IMF announces release of a new database on Special Purpose Entities (SPEs)
The International Monetary Fund (IMF) released a new international database on the cross-border flows and positions of Special Purpose Entities (SPEs), entities set up in countries of convenience and low-tax jurisdictions. The database, for the first time, is based on a common methodology, including an internationally agreed definition of SPEs, endorsed by the IMF Committee on Balance of Payments Statistics. This first annual release includes: (1) information that allows the separate identification of SPEs within the balance of payments and international investment position statistics of participating countries; (2) data from 25 economies, including several offshore centres, with more economies to be added soon; and (3) annual data for 2020 for all participating economies, as well as historical data and/or quarterly data for 2021 for some economies. Going forward, the database will be disseminated on an annual basis, with increased country coverage.
'Ratify agreements to promote trade, investment in Africa'
The African Continental Free Trade Area (AfCFTA) Country Business Index (ACBI) report has called on African countries to ratify and sign important agreements to promote trade and investment in the continent. ACBI recommendations from the study conducted in seven African countries show that they performed better in awareness and use of free trade areas followed by a commercial environment. This was revealed in Arusha by the ACBI report that surveyed businesses in Angola, Côte d'Ivoire, Gabon, Kenya, Namibia, Nigeria and South Africa. Speaking at the Webinar on Primer for the ACBI report that was organised by the United Nations Economic Commission for Africa (ECA), the executive director, East African Business Council (EABC) Mr John Kalisa said, there is a need for flexible, clear and predictable rules of origin for business to benefit from the AfCFTA. On her part, Ms Mama Keita, the director of the Sub-Regional Office for East Africa (SRO-EA), ECA said, the ACBI notes Africa can boost intra-African trade by 26% in 2045 only by ensuring an active engagement with the private sector in the implementation of the AfCFTA.
Source: Daily News
AfDB signs agreement to fund regional financial market infrastructure of WAMU
The African Development Bank (AfDB) has signed a grant agreement for an amount of USD400 000 with the Dépositaire Central/Banque de Règlement of the West African Monetary Union (WAMU) to modernise the regional financial market infrastructure. The grant will fund the creation of a digital platform to automate securities issuance for the regional financial market and reduce the holding period preceding subscription allocations and registration in the books of the Dépositaire Central/Banque de Règlement, the host of the digital platform. It is expected to facilitate access to securities issuance information and data for market stakeholders and allow them to have reliable real-time information on securities issuance. The grant will be sourced from the Capital Markets Development Trust Fund, a multi-donor fund administered by the AfDB and supported by the Ministry of Finance of Luxembourg and the Ministry of Foreign Trade and Cooperation of the Netherlands.
IMF Executive Board concludes regional consultation with WAEMU
The Executive Board of the International Monetary Fund (IMF) concluded the regional consultation with the West African Economic and Monetary Union (WAEMU) on 11 February 2022. The WAEMU has so far demonstrated strong resilience to the COVID-19 crisis. Nonetheless, the region has been hard hit by the Omicron variant and security risks continue to increase in some countries. Despite these headwinds, the economic rebound that started in the second half of 2020 firmed up in 2021, while fiscal and monetary policies remained supportive. Growth is expected to further accelerate to about 6% in 2022, primarily driven by a rebound in net exports and inflation is projected to return to the Central Bank of West African States’ (BCEAO) target band by the end of the year. A gradual fiscal consolidation is expected to start this year and bring the aggregate fiscal deficit to 3% of GDP by 2024. There are however significant downside risks to the outlook, particularly given slow and uneven progress with vaccination, the possibility of further deterioration of security risks and political uncertainty, and the likely tightening of global financial conditions.
