Kenya marks 60 years of independence, and the president defends painful economic measures

People jump and wave Kenyan flags during the 60th Jamhuri Day Celebrations (Independence Day) at Uhuru gardens Stadium in Nairobi, Monday, Dec. 12, 2023. Thousands of Kenyans braved a chilly morning to attend festivities Tuesday in the capital Nairobi, to mark 60 years since the East African country gained independence from British Colonial rule. (AP Photo/Brian Inganga)

NAIROBI, Kenya (AP) — Kenya’s president on Tuesday defended the high taxes the government recently imposed, calling them a “necessary sacrifice “in helping the country deal with ballooning foreign debt which now stands at $70 billion.

Speaking at celebrations marking 60 years since Kenya’s independence from Britain, President William Ruto said East Africa’s largest economy was no longer at risk of defaulting on bond payments following economic reforms his government had undertaken since taking power last September.

“Though painful, the sacrifices we have made will not only make our freedom fighters proud,” Ruto told tens of thousands of people in the capital, Nairobi. He added: “I can now confirm without fear of any contradiction that Kenya is safely out of the danger of debt distress, and that our economy is on a stable footing.”

The economy has taken center stage in politics and daily life in Kenya as the government tackles mounting debts. A $2 billion Eurobond is due in June.

Last month, the government reached a lending agreement with the International Monetary Fund amounting to $938 million, a boost for the country struggling with dwindling foreign exchange reserves.

Recent attempts at reforms include a mandatory housing levy which courts struck down last month for being “discriminatory, irrational, arbitrary and against the constitution.”

The president also removed subsidies on fuel and maize flour — a staple in Kenya.

Ruto vowed that “all taxes collected by the government shall be put to their intended use and that no single shilling — not one shilling — shall be lost through embezzlement, theft or corruption.” Kenyans have long complained of widespread official graft.

Source:  AP , 12th December 2023

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Afcon 2023: ‘Divine’ two-year delay helps Afcon hosts Ivory Coast

By Piers EdwardsFootball writer
Last updated on .
A general view of the Alassane Ouattara Olympic Stadium, one of the six stadiums for the 2023 Africa Cup of Nations
The Alassane Ouattara Olympic Stadium in Abidjan will host the opening game and final of the 2023 Africa Cup of Nations

Ivory Coast international Ghislain Konan says it is an “enormous pride” for his country to host the 2023 Africa Cup of Nations and believes that visitors will receive the warmest of welcomes next month.

The tournament kicks off on 13 January, with the opening game and the final on 11 February taking place in the country’s financial hub Abidjan.

“I can tell you that it will go very well,” Konan, who plays his club football in Saudi Arabia, told BBC Sport Africa.

“We are a country of hospitality and one that welcomes others. As we like to say back home, we like foreigners more than we like ourselves.

“We will truly welcome the visitors who’ll come to our home and also show them that we are a great country.”

Konan, who was born in Abidjan, was speaking a few days after the Ivorian government said it will be using some of its 20,000 volunteers to help fill stadiums during Nations Cup matches.

The tournament, which was moved from June-July of this year to January 2024 to avoid Ivory Coast’s rainy season, will be staged in five different cities.

Abidjan is the only city that will use two stadiums – with the newly-built Alassane Ouattara Olympic Stadium hosting the opening match and final – while Bouake, San Pedro, Korhogo and the capital Yamoussoukro will also host games.

The stadiums in the latter three cities all have a capacity of 20,000, with Abidjan’s Felix Houphouet-Boigny Stadium and the Bouake arena able to accommodate 40,000 and the Alassane Ouattara 60,000.

Yet the 23 teams trying to ensure the trophy leaves Ivory Coast, including defending champions Senegal, may find more support from the locals than they expected.

“Among the 20,000 volunteers we have, it is expected that a portion will support non-Ivorian teams – which is a first,” Toure Nimba, a sports ministry official, claimed on Friday.

“Every time a non-Ivorian team plays in the competition, you will have Ivorians supporting those teams. The organising committee is also arranging that school children will move en masse to stadiums during matches.

“We have local committees reaching out to the smallest hamlets, and it is the combination of all these efforts that will allow us to have full stadiums.”

In the past, poor attendances have been a feature of many Nations Cup matches which do not feature the host country.

However, Cameroon, which hosted the 2021 edition, bucked that trend and organisers hope Ivory Coast can do similarly.

Delay ‘served Ivory Coast well’

A general view of the Felix Houphouet-Boigny Stadium in Abidjan

The Felix Houphouet-Boigny Stadium in Abidjan will host group matches involving Egypt, Ghana and Nigeria along with two last 16 ties and a quarter-final.

