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The Pan-African Economy in Brief: Wednesday, June 12, 2019

SOUTH AFRICA:
Moody's is lowering its growth forecast for South Africa in 2019 to 1%:
The financial rating agency Moody's announced in a research note published on June 10 that it had lowered its economic growth forecast for South Africa in 2019 to 1%, compared to an earlier estimate of 1.3%. "The decline in the country's GDP in the first quarter of this year has had a negative impact on the South African government's economic policy revenues and options," said Lucie Villa, Senior Analyst of South Africa's sovereign risk profile at the US agency, quoted in the report. "The contraction in GDP in the first quarter suggests low growth for the year as a whole," she added. The South African National Statistics Agency (Stats A) announced on June 4 that the rainbow nation's GDP declined by 3.2% in the first quarter of 2019, recording its worst contraction in ten years...


UGANDA:
$205 million for the rehabilitation of the Kampala-Malaba railway:
Uganda plans to invest $205 million to rehabilitate a former railway line linking the capital Kampala to Malaba, a city on the border with Kenya, reported the East African news website on June 9, citing a leader of the national railway company. "The rehabilitation of the old metric track railway line is expected to increase our monthly freight capacity from the current 20,000 metric tonnes to 120,000 metric tonnes by 2026," said Uganda Railways Corporation's CFO Stanley Sendegeya. The Kenyan authorities' decision to rehabilitate the ageing railway line follows the uncertainties surrounding the project for a standard gauge regional railway line...


KENYA:
The commercial bank Credit Bank wants to raise 2 billion shillings to strengthen its capital and support its activity:
Kenya's commercial bank Credit Bank Limited (CBL) will convene a general meeting on June 27, at which its shareholders will vote on a capital increase for an amount of 2 billion shillings (about $19.7 million), reports the Business Daily website. The proposed transaction will be a cash contribution, according to Kenyan media reports. Credit Bank will issue new shares that may be acquired by shareholders of the bank, or by other investors. If this decision is approved, Credit Bank Limited plans to use the financing raised to strengthen its share capital, which in December 2018 amounted to 2.7 billion shillings, and support its activity in the country...

The electricity from the Lamu coal-fired power plant (1,050 MW) could cost 10 times more than expected:
In Kenya, electricity production from the Lamu coal-fired power plant could turn out to be 10 times more expensive than its developers had predicted. This is stated in a report by the Cleveland-based Institute for Energy Economics and Financial Analysis (IEEFA). Based on current coal costs, the energy produced by the plant will sell for about 75 cents per kilowatt-hour, according to the organization, a cost ten times higher than the forecasts made by infrastructure developers. The coal costs taken into account by the project are no longer relevant. In addition, the power purchase agreement will result in the payment of annual royalties of at least $360 million, even if the plant does not produce electricity. "This amply justifies the cancellation of the project as a whole. ", concluded the report...


BURKINA FASO:
Cotton sector: Producers want to restore Burkina Faso's leadership in Africa:
This announcement follows a number of actions planned by the Burkinabe government to boost cotton production. Indeed, the 2017-2018 and 2018-2019 crop years ended in successive outperformances. This is reflected in the production level of 434,717 tonnes of seed cotton recorded for the 2018-2019 season, a decrease of around 29% compared to the 2017-2018 season. These underperformances have led to internal and external arrears and a sharp drop in cotton growers' incomes. It is in view of all these difficulties that the Board of Directors of the Union nationale des producteurs de coton du Burkina (UNPCB), accompanied by the provincial presidents, met twice with the heads of the cotton companies in order to anticipate and find appropriate solutions. "The Board of Directors also met with the President of Faso to discuss the difficulties faced by cotton producers since the 2017-2018 agricultural season," said Sibiri Dao, Secretary General of the UNPCB Board of Directors...