MonitorsPublished on Aug 20, 2018
Africa Monitor | Volume VII; Issue XLXV

The Continent

African air travel is booming as economies gain momentum

African skies are becoming busier as new airlines take to the air, meeting a growing need for safe, reliable travel. The emergence of new airlines, as well as a diversifying of intra-African routes, is beginning to make itself felt. Uganda Airways is the latest, having agreed to acquire four Canadian Bombardier CRJ900 aircraft and two Airbus A330-800neo last month, which will form the basis of its fleet. Uganda is also the first African customer to acquire the Airbus Neo.

The Democratic Republic of Congo has also just re-invigorated itself after being dormant for years. It, too, has two Bombardiers and two Airbuses, and began flights in June. Congo Air has two A320 aircraft it uses to service internal destinations. Its only international stop as yet is a regular flight between the capital Kinshasa and Johannesburg, South Africa. Nigeria and Tanzania also have plans to create national airlines, with the aim of capturing regional and international travelers.

African airlines are aware of the danger of unregulated competition. That is why in January this year 23 African countries signed the Single African Air Transport Market (SAATM), an initiative by the African Union, which consists of all 55 countries on the African continent. The SAATM, it is hoped, will help airlines grow and regulate competition to avoid ruinous air trade battles between countries.

Source: The National

India’s investments in Nigeria hits $10bn

Indian High Commissioner to Nigeria B.N Reddy has said the investments of Indian companies in Nigerian economy stands at $10 billion. The envoy, who disclosed this on August 15 in Abuja at the flag hoisting ceremony held to mark the 71st Anniversary of India’s Independence, said over 135 Indian companies operated in Nigeria. Nigeria, he said, remained India’s strategic partner both in Africa and globally, noting that the Asian country was working to transform its economic cooperation with Nigeria from trading to investment.

“We want to bring about a transformation in our engagement. Nigeria is the fourth largest supplier of crude oil to India and the second largest in gas supply last year. This alone cannot define our relationship. So we are looking at many Indian companies coming to Nigeria and not to look at only the buyers and sellers’ arrangement, but to do more in investment. “I am happy to tell you that as at today, Indian companies have invested about $10bn and there are about 135 Indian companies spread all over Nigeria,” the envoy said.

Indian investments, according to him, were in the field of pharmaceuticals, electrical manufacturing and assembly lines for automobiles; particularly agricultural machinery. He said the volume of Nigeria-India bilateral trade reached $12bn in the last financial year-April 2017 to March 2018, saying it was an increase of 26 per cent from the previous year. Reddy reiterated that his government would continue encouraging more Indian companies to invest in Nigeria. He said about 500 Nigerians benefitted from India-sponsored capacity building training in 2017. India has been offering concessional loans to many African countries amounting to $11bn, and there is a renewed commitment to offer another $10bn, he added.

Source: Daily Trust

Africa free trade talks pass the halfway mark on new rules

Members of the Tripartite Free Trade Area (TFTA) in Africa have completed more than half the work needed to finalise the rules to govern how products imported from nonmember countries are treated within the area. Called the rules of origin, these arrangements will be critical to prevent nonmember nations from flooding the free trade area via the member with the most liberal trade regime. Rules of origin are necessary as the TFTA will not have a common external tariff to regulate the treatment of goods from outside countries.

Department of trade & industry chief director Wamkele Mene told the National Council of Provinces select committee on trade and international relations on 8th August that negotiations over the rules were 60% complete and were expected to be finalised in mid-2019. Parliament is in the process of ratifying the agreement for the TFTA, which will bring together 26 African countries into a single market governed by preferential free-trade arrangements. The agreement was ratified by the select committee and will be considered by the trade and industry portfolio committee in two weeks. So far, 22 countries have signed, with SA doing so in July 2017. It will enter into force once 14 member states have ratified it. So far, only Egypt and Uganda have done so.

The agreement is built on the three existing trading blocs: the Common Market for Eastern and Southern Africa, the Southern African Development Community and the East African Community. Mene said the biggest challenge was to agree on policy, with some countries arguing for a general rule that would allow all products from outside countries to be eligible for TFTA preferences. SA opposed this approach on the grounds that it would limit the region’s ability to industrialise as there would be no requirement for value addition to the imported products.

