Stories that Matter | July 2024

West Africa

ECOWAS Set to Unveil Single Currency
The Economic Community of West African States (ECOWAS)currency is aspired to become a cornerstone of economic integration, streamlining trade and bolstering monetary stability across the region. Plans recently reached an advanced stage to launch the Economic Community of West African States single currency initiative, ECO. This was after the Nigerian government endorsed the initiative, which is envisioned to propel growth and development throughout the West African sub-region. The ECOWAS single currency has also been incorporated as a feature in the three-in-one identity card planned by the National Identity Management Commission and set for roll-out in August.

Finance Ministers and Central Bank Governors from the 15 ECOWAS member states agreed on modalities for the initiative at the 92nd Ordinary Session of the ECOWAS Council of Ministers held in Abuja, Nigeria. Nigeria’s Minister of Finance and Coordinating Minister of the Economy Wale Edun, in a statement highlighted the anticipated impact of the single currency initiative. Edun said the ECO will play a critical role in fostering “economic growth and development in the region,” further emphasising Nigeria’s unwavering commitment to its successful implementation. The single currency’s introduction will lay the groundwork for a more integrated economic future for the 15 member states.

Source: Pulse Nigeria

East Africa

EA Businesses Expand Footprints in Kenya
East African Community (EAC) businesses are increasingly expanding into Kenya’s key sectors, including service, manufacturing, agriculture oil and gas, bucking a trend where Kenyan firms have long dominated forays into the region’s markets. EAC region’s economy was valued at USD 312.9 billion and had a population of 300.4 million people at the end of 2021, according to the trade bloc’s data.

Investors in firms from EAC countries such as Uganda, Tanzania, Rwanda and Somalia have been expanding their footprints into the country, threatening the dominance that has for long been almost exclusively enjoyed by locals and businesses beyond the region. The growing interest of regional firms such as Amsons Group, Taifa Gas, Maziwa, Premier Bank, Yego Global, and Liptons Teas and Infusions Rwanda in the Kenyan market, comes after years of many Kenyan firms, including banks, insurers and manufacturers, expanding into the EAC market in search of new opportunities.

Source: The EastAfrican

Ethiopia / South Sudan

Ethiopia and South Sudan Greenlight Construction of Joint Oil Infrastructure
Ethiopia and South Sudan recently agreed to collaborate on the development of their oil sectors via a construction project. They resolved the idea during a key meeting of executives and governors from both corners of the common border. The collaborative construction project between the Eastern African nations of Ethiopia and South Sudan was currently greenlit. Both countries in a joint effort, have decided to build an alternative oil infrastructure. The decision was reached to bolster security in both regions as well as expand on their budding trade relationship.

The negotiations focused on strengthening collaboration in trade, investment, infrastructure development, and security. The minister of cabinet affairs in Upper Nile State David Nyang, noted that the decision to collaborate on the project resulted from the prospect of greater commerce. “We recognise the importance of border trade, and this can be enhanced through the existence of roads and the provision of security,” said David Nyang.

In response, South Sudan’s deputy minister of foreign affairs and international cooperation, Semaya K. Kumba, applauded the meeting as a watershed moment in bilateral ties, underlining the agreement’s ability to solve common concerns and foster collaboration.

Source: Business Insider Africa

Kenya

Kenya Among Top African Countries in AI Investment Inflows
Kenya’s Artificial Intelligence (AI) sector received USD 15 million in funding in 2023, a new report shows, pipping Nigeria’s which got USD 2.9 million. The two nations, however, trailed South Africa where inflows to the Al sector hit USD 123 million, the report by the Global System for Mobile Communications Association (GSMA) shows. “In 2023, African tech startups received investments of about USD 4 billion, with Kenya, South Africa, Nigeria, and Egypt accounting for the bulk of the funding,” the report said.

Kenyans are embracing the use of Al to catalyse their businesses and day-to-day activities. Al technology allows computers and machines to simulate human intelligence and problem-solving tasks. The technology can be applied to many sectors and industries, including healthcare, manufacturing, and the military. The GSMA report shows that the use of Al in Kenya is presently concentrated in the agricultural sector with the involvement of machine learning to equip local farmers with data-driven advice that seeks to aid them optimise productivity.

Source: Business Daily

Egypt

Egypt’s USD 10 Billion Wind Farm Poised to Break Ground in 2026
Egypt is taking a significant stride towards its renewable energy goals with the construction of a massive USD 10 billion wind farm, set to commence in March 2026. This ambitious project, poised to be one of the world’s largest, is expected to generate a substantial 10 gigawatts of power upon completion in 2032.

This development comes at a crucial time for Egypt, which has been grappling with scheduled power outages due to soaring temperatures and rising electricity demand from its population of over 105 million. The wind farm’s anticipated power output will be a boon, allowing Egypt to gradually decommission some gas-powered plants and reduce its reliance on fossil fuels.

Egypt has set an ambitious target of achieving 42 percent renewable energy in its energy mix by 2030. The 10-gigawatt wind farm will play a pivotal role in achieving this goal, contributing significantly to reducing the country’s carbon footprint and reliance on natural gas.

Source: Business Day

Nigeria

Nigeria Set to Host USD 5 Billion African Energy Bank
Nigeria recently won the bid to host the headquarters of the newly established USD 5 billion African Energy Bank in Abuja. Nigeria emerged as the preferred host nation amidst stiff competition from Ghana, Benin, Algeria, South Africa, and Côte d’Ivoire.

“As the Minister for Petroleum Resources (Oil), I am incredibly proud of this achievement. The African Energy Bank will be a cornerstone for financing and advancing energy projects across Africa, promoting innovation, sustainability, and economic growth,” remarked Minister of State for Petroleum Resources (Oil), Nigeria, Heineken Lokpobiri.

