The government of Egypt has taken drastic measures to curb the spreading of the Covid-19 virus in the country by suspending all international flights into and out of the country starting tomorrow. The decision was informed by the need to maintain the safety and health of the citizens said Minister of Civil Aviation Mohamed Manar. In a meeting attended by Deputy Minister of Civil Aviation Montaser Mannaa and CEOs of all companies and bodies affiliated to the Ministry of Civil Aviation, the Minister directed to quickly provide all the necessary facilities for the travel of Egyptians and foreigners to and from Egypt before suspending air transport movement at Egyptian airports.
Minister of Civil Aviation Mohamed Manar
He highlighted that Egyptair, Egyptian private airlines, and foreign airlines are to continue operating their international flights to accommodate passengers’ desire to travel to and from Egyptian airports before the specified date stressing that all tickets booked in this period to be exempted from any fines when it comes to refunding or changing the tickets.
In regard to the tourist groups currently in Egypt, the Minister assured that tourist programs will be completed and tourists will leave on their booked charter flights, noting that such flights shall not bring new tourist groups to Egypt. He added that Egypt National Airspace is not closed. In order not to harm the interests of Egyptian citizens, the decision to suspend air traffic does not include domestic flights and cargo flights.
Manar also stressed that coordination and cooperation shall continue with all appropriate authorities in Egypt to monitor developments of Covid-19 and its impact on the safety and security of civil aviation. He added that during the period of suspension, all Egyptian airports and vital installations in the civil aviation sector will be disinfected.
The Minister of Civil Aviation noted that EgyptAir, Egypt flag carrier, in coordination with the relevant authorities, will continue the process of evacuating Egyptian citizens intensively during the coming days before the suspension of flights and at the same time facilitating the return of foreign tourists to their countries after the end of their tourism program.
The Ministry of Civil Aviation calls on all travelers to follow up and communicate with their airlines to change and reschedule their flights and to ensure their safe return to their countries without any delay that might jeopardize their commitments.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The world’s first time based music streaming application, MusicTime®, has revealed its new corporate identity. The logo was revealed this week via social media, following months of research and testing, and has already found favour across the market. MusicTime® was first launched in South Africa in December 2018 and it is now officially live in six African countries namely South Africa, Ghana, Nigeria, Zambia, Cameroon and eSwatini.
Miss Oyinkasola Fawehinmi, the CEO of DMCE
With over 500,000 downloads already, MusicTime® has already proven that a unique, legal and affordable music streaming experience is in the rise in Africa. MusicTime®’s vision is to become the music streaming app of choice for the youth and early adopters in Africa and the world, with affordable and flexible plans; as well as to be the best and recommended platform for local artists in the market. MusicTime® has one of the largest catalogues on the continent, offering more than 40 million songs. Label partners and licensing deals include Content Connect Africa, Africori, DMCE and more. MusicTime® also has the major international labels such as Universal Music Group and Warner Music Group, rounding out a rich catalogue.
According to company sources, MusicTime® has a totally unique offering that replicates the consumer behaviour of airtime. Users can buy a weekly pack, that gives 2 or 5 hours access to music, over the seven day period. Their continent-wide partnership with MTN means that the data is pre-packaged with the music, so users can listen to their favourite artists with no fear of running out of data. MusicTime® offers a 60 minute free trial to all users. Payment is done via convenient airtime billing.
Miss Oyinkasola Fawehinmi, the CEO of DMCE, an Intellectual property administration and valuation company based in Nigeria, Ghana and Tanzania said that MusicTime’s pricing model is innovative and it provides a zero data music consumption offering which is easier to access for users through airtime billing. DMCE and its rights holders are excited about the prospect of this model and believe that it will be mutually beneficial solution for all stakeholders in the local music scene.” She further went ahead to say “We love working with MusicTime as it is positioned to provide African artists with a platform that allows them accelerate their careers and reach new audiences. We are certain that this new brand refresh will help further with their positioning”.
Mr Yoel Kenan. CEO of Africori, a leading content distributor and aggregator focused on the African Market also added “MusicTime® integrated offering to users is set to challenge music consumption patterns to mainstream audiences across Africa by offering new opportunities to local artists to reach new fans locally and across the continent. We are looking forward to working with MusicTime® as a key partner in generating revenues and promotional opportunities to our clients as leading African artists and labels”. Expansion to other markets in Africa and the Middle East is a priority for 2020 and the services will be made available in a further four countries by the end of the year.
