By Kestér Kenn Klomegâh
Local and foreign media are awash with Mozambique’s efforts in supplying the first tanker of liquefied natural gas (LNG) to be exported from the Rovuma basin, off Cabo Delgado province, to Europe.
While this southern African country is set to make its history with the new direction in exports, it will also help, to some extent, alleviate the energy crisis that has arisen due to the Russia-Ukraine crisis.
Mozambique expects to ship these liquefied natural gas exports to Europe from the Eni-operated Coral Sul floating plant. The BP’s LNG tanker, British Sponsor, has already arrived offshore northern Mozambique, according to the Welligence Energy Analytics media release, with all of Coral Sul’s annual gas output of 3.4 million tonnes contracted to BP for 20 years on a free-on-board basis.
“Regarding the LNG export, it will be for European markets since BP is committed to taking the gas resources to Europe,” said the National Petroleum Institute (INP) in an emailed response to Reuters. The new LNG cargoes will help alleviate a tight global LNG market and gas shortages in Europe as winter looms following Moscow’s February invasion of Ukraine and Russia’s later decision to curb gas pipeline supplies into major European Union economies.
As part of its exploration activity offshore Mozambique, Eni discovered the Coral South gas field in 2012 and took its final investment decision in 2017, pledging to start producing gas using a floating LNG plant after five years.
Thanks to a fast-track strategy led by CEO Claudio Descalzi, Eni has been able to stick to its original schedule despite the pandemic and supply chain issues. The exports from Mozambique, which neighbours South Africa, will help transform its economy as billions of dollars pour into the country to develop massive offshore gas fields in its deepwater Rovuma basin.
Mozambique’s Minister in charge of Economy and Finance, Max Tonela earlier informed while in Washington, on the sidelines of the annual meetings of the International Monetary Fund, that the first tanker of liquefied natural gas (LNG) to be exported from the Rovuma basin, off Cabo Delgado province.
Of the three liquefied natural gas projects approved for the northern region of Mozambique, it is the Coral Sul platform, on the high seas, far from the armed violence in Cabo Delgado, that is set to be the first to export gas from reserves that are among the largest in the world.
The platform, which is overseen by a consortium led by Italy’s Eni, is expected to produce 3.4 million tons of gas per year. The gas has already started to be processed on the platform, and the arrival of the first cargo ship from BP, which has signed a contract to buy the production for 20 years.
The other two larger projects, led by TotalEnergies and Exxon/Eni, have liquefaction plants planned for onshore on the Afungi peninsula but await final decisions by the oil companies to go ahead. The TotalEnergies project was underway but was suspended in March 2021 due to armed attacks in the Cabo Delgado region.
“We have prioritised ensuring the resumption of the construction work of the two onshore liquefaction lines, promoted by Area 1, and all the work that has been carried out aims to recover the situation of normality for families, for the affected populations, but also to promote investments that will result in a more sustained development of the region,” Minister Max Tonela said.
According to him, among the projects is the resumption of TotalEnergies, but taking into account the volume of gas resources that exist and the challenges at the global level of demand and diversification of sources, the government is ready to discuss other scenarios that do not jeopardise the development of onshore projects.
In early September, Mozambique’s president, Filipe Nyusi, also said that the new global scenario might be an added reason to rethink the issue. “We made the first platform: what is the possibility of making another one? There are studies in that direction among the measures to accelerate the production of those reserves,” Nyusi said.
The Rovuma gas is expected to represent 0.3% of the total revenue of the Mozambican state in 2023, which will be the first full year of production from the Coral Sul floating liquefied natural gas platform (FLNG), according to the State Budget draft for 2023.
“Of the amount foreseen for State revenue, 1.25 billion meticais (€20 million) comes from natural gas from Area 4 of the Rovuma Basin. The number comes from the medium-term fiscal scenario,” reads part of the document sent for discussions in parliament and published on the Ministry of Economy and Finance website.
Rovuma gas, off Cabo Delgado, a province affected by an armed insurgency and a humanitarian crisis, accounts for just 0.3% of total revenue collection, which is expected to reach 357 billion meticais (€5.7 thousand million) in 2023.
The general gas revenues are expected to grow as exploitation of the reserves progresses. The project, led by Italian oil company Eni will produce 3.4 million tonnes of liquefied natural gas per year for BP (which has bought the production for 20 years). Revenues from the extractive sector, including gas, should help to create a sovereign wealth fund this year, to which 40% of them will be channelled, according to the proposed sovereign fund law.