Central African Republic
IMF staff completes mission for a staff-monitored programme to the Central African Republic
An International Monetary Fund (IMF) staff team led by Mr Oral Williams visited Bangui from 22 February 22 to 4 March 2022, to discuss the first review of the Central African Republic’s staff-monitored programme (SMP), which was approved in December 2021. At the end of the mission, Mr Williams issued the following statement, in part: “The economy is showing signs of recovery with the reopening of the main trade corridor with Cameroon and the improvement in security. This has enabled an easing of supply bottlenecks and associated inflationary pressures. The main risks to the outlook include a sustained uptick in international food and oil prices, limited progress on the various peace commitments, and uncertainties surrounding the disbursement of budget support. IMF staff and the Central African Republic authorities discussed the progress that has been made in the implementation of the SMP. To start with, the execution of the 2021 budget appears to be broadly in line with the SMP as key end-December budget targets were met. Progress was also made on the reform front. In particular, key structural benchmarks, notably: (i) the submission to parliament of the 2022 draft budget law; (ii) the issuance of ministerial orders governing compliance with tax obligations and electronic declarations for large taxpayers; and (iii) the submission to parliament of a new anti-corruption law.”
Côte d'Ivoire tests new cocoa traceability system to fight deforestation
Côte d'Ivoire will launch a pilot project in April to trace cocoa beans from farm to market, aiming to tackle issues such as deforestation and child labour, the head of the West African nation's cocoa regulator has said. The new system will allow manufacturers and consumers to know the exact origin and production conditions of cocoa beans, the main ingredient in chocolate. It will also introduce a new payment system aimed at ensuring farmers get a fair wage. The move comes in response to plans by the European Union to ban imports of commodities and products linked to deforestation and human rights abuses. "The objectives of our traceability system is to control the origins and the entire circuit of beans, fight against deforestation and pay the guaranteed price to farmers," said Yves Brahima Kone, head of the Cocoa and Coffee Council (CCC). Currently, exporters have their own traceability systems that are not compatible with one another and do not make it possible to accurately determine the route of Ivorian beans from production to market.
Netherlands working to attract horticulture, dairy investors to Ethiopia
The Netherlands is working to attract investors to Ethiopia in areas of horticulture and dairy and enhance ties between the countries, Netherland’s Deputy Ambassador to Ethiopia, Thijs Woundstra, said. In an exclusive interview with ENA, the ambassador noted that his country is one of the largest investors in Ethiopia. “We are one of the largest investors in Ethiopia. We all know the flower farms in Batu and other parts of Oromia. We are also investing in the diary sector, which is Holland diary; and also Heineken, in addition to other joint ventures.” About 100 Dutch companies are currently investing in Ethiopia in the fields of horticulture products and diary, among others, it was learned. Dutch companies have so far invested over USD1-billion in Ethiopia and the embassy cooperates by helping other investors into Ethiopia to produce better quality milk, yogurt as well as horticulture products in Ethiopia, Woundstra stated.
Ghana to engage global investors on its National Day at Dubai Expo
Ghana is expected to showcase its immense investment opportunities to the international business community, on its National Day, slated for 8 March 2022, at the ongoing Dubai Expo 2020. The country’s contingent will on the day, highlight government's commitment to promote creativity, and display the huge prospects in critical sectors such as manufacturing, health, tourism, agriculture and energy. The big occasion will be graced by the President of Ghana, Nana Akufo-Addo, alongside key government stakeholders and major private industry players, availing a platform for high-profile attendees to network and explore areas for collaboration. On 9 March, there will be a Presidential Breakfast Roundtable at Ritz Carlton Dubai Financial Centre, followed by a Ghana Business Forum at the Jafza One Convention Center, for stakeholders to explore viable investment opportunities. From 10 March, Ghana’s expo celebrations will continue with presidential engagements, ministerial meetings, a ‘Business Connect’ event, and site visits.
