Africa Business in Brief | Issue 464 | 04 SEP 2022 – Lexology

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USD5.5-million collaboration to promote climate infrastructure investment in sub-Saharan Africa
The Rockefeller Foundation has announced a new USD5.5-million collaboration with the Electricity Growth and Use in Developing Economies (e-GUIDE) and Atlas AI to accelerate economic development and promote climate resilient infrastructure investment across sub-Saharan Africa. Initially covering Kenya, Nigeria, Rwanda and Uganda, the platform will provide policymakers with extensive cross-sectoral insight into where new infrastructure development can help mitigate community vulnerabilities and promote economic opportunities. This will ultimately assist in efforts to prioritise and sequence investments more effectively in these key sectors. Leveraging satellite data and machine learning technologies, this three-year effort will produce insight into the well-being of communities through a digital platform. The platform builds upon new research and publicly available datasets covering the nexus of agriculture, energy and transportation sector development conditions.
Source: ESI Africa
Africa / Japan
Japan and the AfDB announce up to USD5-billion in support for Africa’s private sector
The government of Japan and the African Development Bank (AfDB) have announced a USD5-billion financial cooperation under the fifth phase of the Enhanced Private Sector Assistance for Africa initiative (EPSA 5) from 2023 to 2025. The announcement was made at the Eighth Tokyo International Conference on African Development (TICAD8) held Sunday, 28 August 2022, in the Tunisian capital, Tunis. The funds consist of USD4-billion under the existing window, and an additional up to USD1-billion that will be provided under a new special window. Japan will establish this special window to support countries that are making progress in the enhancement of debt transparency and sustainability, and other reforms, thereby making steady and significant improvement in their debt situations. Given the importance of food security, Japan and the AfDB will add agriculture and nutrition as a priority area under EPSA 5. As a result, EPSA 5 will cover: (1) electricity; (2) connectivity; (3) health; and (4) agriculture and nutrition as priority areas in order to address key challenges in Africa. At the EPSA 5 launch ceremony, Japan’s Vice-Minister of Finance for International Affairs, Mr Masato Kanda, said his country is committed to supporting African countries while respecting their own initiatives.
Source: AfDB
Southern Africa
SADC PPDF approves USD20.2-million for preparation of 12 regional projects
The Southern African Development Community (SADC) Project Preparation Development Facility (PPDF) has approved a total of USD20.2-million for the preparation of 12 regional projects covering energy, transport and water sectors, and these are expected to generate at least USD3-billion in infrastructure investment. The projects have a huge potential of unlocking business opportunities across the infrastructure value chain, not just in advisory services, but also financing, construction, equipment supply, technology and skills as well as operations and maintenance. Among the projects approved by the PPDF and funded by the European Union (EU) and KfW Bank of Germany are the Second Alaska-Sherwood powerline in Zimbabwe; the Angola-Namibia transmission interconnector; Kasemeno-Mwenda toll road and Luapula hydro power development both between the Democratic Republic the Congo (DRC) and Zambia; Mulembo Leyla Hydro in Zambia; the North South Rail Corridor involving Botswana, DRC, South Africa, Zambia and Zimbabwe. The transmission projects approved by the PPDF are expected to remove bottlenecks on the Southern African Power Pool (SAPP) transmission system and to increase the capacity to wheel power and thereby enhance trade among SADC member states.
Source: SADC
Southern Africa
SADC steps up efforts to advance the network of DTAAs between member states
The Southern African Development Community (SADC) Secretariat has stepped up activities to facilitate negotiations of double tax avoidance agreements (DTAAs) between member states as part of the efforts to increase the network of DTAAs and foster an aligned tax treaty policy across member states. This will take into account developments both at regional and international levels, in particular, those related to Base Erosion and Profit Shifting (BEPS) issues. SADC Ministers of Finance and Investment approved the revised SADC Model on DTAA and its commentary at their meeting in Johannesburg, South Africa, in July 2018. To date, there are 59 DTAAs in force among SADC member states. A DTAA is a tax treaty signed between two or more countries to help taxpayers avoid paying double taxes on the same income. A DTAA becomes applicable in cases where an individual is a resident of one nation but earns income in another. Recently, through the support of the Support to Improving the Investment and Business Environment (SIBE) Programme, SADC facilitated two negotiations of DTAAs, one between Lesotho and Malawi in May and June 2022, and the other between Botswana and Mauritius in August 2022.
