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Chad’s parliament passes bill to nationalise Savannah Energy’s assets. Should investors worry?

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The Chadian parliament has passed a bill to nationalise Savannah Energy’s oil assets and rights acquired last year from ExxonMobil’s affiliate, Esso Exploration, and Production Chad.

An overwhelming 172 out of 175 parliament members backed the law to nationalise the assets, but the oil giant plans to explore all legal options to contest the move to nationalise its upstream assets in the country.

Last week, the Chadian energy and hydrocarbons ministry announced that all relevant assets and rights of ExxonMobil subsidiaries would be nationalized.

Nationalisation refers to the action of a government taking control of a company or industry, which generally occurs without compensation for the loss of the net worth of seized assets and potential income.

The Minister of Petroleum and Energy, Djerassem Le Bemadjiel told parliament, “Savannah and Esso – ExxonMobil has taken actions that pose serious and immediate threats to public order in Chad as well as to all actors in this economic sector that is crucial to the stability and development of Chad.”

Recall that the Chadian government had in December challenged an agreement made by ExxonMobil to close the sale of its operations in Chad and Cameroon to Africa-focused oil and gas producer Savannah Energy in a $407 million deal.

London-listed Savannah owns a 40% interest in the Doba Oil Project in Chad, comprising seven producing oilfields with a combined output of 28,000 barrels per day (bpd).

The idea of nationalisation is one of the challenges foreign investors are faced with in doing business in Africa because of the political situation in some of the countries which usually birth state actions leading to attempts to consolidate power, resentment of foreign ownership of industries representing significant importance to local economies, or in a bid to prop up failing industries.

But nationalisation isn’t peculiar to just Africa. Russia, at the height of its ongoing war with Ukraine, also threatened western businesses leaving Russia due to the war that their companies and production facilities might be confiscated by the Russian state.

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More trouble for Zambian President as group asks US to impose sanctions on him

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A Zambian civil society group, Our Civic Duty Association (OCIDA), has petitioned the United States government, demanding for sanctions, including financial sanctions, visa restrictions and travel bans, against President Hakainde Hichilema and seven top government officials over alleged undermining of democratic rights in the country.

Apart from President Hichilema, the group listed Home Affairs and Internal Security Minister, Jack Mwiimbu, Inspector General of Police, Graphel Musamba, Speaker of the National Assembly Nelly Mutti, and Chief Justice Mumba Malila.

Others in the black list of the CSO include the Director of Public Prosecutions, Gilbert Phiri and Electoral Commission of Zambia Chairperson, Mwangala Zaloumis.

The petition which was signed by the Chairperson of OCIDA, Emeritus Archbishop Telesphore Mpundu, said it was deeply worried by the continued abuse of institutions of governance and the erosion of democracy in Zambia.

“Of particular concern are the violations of democratic rights such as the right to public assembly, free speech, freedom of association and the right to a speedy trial,” Mpundu said in the petition.

He stated that the continued abuse of state institutions like the Anti-Corruption Commission, the Independent Broadcasting Authority, the Zambia Police Service, the National Assembly of Zambia and the Judiciary was worrisome.

The CSO noted that on several occasions, it and other organisations such as the Zambian Conference of Catholic Bishops, the Law Association of Zambia and Chapter One Foundation had called on the Zambian government to respect and enable the expression of these fundamental democratic rights, to no avail.

“Our combined calls have fallen on deaf ears. What we have instead witnessed over the last several months are further restrictions on these rights.

“Public rallies by opposition parties continue to be banned by the Zambia Police Service, the Judiciary continues to engage in what appears to be wilful delay of the resolution of urgent political matters affecting the main opposition party,” Mpundu said.

He further alleged that the “executive arm of government continued to interfere in the operations of other institutions,” adding that the leadership of the National Assembly has continued to undermine democracy in parliament as critics of the government continue to face intimidation and threats from state institutions.

“OCIDA calls on the United States government to impose financial sanctions, visa restrictions and travel bans against the below-named officials of the Government of the Republic of Zambia whose conduct has aided this continued suppression of democracy in Zambia,” the statement reads.

The group expressed confidence that its plea would be heeded in the wake of a recent decision by the US government to impose similar sanctions on members of the government of Zimbabwe who were at the forefront of restricting democratic rights, tolerating corruption and abusing governance institutions.

“It in this light that we petition the administration of President Joe Biden, through the US Embassy in Zambia, to impose sanctions on the named officials of the Zambian government.

“If there is one person who deserves sanctions for undermining democracy and democratic rights in Zambia, it is President Hichilema.

“Not only is he the one responsible for the appointment of other democracy-threatening officials, he has also aided their conduct by neglecting to reprimand or sanction them for undermining civil and political rights.

”Although many people think the current President of Zambia is a darling of the United States, we believe that the interests of the two nations are by far larger than the interest of an individual leader especially when that leader is in the forefront of undermining democracy and abusing institutions of governance.”

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Nigeria’s forex inflow increases as overseas remittances rise

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The Central Bank of Nigeria reported that foreign exchange inflows to the country reached $2.3 billion in February, driven by a surge in remittances from overseas and a resurgence of interest from international investors.

Nigeria has been severely impacted by a lack of dollars, which has caused the naira to fall to all-time lows in recent weeks and led the central bank to weaken the currency twice in less than a year.

Hakama Sidi Ali, a spokesman for the Central Bank of Nigeria (CBN), foreign investors purchased at least $1 billion worth of Nigerian assets this month, increasing the total amount of portfolio inflows received to $2.3 billion. In contrast, $3.9 billion is allocated for the entirety of 2023.

Sidi Ali said in a statement that CBN statistics also revealed that international remittances more than doubled to $1.3 billion in February from $300 million the month before.

“All the different measures we have taken to boost reserves and create more liquidity in the markets have started to pay off,” CBN Governor Olayemi Cardoso said in the statement.

In order to increase forex liquidity, the CBN has implemented a number of policies, such as restricting the amount of foreign currency that banks can store, prohibiting street trading of foreign currency, and capping net open positions at 20% of shareholders’ funds. peak levels reached during the session.

According to Sidi Ali, higher currency inflows also persisted in March as a result of investors’ growing interest in short-term sovereign debt following the CBN’s 4 percentage point increase in its benchmark interest rate to 22.75%, the highest level in about 17 years, in an effort to rein in skyrocketing inflation.

Foreign investors’ bids accounted for 79% of the total, or $530 million, at the CBN’s Open Market Operation auction on March 6, when it auctioned securities worth 1.053 trillion naira, according to Sidi Ali.

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