A survey conducted by the Institute of Economic Affairs (IEA) has revealed that Ghanaians do not think corruption could be eradicated in the country and that the canker has become part and parcel of the Ghanaian society.

The survey, which sampled 1500 people from all parts of the country, quoted 24% of them as saying that corruption is like DNA in the blood of Ghanaians.

At a forum to discuss the findings in Accra yesterday, Joseph Atsu-Ayee, Professor/Adjunct Senior Fellow at IEA said of the 1500 respondents, 60% and 40% were females and males respectively.

In the report, about 44% respondents said corruption could be reduced to a limited degree. About 19% argued that it could be substantially reduced, while 4.7% believed it could be eradicated completely.

Professor Atsu noted that, corruption attracts attention because of its debilitating and corrosive effects on politics, governance, economy, society and security. According to him, effort to bury corruption has not been successful because of how people understand the root cause of corruption.

"Strategies to curb corruption have failed, because we have misunderstood the roots of corruption. Understanding the root causes of corruption is key in dealing with corruption," he remarked.

He further noted that, the problem with Ghana had to do with the individual, citing that "Ghanaians are acquisitive and materialistic. If you want to live good, work for it."

His comment follows argument by some of the respondents that the corruption in the system was as a result of low salaries paid workers in the country. But the Professor debunked that assertion, saying "if you increase the salaries they will still be corrupt."

Ironically, the police are alleged to be the most corrupt institution in the country, but the survey revealed that Ghanaians still have confidence in them. According to the report, 87% of the respondents stated that they would report any case of corruption to the police before any other person or institution.

The survey, which was conducted amongst Ghanaians aged 18 and above indicated that 52% of the respondents got their information on corruption from the media. However, 35% of the respondents, between the ages of 18 and 24 said they would give bribe to make sure they got what they wanted.

At the same programme, Former Commissioner of the Commission for Human Rights and Administrative Justice (CHRAJ), Justice Emile Short, who was the chairman for the event, said corruption, seemed to have lost it stigmatization.

He said living good and living in poverty does not create room for corruption. "The poor can survive without corruption. Those surviving are rather those engaged in serious corruption," he noted.

He, therefore, kicked against the limitation of corruption to only bribery and that must also it includes embezzlement and others.

"Corruption arises when the systems are weak. So to fight corruption, there should be a robust system where leaders are able to work in the interest of the country," he opined.

The Libyan Investment Authority (LIA) has taken two international banks to courtseeking to recover over $3.3 billion (11 trillion shillings) that the oil-producing country lost in 'bad deals' that were initiated by the banks during former President Muammar Gaddafi's reign.

LIA is attempting to recover $1.2 billion (about 4 trillion shillings) from a U.S investment bank, Goldman Sachs and another $2.1 billion (almost 7 trillion shillings) from French bank, Societe Generale. The country's Sovereign Wealth Fund alleges that the two banks advised it to enter risky deals in 2008 that ended up being worthless. The hearing of one of the cases resumed in London in June 2016, with LIA's lawyers accusing Goldman Sachs executives of taking its officials on luxurious trips to Morocco and Dubai in order to influence their investment decisions. One witness in court claimed that the trips were laden with 'heavy drinking and girls'.

Key in the case is Goldman Sach's relationship with Haitem Zarti, a brother to Mustafa Zarti who was LIA's second-in-command at the time. The bank is said to have paid for Zarti's lavish trip to Dubai and later offered him an internship placement at their headquarters in New York. The Fund's lawyers now argue that the Bank's treatment of Haitem Zarti biased his brother to stake the fortunes of the $67 billion Fund in a series of bad deals.

Happier times: Late Col. Gaddafi's son, Saif-Al-Islam Gaddafi.

The second case against Societe Generale is expected to commence in early 2017 but there are indications that the Fund's lawyers will attempt to link the bad deals to bribery and influence peddling involving the first family, particularly Gaddafi's son, Saif Gaddafi.

