Economy
Africa’s Economy to Rebound 5% in 2021—ECA
By Adedapo Adesanya
The economy of Africa is expected to rebound by 5 per cent next year after declining by 4.1 per cent this year, the UN Economic Commission for Africa (ECA) has said in its new report.
In its report tagged Innovative finance for private sector development in Africa, it was stated that the recovery would be supported by effective response to the COVID-19 pandemic and the measures taken globally to aid economic recovery.
According to the report, imported pharmaceutical products in the middle of a pandemic worth $44 billion would be required for the testing, personal protective equipment for frontline medical staff, equipment and treatment of the coronavirus (COVID-19).
In 2020, spending on health will increase as governments set aside funds to sustain their health systems and absorb costs related to the COVID-19 lockdowns.
In a best-case scenario, $44 billion would be required across Africa for testing, personal protective equipment and treatment of COVID-19 patients requiring hospitalisation and intensive care treatment, the report said.
The report further said that due to the resources being redirected to COVID-19, Africa’s existing health challenges will face spillover costs, as happened in the Ebola crisis. It calls on countries to look into investments in non-COVID-19 health issues which should be kept in view.
The impact of the pandemic will push between 5 million and 29 million people below the extreme poverty line of $1.90 per day, compared with a baseline 2020 African growth scenario, according to ECA projections.
Moreover, reduced demand due to COVID-19 has depressed the prices of agricultural commodities such as coffee, tea and cocoa, which is expected to affect vulnerable small-scale farmers in Africa.
The report advocates for investment to build key infrastructure and foster innovation. Despite Africa’s growth, many economies remain unsophisticated or undiversified, due to low levels of innovation, limited productive capabilities, low investment and poor quality of education.
Building capabilities will require investments in human and physical capital.
The report projected that an estimated financing gap of $2.5 trillion will be for all emerging and developing countries and $200 billion– $1.3 trillion for Africa.
This is because Africa’s population is expected to grow by 43 per cent over 2015–2030, the gap could reach $19.5 trillion by 2030.
Meanwhile, climate change is increasing seasonal variability, frequency and intensity of droughts and floods, and shifting habitats and agro-ecological zones due to climate change can cause food insecurity, lower trade balances, raise inflation pressure and fiscal imbalances.
For instance, cyclone Idai, which hit Mozambique in March–April 2019, weakened the economy, took 1,000 lives and caused $700 million–$1 billion in damages to property and other losses.
African economies remained the second fastest-growing region in the world with growth estimated at 3.4 per cent in 2019. The COVID-19 pandemic will impact growth to decelerate to between 1.8 per cent and -4.1 per cent in 2020.
In order to promote the recovery from the COVID-19 impact, the report calls on African countries to regulate their bank sector to limit the possible harm from banking crises or from more general system-wide misallocation of resources.
For the sake of private sector development, the regulation of banks and other sources of capital for funding private industry, such as equity and debt capital markets and digital platforms, needs to be strengthened.
The report noted that the regulations that concern the banking sector alone may be insufficient to safeguard the financial system against some of the risks fintech services pose, such as data privacy, money laundering, mismatched risk and return, and systemic risk.
Africa needs to rethink its financial services regulation so that innovation is fully functional, the environment enables innovation, transparency is enhanced, and financing for private sector development is delivered, the report stated.
These new risks call for financial regulation to be reviewed to provide a flexible environment for fintech to develop that is strict enough to limit the risks. Some African countries have limited fiscal space and international reserves and thus lack the necessary resources to implement COVID-19 responses.
According to IMF data, African countries will record fiscal deficits averaging 5.8 per cent in 2020 and 4.4 per cent in 2021, compared with 3 per cent in 2019.
However, African policymakers’ and regulators’ experience with the 2008–2009 financial crisis and the use of various measures to cushion its impact give them an advantage in rapidly responding to the COVID-19 crisis.
By Adedapo Adesanya
Nigeria’s maiden shipment under the African Continental Free Trade Area (AfCFTA) has successfully arrived at the Mombasa Port in Kenya.
According to the Nigeria AfCFTA Coordination Office in a statement, the development marks a historic moment for Africa’s trade landscape.
The Senior Trade Expert at the Nigeria AfCFTA Coordination Office, Mr Olusegun Olutayo, said in line with its mandate under the leadership of the National Coordinator, Mr Olusegun Awolowo, the office had coordinated the landmark event.
He said the achievement marked a significant milestone for Nigeria in realising the vision of increased intra-African trade and economic integration championed by the agreement in line with the decision of the AU Assembly at the 31st Ordinary Session of the Assembly.
“In times of escalating geopolitical tension and looming geo-economic fragmentation, AfCFTA presents a perfect opportunity for Africa to leverage trade as a strategic instrument for enhanced market access among state parties.
“This is a historic moment, a realisation of the vision of our continent’s founding fathers and mothers.”