Speaking on the MusicTime® rebranding, the CEO of SIMFY Africa, David Gillaranz said “We are delighted to introduce our new brand to our users. This goes alongside with our vision to provide an affordable and legal music streaming services in Africa and beyond. Our proposition is unique and truly provide everyone the ability to access millions of songs and playlist focusing largely on local music.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
As part of efforts aimed at boosting food production in Africa in realization of the continent’s dream of self sufficiency in food, the Africa Fertilizer Financing Mechanism (AFFM) has launched a $2.2 mill project in Nigeria to boost fertilizer supply to 200,000 farmers. The trade credit guarantee project is AFFM’s first in Nigeria and will involve 10 fertilizer suppliers, 12 hub agro-dealers and 120 retail agro-dealers.The project will also train farmers in proper fertilizer use and other agricultural best practices.
Marie Claire Kalihangabo, AFFM Coordinator
The project according to the Nigerian government was conceptualized by the African Development Bank as part of its Hi-5 programmes at developing the continent. During its launch in Abuja over the week, attendees discussed the project and its implementation with AFFM’s local partner, the Africa Fertilizer and Agribusiness Partnership, or AFAP. According to AFAP’s representative Nana-Aisha Mohammed, “we will leverage on existing networks and look for creative solutions to increase the availability of fertilizer in the country.”
Assistant Director of FMARD’s Farm Inputs Support Services Department who represented the Nigerian Federal Ministry of Agriculture and Rural Development (FMARD) Umar Musa said that AFAP should work with the Nigerian government and other actors in the fertilizer value chain to ensure that the project complies with Nigeria’s policies and sector strategies. “We expect this project to support smallholder farmers and improve their productivity in order to help the country increase its local production and consumption of fertilizer,” he said.
“We are confident that the project will increase access to quality and affordable fertilizer by smallholder farmers and hence contribute to the transformation of the agriculture sector in Nigeria,” said Marie Claire Kalihangabo, AFFM Coordinator. Kalihangabo expressed her gratitude to the Government of Nigeria for their financial support to the Africa Fertilizer Financing Mechanism.
Regional Director at the African Development Bank’s Regional Office Ebrima Faal said the National Fertilizer Quality Control Act 2019 further serves to reinforce the government’s commitment to the sector. “This program is timely because the government has placed measures to encourage local production of fertilizer,” he added.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The Sierra Leonean President Julius Maada Bio has appealed to the African Development Bank to help to stimulate agribusiness development in the country with a focus on rice production. This plea was made by President Maada Bio told a visiting delegation led by its president Akinwumi Adesina.
President Julius Maada Bio
Adesina begana two-day visit to Sierra Leone within the week during which he will hold meetings to discuss curbing malnutrition, creating skills and jobs for young people, rapidly scaling up economic diversification and restoring the country to self-sufficiency in rice production.
“Our government is working hard to recover the economy, which was on the brink of collapse. We want to focus on economic diversification, with agriculture as the main driver,” President Bio observed, in a meeting with the Bank delegation.
“We are serious about developing this country and will appreciate the Bank’s support to realize our dreams. Infrastructure is an enabler for development, so we appreciate what the Bank is doing in Sierra Leone,” Bio said, identifying a productive workforce as a top national priority as well as jumpstarting economic activities in rural areas, where 73.9% of Sierra Leone’s poor live.
Commenting on the country’s capacity to enhance local production, and the export of rice, Sierra Leone’s staple food, Adesina said, “Sierra Leone should not be spending over $200 million yearly importing rice because its climatic conditions are generally favorable for rice production.”
According to the Ministry of Agriculture and Forestry data, total rice demand in 2018 was 1.6 million metric tons, against local production of 700,000 metric tons. In July 2019, the Bank approved the $11 million Agribusiness and Rice Value Chain Support Project to stimulate agribusiness development in the country with a focus on rice.
Sierra Leone also sought the Bank’s support for the implementation of its free quality education programme, which aims to enhance human capital development and facilitate economic transformation.
Adesina encouraged the country to explore the Bank’s Africa Investment Forum to elicit investor interest for the proposed Lungi–Freetown bridge. The project will link the capital city, Freetown, to the country’s sole international airport, which is presently accessible by ferry or helicopter.
