Category Archives: ADB

AfDB Economic Outlook – 2019 AEO for East Africa

This week saw the launch of the 2019 East Africa Economic Outlook Report in Nairobi by officials of the African Development Bank (AfDB), led by Gabriel Negatu, the Director-General of the East Africa regional office. This was the second in the series, after the first was well received and, the reports will now be an annual publication of the Bank.

It looked at growth prospects and economic policies, of countries in the region – Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Rwanda, Seychelles, Somalia, South Sudan, Sudan, Tanzania, and Uganda – their challenges, and particularly progress in the area of regional integration that the AfDB has made a theme of its reports and activities for 2019.

Some key findings in the East Africa AEO are:

  • Fast growth in the East: East Africa at 5.7% leads growth on the continent due to policies of some countries to diversify their economies – Ethiopia and Rwanda which grew at over 7% in 2018 balance lead in manufacturing and services, while Kenya and Tanzania balance services and agriculture. Countries like Kenya (coffee/teas 29% of export and flowers 10%) Ethiopia (coffee 33%) Rwanda (mineral 41% and coffee/tea 38%) have diverse exports while others like South Sudan (mineral fuels – oil at 98% of exports), Somalia (live animals 71%) and Eritrea (ores/ash/slag 97%) are more dependent on single commodities.
  • There is a disparity in the fast growth, whose quality is low, leaving poverty, unemployment and inequality to persist in regional countries. There is also fragility in the nations of South Sudan, Somalia, Comoros and even Ethiopia.
  • Rising debt is a concern: The levels are at over 30% of GDP in most East African countries (over 166% in Sudan) and that, coupled with low deposit resource mobilisation is a risk. Some countries will need to make structural reforms before they slide back to pre-HIPC debt-relief levels of the 90’s and they should consider limiting imports to capital goods while promoting local manufacturing of consumer goods which also creates jobs. 
  • Integration concerns: The AfDB report sees regional integration in East Africa as having mixed performance; intra-regional trade is 8.3% which is below the continental average of 14.5%, and except for Comoros, East African countries all do less than 12% trade in the region. Also that informal trade at border crossings is as high as 50% of what formal trade it. The report looks at how to accelerate intra-regional trade through the removal of tariffs, simplification of export rules, one-stop border posts that share data between countries,  sensitizing populations, and building better infrastructure (many border exits are single file which creates bottlenecks).
  • Security pays: The Ethiopia-Eritrea peace agreements in 2018 have opened up access to Eritrea ports and will ease Ethiopia’s trade by lessening the burden on congested Djibouti than handles 80% of Ethiopia’s goods. “Feedback from Ethiopian Airlines reveals that, following the Ethiopia-Eritrea Peace Agreement, the airline is saving up to $10 million a month in fees that were previously paid to contiguous countries to use their airspace“. That said, Burundi, Somalia, South Sudan and even Ethiopia are considered to be fragile states.
  • Intra-Africa trading opportunities: The goodwill from, and ratification of, the African Continental Free Trade Area (CFTA) in 2018 is expected to boost trade among African countries. But there is concern that few of the regional bodies that are supposed to promote trade are useful; they are under-budgeted and defined by personalities, not policies. 

The 2019 AEO for East Africa is published in English, French, Amharic and Kiswahili languages, and along with other regional reports, for West, Central and South Africa, some are also published in Arabic, Hausa, Pidgin, Yoruba and Zulu to ensure stakeholders can understand and discuss economic and policy issues.

TEF 2019 class unveiled

The fifth cycle of beneficiaries of the Tony Elumelu Foundation (TEF) entrepreneurs program was unveiled on Friday, March 22 in Abuja, Nigeria.

This year 216,000 applied to join (up from 151,000 in 2018), with 90,000 being women during the window that opened on January 1. After an extensive shortlisting process, 3,050 entrepreneurs, from 54 African countries, were selected to receive $5,000 capital for their business ventures, 12 weeks of tailored training, and the opportunity to attend the annual TEF Forum in July 2019.

Over the years, more strategic partners have come forward to assist the Tony Elumelu Foundation to expand the impact of their ten-year $100 million program that aims to empower 10,000 entrepreneurs and create 1 million jobs and in 2019, partners are providing funding support for 2,500 entrepreneurs.

The African Development Bank (AfDB) is sponsoring 1,000 entrepreneurs (a commitment worth $5 million) and matching the support of the Tony Elumelu Foundation this year. Also, the United National Development Program (UNDP) is sponsoring 754 from 45 countries, while the International Committee of the Red Cross (ICRC) is sponsoring 180 entrepreneurs from conflict-hit countries. Others are Seme City (from the Federal Republic of Benin), the US Consulate in Lagos (sponsoring 20), the Anambra State Government, Indorama, and the Government of Botswana (sponsoring 20).

