Year: 2018

Africa: High Level Event on Empowering Women in Agriculture in Addis Ababa

A High Level Breakfast Meeting was organized on January 27, 2018, by Femmes Africa Solidarité (FAS) on the theme Empowering Women in Agriculture (EWA) at the margins of the 30th African Union Summit of Heads of State and Government in Addis Ababa. Chaired by Olusegun Obasanjo, former president of Nigeria, the event was attended by representatives of heads of states, rural women in agri-business, partners and other stakeholders.

In his opening statements, Dr Obasanjo called for the review of the activities and processes of EWA in the six years since it was launched, as well as the challenges facing rural women in agriculture These include the lack of access to resources like land, credit, limited market space and low productivity. Obasanjo called for commitment and support from various partners and stakeholders. He drew the loudest applause of the meeting when he said: “Why are we not talking about discrimination in favor of women … discrimination in favor of women is positive discrimination.”

He also said that EWA must be seen as a way of achieving the UN SDG 2.

The EWA initiative currently involves 9 pilot countries, Malawi, Ethiopia, Rwanda, Senegal, Tanzania, Burkina Faso, Djibouti, Liberia and Nigeria. Dr Obasanjo said he would like to see the number of participating countries increased to 15 in the next 2 years.

Madam Bineta Diop, who moderated the event, thanked UNWomen for their contribution and push. Ms. Giovanne Biha, who represented Dr. Vera Songwe, the executive secretary of ECA, committed ECA’s continuous support to EWA, especially in the area of data collection.

In his address to the group, Dr Akinwunmi Ayodeji Adesina, the president of African Development Bank (AfDB) confirmed the formation of the Affirmative Finance Action for women in Africa (AFWA), which will be a systematic shift in how women, especially women in agriculture, are supported by local commercial banks. He said AfDB would make a $3billion line of credit available towards the AFWA initiative.

Out of this, $300 million would be available towards the EWA initiative through local banks. Commercial and local banks will be rated based on the percentage and volume of money made available to women in agriculture.

Dr Adesina informed the attendees of a $250 Million AfDB program in collaboration with the Bill & Melinda Gates Foundation and the Rockefeller Foundation, the World Bank and AGRA, called Technologies for African Agriculture Transformation (TAAT), in support of the Feed Africa Strategy. He believes this program will empower rural women as technology is scaled up in all the EWA states. While thanking ECA and African Capacity Building Foundation (ACBF) for their continuous support, he promised solid support for EWA programs.

Officials of institutions who pledged support to the EWA initiative at the event include Professor Emmanuel Nnadozie, the executive secretary of ACBF (represented), The Mo Ibrahim Foundation, the African Union Commissioner for Rural Economy and Agriculture, Madam Leonel Correa Josefa Sacko, GIMAC, UN Women, the CEO of NEPAD Agency, Dr. Ibrahim Mayaki, OCP, IFAD, and ambassadors from Rwanda and Burkina Faso.

The Director-General of FAO, Dr Jose Graziano da Silva said FAO is deeply involved with EWA and cautioned that while “working hard to achieve zero hunger, we are also eating less and less healthy with fruits and vegetables missing from our diets”. He hoped the EWA initiatives would help to prevent obesity in Africa.

The rural women, represented by Madam Zainab Isah Arah from northern Nigeria and rural women farmers from Burkina Faso, enjoined all to match their words with action. Zainab said “If women in agriculture are empowered, we will play our role in ending hunger”. Obasanjo thanked Zainab for “allowing herself to be heard coming from an area where women are only supposed to be seen, not heard”.

Amadou Mahtar Ba, the Executive Chairman of AllAfrica and member of United Nations Secretary General high level panel on women affairs, said despite the progress that has been made, “the penny still hasn’t dropped”. He said despite knowing all the problems and knowing almost all the solutions, we are yet to crack the nut on the political determination to solve these problems. He suggested forming a coalition of reporters across Africa who writes on agriculture and women affairs to make sure that people know what rural women in agriculture are doing – an idea that Dr. Obasanjo agreed to quickly.

Source: Ade Adeyemi, Allafrica.com

Smuggling, hides exports hurting bid to grow leather trade

While Kenya has identified the leather industry as among those to push its manufacturing sector, it is struggling to stem export and smuggling of raw hides and skins.

According to the Tanners Association of Kenya, smuggling of hides and skins to China is costing governments in the East African Community (EAC) about $30 million annually in lost tax.