The Bank also expressed keenness to support the development of critical infrastructure in the West African country and to open up space for greater private sector participation in the economy. Adesina said the Bank would deploy the African Legal Support Facility to help the country better manage its natural resources.
Adesina commended President Bio for his decision to join the African Leaders for Nutrition as a nutrition champion in his country, and for Africa. “Sierra Leone is an important country to the Bank,” We will support you to build a more robust and resilient economy, to transform the lives of your people. That is our role as a bank, putting people at the heart of development.”
“The Bank’s footprint is everywhere in Sierra Leone,” Chief Minister David Francis told Adesina. “The Bank has remained committed to the post-Ebola reconstruction. You have remained a faithful partner, and the country is grateful.”
Sierra Leone was one of the Bank Group’s founding members, and the Bank has financed projects there since 1967, to a cumulative sum of $758 million.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Africa does not need to ‘burn down the house’ to defeat COVID-19
Rather than imposing damaging and ineffective travel bans, African authorities should focus on mitigating the pandemic argues Patrick Gathara.
Patrick Gathara
In April 1914, as Europe was moving towards war, Dakar, the capital of present-day Senegal, was hit by an epidemic of bubonic plague that within a year, according to one account wiped out nearly 15 percent of the city’s population
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In response, the French colonial authorities imposed harsh measures on the African population, which included restrictions on movement, the establishment of quarantine camps, forceful vaccinations and the burning of homes. The epidemic was part of what has come to be known as the Third Plague Pandemic that circled the globe between 1855-1959, during which European administrators across Africa implemented similar measures in other colonial cities. Nairobi’s business district, for example, was razed down following an outbreak in 1902.
Plague epidemics on the continent had predated the arrival of the Europeans, and Africans were not unaware of the dangers they posed. Still, in places like central Kenya, plague was not a significant cause of African morbidity and mortality. Colonial medical officials were, however, concerned about the threat epidemics posed to the extractive colonial economy, the flow of migrant labour from Africa to Europe and production in cash-crop growing areas.
The measures they imposed on the locals were unpopular, and Africans quickly became loath to cooperate with the colonial authorities or to report cases in their homesteads knowing it meant the destruction of their homes. More than a century later, a similar dynamic is at work as the world confronts yet another pandemic.
Since it was first identified in China in late December, the coronavirus has swept across the world, killing thousands and wreaking social and economic havoc on a massive scale. Disregarding the advice of the World Health Organization (WHO) as well as global health experts, many countries have resorted to imposing travel restrictions, the latest being the sweeping US ban on all travel from Europe.
African governments too have been scrambling to contain the virus before it establishes a firm toehold on the continent. As is the case in much of the rest of the world, initial fears and efforts focused on the possibility of importing COVID-19 from China. Across the continent, air links with China have been severed and, in some countries such as Kenya, this has led to a spike in racist anti-Chinese sentiment. Yet as publics and governments were looking east, the virus sneaked in from an entirely different direction.
As of this week, at least 18 African countries 14 of them in sub-Saharan Africa, have so far reported a combined total of almost 200 coronavirus cases. The majority of infections outside Egypt, where there are the most reported cases but where the source of the virus is disputed originated in Europe.
In Burkina Faso, which was the latest to confirm the presence of the virus, a couple was quarantined after returning from a trip to France. Nigeria was introduced to the virus by a 44-year old Italian while the cases in Cameroon and Togo involved people who had been travelling in Europe. In fact, according to the WHO, Europe is now the “epicentre” for the pandemic, reporting more daily cases than China did at the height of its outbreak.
For a continent with long historical ties to Europe, measures such as indiscriminate travel bans will be difficult to swallow, akin to burning down the house. For example, according to a report by the Kenyan government, arrivals from Europe last year dwarfed those from China, with five arrivals from the Old Continent for every one from the People’s Republic.
In fact, arrivals from Europe were double those from Asia and the Middle East combined and accounted for 45 percent of visitors to Kenya from the top 12 countries outside the African continent. Given that two-thirds of international visitors to Kenya came to holiday, pumping $1.6bn into the local economy, and helping to sustain over a million jobs, a strategy of shutting the doors to Europe begins to look rather unappealing.
