Author: Maingi Gichuku

• The Horn of Africa has been grappling with the most severe drought in 40 years since late 2020.
• Rain-fed agriculture in parts of Kenya, Ethiopia, and Somalia worst hit as harvests drop to 70 percent of normal standards.
• A United Nations-backed conference raised $2.4 billion on May 24th to address famine in the Horn of Africa.

The worst drought in a-half-century is causing severe economic hit on economies in the Horn of Africa. This is due to the economies’ heavy reliance on agriculture, and other climate-vulnerable resources.

Drought has led to reduced rainfall and water, severely reducing agricultural production. Crops failed, and pasturelands dried up. As a result, millions of heads of livestock died due to a lack of water and fodder. Millions of farmers are experiencing significant crop losses and decreased livestock productivity. Consequently, huge populations are grappling with thinning incomes and food shortages.

Agricultural losses, food insecurity

Rain-fed …

• Mozambique has been given two years to improve Anti-Money Laundering Framework or face bans on international financial transactions.
• Mozambique was placed on the grey list of the FATF for non-compliance with anti-money laundering and terrorist financing.
• If Mozambique fails to comply with the FATF standards, it will be backlisted under non-cooperative countries and territories (NCCTs).

The Financial Action Task Force (FATF) has given Mozambique two years to improve its framework to prevent and combat money laundering and terrorist financing. Authorities in Maputo will suffer wide sweeping bans in international financial transactions if they fail. Currently, policymakers in the country have their feet on the gas pedal, sealing leakages in Mozambique’s financial flows.

Under pressure, the government has set up an executive committee led by Luís Cezerilo to seek Mozambique’s removal from Grey List. The listing has placed the country among the most vulnerable to crimes of money laundering and terrorism …

• For South Africa, there may be no growth in 2023. Indeed, the country is likely to have slumped into a technical recession in Q1 2023.
• Absa Group survey shows South Africa’s power cuts are hitting the manufacturing sector hard.
• A sustained drop in factory output may result in job losses, eroding the economy further.

South Africa’s manufacturing activity continued to contract in April, albeit at a slower pace than in the preceding two months. The seasonally-adjusted Absa Purchasing Managers’ Index (PMI) hit 49.8 points in April  2023, up from 48.1 points in March. It, however, remained below the critical 50-point mark for the third straight month, indicating contraction in the sector.

This modest improvement was attributed to companies building up their inventories. Absa noted that the manufacturing sector faced yet another challenging month in April, with power cuts hindering output.

Eskom, the struggling state-owned utility, has imposed almost daily electricity …

• The Electricity Regulatory Authority (ERA) has announced that it is currently conducting a thorough cost analysis of the Umeme concession buyout, which includes verifying recoverable investments
• As a listed company on the Uganda Securities Exchange, Umeme is one of Uganda’s largest and most profitable companies
• Energy Permanent Secretary Irene Bateebe  estimated that the Umeme buyout as of December 2022 stood at Shs799b (US$215m)

The Electricity Regulatory Authority (ERA) has announced that it is currently conducting a thorough cost analysis of the Umeme concession buyout, which includes verifying recoverable investments. Eng Ziria Tibalwa Waako, the CEO of ERA, stated in a recent interview that the process of investment verification is ongoing and the final buyout amount is expected to be announced in March 2025 after cost and technical audits have been conducted by the Auditor General.

The government had previously indicated that it would allow Umeme’s 20-year concession to expire …

• Tanzania garnered $1.2 billion (approximately Sh2.8 trillion) in investment through projects filed with the Tanzania Investment Centre (TIC) from January to March, compared to $787.4 million (Sh1.8 trillion) in 2022
• According to the most recent TIC report, the investment will be invested in 93 projects that would create more than 16,400 job possibilities
• Domestic sources made significant contributions, contributing US$887 million, or 76 per cent, of the total permitted investments ,US$276 million, or 24%, came from overseas sources.

Due to an improvement in the economic climate, Tanzania had a 52.4 per cent rise in investment over the first quarter of this year compared to the same period last year.

Tanzania garnered US$1.2 billion (approximately Sh2.8 trillion) in investment through projects filed with the Tanzania Investment Centre (TIC) from January to March, compared to US$787.4 million (Sh1.8 trillion) in 2022.

According to the most recent TIC report, the investment will be …

• Marcyrl Pharmaceutical get investments  from Development Partners International and Amethis meant to promote greater access to critical care medications in Africa.
• Through its global distribution network, Marcyrl’s goal is to increase access to specialised medications in Egypt and throughout Africa
• Africa has a sizable pharmaceutical industry worth US$18 billion annual demand for packaged medicines,  Nevertheless, over 60 per cent of goods are still imported.

Leading Egyptian pharmaceutical company, Marcyrl Pharmaceutical Industries, which specialises in specialty generics, on thursday 6 2023, revealed a new investment meant to speed up its goal of promoting greater access to critical care medications throughout Africa.

The infusion of a substantial minority investment from Development Partners International and Amethis will enable the company to strengthen its institutional framework, leverage its prominent market position, and diversify its product portfolio. This strategic move will enhance the company’s growth potential and create opportunities for increased profitability.

Marcyrl, …

• A Boston University report published on Thursday  ,indicates that a Debt reductions of US$500 billions must be written off to assist developing countries that are most at risk of default get back on a better financial footing
• Developing nations’ sovereign debt rose by 178% due to the global financial crisis, reaching US$3.9 trillion by 2021
• Fitch Ratings reported a substantial amount of sovereign debt defaults this year, whereas the International Monetary Fund reported that 25% of developing nations and sixty per cent of developing nations are in or approaching debt distress

Countries in Sub-Saharan Africa (SSA) are dealing with two issues that are reducing productivity and undoing decades of economic progress: increasing levels of debt and an uptick in the frequency and intensity of climate shocks.

Countries now have declining public finances, low resilience to climate shocks, and constrained ability to fund adaptation due to the cumulative nature of these …