Ivory Coast was originally going to host the Nations Cup in 2021, only for the Confederation of African Football (Caf) to reallocate the staging of that tournament to Cameroon, which had been set to host the 2019 finals.

Despite filing a protest with sport’s highest legal body, the Court of Arbitration for Sport, about the change in December 2018, the Ivorian government agreed to the enforced switch just a month later after a meeting between President Ouattara and then Caf president Ahmad.

With the six stadiums and 24 training grounds ready, not to mention corresponding works on upgrading Ivory Coast’s transport, hotel and medical facilities, organisers feel the delay may have ultimately worked in their favour.

“Today, I can see we profited a little bit from the delay, even though I think we would have been ready for 2021 if we had had to be,” said Nimba.

“But I still take it as divine grace that we are here today, with infrastructure which has been finished far better thanks to all the tests we have done.

“We had time to test them technically, and in terms of both crowd control and security, so that we are ready.”

With the then Ivorian sports minister having declared the country “99%” ready as far back as July, Ivory Coast has had the rare luxury of plenty of preparation time to stress-test facilities.

Stadiums already in use

Idriss Diallo, president of the Ivorian football federation, speaks in the stands of the Alassane Ouattara Olympic Stadium

Idriss Diallo, president of the Ivorian football federation, visited the Alassane Outtara Stadium for a tour last week.

The various stadiums have all hosted several matches, with Korhogo and San Pedro even staging this year’s Women’s African Champions League last month.

One of the biggest setbacks Ivory Coast suffered in its preparations came in September when the national side’s friendly against Mali at the Alassane Ouattara Olympic Stadium, now Ivory Coast’s biggest arena, had to be abandoned after 45 minutes when heavy rain made the pitch unplayable.

This was later described by Caf as “a maintenance problem rather than a drainage one”, with the stadium hosting a 2026 World Cup qualifier (the 9-0 thumping of Seychelles) last month without problems.

Following the widespread improvements across a country which suffered debilitating civil wars between 2002 and 2011 – conflicts which led to the displacement of over one million people in addition to the destruction of infrastructure – Ivorian officials are confident the country is on track to host the “best Nations Cup ever”.

“On 13 January, Ivory Coast – before all the cameras of the world – will deliver an unforgettable spectacle,” said Francois Albert Amichia, who heads up the local organising committee.

“Then it will be up to the 24 teams to shine on the field and show that the positive development we saw at the World Cup in Qatar from Africa’s representatives was not a flash in the pan but a reality – because African football is evolving.”

Having last hosted the Nations Cup in 1984, Ivory Coast will be looking to win the title for the first time on home soil, after triumphing in Senegal in 1992 and then in Equatorial Guinea in 2015.

“We are coming to win it but it won’t be easy since there are many big nations,” said Konan, a left back who has won 31 caps since his debut for the Elephants in 2017.

“But given we are playing at home, we will try to give everything to ensure the beautiful trophy stays in the country.”

Additional reporting by Noel Ebrin Brou in Ivory Coast.

Source: BBC,  12th December 2023

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Nigeria loads 1st crude at huge new Dangote refinery

Dangote Refinery, Lagos, Nigeria - Africa's biggest oil ...

Nigeria

A mega-refinery built in Nigeria by billionaire Aliko Dangote has received its first barrels of crude oil, an “important milestone” in a project that has been plagued by delays and aims to fully meet the country’s fuel needs, the company announced on Saturday.

Since Friday, one million barrels from the Agbami offshore oil field, off the Niger Delta, have been unloaded by ship at the refinery located in the Lekki free zone, east of Lagos, the economic capital.

“This is an important milestone”, said Aliko Dangote, who founded Dangote Petroleum Refinery, in a statement released on Saturday, adding that “the next big step will be to get our products to the Nigerian market”.

Initially scheduled for “late July, early August”, oil refining should enable Nigeria to put an end to frequent fuel shortages, and also increase the quality of fuel in circulation.

Nigeria (population 215 million) is one of Africa’s biggest oil producers, but imports almost all its fuel due to the failure of its state refineries, and fuel shortages plague the daily lives of its inhabitants.

Launched in 2013, the $18.5 billion-plus industrial project (double the initial cost) is “the largest single-train refinery in the world”, according to the Dangote Group, and should, at full capacity, have the largest crude refining capacity on the African continent.

The facility is expected to refine 350,000 barrels per day initially, rising to 650,000 when fully operational, and to produce diesel, jet fuel, automotive fuel, and liquefied petroleum gas.

A further 5 million barrels are scheduled to come on stream in the coming weeks.

