Africa Business in Brief | Issue 469 | 09 OCT 2022 – Lexology
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EAC to set up Diaspora Desk to facilitate the diaspora community to invest and trade in the region
The East African Community (EAC) is setting up a Diaspora Desk that will focus on facilitating East Africans living in the diaspora to invest and trade in the region. EAC secretary general Dr Peter Mathuki has revealed that the secretariat is also currently developing a Diaspora Engagement Strategy, providing a framework for interacting with the diaspora community. The secretary general was speaking during the East Africa 17th Annual Trade and Investment Conference, organised by the East Africa Chamber of Commerce in Irving, Texas, United States (US). The meeting saw hundreds of East Africans residing across the US and East African-focused investors, converge to explore areas of investment and deliberate on solutions to overcome investment and trade challenges. The diaspora community highlighted a lack of trust in local financial institutions as one of the challenges deterring investment in East Africa. Dr Mathuki responded by urging them to establish financial institutions such as an EAC diaspora bank, located in one of the EAC’s partner states, where they can access credit and transact.
SADC explores sustainable solutions to challenges of financing projects for energy transmission infrastructure
Senior officials responsible for treasury and energy in the Southern African Development Community (SADC) held a regional workshop in Johannesburg, South Africa, on 19 September 2022 to deliberate on the proposal to develop a Regional Transmission Infrastructure Financing Facility (RTIFF) which is aimed at providing a long-term solution to energy financing challenges within the region. Most of the mainland SADC member states are experiencing insufficient supply of electricity due to frequent breakdown of aging power generation plants; inadequate power generation capacity to meet growing demand; inadequate transmission interconnectors to fully facilitate energy trading between SADC member states; and congested power lines along the main power transfer corridors. Furthermore, energy infrastructure projects are capital intensive, and most member states may not have adequate sovereign capital to individually develop energy generation and transmission infrastructure. The consultative workshop took place against the backdrop of the identified challenges which all need a consolidated regional approach through pooled resources. To this end, a RTIFF has been identified as one of the viable mechanisms for financing of resilient energy infrastructure in order to secure long-term energy supply.
Cameroon joins Africa Finance Corporation in push towards manufacturing economy
Cameroon is partnering with the Africa Finance Corporation (AFC) to create infrastructure that will help transform the economy into a manufacturing hub from one mostly driven by raw mineral exports, driving job creation, skills transfer and higher export revenue. Joining as AFC’s 36th member state, Cameroon will be working with the AFC on key infrastructure to deepen integration, enable import substitution, and develop manufacturing and industrial capacity to account for 40% of GDP, as part of the government’s Vision 2035 programme. AFC, Africa’s leading infrastructure solutions provider, has to date allocated over USD300-million to Cameroon to capture value from the nation’s natural resources, which include maize, cassava, cotton, cocoa, oil and gas, as well as energy transition metals such as cobalt and nickel. Cameroon Prime Minister Joseph Dion Ngute said: “We are committed to working with the AFC to quickly and sustainably build critical supporting infrastructure that will help with Cameroon’s development.” With a mission of solving the continent’s most pressing challenges, the AFC has invested over USD10-billion in the past 15 years, utilising its unique access to global capital markets to drive development, integrate regional economies and transform lives.
Democratic Republic of the Congo / Rwanda
Energy infrastructure firms to scale mini-grid model in the DRC and Rwanda
InfraCo Africa, part of the Private Infrastructure Development Group (PIDG) has signed an agreement with Equatorial Power (EP), committing USD1.7-million to scale the company’s innovative mini-grid model in the Democratic Republic of the Congo (DRC) and Rwanda. The project will see the companies co-develop four new mini-grids and four agri-processing hubs (APHs) on Idjwi Island, DRC followed by a further four solar mini-grids and three APHs in south-east Rwanda. This will provide smaller businesses with access to electricity, create jobs directly and through the local supply chain support Sustainable Development Goal (SDG) 8. Ranging in size from 60 kilowatt (kW) to 85 kW, the new mini-grids will incorporate battery storage to manage fluctuating sunshine during the countries’ rainy seasons. It is anticipated that the project will deliver around 3 330 connections to low-income consumers in the DRC and 2 500 in Rwanda, providing over 35 000 people with clean energy access by 2023, supporting SDG 7 and SDG 13. InfraCo Africa has leveraged a USD1.35-million capital grant from its sister company, PIDG Technical Assistance (PIDG TA), to support the project, and the World Bank has committed USD1.054-million of grant funding for the rollout in the DRC.
