Thursday, May 2, 2024

South Africa | Why post-COVID-19 is a good time to beneficiate

Africa Bulletin
-
0

By Wessel Badenhorst, Office Managing Partner, Hogan Lovells, Johannesburg

Who makes the best chocolate in the world, the Swiss or the Belgians? Either way, neither of these countries owns vast tracts of cocoa plantations. They import the raw materials to make the chocolate. Yet we would all agree that the greatest economic value is unlocked when cocoa beans become chocolate. It is sad to say that resource-based economies are not the wealthy ones.

The Scottish economist and philosopher Adam Smith, who published The Wealth of Nations in 1776, is generally regarded as the father of modern economics. He argued for division of labor and famously advocated that if tasks were divided up, workers could collectively improve their productivity. A notion modernized by Henry Ford in the development of the model T production line.

Beneficiation means to take raw material and to transform it to a higher value product. Applying this principle to mineral extraction, the key to unlocking wealth is the beneficiation thereof to the higher value products. For example, take chromium ore and transform it into ferrochrome, then take ferrochrome and use it in the production of stainless steel and then use the stainless steel to make end products. Such a division of labor at a macro-economic level creates wealth.

Almost a decade ago, in June 2011, the Department of Mineral Resources and Energy (DMRE) published a Beneficiation Strategy for the Minerals Industry. South Africa has been a resource economy for more than a century and is in need of a paradigm shift. We must focus on strategic investment in assets to maximize long-term growth beneficiation projects, enhance value exports and increase sources for consumption of local content.

Unsurprisingly, the Beneficiation Strategy identified the lack of infrastructure as one of the barriers to the development of downstream beneficiation. Shortages of critical infrastructure such as rail, water, ports and electricity supply would, according to the DMRE, pose a major threat to future growth.

There is no doubt that once South Africa emerges from the current lockdown, there will be a renewed look at ways in which to restructure businesses, firstly to absorb the negative impact and ensure survival, but secondly, to improve their global competitiveness in a post-COVID-19 world. The mining industry will not escape restructure. Many mines were marginal operations to begin with and the economic fall-out will send some mines over the fiscal cliff.

It is perhaps in such calamitous circumstances where the opportunity lies for the DMRE to use its regulatory tools to promote downstream beneficiation and so accelerate the healthy metamorphosis of the mining industry.

Section 23(2) of the Mineral and Petroleum Resources Development Act, 28 of 2002 (MPRDA) provides that, when considering an application for a mining right, the Minister of Mineral Resources and Energy may have regard to section 26, which in turn provides that if the Minister, in consultation with the Minister of Trade and Industry, finds that a particular mineral can be beneficiated economically inside South Africa, then the Minister may promote such beneficiation, subject to any terms and conditions the Minister may determine. The principles of section 23 also apply where applications are made to the Minister to transfer a mining right from one holder to another (as would be the case in a restructure).

However, paying lip-service to the regulatory provisions and encouraging private investors to build downstream beneficiation plants at great cost is not enough. A coordinated approach is needed, which would include the following:

  • Tackle the issue of electricity. Unstable and expensive electricity makes the building of processing and refinery plants uneconomical. During the Mining Indaba in February 2020, the Minister announced that he would investigate how mines (and downstream beneficiation plants) could generate their own electricity. A plan is urgently needed to remove the various regulatory barriers to the construction of private power plants, so that they can be owned independently, financed accordingly and then continue to feed into the national grid once the operations they service come to an end. Independent power producers have been lobbying government for decades to get this right – the time to do it is right now.
  • Improve the efficiency of the state-owned rail transport network. Beneficiated product will still have to be exported. Business needs a reliable, efficient and stable logistics network to export product. The current over-reliance on road transport is not sustainable. Public money will have to be spent on improving the rail transport network and the management thereof.
  • Entice investment; make it attractive to invest here. Tariff incentives, tax breaks and other financial incentives will go a long way to demonstrate to investors that there is economic benefit to developing a downstream beneficiation industry.
  • Speed it up. Although we all accept and appreciate that regulatory red-tape is a necessity, it is advisable that the regulatory approval process be streamlined and expedited. The one-environmental system should seamlessly and efficiently interlink with other approvals needed. The easier and more user-friendly the approval process, the more likely we will see investment.

And what will all this bring? Sustainable investment brings sustainable employment, which grows the economy and creates wealth. Now, more than ever, business, labor and the public at large are waiting with bated breath for decisive governmental leadership to steer a course for economic recovery. Perhaps, when all is said and done, South Africa could emerge from this world crisis stronger and better placed to compete for investment.

Togo becomes 18th African country shareholder in ATI

Africa Bulletin
-
0

African countries fast-tracking membership to ATI in response to expected trade and investment insurance capacity impact from COVID-19

Togo becomes 18th African country to join ATI, with a shareholding of

US$12.5 million, through a concessional loan by the European Investment Bank.

Membership in ATI provides African countries with additional trade and investment insurance capacity and improves risk rating for sovereign debts.

Adequate insurance capacity critical component to cushioning against negative economic impacts of COVID-19.

The Government of Togo announced completion of the country’s membership in the African Trade Insurance Agency (ATI), becoming the 1 8th African sovereign shareholder. Togo’s membership, backed by the European Investment Bank, reflects a trend that has seen a record number of West African countries join Africa’s multilateral guarantee agency with Ghana, Niger and Nigeria all completing membership in the last nine months. This trend is expected to continue as countries seek support to ensure investment and trade flows on the continent.

“As we ready ourselves to manage the economic fall-out from the Corona virus, African governments are focused on mitigating the short and long-term impacts. Insurance capacity is an important aspect of our ability to rebuild and to ensure that critical projects receive the funding and guarantee support they require. We see membership in ATI as a necessary component in our ability to shore up the economy and to weather this storm.” said Hon. Sani Yaya, Minister of Economy and Finance of the Republic of Togo.

“The membership of Togo pushes ATI one step closer to achieving full pan-African membership from countries from coast to coast. The COVID-19 crisis increases the relevance of African development finance institutions such as ATI. As the world struggles to get a handle on this fast moving pandemic, the combined resources of African institutions will be needed to effectively counter this newest threat to Africa’s development.” said John Lentaigne, Acting CEO of the African Trade Insurance Agency

In tandem with the country finalising its shareholding, ATI backed Togo’s first access to international financial markets, with the country obtaining a quasi-concessional 10-year loan to reprofile and refinance a portion of its short-term and more expensive public debt. Togo was able to use ATI’s credit wrap to package the debt, helping the country achieve a borrowing rate in the low single digits.

Reflecting the important role that ATI plays in the region’s economic growth, the European Investment Bank (EIB) provided a US$12.5 million concessional loan to cover Togo’s shareholding in ATI. The complete US$37.5 million financing package, finalised by EIB in 2019, covers the shareholdings of Niger, Togo and Cameroon, with Cameroon’s completed membership to be announced imminently and with additional financing possible for more countries to join in 2020.