But what made Libya's Sovereign Wealth Fund so susceptible to manipulation? During Col. Muammar Gaddafi's four decade reign, opacity dominated management of the country's Petroleum Fund, allowing unchecked corruption to thrive. Patronage, family links and political influence were much more important than institutionalised, competence-based investment decision making. Hence, the Fund was often manipulated into investing billions of US dollars in risky assets managed by political friends or allies of the regime. Transparency, independent oversight, clarity of rules and political will eluded Libya, resulting in mismanagement of the resources and potentially causing avoidable losses that form the basis of the cases in court today.

The Libyan case provides a good example of how Sovereign Wealth Funds can be vulnerable to abuse by overbearing governments, unless they have strong, independent governance structures and sufficient corruption control mechanisms. For Uganda, the case comes at an opportune time, since the country is operationalizing the Petroleum Fund as established by The Public Finance Management Act, 2015(PFMA). In some ways, the law attempts to address key issues necessary to ensure good governance of revenues expected from Uganda's nascent oil and gas sector.

However, a number of loopholes exist in the law which, if not addressed, would expose Uganda to the perils Libya has witnessed. Unless regulations for the Act, once issued, offer more clarity, Uganda's Petroleum Fund could end up like that of Libya.

Firstly, reading through that Act, it is not clear what the objectives of the Petroleum Fund are. While the Act alludes to the Fund helping to support budget stability [Section 58 (a) and Section 63 (2)] as well as providing heritage for future generations [Section 64 (3) & (4)], neither of these is clearly stated as its objective. This lack of clarity of objectives presents difficulty for policy makers in terms of giving policy direction in form of operational rules for the fund. It also remains difficult to decide the sort of assets the savings can be invested in and therefore the nature of restrictions that should be put in place for government to access the Fund.

If, on one hand, the Fund is to play a stabilising role, a significant chunk of the money should be invested in liquid assets that can easily be accessed in case of budget shortfalls, like bonds. On the other hand, if the Fund is to serve as a heritage for future generations, restrictions for accessing it have to be made tighter, for example by requiring that the money be invested in long term assets like real estate. Where the Fund has a dual function, this should also be clearly stipulated in law or the regulations.

Secondly, the PFMA presents a possibility of conflict of powers between the Minister of Finance and Bank of Uganda or an external Fund Manager appointed by the Bank over the choice of investments into which the Fund's money may be committed. Whereas section 63 (2) (C) gives power to the Minister to prescribe an instrument into which the Fund's finances may be invested, section 64 (1) vests operational management responsibilities in the Bank of Uganda. Again, Section (64) (6) also leaves it to Bank of Uganda to establish risk management arrangements for the instruments to be used in the management of funds in the Petroleum Investment Reserve. This could result in conflict in the case of Bank of Uganda rejecting an instrument prescribed by the Minister for investment of the Fund's money, even if that may have been done on a technically sound basis.

In addition, the Act falls short of clarifying, in terms of jurisdiction, where funds in the Petroleum Revenue Investment Reserve shall be invested. Although Section 63(2) mentions that the money shall be invested in internationally convertible currency deposit or a debt instrument denominated in internationally convertible currency, it remains silent on whether these investments are to be made in the domestic economy or abroad. Different lessons from the Management of the Government Pension Fund of Norway show that investing petroleum revenues abroad protects domestic industries (and economy), diversifies risk and maximises returns.

However, the choice of that 'international investment' and how the decision to invest in it is made, are very crucial and that is where the Libyans got it wrong. They now claim that they were hoodwinked by street smart bank executives to invest in risky ventures that resulted in billions of dollars in losses.

Yet the Fund should have had their own professional advisors to assess the risks and decide accordingly. In any case, Norway invests the bulk of monies in her Fund in stock markets in the USA. However, because of a more streamlined investment decision making mechanism, when Norway lost hundreds of millions of dollars in the 2008 economic downturn, it was easier to attribute the losses to the global economic downturn and not mismanagement. Uganda should, therefore, consider investing in more developed financial markets abroad to secure the best returns and protect her economy against over-heating, while ensuring that independent investment decision making procedures are followed.

