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Renewable energy solutions company African Rainbow Energy and solar technology and engineering firm Sola have reached financial close on two registered 100 megawatt (MW) energy projects. This comes after the power purchase agreements (PPAs) for the projects were signed in March. “The projects needed to raise a total of R4 billion of funding for construction and development,” notes a statement issued on Monday. “In order for this to happen, Sola reached [an] agreement with funding partner and shareholder African Rainbow Energy.”
The statement, which indicates that the deal marks the largest corporate renewable energy PPA in Africa, says the energy projects will fulfil the obligations of a bilateral electricity sales agreement between Sola Group and titanium dioxide producer Tronox Mineral Sands.
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. With the intention of encouraging the Member States to issue visas to improve the free movement of African nationals on the continent, the project tries to change Africa’s laws, which remain largely restrictive on the movement of people despite political vows to remove borders. Nationals of Namibia and Botswana will no longer require passports to travel between the two nations. The neighbouring nations of Botswana and Namibia have cordial relations and collaborate on economic growth. Last year, Namibia and Botswana agreed to upgrade their cooperation from bilateral frameworks such as the Joint Permanent Commission of Cooperation (JPCC) and the Joint Permanent Commission on Defence and Security (JPCDS).
Once fully embraced by all Member States, the free movement of people within Africa is expected to have many important positive effects, including an increase in intra-African trade, commerce, and tourism; easier labour mobility; knowledge and skill sharing within Africa; the promotion of pan-African identity, social integration, and tourism; an improvement in trans-border infrastructure and shared development; the encouragement of an all-encompassing approach to border management; and the promotion of the rule of law, human rights, and shared development
Kenya’s current account deficit narrows to 5.1pc (Business Daily)
Kenya’s current account deficit narrowed to 5.1 percent in the 12 months to July from 5.3 percent in May, helped by lower oil import costs coupled with improved inflows from tourism and diaspora remittances. The deficit has tended upwards in recent months due to an elevated import bill — due to high crude and food grain prices —but the fall in the price of Murban Crude from $118 per barrel at the beginning of July to $105 at the end of the month helped ease the pressure on the country’s forex. Central Bank of Kenya (CBK) data also shows that diaspora remittances so far this year are 13 percent higher compared to last year, boosting the current account.
“The narrower deficit reflects improved receipts from service exports and remittances,” said the CBK in its weekly markets bulletin.
Imports have outpaced exports in terms of growth this year, largely due to a release of pent-up demand that had built up when the country imposed restrictions in 2020 and 2021 to control the spread of the Covid-19 virus. Kenya’s trade deficit for the first six months of the year widened by nearly a quarter, hitting Sh814.02 billion from Sh620.82 billion in the corresponding period in 2021.
Kenya angles for Sh120b trade pie with Caribbean nations (The Standard)
Over a dozen Caribbean Islands nations led by Barbados are now banking on expected trade and investment pacts with Kenya and other East African Community (EAC) countries to grow trade between the two regions. The pacts have the potential to generate trade volumes estimated at over Sh120 billion.
A Kenyan delegation led by outgoing Industrialisation Cabinet Secretary Betty Maina recently attended the first-ever Africa-Caribbean Trade Investment Forum in Barbados where areas of cooperation were discussed.
Low-hanging opportunities for Kenyan firms, the Kenyan delegation heard, are in the traditional stronghold of tourism but also upcoming sectors such as manufacturing, financial services and maritime.
Declining Non-oil Exports Raising Economic Concerns (Leadership)
The latest Foreign Trade Statistics report as released by the National Bureau of Statistics(NBS) show that the country’s exports in the second quarter of 2022 grew by 4.31 and 47.55 per cents over the figure recorded in the first quarter of the year and the corresponding quarter of 2021 respectively. This, alongside a decline in the import value saw the country recording a trade surplus of N2 trillion in the second quarter compared to N1.2 trillion recorded in the first quarter and the highest in the last 16 quarters. In the second quarter of 2022, total trade stood at N12.84 trillion, lower than N13 trillion recorded in the first quarter of 2022 but higher than N9.71 trillion recorded in the corresponding period of 2021. Total Exports were N7.4 trillion of which Re-exports stood at N9.63 billion, while total imports stood at N5.43trillion.
