By Julius Bizimungu

The number of people involved in informal trade is growing, but most in the region don't have access to proper transport means.

This is one of the challenges highlighted during the last day of The Global African Investment Summit that closed on Tuesday in Kigali.

It was noted that only one in four households in the Common Market for Eastern and Southern Africa (COMESA) region has access to energy, and the majority of them live in rural areas.

Experts said in order to overcome these challenges, the region should put in place creative financing mechanisms to boost infrastructure development.

"We have had desire to increase the region's power pool but the provision of power in COMESA, for instance, is very poor. Only one in four people in the region has access to energy and some of the countries tend to use sources like hydro-power, which makes it complicated especially when it comes to drought seasons. There is no unified grid access and many rural areas simply have no electricity at all," said Edward George, head research at Ecobank.
 

On the other hand, he said, "when you look at the existing corridors in the region, you can tell that they could unlock the potential in the near future."

"The long corridors like those running down the Nile valley along the East African coast, the Maputo development corridor, the proposed Khartoum-Morocco (corridor) across the Mediterranean sea, all could integrate the region," he added.

Spearheading devt

George Negatu, the regional director for Eastern Africa, African Development Bank, said the East African Community is spearheading the infrastructure development on the continent, but there are still challenges that still persist which governments should be addressing.

"EAC is arguably one of the most integrated regions on the continent. But there are some challenges that still persist that need to be addressed. The poor infrastructure like the transmission lines, the low access to energy, air transport lines, railways, and road systems are hampering trade competitiveness and exchange. Unless we get to improve regional infrastructure, we are not going to achieve what we want," he noted.
 

Negatu cited high energy cost as another factor affecting economic integration in a way that it limits productivity of industry in the region.

"In the end, this limits the efficiency and competitiveness of the industries. This means that industries in the region are not able to reap benefits of the global value chain," he added.

Lack of harmonisation of policies and regulations was also cited as a major challenge for infrastructure development.

"If you work across several neighbouring countries you would at least expect to have harmonised policies that allow your investment to become effective across the region, which is a different case in our region. There are different policy regimes and regulatory frameworks, which hinder investment," Negatu said.
 

He called for more financial systems that can allow companies to borrow money to invest in long-term investments.

"The availability of loans is low and access to finance is a problem. Non-tariff barriers are also making it difficult for trade. Unless we change this, regional integration will remain a wish," said Negatu.

Standard Bank's Jonathan Muga said infrastructure financing is most of the times held up by the high risks associated with infrastructure projects.

Currently, governments spend 10 per cent of their GDP in infrastructure and the significant part of this goes into transport, mainly roads.

"When it comes to private sector financing the infrastructure, we see that the gap between the expectations and the reality is critical. Governments should restructure the packaging of projects that require private sector financing."

By Kennedy Senelwa

Companies interested in East Africa's hydrocarbons have started putting their capital into countries with proven resources and decent fiscal terms.

The region still offers significant opportunities for investors taking future strategic positions, but it is not attracting attention as a hotspot of oil and gas exploration investment due to declining crude prices.
 

Data from Oslo-based consulting Rystad Energy shows that capital spending in East Africa by exploration companies was $4.6 billion in 2012, $4.7 billion in 2013, then dropped to $4.3 billion in 2014 and $2.5 billion in 2015 as crude prices declined.

The low price environment has led to a reduced level of activity among industry players, with a crippling effect on countries such as Nigeria and Angola that depended heavily on oil revenues.

PricewaterhouseCoopers (PwC) says governments in East Africa that want to attract oil and gas investors now have to offer an attractive environment by reforming their regulatory, fiscal and licensing systems.

"There seems to be an increased level of awareness on the part of governments and policymakers that they have to play their part in implementing projects as soon as possible," said Chris Bredenhann, PwC Africa oil & gas advisory leader.

Kenya's Petroleum (Exploration, Development and Production) Bill, aimed at creating a new legal and regulatory framework, is being debated in parliament.

PwC's Africa oil & gas tax leader Ayesha Bedwei said Tanzania's regulatory environment is uncertain despite the promulgation of the Petroleum Act, 2015, which allows increased central government involvement, fuelling investor fears of project delays relating to developing liquefied natural gas (LNG) processing plant for natural gas.

