By Adedapo Adesanya
Kuwait joined Saudi Arabia on Monday in announcing fresh, voluntary oil production cuts to be implemented in June.
The member of the Organisation of the Petroleum Exporting Countries (OPEC) made the decision to slash production by 80,000 barrels per day in June, on top of the cuts already agreed under a pact by the group of major oil producing countries last Month.
The Kuwaiti Oil Minister, Mr Khaled al-Fadhel, disclosed this on Monday, joining the de-facto leader of the cartel in announcing fresh oil production cut to be implemented next month.
Saudi Arabia earlier said on Monday it will reduce its crude oil production for June by an additional one million barrels per day.
The Ministry of Energy official said Saudi Aramco had been directed to reduce production.
“This brings the total production cut that will be carried out by the Kingdom, to around 4.8 million barrels per day, from the April production level,” the official said
“Therefore, the Kingdom’s production for June, after both its targeted and voluntary cuts, will be 7.492 million barrels per day,” the official added.
The ministry also directed Aramco to reduce production in May, from the target level of 8.5 million barrels per day.
The official said the Kingdom “aims through this additional cut to encourage OPEC+ participants, as well as other producing countries, to comply with the production cuts they have committed to, and to provide additional voluntary cuts, in an effort to support the stability of global oil markets.”
Saudi Arabia also said on Monday it would raise value added tax (VAT) to 15 percent from the current 5 percent with effect from July 1.
More Arab economies may need to follow Saudi Arabia in hiking taxes to replenish reserves that have been savaged by the spread of the coronavirus and the collapse of oil prices, say analysts.
According to market analysts, the double problem of the pandemic and the collapse in oil prices could force Gulf states to raise fresh funds through taxation, bond sales and asset disposals.
However, neighboring UAE was quick to rule out a similar move. In a statement, the UAE finance ministry said it denied there were any plans currently to raise VAT.
Following the announcement of the cut, oil prices rose with Brent Crude hitting $31 per barrel and WTI Crude up to $25 per barrel.
World Food Prices Remain Flat in November 2022
By Adedapo Adesanya
Global food prices remained virtually unchanged for the second month in November 2022, according to the latest numbers from the Food and Agriculture Organisation (FAO).
The FAO Food Price Index (FFPI) averaged 135.7 points in November 2022, virtually unchanged from October, with month-on-month decreases in the price indices for cereals, dairy and meat, nearly offsetting increases in those of vegetable oils and sugar. At this level, the index stood only marginally above (0.3 per cent) its corresponding value in November 2021.
The FAO Cereal Price Index averaged 150.4 points in November, down 1.9 points (1.3 per cent) from October but still 9.0 points (6.3 per cent) above its value a year ago. World wheat prices registered a 2.8 per cent decline during the month of November, mostly driven by the rejoining of the Russian Federation in the Black Sea Grain Initiative and the extension of the agreement, subdued import demand for supplies from the United States of America due to uncompetitive prices, and greater competition in global markets with increased shipments from the Russian Federation.
International prices of coarse grains also eased in November, down 1.0 per cent from October. Maize prices declined by 1.7 per cent month-on-month, also influenced by developments in the Black Sea Grain Initiative, while improved transport on the Mississippi River in the United States of America weighed on prices as well.
International prices of sorghum declined by 1.2 per cent in November in tandem with maize prices, while those of barley increased by 2.5 per cent. International rice prices moved up by another 2.3 per cent in November, influenced by currency appreciations against the United States dollar for some Asian suppliers and good buying interest.
The FAO Vegetable Oil Price Index averaged 154.7 points in November, up 3.4 points (2.3 per cent) after declining for seven consecutive months. The increase was driven by higher international palm and soy oil prices, more than offsetting lower rapeseed and sunflower oil quotations.
International palm oil prices rebounded in November, supported by renewed global import demand owing to competitive prices relative to those of other edible oils, as well as concerns over lower production potentials due to excessive rainfall in parts of major growing regions in Southeast Asia.
Meanwhile, world soyoil values rose slightly, chiefly underpinned by persistent, robust demand from the biodiesel sector, particularly in the United States of America. By contrast, international rapeseed and sunflower oil prices dropped in November, weighed by, respectively, expected ample global supplies and the extension of the Black Sea Grain Initiative.
The FAO Dairy Price Index averaged 137.5 points in November, down 1.7 points (1.2 per cent) from October, marking the fifth consecutive monthly decline, but remained 11.6 points (9.2 per cent) above its value a year ago.
