Category: Industry

Delegates at Africa’s biggest oil conference have expressed concern about rising prices after the Organization of Petroleum Exporting Countries, plus nonmembers who also export oil, decided this week to cut production targets.

The majority of the oil cartel’s 13 member states are in Africa, but many African countries have to import refined oil.

Speaking at the Africa Oil Week conference in Cape Town, Omar Farouk Ibrahim, secretary-general of the African Petroleum Producers Organization, said the move was aimed at ensuring stability in the global market and ensuring that prices don’t fall too low.

“I believe it’s the right thing they did in order to save the industry,” he said, “and I totally think that every country has the responsibility to protect the interests of its citizens. And if by reducing production they see that as in their best interest, so be it.”

Rashid Ali Abdallah, executive director of the African Energy Commission, said it was too early to tell what the impact of the planned cuts would be.

“I hope that the price is not shooting up, because in Africa we depend on oil products in power generation,” he said.

Natacha Massano, vice president of Angola’s National Agency for Petroleum, Gas and Biofuels, said she wasn’t sure how the announcement would affect her country. Angola is one of the two biggest oil producers in Africa; Nigeria is the other, and both are OPEC members.

“Some countries will be affected more than the others,” Massano said. “Some are benefiting — of course, the producers may benefit from the high prices, but at the same time they are paying also for all other commodities.”

Saudi Arabia, OPEC’s biggest producer, has denied colluding with Russia on the production target cut.

However, Herman Wang, managing editor of Vienna-based OPEC and Middle East News, said one couldn’t tell what was discussed behind closed doors. He said he thought the cut was clearly “a big win for Russia.”

“You know that they are trying to raise money for their war effort in Ukraine,” Wang said. “Again, like all these OPEC countries, [Russia is] heavily reliant on oil revenues, and when you have a case where the outlook for the war is quite dire, [Russia is] needing this revenue. And the other impact of this is that higher oil prices make it harder for the West to enforce and impose their sanctions on Russia. So that might have been part of the calculation here for Russia in terms of trying to get this production cut done.”

OPEC+ members said the group would cut production targets by 2 million barrels per day.

U.S. President Joe Biden called the move shortsighted, noting the global economy has been dealing with the negative impact of Russia’s invasion of Ukraine.

Source: Voice of America

The World Trade Organization predicts global trade growth will slow sharply to 1 percent in 2023, down from the expected high of 3.5 percent this year.

WTO economists say trade has played a key role in keeping the global economy running throughout the COVID-19 pandemic. While merchandise trade plunged amid lockdowns in 2020, they note it subsequently rebounded, keeping the world supplied with food, medicine and other essential goods.

However, they say multipronged crises, including the pandemic, climate shocks and the war in Ukraine, continue to cause supply chain disruptions. Fiscal and monetary policies and inflationary pressures, they note, are causing energy and commodity prices to rise. They say low-income developing countries in particular face serious risks from insecurity and debt distress.

WTO Director-General Ngozi Okonjo-Iweala says most regions will likely register slightly positive export growth in 2023, with the exceptions of Africa and the Middle East. She expects both regions to experience negative export growth. World GDP next year is expected to slow to 2.3 percent, she says, down nearly a full percentage point from the WTO’s previous estimate.

“Policymakers face unenviable choices as they attempt to find an optimal balance among fighting inflation, maintaining employment and advancing important policy goals such as the transition to cleaner energy,” Okonjo-Iweala said. “Trade restrictions may be a tempting response to economic distress, but these would only deepen inflationary pressures and reduce living standards.”

Okonjo-Iweala says free trade generates growth and can help keep prices from rising. For example, keeping markets open for food trade, she says, will increase the availability of essential foodstuffs and maintain downward pressure on prices.

“Our monitoring work on food trade has pointed to some recent backsliding on restrictions, so we need to remain vigilant,” Okonjo-Iweala said. “Looking ahead, a better response to the supply chain vulnerabilities exposed by the past two years is to build a more diversified, less concentrated base for producing goods and services.”

Diversification will boost economic growth and contribute to supply resilience and long-term price stability, she says, adding it also can help meet current and future economic challenges.

Source: Voice of America

U.N. economists warn the monetary and fiscal policies of advanced economies risk plunging the world into a recession worse than the financial crisis of 2008. UNCTAD, the United Nations Conference on Trade and Development has issued its annual Trade and Development Report 2022.

The authors of the report warn the world is teetering on the edge of a recession due to bad policy decisions by advanced economies, combined with cascading crises resulting from climate change, the COVID-19 pandemic, and the war in Ukraine.

They project this year’s global growth rate of 2.5 percent will slow to 2.2 percent in 2023. This, they say, will leave a cumulative shortfall of more than $17 trillion, close to 20 percent of the world’s income.

The report finds the slowdown is hitting countries in all regions, especially developing countries. It says growth rates in the poorer countries are expected to drop below three percent, damaging development and employment prospects.

UNCTAD Secretary-General Rebeca Grynspan says middle-income countries in Latin America, as well as low-income countries in Africa, will register some of the sharpest slowdowns this year.

“In Africa, an additional 58 million people will fall into extreme poverty in 2022 adding to the 55 million already pushed into extreme poverty by the COVID-19 pandemic,” Grynspan said.

Grynspan says developing countries are facing alarming levels of debt distress and under investment. She says 46 developing countries are severely exposed to multiple economic shocks. She adds another 48 countries are seriously exposed, heightening the threat of a global debt crisis.

