Africa / World
Coronavirus outbreak has cost global value chains USD50-billion in exports
The slowdown of manufacturing in China due to the coronavirus (COVID-19) outbreak is disrupting world trade and could result in a USD50-billion decrease in exports across global value chains, according to estimates published by United Nations Conference on Trade and Development (UNCTAD) on 4 March. In February, the country’s manufacturing Purchasing Manager’s Index (PMI) – a critical production index – fell by about 22 points to 37.5, the lowest reading since 2004. Such a drop in output implies a 2% reduction in exports on an annual basis. Because China has become the central manufacturing hub of many global business operations, a slowdown in Chinese production has repercussions for any given country depending on how reliant its industries are on Chinese suppliers. According to UNCTAD estimates, the most affected sectors include precision instruments, machinery, automotive and communication equipment. Among the most affected economies are the European Union (USD15.6-billion), the United States (USD5.8-billion), Japan (USD5.2-billion), the Republic of Korea (USD3.8-billion), Taiwan Province of China (USD2.6-billion) and Viet Nam (USD2.3-billion). The estimated global effects of COVID-19 are subject to change depending on the containment of the virus and or changes in the sources of supply.
Source: UNCTAD
West Africa
Oil cargoes pile up in West Africa as Nigeria, others struggle to find buyers
Oil traders are struggling to sell West African crude oil as the coronavirus slashes demand from China and European refiners balk at purchases because of weak margins. About 70% of April-loading cargoes from Angola and Nigeria have yet to find buyers, a marked decline from the normal pace of sales. The unsold lots will be competing against millions of barrels that were slated for export this month but have yet to be purchased. The distances involved in transporting West African crude to Asia mean barrels exported in April likely wouldn’t reach China until May or even early June. That means traders need to evaluate what Chinese demand will look like several months in the future. There are tentative signs that China’s economy is picking up, but activity remains muted. West African flows this month are expected to slump by a third, according traders of the region’s barrels. On top of that, weak European oil refining margins are depressing purchases. Two traders who specialise in West African grades estimate that 55 Nigerian cargoes and 18 Angolan have yet to find buyers. The two nations are due to ship almost 100 cargoes next month, meaning the rate of unsold consignments is about 70%. By this time in a normal trading cycle, 50% of the oil should have been sold, the traders said.
Source: Bloomberg
Angola / Namibia
Construction of dam on the border between Namibia and Angola begins in 2021
The construction of the bi-national Baynes hydroelectric dam on the Cunene River between Angola and Namibia, will begin in 2021, and bilateral agreements have already been concluded, the Minister for Energy and Water said in the city of Moçâmedes. João Baptista Borges, speaking at the end of a visit to Namibe province to look at power distribution in the region, said the agreement reached with Namibia would make it possible for a public tender to be launched to select the construction company, for the project, costing an estimated USD1.2-billion, to begin on the aforementioned date. The construction will take about four years, with completion scheduled for 2025. “If we stick to the schedule of the agreement, we can comply with the deadlines, because there is a great interest in this bi-national project,” he said. The power plant will have an output of 600 MW, of which 300 will be for Angola and 300 for Namibia, under the terms of the agreement approved by the two governments in November 2014, within the framework of a feasibility study completed in 2013.
Source: Macauhub
Côte d’Ivoire
IFC leads EUR303-million financing package for Atinkou power plant, Côte d’Ivoire
The International Finance Corporation (IFC), a member of the World Bank Group, announced the signing of a EUR303-million financing package for a new gas fired power project in Côte d’Ivoire. The new plant, Atinkou, will boost power generation and supply in a country, where, as of 2017, only 66% of the population had access to electricity. The total cost of the project is EUR404-million. The Project consists of a 20-year concession to develop and operate a 390 MW natural gas-fired power plant located about 40km west of Abidjan. The sponsor of the project is the Eranove Group, a leading industrial group that manages a number of water and electricity assets in West and Central Africa. Eranove also owns and operates the 544 MW CIPREL project, the largest power plant in Côte d’Ivoire. As Lead Arranger and Global Coordinator, IFC arranged the full debt financing package of EUR303-million, which, beyond IFC, was provided by the African Development Bank (AfDB), the Dutch entrepreneurial development bank FMO, Germany’s Deutsche Investitions- und Entwicklungsgesellschaft (DEG), the Emerging Africa Infrastructure Fund, which is part of the Private Infrastructure Development Group, and the Organization of the Petroleum Exporting Countries Fund for International Development (OPEC Fund).
