Too soon to conclude outcome of BE bank

The Deputy Governor of the National Reserve Bank of Angola (BNA), Pedro Castro e Silva, has said it is still “very early” to reach a conclusion about the outcome of the case involving the Economic Bank (BE), whose situation is being monitored “carefully,” by the regulator.

Pedro e Silva said the bank’s recapitalisation plan is underway, with the aim to provide the institution with more liquidity to generate profitability to strengthen its capital.

Speaking at a press conference, as part of the 110th session of the BNA Monetary Policy Committee, Pedro e Silva confirmed the resignation of the chief executive of the BE bank, having pointed to the prompt intervention of the Board of Directors and shareholders to appoint a replacement who is familiar with the BE’s restructuring and recapitalisation plan.

At the moment, Silva said, the BNA is closely following the implementation of the plan, which is based on recovering liquidity levels.

The regulator, the BNA, says it is in a phase of corrective intervention with the BE.

Past this phase, from a total of three acting as regulator, an interim administration and resolution may follow.

Minimum share capital

The BNA official said that most of the banks have met the minimum share capital increase of 15 billion kwanzas, as many were already in this position.

Without giving names, he said that there were only two banks (in the recovery phase) that were being monitored by the BNA.

Despite the two banks that are still missing, he said that the increase in the minimum share capital of the banks has been successful.

Source: Angola Press News Agency (APNA)

Malawi cannabis: Farmers let down after paying out cash

Malawian farmer Ethel Chilembwe has paid out hundreds of dollars, cleared six hectares of land and got ready for the training, but after two years of waiting she has not cultivated a single cannabis plant.

Malawi legalised cannabis farming for industrial and medicinal use in February 2020 hoping to take advantage of the booming global demand and move away from the reliance on tobacco as an export crop.

Ms Chilembwe, who has for the last seven years been a tobacco farmer in Kasungu in the west of the country, also scented an opportunity to replace her shrinking returns.

She was not the only one and, like her, hundreds of other farmers have been left disappointed.

The United States Cannabis Association-Malawi (USCA), a private Malawian company, has been one of those at the centre of this failure, yet it still hopes that things will work out.

As part of its vision for how the country could benefit from cannabis, the government wanted to involve as many small-scale farmers as possible who would source seeds from local private companies and then sell the harvest back to them.

But things did not work out as planned.

As part of a requirement to get a growers’ licence from the government, Ms Chilembwe joined hands with other tobacco farmers nearby and registered a co-operative group.

Having already paid $1,500 (£1,200) to acquire the licence, Ms Chilembwe says the group paid thousands more dollars to USCA for registration, seeds and training in 2021.

But she got neither the seeds nor the training.

“I think the problem lies with [USCA], who cannot deliver what they promised, and then the government itself which does not seem willing to help us

“This is why we are stuck,” the farmer tells the BBC.

The land where she hoped to set up greenhouses has remained bare, something she says has led to a huge loss to her family.

But she is not the only one affected.

“We have got a contract with [USCA] which they gave us a price of $80-$150 per kilogram,” says Maquenda Chunga, another farmer.

Mr Chunga is a former politician who served as an MP for five years up to 2019 and supported the legalisation of cannabis in parliament.

The co-operative of 15 farmers which he leads managed to raise some $250,000 to set up greenhouses.

However, he says USCA only supplied a fraction of the expensive seeds paid for.

The initial harvest they managed to produce now lies in boxes inside a small store house with nowhere to go despite USCA also having committed itself to buy the harvested hemp.

“We had hope, [that] if we borrowed the money from the bank we knew that we would pay it back,” adds the disgruntled former parliamentarian.

He blames the government for not ensuring that USCA would live up to its promises.

USCA is one of the four private entities licensed by the government to produce cannabis in Malawi.

In order to acquire this licence, a company had to “have a warehouse, and ability to process either medicinal or industrial hemp”, says the Cannabis Regulatory Authority (CRA), in a statement issued to the BBC.