“Close cooperation between African and European partners is key to successfully reduce the unprecedented impact of COVID-19 and tackle the negative economic impact of the virus both globally and in more vulnerable economies. Regional partners such as the African Trade Insurance Agency play a valuable role supporting economies across Africa by providing the insurance that helps to maintain investment and trade flows at a time when these are most needed,” said Ambroise Fayolle, Vice President of the European Investment Bank

Membership of ATI opens a path for countries to reduce their debt levels, it equally provides global investors and financiers with comfort that sovereign transactions and other investments are back-stopped by a highly rated and reputable insurance guarantee agency.

There is a perpetual shortage of investment insurance in most African markets and, without it, vital investments, both equity and debt, as well as cross border trade will remain sub-optimal. The onset of Coronavirus is compounding the shortage of such insurance in Africa. ATI’s presence is therefore now, more than ever, a key component of many countries’ ability to remain attractive investment destinations.

As African countries begin to build buffers against the likely negative economic fall out from COVID-19, investment insurance capacity is seen as a critical part of the financial support that will be needed to shore up the economies of many African countries.

Background information:

About The African Trade Insurance Agency

ATI was founded in 2001 by African States to cover the trade and investment risks of companies doing business in Africa. ATI predominantly provides Political Risk, Credit Insurance and, Surety Insurance. In 2019, ATI closed the year with exposures of US$6.4 billion and continued to post record results for the eighth consecutive year with 132% growth on the net profit over 2018 owing to strong demand for ATI’s insurance solutions from the international financial sector and from African governments. For over a decade, ATI has maintained an ‘A/Stable’ rating for Financial Strength and Counterparty Credit by Standard & Poor’s, and in 2019, ATI obtained an A3/Stable rating from Moody’s.

Copyright European Union, 1995-2020

SOURCE European Investment Bank

Earth Day 2020 –  Climate change, water scarcity and plastic waste are top concerns for Africa youth, survey shows

Africa Bulletin
-
0

This Content Is Only For Subscribers

Please subscribe to unlock this content.

What Impact Will COVID-19 Have on Food Security in Africa?

Africa Bulletin
-
0

By Simon Buchler, Senior Associate, Bryan Cave Leighton Paisner LLP London office

COVID-19 has impacted nations all across the globe, but it is across Africa where experts believe the effects may be felt the hardest. Labour shortages and price fluctuations, combined with stringent government measures restricting movement and trade, are likely to have significant impacts on food security across the continent.

According to the World Bank, the COVID-19 pandemic is likely to cause:

→ The first recession for sub-Saharan Africa in 25 years → 7% decline in agricultural production → 25% decline in food imports

Many African governments may struggle to implement the financial interventions and benefit packages introduced by more developed economies. However, solutions such as opening up borders to trade of key food products, encouraging DFI support and stimulating the development of, and investment in, new Agritech businesses may help countries alleviate food shortages.

It is hopeful that these interventions will not just tackle the negative effects of COVID-19 but also help to drive sustainable development in Africa. The strategic partnerships that can be created between investors and local stakeholders will hopefully provide a solid foundation to promote Africa’s role in the global supply chain, creating food security for all.

WHAT IMPACT WILL COVID-19 HAVE ON FOOD SECURITY IN AFRICA?

As of 14 April, over 15,000 cases of COVID-19 have been confirmed in 52 of the 54 countries in Africa. However, the actual figure is potentially much greater as many infections go undetected and untested.

Due to the fragile health systems of many African countries, a pandemic could have a disproportionately worse outcome. As a result, a number of African governments have effectively shut down large portions of their economies and closed borders to travel and trade.

According to The World Bank’s recent report on the impact of COVID-19 in Sub-Saharan Africa (April 2020) (the “World Bank Report”), it is projected that economic growth in Sub-Saharan Africa will decline between -2.1% to -5.1% in 2020, in part due to a sharp decline in trade with China and Europe; the first recession in the region in 25 years.

One sector that will may suffer the most from this reduction in trade is agriculture. According to the World Food Programme, one of the biggest impacts will be on food security, seen through limited access to food, restrictions on labour and imports and price fluctuations.

Agriculture Pre-COVID-19

Africa contains 25% of the global landscape suitable for crop cultivation which is more than sufficient to drive the continent’s economic development and adequately feed its own population. Yet since the 1980s, Africa has been a net importer of agricultural goods. Last year, according to the African Development Bank, approximately $35 billion worth of agricultural products were imported into Africa. This over-reliance on imports is driven by increasing urban demand and compounded by weak infrastructure and inefficient farming methods. Critically, it places much of Africa at significant risk of exposure to global economic shocks such as COVID-19.

Climate change has also threatened Africa’s crop yields. In Southern Africa recent droughts have caused crop yields to fail and an estimated 2.3 million people face severe acute food insecurity in Zambia alone. Across East Africa an infestation of desert locusts has fed on hundreds of thousands of hectares of crops and pastureland, consuming the same amount of food in one day as approximately 35,000 people.

Effects of COVID-19

Fears about the impact on food security in Africa are growing. According to the World Bank Report, agricultural production is likely to contract between 2.6% – 7% with food imports declining substantially by up to 25%. We have highlighted four key effects of this pandemic on Africa’s agricultural industry and how this will likely impact food security:

1. Labour and supply shortages. The majority of Sub Saharan Africa’s food production and processing is labour intensive with informal and smallholder farmers making up more than 60% of the population. Therefore, government restrictions on travel and movement, as well as the health impacts of the virus, will likely lead to a shortage of labour, raw materials and infrastructure. This, in turn, may significantly disrupt the harvesting and processing of raw food, impacting the supply chain across Africa.

The World Food Programme argues that:

restrictions on internal and cross borders movement limit markets access…If the above-mentioned restrictions continue, farmers won’t have access to market to buy good quality seeds and fertilizers.

This disruption may also be exacerbated as women are often the primary crop producers, but are also more likely to shoulder the burden of looking after the elderly and sick and caring for children not able to go to school.

2. Restrictions on imports and exports. With local food supply chains disrupted, many would naturally rely on imports but many governments around the world have closed their borders to trade and travel. This has prevented farmers from being able to distribute their raw or processed foods both nationally and internationally, making it harder for farmers to be able to support their operations.

3. Last mile disruptions. Local food markets are the backbone of the informal economy of many African countries; supplying the majority of food to Africans. For instance, it has been reported than in Nigeria, 95% of the population buys food in these informal markets. City and nationwide lockdowns, and government policies closing markets and restricting public gatherings, could prove disastrous not just for the traders but for the public who will likely struggle to buy food for their families.

4. Price fluctuations. Prices of food (especially staples such as wheat and rice) are likely to rise due to disruptions to the agriculture supply chain, reduced imports and closures of many informal markets. Ghana has already seen a 7.9% increase on the average cost of food. On the other end of the spectrum, the cashew nut, a major export crop for countries such as Ghana, has dropped in price by 63% between January and March this year as China and India have slashed imports. This has severely reduced the income of farmers and their ability to feed their families, which in turn increases the risk of many farms going out of business.

Possible Solutions

Although Africa has a relatively young workforce compared to other continents, which may hold some advantages when it comes to countering the effects of COVID-19, it undoubtedly faces many challenges that require significant action from multiple stakeholders if the risk of food shortages is to be mitigated.

