AFFM Governing Council calls for more private sector financing in the fertilizer sector
Institutional members of the Africa Fertilizer Financing Mechanism’s (AFFM) Governing Council endorsed plans to attract more private sector financing to the continent’s fertilizer sector. The move came during a meeting of the 13-member council, during which participants also validated the AFFM’s 2021 Annual Report and endorsed its proposed 2021 work programme. The AFFM works with African governments, regional institutions, the private sector, development banks and international donors to study the fertilizer value-added chain. The organisation assesses key transnational factors that impede fertilizer use in order to develop comprehensive financing strategies for jump-starting Africa’s agricultural productivity. The African Development Bank (AfDB) manages the AFFM. During the meeting, the governing council commended the institution for its impactful projects to deliver trade credit guarantees in Nigeria and Tanzania. The two projects support the implementation of trade credit guarantees to bolster fertilizer value chains.
Full speed ahead with digital connectivity and Equiano
Google’s state-of-the-art Equiano submarine cable is expected to be operational by end 2022, as the infrastructure installation project proceeds. Equiano is Google’s 14 000 kilometre submarine cable that will run from London to Cape Town, with other confirmed landing points being Portugal, Nigeria, Namibia and St Helena. Other countries will be able to join the network in the future. The cable project was announced in 2019 and was originally scheduled to go into operation in 2021. The latest update is that the cable will probably be operational by year end, and no doubt the delay is due to the long COVID-19 lockdowns. Togo celebrated its landing recently – the first in Africa – while the Namibian landing station is ready and waiting, having been completed recently. Equiano is fully-funded by Google and is part of its USD1-billion investment in building digital capacity on the continent. It will provide fifth-generation 5G service and “20 times more network capacity” to West Africa and the Southern African Development Community than these regions currently enjoy. It will also ensure more available and more affordable broadband on the continent, reducing internet prices. It is the second submarine cable to run the length of western Africa, with the West Africa Cable System (WACS) running from London to South Africa and connecting 15 countries.
Source: The Media Online
Ukraine war creates woes, also an opportunity for Africa, development bank president says
The African Development Bank (AfDB) is aiming to raise USD1-billion to rapidly ramp up agricultural production in Africa and stave off a potential food crisis brought on by Russia's invasion of Ukraine, its president told Reuters recently. But the war, which has sent commodities prices soaring, is also an opportunity for the continent to position itself as a natural gas supplier for Europe and a refuge for investors fleeing Russia. During the COVID-19 pandemic, Africa has not seen infection rates and deaths on the same levels as many more developed regions. Its economies, however, have been battered and its rebound has proven sluggish. Like much of the world, African nations are staring at rapidly rising consumer prices, with the war in Ukraine endangering global wheat and corn supplies and sending fuel prices soaring. To avoid a food crisis, AfDB president Akinwumi Adesina said the AfDB was planning to launch an emergency food production plan that would focus on rapidly boosting wheat, maize, rice and soybean output on the continent.
East / Southern Africa
COMESA calls on member states to utilise online payment platform, REPSS
Nine out of 21 countries are currently live on the Common Market for Eastern and Southern Africa (COMESA) Regional Payment and Settlement System (REPSS) since it was launched some six years ago. The value of transactions processed on the system has however been increasing, a sign that the platform is steadily being accepted in the regional trade bloc. Secretary general Chileshe Kapwepwe has stated that implementation of REPSS is a great milestone in COMESA’s quest to achieve regional economic integration and all member states need to get on board. Once fully operational, REPSS is expected to significantly contribute to the expansion of intra-COMESA trade by facilitating online payments of all intra-COMESA transactions. This move is expected to foster a reduction in transaction and operational costs and bring about a switching of relationships for trade transactions from between commercial banks and foreign correspondents to commercial banks and central banks, thus making intra-regional trade transactions cheaper. “This system could also reduce the need for foreign exchange for intra-regional trade,” said Ms Kapwepwe.