Source: ESI Africa
IMF staff complete discussions for the fifth review under the ECG arrangement for The Gambia
A team from the International Monetary Fund (IMF), led by Mr Ivohasina Fizara Razafimahefa, Mission Chief for The Gambia, held discussions with The Gambian authorities from 21 September to 4 October 2022, on the fifth review of The Gambia’s economic programme supported by the IMF’s Extended Credit Facility (ECF) arrangement. At the conclusion of the mission, Mr Razafimahefa issued the following statement, in part: “The mission team reached staff-level agreement with the authorities on the economic and financial policies that could support the IMF Executive Board’s completion of the fifth review under the ECF arrangement. Despite the challenges caused by the repercussions of the war in Ukraine and the lingering effects of the COVID-19 pandemic, all quantitative performance criteria and three out of four indicative targets at the end of June 2022 were met. Structural reforms are also advancing. The IMF Executive Board’s consideration of the staff report on the review is tentatively scheduled for December 2022. Upon the board’s approval, SDR5-million (equivalent to about USD6.4-million) will be made available to The Gambia.”
Energy and transport infrastructure at the core of AfDB’s 2022-2026 Country Strategy
To address Guinea-Bissau's development challenges, the African Development Bank's (AfDB) new strategy will promote economic diversification, structural transformation and lay the foundation for inclusive, resilient, and sustainable growth through support for infrastructure and good governance. The AfDB and Guinea-Bissau mutually adopted this approach in the Country Strategy Paper 2022-2026, published on 20 September 2022. The objective of the Country Strategy Paper is to support Guinea-Bissau in building the necessary infrastructure to transform agricultural goods, promoting entrepreneurial initiatives for job creation, improving governance and targeting fragility drivers. The AfDB will target three sectors: energy, transport and financial governance, to support the government's debt sustainability efforts. In the energy sector, the strategy will strengthen the distribution network to improve access to electricity for most of the population. The AfDB will continue implementing the Bissau City Power Supply Improvement Project. It is also expected to conclude the preparation study of the Saltinho hydroelectric plant.
Fresh produce exporters lose customs levy war
Fresh produce exporters have lost a petition to stop the implementation of a 0.25% levy on the customs value of consignments introduced two years ago. Nairobi High Court judge Anthony Mrima quashed their prayers to have the levy that was effected in January last year removed, saying the producers had only made blanket claims. The judge said the exporters did not even disclose the types of levies and names of the licences. The exporters, under the Fresh Produce Consortium of Kenya, Fresh Produce Exporters Association of Kenya (FPEAK) and the Avocado Exporters Association of Kenya, had sued the Ministry of Agriculture, the Attorney-General and the Horticultural Crops Directorate in the matter. “The alleged oppressive manner occasioned by the impugned levies had to be empirically demonstrated at least by an expert as against the other sectors,” the judge said. The exporters had estimated the new levy will increase their taxes from the current annual average of KES90-million to KES377-million, projecting that more than 40% of horticulture export firms will be pushed out of business.
Source: Business Daily Africa
NSE mulls listing shoe retailer on main board after its USD4-million acquisition binge
Nairobi Business Ventures (NBV) is set to graduate to the main trading platform of the Nairobi Securities Exchange (NSE) after spending KES428.75-million (USD3.57-million) on the acquisition of four firms in four months. The shoe retailing firm, which is listed on the Growth and Enterprise Market Segment (GEMS), disclosed through its latest annual report that between April and August last year it acquired the following business ranging from automobile to aviation and the extractive sector: Air Direct Connect Ltd for KES15.54-million (USD129 500), Delta Automobile Ltd (KES130.4-million, USD1.08-million), Aviation Management Solutions Ltd (KES61.56-million, USD513 000) and Delta Cement Ltd (KES221.25-million, USD1.84-million). The acquisitions were financed through the proceeds of the sale of 857.51 million shares equivalent to 63% of the total issued shares of the firm estimated at 1.35 billion shares. The new shares were priced at KES0.5 (USD0.004) per share, helping the firm to generate a total of KES428.75-million (USD3.57-million) from the share sale. The firm’s top shareholders include Shreeji Enterprises Ltd (Kenya) which controls 32.69% stake, followed by Delta International FZE (30.66%) and Soni Haresh Vrajlal (16.42%).
Source: The EastAfrican
Kenya / Uganda
Kenya aims to deepen trade ties with Uganda
Kenya will be selling its key export products in Uganda during the ongoing Uganda International Trade Fair that will run from 3-10 October 2022. The Kenya Export Promotion and Branding Agency (KEPROBA) charged with promotion of exports and country branding is spearheading Kenya’s participation at the trade fair. This year’s theme is Business recovery by harnessing local sourcing and deepening value chains integration. Uganda is Kenya’s top trading partner in Africa and third in the world. Kenya’s export to Uganda was approximately USD832-million in 2021 according to Kenya’s Export Performance Report. Over the same period, Kenya’s imports from Uganda were valued at USD305.2-million resulting to a positive trade balance of USD526.8-million in favour of Kenya. This rates Uganda as a critical market for Kenyan export products. Kenya’s key exports to Uganda include cement, palm and coconut oils, medicaments, machine tools, sugar confectioneries, chemical fertilisers and footwear, among others. “Uganda remains Kenya’s number one trading partner and participating in this trade fair will give us an opportunity as a country to penetrate deeper in this market especially with our emerging export products,” said KEPROBA CEO, Dr Wilfred Marube.
