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After COVID-19, what will Africa look like in 2030 and 2063?
April 14, 2020 | 0 Comments

By Banji Oyelaran-Oyeyinka*

Participant leaders take part in a family photo at the African Union headquarters during the 33rd African Union Heads of State Summit in Addis Ababa, Ethiopia on February 09, 2020.
Participant leaders take part in a family photo at the African Union headquarters during the 33rd African Union Heads of State Summit in Addis Ababa, Ethiopia on February 09, 2020.
African leaders need to look in the mirror and ask where this continent will be in 2030 and 2063

The COVID-19 pandemic, one of the world’s most significant events, has resulted in cessation of economic activities that will lead to a significant decline in GDP, an unprecedented social disruption, and the loss of millions of jobs. According to estimates by the African Development Bank, the contraction of the region’s economies will cost Sub-Saharan Africa between $35 billion and $100 billion due to an output decline and a steep fall in commodity prices, especially the crash of oil prices.

More fundamentally, the pandemic has brutally exposed the hollowness of African economies on two fronts: the fragility and weakness of Africa’s health and pharmaceutical sectors and the lack of industrial capabilities. The two are complementary.

This is because Africa is almost 100 percent dependent on imports for the supply of medicines.

According to a recent McKinsey (2019) study, China and India supply 70 percent of Sub-Saharan Africa’s demand for medicine, worth $14 billion. China’s and India’s markets are worth $120 billion and $33 billion respectively. Consider a hypothetic situation where both India and China are unable or unwilling to supply the African market? Africa surely faces a health hazard.

The root of Africa’s underdeveloped industrial and health sectors can be encapsulated in three ways. First, some African policy makers simply think that poor countries do not need to industrialize. This group believes the “no-industrial policy” advocates who engage in rhetoric that does not fit the facts. The histories of both Western societies, and contemporary lessons from East Asia, run contrary to that stance.

Clearly, governments have an important role to play in the nature and direction of industrialization. Progressive governments throughout history understand that the faster the rate of growth in manufacturing, the faster the growth of Gross Domestic Product (GDP).

From the Economist magazine five years ago: “BY MAKING things and selling them to foreigners, China has transformed itself—and the world economy with it. In 1990 it produced less than 3% of global manufacturing output by value; its share now is nearly a quarter. China produces about 80% of the world’s air-conditioners, 70% of its mobile phones and 60% of its shoes. Today, China is the world’s leader in manufacturing and produces almost half of the world’s steel.” The keyword is “making”.

Two, rich countries therefore became rich by manufacturing and exporting to others, including high-quality goods and services. Poor African countries remain poor because they continue to produce raw materials for rich countries. For example, 70% of global trade in agriculture is in semi-processed and processed products. Africa is largely absent in this market while the region remains an exporter of raw materials to Asia and the West.

Lastly, African countries are repeatedly told that they cannot compete based on scale economy, and as well, price and quality competitiveness because China will outcompete them. For this reason, they should jettison the idea of local production of drugs, food and the most basic things.

The question is: How did Vietnam, with a population of 95 million, emerge from a brutal 20-year war and lift more than 45 million people out of poverty between 2002 and 2018 and develop a manufacturing base that spans textiles, agriculture, furniture, plastics, paper, tourism and telecommunications? It has emerged as a manufacturing powerhouse, becoming the world’s third-largest exporter of textiles and garments (after China and Bangladesh).

Vietnam currently exports over 10 million tonnes of rice, coming third after India and China.

How is it that Bangladesh, a country far poorer than many African countries, is able to manufacture 97% of all its drugs demand, yet it is next door to India, a powerhouse of drug manufacturing?

The COVID-19 pandemic has exposed Africa. African leaders need to look in the mirror and ask where this continent will be in 2030 and 2063. Africa must adopt progressive industrial policies that create inclusive, prosperous and sustainable societies.

What then should be done? A three-pronged approached is urgently needed.

First, Africa needs a strong regional coordination mechanism to consolidate small uncompetitive firms operating in small atomistic market structures. With a consumer base of 1.3 billion and $3.3 trillion market under the African Continental Free Trade Area (AfCFTA), the continent has no choice but to bring together its fragmented markets.

Second, Africa needs to build better institutions, strengthen weak ones and introduce the ones missing. No better wake-up call is required than the present pandemic.

Third, one important institution that has been abruptly disrupted is the supply chain for medicines and food, for example. Logistics for transporting capital and consumer goods across the region need predictable structures. Building or strengthening supply chains involve fostering and providing regulations for long-term agreements and competences that leverage both private and public institutional challenges such as customs regulations.

Finally, development finance institutions (DFIs) such as the African Development Bank are mandated to, and are currently, trying to fill the gaps left by private financial institutions. There is an opportunity to Africa to rethink and reengineer its future. The Africa of tomorrow must look inwards for its solutions. – whether in feeding its own people, build industrial powerhouses led by African champions.