“Currently we don’t have a law banning raw exports of hides and skins but the government has increased export tax to 80 per cent from 40 per cent to encourage value addition,” said Kenya Leather Development Authority chief executive Dr Issack Noor.

However, the high taxes feed into a smuggling racket, denying governments millions in tax revenue.

According to its Budget Policy Statement 2018, Kenya is targeting to increase the contribution of its manufacturing sector to the economy to 15 per cent by 2022, from 9.2 per cent in 2016. This will add $2 billion – $3 billion to the GDP and about 400,000 jobs.

The leather industry is one of four subsectors —including agro-processing, textiles and apparels, and oil, mining and gas — seen as the drivers of manufacturing growth.

In the leather industry, the government plans to have all hides and skins processed locally, set up 5,000 cottage industries, invest in four leather parks and support expansion of existing tanneries.

To cushion local manufacturers from external competition, the government intends to review import rules for finished leather products. These initiatives are targeted at creating 50,000 new jobs, ensure Kenya produces 20 million shoes and increase export revenue by $500 million by 2022.

But exports of raw hides and skins continue to deny local tanneries raw materials, with the existing 14 tanneries in Kenya operating at less than 40 per cent of their capacity.

This comes at a time when Kenya is investing $164 million in a mega leather industry park that aims to transform the underdeveloped sector to a key economic contributor.

In building a leather industrial park, Kenya wants to unleash the potential of the industry that has remained stunted due to pressure from import.

In East Africa, only Kenya has manufacturers with the capacity to produce finished products while Tanzania, Uganda, Rwanda and Burundi export leather either as raw, wet blue or crust.

A report by CUTS International on The Impact of Second Hands Clothes and Shoes in East Africa, notes that all the EAC partner states process leather up to the wet blue stage, with 80 to 90 per cent of it exported, and only 10 per cent is processed to finished leather, which caters for the footwear and artisanal shoemakers.

“There is a significant demand for footwear in the region, but 80 per cent of the demand is met through imports out of which 60 per cent are secondhand shoes,” notes the report.

Source: NJIRAINI MUCHIRA,  The East African

A brighter year for mining?

Mineral and commodity prospects are looking up.

The outlook has been clouded for the last few years, but now the world’s major economies are firing, ensuring demand for many key commoditiesmined on the continent. There are still risks of volatility in the global economy and these could pose problems for these shoots of optimism, as we examine below. However, due to technological changes, prospects may be brighter for many of the continent’s minerals in 2018 and even in the medium term.

Global trade winds

Events in the United States and Europe caused many to believe that the commodities supercycle of the 2000s, or at least the upward trend in commodities prices, had ended. After booming in the early 2000s, prices first fell with the financial crash of 2008. This was followed by a depressed outlook for commodities as growth and trade volumes stagnated, and China, or at least capital investment in its economy, seemed to be stalling.

However, more recent events in emerging economies, and in particular China, pose the question of whether Western economies still have as much influence over commodities markets.

While China seems set to grow at a relatively healthy 6.5%, continued “risk controls”, as Citi Research notes, could take it below 6%. That possibility, notes the American lender, could seriously dampen prices for some of the continent’s most valuable commodities. Zinc, copper, steel, iron ore and coking coal would all be vulnerable in the event of a Chinese slowdown.

More specifically, the cessation of Chinese winter environmental protection controls in some of its most economically vibrant eastern urban areas on the 15 March could act as a spur to commodity prices as Chinese producers rev up their engines again.

However, the actions of President Xi Jinping of China this year could prove decisive. His government may decide that the favourable economic outlook for the year makes this a suitable time to crack down on the shadow banking sector or for the tightening of bank lending rules. This could result in a slowdown in the economy, and a drop-off in fixed asset investment, the traditional Chinese engine of commodity price growth.

It is widely accepted that there is a burgeoning debt crisis in China and similarly that official growth figures are routinely fudged. Should either of these issues accelerate or blow up, that could have a severe impact on growth. The possibility of Chinese provinces curtailing investment in fixed assets – for instance in  building infrastructure – could turn commodities bearish. While in the long to medium term greater regulatory oversight in China is welcome – particularly with fears of vast semi-hidden debt – the possiblity of investment taking fright is a major short-term worry.

Unpredictability

Chinese policy changes and their effects are slightly easier to predict, but there are also a multitude of potential threats that emanate from ruptures between the “great powers” – chiefly, the unpredictability of US President Donald Trump.

Of note has been his bellicose rhetoric regarding China. Could the White House initiate a trade war between the two powers? A recent report from the US trade representative, Robert Lighthizer, described allowing China’s accession to the World Trade Organisation as a “mistake”.