Source: Africa Business Communities
Ethiopia
Ethiopia’s new tax proclamation to boost government revenue
Ethiopia’s new excise tax proclamation No. 1186/2020 was promulgated during the sixth ordinary session of the House of Peoples’ Representatives, the parliament, and is aimed at increasing government revenue and discouraging certain imports in support of foreign-currency reserves. The new excise tax law will increase the tax base; however, certain goods, including some consumer goods such as watches and washing machines, have been excluded from being excisable products. The telecommunication services excise tax rate of 5% has also been removed from the list of key excisable products. The import of certain luxury goods is discouraged under the new tax law, which is aimed at encouraging domestic production and increasing foreign-exchange reserves. The excise tax rates are subject to change as part of adjustment exercises by the Ministry of Finance, although not higher than by 10%. Furthermore, the new tax law provides already existing imports with permits a grace period of six months before the new law applies. As part of Ethiopia’s new USD3-billion International Monetary Fund programme, Ethiopia is expected to continue strengthening its tax policy by extending value-added tax coverage.
Source: IHS Markit
Ghana
Ghana pharmaceutical firms merge into single giant
Three Ghanaian pharmaceutical firms merged to become the largest local pharmaceutical manufacturing company, with a portfolio of over 80 products. The new entity, Dannex Ayrton Starwin Plc (DAS Pharma), listed on the Ghana Stock Exchange on 15 January. Two pharma firms, Ayrton and Starwin, have been delisted as part of the merger. Daniel Apeagyei Kissi, CEO at DAS Pharma, said merger synergies would improve operating efficiency, optimise costs and improve its offering to customers and consumers. The company will be able to grow volumes and profitability, achieving its growth ambitions: “We will invest in the business to strengthen our footing in Ghana and expand into the rest of West Africa and beyond.” The merged business has a distribution network across Ghana with some 600 staff and over 2,000 active wholesale and retail customers. Nik Amarteifio, Chairman of DAS Pharma, said the companies had to merge because of the changing business landscape, in order to survive. They hoped for synergies from merging administration, procurement and production and anticipated the company would increase technical capabilities.
Source: African Business Magazine
Ghana
Ghana seeks AfDB funding to boost aluminium industry
The African Development Bank’s (AfDB) support for the West African nation of Ghana has boosted government efforts to consolidate the economy, the country’s Vice President, Mahamudu Bawumia says. The country is now seeking investment from the AfDB to help foster the development of an integrated aluminium industry, using the country’s large bauxite deposit as raw materials. The Bank should also consider supporting Ghana to tackle climate change in line with the Group’s crosscutting interventions, the vice-president said. Bawumia, who welcomed a team of executive directors and senior officials of the Bank on an official visit at the start of March, cited various Bank-supported projects, especially in the areas of infrastructure, agriculture and technical innovation, as examples of interventions that have helped to boost the government’s efforts to consolidate the economy. The Bank’s current portfolio in Ghana is channelled through various projects aimed at job creation, economic inclusiveness, macroeconomic stability and industrialisation.
Source: Mining Review Africa
Ghana
Parliament approves proposed USD993-million multi-purpose Pwalugu Dam project
Ghana's Parliament has endorsed a contract agreement covering over USD993-million between the Government of Ghana and Power China International Group Limited for the construction of a multipurpose dam project at Pwalugu, in the Upper East Region. The Ministry of Energy is representing the Government of Ghana in the EPC/Turnkey Contract for an amount of USD366.911-million for the engineering, procurement and construction (EPC) of a 50 MW hydro-power plant; another EPC of a SOMWac solar power plant in Pwalugu; and EPC/Turnkey contract agreement between the Government of the Republic of Ghana (represented by the Ministry of Food and Agriculture) and Power China International Group Limited for an amount USD474.042-million for EPC of a 24,000-hectare irrigation scheme. The construction of the USD993-million Pwalugu Multi-purpose dam project in the Talensi District of the Upper East Region is expected to commence by end of April 2020. The entire project will be executed by a Chinese construction firm, Power China International and supervised by the Volta River Authority over a period of five years.
Source: Africa Energy Portal
Kenya
New cargo rules to help curb entry of illicit goods
Freight shipping companies, their agents and brokers will be required to identify the individuals or companies sending or receiving cargo as a way to end illicit trade, once a new law comes into effect before the end of the year. Kenya has initiated a process of drafting a legislation which is expected to be presented to parliament for enactment to compel importers and exporters to conduct due diligence on all business people and companies importing and exporting through the Port of Mombasa, airports and other facilities of entry. The law, aimed at curbing illegal transactions and bringing transparency in the global shipping industry, will also require banks and other financial institutions to identify who is sending money and who is receiving it, and to assess the risk that the transaction might be used for illegal purposes. Kenya will be the first country in Africa to pioneer the scheme dubbed 'Know Your Customer" (KYC) which requires customer due diligence by freight companies and keep precise details of their customers for a stipulated period of time. More than 19 Kenyan government agencies led by Ministry of Interior, the Treasury and the Judiciary have already endorsed the scheme which will be a mechanism to fight money laundering and shipments of fake drugs, narcotics, weapons and wildlife parts.