The trade surplus was supported by the twin effect of the expansion in export earnings which was up 4.3 per cent and the decline in import bills which declined by 7.9 per cent quarter on quarter. Crude oil exports had the biggest chunk of the export figure with N5.91 trillion.
Gas output: ‘Pipeline sabotage, insecurity undermining Nigeria’s output, export’ (The Guardian Nigeria)
While many oil and gas producing countries are maximizing the present global crisis to improve output and revenue, rising pipeline sabotage and insecurity in the Niger Delta have continued to hamper the growth outlook for Nigeria’s oil and gas export. With the country’s gas export at only 60 per cent of its capacity, operators and regulators are concerned about continued shut wells, in protest against theft and sabotage.
In a chat with The Guardian, Chief Executive Officer, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, noted that under-production of crude oil was equally affecting gas production, considering that most of the country’s gas is associated gas.
Komolafe said: “We are yet to take advantage of the global crisis. This is basically in terms of our depressed production because in a way when you have depressed oil production, you will equally have a depressed gas production especially as we are talking in terms of associated gas as against the non-associated gas.
Cabo Verde is on course to becoming a regional ICT hub, thanks to the country’s investment in a digital transformation vision, with active support from the African Development Bank. The first phase of construction of the Cabo Verde Technology Park’s main buildings, which is funded by the African Development Bank, is 85% complete and will be ready before year-end, officials said on Thursday, 08 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.
Various states women from African countries issued this appeal before a stakeholders’ meeting at the ongoing African Continental Free Trade Area (AfCFTA) in Dar es Salaam, to discuss women’s opportunities in AfCFTA. They said that laws and policies need to focus on equality between men and special groups including women and young people as investment in these groups, when businesses integrate them; this is an important factor for Africa’s sustainable development.
Dr Joyce Banda, the former Malawian president, said political will among African leaders is an essential factor in bringing development to women alongside men as part of society in general. What is important is for African countries to build strong economies enabling women to overcome poverty, she stated. “We must open opportunities that will empower women and young people so that they are not humiliated and harassed,” she said, pointing out that Africa’s young men who die in the Mediterranean Sea and daughters who are abused in the Middle East are insulting illustrations of the poverty in Africa. “It is now time to empower women and youth to participate in the development process by having policies and opportunities that will remove them from poverty. If women are not fully involved in the development process, Africa cannot develop,” she said.
Vice President Jewel Howard-Taylor has addressed the African Continental Free Trade Agreement (AfCFTA) conference on women and youth scheduled for September 12th to 14th, 2022 in Dar Es Salaam, the United Republic of Tanzania. Speaking at the conference’s opening session, Madam Vice President called for the creation of the AfCFTA Secretariat for Gender Mainstreaming of women and youth, which will focus on the formulation of specific policies to enhance the empowerment of women and youth. Madam Vice President, according to a dispatch, emphasized the compelling need for a hands-on approach and collaboration necessary to ensure the actualization and subsequent transformation of the lives of the largest segment of Africa’s population, the women and youth.
The Liberian Vice President then commended the visionary decision of African leaders to collaborate and diversify economic acceleration through the intra- Africa trade.
Vice President Howard-Taylor further intimated that the provision of affordable and accessible credit to women and youth, the removal of general stereotypes to engender micro-credit facilities, and the free movement of goods and persons across Africa are amongst the most critical issues required in drawing up the final resolution for the implementation of AfCFTA as it relates to women and youth.