SA’s position is that products from outside countries should only benefit from preferential tariffs when exported to other countries in the region if there has been value addition within the country that first imported it. The ultimate agreement was that there would be common product-specific rules of origin for each of the more than 7,000 products in the tariff book. Mene said negotiations on tariffs were under way. Once the tariff negotiations are finalised, the deal will offer exporters preferential or zero tariffs into the markets of member countries. The countries in the TFTA have a combined population of 626 million people and a total GDP of $1.2 trillion. SA’s trade with TFTA countries was 16% of its world trade, $27.6bn in 2017, Mene said. The agreement would facilitate the harmonisation of trade regimes; free movement of business persons; joint implementation of regional infrastructure projects; regional value chains; and regional co-operation.

Source: Business Day

China railways takes up rail project connecting Mozambique to Zimbabwe

China Railways has proposed the construction of a rail link connecting Mozambique to Zimbabwe via Zambia, a project costing an estimated $2.5bn that will give companies in the latter two countries easy access to Mozambique’s ports. The Trans-Zambezi line project led a delegation from China Railways, headed by Vice President Shao Gang, to contact with the local government in late July along with local partner Global Power Bridge International, according to a report in the Harare press. The China Railways project also involves the construction of a 1,700-kilometre line directly connecting Binga, on Zimbabwean border with Zambia, to the port of Nacala. China Railways stated its interest in the project in March this year in a letter to the Zimbabwean government signed by Gang Shao, according to the Financial Gazette. The project also involves China’s New Century Energy International, which has a $500m large-scale soybean production project in Zimbabwe.

Source: Macauhub

Mauritius-China FTA: Third round of negotiations underway

The three-day third round of negotiations on the Mauritius-China Free Trade Agreement (FTA) opened on August 13, 2018 at the Hilton Hotel in Flic en Flac. The FTA aims at further expanding bilateral trade and investment exchanges between Mauritius and the People’s Republic of China. The Mauritian delegation is led by Dr Sunil Boodhoo, Director, International Trade Division, Ministry of Foreign Affairs, Regional Integration and International Trade. The twelve-member Chinese delegation is headed by the Deputy Director General, Ministry of Commerce, Mr Hu Yingzhi. Mr Lutchmeenaraidoo highlighted that it is necessary to find a solution which is related to the finalisation of two agreements namely: the first FTA which China is currently negotiating with an African country that is Mauritius; and, the Road and Belt initiative. The latter initiative implies that China wants to play more and more a positive and substantial role when it comes to the development of the whole planet, he stated. The Minister also spoke how Mauritius although small in land size can act as a transmission belt and connecting link between the philosophy of China and the vision of Africa.

Source: TRALAC

North Africa

Egypt prepares 4mw solar power project for Uganda’s renewable energy

The business environment in Uganda is proving to be more conducive for investors with more investments lining up for a share of the economy. Egypt is currently at the forefront of establishing stronger bilateral relations with its African partner. The transcontinental party, in partnership with the Government of Uganda, will implement a 4MW solar power project that is geared at improving the country’s renewable energy performance. Renewable energy has been touted as a reliable source of power for African nations, and a vehicle to drive economic growth. European countries have imbibed the idea as well to enjoy the benefits accrued to it.

Under the grant agreed upon by the two parties, Egypt has provided the necessary equipment and engineering services while Uganda has provided the 7.5-hectare land upon which the project will be implemented. The latter will also cater to the logistics of the project in terms of taxes and shipping cost from Mombasa, Kenya. The project will be Uganda’s third largest power station. 95% of Uganda’s population use traditional solid fuels for domestic activities like cooking and heating. Despite the country being rich in renewable energy sources, a good proportion is still unexploited. This has limited the country’s energy production and expansion of the industrialization sector. Financial risks have been one of the barriers to major exploitation of such regions to support diverse sectors.

Source: The Exchange

Morocco’s FDI declines 25.6% in Jan-July period this year

The flows of foreign direct investment (FDI) in Morocco declined by 25.6 percent in first seven months of 2018, the foreign exchange regulator said on August 16. Morocco attracted only 1.26 billion U.S. dollars between January and July, down from 1.69 billion dollars a year earlier.

During the same period, Morocco's tourism revenues hiked by 9.3 pct to 3.82 dollars year-on-year, while remittances from some 5 million Moroccan expatriates rose 5.3 percent to 3.76 billion. Tourism revenues and expatriates' remittances are the main sources of Morocco's foreign currency reserves.

