August 2019 / South Africa

July 28 2019

Ethiopia coffee, oilseeds export revenues hit 1.2 bln USD amid growing interest from China

ADDIS ABABA, July 27 (Xinhua) -- The Ethiopian government on Saturday said the country made more than 1.2 billion U.S. dollars in revenue from the exports of coffee and oilseeds during the just-concluded Ethiopian fiscal year that ended on July 7. The revenue was generated from the export of coffee, mung beans, white kidney beans, sesame seeds and soya beans, state-affiliated Fana Broadcasting Corporate (FBC) reported on Saturday. Large amount of the export revenue was generated from the export of coffee. Ethiopia is one of Africa's largest producers of Arabica coffee, in which coffee production is dubbed as the backbone of the country's agriculture-led economy. Ethiopia also recently revealed a new initiative to uplift the current close to 600,000 tons of annual coffee production to 1.8 million tons within the coming five years period. According to the Ethiopian Coffee and Tea Authority (ECTA), the Chinese market is expected to be a major destination for the nation's coffee exports. In April this year, China and Ethiopia signed a Memorandum of Understanding on coffee exports to China and to deepen bilateral trade cooperation. Amid increasing demand for coffee among younger Chinese, penetrating the emerging coffee market is also increasingly seen as a major priority among Ethiopian coffee producers and exporters. Ethiopia's sesame production, which is also considered as one of Ethiopia's top export commodities next to coffee, has in recent years witnessed growing interest from the Chinese market. Haile Berhe, President of the Ethiopian Pulses, Oilseeds and Spices Processors-Exporters Association, told Xinhua recently that the export of sesame seed to China currently constitutes close to 70 percent of the East African country's total export of the product to the global market. China is already the east African country's major export destination. Ethiopia, during the previous Ethiopian 2017-2018 fiscal year, had exported 245 million U.S. dollars of goods to China, according to the Ethiopian Ministry of Trade.
July 30 2019

Rwanda, Burundi And DRC Sign Deal To Kick Off Construction Of Joint $700M Power Project

The governments of Rwanda, Burundi and Democratic Republic of Congo (DRC) have signed a tripartite deal that marks official launch of construction works for a $700 million joint Hydropower project. The project, dubbed ‘RusiziIII’ Hydropower is expected to generate up to 230 MW, with total cost expected to range between $644 and $700 million, according to Rwanda’s Infrastructure Ministry.
The initial capacity had been estimated at 147MW, but further geological studies will be conducted to reach the agrees 230MW. Ruzizi III Hydropower project is a joint venture of two companies; IPS (an Agha Kan owned company) and Sithe Global replaced by SN Power (a Norwegian).   The signing if the deal which took place in DRC’s capital Kinshasa on Monday this week, will boost energy deficits in the three member States, according to Rwanda’s Minister of Infrastructure Amb. Claver Gatete who represented the government at the signing. “The signing of Rusizi III power project today in Kinshasa will boost energy generation and Economic development in Rwanda, DRC and Burundi,” Minister Gatete tweeted after the signing in Kinshasa. The Project, set to be completed in 2024, will be funded by several lenders who will fund the debt through concessional and commercial loans. These include World Bank, African Development Bank, European Union, KfW, Agence Française de Développement (AFD), Commercial Banks and the Developer. It is the first regional project designed as a Public Private Partnership (PPP) aimed at optimizing the hydropower potential of the Ruzizi cascade, according to Rwanda’s Ministry of Infrastructure.
For its implementation, a private partner, acting in the capacity of investor/developer, will be recruited and awarded a concession. This partner will be required to develop the project, be a majority partner in a project company (PC) with the three countries concerned and secure the necessary financing, the Minsitry added in a statement issued on Tuesday. The project is being developed under the Communauté Économique des Pays des Grand Lacs (CEPGL) – a sub-regional organization with multiple purposes bringing together Rwanda, Burundi and DRC. Under the Rusizi III hydropower project, its power output will be shared among the three partner states with Rwanda getting 47MW and the rest being shared between Burundi and DRC. The project consists of 105m long dam crest whose height is 20.5m, 2.28km Headrace Tunnel and a surface power station with 3*50 MW Francis Units. Francis units are named after B. Francis – a British-born Hydraulic engineer. It is a water turbine designed to produce high flow from a low head of pressure – mostly used in hydroelectric power generation. In January 2016, the African Development Bank Group approved $138 million in loans and grants to finance the project. The approval followed a $14 million grant by the New Partnership for Africa Development (NEPAD)’s Infrastructure Project Preparation Facility (NEPAD-IPPF) to the Great Lakes Energy Organisation (EGL) to finance transaction advisory services for the project. EGL is a sub-regional body which coordinates energy development in East Africa. The $1.4 million NEPAD-IPPF grant helped provide key expertise for the project’s development, as well as sound knowledge of the context and actors of the region that led to the project’s eventual financial close, according to the statement issued at the time.
July 30 2019

