By Gerhard Erasmus : Tralac.com
The inter-connected nature (and vulnerability) of the global trading system was dramatically demonstrated with the announcement on 15 May 2019 by the US Commerce Department that companies would need permission (in the form of a special licence) to do business with the Chinese firm Huawei, the world’s second largest smartphone maker and the largest manufacturer of telecoms equipment. The US announcement amounts to an export ban of American technology to Huawei.
The Commerce Department subsequently qualified its announcement by allowing firms to supply Huawei for another 3 months, but for existing products only. No new sales are permitted. And that is where the effect could be most severe; because of the impact on Huawei’s future revenue.
The US ban soon started to bite. Google announced that it will stop supplying components of its Android mobile operating system to Huawei. Several American chipmakers have also ceased sales. Other non-American companies are equally important, such as chip makers elsewhere. An effective ban will require Washington to exert pressure on them too.
How long will this battle last? Huawei issued statements about stockpiling crucial components and working on plans to become less reliant on American technology. Others are more skeptical. Without Google’s co-operation, sales of Huawei smartphones in, for example, Europe – Huawei’s second-biggest market – are likely to suffer. The supply of software required for its telecom networks could also dry up. Huawei is developing replacements but that will take time.
The US Administration has justified its decision by invoking a “risk to national security”. US officials have been warning for some time that Huawei’s products open the door for spying, an allegation denied by Huawei. In order to make the American ban an effective instrument, others must also be convinced not to deal with the Chinese firm.
Matters may be more complex. The US has long suspected that Huawei benefits in other ways from its close ties with the Chinese government. The low prices of its products are suspected to be a result of subsidies by the Chinese government; to undercut other 5G equipment manufacturers.This may explain why President Trump has subsequently hinted that there may still be a solution, as part of a bigger deal on the US-China trade war. Earlier this month the US increased tariffs on $200bn worth of Chinese imports from 10% to 25% after the two sides failed to reach a deal in their trade in goods battle.
The Trump administration had earlier used the same approach against another Chinese smartphone manufacturer (ZTE Corp.), following a ban on the sale of various components for illegally shipping goods to Iran. He later revoked the order against a fine of $1.3 billion and lower tariffs by China on American agricultural products. Huawei plays in a bigger league. It is China’s biggest high-tech company and is seen as a national champion. It also holds many crucial patents on superfast 5G mobile networks and is the world’s largest manufacturer of telecoms equipment. The stakes are higher.
Even if the American ban is lifted in exchange for trade concessions, a return to business as usual seems unlikely. Trust in American technology firms has been eroded.
President Trump’s real strategy (to the extent that there is a final one) is not yet clear. What makes matters more ambiguous is that he seems to be in re-election mode already. The battle with Beijing comes as a useful electioneering plank. What better evidence of putting “America first” than scoring against China and Chinese firms?
This is a high-risk game and could backfire. China is in no mood to be bullied and warned that it may retaliate by banning the export of rare earths. Rare earths are a group of 17 chemical elements used in everything from high-tech consumer electronics to military equipment. China accounted for 80% of the US imports of rare earth minerals between 2014 and 2017. They were excluded from recent tariff hikes by the US, along with some other critical Chinese minerals.
The fact that there are no efforts yet to invoke the WTO system in efforts to resolve the latest round of US-China tensions, may is an indication of how far the behaviour of the big players has drifted towards a contest of power. No rules-based solution is being mentioned; President Trump is clearly no fan of the rules-based game. The multilateral trade system is already under severe strain. The latest developments will be more bad news in Geneva.
AU Headquarters, 8th June 2019 - Africa has made commendable progress in securing deposits of instruments of ratification on the Agreement Establishing the African Continental Free Trade Area (AfCFTA). The agreement officially entered into force on the 30th of March 2019 with twenty four (24) instruments of ratification deposited with the African Union Commission. The African Union is setting the pace for the launch of the operational phase of the operational phase of the continental market in July this year. To build on this momentum and deepen the continental economic integration, the African Union Ministers of Trade (AMOT) held a two-day meeting in preparation for the upcoming Extraordinary Summit on AfCFTA in Niamey, Niger.
