Small traders in Kenya will from July get house loans from local banks at an annual subsidised interest rate of seven percent or nearly half the prevailing market rates. This is part of a broader move to help them cope with Covid-19 pandemic related difficulties.
Treasury Secretary Ukur Yatani
“We and our partners, including banks and institutions like the EU, will provide cash for onward lending at below seven percent,” Treasury Secretary Ukur Yatani told Kenya’s Business Daily in an interview. “There is also an element of guarantees for loans disbursed to small traders and coming from commercial banks.”
Here Is What You Need To Know
The affordable loans for small and micro firms are the product of a newly established credit guarantee scheme and Treasury-backed plan which will offer banks additional cash for onward lending to the small firms. Treasury will lend the money to financial institutions at subsidised annual interest rates, enabling them to offer loans at below seven percent — lower than the average market rate of 12.1 percent. The scheme is intended to help small traders like barbershops, hotels and pubs, which have had to close under coronavirus lockdown measures.
Similarly, the government will provide guarantees of loans given to Kenya-based small and medium-sized businesses, meaning the government commits to repay banks a share of the loans should the small traders default.
In addition, the Treasury has offered Sh3 billion as seed capital to kick-start the scheme that has received a €100 million (Sh11.7 billion) commitment from the European Union while commercial banks will top up additional sums for the SME loans.
On Friday, the Central Bank of Kenya said that the World Bank and the Africa Development Bank were also coming on board on the guarantee scheme.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer
South Africa is doing its lockdown in phases, and now is the time to move down to the next level of lockdown, often accompanied by reduced strictness in enforcing lockdowns. According to a new set of guidelines from the country’s Minister of Cooperative Governance and Traditional Affairs Nkosazana Dlamini-Zuma, the country may reopen up all sectors of its economy from 1 June, with the exception of:
Hotels;
Restaurants;
Bars;
Gyms;
Other recreational facilities (casinos, clubs, etc).
Minister of Cooperative Governance and Traditional Affairs Nkosazana Dlamini-Zuma
“The outcome of these interventions will determine if there is a need to impose lockdown restrictions in a limited geographic district or metropolitan area,” Health minister Dr Zweli Mkhize was quoted as saying last week.
Here Is What You Need To Know
According to Sunday Times reports, under the new guidelines, vendors of alcohol will be allowed under level 3 lockdown. However, smokers are still shut out from accessing the market and restocking their cigarettes because cigarette shops will not be allowed to open.
The new guidelines will further most likely restrict the number of people who can return to work, with larger companies of more than 500 people expected to provide transport for their workers in an attempt to ease congestion in the public transport system.
Businesses will also be asked to introduce staggered working hours, to limit congestion on public transport and at the workplace.
The draft regulations also show:
Non-contact sports matches would be allowed, with no fans in attendance — only the teams, management, medical staff, limited broadcast crew, and two journalists;
Domestic workers would be allowed, but only if employers organise private transport for them (not at the domestic worker’s cost);
Public parks and beaches would be open for the purpose of exercise only;
Exercise would not be restricted by time, but still cannot be in groups or organised clubs, and needs to adhere to social distancing rules.
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
The Economic Commission for Africa (ECA), the African Development Bank and the African Union Commission (AUC), yesterday launched the second Africa Regional Integration Index (ARII 2019) with a call to action to African economies to deepen their integration. The 2019 Index, which builds on the first edition published in 2016, provides up-to-date data on the status and progress of regional integration in Africa. It also helps to assess the level of integration for every Regional Economic Community (REC) and their member countries. The report observed that although 20 countries score above average, no African country can be considered well integrated in its region. Even the most integrated country, South Africa, scores 0.625 less than two-thirds of its potential on the scale.
David Luke, coordinator of the African Trade Policy Centre (ATPC)
The report found that much more needs to be done to integrate regional economies to make them more resilient to shocks such as the current COVID-19 pandemic. Overall, the Index shows that levels of integration on the continent are relatively low with an average score of 0.327 out of 1. “Whereas the Index edition we are releasing today has data cut off points in 2019, the present COVID-19 pandemic has reopened the question of whether enough is being done in advancing regional integration as a means to help Africa withstand systematic shocks such as the one being experienced today,” said Stephen Karingi, Regional Integration Division Director at the ECA. “This index is both a measurement exercise and a call to action; to build resilient economies through integration,” he added. “It will identify the solutions needed to truly build an integrated Africa.”