Source: SADC
AfDB extends training to government staff, advancing Desert to Power initiative
The African Development Bank (AfDB) has provided a financial modelling training to staff of the government of Chad, helping prepare the national utility as part of Desert to Power interventions in the country. Desert to Power is a flagship programme of the AfDB. It aims to light up and power the Sahel region by adding 10 gigawatts (GW) of solar generation capacity, providing electricity to around 250 million people in 11 Sahelian countries. Staff members of Chad’s Ministry of Energy, Ministry of Economy, National Utility Company, Electricity Regulatory Authority and Agency for the Development of Renewable Energies and Energy Management attended the training, held in Mara, Chad from 15 to 19 August. The training enabled participants to take ownership of two technical-financial models developed by the Desert to Power taskforce in August 2021. The bank organised the training following a request from the national utility made in June last year. The training aligns with Desert to Power national roadmap for Chad. The roadmap, developed by the AfDB, identifies major projects that will enable the country to pool its resources to develop a stable and flexible electricity grid, including large-scale solar generation to serve its population.
Source: AfDB
Ethiopia discovers 7 Tcf of natural gas in Ogaden
Ethiopia has announced a discovery of 7 trillion cubic feet (Tcf) of natural gas in the Ogaden. An American-based petroleum property analysis and consulting firm, Netherland, Swell & Associates, Inc. (NSAI), verified the existence and said they conducted a four-month study to issue the finding and hand over the first gas reserves certificate to the Ministry of Mines and Petroleum. The country’s Minister of Mines and Petroleum, Takele Uma, said the study was an assurance of the availability and commerciality of natural gas and crude oil in Ethiopia. Efforts are underway to implement the finding. Exploration in the Ogaden Basin began in the 1920s. It covers an area of 350 000 square kilometres. The Calub gas field in the Ogaden region was discovered in 1973 which made it one of the earliest finds in the area. Two recent discoveries were also made in Dohar and El Kuran, areas in the Ogaden Basin, in addition to NSAI’s finding. The El Kuran discovery was made by a United Kingdom company called New Age Mining while Poly-GCL, a Chinese company, made the discovery in Dohar. The petroleum reserve at Dohar which is located between Calub and Hilala is estimated at 3 Tcf.
Source: Pumps Africa
Motorists face KES20 000 fine for lack of digital car plates
Motorists face a fine of up to KES20 000 or a jail term of six months if they fail to apply for a new digital number plate in the next 18 months. The new number plates, which will be installed on cars, motorcycles and trailers, are aimed at stopping double registration of vehicles and taming unscrupulous car importers as the country moves to restore sanity in the motor industry. The enforcement of the new directive will see the government collect over KES12-billion given motorists and motorcyclists pay KES3 000 each for the smart number plate. Official data shows Kenya had 3.9 million registered vehicles at the end of 2020. The new generation number plate is fixed with a radio frequency identification (RFID) microchip embedded on the sticker to facilitate wireless transfer of information between it and mobile police readers or at traffic lights. The push for the smart plates comes amid concerns about increased duplication of the current ones by tax-evasion cartels and criminals.
