Search results

The nominally ‘independent candidate’ Abdelmajid Tebboune seems set for a second term when Algerians vote in the 7 September presidential election. He has promised accelerated investment in electricity and other infrastructure, a more responsive business environment and faster delivery of jobs and social services – with big new hydrocarbons deals to pay for it all.

Reforms to the way multilateral financial institutions approach project finance could help overcome some of the most intractable barriers to the electrification of Africa, including fears of default and high project financing costs which drive away many potential investors. To be meaningful, changes need to be principled and generally applicable, while also anchored in the often-messy reality of doing business across the continent. African Energy is publishing the first in a series of white papers on how this problem might be solved in a way which recognises Africa’s needs and the capabilities of institutions, without introducing moral hazard.

On a wave of optimism about its offshore Rovuma Basin reserves, Mozambique has emerged as a poster boy for the ‘Africa rising’ agenda. With at least 100tcf of conventional gas reserves – and potentially more than double that amount, according to a range of project sources – this global-scale resource should drive the emergence of a liquefied natural gas (LNG) export industry and substantial domestic and regional electricity supply in the next decade. Mozambique enthusiasts add that the country enjoys several other advantages, including proximity to markets and relatively streamlined decision-making (especially when compared to its potential rival for LNG export markets, neighbouring Tanzania).

Lenders have appetite for Africa’s more attractive sovereign credits, including fashionable francophone markets Côte d’Ivoire and Senegal. When in March Senegal raised $2.2bn in a eurobond issue, its Ministry of Finance received $10.3bn-worth of orders for the euro/dollar-denominated facility. It brought African eurobond issues to a total $10.7bn in Q1 2018, following borrowing by Egypt, Nigeria and Kenya. This was more than the 2016 total, and more than half of the $18bn 2017 record, Bloomberg reported.

As Africa enters the 2020s, issues of climate change and sustainability have gained greater urgency even if not everyone agrees on the way ahead. With desertification and water shortages affecting many regions, Africa has joined the stop-start transition away from a carbon-based economy; the percentage of on- and off-grid renewables is growing in the energy mix, with solar, and to a lesser extent wind, taking a lead, promoted by large public procurement projects and ever more private initiatives.

Launched by President Barack Obama in Cape Town one year ago, the US Power Africa initiative has been making bold claims about its early successes in a campaign to boost sub-Saharan Africa’s installed generation capacity by some 10GW and connect some 20m more homes and businesses to the grid by 2020 (AE 258/5). Power Africa claims it will make some $7bn available in financial support and loan guarantees from 12 government agencies, led by the Export-Import Bank of the United States (Ex-Im Bank), Overseas Private Investment Corporation and US Trade and Development Agency (USTDA).

The Abidjan-based Bourse Régionale des Valeurs Mobilières (BRVM) stock exchange is ambitious but lacks liquidity. Questions persist about the CFA franc peg, underwritten by the French treasury since the West African currency was created in 1945. Destructive trends from climate change to jihadist insurgency can be acutely destabilising to under-resourced governments, while commodity shocks are a perennial headache in economies dependent on agri-business and oil imports.

A significant market is emerging across the continent for renewables-based commercial and industrial (C&I) energy projects. In all but a handful of markets, the talk is of a potential that will soon be measured in gigawatts, rather than the usual dozens (at most) of megawatts of an established business. As Kenya-based Astonfield Solar’s chairman Ameet Shah puts it, the technology is still in its early days – as in some cases is the quality of its delivery to clients – but the C&I industry will reach lift-off even before the ‘transformational’ 24-hour storage becomes the norm.

Twenty years ago, a new publication was launched to fill a gap in FT Energy’s global map: African Energy created in April 1998 as a monthly report, meant the Financial Times subsidiary could claim to cover the world; previously, its stable of newsletters and online products had largely ignored Africa. African Energy opened its account with news that financing for the planned $3.5bn Chad-Cameroon pipeline was falling into place. That controversial project was eventually built, while others have taken longer to leave the drawing board.

President Idriss Déby Itno has attempted to get tough with China National Petroleum Corporation (CNPC) over environmental violations at the Ronier field. This minor development is significant because of increased international interest in the Chadian upstream, with new companies taking acreage in the hope of finding successful rift basin plays, and for what it says about N’Djaména’s relationship with its biggest investor. The government halted CNPC’s operations in August after finding waste crude stored in open pits. However, it lifted the suspension in October after CNPC promised to literally clean up its act.

On paper at least, the new ceasefire signed on 9 May between South Sudan President Salva Kiir and his opponent Riek Machar is a step forward. Not only does it recommit them to the terms of the 23 January ceasefire, but provisions for a transitional unity government and fresh elections go several steps further. As well as Kiir’s government and Machar’s forces, the peace process would include a group of key figures detained until recently by the government, representatives of political parties and civil society, and religious leaders.

Debt restructurings and budget cuts, and reform commitments still to be implemented: in many respects, newsflow from Republic of Congo is much as usual. However, the coronavirus lockdown and oil price slump have severely exacerbated the problems confronting President Denis Sassou Nguesso’s government and the population’s daily lives.

Relationships with China have become and will remain a defining feature of most African states’ economic and geopolitical relations. Those relations are not always easy, as reflected in the popular anger at Beijing’s handling of the thousands of African students and traders stranded by coronavirus. Tensions have been rising over many countries’ mounting debts. As Covid-19 drives global recession, China’s reluctance to join the International Monetary Fund and Paris Club in negotiating transparent long-term debt relief is a concern.

As usual, there was no explanation from Luanda of President José Eduardo dos Santos’ partial government reshuffle on 5 October, which reorganised key economic departments and the senior ranks of the military.

The Government of Southern Sudan will not compromise in negotiations with the north over the status of Abyei, and is prepared to take up arms again if the impasse continues