Jean-Denis Gabikini, Acting Director of the AUC’s Economic Affairs Department, welcomed the collaboration in producing the Index. He noted that the Index covers issues of intellectual property, competition policy, investment and digital trade which are critical to the successful negotiations of Phase II and III of AfCFTA. “To achieve an “integrated, prosperous and peaceful Africa, representing a dynamic force in the concert of nations”, this ARII report will support AU Member States and RECs to address industrialisation and value addition priorities for the development of the continent,” Gabikini said.
With the establishment of RECs and the creation of AfCFTA, Africa has reinforced regional integration as a major development priority for the continent under the 2012 Boosting Intra-African Trade (BIAT) Action Plan. The Index ranks the level of integration of African countries within their respective RECs and also with the rest of the continent. It scores across five key dimensions: trade, productive capacity, macroeconomic policy, infrastructure, and free movement of people.
Among the eight RECs recognised by the AU, the East African Community (EAC) scored highest for overall integration, with the Southern African Development Community (SADC) coming last.The African Development Bank’s Director for Regional Development and Regional Integration, Moono Mupotola, said the Index was a useful tool for tracking progress on the regional integration front and would help countries identify priorities to improve integration.“The crippling effects of COVID-19 illustrate the need for enhanced production of African finished goods and services that can readily be traded across the continent,” Mupotola said.
David Luke, coordinator of the African Trade Policy Centre (ATPC) at the ECA pointed out that the productive and infrastructure dimensions of regional integration are intricately linked. Tackling these two dimensions along with implementing the AfCFTA would be a massive boost for trade, he said. For Africa to succeed in its long-standing efforts towards closer economic integration, ARII 2019 made the following recommendations: improve regional networks of production and trade by enhancing countries’ productive, distributive, and marketing capacities; build innovative, regional value-chain frameworks in different sectors using improved technology, higher-quality inputs, and updated marketing techniques; fully implement the AfCFTA to remove non-tariff barriers, which remain a major challenge for regional integration; enhance African workers’ competencies to match the technology and production capacities of today and tomorrow to succeed in the global economy; improve infrastructure through increased public–private partnerships, tapping into national resources and using regional and global infrastructure development funds and other innovative financing tools, accompanied by rigorous competition and transparency in procurement and construction processes; and implement the Protocol on the Free Movement of People, which will enhance economic growth through increased opportunities for tourism, trade and investment, human capital mobility, and allow firms to find skills more easily, in turn driving productivity.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
On Easter Sunday, April 12th, 2020, Nigeria joined its other OPEC+ counterparts to bring into effect the agreement to cut 9.7 Million Barrels of supply following the alignment of Mexico. The intervention of the United States of America resulted in Mexico agreeing to a cut of 100 KBOPD and to be complemented by an additional 300 KBOPD by US Producers.
This will enable the rebalancing of the oil markets and the expected rebound of prices by $15 per barrel in the short term. This also promises an appropriate balancing of Nigeria’s 2020 budget that has been rebased at $30 per barrel.
As agreed, Nigeria will join OPEC+ to cut supply by 9.7 Million Barrels per day between May and June 2020, Eight (8) Million Barrels per day between July and December 2020 and Six (6) Million barrels per day from January 2021 to April 2022, respectively.
Based on reference production of Nigeria of October 2018 of 1.829 Million Barrels per day of dry crude oil, Nigeria will now be producing 1.412 Million Barrels per day, 1.495 Million Barrels per day and 1.579 Million Barrels per day respectively for the corresponding periods in the agreement. This is in addition to condensate production of between 360-460 KBOPD of which are exempt from OPEC curtailment.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The President of South Africa, Cyril Ramaphosa has announced that the country’s lockdown will be extended by two weeks. The lockdown was implemented to curb the spread of the Covid-19 pandemic. The initial lockdown would have only been for 21 days, but Ramaphosa, in a televised address to the nation today, said the country was at the beginning of a monumental struggle and could not be complacent. He said the decision to extend the lockdown was not taken lightly.
President Cyril Ramaphosa
“This evening I stand before you to ask you to endure even longer. I have to ask you to make even greater sacrifices,” Ramaphosa said. Ramaphosa said that there had been 1,934 cases of Covid-19 across SA by Thursday. The lockdown took effect at midnight on Thursday March 26 and would have been lifted next week Thursday 16 April at midnight.
