The latest African business news

By Jill Starley-Grainger March 25, 2021
Dr Ngozi Okonjo-Iweala Dr Ngozi Okonjo-Iweala

Port Harcourt

Nigerian-born Dr Ngozi Okonjo-Iweala became the World Trade Organisation’s (WTO) first African and first woman Director-General when she commenced her role on March 1, 2021.

The term of the position runs until August 31, 2025.

Her candidacy for the WTO had seen a set-back after criticism by the former US president, Donald Trump.

The former president said he didn’t believe Okonjo-Iweala had the experience required to lead the global organisation.

Prior to her nomination for the role in October 2020, the renowned economist had worked 25 years for the World Bank, and as both Nigeria’s Finance Minister and its Minister of Foreign Affairs.

She has won dozens of awards for her work, including African of the Year 2020, awarded by Forbes Africa, and is frequently profiled in rankings of the world’s greatest leaders.

Shortly after he took office, US President Joe Biden expressed strong support for Dr Okonjo-Iweala, and she was unanimously confirmed by all 164 WTO members in February 2021.

Dr Okonjo-Iweala has made clear that one of her key priorities is the address the global economic and health consequences caused by the Covid-19 lockdowns.

‘The crisis has upended trade and economic activities leading to job losses and reduced incomes around the world. It has erased years of economic gains made by several developing countries and even decades of growth in some low income and least developed countries,’ she said.

‘But there is hope on the horizon.

The WTO expects world merchandise trade to rebound strongly this year,’ she said, also pointing out growth predicted by the IMF of eight per cent in global trade volumes in 2021 and six per cent in 2022, with global GDP expected to grow 5.5 per cent in 2021 and 4.2 per cent in 2022.

Her position will require extensive diplomatic skills as she aims to draw the WTO membership together and help negotiate major trade agreements.

 

Nairobi

After some initial posturing, the UK and Kenya have signed and ratified a vital post-Brexit trade deal worth an estimated $2 billion.

A statement by the UK government said: ‘This trade agreement will ensure that all companies operating in Kenya, including British businesses, can continue to benefit from duty-free access to the UK market. It will support jobs and economic development in Kenya, as well as avoid possible disruption to UK businesses such as florists who will be able to maintain tariff-free supply routes for Kenya’s high-quality flowers.’

The leading goods imported into the UK from Kenya are tea, coffee and spices ($168 million), vegetables ($110 million) and flowers, plus some trees and plants ($75 million). Around 2,500 UK businesses export items from the UK to Kenya, mostly machinery, electronics and technical equipment.

The deal helps ensure that these imports and exports will continue to remain tariff-free.

It’s hoped the other five members of the East African Community (EAC) – Burundi, Uganda, Rwanda, South Sudan and Tanzania – will also sign up to the agreement.

The UK’s Minister for Africa, James Duddridge, said: ‘This agreement will provide the strongest possible platform for the United Kingdom, Kenya and, ultimately, the whole EAC, to expand our trade relationship in future.’

Meanwhile, Kenya has resumed talks with the US over a trade deal, after a four-month break during the US presidential transitional period.

Now President Biden has appointed Katherine Tai as US Trade Representative, and once her position is confirmed by the Senate, it’s hoped talks with Kenya will quickly resume.

The trade between the USA and Kenya was valued at $1.1billion in 2019.

The top exports from Kenya to the US were clothing ($454million), fruit and nuts ($55million), titanium ores and concentrates ($52million), and coffee ($34million). Kenyan imports from the US include aircraft ($59million), plastics ($58 million), machinery ($41 million) and cereals ($27million).

The talks and any agreement will lead the way for other deals between the US and other sub-Saharan African Countries.

Most currently trade with the US under the African Growth and Opportunity Act (AGOA), which was ratified in 2000 and is set to expire in 2025.

This agreement allows more than 6,500 products to be traded without duty between the USA and the sub-Saharan African countries that meet the requirements of the act.

 

Cairo

Egypt’s Petroleum Minister, Tarek el Molla, announced the country is opening tenders to the international market for the gas and oil exploration of 24 areas in the Suez Gulf, Western Desert, and East and West Mediterranean.

This is in addition to recent agreements signed with six local and international companies worth $1billion, and covering the drilling of 17 new exploration wells.

The tenders will be handled through the Egypt Upstream Gateway, a new digital platform that provides geological data covering 100 years’ worth of search, drilling and production activities.

It pulls in national onshore and offshore seismic, non-seismic, well-log, production, and additional subsurface data.

The portal launched in February 2021, and at the time of press, 10 major global oil companies have already signed membership agreements using it.

 

Victoria

The Seychelles will become home to a ‘six-star’ resort in 2023.

The Hilton group will open a resort on the outer island of Platte. It will be part of the group’s mega-luxury Waldorf-Astoria Hotels & Resorts brand.