He also said the first consignment which was a synthetic filaments product of Nigeria’s Lucky Fibres Limited (Lush), a subsidiary of the Tolaram Group, was exported under AfCFTA preferential terms.
Mr Olutayo lauded the bold economic reforms of President Bola Tinubu, emphasising their catalytic role in enabling the country’s active participation in AfCFTA, fostering continental economic integration and industrialisation goals.
He also commended the seamless cooperation and commitment from Kenyan authorities, which exemplifies the true spirit of AfCFTA.
He acknowledged the pivotal leadership role of the AfCFTA Secretariat in fostering the success and emphasised the collaborative efforts of the Kenya AfCFTA Implementation Committee and the Kenya Revenue Authority (Customs).
According to him, the shipment, exported under AfCFTA preferential trade terms, underscores partnership, shared vision, the agreement’s potential to transform Africa’s economic landscape and pave the way for a new era of trade-driven prosperity.
The AfCFTA seeks to create a single market across Africa by reducing barriers to trade, investment, and labour.
The agreement’s goal is to increase socioeconomic development, reduce poverty, and make Africa more competitive globally.
On March 21, 2018, the AfCFTA agreement was adopted and opened for signature in Kigali, Rwanda. The agreement entered into force on May 30, 2019 and officially commenced on January 2021
Former President Muhammadu Buhari established the National Action Committee on AfCFTA (NAC) in December 2019.
By Adedapo Adesanya
The Nigerian Securities and Exchange Commission (SEC) has fixed January 31 as deadline for all Capital Market Operators (CMOs) to renew their operating licence.
In a circular to the operators on Sunday, the apex regulatory agency in the country’s capital market said the annual registration renewal would last between January 1 and 31, 2025.
SEC said the annual registration renewal enforcement for CMOs was aimed at ensuring that only “fit and proper” persons operate in the capital market, warning that CMOs without valid registration will be penalised and may be excluded from capital market activities.
”This is to inform all CMOs and the general public that the annual renewal of registration of CMOs for the year 2025 will commence from January 01.
“All CMOs applying for renewal are required to include their 2025 annual subscription receipt from their respective trade groups as part of their application.
“In line with the commission’s Rules & Regulations, all CMOs are to complete the process of renewal of registration for 2025 on or before January 31 via registration renewal portal at www.eportal.sec.gov.ng,” it said.
The commission added that CMOs desiring to make enquiries or get support to complete the process should contact [email protected].
The regulator said it had in 2021 re-introduced periodic registration renewal by CMOs to create a reliable active operators’ data bank in the country’s capital market.
It said the renewal arrangement aimed at updating operators information on capital market for official use by local and foreign investors, other regulatory agencies and the public.
The agency added that the renewals would drastically reduce incidences of unethical practices by CMOs which may affect investors’ confidence and impact the capital market negatively, noting that the exercise will strengthen supervision and monitoring of CMOs by the commission.
By Adedapo Adesanya
The third trading week of 2025 ended on a positive note at the NASD Over-the-Counter (OTC) Securities Exchange, with seven equities on the platform inspiring a 1.24 per cent growth.
Consequently, the market capitalisation of the bourse increased by N21.56 billion during the five-day trading week to N1.075 trillion from the N1.053 trillion quoted in the preceding week (Week 2) as the NASD Unlisted Security Index (NSI) expanded by 37.98 points to 3,111.91 points from the 3,073.93 points it ended in the preceding week.
In the period under review, the volume of transactions went down by 42.1 per cent to 9.45 million units from the 16.30 million units in the previous week, as the value of trades declined by 53.1 per cent to N48.4 million from the N104.11 million, with these transactions completed in 122 deals involving 15 different stocks.
Industrial and General Insurance (IGI) Plc gained 50 per cent in the week to close at 36 Kobo per share versus 34 Kobo per share, Mixta Real Estate Plc increased by 20 per cent to end at N2.58 per unit compared with the previous week’s N2.15 per unit, and Okitipupa Plc rose by 10 per cent to N39.59 per share from N35.99 per share.
Further, UBN Property Plc grew by 10 per cent to N2.20 per unit from N2.02 per unit, Newrest Asl Plc jumped by 9.9 per cent to N31.38 per share from N28.53 per share, FrieslandCampina Wamco Plc surged by 3.7 per cent to N39.65 per unit from N38.22 per unit, and 11 Plc advanced by 0.3 per cent to N256.00 per share from N255.31 per share.
FrieslandCampina Wamco Plc topped the activity chart last week by value with with N0.030 billion, 11 Plc recorded N0.009 billion, Central Security Clearing System (CSCS) Plc raked in N0.004 billion, IGI Plc followed with N0.002 billion, and Geo-Fluids Plc recorded N0.002 billion.
However, IGI Plc was the most traded instrument by volume with 7.5 million units, FrieslandCampina Wamco Plc transacted 0.77 million units, UBN Property Plc recorded 0.38 million, Geo-Fluids Plc traded 0.37 million units, and CSCS Plc posted 0.16 million units.
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