Items of Interest: June 5

The following items from June 5 may emerge to become significant factors impacting geomarket developments in Africa:

Mozambique: The Council of Ministers approved the financing structure for the country’s Anadarko-led liquified natural gas project.

Significance: The Mozambique government approval for the funding structure of the Anadarko-led consortium LNG project ensures the Final Investment Decision that is scheduled for June 18 remains on-track. The proposed funding structure of roughly $14 billion in borrowing and $11 billion in equity follows the successful acquisition of sales and purchase agreements commensurate with the planned-for output of almost thirteen million tonnes of LNG per year from the two-train facility to be constructed in the Palma district of Cabo Delgado province in northern Mozambique. Anadarko has separately negotiated agreements for security support as well as local content provisions so that its operations in northern Mozambique will maximize host community and national government satisfaction and minimize disruptions to personnel or production.  

Niger, Bénin: The Nigerien parliament approved the January 23 crude oil pipeline agreement that was negotiated with the government of Bénin.

Significance: The Nigerien parliamentary approval includes terms of reference for tariffs that will apply for Nigerien crude produced from the country’s Agadem basin intended for export to global markets via a Beninese coastal platform. The crude oil export pipeline is a project in addition to the Zinder-Torodi refined petroleum products pipeline the Issoufou administration has launched that intends to supply production output from Niger’s Zinder Refinery Complex to markets in the Sahel sub-region. Growing Niger’s hydrocarbons industry is a critical priority for the Issoufou administration given volatility in the country’s principal extractive industry, that being uranium mining, as well as instability posed by Islamist militant threats in western, central, and eastern regions of the country where extractive industry assets are exposed. 

South Africa: Government and African National Congress party officials denied the statement of June 4 that the ruling party had decided to expand the mandate of the South African Reserve Bank.

Significance: Finance Minister Tito Mboweni and African National Congress economic transformation committee chairperson Enoch Godongwana stated there was no decision from the ruling party’s recently-concluded national executive committee retreat to expand the South African Reserve Bank (SARB) mandate, challenging previous day’s statement by the ruling party’s Secretary General Ace Magashule. The issue of expanding the mandate of the country’s Reserve Bank beyond its primary concern for inflation stability – to add in mandates for economic and employment growth – raises concerns for compromising the independence of the financial institution and subjecting it to political requirements. While the challenges to Magashule’s statement speak to the diversity of economic policy preferences found within the African National Congress, there was no denial that it is African National Congress resolution to nationalize the South African Reserve Bank, an assertion reiterated in parliament by President Cyril Ramaphosa on March 7. An Economic Freedom Fighters party spokesman added that the far-left party intends to introduce a parliamentary bill to effect the nationalization of the Reserve Bank.

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