afric-Invest | Investments in Africa

This photo provided by the Tunisia presidency shows Tunisian President Kais Saied, right, shaking hands with Russian Foreign Minister Sergey Lavrov, Thursday Dec. 21, 2023 in Tunis. Russia is working to deepen political and economic ties and spread its narrative about wars in Ukraine and Gaza. (Slim Abid/Tunisian Presidency via AP)

TUNIS, Tunisia (AP) — Not far from where Russia’s Foreign Minister is holding meetings in Tunisia on Thursday, large green billboards advertising Russia Today, a Kremlin-backed media outlet, have been recently erected.

The ads are yet another indicator that Russia continues to expand its presence in North Africa as support for western powers across the Arab World fades amid the Israel-Hamas war in Gaza.

With deep trade ties and large diaspora populations in western Europe, North African countries have long maintained close, albeit complicated, relations with the European Union.

Morocco, Algeria and Tunisia also enjoy close relations with the United States.

But since October the region has been convulsed by protests about Israel’s latest war with Hamas, including in Tunis, where demonstrators have rallied in front of the United States and French embassies, chanting for a free Palestine.

Arab Barometer, a non-partisan research firm, published data last week that suggested the United States’ popularity fell 30 percentage points in the weeks after the Israel-Hamas war began. It found France’s image also suffered.

“Tunisians’ views on the world shifted in ways that rarely happen even over the course of a few years. There is no other issue across the Arab world to which people feel so individually and emotionally connected,” Arab Barometer researchers concluded, based on 2,406 interviews.

In the vacuum created by western powers’ diminishing popularity, Moscow has doubled down on efforts to strengthen its ties to North Africa and spread its narrative about issues including Ukraine and Gaza. Russian officials are exchanging visits with North African leaders, seeking new trade agreements and signing joint memorandums that cover issues ranging from Ukraine to Syria.

“It has become obvious that some external forces are not averse to using the next escalation of the Palestinian-Israeli conflict in their own interest, to ignite the fire of a regional war,” Russian Foreign Minister Sergey Lavrov said at this week’s Arab-Russian Cooperation Forum in Marrakech, alluding to the United States.

Marrakech was the first destination on Lavrov’s tour through North Africa. He arrived in Tunis on Wednesday evening to meet with President Kais Saied and Tunisia’s foreign minister, who visited Moscow in September, when the two countries announced a new grain deal.

Before Russia’s invasion of Ukraine, Tunisia received roughly half of its total wheat imports from Ukraine.

While lamenting pressure from countries that isolate Russia, Lavrov announced new efforts to expand energy and agriculture trade with North Africa.

He also contrasted Russia’s positions with those of the United States in the Middle East.

Source: AP, 21st December 2023

Congo

Congo reaffirms commitment to OPEC, oil minister says

Wednesday December 27th, 2023 Michael Patotschka

FILE PHOTO: OPEC logo is seen in this illustration taken, October 8, 2023. REUTERS/Dado Ruvic/Illustration/File Photo/File Photo

Dec 23 (Reuters) – Congo on Saturday reaffirmed its commitment to the Organization of the Petroleum Exporting Countries (OPEC), days after neighbor Angola decided to leave the organization.

“The Republic of Congo reaffirms its steadfast commitment to the strategic policy defined by the Secretary-General of OPEC and OPEC+,” Congo’s hydrocarbons minister Bruno Jean-Richard Itoua said in a LinkedIn post.

“Congo is committed to continuing close and constructive collaboration with all member countries.”

The development comes after Nigeria on Friday reaffirmed its commitment to OPEC, with minister of state for petroleum Heineken Lokpobiri saying that his country’s position remained unwavering.

Congo, which became a full member of OPEC in 2018, has been set a target of 277,000 barrels per day (bpd) for 2024 by the Saudi-led oil producer group.

Nigeria, which is Africa’s biggest oil producer, and Angola were among several countries given lower output targets for 2024 after years of failing to meet previous ones.

Angola’s Oil Minister Diamantino Azevedo said on Thursday that OPEC no longer served the country’s interests. It joins other mid-sized producers Ecuador and Qatar that have left the organization in the last decade.

Source: Reuters, 23rd December 2023

General

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

Tuesday December 26th, 2023 Michael Patotschka

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

Angola

Angola to leave OPEC over disagreement on oil production quotas

Monday December 25th, 2023 Michael Patotschka

Oil minister says the country ‘gains nothing’ from remaining in the group after disagreements emerge over production cuts.

