Category: WORLD BUSINESS & ECONOMY

North American energy giant Kariya Energy has announced it is set to sign a number of definitive agreements to take over some oil and gas assets in a number of African countries. The company in a statement seen by Business A.M. described the assets as midstream and upstream.

Kariya has had deep and shallow water projects experience in some African countries, including Nigeria, Mozambique, Congo DRC, Congo Republic, Gabon and Senegal, making the aforementioned countries great possibilities for investments.

The company’s financial and technical strengths places it in a good position to transfer North American ingenuity to the oil and natural gas market in Africa that is still growing.

The company says that it has spent 16 months studying data from several international oil companies (IOCs), and that it will pursue acquisitions of development and exploration plays through operatorship via risk service contracts, farm-in deals or direct negotiation with governments.

Kariya Energy says it will continue playing its ongoing support role by offering financial, technical and operational support to oil and gas firms currently plying their trade in Congo, Gabon and Nigeria.

It says that its strategy is to focus more on the evaluation of new opportunities and innovation to extract resources with technology that has been shown to work.

Meanwhile, the firm has also stated that it will focus on pursuing small-scale liquid and natural gas projects on the continent; a niche that Kariya Energy’s leadership has mastered in terms of both building and making ventures profitable and scalable thereby bolstering the firm’s potential to succeed in the African market.

With Kariya’s technological assets, it can turn around small-scale African LNG, and create partnerships targetted at addressing off-grid power generation for both residential and industrial needs in rural locations as well as deal with issues around energy poverty on the African continent.

The Canadian Imperial Bank of Commerce (CIBC), a leading North American financial institution, has appointed a Nigerian-born Kikelomo Lawal, to the position of executive vice president and chief legal officer, Victor Dodig, the bank’s chief executive officer, announced earlier this month.

Charles Abuede

The Johannesburg Stock Exchange (JSE) Limited, the operator of the Johannesburg Stock Exchange (JSE), Africa’s largest, multi-asset class stock exchange, has announced that it has received the green light to acquire a majority stake in Link Market Services South Africa (Proprietary) Limited from the Competition Tribunal.  The Tribunal’s approval is subject to various conditions that will be communicated in due course, the JSE said in a statement sent to Business A.M.

Pheliswa Mayekiso, the JSE media and internal communications manager, who signed the statement disclosed that the acquisition will see JSE Limited acquire 74.85 per cent shareholding in Link SA for a cash amount of 224.5 million South Africa rand, with Link SA’s Black Economic Empowerment (BEE) shareholder retaining the remaining 25.15 per cent. The transaction is expected to be concluded within the first week of November 2020.

“I am very pleased with the positive outcome from the Competition Tribunal. This acquisition paves the way to exciting new opportunities in the issuer services space. The Link SA acquisition is part of the JSE’s ongoing strategy to grow sustainably and diversify its revenue,” the statement quotes Leila Fourie, the JSE chief executive officer, as saying.

But Mayekiso further explained that through Link SA, the JSE intends to introduce products and services to corporate entities in South Africa with a focus on shareholder communication and engagement; while, as a leading global exchange, the JSE co-creates, unlocks value and makes real connections happen.

Link SA is described as the second largest share registry business in South Africa with a client base that includes six of the top 40 issuers, offering, primarily, transfer secretarial and registry services, including registry maintenance, such as maintaining companies’ share registers; treasury services, such as calculating and managing the payment of dividends and distributions for companies; and corporate actions, such as planning and managing rights issues, elections and dividend payments on behalf of companies.

Ben Eguzozie, with wire copy

• Says projects increased 400% in 5 years
• AIF attracts $78.8bn investment into Africa
• Bank’s general capital also increased to $208bn from $93bn

Akinwunmi Adesina, who was sworn-in as president of the African Development Bank (AfDB) for a second term of five years, said going forward the pan-African multilateral financial institution would take its climate finance to reach $25 billion by 2021.

Adesina in a moving acceptance speech after his swearing-in Abidjan, Côte d’Ivoire, at the headquarters of the AfDB Group, said the bank has been accountable for the climate since COP 21 in Paris; adding that its climate financing expanded from 9 per cent in 2015 to 36 per cent by 2019 – showing an increase of 400 per cent. “We’ve now targeted to reach $25 billion in climate finance by 2021,” he said.

He also announced that the bank’s innovative and ground-breaking Africa Investment Forum in 2018 and 2019 were able to attract a combined $78.8 billion worth of investment interests into Africa.

A number of Nigerian states picked up funding agreement for a plethora of projects they target to develop in the country. Some of them include Abia State’s Enyimba City, which development is estimated to cost $500 million.