Lokpobiri also noted that the bank’s share capital, set at USD 5 billion, is expected to be subscribed over three years, with an initial capital of USD 1.5 billion reserved for APPO member countries. Presently, APPO has a total of 18 members across Africa, all of which are either oil or gas-producing nations, or both. AfreximBank has been supporting APPO in establishing the bank and has approved an investment of USD 1.75 billion for this purpose. The lender stated it had partnered with over 700 banks across Africa and its partners to chart a profitable pathway for the African energy sector.

Source: Business Insider Africa

Tanzania

TIC Targets Ambitious USD 10 Billion in Investment Capital
The Tanzania Investment Centre (TIC) has set an ambitious target of attracting nearly USD 10 billion in capital investments in 2024. This goal builds on five consecutive years of impressive growth in foreign and domestic investments, driven by favourable investment laws and incentives, according to TIC’s executive director, Gilead Teri. “TIC targets to register 1, 000 projects, with USD 5 billion in foreign capital and USD 3.5 billion in domestic capital,” he said.

According to Mr Teri, as the government closed the 2023/2024 fiscal year in June, the centre had registered 707 projects worth USD 6.56 billion. He said local participation has also been impressive, with 38.19 percent of the registered projects owned by Tanzanians, while foreigners own 42.86 percent, and 19.38 percent are joint ventures between Tanzanians and foreigners. Mr Teri said the investment laws and regulations had played a crucial role in creating a business-friendly environment and influencing investor confidence.

Source: The Citizen

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Reports

African Trade and Economic Outlook 2024 | Afreximbank
As the global economy continues to navigate the challenging operating environment characterised by multiple shocks including the long COVID-19 effect, intensification of geopolitical tensions and incipient geoeconomic shifts, heightening trade and tech wars, supply chain disruptions, inflationary pressures on account of high commodity and energy prices, and abandonment of the rule based multilateral trading system, the risk of global slowdown is elevated.

The report provides an in-depth analysis of the current global and African macroeconomic environment, trade patterns, and sovereign debt sustainability dynamics, as the basis for trade and economic projections for 2025. Through the examination of historical trends, existing and emerging risks, as well as opportunities, the report seeks to foster a deeper understanding of the factors driving Africa’s economic performance and trade patterns, to inform policy design. It also singles out the implementation of the African Continental Free Trade Area and other initiatives as critical to accelerating industrialisation and promoting sustainable growth across the continent.

Click here to read and download the full report.

State of Africa’s Infrastructure Report | Africa Finance Corporation
Infrastructure development is crucial for Africa’s economic growth, but the public and private investments require significant support. Public and private investment flows are key inputs in developing a network of physical infrastructure assets over time, including economic infrastructure (ports, railways, roads, airports, etc.) and social infrastructure (schools, hospitals, etc.). Unfortunately, while a country’s capital stock has been shown to contribute towards higher productivity growth and living standards, Africa’s total capital stock has experienced a near stagnation over the past three decades.

This report elucidates a stark reality: despite decades of achievement, the pace of Africa’s infrastructure development has not kept up with the growing needs of the population. Most of the core infrastructure is centred around legacy redundant pit-to-port models. Such conclusions must spur Africa to reassess its approach and build infrastructure that will instead catalyse economic and structural transformation. The urgency to act cannot be overstated and presents unparalleled opportunities. International economic shifts, including the restructuring of supply chains and transition to green energy, offer Africa a unique opportunity to redefine its role on the world stage.

The continent possesses the resources essential for renewable energy technologies and electrification, both critical to the global shift towards a less carbon-intensive future, as well as a resourceful youth ready to drive this change.

Click here to read and download the full report.

Africa Sustainable Development Report 2024 | United Nations Economic Commission for Africa
While numerous advanced economies are bracing for a ‘soft landing’ in 2024, many developing economies across the globe and especially in Africa are grappling with the burden of servicing high levels of debt, double-digit inflation rates, and a severe lack of access to crucial development and climate financing. Despite two decades of advancement, disparities in the Human Development Index, which gauges a nation’s health, education and standard of living, are widening between nations at the pinnacle of the index and those at the bottom, with many of the latter located in Africa.

Against this backdrop, the 2024 Africa Sustainable Development Report utilises unique country perspectives and evaluates the advancements made by African countries in achieving the 2030 Agenda for Sustainable Development and the African Union Agenda 2063. The report reflects the commitment of the United Nations system, the African Union, and the African Development Bank to support the implementation of the two Agendas in Africa, by taking stock of progress and actionable solutions by member states. Together, these agendas present a cohesive vision and platform for a unified multilateral and regional response to the ongoing global crises that have disproportionately affected African economies.

Click here to read and download the full report.

Developing Urban Rail Corridors in African Cities | World Bank
Africa contains 11 of the world’s most populous cities (Geoba.se, 2011) and urban areas throughout the continent are growing rapidly (World Population Review, 2023). Demand for urban transport is rising. Traffic congestion, road accidents, and urban sprawl make daily commutes long and costly. Introducing rail-based public transport can help meet this demand as well as enable affordable mobility and greater accessibility, reducing pollution and greenhouse.

This report attempts to relate the policy and good practice literature on urban and suburban passenger rail, much of which originates from high- or middle-income countries to the context of developing cities in Africa. It includes case studies from three African cities- Lagos, Maputo, and Nairobi to identify and provide guidance on key issues for developing effective urban rail services in Sub-Saharan Africa. All three cities use existing railway right-of-way for part or all of their networks. Improving the established right-of-way and assets provides a faster and less costly option than building new ones if coordination challenges can be overcome.

Click here to read and download the full report.