In forecasts made in 2020, with all three LNG projects up and running, Mozambique is expected to receive $96 billion (roughly the same amount in euros) over the lifetime of Rovuma gas reserves – almost five times the country’s annual gross domestic product (GDP).
With an approximate population of 30 million, Mozambique is endowed with rich natural resources but remains one of the world’s poorest and most underdeveloped countries. It is one of the 16 countries with a collective responsibility to promote socio-economic, political and security cooperation within the Southern African Development Community.
Russia’s Cultural Diplomacy in Multipolar World: Perspectives and Challenges for Africa
By Kestér Kenn Klomegâh
After careful research to find the meaning and implications of the term “multipolar world” often used these days, the free dictionary and englopedia offer insights as a system of world order in which the majority of leading global powers coordinate and commonly agree on economic, political and cultural influence and acceptable directions.
Both dictionaries further explain that countries have multipolar approaches to foreign policy. Participating countries necessarily conceive multiple centres of power or influence in the world and have a multipolar approach to foreign policy. A multipolar world could mean various differences in thoughts, views and ideas regarding anything in particular that different people desire to do across the world.
It appears from several reports that China and Russia intend to lead the new world order. Speeches from both sides are extremely critical of “based rules and regulations” given by the United States and Europe. The United States’ global dictatorship might end so that the unipolar would then become a multi-polar world, in which democracy could actually thrive.
In practical terms and in order to lead a multipolar system requires an outward, broad and integrative approach. While China, to a large extent, has portrayed this practical approach which is readily seen around the world, Russia’s method is full of slogans and highly limited. With the emerging new global order, China appears more open and integrative than Russia. Despite the fact that it madly advocates for creating and ultimate establishment of this multipolar world, Russia exits significantly from the global stage, thus isolating itself and further contributing towards its own “cancel culture” instead of the opposite.
Whether people like it or not, the United States will conveniently operate within the emerging multipolar system. It has the instruments to operate within the framework of multilateralism and an integrative multicultural environment. The United States is and remains an “indispensable” power. Russia and a few of its allies in this evolutionary process, without adopting cautious steps and strategic approach, will definitely remain “dispensable” in the end.
In order to deepen our understanding of the emerging multipolar world, it is useful to make comparisons. The United States’ new strategy acknowledges that Africa will shape the future – not just the future of the African people but of the world. And as such deals with civil society, women and the youth, which it refers to as the megaphone of governance. These have an influence on policies and processes engaging policy-makers.
It further works in various directions closely with the African Union, and one more new direction is the African diaspora. The United States has the largest African diaspora with social inroads and business inter-linkages and a hugely significant impact on developments inside Africa. In contrast, Russia has grossly ignored the African diaspora and even those African professional specialists it has indeed trained from Soviet times to and currently. In the emerging new multipolar world, to overlook these would be a sad mistake from a policy perspective.
Russians seriously brush aside the relevance and the role of culture, for that matter, soft power in foreign policy while advocating for this emerging new order. Examining, in broad terms, all aspects of culture that basically includes continuing the struggle for self-determination, for creating the grounded opportunity to live in peace and preserving one’s valuable traditions. Language, of course, plays its unifying role.
Some contradictions and different interpretations might exist. On the other hand, there are divergent views and different perceptions relating to the current geopolitical changes, but frankly speaking, the study of foreign languages, including English, Spanish, Portuguese, Arabic, and the emerging interest in the Chinese and Russian languages, has been a long part of people’s lives, especially those who hope to move across borders and dream to have smooth interactions with other nationals from different countries around the world.
For the past three decades since the collapse of the Soviet era, Russian language studies have been low, for example, among the African population, primarily due to a lack of overwhelming interest and adequate motivation, and a lack of consistent interactive cultural activities by Russian authorities, experts at the Africa Studies Institute frequently say, and warmheartedly admit that things have slow with Russia’s return to Africa.
Most Africans prefer to study foreign languages to ensure smooth participation in interstate activities such as trade and in order to maintain relationships with people abroad. Foreign countries, for example, Britain, the United States, European countries and now China, are their traditional favourites. There are always interactive programmes and cultural activities throughout the year operated by foreign missions and NGOs.
Interpreted from different perspectives, Russia has not been a major economic giant in Africa compared to Western and European countries and China. Due to this historical truth, Africans have little interest in studying the Russian language and its culture. The Russian language itself does not sound attractive in terms of its economic opportunity, and therefore, Africans prefer to study languages that readily offer opportunities. China is making huge contributions to the continent, and this has made Africans see the need to understand the language in order to have better interaction with them.