Source: Business Daily
Rwanda
Kagame welcomes investors into Rwanda’s high-end tourism
President Paul Kagame has invited investors into the high-end tourism, promising that their ventures will be handled and treated with an aim to ensure that it benefits both the country and the shareholders. Kagame was speaking at the foothills of Volcanoes National Park where he officially launched the One & Only Gorilla’s Nest alongside First Lady Jeannette Kagame and Chair of Kerzner International, Mohammed Al Shaibani and the board. One & Only Gorilla's Nest is a multi-luxurious lodge on the foothills of the National Park. It targets high-end tourists. The facility has 21 cottages with prices ranging from USD3,600 (RWF3.6-million) to USD10,500 (about RWF10-million) per night. The facility is owned by Kerzner International, a leading international developer and operator of destination resorts, ultra-luxury hotels and residences and innovative entertainment and gaming experiences. The Dubai-based firm invested over USD65-million in the facility to create luxurious experiences for the top end of the market. This is their second facility after One & Only Nyungwe House, a luxury facility located amidst Nyungwe Forest. Speaking at the opening, Kagame pledged continuous support to investments as well as value addition in many ways.
Source: The News Times
Rwanda
Mara Phones to produce low cost smart phones by May
After four months on Rwandan market, Mara Phones, the first African made phones manufacturer has announced plans to produce cheaper smart phones to respond to the market’s demand. Mara Phones, which has a production plant in Rwanda and South Africa was launched last year in Kigali. With a capacity of producing 1.5 million phones (Mara X and Z models) annually, the plant has in the four months managed to put over 40,000 phones on the market. Currently, each of the Mara phone models (X and Z) costs about USD190 and USD200 respectively. According to the CEO of Mara Phones, Eddy Sebera, the issue of prices has been one of the challenges but after four months in business, soon this will be solved since the company has set its focus on understanding specific market models instead of a general model of operation. “In the next three months, we are going to start producing cheaper Mara phones but smart phones. They will cost about $60 and $70. This is not to compete with other products but to contribute and touch the grass roots with smart affordable phones,” Sebera said. The wider Mara Phones plan, Sebera said, is to have two to three affordable smartphone models on the global market every year, which will depend on the volumes, demand and income of the markets.
Source: KT Press
Tanzania
France lists areas of investment interest in Tanzania
Solar energy, climate and sustainable cities development are three areas of investment that France is more interested in Tanzania, the country's ambassador said on 2 March, three months into the African France Summit scheduled for June this year. Mr Fredreic Clavier named the priority areas when briefing journalists on the official visits of six senators to assess various development projects supported by France and other local initiatives that may need France support. The envoy said France has released EUR1.2-million to support more than 8,000 farmers to reduce the use of pesticides in the Lake Zone. The delegations will visit some French companies operating in Tanzania's energy and transport sectors. It is also targeting the creation of the French Chambers of Commerce to be inaugurated soon as part of bilateral economic relations and investment. The delegate will visit Dodoma and Morogoro to see some of the projects implemented by France and other development partners.
Source: The Citizen
Tanzania
Tanzania to invite tenders for SGR to connect Rwanda, DRC
The government of Tanzania has said it is in final touches of inviting international tenders for the construction of a standard gauge railway (SGR) from Isaka dry port to neighbouring countries of Rwanda and the Democratic Republic of Congo (DRC). "Tenders for the construction of the SGR project to Rwanda and DRC will be announced anytime from now," said Hassan Abbasi, Chief Government Spokesperson and Permanent Secretary for the Ministry of Information, Culture, Arts and Sports. He told a news conference in the capital Dodoma on 1 March that President John Magufuli had already given directives on construction of the Mwanza-Isaka SGR that will connect to the two neighbouring countries. Abbasi said feasibility studies for the SGR linking Tanzania and Rwanda have already been undertaken, adding that the two countries were now looking for financiers of the project. Trade and Development Bank, a trade and development financial institution in Africa, said in November 2019 it had approved a USD1-billion soft loan to Tanzania for implementation of infrastructure projects, including the construction of the SGR.
Source: Daily Nation
Tanzania / Uganda
Tanzania agrees to open up its market for Ugandan sugar
Tanzania has partly allowed to open up its borders to Ugandan sugar exports following more than a year of being locked out. This was revealed by Mr Japheth Hasunga, the Tanzanian Minister of Agriculture, who, together with a delegation from Tanzania, was in the country to understand Uganda’s sugar production and its capacity. However, he noted, the sugar will be traded under a new arrangement that will only involve government-to-government. Previously, the Tanzanian government had been issuing permits to dealers and millers. Mr Hasunga also noted that it was much better “we start trading between ourselves to promote the East African integration”, adding there will be no “change in Import Duty because all the goods being produced in East Africa have a rule of origin”. The move is expected to increase Uganda’s sugar exports that had dipped after Tanzania closed out the country’s sugar.
Source: Daily Monitor