Kenya joins top 8 global geothermal producers

Kenya has improved its global ranking among the world’s largest geothermal powerhouses after it completed the testing of the first unit of the Olkaria V project.
The 82.7 megawatts from the project now push Kenya above Iceland to position eight in the global rankings as the country continues its advancement towards green energy.
The Kenya Electricity Generating Company (KenGen) on Tuesday announced that it had completed load tests for the unit which attained its full design output of 82.7 megawatts.
The unit, which was first was first synchronised to the national grid on June 28 has been undergoing commissioning tests and would significantly boost Kenya’s green energy on the national grid, according to KenGen Managing Director Rebecca Miano.
“We are delighted to announce the completion of the first unit of Olkaria V geothermal power plant and subsequently injecting 79 megawatts to the national grid. This brings to 612 megawatts the total amount of installed geothermal power capacity by KenGen and will be significant in ensuring that our country’s power needs are met through the continuous use of green energy solutions,” said Ms Miano.
August 3 2019

Ethiopian Airlines to open Tanzania’s horticulture to the world

Arusha. Ethiopian

Airlines says it is ready to uplift Tanzanian perishable horticultural exports to the markets overseas to beat the growing demand.

The move would reduce the trucking of the horticultural produce by exporters based in the northern regions to Nairobi where it is put on freighters to Europe.

"With its freighters and large terminal facilities in Addis Ababa, Ethiopian Cargo can connect Tanzania's exporters directly with the buyers abroad", said Ms Fitsmit Dejene, the airline's sales manager for Arusha and Kilimanjaro.

Africa's largest airline, she explained, would avail additional uplifts of perishable goods from Tanzania at competitive prices after learning of the low capacity of the carriers currently doing the same.

"The (horticulture) industry wrongly perceives that the main problem it faces is the cost and capacity of airfreight out of the Kilimanjaro International Airport (KIA)", she told The Citizen.

She said after the recent upgrading of its Bole International Airport hub, Ethiopian Airlines Cargo and Logistics now operated one of the largest trans-shipment terminals in Africa and has 12 air cargo freighters.

August 4 2019

Kenya’s Africa imports beat exports for first time

Kenya has for the first time bought more than she sold to African countries in the half-year period, signalling continued dwindling competitiveness of her products on the continent.
Trade deficit in Africa — the gap between imports and exports — stood at Sh156 million, marking the first time Nairobi has run a deficit since the Central Bank of Kenya (CBK) started to publicly keep trade records in 1999.
Data from Kenya Revenue Authority (KRA) show total exports in six months through June dropped 1.96 percent to Sh107.55 billion compared with a year ago, higher than 0.99 percent in imports to Sh107.71 billion.
A higher growth in imports than exports, economists say, denies Kenya an opportunity to create more jobs because local firms lose out market to foreign factories and traders.
Kenya has struggled to sustainably expand her exports to African countries since the turn of the decade, a further analysis of the official trade statistics indicate, a sign factories in Nairobi have been losing their market share partly due to import substitution amid dwindling industrial competitiveness.
Exports to key markets such as Uganda (Kenya’s single largest market), Tanzania and DR-Congo have fallen from recent highs because factories in those countries are increasingly producing goods they previously ordered from Nairobi.
Orders from Kampala have dropped to Sh30.77 billion in the January-June 2019 from recent highs of Sh34.51 billion in 2013, the statistics kept by the CBK shows.
Half-year exports to Tanzania have dipped to Sh15.79 billion this year from Sh21.73 billion five years ago, while those from DRC have dipped to Sh6.86 billion from Sh10.12 billion.
Imports from Uganda, on the other hand, have doubled to Sh13.95 billion in June 2019 from Sh5.14 billion in 2014, while Tanzania’s has grown to Sh12.95 billion from Sh8.34 billion.
The Kenya Association of Manufacturers (KAM), the sector lobby, has in the past blamed “continued erosion in our competitiveness” on levies, fees and taxes which have kept cost of production for factories high.
The Treasury has in the Finance Bill 2019 proposed to cut Import Development Fee (IDF) on raw materials and intermediate goods to 1.5 from 2.0 percent, and increase the same on finished imports to 3.5 percent.
Other proposed protectionist measure aimed at cushioning Kenyan factories include raising Railway Development Levy (RDL) on finished imports to 2.0 from 1.5 percent.
Factories are, however, yet to start enjoying a 30 percent refund on power bills, due to delayed gazettement of guidelines for benefitting firms.
About 54 percent of manufacturers a survey released on July 3 by Strathmore University and global business management software firm Syspro cited energy as single largest cost driver for factories.
August 5 2019

