Africa Business in Brief | Issue 475 | 20 NOV 2022 – Lexology

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Africa
AfDB invests USD20-million in private equity fund targeting renewable energy projects in sub-Saharan Africa
The Board of Directors of the African Development Bank (AfDB) Group have approved an equity investment of USD20-million in Evolution Fund III (EVIII), a pan-African clean and sustainable energy private equity fund that is mobilising about USD400-million into renewable energy and resource-efficiency assets across sub-Saharan Africa (SSA) over a 10-year period. Inspired Evolution Investment Management is a well-established fund manager with more than 15 years of experience and a track record of deploying more than USD310-million in renewable energy projects in African counties. The fund manager, through its predecessor funds, has delivered 21 renewable energy projects with a total generation capacity of 2 gigawatts (GW). EVIII aims to broaden geographic and technology scope to incorporate North Africa as well as several SSA countries and decentralised energy business models as the key climate mitigation and energy transition. The bank’s support will contribute to an additional 2 162 megawatts (MW) of installed renewable power generation capacity, 1.8 million tonnes of CO2 emission savings, and green and sustainable growth across Africa by creating 2 480 full-time jobs, building on the track record of Evolution Funds I and II which generated about 1 309 jobs out of which 22% were women.
Source: AfDB
East Africa
Why EAC needs to enhance investments in agriculture
The East African Community (EAC) must invest heavily in agriculture to cater to the growing demand for farm products. Besides rising demand for food due to the vagaries of the weather, 70% of the region’s industries are agro-based. This was emphasised recently during a high-level forum of business leaders and policymakers in the region held virtually. The partner states were urged to review their agricultural development strategies in order to attract more investments. The East African Business Council (EABC) CEO, John Kalisa, said the sector saved the region from recession during the height of COVID-19. The virtual meeting was held within the framework of the Comprehensive Africa Agriculture Development Programme (CAADP) support for the EAC. The agricultural sector in the EAC accounts for between 25% and 40% of the region’s GDP and employs over 80% of the population. However, Mr Kalisa said the sector was not attracting much investment to match its critical role in the economy and food security. The EAC countries were also urged to ensure their agricultural development programmes were compliant with CAADP principles and commitments.
Source: The Citizen
East / Southern Africa
ADF invests over USD6-million to develop the pharmaceutical sector in southern and eastern Africa
The Board of Directors of the African Development Fund (ADF), the concessional lending arm of the African Development Bank (AfDB) Group, on 2 November 2022 in Abidjan, approved a USD6.63-million grant to the Common Market for Eastern and Southern Africa (COMESA) to develop the pharmaceutical sector in the sub-region. The project, which will be implemented over three years (2023-2025), is institutional support to develop the region’s pharmaceutical industry. In particular, it will build the capacity of pharmaceutical regulatory bodies, product quality control and management systems, and research and development institutions. The aim is to achieve the manufacture and marketing of safe, quality pharmaceutical products, for COVID-19 and other diseases. The project will support the sub-regional body in implementing continental strategies on pharmaceutical manufacturing and assist it in streamlining and harmonising drug registration processes, as well as ensuring access to essential medical products and technologies. An information platform for pharmaceutical manufacturers, importers and exporters will also be created.
Source: AfDB
Ethiopia
Government invites international bidders to privatise 40% of Ethio telecom
The Ethiopian Ministry of Finance has invited international telecommunications bidder companies, as it looks to implement the policy to denationalise 40% share of Ethio telecom. Minister of Finance, Ahmed Shide, and Minister of State at the Ministry of Finance, Eyob Tekalign, delivered a statement regarding the partial privatisation of Ethio telecom. In their statement, the officials revealed that a tender has been issued from Wednesday, 16 November to identify the international company engaged in the telecommunications sector. They also stated that a tender will be issued to transfer 40% of Ethio telecom to the private sector and to give a licence to a third telecommunications company in Ethiopia. In a bid to identify the third telecommunications company that will join the two current active companies in Ethiopia, Ethio telecom and Safaricom Ethiopia, the Ministry of Finance has invited international bidders to submit their interest in a tender running from 16 November to 16 December 2022 on the website of the Ministry of Finance.
Source: Fana Broadcasting Corporate
Ethiopia
Ministry sets sight to collect USD562-million income from manufacturing sector
The Ethiopian Ministry of Industry announced that efforts are being made to collect USD562-million from the manufacturing sector. According to the Minister of Industry, Melaku Alebel, the ministry will focus on collecting better foreign exchange in the sector by filling the gap of value adding to exports. He also mentioned that textiles industries take greater share of manufacturing export products among other industries in Ethiopian industrial parks. The minister also indicated that the foreign investment has shown encouraging improvement since the COVID-19 pandemic and the conflict between Russia and Ukraine. According to Melaku, these investments have not only brought in foreign currency, but also a significant transfer of knowledge to the country.