Source: Xinhua

Western Sahara: Sahrawi Republic and Botswana establish diplomatic relations

The Sahrawi Republic and Republic of Botswana on 6 August in Addis Ababa signed a joint statement on the establishment of diplomatic relations at ambassadorial level. The statement was signed by Saharawi ambassador to Ethiopia and the African Union, Lamine Baali, and Bostswana counterpart, Ms. Mmamosadinyana Molefe.

This decisions came as a culmination of the meeting between the Saharawi and Botswana heads of state in the capital of Botswana, Gaborone. In a statement to the media, the ambassadors of the two countries expressed their full satisfaction at this level of relations between the two countries.

Source: SPS 

Southern Africa

Angola: Inflation reaches 1.2 % in July

Inflation, measured through the National Consumption Price Index (IPCN), recorded last July an increase of 1.2 per cent. According to a note from the National Statistics Institute (INE) the category Food and Non Alcoholic Beverages contributed the most to that inflation (0.5%), followed by Clothes and Footwear (0.17%), Diverse Goods and Services (0.15%), Furniture, Domestic Appliances and Servicing Equipment with 0.10%. The provinces that recorded the highest inflation rate were Malanje (3.11%), Bengo (1.89%), Cunene (1.75% %) and Uige (1.58%). The provinces that recorded the lowest inflation rate were Lunda Sul (0.76%), Cuando Cubango (0.81%), Namibe and Cabinda with 0.88%.

Source: ANGOP

SADC moves towards multi-currency regional payment settlement system

Southern Africa is making progress towards creation of a multi-currency regional payment system, with the United States dollar expected to become the second currency of settlement after the South African rand. The Southern African Development Community (SADC) Executive Secretary, Dr Stergomena Lawrence Tax, said the SADC Integrated Regional Electronic Settlement System (SIRESS) is expected to move from being a single currency settlement system that uses only the South African Rand as the currency of settlement into a multi-currency settlement system.

“Settlement in US Dollars on the current platform is expected to go live in October 2018, while the whole multi-currency platform is expected to be fully operational by December 2019,” Dr Tax said during the official opening of SADC Council of Ministers Meeting in Windhoek, Namibia.

The adoption of a multi-currency settlement system is an important milestone that builds on other progressive developments in SADC over the past few years, SIRESS is a regional electronic payment system developed by SADC member states to settle cross-border transactions faster without having to rely on intermediary banks from outside the region. The SIRESS was established in July 2013 and piloted in four countries – Lesotho, Namibia, South Africa and Swaziland. The system is now operational in 14 SADC member states except Madagascar and the regional organisation’s newest member, Union of Comoros.

Source: South African News Features

Mozambique to impose high media licensing fees

Mozambique is the latest African state to put a high price tag on the right to report the news. Later this month, a new set of laws are expected to go into effect that will create exorbitant fees for both news outlets and individual reporters. The move makes Mozambique’s already limited media space even smaller. Print, radio, and television news are dominated by state outlets. Radio is the main source of information for the majority of Mozambicans, and outside the cities, it is often the only source. Under the proposed regulations, new national radio stations will need to pay about $35,000 to secure a broadcast license. Fees for a community station will cost $830.

Establishing an independent local publication will now cost $3,300, and existing media companies will need to pay between $34,500 and $69,000 to adjust their licenses to the new rules. Establishing a new television station will cost nearly $52,000. The new regulations will require foreign correspondents living in Mozambique to pay more than $8,600 per year to report from the country, according to an August 15 statement from Amnesty International.

Source: Quartz

East Africa

Kenya: Uhuru Kenyatta picks 5 envoys in China, India trade quest

Kenya has posted a team to safeguard its economic interests in China and India as it moves to boost exports to the lucrative markets. Deputy President William Ruto, on 1st August, said in Nairobi that the country had appointed five ambassadors to the two Asian economies with the aim of growing its exports. Speaking at Trade Week 2018, the Deputy President said Kenya’s trade balance was highly skewed in favour of the two Asian giants. He noted that while China and India contribute about 40%of Kenya’s imports, combined exports to the two economies made up a measly 4% of the country’s total exports. “That will have to change; we will have to turn it around. And that is why we are enhancing our diplomatic footprint to support our export strategy,” said Mr Ruto on a day that the Government also unveiled three export strategies. These are the integrated National Export Development Promotion Strategy, the Second National African Growth Opportunity Act Strategy and the Action Plan for 2018-2022 of the Made in Kenya Grand Vision.