Enhancing sustainable regional value chains for food security
Enhance synergies to unlock green and blue industrial development for private sector through development of integrated sustainable value chains in AfCFTA;
Encourage countries to engage in efficient food management and storage projects in agriculture to improve food supply chains, limit price increases, and support agricultural resilience. In this regard, we urge the strengthening of the efficacy of free trade agreements, especially AfCFTA, to increase the resilience of African countries against food supply shocks;
Strengthen cost-effective investments and implementation at scale around food security and agriculture, for both adaptation and mitigation is an imperative, including on early action; protection to the most vulnerable through safety-nets, insurances, social protection; resilient infrastructure; nature-based solutions including land rehabilitation; climate smart agriculture; healthy and sustainable diets and access to markets through the AfCFTA. This should be a political and development priority across multiple sectors, as it is not only related to agriculture.
Can William Ruto tilt EAC trade balance? (Business Daily)
As Kenya welcomes William Ruto’s presidency Tuesday, the East African Community (EAC) will be keenly watching the new administration’s approach to foreign trade policies. With a combined gross domestic product (GDP) of over $100 billion — double that of Tanzania and nearly three times that of Uganda — Kenya remains the largest economy in the region. An analysis of trade data in the past decade under President Uhuru Kenyatta shows that Kenya’s balance of trade against EAC members has declined by Sh19.1 billion. Gains from Rwanda and Burundi have partially helped to offset much of the deficit incurred with Tanzania.
Data from the Kenya National Bureau of Statistics (KNBS) show trade surplus with the neighbouring countries in 2012 was Sh119 billion —which was inherited by Mr Kenyatta when he assumed office in 2013 — and it declined last year to Sh99 billion. Trade surplus between Kenya and Rwanda
New cargo vessel links Kisumu port to EAC region (Capital Business)
A 2,000 tones capacity Marine Vessel, Pamba Wagon Ferry owned by Mango Tree Group commenced the transportation of goods from the Kisumu Port to the East Africa region on Monday. The Group’s General Manager Franck Menard says they will be transporting goods from Kisumu Port weekly to Uganda and Tanzania. “We are off to Mwanza, in Tanzania, once we offload we head again to Jinja in Uganda with goods,” he said.
Menard says it takes one day to travel from Kisumu Port to any destination within the ports in EAC, noting that their services are efficient.
Improving shipbuilding capabilities in Africa (Businessday)
While investment in shipbuilding is huge, the need to import and export goods, as sparked by globalisation, made shipbuilding an important strategic industry. Shipbuilding has a complex value chain that demands skilled workers at each stage of this chain. Although Europe remains a crucial market to produce cruise vessels.
China is now repeating these models with large state-supported investments in the industry. Due to massive investment and low labour costs, China has emerged as the world’s largest shipbuilding nation.
Between 2014 and 2019, reports in foreign marine publications show that the number of active shipyards worldwide was nearly halved. During this period, more than 230 shipyards were closed due to the consolidation process within the shipbuilding industry globally. According to a maritime regulator based in Nigeria, this was caused by a decrease in the demand for new vessels, stemming from the uncertainty surrounding future fuel composition, propulsion systems and environmental regulations.
President Paul Kagame says the sooner the African continent liberalises air transport, the faster the aviation industry can recover from the impact of the Covid-19 pandemic on the industry.
The Head of State made the call on Monday at the opening of the 6th Aviation Africa Summit in Kigali, which brought together leaders from African airlines, civil aviation authorities, business aviation and support industries to discuss how to resuscitate the continent’s aviation industry still reeling with post-pandemic effects.
President Kagame said that with the African Continental Free Trade Area (AfCFTA) coming into force, it is time African countries moved fast to implement the Single African Air Transport Market (SAATM) if the air transport industry is to recover and catch up with the rest of the world.
the Covid-19 pandemic severely affected the aviation industry worldwide, and Africa was no exception. Airlines and airports around the world faced massive layoffs,” President Kagame said. He however pointed out that now travel and tourism are getting back to normal, but the industry is not yet back to where it was, and a lot more needs to be done to open up the skies. “The further liberalization of air transport in Africa can act as a catalyst to speed up the industry’s recovery, by increasing connectivity, stimulating demand, and creating jobs,”
“In the wider context of the African Continental Free Trade Area, open skies help to link our businesses to regional and global supply chains, boosting trade and investment,” President Kagame said. “This is why the full implementation of the Single African Air Transport Market must remain a top priority,” he added.
