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AfCFTA: African Tripartite Business Council established
Three eastern Africa regional business councils have officially formed a continental business council to spearhead the inclusion of private sector policy proposals into the negotiations of the African Continental Free Trade Area (AfCFTA) Agreement and the African Tripartite Free Trade Area (TFTA). Under the name African Tripartite Business Council, the council brings together the East African Business Council (EABC), the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC). This formation is one of the resolutions from a Consultative Meeting of Regional Business Councils on the Implementation of the AfCFTA Agreement held in Kigali from 10 – 11 August. “The [TFTA] will put forward joint private sector policy positions to the AfCFTA Secretariat in Ghana and Tripartite Ministerial Council Meetings in order to accelerate the implementation of the agreements,” said John Bosco Kalisa, EABC CEO. Kalisa called upon the member states from COMESA, East African Community (EAC) and SADC to ratify the TFTA agreement in order to achieve the threshold of 14 ratifications required to enable the agreement to enter into force.
Source: KT Press
Angola strengthens regional cooperation to foster trade and economic diversification
A lower middle-income country, the backbone of Angola’s economy is driven by its oil industry, which, along with fishing, are the country’s main sources of foreign investment. The upstream oil industry is Angola’s primary source of foreign exchange, contributing to approximately half of its GDP and 90% of exports. With an agenda to diversify its economy, process more of its raw materials in country and increase trade with its neighbours, Angola has prioritised strengthening regional ties, leveraging global and regional organisations such as the United Nations, the Organization of the Petroleum Exporting Countries, the African Union, the Port Management Association of Eastern and Southern Africa, and the Southern African Development Community (SADC). The Angolan government seeks to boost refining capacity for crude oil and other associated petrochemicals within Angola to supply an ever-growing SADC market. This it hopes, will not only ensure increased value creation for Angola but will also ensure supply security for Angola and the region as well as help to boost sectors like agriculture and power generation that are dependent on by products such as fertiliser and gas.
Source: Energy Capital & Power
In Benguela, two solar power plants (284 MWp) come into operation
As part of the Energy Angola 2025 programme, the government of this Central African country is commissioning two new solar photovoltaic (PV) power plants in the western city of Benguela. The installations, with a total capacity of 284 megawatt peak (MWp), are in line with the Angolan authorities' energy vision of diversifying the electricity mix through investments in clean energy. Despite an installed capacity of 6 400 megawatts according to the United States Agency for International Development (USAID), Angola’s electricity access rate is 43%. Thanks to two new solar PV plants with a combined capacity of 284 MWp in Benguela province, at least 1.8 million people will now be connected to the national electricity grid. The Portuguese group MCA, named after its founder Manuel Couto Alves, carried out the installations. The first power plant is located in Biópio, in the municipality of Catumbela. At a cost of USD300-million, the construction work on this facility, which has a capacity of 188 MWp, has allowed for the installation of the metal piles that support 509 040 solar panels. The second PV solar power plant, worth USD152-million, is going into operation with 261 360 solar panels to produce 96 MWp of electricity in Baía Farta.
Source: AFRIK 21
Ethiopia opens its first free trade zone
The government of Ethiopia has introduced its first free trade zone in Dire Dawa, inaugurating the facility that allows investors to primarily add value to agriculture commodities and export easily. During the inauguration of the Dire Dawa Free Trade Zone, Prime Minister Abiy Ahmed affirmed that such zones are very important to facilitate export and import. He also stated that trade zones like this will be multiplied in a way that will enable competition with the global trade system. Free trade zones have been known for attracting huge investments in countries like Dubai of the United Arab Emirates, which gives privilege of up to zero income tax to investors working within the free trade zone. A few years ago, Ethiopia’s neighbour [Djibouti] also introduced a free trade zone to attract more investors into the country and currently many Ethiopians are running businesses within the free zone. Operational since 2004, the Free Zone of Djibouti (DFZ) positions Djibouti as the regional logistics, trade and marketing hub for the import, warehousing, processing and re-export of goods to and from eastern African countries.
