Arch injects USD16.5-million in CBE to supply solar energy to companies
The solar off-grid provider CrossBoundary Energy (CBE) has secured funds for its expansion in Africa. The USD16.5-million is being invested by Arch Emerging Markets Partners’, a London-based investment fund specialising in renewable energy. The new funds will enable CBE to expand its services in Africa, including the supply of solar energy to businesses in a context marked by the failure of the electricity grids in some sub-Saharan African countries. It is expected that CBE’s portfolio will grow with new projects in several African countries. In Nigeria, for example, the company is installing a small solar power plant on the rooftop of Jabi Lake Mall, a shopping centre in Abuja, owned by the British investment fund, Actis. The installation will have a capacity of 600 kWp. CrossBoundary also wants to diversify by installing off grids in rural areas in Africa. As part of this strategy, its investment fund CrossBoundary Energy Access (CBEA) has signed a partnership with PowerGen Renewable Energy, a supplier of off grids. The two partners will work together to build 60 off-grid solar photovoltaic systems in rural areas. These installations will provide electricity to 34,000 people.
Is the time right for a single currency in West Africa?
The eight Francophone states that form the West African Economic and Monetary Union have agreed to drop the use of the CFA Franc. Benin, Burkina Faso, Guinea-Bissau, Côte d’Ivoire, Mali, Niger, Senegal, and Togo will soon start using new currency, the ‘Eco’. The currency is scheduled for launch in June 2020. These eight states are members of the Economic Community of West African States (ECOWAS), a wider regional economic community, which also has a plan to introduce a single currency in 2020. The challenge will be maintaining the components of the monetary union – such as a stable currency and keeping inflation under control both of which require an independent central bank – once institutional arrangements change and the countries delink from France. Will the Central Bank of West African States be able to maintain a stable currency and low inflation without France? This has been a huge struggle for other West African central banks.
Source: The Conversation
Sonangol plans share sale for 30% of business in expansive shakeup
Angola’s state oil company Sonangol EP will step up its transformation with the sale of 30% of the business by 2027 and the further disposal of non-core assets. The partial sale of Sonangol will take “some time” and follow a financial review, Chairman Gaspar Martins told reporters Thursday, 27 February in the capital, Luanda. The restructuring is part of President Joao Lourenco’s plans to change the face of Angola’s oil industry, which the government relies on for about three-quarters of its revenue and more than 90% of exports. Production of crude has dropped to its lowest level in more than a decade and new projects are required to halt the decline. Sonangol is expected to sell stakes in more than 72 non-core ventures and to transform into an operator rather than being a passive partner. The company is currently preparing a public sale of 11 assets in April, Martins said.
AfDB supports development finance agency with USD80-million
The African Development Bank (AfDB) and the Botswana Development Corporation (BDC) have signed a Line of Credit (LOC) totalling USD80-million to help scale up key investments in the southern African country. The Bank said in a statement that the BDC will on-lend to specific target groups, focusing on industrialisation including manufacturing, transport and service sectors that have significant development impact. Repayment will be over 10 years, including a two-year grace period. Signing on behalf of the Bank, Mohamed Kalif, Manager, Financial Intermediation and Inclusion Division, said: “The African Development Bank is excited to collaborate with BDC to promote private sector development, as well as support broad-based economic growth in Botswana.” Kalif noted that the facility is the largest to be extended to a financial institution in Botswana and that the Bank is very proud of its partnership with BDC, the country’s main development finance agency. The institution is also one of the largest investors and a key promoter of the country’s industrialisation agenda.
Source: ESI Africa
IFC looks into energy storage to enhance Burkina Faso’s grid
The International Finance Corporation (IFC) has signed an agreement with Burkina Faso’s Ministry of Energy to assess how private investment in energy storage can contribute to higher levels of solar power production while enhancing grid stability and dispatch issues. This assessment will lead to the definition of a storage investment roadmap based on PPP models in Burkina Faso. It will be jointly supervised by IFC, the Ministry of Energy and the grid utility Société Nationale d’Electricité du Burkina (SONABEL). Under this agreement, IFC will assess the economic benefits of storage to integrate solar capacities to the grid and decrease the overall generation costs, review the country’s legal and regulatory frameworks and compare private and public storage project development and financing models. Burkina Faso’s power sector is characterised by a high reliance on expensive thermal capacities and imports. While the target is to achieve universal access to electricity by 2025, the country’s present electrification rate is approximately 20%.
Source: ESI Africa
AfDB grants EUR64-million for water, sanitation and electricity
Some financing agreements have been signed between the government of Burkina Faso and the African Development Bank (AfDB). The pan-African financial institution has agreed to finance several development projects currently under way, with a budget of XOF42-billion CFA (more than EUR64-million). The first financing agreement worth XOF10-billion (EUR15.2-million) is for the Rural Drinking Water and Sanitation Project (Pepa-mr). The objective is to build drinking water supply and sanitation facilities. The financing agreements recently signed between the government of Burkina Faso and the AfDB provide up to XOF32-billion for the Yeleen project. The objective of the project is to increase and diversify the supply of electricity through the construction of four new photovoltaic solar power plants with a cumulative capacity of 52 MWp. The installations will be carried out between 2020 and 2024. The “Yeleen” project is also supported by the European Union, the French Development Agency (AFD) and the Green Climate Fund (GCCF).