Bombardier-led consortium wins $4.5 billion monorail contract in Egypt

(Reuters) - A consortium led by Bombardier Inc said on Monday it had won a contract to build and operate two monorail lines in Egypt for more than $4.5 billion. The project, for which Bombardier’s rail division had emerged as the preferred bidder, would be its largest in recent years, with the company having a $2.85 billion share of the contract. Orascom Construction will have a share of about $900 million. The project, signed with the National Authority for Tunnels in Cairo, includes a 54-kilometre monorail system connecting the New Administrative City with East Cairo and a second 42-kilometre line linking 6th October City with Giza. As part of the contract, Bombardier Transportation will design, supply and install the electrical and mechanical equipment for the two lines.
The consortium, which also includes Eqypt’s Arab Contractors, will be responsible for the operation and maintenance of both lines for 30 years. Bombardier is in the middle of a broader restructuring, shedding underperforming commercial plane programs to focus on its more profitable jet and rail units. The Montreal-based plane and train maker lowered its full-year core earnings and free cash flow forecasts, and reported a quarterly loss last week, as the company wrestles with challenges in the rail division, its largest by revenue.
August 7 2019

Nigeria, US to mobilise $300m for agribusiness

Adelani Adepegba, Abuja The Federal Government, the United States and other stakeholders have mapped out strategies to mobilise $300m to support investment and boost business in the agricultural sector in the country. The fund aimed to reach at least 5,000 small and medium enterprises in order to expand opportunities for agribusiness borrowers and lenders in Nigeria. Vice President Yemi Osinbajo, while speaking during the launch of the initiative in Abuja on Tuesday, said the Federal Government was creating the enabling environment and would ensure coordination among the states, the Federal Government and the US to achieve the target. Represented by Andrew Kwasari, Senior Policy Adviser in the Office of the Vice President, Osinbajo noted that “the synergy between the US, the Federal Government and the states is a way for the future.” The USAID Contractor of the FTF Nigeria Agribusiness Investment Activity, Adam Saffer, explained that Nigeria had tremendous opportunity to take advantage of the arable land in the country, abundant water, human resources, fertile soil and many other things that should make Nigeria not only self-sufficient but also the food basket of the region. He said, “FTF Activity in order to help Nigeria reach the target is working with financial institutions, investors, agro data, processors and other businesses and producers to create a more enabling environment to attract those finances and investors.” “With a more efficient agribusiness sector, food generation, better income and more inclusiveness of women and youth, we can end up with a better quality food at a lower price.  Our activity is trying to activate $300m from the investors, from the banks and from the finance institutions to make this happen.” US Ambassador to Nigeria, Stuart Symington, said the US government would work with  Nigeria to improve the ease of doing business in the agriculture sector, mitigate the risks to lending institutions and promote investment opportunities for agribusiness to expand and scale up their operations. Kebbi State Governor, Atiku Bagudu, told reporters that Kebbi was doing a number of things to key into the programme to unlock the agricultural potential of the state. “In the last five years, we have recorded significant improvement in yields in many commodities particularly rice where we have seen yields increasing from as little as one tonne per hectare to an average of five to six tonnes per hectare. We have similar increases in other crops like soya beans and millet,” he said. Also speaking, Cross River State Governor, Ben Ayade, called on the US to assist Nigeria with the requisite technology to tackle some of the challenges associated with food production and preservation in the country. The $15.7m Agribusiness Investment Programme aimed to facilitate the growth of existing private sector agribusinesses and work with producer organisations in the rice, maize, soybean, aquaculture, and cowpea value chains to increase Nigeria’s food security status and foster job creation opportunities. Kaduna, Niger, Kebbi, Benue, Delta, Ebonyi and Cross River States are targeted under the initiative.
August 7 2019