In November, international price quotations for skim milk powders fell the most, reflecting lower import demand, as buyers were well covered for their near-term needs coupled with increased export availabilities in Europe.
Whole milk powder prices dropped substantially, principally due to lower buying interest from China, only partially compensated by higher purchases by Southeast Asian countries.
Meanwhile, world butter prices declined on weak import demand, impacted by high retail prices and market uncertainties about consumer purchases in the months ahead.
By contrast, international cheese prices increased, underpinned by a steady import demand and less buoyant export availabilities from leading producing countries in Western Europe.
The FAO Meat Price Index averaged 117.1 points in November, down 1.1 points (0.9 per cent) from October, also marking the fifth consecutive monthly decline, but remained 4.6 points (4.1 per cent) above its value a year ago.
In November, international bovine meat prices fell for the fifth month in a row, as increased export supplies from Australia added to already high supplies from Brazil, notwithstanding China’s continuing strong import demand.
By contrast, world prices of all other meat types rebounded, with the price of ovine meat rising the most, driven by solid import demand, despite seasonally rising supplies from Oceania.
International poultry meat prices also recovered, reflecting tighter global export supplies amid production setbacks in many large producing countries due to intensified avian influenza outbreaks.
Meanwhile, pig meat prices rose on a surge in demand ahead of the upcoming holiday period and the impact of currency movements.
The FAO Sugar Price Index averaged 114.3 points in November, up 5.7 points (5.2 per cent) from October, marking the first increase after six consecutive monthly declines.
The November rebound was mostly related to strong buying amid prevailing tight global sugar supplies due to harvest delays in key producing countries and the announcement by India of a lower sugar export quota. Higher ethanol prices in Brazil, raising concerns over a greater use of sugarcane to produce ethanol, exerted further upward pressure on world sugar prices.
Despite the November increase, international sugar price quotations remained 5.9 points (4.9 per cent) below their levels in the same month of last year, weighed down by prospects of ample global supplies in the 2022/23 season.
Angola Hopes for Russia’s Support in Manufacturing Military Equipment
By Kestér Kenn Klomegâh
Russia has made military-technical cooperation its key component in relations with Africa, and African leaders with high enthusiasm express readiness to pay for deliveries. Some African leaders have bartered for such deliveries by granting complete access to lucrative natural resources. Reports indicate that Russia has signed military-technical agreements with over 20 African countries.
Angola stands distinctively out of the 20 African countries. President João Lourenço went on an official working visit in April 2019 and held talks with President Vladimir Putin.
“Angola is a reliable and old partner. We need to consider what we need to do, without delay, to stimulate our trade and economic ties. There are interesting fields of activity, such as the diamond industry, fisheries and space exploration. There are also cultural spheres, such as education and the training of personnel,” Putin told the Angolan President.
On his part, the Angolan leader João Lourenço said: “We have come to Russia on an official visit to strengthen our ties and cooperation and, if possible, to promote interaction between our countries. Russia is doing splendidly in the spheres of mineral resources, education, healthcare and defence. But we would like to know about Russia’s potential in other fields so we can promote cooperation in these areas of the Angolan economy.”
Before their final departure from the Kremlin, João Lourenço presented Vladimir Putin with a high Angolan award – the Order of Agostinho Neto, the first President of Angola – as a sign of gratitude for several years of support for the Republic of Angola.
Agostinho Neto Order is the highest distinction of the Angolan State with a single degree granted to nationals and foreigners, in particular Heads of State and Government, political leaders and other heavyweight individuals.
President Lourenço spent his four days attending several meetings. There were discussions relating to many aspects of cooperation. But then, President Lourenço expressed, along the line, corporate plans to diversify its state business away from purchasing to full-fledged manufacturing of Russian military equipment for the southern African market and possibly other regions in Africa.
Earlier before meeting with President Putin, President João Lourenço revealed his plan about manufacturing of Russian weapons in an exclusive interview to the Russian news agency Itar-TASS during that visit from April 2-5, 2019. He said that Angola is one of the principal buyers of Russian arms and that his country wants not only to buy but also produce.
“As for our military and technical cooperation with Russia, it will continue and be deepened. We would like to evolve from our current state of purchasers of Russian military equipment and technologies towards becoming the manufacturers and having an assembly plant of Russian military equipment in our country,” he told the news agency.
In recent years, Angola’s leadership has had plans to turn the country into a base to repair Soviet equipment for African countries. For its part, South Africa had similar business ideas as well. One cannot rule out that the proposal to both purchase and produce (manufacture) weapons is an attempt to outmanoeuvre South Africa, but the local industry is not yet ready to manufacture its military equipment.