The obvious worst-case scenario is that the Russian government has not created the necessary conditions and reasons to study the language simply because it has little influence in the continent. Besides that, the trade and commercial links between Russia and Africa are quite negligible, so there is no desperate demand for the Russian language for businessmen. Admittedly, Russia is not a welcoming holiday destination for African elites and the middle class, which is twice the total population of Russia and constitutes 40% of the 1.3 billion population of Africa. Travel and tourism is an increasingly huge business, and the unique geographical landscapes and changing attractiveness of Moscow, St Petersburg and Sochi – are unknown to the African elite and the growing middle class.
With the current evolving political and cultural processes, the West and Europe will still have a strong classical grip on Africa, influencing everything first from culture and tourism and moving onward to politics and economics. Perhaps, Russia has to play the correct strategic openness and welcome African travellers, tourists and visitors. Closing doors in these critical times might negatively distract Africa’s support for Russia.
The worrying tendency is that Rossotrudnichestvo, an agency under the Ministry of Foreign Affairs of the Russian Federation, pays little attention to educational and cultural questions in Africa, compared to its assertive counterparts – USAID, Alliance Française de France, The Goethe Institute, British Council, Instituto Cervantes that operate throughout the world.
Another Russian organization – Russkiy Mir Foundation, which is directly responsible for promoting the Russian language and culture abroad, does extremely little in sub-Saharan Africa. In addition, cultural officers work in all 38 Russian embassies in Africa.
Russia appears quite removed from Africa’s development issues, it is only mentioned in limited areas like weapons and military equipment supplies to French-speaking West Africa. Nowadays, China is being viewed as a strong strategic partner in Africa, given its (China’s) strong footprints in diverse economic sectors. China has more than 20 Confucius Centers and a party school in Africa. Western and European, and China support civil society, youth programmes and women’s issues – these are completely not on Russia’s radar.
Russia allegedly allows its own ‘cancel culture’ and significantly not by the United States and its European allies. In practical terms, creating a multipolar system deals largely with cultural and social orientation, it deals with public perceptions through openness and friendliness. At this new historical reawakening stage, Russia has reviewed itself and tried to focus on building relations, both with substance, trustful and refined approach and strategically engaging with civil society, youth organizations and non-state institutions in Africa.
By and large, Russia has to intensify its people-to-people connections, soft power and cultural diplomacy with Africa. There is a huge cultural gap in new thinking, working with young professionals and associations to promote people-to-people diplomacy through business links, cultural exchanges and competitions. As Russia charts loudly for the multipolar system, this has to reflect in its current foreign policy and approach, especially towards the developing world, in Latin America, Asia and Africa.
Late October, during the final plenary session of the 19th meeting of the Valdai Discussion Club, the focus was on matters related to the changing geopolitics and civilisation diversity, the new world order and its future developments. Under the theme, A Post-Hegemonic World: Justice and Security for Everyone, the four-day-long interactive meeting brought academic experts and researchers, politicians, diplomats and economists from Russia and 40 foreign countries.
President Vladimir Putin discussed, at considerable length, so many controversial questions. According to him, classic liberal ideology itself today has changed beyond recognition. They predicted the end of the United States’ global dominance but fell short in proposing an appropriate Russian template – the principles and mechanisms – for realizing the lofty idea and approach to establishing a multipolar world.
Putin did not say anything about Russia becoming a power but awarded that position to China. Giants like China, India and Indonesia with large populations are showing economic growth; in Africa, large countries – some of them with a population of 200 million – are emerging and making progress, as well as countries in Latin America.
According to him, Russia still has friends around the world. He mentioned that in Central America and Africa, Russian flags are flying everywhere. “There are flags in European countries and in the United States too; we have many supporters there. By the way, a large proportion of the US population adheres to traditional values, and they are with us, we know this,” he added in his assertive conversation at the Valdai gathering.
Putin, along the line, argued that the support for multipolar order largely exists in the global south. Russia is not the enemy and has never had any evil intentions as regards the European countries and the United States. He appreciated Africa’s struggle for independence and against colonialism. These absolutely unique relations were forged during the years when the Soviet Union and Russia supported African countries in their fight for freedom.
In this context and in relation to Africa, Natalia Zaiser, Founder of the African Business Initiative Union, apparently talked about the new historical stage need to establish new or different institutions of international partnership.
