Movers & Shakers
Mauritius declared wary victory over Covid-19, saying on May 12 it had “zero” active patients and had not documented a single new case in 17 days. The Indian Ocean island nation is the first African country to announce such a feat, though the island remains wary of new infections.
Kenya’s biggest bank by assets, KCB Group, posted 8% profit after tax in the first quarter to March at $59m. However, the lender has had to restructure more than $1bn in loans and the CEO is hesitant to predict how earnings will be impacted this year.
Jumia, a major e-commerce platform in Africa, has reported an almost 7% fall in first quarter revenue due to supply chain disruptions, particularly in China. It also reported signs that lockdowns were hastening a shift towards online shopping in Africa.
Kenya and Zambia have closed their borders with Tanzania, following growing fears that the government has failed to get a handle on Covid-19. The government has not announced any updates since April 29, leading to a warning from the US Embassy that the pandemic has grown exponentially in Dar es Salaam.
The eastern-based Libya National Army (LNA) has suffered a series of military setbacks since Turkey sided with the Triopli-based UN-backed government in January. The Government of National Accord (GNA) captured the LNA’s only airbase near Tripoli, as Libya’s ongoing civil war draws in more foreign powers.
The African Development Bank (AfDB) has issued a $3bn bond in an effort to help alleviate the economic and social fallout from the coronavirus pandemic in Africa.
With a three-year maturity and an interest rate of 0.75%, the ‘Fight COVID-19’ social bond is the largest of its kind ever launched in international capital markets to date.
Gaining interest from central banks, bank treasuries, asset managers and socially responsible investors the bond was oversubscribed by $1.6bn.
Akinwumi Adesina, AfDB president, said: “These are critical times for Africa as it addresses the challenges resulting from the Coronavirus. The African Development Bank is taking bold measures to support African countries.”
“This $3 billion Covid-19 bond issuance is the first part of our comprehensive response that will soon be announced. This is indeed the largest social bond transaction to date in capital markets. We are here for Africa, and we will provide significant rapid support for countries.”
Ugandan lawmaker and musician Bobi Wine released a song on Wednesday called ‘Coronavirus alert’ to raise awareness about how to minimise the spread of the virus.
Working with fellow artist Nubian Li, the controversial figure in Ugandan politics used East Africa’s rumba melodies to inform listeners about the importance of personal hygiene.
“The bad news is that everyone is a potential victim,” Wine sings. “But the good news is that everyone is a potential solution.”
After reporting very few cases, Uganda’s number of confirmed cases has risen sharply to 18 over the last few days.
President Yoweri Museveni’s government has already taken a raft of measures including sealing off borders, closing bars, and banning public gatherings to contain the outbreak.
Morocco has mobilised $3.24bn in financial resources in the fight against coronavirus, making it the fourth-largest donor worldwide.
Amounting to 2.7% of GDP, the north-African country was bested only by New Zealand (4%), Chile (4.7%) and Sweden (6%).
Adding to its contribution, a special fund worth $1bn was announced by King Mohammed VI last month to combat the spread of the virus.
Several banks, government officials and the king contributed to the fund which has more than doubled in size.
Companies such as Afriquia Gas and OCP Group also made major contributions donating $100m and $305m respectively.
The Ministry of Economy launched an SMS campaign for anyone wishing to contribute to the fund.
Morocco today has 275 coronavirus cases, the fourth-highest in Africa.
Nigeria’s president Muhammadu Buhari announced yesterday a host of travel restrictions and the release of emergency funds to help counter the spread of coronavirus.
Land and air borders will be closed for a period of four weeks while only cargo ships which have been at sea for more than 14-days will be allowed to dock in Nigeria’s ports, the president wrote on Twitter.
Commuter trains running from Lagos to other parts of the country are also suspended, as the country’s commercial capital is the epicentre of the virus.
The president also released a $27m grant to Lagos State to help the region “increase its capacity to control and contain the outbreak”.
A further $13.5m was given to a Nigeria Center for Disease Control (NigeriaCDC) to equip, expand and provide personnel to its facilities and laboratories across the country.
He also hinted at coming fiscal interventions once the federal budget had been concluded.
These measures add to partial closure of public spaces across many states and the directive given yesterday by Lagos state authorities to close all markets and shops for seven days.
Nigeria today has 65 cases, though many believe the figure is much higher due to the lack of testing capability by local authorities.
Read our story from Lagos yesterday as our reporter spoke to small businesses being affected by the restrictions: https://liveblog.africanbusinessmagazine.com/2020/03/27/small-businesses-suffer-as-nigeria-fears-spike-in-coronavirus/
As the UK grapples with almost 10,000 coronavirus cases, the country’s response to the pandemic on a global stage where it usually plays a leading role has been noticeably lacking.
The Department for International Development (DFID), the UK’s foreign aid body, has been “disappointing” and “very inward-looking”, a member of staff told Devex on condition of anonymity.
Despite holding the world’s third-largest aid budget, DFID has not made a public statement for two weeks and there has been little indication from lawmakers on how they intend to lead or influence the global fight.
On March 6, the UK announced a £46m aid package to support the production of a 10-minute vaccine in Senegal.
It later promised up to £150m to the IMF’s Catastrophe Containment and Relief Trust to help lower-income countries deal with the economic fallout of the crisis.