Uganda Plans $813 Million Industrial Investment in Next Decade

Uganda plans to invest as much as 3 trillion shillings ($813 million) during the next decade through a state-owned investment company to unlock industrial investment in areas that currently attract the least private-sector interest.
Uganda Development Corp. is already in agricultural manufacturing and wants to venture into services and mineral processing, Chief Executive Officer Patrick Birungi said Tuesday in an interview in the capital, Kampala. In addition to a hotel, a fruit processor and a stake in a planned sugar miller, the company will build more plants for cereals, cocoa and cassava. “We want to invest where the private sector is not going strongly,” he said. “We want to go in and de-risk these sectors; we shall start companies in these sectors and then divest them to the private sector.”
The state may raise at least a third of the planned cost and the agency will mobilize the rest from the private sector, multilateral lenders and its own funds, he said. The government has committed to increasing the company’s capitalization to 500 billion shillings in five years, from 70 billion shillings, to boost investment, he said.
UDC will be done with feasibility studies and exploration for clinker in the northeastern Karamoja region by the end of 2019 and plans to start raising funds for the project thereafter, Birungi said. The nation imports as much as 70% of its requirements of the cement-making ingredient from Kenya, India and China, he said. Exploration for salt and associated chemicals is ongoing in Lake Katwe near the border with the Democratic Republic of Congo, and UDC plans to undertake glass-sheet manufacturing and invest in the iron and steel industry, he said. Uganda has 300 million tons of iron ore and estimates that reserves could potentially triple that amount, according the Energy and Mineral Development Ministry.
August 8 2019

Ethiopia grants first financial services licence to foreign firm

NAIROBI (Reuters) - Ethiopia’s central bank granted a financial services licence to a foreign-owned company for the first time on Thursday, as the government begins to open up the economy of Africa’s second most populous nation. Ethio Lease’s new licence signals Prime Minister Abiy Ahmed is moving ahead with the economic reforms he pledged when he took office last year. The company will lease equipment such as MRI scanners, tractors and drilling rigs to companies that can’t import such equipment themselves due to foreign exchange shortages. This will create jobs and increase productivity, Ethio Lease said in a statement. The company is owned by New York-based equipment leasing firm Africa Asset Finance Company (AAFC). “There is a liquidity shortage and a lot of businesses are craving equipment that they just can’t get,” said Frans Van Schaik, chairman and CEO of AAFC. “Almost every factory in Ethiopia will be able to tell you about how an equipment shortage or some other issue is delaying their construction or operations.” The company plans to import $600 million of equipment initially. Abiy wants the private sector to help provide jobs for millions of unemployed youth in the nation’s 100 million people.
Ethio Lease will fill a significant unmet demand for equipment, National Bank of Ethiopia governor Yinager Dessie told Reuters in a phone interview. Yinager said that the central bank would like to license more foreign companies to lease equipment. “This will ultimately create more jobs, more employment and more economic growth,” he said. Yinager said the government was taking tangible measures to support the private sector, noting that last year the central bank allocated more foreign exchange to the private sector than the public sector for the first time. “We will continue this,” he said. The governor declined to specify current foreign reserves but said it was stronger than when Abiy took office 18 months ago. Ethiopia wants to open up its economy, said Van Schaik, but problems remain.
“The bureaucracy in Ethiopia is overwhelming,” he said. “If you want to succeed in Ethiopia, you need to be patient and persistent.” The foreign exchange shortages have worsened in the past five years as the government spent heavily on infrastructure before export earnings from new sectors such as manufacturing took off.
August 15 2019

Johannesburg to launch new high density housing scheme

City of Johannesburg in South Africa is set to launch a new high-density housing scheme. The city’s Mayor, Herman Mashaba announced the reports and said that the housing development are aimed at integrating mixed-income groups to achieve social, economic, and spatial integration.
High density housing scheme
Mashaba said that the development being built by Johannesburg Social Housing Company (Joshco), is part of the four sites zoned for high density residential projects across the country. It forms part of a mixed integrated housing development, with 24 buildings consisting of two and three storey walk-up apartment and blocks with a total 407 rental units.   The new high density of social housing scheme will be built in Lufhereng Ext. 1 in Soweto. The building will accommodate mixed income households with gross income ranging from US $98.17 to US $981.6 per month. These units also comprise of bonded-housing, Finance Linked Individual Subsidy Programme (FLISP) and Breaking New Ground (BNG) houses. Mashaba added that the project will feature and incorporate optimal water and energy efficient practices such as solar geysers, energy efficient lighting, insulation, waste management initiatives, as well as water harvesting directly from the roofs. “The development of new and improvement existing affordable rental housing opportunities for the residents of Johannesburg is critical for driving our economy, and stimulating the creation of much-needed jobs. The City is therefore committed to designing and building quality, resource efficient, economically sustainable and affordable housing, located in neighborhoods that have easy access to transport nodes, which links to job opportunities, and ultimately, better quality of life,” said the mayor.