Present at the unveiling, that was livestreamed around the world, was Aisha Buhari, the First Lady of Nigeria, and Tony Elumelu, who founded the Program. Others were the Foundation CEO Ifeyinwa Ugochukwu, her predecessor Parminder Vir, TEF partner representatives, and the media.

Also at the event, a team of evaluators from Accenture explained the selection and short-list process they had done since the application deadline of March 1 2019. They also provided a breakdown of applications by country, gender, business stage, and business industry, with the highest number of applicants for 2019 engaged in agriculture, ICT and education sectors. They also highlighted trends in the program over the years including the overall increase in the number of female applicants.

All the applicants are now part of TEF Connect, which, with over 600,000 members, is the largest social network of African entrepreneurs. On the Connect platform, they can chat with fellow business owners in different African countries, access mentors, learning materials and network and share business ideas.

Update for 2020: The TEF Entrepreneurship Programme Cycle which opened on January 1 will feature new changes that are vastly different from previous years. This year applicants will now receive instant feedback on their application and if they can proceed to the next stage to receive business training.

They will then be notified on if they can proceed to the mentorship stage and in June 2020, there will be pitching sessions to determine who the final beneficiaries of the $5,000 seed capital will be.

AfDB 2019 Annual Meetings set for Malabo, Equatorial Guinea

The African Development Bank, the leading development finance institution on the continent,  has announced that it will hold its 2019 series of annual meetings from 11 to 14 June in Malabo.

Hosted by the Government of Equatorial Guinea, the meetings are expected to feature over 3,000 participants including finance ministers, bankers and business leaders. The country’s preparedness to host the event was confirmed at a signing ceremony during a consultative meeting between representatives of the Bank and its African shareholders at the Bank’s headquarters city of Abidjan which was attended by the Finance Minister of Equatorial Guinea. 

The annual meetings which this year will have the theme of “Regional Integration” mark a return to Africa after a two-year break.

They were held in May 2015, in Abidjan, which also marked the 50th anniversary of the bank and the return to its statutory headquarters city in Côte d’Ivoire, after a temporary relocation to Tunis for 11 years.

The 2016 meetings were held in Lusaka Zambia,  where the Bank, as an agent of change, introduced their ‘ High 5s’  of five development priorities which were to “Light up and power Africa”, “Feed Africa”, “Industrialise Africa”, “Integrate Africa”, and “Improve the quality of life of the people of Africa.”  

The 2017 meetings were held in Ahmedabad, India, with the 2018 annual meetings at Busan in the Republic of Korea, and they had themes in each of the years, of “Transforming Agriculture for Wealth Creation in Africa,” and “Accelerating Africa’s Industrialisation,” respectively.

The regional integration theme for the 2019 meetings is derived from one of the pillars of the High 5s and focus on the opportunities of Africa with one billion people and a combined GDP of $3.4 trillion to trade with each other.

Idea Exchange: Anzisha, Obama, Elumelu, HEVA

EDIT The African Banker Awards that will take place during the African Development Bank Annual Meetings on 11th June in Malabo, Equatorial Guinea are now accepting entries for the awards of African Bank of the Year, African Banker of the Year, Investment Bank of the Year, Best Regional Bank in Africa, Best Retail Bank in Africa, Innovation in Banking, Infrastructure Deal of the Year, Deal of the Year (Debt), Deal of the Year (Equity), Award for Financial Inclusion, and Socially Responsible Bank of the Year. All financial institutions (banks, micro-financiers, investment banks, DFIs and others) are invited to compete. Completed entry forms should be submitted by Monday 1st of April.

Edit Africa CEO Forum Awards recognizes outstanding business leaders and this year includes a  “Gender Leader of the Year” prize and “Disrupter of the Year” award to go with other existing awards for CEO of the Year, African Champion of the Year, and International Company. Some nominees include Mohamed El Kettani – Attijariwafa bank and Tewolde Gebremariam – Ethiopian Airlines for “CEO of the year”, Banque Centrale Populaire, Ethiopian Airlines, OCP Group and Royal Air Maroc for “company of the year”, Absa Group, Access Bank, First Bank of Nigeria and Unilever for “gender leader” and Africa’s Talking, Baobab+, InTouch, Jumia and Kobo360 for the “disruptor” award. The awards will be given during the 7th Africa CEO Forum on 25 – 26 March 2019 in Kigali, Rwanda.