Agra unveils $550m fund to fight food insecurity in Africa (The East African)
The Alliance for a Green Revolution in Africa (Agra) has unveiled a catalytic fund of $550 million for the next five years to boost efforts to improve food security on the continent that continues to struggle to feed itself. Under the new policy, Agra targets 28 million farmers in 15 countries to boost agricultural productivity and incomes. The focus in the next five years, from 2023 to 2027, will be on improving seed systems, government engagement, agricultural supply chains and mitigating climate change. Experts say smallholder farmers across the region remain vulnerable to shocks and bear the brunt of the current external pressures, including climate change and rising prices of farming inputs such as fertilisers.
Mr Hailemariam, a former Ethiopian Prime Minister, added, “Covid-19 put supply chains under intolerable pressure. The commodity price crisis, exacerbated by the Russia Ukraine crisis, is undermining food security and agriculture everywhere”. “We want farmers to be able to gain and retain the access to the right seed, at the right price and at the right time,” he said. The challenge facing most African countries is how to raise productivity and reduce food imports.
Bolstering food security in Africa with special economic zones (fDi Intelligence)
Global food insecurity is reaching its highest point in decades, with crop prices climbing to record highs in the first half of 2022. The crisis lies in several overlapping factors, including surging energy prices, limitations on the export of fertilisers, holdover Covid-era supply chain disruptions, and the ongoing war between Russia and Ukraine. While most of the world will face prohibitive costs and food shortages, the developing world — particularly Africa — faces high food insecurity risks over the course of the next few years.
Without addressing the foundational issues — low labour and land productivity, a general lack of infrastructure, poor access to credit and ineffective government policies — such countries will always be reliant on the rest of the world for food.
A potential long-term solution to the problem of agricultural productivity in Africa lies in the utilisation of special economic zones (SEZs) to support the development of a more robust agriculture industry — particularly agribusiness, but also farming itself, as I believe there will be an uptick in the number of zones that also host agricultural activities and are designed to augment the efficiency of farmers.
The devastating floods in Pakistan, which plunged great swaths of agricultural land under water – coupled with India’s decision to curb its rice exports – risk exacerbating food insecurity in the African countries most dependent on imports from Asia.
The war in Ukraine, which sparked soaring wheat and corn prices, has hit the continent of Africa hard over the past six months. Now, a new food crisis looms as the continent faces a likely rise in the price of rice, a staple on many African tables.
Although food security in sub-Saharan Africa does not rely solely on rice, it remains the second-most-consumed cereal after corn. A surge in prices would be a further blow to populations already weakened by the rise in the price of foodstuffs.
Africa has been losing from 5 to 15% of its GDP per capita growth because of climate change and its related impacts, but needs about $1.6 trillion between 2022 and 2030 to meet its nationally determination contributions, says African Development Bank Group Acting Chief Economist and Vice President Kevin Urama. Speaking at a panel discussion—titled “African Countries Ownership in Determining Climate Agenda”— on the side-lines of the Egypt International Cooperation Forum (Egypt-ICF 2022) in Cairo on Wednesday, Urama urged developed nations to bridge the “climate financing gap.”
“Collectively, African countries received only $18.3 billion in climate finance between 2016 and 2019” Urama said. “This results in a climate finance gap of up $1288.2 billion annually from 2020 to 2030.” The chief economist added: “These sums reflect how the crisis is. Climate change affects Africa severely, while the continent contributes to only 3% of global emissions. The global community must meet its $100 billion commitment to help the developing countries and African economies to mitigate the impacts of the climate change and to adapt to it. Investing in climate adaptation in the context of sustainable development is the best way to cope with the climate change impacts, adding that gas must remain included in the continent’s plan for the gradual transition to clean energy.”