Côte d’Ivoire takes progressive investment step to attract IPPs
In December 2019, the Ivorian government concluded a loan agreement with Kreditanstalt für Wiederaufbau (KfW) amounting to USD6.5-million to finance the increase in Côte d’Ivoire’s share of the capital of the African Trade Insurance Agency (ATI). The capital increase aims to improve the investment climate, particularly in the renewable energy sector. As a result of the capital increase, the Government of Côte d’Ivoire signed the Memorandum of Understanding under the Regional Liquidity Support Facility (RLSF), which will help the country attract more Independent Power Producers (IPPs) and project developers. Under the RLSF, IPPs can obtain immediate cash collateral supported by guarantees to a bank that will then open a Stand-by Letter of Credit for the IPP in an amount that is equivalent to six months of the IPP’s revenue. The RLSF policy can be issued for a tenor of up to 10 years providing project sponsors and their lenders greater comfort. The RLSF targets small-scale renewable energy projects of 50 MW, and in exceptional cases, 100 MW because these projects are easier to implement and less costly. The capital increase is part of the ‘Reform Partnership’ initiative launched by the German government in close cooperation with the West African country.
Source: ESI Africa
Kenya scraps controversial online cargo clearance fees after coming under fire
Kenyan importers and traders have signed a sigh of relief after the government scrapped the controversial online cargo clearance fees. Last week, Kenya Trade Agency (KenTrade) introduced the Kenya TradeNet System fees compelling importers to pay KES5,000 (USD50) annual fee besides value added tax (VAT). The user must also part with KES750 (USD7.5) for a unique consignment reference number plus VAT and an arrival notification fee per vessel of KES7,500 (USD75), plus VAT. The system, which serves as a national electronic single window for lodging international trade documents, has been free since 2012 when it was first launched. However, no sooner had the new fees been introduced than local industrialists led by Kenya Association of Manufacturers (KAM) strongly opposed it saying it would hurt the government’s effort to boost employment and exports via the manufacturing sector. In a two paragraph statement, KenTrade said it had decided to remove the charges which came into effect on 1 February 2020. “We notify all our stakeholders that following consultations, the recently introduced user fees on the national electronic single window (KenTrade TradeNet System) services have been withdrawn,” said the notice.
Source: Pulse Live Kenya
Malawi Parliament passes cannabis bill
Parliament has passed the Cannabis Regulation Bill which allows the cultivation of cannabis for medicinal benefits. Agriculture Minister Kondwani Nankhumwa introduced the bill Cannabis saying it would help diversify the economy and boost the country’s exports especially at this time when tobacco exports are dwindling. “Legalisation of this crop will contribute to economic growth, ” he said. The Cannabis Regulation Bill establishes the Cannabis Regulatory Authority (CRA) which will be responsible for licensing and regulating medicinal and industrial hemp programmes. The CRA will grant licences to cultivate, process, store, sell, export and distribute cannabis. The Authority will also grant permits to conduct scientific research programmes and all licensees will be required to comply with security measures regarding cultivation, processing, storage and distribution of cannabis. People or organisations found cultivating, processing, or distributing cannabis in contravention of the law will face a fine of MWK50-million and maximum imprisonment of 25 years. Under the law, refusing to produce documentation or making false statements will be an offense liable to a fine of MWK10-million and imprisonment for five years.
Source: Malawi 24
Large projects contribute USD1.118-billion to Mozambique’s tax revenues in 2019
Large extractive industry projects in Mozambique contributed MZN73.3-billion (USD1.118-billion) to the country’s tax revenue in 2019, five times higher than the amount recorded in 2018, according to the Budget Execution report. The document said the State raised tax revenue of MZN276-billion, and large extractive industry projects contributed 26.5% of the amount collected. Capital gains tax in the amount of MZN54.1-billion or USD880-million, from the sale of the assets of oil company Anadarko Petroleum, in the Area 1 block of the Rovuma basin, to France’s Total, contributed the most to the tax provided by major projects in the period under review. Omitting this extraordinary income, the mining and minerals sector and other large projects, recorded declines of 20.9% and 13.8%, respectively, as a result of the fall in the price of coal on the international market. Daily newspaper O País also reported that the communities located in the areas of major projects in 2019 benefited from, “just 83.4 million meticais of the revenues generated by mining and oil extraction.”