“So, countries that were showing signs of debt distress before COVID are taking some of the biggest hits, with climate shocks further threatening economic stability,” Grynspan said. “This is increasing the threat of a global debt crisis. So, countries urgently need real debt relief.”

Grynspan says there is still time to step back from the edge of recession if countries use available tools to calm inflation and support vulnerable groups.

Among its recommendations, UNCTAD urges a more pragmatic strategy that deploys strategic price controls, windfall taxes, anti-trust measures and tighter regulations on commodities speculation.

Source: Voice of America

The African continent need to develop the Mango, Cassava and ICT sectors, given the great potential for value addition and export, said  Ruben Poolchund, Chief Officer for Africa at the International Trade Centre (ITC).

Speaking  at the launch of the second edition of the West Africa Connect event, in Accra, he said out of 302 million tonnes of cassava globally produced in 2020, more than half was produced in Africa. 

The two-day event is hosted by the West Africa Competitiveness Programme (WACOMP) to connect suppliers from the region with buyers inside and outside the region in order to promote access to market opportunities and linkages with global value chains.

This year’s event focuses on Mango, Cassava and ICT Value chains, with the objective of providing SMEs across the region with a platform for business engagement, market linkages and commercial exchanges that will serve to promote trade in the region

He said on the African continent, 52 per cent of total Cassava production was carried out in West Africa, with Nigeria alone accounting for 23.4 per cent of global production. 

He said in the Mango sector, although a significant part of the production was not marketed, the ECOWAS Region led as the 7th Mango-exporting origin worldwide, with 90,000 tonnes exported in 2019 and the market share of global trade rising up to 5.1 per cent in 2020.

Poolchund said West Africa also provided a vibrant ecosystem for the development of the ICT sector.

He said the ECOWAS region had both benefitted and contributed to the significant growth witnessed in the digital space in the past decade.

The Region has experienced up to 45 per cent additional share of the population using the internet between 2010-2019, with an estimated increase in bandwidth of up to 368 Tbps (Terabit per second)  by 2023, allowing for faster and greater interconnectivity with the rest of the world.

He said the ICT space was important in itself, but also represented an important enabler for the rest of the economic sectors, including agritech. 

He said businesses across the region have begun to embrace digital transformation in the way they trade and carry out operations, and the e-commerce sector was a prime example, with revenues expected to triple to more than €30 billion between 2017–2024.  

He said across all three priority sectors, ITC had conducted a number of studies and initiatives in West Africa and beyond, supporting the promotion of these agric sectors through exports, as well as enabling the creation of a number of tech hubs for ICT SMEs and agritech start-ups, in support of the immense potential in the region.

More than 140 representatives of financial institutions across the ECOWAS Region have been trained on sustainable finance, in order to better serve the needs of West African SMEs and Business Support Organisations. 

He said ITC was partnering with the ECOWAS Commission to support the first ECOWAS-wide network for Trade Promotion Organisations, recently established through the assistance of ITC.

Source: NAM NEWS NETWORK

WASHINGTON, The International Monetary Fund (IMF) has ranked Ghana number one in Africa with the largest outstanding debt owed to the Bretton Woods institution.

The Fund in its latest Quarterly Finances report ending July 2022 showed that Ghana’s outstanding debt obligations are estimated at 1.31 billion in Special Drawing Rights which is equivalent to about $1.69 billion.

The report further explained that Ghana’s outstanding loans represent 9 percent of the total sum for African countries which are indebted to the Fund and yet to honor their loan obligations.

It added that the percentage is equivalent to 178 percent of its share of monies borrowed from the IMF.

The Quarterly Finances report, however, excluded COVID-19-related and economic support received by Ghana which amounts to more than $1.2 billion from the Fund.

Ghana’s loan exposure has since been classified by the IMF as concessional lending – which comes with low-interest financing.

Meanwhile, Ghana’s external debt component was pegged at $28.1 billion as of June 2022, with a large portion of the loans used for commercial purposes.

The IMF rankings have also placed Sudan and the Democratic Republic of Congo in 2nd and 3rd in Africa with the largest outstanding loans.

The two countries have Special Drawing Rights of 992 million and 990 million respectively.

Source: NAM NEWS NETWORK

ACCRA— The chair of the Advisory Board of the Commonwealth Enterprise and Investment Council (CWEIC), Gabby Asare Otchere-Darko, has urged US investors to quickly take advantage of the African Continental Free Trade Area ( AfCFTA) and invest.

Otchere-Darko said, “When you have a continent with 1.3 trillion, that is building a single market if you don’t wake up to it, it will be too late and you can’t blame China when it happens. So my message to America is that there is an opportunity in Africa.”

He said under the AfCFTA a customs union will be implemented which will cut down significantly on imports.

“We are building a new Africa and that new Africa is a single market, Africa. Potentially the largest single market in the World. We are going to have a customs union, some may think that it’s not possible but it’s possible. In fact, the first customs union in the world happened in Africa.”

Addressing an insightful trade and round table discussion on US-Ghana investment opportunities, he advised US investors not to lack behind their Chinese counterparts but to take several opportunities in the industry which he said remains a major source of transformation in Ghana.

“So I think what the Chinese are recognising [and I am just using Ghana as an example] is that they are setting industries here [in Ghana]. And perhaps before America wakes up, the single market would have been in full motion and you would have Chinese industries not just depending on imports into Africa but actually setting up in Africa and taking advantage of the single market.”

Source: NAM NEWS NETWORK