Source: Business Daily Africa
Weakening shilling pushes up Kenya’s debt by USD4.1-billion
Kenya’s depreciating currency cost the country nearly half a trillion shillings on the external public debt burden alone, eroding the government’s efforts to pay external lenders. The shilling, which continues to present a challenge to the economy mainly in servicing of external debts and importation of goods by businesses, devalued by 9.3% from 107.85 units by end of June 2021 to 117.83 by 30 June this year. A new report by the National Treasury shows that while Kenya’s external debt stock – in dollar terms – reduced by 5% from USD37.1-billion to USD35.3-billion in the year to June 2022, in Kenyan shilling terms it increased by KES156-billion (USD1.3-billion), to KES4.16-trillion (USD34.7-billion). “The increase in the public debt is attributed to external loan disbursements, exchange rate fluctuation and the uptake of domestic debt during the period,” Treasury stated in the 2021/22 last quarterly budget and economic review report. The increase in the external debt burden was despite the government’s spending to service loans from other countries, multilateral lenders and foreign commercial banks.
Source: The EastAfrican
IMF Executive Board completes Fourth Review under the ECF arrangement and concludes the 2022 Article IV consultation for Liberia
The Executive Board of the International Monetary Fund (IMF) has completed the 2022 Article IV consultation and the Fourth Review under the Extended Credit Facility (ECF) with Liberia. The four-year arrangement, with total access of SDR155-million (60% of quota or about USD214.30-million) was approved by the IMF Executive Board on 11 December 2019. The decision allows for an immediate disbursement of SDR17-million (about USD22.1-million), bringing total disbursements under the arrangement to SDR85-million (about USD110.7-million). In completing the fourth review, the executive board granted a waiver of nonobservance of the end-June 2021 quantitative performance criterion on net international reserves, based on corrective action taken by the authorities. Liberia experienced a strong economic recovery in 2021. Growth is expected to soften to 3.7% in 2022, largely due to heightened global uncertainties and commodity price shocks, which are pushing inflation into the double-digits. Liberia’s COVID-19 vaccination programme has accelerated in recent months, but pandemic-related risks, including a potential outbreak of new variants, remain. The upcoming political cycle with presidential and parliamentary elections, scheduled for September 2023, is another source of uncertainty.
Source: IMF
EU increases security funding in Mozambique
The European Union (EU) has announced plans to increase its financial support towards a military mission in Mozambique in a bid to ensure large-scale natural gas projects are brought online as soon as possible. With an Islamist insurgency disrupting several gas projects underway in the country, the funding will significantly improve security, ensuring developments get back on track and that new supplies of liquefied natural gas (LNG) hit the global market. Following the discovery of over 100 trillion cubic feet of natural gas resources in Mozambique, international majors announced development plans through the construction of large-scale LNG projects. These include TotalEnergies’ Offshore Area 1 of the Rovuma Basin, where the French-based company is constructing a 13 million tonnes per annum onshore LNG facility; ExxonMobil’s Rovuma LNG Liquefaction plant, set to utilise gas from the Mamba Complex of Offshore Area 4 of the Rovuma Basin and the Coral South Project and the Coral-Sul floating LNG facility developed by Italy’s Eni.
Source: Energy Capital & Power
Namibia scraps COVID-19 vaccination proof, PCR test result requirement at entry for foreigners
Namibian Minister of Health and Social Services Kalumbi Shangula has said that people visiting Namibia will no longer be required to produce a vaccination certificate or a negative polymerase chain reaction (PCR) test result at the ports of entry. Shangula said in a statement that the current epidemiological situation no longer supports the retention of this requirement. "Consequently, the entry requirement into Namibia by foreign travellers of vaccination licence and a negative PCR test result has been scrapped," he said. In July, the ministry decided to cease daily updates on COVID-19 and replaced them with weekly reports on Thursdays. Shangula added that the weekly COVID-19 updates will be discontinued immediately, given that COVID-19 cases have exponentially decreased.