His address to the nation followed a meeting of the national coronavirus command council held on Wednesday and further consultations with various social partners, the presidency said earlier on Thursday. By Thursday, more than 1.5-million people globally had been infected with the novel coronavirus, according to the Johns Hopkins tracker, while more than 90,000 people had died.
Ramaphosa said while it was too early to make a definitive analysis, there was sufficient evidence that SA’s lockdown was working. He said that in the two weeks before the lockdown, the average daily increase in cases was about 42%, but since then had dropped to about 4%.
He said while the government recognised the need to expand testing, the numbers did indicate “real progress”.
Ramaphosa announced that he, deputy president David Mabuza and all cabinet ministers would each take a one-third cut in their salaries for the next three months, and would donate that to the Solidarity Fund. Provincial premiers would do the same. “We are calling on other public office-bearers and executives of large companies to make a similar gesture and to further increase the reach of this national effort,” he said.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The International Monetary Fund has called for help for Zimbabwe warning that if nothing is done urgently, the southern African country will be in dire situation as the coronavirus exacerbates the impact a food shortage following the worst drought in nearly four decades. The southern African nation needs hundreds of millions of dollars in foreign aid in coming months to fend off a humanitarian crisis that’s likely to leave more than half of the population hungry, the Washington-based institution said. “The outbreak has greatly amplified uncertainty and downside risks around the outlook,” the IMF said in an Article IV report, released on Friday. To-date, Zimbabwe has nine confirmed infections and, like much of the region, the government has imposed a lockdown to halt the spread of the virus. The outbreak has greatly amplified uncertainty and downside risks around the outlook.
President Emmerson Mnangagwa
An economic crisis marked by a dire shortage of foreign currency and power supply, coupled with the drought has increased the number of poor people in what was once one of Africa’s most-industrialized countries. The fund estimates that the economy contracted 8.3% last year. The report was largely compiled before the virus reached Zimbabwe.
“Absent a scaling-up of donor support, the risks of a deep humanitarian crisis are high,” the IMF said. Only half of the humanitarian aid requested by the United Nations to help about 8 million people has been pledged, it said. President Emmerson Mnangagwa, who promised far-reaching political and economic reforms after replacing Robert Mugabe in 2017, hasn’t moved fast enough to strengthen the rule of law, fight corruption and improve the business climate, the IMF said.
Without additional donor support in the first half of the year, pressure will increase on the central bank to revert to printing money, which would in turn result in even higher inflation and loss of confidence in the new currency, the IMF said. Zimbabwe’s annual inflation rate is currently 540%. Zimbabwe is also struggling to clear $16.9 billion in arrears, while external public debt is expected to jump more than 10 percentage points in just four years to 52% of gross domestic product in 2020, according to the IMF.
The International Monetary Fund has called for help for Zimbabwe warning that if nothing is done urgently, the southern African country will be in dire situation as the coronavirus exacerbates the impact a food shortage following the worst drought in nearly four decades. The southern African nation needs hundreds of millions of dollars in foreign aid in coming months to fend off a humanitarian crisis that’s likely to leave more than half of the population hungry, the Washington-based institution said. “The outbreak has greatly amplified uncertainty and downside risks around the outlook,” the IMF said in an Article IV report, released on Friday. To-date, Zimbabwe has nine confirmed infections and, like much of the region, the government has imposed a lockdown to halt the spread of the virus. The outbreak has greatly amplified uncertainty and downside risks around the outlook.
An economic crisis marked by a dire shortage of foreign currency and power supply, coupled with the drought has increased the number of poor people in what was once one of Africa’s most-industrialized countries. The fund estimates that the economy contracted 8.3% last year. The report was largely compiled before the virus reached Zimbabwe.
“Absent a scaling-up of donor support, the risks of a deep humanitarian crisis are high,” the IMF said. Only half of the humanitarian aid requested by the United Nations to help about 8 million people has been pledged, it said. President Emmerson Mnangagwa, who promised far-reaching political and economic reforms after replacing Robert Mugabe in 2017, hasn’t moved fast enough to strengthen the rule of law, fight corruption and improve the business climate, the IMF said.