AfDB Group signs MoU with ECOWAS for USD3.56-million grant to develop West Africa pharmaceutical industry
The African Development Bank (AfDB) and the Commission of the Economic Community of West African States (ECOWAS) have signed a memorandum of understanding (MoU) for USD3.56-million in grant funding to support the development of pharmaceutical industries in West Africa. Lamin Barrow, managing director of the Bank for Nigeria and Mamadou Traoré, ECOWAS commissioner in charge of Industry and the Private Sector, signed the agreement for the Pharmaceutical Industry Development Support Project in West Africa. The project's total cost is USD3.77-million, to which the ECOWAS Commission will provide USD200 000 in cash and USD400 000 in-kind. The funds will support the implementation of regulations to allow duty-free access to pharmaceutical raw materials, packaging, and finished products under the ECOWAS Common External Tariff. It will also help establish an effective regional pharmaceutical regulatory ecosystem by providing technical assistance programmes for regional regulatory authorities. The ECOWAS Commission will be the executing agency for this project, which will run for two years, starting from 2022. The West African Health Organisation will be the implementing agency.
IMF staff concludes visit to Chad
An International Monetary Fund (IMF) mission led by Edouard Martin visited N’Djamena from 16 – 30 March 2022 to discuss the first review under the programme supported by the Extended Credit Facility (ECF) arrangement approved by the IMF Executive Board on 10 December 2021. The new 36-month ECF arrangement, in an amount of SDR392.56-million (about USD570.75-million or 280% of quota), will help meet Chad’s large balance-of-payments and budgetary needs, including by catalysing financial support from official donors. At the conclusion of the visit, Mr Martin issued the following statement, in part: “The Chadian authorities and the staff of the International Monetary Fund (IMF) started discussions for the first review under the ECF-supported programme approved on 10 December. These discussions will continue in the coming days to reach understandings that could be submitted for approval to the Executive Board of the IMF. “The outlook for 2022 remains broadly favourable but subject to significant risks. After contracting the last two years, economic activity is expected to grow by 2.3% in 2022, driven by a recovery in both oil and non-oil productions. Driven by food prices, inflation is expected to rise to about 4% on average.”
Democratic Republic of the Congo
The Democratic Republic of the Congo joins EAC as its 7th member
The Democratic Republic of the Congo (DRC) has joined the East African Community (EAC), becoming its 7th partner state. The Summit of EAC Heads of State at their 19th ordinary summit held on Tuesday, 29 March 2022 admitted the DRC following recommendation by the Council of Ministers. The chairperson of the summit, Kenya’s President Uhuru Kenyatta, informed the meeting that the DRC had met all the set criteria for admission as provided for in the Treaty for the Establishment of the EAC. “We have concluded the regional processes for admitting new members as provided for in our rules of procedure,” said President Kenyatta. “Admitting the DRC into the EAC is historic for our community and the African continent at large. It demonstrates the agility of the community to expand beyond its socio-cultural boundaries to new people and trade-centred partnerships and collaboration, thus increasing trade and investment opportunities for the citizens,” added the chair. President Kenyatta said that he was looking forward to the DRC signing the treaty of accession before the stated date of 14 April 2022.
Source: The EastAfrican
Government reopens Ghana’s land and sea borders
The government has finally reopened its land and sea borders two years after closing such entry and exit points following the outbreak of COVID-19. This was announced by President Akufo-Addo as part of measures to ease the restrictions brought on by the pandemic. While speaking in his 28th COVID-19 national address on 28 March, the president said: “As from 28 March, all land and sea borders will be opened. Fully vaccinated travellers will be allowed entry through the land and sea borders without a negative [polymerase chain reaction (PCR)] test result from the country of origin. Citizens and foreign residents in Ghana, who are not fully vaccinated, will have to produce a negative 48-hour PCR test result, and will be offered vaccination on arrival.” President Akufo-Addo attributed the eased restrictions on the reduced number of active cases in the country. He also cited the number of vaccinated persons and the advice of the national COVID-19 Taskforce and the health experts leading to the revision of the COVID-19 restrictions, enacted under Executive Instrument No. 64. Ghana’s land, sea and air borders had been closed since the onset of COVID-19 two years ago as part of measures to prevent the virus. The air borders were subsequently reopened amidst tight COVID-19 protocols and testing.
Source: Prime News Ghana
President Akufo-Addo to assent E-Levy Bill shortly – majority leader
Majority Leader Osei Kyei-Mensah-Bonsu has revealed that President Nana Akufo-Addo is likely to assent into law the controversial Electronic Transfer Levy (E-Levy) Bill soon. The Bill which was approved by the House recently has generated a lot of discussions among Ghanaians. Mr Kyei- Mensah-Bonsu, addressing a press conference in Parliament House after the passage of the E-Levy Bill, revealed that but for the State of the Nation Address (SONA) soon, President Akufo-Addo would have assented to the new Bill. Mr Kyei- Mensah-Bonsu also explained that the purpose of the Bill is to broaden the tax base of the country and to increase revenue mobilisation domestically, adding that the new levy seeks to increase the revenue streams of the country. He said the Bill when assented to by the president would become a law that binds every electronic money transaction to attract a 1.5% charge. Mr Kyei- Mensah-Bonsu also explained that increasing domestic revenue mobilization would help to curtail the country’s rate of borrowing thereby limit the debt stock.