However, Uganda's PFMA (2015) lacks provision for independent third party oversight over the Fund's operations, a cardinal principal in ensuring transparency and accountability in the way funds are managed. Third party oversight is critical in exerting public pressure on policy makers and fund managers to ensure open decision making as a guarantee for integrity in the way natural resource funds are managed.

In Ghana, the Public Interest and Accountability Committee's (PIAC) May 2012 report revealed that the Ghana National Petroleum Company (GNPC) was retaining large amounts of petroleum revenues that threatened to grow the petroleum sector at the expense of other sectors. The report also revealed that the Ministry of Finance had overestimated corporate income taxes by nearly 100 percent in order to create extra fiscal space for government and legitimise greater spending under the country's laws.

Although Ghana's PIAC has been constrained by lack of funds and mandate to implement its recommendations, its experience underscores the need for Uganda to ensure third party oversight if our revenues are to be managed in a transparent manner.

Globally, Norway offers the best lessons given that they have been exemplary in running their extractives sector. Several similar funds around the world have been successful as well. It is estimated that worldwide, sovereign wealth funds hold assets in excess of three trillion dollars. Information on some of the natural resource funds globally is shown in the table below:

Country Fund name Year established Estimated value of assets

Norway Government Pension Fund Global 1990 $850 billion

Saudi Arabia SAMA Foreign Holdings 1952 $730 billion

Public Investment Fund 1971 $5.3 billion

Abu Dhabi (UAE) Abu Dhabi Investment Authority 1976 $773 billion

International Petroleum Investment Authority 1984 $68.4 billion

Mubadala Development Company 2002 $60.9 billion

Kuwait Kuwait Investment Authority 1953 $400 billion

Qatar Qatar Investment Authority 2005 $175 billion

Russia National Welfare Fund 2004 $87.9 billion

Reserve Fund 2004 $87.3 billion

Algeria Revenue Regulation Fund 2000 $70.9 billion

Dubai (UAE) Investment Corporation of Dubai 2006 $160 billion

Ghana Ghana Heritage Fund 2011 $0.13 billion

Ghana Stabilization Fund 2011 $0.32 billion

Botswana Paula Fund 1994 $5.7 billion

Nigeria Nigeria Sovereign Investment Authority 2011 $0.98 billion

Adapted from Andrew Bauer, 'Managing the public trust: How to make natural resource funds work for citizens', 2014.

Uganda too can join this elite club in a decade or so. However, the politicians need to let the proposed Petroleum Fund function independently and only allow for independent third party oversight over its operations.

Chris Musiime is the Managing Editor, Oil in Uganda while Gerald Byarugaba is a Research Associate, Advocates Coalition for Development & Environment (ACODE) and a 2014 PETRAD Fellow.

What struck me most was his analogy of how many lives and properties could be lost if Ethiopia and Eritrea were to embark on yet another atrocious war at a time when both countries have other more urgent responsibilities to carry out. I am not sure if we have forgotten the 1998-2000 Badime conflict, when Ethiopians from all parts of the country were shoving shoulder to shoulder, queuing up forcibly to be taken to the war front, when the short recruitment time was finished. I have never seen such kind of voluntary dedication and commitment to reply to the call of the motherland.

Ato Abay, it can be said, has become the real navigator, sitting on the navigational tower behind the pilot to guide the plane. This is only to be expected from the chief guide, rather than the Prime Minister sitting behind the steering wheel.

War is never as cheap and simple as a luxurious weekend pastime or something one can do away with. The Badime engagement was a civil war in which over 70 thousand people paid with their dear lives. What was regrettable was the agreement signed in Algiers as a lasting agreement that is never to be appealed.

