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Senegal Seeks to Learn From Mistakes of Other African Countries and Reverse ‘Resource Curse’

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Civil Society Meeting on Revenue in Senegal Resource Curse

By Kester Kenn Klomegah

Senegal has held a well-representative meeting to seek dialogue with a cross-section of civil society leaders, experts from different economic sectors and both public and private business leaders for the management of revenues from the country’s oil and gas, hydrocarbons and energy resources in the country.

Senegal, located on the West African coast, has a population of approximately 15.9 million. While the economy is mostly driven by mining, construction, tourism, fishing and agriculture, it has state revenues from the exploitation of some natural resources. These revenues largely constitute the national budget.

With the utmost ambition and desire for all Senegalese people to benefit and prosper from their country’s natural resources, President Macky Sall demonstrated his determination to implement reforms to exploit Senegal’s hydrocarbon potential. The move is to propose a framework that will mandate accountability and transparency in the management of resources to ensure that oil and gas production will be conducive and significant towards the well-being of the entire nation.

Senegal is looking towards learning from the mistakes of other African countries in an attempt to reverse the so-called “resource curse” that plagues many oil and gas producing African countries. In a further demonstration of enlisting public opinion, such a broad meeting was called to brainstorm for ideas and incorporate them into a national development programme.

“It is extremely important to remind you all today, we remain convinced that the promotion of a participatory, multi-institutional, and collaborative approach is imperative for capable governance and guaranteeing sustainable prosperity,” stated President Macky Sall of the Republic of Senegal.

Under this new legislation, the citizens of Senegal will have a seat at the table, with civil society to play a leading role in driving the discussion surrounding the monetization of the country’s oil and gas industry. This landmark act will ensure a trickle-down economy that guarantees investments within petrochemicals, agriculture, power, gas, and transportation, thus expanding the economy and facilitating the creation of many jobs for Senegalese citizens.

While the undeniable impacts of climate change continue to be taken into consideration, Senegal is driven towards eradicating energy poverty, and notes that the development of the nation should be prioritized, and this will be done through oil and gas.

Poised to catalyze Senegal’s economy, oil and gas exploration and production are at the forefront of providing efficient, low-cost energy solutions in accordance with the primary objectives of the Plan for an Emerging Senegal. Thus, with the country’s first oil production geared for 2023, President Macky Sall has put into place, the requisite systems necessary to strengthen the revenue from the exploration and production of hydrocarbons for the benefit of Senegalese civil society.

The Senegalese Presidential Council is, however, praised for the distribution and supervision of the management of revenues derived from the exploitation of hydrocarbons. It marks a significant step towards the leader’s desire for oil and gas to be conducive to the well-being of all Senegalese people. It further shows efforts to involve civil society in significant issues relating to the socio-economic growth.

Abdoulaye Wade’s decision to run for a third presidential term sparked a public backlash that led to his defeat to current President Macky Sall. His election was primarily due to support from broad-minded democratic groups. The 2016 constitutional referendum limited future presidents to two consecutive five-year terms. In February 2019, Macky Sall won his bid for re-election; his second term will end in 2024.

Reports show Senegal is committed to harnessing its oil and gas resources to drive socio-economic growth, and support a national development model – the Emerging Senegal Plan.  Senegal is working collaboratively with external and regional partners to position itself as a globally competitive hydrocarbon producer. In 2021, the country saw several significant achievements regarding its top two energy projects, according to reports provided at last African Energy Week (AEW) held in Cape Town, South Africa.

As one of Africa’s leading natural gas markets, boasting over 450 billion cubic meters of reserves, Senegal is aggressively pursuing industry expansion with the aim of establishing the country as a regional gas producer and exporter.

Senegal’s National Oil Company (NOC), for instance, has been advancing the industry. With a participating interest in all upstream commercial hydrocarbon activities, the company has accelerated oil and gas exploration and production, effectively positioning Senegal as a regional gas hub and global competitor.

The company has effectively navigated the global pandemic, enhancing industry activities and introducing key investment opportunities to international stakeholders and driving a strong discussion on the role of Senegal in Africa’s energy future.

Its largest project, the Greater Tortue Ahmeyim (GTA) Liquified Natural Gas (LNG) project, is the deepest offshore project on the continent and is set to unlock approximately 15 trillion cubic feet of gas. Jointly developed by BP, Kosmos Energy, Societe des Petroles du Senegal (Petrosen), and Societe Mauritanienne des Hydrocarbures (SMHPM), with BP as the operator, the project has set a high standard for other African gas markets looking to enhance development.

Senegal enjoys mostly cordial relations with its neighbours – Guinea, Guinea-Bissau, Mauritania, Mali and The Gambia. It is a member of the Community of Sahel-Saharan States and also belongs to the 16-member regional bloc, the Economic Community of West Africa States (ECOWAS).

