Items of Interest: May 1

The following items from May 1 may emerge to become significant factors impacting geomarket developments in Africa:

Angola: The deputy leader of the opposition Broad Convergence for the Salvation of Angola-Electoral Coalition (CASA-CE) party stated that municipal elections are imperative toward resolving socioeconomic conflict in the country’s oil-producing Cabinda exclave province.

Significance: Angola is preparing to convene first-ever municipal elections in 2020 as part of a broader package of reforms that include the decentralization of political and economic competencies to provincial and municipal authorities. Manuel Fernandes of the opposition CASA-CE party, the third largest in the country, addressed the status of socioeconomic and political discontent in Cabinda province which has led the armed forces command (FAC) of the Front for the Liberation of the Cabinda Enclave (FLEC) to declaring a resumption of their armed struggle against the Angolan state. Threats by the Cabinda rebel group to oil and gas personnel and production is a sovereign risk the Angolan government has disclosed in Eurobond prospectuses. There are concerns communicated by Angolan opposition parties that the inaugural municipal elections may not be held on time in 2020, undermining confidence that critical political and socioeconomic priorities they hold will be honored by the Angolan government. 

Nigeria: Two expatriate oil worker and four Nigerian civilians have been released by kidnappers in the country’s oil-producing Rivers State.

Significance: The separate kidnappings involving employees of Shell and the Nigerian National Emergency Management Agency took place on April 25 and April 23 respectively. In the case of the four Nigerian civilians, a known ransom demand of ₦40 million (roughly $110 thousand) was issued two days following their kidnapping. Two other expatriate oil workers, along with a Nigerian colleague, remain unaccounted for since their April 27 kidnapping in Rivers State. Despite the remaining kidnapping incident, that the others were released by their kidnappers within days support the outlook that the motivation for the uptick in insecurity in Rivers State is criminal, rather than geostrategic, in intent. That there has been no claim of responsibility nor assertion of a resumption of an armed struggle in the Niger Delta underscore the criminal nature of the insecurity developments in the energy-rich region. 

Tanzania: The Tax Revenue Appeals Board ruled against an appeal filed by Acacia Mining for gold and copper concentrates detained at the port of Dar es Salaam to be exported.

Significance: The adverse ruling reveals no resolution has been reached thus far between the Tanzanian government and Acacia Mining and its parent company Barrick Gold over a tax dispute and the broader ban against exporting ore concentrates. Barrick Gold had hoped in recent weeks that an offer of a $300 million payment to resolve the government’s tax dispute with Acacia Mining would lead to an unblocking of the company’s ore concentrates that were seized in late 2017. While banning the export of ore concentrates complies with Magufuli administration policy preferences of expanding value-added industrial activity in the country, the rigid legislative and regulatory requirements have discouraged foreign-based extractive industry companies from committing to the country. The resultant foreign investment behavior has contributed to the Magufuli administration electing to self-finance priority national development projects, notably the country’s standard gauge railway as well as the Stiegler’s Gorge hydroelectric power generation project. 

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