March 29, 2021
NEWS
Secretary-General of the Organization of African, Caribbean and Pacific States (OACPS), Georges Rebelo Pinto Chikoti, presented Dr Mekondjo Kaapanda-Girnus, Ambassador of the Republic of Namibia to the Kingdom of Belgium, the Netherlands, the Grand Duchy of Luxembourg and Mission to the European Union, to the OACPS Committee of Ambassadors (CoA) at their 936th session. During her inaugural address to the CoA, Ambassador Kaapanda-Girnus touched on a number of current challenges, including COVID-19, which she noted, is having a “disproportionate impact on developing and emerging economies” and which is further putting decades of progress in health, education and economic development at risk.
Kenya Wins Shs200 Billion Cortec Mining License Dispute
Kenya won a Sh200 billion case against Cortec Mining Kenya Limited and Stirling Capital Limited over revocation of their licence in 2013. This is the second time Kenya has won a case against Cortec. Cortec and Stirling wanted the International Centre for Settlement of Investment Disputes (ICSID) to overturn a 2018 tribunal decision, which found the license was a protected investment. The firms had been granted license to mine niobium and rare earth minerals at Mrima Hills in Kwale County but it was later cancelled by the government, forcing Cortec to challenge the revocation. In 2018, the investor-State arbitral tribunal dismissed the case and ordered the companies to pay costs of around $3.5 million to the government, compared with the $6.5 million it was seeking.
The Economic Commission for Africa (ECA) launched a report on the impact of COVID-19 on e-commerce where it calls on AfCFTA to create a harmonized protocol to accelerate the growth of the digital economy in Africa. “This important protocol, if harnessed correctly, has the potential to coordinate and facilitate cross-border e-commerce, regulatory cooperation, digitalization as well as the promotion of electronic goods and services originating from within Africa,” states the report, adding that under the existing arrangement across Africa, regulators employ different rules, which, coupled with the small sizes of their markets, prevent African tech companies from thriving.
African Finance Institutions Need Strengthening
At the just-ended COM2021, Remy Rioux, CEO of the French Development Agency (AFD), spoke during a high-level panel discussion on managing debt and liquidity, and the role of the private sector. He addressed the question of how international partners and financial institutions can best support the financing of Africa's recovery, especially with regard to a new issuance and distribution of IMF Special Drawing Rights and the possible extension of the G20's Debt Suspension Initiative (DSSI).
The Big Debate: Africa’s Post-COVID-19 Recovery Will Be a Marathon, Not a Race
African countries are yet to see the light at the end of the tunnel of the COVID-19 crisis, but they must quickly initiate deep economic reforms to prepare for their future as returning to their pre-pandemic model is no longer impossible. While the pandemic has generated an urgent need for increased international support for Africa within the framework of a more modern form of multilateralism, the region will have to take charge of its own future by building a new kind of partnership with the private sector - both at the national and international level - so as to secure the financing needed for Africa’s economic recovery and mitigate the medium and long-term impacts of the crisis.
ECA Launches LSD, a Vehicle for Debt Management and Fiscal Sustainability
In a bid to assist member States having access to a facility that will strengthen their liquidity in the short term and restart growth in the longer term, the Economic Commission for Africa (ECA) has partnered with PIMCO, an asset management corporation, to set up a Liquidity and Sustainability Facility (LSF) that would lower governments’ borrowing costs by increasing the demand for their sovereign bonds. This will be achieved by making it possible for existing sovereign bondholders to post such instruments as collateral for low-interest loans financed in part by a new issuance of Special Drawing Rights (SDRs). The resources mobilized through such repurchase agreements will then be used to finance investments in emerging market sovereigns.
Fostering Investment in Infrastructure Key for Africa’s Industrialization
Sustainable industrialization is a feasible growth engine for Africa to build forward in the aftermath of the coronavirus pandemic. Governments, however, need to invest in critical technological infrastructure and supportive policies to deliver economic development. This was the consensus of African policy makers attending the annual Economic Commission meeting for African Ministers of Finance, Planning and Economic Development (COM2021) which opened in Addis Ababa on March 22, 2021.
ECOWAS Grants 10 Million Euro to Support Guinean SMEs
ECOWAS Bank, the financial institution established by the Economic Community of West African States, has granted one of Guinea’s largest banks a 10 million euro line of credit. Vista Bank Guinea secured the credit from ECOWAS Bank for Investment and Development (EBID), which will support medium-term funding for the benefit of the Republic of Guinea’s small and medium sized enterprises (SMEs) and small and medium sized industries (SMIs). The agreement for the line of credit was signed by EBID’s president and chairman of the board of directors George Agyekum Donkor, and Vista Bank Guinea’s managing director Yassin Bayo.
Three subsidiaries of state-owned energy company Central Energy Fund have agreed to a merger. The South African Department of Mineral Resources and Energy (DMRE) announced on March 2, 2021 that South African gas development company iGas, national oil company of South Africa PetroSA, and Strategic Fuel Fund (SFF), all subsidiary companies of state-owned Central Energy Fund (CEF), will merge, effective April 1, 2021. The newly formed company, which will be named South African National Petroleum Company, has been established with the goal of creating a streamlined operating model. The merger agreement follows in the footsteps of recent cabinet approval, and PetroSA’s announcement that it suffered losses equivalent to approximately GBP 972.6 million since 2014.
EVENTS – 3.28.2021
“Gearing Up: Accelerating Growth in Africa’s Automotive Industry.” Invest Africa. Online. 8 April 2021.
“2021 Annual AVCA Conference : Resilience, Resurgence and Results.” Invest Africa. Online. 20-23 April 2021.
“Invest Africa Member Meeting with UK Trade Envoys - Southern Africa.” Invest Africa. Online. 27 April 2021.