To harness the development benefits of using mobile channels to send and receive remittances, the UN’s International Fund for Agricultural Development (IFAD) announced today its first grant to a digital payments company, MFS Africa, to promote the use of mobile remittances in marginal rural areas in five African countries: Ghana, Kenya, Senegal, The Gambia and Uganda. Mobile remittances – the money that migrant workers sent home through digital channels using mobile technology – can play a catalytic role linking individuals and businesses to the formal economy, while providing access to key financial products and services such as transactions, credit, insurance, payments or savings that can boost their own social and economic wellbeing.
This public-private partnership will help MFS Africa and its partners unleash new and untapped markets in marginalized rural communities where mobile remittances can provide significant social and economic benefits to some of the poorest people thanks to lower transaction costs coupled with safer and more easily accessible remittance services.
Despite its staggering growth since the start of the pandemic, mobile remittances only represent 3% (US$16 billion) of the total remittances sent home by migrants to their families living in low- and middle-income countries. “In order to change habits and attract people to digital and formal sending channels, it is vital to provide consumer awareness and education on both sending and receiving sides, particularly in rural areas. But these activities do not offer immediate financial returns and are very resource intensive for service providers,” said Pedro de Vasconcelos, Manager of the Financing Facility for Remittances at IFAD
“Transferring money internationally should be as easy and as affordable as making a phone call. We look forward to growing the digital remittances market by increasing the diversity of actors and competition. This will ensure that African consumers have access to cost-effective and sustainable means of sending money,” said Nika Naghavi, Executive Director of MFS Africa.
Africa’s emerging markets vital for British businesses – Joel Popoola, IoD UK Ambassador (The Guardian Nigeria)
Joel Popoola, a British citizen of Nigerian descent is an ambassador of the Institute of Directors (IoD) North East (North) Branch in the United Kingdom. Popoola, who is the founder of the digital democracy project app, Rate Your Leader, is also Chair of the IoD’s Special Interest Group Africa. He speaks in this interview on why Africa is the emerging market for British businesses, among others
Africa is coming of age as a continent. After Brexit and post-pandemic, global markets are going to be vital for British businesses – and Africa’s emerging markets offer huge untapped potential. There is a huge cachet to buying British in Africa, meaning billions of potential customers for British businesses, many of whom have the products and services African nations’ companies and growing population needs. Britain has a lot to export – clean energy expertise, professional services, education, advanced manufacturing products, media, even football – and Africa is ready to buy. But is the UK ready to sell? One recent parliamentary report found that UK-Africa trade has ‘flat-lined’ – and accounts for just 2.5% of all UK trade. Pre-Covid the world’s five fastest-growing economies were all African, and regional leaders like Nigeria and South Africa are likely to become superpowers of the global economy as we move towards the second half of this century.
More needs to be done on both sides to take advantage of the opportunities on offer.
Trade is a fundamental driver of growth, and both the African Continental Free Trade Area (AfCFTA) and the WTO are key to helping African countries achieve economic prosperity, Deputy Director-General Xiangchen Zhang noted on 7 September at a conference organized by 13 African members of the WTO Chairs Programme. He called on the chairs to support the implementation of outcomes of the 12th Ministerial Conference and expressed the hope that the chairs can “provide great insights on interactions and complementarities between the WTO and the AfCFTA”.
Slow roads among developing countries pose an obstacle to inclusive growth, the International Monetary Fund (IMF) has said. An Economics and Finance insight by the international lender says speed at which goods are carried to customers in distant markets is key in determining sustainable and inclusive economic development. “High-speed roads can carry goods to far-off markets and in turn raise productivity and reduce poverty. They are also important contributors to the development and this is why economists spend time assessing the state of roads, “ IMF says. The report notes that poor, developing countries have the world’s slowest roads
Kenya has been on track to counter the issue of slow roads in enhancing faster connectivity. The country over the past decades has had steady improvements to road networks on the back of Chinese infrastructural developments such as the Nairobi-Thika Superhighway and the Nairobi expressway. With the projects coming into operation, commuters are now experiencing reduced traffic congestion and faster trips as cities and towns attract more investment. The superhighway, one of the first infrastructure projects to be carried by Chinese companies, has enhanced transport services and urban mobility in the Kenyan capital.