Without additional donor support in the first half of the year, pressure will increase on the central bank to revert to printing money, which would in turn result in even higher inflation and loss of confidence in the new currency, the IMF said. Zimbabwe’s annual inflation rate is currently 540%. Zimbabwe is also struggling to clear $16.9 billion in arrears, while external public debt is expected to jump more than 10 percentage points in just four years to 52% of gross domestic product in 2020, according to the IMF.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Crisis ridden startup Custostech, has said that decision to lay off staff was caused by the lawsuit brought against it by venture capital (VC) company HAVAÍC which sued the startup for $4.45-million, alleging its founders reneged on an investment agreement. The Stellenbosch, South Africa based start-up which uses an innovative blockchain solution to protect media such as movie industry from piracy and has helped successfully protect about 600 film titles, is presently enmeshed in legal disputes for having reneged on the agreement. The startup’s founders Gert-Jan van Rooyen and Fred Lutz argue that they never signed the final agreement to accept the investment HAVAIC.
co-founder Fred Lutz
Van Rooyen, who is the startup’s CEO that the startup had laid off eight of its 10 employees and that it has been operating on a skeleton staff of two part-timers to ensure that the company could continue to manage contracts with its current clients. He and Lutz have also had to resign in order to cut costs and are working part-time on the startup, with the hope of starting things up again once the matter is resolved. Custostech says it has been forced to lay off most its staff after SA VC HAVAÍC sued the startup for $4.45m, alleging its founders reneged on an investment agreement. Van Rooyen said the startup — which has raised a total of R28-million since he, Lutz and Herman Lintvelt founded it in 2014 — was forced to lay off staff after the VC issued summons to sue the startup, alleging he and co-founder Fred Lutz turned down the VC’s investment offer of R3.5-million.
While the case has yet to be heard in court, the Cape Town based VC argues in a summons filed in the Western Cape High Court on 20 August last year that its investors lost out on a valuable business opportunity, after the deal was not signed. The summons was issued against Custostech and its subsidiary CMT Research Proprietary Limited, both of which the VC was going to invest in. The VC says in the summons, that the $4.45-million in damages is calculated from “the value of the equity it would have held in the startup on the strategic exit date, divided by the proportional size of the VC’s shareholding in the startup, less the sum of R3.5-million and the $1-million Series-A investment”.
Van Rooyen confirmed that the startup was in the process of raising a Series-A round after having run short of cash. HAVAÍC’s investment was to form part of the round. He and Lutz argue that the VC’s legal bid led to two US investors that had already committed to invest a total of $300 000 in the startup pulling out. Added to this, a Hong Kong-based VC investor that was to invest an amount to make up for the startup having not gone with HAVAÍC’s contribution, also pulled out.
HAVAIC argues that on 18 April 2019, one of the VC’s partners, Grant Rock, sent the startup’s founders a written offer of purchase, after the two parties signed a non-binding agreement on 13 March 2019. Part of the conditions of the non-binding agreement was that beyond investing in the round, the VC would act in an advisory capacity for the upcoming round, for which it would be remunerated a fee of 3.95% on the investment amount of each investor committing to the round.
The purchase agreement of 18 April, says the VC, was further supplemented by a written offer from HAVAIC CEO Ian Lessem to invest R3.5-million. HAVAIC says Custostech, represented by Lutz accepted Lessem’s offer in writing on the same day. In an email to Lutz, dated 29 April 2019 and with the subject line “Re: Call about advisory agreement”, Lessem wrote: “Hi Fred, To confirm, we would like to advance R3.5m. You happy with that? Ian”. Lutz responded on the same day, by saying: “Hi Ian, Yes, thanks. We are happy with that. I’m getting the final ducks (getting final buy-in from everyone before they recieve the final documents) in a row this side, and then I’ll send out the resolutions to our board and shareholders. I’ll keep you posted.” In a second email, sent to Lessem the following day, Lutz notes that the startup has received “buy-in” for the signing of the agreement. “Hi Ian, I’ve had discussions with the board members, and we have buy-in for the agreement. To lay the cards on the table, Anita (Nel — CEO of Innovus, a shareholder in Custostech — Ed) is disgruntled by the fee on the investment from the university. She will not block us from taking the investment, but she is the type to hold grudges and burn bridges.