Of course, this has not stopped some countries from trying. Uganda has asked Italians, Spaniards, Germans and the French not to come and has also banned international conferences on its soil including the United Nations Group of 77 and China Summit, which had been expected to attract more than 6,000 delegates. Across the border, Kenya has issued a similar ban, which will mean foregoing much-needed income for the region’s economies.
Yet questions linger over the sustainability of travel bans for a continent where travel and tourism remain one of the key drivers of growth. Although Africa captures a tiny fraction of the global tourism market, the industry still accounted for 8.5 percent of the continent’s gross domestic product in 2018 and employed over 24 million Africans. With the virus now present in over 115 countries, the Kenyan transport minister has noted the impossibility of stopping flights from them all.
The decision by the WHO to declare COVID-19 a global pandemic is itself an admission that containment efforts have failed. Last week WHO officials had said that declaring a pandemic would be tantamount to throwing in the towel on containment and would be a signal to governments that efforts should focus instead on mitigation: treating patients, developing and providing vaccines and reducing the strain on health systems and society.
For African countries, it should be treated as a caution against wrecking an important source of livelihoods by imposing indiscriminate travel bans. That does not mean abandoning reasonable precautions to stop infected persons getting into the continent, but rather changing focus to ramping up capacity for free testing for the virus, shoring up dilapidated health systems to deal with local infections, and, importantly, public education – measures that some countries are now implement.
However, huge gaps remain. At a press conference on Friday to announce Kenya’s first confirmed case, the Cabinet Secretary for Health offered contradictory advice, alternately asking the sick to stay at home and then later saying the responsible thing was actually to head to the hospital. The panic buying that followed the announcement exemplified a lack of faith in the government’s ability to manage the epidemic driven largely by its failure in the preceding weeks to prepare the population for what was coming.
The continent could look to Asian countries such as Singapore and South Korea where public information coupled with widely available free testing and contact tracing as well as rigorously enforced isolation of infected cases has minimised the need for Italian town shutdowns.
Africa can beat COVID-19. It just doesn’t need to burn down the house to do it.
Patrick Gathara, a Communications Consultant lives in Nairobi.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The new Africa presents the continent’s youth with an excellent battleground to join and wage the economic struggle that will finally liberate Africa, Prof. Benedict Oramah, President of the African Export-import Bank (Afreximbank) has said. Speaking on Wednesday on the topic “Unleashing the Power of the Youth” while delivering the 14th Convocation Lecture of the Nnamdi Azikiwe University (UniZik) in Awka, Nigeria, Prof. Oramah said, “just as Africa’s political struggle was led by the youth, so will the youth lead the way for Africa’s economic emancipation”.
Prof. Benedict Oramah, President of the African Export-import Bank
Youths represented agents of change across the social, political and economic spectra and history and contemporary evidence had shown that they had always been the catalyst to economic transformation, constituting the largest proportion of the labour force and the population at the height of the industrial revolutions in the advance countries, he said.
“History has shown that where the youth are given the opportunity, they have been the force for positive change,” noted Prof. Oramah who added that he considered the youth to be Africa’s greatest resource, “an asset much more valuable than all the oil and solid minerals we so frequently celebrate”.
He quoted the statement by Dr. Nnamdi Azikiwe, the former President of Nigeria after whom the university was named, that, “The immediate aim of African education should be to develop character, initiative, and ability of the youth of the country, so that they may be reliable, useful, and intelligent in the rapidly changing life and circumstances of their own people. …….. Anything narrower than this must lead to a stagnant and menacing flood of unemployed and unemployable youth.”
Prof. Oramah noted that the ubiquitous social media platforms, Facebook, Twitter and Instagram; Tech companies such as Apple and Microsoft; and e-commerce platforms, including Amazon and Alibaba; were founded by people in their youth. Youth-powered digital businesses accounted for about two-thirds of the U.S. economy, one-third of the Chinese economy and eight per cent of the Indian economy, he added, saying that those companies were bigger in value than many African economies.
Despite limited opportunities, however, Africa’s youth was beginning to make important contributions to economic transformation on the continent, said Prof. Oramah. The African versions of Steve Job, Mark Zuckerberg, Alexander McQueen and Calvin Klein were rising like the Phoenix while others, like Aliko Dangote, Tony Elumelu, Lily Alfonso and Njideka Akunyili-Crosby, all started making impact in their various endeavours as youth.