The industrial site has been built next to the new Lekki deep-water port, which is intended to relieve congestion at the Port of Lagos, but also to export some of Dangote’s refined oil to other African countries.

According to Mr. Dangote, eventually “at least 40% of the refinery’s capacity will be available for export, which should result in significant foreign exchange earnings for the country”.

Source:  AfricaNews 10th December 2023

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Africa’s development dynamics 2023 – Investing in sustainable development

Africa Map Images - Free Download on Freepik

Africa’s sustainable financing gap until 2030 is about USD 1.6 trillion. According to this report’s estimates, the continent needs additional financing of about USD 194 billion annually to achieve the Sustainable Development Goals by 2030. This annual sustainable financing gap is equivalent to 7% of Africa’s gross domestic product (GDP) and 34% of its investments in 2021. The annual gap equals less than 0.2% of the global and 10.5% of the African-held stock of financial assets.

African economies hold unique assets to close the continent’s sustainable financing gap:

  • Real GDP growth is estimated to return to the levels before COVID-19, at 3.7% in 2023, the second highest rate in the world after developing Asia (5%) and before Latin America and the Caribbean (1.6%). The growth is estimated at 4.9% in East Africa, 4.3% in Central Africa, 4% in North Africa, 3.8% in West Africa and 1.4% in Southern Africa.

  • The proportion of African youth completing an upper-secondary or tertiary education could reach 34% by 2040, up from 23% in 2020 and 18% in 2010. Africa has the world’s youngest population, with a median age of 19 years, compared to 30 for Latin America and the Caribbean, 31 for developing Asia and 42 for Europe.

  • Natural resources represent key assets for African economies. Natural capital accounts for 19% of Africa’s total wealth compared to 7% for Latin America and the Caribbean and 3% for developing Asia. From 2011 to 2020, African forests increased the global carbon stock by 11.6 million kilotons of CO2-equivalent net emissions, while carbon stocks in forests outside Africa declined by 13 million kilotons.

  • Africa’s domestic financial resources hold a large potential for sustainable development. Domestic government revenues amounted to USD 466 billion in 2021, equivalent to 17% of GDP, and assets held by African institutional investors amounted to USD 1.8 trillion in 2020, equivalent to 73% of GDP. During the COVID-19 pandemic in 2020-21, intra-Africa foreign direct investment was three times more resilient than foreign direct investment from outside the continent, boosting growth in renewable energies and in information and communications technology.

Despite this potential, global crises are affecting investment in Africa more than in other regions. The average inflation rate for the continent is projected to reach 15.5% in 2023 – the highest level in 27 years – with peaks above 15% in 11 African countries. As of February 2023, 8 African countries were in debt distress (out of 9 globally), and 13 were at a high risk of debt distress (out of 27 globally). Africa’s share of global greenfield foreign direct investment has been on a downward trend in recent years, dropping to 6% in 2020-21 (the lowest share in 17 years), while high-income countries in other parts of the world have recorded their highest share ever (61%), compared to 17% for developing Asia and 10% for Latin America and the Caribbean.

The cost of capital in Africa has risen above the levels in other world regions, pricing some African governments out of bond markets while thwarting investments in transformational sectors such as renewable energy. The spread on an average African Eurobond (a measure for the potential cost of sovereign borrowing) reached a 15-year high of about 10 percentage points in September 2022, eclipsing previous peaks. In 2021, the average cost of capital for energy projects was about seven times higher in Africa than in Europe and North America. While experienced investors attain higher average returns in Africa than in other world regions, the lack of reliable information and data is an important barrier to new investments.

To increase resilience to external shocks and improve investor confidence, African policy makers can work with international partners and African civil society to mobilise investments towards Agenda 2063 and sustainable development. The international community must follow through on commitments on debt restructuring and climate finance. African governments, development partners, the private sector and civil society must work closer together to improve Africa’s investment landscape. This report proposes three key policy priorities to accelerate sustainable investments on the continent:

  • More and better data will reduce transaction costs, improve sustainability assessments and increase investor confidence. In 2021, less than a third of African countries (30%) had a fully funded statistical plan, compared to almost half the countries in Latin America and the Caribbean (44%) and in developing Asia (47%). Improved macroeconomic data may help align risk perception with real risks. Partnerships with business associations or academic institutions can allow government agencies to share industry data that inform investors’ risk assessments at lower cost. African governments can also facilitate sustainability assessments through disclosure requirements and the provision of training and incentives to smaller firms with limited capacity.