While announcing phenomenal record achievements by the AfDB Group during the last five years (2015-2020), recording an increase of $115 billion to $208 billion during the period, Adesina said: “In every country, the bank’s impacts are felt. We expanded our presence to 44 countries, including across fragile states. The bank has the lowest cost among all multilateral development banks, and has also been rated as the 2^nd best managed concessional financing institution globally. Our staff risk their lives to deliver.”

He said the AfDB was delivering more for women with the implementation of the Affirmative Finance Action for Women (AFAWA), to leverage $3 billion for women and women businesses. “We have launched a Gender Equality Trust Fund, the first ever in the Bank, and are advancing on gender markers for all projects of the Bank. We must continue to strongly support women. When women win, Africa wins,” he said.

The AfDB president informed the shareholders which comprise 54 African nations and 27 non-African members that the bank’s High5s initiative which are: Light up and Power Africa; Feed Africa; Industrialize Africa; Integrate Africa; and Improve the Quality of Life of the people of Africa which were developed to accelerate the delivery of the 10-year strategy, have been “implemented with deliberateness, speed and rigour.”

“The High5s have taken hold on the continent and become the keys for accelerating Africa’s development. The UNDP has shown that achieving the High5s would lead to achievement of 90% of the SDGs and the Agenda 2063 of the African Union,” Adesina said.

He informed that over the past five years, the Bank has delivered impressive results on the High5s with: 18 million people with access to electricity; 141 million people had access to improved agricultural technologies for food security; 15 million people with access to finance from private investments; 101 million people with access to improved transport from infrastructure; 60 million people with access to water and sanitation.

“The Bank’s High5 programmes have impacted 335 million people. That’s what the African Development Bank – your Bank – is all about … ‘people impact,’” he said. The initiative would be the plank of the Bank’s next five-year programme under Adesina.

South Africa’s rand depreciated 2.1 per cent to 16.8229 to the dollar to emerge the most weakened currency against the dollar. This has led to an economic volatility and fears of more economic challenges in weeks to come.

The rand which is headed for its biggest daily drop since June 11 witnessed its greatest decline in a month as the government continues to restructure the economy from recession following the covid-19 pandemic. According to the South African Treasury, the economy is expected to slump by an estimate of seven per cent in 2020.

Johannesburg based chief economist at Investec Bank Ltd, Annabel Bishop is of the assertion that the political opposition to the economic reforms by the country’s President, Cyril Ramaphosa is responsible for the domestic currency’s depreciation. He stated further that if the environment remains hostile to economic growth, it will result in further credit-rating downgrades and the rand would continue to decline.

South Africa, which is currently rated as the second-largest economy in Africa after Nigeria, recorded a negative investment-grade credit rating when Moody’s Investors Service degraded its assessment in March. This led to the sale of the country’s bonds resulting in net outflows culminating a record 59 billion rand equivalent to $3.5 billion on August 28. Yields on the country’s 10-year benchmark bonds also plummeted by two basis points to 9.29%.

Charles Abuede

Akinwumi Adesina has been re-elected as the president of the Africa Development Bank (AfDB) by the bank’s Board of Governors for a second five-year term. His re-election came after he stood unopposed in the development bank’s elections.

The continent’s multilateral lender, based in Abidjan, conducted her elections on August 27 at the bank’s headquarters where Adesina had emerged ahead of Cristina Duarte, the agricultural minister of Cape Verde and Chadian finance minister, Kordje Bedoumra, who were the contenders for the said position five years earlier.

On the back of the approaching election on Thursday, Nigeria, in a bid to support its own in the race for the leadership of the international financial institution, had discreetly increased her voting rights through the doubling of her capital share in the bank from 9 per cent to 16.8 per cent.

The move made Nigeria the biggest rights holder in the continental lender ahead of Egypt who has 4.8 per cent stake in the bank, Germany with 7.5 per cent, and the United States and Cote d’Ivoire who have 5.5 and 3.1 per cents shareholding rights respectively, after redeeming the subscriptions it had pledged as part of a general capital before the January deadline.

Ahead of the election there had been media reports about a probe of Adesina following a petition by some whistleblowers, a petition that was later dismissed by an internal probe set up under the bank’s processes. An independent review then followed after the United States disagreed with the internal probe carried out by the bank; and this also cleared Adesina of any wrong-doing.

But many view the first five years of Adesina as very successful, with specific mention of progress made in the continent as a result of the activities of the AfDB under Adesina’s watch, including a power programme that has seen over 18 million people now with access to electricity; 141 million people benefiting from improved agricultural technologies for food security, as well as the 15 million people who have access to finance in a drive to enhance financial inclusion in Africa. 

In the same vein, over 101 million people now have access to improved transport and 60 million people have gained access to water and sanitation.