Prof Oramah cited Ndubuisi Eze, a young drone expert who was identified by Singaporean investors at the inaugural Intra-African Trade Fair in Cairo in 2018 and, subsequently, relocated to Singapore where he was able to get support to develop his company and now produces and exports drones to global markets.
Prof. Oramah also highlighted the Nigerian youth-led entertainment industry which is making significant gains and inroads into the global scene and noted that Afreximbank had recently announced a $500 million Creative Industry Financing Facility which was available to operators in the full spectrum of Africa’s creative sector. That facility was expected to boost youth participation in the African creative economy.
Prof. Oramah urged the youth to be prepared to take advantage of emerging opportunities under the African Continental Free Trade Area (AfCFTA) and announced that Afreximbank had launched a number of initiatives and programmes to support African economies and the youth to maximize the benefits of the AfCFTA. Those included an incubation lab being put in place to support innovation and help bring innovative products to market.
Prof. Oramah paid tribute to the leaders whose visions made UniZik possible, including Chief Jim Nwobodo and Dr. Chukwuemeka Ezeife, two former governors of Nigeria’s Anambra State, and former Nigerian President Ibrahim Babangida under whose leadership the former Anambra State University of Science and Technology was renamed Nnamdi Azikiwe University and made a federal university.
Prof. Oramah also paid tribute to Dr. Azikiwe, who was Governor General of Nigeria from 1960 to 1963 and President from 1963 to 1966, saying that he was a freedom fighter who devoted his youth and entire life towards the emancipation of Africa in general and Nigeria in particular.
“He was fearless in his struggle, knew no boundaries in his scope and leveraged his legendary intellectual capacity to overcome the most complex of challenges. He understood the importance of education in the struggle for Africa’s renaissance. His passion for scholarship and Africa’s emancipation – what he stood for and his fulfilled life lived – presents us with an armour to engage in the complex battles of today,” said the Afreximbank President.
Earlier, Prof. Rasheed Abubakar, Executive Secretary of Nigeria’s National Universities Commission and Chairman of the Convocation Lecture, introduced Prof. Oramah, describing him as “one of the greatest minds” and saying that his lecture would stress the primacy of education.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
With the planned launch of the universal QR Code Payment System later next month, Ghana aims to become the first country in Africa to adopt this technology which will go a long way in easing payments across boards. This is part of Ghanaian government’s formalization of the economy through digitization. The programme which is being spearheaded by the Vice President Dr. Mahamudu Bawumia who revealed government’s readiness to roll out the universal QR code payment system next month during the opening of the maiden Mobile Technology 4 Development (MT4D) Conference in Accra on Tuesday.
Vice President Dr. Mahamudu Bawumia
Speaking on the importance of the QR Code payment system, Dr. Bawumia said that thanks to the Bank of Ghana and Ghipss, Ghana will launch a universal QR Code payment system next month which will make it possible for all retailers to receive payments on their mobile phones without the need for the traditional point of sale device. “This will apply to all retailers whether you are selling pure water, trotro service, or waakye. Ghana will be about the only country in Africa with a Universal QR Code payment system when it is launched next month. Singapore launched theirs’ only last month.”
The QR code is an abbreviation for Quick Response Code, a digital technology which has been around for some time now but made popular in 2011 when two payment apps, WeChat and Alipay started offering proprietary versions. It has since been very popular outside China and a number of banks and businesses, including retailers in other countries, are taking full advantage.
As the government of Nana Akufo-Addo has embarked on a vigorous digitization agenda, it is not surprising that the government is ready to once again, set the pace in Africa with the QR Code payment system. Using the QR Code, ( a two-dimensional code made up of black and white squares that can be read by smartphone cameras, point of sale (POS) terminals or other devices including ‘yam’ phones) is very simple and inexpensive for even retailers.
All that a shop or a retailer has to do is to use a sticker with a QR code or download the merchant app and create a QR code to accept digital payment. Interestingly, both smart and ‘yam’ phones can pay through QR codes. For customers with smartphones, all that they need to do is to scan the QR code displayed by the merchant or shop owner with their phones and then enter the amount to be be paid for goods they have bought. For customers with ‘yam’ phones, they can pay through the QR code payment system by dialing a code that will be displayed at the seller’s end for payment to be effected.
