Tuesday, 28 July 2015

The week ahead - Tuesday 28th July

The week ahead will be dominated by reflections on President Barack Obama’s historic visit to East Africa, President Buhari’s radical action over oil, and the repercussions of the Burundian President’s insistence that he has a right to govern for a third term after his election.

NIGERIA: President Buhari to launch radical reform of state oil company

A week after President Muhammadu Buhari asked President Barack Obama in Washington to help repatriate some of the $150 billion in oil and gas revenues stolen over the past decade, he is to split the state oil company Nigerian National Petroleum Corporation into two parts. One part will be an independent oil and gas regulatory authority with oversight over the entire sector, and the other would be restructured into what presidential spokesman Femi Adesina described as 'an investor vehicle'.

This suggests the government may revive the core ideas behind the much-delayed Petroleum Industry Bill – that the NNPC's joint ventures with international oil companies be incorporated, properly audited and managed with the capacity to raise investment on the international and local markets.

SOUTH SUDAN/US: Warring parties risk sanctions

Tough measures – such as an arms embargo, freezes on individuals' assets and travel bans – await South Sudan's warring parties should they fail to accept the latest peace proposal 
by 17 August.

US officials, noting that Uganda is supporting President Salva Kiir's forces in Juba and Sudan is covertly backing sacked Deputy President's Riek Machar rebel forces, said they were not optimistic that the latest deadline would produce a breakthrough. President Barack Obama’s delegation was with the African Union in Addis Ababa yesterday and tougher measures to pressure Salva and Riek into an agreement were on the agenda. “The parties have shown themselves to be utterly indifferent to their country and their people, and that is a hard thing to rectify,” said a US officials quoted by Reuters.

BURUNDI: Overwhelming rejection of Nkurunziza’s election

The country's political crisis looks set toescalate with the main opposition party, Front pour la démocratie au Burundi (Frodebu) rejecting President Pierre Nkurunziza's claimed victory in the 21 July elections with 69.41% of the votes. The European Union and the United States are threatening further aid cuts and sanctions against the Nkurunziza government. The African Union, which had previously discussed sanctions against Nkurunziza, is to announce its position this week.

ZAMBIA/GHANA: Investors buy into bonds despite growing risks

Ghana and Zambia, both resource-based economies with substantial budget deficits, are going ahead with major new sovereign bondissues despite financial analysts' warnings over the unsustainability of the strategy. Last week Zambia floated a US$1.25 billion bond offering a yield of 9.4% and Ghana announced it would shortly float a $1.5 bn bond, $500 mn. more than previously announced, as its government struggles with budget overruns and falling commodity prices.

MOBILE PHONES: e-money’s boundaries expand

Two of the biggest mobile phone companies in Africa – South Africa's MTN and Britain's Vodafone – are launching a plan this month to allow their subscribers in East and Central Africa to send money across borders and from one network to another. The deal will boost trade and consolidate Africa as a leader in the mobile money systems, pioneered by Mpesa in Kenya more than a decade ago.

Don't forget to check www.africa-confidential.com for our latest stories.

Yours confidentially,

Patrick Smith

No comments: