Economy
AfDB Anticipates EU-Like Regional Integration for Africa
By Adedapo Adesanya
The African Development Bank (AfDB) is envisioning a regional integration in Africa, along the lines of the European Union (EU), according to the Vice-president of the Bank for regional development, integration and business delivery, Mr Khaled Sherif.
This disclosure was made by Mr Sherif during an interview with The Arab Weekly, who said the purpose of creating the bank was to support development plans in African nations, especially at times when such projects did not receive sufficient support from organisations like the World Bank or the International Monetary Fund (IMF).
According to him, the AfDB’s largest shareholders are Nigeria, Egypt, South Africa and Morocco, but the bank also receives investment from the United States, France, Germany and Nordic countries like Norway, Sweden, Finland, and Denmark.
He also revealed that investment also come from non-Western countries like China, South Korea, India and Japan, which are all shareholders in the bank.
“Western countries want to ensure there won’t be a huge flow of immigrants from Africa to Europe. They want to create the conditions where Africans stay where they are,” said the VP.
This and more were reasons why there was advocacy for regional integration in Africa, something modelled along the lines of the European Union (EU0 in Europe.
“We push for freedom of movement and for having a common currency,” said Mr Sherif. “We are working with the African Union for continental free trade.” He said.
Speaking on means through which the bank is supporting the continent, the VP said the bank monitors how its funds are spent, “When we give assistance, we monitor, we don’t just write a check. We have to account for it to our investors.”
He noted that were occasions when the bank does not fund projects but offers governments advice based on feasibility studies carried out by the bank, adding that they also help direct businesses towards what it considers, successful strategies.
Speaking on the loan strategy of the bank, Mr Sherif said that it was basically “free money” because the bank’s objective was not to make money, as evident in its long term loans which generally span 20-50 years with 1-2 percent interest rates.
“The bank’s objective isn’t to make money. There are 600 million people without power in Africa; the bank’s primary mandate is to light up Africa, to feed Africa, to improve the quality of life for its people, agriculture and industry,” he said.
It was revealed that most of the money is given to governments, to fund energy, water and sanitation, as well as general infrastructure projects. The rest goes to no-sovereign parties, which include lines of credit to businesses and entrepreneurs.
He added that the bank encourages businesses to trade or export in the same region, whether immediate neighbours or in the continent as a whole, clarifying that the aim is to boost production in order to promote industrialsation.
Regarding investment on the continent, Mr Sherif noted that security was a major concern adding that conditions like youth unemployment made the environment susceptible to radicalism.
He also added that the bank was interested in alleviating vulnerable women on the continent and also provide feasible alternatives to coal in promotion of cleaner energy.
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries (OPEC) has once again trimmed its 2024 and 2025 oil demand growth forecasts.
The bloc made this in its latest monthly oil market report for December 2024.
The 2024 world oil demand growth forecast is now put at 1.61 million barrels per day from the previous 1.82 million barrels per day.
For 2025, OPEC says the world oil demand growth forecast is now at 1.45 million barrels per day, which is 900,000 barrels per day lower than the 1.54 million barrels per day earlier quoted.
On the changes, the group said that the downgrade for this year owes to more bearish data received in the third quarter of 2024 while the projections for next year relate to the potential impact that will arise from US tariffs.
The oil cartel had kept the 2024 outlook unchanged until August, a view it had first taken in July 2023.
OPEC and its wider group of allies known as OPEC+ earlier this month delayed its plan to start raising output until April 2025 against a backdrop of falling prices.
Eight OPEC+ member countries – Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman – decided to extend additional crude oil production cuts adopted in April 2023 and November 2023, due to weak demand and booming production outside the group.
In April 2023, these OPEC+ countries decided to reduce their oil production by over 1.65 million barrels per day as of May 2023 until the end of 2023. These production cuts were later extended to the end of 2024 and will now be extended until the end of December 2026.
In addition, in November 2023, these producers had agreed to voluntary output cuts totalling about 2.2 million barrels per day for the first quarter of 2024, in order to support prices and stabilise the market.
These additional production cuts were extended to the end of 2024 and will now be extended to the end of March 2025; they will then be gradually phased out on a monthly basis until the end of September 2026.
Members have made a series of deep output cuts since late 2022.
They are currently cutting output by a total of 5.86 million barrels per day, or about 5.7 per cent of global demand. Russia also announced plans to reduce its production by an extra 471,000 barrels per day in June 2024.
By Aduragbemi Omiyale
A minority equity stake in Chappal Energies Mauritius Limited has been acquired by a Nigerian energy firm, Aradel Holdings Plc.
This deal came a few days after Chappal Energies purchased a 53.85 per cent equity stake in Equinor Nigeria Energy Company Limited (ENEC).
Chappal Energies went into the deal with Equinor to take part in the oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.
Since production started in 2008, the Agbami field has produced more than one billion barrels of oil, creating value for Nigerian society and various stakeholders.
As part of the deal, Chappal will assume the operatorship of OML 129, which includes several significant prospects and undeveloped discoveries (Nnwa, Bilah and Sehki).
The Nnwa discovery is part of the giant Nnwa-Doro field, a major gas resource with significant potential to deliver value for Nigeria.
In a separate transaction, on July 17, 2024, Chappal and Total Energies sealed an SPA for the acquisition by Chappal of 10 per cent of the SPDC JV.
The relevant parties to this transaction are working towards closing out this transaction and Ministerial Approval and NNPC consent to accede to the Joint Operating Agreement have been obtained.
“This acquisition is in line with diversifying our asset base, deepening our gas competencies and gaining access to offshore basins using low-risk approaches.
“We recognise the strategic role of gas in Nigeria’s energy future and are happy to expand our equity holding in this critical resource.
“We are committed to the cause of developing the significant value inherent in the assets, which will be extremely beneficial to the country.
“Aradel hopes to bring its proven execution competencies to bear in supporting Chappal’s development of these opportunities,” the chief executive of Aradel Holdings, Mr Adegbite Falade, stated.
By Adedapo Adesanya
Afriland Properties Plc helped the NASD Over-the-Counter (OTC) Securities Exchange record a 0.04 per cent gain on Tuesday, December 10 as the share price of the property investment rose by 34 Kobo to N16.94 per unit from the preceding day’s N16.60 per unit.
As a result of this, the market capitalisation of the bourse went up by N380 million to remain relatively unchanged at N1.056 trillion like the previous trading day.
But the NASD Unlisted Security Index (NSI) closed higher at 3,014.36 points after it recorded an addition of 1.09 points to Monday’s closing value of 3,013.27 points.
The NASD OTC securities exchange recorded a price loser and it was Geo-Fluids Plc, which went down by 2 Kobo to close at N3.93 per share, in contrast to the preceding day’s N3.95 per share.
During the trading session, the volume of securities bought and sold by investors increased by 95.8 per cent to 2.4 million units from the 1.2 million securities traded in the preceding session.
However, the value of shares traded yesterday slumped by 3.7 per cent to N4.9 million from the N5.07 million recorded a day earlier, as the number of deals surged by 27.3 per cent to 14 deals from 11 deals.
Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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