The African Development Bank stands ready to help target and push for deeper economic transformation. Africa needs to execute structurally transformative projects that generate positive externalities and social returns. Keep our eyes on the days after.

*Source AFDB.Professor Banji Oyelaran-Oyeyinka, is the Senior Special Adviser on Industrialization to the President of the African Development Bank. He is a fellow of the Nigerian Academy of Engineering and Professorial Fellow, United Nations University. His recent book is “Resurgent Africa: Structural Transformation and Sustainable Development”, UK: Anthem Press, 2020.
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Kagame’s former bodyguard’s commander faces new escape attempt charges
April 10, 2020 | 0 Comments
Byabagamba (left) faces new escape attempe charges
Byabagamba (left) faces new escape attempe charges

Former President Paul  Kagame bodyguards’s Commander, Colonel Tom Byagamba  Force will  be arraigned  again  before military courts for additional charges alleged to have  committed while in detention.

 Rwanda Defence Force has announced that Col Byabagamba is suspected of criminal activities related to attempt to commit corruption and attempt to escape from a prison.

Suspected criminal activities committed by Colonel Tom BYABAGAMBA and his inside and outside accomplices are being thoroughly investigated.

“The RDF reassures the public that justice will take its course and will not tolerate any person who violates the law and RDF ethics and values”, the announcement reads

Col Tom BYABAGAMBA was arrested on August 24, 2014. On 27 December 2019, the Court of Appeal sentenced him to an imprisonment of 15 years and stripping off his military ranks.

He was found guilty of inciting insurrection or trouble amongst the population; tarnishing, as a leader, the image of the country or Government; wilfully concealing objects that would facilitate the execution of a crime; and contempt of the national flag.

Byabagamba, who once headed the Republican Guards together with his co-accused Brigadier General Frank Rusagara have recently appealed to the East African Court of Justice (EACJ) seeking to challenge their continued detention wich they call ‘illegal’.

Their appeal is yet to be heard by the East African Court of Justice.

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Oil Industry Welcomes Re-Appointment of H.E. Diamantino Pedro Azevedo in Angola
April 9, 2020 | 0 Comments
Diamantino Azevedo

The industry has welcomed the Minister’s reappointment and the continued confidence and trust placed on him by President João Lourenço

LUANDA, Angola, April 8, 2020/ — The Angolan and African energy industry has welcomed the reappointment of Diamantino Pedro Azevedo as Minister of Mineral Resources, Petroleum and Gas of the Republic of Angola by President João Lourenço today.

The industry has welcomed the Minister’s reappointment and the continued confidence and trust placed on him by President João Lourenço. Diamantino Pedro Azevedo was first appointed in September 2017, and has since then overseen a complete regulatory overhaul of Angola’s oil & gas sector. This notably includes new frameworks for marginal fields development, gas developments, licensing rounds and domestic capacity building.

“Minister Diamantino Pedro Azevedo has always ensured that our industry has a strong voice in Angola, Africa and across the world. We have seen him advocating for our interests and those of the continent at OPEC, and ensuring that our positions are heard and respected,” stated Sergio Pugliese, President for Angola at the African Energy Chamber. “Meanwhile, his support for a stronger industry dialogue between local companies, international oil companies and state institutions has renewed interest into major projects across the value-chain in Angola. We are delighted to see him continue leading our industry,” concluded Mr. Pugliese.

Under the leadership of President João Lourenço, Diamantino Pedro Azevedo has been a champion of key industry reforms in Angola, and managed to put back Angola’s oil & gas sector on track. The country has renewed its collaboration with all major investors over the past few years, including Total, Eni, BP and Chevron. Renewed engagement has translated into new discoveries, new final investment decisions and new fields being brought on stream.

At the end of 2017 for instance, Angola agreed on the contractual conditions for the development of Total’s Zinia Phase 2 development and its entry into block 48 with Sonangol. The negotiations resulted in the FID on the $1.2bn Zinia Phase 2 deep offshore development in May 2018, and the extension of the block’s license until 2045. Total also eventually started up production of Kaombo in Block 32 in July 2018 with the bringing on stream of the Kaombo Norte FPSO, followed by that of Kaombo Sul in April 2019. In December 2019, the French major further acquired interest in Blocks 20/11 and 21/09 on the back of more attractive fiscal and regulatory terms.

The same goes for BP, who signed an agreement with Sonangol in 2018 paving the way for an FID on the Platina field development in Block 18 and the extension of the bloc’s license until 2032. Finally, Angola formed a Natural Gas Consortium joint-venture last year with Eni, Chevron, Total and BP to to invest $2bn in gas exploration and LNG development projects and ensure supplies to the Soyo LNG plant.

*Source Africa Energy Chamber

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Rwanda: Government officials donate salaries to the fight of COVID-19
April 6, 2020 | 0 Comments

By Maniraguha Ferdinand

President Kagame (left) chatting with Prime Minister Edouard Ngirente during National Retreat
President Kagame (left) chatting with Prime Minister Edouard Ngirente during National Retreat

Government officials in Rwanda have agreed to donate their April salaries to help in the fight against coronavirus.

