The following items from April 26 may emerge to become significant factors impacting geomarket developments in Africa:
Guinea: President Alpha Condé called for a common currency to take effect in the Economic Community of West African States in 2020.
Significance: The Economic Community of West African States (ECOWAS) comprises member governments with eight different currencies, one of which, the Communauté Financière Africaine (CFA) franc, is a regional currency. Adopting an ECOWAS-wide common currency would solve for currency trade efficiencies among member states who are already extensively economically integrated. The cost, and what would impede the adoption of a common ECOWAS currency, however, is the loss of sovereignty over monetary policy and the benefits this provides national governments with their own currencies (such as Nigeria and Ghana) to manage exchange rates for policy purposes.
Kenya: During his official visit to China President Uhuru Kenyatta signed three agreements worth roughly $2.2 billion.
Significance: The agreements signed ahead of Kenyatta’s participation in the Second Belt and Road Initiative Forum in Beijing comprise the development of the Konza Data Center smart city hub for Nairobi, transportation infrastructure for the Nairobi to Jomo Kenyatta International Airport expressway project, and for operational support to the Nairobi to Naivasha standard gauge railway project. No agreement has been reached thus far on Kenyan efforts to borrow roughly $3.6 billion to finance the extension of the standard gauge railway from Naivasha to the Ugandan border. Without Chinese funding, the Naivasha to Kisumu phase of the standard gauge railway project will likely not proceed.
Mozambique: Anadarko reiterated it is on track to reach a Final Investment Decision during the first half of 2019.
Significance: The energy company reiterated its March 5 statement that it will make a Final Investment Decision in the first half of the year for its proposed $15 billion liquified natural gas project in the country. The reiteration comes following a takeover bid of Anadarko by Chevron, which has subsequently been countered by Occidental Petroleum. Additionally, the reiteration follows due diligence conducted into Islamist militant attacks on two convoys in Mozambique’s Cabo Delgado province contracted to Anadarko, which were assessed to be anomalous incidents.
Nigeria: President Muhammadu Buhari will dissolve the Federal Executive Council on May 22.
Significance: The move takes effect one week prior to his inauguration for a second term as Nigerian president. Buhari’s subsequent appointment of a new administrative cabinet will follow the completion of general elections in the country and of political consultations to take place among ruling All Progressives Congress stakeholders at the sub-national geopolitical zone level. The composition of the Buhari administration will inform second term policy priorities, though it is unlikely to expect substantial policy change in the near term: for example, Finance Minister Zainab Ahmed stated that controversial fuel subsidies will remain in place, and, notably, despite that the Senate passed the Petroleum Industry Governance Bill, no administration official, to include the president, has indicated the Bill will be assented to.
Senegal: FAR Ltd. stated it expects to complete a Final Investment Decision by September.
Significance: The crude oil and natural gas exploration and production project in Senegal’s offshore SNE field involving Woodside Energy, Cairn Energy, Far, and Société des Pétroles du Sénégal targets first oil in 2022. The on-schedule project to produce over one hundred thousand barrels of crude oil per day validates confidence in Senegal’s oil and gas regime and the government’s new Petroleum Code that recently re-elected President Macky Sall introduced to raise transparency, accountability, and modern best practices.