Source: Ghana Business News
Fund managers get nod to hold firms accountable
The Capital Markets Authority (CMA) will begin implementation of the Stewardship Code this year, allowing institutional investors to take an active role in the oversight of operations of public companies. The code will see the major investors such as pension funds, insurance companies, investment trusts and collective investment schemes with stakes in listed companies question management on policies and critique the board’s strategies. The code is not mandatory as the companies are not direct licensees of the CMA, but it is expected to promote good governance and sustainability of the businesses. The code will define how institutional investors will interact with companies and hold them accountable. “The adoption of the Stewardship Code for institutional investors is gaining traction, with institutional investors expected to sign up to implement the code this year,” the CMA said. The code will apply to the group of shareholders who in most cases hold large stakes in a single stock and their positions stand to be affected in case of closure or bankruptcy of the company.
Source: Business Daily
NEMA seeks return of impact assessment fees
The national environment watchdog is pushing for the return of environmental impact assessment (EIA) fees after sinking into a negative working capital. The National Environment Management Authority (NEMA) director-general Mamo told parliament that scrapping the EIA fees has pushed it into financial distress. Mr Mamo said a Cabinet memorandum on the reinstatement of the fees has been forwarded for consideration. “The authority is in a negative working capital position. This is attributable to the government’s decision to scrap the collection of EIA fees coupled with serious underfunding from the National Treasury,” Mr Mamo said. “It is our strong belief that the government will reinstate the EIA fees and increase allocations to reverse this negative working capital,” he said. President Uhuru Kenyatta in October 2016 directed the scrapping of the fees paid by property developers as a percentage of the value of projects is punitive. The EIA, which is prepared by investors and reviewed by NEMA, details the project site, its likely impacts on the environment and remedies.
Source: Business Daily
Malawi runs out of forex
As Malawi continues to experience foreign exchange (forex) shortages, the Reserve Bank of Malawi (RBM) has demanded that 30% of forex realised from tobacco sales should be immediately sold to the bank. In a letter to chief executive officer of Auction Holdings Limited (AHL), RBM governor Wilson Banda noted that the supply of forex in Malawi has been tight. According to Banda, to address the forex shortages, the bank introduced an “export proceeds surrender requirement.” In line with the policy, the RBM has demanded AHL to immediately sell to the central bank 30% of forex generated on the tobacco auction floors. The RBM will be buying the forex at the prevailing official exchange rate. “Further you will be required to submit weekly returns to the RBM detailing the amount of tobacco sold on the floors and the amount of forex sold to the RBM,” Banda said in the letter dated 24 March 2022. Tobacco is Malawi’s major forex earner.
VAT bill ignites hope
Parliament recently passed the Value Added Tax (VAT) Bill allowing the removal of 16.5% VAT on cooking oil, sanitary pads and tap water, among other commodities, effective 1 April 2022. The move could, to an extent, offer a sigh of relief to consumers of the commodities, who have been subjected to an elevated cost of living lately. A two-litre bottle of cooking oil, for instance, is being sold at between MWK6 900 and MWK7 200 from between MWK4 200 and MWK5 200 in January. This represents a 38.4% rise within 10 weeks. The Bill, which has also abolished the withholding VAT agent scheme and introduced VAT on moulds for plastics or rubber, will trigger lowering of the prices, according to Minister of Finance Sosten Gwengwe. Amid pessimism from some commentators who say the impact would not be huge, Gwengwe insisted that the prices of cooking oil must drop, considering that 90% of cost of production is from the importation of the crude oil. “Our analysis shows that 90% of the cost is on the importation of crude oil. Therefore, exempting is the best,” he said. Recently, Minister of Trade and Industry, Mark Katsonga Phiri said his ministry would not hesitate to issue out licences and allow interested parties to import cooking oil.