Source: Pulse Ghana
Kenya to host one of Africa’s two giant data hubs
Kenya will host one of the two mega data centres in Africa that will increase internet speed and make it harder for hackers to bring down websites. The new data centres, which will have multiple servers with a high bandwidth to deal with spikes in traffic, will offer the continent faster access and better protection from cyberattacks. The Internet Corporation for Assigned Names and Numbers (ICANN), the non-profit corporation that coordinates the domain name systems, announced that it will set up two Root Server (IMRS) clusters, one of which will be in Kenya. "The clusters ensure that internet queries from Africa can be answered within the region, and not be dependent on networks and servers in other parts of the world, thus reducing latency and improving internet user experience in the entire region,” the organisation entrusted with stewarding the internet’s unique identifier systems in the world said. Information and Communications Technology Cabinet Secretary Joseph Mucheru said the new infrastructure is in line with the African Digital Transformation Strategy (2020-2030) and more specifically, with Kenya’s Digital Economy Blueprint, which identifies infrastructure as one of the five key pillars necessary for the digital transformation of the economy.
Source: Business Daily
Employers caution PAYE bracket revision
The Employers’ Consultative Association of Malawi (ECAM) says it is concerned with Treasury’s move to revise Pay As You Earn (PAYE) to 30% for income between MWK330 000 and MWK3-million per month. In its 2022/23 National Budget response statement, the association said the tax imposed in this range will not increase disposable income as many Malawians earn below MWK1-million. Reads the response in part: “Therefore, the revision will not cushion this category from effects of the increased cost of living in the country and enable many working Malawians to attain a decent standard of living. “Thus, Malawi will not reap the long-term benefits of increased expenditure to spur productivity, and job creation that have the effect of increasing the tax base.” ECAM has since urged Treasury to consider revising the PAYE tax bracket so that earnings between MWK100 000 and MWK1-million attract the same PAYE tax rate.
Source: The Nation
European Union, Malawi sign MWK352-billion grant
Malawi government and European Union (EU) officials recently signed a MWK352-billion grant for a multi-annual indicative programme (MIP) running from 2021 to 2027. EU Ambassador to Malawi Rune Skinnebach said the MWK352-billion grant was for the first three years and would focus on three priority areas which include green and resilient economic transformation, democratic and economic governance, and human development and social inclusion. The financial allocation for 2025 to 2027 will be determined following a review in 2024. Skinnebach said, under green and resilient economic transformation, the EU would want to see Malawi thrive in the agri-food business by enhancing not only the profitability of the sector, but also its environmental sustainability. Under democratic and economic governance, the EU is interested in encouraging initiatives that reinforce Malawi’s governance institutions that can attract investors to grow. “We can push for European investments to flow to Malawi but only when investors see advantages of doing so [can Malawi benefit],” Skinnebach said.
Source: The Times
Central bank to pronounce itself on digital currency by December
People will know Rwanda’s stand on the use of digital currency by the end of December 2022, according to central bank deputy governor, Soraya Hakuziyaremye. Digital currency represents any currency or money that is managed or exchanged on digital computer systems, especially over the internet, and never converted into physical form at any point. In this case, the Central Bank Digital Currency (CBDC) is the one that would be issued and overseen by a country’s central bank. In June 2021, the central bank announced the commencement of a study that would look at the economic, financial and technology aspects related to CBDC as well as the operationalisation model, taking into account the local context. Hakuziyaremye said that the research will be concluded by end of December, and the country will have a clear policy on whether it will issue the CBDC or not.
Source: The New Times
Farmers call for review of crop insurance scheme
Farmers have argued that the current crop insurance policy which only covers investments such as for seeds and fertilisers, is not enough, calling for its review so that it also extends to expected farm output – based on the production trend of a given crop per hectare. Rwanda launched the National Agriculture Insurance Scheme in April 2019, a move that was considered by stakeholders as a milestone for the country’s agriculture sector as it aims to cushion farmers against losses stemming from disasters such as floods or drought. The scheme, which is subsidised at 40% by the government, is also intended to enable farmers to easily access funding from financial institutions and ensure the flow of credit to the agricultural sector. Unlike livestock insurance which covers the entire value of the cow and pays a farmer all the money the cow is worth in case of death from disease or unpredictable natural disasters, crop insurance covers the investment alone. In February 2020, the Senatorial Standing Committee on Economic Development and Finance expressed concern that insuring inputs alone was inadequate as that could not be enough to repay both the farmers’ bank loan and the accrued interest.