Their pledge comes when Rwanda registers 104 confirmed cases of coronavirus, in which four people were recovered and discharged as of Sunday.

A statement that came from Prime Minister’s office this Sunday, 5th April 2020 said that government officials ‘salaries will be forfeited, and be used in ongoing social protection initiatives.

“In the context of the fight of against COVID-19, and in the solidarity with the most affected Rwandans , the Government of Rwanda has decided over and above ongoing social protection initiatives, that all cabinet members, Permanent secretaries , Heads of Public institutions and other senior officials shall forfeit one month salary (April”, the statement said.

Rwanda is in a lockdown that is set to end by 19th April 2020. Life is hard for those who would get a meal because they have worked.

Government have set up a relief fund that help in distributing  food for the most vulnerable during the lockdown.

In late March during a national address, President Paul Kagame promised that government will do everything possible to support Rwandans “through this challenging time”.

“We know that this is not an easy period for most Rwandans, whose livelihoods have been interrupted across the country. But we ask you to be patient. Although we are making good progress, we cannot afford to relax yet,”  he said.

Citizens around the country were later  mobilized to help their neighbors during this difficult time.

Kigali Roman Catholic archbishop, Monsignor Kambanda Antoine on Sunday urged Christians around the country to share food with the most vulnerable as they move in a holly week  preceding Easter celebrations.

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Opinion: The pandemic is no time for fiscal distancing
April 4, 2020 | 0 Comments

By Akinwumi Adesina*

Akinwumi Adesina is the President of the African Development Bank

CNN)These are very difficult days, as the world faces one of its worst challenges ever: the novel coronavirus pandemic. And it seems almost no nation is spared. As infection rates rise, so does panic across financial markets, as economies drastically slow down and supply chains are severely disrupted. 

Extraordinary times call for extraordinary measures. As such, it can no longer be business as usual. 

Each day, the situation evolves and requires constant reviews of precautionary measures and strategies. In the midst of all this, we must all worry about the ability of every nation to respond to this crisis. And we must ensure that developing nations are prepared to navigate these uncharted waters fully

That’s why I support the UN Secretary-General Antonio Guterres’ urgent call for special resources for the world’s developing countries. 

In the face of this pandemic, we must put lives above resources and health above debt. Why? Because developing economies are the most vulnerable at this time. Our remedies must go beyond simply lending more. We must go the extra mile and provide countries with much-needed and urgent financial relief — and that includes developing countries under sanctions. 

According to the independent, global think tank ODI in its report on the impact of economic sanctions, for decades, sanctions have decimated investments in public health care systems in quite a number of countries.

Today, the already stretched systems as noted in the 2019 Global Health Security Index will find it difficult to face up to a clear and present danger that now threatens our collective existence.

Only those that are alive can pay back debts.  

Sanctions work against economies but not against the virus. If countries that are under sanctions are unable to respond and provide critical care for their citizens or protect them, then the virus will soon “sanction” the world.

In my Yoruba language, there is a saying. “Be careful when you throw stones in the open market. It may hit a member of your family.”  

That’s why I also strongly support the call by the UN Secretary-General that debts of low-income countries be suspended in these fast-moving and uncertain times. 

But I call for even bolder actions, and there are several reasons for doing so. 

First, the economies of developing countries, despite years of great progress, remain extremely fragile and ill equipped to deal with this pandemic. They are more likely to be buried with the heavy fiscal pressure they now face with the coronavirus. 

Second, many of the countries in Africa depend on commodities for export earnings. The collapse of oil prices has thrown African economies into distress. According the AFDB’s 2020 Africa Economic Outlook, they simply are not able to meet budgets as planned under pre-coronavirus oil price benchmarks.

The impact has been immediate in the oil and gas sector, as noted in a recent CNN news analysis.

In the current environment, we can anticipate an acute shortage of buyers who, for understandable reasons, will reallocate resources to addressing the Covid-19 pandemic. African countries that depend on tourism receipts as a key source of revenue are also in a straightjacket. 

Third, while rich countries have resources to spare, evidenced by trillions of dollars in fiscal stimulus, developing countries are hampered with bare-bones resources. 

The fact is, if we do not collectively defeat the coronavirus in Africa, we will not defeat it anywhere else in the world. This is an existential challenge that requires all hands to be on deck. Today, more than ever, we must be our brothers and sisters’ keepers.  

Around the world, countries at more advanced stages in the outbreak are announcing liquidity relief, debt restructuring, forbearance on loan repayments, relaxation of standard regulations and initiatives.

In the United States, packages of more than $2 trillion have already been announced, in addition to a reduction in Federal Reserve lending rates and liquidity support to keep markets operating. In Europe, the larger economies have announced stimulus measures in excess of 1 trillion Euros. Additionally, even larger packages are expected. 