Source: New Business Ethiopia
Private sector participation crucial to energy provision in Ghana
The Minister of Energy in Ghana, Dr Matthew Opoku Prempeh, has called on the private sector to participate in the provision of energy services in the West African country. The minister said this participation would improve the social and economic wellbeing of the people as well as bridge the developmental gap. He recently made the comment in Accra, in a speech read on his behalf at the Umoja Renewable Energy Incubator roadshow. The roadshow brought together energy developers from across the country in order to encourage them to apply and submit projects by 4 September 2022. The Umoja incubator is a collaboration between Serengeti Energy and Private Financing Advisory Network aimed at giving aspiring renewable energy developers in sub-Sahara Africa the tools needed to access commercial and technical knowledge as well as funding to succeed in their projects. According to the minister for Energy, about 600 million of the continent’s population have no access to electricity: “Umoja [Renewable Energy] Incubator has come at such an opportune time to help de-risk the preparatory costs of renewable energy projects on the continent.”
Source: ESI Africa
Digital lenders move to court to challenge 20% excise tax
Digital lenders have moved to court seeking to revoke the 20% excise tax on loans advanced to online borrowers, setting it on a collision course with the incoming government. Through their umbrella body, Digital Finance Services Association of Kenya, the lenders want the court to suspend further implementation of the Excise Duty Act as amended by the Finance Act 2022, pending the determination of the suit. The fintech lenders want the court to issue orders barring the taxman from collecting or demanding payment of excise duty on fees charged on loans. The new law came into operation on 1 July 2022. Digital loans are defined as credit obtained via mobile banking such as M-Shwari and KCB-M-Pesa or smartphone applications such as Branch and Tala. Airtime advances and other forms of digital borrowing such as Safaricom’s overdraft facility Fuliza are excluded. The association is disputing the new tax on grounds that it unfairly discriminates against its members (digital lenders) as compared to other financial institutions.
Source: Business Daily
Banks take mobile loans model to regional market
Kenyan banking multinationals are increasingly targeting the regional market with mobile short-term credit facilities loans in a bid to grow fees and interest income from consumer loans. I&M Group’s Tanzanian subsidiary has partnered with Airtel Tanzania to launch an overdraft mobile money service that enables customers to complete transactions without sufficient funds in their mobile money wallets. The facility dubbed Kamilisha, is similar to Safaricom’s M-Pesa overdraft service launched in partnership with NCBA Group Plc and KCB Bank. Kamilisha allows Airtel Money customers to complete transactions such as person-to-person (P2P) transfers, purchase of airtime, data bundles, and bill payments. The facility follows a race by most local banks going big in lending small loans as low as KES500 and minting revenues through fees and interest running into billions of shillings. NCBA Group has been ahead of the pack in the digital lending business with seven products in five countries. Commercial Bank of Africa, which merged with NIC Group PLC to form NCBA Group, teamed up with Safaricom in November 2012 to launch the mobile-based loans and savings platform M-Shwari.
Source: Business Daily
Mauritania advances renewable adoption with EIB cooperation
Notwithstanding the country’s success regarding natural gas investment and development, Mauritania is making a name for itself as a highly competitive renewable energy market. Solar potential of 457.9 gigawatts (GW) and wind potential of 47 GW have already captured the interest of global green energy players, and now, with targets to increase the share of renewables in the electricity mix to 50% by 2030, new opportunities for investors have arisen. Eager to capitalise on this potential, Mauritania’s President, Mohamed Ould Ghazouani, has prioritised bilateral partnerships, having recently met with Werner Hoyer, president of the European Investment Bank (EIB), to discuss strengthening cooperation with the aim of scaling up renewable energy investments including wind, solar and green hydrogen investment in the west African country. For Mauritania, institutions such as the EIB will be key for unlocking the true potential of the sector while for the EIB, strengthened cooperation provides an in-road to one of the world’s most lucrative green energy markets.
Source: Energy Capital & Power
Mali settles outstanding debt caused by ECOWAS sanctions
Mali recently announced that it had "settled all outstanding debts" caused by sanctions imposed by West African states after two coups in the country. As a result of Economic Community of West African States (ECOWAS) sanctions, the West African country was unable to "settle its debt service" between January and July, according to the Economy and Finance Ministry. The announcement follows the lifting of sanctions decided in early July by ECOWAS leaders after Mali's military junta unveiled a plan to rule for five years. As a result of the sanctions, institutions such as the World Bank and the African Development Bank suspended disbursements to Mali, which was notably in default, especially on the West African financial market. The ruling junta gave in to the demands of ECOWAS by publishing a new electoral law and a timetable that includes a presidential election in February 2024, a timetable accepted by the West African organisation.