Source: Xinhua
Nigeria’s USD10-billion Energy Transition Plan launched
The government of Nigeria has officially launched its Energy Transition Plan and has said it will require USD10-billion to realise its plan. Speaking at the virtual launch of Nigeria’s Energy Transition Plan – a roadmap to tackle the dual crises of energy poverty and climate change – Vice President, Professor Yemi Osinbajo declared that Nigeria will seek USD10-billion from international partners to fund the nation’s new Energy Transition Plan. Osinbajo stated that Nigeria is currently engaging with partners to secure an initial USD10-billion support package ahead of COP27 along the lines of the South African Just Energy Transition Partnership announced at COP26 in Glasgow. “Nigeria would need to spend USD410-billion above business-as-usual spending to deliver our [Energy] Transition Plan by 2060, which translates to about USD10-billion per year,” explained Osinbajo. According to him, Africa’s increasing energy gaps require collaboration to take ownership of the continent’s transition pathways and the action should be decisive and urgent. The vice president highlighted the significant scale of resources required to attain both development and climate ambitions.
Source: ESI Africa
Taking mobile towers off-grid in Nigeria
An energy services company and a telecommunications service provider are teaming up in Nigeria to transition mobile cell towers from diesel to solar and bundle electricity and connectivity solutions for off-grid communities. Husk Power Systems and Hotspot Network have already converted almost 20 of the telecommunications mobile towers for diesel power to solar. They expect to complete at least 100 projects of this nature by the middle of 2023. Nigeria’s estimated 25 000 telecommunications towers and their base transceiver stations use around 1.25 million litres of diesel every day. That is equivalent of 50 tonnes of carbon dioxide (CO2) emissions that can be avoided annually if these are converted to use solar power instead. Working with Husk Power, Hotspot is going zero-carbon from design to installation of new mobile towers. This will reduce capital and operational costs and accelerate the telecommunications energy transition. At the same time, it avoids risk from global diesel price volatility. It also means Hotspot can offer 100% clean energy service to mobile and data customers in Nigeria on a 24/7 basis.
Source: ESI Africa
Government, NMB Bank in TZS100-million ‘Diaspora digital hub' deal
The Ministry of Foreign Affairs and East African Cooperation and NMB Bank Plc have inked a TZS100-million diaspora deal. Dubbed ‘Diaspora digital hub’, the digital platform will act as a database for all Tanzanians in the diaspora. The director of the diaspora unit at the Ministry of Foreign Affairs and East African Cooperation, Ambassador James Bwana, and the NMB bank’s chief of wholesale banking, Mr Alfred Shao, signed the memorandum of understanding (MoU) in Dar es Salaam. Mr Shao said the bank believes that Tanzanians in the diaspora have a big role to play in the country’s economic development process. As such, he said, the bank will continue to invest in systems to enable Tanzanians in the diaspora to access banking services, including remitting funds back home, hassle-free. “The bank operates a dedicated department for the diaspora. It has also come up with a tailor-made system for Tanzanians in the diaspora,” he said. In his remarks, Ambassador Bwana said the government has embarked on a number of strategies to boost the country’s development by ensuring that Tanzanians in the diaspora contribute to that effect.
Source: The Citizen
Tanzania firms get nod to import raw material for wire products tax free
Tanzanian companies have been granted exemption on imported products that attract 35% duty, barely a month after the East African Community (EAC) Common External Tariff came into force. In a legal notice signed by the EAC Council of Ministers chair Betty Maina, the companies can now import, at 0% for a year, raw materials and inputs for the manufacture of wire products. The decision follows an application by Afriweld Industries, Tanuk Africa Ltd, MM Integrated Steel Mills and other firms for duty exemption. This came just as the region started to implement the four-band Common External Tariff (CET) structure that came into force on 1 July. The structure has rates of 0%, 10%, 25% and 35% for all products imported into the EAC. The maximum tariff band of 35% was considered the most appropriate rate as it has a positive impact on regional growth. However, Tanzania’s successful application has raised questions on whether the determination of the maximum CET tariff rate is implementable when countries are facing a shortage of products that fall under the band.