While global demand for affordable reliable energy will continue to grow for the foreseeable future, navigating the years ahead will be challenging, as hydrocarbons are no longer as profitable to produce.

"The appetite for exploration has fallen, with companies moving away from higher risk wildcat wells in frontier regions like East Africa," said Alasdair Reid, sub-Saharan Africa upstream research analyst at London-based consulting firm Woodmac.
 

He said hydrocarbons projects in the pre-final investment decision (FID) stage will not produce commercially for some years and the question is not "What do oil prices look like today?" but "What will they look in the early-to-mid 2020s when production could begin?"

Each operator will use a long-term price scenario and their projection will impact how they design and implement the projects with regard to when they plan to produce first oil, taking account of how they phase the development of the oilfields.

Getting off ground

Financing the projects and the associated infrastructure is a major constraint. If projects can break even below the projected long-term oil price, then they are likely to reach FID. If not, securing financing and getting them off the ground becomes far more challenging.

Mr Reid said that Wood Mackenzie sees the Uganda and Kenya onshore projects breaking even at a Brent price between $40 and $60 a barrel, which is positive for Tullow Oil Plc with its joint venture partners.

"There is still an imperative for the partners to reduce costs as far as possible to ensure a reasonable rate of return. There is a likelihood that some upstream partners will reduce their equity stake in order to meet their capital commitments," he said.
 

Some 6.5 billion barrels of crude oil have been discovered in the Albertine basin in western Uganda and 750 million barrels in South Lokichar, northwestern Kenya.

Tanzania's natural gas is facing the challenge of massive LNG volumes coming on-stream in the next five years from the US and Australia, among other countries. The market is not expected to improve until 2024.

"The key question is whether Tanzania can ensure that its fiscal and regulatory structures are in place and supportive of the project," said Mr Reid.

Tanzania has 57.1 trillion cubic feet of natural gas. Mr Reid said Tanzania's LNG will need to be competitive with other projects around the world that are looking to supply the same markets.

Luanda — The Angolan Oil Company (Sonangol) has categorically denied as untrue news published by a certain weekly, according to which it owes Usd 1.2 billion to Banco Millennium Atlântico (BMA) in syndicated loans.

In a press release that reached Angop on Monday in Luanda , the company admits that through its Sonangol Holdings, it owes BMA about Usd 5.0 million which repayment is expected for July 31, 2017.

Sonangol reiterates that the company is committed to a transparent and institutional cooperation, rigour and competence to build a stronger company and better contribute to the economic and social development of the country.

ANALYSISBy Diane Mushimiyimana

The ministry of health and the ministry of finance are planning to see how tobacco taxation can be further increased. This comes after an 11% reduction in consumption since the tobacco taxation policy was started.

Studies have shown that increasing tobacco prices by 10% will reduce consumption by 8%in low and middle income countries.

Figures from Minecofin indicate that basing on the selling price, tobacco taxation stood at 60% in 2001-2006 and at 120%in 2007- 2009. In 2009-2015, it was at 150%.

Based on retail price from 2015, the taxation now stands at 36% i.e. an extra Rwf 20 on each tobacco packet sold at the market.
 

While there are many varieties of tobacco products, the taxation only regards what is produced in industries.In Rwanda, there are two main products: Intore, the local brand which costs Rwf 1,000per packet, and Dunhill (imported) costs Rwf2,000.

Emmanuel Nkurunziza, the head of taxation department at Minecofin, says the ministry is yet to decide on how much tax should be added on tobacco products since it is a decision that needs consultations.

"People should understand that increasing tobacco taxation is not in the interest of increasing the country's revenue. We get revenues but a considerable amount is spent on the expensive treatment of non-communicable diseases (NCDs)yet that money can be used for other development projects.Therefore, will encourage the population to quit smoking," he said.

According to the NCD Risk Factor Survey 2013/14, the adult smoking prevalence stands at 14%. Dr. Marie Aimee Muhimpundu, the head of NCD Unit at the RBC, says measures to curb consumption are crucial considering that tobacco is one of the most common riskNCD factors such as heart disease, stroke, chronic lung disease, type 2 diabetes and many types of cancers.