Source: Fana Broadcasting Corporate
Ethiopia
Prime Minister Abiy Ahmed announces establishment of National Anti-Corruption Committee
Prime Minister Abiy Ahmed has announced the establishment of a National Anti-corruption Committee comprising seven members. In a statement, the prime minister said corruption is a pest that eats away the wealth of the country day and night to erode its resources. “When ill-mannered government officials, greedy brokers and investors come together and when a large number of citizens begin to line up behind these forerunner thieves, corruption attacks the nation like an epidemic,” the premier noted. One of the factors that hinders efforts to bring an end to wars and make peaceful resolution to conflicts is the involvement of corrupt individuals who profit from these crises. “Nowadays corruption has become a threat to our national security. We have been fighting corruption in a concerted manner to prevent it from derailing our journey to prosperity through implementation of reforms and technologies.” According to the prime minister, the government has established a National Anti-corruption Committee tasked to coordinate the campaign against corruption, identify corrupt entities and bring them to justice. The prime minister further called on the public to inform the national committee about any corrupt individuals and activities, thereby playing an active role in eliminating corruption.
Source: Fana Broadcasting Corporate
Kenya
How bond collateral system will work
In September 2008, the Central Bank of Kenya (CBK) introduced a system where banks could borrow from one another on an emergency basis and address liquidity imbalances in the sector, backed by government securities as collateral. This kind of interbank lending, technically known as horizontal repurchase (repo) transactions, was also meant to ease pressure on the regulator to keep distressed lenders supplied with liquidity. The usage of the horizontal repo facility among banks never quite picked up and has effectively been dormant since 2014. This is largely due to the inability of the lender to transfer the ownership of the collateral – Treasury bills and bonds – from the borrower, making it hard for creditors to recover their funds in case of default. Now, by bringing reforms to the repo market that will allow a borrowing bank to surrender ownership of collateral securities to the lender until the loan is settled, the CBK and banking sector players hope to reinvigorate the market and address the persistent liquidity struggles small lenders experience. The treatment of the collateral is expected to mirror that of the “vertical” repo market, where borrowers place their securities with the CBK for emergency loans.
Source: Business Daily Africa
Kenya
Kenya eyes 100% shift to clean energy by 2028
Kenya will fully transition to green energy by 2028, President William Ruto has said. Speaking to CNN, he said continued reliance on fossil fuels was no longer tenable. “I think leaning on fossil fuel is not an option in the face of the reality of what we know is happening to our globe. We need to make difficult decisions, and the rest of the world needs to help Africa make the difficult decisions, work with the just transition of our energy, work with ensuring that we go green,” said Dr Ruto. During the interview on the sidelines of the 27th session of the United Nations Climate Change Conference (COP27) in Egypt, the president said Kenya currently gets more than 90% of its electricity and 74% of its overall energy from renewable sources. Kenya faces one of the worst droughts in decades following four consecutive seasons of rainfall failure blamed on climate change due to global carbon emissions. Earlier at the COP27 summit, Dr Ruto signed a pact with the United Kingdom Premier Rishi Sunak agreeing to fast-track six green projects worth KES500-billion in efforts aimed at accelerating the flow of climate finance into the country. At the talks, Sunak hailed President Ruto for what he termed as pioneering climate leadership and urged member states to pursue their COP26 commitments to their full delivery.
Kenya / South Africa
Inside plan to make KQ, SAA a pan-African carrier
South Africans recently visited East Africa with a long-term business proposal that reaffirms Pretoria and Nairobi’s ambition to create a continental airline, smoothen migration policies and promote complimentary trading privileges. President Cyril Ramaphosa led a business delegation to Nairobi with a promise to enhance business ties to “greater heights” and upend traditional modus operandi. South Africans have done business in Kenya and the wider region before, but they have registered mixed fortunes, with banks succeeding and retail chain stores closing shop. The new deal, President Ramaphosa and his host President William Ruto said, will be hinged on the African Continental Free Trade Area (AfCFTA) Agreement, which will help bypass the protectionism that has dogged the regional blocs they belong to – the East African Community (EAC) and the Southern African Development Community (SADC). The pan-African airline was a priority on the agenda of the Nairobi meeting. But it will not come cheap, or fast. The two countries have technical teams working on a partnership between Kenya Airways (KQ) and the South African Airways (SAA). The partnership will first target survivability of both airlines – which have recently seen lean times – by completing each other’s routes as well as focusing on viability by reducing debt exposure.