But USCA has neither a warehouse nor the processing facility.

The company has nearly 7,000 farmers on its register.

Its chief executive officer Paul Maulidi blames a fall out between the local owners of the company and foreign investors who allegedly pulled out of an investment deal.

The head of CRA says the money that was raised from the farmers was spent on running USCA’s office operations, and this left them with no funds to carry out their plans.

But Mr Maulidi still believes things can work out. He only joined the company last year and insists he is there to make things right.

“There must be some people who can come in and say let’s do something about it to rectify the situation. I still feel farmers need to be helped,” Mr Maulidi says.

“We are engaging with the co-operatives who are coming here and we are telling them of our plans and how we can execute those plans.”

The CRA says it has asked the company to fulfil its contracts or refund the farmers.

Furthermore, it has given USCA a three-month grace period after its licence had expired and says it will only renew it if farmers’ concerns are addressed.

The authority has asked USCA “to fulfil their agreement with farmer co-operatives or else they should pay back the money”, the regulator told the BBC in an email response.

But the problem is not just with USCA.

Out of the four companies operating in the cannabis industry in Malawi, only one still has a valid licence. The other two are yet to launch commercial operations according to the regulator.

The government insists farmers will get help.

The farmers “should come forward and present their case through the CRA to us and we will show the direction as to how they can be assisted”, says Dixie Kampani, an assistant minister in the department of agriculture, but he did not elaborate on the plan.

There has however been one success.

Invegrow, a company owned by a mix of local and foreign investors, employs hundreds of people, and grows cannabis from the nursery to the flowering and harvesting stage.

This is in addition to having a processing factory on site in the capital, Lilongwe, where they produce cannabis oil for local sales and export as well as other by-products like animal feed.

But they are yet to sign up many farmers.

“We have been piloting with 100 farmers for production of seeds only for the past one year,” says Nebert Nyirenda, the company director.

The growing of the crop for sale is a separate process.

If the scale of their operations is anything to go by, cannabis farming in Malawi could be out of reach for the majority of the farmers it was initially targeted at.

“We have invested $4m since 2013, part of it went to research and lobbying but the bulk has gone into setting up the infrastructure you can see here,” Mr Nyirenda adds.

Malawi is still saying that it can make a success out of cannabis.

But for now farmers like Ms Chilembwe and Mr Chunga who had hoped to benefit say they have been left financially scarred by this experience.

ECA Calls for Africa’s Economic Growth to be Inclusive to Reduce Widespread Poverty

The UN Economic Commission for Africa’s (UNECA) has called for Africa’s economic growth to be inclusive to reduce widespread poverty.

While the world was still fighting the COVID-19 pandemic, the war in Ukraine broke out in early 2022.

The impact of the two shocks has been exacerbated by the higher frequency and intensity of natural disasters, it was indicated.

UNECA Deputy Executive Secretary and Chief Economist Hanan Morsi told the fifty-fifth session of the ECA Conference of African Ministers of Finance, Planning and Economic Development in Addis Ababa, that the three overlapping crises have pushed more Africans into extreme poverty and resulted in increased inequalities and vulnerabilities on the continent.

Morsi said that there were significant levels of poverty and inequality in Africa even before recent global crises but now poverty has worsened, and inequality has widened.

“Today, 546 million people are still living in poverty, which is an increase of 74 per cent since 1990”, stressed Morsi. “Global shocks have ripple effects on the poor in Africa through inflation, which, in 2022, stood at 12.3 per cent, which was much higher than the world average of 6.7 per cent”.

ECA estimates that households in Africa spend up to 40 per cent of their income on food, and the impact of global crises has hit the poorest households in Africa severely.

A staggering 310 million Africans experienced some form of food insecurity and 6 million Africans faced extreme hunger in 2022.

According to recent research, the 10 African countries with the highest levels of poverty in Africa are Burundi, Somalia, Madagascar, South Sudan, the Central African Republic, Malawi, the Democratic Republic of the Congo, Guinea-Bissau, Mozambique and Zambia, in each of which between 60 per cent and 82 per cent of the population is poor.