OPEC has agreed to production cuts as it seeks to boost the price of oil, a move Angola had objected to [File: Dado Ruvic/Reuters]

Angola says it will leave the Organization of the Petroleum Exporting Countries (OPEC) over a disagreement regarding production quotas, a move that will bring the group down to 12 members.

Speaking on public television on Thursday, Diamantino Azevedo, minister for mineral resources, petroleum and gas, said Angola, which produces about 1.1 million barrels of oil a day, is leaving OPEC because it was not serving the country’s interests.

“We feel that … Angola currently gains nothing by remaining in the organisation and, in defence of its interests, decided to leave,” Azevedo was quoted as saying in a statement issued by the president’s office.

Angola, which first joined OPEC in 2007, has struggled to meet production quotas over the past several years. The country is joining others, such as Qatar and Ecuador, that have left OPEC in the past decade.

Questions about potential production cuts sought by leading oil producers such as Saudi Arabia have been a source of recent debate within the group.

Without Angola, OPEC countries will produce about 27 million barrels of oil per day, about 27 percent of the global supply.

But while Angola was a relatively small player in OPEC, the country’s departure has raised larger questions about the future of the organisation.

Crude prices dropped by more than 1.5 percent after the announcement.

“From an oil market supply perspective, the impact is minimal as oil production in Angola was on a downward trend and higher production would first require higher investments,” said Giovanni Staunovo, a commodity analyst with UBS.

“However, prices still fell on concern of the unity of OPEC+ as a group, but there is no indication that more heavyweights within the alliance intend to follow the path of Angola.”

Oil and gas make up about 90 percent of Angola’s exports and are a crucial economic lifeline for the country.

Last month, Azevedo’s office protested against an OPEC decision to reduce its production quota for 2024, concerned that it would damage Angola’s ability to increase its output capacity.

OPEC and its allies in OPEC+ have agreed to cut production to prop up oil prices.

Angola’s production capacity peaked in 2008 at 2 million barrels per day but has dropped since due to ageing infrastructure.

SOURCE: AL JAZEERA AND NEWS AGENCIES, 21st December 2023

General

AIF 2023 builds formidable powerhouse around investments in Africa

Sunday December 24th, 2023 Michael Patotschka

This year’s Africa Investment Forum attracted significantly increased investment to the continent.

November 28th, 2023 By Dianna Games

The Africa Investment Forum (AIF) 2023 has lived up to its name, with investment promises amounting to $34.82bn made over the three-day Market Days event held in Marrakech, Morocco, in November. It was attended by financiers, investors, pension funds, policy makers, private equity firms and governments.

The pledged investments are across several sectors of the continent’s economy. As always, infrastructure was a main feature of discussions.

Kenya secured $300m for building new power lines, for example. Tanzania secured a $5.9bn investment in the country’s new Mtwara-Mbamba Bay standard-gauge railway project. It also received funding for the Mangapwani II Integrated Hub Port project in Zanzibar, which forms part of the government’s drive to develop its blue economy.

Power was also a top draw, with a focus on green energy projects. Huge power deficits across many countries and the drive for net zero carbon emissions have lent momentum to renewable energy rollout in Africa, including in the continent’s two biggest economies – Nigeria and South Africa.

Also on the table were deals in health and creative industries and agriculture. Side events included regional transport corridors and a Mayors’ Forum on leveraging cities and municipalities to unleash growth and development. This included mayors and governors from Lagos, Nairobi, Addis Ababa, Abidjan and ministerial representation from Rwanda.

The event hosted the launch of the private sector-focused Alliance for Special Agro-Industrial Processing Zones. This drew a commitment of $3bn towards development of these zones across the continent made by the AfDB, Afreximbank, the Islamic Development Bank and other partners.

The Forum also included some non-traditional discussions. One was about the role of sport in boosting economic development. The newly elected President of Rugby Africa, Ghana’s Herbert Mensah, highlighted the opportunity. “To invest in rugby across Africa is to invest in a continent of 1.3bn people, utilising the sport as a catalyst for both economic development and empowerment of the youth.”

‘Speed dating’ for investors

Organised by the African Development Bank (AfDB), the Africa Investment Forum, held under the theme “Unlocking African value chains”, is now in its fifth year. It was launched in South Africa in 2018 as an innovative marketplace. It was hosted this year in Marrakech, under the high patronage of King Mohammed VI.

Dedicated to advancing projects to bankable stages, raising capital, and accelerating the financial closure of deals, it has sometimes been described as “speed dating” for investors. The three-day global event drew over 1,000 delegates from more than 60 countries.