With his re-election, many now expect Adesina to renew with vigour his AfDB agenda encapsulated in the AfDB’s High 5s of development.

…as annual meetings kick off in Cote d’Ivoire with Adesina presiding

…says continent lost a decade of economic growth

As Covid-19 pandemic hits the global economy, with certain continents and regions of the world expected to receive more knocks, the African Development Bank (AfDB) estimates that Africa, could lose $173.1 billion in gross domestic product (GDP) in 2020 and $236.7 billion in 2021 because of the pandemic.

This emerged as the 55^th annual meetings of the AfDB and the 46^th meetings of the board of governors of the African Development Fund (ADF) began Wednesday in Abidjan, Côte d’Ivoire. This year’s meetings being held virtually due to restrictions occasioned by the COVID-19 health crisis are aimed at a renewed commitment to economic resilience in Africa.

The restrictions and strict lockdown measures imposed at the start of the virus crisis, some of which are being gradually relaxed, have resulted in mass closures of businesses and millions of job losses. The aim is to soften the impact of the anticipated recession.

Africa, a continent of over 1.2 billion people with a combined GDP of $3 trillion, has most of its 55 nations highly dependent on primary commodities, especially oil, for their foreign revenues. Today, these commodities are witnessing their worst demand drop in history. Worst hit is crude oil where Africa’s upstream spend is down by $14 billion, while foreign direct investments (FIDs) into the continent’s LNG is down from 22 to only three, a report by Africa Oil Week (AOW) said.

“With the pandemic, Africa has lost over a decade of gains of economic growth. Africa’s

recovery will be long and difficult. Now we must help Africa to build back, boldly, but smartly, paying greater attention to quality growth: health, climate and the environment,” said Akinwunmi Adesina, AfDB Group president, while addressing the audience.

He said back in April, the Bank reacted swiftly to the pandemic, with a series of bold measures to support its regional member states to help cushion them against the impacts of the outbreak. “One example was the launch of the COVID-19 Response Facility of up to $10 billion. The response, like the crisis, is now on a continental scale. From the north to the south of the continent, the Bank has provided massive support to strengthen the resilience of regional member states. The Bank has provided support worth $22 million to regional bodies such as ECOWAS in West Africa, to strengthen the health systems of low-income countries, and to CEMAC in central Africa. It also assisted the G5 countries in the Sahel to the tune of $20 million,” Adesina said.

Nialé Kaba, Ivorian minister for planning and development in Côte d’Ivoire and president of the AfDB’s Board of Governors, stressed that the pandemic was, in spite of all, an opportunity to “take up the challenge of the digitization of our economies.” She encouraged the Bank’s management “to provide substantial support to African countries individually and collectively in order to strengthen national and regional digital infrastructure for greater connectivity.”

The highlights of the 2020 sessions are the election of the Bank Group’s president and the statutory meetings of its Governors, which are being held behind closed doors. Expectedly, Adesina would be re-elected later today (Thursday 27 August) unopposed for a second term of five years, after serving an earlier first term. Adesina, the first Nigerian to occupy the position, was elected by the Bank’s Board of Governors for a five-year term on 28 May 2015 at the 50^th annual meetings, which took place in Abidjan.

In his opening speech at the AfDB, ADF meetings, the President of Côte d’Ivoire, Alassane Ouattara, highlighted the unusual context of this year’s annual meetings, taking place against the backdrop of the COVID-19 pandemic. He also underscored the Bank’s critical support for his country and other regional members.

“This is an opportunity for me to acknowledge the African Development Bank, its President and Board of Directors, for the unwavering support expressed in these difficult times to African states. Indeed, the Bank’s COVID-19 Rapid Response Facility has made it possible to finance

and support African countries in the fast implementation of plans to fight the pandemic,” Ouattara said.

President Ouattara applauded the “remarkable capacity to adapt that the Bank has shown by continuing its operations and functioning in virtual mode, since March 2020,” and the work accomplished by Bank President, Akinwunmi Adesina “who has successfully led the transformation of the African Development Bank and has given it great credibility and visibility, of which we are proud.” He wished Adesina good luck in his re-election bid.

Adesina also lauded the excellent relationship between the financial institution and Côte d’Ivoire, which is home to the Bank’s headquarters. He also paid tribute to the country’s steady economic progress.

During the meetings, Governors from the Bank’s 54 regional member states in Africa and 27 non-regional member states, will also evaluate the response to the pandemic, which will help to build a truly resilient post-COVID-19 Africa.

The African Development Bank’s annual meetings are attended by ministers of finance, central bank governors, political decision-makers, civil society organizations, heads of international organizations and key representatives of industry and the private sector. Meanwhile, Adesina has welcomed Ireland as the Bank Group’s 81st membe