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Africa Business in Brief | Issue 466 | 18 SEP 2022 – Lexology

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AfCFTA to supervise first trading activity
Without any unexpected hitches, the Ghana National Coordinating Office (NCO) of the African Continental Free Trade Area (AfCFTA) will from October this year pilot a guided trading activity with six countries within the bloc, under supervision of the AfCFTA Secretariat, coordinator of the NCO, Dr Fareed Arthur, has confirmed. This pilot trade, according to Dr Arthur, is expected to test documentation and processes of the AfCFTA and open the gate for other countries to start trading in earnest. “Ghana will pilot a commercially meaningful trade from next month with Kenya, Mauritius, Tanzania, Rwanda, Cameroon and Egypt for the first time, using the AfCFTA documentation. This will help answer the question that has been on the minds of many people: when are we going to start trading?” he stated. Dr Arthur was speaking at the three-day 7th African Tax Research Network (ATRN) Annual Congress in Accra on the theme The Tax and Revenue Implications of the AfCFTA and said though the trade agreement seeks to boost intra-African trade by progressively removing tariff and non-tariff barriers, it also comes with certain challenges.
Source: The Business & Financial Times
East Africa
Fear of losing staff benefits slows free movement in EAC
Fear of losing pension and other social security benefits in home countries is holding back the East African Community (EAC) from reaping the full benefits of a common market protocol that allowed free movement of labour. The EAC Secretariat says it is working on coordinating and extending social security coverage to migrant workers while exercising their right to free movement and living within the region. Despite the common market protocol, national laws continue to affect persons who seek employment in neighbouring countries. According to EAC head of Labour and Immigration Stephen Niyonzima, social security legislation in partner states needs to be progressively amended to provide for cross-border portability of benefits to guarantee decent work. “The majority of workers shun seeking employment for fear of losing their past contribution periods in different countries and, therefore, their pension benefits,” he said. He noted that the portability of security will enable migrant workers to preserve, maintain and transfer benefits, independent of nationality and country of residence. With the support of the International Labour Organization (ILO), the EAC Secretariat has developed EAC Draft Labour Migration Policy to facilitate the implementation of the movement of labour within the seven partner states.
Source: The EastAfrican
East Africa
Tea, coffee, dairy bag long cushion in EAC trade plan
A host of top agricultural produce including tea, roasted coffee, cut flower, beef, and dairy will enjoy lengthy protection as Kenya and its East African Community (EAC) partners offered tariff concessions for transition into the new Africa free trade area. A review of a newly published schedule by chairman of the EAC Council of Ministers, Ezekiel Nibigira shows that the crops will be protected until 2029 to save growers from competition. Under the Africa Continental Free Trade Area (AfCFTA) Agreement, intra-Africa trade will be liberalised by 2030 by removing all cross-border taxes, in a series of actions that officially began last year. Under the agreement establishing the AfCFTA, members must phase out 90% of tariff lines over the next five to 10 years. Another 7% considered sensitive will get more time, while 3% will be allowed to be placed on an exclusion list. Most of the products traded across African borders will not be attracting any taxes by 2029 or will be slapped with as little as 1% tax. But products including meat, cut flowers, tea, coffee, and dairy will continue to attract 3.5% in tax up to 2029. A review of the tariff concessions shows that the products that EAC states have always protected, will accrue a comparatively higher tax rate up to 2029, before full elimination the following year.
Source: Nation Africa
East / Southern Africa
COMESA Research Forum: Call for comprehensive research on pharmaceuticals
There is need to undertake comprehensive research on pharmaceuticals production and trade flows in the Common Market for Eastern and Southern Africa (COMESA) region to determine trade and competitiveness opportunities in the pharmaceutical industry. This was one of the recommendations from the four-day 9th COMESA Annual Research Forum that was held in Cairo, Egypt. The forum which attracted eminent scholars, researchers, academics, regional and international experts from the public and private sector, stressed the need to strengthen mobilisation of resources to promote science, technology and innovation activities. This is intended to build resilience in line with the theme of the forum: Enhancing Business Competitiveness and Resilience to Boost Intra-COMESA Trade. Eight research papers based on emerging topical issues in economics, trade and regional integration at continental and global levels were presented for review. They included a study on the trade implications of the cross-border data transfer laws/policies in the COMESA region.