The export strategy that was unveiled identifies eight sectors with the potential to triple Kenya’s exports from 8% to 25% of GDP by 2022. Some of these sectors include manufacturing, agriculture, livestock, fisheries, trade and services, and emerging sector such as oil and gas. With the Second AGOA strategy, the country aims to increase the volume of exports to the US and widen their reach. President Kenyatta also announced policy changes to enable the achievement of these goals. “We have agreed to establish the export promotion sub-committee of Cabinet to spearhead the execution of this strategy to diversify and grow our exports.”

Source: The Standard

Tanzania slaps 25% tax on Ugandan sugar

Tanzania has slapped a 25% import duty on Ugandan sugar exports contrary to the EAC Common Market Protocol, which recommends zero tax on goods manufactured within the region. In a media briefing at the weekend, Mr Vincent Seruma, the Uganda Revenue Authority assistant commissioner for public and corporate affairs, said sugar that had been exported by Kakira Sugar Works in May had been denied entry and forced to return. Kakira Sugar Works, according to URA, had exported 12,000 bags (600 tonnes) of locally manufactured sugar but was denied entry. “Under the EAC Common Market Protocol, this is supposed to enjoy preferential treatment at 0% import duty within in EAC partner states because it is wholly produced in Uganda. However… Tanzania decided to impose duty of 25 per cent, a violation of the EAC rules of origin and the Common Market Protocol.”

Source: Daily Monitor

East Africa’s gas pipeline plans steadily progress

TANZANIA’S plans to export gas to Uganda are advancing towards fruition as the government moves ahead with construction plans of a natural gas transmission pipeline from Dar es Salaam to Uganda via Tanga and Kagera regions. Tanzania Petroleum Development Corporation (TPDC) Managing Director Kapuulya Musomba told the ‘Daily News’ East African Edition in an interview that they were now looking for a consultant to conduct a feasibility study for construction of the pipeline.

Tanzania boasts estimated recoverable natural gas reserves of over 57 trillion cubic feet (tcf), mostly in offshore fields in the south of the country. The gas pipeline is expected to provide Uganda with natural gas for their steel industries from iron ore deposits in the south western region are among the highest quality iron ores in the world. The planned gas transmission pipeline will deepen commercial ties between the two countries which are jointly constructing a crude oil export pipeline to help transport land-locked Uganda’s crude reserves from fields in the country’s west to international markets. The 1,445 km pipeline from Hoima oil fields in Uganda to the Tanga port is expected to be the longest electrically heated crude oil pipeline in the world will cost the two countries US$ 3.55 billion.

Source: Daily News

West Africa

Ghana, Cote d’Ivoire agree on delimiting maritime boundary

Ghana and Cote d’Ivoire have agreed on plotting all seven coordinates to determine the maritime boundary as per the International Tribunal for the Law of the Searuling in October, 2017. In its initial ruling in 2015, the Chamber placed a halt on new projects, compelling Tullow Oil to put on hold operations including new drilling in the disputed area. However, on 23 September, 2017 the Chamber ruled in favour of Ghana in a unanimous decision, stating that there has not been any violation, on the part of Ghana, of Côte d’Ivoire’s maritime boundary. Senior Minister, Yaw Osafo-Marfo, reading the agreement in Accra on August 10 said “in pursuance of the implementation of the decision of the Special Chamber of the ITLOS, concerning the delimitation of the maritime boundary between Ghana and Côte d’Ivoire’, the second meeting of Ghana-Côte d’Ivoire’ joint committee was held 9-10 August in Accra at the International Conference Centre.

Source: Ghana Web

Nigeria and Benin: Customs commissions $4.5bn ECOWAS border post at Seme

The Seme Border Command of the Nigerian Customs Service, NCS, has said that the newly-commissioned Joint Border Post by the Economic Community of West African States (ECOWAS) at the Seme border will enhance border security and facilitate seamless legitimate trade, in tandem with the executive order on the ease of doing business. The border facility is to be jointly operated by Nigeria and Benin Republic, with increased hopes of smoother trade across West Africa and with third party countries. The Joint Border Post will serve as a platform that will simplify Customs procedures while increasing cooperation, collaboration, coordination and harmonious working relationships at the border post.

Reports show that Nigeria will be the better for the joint border initiative. The total trade of the West African region is about $300 billion. Exports are projected at approximately $137.3 billion, while imports total about $80.4 billion. The main active countries in trade is Nigeria, which alone accounts for approximately 76 per cent of total trade, followed by Ghana (9.2 per cent) and Côte d’Ivoire (8.64 per cent). Source: Vanguard

Ghana unlikely to return to IMF after current programme

The Ghanaian Government is working hard to build a strong and resilient economy to avoid a return to the International Monetary Fund (IMF) for financial bailout Ghana ends the current programme.

