Category Archives: General

Economic review: 2024 and its key challenges [Business Africa]

After a tumultuous 2023 for African economies, 2024 is shaping up to be equally challenging.

2024: New Year, New Economic Challenges

The economic pace in Africa, slowed by the Covid-19 crisis and impacted by the consequences of the Ukrainian conflict, has been tested throughout 2023. As the new year approaches, the almost endemic inflation raises questions about its sustainability, prompting reflection on sectors deserving investment priority.

Rabah Arezki, economic expert and former vice president of the African Development Bank, sheds light on the challenges of 2024 in an Exclusive Interview with Business Africa.

Record US-Africa Trade in 2023

A review of US-Africa collaboration in 2023: a memorable chapter with the ratification of over 550 trade and investment agreements.

As the African population continues to grow, and its economic potential expands, the United States has shown a strong willingness to strengthen ties with the continent last year. More details with American analyst Calvin Dark.

In Search of Energy Self-Sufficiency: Challenges in Rural Communities in Congo

In the Republic of Congo, despite the proximity of pipelines, power plants, and high-tension lines, the electricity deficit persists in villages in the oil-rich region of Pointe-Noire, resulting in losses for local businesses. A report by our correspondent Cédric Lyonnel Sehossolo.

Source:  Africanews, 4th January 2024

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Oil prices edge lower with investors cautious ahead of U.S. data

Jan 3 (Reuters) – Oil prices dipped slightly on Wednesday after sharp moves earlier in the week, with investors cautious about the U.S. economy amid supply disruptions from persistent tensions in the Red Sea.

Brent crude fell 39 cents to $75.50 a barrel by 1056 GMT, while U.S. West Texas Intermediate crude futures slipped 51 cents to $69.87 a barrel.

Prices had climbed around $2 earlier in the week following attacks on vessels in the Red Sea by Houthi rebels. On Tuesday they fired two anti-ship ballistic missiles into the Southern Red Sea, though no damage was reported.

A wider conflict could close crucial waterways for oil transportation and disrupt trade flows.
“Although the supply of oil has not been affected, as reflected in yesterday’s oil price sell-off, the nervousness is conspicuous,” said Tamas Varga of oil broker PVM.

Both benchmarks ended Tuesday more than 1% down, with optimism about early and aggressive U.S. interest rate cuts also ebbing ahead of the release of Federal Reserve meeting minutes and jobs data on Wednesday.

“The market bade farewell to 2023 with a considerable liquidation of length and persisting anxiety about the geopolitical outlook failed to draw buyers back to the fore as the new year has kicked off,” added Varga.

Israeli forces intensified their bombing of the Gaza Strip on Wednesday, after the war stretched into Lebanon with the killing in Beirut of Hamas’ deputy leader.

Meanwhile, expectations of ample oil supply in the first half of 2024 have kept a lid on prices ahead of OPEC+ plans to hold a meeting of its Joint Ministerial Monitoring Committee (JMMC) in early February.

An exact date has not been decided, three sources from the alliance told Reuters.

The decision to hold the meeting in early February suggests OPEC+ is possibly growing uneasy over currently weak oil market conditions, despite voluntary cuts of 2.2 million barrels a day for the first quarter agreed in November, OANDA’s senior market analyst Kevin Wong said.

“WTI oil is likely to trade sideways in the short term between $68.90 and $72.30 a barrel (close to the downward-sloping 20-day moving average),” he added.

Ahead of weekly U.S. crude and product inventory reports, analysts polled by Reuters expected crude stockpiles fell last week, while distillate and gasoline stocks likely rose.

Reporting by Natalie Grover, Trixie Yap and Laura Sanicola; editing by Jamie Freed and Jason Neely.

Source: Reuters, 3rd Januar 2024

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Policy Insights: How African-European Partnerships are Shaping Oil & Gas Regulations

The Invest in African Energy 2024 forum will explore the role of Europe’s leading IOCs in strengthening Africa’s oil and gas regulatory frameworks

ARIS, France, December 28, 2023/APO Group/ —

Growing partnerships between European and African companies are playing a pivotal role in shaping Africa’s oil and gas regulatory frameworks. Through cooperative efforts and shared mandates, these partnerships aim to drive energy security, industrialization and environmental sustainability through advancing mutually beneficial projects across the continent.

The upcoming Invest in African Energy (IAE) 2024 forum – scheduled for May 14-15 in Paris – will explore how European investors and African energy markets are working together to revamp oil and gas regulations and foster sustainable development, while still attracting oil and gas investment. Renewed collaboration with European international oil companies (IOCs) like Equinor, Shell, TotalEnergies, bp and Technip Energies is serving to strengthen African energy policies and fiscal terms, with tangible results.

These partnerships aim to drive energy security, industrialization and environmental sustainability through advancing mutually beneficial projects across the continent

In Senegal, bp’s partnership with national oil company Petrosen resulted in the flagship discovery and development of the Greater Tortue Ahmeyim LNG project, and prompted Senegal to revise its existing oil and gas code. The revision resulted in the introduction of a new Petroleum Code in 2019 that targets improved revenue collection for the West African country, while attracting further investments into upstream exploration.