Reversing this fundamental of American policy, through potential penalties for what Washington sees as punitive Chinese actions towards foreign companies in China, could result in retaliations by China and harm to global growth. President Trump has already imposed tariffs on imported solar cells and washing machines.

Should the White House’s war of words with North Korea move towards action, major commodity prices, in particular iron ore, would be hit. Japan, South Korea and China account for over 80% of seaborne iron ore trade. War in the region would be catastrophic for values of the commodity and global trade in general.

While tensions in East Asia risk blowing up in ways that would be catastrophic to global trade, theyalso raise intriguing possibilities for African miners. For instance, the renewed threat from nuclear conflict raises the interest in uranium sourced in Niger, Gabon and elsewhere on the continent.

The renewed tensions between the major powers and determination to secure supplies and prevent others from doing so offers potential for dampened uranium prices to rebound. Increased demand combined with cuts to supply from Canadian and Kazakh producers mean that the price of the nuclear metal could recover.

Meanwhile the changing tides of technology and the demands new entrants place on suppliers also look to be at decisive juncture. For instance, contrast the fortunes of platinum and cobalt. Platinum’s outlook looks uncertain.

The precious metal is used in the engines of diesel and other combustion engines. But the emissions scandal that has engulfed automakers such as Volkswagen has raised awareness of the pollution caused by diesel. Efforts are being made across the world, at least nominally, to turn away from diesel engines, and combustion engines more generally. As a result, the outlook for platinum has looked weak.

Cobalt surges

Cobalt by contrast surged by around 127% last year to over $75,000 a ton. The precious metal is found in abundance in the Democratic Republic of Congo (DRC). While the advance of sustainable technology is arguably humanity’s greatest tool to meet the challenge of climate change, the mineral’s production in DRC highlights many of the continent’s continued challenges.

With cobalt’s rise analysts fret over instability and the weak regulatory environment in the country, in particular the opaque nature of supply chains. A 2016 report by Amnesty International found that Chinese child labour was used to mine the ore that is used in components for everyday objects such as smartphones.

The increased importance of minerals from DRC has, moreover, shed light in recent years on the loss-making, state-owned mining outfit cum gatekeeper, Gécamines, and the political and civil conflict across the country.

Meanwhile, DRC’s political and humanitarian woes endure. The UN currently estimates that in the Kasai region alone, some 3.2m people face starvation this year without increased external assistance.

Moreover, the threat from further political rupture as President Joseph Kabila continues in power, despite his legal tenure ending in December 2016, remains high. As  Peter Jones, DRC expert at London-based extractive sector watchdog Global Witness, says: “As the political crisis drags on it’s likely that the regime’s need for money increases, so it is very worrying when we see questionable deals being signed.”

Violence and the sentencing to prison in absentia of opposition figure Moïse Katumbi, the former governor of the vital Katanga province, contribute to a difficult environment in a nation which should be thriving. DRC is the source of two thirds of the world’s cobalt and has vast copper reserves.

Both minerals started the year in bullish form. Of note this year is a promised new mining law that threatens to more than double taxes on the export of any commodity the government deem “strategic”, which would most likely include cobalt and copper.

In theory greater tax revenue for Kinshasa would help to sure up the weak regulatory environment, but Jones comments: “The tax agencies are very opaque and it’s not clear what happens to some of those revenues, so it’s not certain that increased taxation through the new mining law would necessarily mean more spending on public services… The new mining law proposals have also caused a lot of concern among investors.”

By some estimates some 30–40% of mining revenues owed to the people or government of DRC disappears. Meanwhile, there is little scope for the political crisis ending in the country, which say analysts will most likely lead to continued instability throughout 2018, with an election tentatively scheduled for December. President Kabila is unlikely to leave willingly, so hopes for stability most likely lie with his government changing the two-term limit on office in the constitution to allow his continued rule, which, if nothing else, would ensure an uneasy degree of stability.

Optimism in South Africa

In contrast, analysts have greeted Cyril Ramaphosa’s ascension to the presidency of the African National Congress (ANC) in South Africa as a positive turn of events. Ramaphosa has both strong political credentials and serious mining credibility, having been general secretary of the country’s National Union of Mineworkers and a member of the board of mining company Lonmin.

He has been criticised for the position he took on the massacre at Lonmin’s Marikana mine in which 34 striking workers were killed in 2012. Lonmin is currently mired in debt, having lost over $1bn last year, with potential for a major takeover and restructuring this year.