The decision of the agreement was rather difficult to understand. Would that kind of a national call be met with a similar response?

In this regard, Ato Abay's speculations about the consequences could be taken as a wiser guess. There are many political observers who tend not to believe what he says judging from previous experiences. But then there are chances that he could prove what he says to be true if he could convince some of the other high notch TPLF officials. He could then use the leverage of his advisory post to progress step by step towards resuming negotiations with Eritrean officials as soon as possible.

Sixteen years is too long a period of time to tolerate waiting in a "no war, no peace" deadlock. Ato Abay should carefully review where things went wrong. On the part of the President of Eritrea, Isayas Afeworki, he should try to keep up with the present situations and be able to make good for the generation of tomorrow. It is about time that leaders of both countries came to their senses and realised that the demands of the 21st century are not yet obsolete. There is still enough time to make unforgettable history for both their peoples, respectively.

The basic heritage

our forbearers have bequeathed us with is not only the goal to be free from the yoke of colonialism and exploitation by our former colonial powers. but to be completely free to form a United States of Africa.

There are no countries better than Ethiopia and Eritrea to take the first practical and reliable step towards an integrated political and economic union in this part of Africa. This could be in the form of a confederation or some kind of union, to be agreed upon.

The way to start this move could simply be sitting around the table and working out some kind of road map to revitalising the ministerial commission, comprising political and trade commissioners, while discussing the possibilities of finding common ground in settling outstanding problems.

Should the two neighbouring countries decide to start negotiations, there is no better situation than the structural readiness of the two countries. There is the 1,080km road between them; Ethiopian Airlines could revive its former daily flight to Asmara; Ethiopians and Eritreans could make direct telephone calls between them.

The people along the border of both countries can exchange trade between them. Whether it is for emergency freight or the strength along the coast, the two nations can use the Assab and Massaw ports for the benefit of the two nations. We should ensure that the Red Sea is kept free from pirates, as was the case some time ago.

The United States government has brokered peace with Cuba after 60 years of isolation. I see no reason why Ethiopia and Eritrea cannot make peace between them.

Plans for the construction of a 2,190-kilometre central railway line to standard gauge form are now up for implementation as Chinese Exim Bank has agreed to give a soft loan of 7.6 US dollars (about 16 trillion/-) to finance the project.

According to a statement issued yesterday by the State House, the amount is enough to cover construction of 2,190 kilometres. The project is expected to start this financial year as the government has also set aside about 1tri/- from the current budget for the purpose.

Once completed, it is expected that the project will revolutionise Tanzania’s economy and other countries in Eastern and Central Africa including Burundi, Rwanda and Democratic Republic of Congo (DRC). The first phase will constitute the construction of the railway line from Dar es Salaam to Mwanza via Isaka and Tabora.

Exim Bank gave a nod yesterday over financing the construction after its president, Mr Liu Liang, met President John Magufuli at the State Lodge in Dodoma.

Mr Liu said apart from the funds, the bank would cooperate with Tanzania in exchanging experience and skills on the construction of the railway and its management. He praised Dr Magufuli for what he termed “his true desire to bring development to the country,” including fostering the construction of the central railway line. “On this central railway line project, we have a positive view. We see it as good project.

We will accord the needed cooperation,” Mr Liu pledged.

According to him, the bank is ready to support the railway project and other development projects. President Magufuli assured Mr Liu that Tanzania desires to implement such projects by using funds from its own budget and foreign sources.

The talks between President Magufuli and Mr Liu were held in the presence of Chinese Ambassador to Tanzania, Dr Lu Youqing, the Minister for Works, Transport and Communication, Professor Makame Mbarawa, Finance and Planning Minister, Dr Philip Mpango and Deputy Minister for Foreign Affairs, East African, Regional and International Cooperation, Dr Suzan Kolimba.

Recently, Ambassador Lu assured President Magufuli that the Chinese government, its financial organisations and other companies will give their total support towards the implementation of the project.