In the absence of substantial state-backed financial interventions and economic packages akin to some European countries, some important measures can be taken. Although each country has differing infrastructure, government policies and trade links, we are focusing on three general possible solutions:

1. Legal and Political Frameworks

According to the World Bank Report, it is critical that governments across Sub-Saharan Africa take action to minimise disruptions in food supply chains, keep logistics open and reduce trade barriers.

Rather than closing all food markets, governments may consider:

→ allowing them to operate but with reduced capacities;

→ staggered entries; and

→ better hygiene practices (such as clean water supplies and hand-sanitising facilities).

Not only would this support the informal economy of many African nations but people would have better access to food and farmers would continue to have access to their usual supply chains.

Additionally, countries that have closed their borders may need to consider opening the country up to imports of certain food products that cannot be supplied through local systems, and to exports of domestic products to ensure that their national agricultural industry doesn’t collapse.

A consortium of food and beverage corporates, along with farmers’ organisations and the UN Foundation have written to world leaders, calling on them to keep borders open to trade in order to help the most vulnerable classes of society.

With sufficient controls and security measures, these countries could protect themselves from food shortages while still limiting the spread of COVID-19. Some early examples of this come from South Africa which has pledged to set aside 1.2 billion rand ($64 million) to help small-scale farmers in a bid to support food production, from Namibia which is offering an emergency income grant to workers (including in the agricultural industry) who have lost jobs, and from Kenya where various tax relief measures have been proposed.

2. Global Coordination

It is vital that the efforts and strategies put in place to tackle COVID-19 are implemented on a global rather than national scale; where action from developed countries and DFIs can help protect the most vulnerable countries and prevent the economic and social kick-back from the pandemic being the real disaster.

The World Bank is deploying up to $160 billion in financial support for developing countries over the next 15 months to help protect the poor and support businesses. In addition, the African Development Bank just announced that it will provide up to $10 billion to African governments and the private sector under a new COVID-19 Response Facility and a $3 billion COVID-19 bond to help alleviate the impact of the pandemic on Africa’s economies.

However, some aid organisations have sadly had to go the other way, with the UK Prosperity Fund temporarily pausing all tenders including those where funds were due to be invested into Africa. Such freezes will likely disrupt the ability of these aid programmes to operate at the time when they may be needed most.

Further funds are needed from other development financial institutions, donors and institutional impact investors to provide liquidity to struggling businesses and cash transfers to those individuals with no work or social security net. Injecting cash into the African food economies is likely to be the most effective short term solution to alleviate food shortages whilst stemming the pandemic.

3. Foodtech & Agritech

Crop yields in Sub-Saharan Africa are around a quarter of the global average and many believe that technology has a vital role to play in improving efficiencies in the supply chain.

The best manufacturers have used data and AI to increase production by 50% and cut waste by 20% – agriculture can do the same. It is possible to sustainably feed everyone on our planet for many years to come, but not without AI and not without data-sharing.

→ Richard Tiffin, the chief scientific officer and founder of agricultural data firm Agrimetrics

Investments in Agritech can enable farmers to use water, pesticides and fertilizers much more efficiently, significantly reducing operating costs whilst also being more environmentally sustainable. For instance, Apollo Agriculture, a Kenya-based Agritech business, supports farmers by providing agronomic machine learning, remote sensing and data analytics. Online platforms like WeFarm have taken advantage of the rapid spread of mobile phones across Africa to create a network of small-scale farmers who can help each other with questions and suggestions to increase productivity.

It is not just farmers who are benefitting from tech start-ups. Namibian start-up E-bikes4africa, which specialises in the manufacture, rental and sale of electric bikes, has entirely shifted focus towards the home distribution sector to take advantage of the surge in demand for home deliveries since the containment measures adopted by the government.

According to Agfunder, agricultural technology start-ups have grown more than 80% per year since 2012. However, more than 90% of Africa’s Agritech market remains untapped and could be worth over $2.2 billion.

There is a clear opportunity here for both technology companies and investors to not just help revolutionise Africa’s agricultural industry and food supply systems but tap into a potentially lucrative market. At BCLP we are very well placed to aide this push, with our top tier global Agribusiness and Food ranking and our long history of advising investors and start-ups across the world.

Bringing Nollywood star power to Nigeria’s fight against COVID-19

Africa Bulletin
-
0

Ahead of its arrival in Nigeria, a lot of people in the country had misconceptions about COVID-19. Many thought it was a disease only for advanced countries, or that black Africans were immune to it.

But as the number of infections grew from one case in Lagos on 27 February, to more than 400 by 17 April, new myths developed. For example, “Coronavirus is a disease of the rich”, and “since alcohol-based hand rub can kill the virus, drinking alcohol will prevent infection”. These, and other unverified myths, started doing the rounds on social media, spreading even faster than the virus itself. Addressing this dangerous misinformation became one of the first and most critical tasks for the UN in Nigeria.

The Nollywood factor

Nigerian musician Cobhams Asuquo

Nigerian musician Cobhams Asuquo, by Kelechi Amadi-Obi

We quickly turned to the Nigerian film and entertainment industry, otherwise known as Nollywood, which produces some 50 movies per week, second only to India’s Bollywood (Hollywood, in the United States, is a distant third).

Nigerian stars were mobilised, and produced powerful content with potent messages that quickly began to trend: “No shaking of hands with your neighbour; blow them a kiss from afar, use soap and water to wage war…” sings award-winning Nigerian musician Cobhams Asuquo, in his heartfelt song to contain the spread of COVID-19.

Addressing the issue of coronavirus myths, popular comedian Basket Mouth, in his short video, urges everyone in pidgin English, “Abeg confam information before you share am,” meaning, “Please confirm every piece of information before you share with others.” Star actress, Toyin Abraham in her short video, advises, “Do not be terrified. Listen not to rumours about coronavirus.”

Collaboration, cooperation and funding

There are many different UN agencies, programmes and fund present in Nigeria, and we ensured that the strengths of each one could be used to effectively help the Government and people of Nigeria through this crisis.

At a meeting with government agencies, and key donors, we held a meeting to discuss the unfolding emergency, and agreed on a plan of action, which included launching a fund to channel contributions to Nigeria’s Presidential COVID-19 Task Force.

Nigerian actress Toyin Abraham, by Toyin Abraham

Together, the different parts of the UN in Nigeria contributed $2 million towards the procurement of essential medical supplies, including 50 ventilators that will likely double the national reserves, Personal Protective Equipment (PPE), 30,000 test kits, and five ambulances with surveillance equipment.

But our work goes beyond just funding. The UN in Nigeria has supported coordination at Emergency Operations Centres (EOCs), contact tracing and surveillance, logistic support for transportation and provision of materials such as PPE and much more.

The World Health Organization (WHO), which is taking the lead on the COVID-19 containment strategy, has sent staff members to the affected regions to support the response, and is helping other regions to prepare to cope, including risk communications and community engagement, with strong support from other UN Agencies.

The humanitarian consequences

The UN Resident Coordinator in Nigeria, Edward Kallon, washes his hands, demonstrating one way to reduce the transmission of the coronavirus.

The UN Resident Coordinator in Nigeria, Edward Kallon, washes his hands, demonstrating one way to reduce the transmission of the coronavirus., by UN Nigeria/Oluseyi Soremekun

Currently, we are getting ready to deal with the immediate humanitarian consequences of the pandemic, should it spread to the north-east of Nigeria. We will not wait for COVID-19 to reach camps for internally displaced persons (IDPs) before we act: they have already suffered enough from the decade-long conflict in the region.