Source: EABW News
AfDB Board approves USD134.9-million loan for post-COVID-19 economic recovery support programme phase II
The Board of Directors of the African Development Bank (AfDB) has approved a loan of ZAR2.3-billion (USD134.9-million) in co-financing for the second phase of Namibia’s Governance and Economic Recovery Support Program (GERSP II). The funds will support Namibia’s resilience and post-COVID-19 inclusive economic recovery by strengthening governance and implementing real sector reforms. German development bank Kreditanstalt für Wiederaufbau (KfW) is processing a complementary budget support loan to the tune of EUR50-million. The programme has three components: attaining fiscal sustainability, supporting private sector-led agriculture and industrial sector transformation, and enhancing economic and social inclusion. The approval, on 28 September, follows an earlier loan tranche of ZAR1.5-billion, which the board approved for the programmes first phase in March 2021. The International Monetary Fund (IMF) contributed ZAR4.1-billion (USD270.8-million) in co-financing for phase I through the Rapid Financing Instrument.
Niger / Burkina Faso
Afreximbank welcomes the adoption of factoring laws in Niger and Burkina Faso
African Export-Import Bank (Afreximbank) has commended the governments of Niger and Burkina Faso for adopting a factoring law to support the business activities of small and medium-sized enterprises (SMEs). The enactment of the factoring law by these two countries will support the emergence and growth of factoring, which in turn will support SMEs in these countries. The factoring law will ensure certainty and confidence and will create a facilitative environment for the conduct of factoring transactions including clarity in the taking of assignments and enforcement of the rights of the factor. The factoring law as adopted by Niger and Burkina Faso was drawn from the Central Bank of West African States (BCEAO) Factoring Law, which was developed on the basis of Afreximbank’s Factoring Model Law. Launched in 2016, the Afreximbank Factoring Model Law is designed to guide African countries in the enactment of their national factoring laws. It reflects the bank’s strategy of supporting enabling legal and regulatory environments for factoring to thrive on the continent.
Afreximbank and the government of Nigeria sign a Host Country Agreement for African Medical Centre of Excellence
African Export-Import Bank (Afreximbank) and the government of Nigeria have signed the Host Country Agreement for the first African Medical Centre of Excellence (AMCE) currently under construction in Abuja, Nigeria. The agreement was signed on 30 September 2022 between Professor Benedict Oramah, president and chairman of the Board of Directors of Afreximbank and Mr Geoffrey Onyeama, Minister of Foreign Affairs of Nigeria. The signing of the Host Country Agreement builds up on the recent ground-breaking for the AMCE project, in December 2021, presided over by President Muhammadu Buhari. Professor Benedict Oramah commented: “The AMCE Abuja is a first of its kind quaternary level medical facility in the West Africa region and one among the very few, if any, on the African continent. The AMCE will promote intra-African trade medical tourism by offering a full spectrum of services in oncology, haematology, cardiology, and general healthcare across the continent, in addition to training, research and development capabilities. The AMCE Abuja will serve as the headquarters for other AMCEs to be launched across Africa.”
EU supports new masterplan to enhance biodiversity in Rwanda
The European Union (EU) has concluded a technical assistance contract for around RWF230-million (around USD220 000) to support the Rwanda Development Board (RDB) in designing the Rwanda Conservation Strategy and Masterplan. The strategy will contribute to the sustainable management of biodiversity in Rwanda and enhance the sector’s policy framework by providing guidance for the protection and management of natural and cultural landscape sites or features, including national parks. The Head of Cooperation at the EU Delegation to Rwanda Michela Tomasella said: “This initiative is yet another demonstration of how the EU supports Rwanda’s key development priorities in line with the European Green Deal, the EU’s policy package to achieve climate neutrality by 2050.” Rwanda’s vision is to become a leading sustainable, conservation-based tourism destination on the African continent for the benefit of Rwandans. The country’s tourism goals include diversifying Rwanda’s unique tourism experiences. The country also wants to promote itself as a high-quality leisure and meetings, incentives, conferences, events/exhibitions (MICE) tourism destination.