Ramaphosa, meanwhile, has vowed to fight corruption, allegations of which have tainted the Zuma administration. There is hope, moreover, that he will produce a more investment-friendly final version of South Africa’s Mining Charter 3 than the Zuma administration had promised.

Similarly, in Zimbabwe there is hope riding on Emmerson Mnangagwa’s presidency after the surprise ousting of Robert Mugabe last year. The new administration in Harare has made promises to turn around the country’s economy, and while some have claimed that the former Mugabe loyalists in power have lacked specificity in their promises, changes to stringent indigenisation laws that have prevented FDI in mining would be welcome news in 2018.

Such moves could help to stimulate interest in the country’s lithium potential. Like cobalt, lithium has surged in price and importance due to its use in batteries that are essential for electric vehicles. Zimbabwe is currently the world’s fifth largest producer of lithium, but it is hoped that new finds can help it to grab market share.

Outlook for copper, gold, cobalt and platinum   

Copper: Industrial demand, particularly in Asia will most likely keep the outlook rosy for the red metal. While it started the year trading at around $7,000, Bank of America Merril Lynch predict it could reach $7,700 a ton by the middle of 2018.

The general trend of demand for infrastructure, spurred by strong growth figures globally bode well. Supply-side issues in Latin America are welcome news for suppliers on the continent, most prominently Zambia. The country is looking to re-open a number of mines and should be able to continue impressive increases in output in 2018.

Gold: Weak demand last year should be gradually corrected in 2018, with a rebound expected in its second largest market, India. Reversals to otherwise strong global stockmarket growth sparked by political instability could similarly see a rush to gold. For instance, fears over America’s government shutdown in January saw gold prices surge briefly.   

Cobalt: 2018 should see continued strong growth in cobalt prices. Political instability in DRC, which has a near monopoly on supply, will likely only have minor impacts on the price of the mineral.

Said instability and fears over doing business in DRC will most likely keep more responsible investors out of the troubled Central African nation. However, threats remain in the short-term.

The major applications for cobalt remain in new battery technologies, which could be affected by cuts to subsidies for electric cars in China. Meanwhile, breakthroughs in technology mean less cobalt could be required in batteries.

Platinum: The precious metal’s broad outlook has been bearish of late. This trend will most likely not disappear.

However, its weakness could result in a moderate correction as prices make it attractive, especially in relation to copper, palladium and gold. While its use in catalytic converters in out-of-favour diesel cars has been the major reason for bearish sentiment, general strong form for car sales in general and a possible up-tick in demand for its use in jewellery in China could result in at least a minor correction.

Restructuring of once mighty Lonmin, which has shut older mines in light of a precipitous fall in the company’s value, could result in a supply deficit which could additionally result in at least short term bullishness.

Source: Joseph Zeitlyn, African Business Magazine

I&M Bank gets $50m for Kenya, Rwanda expansion

I&M Bank has received $50 million from international lenders to expand its operations in Kenya and Rwanda.

The European Investment Bank on Wednesday announced a $40 million financing facility to I&M to support investment in Kenya.

The agreement which was inked in Nairobi by I&M Bank Kenya Chief Executive Officer Kihara Maina and EIB executive responsible for business financing outside Europe Robert Schofield is targeted at supporting small and medium size enterprises (SMEs), corporate, and institutional customers.

According to the bank, the loans will be advanced to eligible borrowers up to a maximum of 50 per cent of the total cost of each of the projects they’re undertaking.
However, the borrowers have to meet the EIB eligibility criteria.

“This facility from the European Investment Bank, which affirms our position as a development partner of choice for the SME and Corporate sector aimed at facilitating the country’s economic growth,” said Mr Maina.

The new agreement comes only a few days after the bank’s Rwandan subsidiary received $10 million in financing from the IFC to expand lending to SMEs and to the agri-business sector in the country.

The IFC, which is the private-sector lending arm of the World Bank said it could funding with training on agri-business finance and agency banking.

“The project will improve access to finance for SMEs and the agri-business sector, both priority areas for spurring economic growth and job creation in Rwanda and  also help in lengthening the maturity profile of the Bank’s funding” the IFC said in its disclosures.

Source:  VICTOR KIPROP, The East African

Uganda seeks to reclaim control of energy projects

The Uganda government is keen on regaining the role of primary operator of the country’s power infrastructure, with sources saying it is closely watching concessions of private players in generation and transmission.

The view is informed by concerns that the government’s complete withdrawal was ill-advised given the sensitivity of the sector.