We are supporting the authorities in the Borno, Adamawa and Yobe regions to develop emergency response plans that pay special attention to the reality of the living conditions in many communities and IDP camps, and the specific needs of women and children, who often bear the biggest brunt of any crisis.

To protect the IDPs against coronavirus, we have installed handwashing stations in camps and informal settlements and are working to ensure a rapid distribution of water. Beyond the IDPs, the UN is launching a survey tool with the Network of People living with HIV (NEPWHAN) to gather specific information regarding potential challenges, and also for people living with HIV/AIDS, and how they can maintain continuous access to quality treatment, care and support in the midst of the response to the outbreak of COVID-19.

Looking ahead to the post-coronavirus era

Anticipating the socio-economic impact of COVID-19 in the post-coronavirus era, the UN in Nigeria has prepared an analysis of the socio-economic environment and projections post-coronavirus, with a view to drafting a technical report that will help planning and decision-making by the Government.

It is key for the different parts of the UN to act as one. Togetherness achieves more. The collaboration and cooperation between the UN and the Government is clear for all to see, and is already bearing fruit in ensuring an effective and coordinated national response to contain the COVID-19 pandemic.

We are committed to continuing this collaboration for the benefit of all Nigerians, as the world faces one of the biggest health crises ever seen.

Working together, we can surely win. In fact, this is the only way we can win.

The UN Resident Coordinator

The UN Resident Coordinator, sometimes called the RC, is the highest-ranking representative of the UN development system at the country level.

In this occasional series, UN News is inviting RCs to blog on issues important to the United Nations and the country where they serve.

SOURCE UN News Centre

African farmers face difficult times ahead as they lose export market access amidst COVID-19 crisis

Africa Bulletin
-
0
  • Millions of African smallholder farmers who grow fruits and vegetables (FFV) for export have lost market access as flights are cancelled and borders restricted around the world.
  • Morocco, Kenya, and South Africa are the most affected countries in Africa.
  • Global disruption of supply chains is also affecting the import of agricultural inputs such as seeds, fertilizers, and insecticides.

NAIROBI, 14 April 2020 – Millions of family farmers across Africa are facing economic devastation as COVID-19 pandemic disrupts exports and global food supply chains. This is according to the Impact of Coronavirus on Africa’s Agriculture April 2020 report released by Selina Wamucii that gives a most-recent and ground-up perspective on how the pandemic is affecting African farmers.

According to John Oroko, CEO of Selina Wamucii, intra-Africa trade is around 2% while exports from Africa to the rest of the world range from 80% to 90% of total exports, of which a huge share is made up of agricultural produce.

“The COVID-19 pandemic has unfortunately come at a time when our farmers depend largely on exports to markets outside the continent and also before the commencement of trading under the African Continental Free Trade Area (AfCFTA) that was scheduled to commence on July 1, 2020, thereby creating a single continental market of more than 1.3 billion people. Now, unlike no other time, we can see a demonstration of why the success of the African Continental Free Trade Area will be directly linked to securing the livelihoods of African farmers in the future,” says Oroko.

“COVID–19 is severely disrupting trade in key markets for Africa’s agricultural produce and African farmers are bound to experience a nightmare in export market access.”, adds Oroko.

African farmers are a relatively elderly demographic and 70% of Africa’s food is currently produced by women, who are also primary caregivers across many of Africa’s rural regions. This means therefore that a key segment of the farmers in the region is also at a higher risk of contracting COVID–19.

Morocco tops the list of African countries whose agricultural exports face the highest risk largely due to the country’s over-reliance on the European market given its close proximity and well-established traditional trading ties. In 2018, Morocco’s FFV, fish, seafood and cut flowers, worth $3,024,724,000 was exported to the European Union, translating into over 78% of the FFV, fish, seafood and cut flowers worth $3,846,083 exported by Morocco to the rest of the world in that year.

Kenya’s agricultural exports also face a great risk mainly due to the over-reliance on fresh-cut flower exports, the bulk of which end up in the European Union. Additionally, over 50% of Kenya’s FFV exports and nuts go to the European Union and China, which are markets that have already been shaken up. In 2018, Kenya’s FFV and nut’ exports worth $223,113,000, out of the total $482,559,000 exported, went to European markets.

Before the COVID–19 pandemic, farmers in Kenya and other East Africa countries were already suffering severe locust invasion and now COVID–19 has worsened the situation. The U.N. Food and Agriculture Organization (FAO) has warned that a new wave of locust swarms are starting to form, representing an unprecedented threat to farmer livelihoods – specifically in Kenya, Ethiopia, and Somalia.  As a result, farmers are facing a double catastrophe from the impact of COVID–19 and the locusts at the same time, a combination that will negatively affect their farm yields.

While the agricultural production in South Africa has not been adversely affected by the Coronavirus pandemic, logistics and border restrictions are likely to affect South Africa’s agricultural exports. The country has closed 35 land borders and two seaports. Coupled with the fact that the county also has prohibited crew changes in all of its ports amidst a looming container shortage, the export volume is bound to go down especially for fish, seafood and fresh vegetables.

Other African countries that will experience significant drops in the FFV, fish and seafood exports are, in order of the projected severity: Tunisia, Senegal, Cameroon, Uganda, Mauritania, Tanzania, and Egypt.

Impact of Coronavirus on Africa’s Agriculture April 2020 Report available at:

https://www.selinawamucii.com/impact-covid-19-africas-agriculture/

About Selina Wamucii

Selina Wamucii is the platform for food and agricultural produce from Africa’s agricultural cooperatives, farmers’ groups, agro-processors and other organizations that work directly with family farmers across 54 African countries.

Selina is putting all Africa’s producers ( 80% of whom are family farmers) and their products in one platform where buyers from anywhere in the world can reliably find and buy produce from Africa.

For more information, please contact:

Selina Wamucii Communications and Information Team

T: +44 808 164 1995

E: [email protected]

 

Nigeria: The Legal Framework Applicable To The Facilitation Of Digital Content In Nigeria

Africa Bulletin
-
0
By Nnanke Williams and Adetayo Adetuyi, Senior Consultants, Brooks & Knights Legal Consultants1

1. Introduction

By making the world a global village, the internet has spearheaded the seamless transmission of data and digital content across jurisdictions from the comfort of homes through the use of computer systems and mobile telephones. From messaging and other forms of online communication transmissions to the sharing of media and entertainment and to the completion of transactions in the sale of goods and services, digital content is constantly being shared across countries, and Nigeria has not been left behind in the digital content boom. In November 2019, the Nigerian Communications Commission (NCC) reported the number of active internet users in Nigeria at almost 123 million,2 which was up from about 109 million in 2018.3

Some of the types of digital content available to Nigerian users include, among others, services that facilitate user communications such as social media and messaging services, services that facilitate the creation and delivery of amateur and professionally produced content, and digital marketing services. As the digital services market continues to grow, regulators have struggled to catch up with regulating a content space that is constantly evolving. This article will consider some of the legal and regulatory considerations that affect the provision of the digital services listed above.