  • Strengthening the capacity of Africa’s large development finance network will improve the allocation of sustainable finance. The 102 African development finance institutions (DFIs) can act as intermediaries between international finance and local projects, in line with national development agendas. The international community can channel more resources to well-managed DFIs and deliver on existing obligations, for instance, by increasing the allocation of climate adaptation finance. African governments and DFIs can also scale up the use of innovative de-risking and financing tools, including green, social, sustainability, and sustainability-linked bonds or local currency financing solutions emerging in many countries. Developing and interconnecting capital markets and stock exchanges will contribute to the growth of African firms.

  • Regional integration policies will improve and harmonise Africa’s investment landscape. Cross-border initiatives such as development corridors and digital infrastructures can reduce trade frictions and market fragmentation. At the same time, small and medium-sized enterprises need targeted support to seize investment opportunities along regional value chains. The African Continental Free Trade Area (AfCFTA) Investment Protocol aims to harmonise the African investment policy landscape but requires effective monitoring mechanisms and public-private alliances.

The five regional chapters of this report highlight how African regions can accelerate sustainable investments in strategic sectors. African regions can better leverage their unique assets to accelerate sustainable development and productive transformation. Regional case studies propose ways of operationalising the continental policy recommendations in specific sectors.

Policy recommendations to accelerate sustainable investments in African regions

Region

Case study

Policy recommendations

Southern Africa

Renewable energies

  • Harmonise regulatory frameworks and accelerate regional initiatives on renewable energy infrastructures

  • Enhance public-private alliances and development finance based on national energy priorities

  • Adopt targeted policy solutions to scale up off-grid renewable energy projects in rural areas

Central Africa

Natural ecosystems

  • Improve natural capital accounting to better inform investors and stakeholders

  • Establish institutional frameworks for the monetisation of natural ecosystems

  • Ensure local ownership when developing innovative financing mechanisms

East Africa

Renewable energies

  • Enhance regulatory frameworks and energy utilities’ capacity to improve investor confidence

  • Strengthen local financial institutions to catalyse resources for renewable energy projects

  • Support the growth of innovative enterprises through regional integration policies like the AfCFTA

North Africa

Climate finance

  • Improve assessment of financing needs based on national and multi-sectorial priorities

  • Adopt and implement inclusive regulatory frameworks on sustainable finance

  • Encourage the development of sustainable finance markets (nationally and regionally)

West Africa

Agri-food value chains

  • Increase smallholder farmers’ access to financial products focused on productivity and sustainability

  • Strengthen regional agricultural policies and place-based programmes like agro-industrial parks

  • Support food security and agricultural practices through agro-poles, incubators and technical partnerships

Source:  OECD 2023

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African businesses are positive about the AfCFTA – but want to know more

Optimism about the African Continental Free Trade Area (AfCFTA) is high among African CEOs, according to the latest survey by the Pan-African Private Sector Trade and Investment Committee (PAFTRAC).

The Pan-African Private Sector Trade and Investment Committee (PAFTRAC) has launched its annual Africa CEO Trade Survey, which gives a snapshot of sentiments among Africa’s business leaders and is intended to inform decision-making by African public policymakers. This year, over 1000 CEOs from 44 countries, the largest sample ever, participated in the survey. The report shows that while inflation and access to finance remain of great concern to businesses in Africa, many are optimistic about the prospects of the African Continental Free Trade Area (AfCFTA).

Presenting the results at the virtual launch of the report in a webinar on 21 November, Professor Patrick Utomi, chairperson of PAFTRAC and policy consultant to the Africa Export-Import Bank (Afreximbank), noted that the majority of the sample were small businesses, and about 35% had been in operation for five years or less. This, he said, reflects the fact that about 80% of businesses in Africa are in the small- and medium-sized enterprise (SME) category.

While rising debt and global security issues were of concern, high inflation was the major concern that interviewees had. “Overwhelmingly, inflation is seen as having the most significant impact on the continent and its businesses,”

Free trade spurs optimism

Despite the challenges, the survey indicates that optimism regarding the African Continental Free Trade Area (AfCFTA) is high. Over 50% of businesses anticipate a positive impact, while “about 24% think it will have a moderate effect on their business, and 18% think it would have little effect, or did not know what impact it would have on their businesses,” Utomi said.

Another common hurdle highlighted by the survey is access to finance, which affects the ability of businesses across sectors to operate and to scale up their operations. Utomi noted that agriculture, manufacturing, and transportation firms particularly identify financing as a major hindrance. “It goes to show that if financing does not exist, then anything else we’re speaking about, whether it is cross-border trade, unification or AfCFTA, would amount to nothing more than rhetoric,” Utomi stressed.