GOVERNMENT has issued over 6 000 import certificates, with three quarters of those for South African products, five months after it tightened the flow of imports to curb dumping of substandard products onto the local market.

The southern African country enforced a Consignment-Based Conformity Assessment (CBCA) programme in March this year under Statutory Instrument 132 of 2015 to ensure that the goods imported into Zimbabwe comply with accepted quality.

A French company Bureau Veritas, has been contracted to enforce the import standards.

South Africa is Zimbabwe’s largest trading partner, accounting for about 70 percent of imported goods in the southern African country and over 60 percent of its total trade, official figures show.

“It has been observed that most certificates were issued on imports coming from South Africa constituting 75 percent, followed by China, and the rest of the world,” said the minister of Industry and Commerce Mike Bimha at the launch of Bureau Veritas office in Harare.
A total of 6,004 CBCA certificates have been issued so far, Bimha added.

The import policing programme has seen a general improvement in quality and the number of consignments failing to meet standards has fallen to 44 percent from 67 percent since March when it started.

About 58 percent of the accepted imports are for chemical, machinery and food products as well as electrical equipment.

The majority of failures are mostly electrical equipment and machinery, plastics and chemical products, Bimha added.

Zimbabwe has been battling a tide of cheap and predominantly substandard products from China and neighbouring countries, which has pushed its own manufacturing industry on the brink and widened its trade deficit.

In 2015, it registered a trade deficit of US$3,3 billion, about a fifth of its GDP, after exports for the full year to December amounted to $2,7 billion against imports of $6 billion.

A similar trend is expected this year as the manufacturing sector remains flat amid a worsening cash shortage.

The Finance Act, 2016 has introduced a new income tax regime for the extractive industry. The Income Tax has been amended to incorporate two new divisions for mining and petroleum respectively.

Tax regimes for the extractive industry are different from the regimes of other sectors partly because of the uniqueness of the sector.

Some of the unique features of the sector include long period of exploration, uncertainty regarding production outcomes, high sunk costs, unpredictability of future revenues due to fluctuations of oil/gas and mineral prices, a long production period before reaching break-even point, substantial rehabilitation and decommissioning expenditure and exhaustibility of the resources etc.

The changes introduced include ring fencing of mineral and petroleum operations; granting of depreciation allowances; realization (disposal) of mineral and petroleum rights; treatment of unrelieved tax losses; treatment of joint mineral and petroleum rights; treatment of bonus payments, provisions for rehabilitation and decommissioning expenditure etc. Last week we looked at ring fencing of mineral and petroleum operations and the granting of depreciation allowance. Today we look at treatment of unrelieved losses as well as rehabilitation and decommissioning expenditure.

Loss relief

Previous years unrelieved losses of an operation may reduce income of the same operation in the current year up to only 30 per cent of the current year income. The other losses will be carried forward.Ring fencing on losses for petroleum applies to upstream, midstream and downstream activities while for mining it applies to mineral operations, processing, smelting and refining activities.The perpetual loss corporation rules (alternative minimum tax) are also not applicable. Effectively this provision implies that the Government wants to ensure that entities in the extractive industry with a taxable profit and with no carried forward losses pays income tax of at least 30 per cent. Entities in the extractive industry will be affected by this limitation in terms of project cash flows as the timing of tax payments is fast tracked.

Rehabilitation and decommissioning expenditure

Rehabilitation and decommissioning expenditure are exempt from income tax (for upstream, midstream and downstream activities) only when payments are made to a rehabilitation or decommissioning fund. Rehabilitation expenditure with respect to a mineral operation, processing, smelting or refining minerals covers expenditure incurred on abandonment activities including reclamation, rehabilitation, restoration and closure of an operation as required by law, mineral right or development agreement. Decommissioning expenditure applies to petroleum operations and refers to expenditure incurred on removal or disposal of structures, facilities and installations operations in an area, cleaning of the area, plugging and secure of wells, restoration of land, safety clearance related to abandonment or cessation of petroleum operations. Decommissioning fund is a fund established under the Petroleum Act, 2015 for activities authorized by the decommissioning plan.
The requirement for payments for expenditure to be paid to a fund for a relief to be provided will to some extent limit the ability of companies to claim the relief for tax purposes as some companies may not be ready to tie up a significant amount of fund at initial stages of operations.