“In the call with her where I explained that this was what we already agreed upon, she mentioned that she “was” excited to work with HAVAIC for some of the other university spinouts. As I mentioned, she and the rest of the investors will sign off on the agreement as-is, but if you were thinking about building a long term relationship with the university directly, I would consider making a concession, but that is completely up to you,” writes Lutz. ‘We never signed anything’
In response in its plea (its legal response and defence to HAVAIC’s summons) filed on 26 March 2020, Custostech denies that the startup’s founders Lutz and Van Rooyen, signed anything other than the non-binding agreement with the investor on 13 March last year. The non-binding agreement states that a break fee of R50 000 must be paid by the startup to HAVAIC should the company or its founders delay or fail to sign the acceptance of the offer within three months.
In a legal letter seen by Ventureburn, the startup was issued by a letter of demand by the VC’s attorneys Webber Wentzel, on 17 May. According to Van Rooyen the legal letter was issued on the same business day after the startup communicated to the investor that the board had decided not to agree to accept the investment offer. HAVAIC contends in their summons that Lutz’s agreement in an email to the investor can be taken as confirmation of the agreement for the VC to invest. However, the founders in their plea contend that the agreement never came into force because they hadn’t signed the actual Convertible Promissory Note.
The startup’s founders single out that while they made comments or amendments on the actual agreement form, they had left blank spaces where signatures should have been. “The document entitled ‘Convertible Promissory Note’ had spaces for signature by the defendants, above which was recorded that ‘in witness whereof’ intending to be legally bound, each of the companies has executed and delivered this Note as of the date first written above’,” they argue in the plea. Van Rooyen pointed out that negotiations between the startup and the VC had not yet been concluded, with a lot of “to-ing and fro-ing” around specific terms in the convertible note.
“Note that the full form of the convertible note hadn’t even been finalised, and is still in ‘track changes’ mode with comments and tentative edits. So in either case it’s not clear what would have been ‘agreed’ to,” he added. Van Rooyen said the board was concerned chiefly about the 3.95% commission fee that HAVAIC had demanded it take on any new investors brought into the startup.
The startup’s biggest shareholder, with a 26% share, is Stellenbosch University’s technology transfer company Innovus. The startup also has several other investors including two US-based VCs, a local angel investor, and a US-based angel investor. In addition, the Technology Innovation Agency (TIA) had in the past invested R6-million in the startup., HAVAIC’s Rock said before it sought legal redress, the VC had met with Innovus in an attempt to try to “resolve the issue” and had even suggested that the VC could drop its advisory service and commission, in order to secure the investment.
However, Nel argues that the VC made no offer to drop the 3.95% fee during their conversation. “In fact, (it was) quite the opposite — it was a ‘take-it or leave-it’ discussion,” she said. It is understood that Stellenbosch incubator LaunchLab even approached the Southern African Venture Capital Association (Savca) to intervene, but that the organisation said it couldn’t get involved until the matter was resolved in court.
Van Rooyen said he and Lutz did try to convey to the VC that litigation as first recourse is damaging to the local startup environment. “Legal fees like these erode value from the ecosystem; they’re paid for by existing investors, and through the hard-fought revenue a startup generates. “There are so many other options, of which just stepping away from a deal that isn’t working out is probably the most pragmatic. If there truly is a dispute, mediation – even arbitration – are more sensible routes to pursue in such a vulnerable local startup ecosystem,” said Van Rooyen.
But Rock stressed that the investor was simply “trying to enforce our rights in terms of an agreement we had”. Rock said on the understanding that the startup had agreed to the investment, the VC had gone ahead and got the money from its private investors, mainly South Africans he said. The money was in the VC’s bank account ready to invest, he said. “They (Custostech) told us to get the money ready and that they need the money by a certain time,” he said. He said the VC’s investors were in agreement about suing the startup. “We asked investors what to do, they said go ahead and litigate,” he said, adding that it was never the VC’s intention to “put them out of business”.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Africa urgently needs a globally coordinated Ubuntu Plan in response to COVID-19, a fiscal stimulus that recognises our shared and connected humanity, as we find ourselves in the midst of an unprecedented crisis.
Dr Victor Oladokun, outgoing Director of Communication & External Relations at the African Development Bank Group
The plan is named after an African word and approach which literally means “being self through others”.The world’s largest cities are eerily silent. One virus has disrupted the whole world in a manner never seen before in history.
COVID-19, a term that did not exist in our vocabulary a couple of months ago, has brought virtually everything to a grinding halt. It’s a surreal almost cinematic scene. Except that we are all living through it.
With governments balancing economies and the welfare of their citizens, entire industries and institutional systems find themselves fighting for survival in the midst of mandatory lockdowns. Food supply chains, transportation networks, educational systems, governance and judicial systems are either strained or barely functioning with medical services being the worst hit.