Source: COMESA
Cabo Verde
AfDB's support to propel Cabo Verde’s efforts to become regional ICT hub
Cabo Verde is on course to becoming a regional information and communications technology (ICT) hub, thanks to the country’s investment in a digital transformation vision, with active support from the African Development Bank (AfDB). The first phase of construction of the Cabo Verde Technology Park’s main buildings, which is funded by the AfDB, is 85% complete and will be ready before year-end, officials said on Thursday, 8 September 2022. The project will enable the West African country to diversify away from an economy dependent on tourism to one driven increasingly by innovation. Over 50% of the beneficiaries of the technology park will be youths, mainly from West Africa and Portuguese-speaking African countries. Over 15 technology businesses have already expressed interest in the Cabo Verde Technology Park, including Microsoft, Unitel, Huawei and AfriLabs. Officials say the ICT facilities will enable Cabo Verde to train, incubate and invest in innovative African youths, start-ups, and digital nomads.
Source: AfDB
Democratic Republic of the Congo
DRC pledges to pay EAC dues and cement role in bloc
The Democratic Republic of the Congo (DRC) says it will settle dues to the East African Community (EAC) on time, reflecting the country’s commitment to its new membership in the bloc. Recently, the DRC’s Deputy Prime Minister Christophe Lutundula said Kinshasa is ready to send representatives to the EAC organs to cement its role in the bloc it formally joined in May. The country, like other member states, is required to pay at least USD8-million a year. Most countries owe the bloc membership fees, however, with South Sudan leading with more than USD20-million due. The DRC needs to pass amendments to its laws to allow free movement of people, localise trade protocols of the EAC and send members to the East African Legislative Assembly, East African Court of Justice and the secretariat. He spoke as the EAC kicked off its first mission to the country led by secretary general of the EAC Peter Mathuki. The mission aims to reflect on the key priorities for deepening integration and exploiting investment opportunities, a dispatch said. It is also meant to help the DRC to improve the understanding of the integration pillars; Common Market, Customs Union, Monetary Union and Political Federation protocols; and the various governance instruments of the EAC to help it easily join the community.
Source: The EastAfrican
Djibouti / South Sudan
Djibouti, South Sudan sign industry-advancing MoU during South Sudan conference
The South Sudan Oil & Power (SSOP) 2022 conference and exhibition, held in Juba, was centred around the role the country plays as a gateway to East African energy development, and as such, represents the official platform for deals to be signed that will advance the regional energy sector. To this effect, during the first day of the conference, a memorandum of understanding (MoU) was signed between Djibouti and South Sudan to enhance cooperation across the energy sector for both countries. The signing was conducted by Djibouti’s Minister of Energy and Natural Resources, Yonis Ali Guedi, and South Sudan’s Minister of Petroleum, Puot Kang Chol. Under the terms of the cooperation agreement, the two countries have agreed to expand trade, investment and cross-border energy opportunities, leveraging regional collaboration to expand both the energy sectors in Djibouti and South Sudan. “Djibouti is now open with the markets of east Africa. We are waiting for all investors to come to Djibouti. We have facilitated all processes to create the free zone in Djibouti. Now, we have signed the MoU and will work together,” stated Guedi.