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Cape Town to Host 2022 African Energy Week October 18

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2021 African Energy Week

By Adedapo Adesanya

The annual African Energy Week (AEW) will be taking place on October 18 -22, 2022, in Cape Town, South Africa, the organisers have announced.

The African Energy Chamber (AEC), which organises the event, will bring energy leaders and global stakeholders together for a week of intense dialogue on the African energy sector, with a strong pursuit of making energy poverty history by 2030.

In pursuit of an electrified economy, AEW 2022 will introduce critical topics that cover the entire energy value chain.

Regarding the upstream sector, there will be a focus on exploration, licensing rounds, and remaining competition for investment in 2022 and beyond.

With emerging frontier markets such as Somalia, Kenya, Namibia, Uganda and Côte d’Ivoire gaining increased attention from regional and international players, AEW 2022 will emphasize the potential and current opportunities across Africa’s emerging and mature upstream markets.

On the midstream front, AEW 2022 will offer critical insight into new and existing projects – such as the $6 billion African Renaissance Pipeline Project and the proposed 1,800km Tanzania-Uganda Natural Gas Pipeline Project – introducing lucrative opportunities to investors.

With the scaling up of refinery construction underway across the continent, the conference is committed to increasing investment and enhancing production across key African markets.

The organisers noted that by discussing the challenges and opportunities present across the downstream sector, African stakeholders will collaboratively discuss the future of the African energy industry.

On his part, Mr NJ Ayuk, Executive Chairman of the AEC said, “In 2021, they said it could not be done in Cape Town and we all must go to Dubai.

“With massive support from the City of Cape Town, the government of South Africa IOC’s and NOC’s and alternative energy companies, we demonstrated that Africa is ready and capable to hold a continent-wide energy event in Africa and we held the largest event on the continent. Even in the midst of the pandemic, AEW took place, ushering in a new era of safe, accessible, and industry-focused events.

“This year will be huge for the African energy industry. We expect a range of investments to be made and developments to take off that will drive the continent’s economic advancement.

“During this year’s edition of AEW, an emphasis will be placed on finance, natural gas, electrification, hydrogen, upstream and a just transition as we believe these sectors have a specific role to play in Africa.

“By developing our gas resources, Africa can meet the growing demand for energy while reducing emissions. From AEW 2022, we will be going to COP27 to meet with global leaders and discuss African energy – from Cape to Cairo.”

The organisers noted that as the continent continues to deal with reduced funding for hydrocarbon projects, AEW 2022 will offer new insights into how Africa’s oil and gas projects can raise capital in a post-COVID-19, energy transition context.

Accordingly, panel discussions and investor forums will place a focus on finance, enabling environments, and the role that African Energy Banks will play in financing the future of the industry. By introducing African stakeholders to innovative capital raising, AEW 2022 is committed to the growth of African oil and gas.

Regarding gas, the Chamber noted that Africa is not only rich with resources but opportunities. Markets such as Nigeria, Mozambique, Mauritania, Senegal, Tanzania, Equatorial Guinea, the Republic of the Congo, and Ghana have significant untapped resources.

Already, there has been an influx in investment and development within the gas sector, and yet a range of opportunities remain, particularly within the gas-to-power and Liquefied Natural Gas space.

AEW 2022, therefore, has placed a strong emphasis on the role that gas will play in electrifying Africa, driving socio-economic growth and industrialization for years to come. By introducing project profiles, highlighting key discoveries, and emphasizing how gas will drive a just transition in Africa, AEW 2022 has placed gas at the centre of its programme agenda.

The recent move by the European Union to label certain gas projects as green is likely to usher in a new wave of investment in Africa and AEW 2022 will be the place where deals in this area will be made.

The development of resources such as gas, hydrogen and renewables according to the organisers will ensure Africa adheres to global climate mitigation targets while at the same time driving economic growth.

During the summit, speakers will highlight key opportunities across Africa’s renewable energy space, providing insight into potential markets such as the Congo, Mozambique, the Gambia, Kenya, Angola, and Libya, all rich with renewable resources.

Additionally, the programme will emphasize the role that hydrogen will play in Africa by detailing high potential markets and projects such as Hive Hydrogen’s green ammonia plant in South Africa and the $9.4 billion green hydrogen project in Namibia.

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Intra African Trade Could Reach $300bn in 2025—Akinwuntan

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Intra African Trade

By Aduragbemi Omiyale

The Managing Director/Regional Executive of Ecobank Nigeria, Mr Patrick Akinwuntan, has projected that intra Africa trade could reach $300 billion by 2025.

He gave this forecast during an interview with Arise TV while speaking on the recently launched Pan-African Payment and Settlement System (PAPSS).