In this article ‘digital content provider‘ and ‘online platform‘ may be used interchangeably to refer to creators of digital content as well as platforms through which these contents are shared and made available to users within Nigeria, each phrase may imply the meaning of the other.

2. Legal Considerations Involved in the Provision of Digital Content in Nigeria

Nigerian users have access through several online platforms, to digital content shared by local and international content providers. However, for the purpose of doing business in Nigeria, providers who make these contents available to users in Nigeria may be required under the Companies and Allied Matters Act to incorporate as Nigerian companies where they intend to carry on business in Nigeria.4 The phrase, carry on business, was illustrated by the Court of Appeal’s decision in Edicomsa International Inc. and Associates v. Citec International Estates Ltd,5 a case involving a foreign company who entered into agreements with a Nigerian company to design and build housing units in Abuja, Nigeria. When disagreements ensued concerning payments due to the foreign company, it sued in the Nigerian courts for breach of contract. The Court of Appeal defined the phrase “carrying on business” thus:

“To carry on business means to conduct, prosecute or continue a particular vocation or business as a continuous operation or permanent occupation. The repetition of acts may be sufficient. It also means to hold oneself out to others as engaged in the selling of goods or services”6

The Court then held that a foreign company carrying on business in Nigeria without incorporation as a Nigerian entity is liable upon conviction to the fines prescribed under the Companies and Allied Matters Act and all its acts are void under the law.7 The prescribed fines are negligible, not very proscriptive and may not act as a deterrent to foreign companies engaging in business in Nigeria without registering as Nigerian entities. 8

How does this apply to platforms that share digital content to Nigerian users?

A digital content provider or a platform sharing digital content may be considered to be doing business in Nigeria if it has subscribers from within Nigeria, especially if it offers paid subscription services. An online platform that sells or facilitates the sale of goods and services to consumers within Nigeria may also be considered as carrying on business in Nigeria within the Edicomsa definition. This would mean that it is required to incorporate as a Nigerian entity or risk its actions being voided by the Nigerian courts.

The potential upside for foreign digital content providers doing business in Nigeria is that payments are usually made up front before services are provided and the Edicomsa situation is not likely to occur in their case.

Tax Considerations for Digital Content Providers Offering Services to Consumers in Nigeria

Both Nigerian and Foreign registered companies may be subject to income tax under Nigerian law, upon their profits that accrue in, are derived from, are brought into or are received in Nigeria.9 Non-incorporation as Nigerian entities of foreign companies who do business in Nigeria does not exempt them from liability to tax.

Furthermore, the incomes of foreign digital service providers who offer services in Nigeria have been specifically addressed for tax under the newly enacted Finance Act of 2020. The law amends the section of the Companies Income Tax Act that subjects foreign companies to tax liability in Nigeria, by including the following:

“the profits of a company other than a Nigerian company from any trade or business shall be deemed to be derived from Nigeria if it transmits emits, or receives signals, sounds, messages, images or data of any kind by cable, radio, electromagnetic systems or any other electronic or wireless apparatus to Nigeria in respect of any activity including electronic commerce, application store, high frequency trading, electronic data storage, online adverts participative network platform, online payments and so on to the extent that the company has significant economic presence in Nigeria and profit can be attributable to such activity.”10

Licenses Applicable to Digital Content Providers Offering Services to Consumers in Nigeria

Digital content providers may be subject to licensing depending on the service being supplied. There are no Nigerian licensing requirements for an online platform that facilitates communications between users in Nigeria. However, as will be discussed in section 3 below, providers delivering professionally produced and amateur content in video format will be subject to the licensing requirements of the Nigerian Broadcasting Commission.

3. Laws Applicable to Digital Content Providers in Nigeria

This section will consider the laws and regulations applicable to digital content providers who provide services to facilitate user communications such as social media and messaging services, services that facilitate the creation and delivery of amateur and professionally produced content, and digital marketing services. It will also consider the data privacy rules applicable in Nigeria.

Platforms That Facilitate User Communication

There are 3 (three) primary laws and regulations applicable to platforms that facilitate internet-based communications for users in Nigeria, whether in text, picture or video format, and these laws cover issues of privacy, data protection and security. These laws aim to protect the privacy rights of Nigerian consumers and govern how online platforms handle the data of their Nigerian users. These laws are: the Constitution of the Federal Republic of Nigeria, 1999 as amended (Constitution), the National Information Technology Development Agency (NITDA) Act, 2007, and the Nigeria Data Protection Regulations 2019 (NDPR).

  1. The Constitution

The Constitution is the overarching law and the basis upon which law and government is organized in Nigeria. It aims to promote the good government and welfare of all persons in Nigeria on the principles of freedom, equality and justice. The Constitution guarantees the privacy of every Nigerian citizen as a fundamental human right. It provides that “the privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications is hereby guaranteed and protected.”11

  1. NITDA Act, 2007

Nigerian users are therefore entitled to their privacy in their communications and online platforms must consider privacy issues when sharing user data.

NITDA Act establishes NITDA as the regulating agency for all information technology matters in Nigeria.12 NITDA is the principal regulatory agency in Nigeria for online platforms that facilitate consumers sending communications to each other via the internet in text, picture or video format. It is the agency responsible for regulating online platforms that enable the creation and sharing of amateur and professionally produced content. NITDA is empowered under the Act to make regulations and issue guidelines for the development, monitoring, evaluation and regulation of information technology practices, activities and systems in Nigeria and all matters related to and for that purpose.13 It is also empowered to develop guidelines for electronic governance and to monitor the use of electronic data interchange and other forms of electronic communication transactions.14

  1. NDPR, 2019

Further to its powers under the Act, NITDA issued the NDPR in 2019. The objectives of the NDPR are to safeguard the rights of natural persons to data privacy, to foster safe conduct for transactions involving the exchange of Personal Data and to prevent manipulation of Personal Data.15

NDPR defines Personal Data thus:

“any information relating to an identified or identifiable natural person (“Data Subject. An identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person. It can be anything from a name, address, a photo, an email address, bank details, posts on social networking websites, medical information, and other unique identifier such as but not limited to MAC address, IP address, IMEI number, IMSI number, SIM, Personal Identifiable Information (PII) and others.” 16

The NDPR applies to all transactions intended for the processing of Personal Data, and to the processing of Personal Data irrespective of the means by which the data processing is being conducted or intended to be conducted in respect of natural persons17 in Nigeria.18 It also applies to natural persons residing in Nigeria or those residing outside Nigeria who are citizens of Nigeria.19 However, the NDPR does not operate to deny any Nigerian or any natural person the privacy rights he is entitled to under any law, regulation, policy, contract for the time being in force in Nigeria or in any foreign jurisdiction.20

The NDPR provides that online platforms facilitating internet-based communication may only collect and process Personal Data in accordance with a specific legitimate and lawful purpose consented to by the Data Subject.21 A Data Subject is defined to refer to any person who can be identified directly or indirectly by reference to an identification number or to one or more factors specific to his physical, physiological, mental, economic, cultural or social identity.

