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Egypt reaps $5.6bn from expansion of Suez Canal

Egypt is reaping bountifully from its strategic investments on the Suez Canal, a major shipping route for international maritime. President Abdul Fattah Al Sissi had envisioned the expansion of the canal as a major boost to the economy.

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Egypt is reaping bountifully from its strategic investments on the Suez Canal, a major shipping route for international maritime. President Abdul Fattah Al Sissi had envisioned the expansion of the canal as a major boost to the economy.

The North African country’s revenue from the Suez Canal for the 2017-2018 financial year rose 11.5 per cent to a record high $5.585 billion (Dh20.5 billion), the canal authority said in a statement on its website on Sunday.

The financial year has not yet finished, however. Egypt’s fiscal year runs from July 1 to the end of June.

The canal authority did not explain why it had released figures ahead of the end of the fiscal year.

It announced on Saturday increased revenue in May, and predicted a record yearly figure, attributing this to increased international trade and improvements in the shipping industry.

Egypt under President Abdul Fattah Al Sissi invested in an expansion of the Suez Canal which began in 2014, one of the former military commander’s mega-projects designed to revive an ailing economy and restore the country’s place as an important trade hub.

Egypt’s finances were hit badly by unrest that followed a 2011 popular uprising which toppled longtime leader Hosni Mubarak.

Critics have slammed some projects, including the Suez expansion, as a waste of money.

Cairo is also imposing a raft of harsh austerity measures tied to a $12 billion loan from the International Monetary Fund (IMF), which some economists say are helping get the economy back on track, but which have hit ordinary Egyptians hard.

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Dangote Refinery in crude supply negotiations with Libya

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To get around issues with local supply, Nigeria’s Dangote refinery is in negotiations with Libya to get crude for the 650,000 barrels per day (bpd) plant. A senior official stated that the refinery would also look for Angolan oil.

The $20 billion refinery, the largest in Africa, was constructed on the outskirts of Lagos by Africa’s richest man, Aliko Dangote. Its purpose is to eliminate Nigeria’s reliance on imported fuels due to inadequate refining capacity.

Since starting operations in January, Dangote has not been able to obtain sufficient crude supplies from Nigeria, the largest oil producer in Africa, beset by poor investment, theft, and pipeline vandalism. Dangote has had to buy petroleum from the US and Brazil, among other places.

“We are talking to Libya about importing crude,” Dangote refinery senior executive Devakumar Edwin told Reuters late on Saturday. “We will talk to Angola and some other African countries.”

He added that foreign traders and oil corporations were among the largest purchasers of Dangote’s gasoil, which was mostly being exported, but he would not elaborate on the specifics of the discussions.

“The biggest off-takers are the two big traders Trafigura and Vitol and BP and, to some extent, even TotalEnergies. But all of them are saying they are taking it to offshore,” Edwin said.

According to traders and shipping statistics, Dangote is displacing European refiners in the gasoil market by increasing exports to West Africa.

By 2050, the nuclear sector wants to treble its capacity.

According to Edwin, Dangote’s oil trading division was running, employing people in Lagos and London to assist with product sales and supply management. The intended trading arm was initially revealed by Reuters in March.

In a recent dispute with Dangote, Nigeria’s upstream authority claimed that the fuel’s sulphur concentration exceeded the mandated 200 parts per million (ppm). Rejecting that claim, Aliko Dangote stated that sulfur levels had been higher at the beginning of production but have since dropped to 88 parts per million (ppm) and would reach 10 parts per million in early August as output increases.

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As inflation slows down, Angolan central bank maintains stable interest rate

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The central bank of Angola maintained its main interest rate at 19.5% on Friday, noting a possible short-term improvement in the supply of necessities and a possible decrease in inflation.

To contain growing inflation, which has reached 30%, the Bank of Angola hiked its main rate by 50 basis points at its most recent monetary policy meeting in May after raising it by 100 basis points in March.

The annual inflation rate increased last month, from 30.16% in May to 31.00%, although at a slower rate than in prior months.

“The decision (on Friday) was motivated by the prospect of a slowdown in the rate of price growth and an improvement in the supply of essential goods,” said Central Bank Governor Manuel Tiago Dias.

“If current conditions prevail from August onwards, we predict a slowdown in year-on-year inflation,” Tiago Dias added.

Since the middle of last year, inflation has been increasing in the nation that produces oil in Africa.

By September, the central bank will make its next move on monetary policy.

 

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