As developed countries put in place programs to compensate workers for lost wages for staying at home for social distancing, another problem has emerged — fiscal distancing.

Think for a moment what this means for Africa. 

The African Development Bank estimates that Covid-19 could cost Africa a GDP loss between $22.1 billion, in the base case scenario, and $88.3 billion in the worst case scenario. This is equivalent to a projected GDP growth contraction of between 0.7 and 2.8 percentage points in 2020. It is even likely that Africa might fall into recession this year if the current situation persists.

The Covid-19 shock will further squeeze fiscal space in the continent as deficits are estimated to widen by 3.5 to 4.9 percentage points, increasing Africa’s financing gap by an additional $110 to $154 billion in 2020. 

Our estimates indicate that Africa’s total public debt could increase, under the base case scenario, from $1.86 trillion at the end of 2019 to over $2 trillion in 2020, compared to $1.9 trillion projected in a ‘no pandemic’ scenario. According to a March 2020 Bank report, these figures could reach $2.1 trillion in 2020 under the worst case scenario.

This, therefore, is a time for bold actions. We should temporarily defer the debt owed to multilateral development banks and international financial institutions. This can be done by re-profiling loans to create fiscal space for countries to deal with this crisis.  

That means that loan principals due to international financial institutions in 2020 could be deferred. I am calling for temporary forbearance, not forgiveness. What’s good for bilateral and commercial debt must be good for multilateral debt.

That way, we will avoid moral hazards, and rating agencies will be less inclined to penalize any institution on the potential risk to their Preferred Creditor Status.  The focus of the world should now be on helping everyone, as a risk to one is a risk to all.

There is no coronavirus for developed countries and a coronavirus for developing and debt-stressed countries. We are all in this together.  

Multilateral and bilateral financial institutions must work together with commercial creditors in Africa, especially to defer loan payments and give Africa the fiscal space it needs.

We stand ready to support Africa in the short term and for the long haul. We are ready to deploy up to $50 billion over five years in projects to help with adjustment costs that Africa will face as it deals with the knock-on effects of Covid-19, long after the current storm subsides. 

But more support will be needed. Let’s lift all sanctions, for now. Even in wartime, ceasefires are called for humanitarian reasons. In such situations, there is a time to pause for relief materials to reach affected populations. The novel coronavirus is a war against all of us. All lives matter.

For this reason, we must avoid fiscal distancing at this time. A stitch in time will save nine.  

Social distancing is imperative now. Fiscal distancing is not. 

*Akinwumi Adesina is the President of the African Development Bank. He was formerly Nigeria’s Minister of Agriculture and Rural Development and and is the 2017 World Food Prize laureate. The views expressed are solely those of the author. Click here to read the full OpEd on CNN.com

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COVID-19: Samuel Eto’o, Didier Drogba and others hit out at using Africa as “Guinea pigs” to test Potential Vaccine
April 3, 2020 | 0 Comments

By Boris Esono Nwenfor

L-R Samuel Eto'o and Didier Drogba blast calls for the test of a potential vaccine for the deadly coronavirus to be carried out in Africa
L-R Samuel Eto’o and Didier Drogba blast calls for the test of a potential vaccine for the deadly coronavirus to be carried out in Africa

Four times African Player of the Year, and Cameroon great, Samuel Eto’o Fils and Ivorian Legend Didier Drogba have both hit out at “racist” and “contemptuous” calls made by two doctors on French TV calling for the test of a potential vaccine for the deadly coronavirus to be carried out in Africa.

A video of the doctors’ comment was posted on Twitter by Senegalese forward and Former Newcastle and Chelsea player Demba Ba

Demba Ba wrote: “Welcome to the West, where white people believe themselves to be so superior that racism and stupidity become commonplace. TIME TO RISE

There are ongoing studies on the possibility of using the BCG vaccine that has previously been used for Tuberculosis, as a possible preventive vaccine for the coronavirus.

“If I can be provocative, shouldn’t we do this study in Africa where there are no masks, no treatment, and no resuscitation? Professor Jean-Paul Mira, Head of the intensive care unit at the Cochin Hospital in Paris asked on French TV.

“The same as for some AIDS studies where prostitutes try things because we know they are unprotected,” He added

Professor Camille Locht replied: “You are right. We are currently thinking in parallel about a study in Africa to make this same type of approach with the BCG.”

“There is a tender process that has gone out or is going to go out. We will seriously think about that. That doesn’t prevent us from thinking in parallel about a study in Europe, and Australia,” He added

Multiple awards winner Samuel Eto’o vented out his anger as he replied to Ba’s video on Twitter as he held nothing back. “Sons of Bitches,” He said.

“You are SH*T. Africa isn’t yours to play with,” the former Real Madrid, FC Barcelona, Chelsea player said on Instagram.

Two-time African player of the year winner Didier Drogba equally vented out his frustration as he called the comments “absurd” while advocating against the use of Africa as “guinea pigs.”

