transparent tax policy were discouraging interest in Kenya. These issues emerged at the summit of the American Chamber of Commerce (AmCham) in Nairobi, where President William Ruto was among key speakers. “My government is finalising new tax policy guidelines that have gone through various stakeholder consultations, including inputs from AmCham. This policy that will enhance transparency in our tax regime will take effect by June and will be in place for a minimum of three years,” President Ruto said. He also revealed a plan by the government to scrap a 1.5% levy on digital services for the contentious global framework proposed by the Organisation for Economic Cooperation and Development (OECD) on taxing multinationals that includes a minimum rate of 15%. While Kenya had been opposed to the framework proposing a 15%minimum tax rate on global firms, President Ruto has expressed a change in tone, which will see Kenya sign up to the OECD pact ahead of its implementation on 1 January 2024.
Source: The EastAfrican
Mozambique develops strategy to manage its borders to improve trade and movement of people in SADC region
The geographic location of Mozambique is attractive for international movement of people and goods but exerts pressure on all entities operating at borders. This therefore calls for effective and efficient coordination between public bodies and the private sector at the borders to improve fiscal control, public security, as well as facilitating trade and migratory transit. This was said by Mr Fernando Alage, Deputy Director General of Customs, Mozambique Revenue Authority, when he opened a workshop on the country’s Coordinated Border Management (CBM) National Strategy held in Maputo from 27 March to 30 March 2023. The workshop aimed to enhance coordination and cooperation among government ministries, departments and agencies, as well as representatives of private sector organisations that have a role in facilitating cross-border trade and the clearance of travellers. At the end of the workshop, the Southern African Development Community (SADC) Secretariat handed over the CBM National Strategy document to Mozambique, which became the first SADC member state to develop the strategy which is supported by the European Union (EU)-funded Trade Facilitation Programme (TFP) and is implemented by the secretariat.
Mozambique eliminating physical rail borders
Mozambique is working to remove physical frontiers in rail transport with Malawi and Zimbabwe, as one of the strategies found for reducing transit time in the country’s rail corridors. According to Deputy Transport Minister Amilton Alissone, the measure seeks to simplify procedures to make Nacala and Beira Corridors more competitive. The Nacala Corridor links the northern Mozambican port of Nacala to Malawi, while the Beira Corridor runs from the port of Beira to Zimbabwe. Alissone was speaking recently in the Malawian city of Lilongwe at the end of a tripartite meeting between Mozambique, Malawi and Zambia, which discussed the development of the Nacala Corridor. The Mozambican government’s desire to eliminate the rail borders with Malawi and Zimbabwe follows the removal of the physical rail borders with South Africa on 1 July last year, and with Eswatini on 8 August. Under the agreement with South Africa, the trains operated by the Mozambican rail company, CFM, and by its South African counterpart, Transnet Freight Rail (TFR), cross the border at Ressano Garcia without restrictions and without the need to change locomotives.
Source: Club of Mozambique
MoU strengthens non-banking financial statistics
The Namibia Statistics Agency (NSA) and the Namibia Financial Institutions Supervisory Authority (NAMFISA) recently inked an agreement on financial services data exchange and other areas of collaboration. The memorandum of understanding (MoU) sets out the framework for cooperation between the two organisations, a joint statement revealed. According to the statement, the historical collaboration to which both institutions are committed ensures that the two organisations will now cooperate in the exchange of data, advancing their common goals in the areas of financial sector statistics, developed through collaboration on new methods for data collection, processing, and presentation. The financial statistics referred to, include long and short-term insurance data, medical insurance data, data on loans and advances from non-banking financial institutions as well as data on pension funds. The MoU which was signed in Windhoek by Alex Shimuafeni, the Statistician General, and Kenneth Matomola, the chief executive of NAMFISA, sets the stage for collaboration in the sharing of information about the non-banking financial sector. The memorandum also underscores the importance of timely, reliable satistics that serve the needs of the statistics users.