With two key generation plants at Isimba and Karuma set to come on board later this year, under the government’s full control, technocrats and policy makers have been looking closely at the concession to South African firm Eskom, which operates the Kiira and Nalubale generation dams. Eskom’s contract is due to expire in five years.

The concession to Umeme — the main distributor — is still running until 2025.

The EastAfrican has learnt that Uganda Electricity Generation Company Ltd (UEGCL) is already preparing to carry out repairs at Nalubaale dam. The dam was built in 1954 and, according to experts, is past its lifespan.

Eskom, as per concession agreements, should fix any anomalies in the dam but UEGCL’s intended active involvement raises questions about whether the government is making a U-turn on its privatisation policy.

“Those are our assets and Eskom’s contract is ending in five years so there is no way it can invest in the dam,” said UEGCL chief executive Harrison Mutikanga.

“We are going to carry out a cost benefit analysis of the Nalubaale dam. It will help us determine whether to abandon it or not,” Mr Mutikanga added.

The EastAfrican has seen a document outlining the government’s move to regain divested companies. Top on the list is the electricity sector.

According to the document, the government is considering amendments to several laws including the Electricity Act 1999 and the Public Enterprises Reform and Divesture Act 1993, to clarify roles of different players, sourcing for funding, making the electricity sector government business and making it mandatory for the private sector to provide internship to students under its new power sector investment plan.

“The government is amending the Public Enterprises Reform and Divesture Act to return the management and oversight roles of all companies to ministries,” reads a report of the Presidential Investors’ Roundtable published in December 2017.

Proposal before Cabinet

The amendment implies that electricity generation, transmission and distribution companies will revert to the Ministry of Energy as one entity. This proposal is already before Cabinet.

The government brought in Eskom and Umeme in 2005, when it privatised the Uganda Electricity Board (UEB) and split it into three companies: Uganda Electricity Generation Company Ltd (UEGCL), Uganda Electricity Transmission Company Ltd (UETCL) and Uganda Electricity Distribution Company Ltd (UEDSCL).
An official at Umeme declined to comment.

“We are in a closed period. We are limited by the law on how much we can share (with the public) until we release the 2017 financial reports, which will come in the first quarter of 2018,” the official said.

The government hoped to reduce energy losses that stood at 28 per cent then bring in private sector efficiencies, increase access to electricity and reduce high tariffs.

The privatisation of the sector did not achieve the intended objectives. For example, tariffs remain high, and access to electricity remains low at only 22 per cent of the population.

Owing to persistent problems in the sector, parliament appointed an ad hoc committee in 2011 to probe the electricity sector.

The committee’s report was adopted by the whole house, which voted to throw out Umeme and Eskom on grounds of underperformance, unfavourable concession terms and for Umeme lack of proper registration with the registrar of companies.

The committee recommended that the disbanded UEB be reinstated as one company owing to duplication of responsibilities and that government should take over the sector. That was in 2014.

In addition, the Auditor-General’s performance report 2017 shows there were also other non-repair works at two turbines and delayed execution of 13 projects since 2013, which according to the report, amounts to non-compliance based on terms of the concession.

“Whereas the non-compliance issues were noted throughout the period under review, UEGCL did not enforce compliance by the firm. There is risk that the Nalubaale and Kiira hydropower complex may not be in proper working condition by the time they’re handed back to UEGCL at the end of the concession,” said Auditor-General John Muwanga.

Despite the government ignoring the recommendations it now appears to be silently acting upon them.

It is understood that lack of access and high cost of electricity is a major cause of poor ratings in the doing business environment in Uganda, but one of the priorities under the Presidential Investors’ Roundtable, which did not achieve much by end of its set deadlines of December 2017.

Even with the amendments to the Public Enterprises Reform and Divesture Act, the government will still face legal hurdles as per terms of the concession agreements.
Umeme secured a buy-out clause, which makes it costly for the government to terminate the contract.

Source: HALIMA ABDALLAH, The East African

Africa Re joins African Finance Corporation

African Reinsurance Corporation (Africa Re) has become the first multi-lateral financial institution to invest in Africa Finance Corporation as it becomes a member of AFC – the  pan-African multilateral development finance institution.

With approximately 107 insurance/reinsurance companies and non-African strategic investors in 41 African states, Africa Re, is one of the continent’s premier reinsurance corporation.

Andrew Alli,  the out-going President and CEO of AFC commented: “We welcome African Reinsurance Corporation (Africa Re) as a member and shareholder of AFC. As the first multilateral financial institution to become a member of AFC, this is a key milestone for us, as the Corporation seeks to further diversify its shareholding. We are, therefore, pleased to welcome Africa’s premier reinsurance corporation into membership of AFC and look forward to collaborating with Africa Re to provide innovative solutions to the development and financing of infrastructure assets in Africa.”

