October 13, 2022
Amid climate politics, Uganda presses on with oil pipeline
Uganda’s ambitions of joining the oil production rests on a pipeline being built between the oil fields in the Lake Albert region and the Tanzanian port of Tanga on the east African coast. If the East African Crude Oil Pipeline (EACOP) is completed, it would move 230,000 barrels of oil per day. However, the project has been the target of climate activists who say it is an environmental disaster waiting to happen.
Workers' Strike at South African Ports
Esther Rose from AllAfrica shares that Transnet has come with a new wage offer to members of two of South Africa's larger unions, the United National Transport Union and the South African Transport and Allied Workers Union. Transnet is a large South African rail, port and pipeline company responsible for the movement of cargo and exports, both nationally and abroad. The workers downed tools at the major ports of Durban and Cape Town over a week ago, in protest over salary increases. As a response, Transnet offered a partial wage increase, but there is no indication yet on whether workers will accept the offer.
Increased Theft in Nigerian Oil Export Terminal
Nigeria has seen increased oil theft in recent years. Recently, the Nigerian National Petroleum Company (NNPC) says it has uncovered an illegal oil connection that operated for nine years. Group Managing Director of NNPC, Mallam Mele Kyari, says an illegal oil connection line from the terminal into the sea was detected during a clampdown. In a bid to put a stop to crude oil theft in Nigeria, authorities launched a mobile app, Crude Theft Monitoring Applications, to enable early reporting of incidents and spur immediate action from relevant security and government authorities.
Fidelity Bank buys United Kingdom’s Union Bank
According to Robert Li from African Law and Business, Lagos-headquartered Fidelity Bank has agreed to acquire Union Bank UK, the former United Kingdom subsidiary of Union Bank of Nigeria. The transaction marks Fidelity Bank’s first foray into international mergers and acquisitions and sets the scene for the institution’s future growth outside Nigeria. With 250 branches, it has developed into one of Nigeria’s biggest and quickest-growing financial institutions.
Moroccan Private Equity funds call upon African Asafo & Co
Robert Li from African Law and Business writes that two investment companies have launched their respective inaugural private equity funds in Morocco, both receiving advice from Africa-focused international law firm Asafo & Co. The firm advised Valoris Capital on structuring and securing regulatory and other clearance for its first private equity fund, Valoris Equity Fund. It will target investments between $18,000,000 and $68,000,000 in companies at various stages, and that are aiming for additional growth or disposal of the business.
African Development Bank backing for Ivorian SMEs
Andrew Mizner from African Law and Business shares that the Ivory Coast state financial institution Caisse des dépôts et consignations de Côte d'Ivoire (CDC-CI) has received $400,000 in backing from the African Development Bank (AfDB) to fund its support of small and medium-sized enterprises (SMEs) in the country. CDC-CI will use the money to promote female and youth-led entrepreneurial opportunities as they recover from the coronavirus pandemic.
Rwanda backs UN resolution condemning Russia’s annexation of Ukraine regions
According to Edwin Ashimwe at the New Times, the United Nations General Assembly voted to condemn Russia’s “attempted illegal annexation” of four partially occupied regions in Ukraine, urging member states not to recognize the move. Rwanda was one of the 143 countries that backed the resolution. This move seemingly reaffirmed the sovereignty, independence, unity and territorial integrity of Ukraine within its internationally recognized borders. Only five countries including Russia voted against the resolution, while a total of 35 countries abstained from the vote.
Libyan Experts Consider AfCFTA Implications for National Economy
This past week, the ECA Office for North Africa concluded a four-day capacity development workshop on Libya and the African Continental Free Trade Area (AfCFTA). Zuzana Brixiova Schwidrowski, Director of the ECA Office for North Africa, said “Libya is facing multiple crises, including COVID-19, civil conflict, intensifying droughts, and spillovers from Russia-Ukraine war. The African Development Bank projects the economy of Libya to grow by 3.5 percent in 2022 and 4.3 percent in 2023. However, these short-term projections hinge on political stability, security improvements and uninterrupted oil production.” This new capacity building program provides an opportunity to discuss how Libya can diversify its economy and put it on a more balanced growth path.
British firm to start Arbitration with Tanzania
According to Paul Owere at African Arbitration Association, British firm Pennyroyal Limited has said it will sue the Tanzanian government over leasehold revocation in Zanzibar. Mr. Brian Thomson, owner of Pennyroyal, has exclusively confirmed that the company has decided to file for arbitration under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention). Several stakeholders have warned that investor confidence in Zanzibar and Tanzania in general will be affected because potential investors will consider it as an unpredictable climate.
France Court of Cassation nullifies Kuwaiti group's seizure of Libyan assets
This past week, the French Court of Cassation ruled the invalidity of the executive seizures made by the Kuwaiti Kharafi Group on the assets of the Libyan Investment Authority (LIA) in France. According to the LIA Chairman, this legal and judicial struggle lasted for more than nine years. This case is related to an investment agreement concluded by the Libyan Tourism Development Authority in 2006 with the Kharafi Group to establish a tourism project in Tajoura, Tripoli. After withdrawing the approval of the project, the group initiated arbitration proceedings against the Libyan state.
China fines Kenya for defaulting on SGR loans
In a recent development, Kenya defaulted on repayment of the Chinese loans provided to build the standard gauge railway (SGR). According to John Mutua from the Business Daily, the Chinese banks fined Kenya $10.8 million in the year ended June for loan defaults. Taxpayers in Kenya have been forced to shoulder the burden of the SGR loans because revenues generated from the passenger and cargo services on the track are not enough to meet the operation costs. The loan default underscores Kenya’s financial distress in the face of fast-maturing debts that have eaten deep into tax collections and squeezed funds for development projects.
Kenya buys half of August sugar from Uganda
According to Gerald Andae at the Business Daily, Kenya bought half of its imported sugar from Uganda in August, making Nairobi a leading destination for Kampala’s exports during the month. In July, Kenya did not import any sugar from Uganda, as the imports mainly came from Zambia, Mauritius and Zimbabwe as the sole suppliers of the sweetener. According to Uganda’s Ministry of Finance data, Uganda exported more goods to Kenya and South Sudan in August compared to any other country. This made sugar emerging as one of its top exports.
Climbing steel prices cut Kenyan imports
According to Edna Mwenda at the Business Daily, Kenyan iron and steel imports shrank by 20 percent in the second quarter of the year amid a slowdown in the construction sector. Due to a shortage related to Russia’s onslaught on Ukraine and the battered shilling, the prices of some steel products in Kenya shot up 40 percent in the first quarter. While steel is one of the world’s most important construction materials, mega-public projects such as the affordable housing projects, and the upgraded Kipevu Oil Terminal have boosted cement use. This recent supply change affects steel needs in Kenya.
EVENTS- 10.13.2022
"Absa Africa Financial Markets Index." Invest Africa. London, United Kingdom. 20 October, 2022.
"Interlinking Intra-African Trade, Industrialization and Infrastructure Development where the guns are silent." Economic Commission for Africa. Tangier, Morocco. 22 October, 2022.
"Masterclass: Understanding AfCFTA & ADR." African Arbitration Association. Nairobi, Kenya. 25-26 October, 2022.
"1st CIArb Kenya Mediation Conference." African Arbitration Association. Nairobi, Kenya. 28 October, 2022