Uganda’s Minister of Trade, Industry and Cooperatives and Chairperson of the African Union Ministers of Trade, H.E. Amelia Kyambadde, emphasized that with the entry into force of the AfCFTA, the focus is now on how Africa can strategize to take advantage of the huge market opportunities and Africa’s demographic dividend to boost intra Africa trade. “A united Africa will be powerful, attractive to investment and a solid negotiating force. We still have outstanding work on product rules of origin, finalization of tariff offers, trade in service market schedules and trade remedies, but I think this is an opportunity for us to transform Africa for the benefit of future generations”, she noted. She further highlighted five key priorities areas member states should focus on such as boosting of Intra-Africa Trade; Infrastructure interconnectivity and trade facilitating logistics; Industrialisation and development of regional value chains; Employment; and beneficiation of minerals and natural resources.
The supporting tools for the AfCFTA will be launched at the Extraordinary Summit in Niger. These are; the Pan-African Payments and Settlements Platform; Online Mechanism for Monitoring, Reporting and Elimination of Non-Tariff Barriers within the AfCFTA; the password protected online portal for tariff concessions and Dashboard of the African Union Trade Observatory. African Union Commission Commissioner for Trade and Industry, Amb. Albert Muchanga, while calling on the ministers to conclude on the supporting tools for the AfCFTA, stated that the July Extraordinary Summit would also adopt the agreed Rules of Origin for the AfCFTA. “My appeal to you is to provide the necessary political oversight to the remaining negotiations on the AfCFTA while providing further guidance to any remaining sticky areas. We are now awaiting the finalization of the outstanding work to enable the continent to take advantage of the enlarged market”, he stated. The report of the Ministers will input into the report of the AfCFTA Champion, the President of the Republic of Niger H.E. Mahamadou Issoufou, whose report will be considered at the Summit. The AfCFTA Extraordinary Summit will be preceded by side events such as Civil Society Forum on 3rd July and Business Forum on 6th July, 2019.
The Deputy Executive Secretary of the UN Economic Commission for Africa (UNECA), Ms. Giovanie Biha, noted that the meeting of the African Union Ministers of Trade comes at a critical juncture for the AfCFTA. “The AfCFTA is not merely a project of a small sub-set of African Union members. We should aim for no less ambition than every country in this continent signs and ratifies the Agreement, to ensure that our continent moves forward collectively, and meaningfully, in trade integration”, she underlined. She applauded the signatory countries and invited the few countries that have not yet signed to rapidly join and ratify the Agreement to make progress with the AfCFTA implementation roadmap and ensure that the continent moves forward together as one entity.
The 8th meeting of the African Union Ministers of Trade (AMOT) was preceded by the meeting of the 8th Senior Trade Officials (STO) and the 15th Negotiating Forums (NF). The meeting was attended by AU Ministers of Trade from Member States, the African Union Commission (AUC), the Regional Economic Communities, the African Development Bank (AfDB), the African Import and Export Bank (Afreximbank), United Nations Conference on Trade and Development (UNCTAD) and United Nations Economic Commission for Africa (UNECA).
The Extra-ordinary Summit will also make a decision on the location of the secretariat of the African Continental Free Trade Area which will have the principal function of implementing the Agreement through a focused work programme. Seven Member-States: Egypt, Eswatini, Ethiopia, Kenya, Ghana, Madagascar and Senegal submitted bids to host the secretariat.
Source : AU Website
As we get ready to celebrate the opening the of the gateway to the largest trade block in the world!
The AfCFTA Agreement will in this regard enter into force on 30th May, 2019.
All that is now left is for the African Union and African Ministers of Trade to finalize work on supporting instruments to facilitate the launch of the operational phase of the AfCFTA during an Extra-Ordinary heads of state and government summit on 7th July 2019.
The supporting instruments are: rules of origin; schedules of tariff concessions on trade in goods; online non-tariff barriers monitoring and elimination mechanism; digital payments and settlement platform; and, African Trade Observatory Portal.
The African Ministers of Trade are scheduled to meet in Kampala, Uganda in the first week of June this year to review work on these supporting instruments ahead of the ExtraOrdinary Summit on the AfCFTA.
by Tom Collins
Exploration data suggests that Tanzania’s Rukwa Basin could hold large reserves of helium, a natural resource whose price has risen considerably in recent decades. Tom Collins considers the significance of the finds.