Unlike any other pandemic, COVID-19 will alter the way we live, work, and socialise. The financial costs and the economic devastation are already of epic proportions. This is why Africa in particular urgently needs an Ubuntu Plan. A globally coordinated fiscal stimulus plan that recognises our shared and connected humanity.
The case for an Ubuntu Plan
This past week, America passed a 2 trillion Dollar stimulus package that will keep markets operational, support Americans out of work, and help reduce Federal Reserve lending rates. It is the largest bailout in the history of the United States. European economies likewise have announced stimulus measures in excess of 1 trillion Euros. Chinese factories are ramping up again, backed by a $344 billion stimulus package.
In contrast, Africa’s economies are already buckling. Global demand for oil and gas and commodity products – the mainstays of Africa’s leading economies – has stalled. Revenues which were already overextended have dried up and small, medium, and large enterprises are at risk of total collapse.
Last Thursday, the United Nations Conference on Trade and Development (UNCTAD) estimated that the pandemic could reduce the growth of the region’s gross domestic product (GDP) from 3.2% to 1.8% in 2020. On 27th March, The Secretary General of the UN Antonio Guterres said: “Africa is a continent with very little capacity to respond and I am extremely worried that in those situations, we might have millions of cases with millions of people dying.”
Even though the United States, Europe and many parts of Asia are better suited economically and infrastructurally to a lockdown, they are struggling to cope with the burden of this sudden pandemic. A situation that will likely will be worsened by the duration and unpredictability of the pandemic.
If these societies are struggling, the impact on Africa is best imagined.
Prior to the crisis, 41% of sub-Saharan Africa’s population lived on less than $1.90 a day which is very little to survive on. Seven out of ten persons (70%) in Africa are in vulnerable and precarious forms of informal employment eking their living on a daily basis.
Lockdown, homeworking and teleconferencing is therefore not an option. Family support systems from blue and white-collar workers and the diaspora, are themselves under threat. Job losses will strain these critical informal support systems to breaking points.
In Africa, formal social safety nets rarely exist. Therefore, stockpiling food items for extended periods of isolation is out of consideration. Linked with this, Africa requires vast food supplies to meet the needs of the continent’s poorest who can barely afford a decent mmeal.
Recent cyclones, Kenneth and Idai, and a plague of locusts, have already put considerable pressure on immediate food supplies for the continent.
Which is why an Ubuntu Plan is now critical in order to cushion the harsh social and economic impacts of the COVID-19 pandemic in Africa. Such a plan would include a fiscal stimulus package, the development of critical infrastructure and support for the continent’s most vulnerable populations.
The fact is that in the 21st century, clean water supplies and access to electricity are the stuff of dreams for millions of Africans. Globally, almost 800 million people are without access to clean water. Of these, 40% live in sub-Saharan Africa. The simple act of hand washing which the pandemic requires for prevention is still not possible for millions.
Linked with this, less than 58% of Africa’s population has access to modern healthcare facilities.
A race against time
Africa and its partners have already been striving hard to tackle the challenge of eradicating poverty with measures such as the UN’s Sustainable Development Goals, and the African Development Bank’s High5 strategy.
The COVID-19 pandemic however shines the spotlight on Africa’s poor healthcare delivery systems and facilities and its vast challenges. Africa has one of the highest population densities in the world. For people living in tens of thousands of informal settlements, the idea of social distancing is inconceivable. Millions of vulnerable low-income people live in cramped communal houses and rooms and in areas that lack basic amenities, especially water and sanitation.
In the short term, to effectively combat COVID-19, we urgently need self-testing kits, personal protective equipment (PPEs), makeshift living spaces and hospitals, recovery units and inexpensive easy-to-operate ventilators.
The World Health Organisation (WHO) has already issued a ten-point strategy that calls for the creation of corridors on the continent to facilitate emergency deployments and material shipments.
The plan also calls on governments and the private sector to help increase supplies, medical equipment and care, and to strengthen surveillance and public awareness, in order to prevent continent-wide community transmission.
In the short window available, global cooperation is imperative.