Kahama and Dar es Salaam — Economists commended President John Magufuli’s yesterday ban on transporting mineral sands from gold mines for smelting outside the country.

Speaking to The Citizen in separate interviews, they said the ban was long overdue because the government was losing the much deserved revenue due to poor follow-up on the amount and value of minerals recovered from the sands.

President Magufuli said at a public rally yesterday in Kahama that gold miners should invest in smelters right here in Tanzania instead of “exporting” sands to recover minerals in them that include tin, copper and silver.

The President, who is on a tour of the Lake Regions, said among all the countries blessed with minerals, it was only Tanzania that airlifted its valuable sands abroad. He affirmed that his government would not allow that to continue.

“It is very surprising that these investors have been air-lifting mineral sands to other countries. So, I’m saying this: they must now build processing plants right here in Tanzania to purify the mineral sands. This is because when they export the sands, the government loses some revenue,” Dr Magufuli said.

But the economists, in addition to commending President Magufuli’s ban, said care should be taken to ensure maximum benefit from domestic investments in the smelters. Prof Semboja Haji from the Economics Department of the University of Dar es Salaam said even as the government welcomes investors to invest in smelting, it should also work diligently to establish markets for the minerals that are recovered from the sands to ensure investors recover the costs of their undertakings.

“It is crucial that the issue of markets for the minerals, mostly tin, silver and copper, is considered well in advance to ensure the investments become sustainable,” Prof Haji said.

Prof Samuel Wangwe said smelting the sands within Tanzania is possible so long as there is enough political will.

“If we cannot build the smelters immediately, then there must be an agreement with the gold miners on the value of the minerals contained in the sand so as to ensure the government gets its fair share of the tax when the smelting is done outside the country,” Prof Wangwe, a renowned industrial economist noted.

Dr Jehovaness Aikaeli, a senior lecturer in Economics at the University of Dar es Salaam, said smelting the sands in the country would reduce unnecessary costs of transporting them to far off countries.

“I believe those who afford to export the sands have the financial capacity to invest in smelters in Tanzania,” Dr Aikaeli said.

He added that President Magufuli’s move was actually overdue, one that previous administrations ought to have taken a long time ago.

Prof Haji added that in the past, when investors opened the gold mines, smelting technology seemed too expensive and was feared it could have added to operational costs, but now a new technology called mobile minerals processing plant has come into the market.

This one, he said, is relatively cheap and well advanced.

“What is needed is for the government to look for investors who can invest in that area,” he noted.

He cautioned, however, that investing in smelting gold sand in the country needs reliable electricity. Investors would incur untold loss if electricity will be erratic. Marketing channels should also be found to sell the minerals so that investors can be assured of where to sell and get returns for their investors.

He noted that the government has been incurring huge losses because there was no evidence whether the Bank of Tanzania was following up on the amount and value of minerals recovered from smelting gold sands abroad to enable the government to collect taxes.

“Lack of coordination between ministries of Industries, Trade and Investment as well as that of Minerals and Energy could have complicated matters. While mining was under MEM, the export of the sands was under the ministry of MITI,” he said.

Meanwhile, President Magufuli ordered yesterday the National Environment Management Council to remove gold residual in the Geita Gold Mine and give it to wananchi.

He warned leaders in the region from dividing the residuals among themselves. The Head of State also touched on the issue of mineral discoveries by residents, who found themselves being removed, saying from now on procedures would be followed and those residents would stay put in the area where the minerals have been discovered on the basis laws and procedures.