In recent months, AFC has grown its country membership in Francophone, East and Southern Africa, with the accession in 2017 of Benin, Kenya and Zambia, respectively. AFC now seeks to consolidate this success by further expanding its shareholder base.

 “As a Corporation with both private and public shareholders, we see many synergies with AFC in the pursuit of African continent development agenda as well as business growth. Indeed, we have long admired AFC, and the transformative impact it has made across many of the geographies in which we operate, whilst delivering competitive returns. We are therefore delighted to become a part of one of Africa’s best success stories,” said Corneille Karekezi, Group Managing Director & Chief Executive Officer of Africa Re, following the signing ceremony which took place in Lagos, Nigeria on Thursday 1 February.

To date, AFC  has invested approximately US$4 billion in projects within 28 countries across North, East, West and Southern Africa.

The Africa Finance Corporation an investment grade multilateral finance institution, was established in 2007 with an equity capital base of US$1 billion, to be the catalyst for private sector-led infrastructure investment across Africa. With a current balance sheet size of approximately US$3.5 billion, AFC is the second highest investment grade rated multilateral financial institution in Africa with an A3/P2 (Stable outlook) rating from Moody’s Investors Service.

AFC successfully raised US$750 million in 2015 and US$500 million in 2017; out of its Board-approved US$3 Billion Global Medium Term Note (MTN) Programme. Both Eurobond issues were oversubscribed and attracted investors from Asia, Europe and the USA.

The Corporation’s  investment approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital to address Africa’s infrastructure development needs and drive sustainable economic growth. AFC invests in high quality infrastructure assets that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications.

To date, AFC  has invested approximately US$4 billion in projects within 28 countries across North, East, West and Southern Africa.

Source: Africa Business Magazine

Angola: Over 60 proposals for construction of refineries

Created by the President of the Republic, the Commission met Wednesday  with representatives from national and foreign companies interested in investing in the country’s refining sector.

The meeting served to set guidelines and present a set of procedures to be observed by entities.

The head of State has directed the launch of a tender for the construction of refineries in northern Cabinda province and Lobito (Benguela).

The objective is to offset the current refinery production in Luanda Refinery, which stands only at 20% of the market needs.

Another factor has to do with the high costs in the import of the aforementioned products, standing at 80%.

The existence of initiatives, in phase of their implementation, as well as the construction of a refinery in Lobito by Sonangol is another factor.

With its completion, going until 2022, the Lobito-based project will process up to 200,000 barrels of oil/day.

In Cabinda the infrastructure is still to be defined, according to a note from Sonangol delivered to Angop.

On the other hand, Sonangol has already signed an agreement with the Italian oil company ENI aimed at improving the Luanda refinery in 24 month time frame.

The initiative will enable the infrastructure to increase the current nominal capacity of 65,000 barrels/day.

The interested companies are required to present the improvements to their proposals until next February 10.

The interested firms should, among other aspects, demonstrate proven technical-operational ability and experience in refining sector.

The meeting was attended by State Secretary for Oil Paulino Jerónimo.

CEO of Sonangol Carlos Saturnino and Nacional Director of Oil Amadeu Azevedo and Executive and non-executive members of the board of directors also attended the meeting.

In December 2017, the President João Lourenço set up a working team made of members of the Ministry of Mineral Resources and Petroleum and Sonangol with a view to analysing and handle the proposals for construction of refineries in Angola. “

Angola is second largest oil producer in Africa, behind Nigeria.

The country ensures more than 1.6 million barrels of crude oil per day.

Source: Africa Business News

Nigerian Economy, Forex Reserves, Stocks Poised For Growth in 2018

Analysts at Capital Bancorp Plc have forecasted a positive year for Nigeria in 2018, in terms of economic growth, healthy foreign reserves and the stock market growth.

Managing Director of Capital Bancorp, Mr Higo Aigboje, who spoke on Tuesday in Lagos at the presentation of its Economic Review and Outlook For 2018, disclosed that the nation’s bourse would post 25 percent growth this year.

In 2017, the Nigerian Stock Exchange, NSE, soared by 42.3 percent, emerging the third best performing markets globally.

In its 70-page report, the firm said performance in 2018 would be hinged on stability of oil prices, effective management and improved liquidity of the foreign exchange market, improvement on the corporate earnings, significant focus on the non-oil sector to increase output and lower interest rate regime.

