Africa Business In Brief
Related Articles in
Crossborder Trade & Investment | Corporate & Business
Latest Firm's Press
Report: Africa delivers largest profits on investment
British companies have made bigger profits investing in Africa than in any other region of the world, according to a new report from the Overseas Development Institute (ODI), which urges firms to seek profits on the continent rather than seeing it as a place to do charitable work. With 1.2 billion people and eight of the world's 15 fastest-growing economies, the ODI says Africa offers world-beating returns on investment. The report looks at investment by British firms in Ghana, Kenya, Nigeria and South Africa. Its authors say the "young population, growing middle class, and planned industrial growth make the continent a great place to do business." In 2019, the rate of return on all inward foreign direct investment in developing African countries was 6.5%, higher than the rates in developing Latin America and the Caribbean at 6.2%, and also higher than the 6% return in developed economies. The report was published as Britain formally left the European Union on 31 January. The government repeatedly has said its ambition is to create a "global Britain" with new trading partners beyond the European continent. As part of the effort to court new partners, London hosted the UK-Africa Investment summit on 20 January 2020.
ADM Energy signs MoU with Trafigura to develop and finance energy projects in Africa
AIM-listed ADM Energy has entered into a non-binding memorandum of understanding (MOU) with Trafigura, a market leader in the global commodities industry whose core business is the physical trading of oil and petroleum products and metals and minerals, to develop investment opportunities in the African energy sector. Under the terms of the MOU, it is the intention of ADM and Trafigura (together, the “Parties”) to create a strategic alliance where ADM will act as the sponsor for investment opportunities in the African energy sector (“Projects”) which will be presented to Trafigura for consideration as a trading counterparty, or financing provider. ADM, as principal, will be responsible for originating, analysing, developing, structuring and negotiating the Projects with counterparties and presenting the Projects to Trafigura for further evaluation. Subject to a Project being approved by Trafigura (“Approved Project”), the Parties will negotiate a definitive agreement for each Approved Project. Trafigura will be entitled to provide ADM with conditional pre-financing of up to USD100-million for the acquisition or development of Approved Projects. It is anticipated that Trafigura may subscribe for up to USD20-million in convertible loan notes in ADM as definitive agreements and project funding for Approved Projects are agreed.
Source: Energy Mix Report
Angolan Ministry of Tourism prepares review of sector legislation
The Angolan Ministry of Tourism is working on the regulation process of the Ecotourism Law, approved in 2015, with a view to ensuring greater growth in activity, boosting the sector and contributing to the growth of the country's economic diversification. Sandra Vigário, who took the floor during the public presentation of proposals to revise some of the diplomas that make up the legal framework of the tourism sector in the country, noted that ecotourism, as the fastest growing activity in the world, was not regulated in Angola, although it has been developing for some time. A year ago, the Ministry of Tourism began to review the sector's legislation, in partnership with the Agostinho Neto University Studies Center, and work is currently being carried out on eight diplomas related to the sector's operation. One of the most debated topics during the meeting was, according to Jornal de Angola, the issue of the minimum amount of liability for insurance coverage, with Sandra Vigário noting that the current Tourism Law provides for a minimum deposit of AOA2-million for insurance coverage.
Botswana deposits Tripartite FTA Ratification instruments
Botswana has deposited the instruments of Ratification for the COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) Agreement bringing the number of countries that have done so to eight. The other countries that have ratified and deposited their instruments are Burundi, Kenya, Egypt, Rwanda, Uganda, South Africa, and Namibia. The ceremony took place in Lusaka, at the Common Market for Eastern and Southern Africa (COMESA) Secretariat on 30 January 2020. The TFTA was launched in June 2015 with the aim of bringing together, in one common market, countries in the three regional economic blocs namely the East African Community (EAC), COMESA and the Southern African Development Community (SADC). With the ratification of the tripartite agreement by the required number of States, Botswana High Commissioner to Zambia, Mr Alpheus Matlhaku said Botswana looks forward to tapping into the wider market of the EAC-COMESA-SADC region. Commending Botswana, Chairperson of the Tripartite Taskforce and Secretary General of COMESA, Ms Chileshe Mpundu Kapwepwe said the TFTA offers a bigger market and it will enable countries to trade more duty free, a move that will increase the levels of intra-Africa trade.