A Data Subject’s consent may not be sought, given or accepted in any circumstance that may engender the direct or indirect propagation of atrocities, hate, child rights violation, criminal acts and anti-social conducts.22 Any such online platform through which Personal Data is collected or processed must display a simple and conspicuous privacy policy that the class of Data Subject being targeted can understand.23 In interpreting this provision it is our opinion that this privacy policy must be in the English Language, despite the multilingual nature of Nigerian society, as English is the official language of Nigeria, and the language of its laws, its government and its courts. This policy must however be prepared in simple, plain and easily intelligible form to the Data Subject.

Where online platforms are involved in data processing or the control of data, they must develop security measures to protect such data, “including but not limited to protecting their systems from hackers, setting up firewalls, storing data securely with access to specific authorized individuals, employing data encryption technologies, developing organizational policy for handling Personal Data.”24

The NDPR safeguards the right of a Data Subject to object to the processing of his data.25 The privacy policies for many online platforms provide for a Data Subject’s right to object to the use or processing of its information by either deleting the information, disabling a feature or by contacting the online platform. This may form a sufficient protection of the Data Subject’s right to object under the NDPR.

The NDPR also provides that the privacy right of a Data Subject shall be interpreted for the purpose of advancing and never for restricting the safeguards that the Data Subject is entitled to under any data protection instrument made in furtherance of fundamental rights and the Nigerian laws.26

Where an online platform is found to be in breach of the data privacy rights of a Data Subject, it shall be liable in addition to any other criminal liability to:

  1. in the case of a Data Controller dealing with more than 10,000 (ten thousand) Data Subjects, payment of a fine of 2% of the Annual Gross Revenue of the preceding year or payment of the sum of NGN10 million, whichever is greater; or
  2. in the case of a Data Controller dealing with less than 10,000 (ten thousand) Data Subjects, payment of a fine of 1% of the Annual Gross Revenue of the preceding year or payment of the sum of NGN2 million, whichever is greater.27

A Data Controller is a person who either alone, jointly alone with other person or in common with other person or a statutory body determines the purposes for and the manner in which the Personal Data is processed or is to be processed.

The NDPR also governs the storing and hosting of communications data in real time or in local data centers for online platforms in Nigeria. It provides for how data collected should be processed, stored and secured to ensure that a Data Subject’s right to privacy is protected.

In this regard, the NDPR provides that any medium through which Personal Data is collected or processed shall display a simple and conspicuous privacy policy that the class of Data Subject being targeted can understand. Such privacy policy shall contain, among other things, information on the technical methods used to collect and store personal information, cookies, JWT, web tokens, etc.28 Any such online platform which stores or hosts data is mandated, when processing such data to develop security measures to protect the data, including but not limited to protecting systems from hackers, setting up firewalls, storing the data securely with access to specific authorized individuals, employing data encryption technologies, developing organizational policy for handling Personal Data.29

Prior to collecting Personal Data from a Data Subject, the Data Controller for any such online platform is mandated under the NDPR to provide the Data Subject with information which includes the period for which the Personal Data will be stored, or where not possible, the criteria used to determine that period.30

Platforms that Deliver Professionally Produced or Amateur Content

The major laws that govern online platforms that deliver professionally produced and amateur content concern issues of broadcasting and intellectual property. These laws include the Nigerian Broadcasting Commission (NBC) Act,31 the 6th Edition of the Nigerian Broadcasting Code (NBC Code) and the Copyright Act.32

  1. The NBC Act and the NBC Code

The NBC Act establishes the National Broadcasting Commission (NBC) which regulates and controls the broadcasting industry.33 The NBC is the primary regulator for online platforms that deliver professionally produced editorial content to consumers in video and picture format. The NBC, pursuant to its rulemaking powers under the NBC Act, issued the NBC Code 34 which describes broadcasting as a creative medium, characterized by professionalism, choice and innovation and which utilizes audio and video technology to serve the interest of the general public and enable individuals to share in and contribute to the world around him.35 Internet Broadcasting (radio and television) is a type of broadcasting which is categorized by the NBC Code.36

The NBC Code mandates that all internet radio and television broadcasting streaming signals from and into Nigeria shall be licensed by the NBC.37 It also provides that all subscription internet radio and TV that seeks subscribers in Nigeria be licensed by the NBC. 38 Therefore, online platforms that deliver professionally produced editorial content to consumers in Nigeria in video format must be licensed by the NBC. Such platform will also be subject to all other laws and regulations governing news, programmes, advertising and sponsorship.39

  1. The Copyright Act

The Copyright Act governs copyright issues in Nigeria. According to section 1 of the Copyright Act, copyright eligible works include literary works, musical works, artistic works, cinematograph films, sound recordings, and broadcasts.40 Professionally produced editorial content in video and picture format may be categorized as copyright-eligible artistic works, cinematograph films, and broadcasts. In such cases, copyright concerns will arise.

The Copyright Act confers copyright on eligible works where the author(s) is at the time when the work is made, a qualified person, i.e. an individual who is a citizen of, or is domiciled in Nigeria; or a body corporate incorporated by or under the laws of Nigeria.41 Copyright is also conferred on any eligible artistic work or cinematograph film that is first published in Nigeria, where such work is otherwise not eligible to copyright. Copyright is also conferred on every work that on the date of its first publication:

  1. at least one of the authors is a citizen of or domiciled in; or a body corporate established under the laws of; a country that is a party to an obligation in a treaty or other international agreement to which Nigeria is a party; or
  2. the work is first published in a country which is party to an obligation in a treaty or other international agreement to which Nigeria is a party; or it is published by the UN or any of its specialised agencies; or by the Organization of African Unity or by the Economic Community of West African States.42

Copyright generally protects against copying or reproducing the work as well as any unlawful public use of the work. Copyright infringement incurs both civil and criminal liability under the law.43

The Copyright Act also governs the sharing of amateur content by affording its author copyright protections where it is an eligible work first published in Nigeria or published by a Nigerian citizen or a Nigerian resident. An online platform may also have copyright infringement claims instituted against it where it infringes on the copyright of an author by using or otherwise broadcasting the work in an unauthorized manner.

4. Conclusion

Digital content providers and online platforms that facilitate access to digital content to Nigerian users may consider these issues as they navigate the Nigerian business and regulatory space.

Footnotes

1 Brooks & Knights Legal Consultants (BKLC) is a law firm established in Lagos, Nigeria to provide bespoke legal advisory and policy consulting services to individuals, corporates, government agencies and NGOs.