Mr Aigboje explained that effective synergy in the use of fiscal and monetary policies, government’s focus on the real sector of the economy, improved market participation by local investors and domestic institutional investors, efficient regulation of the market by the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) are other factors that will help to sustain the market rally.

“Others are passage, passage of Petroleum Industry Bill, unbundling of Nigerian National Petroleum Corporation and listing of resultant companies and deliberate efforts aimed at encouraging more listing on the NSE company such as Telecom, Gencos among others,” Mr Aigboje said.

The capital market operator also disclosed that by the end of 2018, the nation’s external reserves will cross $48.50 billion.

He said this growth would be achieve if government does not irrationally increase its spending during the year especially in the second half of the year as the country begin to close in on the election period and the price of oil continues to firm up or remains stable at current level.

However, he warned that sudden rise in insecurity can trigger exit of the Foreign Portfolio Investors (FPI), political instability owing to forthcoming general elections, sudden reversal in oil prices, an upturn in the yields of fixed income securities and failure in the banking sector, which may trigger a sell-off and cause further damage to the entire stock market.

Source: Africa Business News

Expansion of Ethiopia’s first industrial park reopens old wounds

The scenic road from Addis Ababa to the small town of Dukem is peppered with signs of industry: warehouses and factories, garages and gas stations, newly-built rail tracks and a freshly paved highway.

Dukem, just a short drive south of the capital, is home to Ethiopia’s first industrial park, the Chinese-owned Eastern Industrial Zone (EIZ), and some of the country’s most fertile land.

For more than a decade, it has been on the frontline of a government-led push to turn the still overwhelmingly agricultural country into Africa’s manufacturing hub.

Chinese companies are constructing five industrial zones, while the government plans to have 15 industrial parks nationwide by June 2018.

Last year, the EIZ, which hosts companies ranging from shoe manufacturers and steelmakers to leather processors and car assemblers, embarked on a new expansion phase.

Land expropriation

The move, which means expropriating an additional 167 hectares of rural land around Dukem and the relocation of around 300 farmers, has sparked anger among locals and reopened old wounds.

“We were the first,” Shewangizaw, a middle-aged farmer who lost his fields to an Ethiopian-owned factory back in 2006, told the Thomson Reuters Foundation bitterly.

He and around 40 other farmers were relocated – without fair compensation, they argue – when some of the first factories arrived in the area a decade or so ago.

“I don’t have any land now,” said his 72 year-old neighbour, Bashada, who lost nearly five hectares of farmland then and now rents one hectare from an older neighbour for 10,000 birr ($367) a year.

The group is campaigning to have its case heard by the federal government.

“It’s not fair,” said Shewangizaw. “Our families were just destroyed. At the time compensation paid to us was so, so cheap. And we don’t have any land to farm or live on now.”

Angry once more

Muhammed Tilahun, vice-head of the Dukem Land Development and Management Office, told the Thomson Reuters Foundation the local government was now addressing the concerns of farmers.

That includes 190 farmers and their children who lost their land back in 2007 and are now being given additional land to support them, he said.

Yet the anger expressed by Shewangizaw and his fellow farmers is echoed across much of central Ethiopia, which has experienced rapid urbanisation and fledgling industrialisation over the past decade.

In 2014, a plan to expand Addis Ababa into the surrounding region of Oromia – in effect swallowing up small towns like Dukem – sparked mass protests.

The demonstrations later spread across the country, resulting in hundreds of deaths and eventually prompting the government to impose a nine-month state of emergency.

Peace has now returned to Dukem’s streets, but farmers whose land has been earmarked by the EIZ for future development are frustrated and angry once more.

“Our land came from our ancestors,” said Telahn Chaka, a 57- year-old farmer in nearby Goticha village, who said he would lose his remaining farmland this year.

“I was hoping to give it to my children too. Now I have nothing for them to inherit.”

He and his neighbours tried to resist the plan, he recounted, prompting the local police to briefly detain four of them.

Solomon Basha, spokesman for the Dukem town administration, disputed this account.

“No farmers are protesting the expansion now,” he told the Thomson Reuters Foundation. “No farmers were arrested or killed in this process.”

Social amenities

The EIZ has promised to build a hospital, a school and a market centre for farmers in addition to a total of 113 million birr ($4 million) compensation for the latest phase of expansion, Basha said.

Each farmer will receive 500 square metres of replacement land in addition to compensation, he added.

But for farmers like Chaka, memories of the first phase of expansion still loom large.