Her series of questions to Putin: “Mr President, what is your vision of a new international partnership institution? Which basis of parities is Russia ready to offer at the international level? Which mechanisms, tools and personalities are needed to acquire new allies, partners and friends, not at a declarative level but at the level of unquestionable responsibility in terms of agreements? Do you think we should also change or build up other approaches within the future international partnership?”
Putin’s answer was: “We must, and we can focus on cooperation, primarily, with countries which have sovereignty in taking fundamental decisions. This is my first point. My second point is that we need to reach a consensus on each of these decisions. Third, we need to secure a balance of interests. Part of which institutions can we do this? Of course, these are primarily universal international organizations, and number one is with the United Nations.”
EU, IFC Launch €25m Fund to Rebuild Ukraine
By Adedapo Adesanya
A new agreement between the International Finance Corporation (IFC) and Ukraine’s Energy Efficiency Fund will channel up to €25 million in EU funds to help homeowners’ associations restore war-damaged residential buildings, the organisations announced on Monday.
The effort will support Ukrainian families amid the ongoing war and boost the resilience of Ukraine’s residential sector. Since February 24, the conflict in Ukraine has substantially damaged or destroyed the homes of 2.4 million Ukrainians, according to the Ministry for Communities and Territories Development of Ukraine.
The Kyiv School of Economics estimates that the total number of the affected housing stock in Ukraine is up to 136,000 buildings or 40 per cent of the total number of residential buildings, including almost 16,000 multi-apartment buildings. As it stands, there is not enough public and private financing to rebuild the sector.
IFC will support the Energy Efficiency Fund’s Restoration Program by channelling the EU grants to homeowners’ associations across Ukraine, covering the costs of restoring multifamily buildings that did not suffer structural damage.
The programme will cover the replacement of windows, doors, roofs, and walls, among other elements, and IFC will also help the Fund with a pipeline of reconstruction projects as well as support beneficiaries with the application process.
A €5 million pilot phase is being rolled out in Kyiv, Zhytomyr, Sumy, and Chernihiv, larger cities in northern and central Ukraine that have come under increased attacks over the last two months.
Speaking on this, Mr Yehor Farenyuk, director of the state-owned Energy Efficiency Fund, said, “This programme launched by the Energy Efficiency Fund provides vital support to homeowners’ associations to help them restore buildings damaged by Russia’s military aggression.
“This is substantial support for many war-affected Ukrainians since the program will cover 100 per cent of the cost of all construction materials and work. We are very grateful to our partners — the EU and IFC — for their engagement and support, and we hope to continue our fruitful cooperation in this area.
“Rebuilding efforts in war-torn Ukraine cannot and should not be stalled,” said Ms Rana Karadsheh, IFC’s Regional Director for Europe. “We are grateful to the EU for their ongoing assistance, enabling us to provide vital support to Ukraine during these challenging times. We are committed to supporting Ukrainians and their efforts to restore residential and other economic sectors devastated by the war.
“The EU stands with Ukraine as it fights off Russia’s aggression and supports its people. We are happy to join forces with our trusted partners Ukraine’s Energy Efficiency Fund and IFC to help rebuild Ukrainian’s homes that were destroyed by Russia,” said Ms Katarína Mathernová, Deputy Director General of the Directorate General for Neighbourhood & Enlargement Negotiations and Head of the Support Group for Ukraine at the European Commission.”
Since October 2019, the original Ukraine Energy Efficiency Fund Program, led by IFC in partnership with the EU, has channelled grants worth nearly €15 million into energy-efficient renovations of 229 residential buildings in Ukraine, of which 109 are fully completed, with the remaining 120 projects continuing to implement the energy efficiency modernizations amid the war.
As part of IFC’s broader response to the war in Ukraine, in October, IFC launched another €25 million EU-supported programme to help municipalities to renovate municipally owned buildings to host internally displaced people.
The Role of African Export-Import Bank in AU Agenda 2063
By Kestér Kenn Klomegâh
At the 12th Extraordinary Summit on Industrialization and Economic Diversification and the Extraordinary Session held in Niamey in late November, the African Export-Import Bank offered an instrumental report about the pace of economic diversification and industrialization across Africa. It was one among several review reports dealing with the present and the future of Africa.
In the first place, the African bank offers strong financial support, engages in external fundraising campaigns and collaborates with the African Union and the AU members. Beyond that, the bank gives advisory services relating to the development of various economic sectors, all these in attempts to improve the conditions, as espoused in the shared “Agenda 2063: the Africa We Want” in Africa.