Source: Common Market for Eastern and Southern Africa
Botswana to accelerate USD4-billion coal-to-liquid refinery project: Minister
Botswana, which has some of Africa’s largest coal reserves, wants to cut harmful carbon emissions but is committed to using its resources for a new coal-to-liquid (CTL) refinery set to come onstream by 2025, the mines Minister said on Tuesday. State-owned firm Botswana Oil (BOL) issued a tender three years ago seeking investors to build the plant, estimated then to cost around USD4-billion, as the diamond-rich southern African country seeks to secure its energy supplies. “It [CTL plant] is still in its infancy stage, but we believe now it will be accelerated,” Lefoko Maxwell Moagi, Minister of mineral resources, green technology and energy security, told Reuters on the sidelines of the Mining Indaba investment conference in Cape Town. Moagi described Botswana’s 212 billion coal reserves as “God’s gift” and said the CTL project, as well as a 100 MW pilot coal bed methane project, were two projects Botswana would fast-track. The government expected the coal bed methane project to come onstream by 2022.
Urbasolar is building a 33 MW solar power plant in Pâ
The French company Urbasolar has recently started construction work on a solar power plant in the municipality of Pâ. It is the second largest solar power plant in Burkina Faso, with a capacity of 33 MW. It is a project through which the constructor intends to demonstrate its capacity to expand in West Africa. Burkina Faso’s solar programme is on track. This West African country, which aims to achieve 200 MW of solar energy via the construction of a series of five-power stations, has just laid the first milestone on the construction site. On 1 February 2020, the Burkinabe authorities and their partners officially launched the construction of the solar power plant in Pa, a commune located 250km west of the capital Ouagadougou. Installed on a surface area of 35 hectares, the plant will be equipped with 25,000 panels for a total production capacity of 33 MW. The cost of the work amounts to EUR32.8-million (XOF21.5-billion). Funds were mobilised by Urbasolar via a financial pool including Proparco, a subsidiary of the French Development Agency (AFD) group, as well as the West African Development Bank. The plant will be operated under a public–private partnership contract by Urbasolar for 25 years before being handed over to the Burkinabe State.
Source: Afrik 21
Cabinet reshuffle strengthens ruling party at Ethiopia's August elections, increases contract risk for politically affiliated projects in Tigray
Ethiopian Prime Minister Abiy Ahmed on 22 January appointed three new cabinet members, removing one of the two remaining cabinet portfolios held by the previously influential Tigrayan People's Liberation Front (TPLF). The TPLF's diminishing influence at the national level increases the risk of contracts being altered or cancelled within the Tigray region following the legislative elections. The cabinet reshuffle removes the TPLF's ability to influence policymaking within central government but it likely can still protect its commercial interests within Tigray region at least until the legislative elections. However, the central government likely will gain influence within Tigray region if Tigrayan opposition parties control more seats in the legislature, which would increase the scope for altering or cancelling TPLF-affiliated projects. The continued appointment of commercial and political elites from the Amhara region very likely strengthens an alliance between the two largest parties – Prime Minister Ahmed's Oromo Democratic Party (ODP) and the Amhara Democratic Party (ADP) – that merged into the newly created Prosperity Party (PP). The appointment of Melaku Alebel Addis to the trade and industry portfolio indicates a continuation of commercial preference for ADP-affiliated businesses, over TPLF-affiliated ones – as has been demonstrated by the growing influence of the state-directed Tiret Corporate.
Source: IHS Markit
Ghana, AfDB sign USD81.67-million loan agreement to finance Eastern corridor road phase 1
The African Development Bank (AfDB) signed, in Accra, an agreement with the government to commit an amount of USD81.67-million meant to finance the Eastern Corridor Road Development Programme Phase 1. The 695km corridor project is meant to link Accra with the northern hinterland by avoiding the long known central corridor. This would also reduce the distance to about 200km. The Phase 1 of the project covers the construction of roads and community development along; Dufor Adidome- Asikuma Junction (39.2km), Asutuare-Aveyime (23.9km) and the construction of two interchanges at Dufor Adidome and Asikuma Junction. Briefing the media before the signing ceremony, Mrs Abena Osei Asare, Deputy Minister for Finance said the government was committed to the development of roads in Ghana to accelerate the economic development and therefore has a comprehensive programme for the development of roads in the country.
Source: Ghanaian Times
ADB records 435% profit in 2019
Indigenous bank, ADB, has recorded a whopping 435% profit for the 2019 financial year. According to its unaudited 2019 Financial Statement, it recorded a profit of GHS35.9-million in 2019 as against GHS5.9-million in 2018. This impressive performance is primarily due to a reduction in interest expense and investment in government securities. The bank registered an interest expense of GHS182-million in 2019 as against GHS213-million in 2018. This might be due to reduction in cost of funds, from expensive deposits (fixed deposits) to cheap funds (current and savings deposits). From the income statement, ADB registered GHS11-million tax expense in 2019, compared to GHS28.1-million expense in 2018. It is however unclear why the income tax expense reduced significantly. Per the impressive performance by the bank, the earnings per share rose from GHS3 to GHS11, a significant benefit to shareholders. From the balance sheet, GHS1.5-billion was invested in securities in 2019 as against GHS1.1-billion in 2018. Deposits from customers also grew by 31% to GHS3.3-billion in 2019.