Roaming across the Tanzanian plains on safari some six years ago, it dawned on two Australian geologists that Tanzania could hold world-class helium reserves.
Looking at local research done by a British geologist in the 1950s, an unusually high concentration of helium in the country’s naturally occurring gas seeps was a strong indication that large primary deposits lay under the ground.
While the global supply of helium had comfortably outweighed the demand, this revelation gathered dust in the Tanzanian archives in the absence of any commercial justification for further exploration.
Now global supply is under threat, with the commodity surging around 500% in the past fifteen years, Helium One – the company eventually created by the Australian geologists – announced from early analysis data that Tanzania could hold as much as 98.9 billion cubic feet (bcf): enough to make the East African nation one of the world’s top producers
Aside from the large quantity, Tanzania’s south western Rukwa basin – where the helium seeps are located – is also relatively unique in the concentration of helium it produces.
Professor Jon Gluyas, Director of Durham University’s Energy Institute, who conducted research on Tanzania in conjunction with Oxford University and Helium One, argues that the helium concentration in Tanzania is “getting on for a world record.”
While most helium is produced with very low percentages as a by-product of natural gas, helium in the Rukwa basin is found attached to the carrier-gas nitrogen and takes up a much greater share of that compound.
The percentage of helium found in Qatar – a heavyweight of helium production along with the US – stands at around 0.4% relative to methane, whereas concentration in Tanzania falls at around 10% relative to nitrogen.
Added to the 98.9 bcf potential – which towers over the yearly global supply of only 6 bcf – Josh Bluett, Helium One’s Technical Director, firmly believes that “this will be the largest primary helium project in the world.”
Helium One, in fact, are moving relatively quickly towards production after the pre-exploration phase was aided by extensive seismic data collected as a result of drilling by US oil company Amoco who came through the Rukwa basin in the 1980s looking for oil or gas.
Bluett states that the company is now “drill ready” after raising $2m from Australian, Asian and African investors last year, and procuring three licenses from the government.
“The next stage is to conduct the drilling program and the expectation is to make one or more helium discoveries in these reservoirs,” he says. “All going to plan we will be in that phase next year and hopefully moving to production by 2021.”
image source: African Business
When Helium One comes online, provided of course the drilling stage confirms previous estimates, the production looks set to shock the global market.
Helium is a crucial component in a number of instruments including MRI scanners, telescopes and radiation monitors as well as spacecraft.
The supply has been dwindling slowly over the years with around 75% of helium produced from just three sites: two in the US and one in Qatar.
This set-up is currently taking a serious hit following the decline of two US oil and gas fields which produce helium as a by-product, and the blockade of Qatar by Saudi Arabia which continues to choke their supply.
With the price of helium ballooning, buyers are nervous that the fragility of the supply chain may lead to further price volatility and eventuality put the ability to source helium into question all together.
“If any of these plants shut down for maintenance or anything happens, then that will really wipe out a significant amount of supply,” explains Bluett. “We see ourselves as playing an important part in rectifying the fragile and not very diverse supply chain. The message from all our buyers is – when are you going to be in production, we want to buy your helium.”
Indeed, contrary to media reports that helium gas is ‘running out’ the concern is more accurately centered around securing and diversifying the supply chain.
Places like Algeria and Russia have the potential to export helium but are hindered by governance issues.
As a result, leading scientists like Gluyas argue that it’s the accessibility of helium which is under threat not the resource itself.
“I don’t think there’s a global shortage of helium at the moment; there’s a global shortage of accessible free market helium,” he says.
In this context Tanzania has the capacity to “alter the global supply” if it can effectively manage its helium industry and create an enabling environment for private sector input.
Making the most
While Tanzania is developing a reputation for spooking investors amid complaints of executive overreach into areas of the economy like mining – often with hefty fines slapped on twitchy multinationals accused of exporting profits without benefit to Tanzania – Helium One is shaping up as a rare example of good news.
Bluett explains how Helium One is working closely with Tanzania’s Ministry of Minerals, and the government “stipulated quite clearly what the requirements for taxation were”.