“This is propaganda,” Chaka said. “They promise us a lot of things – new land, a school for our children, electricity, running water – but after they take it nothing happens. So we lose our land and end up in poverty.”

Compensation

However, in the decade since the EIZ started the process of land acquisition and compensation in Ethiopia has changed.

Muhammed Tilahun, the local official, said compensation during the first phase of development was “very low” and did not include replacement agricultural land.

“We have set up a committee to identify those who suffered under previous regulations,” he said, adding the price of compensation had more than doubled from 18 birr then to 54 birr per square metre today.

In Ethiopia, all land is formally owned by the state, and there is no established price for farmland.

Officially, households should be paid 10 times the market value of what can be produced on their plot in a single year, though this can be tricky to measure and vulnerable to abuse by unscrupulous officials.

“The amount of money they pay for compensation is actually quite high,” said Stefan Dercon, chief economist of the UK Department for International Development (DfID) and a professor of economic policy at Oxford University.

A 2015 report by Oxford’s Centre for the Study of African Economies found affected households in one part of Ethiopia received compensation payments on average nearly five times higher than their total annual expenditure on consumption, and for some households as much as 10 times more.

A further revision to the compensation process is expected to lead to a substantial increase in the amount of financial compensation received by farmers when it is introduced by the federal government later this year.

But the Oxford report’s author, Anthony Harris of Mathematica Policy Research, which analyses public wellbeing, said providing replacement land remains a challenge.

“They are supposed to receive a new plot. But that often doesn’t happen, especially in places around Addis Ababa where land is scarce,” said Harris.

Meanwhile, households lose an unmeasured stream of income from their farmland and many individuals struggle to find new employment, he added.

“It’s sort of an inevitable consequence. It’s going to be very hard to find some sort of alternative livelihood, especially for the older generation.”

Low wages

As for Dukem’s farmers, the prospect of giving up farming for work in the factories of the EIZ is often unwelcome.

The zone currently employs more than 10,500 Ethiopian employees, the vast majority of whom come from the Dukem area, according to the Ethiopian Investment Commission.

But locals complain of low wages and poor treatment by employers.

Lemma Teshome, the 24 year-old son of a farmer in Goticha whose land is being expropriated this year, worked for three years at a soap factory.

“Nothing was good,” he said. “The pay was low and our hours were long. We were so disappointed.”

In December last year a strike over overtime hours broke out in a shoe factory, which led to some street protests.

A spokesman for the Ethiopian Investment Commission said that dispute had since been resolved through “mutual understanding.”

“Some of the workers didn’t want overtime even though they are paid. But they reached an agreement,” the spokesman added. “The company said they could decide whether they wanted to do overtime or not.”

Source: The East African

Tanzania’s sugar mill Kilombero in plans to construct new factory

Kilombero Sugar Company, a subsidiary of Illovo Sugar Africa, is planning to build a new factory as it increases acreage of farms under its operation in Morogoro region, Tanzania.

The company is also targeting to increase sugar production from 126,000 tonnes to 250,000 tonnes per year. The new factory is expected to process 2.5 million tonnes of sugar cane from the current 1.2 million tonnes.

Sugar in Tanzania comes from four companies — Kilombero Sugar (KSC), Mtibwa, Kagera and TPC, a unit of Mauritius sugar producer Alteo. The four produce 320,000 tonnes of sugar per year, leaving an estimated gap of 100,000 tonnes.

According to KSC executive director Guy Williams, the new sugar factory is banking on the company’s investment in sugarcane farming under its special programme to attract outgrowers.

Industrialisation drive

“We are looking to support the government’s industrialisation drive and ensure that Tanzania produces sugar that will meet domestic consumption needs,” Mr Williams said.

The Minister for Agriculture, Livestock and Fisheries, Charles Tizeba, had advised Illovo Sugar to expand sugar production to fill the deficit of 200,000 tonnes. Illovo Sugar is the biggest producer of sugar in Tanzania.

Tanzania’s Prisons Department partnered with the National Social Security Fund and the PPF Pension Fund to revive Mbigiri sugar factory and Mkulazi sugar farm in Morogoro region, aiming to produce 30,000 tonnes of sugar per year.

Tanzania aims to raise sugar production by about 31 per cent over the next four years. The country imports industrial sugar from Brazil, Thailand and other southeast Asian countries.

The government had set aside 294,000 hectares to be allocated to companies looking to develop sugarcane plantations. Companies from Oman have been invited to invest in sugar production in Tanzania.

Source: By APOLINARI TAIRO, The East African