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



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.


Ivory Coast aims regional shipping hub, completes $953 million container terminal



West African country, Ivory Coast is making waves at becoming a regional shipping hub as it has completed construction of a second container terminal at its main port in Abidjan.

The project, financed by China’s Eximbank by 85% and 15% by the Ivorian state costs about 596 billion CFA francs ($953 million).

The new container terminal, called Cote d’Ivoire Terminal (CIT), started operations on Nov. 1 but was officially unveiled at a press conference on Friday. It is able to receive large ships from Asia, Europe, and America that previously had to land goods in South Africa, transferring them to smaller ships to reach West Africa.

The technical director of the terminal Andre N’Doli, remarked “we are no longer a second port. We are becoming a hub,”

“In addition to national traffic, we will handle traffic from other ports that cannot accommodate large vessels,” he told reporters.

According to official data, there has been growth in recent years in the country’s maritime sector. Ivory Coast shipped goods worth USD 12,717 million in 2019, an -8.5% dip as compared to the previous year.

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Ghana makes strong push to save currency, Cedi, orders mining companies to sell 20% stock



As part of its many initiatives to out of its current economic challenge, Ghana has ordered all large-scale mining companies to sell 20% of their entire stock.

The gold rich country wants the companies to pay the Bank of Ghana with refined gold at their refineries from Jan. 1, 2023.

According to Vice-President, Mahamudu Bawumia said in a social media post on Friday, the government is planning a new policy where gold rather than U.S. dollar reserves will be used to buy oil products.

The move is meant to tackle dwindling foreign currency reserves coupled with the demand for dollars by oil importers, which is weakening the local cedi and increasing living costs.

“The Bank of Ghana and the Precious Minerals Marketing Company (PMMC) will coordinate with the large-scale mining companies to ensure compliance with this directive,” the vice-president said.

“The gold to be purchased by the Bank of Ghana and the PMMC will be in cedis at spot price with no discounts,” he added.

The VP further revealed that community mining schemes and licensed small-scale miners will also have to sell gold to the government.

Statista reports that gold reserves in Ghana stood at a volume of 8.74 metric tons from the first quarter of 2015 to the third quarter of 2021.

Moreover, gold mine production in the country reached a volume of 150 metric tons in 2020, an increase compared to the previous year. Ghana did not suspend its production of gold in 2020 amid the coronavirus (COVID-19) pandemic.

Ghana hinted at the Gold for payment policy in May but the continued fall to a point of being rated worst in the world demands pragmatic measures. Hopefully, the gold-for-pay policy will bring some solace.

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