CA removes Equitel from mobile money category
The Communications Authority of Kenya (CA) has dropped Equitel from the list of mobile money services it regulates, declaring it a banking product. In the latest quarterly report, Equitel was excluded from the telecommunications sector performance data in what resulted in a decrease in the number of mobile money subscriptions. “The Authority in the July-September 2019 statistics has revised its data on mobile money services, with the exclusion of data on Equitel Money, which is a mobile banking service as opposed to a mobile wallet service offered by telecommunications service providers,” CA said in the report. “This reconsideration has occasioned the decrease in the value of transactions as well as indicators on mobile commerce transactions.” The declaration means that Equitel will now be regulated almost exclusively by the Central Bank of Kenya (CBK) which oversees banks and their services. Before it was dropped from CA’s purview, Equitel’s subscriber base as at June 2019 was 1.88 million, representing a 3.6% market share. Its mobile money commerce transactions increased to 101 million as at the end of June 2019, up from 87 million in the same period last year, according to the data from the CA.
Source: Business Daily
Emirates Airlines to start operating in Mozambique
In recent years, several international airlines have expressed an interest in operating in Mozambique. Fly Emirates is one of them. Emirates, one of the largest airlines in the world, has been carrying out studies in the country for two years and, next July, will start operating international flights from Maputo on routes that include direct flights to Dubai, Chairman of the National Civil Aviation Institute, João de Abreu, said . Emirates Airlines will begin scheduled flights to Mozambique in June, according to the Chairperson of the Mozambican Civil Aviation Institute (IACM), Joao de Abreu. Speaking to reporters after a visit to the IACM by the new Transport Minister, Janfar Abdulai, Abreu said the go-ahead for Emirates flights to Maputo had been given after the company had completed a commercial viability study. Abreu said that Emirates plans to fly from Dubai to the Botswana capital, Gaborone, via Maputo. Abreu told the reporters that Egypt Air has also expressed an interest in flying to Mozambique. He did not say what type of plane either of these airlines would use, or how many flights a week they plan to operate.
Source: Mozambique News Agency
Agric, manufacturing, telecom will drive economy, say Rewane, others
Activities in the three major sectors of the economy are expected to drive growth in the Nigerian economy this year, experts have said. A renowned economist, Mr Bismarck Rewane, identified this year’s economic drivers as agriculture, manufacturing and telecommunications. His view is shared by Manufacturers Association of Nigeria and the Association of Small Business Owners of Nigeria. Listing some of the game-changing events that would shape growth of the Nigerian business economy in general in 2020, he noted that projects and initiatives of the government including construction projects such as the Lekki deep seaport, Lagos-Ibadan railway as well as the newly introduced Finance Act, border closure policies, the cost-reflective electricity tariff policies, and the cashless policy among others were bound to expand the economy and attract more foreign direct investment. He, however, added that notwithstanding the likelihood of a slow Gross Domestic Product growth rate at 2.2%, with the impact of government intervention policies, businesses were likely to increase spending on public relations, advertising and branding this year. He said, “The three key sectors predicted to play significant roles in the growth process for the industry are the telecommunications, retail and Fast Moving Consumer Goods business.”
Nigeria expects explosive growth in mining as it diversifies away from oil
Nigeria expects its mining sector to account for 3% of GDP over the next five years from just 0.3% now as the government seeks to diversify the economy away from oil, the Minister for Mines and Steel Development said. Olamilekan Adegbite said he expects “exponential growth” in the mining sector, with gold, lead, zinc, limestone and coal among seven strategic minerals identified for investment. He said the West Africa nation had already attracted USD600-million to develop an iron ore project from African Natural Resources and Mines, the largest single mining investment in years. “The short-term goal … is to raise the contribution of the mining sector from 0.33% to 3% within the next five years,” Adegbite said. “We’ve seen steady growth … and we’re now poised for exponential growth as investments start crystallising,” he said on the sidelines of the Mining Indaba investment conference in Cape Town. Africa’s largest economy has largely untapped deposits of minerals including gold, tin and zinc but about 80% of mining is carried out on an artisanal basis.
World Bank raises Rwanda 2019 growth estimate for second time
Economic growth in Rwanda could accelerate to more than 10% this year if construction of a planned USD1.3-billion airport starts, according to the World Bank, which increased its estimate for 2019 expansion for a second time. Growth was likely 8.5% last year, more than the 7.8% the Washington-based lender had initially anticipated, according to World Bank Senior Economist Aghassi Mkrtchyan. “The growth will be driven by an unexpected magnitude of fiscal expansion,” he told reporters in the capital, Kigali. “Growth is expected in double digits if works on Bugesera airport are implemented this year or next year, but medium term growth remains strong” and is projected at 8%. Rwanda and Qatar Airways have agreed for the Gulf airline to take on construction and operational work for the airport in exchange for a 60% stake in the facility. While monetary policy will remain accommodative, the return of inflation to the “normal range” and exchange-rate pressure have narrowed the Central Bank’s policy space, he said. Rwanda’s fiscal deficit for 2020 will remain “well above” the historical average between 8% and 8.2%, he said.