Source: The EastAfrican
Kenya / South Africa
Visa-free travel: Kenya, South Africa pact boosts AfCFTA
Kenya and South Africa, some of the two strongest economies on the African continent, have agreed to reduce barriers to cross-border movement by allowing visa-free travel between them. The pact agreed upon by Kenya’s President William Ruto and his South African counterpart on 9 November 2022, will resolve a long-standing visa dispute between the two countries. With the formalisation, Kenyans will, from 1 January 2023, be eligible for visa-free travel to South Africa for up to three months (90 days) in a calendar year. Already, South Africans get free visas on arrival in the East African nation, a gesture Kenyans have wanted to be reciprocated for a long time. For Kenyans travelling to South Africa, they were required to pay USD40 for the visa while they also had to provide proof they had sufficient funds and had booked return flight tickets. The two countries are also working to address trade barriers to increase business and trade cooperation which will now be easier with visa-free travel.
Source: The Exchange
Mozambique
IPPs needed to develop 30 MWac solar PV plants in Mozambique
The Ministry of Mineral Resources and Energy of Mozambique, through the Energy Regulatory Authority (ARENE), invites eligible independent power producers (IPP) to submit their applications to develop, finance, design, construct, operate and maintain two solar photovoltaic (PV) power plants. The one solar plant will be in Manje, Province of Tete (30 megawatts, alternating current (Mwac)) and one in Chimbunila, Province of Niassa (30 MWac). The deadline for applications is 17 January 2023. The Government of Mozambique launched the Programa de Promoção de Leilões de Energias Renováveis (Promotion of Renewable Energy Auction Programme or PROLER), which will contribute to the increase of power generation capacity and to the diversification of energy sources in the country. Mozambique has now received funds from the European Union (EU) through Agence Française de Développement (French Development Agency) to support the PROLER programme which aims to select IPPs for solar PV and wind projects with a total capacity of around 120 megawatts (MW).
Mozambique
Mozambique starts to export liquefied natural gas through FLNG project in north
Mozambican President Filipe Nyusi has announced the start of the export of liquefied natural gas (LNG) in Mozambique, as the oil tanker British Sponsor has already left Mozambican territorial waters carrying the first cargo of LNG produced by the Coral South Floating Liquefied Natural Gas (FLNG) project in the north of the country. Being Africa's largest and the second largest FLNG project in the world, Coral South FLNG is the pioneering part of Mozambique's Area 4 mega gas project, which was a joint venture bringing together the Italian ENI, ExxonMobil of the United States, China's CNPC, Mozambican ENH, the Galp from Portugal and the Korean KOGAS. Integrating the world's most cutting-edge deep-sea LNG technology, Coral South FLNG contains a floating production platform installed 80 kilometres (km) offshore Mozambique in the southern part of Area 4 of the Rovuma Basin. It has a production capacity of 3.4 million tonnes of LNG per year from wells located in 2 000-metre water depth with a design life of 25 years.
Source: Xinhua
Namibia / Zambia
Namibia, Zambia cement intent to develop oil and gas pipeline from 100 000 to 120 000 barrels per day
Namibian and Zambian officials have inked an agreement to facilitate a private sector-led infrastructure development project. The memorandum of understanding (MoU) which was signed in Swakopmund by the Minister of Mines and Energy, Tom Alweendo, and Zambia’s Minister of Energy, Peter Kapala, is for the construction of an oil and gas pipeline from the port of Walvis Bay to Zambia. “If executed as planned, this project has the potential to unblock economic potential, not only for Namibia and Zambia; but for the Southern African Development Community (SADC) region as a whole. This project will be a great example of regional cooperation as envisaged by the SADC Regional Indicative Strategic Development Plan,” said Alweendo in a statement. This plan calls for more collaboration and less competition among the member countries. As a region, we need to go far, he added. “As we all know one of the biggest challenges we have on the African continent is access to energy, where more than 600 million Africans do not have access to energy. What we have on the continent is energy poverty. One of the contributing factors to the energy poverty we are all experiencing is the lack of energy transport infrastructure,” he noted.
Source: Namibia Economist
Nigeria
Nigeria plans 3 318 km of rail as stakeholders seek connectivity across Africa
Federal government, in Abuja, has said about 3 318 kilometres (km) of rail lines are being considered across the country. This came as stakeholders insisted that unless Africa is linked by railway network, projected boost in intra-African trade, as envisaged under the African Continental Free Trade Area (AfCFTA), would remain a mirage. Speaking at an International Railway Conference, organised by the Abuja Chamber of Commerce and Industry (ACCI), the stakeholders noted that the continent must prioritise railway, if it must address growing poverty, unemployment and weak economic outlook. Minister for Transportation, Mu’azu Sambo, said the federal government has conducted feasibility studies on selected route alignments it considered viable for development. Represented by the Permanent Secretary, Federal Ministry of Transportation, Dr Magdalene Ajani, Mu’azu disclosed that a 25-year strategic railway plan for Nigeria had suffered setback due to discrepancies in government policies, inadequate funding of the rail sector, and absence of experienced private investors, among others. He noted that the current administration deserves commendation for efforts on railway development.