"Research shows that tobacco increases the risks for NCDs by 80%. Therefore, we are convinced that high taxation on tobacco products can lead to high purchase and hence, discourage consumption which in the process reduces health risks," she said.
 

Dr. Muhimpundu added that diseases linked to tobacco consumption are expensive to treat and advised people to quit consuming tobacco as prevention is better treatment.

She also mentioned that apart from increasing taxes, the ministry of health regularly reminds people of the consequences of smoking on occasions such as the world tobacco day. "We also work with different partners such as the police to reach the youth with anti-tobacco messages, mainly during anti-drugs campaigns," she said.

According to the World Health Organization (WHO), tobacco use was the second leading risk factor for all deaths worldwide in 2000. It is also a significant risk factor for six of the eight leading causes of death globally.

WHO reports indicate that tobacco consumption is reducing in high income countries and many lower and middle income countries. However, deaths from tobacco use will continue to increase in the coming years, with over 175 million people expected to die by 2039.

By Natalie Campbell-Rodriques

Regional integration is still a highly discussed topic with the Brexit vote still fresh in minds across the globe. Of course, over two months on, conversations have moved beyond shock, joy and dismay. The focus is currently on the potential effects of the decision made by the British people.

On surface, it may seem as though African nations will not be directly affected once the British Prime Minister triggers Article 50. While this article will not focus on the potential consequences, it is important to note that there will be both positive and negative aftereffects.

There are analysts, economists and policymakers sharing their thoughts as to the impact on Africa as a region and specifically for individual countries. But what the Brexit vote should teach us is that no one can accurately make predictions about such issues.
 

It is within this vein that the question of the East African Community (EAC) comes to the table.

Should integration in this region still be a priority? Should the pace of the integration movement be hastened or slowed down?

Signs coming out of Arusha suggest that integration for the region is still on course and why shouldn't it be? The revived Community, which is a few years away from its twenty-first birthday, has moved somewhat slowly and that has worked well so far.

There have been criticisms over the years that the process should move faster but to what avail? With a cumulative population of approximately 146 million it makes sense for there to be a union among the member states but there is no rush for it to be defined as desired by economists and analysts.

The Brexit vote has left questions as to the fragility of integration among countries but it would be hasty to assume that regional integration does not work.

Each region is different as should the tenets and patterns of regional agreements. The cookie cutter formulas and the set in stone timelines should be ignored and the process be allowed to continue growing in an organic though structured manner.
 

It is a good sign that the EAC's integration process has managed to implement three of four stages from its Development Strategy: the Customs Union, Common Market and the Monetary Union.

These first three stages of the integration process lay the foundation for the fourth: the Political Federation. There is talk in some quarters that the political federation should be fast-tracked, but to what end?

With two member states expecting to have national elections in 2017, waiting may not be a bad idea. Why not place the focus on delivering on the first three phases?

The decision to make Kiswahili the second official language of the East African Legislative Assembly, the current plans to phase out the dollar as the cross-border trade currency as well as working together to capitalise on the African Growth Opportunity Act (AGOA) are just a few of the initiatives which, if harnessed, could truly change the lives of individual citizens within the EAC.

While Kiswahili is spoken in all the member states it is most pervasive in Tanzania and Kenya with the other nations having a smaller portion of their population using the language.
 

With only a segment of the bloc's population properly speaking and using Kiswahili, there is need to increase the numbers which in itself requires policy initiatives as well as strategy development and implementation.

Phasing out the dollar for cross-border trade across the EAC partner states will be a game changer for small- and medium-sized businesses. The savings gained from being able to trade in one's own currency is expected to increase income as well as expand the trading industry in all countries involved.

For this plan to work, there will need to be education campaigns as well as changes to banking laws, among other things. Again, this is an area which needs specific attention in order to facilitate successful implementation.

While different member states have different arrangements within AGOA, individual EAC partner states, and the bloc as a whole, stand to benefit.

There is much work to be done with regards to regional integration for East Africa but the Community needs to continue working at its own pace. Delivering on plans which positively affect the livelihood and existence of citizens is more important than meeting timelines.

