🔅 Oil companies are leaving Africa
Today’s Issue: Comoros' former president is sentenced to life, Kenya's foreign-exchange reserves have breached the four-month import cover, and London is handing back over six artefacts looted 125 years ago... ☕
Photo of the day: A biker on the Great East Road, Zambia.
Markets
🔻 Nigerian SE: 47,322.97 (-0.24%)
🔻 Johannesburg SE: 73,163.75 (-0.28%)
— Ghana SE: 2,463.27 (0.00%)
🔻 Nairobi SE: 127.23 (-0.09%)
🔻 US S&P 500: 3,952.82 (-0.28%)
🔺 Shanghai Composite: 3,149.75 (+2.31%)
*Data accurate as of the close of markets across the continent
Kenya: The country's foreign-exchange reserves have dropped to the lowest level in seven years, breaching the four-month import cover. This means that Kenya doesn't have enough reserves to cover its imports for four months. The funds currently stand at $7.04 billion, equivalent to 3.94 months of imports.
OIL AND GAS
Oil companies are leaving Africa. Case in point, Equatorial Guinea
What's happening?
It looks like it's time to bid farewell to Exxon in Equatorial Guinea. The oil giant has decided to cut its losses and move on from the West African country by 2026. The move is part of a larger shift by major oil producers to reduce their reliance on crude oil in Africa. The region is struggling to meet OPEC quotas due to the lack of investments in oil production.
Why are oil companies leaving?
Africa's oil industry faces several issues, such as high production costs, rampant oil theft, and an inability to meet OPEC quotas. Additionally, oil companies have been looking to invest in more lucrative projects in the Americas. As a result, major oil producers such as Exxon, Chevron, and Shell have been exiting Africa and shifting their focus to other regions.
Output from the two biggest producers in the region, Angola and Nigeria, has plummeted by a third in the last year, and TotalEnergies exited Angola earlier this year. The move is also down to the more lucrative projects the Americas have to offer, with production there expected to grow to 28 million barrels per day next year. Much of the increase comes from the United States, Canada, Guyana and Brazil, where Exxon has increased spending on oil output.
Is it all bad news?
Not exactly. When it comes to Africa's gas future, things are looking up. Major producers are investing in LNG, with Mozambique recently exporting its first cargo. There are also promising oil and gas reserves in Namibia, with appraisal wells expected to be drilled in the first half of next year. So, looks like Africa's oil future is shifting to the (lighter) gas side of things.
ACROSS THE CONTINENT
Other Headlines
🇰🇲 Ahmed Abdallah Sambi, the former president of the East African nation Comoros, has been sentenced to life in prison for "high treason". He was accused of selling passports to stateless people living in the Gulf and was said to have embezzled $1.8 billion. His lawyer argued that no evidence had been provided for the missing monies and no bank accounts had been put forward to suggest a crime. However, the court ruled in favour of the prosecution, and Sambi was sentenced to life in prison. The ex-president has been in and out of jail since he was accused of disturbing public order, corruption, and forgery. His daughter believes that his political rival, the current President of Comoros, is in a high-stakes power struggle and is doing everything to remove Sambi from the political agenda.
🇸🇴 Somali security forces and al Shabaab militants clashed in a nearly day-long siege of the Villa Rose hotel near the president's residence. The gunfight ended with the security forces rescuing 60 civilians and killing six al-Shabaab fighters. A total of nine people were killed, including one soldier, and five were injured. In the aftermath, Somalia's parliament postponed a session of its houses, and the government vowed to press on with its offensive against al Shabaab. It's clear, though, that al-Shabaab can still pull off deadly attacks in the city, despite the government's efforts.
🇧🇯🇳🇬 The Horniman Museum in London handed over six artefacts looted by British troops 125 years ago from Benin City. The objects, including two 16th-century Benin bronze plaques, were received by Abba Tijani, the director general of Nigeria’s National Commission for Museums and Monuments (NCMM). This is the first time a UK government-funded institution has agreed to hand back treasures looted by British forces. Tijani hopes other museums holding stolen artefacts from Benin City will follow suit. The British Museum, which holds 900 objects, is particularly under pressure to return its artefacts but has resisted calls to do so, arguing that it is prevented by the British Museum Act of 1963 and the Heritage Act of 1983. Last month, Nigeria’s culture minister urged the British Museum to take action, and Horniman's move will likely add more pressure. Could the writing be on the wall for Britain to give back the goods?
🇿🇼 Looks like the electricity woes in Zimbabwe are about to get worse. The Zambezi River Authority, which runs the Kariba Dam (the country’s biggest hydroelectricity supplier), said that water levels at the dam have reached a record low and electricity generation must stop. This means that the Kariba South hydropower station — which provides Zimbabwe with about 70 per cent of its electricity — will no longer be producing electricity until at least January. It’s not like the country has many alternatives — coal-fired power stations are unreliable due to ageing infrastructure, and solar power isn’t quite up to snuff yet — so Zimbabwe's lights might be off for a while. However, there is one glimmer of hope: the local Herald newspaper reported that the expansion of a critical coal-fired power station, Hwange, could help plug the shortages exacerbated by the Kariba plant shutdown if it goes live by year-end.
IN TECH
Nigeria's Pivo gets 2m funding to power small and medium enterprises through digital banking.
It's a tough job market out there, but Nkiru Amadi-Emina and Ijeoma Akwiwu have just scored the biggest job of their lives: getting $2 million to build their startup, Pivo. Pivo is a digital bank designed to help small and medium enterprises (SMEs) in supply chains across different sectors in Africa get paid faster and track payments more efficiently. The startup, which has raised $2.55 million since its launch in July 2021, will use the money to upgrade its products, build new ones, hire talent and expand outside of Lagos, its first market. The credit play of Pivo’s platform, Pivo Capital, provides an early payment alternative for truckers and allows logistics companies to cover any upfront costs. Pivo Business, its payments reconciliation arm, helps SMEs facilitate payments via peer-to-peer transfers and track payments with debit cards with spend controls. Nkiru and Ijeoma also made history when they became the first all-female-founded team Y Combinator has backed in Nigeria.
FOOD FOR THOUGHT
Proverb of the Day
“The pillar of the world is hope.”
— Nigerian Proverb.