The group will also open the more affordable Canopy hotel on Mahé. When these two properties open in 2023, Hilton will have six properties in the archipelago - Hilton Seychelles Northolme Resort & Spa, Hilton Seychelles Labriz Resort & Spa, DoubleTree by Hilton Seychelles - Allamanda Resort and Spa, Mango House Seychelles (opening later this year).

Carlos Khneisser, Hilton’s vice-president of development, Middle East & Africa, said: ‘The Seychelles remains unquestionably one of the world’s most desirable destinations for the discerning traveller.  We are proud of the role our teams have played in the sustainable development of the Seychelles, and these new additions, coupled with Mango House Seychelles, LXR Hotels & Resorts, will give our guests an unprecedented range of world-class experiential options to choose from when planning what is sure to be an unforgettable visit.’

The hotel on Platte Island that will be under the Waldorf-Astoria brand is also part of the Islands Development Company (IDC).

The resort will have 42 ocean-facing luxury villas, and is expected to cost around $100million.

 

Lusaka

Zambia’s copper and coal mines saw significant boosts to output in 2020, while gold production dropped slightly.

The country’s Mines and Minerals Development Minister, Richard Musukwa, said that copper production had increased 9.71 per cent in 2020 - at 888,061 tonnes, compared to 796,430 tonnes in 2019.

Copper continues to be in high demand globally for use in electrical wiring (60 per cent), roofing and plumbing (20 per cent) and industrial machinery (15 per cent).

It’s often used in healthcare equipment, too, for its anti-bacterial properties.

Musukwa called it a ‘historical high’ for the country’s copper production, and he said the growth is partly being driven by the increasing popularity of electric cars, which use significant amounts of copper.

The minister also highlighted the growth in coal production, at 448,821 tonnes in 2020 compared to 361,647 tonnes in 2019 - an increase of 24.1 per cent.

Demand has grown as coal continues to be the main source of power generation for electricity globally, despite the fact it is the most polluting source of energy, emitting twice the CO2 of natural gas, and is one of the world’s leading sources of climate change, according to the United Nations.

Gold has dipped slightly in Zambia, from 3,912kg in 2019 down to 3,578kg in 2020 – a reduction of 0.085 per cent.

The minister explained that this was due to reduced grades of gold sourced from the mines at Kansanshi.

However, a state-owned company, which began operations in May 2020, is helping boost reserves going forward.

‘Zambia Gold Company Limited was able to produce a total of 93.66kg of gold in 2020 from its mining operations at Kasenseli and was able to sell a total of 47.9kg of gold to Bank of Zambia on 31st December 2020,’ Musukwa said.

Nickel production more than doubled last year, up to 5,712 tonnes in 2020 compared to 2,500 tonnes in 2019.

And manganese output grew to 28,409 tonnes in 2020, and increase of 79 per cent on the 15,904 tonnes produced in 2019.

 

Pretoria

South African President Cyril Ramaphosa said the government is planning to introduce incentives to support people to buy locally in South Africa.

He laid out his plans as part of a keynote speech to the Proudly South African Summit and Expo on March 9, 2021.

He said buying locally made products and choosing to patronise local businesses were both vital to help with economic crisis caused by the country’s draconian lockdown policies.

‘Whether public or private, we need to appreciate that choosing to procure locally through and across value chains is a solid investment in our economic recovery,’ said Ramaphosa.

‘Companies with long histories and deep footprints in the domestic market have been badly affected by the pandemic,’ he said.

‘Many have had to scale down and some have been forced to close.’

South Africa’s economy shrank by seven per cent last year, the biggest contraction for the country since 1920.

To help the country back on its feet, Ramaphosa aims to prioritise local businesses, including by cracking down on the illegal importation of goods, and by designating 27 sectors for local procurement by the public sector.

He also said that he also now buys all of this own suits and shirts from local suppliers.

‘Our message must be that wherever you may be in the country, be Proudly South African,’ he said. 

‘Wear local, travel local, eat local, watch local content, read local authors, support local music, and use local raw materials in your businesses. It grows our economy, creates jobs, broadens markets and creates numerous opportunities for business expansion.’

 

Abuja

The Central Bank of Nigeria (CBN) has introduced a ‘Naira 4 Dollar Scheme’ for diaspora remittances.

Intended as an incentive for people using international money transfers, the scheme will pay N5 for every US$1 received.

The goal of this appears to be to get more dollars flowing into the country.

The press release announcement from CBN stated: ‘A typical recipient of diaspora remittances will, at the point of collection, receive not only the USD sent from abroad, but also the additional N5 per US received.’

What that means is that for every dollar someone receives from the diaspora, they will be given an additional N5 as a credit.

If someone sends $100, the recipient will get the $100 plus N500.

The naira credit will be given to the recipient, whether they take cash across the counter or choose to put the US dollars into their bank account.

However, the remittances must be processed and received from one of the International Money Transfer Operators (IMTO) registered by the CBN, and is supported by commercial banks.

The scheme will be funded by the CBN, and will run until May 8, 2021.