Sun Africa to invest USD1.5-billion in solar electrification
An agreement was recently signed between the Nigerian government and the American company Sun Africa, with a view to installing solar energy production systems in a dozen localities poorly served by the national electricity network. The project, which will be implemented thanks to a USD1.5-billion loan from Exim Bank, comes at a time when 85 million people do not have access to electricity in Africa's most populous country with 206 million inhabitants. Nigeria is determined to reduce the gap in access to electricity between the country’s urban and rural areas through the extension of the national electricity grid in underserved states. As part of this energy policy, the authorities of this West African country have obtained a loan of USD1.5-billion from the American export credit agency, Exim Bank. These funds, mobilised by the American company Sun Africa (a supplier of off-grid solutions), will enable the implementation of numerous renewable energy projects, in particular solar photovoltaic stations for a duration of 20 years.
Source: AFRIK 21
NPA plans new tariff for transshipment, transit cargoes
Nigerian Ports Authority (NPA) is planning to come up with a new tariff regime that will encourage transshipment and transit cargoes back into Nigeria. The managing director of the authority, Mohammed Bello-Koko, disclosed this in Lagos when the Minister of Transportation, Muazu Sambo, inspected the Lekki Port project. Bello-Koko explained that the NPA was ready to take delivery of two 80-tonnes bollard pull ASG tugboats and two pilot boats for deployment to the seaport. He stressed that the NPA would procure vessel tracking systems for the Lekki channel and other port locations in the country, stressing that the NPA was in discussions with Lekki Port operators on the African Continental Free Trade Area (AfCFTA) Agreement. Bello-Koko added that approval of the minister on the tariff would be sought when concluded, stressing that the operationalisation of the port before the end of 2022 would help Nigeria take full advantages of the AfCFTA. He explained: “We are already in discussion with them on tariff on transit and transshipment cargoes, these kinds of cargoes are sensitive to tariff, it means that it is coming to this port before it gets to final destination.”
Source: New Telegraph
Rwanda makes biggest interest rate rise to 6%
Rwanda’s central bank has raised its lending rate by 100 basis points, the biggest increase in recent years, to 6.0% to stem rising inflation. The National Bank of Rwanda (BNR) rate-setting Monetary Policy Committee (MPC) has recently noted that inflation had hit 15.6% in July from 12.6% in the prior month, well above the 0.8% average rate recorded last year. The central bank attributes the sharp rise to imported fuel costs and the poor harvest due to unfavourable weather and increased prices of imported agricultural inputs. Inflation is a measure of annual changes in the cost of living. “This (inflation) is a big concern for us. We are talking to other government agencies to intervene. Inflation is expected to remain high over the next three quarters and start easing in the second half of 2023 when the headline inflation converges towards the 5% benchmark,” BNR governor John Rwangombwa told a press briefing after the MPC meeting.
Source: The EastAfrican
Rwanda stock market eyes connection to regional bourses
The Rwanda Stock Exchange (RSE) is eyeing the implementation of a unified electronic settlement system for regional bourses to bolster trading on its cross-listed shares. The market wants to boost trading on inactive cross-listed stocks on its platform. Trading of these stocks is low due to the tedious process of buying and selling them. The RSE CEO Celestin Rwabukumba told The EastAfrican that the implementation of the regional Capital Markets Infrastructure (CMI) project will ease the trading of cross-listed shares. “We have already worked on our own automation, and it is very simple. It is part of the CMI. Our system will be plugged into the CMI and be part and parcel of the infrastructure,” said Mr Rwabukumba. “We are able to trade with Tanzania or Uganda or the other countries if companies are cross-listed. We have done a soft launch to see if the system is working in live mode. So, when the CMI is fully deployed we will also go live.” The CMI project that is awaiting official launch by the East African Community Secretariat links the trading platforms of Uganda, Tanzania and Rwanda enabling them to operate as a single market.
Source: The EastAfrican
Rwanda / Burundi
Rwanda-Burundi electricity interconnection project kicks off
The government of Burundi recently began the implementation of its section of the proposed Rwanda-Burundi electricity interconnection project. This was made known by Selemani Khamis, the Permanent Secretary of the Burundian Ministry of Hydraulics, Energy, and Mines. The Rwanda-Burundi electricity interconnection project comprises the construction of a 220 kilovolt (kV) transmission line. The line will cut across Kigoma and Butare in Rwanda and Ngozi and Gitega in Burundi. As part of the project, corresponding sub-stations will also be constructed and extended. In Burundi, the project will entail the construction of a 79.2 km 220 kV, single-circuit transmission line at the Rwanda/Burundi border at Ngozi and then from Ngozi to Gitega. In addition, a 220/30 kV sub-station will be built at Ngozi with a connection to the existing 30 kV distribution network. Moreover, the 110 kV substation at Gitega will be transformed into a 110/30 kV one by installing a set of 110 kV bars and two additional 110 kV busbar connections at Ngozi. Lastly, the Rwanda-Burundi electricity interconnection project in Burundi will involve the connection of the line to the Bujumbura central control centre.