As Dr. Bawumia announced, the Bank of Ghana and the Ghana Interbank Payment and Settlement System (GhIPSS) are key players for the implementation of the QR Code payment system in Ghana. Regardless of one’s bank or mobile money wallet, GhIPSS will make it possible for customers to be able to scan any displayed QR Code in Ghana and effect payment instantly through their mobile phones.
As soon as payment is made by a customer through the QR Code payment system, the customer’s bank balance or mobile money wallet will be debited instantly, while that of the merchant will be instantly credited.With the huge success of the government’s other digitization drive such as the paperless systems at the DVLA, Passport Office, the Ports, Registrar General, etc., the QR code payment system is expected to bring another relief to millions of Ghanaians as far as their daily business transactions are concerned.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Sometimes it is easy to forget how interconnected human lives across the globe have become. Perhaps we no longer talk as much about globalization as we used to in the 1990s because it is no longer an issue to be discussed or protested against, it is simply the reality that surrounds us. And there is no cruder evidence of that than the Coronavirus.
NJ Ayuk is Executive Chairman of the African Energy Chamber, CEO of pan-African corporate law conglomerate Centurion Law Group
Despite the fact that the virus hasn’t yet affected African nations in anyway as seriously as other regions of the world, a fact the World Health Organization is still unable to explain, forecasts already indicated that just through reduced demand for African exports, the virus was expected to wipe at least USD$4 billion in revenue from the continent’s economy. Most of that was simply because China in particular, and Asia and Europe in general, were reducing oil and gas consumption dramatically as transport and economic activities came to a standstill in light of the epidemic that already forced several dozens of millions of people to be put under quarantine.
Last week, news reports indicated that oil traders in Africa were unable to find buyers for fifty-five Nigerian oil cargoes as global demand crashed. By last Friday morning, the virus had wiped the equivalent of USD$5 trillion in value from the global stock markets. That’s two and a half times the GDP of the whole African continent.
And all that was before OPEC+’s Friday meeting in Vienna. Wasn’t that one surprising?
I believe it is safe to say that few people could have expected this outcome. After all, for the last three and a half years, the world, and the oil industry in particular, had learned to trust the alliance of OPEC countries with Russia and other oil producers to work together to stabilize the markets and guarantee a sustainable price for the barrel of crude.
Through their decision to cut down oil production to address reduced demand and balance out the effect of the US shale play, all together, they were keeping 1.7 million barrels of oil per day away from the market, a landmark decision of cooperation like we had never seen in history. Perhaps also because of its novelty, of its width and because it was dependent on the will and cooperation of so many, it also fell victim to the infestation this virus has brought.
The Saudi-led consortium of nations was proposing a combined further cut of 1.5 million barrels per day to continue to match the decline in global demand. The Russia-led group was not going to go further than 600 thousand. The conclusion… no new cuts at all and no renewal of the previous cuts. The OPEC+ alliance that saved the industry from collapse in 2016 has, at least for the moment, come to an end. All bets are off. At the end of April, when the current agreement ends, all restrictions will be lifted and the world is bracing for an oil flood.
The markets have already factored that in, with the Brent and the WTI registering its biggest daily crash since the beginning of the first Gulf War. While oil seems to have rebounded slightly today, it will take time to make up for Monday’s 25% crash. That is, if the recovery is anywhere in sight, since Saudi Arabia announced it was ramping up production and selling its oil discounted by as much as USD$8 per barrel, on a barrel priced at little more than USD$30.
In all honesty, the situation looks bleak. If Saudi Arabia and Russia do go on having a price war, a USD$20 barrel is possible, if not probable.
But what does this mean for Africa?
Several African petroleum and energy ministers were in Vienna last Friday, both as members of OPEC and as members of APPO. Shortly before the announcement on the fall of the agreement, they had decided to strengthen cooperation between African oil producers, promote synergies, intra-African trading, and knowledge exchange. Surely, we need that more than ever.
For the moment, however, there is no reason to panic. Surely, things might get worse before they get better, as the world battles this rapidly spreading virus. And surely, some oil dependent African nations will suffer with reduced revenue. Angola’s state budget, for instance, was designed for an oil price of USD$55 not USD$35. But we have survived the oil price crisis of 2014, and we will survive this one two. Further, most African producers have learned from the past experience and have adjusted themselves to respond to price crashes. The progressive economic diversification the continent has witnessed in recent years will also contribute to minimize the impact of this situation. Yes, final investment decisions might be slightly delayed until the situation stabilizes, but they will come in due time.