Source: The EastAfrican
Uganda pushes for internet cost cuts to promote digital financial services
The Ugandan government is pushing for lower internet costs to promote the usage of digital financial services across the country in a bid to increase financial inclusion for vulnerable groups. According to the Ministry of Information and Communications Technology (ICT) and National Guidance, the country will, by the end of this year, reduce the cost of data it provides through the national backbone infrastructure fibre by more than half from USD70 megabits per second (Mbps) to USD30. This, the ministry says, will support the growth in ICT innovations, digital financial services, communication and e-government services among others. “We are talking about purely government internet. Once we cut down the cost at which government is selling to service providers, then they will automatically also reduce the cost that the end user will be paying and we think this will help in our efforts to digitise our economy,” Mr Chris Baryomunsi, the Minister for ICT and National Guidance, told The EastAfrican. The government has completed a USD75-million National Data Transmission Backbone Infrastructure and e-Government Infrastructure Project. The project aims to connect all major towns in the country onto an optical fibre cable-based network and to connect ministries and government departments to the e-Government Network.
Source: The EastAfrican
Stakeholders consult on implementing the RCTG Scheme in Zambia
A national consultative meeting on the implementation of the Common Market for Eastern and Southern Africa (COMESA) Regional Customs Transit Guarantee (RCTG) Scheme was conducted with key stakeholders in Zambia on Thursday, 25 August 2022. The one-day session updated the stakeholders on the status of implementation and operations of the RCTG in the region and discussed issues and concerns raised about the scheme in Zambia. The RCTG is a customs transit regime designed to facilitate the movement of goods under customs seals in the COMESA region and to provide the required customs security and guarantee in the transit countries. In the North-South Corridor countries to which Zambia belongs, customs transit bonds are raised in each country of transit which is cumbersome, time consuming and costly. Nationally executed bonds have reportedly tied up huge sums of money belonging to importers, clearing and forwarding agents and transporters. The combined effect of road transit fees and expenses that arise from the execution of nationally executed bonds also raises the cost of transportation. Experts hold that these costs could be reduced or minimised by implementing the RCTG.
Source: COMESA
Senior AfDB officials highlight private sector development, renewable energy opportunities
Senior African Development Bank (AfDB) officials recently undertook a three-day business mission to Zimbabwe. The bank’s vice president for Power, Energy, Climate and Green growth, Dr Kevin Kariuki, and its vice president for Private Sector, Infrastructure and Industrialization, Mr Solomon Quaynor, both met with senior Zimbabwean government officials and business leaders in Harare. Discussions covered developing the private sector and ways Zimbabwe could best tap its renewable energy resources. Kariuki and Quaynor met with the Finance and Economic Development Minister Mthuli Ncube, and the Energy and Power Development Minister Soda Zhemu, among others. At a Harare press conference following the meetings, Zhemu commended the AfDB for its continued investment in Zimbabwe’s power sector. He said: “The government of Zimbabwe appreciates the [AfDB’s] support and involvement, particularly in the Kariba Dam Rehabilitation project (USD32-million), the ZimFund Emergency Power Infrastructure Rehabilitation project (USD59.5-million), the Alaska-Karoi Transmission Reinforcement project (USD19-million) and the Energy Sector Reform Support project (USD3.5-million).”
Source: AfDB
Zimbabwe's monthly inflation declines to 12.4%
Zimbabwe's monthly inflation for August declined to 12.4%, shedding 13.2 percentage points from 25.6% the previous month, the Zimbabwe National Statistics Agency has said. The downward spiral in monthly inflation for the third consecutive month follows a raft of measures that have been implemented by monetary authorities to tame inflation. The measures include hiking the bank policy rate from 80% to 200% per annum and the introduction of gold coins to mop up excess liquidity from the market. Monthly inflation was 30.7% in June before it further declined to 25.6% in July. On the other hand, annual inflation for August surged to 285.0%, from 256.9% in July. Zimbabwe has experienced inflationary pressures over the past seven months driven partly by external factors as well as exchange rate volatility. Annual inflation has steadily risen from 60.7% in January to 285.0% in August.
Source: Xinhua
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