The commissioner for Trade and Industry of the African Union Commission, Albert M. Muchanga told the conference of African Ministers of Finance, Planning and Economic Development that although Africa is the richest in the world in terms of natural endowments, we are the poorest.

African reliance on imports makes the continent vulnerable to commodity price shocks. In 2021, 39 African countries were net importers of food products. In addition, in 2021, Africa exported only 5.7 billion USD of refined petroleum products but imported over 44 billion of them.

“Coming out of the low levels of income and wealth is now being made more challenging by climate change as seen in the recent flooding in Madagascar Malawi and Mozambique” stressed Muchanga. “We must add to this, the looming debt crisis which could undermine all the growth achievements of the past 23 years”.

Experts and Ministers at the conference noted that African countries continue to face declining revenue, rising debt stress and increasingly constrained fiscal space.

In 2022, the government debt-to-GDP ratio in Africa was 64.5 per cent, which is significantly higher than the pre-pandemic figure for 2019 that was 57.1 per cent, according to ECA.

The two day-conference of African Ministers of Finance, Planning and Economic Development was convened under the theme: Fostering recovery and transformation in Africa to reduce inequalities and vulnerabilities.

Source: Ethiopian News Agency

More Investment in Data, Statistics Needed in Africa to Accelerate Sustainable Dev’t : ECA

African countries can take action to accelerate sustainable development if they plan better and invest in effective data and statistical systems, says Oliver Chinganya, Director of the Africa Center for Statistics (ACS) of the Economic Commission for Africa.

“Data is public good, the new oil, the gold that Africa must invest in to support its development,” Chinganya said on the sidelines of the 55th Session of the Committee of Experts meeting in Addis Ababa, Ethiopia.

The mission of the Africa Centre for Statistics is to enable national statistical systems in Africa to produce high quality statistics, data and geospatial information to inform sound and evidence decision-making in support of sustainable development, regional and national priorities.

“We need to invest in data and statistics to support Africa’s industrialization agenda,” said Chinganya.

There has been an improvement in the state of data and statistics across countries on the continent if we compare the situation over 20 years ago where data was poor and close to non-existent in cases. There is a lot more that can be done in making data available.”

According to the director, although many countries are making good progress, there is a situation on the continent where some countries, have not even conducted the censuses in the 2020 Round.

“It is very important to have data for the SDGs. When you are able to have data for SDGs which are properly aligned with the National Development Plans, it allows you to be able to know what is going on in improving the lives of people and overall national development.”

If countries do not conduct censuses, this may affect the reporting on SDGs as more than 10 of the SDGs are informed by data from the census that will impact the decision making process, he added.

“Similarly, when we talk about the AfCFTA, we want it to be a driver of the transformational agenda on the continent but to do that we must understand what each country is producing, for instance and what each country is trading, in terms of items, volumes and comparative advantages. For that you need data.”

Source: Ethiopian News Agency

Finance Minister Says Ethiopia’s Measures to Avert Economic Pressure Effective

The Government of Ethiopia has been effective in implementing different policies and response measures to avert the impacts of internal and global shocks on the economy, Finance Minister Ahmed Shide said.

Speaking at the 55th Conference of African Ministers of Finance, Planning, and Economic Development hosted by the UNECA, the minister stated that COVID-19, the Russia-Ukraine war and internal conflicts as well as climate change have mainly affected many African countries.

And Ethiopia’s economy has similarly faced the impacts of the above.

With the introduction of the Home-Grown Economic Reform and fiscal and monetary policy responses as well as boosting production and precautionary health measures, however, Ethiopia has succeeded in withstanding the shocks and registering growth, he elaborated.

According to him, the production of wheat and maize in particular was boosted, health equipment were manufactured massively to prevent spread of the pandemic and digital financial services improved.

Following the global fertilizer price increase, the government has been subsidizing the purchase of fertilizers to help boost agricultural production and ensure food security.