In Angola, the government’s longstanding partnerships with operators like Eni, TotalEnergies and bp have not only boosted exploration and production activities, but also directly shaped the fiscal and regulatory framework. A Presidential Task Force established in 2019 engaged the country’s leading IOCs to assist with the amendment of three presidential decrees and enactment of two new laws. Focus areas included simplifying the oil concessions management process and implementing incentives for investment in marginal fields, with the task force serving as a model for successful public-private sector engagement.

In Nigeria, European IOCs – which also represent the top hydrocarbon producers in the country – have played a significant role in shaping the development and enactment of the Petroleum Industry Act of 2021. The long-awaited piece of legislation serves to facilitate a just energy transition, revamp upstream, midstream and downstream operations, and enhance the country’s competitiveness on a global scale. As a result, it is considered one of the biggest achievements in Nigeria’s energy sector to date.

European-African partnerships also extend to local content development, with a focus on capacity building and knowledge and technology exchange. Namibia has implemented the National Upstream Local Content Policy of 2021 to stimulate the participation of local entities in the country’s burgeoning oil and gas sector. The policy comes in response to growing cooperation between Namibia and European firms including Shell and TotalEnergies in the exploration of the offshore Orange Basin, which has led to five large-scale oil discoveries in the past 24 months.

Finally, Europe is playing a key role in helping Africa to define its policy towards environmental stewardship and sustainability, leading to initiatives like Nigeria’s Methane Emissions Reduction Guidelines and Gas Flare Commercialization Program, which target the reduction of carbon emissions and minimize the ecological impact of oil and gas projects. Partnership initiatives like the Global Gateway Investment Package and the Just Energy Transition Partnerships have sought to foster cooperation between Africa and Europe, focusing on the development, utilization and monetization of gas resources to enhance energy security and facilitate an equitable energy transition. Recognizing the crucial role of natural gas in bolstering energy supplies, several African countries – such as those with integrated gas policies like Ghana’s Gas Master Plan and Mauritania’s Energy Vision 2030 – are actively implementing strategies to maximize sector expansion, in collaboration with European partners.

Source: Energy Capital & Power | Dec 28, 2023

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World Bank President Outlines Ambitious Vision For A Poverty-Free Globe At IDA Midterm Review

Dignitaries and leaders from around the globe convened in Zanzibar, Tanzania, today for the International Development Association (IDA) Midterm Review. This landmark event unveiled an extraordinary call to action and a visionary plan to eradicate global poverty while fostering sustainable development.

Two leaders, President Samia Suluhu Hassan of Tanzania and President Hussein Ali Mwinyi of Zanzibar, extended a welcome to attendees and expressed their heartfelt gratitude for the support provided during recent natural disasters in the region.

Addressing the audience, the President of the World Bank, whose identity remains undisclosed in the provided text, conveyed sincere condolences to the flood-affected communities. The President assured them of the World Bank’s steadfast commitment to assisting in the region’s recovery and reconstruction efforts.

Established with the mission of enhancing living standards and stimulating growth in developing nations, the International Development Association now confronts an intricate landscape marked by multifaceted poverty challenges, climate crises, food insecurity, fragility, ongoing pandemic recovery, and global conflicts.

In a compelling address, the President underscored the imperative of addressing these interconnected issues, emphasizing the unacceptable cost of inaction. With an estimated 1.1 billion young people in the Global South poised to enter the workforce within the next decade, the gap between job creation and demand looms large.

One conspicuous impediment to progress is the pervasive lack of reliable electricity access, affecting approximately 600 million people in Africa, with 36 million residing in Tanzania alone. The President firmly asserted that this glaring disparity cannot be allowed to persist.

The President articulated an ambitious vision for the World Bank: to create a world free of poverty while safeguarding the environment. This vision necessitates an expansion of the World Bank’s role and the scope of IDA itself.

A call to action resounded throughout the conference, with an impassioned plea to transition from projects to platforms, replicate successful initiatives, and foster seamless collaboration. A case in point was shared about a Nigerian town where IDA funding had facilitated a mini-grid system, bringing electricity to the community and resulting in a cascade of benefits, from heightened productivity for farmers to improved healthcare access.

The President’s announcement of a $5 billion commitment from IDA to provide reliable, affordable, and renewable electricity to 100 million Africans by 2030 underscores the magnitude of ambition required to confront these challenges head-on.

Nonetheless, the President candidly acknowledged that such aspirations come at a price. The current limits of concessional resources necessitate a substantial increase in funding. A plea was made for donors, shareholders, and philanthropies to unite in this fight and ensure that the next replenishment of IDA becomes the most substantial in history.

Reforms are imperative for enhanced efficiency and impact. The President called for simplifying processes, standardizing application procedures, and alleviating the bureaucratic burden on governments.

Furthermore, there was a push to shift the focus from measuring inputs to measuring outcomes. The President stressed the importance of concentrating on the tangible impact of development initiatives, such as girls’ education, job creation, and environmental conservation.

The President’s stirring address concluded with a poignant reminder of the World Bank’s origins and the collective goodwill, wisdom, and sincerity required to address today’s global challenges. Over the next two days, attendees will reflect on IDA’s journey and renew their commitment to its founding principles.

The IDA Midterm Review sets the stage for a future where poverty is not an insurmountable barrier but a challenge met with unwavering determination. The world eagerly anticipates the transformative results that this visionary leadership promises to deliver.

Source:  Today News Africa, 6th December 2023

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