The African Union’s Vision Agenda 2063 and action plan states among other things, that “We are part of the global drive through the United Nations and other multilateral organisations to find multi-lateral approaches to humanity’s most pressing concerns including human security and peace, the eradication of poverty, hunger and disease…”
Rethinking the future
In the mid to long term, we must urgently rethink social life, urban and rural planning and our budgetary priorities, if life is to be preserved. We must decongest informal settlements rapidly and in their place develop affordable housing that is suitable for isolation and quarantine, in the event of future pandemics.
There is no better time for a globally coordinated Ubuntu Plan. To stop the global spread of COVID-19 and its global devastation, it must be stopped in Africa. The world must pay attention and lend a helping hand by strengthening global cooperation, now more than ever before.
Ubuntu – The preservation of human dignity, health, lives and wellbeing, demands nothing less.
Dr Victor Oladokun is the outgoing Director of Communication & External Relations at the African Development Bank Group
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
A Ghanaianstart-up has taken a bold step to help in monitoring development within the continent vis-a-vis the Covid-19 pandemic. Redbird, a distributor for Medical diagnostics developed the COVID-19 Daily Check-in App and Symptom Tracker in its bid to counter the spread of Coronavirus across the African continent.
Patrick Beattie, CEO and Co-Founder of Redbird
Accessible as a browser-based app via covid19.redbird.co, Redbird’s COVID-19 check-in app is a way for every person to self-report symptoms without needing to visit a healthcare facility and thereby aiding in social distancing.
The solution will enable public health officials from Ghana to see a real-time map of where patients are self-reporting symptoms in order to follow-up directly with high-risk patients. This provides them with a digital alternative to the overwhelmed hotlines for triage and follow-up.
Through this platform, Redbird provides hospitals with digital record keeping and the potential to keep unnecessary patients from coming to the hospital and putting themselves and others at risk.
“These remain trying times all over the world, but we’re also seeing an incredible validation of everything we’ve built at Redbird and we’re not letting that slip. With limited testing resources, understanding where the risk is and how to reach those at risk is of great importance. We have been looking at how to support public health with the data and the COVID-19 Daily Check-in App and Symptom Tracker is one such way,” says Patrick Beattie, CEO and Co-Founder of Redbird.
At present, the app works in the U.S. and Ghana but Redbird plans to roll out the solution to Nigeria, Kenya, and South Africa.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
African oil-producing and reliant countries have been among the most hard hit by the COVID-19 pandemic and declining oil price. In particular, Senegal, Nigeria and Angola continue to face new challenges each day amid the threat of economic fallout.
Paa Kwasi Anamua Sakyi, Executive Director at the Institute for Energy Security
In 2020, the Angolan government led by H.E. President João Lourenço, had set out to focus on economic diversification and uplift the country from nearly five years of recession. However, in the face of the oil price slump, the oil-reliant country has slowed the implementation of its planned economic reform strategy, which had included the privatization of state-owned companies and plans to reduce public debt to less than 60 percent of GDP by 2022 from approximately 90 percent in 2018 and, over 100 percent in 2019.
In response to the current market instability, the Angolan government which relies heavily on oil revenue has declared a state of emergency and made the decision to review its national budget. With this, it will object its budget on a reference oil price of $35 per barrel maximum – a significant cut from the initially drawn up $55 per barrel, Finance Minister Vera Davis de Sousa revealed on Friday, explaining that the country’s oil production is expected to tumble to 1.36 million barrels per day(bpd).
Further, Davis de Sousa shared that Angola would also be freezing 30 percent of its goods and services budget and its CAPEX would be suspended pending completion of the budget review. Meanwhile, the Angolan sovereign wealth fund has agreed to offer $1.5 billion on condition of future repayments through increased tax in the Bank of Angola’s growing debts.
“In this time, the Angolan economy will be best served by swift government action,” said NJ Ayuk, Executive Chairman of the African Energy Chamber. “With the finance minister already confirming that the country’s economy will shrink by 1.21 percent this year, signally a fifth year of recession, Angola needs a solid action plan that involves intense renegotiation strategies with domestic and foreign creditors, if it is to make it out on the other side,” he added.
Since discovering oil and gas in 2014, the West African country emerged as a major player in the global oil and gas industry, with it moving rapidly on setting up a new Petroleum code in 2019, creating new entities such as COS-Petrogaz and revising local content regulations. As a result, the country has enjoyed increased foreign investment and entry of international majors. However, global market turbulence has had a hard knock-on effect on Senegal’s promising oil future.