Luanda — A credit for teachers agreement, estimated at 2.5 billion kwanzas, was signed last Tuesday, in Luanda, between the Sol bank and the Teachers Pension Scheme (CPP).

The protocol, which enters into force on Wednesday (Sept. 07), is intended to dignify Angolan teachers and will focus on credit grants in areas like housing, cars and consumption.

According to the agreement, the refunding of the credits is to be done in four years for consumer credit, five years for car credit and thirty years for housing credit.

On the occasion, the CEO of Sol bank, Coutinho Miguel, explained that the construction of a society of equity and inclusion requires development of human capital, as a fundamental element for any change.

He then stressed that the agreement will contribute to the improvement of the lives of those citizens who have a great responsibility to train and educate people.

On his turn, the chairman of the CPP, Miguel Flávio Bongo, said that the agreement will serve to hold frequent dialogue and, at the same time, will gave is expected to have a real and effective impact on the lives of teachers, including their respective families.

Pretoria — The South African Reserve Bank (SARB) has launched a national campaign aimed at raising public awareness of illegal deposit-taking schemes and advance-fee schemes.

Launched on Tuesday under the theme 'Easy Come. Easy Go', the campaign aims to give South Africans practical tips to check whether they are being scammed.

It also encourages the public to exercise extra caution when choosing potential investment opportunities.

"Easy Come. Easy Go draws on the old adage that if a deal sounds too good to be true, it probably is.

"One of the responsibilities of the SARB is the prudential supervision of banks. The Banks Act prescribes that only registered banks can take deposits from the general public and it is an offence for unregistered persons to conduct the business of a bank," said Governor Lesetja Kganyago.

Speaking at the launch of the campaign, Governor Kganyago said the SARB is empowered to investigate the activities of unregistered persons suspected of taking deposits from the public in contravention of the Banks Act.
 

Last year alone, the bank investigated 41 illegal deposit-taking schemes. Twenty-eight of these are from previous years, while 13 are new schemes. The SARB is investigating 19 suspected illegal deposit-taking schemes. Over 5 000 advance-fee scams have been reported to the SARB in the past five years.

The central bank said illegal deposit-taking schemes take a number of forms and varying degrees of inventiveness, including Ponzi, pyramid, and related schemes.

"Generally speaking, Ponzi and pyramid schemes fall within the jurisdiction of the National Consumer Commission, but the SARB investigates such schemes to the extent that they may have an element of deposit-taking, in contravention of the Banks Act," said the SARB.

Tread with caution

The bank called on the public to make use of the "stop, check and report" mantra.
 

Stop for a moment and ask yourself some basic questions. If it sounds too good to be true, it probably is.

Check to see if you are being targeted and avoid becoming a victim

Report the scam and help others stay vigilant.

Eckard Volker, the Managing Director of Integrated Forensic Accounting Services, who has investigated many scams totalling billions of rands over his career, has endorsed the bank's campaign.

"There is no such thing as a risk-free 'get rich quick' scheme," said Volker.

The Easy Come. Easy Go campaign will make use of radio, billboards, community activations, social media, and online platforms to raise public awareness.

The public can also visit www.easycomeeasygo.co.za for more information on illegal deposit-taking schemes and advance-fee schemes.

Werda — Measles is a threat to the beef industry, the Minister of Agriculture, Mr Patrick Ralotsia, has said.

He was addressing a kgotla meeting in Werda in Kgalagadi District on Friday.

Mr Ralotsia said the measles outbreak was growing at an alarming rate and if stringent measures were not taken, the meat industry would be negatively affected.

He said cattle diagnosed with the disease went not suitable for human consumption, let alone the lucrative European Union market, which was the biggest consumer of Botswana beef.

He, however, pointed out that controlling the disease was easy because all farmers had to do was to build pit latrines at cattle posts because the disease was spread by worms from faecal excretions.

The minister said law enforcement officers in the district had told him that stock theft was also a concern in their area and government was still looking into ways in which it could increase penalties of such offences as way of trying to control the unbecoming behaviour.
 

He advised farmers to look after their livestock and make sure that they know their where abouts because stray animals were prone to attracting thieves.