Source: Namibia Economist
IMF staff reaches staff-level agreement on the first reviews of the Policy Coordination Instrument and arrangement under Resilience and Sustainability Facility with Rwanda
An International Monetary Fund (IMF) mission, led by Haimanot Teferra, held meetings with the Rwandan authorities from 22 March – 4 April 2023, to discuss the first reviews of Rwanda’s Policy Coordination Instrument (PCI) and programme under the Resilience and Sustainability Facility (RSF). The PCI and RSF arrangement were approved on 12 December 2022, the latter with a total amount of SDR240.3-million (about USD319-million). At the conclusion of the mission, Ms Teferra issued the following statement, in part: “The Rwandan authorities and IMF mission team reached staff-level agreement on the economic and financial policies needed to complete the first reviews under the PCI and RSF arrangement. The agreement is subject to approval by the IMF Management and Executive Board. Consideration by the board is tentatively scheduled for May 2023. Upon completion of the executive board review, Rwanda would have access to SDR55.46-million (equivalent to about USD74.6-million) under the RSF.”
What is inside the new Rwanda tax procedure law?
Effective from 31 March 2023, Rwanda has a new law on tax procedures (see here) as part of tax reforms the country has embarked on in the last few years. The first change this new law introduces relates to the maintenance of books of accounts and records. The repealed law (see here) provided that taxpayers must keep books of accounts and records for five years, but this has under the new law been increased to 10 years. The new law further provides that such records can be accessed and shared electronically, and this was not clear in the repealed law. The new law also requires taxpayers in the real tax regime to file their tax declarations along with transfer pricing documentation prepared in accordance with the applicable legislation. This new requirement does however not seem to be aligned with Rwanda’s general rules on transfer pricing which provides that only the controlled transactions schedule must be filed along with the taxpayer’s income tax declaration. For other documents, taxpayers must ensure that they are prepared and available before the deadline for filing their income tax return.
São Tomé and Príncipe
IMF staff reaches staff-level agreement on an ECF arrangement with São Tomé and Príncipe
An International Monetary Fund (IMF) team led by Mr Slavi Slavov, mission chief for São Tomé and Príncipe, visited São Tomé from 9-23 February 2023 and recently held virtual discussions to discuss with the São Toméan authorities IMF support for their policy and reform plans. At the end of the mission, Mr Slavov issued the following statement, in part: “The São Toméan authorities and the IMF team have reached staff-level agreement to support the authorities’ economic adjustment and reform policies with a new 40-month programme supported by an arrangement under the Extended Credit Facility (ECF) in the amount of SDR14.8-million or about USD20-million. The agreement is subject to approval by IMF Management and Executive Board in the period ahead, contingent on the implementation of prior actions by the authorities.”
Government to increase gaming tax by 10%
The Ministry of Finance has proposed a 10% increase in gaming and lotteries tax. The proposals are contained in the Lotteries and Gaming (Amendment) Bill, 2023 which seeks to amend a number of provisions under the Lotteries and Gaming Act, 2016. The amendments, signed by Finance Minister Matia Kasaija seeks to increase the tax rate on gaming activities from 20% to 30%. The Bill is currently under consideration by Parliament, which has invited stakeholders and other interested parties to submit views to the Parliamentary Committee on Finance, Planning and Economic Development. The Bill, if passed, will have a significant impact on the gaming industry but is expected to generate more revenue. It is expected to take effect on 1 July. The gaming industry in Uganda has expanded rapidly in recent years, owing in part to the growing popularity of sports betting and online gambling. According to the Uganda Revenue Authority (URA) annual revenue performance report for the 2021/22 financial year, there was a surplus in tax collected from casinos, which resulted in a significant increase in revenue attributed to gaming tax arrears recovery amounting to UGX35.65-billion.
AfDB facilitates third structured dialogue platform meeting in Harare on Zimbabwe arrears clearance and debt resolution process
Zimbabwe moved closer to resolving its debt issues recently as it hosted the third debt and arrears clearance structured dialogue platform meeting with development partners and creditors. Dr Luisa Diogo, the former Prime Minister of Mozambique, served as the meeting’s facilitator. Dr Diogo is the lead technical advisor to Joaquim Chissano, the former President of Mozambique and high-level facilitator of the process. In 2022, President Emmerson Mnangagwa appointed African Development Bank (AfDB) President Dr Akinwumi Adesina champion of the country’s arrears clearance and debt resolution process. Finance and Economic Development Minister Professor Mthuli Ncube chaired and led a team of senior officials in this third engagement with development partners and creditors, one of which is the AfDB, which is facilitating the overall dialogue. The technical meeting ¬– which took place at Manna Resorts in Harare – followed two similar meetings held in Harare in December and February. The Zimbabwean government has identified five priority areas that would require funding, namely education, social protection, health, agriculture, and climate change.