Source: The Electricity Hub
EU's BlueInvest Africa Forum: Seychelles-based businesses to promote blue economy
Four Seychelles-based businesses will take part in the first edition of the BlueInvest Africa Forum, a European Union (EU) initiative to promote the blue economy, that will take place in Seychelles from 6 – 8 September. The event will be held under the patronage of Seychelles' President Wavel Ramkalwan, who was named as one of the two patrons of the Ocean Decade Alliance at the One Ocean summit in France in February. The BlueInvest forum will bring together investors from Africa and Europe and African start-ups in order to generate business opportunities and promote the blue economy sector in Africa. In an interview recently, Seychelles' Minister for the Blue Economy, Jean-Francois Ferrari said that "BlueInvest Africa is that unique opportunity that Seychelles gets to bring all those entrepreneurs to Seychelles to share and exchange information in all sectors and sub-sectors of the blue economy." He added that Seychelles, an archipelago in the western Indian Ocean, was chosen as the venue due to its best credentials in the development of the blue economy, which is recognised by the EU. This was echoed by the EU Ambassador to Mauritius and Seychelles, Vincent Degert.
Source: Seychelles News Agency
High commodity prices, import bill hurt Tanzania’s forex reserves
Tanzania is facing pressure to balance its expenditure as price shocks occasioned by global economic crises eat into its current account. The current account measures how much the country spends or saves on its foreign exchange. And according to the Monthly Economic Review released by the Bank of Tanzania (BoT), the deficit more than doubled during the year ending June 2022. It reached USD3.8-billion compared with USD1.8-billion in the corresponding period in 2021. BoT said the deficit was caused by shocks emanating from high commodity prices, tight financial conditions, and resurgence of COVID-19 in China. China is a key import source, but its ports and factories have remained under-utilised during the pandemic season. It added that those “global challenges have been aggravated by the Russia-Ukraine conflict, which has caused supply disruptions.” As a result, imports of goods and services rose by 44% to USD14.135-billion in the year ending June 2022 up from USD9.841-billion. “Much of the rise emanated from imports of intermediate goods particularly white petroleum products, iron and steel and plastic products,” it said.
Source: The EastAfrican
Tanzania's economy grows by 5.4%
Despite the spillover effects of the war in Ukraine and lingering impact of COVID-19, Tanzania’s economy grew by an impressive 5.4% in the first quarter of 2022. This puts the country on track to achieving its 2022 growth target of 4.7%. Initially, the government had set itself a target of boosting economic output by 5.5%. However, with the Russia-Ukraine war, which saw prices of fuel, cooking oil, wheat and fertiliser, among other essential items, rise due to disruptions of supply chains after the United States and its allies imposed sanctions on Russia, Tanzania reviewed its GDP growth targets. Finance and Planning Minister Mwigulu Nchemba said in parliament in June that the country has revised its real GDP growth rate for 2022 to 4.7%. But latest data by the National Bureau of Statistics shows that Tanzania’s quarterly GDP was at TZS34.9-trillion in the period from January to March, an increase from TZS33.1-trillion that was registered during a similar period last year.
Source: The Citizen
Tanzania / Zambia
Tanzania, Zambia cross-border railway unlocks trade ties
Tanzanian President Samia Suluhu Hassan and her Zambian counterpart, President Haikande Hichilema, have agreed to upgrade the cross-border railway connecting the two countries to speed up economic progress as part of a broader push to strengthen ties. The decision to revive the Tanzania and Zambia Railway Authority (TAZARA) was reached recently in the port city of Dar es Salaam where the two leaders held talks. Hassan said the dilapidated, single-track TAZARA line does not deliver what is expected and an upgrade is badly needed to tap new business opportunities along the route. “In today’s world, railway is standard gauge, so through a public-private partnership we have agreed to mobilise resources to improve the railway to that level,” she said. With an installed capacity of 5 million tonnes of freight per year, TAZARA has been handling traffic for the Southern African Development Community, as well as the Common Market for Eastern and Southern Africa, providing a vital regional link among the southern, eastern and central African regions with the rest of the world through the port of Dar es Salaam.
Source: Anadolu Agency
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Africa Business in Brief | Issue 462 | 21 Aug 2022 – Lexology
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