Source: The Times
AfDB head celebrates food ‘milestone for Africa’ at launch of first special agriculture industrial zone in Mozambique
African Development Bank (AfDB) head Akinwumi A. Adesina joined the President of Mozambique Filipe Jacinto Nyusi to launch the “milestone” Pemba-Lichinga Integrated Development Corridor in Mozambique’s northern Niassa province. The Board of Directors of the African Development Fund, the concessional window of the AfDB Group approved a USD47.09-million grant for the first phase of the Development Corridor Group in December 2021. This forms part of the African Development Bank’s Special Agro-Industrial Processing Zones initiative. These industrial zones are designed to create cost-efficient agro-processing hubs in areas of high agricultural potential. The initiative is in line with Mozambique’s National Development Strategy, which seeks to improve living conditions through structural reforms and economic diversification. The project will directly contribute to the implementation of the National Program to Industrialize Mozambique (PRONAI). It will build on an extensive list of AfDB interventions in northern Mozambique for the provision of infrastructure and will unlock, beginning with Niassa province, the agricultural potential of the Nacala corridor.
IMF staff agree USD470-million programme for Mozambique
The International Monetary Fund (IMF) and Mozambique have reached a staff-level agreement on a USD470-million facility, the IMF said recently, in what would be the African nation's first programme since the global lender suspended support six years ago. In 2016, Mozambique unveiled hefty state-backed borrowing it had previously failed to disclose, in a USD2-billion corruption scandal that prompted donors to cut off aid and sparked a currency collapse and debt crisis. A statement from the IMF said final approval for the three-year Extended Credit Facility was expected to come from IMF management "in the coming weeks". "In recent years, the Mozambican economy has been hit by a series of severe shocks that risk intensifying vulnerabilities and worsening socioeconomic conditions," the IMF said in a statement. It said the government's medium-term programme focused on economic growth, fiscal sustainability, and reforms in public financial management and governance. One of the world's most impoverished countries, Mozambique is still grappling with its hefty debt burden, as well as an Islamist insurgency and the impact of COVID-19, which led to its first economic contraction in three decades last year.
BDCs seek return to mainstream forex business as naira nears NGN600/USD
Eight months after the Central bank of Nigeria (CBN) stopped funding Bureaux de Change (BDCs) operations, the Association of Bureaux de Change Operators of Nigeria (ABCON) is seeking the return of its members to mainstream foreign exchange (forex) business. The umbrella body is soliciting the reversal of the CBN’s decision to boost its efficiency in servicing the retail end of the market. The plea comes as the dollar consolidates around NGN590/USD after it broke the NGN580/USD resistance two weeks ago. NGN580/USD had remained a ceiling for the third quarter of last year. In a notice distributed to its members nationwide, ABCON National Executive Council (NEC) appealed to the regulator to revisit the stoppage of dollar sales to BDCs as part of its search for solutions to the volatility of the market. It faulted the claims that the naira has remained largely stable following the stoppage of forex allocation to its members, arguing its operation is part of the stabilisation mechanism the market needs. According to the NEC, BDCs remain the most potent tool the CBN was leveraging to achieve its forex rate management at the retail market level.
Source: The Guardian
NEPZA eyes opportunities in crypto trading to grow FTZ
The Nigeria Export Processing Zones Authority (NEPZA) has promised that the ongoing digital technology policy being developed by the agency will open the free trade zones (FTZs) to multi-trillion-dollar blockchain technology businesses, including leading cryptocurrency exchanges such as Binance and Kucoin. NEPZA managing director, Prof Adesoji Adesugba, said this recently when he paid a courtesy visit to the executive chairperson of the Federal Revenue Inland Services (FIRS), Mohammed Nami, in Abuja. He said the government must explore new technology to grow the economy. The NEPZA chief executive also assured that the agency is determined to open the country’s FTZ corridor for global competitiveness. “As we speak, FTZs are springing up everywhere in Africa. Nigeria must be concerned about competition from Egypt, South Africa, Kenya, Benin, Ghana and Togo where huge investments have been committed to FTZ development. We are doing well with about 500 enterprises operating in 42 zones across the country. But we must expand the investment corridor to magnet operators of blockchain technology, which remains the future of the global economy.