Africa Netpreneur Prize Initiative (ANPI) will officially open its call for applications starting from the 27th of March 2019. The ANPI is a US$10 million Prize competition for African entrepreneurs, founded by the Jack Ma Foundation, where ten finalists from across the continent will compete for US$1 million in total prize money. Deadline for applications is 30th June 2019

EDIT Class 5 of the Alibaba Global Initiatives eFounders fellowship is open to founders/co-founders of digital ventures from Botswana, Cameroon, Chad, Kenya, Rwanda, or Uganda. It is jointly organized by Alibaba Business School and UNCTAD and the deadline is March 17. Note that the fellowship does not cover air tickets and transportation/pick-up services to and from Hangzhou, China.

The Anzisha Prize is Africa’s biggest award for her youngest entrepreneurs and hands out over USD $100,000 every year in funding to entrepreneurs from all over the continent.  Details here.

EDIT  The British Council Future Leaders Connect, is a global network for emerging policy leaders seeking to connect to a long-term network of emerging leaders from around the globe, who want to change the world through policy making. To take part you must be aged 18-35 and live in one of our participating countries – Canada, Egypt, India, Indonesia, Kenya, Mexico, Morocco, Nigeria, Pakistan, Poland, Tunisia, UK and USA. Applications from Egypt and the USA are by invitation only. Applications close on Monday 6 May 2019.

EDIT Cities Alliance a global partnership supporting cities to deliver sustainable development, hosted by the United Nations United Nations Office for Projects Services (UNOPS), is offering grants up to USD 50,000 to people working on innovative and accessible solutions for improving tenure security and land and property rights in any African country. It is open to Innovators, microenterprises, social entrepreneurs, community-based organisations, and national and local NGOs working in African cities.  Deadline to apply for the Cities Alliance is  March 14, 2019.

Edit Coca-Cola Beverages Africa and PETCO have launched an innovation challenge, dubbed the Beyond Baling Innovation Challenge (BBIC), that aims to provide innovative solutions to bale post-consumer PET plastic in order to ease their transportation for recycling and manufacturing.

DRC Innovation for Financial Services 2019:  The Central Bank of Congo, in partnership with FSDA Africa and Elan DRC, has launched Innovation for Financial Services 2019, a competition for businesses and entrepreneurs aimed at promoting the development of innovative and relevant financial services and payment solutions in the DRC. The winner of each category will then have access to FSD Africa’s investment process with the possibility of raising up to US$130,000.

The Tony Elumelu Foundation, the leading African-funded and founded philanthropy committed to empowering African entrepreneurs, has announced its last call for applications into its prestigious 2019 Entrepreneurship Programme. Selected beneficiaries will join 4,470 current alumni and will receive $5,000 seed capital, access to mentors, bespoke training and numerous opportunities to impact policies at the local and global level.

The programs is a 10-year, $100 million commitment to identify, train, mentor and fund 10,000 African entrepreneurs, the Programme’s objective is to generate at least 1,000,000 new jobs and create at least $10 billion in new business revenue across Africa. Applicants can apply on TEFConnect, the largest digital networking platform for African entrepreneurs by March 1.

HEVA Fund: HEVA has launched a Growth Fund in collaboration with Agence Française de Développement (AFD), targeting mature businesses in the creative economy – fashion, apparel and accessories; live cultural events (music, shows, venues, festivals); and digital media content production and distribution. – that have been in operation for at least 5 years, with annual revenues exceeding KES 10 million. The targeted businesses are in the following creative economy value chains:  HEVA will be investing a minimum of KES 5 million and a maximum of KES 10 million in each successful enterprise. Deadline is 13th March 2019. HEVA is also receiving applications for its Cultural Heritage Fund and for a Young Women in Creative Enterprise Fund.

The Inter Region Economic Network (IREN) has launched the IREN Technologies and Innovations Platform 2019 (ITIC 2019) to promote the best mix of technology and innovation to processes along the agribusiness value chains. Innovators are expected to address the region’s challenges in value addition, energy, storage, logistics and marketing. The Lake region is known for fish, grain, vegetable, cash crop, dairy and livestock production. IREN welcomes Institutions and established companies to participate in the final ITIP 2019 Trade Fair to be held later in November 2019.

Edit MEST: Five promising start-ups from across Africa have been chosen as regional winners in MEST Africa’s annual Pan-African pitch competition, moving one step closer to winning $50,000 in equity investment, a place in the MEST Africa incubator of their choice and global mentorship to help their company scale. The winners who were chosen from over 1,000 applicants are AMPZ.TV – a ‘LinkedIn for Sports’ (Nigeria), OZÉ – a financial data insights company (Ghana), Snode – real-time cyber security (South Africa),  WayaWaya – a fintech company (Kenya) and Seekewa – an agricultural financing platform (Cote d’Ivoire).