Except there is a last-minute change in his schedule, the embattled Speaker of the House of Representatives, Yakubu Dogara, will on Friday meet President Muhammadu Buhari over the budget padding scandal rocking the lower legislative chamber, PREMIUM TIMES can authoritatively report.

According to President Buhari’s list of engagements for Friday, seen by this newspaper, Mr. Buhari will meet Mr. Dogara at 4.30p.m.

The meeting is at the instance of the Speaker, presidency sources said.

Associates of Mr. Dogara said the speaker sought audience with the President over the allegations levelled against him by a former chairman of the appropriations committee of the House, Abdulmumin Jibrin, that he abused his office and committed budget fraud.

The meeting is holding about 24 hours after the governing All Progressives Congress ordered Mr. Jibrin to stop further public comment on the matter.

Those familiar with the matter said Mr. Dogara sought to see the President “to offer personal explanation” on the allegations against him.

Our sources said the speaker is worried that the President might believe Mr. Jibrin’s claims if he did not make efforts to state his own side of the story to the nation’s number one citizen.

Mr. Dogara will also be requesting the President to help call Mr. Jibrin and his backers to order, our sources said.

The crisis has deeply polarised the House, with the allegations made by Mr. Jibrin now being investigated by the Economic and Financial Crimes Commission, the Independent Corrupt Practices and other related offences Commission, the State Security Service and the Nigeria Police Force.

When contacted, Mr. Dogara’s spokesperson, Turaki Hassan, said he was not aware of the planned meeting between the President and the Speaker.

The 2016 African Economic Outlook (AEO) was launched by the Nigeria Country Office of the African Development Bank at an outreach event held at the Ahmadu Bello University in Zaria. The theme of the 2016 AEO is Sustainable Cities and Structural Transformation. The report looks closely at Africa’s distinctive pathways towards urbanisation, and how this is increasingly shifting economic resources to more productive activities.

The publication covers all 54 African nations, with individual country notes and corresponding statistical annexes. Nigeria’s case formed the basis for exchange of views on the AEO, as well as deliberations on prospects for the Nigerian economy.

The July 29, 2016 event started off with a brief meeting with the university’s senior management, which expressed appreciation of the Bank’s efforts in reaching out to academia and encouraging scholars to engage in public policy space. In his remarks, the Country Director of AfDB’s Nigeria Office, Ousmane Dore, emphasised the importance of the report. “It significantly informs policy dialogue and feeds into the design of Bank’s projects to support government priorities,” Dore said.

AfDB Lead Economist Barbara Barungi outlined the main findings of the report. According to the publication, Africa’s economic performance had been steady and was expected to remain moderate in 2015 and strengthen in 2016 against the backdrop of a fragile global economy. The continent remained the second fastest-growing economic region after East Asia. The report predicts the continent’s average growth at 3.7% in 2016, increasing to 4.5% in 2017, provided the world economy strengthens and commodity prices gradually recover.

Urbanisation, the report states, is a megatrend that is transforming African societies profoundly. However, this is not accompanied by structural transformation, and therefore industrialisation remains rather slow. Two-thirds of the investments in urban infrastructure until 2050 are yet to be made, the report adds.

If harnessed by adequate urban planning policies, urbanisation can help advance economic development through higher agricultural productivity, industrialisation, services and foreign direct investment in urban corridors.

According to the report, Nigeria has had a sluggish economic growth of 2.8% since the end of 2015. At the time of the report launch, Barungi reported that the economy had contracted further by 0.36% in the first quarter of 2016, while inflation continued to rise, standing at 16.5%.

Policy reforms by the new administration are highlighted, and they include strong fiscal policy, improvements in public sector transparency and accountability, as well as adoption of a more flexible exchange rate.

Nigeria has been rapidly urbanising, with fast-growing cities such as Lagos and Kano facing increasing unemployment and income inequality due to poor urban planning and weak links between structural transformation and urbanisation.