Rwanda, 6% growth prospects: The IMFon May 30th completed the first reviewunder the three-year policy supportinstrument (PSI) approved on Decem-ber 2nd, 2013. Following a slowdown in2013 characterized by a 4.6% growthrate, Rwanda’s growth prospects areprojected to improve to 6% in 2014,while inflation is expected to remainwell contained. Downside risks centrearound delays in government financedprojects and a weak second season foragriculture.

Looking ahead, the challenge is the cost-effective financing and implementationof the ambitious agenda embodied in thegovernment’s second Economic Devel-

opment and Poverty Reduction Strategy(EDPRS2). The authorities thus need toaccelerate their domestic revenue mobi-lisation efforts. Careful project selectionand prioritisation will be critical tocontain fiscal risks and maintain debtsustainability. (IMF 30/5)

Uganda, continuing robust growth: AnIMF mission visit for the Second Reviewof the PSI stated in mid-May that“despite a slowdown in agriculture andunrest in South Sudan, growth continuesto be robust, and is now projected toreach 5.7% in. . . 2013/14 and 6.1% in

2014/15, mainly supported by publicinvestment.” It warned that private sec-tor growth is lagging behind – at 5.4% in2014 and 5.7% in 2015. Medium-termgrowth prospects are strong, helped byintegration of the East African Commu-nity (EAC), infrastructure development,and oil production.

The Fund advocated restrained publicconsumption to create room forimproved credit conditions, laying theground for a rebound in private sectoractivity and increased attention to reve-nue mobilization. In addition, the gov-ernment’s plans to embark on the largeKaruma and Isimba hydropower pro-jects to address the large infrastructuregap should start without further delay.(IMF website 13/5)

NIGERIANew Central Bank Governor

An apolitical and people-focusedinstitution is promised.

The new governor of the Central Bankof Nigeria (CBN), Mr. Godwin Emefi-ele, on June 5th unveiled his blueprintaimed at growing the Nigerian economy,and pledged to create a central bank thatis professional, apolitical and peoplefocused.

Emefiele told journalists at the CBNheadquarters that he would repositionthe bank into an institution that wouldbuild a resilient financial system. Hisvision is “anchored on a 10-pointagenda, which will help the bank reducepoverty, create jobs and ensure macro-economic stability.”

The agenda is to pursue a gradualreduction in key interest rates andinclude the unemployment rate in mon-etary policy decisions; maintainexchange rate stability and aggressivelyshore up foreign exchange reserves; andstrengthen risk-based supervision mech-anism of Nigerian banks to ensureoverall health and banking stability.

It will also include building up sector-specific expertise in banking supervisionto reflect loan concentration of thebanking industry; to consider andannounce measures to effectivelyaddress the anomaly in macro-pruden-tial space; abolish fees associated withlimits on deposits and reconsider ongo-ing practice in which fees associated withlimits on withdrawals accrue to banksalone; to introduce a broad spectrum offinancial instruments to boost specificenterprise areas in agriculture, manufac-turing, health and oil and gas.

He promised to “establish a SecuredTransaction and National CollateralRegistry that will improve access to

Investing in Africa – ChangingTrends

International investors putting money inAfrica are increasingly looking beyond theoil and mineral sectors and Africa’s topeconomies as they hunt for new business,according to a report by Ernst & Young.

The London-based advisory firm’s surveyof more than 500 global business leadersshowed investors “are looking beyond themore established markets of South Africa,Nigeria and Kenya to expand their oper-ations.”

The number of projects in South Africaand Nigeria actually declined in 2013,while there were notable increases inGhana, Mozambique, Tanzania andUganda.

South Africa in particular has seen asignificant slowdown in economic growthin recent years, amid labour unrest, policyuncertainty and vast unemployment (seep. ???)

Mining and energy longer figure in the topten for number of investments as investorsmove “into more consumer-related sectorsas Africa’s middle class expands,” thereport said.

The largest number of projects were foundin technology, media and telecoms; retailand consumer products; and financialservices.

“Resource driven sectors are expected toremain the industries with the highestpotential over the next two years, theactual numbers show that infrastructureand consumer-facing sectors will increasein prominence as the middle class expandsand consumer spending on discretionarygoods increases,” said EY’s MichaelLalor.

According to the International MonetaryFund, (IMF) about 150m people can beconsidered firmly in the continent’s middleclass.

Ernst & Young reported most of theinvestments came from Britain, the UnitedStates and South Africa, with a “sharpuptick” in investments from Japan andSpain. (© AFP, Johannesburg 15/5 2014)

Mauritius

Malagasy Acquisition: A consortium, inwhich the Mauritian group CIEL Ltd. is amajority shareholder with 60%, in part-nership with Malagasy group First Immo,has acquired the BNI Madagascar Bank,PANA learnt on June 9th from officialsources in Port Louis. “We want tostrengthen our presence in the financialsector in Madagascar by investing in analready established bank,” said CIELExecutive Director, Jean-Pierre Da-lais.”We should stay focused on e-bankingby developing new tools and services thatfacilitate accessibility, simplicity, reliabil-ity and security,” Dalais declared.

BNI Madagascar has a network of 32agencies among which 14 are in Antanan-arivo and 51 Automatic Teller Machines(ATM). It employs 700 people.

The other partner, First Immo, belongs toa Malagasy businessman, HassaneinHiridjee, whose family had lived in Mad-agascar for five generations. It operates inthe sectors of infrastructure, mobile tele-phony, energy and distribution of petro-leum products, among others.

Islamic Banking: Mauritian Prime Minis-ter Navin Ramgoolam, said on May 21stthat Mauritius is poised to sustain andfurther develop a buoyant Islamic finan-cial services sector which will serve as anew frontier for the country and a bridgeto Africa.

Speaking at the 11th Islamic FinancialServices Board (IFSB) summit held atPointe aux Piments on the island, he saidIslamic investments across the world,totalled US$ 3trn, out of which only 1%was channelled into Africa.

The Bank of Mauritius (BOM) has au-thorised Habib Bank Ltd (HBL) to engagein Islamic banking side-by-side with itstraditional banking activities, officialsources said on May 23rd. BOM Gover-nor Rundheersing Bheenick said the Mau-ritian authorities relied on HBL todevelop Islamic finance in Mauritius.

The Bank of Mauritius and the CentralBank of Sudan have signed a Memoran-dum of Understanding (MoU) to cooper-ate in information sharing and supervisoryduties.

(PANA, Port Louis 21-23/5) IMF apprai-sal p. 20386

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© 2014 John Wiley & Sons Ltd.

20422 – Africa Research Bulletin