Obama Founder Leaders Africa Applications are live for the Obama Foundation Leaders Africa Program which aims to identify a group of emerging African leaders from all sectors—government, civil society, and entrepreneurs—who have demonstrated a commitment to advancing the common good. Apply by February 28, 2019.

Edit  Pivot East: East Africa’s premier entrepreneurs’ program is back for its 6th year after a two year break with a call for applications opening on 11th March 2019 and the startups pitching competition and conference event happening on 27th June 2019. Applicants can be in software and hardware in five categories of finance, enterprise, entertainment, social Impact and utilities.

Sanofi, the global pharmaceutical company, extended the registration deadline for entries to this year’s edition of the VivaTech innovation conference. 17 Kenyan start-ups have registered so far and are expected to participate in the conference.

Economic Forecasts from Citi, Barclays, World Bank, Brookings, Oxford

A roundup of recently published economic forecasts, reports, and surveys.   

AfDB: The African Development Bank’s interactive platform, #MapAfrica, maps the locations of the bank’s investments in every country across Africa.   

Also the AfDB launched their 2018 African Economic Outlook report. 

Barclays: In Nairobi this week, Barclays Africa launches the 2017/18 macro-economic report as well as the Africa Financial Markets Index,  which is a survey of 17 African stock markets.

Citi: Citi Research has just published two reports on frontier markets and one on food inflation in Africa. Citi found that frontier markets did better than developed markets and that Kenya did well (36% return on equities) despite the banking interest cap law and the prolonged election season which has now ended.

Citi’s forecasts of top picks for frontier markets in 2018 are Sri Lanka, Romania, and Kenya and they see weaknesses for Argentina, Morocco, and Egypt. The Citi rankings consider six factors: macro growth, macro imbalances, monetary factors, valuations, earnings momentum and price momentum for their forecasts. Citi also ranked five top stock for frontier markets BGEO Group (Georgia), Humansoft (Kuwait), IDH (Egypt), KCB (Kenya) and MHP (Ukraine). For KCB they like the growth profile of corporate and salaried customers from which the bank will grow market its share even if the banking law remains the same.

The Citi forecasts also looked at the Kenyan currency (shilling) which has remained stable relative to other African currencies and how it will continue to do so even with the country’s balance of payments deficits and heightened politics. But they found that one problem with making Kenya predictions is that a significant portion of inflows that offset the current account deficit is classified as other flows, and their timing is not predictable. They assume that the inflows are from the East and Central Africa region that sees Kenya as a safe haven, despite the politics of the second half of 2017. Another finding was that devaluation of currencies have a bigger impact on food inflation in sub-Saharan Africa but Kenya which had drought and food security issues in 2017 is able to draw on food production from its neighbors (Ethiopia, Tanzania, Uganda) that keeps food inflation in check even though the food trade data is not captured in official statistics.

World Bank: Meanwhile the World Bank is taking heat after one of their economists admitted that the WB “Doing Business” rankings for Chile had been manipulated for political reasons. The Doing Business reports are cited by leaders of several countries such as Kenya, Rwanda, India as indicators of their good performance in office, But this one admission of political interference could trigger fall out as to the credibility of other reports, country economic forecasts, growth statistics, inflation measures and discussions with governments that the World Bank does.

The Oxford Business Group: The Oxford forecasts reviewed the year Kenya in 2017 in which growth was expected to be about 5% (down from an initial forecast of 5.8% for 2017), but still above the sub-Saharan Africa average of 2.7%. It noted the mixed agriculture performance was due to the drought that affected maize, sugar, tea. Also that Kenya’s Supreme Court decision to nullify the presidential election set a good path for the country in 2018 despite the added cost of staging two elections in 2017 affecting the government’s ability to meet budgetary targets and which later resulted in Moody’s considering a downgrade of Kenya’s debt rating.

Brookings: The Brookings forecasts are contained in Foresight Africa, an Africa-focused report  that celebrates Africa’s growth and highlights priorities for the continent. For Kenya, it contains a sum up of the ability of the country to leverage technology and innovation for things like revenue collection and uptake of products and mobile bonds (M-Akiba), M-Tiba, and IFMIS. It mentions that Kenya can balance the impact of special economic zones and infrastructure from China against politics and that the successful launch of the SGR in May 2017 could one day serve Uganda Rwanda, Burundi and even Tanzania South Sudan and Ethiopia. It has special sections on the 2017 Kenya election and the M-Akiba bond (“The KSh 150.04 million (approximately $1.5 million) uptake of the M-Akiba bond was mainly dominated by small investors who invested less than KSh 10,000 (approximately $100)”)