So what’s next?
If 2020 is showing itself challenging for African energy, 2021 will be a year of opportunity, but for that to happen, we have to start adapting now, laying down the policies that will allow us to take advantage of the future opportunities. It is in moments of crisis that true leaders have the opportunity to shine.
While it is difficult to predict the future, there are a few deductions and inductions we can try to make with some certainty.
One, is that neither Russia nor Saudi Arabia want a low oil price and there is a limit to how long they are willing to sustain it. No one gains from it and if anyone has the capacity and funds to sustain it for a longer period of time is Saudi Arabia. So, it is not really a price war, since it can’t really be a war if you already know the winner at the head start. Already, Russia has suggested it might be open to negotiate coordinated cuts within OPEC+ during the group’s next meeting in May/June.
What seems likely that will happen is that the first to suffer from this will be American shale producers. This sector was already finding it hard to finance itself in recent years but continued to unbalance the market with its rapid response times to price fluctuations. These producers are highly leveraged, and it is likely that most will go bust in the present situation. This is something Russia and Saudi Arabia tried to do back in 2015/2016. While it did not succeed at the time, it might have better chances now.
Further, in three months time, at the time of the next OPEC+ meeting, the virus situation might also be very different. This week, president Xi Jinping visited Wuhan, the epicenter of the epidemic, for the first time since the beginning of the outbreak, in a clear demonstration of a strong response to a rapidly evolving situation that seems to be stabilizing. China itself is an extremely leveraged economy and cannot afford to slow down for much longer. It can be expected that demand in the country will start rising again in the foreseeable future. If that happens in a scenario when the US shale sector is no longer able to respond, it might just be that the price will climb higher than it was before the virus, and with Saudi Arabia securing for itself a much larger slice of the global marketplace. Again, things will get worse before they get better, but they will certainly get better.
So, for African nations, this is the time to position ourselves correctly, and that will require close attention to international developments and close cooperation, to be able to take advantage of new opportunities. The African Energy Chamber will be instrumental in that, but so will be the African members of OPEC. The time to show statesmanship and stay close to Saudi Arabia and the decision-making table is now. To grow Africa’s relevance in the international oil stage by showing level-headedness and cooperation in face of a global crisis. If we take that route, we will come out of this stronger than ever.
NJ Ayuk is Executive Chairman of the African Energy Chamber, CEO of pan-African corporate law conglomerate Centurion Law Group.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Nigerian based identity verification startup closed a $1.5 million seed round of equity financing from Orange Digital Ventures this week, opening doors for the firm’s next level of projects aimed at expanding its offerings across industry. The company with headquarters in Lagos Nigeria is a verification startup that helps automate due diligence and compliance by using data-driven decisions for the financial services, and telecommunication industries. Co-founded by its CEO Gbenga Odegbami, Youverify provides API for address and identity verification in Africa. The company has the ambition to help organisations use data and its insight to make automated and efficient business decisions. It also aims to help speed up previously manual back-office processes.
CEO Gbenga Odegbami
This round was led by Orange Digital Ventures Africa (ODV), Orange group’s dedicated Euro 50 million investment initiative in the Middle East and Africa region. It was joined by Loftyinc Afropreneurs Fund, a West African early-stage technology fund that has previously backed top startups such as Andela, Flutterwave and Reliance HMO.
Speaking on the development, YouVerify CEO Gbenga Odegbami said that this constitutes a unique opportunity for the company to take further our ambition to simplify and secure its client’s internal processes, whether in the recruitment of staff, customer onboarding etc. “Our ambition is to be the leading African player in verifying people and companies’ identities by making data protection and security the core of our proposal”, he added. The investors are hopeful the raise will help Youverify accelerate growth and execution of its technology roadmap to empower Africans with their identity most reliably and securely.
According to Grégoire de Padirac, Investment manager at ODV,“the matters of security and access to financial or telecommunications services should never be at odds. Telecom operators like Orange are at the forefront of these transformation challenges. We are proud to support Youverify, which intends to resolve this triple objective of fostering financial inclusion, strengthening security and preserving user rights over their data”.