Source: The New Times
Government launches search for investors in multibillion Gabiro agribusiness hub
The government has started to look for investors to lease land in the Gabiro agribusiness hub project – located in Nyagatare and Gatsibo district. The hub was developed to cater for the country’s food security needs, and offset the trade balance where imports still outstrip exports. If well utilised, officials believe it would help boost farmers’ incomes. It was initiated through a partnership between the government of Rwanda and Netafim – an Israel-based firm considered a global leader in irrigation. The project also aims to develop an advanced agricultural eco-system and modern value chain with advanced water infrastructure, innovative irrigation systems, high-value agro-processing operations, and other agrotech activities across the value chain. According to the call for proposals that was issued by the Ministry of Agriculture, at least 15 600 hectares (ha) will be developed under the two-phased project. Phase one which is already under development (in partnership with Netafim) is equal to 5 600 ha – at an estimated cost of about USD73.9-million – of which 4 000 ha shall be allocated to commercial farming and will be leased to members of the private sector for a minimum tenure of 49 years (renewable).
Source: The New Times
Oil, gas sector attracts UAE investors
Tanzania's participation in the Dubai Expo 2020 has paid off as the country has attracted a number of international companies that have shown interest in investing in the oil and gas sector. Some of the areas that have attracted foreign companies include supply of natural gas, construction of compressed natural gas (CNG) stations, construction of pipelines, as well as participation in oil and gas exploration. The Tanzania Petroleum Development Corporation (TPDC) managing director, Dr James Mataragio, said told journalists that the companies have also shown an interest in investing in fertilizer plants. "Some of them have shown interest to venture in gas processing and exporting it," he noted, saying this was the results of an energy symposium that was held in Dubai in the United Arab Emirates (UAE). During the expo, the TPDC signed an agreement with the Abu Dhabi National Oil Company (ADNOC) entailing a petroleum bulk procurement process with the aim of reducing the prices of fuel and bringing relief to problems relating to securing fuel. According to Dr Mataragio, through the signed agreement, ADNOC will participate in upstream, midstream and downstream oil exploration, and capacity building, among others.
Source: Daily News
Tanzania risks debt distress: World Bank
Tanzania’s risk of debt distress has worsened from low to moderate, the World Bank has said. According to a survey conducted in September 2021, the risk has been exacerbated by poor performance of the tourism sector due to COVID-19 concerns. While the local economy was not affected by the shutdowns and lockdowns that were imposed by neighbouring East African states, Dar es Salaam lost a big chunk of international business and investments. According to the World Bank’s 17th Tanzania Economic Update, released on 1 March, the tough times saw the country borrowing non-concessional loans from lenders to keep the economy afloat. Tourism and travel account for more than a quarter of Tanzania’s exports and are major foreign exchange earners. To help address the rising debt burden, the global lender has tipped Dar, now under President Samia Suluhu Hassan, on key focus areas. They include enhancement of public sector debt statistics, focusing on projects that promise clear socio-economic payoffs, and balancing emergency spending with broader development agenda.
Source: The EastAfrican
Form joint ventures to acquire requisite standards, says PAU
Ugandan firms must build capacity through forming joint ventures where necessary to deliver requisite standards in the oil and gas sector, according to the Petroleum Authority of Uganda (PAU). Speaking in a telephone interview, Ms Gloria Sebikali, the PAU public relations officer, said given that the next three years ahead of first oil in 2025 are going to have a lot of activities, Ugandans must not be left behind, noting that where necessary, they should form joint ventures to gain experience and build capacity from existing companies that are specialised oil and gas fields. “Joint ventures are one of the ways in which Ugandan companies can acquire capacity in some technical areas and also benefit from technology transfer from companies that have experience in specialised oil and gas fields,” she said, noting that a number of small and medium enterprises have not built enough capacity, especially in areas that are deemed specialised. However, Ms Sebikali said joint ventures can only be allowed before a contract is awarded.