Connect with us

VenturesNow

Russia strikes Ukraine in war of neighbours. Why Africa should be concerned

Published

on

Russia’s invasion of Ukraine on February 24 is casting a long shadow across Africa – a devastating effect on some African states, threatening their economies and could also benefit the continent in some ways.


As devastating as it is, some African countries may benefit from a shift in global markets away from Russia due to the crisis. The short-term potential impacts on economic livelihoods are worrying while the implications for pan-African solidarity and adherence to multilateralism are increasingly uncertain.


There are important ties between Ukraine and Africa, including more than 8,000 Moroccans and 4,000 Nigerians studying in Ukraine and over $4 billion in exports from Ukraine to Africa.


Though, African leaders have come under diplomatic pressure to take sides in the escalating feud between Russia and Western powers, African Union (AU) has called on Russia to respect international law and Ukraine’s sovereignty.


In a statement on Feb. 24, AU chair Macky Sall and AU Commission chair Moussa Faki called on Russia and Ukraine to establish a ceasefire and open political negotiations “to preserve the world from the consequences of planetary conflict.”
Kenya, Gabon, and Ghana spoke out against the escalating conflict at an emergency meeting for the United Nations Security Council on Feb. 21, but most African countries have remained quiet.

South Africa, on Feb. 23 asked Russia to withdraw its troops from Ukraine and called for a peaceful resolution of the conflict.


How will the ongoing conflict affect Africans?

Russia is one of the world’s biggest fossil fuel producers. The sanctions on Russia, especially by the United States of America, would linger inflation, high prices of gas in the countries which is a giant headache for American President, Joe Biden.


With this, few countries are sensing long-term growth opportunities from the crisis specifically, Africa’s natural gas could reduce Europe’s dependence on Russian energy.


The budgets of oil-producing countries like Nigeria and Angola might get a boost from the rising prices, but the cost of transport is likely to rise for people across the continent. This will have a knock-on effect on the prices of nearly all other products.


“It becomes a double whammy of potentially higher food prices globally and higher energy prices pushing up inflation. And when central banks respond by hiking interest rates, it becomes a triple whammy,” said Charlie Robertson, global chief economist at Renaissance Capital.


But the editor of the UK-based Africa Confidential publication, Patrick Smith, said the war offered massive opportunities for oil- and gas-producing countries.


“Europe has to rapidly find alternatives to Russian gas, and the most reliable alternatives are in Africa. It’s a great opportunity for African states to move in, and get new deals done quickly,” he added.


Besides natural gas, further sanctions on Russia might benefit other natural resource exporters in the region. For instance, South Africa is, after Russia, the world’s second-biggest producer of palladium—a critical input into automobiles and electronics—and therefore could experience growing demand as a result of international sanctions placed on Russia. Similarly, as a major exporter of gold, the South African rand has been strengthening as a result of rising global prices for precious metals.


Several other countries could similarly benefit from Europe’s energy diversification, including Senegal, where 40 trillion cubic feet of natural gas were discovered between 2014 and 2017 and where production is expected to start later this year. Nigeria, already a supplier of liquified natural gas (LNG) to several European countries, is also embarking with Niger and Algeria on the Trans-Saharan Gas Pipeline to increase exports of natural gas to European markets. On February 16, the three countries signed an agreement to develop the pipeline, estimated to cost $13 billion. Europe is likely to be a key financer, bolstered by the EU’s controversial decision in early February to label investments in natural gas as “green” energy.

VenturesNow

Kenya: Parliament approves appointment of Kamau Thugge as central bank governor

Published

on

Months after throwing open the position for the country’s top banker, Kenya’s parliament has approved the appointment of Kamau Thugge as the country’s central bank governor.

The National Assembly on Wednesday approved the
appointment of economist and senior civil servant who was nominated by President William Ruto as the next apex bank chief.

Thugge, who served as principal secretary in the finance ministry until mid-2018, was nominated after serving as one of the president’s senior economic advisers since late last year.

He shook off competition from others shortlisted candidates like Adan Mohamed, who served in the cabinet from 2013-2022, with four others also interviewed for the role.

The new central bank governor will be faced with the immediate pressure of stabilizing the country’s monetary policy as the East African giant currently faces a shortage of funds amidst rising public debt.

Despite the odds, the World Bank in a report earlier today expects growth to edge up to 5.0% in 2023, underpinned by a recovery in agriculture.

Continue Reading

VenturesNow

Ghana presents ‘working proposal’ for debt restructuring— IMF sources

Published

on

West African country, Ghana has made a major move at resolving its debt crisis as the country has presented debt restructuring proposal to its creditors.

According to sources quoted by Reuters, a “working proposal” has been submitted to help the country escape its worst economic crisis in a generation.

One of the sources revealed that the proposal was a first attempt to engage the official creditor committee after its formation in May. It should be recalled that the Paris Club last month announced that official sector of creditors of Ghana had formed a committee co-chaired by China and France for debt restructuring talks.

The plan is to end restructuring of domestic debt before turning to negotiations with its official bilateral creditors and international bondholders, a government official said.

Ghana is one of several cash-strapped countries facing unprecedented delays in getting bailouts as China, its biggest bilateral creditor with about $1.7 billion of debt and Western economies disagree over how debt relief should be structured.

The first formal review of the programme will hold in the coming months as an IMF team will visit Ghana between 8th and 15th of June.

Continue Reading

EDITOR’S PICK

VenturesNow7 hours ago

Kenya: Parliament approves appointment of Kamau Thugge as central bank governor

Months after throwing open the position for the country’s top banker, Kenya’s parliament has approved the appointment of Kamau Thugge...

VenturesNow7 hours ago

Ghana presents ‘working proposal’ for debt restructuring— IMF sources

West African country, Ghana has made a major move at resolving its debt crisis as the country has presented debt...

Metro8 hours ago

Rwandan President, Kagame sacks over 200 military personnel in major shake-up

Rwandan President, Paul Kagame has sacked over 200 soldiers including top military brass and commanders from the Rwanda Defence Force...

Tech8 hours ago

Flutterwave partners Token.io to provide seamless bank transfer to users in UK, EU

Pan-Africa’s payments technology company, Flutterwave has entered into a partnership with Europe’s account-to-account (A2A) payment infrastructure provider, Token.io to power...

Culture8 hours ago

Kenyan govt to convert ‘evil cult’ forest into a memorial site

The Kenyan government says it plans to convert the Shakahola Forest, where bodies of over 250 members of a Christian...

Metro9 hours ago

UN war crimes court declares Rwandan genocide suspect, Felicien Kabuga unfit to stand trial

An 88-year-old Rwandan genocide suspect, Felicien Kabuga has been declared unfit to stand trial by judges at a United Nations...

Sports9 hours ago

FIFA honours Osimhen after amazing season with Napoli

Following his record-breaking season with Napoli where he scored 26 goals to win the Serie A top scorer award, Nigerian...

VenturesNow9 hours ago

Despite revenue crisis, World Bank projects faster growth for Kenya  

The World Bank on Wednesday said progress in the agricultural sector would likely lead to Kenya’s economic growth at a...

Musings From Abroad1 day ago

Angola, Portugal sign 13-point pact spanning finance, law, others    

Angola and Portugal have signed a Memorandum of Understanding including 13 different agreements that cut across financial, legal and other...

VenturesNow1 day ago

Congo DR, Angola advance talks over decades-long oil block dispute

Discussions are on to end a decades-long dispute between the Democratic Republic of Congo and Angola over an off-shore oil...

Trending