As in previous surveys, a notable concern was the lack of adequate information on the AfCFTA. “Most of them did not know what the AfCFTA was, what it meant for their businesses or, more importantly, how to tap into it,” Utomi said, stressing that without this information, SMEs in particular would be left out of the AfCFTA because they would not know how to engage with it and access the benefits they could derive from doing so.

In response to these concerns, Utomi said, the report makes a number of recommendations, which focus on boosting value-added production; providing more information on AfCFTA opportunities; creating forums for SME engagement with policymakers; incentivising cross-border aggregators; and fostering collaboration between the private sector and development institutions. The report also highlights the need for capacity improvement, structures for businesses to access financing, and continuous monitoring and evaluation of AfCFTA implementation for a prosperous future of trade in Africa.

The presentation was followed by a panel discussion with Professor Utomi; Gwendoline Abunaw, managing director of Ecobank Cameroon; Geoffrey White, CEO of Agility Africa; and Amit Agrawal, Ghana country head at Olam Agri. The discussion was moderated by Pedro Besugo, head of business development at Invest Africa.

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Access to finance is critical

Utomi welcomed the report’s findings, saying “it is an important affirmation of something that we know, which is the problem of access to finance being a major challenge, especially for cross-border trade.” He noted that inflation also remains a major challenge, arising from recent trends and supply chain crises related to the Covid-19 pandemic. This, he said, has had a significant impact on the capacity of small scale businesses to deal with the commitments they have.

Utomi also underscored the significance of information availability and the role of aggregators in facilitating efficient trade and emphasised the need for SMEs to recognise the benefits of collaboration and aggregation across borders, which he said could give them the kind of volume that would make them significant global players. He stressed that PAFTRAC will continue to play its advocacy role and work with policymakers to create the conditions most conducive to business and trade on the continent.

Reacting to findings from the report which indicate that central Africa is the least dynamic region in the continent, Abunaw said that “The flows are not at the level that they should be. And it actually shows that there has been a regression or it has been stagnant,” she said. Other obstacles to regional trade, Abunaw said, are inadequate transportation links, economic and physical integration barriers, and complex customs and tax regimes. “Trade liberalisation would definitely boost economic growth and poverty alleviation,” she argued. She pointed to efforts by financial institutions such as Ecobank to facilitate money transfers and to support small and medium-sized players in cross-border trade, while emphasising the crucial role of political will in addressing infrastructure, tariffs, and trade-related decisions among participating countries.

White said he was most heartened by the enthusiasm shown for the AfCFTA, which has the potential to create a market of 1.3bn people, growing to 2.4bn over the next 25 years. “The concept of the AfCFTA is strong and so beneficial for everyone,” he said. He noted that his company, Agility Africa, which is building warehouses across Africa, will make it easier for local and foreign businesses to operate in Africa.

Trade promotes local production

Following Covid-19, companies are keen to produce locally to obviate challenges associated with moving goods across long distances. Creating a larger market through the AfCFTA would make Africa a more attractive destination. “If you can actually move goods across the borders easily and seamlessly and in one trade bloc, West Africa, for example, becomes a 500m-person market,” he noted.

Commenting on intra-regional trade, Agrawal noted that the Economic Community of West African States is a good example of a regional trade bloc that works. “The Ecowas regime works actually pretty well in terms of documentation, acceptance across borders, zero duty and entry into various markets within the Ecowas zone,” he said. It also has a good road network that enables the transport of goods from Ghana as far as Niger and Benin, for example.

With regard to the AfCFTA, he observed that uneven tariff regimes are likely to be the biggest stumbling block to its successful implementation. Increasing intra-regional trade will also depend, in large measure, on expansion of the road infrastructure, Agrawal said, pointing out that, in some cases, it is more cost-effective to transport goods from Asia to Africa than between African countries.

He proposed a phased approach to implementation, beginning with making regional blocs function more smoothly. “I think the first thing that the African Union can do is to make the regional blocs work very smoothly. There is a lot of scope to make them work better,” he urged.

On how to improve regional trade, Abunaw stressed the importance of facilitating the movement of people within sub-regional blocks and across Africa as a whole. Streamlining visa procedures, she said, would discourage the use of informal routes.

She also suggested that “if people know what they’re supposed to pay, and we can actually digitalise it, it becomes formalised and transparent and it would also greatly improve the flows.” She suggested that parity in currencies would mean that traders do not need to go through a foreign currency to buy across borders. Finally, she advocated for capacity building and increasing production, underscoring the need to provide knowledge and promote the use of initiatives from development banks and governments.

 

……

Source: AfricanBusiness, 6th December 2023

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