With several initiatives and programmes, Afreximbank has pursued, with courage and determination, using the necessary high-level platforms within Africa and outside Africa to drum home the necessary funds for development. What is required here for African leaders to exhibit good governance, design and implement the best policies and speak with one voice to realize the set AU Agenda 2063.
While the bank has done a lot during the past few years, not many African leaders have achieved what was expected. That Afreximbank intervened strongly during the COVID-19 pandemic, disbursing over $8 billion to central and commercial banks to avert looming trade debt payment defaults and support the procurement of test kits, PPEs and other COVID-19 containment materials.
The Afreximbank supported the first ever pooled procurement by African Union members in an emergency when it provided a $2 billion financing towards the procurement of 220 million doses of Johnson and Johnson vaccines.
And as the Russia-Ukraine crisis rages on, the bank has also stepped up and already disbursed over $5 billion towards the procurement of food, fertilizer and grains. Beyond that, the bank is closely working with UNECA, the AU and the AfCFTA Secretariat to create a pooled procurement platform called the Africa Trade Exchange (ATEX), which is helping African countries to procure grains, edible oils and fertilizers at a much-reduced cost.
It continues to support the implementation of the African Continental Free Trade Agreement (AfCFTA). During the five years to 2021, Afreximbank disbursed over $20 billion in support of intra-African trade and investments and plans to double this to 40 billion US dollars during the five years of 2022 to 2026.
Afreximbank is helping African economies to manage the exodus of international banks by financing African-owned financial institutions to acquire those banks, helping to build a strong interconnected African financial system. It is re-creating banking systems so that they can serve Africa better. It has also onboarded about 500 of the continent’s 600 regulated commercial banks into Afreximbank Trade Finance Facility (AFTRAF) and provided them with Trade Credit Confirmation lines.
The goal is to grant an aggregate of $8 billion in Trade Confirmation lines to these African banks and ensure that every country on our Continent has at least one bank that has a dedicated credit line to support intra-African trade. Afreximbank sits today at the centre of the most extensive messaging network, with connections to almost 500 banks. It has built a web that will form the architecture for an integrated African banking network.
These mentioned above are the bank’s efforts to support Africa’s economic development prospects defined by the extent of control the continent wields over its financial system, that it is access to and control of capital that defines the future of the continent.
As partners, Afreximbank, the African Union Commission and the AfCFTA Secretariat have launched the commercial operations of the Pan-African Payment and Settlement System (PAPSS). It has now become possible to conduct intra-African trade payments in African national currencies. The bank is proud to be backing settlements under this system with a facility, thanks to the leadership of the African Union and the Commission for their strong support towards this transformative initiative.
Afreximbank is working with the AfCFTA Secretariat and Council of Ministers for Trade to establish the AfCFTA Adjustment Fund. The Fund is expected to help countries to adjust in an orderly manner to AfCFTA tariff removals and prepare them to participate in the new trading regime. The Bank was earlier this year appointed the Fund Manager of the $10 billion Fund, which it is supporting with a $1 billion facility and a $10 million grant directed at the Base (Compensation) Fund.
With industrialization, the bank is working with various African governments to develop and expand Industrial Parks (IPs) and Special Economic Zones (SEZs) to deal with infrastructural constraints to industrialization. These parks are ongoing across ten African countries, including two parks in Malawi and one in Cote d’Ivoire under development. It has also commenced discussions for the creation of industrial parks in DRC, Zambia, Rwanda, Kenya and Botswana.
In the first-ever Africa-Caribbean Summit in 2021, Afreximbank has taken steps to accelerate the integration of the two regions. In early September, the first-ever Africa-Caribbean Trade and Investment Forum which attracted over 1,000 participants from Africa and the Caribbean.
Since then, about 9 of 14 CARICOM countries have signed a Partnership Agreement, a treaty instrument akin to the Afreximbank Establishment Agreement, thereby opening up the region for bank interventions. This partnership creates an opportunity for Afreximbank to facilitate and promote trade and investment flows between the two regions and attract African investments into the Caribbean and Caribbean investments into Africa.
In that regard, it has conducted successful trade and investment missions to the Caribbean with African corporates and banks to explore opportunities in that market. Plans are advanced towards opening an Afreximbank office in the Caribbean so that it can support Africa-Caribbean trade and investments better.
With the mandate to forge greater partnerships, Afreximbank is seriously working jointly to push ahead with the pan-African trade and industrialization agenda. These dynamic collective efforts are directed towards the realization of the shared developmental goals with Agenda 2063. Afreximbank remains alive to that responsibility with African Union.
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