Source: The Guardian
Rwanda's export revenues grow by 8.8%
Rwanda recorded strong growth in export earnings in 2021 thanks to the rebound of business activity from the COVID-19 pandemic as well as the rise in global commodity prices and improvement of trade in the region. The central bank recently said that last year the country generated USD1 531-million from exports, a rise of 8.8% from USD1 407.5-million in 2020 when export revenues contracted. Merchandise exports gained the most as they raked in USD1 167.8-million for the country compared to USD761.3-million in 2020, central bank governor, John Rwangombwa, disclosed as he presented the monetary policy and financial stability report. The report also highlights the status of the economy. In the period under review, traditional exports – coffee, tea, minerals – grew by 41.1%, non-traditional exports – manufacture products and horticulture – by 56.7%, re-exports by 49.2% as informal cross border exports increased by a staggering 152.7%. Most of Rwanda’s exports (48%) are shipped to African countries. 41% of Rwanda’s exports go to Asia.
Source: The New Times
São Tomé and Príncipe
IMF completes fourth review under the ECF and concludes 2022 Article IV consultation for São Tomé and Príncipe
On 30 March 2022, the Executive Board of the International Monetary Fund (IMF) concluded the 2022 Article IV consultation and completed the fourth review of the Extended Credit Facility (ECF) arrangement with São Tomé and Príncipe. The board’s decision enables the immediate disbursement of SDR1.90-million (about USD2.70-million). This brings São Tomé and Príncipe’s total disbursements under the arrangement to SDR10.99-million (about USD15.15-million). In completing the fourth review, the executive board also approved the authorities’ request for waivers for non-observance of performance criteria pertaining to net international reserves at end-June 2021 due to lower-than-expected external disbursements, and continuous performance criterion on non-accumulation of external arrears. São Tomé and Príncipe’s 40-month ECF arrangement was approved on 2 October 2019 for SDR13.32-million (about USD18.15-million or around 90% of quota). The programme aims to support the government’s economic reform programme to restore macroeconomic stability, reduce debt vulnerability, alleviate balance of payments pressures, and create the foundations for stronger and more inclusive growth.
DP World launches B2B platform in Tanzania
DP World has announced the rollout of Dubuy.com, its wholesale e-commerce platform, in Tanzania, a report from New Business Ethiopia said on 29 March. The marketplace is intended to give better access to international markets, and will offer a more secure, reliable supply chain using the company’s ports and logistics network. The platform will allow Tanzanian businesses to sell wholesale products across numerous categories. Dubuy.com will offer a combination of advanced technology and DP World physical infrastructure, which will include the Port of Berbera in Somaliland. It will work on solving several challenges facing Africa’s e-commerce growth, such as secure financial transactions and safe movements of goods. “Dubuy.com presents an opportunity for homegrown businesses to transform into international enterprises by providing access to new markets in Africa, the Middle East and the rest of the world,” said Mahmood Al Bastaki, chief operating officer of Dubai Trade World.
Tanzania poised to become mineral refinery hub
Tanzania’s plan to become a regional processing and refining hub for minerals is taking shape, following the decision by Kabanga project management to adopt the hydrometallurgical processing technology (HPT). The HPT is an aqueous processing technology that selectively targets the valuable metals in a concentrate for extraction. The green refining technology is more cost efficient than smelting and has a significantly lowered environmental impact. Minerals Minister Dr Dotto Biteko disclosed this during a meeting with Burundi Minister for Energy and Minerals, Engineer Ibrahim Uwizeye that took place in Ngara town recently. The meeting was attended by, among others, Tanzania Ambassador to Burundi, Dr Jilly Maleko, the Burundi Ambassador to Tanzania, Engineer Gervais Abayeho as well as the executive secretary of the Central Corridor Project, captain Dukundane Dieudonne. Dr Biteko commended President Samia Suluhu Hassan for implementing people-oriented projects including the Standard Gauge Railway (SGR) project.
Source: Daily News
Insolvency law helping to rescue businesses, says principal judge
Principal Judge Flavian Zeija has said the Insolvency Act, has helped the judiciary to rescue a number of businesses because it provides for rescue mechanisms of businesses under financial stress. Speaking during a stakeholders meeting in Kampala, Justice Zeija said the Insolvency Act, which is the principal legislation governing insolvency, provides a cover for stressed businesses through which they can seek business continuity as they mobilise money to pay creditors. It is now possible for insolvent companies to seek protection from court and negotiate with creditors to enable them to regain financial stability,” he said, noting that judicial officers should, before condemning a financially stressed business, explore ways through which such a business can be saved. COVID-19 has worsened the financial position of a number of companies, which, according to Justice Zeija, creates the need for special consideration for businesses facing challenges. According to the Uganda Registration Services Bureau (URSB), despite more than two challenging years for a number of businesses, the agency has only recorded two companies under administration while another two are in receivership.