“It is inconceivable that we continue to accept this,” Drogba wrote on Twitter. “Africa is not a laboratory. I strongly denounce this racist and contemptuous remark.” “Help us safe lives in Africa, and stop the spread of this virus which is destabilizing the whole world, instead of considering us as guinea pigs. It is absurd.”

He went on to add: “African leaders have the responsibility to protect their people from these heinous plots.”

Scientists across the globe are in a race against time to produce a vaccine for the coronavirus. Health specialist note that it could take 12 to 18 months before a vaccine is produce as it has to go through various tests before it is certified.

Dr Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases, said earliest the US could possibly get a vaccine would be in 12 or even 18 months — “at least.”

40 vaccines for the coronavirus are in development right now, according to the World Health Organization. A number of labs have begun human trials.

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Nigerian Senators will Donate 50% of Salaries for COVID-19 Fight until country is declared Coronavirus-free
April 2, 2020 | 0 Comments

By Amos Fofung

Senators in the federal republic of Nigeria have agreed to contribute 50% of their salaries to support the efforts being made to contain the spread and treatment of COVID-19 victims in the country. 

Over 140 confirmed cases have been reported in Nigeria, Africa’s largest economy.

Acting Spokesman of the Senate, Godiya Akwashiki, made public the decision adding that the contributions by senators will only end after the country has been declared free of the deadly coronavirus.

“This monthly contribution from the Upper Legislative Chamber will be sustained until the country is declared free from the deadly virus.

“The Senate commends efforts of President Muhammadu Buhari and the administration towards securing our nation against this plague. The Senate is willing and ready to do whatever is required for the effectiveness of the measures in place now or that may be required in future to win the fight against this menace.

“The Senate commends all agencies at the Federal and state levels for working together to protect public health in the country. It also acknowledges the patriotic response of public-spirited individuals and organizations’, who have contributed in one way or the other to support this fight,” the statement reads.

This comes after the federal government of Nigerian approved a 10 billion Naira grant (about $27 million) to fight the spread of coronavirus, or COVID-19, in the country.

Nigerian and some organizations, including banks, have also donated billions of Naira to help fund medical centers and provide essential materials necessary to curtail the spread of coronavirus in the country.

The United Bank for Africa, UBA, announced a donation of 5 billion Naira (about $13 million) to provide beds for isolation centers, intensive care unit facilities and direct access to medical advice to up to 450,000 citizens every day.

Some billionaires among them, Femi Otedola, Abdulsamad Rabiu, Herbert Wigwe, Segun Agbaje and Aliko Dangote, Africa’s richest man, all contributed 1 billion Naira (about $2.7 million) each to support the government in curtailing the pandemic as Nigeria gears up in its fight against the pandemic.

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Rwanda extends lockdown by 15 days to contain coronavirus
April 2, 2020 | 0 Comments

By Maniraguha Ferdinand

Kigali roads that used to be busy are empty during lockdown
Kigali roads that used to be busy are empty during lockdown

The Government of Rwanda has extended lockdown period by 15 days, to further contain the spread of COVID-19.

By Wednesday, 1 April 2020 Rwanda had the highest number of cases of COVID-19 in East Africa, with 82 confirmed cases.

The initial lockdown period Government set would last until the  4th April 2020.

In a special cabinet meeting chaired by President Paul Kagame via video conference on 1st April, decided to extend the lockdown.

Statement released after the meeting, said that borders are to remain closed except for goods and cargo.

Travel between different cities and districts of the country is not permitted  except for medical reasons or essential services. Shops and markets are closed except for those selling foods, medicine, hygiene and cleaning products and fuel.

Farming will continue preparation for the ongoing agricultural season  while observing the guidelines from health authorities.

Schools and higher education institutions (both public and private) will remain closed.

Employees of both public and private institutions will to continue using technology to work from home with the exception of those working in essential services.

The statement also banned  motorcycles  to carry passengers. Bars are closed and restaurants will be providing take away services only.

Government of Rwanda had started distributing foods to the needy families during the lockdown, and those who would eat because they have gone to work.

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Angola, Senegal, Cameroon, Ghana and Nigeria among the most hard hit amid Covid-19 and oil price plunge
March 31, 2020 | 0 Comments
Offshore oil rig worker prepare tool and equipment for perforation oil and gas well at wellhead platform. Making up a drill pipe connection. A view for drill pipe connection from between the stands.

The African Energy Chamber analyses the most vulnerable African countries amid the Covid-19 pandemic and low oil price.

JOHANNESBURG, South Africa, March 31, 2020/ — Angola revises national budget and suspends CAPEX; Senegal’s first oil development faces debt arrangement challenges; Nigeria poised for a major revenue loss; Analysts predict Ghana will get half its projected revenue; Cameroon can expect to see a three percent drop in economic growth.

African oil-producing and reliant countries have been among the most hard hit by the COVID-19 pandemic and declining oil price. In particular, Senegal, Nigeria and Angola continue to face new challenges each day amid the threat of economic fallout.