In particular, the country’s first oil development, the $4.2 billion Sangomar deepwater offshore project has suffered immense pressure as project partner FAR Ltd fails to finalize debt arrangements. Citing current environment as a major contributor, FAR said: “the company’s ability to close the Sangomar Project debt arrangements that were ongoing during this time have been compromised such that the lead banks to the senior facility have now confirmed that they cannot complete the syndication in the current environment,” adding that neither the junior nor mezzanine facilities that were being arranged will be able to be completed for the foreseeable future. Project operator, Woodside and partner Cairn, continue to explore other options to see through project development.
The current global environment also stands to slow down the country’s other activities in the sector specifically, the country’s first offshore licensing round which was launched earlier this year by the national oil company, PETROSEN as a means to further push the countries exploration and production.
Though the government is yet to share incentives for companies to continue activities, it has set up a fund to support the local economy.
“Senegal is undoubtedly one of the most promising oil and gas producers Africa has to offer. Led by H.E. President Macky Sall, the country is primed for new growth and investment. Despite what is happening in the global market, we hope to see Senegal build on its eight oil and gas discoveries, and enjoy first oil from the Sangomar oil field and first gas from BP’s Greater Tortue Ahmeyim LNG project,” said NJ Ayuk, Executive Chairman of the African Energy Chamber.
As it stands, Senegal has also seen Cairn Energy reduce its planned investment to below $330 million from the initial forecast of $400 million.
Nigeria
Nigeria is projected to suffer substantial revenue losses. With it having planned for an oil price of $57 in 2020, the low oil price presents massive struggles for Africa’s largest oil producer. To this point, Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari said at a crude oil price of $22 per barrel, high-cost oil producers like Nigeria should count themselves out of the business.
To this, the Atlantic Council has predicted that COVID-19 would cause the country to suffer the biggest lost in the continent with $15.4bn, representing about 4% of the nation’s GDP, a fair assessment considering the country has over $58bn in oil projects set to suffer delays or cancellations.
Though the country is yet to announce incentives for continued oil exploration and production, it is set on protecting its oil production which contributes generously to its economy. Specifically, the country’s petroleum regulator has, according to Reuters, ordered oil and gas companies to reduce their offshore workforce and move to 28-day staff rotations in order to avoid the spread of coronavirus.
“Nigeria is at risk to suffer the biggest loss. With the low oil price pushing the country to cut its budget and companies to reduce their CAPEX, the global is waiting to see Nigeria’s next move,” said NJ Ayuk, “Although it is hard to see the light for Nigeria, with the commitment of companies and resilience of the government, the country can certainly weather the storm, “ he added.
Ghana
The fall in oil prices coupled with COVID-19 has also had heavy impacts on Ghana’s oil industry, which has been on a path of steady growth for over 10 years since Kosmos Energy’s oil discovery west of Cape Three Points in the country’s offshore. And, more recently, Springfield Group’s historic 1.5 billion barrels.
Having set a benchmark of $58.66 oil price per barrel until the end of 2020, Ghana’s projected oil revenue is set to take a hit, with analysts already predicting the country will get half its projected revenue.
Oil production activity is also expected to see delays as Tullow Oil revises production targets and terminates the drilling contract with Maersk Drilling for the Maersk Venturer drillship offshore Ghana.
“If prices should stay around the US$30 mark, then the government is less likely to get half of the revenue that it projected. Already, we’ve seen Tullow cut back it’s production. So aside the international fall in crude oil price that we have to match with in selling our own bit of oil that we get as a country, production is also falling in our own shores,” said Paa Kwasi Anamua Sakyi, Executive Director at the Institute for Energy Security.
Cameroon
According to an analysis of the economic and financial impacts released by the Press Secretariat of the CEMAC Economic and Financial Reforms Programme, Cameroon can expect a three percent drop in growth in light of the global crisis.
Operations in the oil also stand to be affected with the country already seeing a turn. Specifically, with companies such as Tower resources declaring force-majeur on its development in the Thali block in the country’s offshore. The company also revealed that activity on the NJOM-3 offshore well may also be suspended.
Although the government has not announced any incentives for continued activity in the sector, it has acknowledged the non-oil commodities that will contribute the most to the country’s economic decline.
Now is an extremely challenging time for African oil development, the African Energy Chamber encourages Africa’s oil producing countries to adapt to the changes, implement incentives and plan for the future. This global crisis can only be worked through with continued commitment, support and collaboration.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
