Author: Padili Mikomangwa

Since November 2020, Tigray’s rebel forces have been fighting Ethiopia’s military forces, leaving hundreds in humanitarian crises and with countless deaths. This poses a threat to the rest of the region and to Ethiopia’s development initiatives. Ethiopia’s two neighbouring countries, South Sudan and Somalia, are also in deep civil conflict.
The World Bank (WB), one of Ethiopia’s close development partners, argues that its location gives this nation of more than 112 million people a strategic dominance as a “jumping-off” point in the Horn of Africa, close to the Middle East and its markets.
The second most populous country with the fastest growing economy in the region has impressed the globe with its development pace, from enhancing its aviation power to increasing infrastructure to make the country more accessible and up to speed. …

• Gold exports accounted for 43 per cent of goods exported by the year ending September 2021
• The Tanzanian shilling is argued to be stable against the US dollar
• Still, debt is a thorn to the Tanzanian government as it stands at more than $33 billion 

The central bank of Tanzania released its monthly economic review report on 11 November, for October 2021, and it depicts the economy to be stabilised, despite a few sectors showing some decline in performance.

One of the most promising notes in the report is the stability of the shilling against the US dollar, “trading at an average rate of Tshs. 2,309.62 per US dollar in September 2021, compared to Tshs. 2,310.88 per US dollar in the preceding month,” the report noted.

Inflation

On this crucial sector of the economy, the report noted that inflation remained within the target of 3.5 per cent for the years …

• North Africa GDP was negative -1.1 per cent (2020) and -5.1 percentage point drop over 2019
• But the region is expected to recover pre-pandemic, propelled by oil and tourism industry
• Vaccination is still an important element in supporting the region towards recovery

The African Development Bank (AfDB), one of Africa’s multilateral development finance institutions, has released its 2021 edition of the North Africa Economic Outlook published on November 3, noted several interesting developments, including the potential for the economy to rebound attributed to performance in oil and tourism.

The COVID-19 pandemic trapped North Africa in economic uncertainty, as growth was hugely affected, causing serious shocks in oil prices and a drop in tourism.

The bank report noted that real GDP growth was negative in 2020 at – 1.1 per cent and – 5.1 percentage point drop over 2019. This situation pulled different sorts of reactions to curb the impacts, such …

• US, EU pledge to cut global methane and greenhouse gas emissions by at least 30 per cent by 2030.
• 16 Southern African Development Community (SADC) states have recorded 36 per cent of all weather-related disasters in Africa.
• China, the world’s largest emitter of methane, India and Russia are not part of a pledge to cut down emissions.

The 26th Conference of Parties (COP26) has demonstrated to the world action towards climate change is possible.

As heads of state converge and pledge crucial issues including, the US and European Union announced a global methane pledge, cutting emissions of greenhouse gas by at least 30 per cent by 2030.

The conference, which is attended by countries that signed the United Nations Framework Convention on Climate Change (UNFCCC), has been drawing international attention as climate change impacts the global economy, especially developing economies across the world.

In that context, Africa as a region …

• Elon Musk is ready to sell his Tesla shares if WFP will describe how it will spend it and display accounting reports
• Nearly 42 million people are face starvation due to various factors including climate change 
• 2 per cent of Elon Musk’s wealth could help the 42 million people facing hunger

Who would have thought that one man can solve a portion of global hunger?

The old saying, ‘numbers don’t lie’ has somehow shocked the world, as the director of the United Nation’s World Food Programme, David Beasley, recently challenged the world’s wealthiest individuals to ‘’step up now, on a one-time basis’’ and address global hunger.

“US$6 billion could help 42 million people that are going to die if we don’t reach them. It’s not complicated,” he added, as cited by CNN.

It seemed to be a normal statement, by when one of the most influential like Elon Musk, took …

• African economy has sustained significant impacts due to the pandemic
• Several sectors such as tourism and trade have been impacted significantly
• Despite the virus, Africa has demonstrated important issues towards handling pandemics

One of the most vibrant economies in the world, sub-Saharan Africa is slated to bounce back from the shocks of COVID-19 which left a number of economies shaken to the core and hundreds of lives lost.  

Despite the pandemic limiting several economic functions such as international travel—which marred tourism operations in East Africa, the region is expected to score growth of 3.3 per cent in 2021, according to a recent report by the World Bank. 

The October edition of Africa’s Pulse report explicitly noted that the resurgence of the economy is promoted by elevated commodity prices, a relaxation of stringent pandemic measures and recovery in global trade.  

Kenya, Tanzania, Rwanda and Uganda, are now working towards building …

• Mobile money is growing fast in East Africa
• Despite of the pandemic, still mobile money regulators enabled its performance
• Financial technologies are changing the way unbanked populations access finance services 

Mobile money is still king in Africa and will be so for long. With more than 548 million (up 12 per cent) registered accounts attached to a 27.4 billion transaction volume worth $490 billion, Africa stands to draw billions from mobile money and transform its economies significantly (GSMA 2021). 

Thanks to financial technology (fintech) which has accelerated financial inclusion in sub-Saharan Africa, now more than ever, the unbanked population in rural areas of Africa can access financial services seamlessly, even during the coronavirus pandemic’s harsh times. 

Today fintech technologies are challenging traditional financial services, particularly banks in Africa. This has forced banks to adapt to the new game brought by fintech aggregators, including fusing their services to mobile services and …

• Tanzania has went through significant changes in its pension schemes over the past years
• Pension funds have becomes a useful tool in the wake of the pandemic
• Nigeria,Kenya, Namibia, Bostwana and Mauritius demonstrate serious activity in pension fund growth

Pension funds are now an instrumental tool in the economy across Africa that play a major role in building long-term finance and capital markets, through mobilization and allocation of stable and long-term savings to support investment, according to Making Finance Work for Africa. 

In a nutshell, according to Corporate Finance Institute, the pension fund is an endowment that accumulates capital to be paid out as a pension for employees when they retire at the end of their careers. 

In countries such as Tanzania, where pension funds are part of government lending, contributing at least 11.4 per cent of total investment by March 31, 2019, there is a glimpse of hope that …

African Development Banks (AfDB) one of Africa’s vibrant development funders have levitated the cold storage chain industry in East Africa, by supporting it with a $10 million equity investment.

According to the bank’s statement, AfDB’s board of directors approved the sum which is part of the ARCH Cold Chain Solutions East Africa Fund (CCSEAF), which is targeted at supporting the development, construction and operation of greenfield cold storage, temperature-controlled solutions and distribution facilities in East Africa.

At the moment, several startups and business solutions have been established across East Africa, tackling storage challenges, one of them is Cold Solutions East Africa, which is one of the region’s leading temperature-controlled storage and logistics.

Read: Will the digital economy in Africa just remain a myth?

AfDB is not the only financial institution to throw its resources into the cold storage arena, Rabobank is also dedicated to the same market in East Africa.…

As the world and the East African region continue to recover from different kinds of economic shocks triggered by Covid-19, inflation in Tanzania has also taken different turns. According to the review, in August 2021, twelve-month inflation remained at 3.8 per cent, which is noted to be the same, as the last month.

On the other side of the fence, the review showed that core inflation—of which its index calls of the largest share in consumer price index (CPI), rose to 4.5 per cent in August 2021 from 4.1 per cent in July 2021, this is attributed to the increase in transport costs, “reflecting an upward shift in fuel prices”.

Things seemed to work better in food inflation, whereby annual food inflation—excluding alcoholic beverages, slimmed down to 3.6 per cent from 5.1 per cent, the review argues that this is due to a decrease in prices of maize and maize …