Mr Ralotsia said by doing this, law enforcement officers wwould in turn be able to carry out their duties effectively.

He cautioned the residents that since they were located in the border line, therefore they should know that by allowing their animals to stray over the border was a crime punishable by law.

For his part the farmers committee chairman, Mr Jacob Matebesi, said they were disadvantaged by lack of tractors during ploughing season and as such the season normally came to an end while most of them had not ploughed yet.

He also pointed out that they needed to be helped with cluster fencing because animals always destroyed their crops.

Most of the beneficiaries of LIMID programme told the minister that procuring officers took long to pay them and at times they do not use the full amount intended for each beneficiary.
 

They said the special economic zone idea is disadvantaging them because they are now stuck with small stock and the situation is worsened by the fact that there is no market where they can take their produce and as such they should be allowed to diversify and try other available programmes.

The minister told residents that cluster fencing programme was there and all they need to do is to group themselves and they will be assisted, adding that there are components such as borehole drilling if they need water.

He went on to encourage residents to buy themselves tractors because government is ready to pay them after ploughing for fellow farmers.

He encouraged residents to utilise their agricultural land so that the country can stop importing food.

BOPA

Kasane — Food production and security is expected to increase in Chobe with the latest handover of agricultural machinery and implements worth over P1 million; courtesy of the United Nations Development Programme through their Bio-Chobe project.

Receiving the implements on Monday, Vice President, Mr Mokgweetsi Masisi challenged Chobe farmers to prove their worth and justify why they had to receive the donation instead of other farmers elsewhere.

"The burden is on you to prove that you deserve this more than anyone else, and since these are communal resources, you must put national interests ahead of individual or political agendas," he cautioned.

He highlighted that this could not have come at a better time as agricultural production in Chobe west had gone down as a result of climate change and high levels of human-wildlife conflict.

"As part of the Bio-Chobe project, farmers will be encouraged to adopt modern farming practices such as minimum tillage, crop cover and rotation to reduce the impact of climate change," he noted.He added that to address human-wildlife conflict, the Ministry of Agriculture through Integrated Support Programme for Arable Agriculture Development (ISPAAD) encouraged farmers to cluster fence their fields to reduce crop damage by wildlife.

Nairobi — East African leaders should address issues that impede growth and transformation of agricultural sector to become a key driver of growth and development, a Kenyan Cabinet Secretary, has said.

Mr Willy Bett, Cabinet Secretary in the Ministry of Agriculture, Livestock and Fisheries, said here on Monday that East African leaders need to engage the private sector to review the issues which are hampering growth into the sector.

"The biggest question is what we are going to undertake to bring transformation to agriculture to become a key driver of socio-economic development," he told reporters at an inaugural Africa Green Revolution Forum press conference here on Monday.
 

Mr Betty said it was important that African leaders were committed to transform the sector whose growth and contribution to the economy had declined in recent years.

The East African Community is one of bright spots of growth in sub-Saharan African with growth rate of above six per cent driven by fastest growing sectors of communication, finance and banking which are not labour-intensive.

He said industrialization agenda in the EAC region would not succeed much without transformation of agriculture to support the growth of the manufacturing sector.

The President of Alliance for Green Revolution in Africa, Dr Agnes Kalibata said there was a need for African leaders and the private sector to work together to unleash the great potential of the sector.

She said rapid growing young population and plans for boosting the manufacturing sector were presenting opportunities for meaningful growth in agriculture through transformation of the sector.
 

"We need to step up our actions and take advantage of the moment to bring about transformation of agriculture," she said. "The private sector is engaged and wants to engage more. How do we support them?

How do our leaders seize the moment?" The Managing Director of Africa for Rockefeller Foundation, Mamadou Biteye said it was concerning to see agriculture declining while other sectors were flourishing noting it was something which provides a food for thought. "Since 2005 it is declining.

Is it a result of other sector rising significantly that we don't see its growth of is it just declining because we have not done enough to support its growth," he said.

African leaders, agriculture development partners and other stakeholders are meeting in Nairobi for a week-long conference at the sixth African Green Revolution Forum to discuss various ways of transforming agriculture into a key driver for growth and development.

The conference is hosted by Alliance for Green Revolution in Africa.