Namibia first African country to export red meat to hungry US market
Namibia became the first African country to export red meat to the United States (US) after it sent 25 tonnes of beef to Philadelphia, following two decades of haggling over safety regulations and logistics. The arid southern African nation, known for free-range, hormone-free beef, is set to export 860 tonnes of various beef cuts in 2020 to the US, rising to 5,000 tonnes by 2025. The shipment is the first commercial consignment after samples were sent in the past 24 months to US laboratories for tests. Under the deal, exports will include boneless, raw beef cuts in frozen or chilled form. Agriculture contributes about 5% to Namibia’s economy but farming including cattle raising contributes to nearly two-thirds of the population’s income. In 2019, Namibia exported about 12,400 metric tonnes of meat to Norway, Britain, the European Union and Chinese markets. “Namibia will benefit economically from tapping into the largest consumer market with purchasing power of $13 trillion, and U.S. consumers will benefit from access to Namibia’s high-quality, free-range, grass-fed beef,” US ambassador to Namibia, Lisa Johnson, said. Namibia’s exports will also benefit from a duty-free regime under the African Growth and Opportunity Act (AGOA).
Namibian central bank cuts policy rate by 25 basis points
The Bank of Namibia (BoN) cut its policy rate by 25 basis points to 6.25% during the central bank’s monetary policy committee (MPC) meeting in February – in line with IHS Markit’s expectation. IHS Markit forecasts a further 25-basis-point cut in the BoN’s policy rate during June. Developments in neighbouring South Africa pose the biggest risk to the Namibian interest rate outlook. Local as well as regional and global conditions underlined the BoN’s interest rate decision. Namibia’s economic growth is expected to contract during 2019, the BoN’s estimates show. The mining, agriculture, manufacturing, and wholesale and retail trade sectors are expected to make the largest contribution to the economic weakness during the year. Private-sector credit extension growth increased moderately to 6.8% year on year (y/y) at end-2019, from 6.3% y/y at end-2018. Credit extended to businesses supported the marginal improvement in overall private-sector credit extension, while growth in credit extended to households slowed further during 2019. Inflationary pressures remain moderate, with headline inflation averaging 3.7% in 2019, from 4.3% in 2018. The BoN expects headline inflation to remain at less than 5% in 2020.
Source: IHS Markit
All hands on deck to implement Special Agro-Industrial Processing Zones, says Minister Nanono
The African Development Bank (AfDB), in collaboration with the government of Nigeria, has held a meeting with stakeholders to discuss details around Special Agro-Industrial Processing Zones (SAPZs) in Nigeria. A workshop was held in Abuja from 17 to 18 February to address the categorisation and location of the SAPZs, which are meant to kick start the agriculture sector. Speaking at the event, Nigeria’s Minister for Agriculture and Rural Development, Alhaji Sabo Nanono, lauded the efforts of the AfDB and called for all hands to be on deck in the sustainable implementation of the initiative. The workshop was attended, among others, by Afreximbank, the International Finance Corporation, the Food and Agriculture Organization, the Development Bank of Nigeria and the Small and Medium Enterprise Development Agency of Nigeria. “The establishment of SAPZs in Nigeria will boost the structural transformation of the economy by providing opportunities for public and private sector investment in agriculture,” said Ebrima Faal, Senior Director for the African Development Bank in Nigeria.
Source: African Development Bank Group
Nigeria settles dispute over construction of Mambilla hydro plant
Nigeria is set to build the second-largest hydropower plant in Africa after the government settled a legal dispute that was delaying the project, said power minister Sale Mamman. “We have now overcome the major problem stopping this project and it [the legal dispute] is nearly over,” Mamman said in an interview in Abuja, the capital city. He said Attorney-General Abubakar Malami is finalising the terms of the settlement, which are undisclosed. International arbitration in Paris initiated by Sunrise Power and Transmission Co., a company that once held the construction contract, was recently resolved, clearing the main obstacle to the plant’s construction, according to Mamman. A consortium including China Energy Engineering Corp. and Sinohydro Corp. Ltd will build the Mambilla facility, which is forecast to cost USD4.8-billion, about USD1-billion less than earlier estimates, Mamman said. Nigeria has 13,000 MW of installed electricity-production capacity, about 80% of which comes from gas-fired plants. Only 7,500 MW of that is available and about 4,000 MW is dispatched to the grid each day.
Source: ESI Africa
Ugandan central bank maintains key policy rate at 9% in February
The Bank of Uganda (BoU) maintained its benchmark policy rate at 9% during the 13 February meeting of its monetary policy committee (MPC). The central bank rate was previously lowered to 9% from 10% in October 2019. The band on the central bank rate will be maintained at plus or minus 3 percentage points. The rediscount rate and the commercial bank lending rate were adjusted to 13% and 14%, respectively, at the February MPC meeting. The Ugandan central bank’s MPC stated that public-sector financing needs are pushing risk premiums as well as borrowing costs for the broader economy, despite the BoU’s accommodative monetary policy stance. Although Uganda’s near-term GDP growth is expected to remain strong, the outlook has been lowered amid increased downside risks related to the global and domestic environment such as the coronavirus disease 2019 (COVID-19) virus outbreak. Data show the inflation rate remains relatively subdued and the BoU’s inflation outlook has not changed since the last MPC meeting in December 2019, with inflation expected to remain around the central bank target of 5% in the medium term.
Source: IHS Markit