AfDB Group President and Chairperson of the AIF, Dr Akinwumi Adesina, said “We are building a formidable powerhouse around investments in Africa that will have transformative impacts on the lives of people. That is the bottom line of the Africa Investment Forum: investing to improve lives.”

Adesina highlighted the success of the AIF which, since 2018, has drawn 16,500 participants and generated nearly $143bn in investment interest, including securing $15.5bn for the Abidjan-Lagos highway corridor and $3.6bn for the East Africa railway corridor.

Its founding partners are the AfDB Group, Africa50, Afreximbank, the Africa Finance Corporation, the Development Bank of Southern Africa, the European Investment Bank, the Islamic Development Bank and the Trade and Development Bank.

Among delegates were several African heads of state and government, including Comoros President Azali Assoumani, President Samia Suluhu Hassan of Tanzania; President Julius Maada Bio of Sierra Leone; and Rwanda’s Prime Minister Eduoard Ngirente, also joined by the Prime Minister of Barbados, Mia Mottley.

Adesina observed that despite insalubrious global economic conditions, African countries had exhibited resilience, even growing faster than the global average.

“African economies witnessed a real GDP growth of 3.8% in 2022, higher than the world average of 3.5%. Five of the six pre-pandemic top-performing African countries are projected to be back in the league of the world’s 10 fastest-growing economies for 2023-2024.”

He said his optimism is based on the data. Africa, he noted, is expected to have a population of 2.5bn by 2050, accounting for 25% of the global labour force, making it a key player in the global economy.

The continent is expected to grow to $3.4 trillion as a result of the African Continental Free Trade Area, with the agricultural market worth $1 trillion by 2030.

He pointed out that the continent is critical to the green energy transition, being home to many of the minerals needed for the production of electric vehicles. “Africa accounts for the largest source of the ‘green metals’ for the development of electric vehicles, including platinum (70%), cobalt (52%), manganese (46%), bauxite (25%), and graphite (21%).”

The King calls on the private sector

In opening remarks read on his behalf by Omar Kabbaj, an advisor to the king and president emeritus of the AfDB, King Mohammed VI noted that the complex economic issues facing the continent, exacerbated by geopolitical tensions and climate change, had been further complicated by challenging fiscal conditions.

He urged greater private sector investment and participation in African countries. “State budgets alone cannot cover all the investment needed, especially in high-potential, job-intensive sectors.”

The King observed that while infrastructure development is a barrier to development in Africa, he emphasised what can be done, using the example of Morocco.

The Kingdom of Morocco now has 4.1 GW of installed renewable electricity generating capacity, and is continuing to roll out its strategy to increase the share of renewable energy to over 52% of its national electricity mix by 2030. The Tanger Med port complex has helped position the kingdom as one of the top 20 logistics hubs in the world.

The importance of being derisked

Speakers raised the issue of the unrealistically high perceptions of risk in Africa, which affects the flow of capital into the continent and pushes up costs of finance. It has also deterred the deployment of assets under management from pension funds and other institutions for infrastructure and other investments.

Investors and institutions based in Africa or already doing business here believe the risk is overstated and does not match the reality on the ground. The AfDB aims to change this by derisking investment, improving information about opportunities in Africa and pushing for, and supporting, more bankable projects. The founding members of the AIF weighed in with some of their views.

The CEO of the Islamic Trade Finance Corporation, Eng. Hani Salem Sonbol, said that Africa was a land of boundless possibilities and a dynamic engine of growth.

Admassu Tadesse, Trade and Development Bank group president emeritus and group MD, said the TDB Group was pleased to see the AIF continuing to attract diverse financiers and institutional investors for greater engagements on investments and co-financing opportunities.

European Investment Bank vice-president Ambroise Fayolle restated the importance of a strong, innovative and resilient private sector and added, “We are happy to see how the creativity and vision of African innovators is making an impact, particularly in the area of technology.”

Africa Finance Corporation president and CEO Samaila Zubairu said collaboration through strategic partnerships such as the AIF was critical to unlocking opportunities in Africa’s rich and diverse value chains. The CEO of the Development Bank of Southern Africa, Boitumelo Mosako, praised the utility of the event in providing a platform for engagement with partners on transactions.

Alain Ebobissé, Africa50 CEO, said: “Once again, this year, the Africa Investment Forum has been a testament to the founding partners’ dedication to initiating projects that tap into Africa’s rich potential across diverse sectors.”

Source: African Business, 9th November 2023