2 Nigeria Communications Commission, Industry Statistics, available at https://www.ncc.gov.ng/stakeholder/statistics-reports/industry-overview#view-graphs-tables-5

3 Id.

4 Section 54 of the Companies and Allied Matters, Chapter C20, Laws of the Federation of Nigeria (LFN) 2004.

5 (2005) LPELR-5584 (CA)

6 Per Rhodes-Vivour, J.C.A., Edicomsa International Inc. and Associates v. Citec International Estates Ltd, (2005) LPELR- 5584 (CA) at p.17 (paragraphs A-D)

7 id at pp.17-19 (paragraphs A-D)

8 Section 55 of the Companies and Allied Matters, Chapter C20, LFN 2004 provides

9 Section 9 of the Companies Income Tax Act, Chapter C20 LFN 2004.

10 Section 3, Finance Act of 2020.

11 Section 37 of the Constitution

12 Sections 1 and 6 NITDA Act, 2007.

13 Section 6(a) NITDA Act, 2007.

14 Section 6(c) NITDA Act, 2007.

15 Paragraph 1.1 of the NDPR.

16 Paragraph 1.3 of the NDPR.

17 A human being. See Bryan A. Garner, Black’s Law Dictionary, 9th Ed. Pp. 1257

18 Paragraph 1.2(a) of the NDPR.

19 Paragraph 1.2(b) of the NDPR.

20 Paragraph 1.2(c) of the NDPR.

21 Paragraph 2.1 of the NDPR.

22 Paragraph 2.4 of the NDPR.

23 Paragraph 2.5 of the NDPR.

24 Paragraph 2.6 of the NDPR.

25 Paragraph 2.8 of the NDPR.

26 Paragraph 2.9 of the NDPR.

27 Paragraph 2.10 of the NDPR.

28 Paragraph 2.5 of the NDPR.

29 Paragraph 2.6 of the NDPR.

30 Paragraph 3.1 of the NDPR.

31 Chapter N11 LFN, 2004.

32 Chapter C28, LFN 2004.

33 Section 1 of the National Broadcasting Commission Act, N11 LFN 2004.

34 Nigeria Broadcasting Code, 5th Edition, 2012. A 6th Edition of the Nigerian Broadcasting Code was recently issued; however, it is not yet in circulation.

35 Paragraph 0.1.1.1 of the Nigeria Broadcasting Code, 5th Edition, 2012.

36 Paragraph 2.2.7 of the Nigeria Broadcasting Code, 5th Edition, 2012.

37 Paragraph 11.8(a) of the Nigeria Broadcasting Code, 5th Edition, 2012.

38 Paragraph 11.8(e) of the Nigeria Broadcasting Code, 5th Edition, 2012.

39 Paragraph 11.8(b) of the Nigeria Broadcasting Code, 5th Edition, 2012.

40 Section 1(1) of the Copyright Act, C28 LFN 2004.

41 Section 2 of the Copyright Act, C28 LFN 2004.

42 Section 5 of the Copyright Act, C28 LFN 2004.

43 Section 6 of the Copyright Act, C28 LFN 2004.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Some of the potential impacts of COVID-19 on the TMT sector in Africa

Africa Bulletin
-
0

Janet Mackenzie, Partner and Head of the Technology Media and Telecommunications Practice, Baker McKenzie Johannesburg

Africa is beginning to feel the full impact of the Coronavirus (COVID-19) and plans to control and manage the humanitarian challenges of the virus are underway across the continent. Economically, the effects have already been felt. COVID-19 has resulted in mass production shutdowns and supply chain disruptions due to port closures in China, causing global ripple effects across all economic sectors in a rare “twin supply-demand shock”. Further, outbreaks and economic impacts in other key regions, such as Europe and the United States, could affect Africa in terms of both demand for its raw materials and its access to much needed manufactured goods and components. This is leading to further uncertainty in a continent already grappling with widespread geopolitical and economic instability.

 

The technology, media and telecommunications (TMT) sector in Africa was expected to attract high value investments in 2020 with many telecoms companies seeking to expand infrastructure as well as the booming e-commerce sector showing opportunities for M&A in the continent. However, the uncertainty around COVID-19 means that expected investment could be delayed as tech investors wait out the uncertainty and recover from the short-term impacts.

 

Most of the large technology multinationals have said that the impact of reduced demand for their products in China and the effect of breaks in the supply chain for materials needed in the production of their products, have impacted their businesses negatively. For example, Wuhan in China is the largest producer of optical fibre and cable in the world, accounting for a quarter of the international market. A break in the supply chain for such products means that the African telecommunications industry and the quest to implement fourth industrial revolution technology infrastructure in Africa could be affected. Fibre optic cable is a necessary component of high-speed broadband, which is essential for 4IR technology and implementation.

 

Many TMT companies have been forced to close stores, factories, manufacturing plants and offices and allow employees to work from home. Labour-intensive industries are the most affected by the virus and this has impacted on planned projects, development and product releases in this sector. This is likely to cause a ripple effect and lead to project delays in Africa as well.

 

In South Africa, President Cyril Ramaphosa recently imposed travel restrictions, banning citizens of high risk countries from entering South Africa and imposing compulsory checks on others. The TMT industry is expected to be further impacted by the travel restrictions as skilled people from high risk countries who work in the TMT industry in South Africa will not be able to enter the country. This will be further exacerbated by those working in sector having to take time off and isolate themselves should they become ill with the virus. A number of African countries, including Namibia, Zambia, Angola and Egypt, have also imposed some sort of travel restrictions, with more expected to follow suit.

 

Further, it is predicted that the global theatre industry might suffer if people stop going to cinemas for fear of picking up the virus, leaving the way open for traditional broadcasters and live streaming platforms to benefit from stay at home movie and tv watchers. It will be interesting to see what changes are implemented by film distributors to address this difficulty. One option could be to use transactional video on demand platforms for new releases. Whatever means are implemented, the impact is likely to disrupt the traditional reliance on theatres as the first release window and ultimately, the way of doing business in the film distribution industry could find itself forever changed as a result.

 

Online retailing is another notable beneficiary of COVID-19’s impact – the sector has experienced growth as people turn to online shopping to avoid crowded shops, stock up on essentials, or because they are quarantined and unable to leave home. While demand for luxury items is expected to decrease, most retailers are noting a substantial increase in demand for household essentials and food with a long shelf life. Going forward, African retailers will likely be looking at further strategies to increase and promote online retail sales. Africa’s banks are also likely to start testing disaster recovery sites in order to secure ongoing trading and business continuity where operations are impacted by office evacuations due to COVID-19.

ATIGS Group partners with Africa Analyst to Promote ATIGS Dubai 2020

Africa Bulletin
-
0

Leading Africa business development company, ATIGS Group is proud to announce a partnership with Africa Analyst to promote the 2020 Africa Trade and Investment Global Summit (ATIGS) on October 28 & 29, 2020 in Dubai, United Arab Emirates.

ATIGS is a unique business platform to foster relationships and engage efficiently with key influencers and investors from every corner of the world. During a period of two days, Vice presidents, Ministers, Governors, Business Executives, top CEOs, international investors and companies seeking to expand in African markets are gathered in one single place to discuss concrete investment projects and establish strategic partnerships through thematic workshops, presentations, and networking sessions.

Last year, ATIGS Group hosted the premier ATIGS in the United States, on June 24-26 in Washington DC at the Ronald Reagan Building and World Trade Center. With more than 2,300 delegates from 92 countries, ATIGS USA 2018 was a great success for both the hosting country, sponsors and the participants. High-potential industries and companies were presented to a select audience which led to direct engagement, deal-making, co-investments and the establishment of business partnerships.

The next edition, ATIGS Dubai 2020 will be a more exclusive high-level gathering for government officials, high-profile African business leaders, project developers, and international investors from Africa, UAE, Asia, Europe, and America. www.atigs2020.com

“We are privileged to be strategic media partners with the ATIGS Dubai 2020, it truly is one of the premier events to attend in the region and we look forward to attending. This is an event not to miss.  ” said, Derek Payne, Senior Editor, Africa Analyst

Under this partnership, Africa Analyst will join efforts with ATIGS Group in the capacity of a Media Partner for ATIGS Dubai 2020 and will promote the event via Africa Analyst media outlets.