On his part, Idris Bello, Managing Partner, Loftyinc said “we are excited to back Youverify in its quest. The investment fits into our thesis of backing strong local founding teams with a bias towards execution, leveraging technology in solving key problems across Africa’s large markets. We have worked closely with Gbenga and his team over the past year and are excited to joined ODV and others on this journey.”
Since its commercial launch in 2018 in Lagos, Youverify has processed registrations and verification for some of the biggest banks, Fintech platforms and on-demand platforms in Nigeria. Youverify’s solution allows organisations to bring together siloed data sources which can include identity data, educational data, addressing data, credit history, facial image and others to drive a customisable decision-making process to seamlessly onboard customers in a secure and regulatory compliant manner.
In Africa where the due diligence process is traditionally arduous and manual, Youverify offers a simple, nimble, easy-to-adopt, and cost-effective solution to transform the customer onboarding decisions and streamline this process while reducing fraud, manual processes and cost.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The Governor of Central Bank of Kenya Dr. Patrick Njoroge has called for the adoption of receivable finance as important tool to help close the $90 billion funding gap faced by small and medium-sized enterprises (SMEs) in Africa. Dr. Njoroge was speaking during the opening of a two-day Regional Conference on Factoring and Receivables Finance organised by the African Export-Import Bank (Afreximbank) and FCI in Nairobi, Kenya, to promote the use of factoring to address the challenge of access to financing for SMEs in East Africa said that the funding gap could not be filled by traditional banking and described the conference as a timely initiative that would support the efforts to sustain the SME sector in Kenya and East Africa. According to the Governor, receivables finance is important for Kenya where SMEs are the backbone of the economy.
Dr. Patrick Njoroge
Also speaking, Kudakwashe Matereke, Afreximbank Regional Chief Operating Officer in East Africa, said that the Bank had placed a premium on the promotion of factoring as a strategic priority as it would stimulate growth in many African economies and increase intra-African trade while expanding value chains for export development. He stated that, over the last 10 years, Afreximbank had made enormous progress in promoting factoring in Africa through mechanisms such as the launch in 2016 of the Afreximbank Factoring Model Law which was being used by some African countries as a guide to develop their own national laws on factoring.
Mr. Matereke also listed other mechanisms to include the provision of finance and guarantees, training and capacity building sessions in partnership with FCI as well as awareness-raising and strategic partnerships with FCI, the Nigerian Export-Import Bank, the Making Finance Work for Africa Partnership, the African Development Bank’s Fund for African Private Sector Assistance and the African Capacity Building Foundation. Eric Intong, Afreximbank Senior Manager, Financial Institutions, Sovereigns and Corporates, stressed Afreximbank’s commitment to continuing to promote factoring in Africa.
He said that factoring was an alternative form of finance for SMEs, highlighting the role SMEs play in economic development. Mr. Itong urged the conference participants to contribute to Africa’s development by engaging in factoring activities, either as financial institutions (commercial banks) or as standalone factoring companies, and encouraged them to leverage the support provided by Afreximbank, FCI and other partners.
Commenting on the conference, Peter Mulroy, Secretary General of FCI, said, “We had significant interest from the participants to the conference with over 125 Executives from the region. There were Q&As to better understand factoring mechanics, risk management, the legal perspectives, and the role of Import Factor and Export Factor… In summary it was one of the best conferences we ever held in Africa to date, with tremendous enthusiasm for the development of factoring in the area. I believe it brought an added value to the Receivables Finance industry in East Africa.”
Topics covered during the conference include: The evolution of factoring in the regions, opportunities and challenges faced; New horizons: the One-Belt-One-Road from Fuzhou to Nairobi; Legal and Regulatory Environment in East Africa and Regulatory Obstacles; and Challenges and opportunities on credit insurance in Africa. The conference attracted more than 125 senior executives from factoring companies, banks and non-bank financial institutions, government agencies, consulting firms and IT providers.
FCI was set up in 1968 as an umbrella organisation for independent factoring companies around the world. Today, FCI has grown into the world’s representative factoring network and association with close to 400 members in 90 countries with member transactions representing nearly 90% of the world’s international correspondent factoring volume. Today, FCI is truly the global representative body for the Factoring & Receivables Finance Industry.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