Source: Bloomberg Africa
Mining firms get licenses under tougher terms
Mining firms that were last week given new licenses will be operating under tougher terms especially related to environment protection, use of modern equipment, and miners’ safety, Richard Niyongabo, Director of Mining Cadastre and Licensing Unit at Rwanda Mines, Petroleum and Gas Board told The New Times. The cabinet approved 42 firms’ applications for mineral and quarry licenses. The 42 firms have 82 licenses with some companies having more than one license. The licenses, he said, are the first ones approved after new mining regulations were issued in July 2019. Mining license used to last 5 years in the previous law before renewal, but with the new law it can last for 15 years maximum depending on the contract, he said. The new law and regulations have set up tougher terms for firms to renew their mining licenses or enable them to move from exploration to mining licenses, he said. Under the National Strategy for Transformation (NST), the Government targets to increase mineral export revenues to USD800-million by 2020 and USD1.5-billion annually by 2024.
Source: The New Times
Power generation exceeds demand by 280 MW
In the past four years, the government has managed to add 480 MW in the national grid, a move that has enabled the country have a surplus of 280 MW. The additional megawatts are the results of the completion of various power projects including the gas-fired Kinyerezi I and Kinyerezi II plants, the Minister of Energy Dr Medard Kalemani revealed. The power in the national grid has also increased to 1602.34 MW this year, up from 1038 MW that was recorded in 2015, he added. The Minister said the government has also been rehabilitating electricity infrastructures including transmission lines, hence reduce the frequency of power-cut compared to the past. "We have constructed a high voltage transmission line of 400 KV on a 670 km line; Iringa to Shinyanga via Dodoma and Singida, and 200 KV line from Makambako - Madaba - Songea in Ruvuma region," he said. The next project will be the construction of the1384 km long of 400 KV transmission line from Mbeya-Tunduma- Sumbawanga-Mpanda through Kigoma to Nyakanazi, revealed Dr Kalemani.
Source: Daily News
Tanzania’s gas plant and Bagamoyo port top East Africa’s USD75.5-billion mega projects
Eastern Africa countries have increased investment in infrastructure projects in the past five years with Tanzania leading in terms of the value and number of projects that broke ground by June 2019, helped by the new Likong’o-Mchinga Liquefied Natural Gas plant, the most valuable project in the region, according to a new report. The Africa Construction Trends Report (2019) by Consultancy firm Deloitte released in January 2020, shows that in the past five years Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Rwanda, Seychelles, Somalia, Tanzania and Uganda have almost tripled the number of infrastructure projects to 182 valued at USD146.5-billion from 61 valued at USD57.5-billion in the previous five years. The report says Tanzania has caught up with Kenya in terms of infrastructure projects, both recording 51 projects in 2019. But it’s total share of projects by value stands at 41.2% (USD60.3-billion), making it the largest contributor towards East Africa’s total project value.
Source: East African
Court stops enforcement of digital tax stamps deadline
Court has stopped Uganda Revenue Authority (URA) from implementing the 1 February deadline that the tax agency had given manufacturers to install equipment for Digital Tax Stamps (DTS). In an injunction issued by the Commercial Division of the High Court, URA was directed not to enforce the 1 February deadline until 4 February when an application for stay of execution has been heard. “An interim order … restraining the respondent (URA), its agents … or any person deriving authority from it, enforcing of the 1 February 2020 deadline of the transitional period by which all gazetted goods comprised in water, soda, wine, beer, spirits and tobacco should bear the Digital Tax stamps under the Digital Trucking System which is being implemented by the respondent (URA),” the order issued by Deputy Registrar Agnes Nkonge, reads in part. This is the second time court has issued an order against Digital Tax Stamps with the first being in 2019 when a section of manufacturers filed an application against the implementation of the system.
Source: Daily Monitor
Related Articles in
Crossborder Trade & Investment | Corporate & Business
- EU Recovery Prospectus - Planned Facilitation of the Equity Issuance through an Abridged Securities Prospectus
- The Pros and Cons of the Small Business Reorganization Act of 2019
- Feasibility of Organizing a Startup as Limited Liability Entrepreneurship Company
- COVID-19 “Safe Harbour” Not for Sinking Ships
Latest Firm's Press
WSG Member: Please login to add your comment.