Source: Energy Capital & Power
CRB reforms lined up to ease credit cost for small businesses
The new administration has announced plans to reform the credit information sharing system in a bid to lower the cost of loans for micro and small businesses. President William Ruto said the reforms will aim at gradually moving away from the negative listing of loan defaulters. “Our starting point is to shift the credit reference bureau (CRB) framework from its current practice of arbitrary, punitive and all-or-nothing blacklisting of borrowers, which denies borrowers credit,” Dr Ruto said in his recent inauguration speech. “We will work with credit reference bureaus on a new system of credit score rating that provides borrowers with an opportunity to manage their creditworthiness.” This comes days to the end of the year-long suspension of negative listing of defaulters of up to KES5-million by the administration of former President Uhuru Kenyatta. The relief period for such defaulters ends on 30 September. Lenders say the directive suspending reporting of defaults on loans has hampered the rollout of the differentiated lending framework on mass market loans due to the inability to use the credit reporting system.
Source: Business Daily Africa
Nairobi to issue USD1.2-billion green bond for green projects
The Nairobi County government has announced that it will issue a USD1.2-billion green bond. The proceeds will be used to finance environmentally friendly infrastructure. With a population of 4.9 million, the city of Nairobi is not spared from the drought that is undermining people’s livelihoods in Kenya. Against this backdrop, the county government is planning to launch a KES150-billion (USD1.2-billion) green bond on the Nairobi Stock Exchange (NSE) to accelerate the green transition. The funds raised will be used to finance renewable energy, energy efficiency, sustainable transport and water infrastructure. These projects will ultimately contribute to Kenya’s climate change adaptation. “The exchange is ready to guide the Nairobi County government in developing the bond, which would seek to tap into the growing green finance segment,” promises Kiprono Kittony, the chairman of NSE. If successful, this financial transaction will make Nairobi the second county after Laikipia to issue a green bond in Kenya.
Source: AFRIK 21
Kenya / United Arab Emirates
What Kenya seeks to unlock in UAE pact
A new trade deal being negotiated with the United Arab Emirates (UAE) is expected to open the giant market to Kenya's coconuts and potatoes among other agricultural products to boost non-oil trade between the two countries. The two countries in July launched talks on the United Arab Emirates-Kenya Comprehensive Economic Partnership Agreement (UAEK-CEPA) to increase the volume of trade in goods and services and investment. The trade pact was an initiative of former President Uhuru Kenyatta, and the private sector is hoping the new government will stay on it. “This is the latest agreement we have, and we hope will continue with it under President William Ruto. It is ready for negotiation and have paused it for the transition and Emiratis are eagerly waiting for us to go back to the table," said Johnson Weru, the Trade and Enterprise Principal Secretary, in a briefing with the private sector. He said this will be a big test for Nairobi because this is the first time the country will be negotiating directly with the Middle East.
Source: Business Daily Africa
IMF Executive Board completes second review under the ECF arrangement for Madagascar
The Executive Board of the International Monetary Fund (IMF) has completed the second review of Madagascar’s economic programme under the Extended Credit Facility (ECF). The completion of this review enables the immediate disbursement of SDR24.44-million (about USD31.9-million) to cover external and fiscal financing needs, bringing total disbursements under the arrangement to SDR122.2-million (about USD159.7-million). Madagascar’s recovery from the pandemic has been hindered by a severe cyclone season and the spillovers from Russia’s war in Ukraine. While 2021 growth was revised up to 4.3%, 2022 growth is projected to stall at 4.2%. Annual average inflation is projected to accelerate to 9.8% fuelled by the surge in international oil and food prices. Lower growth and higher commodity prices will weigh on the budget, widening the fiscal deficit. The outlook remains subject to significant uncertainty and risks. New COVID-19 outbreaks in a context of slow vaccination uptake, a further slowdown in global growth and higher oil prices would adversely affect the near-term outlook. On the upside, implementation of the reform agenda envisaged in the Plan Emergence Madagascar along with an increase in investment could boost productivity and growth.