Source: The Guardian
Rwanda
Rwanda's central bank raises lending rate to 6.5%
The Rwanda central bank has raised its lending rate from 6.0% to 6.5% as it battles a drastic rise in the cost of living. High food prices as well as external shocks, including the impact of the war between Russia and Ukraine, have fuelled an increase in the prices of imported commodities including oil, gas, fertiliser and sunflower seed oils. This is the third hike by the country’s central bank rate-setting Monetary Policy Committee (MPC) this year, which says the recent drastic increases in prices remains a major concern. According to Rwanda’s central bank Governor John Rwangombwa, inflation in the country has risen sharply due to high prices of imported goods, as well as local food prices as the agricultural output remains constrained. “The poor performance of the agricultural sector is a key contributor to inflation. We expect inflation to remain high for the rest of the year and the first half of next year before easing in the second half of 2023,” said Mr Rwangombwa during a press briefing. Despite the intervention by the central bank, inflation remains above target, sharply rising to double digits, well above the initial annual average target of 12.1%.
Source: The EastAfrican
Rwanda / Barbados
Rwanda, Barbados agree to tap into pharmaceutical industry
Rwanda and Barbados have agreed to look into possibilities of jointly investing in the unexploited pharmaceutical industry in Africa and the Caribbean. President Paul Kagame, while hosting Barbados’ Premier Mia Amor Mottley in Rwanda’s capital, Kigali, said that the COVID-19 pandemic reminded us that economic prosperity means nothing without putting health at the centre. “So, one area we have found we are able to cooperate productively is pharmaceutical manufacturing,” Kagame told the press gathering. “We are both small countries, but with a big vision to elevate the standards and quality of life of our people, working with other countries in our regions,” Kagame said while addressing the press. Kagame understands that the pharmaceutical industry is complex, “but it is indeed possible for countries like ours to be part of it. Thanks to new technologies and partners. The important thing is to share knowledge and cooperate with partners and we intend just to do that.” On her part, Mia Amor Mottley, a pragmatic leader who was on her three-day official visit to smoothen the relationship between Rwanda and Barbados, described the mutual interests in the pharmaceutical industry as a game changer for both countries.
Rwanda / England
RwandAir starts non-stop flights to London
Rwanda’s national flag carrier RwandAir has launched direct flights between Kigali and London, England, shortening the flight time for travellers between the two cities as the airline seeks to expand its service portfolio. The new direct flight replaces the existing service between London and Kigali, launched in 2017, with one stop in Brussels, Belgium. The inaugural flight left Kigali on Sunday, 6 November 2022 in the afternoon and landed in London on Monday, 7 November 2022 in the morning. The carrier said there would be four direct flights weekly from Kigali to London – Sunday, Tuesday, Thursday and Saturday – with return flights on Monday, Wednesday, Friday and Sunday. The direct flight will also help the carrier link travellers from London “via Kigali to a wealth of destinations in Africa, the Middle East, and Asia,” it said in a tweet just before the first flight left for London. “The [United Kingdom] is an incredibly important market for us, and we know our customers will value the shorter flight times and increased connections that will be offered by the new service,” Yvonne Makolo, RwandAir’s chief executive, said last month while announcing the direct flights’ plan.
Source: The EastAfrican
Zimbabwe
Zimbabwe reaffirms commitment to rejoining the Commonwealth
Zimbabwean Foreign Affairs and International Trade Minister Frederick Shava has reaffirmed Zimbabwe's commitment to rejoining the Commonwealth, a grouping of mainly former British colonies which it left in 2003 over governance issues. Shava made the remarks during a meeting with the Commonwealth team that was in the country for a week-long visit to assess Zimbabwe's suitability for readmission to the group. The southern African country began to apply for readmission in 2018 after President Emmerson Mnangagwa took over power, and the Commonwealth has since made two assessment visits to Zimbabwe. Shava said since the last assessment mission in 2019, the Zimbabwean government has made significant strides in the implementation of reforms and in meeting the five expectations critical to the country's readmission. "Zimbabwe's wish to rejoin the Commonwealth is premised on our desire to play a meaningful role in the community of nations, open new frontiers of growth and development, and rekindle relationships with erstwhile friends," Shava said.
Source: Xinhua
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