Source: ESI Africa
IMF staff reaches staff-level agreement on the third review under the EFF with Seychelles
An International Monetary Fund (IMF) mission led by Calixte Ahokpossi, mission chief for Seychelles, visited Victoria from 22 September to 5 October 2022, to conduct discussions for the third review of Seychelles’ economic and financial programme supported by the Extended Fund Facility (EFF) arrangement. At the end of the mission, Mr Ahokpossi issued the following statement, in part: “The Seychellois economy has continued its strong recovery in 2022, as tourism activity accelerated its rebound notwithstanding a challenging global environment. Real GDP growth is projected at 10.6% based largely on the tourism rebound, before moderating to 5.4% in 2023. This outlook is subject to downside risks given the challenging international environment. Inflation moderated to 2.8% (year-on-year) at the end of August and is projected to average 3.0% in 2022, against 9.8% in 2021. The lagged effect of appreciation of the rupee in 2021 helped absorb the pressures that emanated from higher international prices in 2022. Inflation is projected to average 4.5% in 2023.”
First commercial solar and battery system commissioned in Sierra Leone
A first-of-its-kind commercial solar and battery system has been commissioned in Sierra Leone to cut carbon emissions and enhance sustainable forestry. The 236 kilowatt peak (kWp) solar photovoltaic (PV), 389 kilowatt-hour (kWh) battery storage facility commissioned at Miro Forestry and Timber Products’ Tonkolili factory marks a new milestone for sustainability in Sierra Leone’s forestry sector. The renewable energy system will be able to provide 25% of the factory’s power, cutting its reliance on fossil fuels and delivering substantial savings on Miro’s current power costs. Minister of Energy for Sierra Leone Alhaji Kanja Sesay heralded the project, saying: “This new fully financed solar solution will help Miro move away from costly and polluting generators and to stand by their broader corporate commitment to sustainability. The installation of a solar and battery system at Miro Forestry by CrossBoundary Energy is an indication of another, more positive trend underway on the continent, and in our own country. Investors and their financial partners are increasingly calling on leading enterprises to decarbonise and to find ways to leverage renewable energy solutions.”
Source: ESI Africa
Somalia receives USD58-million in World Bank financing to develop a regional transport infrastructure, a first in decades
The World Bank approved a USD58-million International Development Assistance (IDA) grant to help lay the foundation for the future development of Somalia’s transport infrastructure. Somalia will develop a pipeline of projects and establish the capacities to plan for, implement, and manage the sector. The Somalia – Horn of Africa (HoA) Infrastructure Integration Project will benefit from an additional USD5-million investment from the HoA Initiative Multi-Donor Trust Fund which seeks to foster economic trade and integration in the HoA. The project will contribute to the overarching objective of the HoA Program Series of Projects which is to enhance connectivity among the HoA countries and access to seaports; facilitate domestic and regional trade and economic integration; and improve road safety. The HoA Initiative has over USD8-million regional integration portfolio of active and pipeline operations. The Initiative, which consists of seven member countries (Djibouti, Ethiopia, Eritrea, Kenya, Somalia, Sudan and South Sudan), offers opportunities to transform the economies of the region and create jobs; reduce poverty, conflicts, and inequality; and boost the economic performance of the region.
Source: World Bank
Tanzania launches Africa’s first USD300-million smart economic zone
The newly launched Mkinga Economic Zone project is expected to take Tanzania’s intercontinental trade to new heights. The USD300-million (about TZS700-billion) project in the Tanga Region, is expected to act as a gateway to over 18 landlocked countries in the region. It is the first smart economic zone in Africa spanning on 650 acres leading sustainable and economic development in Africa and featuring world-class technologies like Artificial Intelligence (AI), e-commerce and digital business (virtual company), making it unique in the region. Recently launched by Zworld, an independent consultancy company dealing with business-critical information and communications technology (ICT) environments, the project is now looking for interested investors. “The project aims to create vital infrastructure for Mkinga to enhance the economy and build the foundation for development, taking into consideration the agreements between African nations such as the African Continental Free Trade Area (AfCFTA) Agreement, the East African Community (EAC), the Southern Africa Development Community (SADC) and many other agreements,” said Mr Shady El Zeki, a board member from Zworld.
Source: The Citizen
Tanzania / United Arab Emirates
Tanzania, UAE sign trade deal to remove double taxation
Tanzania and the United Arab Emirates (UAE) have signed an agreement to remove double taxation hurdles in trade between the two countries. The Agreement on Avoidance of Double Taxation and Prevention of Fiscal Evasion on Income Taxes was signed in Dubai by Finance Ministers Mwigulu Nchemba of Tanzania and Mohamed Bin Hadi Al Hussain of the UAE. It touches on areas including taxation of income from individual and institutional business activities, air and sea transportation operations, immovable properties, interest rates, dividends, natural resource use, workforce salaries, research payments, pension and social security payments, students’ bursaries and sports matters. Speaking after the signing in Dubai, Mr Nchemba said one of the primary aims of the 31-clause agreement was to establish a more conducive platform for new foreign direct investment (FDI) engagements between Tanzania and the Middle East. “This step will help to expand the (Tanzania) government’s tax base by boosting industrial activities and production designed for both domestic and export markets,” he said.
Source: The EastAfrican
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