Angola

In 2020, the Angolan government led by H.E. President João Lourenço, had set out to focus on economic diversification and uplift the country from nearly five years of recession. However, in the face of the oil price slump, the oil-reliant country has slowed the implementation of its planned economic reform strategy, which had included the privatization of state-owned companies and plans to reduce public debt to less than 60 percent of GDP by 2022 from approximately 90 percent in 2018 and, over 100 percent in 2019.

In response to the current market instability, the Angolan government which relies heavily on oil revenue has declared a state of emergency and made the decision to review its national budget. With this, it will object its budget on a reference oil price of $35 per barrel maximum – a significant cut from the initially drawn up $55 per barrel, Finance Minister Vera Davis de Sousa revealed on Friday, explaining that the country’s oil production is expected to tumble to 1.36 million barrels per day(bpd).

Further, Davis de Sousa shared that Angola would also be freezing 30 percent of its goods and services budget and its CAPEX would be suspended pending completion of the budget review. Meanwhile, the Angolan sovereign wealth fund has agreed to offer $1.5 billion on condition of future repayments through increased tax in the Bank of Angola’s growing debts.

“In this time, the Angolan economy will be best served by swift government action,” said NJ Ayuk, Executive Chairman of the African Energy Chamber. “With the finance minister already confirming that the country’s economy will shrink by 1.21 percent this year, signally a fifth year of recession, Angola needs a solid action plan that involves intense renegotiation strategies with domestic and foreign creditors, if it is to make it out on the other side,” he added.

Senegal

Since discovering oil and gas in 2014, the West African country emerged as a major player in the global oil and gas industry, with it moving rapidly on setting up a new Petroleum code in 2019, creating new entities such as COS-Petrogaz and revising local content regulations. As a result, the country has enjoyed increased foreign investment and entry of international majors. However, global market turbulence has had a hard knock-on effect on Senegal’s promising oil future.

In particular, the country’s first oil development, the $4.2 billion Sangomar deepwater offshore project has suffered immense pressure as project partner FAR Ltd fails to finalize debt arrangements. Citing current environment as a major contributor, FAR said: “the company’s ability to close the Sangomar Project debt arrangements that were ongoing during this time have been compromised such that the lead banks to the senior facility have now confirmed that they cannot complete the syndication in the current environment,” adding that neither the junior nor mezzanine facilities that were being arranged will be able to be completed for the foreseeable future. Project operator, Woodside and partner Cairn, continue to explore other options to see through project development.

The current global environment also stands to slow down the country’s other activities in the sector specifically, the country’s first offshore licensing round which was launched earlier this year by the national oil company, PETROSEN as a means to further push the countries exploration and production.

Though the government is yet to share incentives for companies to continue activities, it has set up a fund to support the local economy.

“Senegal is undoubtedly one of the most promising oil and gas producers Africa has to offer. Led by H.E. President Macky Sall, the country is primed for new growth and investment. Despite what is happening in the global market, we hope to see Senegal build on its eight oil and gas discoveries, and enjoy first oil from the Sangomar oil field and first gas from BP’s Greater Tortue Ahmeyim LNG project,” said NJ Ayuk, Executive Chairman of the African Energy Chamber.

As it stands, Senegal has also seen Cairn Energy reduce its planned investment to below $330 million from the initial forecast of $400 million.

Nigeria

Nigeria is projected to suffer substantial revenue losses. With it having planned for an oil  price of $57 in 2020, the low oil price presents massive struggles for Africa’s largest oil producer. To this point, Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari said at a crude oil price of $22 per barrel, high-cost oil producers like Nigeria should count themselves out of the business.

To this, the Atlantic Council has predicted that COVID-19 would cause the country to suffer the biggest lost in the continent with $15.4bn, representing about 4% of the nation’s GDP, a fair assessment considering the country has over $58bn in oil projects set to suffer delays or cancellations.

Though the country is yet to announce incentives for continued oil exploration and production, it is set on protecting its oil production which contributes generously to its economy. Specifically, the country’s petroleum regulator has, according to Reuters, ordered oil and gas companies to reduce their offshore workforce and move to 28-day staff rotations in order to avoid the spread of coronavirus.

“Nigeria is at risk to suffer the biggest loss. With the low oil price pushing the country to cut its budget and companies to reduce their CAPEX, the global is waiting to see Nigeria’s next move,” said NJ Ayuk, “Although it is hard to see the light for Nigeria, with the commitment of companies and resilience of the government, the country can certainly weather the storm, “ he added.

Ghana

The fall in oil prices coupled with COVID-19 has also had heavy impacts on Ghana’s oil industry, which has been on a path of steady growth for over 10 years since Kosmos Energy’s oil discovery west of Cape Three Points in the country’s offshore. And, more recently, Springfield Group’s historic 1.5 billion barrels.

Having set a benchmark of $58.66 oil price per barrel until the end of 2020, Ghana’s projected oil revenue is set to take a hit, with analysts already predicting the country will get half its projected revenue.