He described the payment platform developed by Afreximbank as a good development, noting that it will serve as a backbone through which all the countries in Africa are able to actualize transactions done within the free trade area, adding that it will also create employment, wealth, and deliver values to exporters on the continent.

“This common payment platform will enable Africa to move intra trade from the current 16 per cent, representing $70 billion to the range of 50-55 per cent in the next two to three years. This is huge because we could be talking about $300 billion intra African trade close to 15 per cent of Africa GDP.

“Besides, PAPSS will also eliminate payment delays, third party currencies as well as benefit households, small businesses, and financial institutions. This is a positive development for intra Africa trade. It is a step in the right direction. It will promote cross border trade for African exporters, liberalize payments and will deliver payment that delivers value. Africa is here for real business. Africa is ready. Let’s go for it,” he said.

Further, Mr Akinwuntan disclosed that “Ecobank is a supporter of this initiative. Today, we can reach up to 35 countries because we already have a Pan African switch, and we are already connected to PAPSS.

“I call for the collaboration of all stakeholders to achieve the desired objectives; we have the key industry sectors that deals on Pan African trade.

“We need to go through with them, helping them to see the practical possibilities. We have a responsibility to take this message to them that if they want to do any transaction across Africa, they don’t need to look for an international bank. PAPSS will work the same way NIBSS works in Nigeria.”

PAPSS is expected to boost intra-African trade by transforming and facilitating payment, clearing and settlement for cross-border trade across Africa.

At the launch, Prof. Benedict Oramah, the President and Chairman of the Board of Directors of Afreximbank, said “we are eager to build upon AfCFTA’s creation of a single market throughout Africa.  PAPSS provides the state-of-the-art financial market infrastructure connecting African markets to each other, thereby, enabling instant cross-border payments in respective local African currencies for cross-border trade.

“Afreximbank as the main settlement agent for PAPSS, provides settlement guarantees on the payment system and overdraft facilities to all settlement agents, in partnership with Africa’s participating Central Banks.

“PAPSS will effectively eliminate Africa’s financial borders, formalise and integrate Africa’s payment systems, and play a major role in facilitating and accelerating the huge AfCFTA-induced growth curve in intra-African trade,” he stated.

Also speaking at the event, PAPSS’s Chief Executive Officer, Mr Mike Ogbalu, emphasised that the payment system was not designed to compete with or replace existing payment systems.

He said it would facilitate the connectivity level that brings all payments systems together into one network that was interoperable, efficient and affordable.

“PAPSS is designed to make our currencies regain value to domesticate intra-Africa payments in this journey toward African prosperity. This is done while providing the superhighway which connects others to reach every part of this continent as we seek to create the Africa that we want,” he said.

The PAPSS pilot in WAMZ central banks has been completed and all six central banks have tested and gone through the trial operations.

In the last week of August 2021, all the central banks became live on the system and have since been sending through live transactions across the WAMZ region.

PAPSS has been successfully piloted in the six countries of the West African Monetary Zone, and promises to deliver multiple advantages and efficiencies to intra-African trade payments. As a major supporter of this initiative, Ecobank is already connected to PAPSS.

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Russia Proposes Complete Ban on Cryptocurrencies

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Cryptocurrencies

By Adedapo Adesanya

The Russian central bank has proposed a complete ban on cryptocurrencies in the country.

The proposal emphasized that crypto is extremely volatile and has helped to spread fraudulent activities in the country, adding that it is also a potential risk to the country’s national economy.

Director of the Bank of Russia, Ms Elizaveta Danilova, during a presentation, said that a complete ban would mean no mining, trading, or usage of crypto in the country.

However, owning cryptocurrencies would still be legal.

The report also suggested that the government should introduce punishments for individuals who buy or sell products/services using crypto.

The central bank, which is planning to issue its own digital currency, said crypto assets becoming widespread would limit the sovereignty of monetary policy, with higher interest rates needed to contain inflation.

This isn’t the first time the Bank of Russia has gone after cryptos as it had banned mutual funds from investing in any cryptocurrencies.

In 2019, the country blamed cryptocurrencies for spreading money launching and terror financing.

However, the government legalized crypto in 2020, although banning their use as payments.

The move is the latest in a global cryptocurrency crackdown as governments from Asia to the United States worry that privately operated and highly volatile digital currencies could undermine their control of financial and monetary systems.

With the total ban of the asset by China, Russia witnessed a rise in crypto mining and this move has already triggered investors to dump their coins.

In September, China intensified its crackdown on cryptocurrencies with a blanket ban on all crypto transactions and mining, hitting bitcoin and other major coins and pressuring crypto and blockchain-related stocks.

Market analysts note that although the Bank of Russia’s proposal can cause significant worry for its crypto traders and miners, it’s still not confirmed if the government will follow through with a total ban.

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