He points out how the current administration is pursuing companies who are believed to have acted illicitly in the past, which has little to no bearing on companies looking to enter in the present.
“I suspect that most of what we are seeing is dealing with legacy issues; with companies who have been in production for a while,” he says. “We are in exploration so we don’t see the same risk profile.”
Elisante E. Mshiu, Department of Geology at University of Dar es Salaam, who also conducted research alongside Helium One, believes the period belongs to a government who are firming up shaky legislation which allowed for loopholes and therefore abuses in the past.
“The intention is not to scare away external investors but to attract them,” he says. “The government is now in a better position to control and get the appropriate percentage of tax back to the government.”
With Helium One hoping to transport its helium to the port of Dar es Salaam and then ship it to the US, Asia and Europe by 2021 – the partnership tells a different story of Tanzania under President John Magufuli and looks set to benefit both parties.
“For Tanzania this is another good opportunity for the economy,” comments Mshiu. “Like other resources which we have here in Tanzania, we are supporting the private sector to exploit it but also to make sure we have sufficient oversight of it.”
Renewable energy powers growth in Senegal
by William McBain
Increasing the share of renewables in the country’s energy generation is a key facet of the Senegalese government’s power generation strategy, part of its plan to make Senegal a middle-income country by 2035. Will McBain reports
The government of Senegal, led by President Macky Sall, has made increased renewable energy generation one of the key pillars of its power generation strategy, with hopes of achieving universal access to electricity by 2025.
As part of its Plan for an Emerging Senegal (PES), the government expects increased generation capacity to help position Senegal as a middle-income nation by 2035.
A target of 15% renewable energy in Senegal’s energy generation mix looks set to be accomplished ahead of the 2025 schedule, as colossal utility-sized wind and solar power plants are due to be added to the national grid within the next two years.
The country has traditionally relied on imported liquid fuels for its oil and diesel-fired plants, but recent discoveries in oil and gas reserves could make Senegal an oil exporter in the coming years.
A further objective of 25% of renewable energy in the mix by 2030 looks achievable, according to Massaer Cisse, Senegal general manager of renewable power generation company Lekela Power.
“It’s an aggressive target and with that target come challenges, notably that grid integration and transmission will have to keep up with supply.
“It’s vital that all stakeholders are involved in work to upgrade the grid, but things are moving in the right direction,” says Cisse.
These are dramatic developments for a nation formerly hampered by the low supply and high cost of electricity, which stunted economic growth at the beginning of the decade.
Between 2010 and 2018, access to electricity increased from 54% to 68% according to the World Bank, and generation capacity rose from a 2012 low of 573 MW, to a current 864 MW capacity, subsequently providing cheaper tariffs for consumers.
Senegal has experienced yearly GDP growth above 6% since 2015, and optimism about further growth among the young and rapidly expanding 16.6m population is palpable.
The power market continues to benefit from a partially liberalised structure, allowing private companies to build and operate power plants, while transmission and distribution remains controlled by state-owned utility Senelec.
West Africa’s largest windfarm
Lekela – a 60:40 joint venture between emerging market investor Actis and a consortium led by Mainstream Renewable Power – has initiated construction on the Taiba N’Diaye windfarm, 80km northeast of Dakar.
Once complete in 2020, it will be the largest windfarm in West Africa, adding 158.7 MW to the grid and providing more than 450,000 MW hours of energy per year for 2m people.
Lekela deploys its fund in Africa, with a portfolio of three established windfarms in South Africa, and development of additional plants in Ghana and Egypt.
Chris Ford, Lekela’s COO, says that the business can add value to a nation benefiting from a stable government, and political leadership committed to a vision of how it wants the market to develop.
The company also profits from advancements in technology that will enable it to install 46 Danish-made Vestas turbines that will each be able to produce 3.45 MW of energy.
Wind turbines are getting bigger, more powerful and increasing in generating capacity, enabling greater returns.
“The technology is getting cheaper over time, particularly as turbines get bigger the physical and technical limits the turbines push out increase.
“The direction of travel for renewables is positive and I think it continues to surprise people just how competitive it can be. As rates go down, and with the comparative volatility of oil prices, renewables become mainstream,” says Ford.