Oil production activity is also expected to see delays as Tullow Oil revises production targets and terminates the drilling contract with Maersk Drilling for the Maersk Venturer drillship offshore Ghana.

“If prices should stay around the US$30 mark, then the government is less likely to get half of the revenue that it projected. Already, we’ve seen Tullow cut back it’s production. So aside the international fall in crude oil price that we have to match with in selling our own bit of oil that we get as a country, production is also falling in our own shores,” said Paa Kwasi Anamua Sakyi, Executive Director at the Institute for Energy Security.

Cameroon

According to an analysis of the economic and financial impacts released by the Press Secretariat of the CEMAC Economic and Financial Reforms Programme, Cameroon can expect a three percent drop in growth in light of the global crisis.

Operations in the oil also stand to be affected with the country already seeing a turn. Specifically, with companies such as Tower resources declaring force-majeur on its development in the Thali block in the country’s offshore. The company also revealed that activity on the NJOM-3 offshore well may also be suspended.

Although the government has not announced any incentives for continued activity in the sector, it has acknowledged the non-oil commodities that will contribute the most to the country’s economic decline.

Now is an extremely challenging time for African oil development, the African Energy Chamber encourages Africa’s oil producing countries to adapt to the changes, implement incentives and plan for the future. This global crisis can only be worked through with continued commitment, support and collaboration.

*Africa Energy Chamber

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Gambian leader Describes New Constitution as All-inclusive
March 31, 2020 | 0 Comments

By Bakary Ceesay

President Adama Barrow

State House, Banjul, March 30, 2020 – President Adama Barrow has said that the new Constitution, premised on strong foundations and all-inclusiveness, will provide a safe haven for all citizens to enjoy the path to peace, freedom and prosperity.

The President made this remark in receiving the draft new Constitution presented by the Constitutional Review Commission (CRC) at the State House on Monday.


The drafting process took the 11-member Commission, headed by Justice Cherno Jallow, under two years to consult, draft, review and submit a validated new Constitution to His Excellency, President Adama Barrow.

The exercise was meant to provide Gambians with a constitutional framework to enjoy their rights as citizens of the country.

Constitution Review commission team with Barrow

“This springs off from the belief that every Gambian should comfortably relate to the Constitution, and that our institutions must be structured for sustained performance,” President Barrow said at a ceremony attended by Speaker of the National Assembly, Chief Justice of The Gambia and a cross section of Cabinet Ministers.

He added that it would promote and nurture best practices, as well as to maintain the country’s values as a nation.

“Accommodating our diversity allows us all to enjoy the fundamentals of democracy, freedom and the rule of law,” he maintained, noting that the new Constitution will allow Government to focus on development, and create the environment for all to enjoy their citizenship and realise their full potentials.

The Attorney General and Minister of Justice, Abubacarr Tambadou described the submission of the new Constitution by the CRC as progress that is “most profound and satisfying” for him.

He said a number of Bills tabled before the National Assembly for enactment, on top of this new Constitution, will radically transform the legal landscape of the country, particularly with respect to the country’s criminal justice system.

“[It] marks another fulfilled promise to the people of this country. You promised a new Constitution within two years and you have delivered on your promise. It is now up to us, the Gambian people, to uphold our part of the bargain,” Aboubacarr Tambadou said.

Justice Jallow, Chairperson CRC

In June 2018 the eleven-member Constitutional Review Commission was sworn into office and mandated to execute their assignment in two phases: First, to review the 1997 Constitution of the Republic of The Gambia and write a new Constitution; second, to prepare a report with regard to the new Constitution.

The CRC Chairperson, Justice Cherno Jallow reported that they adhered to these statutorily established functions and exercised their discretionary powers “in a fair and balanced manner”, bearing in mind at all times matters that it considered to be in the best interest and future of The Gambia.

“Constitution-building is a serious business,” said Chairman Jallow. “But it is also a herculean task, especially when the drafters of the new Constitution are confronted with tons of wishes and aspirations for inclusion in that Constitution,” he added.

Mr. Jallow said when President Barrow tasked them to review the 1997 Constitution, he was emphatic about the need to develop a Constitution that will serve the test of time. Hence they were grateful to be given both the strength and the commitment to achieve this for their country and as their leader expected of them.

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Equatorial Guinea shortlists companies for Key Energy Projects under its Year of Investment
March 30, 2020 | 0 Comments
Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons.
The decision was adopted during a meeting on March 19th, 2020

MALABO, Equatorial Guinea, March 30, 2020/ — The Board of Directors of the Ministry of Mines and Hydrocarbons (MMH) of Equatorial Guinea has selected and revealed the key companies shortlisted for the execution of its landmark projects under its ongoing Year of Investment. The decision was adopted during a meeting on March 19th, 2020.

At Punta Europa, where most of Equatorial Guinea’s gas and energy activities are currently located, the country is building a modular refinery, storage tanks and a methanol-to-derivatives plant. Interested companies for the modular refinery include American oil company Marathon Oil, a Spanish-Russian consortium of Selquimica International with Engineering and Energy, and British company Rosslyn Energy.