In a research report titled “Angola: Russia and Angola – the Rebirth of a Strategic Partnership” that was released by the South African Institute of International Affairs (SAIIA), the authors; Ana Christina Alves, Alexandra Arkhangelskaya and Vladimir Shubin acknowledged that “defence remains the most solid Russia-Angola cooperation dimension.
Angola’s decision to manufacture military equipment and ultimately distribute it throughout Southern Africa, however, sparked further discussions. Should Angola become a key producer and distributor of Russian arms, there is always the possibility some of them could eventually appear outside Angola in the 16-member Southern African Development Community (SADC) region, warned Professor David Shinn at the Elliott School of International Affairs, George Washington University.
“Weapons produced by any country can and do appear in African conflict zones. There is plenty of documentation, for example, that weapons made in China, Russia, and Western countries are being used in ongoing conflicts in Darfur, the eastern Congo, and Somalia,” said Professor Shinn, a former U.S. Ambassador to Ethiopia (1996-99) and Burkina Faso (1987-90).
In some cases, African governments have transferred the arms to rebel groups, and many others have been purchased on the international arms market, he added.
Professor Shinn added that South Africa has the most advanced capabilities in manufacturing military equipment, followed by Egypt. Sudan, which received assistance from China and Iran in building its arms industry, and Nigeria, among others, also have the ability to produce military equipment. In this sense, what Angola proposes to do (i.e. to establish a manufacturing plant) is not much different except that it would, reportedly, be assisted by the Russian Federation.
Nevertheless, Professor Shinn hopes that possible Angolan arms export initiatives would be subject to approval by the Angolan parliament and be of great interest to SADC, the African Union and the Security Council of the United Nations.
On February 29, 2019, the Security Council adopted a resolution that outlined steps leading towards the goal of ending the conflict in Africa through enhanced international cooperation and partnership as well as robust support for peace operations led by the African Union.
Unanimously adopting resolution 2457 (2019) at the outset of a day-long open debate, the Council welcomed the 54-nation African Union’s determination to rid the continent of conflict through its “Silencing the Guns in Africa” initiative, expressing its readiness to contribute to that goal.
The importance of this resolution is underlined by the fact that there are currently fifteen African countries involved in a war or are experiencing post-war conflict and tension. In West Africa, the countries include Cote d’Ivoire, Guinea, Liberia, Nigeria, Sierra Leone, and Togo. In East Africa, the countries include Eritrea, Ethiopia, Somalia, Sudan, and Uganda.
Angola has diamonds, oil, gold, copper and rich wildlife, forest and fossil fuels. Since independence, oil and diamonds have been the most important economic resource. It is a member of the Southern African Development Community (SADC), an inter-governmental organization that has made its goal to further socio-economic cooperation and integration as well as political and security cooperation among 16 Southern African States.
The Republic of Angola is a country in south-central Africa, the seventh largest by territorial size and bordered by Namibia to the south, the Democratic Republic of Congo to the north and Zambia to the east, and on the west, the South Atlantic Ocean.
Russia-Africa Summit: Sergey Lavrov Undertakes Assessment Tour
By Kestér Kenn Klomegâh
Behind lofty summit declarations, several bilateral agreements and thousands of decade-old undelivered pledges, Russia has been stacked due to the “special military operations” it began in late February in Ukraine. It has achieved little these few years after the symbolic summit held in 2019. With preparations for the next African leaders’ summit, Foreign Minister Sergey Lavrov plans to undertake two African tours during the first quarter of 2023.
At the heat of the Russia-Ukraine crisis and within the context of the current geopolitical and economic changes, Lavrov made a snapshot trip to four African countries from July 24-28 this year. The four African countries on that travel agenda: are Egypt, Ethiopia, Uganda and the Republic of Congo.
In January-February 2023, Lavrov will first focus on North Africa. Why is Maghreb a strategic region for Russia? It is true that despite the appearance of competition between Europe and the United States, between Russia and China, as well as the Gulf States, Russia has intensified its relations aims at raising its influence in the Maghreb.
Worth noting that Egypt already has significant strategic and economic ties with Russia. With the geographical location of Egypt, Lavrov’s frequent visits there have some tacit implications. Last July trip, for instance, concretely aimed at explaining the perspectives for Russia’s actions in neighbouring Ukraine to frame-shape its geo-strategic posture in the region and solicit support from the entire Arab world. It followed US President Joe Biden’s official visit to the Middle East. Biden visited Israel, the Palestinian territories and Saudi Arabia.