The current programme with the Bretton Woods institution is expected to end by end of 2018.

President Nana Addo Dankwa Akufo-Addo who made the announcement, said his government was doing everything possible to successfully wean the country off the IMF and run the economy independently of the Bretton Woods institutions. He was speaking at the St. Peter’s Cathedral Basilica in Kumasi at a thanksgiving mass held in his honour as part of his five-day tour of the Ashanti Region.

The President is in the region to cut sod for the commencement of various projects, inspect on-going ones and engage the people to know their felt needs to aid the government in its development agenda.

He said he owed Ghanaians a duty to learn at first hand their problems and had resolved to visit all the ten regions each year. He noted that government was pursuing policies that would guarantee inclusive and coherent society for a peaceful and stable country and called on everybody including the church to play their roles to build a prosperous and peaceful nation.

Source: Ghana Web

Central Africa

Fitch ratings: IMF supports Gabon, Cameroon as adjustment remains uneven

The successful completion of the second IMF programme reviews of Gabon (B/Negative) and Cameroon (B/Stable) will ease liquidity constraints, but fiscal adjustment remains uneven and programme implementation risks are high, Fitch Ratings says. The IMF completed its second review for Cameroon on 6 July and for Gabon on 1 August and approved disbursements of USD77.8 million and USD100.2 million respectively. This will ease liquidity constraints and help meet 2018 financing needs.

Programme implementation has, however, been uneven. Weak growth, weak public finance management and recurrent fiscal slippages, stemming partly from strikes in the public sector, have hampered fiscal consolidation in Gabon. External arrears to bilateral and multilateral creditors have been cleared, but arrears to external commercial creditors are still outstanding, and domestic arrears weigh on the economy and the banking sector. Cameroon missed its consolidation target in 2017, due to higher-than-expected spending and despite better performance of non-oil revenues.

The authorities in both countries have demonstrated their commitment to keeping the programmes on track. Gabon’s government has taken steps to reduce the wage bill and improve fiscal transparency and cash management. It has also adopted a supplementary budget that incorporates an automatic adjustment mechanism to contain public expenditure if revenues underperform. Cameroon has also adopted corrective measures and revised its fiscal targets and budget for 2018.

Fiscal receipts will also be boosted by recovering economic growth, forecast at 2.0% in 2018 for Gabon and 3.9% for Cameroon, and by higher oil prices. As a result of higher oil price forecasts in our June Global Economic Outlook (USD70/barrel for 2018 and USD65/barrel in 2019), we expect Gabon’s fiscal deficit (on a cash basis) to narrow by 2pp in 2018 to 1.4% of GDP, while we forecast Cameroon’s fiscal deficit to narrow by 0.9pp to 3.0% of GDP. But implementation risks are high and compliance with IMF performance criteria remains challenging.

Source: Hellenic Shipping News 

Burundi sets 2020 target to enforce total ban on plastics

The Burundian government has moved to join fellow East African counterparts on the list of countries that have outlawed the use of plastics. The move will begin in early 2020. An August 13, 2018 decree signed by President Pierre Nkurunziza said the country was prohibiting the “manufacture, import, storage, sale and use of all plastic bags and other plastic packaging.” Enforcement of the ban will however begin in 18 months’ time – i.e. in February 2020. This according to the authorities is to allow enough time for “the disposal of current stocks and orders already placed.”

As is usually the case, the decree noted that there could be some exemptions “for biodegradable plastic bags, bags and plastic materials used in medical services, and in industrial and pharmaceutical packaging.” Currently, only a handful of African countries are enforcing a ban on plastics – among others Eritrea, Rwanda, Kenya, and Morocco. Records indicate that over 40 countries worldwide have banned plastic bags.

According to a 2018 UN report, policies to combat plastic waste have produced mixed results. Successive governments in Ghana have pledged to deal with the plastic menace but have failed to implement an effective ban – same is the case with most countries across West Africa. In Congo Republic, they are largely banned with most materials being sold with paper envelopes, foil and old newspapers. The ban is however very loosely enforced. Over in Cameroon, households are paid for every kilo of plastic waste they collect, but still plastic bags are being smuggled in.

Source: AfricaNews

This monitor is prepared by Abhishek Mishra, Research Assistant, Observer Research Foundation, New Delhi

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