The latter is also interested in the development of the Storage Tanks, along with British company Orange Resources Worldwide and the China Communications Construction Company.

Finally, the Methanol-to-Derivatives project has attracted the interest of South African company Pan African Energy, Nigerian company Bugabi Group, and Danish catalysis company Haldor Topsoe.

At Kogo South of the nation’s economic capital Bata, the second Modular Refinery project has attracted the interest of Egyptian company Petrojet, British company Rosslyn Energy, the Spanish-Russian consortium of Selquimica International with Engineering and Energy, and UAE-based SDLE International DMCC. Meanwhile, South African company Grindstone Resources and Omani company MSS LLC are both shortlisted for the gold refinery project and the Minerals Industrial Zone.

While the MMH is still registering interest from additional players, including Chinese companies, these are the shortlisted potential investors for these projects so far.

“Equatorial Guinea has postponed most investment conferences under its Year of Investment in 2020 due to the ongoing pandemic of coronavirus, but we keep working with our team and our partners on having all these projects break ground as soon as possible. These are landmark infrastructure development projects that will ensure the sustainable growth of our hydrocarbons and minerals industry, create jobs and generate income for the state and citizens for decades to come,” commented H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons.
*African Energy Chamber

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African Development Bank launches record breaking $3 billion “Fight COVID-19” Social Bond
March 27, 2020 | 0 Comments

Landmark transaction,largest US dollar denominated Social bond transaction to date in capital markets

The African Development Bank (AAA) has raised an exceptional $3 billion in a three-year bond to help alleviate the economic and social impact the Covid-19 pandemic will have on livelihoods and Africa’s economies.  

The Fight Covid-19 Social bond, with a three-year maturity, garnered interest from central banks and official institutions, bank treasuries, and asset managers including Socially Responsible Investors, with bids exceeding $4.6 billion. This is the largest Social Bond ever launched in international capital markets to date, and the largest US Dollar benchmark ever issued by the Bank. It will pay an interest rate of 0.75%.

The African Development Bank Group is moving to provide flexible responses aimed at lessening the severe economic and social impact of this pandemic on its regional member countries and Africa’s private sector.

“These are critical times for Africa as it addresses the challenges resulting from the Coronavirus. The African Development Bank is taking bold measures to support African countries. This $3 billion Covid-19 bond issuance is the first part of our comprehensive response that will soon be announced. This is indeed the largest social bond transaction to date in capital markets. We are here for Africa, and we will provide significant rapid support for countries,” said Dr. Akinwumi Adesina, President of the African Development Bank Group.

The order book for this record-breaking bond highlights the scale of investor support, which the African Development Bank enjoys, said the arrangers.

“As the Covid-19 outbreak is dangerously threatening Africa, the African Development Bank lives up to its huge responsibilities and deploys funds to assist and prepare the African population, through the financing of access to health and to all other essential goods, services and infrastructure,” said Tanguy Claquin, Head of Sustainable Banking, Crédit Agricole CIB.

Coronavirus cases were slow to arrive in Africa, but the virus is spreading quickly and has infected nearly 3,000 people across 45 countries, placing strain on already fragile health systems. 

It is estimated that the continent will require many billions of dollars to cushion the impact of the disease as many countries scrambled contingency measures, including commercial lockdowns in desperate efforts to contain it. Globally, factories have been closed and workers sent home, disrupting supply chains, trade, travel, and driving many economies toward recession. 

Commenting on the landmark transaction, George Sager, Executive Director, SSA Syndicate, Goldman Sachs said: “In a time of unprecedented market volatility, the African Development Bank has been able to brave the capital markets in order to secure invaluable funding to help the efforts of the African

continent’s fight against Covid-19. Not only that, but in the process, delivering their largest ever USD benchmark. A truly remarkable outcome both in terms of its purpose but also in terms of a USD financing”.

The Bank established its Social Bond framework in 2017 and raised the equivalent of  $2 billion through issuances denominated in Euro and Norwegian krone. In 2018 the Bank was designated by financial markets, ‘Second most impressive social or sustainability bond issuer” at the Global Capital SRI Awards.

“We are thankful for the exceptional level of interest the Fight Covid-19 Social Bond has raised across the world, as the African Development Bank moves towards lessening the social and economic impact of the pandemic on a continent already severely constrained. Our Social bond program enables us to highlight our strong development mandate to the investor community, allowing them to play a part in improving the lives of the people of Africa. This was an exceptional outcome for an exceptional cause,” said Hassatou Diop N’Sele, Treasurer, African Development Bank.

Fight Covid-19 was allocated to central banks and official institutions (53%), bank treasuries (27%) and asset managers (20%). Final bond distribution statistics were as follows: Europe (37%), Americas (36%), Asia (17%) Africa (8%,) and Middle-East (1%). 

*AFDB


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