Reports from Russia’s Ministry of Foreign Affairs this week indicated that Lavrov plans to undertake two “coordinated working visits” and the first trip will focus on the Arab-speaking North African region popularly referred to as Maghreb. For several decades, the Maghreb region has been a multifaceted conflict region, in fact, one of the most volatile geopolitical frontiers, which includes Mauritania, Morocco, Algeria, Tunisia and Libya. This vast area inhabited by some 120 million people – 80 per cent of them in Algeria, Egypt and Morocco – is landlocked between the huge Mediterranean Sea and the Sahara Desert.
Historically, Russia has had long-standing good political relations not only in the North but also with sub-Saharan Africa down to Southern Africa since Soviet times, providing tremendous support for liberation movements that culminated in decolonization and, ultimately, the rise of the economies in Africa. The continent is rife with rivalry and competition, attracting foreign players, especially at this time of emerging new global order.
According to official reports, Russia is interested in expanding multifaceted cooperation and making feverish attempts for a collaborative mechanism to upgrade its relations. It seeks to work closely in developing a new architecture necessary for participating in development projects, and promote infrastructure, trade and other viable economic ties. It held the first Russia-Africa summit three years ago, signed many bilateral agreements and issued an impressive joint declaration as a roadmap for future directions.
On the agenda for the second Russia-Africa summit scheduled to be held in St. Petersburg, there are matters relating to building a new global architecture in the context of strengthening multi-polarity and international security, food and energy security, healthcare and humanitarian cooperation, education, science and culture.
With rafts of sanctions imposed on Russia, it becomes expedient for both Russia and Africa to find alternative ways of collaboration (between Russia and Africa) that do not rely on Western currencies or sanctions policy. Of course, illegal sanctions imposed on Russia continue to have a negative impact on foreign economic relations, necessitating an urgent reconfiguration of strategies for pushing further cooperation.
The reports always note that Africa is one of the most important and fastest-growing regions for Russian producers. Moscow understands the significance of engaging and achieving sustainable development there. For example, Russia faces the challenge of promoting the creation of a reliable infrastructure for the production and transportation of African energy products and the development of domestic markets. It faces the challenge of setting its economic influence in the continent admirably.
However, in November 2021, a policy document titled the ‘Situation Analytical Report’ presented at the premises of TASS News Agency was very critical of Russia’s current policy towards Africa. While the number of high-level meetings has increased, the share of substantive issues on the agenda remains small. There are few definitive results from such meetings, according to that authoritative report researched and put together by 25 Russian policy experts headed by Professor Sergey Karaganov, Chairman of the Council on Foreign and Defense Policy.
The report pointed to the lack of coordination among various state and para-state institutions working with Africa. For the past three decades, Russia has played very little role in Africa’s infrastructure, agriculture and industry. Many bilateral agreements at the top and high political levels have still not been implemented. A lot more important issues have received little attention since the first African leaders’ summit was held in Sochi.
Our monitoring shows that the Russian business community hardly pays attention to the significance to, and makes little effort to leverage the African Continental Free Trade Area (AfCFTA), which provides a unique and valuable platform for businesses to access an integrated African market of over 1.3 billion people.
Nevertheless, Russia brings little to the continent, especially in the economic sectors that badly need investment. An undeniable fact is that many external players have also had long-term relations and continue bolstering political, economic and social ties in the continent.
Of course, Russia aims at restoring and regaining part of its Soviet-era influence but has problems with planning and tackling its set tasks and lack of confidence in fulfilling its policy targets. The most important aspect is how to make strategic efforts more practical, more consistent and more effective with African countries. Without these fundamental factors, it would therefore be an illusionary dream considering a multifaceted partnership with Africa.
Latest News on Business Post
- CBN Orders Banks Not to Load N500, N1,000 Notes in ATMs December 6, 2022
- Schneider Electric: Driving the Digital Transformation of Nigeria with Augmented Reality December 6, 2022
- Cashless Policy: CBN Announces Fresh Cash Withdrawal Limits December 6, 2022
- FBNQuest Advises Firms What to do to Manage Rising Cyber-Attacks December 6, 2022
- Nigeria Records N269.34bn in Trade Surplus in Q3 2022 December 6, 2022
- Panelists Discuss How To Grow Your Money In Difficult Times December 6, 2022
- Real Estate Company Promises to Develop Remoland December 6, 2022
- World Food Prices Remain Flat in November 2022 December 6, 2022
- Airtel Africa Gets $194m for Mobile Internet Connectivity December 6, 2022
- Interswitch, FIRS Highlight Benefits of Digital Tax Remittance System December 6, 2022