Yet as a key donor across many African countries, DFID is expected to play a more commanding role.
The situation has reportedly not been helped by bureaucratic disagreements with the Foreign and Commonwealth Office, the UK’s overseas department, and the self-isolation of DFID’s secretary of state after she was exposed to the virus.
Note: After this story was published, the UK announced £210m to help find a coronavirus vaccine and stated that its total funding amounts to £544m.
The IMF has received requests for emergency financing from almost 20 African countries and are expecting 10 more soon, according to a blog post from senior staff in the Africa department.
Director Abebe Aemro Selassie and advisor Karen Ongley write that while African countries are acting “decisively” to halt the spread of the virus, social distancing remains a challenge and the continent faces potentially devastating economic consequences.
Local economic disruption as a result of shutdowns, the slowdown in major global economies and the impact on commodity prices will all contribute to hardship in Africa, they write.
In a global response, the fund is making $50bn available via rapid-disbursing emergency facilities, including $10bn on highly concessional terms for low‑income countries.
They expect the first wave of support to be delivered in early April, but say that countries can pursue a range of fiscal policies to mitigate the impact.
“Fiscal policy will have to play a leading role in mitigating the shock, with fiscal positions reverting to medium‑term paths consistent with debt sustainability once the crisis has passed. Targeted cash transfers could also be considered to help individuals and households under strain.”
“Where feasible, governments should consider targeted and temporary support for hard-hit sectors such as tourism – easing monetary policy can complement fiscal efforts, especially with inflation in single‑digits in the vast majority of countries in the region.”
They continue: “Financial measures can help minimize disruptions to much‑needed credit and liquidity for businesses, including central bank liquidity provision or temporary credit guarantees. For countries with flexible exchange rate regimes, the exchange rate should be allowed act as a shock absorber.”
At the outset of the coronavirus pandemic, South Africa and Senegal were the only two African countries capable of testing for the virus.
Samples from other African countries were sent to labs in these two countries to determine whether a suspected individual tested positive.
Thanks to efforts undertaken by the WHO and AfricaCDC the number of countries has increased to 44, says WHO regional director for Africa, Matshidiso Moeti.
Countries without testing labs continue to send their samples to neighbours.
“Our target is for each country to have the capacity to test and we are working towards that target,” says WHO.
Somalia has taken all the necessary steps to rebuild economic ties with the World Bank and the IMF, confirming its eligibility for debt relief at a crucial juncture as the country today confirmed its second coronavirus case.
Mogadishu has been in arrears to the IMF for over three decades – the second-longest period of protracted arrears after Sudan.
Most of its $5.2bn external debt will be forgiven as part of the Highly Indebted Poor Countries’ Initiative (HIPC).
The development is welcome news for Somalia as it battles al-Shabaab and a locust outbreak alongside the pandemic.
“I would like to congratulate the Somali government and people for their intense efforts over the past years leading to this momentous event,” said Kristalina Georgieva, IMF managing director.
“Successful reform efforts have laid the foundation for inclusive economic growth and for addressing the needs of the country’s most vulnerable people. Work must continue to sustain and expand the implementation of these reforms as Somalia starts a new chapter of its history. I am confident a more resilient and prosperous future lies ahead for the people of Somalia.”
‘If the virus is not defeated in Africa, it will only bounce back to the rest of the world,’ says Abiy Ahmed
In a bid to rally support and funding for the fight against coronavirus in Africa, Ethiopia’s prime minister Abiy Ahmed has said the virus will “bounce back to the rest of the world” if it is not properly controlled on the continent.
While advanced economies are unveiling unprecedented economic stimulus packages, African countries lack the financial means to make similarly meaningful interventions, he writes in an article published by the Financial Times.
“That is why the current strategy of uncoordinated country-specific measures, while understandable, is myopic, unsustainable and potentially counter-productive,” he says.
“A virus that ignores borders cannot be tackled successfully like this. We can defeat this invisible and vicious adversary — but only with global leadership.”
Despite steady progress in the provision of healthcare services over the past two decades in Ethiopia, the country is unprepared for the threats posed by coronavirus.
Access to basic health services remains the exception rather than the norm, he says.
Hand washing is an unaffordable luxury to half the population who lack access to clean water.
Social distancing is problematic in a culture which is deeply communal and often features many generations living side by side.
On the economic side, the shortage of hard currency resulting from the reduced activity of the country’s largest company Ethiopian Airlines will make it impossible to source essential medical supplies and equipment from abroad.
Many of these concerns are shared across the African continent, he writes.
“Momentary victory by a rich country in controlling the virus at a national level, coupled with travel bans and border closures, may give a semblance of accomplishment,” he says.
“But we all know this is a stopgap. Only global victory can bring this pandemic to an end.”
Kenya’s president Uhuru Kenyatta has announced a raft of measures to soften the coronavirus blow for the most vulnerable, including 100% tax relief for citizens earning a gross income of $240 or less per month.
Speaking from his official residence in Nairobi, income tax and corporation tax will also be cut from 30% to 25%.
He further ordered the reduction of VAT from 16% to 14% effective 1st April.
This came as Kenya’s confirmed cases increases to 28 and the president announced a curfew from 7pm to 5am, starting Friday 27 March.
Data: Cédric Moro, I-Resilience
Updated 22 May
Top 5 confirmed cases by country