The UN-brokered Black Sea Grain Initiative is reintegrating much-needed grains to global markets and contributing to bringing down prices of basic staples across the world. The agreement was signed in Istanbul by the Russian Federation, Türkiye, Ukraine and United Nations on 22 July 2022 to help stabilize spiralling food prices worldwide and prevent a food crisis that could affect millions of people.
As of 12 September, the initiative had enabled over 2.7 million metric tons of grain and other foodstuffs to move from the Ukrainian ports of Odesa, Chornomorsk and Yuzhny (Pivdennyi). The Food Price Index published by the UN Food and Agricultural Organization (FAO) showed double-digit percentage drops in the cost of vegetable oils and cereals in July and a further 1.9% fall in August. The UN will continue to work with all parties of the initiative to reintegrate Ukraine’s agricultural supplies as well as the food and fertilizer produced by Russia into world markets – despite the war – to better tackle the global food crisis.
Tax avoidance is increasingly damaging developing economies, says TIPS (Engineering News)
Billions of dollars in tax revenues are lost to African governments each year, owing to illicit financial flows and tax avoidance, which impacts countries’ ability to provide services and support industrial development. Trade & Industry Policy Strategies (TIPS) chairperson and Department of Trade, Industry and Competition industrial procurement chief director Dr Tebogo Makube explains that tax avoidance means legally reducing your taxable income, which has base erosion and profit-shifting affects as a consequence.
University of London School of Oriental & African Studies lecturer Jonathan Di John says tax speaks to State capacity, with governments using tax to finance public goods and social programmes. It can also be used as a strategic tool to promote development and incentivise production, particularly through tariffs.
He elaborates that there has been more emphasis in recent times on how efficiently and effectively governments are collecting tax and how tax links to production strategies over and above collection rates.
United Nations Industrial Development Organisation (UNIDO) convened the Fifth Steering Committee of the Global Network of Regional Sustainable Energy Centres (GN-SEC) with support of the Governments of Austria, Norway and Spain, from 5 to 8 September 2022 at the Vienna International Centre. The heads of ten centres, representing various economic communities and more than 108 developing countries from the Africa Arab, Asia Pacific, Latin America and Caribbean regions concluded with a clear message: “In times of fossil fuel price and climate escalations, regional cooperation is needed more than ever to accelerate the transition towards renewables and energy efficiency”.
Delegates also highlighted the difficulties in accessing climate financing for regional programmes. Regional cooperation can contribute to economies of scale by facilitating progress and joint learning, harmonization of policies and market standards, shared resources and intelligence, replication of best practice, as well as bundling of projects and efficient financing. The centres will jointly advocate for better recognition of the “missing regional link” to reach local level at COP27. The Centres are calling on development finance institutions, climate finance, and multilateral donors to include within its planning, regional allocations that will catalyze investments to achieve local level development impact.
The International Monetary Fund’s executive board, under pressure to provide emergency funding to countries facing war-induced food price shocks, reviewed a plan on Monday that would help Ukraine and other countries hit hard by Russia’s war, sources familiar with the matter told Reuters.
Developed by IMF staff in recent months, it would allow the IMF to support countries struggling with budget problems because of the war, without imposing conditions required in a regular fund program, said the sources, who asked not to be named since the plan has not been formally approved.
If approved, it would temporarily increase existing access limits and allow all member countries to borrow up to an additional 50% of their IMF quota under the IMF’s Rapid Financing Instrument, while low-income countries could tap the Rapid Credit Facility, the sources said.
“The concept is simple, but it could help many countries,” said one of the sources.
Food prices surged worldwide after the start of the war given blocked supply routes, sanctions and other trade restrictions, although a UN-brokered deal that allowed resumed exports of grain from Ukrainian ports last month has begun to help improve trade flows and lower prices in recent weeks.
Many African countries and other poor nations suffering food shortages and acute hunger have clamored for increased funds, but it was not immediately clear how many countries would seek the additional financing aid.