“Hosting ATIGS is a huge contribution to the development of Africa, and we are excited to partner with Africa Analyst to advance the mission and agenda of ATIGS Dubai 2020.” said, Bako Ambianda, Chairman and CEO of ATIGS Group, Inc.

 ATIGS Dubai 2020 is presented by ATIGS Group, Inc, and organized by Global Attain Advancement, LLC, known as GAA Exhibitions & Conferences, and supported by partners & sponsors.

 Africa Analyst.com

Africa Analyst provides objective commentary as well as business statistical and economic information to a continent that is ‘emerging’. Industrialist, investors in people and economies do well not to generalise about one of the world great land masses. The political map of Africa is still subject to great change and provides startling examples of variable development. Africa Analyst can be relied upon to provide a meaningful source of data and is the publication chosen by politicians, civil servants, bankers economist industrialist, investors and members of the international business fraternity who wishes to exerts influence as well as conduct business with the African business community

https://africaanalyst.com

About ATIGS Group

ATIGS Group (Africa Trade & Investment Global Services), is a leading USA-based consulting and business development firm specialized in promoting Trade and Investment opportunities in Africa. As part of our activities, we design and organize exclusive summits, forums, and conferences dedicated to business development and Investment in Africa. www.atigsgroup.com 

CONTACTS:

Africa Analyst

Senior Editor

United Kingdom

[email protected]

AFRICA ANALYST

ATIGS Group, Inc

Africa Trade and Investment Global Services

Houston, Texas (USA)

Email: [email protected]

www.atigsgroup.com

Global Attain Advancement, LLC

GAA Exhibitions & Conferences

Email: [email protected]

www.gaaexhibitions.com

EIB launches new study confirming strong growth and impact of African banking

Africa Bulletin
-
0

European Investment Bank 

Mar 06, 2020, 09:50 ET

LUXEMBOURG, 06 March 2020-Real GDP growth in Africa resilient despite global uncertainty

African banks optimistic about future development of local markets Small business, manufacturing and agriculture key focus of increased lending

The European Investment Bank today published the new edition of the “Banking in Africa” series: “Financing Transformation amid Uncertainty”. It is the fifth edition of this economic report that analyses recent developments in the African banking sectors. Based on both macroeconomic and survey data, the report addresses structural issues and investment opportunities in Africa and frames policy options for all stakeholders.

The new report combines in-house research with contributions from commercial banks operating across Africa, international financial institutions and other leading policy institutions including the OECD Development Centre and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).

“The EIB is committed to investment in Africa in partnership with countries and industry across the continent. The EU Bank has been active in Africa since 1963 and provided a total of 45 billion Euro in financing since then. Our new report aims to share understanding and knowledge of African investment trends, and contribute to debate about best practice in investment and financing. Investments are essential for sustainable growth, prosperity, and social progress in Africa. As the European Union’s bank, we will continue to work together with our partners to support sustainable investments, foster inclusive and resilient growth, and reduce poverty,” said Werner Hoyer, President of the European Investment Bank.

Sustainable cities, boosting agricultural productivity and remittances

This year’s report includes a detailed analysis of three issues crucial for Africa in the 21st century.

Firstly, the report explores policy options to finance urban development in the context of fast expanding African cities and highlights that adopting a territorial and inclusive approach is key to unleashing the potential of urbanisation in Africa.

Secondly, the report discusses the financing of Africa’s agricultural value chains and their potential to boost agricultural productivity, thereby supporting sustainable economic development.

Finally, the report examines how remittances can be harnessed to boost financial sector development,. It outlines how development of payment systems and increased competition in remittance markets is essential to bring down the cost of sending remittances and encourage remitters to use formal channels to send funds.

Economic growth and debt situation

The new study expected that economic growth in Africa is projected to accelerate moderately in 2020, due to strengthening demand. However, the current population growth rate means that GDP per capita will increase less than needed to ensure fast convergence with middle- and high-income economies, to make a significant dent in poverty and create enough jobs for the growing labour force. The average debt situation of African countries shows signs of stabilisation, but there is a high risk of debt distress in several countries due to the high level of government debt, particularly non-concessional debt, and rising debt-servicing costs. There is a significant degree of heterogeneity across countries regarding the pace of recovery, medium-term prospects and debt sustainability.

Development of African banking groups and markets

Taking stock of trends and strategic issues affecting banking groups in Africa, the report finds that the surveyed banking groups are cautiously optimistic about a gradual return to growth and stability in African banking markets. Nevertheless, some banks are still in consolidation mode, especially in the short term. Banking groups report improvements in terms of loan origination and funding conditions. Non-performing loans (NPLs) appear to be coming under control in most banking groups but they are still on the rise in others. Respondent banks are planning to expand their loan books, identifying manufacturing and agriculture as their top sectoral focuses at the moment. In addition, most banking groups report putting a very high priority on small and medium-sized company (SME) financing as a growth area. However, they also identify some specific constraints to lending to SMEs: shortage of bankable projects, lack of collateral of sufficient quality, SMEs’ lack of managerial capacity, informality and high default rates amongst SMEs.

Sustainable cities, boosting agricultural productivity and remittances

This year’s report also touches upon three thematic issues of cross-cutting importance in African countries.

Firstly, the report explores policy options to finance urban development in the context of fast expanding African cities and highlights that adopting a territorial and inclusive approach is key to unleashing the potential of urbanisation in Africa. Secondly, the report discusses the financing of Africa’s agricultural value chains and their potential to boost agricultural productivity, thereby supporting sustainable economic development. Finally, the report examines how remittances can be harnessed to boost financial sector development, e.g. by developing payment systems and promoting competition in remittance markets to bring down the cost of sending remittances and encourage remitters to use formal channels to send funds.

Background information

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. The Banking in Africa report is a product of the EIB Economics Department, providing an analysis of recent development in the African banking sectors and specific structural topics of relevance. It combines in-house research with contributions by leading market experts from commercial banks operating in the region, international financial institutions, development institutions and others.

Chapter overview “Banking in Africa: Financing Transformation amid Uncertainty”

The first part of the report represents a study of the banking sectors across Africa. The second part consists of thematic chapters that address transversal challenges and opportunities with regard to financing investment in Africa.

Chapter 1 reports on the responses to a survey of banking groups in Africa.

Chapters 2-6 examine recent trends in the banking sectors in, respectively, Northern Africa, West Africa, Central Africa, East Africa and Southern Africa.

Chapter 7 concerns the opportunities and challenges associated with investing sustainably in Africa’s cities.

Chapter 8 analyses how well-structured agricultural value chain financing can boost agricultural productivity, thereby supporting sustainable economic development in Africa.

Chapter 9 discusses how remittances can become an even more effective driver of economic and social development on the continent.

Chapter 10 summarises how the EIB has been investing in sustainable development across Africa since 1963, explaining the type of financial support and technical assistance offered by the EIB to financial sectors on the continent and briefly exploring the way forward.

Copyright European Union, 1995-2020

SOURCE European Investment Bank

1...101112...15Page 11 of 15
Translate »