The National Bank of Ethiopia also injected funding into commercial banks that had been experiencing liquidity challenges, personal income tax payments postponed, bank loan repayments rescheduled, and tax amnesty given to different sectors, among other measures, Ahmed pointed out.

However, despite the gains registered by introducing and implementing various measures, forex distortions, fiscal deficits, and rising inflation remain major economic setbacks to the economy.

Therefore, the second version of Home-Grown Economic Reform will continue to consolidate the gains and address the current and emerging challenges, the minister added.

Joint United Nations Programme on HIV/AIDS Executive Director, Winnie Byanyima on the occasion hailed Ethiopia’s response to the shocks and observed that the biggest challenge for Africa is access to fair financial services.

Even before the COVID-19 crisis and the war in Ukraine, countries were borrowing at an interest rate of over eight percent, while the high-income countries borrowed at lower rates as low as one percent, she revealed.

The high cost of borrowing is taking away Africa’s prospects of achieving SDGs, the executive director stressed.

Moreover, Byanyima stressed that the challenge of not being able to borrow in countries’ own currency points to how countries are being treated unequally on matters of access to affordable finances.

Hence, she stated that there is a need for countries to tackle the high cost of debts, connect financing with SDG achievement, and push harder for Africa to have a seat at the G20 forum.

Source: Ethiopian News Agency

Gov’t Striving to Enhance Responsible Agricultural Investment that Meets Accepted Principles

The Ethiopian government is striving to enhance responsible agricultural investment that can meet nationally, regionally, and internationally accepted principles, according to Ministry of Agriculture.

In his opening remark at the National Multi-Stakeholders Dialogue on Responsible Governance of Investment in Land underway here in Addis Ababa, Agriculture State Minister Ifa Muleta said land in Ethiopia is not only the foundation of the economy, but also plays significant role in cultural, social, and political affairs.

The Government of Ethiopia is, therefore, carefully looking for a long-term sustainable land use system which enables it to design a guiding policy framework that addresses both small holders and commercial ones.

According to him, the government has demonstrated strong commitment to agriculture in order to increase production and productivity of small holders through dissemination of effective technologies and scaling up strategies.

As a result, considerable achievements have been registered over the past decades even if there is still substantial scope to improve production, productivity, and to also create untapped market linkages, it was learned.

“We are striving to enhance responsible agricultural investment that can meet national, regional and international accepted principles and guidelines in an innovative and responsible ways. Indeed, establishing responsible agricultural investment system in the main objective of our current reform agenda in the sector land governance is a crucial issue.”

Responsible Governance of Investment in Land Project Manager, Christian Mesmer said land is a finite and non-renewable resource that many found significance in economic, social, ecological, cultural and political terms. Due attention must (therefore) be given to this precious resource from national to kebele level.

The manager noted that the global rush for land indicates that many land owner local communities do not benefit from land investment.

Christian added that the lack of safeguarding and consultation mechanisms in doing land allocation process result in land degradation, dispute and evictions.

“With its agricultural reform agenda, the Government of Ethiopia has demonstrated its commitment for good land governance through improved land tenure security for both small holders and commercial agricultural investment and alike,” he stressed.

Many systematic efforts have been undertaken, the manager stated, adding that the country can still make major headway in ensuring responsible agricultural investment.

EU Delegation Green Deal Team leader, Roberto Schiliro said on his part that land governance is a precondition for any development policy and strategy in agriculture.

This is particularly important in Ethiopia to fully exploit its unleashed potential, the team leader said, adding the UN and its member states have taken various measures, including the adoption of UN land policy guidance in 2004, in order to meet these objectives.

The EU supports this initiative acknowledging that responsible land management is a key and critical issue in Ethiopia, according to Schiliro.

The team leader further underlined that we need to have specific Ethiopian approach. “We need to be inclusive and innovative in the approach to land management in Ethiopia.”

Source: Ethiopian News Agency