The Lekela project is also expected to contribute up to $20m to the local community and provide 400 jobs during construction, while continued employment opportunities will be provided for a maintenance team during operation of the plant for at least 25 years.
Spurred on by the successful construction of smaller scale solar plants, Senegal launched a tender process in 2018 to build two further plants with a combined installed capacity of 60 MW, which will almost double existing capacity.
Developed in partnership with the International Finance Corporation and part of a wider initiative called Scaling Solar, 14 bids were tabled.
The French alliance of Engie, the utility, and Meridiam, the infrastructure investor, won at auction.
Engie is currently building the plants in Kahone, near Kaolack, and Kaël in the Diourbel region, and they will represent one of the fastest buildouts of renewable power in Africa.
The contract was awarded with prices approximately 60% lower than the solar contracts previously agreed in Senegal.
Read the full article and more from the source site: Africa Business
MTN Nigeria, owned by South Africa’s MTN Group, on Thursday listed in Nigerian Stock Exchange (NSE) in a N2 trillion ($6.54 billion) flotation.
The listing turns the telecoms company into the exchange’s second-largest stock by market value.
MTN Nigeria’s shares climbed 10 percent from their listing price of 90 naira after the float went live.
“The telecoms space accounts for a little over 9 percent of GDP so bringing in the big companies in that space is very critical for us and MTN being the largest and the market leader, this is a major listing for us,” said CEO, Nigeria Stock Exchange, Oscar Onyema.
The listing is aimed at helping to settle rows with Nigerian authorities, over SIM cards and tax payments.
MTN is still in the middle of a 2 billion dollar tax row with the country’s attorney general which the company says will delay a further sale of shares and a public offering.
According Reuters Financial Correspondent, Chijioke Ohuocha no set time has been given given by MTN for the public offer.
“MTN agreed to this listing as part of a settlement to long-running disputes with the Nigerian government, which it has fulfilled today. With this particular listing, local investors and indeed international investors, will have the opportunity to buy into the telecoms story in Nigeria. MTN Group owns 78.8% of the Nigerian business,” Ohuocha added.
Nigeria accounts for a third of MTN’s group profit but it’s increasingly been one of its most problematic markets.
There are over 52 millions subscribers on the network in Nigeria.
Article by DIBIE IKE Michael with ReutersCheck out the video and More from the source site:
Image source: Financial Post
Canadian billonaire mining investor Robert Friedland is on the verge of sealing an agreement to take over Nimba iron ore deposit in Guinea, according to reports.
Although a final agreement is yet t be reached, advanced talks are ongoing between,BHP group, Newmont and Areva, the owners of the iron mine; who are yet to succeeded at exploiting the site.
Guinea has some of the world’s richest iron ore deposits such as the Simandou mine.
But the heavy investments cost for the exploration of the mineral, including construction of railway lines as means for export, causes potential investers to develop cold feet.
Such has been the case of Rio Tinto group, Vale SA and the billionaire Beny Steinmetz, who failed to reach a conclusive deal with the government on the Simandou iron mine project.
Should the leader of the High Power Exploration (HPX) company ,ever succeed at reaching an agreement, exporting the mineral out of Guinea will be his most daunting challenge.
Guinea remains bedeviled by the high cost of building a railway to export minerals out of the country, while a much shorter route through Liberia is also an option.
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Our once-in-a-lifetime celebration – the largest event ever staged in the Arab world – is set to welcome 190 participating countries, and millions of visitors from across the globe. Here they will experience warm Emirati hospitality at its finest, as well as the UAE’s values of inclusion, tolerance and cooperation. Youth are at the heart of our World Expo. That’s why Expo 2020 aspires to create a meaningful legacy that will benefit generations to come, both locally and globally, spanning everything from innovations and architecture to friendships and business opportunities.
For the first time, every single country on the African continent will be represented at a World Expo.
On official invite from the U.A.E the 54 coutries will represent at the EXPO 2020 Dubai and the African Union as an Official Participant will have a pavilion to showcase what the continent has to offer with a focus on Agenda 2063.
Grab the opportunity to showcase through the Global Practice Program