Source: IMF
Agreement inked for a ‘first of its kind’ hydropower facility
The government of Malawi, the International Finance Corporation (IFC), Scatec and EDF Energy have signed a binding commercial agreement to co-develop the Mpatamanga hydropower project. The agreement, signed under Malawi’s public-private partnership framework, concludes the selection process undertaken by the government of Malawi to competitively select a private sector partner to finance, build and operate the Mpatamanga hydropower plant. Located on the Shire River, the 350 megawatt (MW) facility will be a first of its kind in Malawi. The generation facility is composed of two plants – a 309 MW peaking plant and a 41 MW downstream plant. The project is expected to contribute to reducing energy shortages and enhancing energy security in Malawi. The 309 MW plant with its reservoir storage is designed to provide much-needed energy during peak demand hours of the day and overall grid stability with its ability to ramp up or down production to meet actual demand. Hydropower can play a critical role in Africa’s renewable energy development. Mpatamanga will deliver electricity to approximately two million people and save 520 000 tonnes of CO2 emissions per year.
Source: ESI Africa
Mauritius / India
Mauritius PM hails India for CECPA agreement, says it fosters trade between the two countries
The Prime Minister (PM) of Mauritius Pravind Kumar Jugnauth, while speaking at an event to commemorate the relations between India and Mauritius has expressed gratitude to New Delhi for their continued support and unwavering commitment to making the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) a reality. Notably, this is one of the first such agreements that India has signed with an African country. The CECPA is a trade agreement between India and Mauritius. “The CECPA forms a part of a broader strategy between the governments to broaden our economic horizons and plays an integral part in facilitating cross-border trade and investment,” said PM Jugnauth, at an event celebrating the 75th anniversary of establishing diplomatic ties between India and Mauritius. The agreement came into force on 1 April 2021 and focuses predominantly on trade between the two countries besides including sanitary and phytosanitary (SPS) measures, dispute settlement, movement of natural persons, telecommunications, financial services, customs procedures and cooperation in other areas, stated a press release by the Indian Ministry of Commerce and Industry.
Source: WION
Namibia / Botswana
Namibia and Botswana remove a barrier to freedom of movement, abolish the use of passports
The government of Namibia and Botswana have agreed to abolish the use of passports for travel between the two countries. One of the main initiatives of the African Union’s Agenda 2063, which aims to remove barriers to Africans’ freedom of movement, employment, and residence on their continent, is the free mobility of Africans within it. Nationals of Namibia and Botswana will no longer require passports to travel between the two nations after the presidents of those nations decided to open their borders to one another. The declaration was made at the opening ceremony of the Botswana-Namibia binational commission at the Gaborone International Convention Centre by Namibian President Hage Geingob. He called on senior officials to fast-track the implementation of the use of identity documents as travel documents between the two countries, according to the Namibian.
Source: The Exchange Africa
TZS954.04-billion paid as VAT refunds
The government of Tanzania said on Tuesday, 13 September 2022, that a total of TZS954.04-billion has been paid in value-added tax (VAT) refunds during the 2021/22 fiscal year. The payment is equivalent to 431.7% of TZS221.01-billion target that was expected to be used for servicing VAT refunds claims during the said period. The statement was issued by Deputy Minister for Finance Hamad Hassan Chande when responding to a question from Njombe Urban Constituency Member of Parliament Deodatus Mwanyika. In his principal question, Mr Mwanyika sought to know the amount spent by the government in VAT refunds in the financial year that ended in June 2022. In his response, Mr Chande said the payment efficiency is attributed to the government’s decision to verify payment claims through the risk-based verification of VAT refunds, instead of the earlier procedure to verify all claims by 100%. “The new procedure has increased the speed of verification and respective VAT refunds and therefore reduced delays due to timely verification,” he said. Mr Chande said recorded achievement would stimulate economic growth, investment and protection to the businesspeople and investors’ capital.
Source: The Citizen
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Joseph Muongi

Financial.co.ke was founded by Mr. Joseph Muongi Kamau. He holds a Master of Science in Finance, Bachelors of Science in Actuarial Science and a Certificate of proficiencty in insurance. He's also the lead financial consultant.