Wednesday, July 24

Regional Markets

Comesa programme targets horticulture production in East Africa
  • Under a new COMESA programme, farmers in the five East African countries are expected to access quality seeds, and training on how to improve production and distribution.
  • The five-year programme is expected to help the countries cut post-harvest losses in horticulture to 40 per cent or lower, from highs of 60 per cent, for instance in Kenya. 
  • Agriculture is estimated to contribute on average 27% of the gross domestic product (GDP) in the EAC and accounts for the highest share of employment not only in the region but across Africa.

Agriculture is the backbone of nearly all East Africa region’s economies and the main economic activity for more than 70 per cent of the population. It is estimated to contribute on average 27 per cent of the gross domestic product (GDP) in the EAC and accounts for the highest share of employment not only in the region, but the African.…

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East Africa's economic growth
  • East Africa’s economic growth is projected to grow at 5.3 and 5.8 per cent in 2024 and 2025-26, respectively. 
  • The World Bank projects African economies to grow by 3.4 per cent in 2024.
  • However, faster and more equitable growth is needed to reduce poverty.

East Africa’s economic growth to lead the continent

Economies in East Africa are expected to spearhead growth in Sub-Saharan Africa this year amid increased private consumption and declining inflation, which are supporting an economic rebound in the region.

The World Bank’s latest Africa’s Pulse report indicates the East African Community is projected to grow at the fastest pace at 5.3 and 5.8 per cent in 2024 and 2025–2026, respectively, thanks to robust growth in the Democratic Republic of Congo, Kenya, Rwanda, and Uganda.

This is higher than the compounded growth for Sub-Sahara Africa, which, albeit rebounding from a low of 2.6 per cent in 2023, is …

petroleum exports
  • Kenya is keen on extending its pipeline to Malaba (Kenya-Uganda border), with Uganda expected to construct a link line to Kampala.
  • According to the Shippers Council of Eastern Africa (SCEA), Mombasa used to command up to 70% of transit business, but this has decreased to 60 per cent.
  • Uganda imports an average of 2.5 billion litres of petroleum annually, valued at about $2 billion, with KPC handling at least 90 per cent of the volumes.

Kenya is courting Uganda in a fresh bid to retain and possibly increase petroleum exports amid increased competition from neighbouring Tanzania. In recent months, East Africa’s economic powerhouse has come under pressure from Tanzania, which is eyeing to tap more transit markets for imports and exports into the hinterland through the Dar es Salaam Port.

In the latest developments, Tanzania has offered to license Uganda National Oil Company (UNOC) to import petroleum products through Dar …

Lake Tanganyika
  • Kalemie, on the DRC side of Lake Tanganyika, is a vital connection point, linking the DRC with regional ports such as Bujumbura, Burundi, Mpulungu, Zambia, and Kigoma, Tanzania.
  • Tanzania’s exports to Congo were worth about $280.54M in 2022, per the United Nations’ Comtrade Database of International Trade.
  • Lake Tanganyika, an important geographical feature that serves as a natural boundary between the two countries, plays a crucial role in this developing relationship.

The trade between the Democratic Republic of the Congo (DRC) and Tanzania is growing rapidly. Both countries have great potential for economic growth and development. Lake Tanganyika, an important geographical feature that serves as a natural boundary between the two countries, plays a crucial role in this developing relationship.

Trade Corridors and Infrastructure

One particularly important corridor for trade connecting these countries is the Central Corridor in Eastern Africa. It links the DRC, Rwanda, Burundi, Uganda, and Tanzania with …

family businesses
  • Most East African family businesses believe that it is essential to be trusted by customers, employees and family members. 
  • Among those who consider trust among each group important: 56% are fully trusted by customers, 47% are fully trusted by employees and 77% are fully trusted by family members.
  • East Africa’s level of trust is slightly higher than global survey on family businesses.

Family businesses in East Africa demonstrated robust performance over the past financial year, with 64 percent experiencing growth, compared to 46 percent in 2021, as indicated by a survey conducted by the advisory firm PwC. The PwC’s East Africa Family Business Survey 2023 affirms the resilience of family businesses, consistently overcoming geopolitical challenges.

Despite their success, experts emphasize that these businesses must adopt new priorities to ensure the longevity of their legacies. The landscape of building trust in business is undergoing a fundamental and rapid transformation. Environmental, Social,

Hollard International

South Africa-based insurer Hollard International has extended its footprint into East Africa. Hollard, a privately owned insurance, has struck a deal to acquire a stake in Apollo Investments Limited, the parent company of Kenya-headquartered APA Insurance.

This strategic investment, subject to regulatory approvals, gives Hollard International a presence in the East African market. The new acquisition supplements its existing operations in Southern and West Africa. Once approved, Hollard will become the second international investor in APA Insurance, following Swiss Re, which acquired a stake in 2014.…

Nigerian Naira currency
  • The sudden collapse of the Nigerian Naira versus the US dollar has caused widespread shock and alarm in the banking and investment industries..
  • Continued loss in value of the Naira poses huge repercussions for the entire 15-member ECOWAS bloc, not just Nigeria.
  • Many ECOWAS countries rely heavily on trade with Nigeria. When the value of the naira drops, the cost of importing products into Nigeria rises, and less money is available to spend on goods from other nations.

The sudden collapse of the Nigerian Naira versus the US dollar has caused widespread shock and alarm in the banking and investment industries. The effects of the currency exchange rate dropping to an all-time low on Nigeria’s economy and regional commerce are significant.

Current exchange rate of the Naira to the Dollar

The FMDQ, where foreign currency is legally sold through the NAFEM, reported an alarmingly low exchange rate of N999 for …

South Africa | Africa's biggest economy | Egypt's economy | South Africa's economy | Nigeria's economy

South Africa is set to topple Nigeria and Egypt as Africa’s biggest economy in 2024. This is according to forecasts from the International Monetary Fund. According to IMF’s World Economic Outlook, South Africa’s gross domestic product will reach $401 billion per current price in 2024. On the other hand, Nigeria’s GDP will reach $395 billion, with Egypt’s GDP reaching $358 billion.

South Africa, the continent’s most industrialised nation, is expected to maintain the top spot as Africa’s biggest economy for only one year. In 2025, the country will again lag behind Nigeria and fall to third place behind Egypt a year later. This is according to the IMF’s World Economic Outlook, a report released last week.…

EABL Profits
  • Counterfeits and the informal alcohol industry is increasingly eating into EABL’s mainstream market.
  • EABL net sales remained flat in the year at $769.5 million, impacted by thinning disposable incomes.
  • Uganda and Tanzania top line performance up 17% and 1% respectively, while Kenya declined by 4%.
  • EABL’s final dividend decreased by 50% from $0.077 paid in FY’22 to a total dividend of $0.039.

A tough macro environment in East Africa is to blame for subdued earnings posted by the East African Breweries (EABL) for the year ended June 2023. Higher excise taxes, rising cost of inputs and effects of the difficult macro-economic environment saw the regional brewer record mixed performance in Kenya, Tanzania and Uganda markets.

The Diageoowned biggest manufacturer of branded beer, spirits, and non-alcoholic beverages in East Africa reported a 21 per cent drop in net profit for the year. The giant brewer said its sales for …

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