Items of Interest: May 13

The following items from May 13 may emerge to become significant factors impacting geomarket developments in Africa:

Burkina Faso: Two suspected Islamist militant attacks since the May 10 French hostage rescue operation mean Islamist militants have not been deterred from conducting operations in the country.

Significance: Suspected Islamist militants attacked a Catholic church in the country’s central-northern province of Samnatenga on May 12, killing six including the priest. In the southern Soum province, a Burkinabé special forces patrol was ambushed, with one soldier killed and nine wounded. Despite the breadth and scope of the Islamist militant attacks – against not only unarmed civilians but on specialized soldiers as well – the attacks have not disrupted gold mining or other critical economic development efforts in the country. To witness, Prime Minister Christophe Dabiré inaugurated the 7.3 tonnes per year West African Resources-led Sanbrado gold mine project, and the ministry of Economy, Finances and Development signed a $235 million grant and loan agreement with the World Bank for budgetary and project funding support.  

Côte d’Ivoire: The executive secretary of the Democratic Party of Côte d’Ivoire announced the reconciliation between it and the Ivoirian Popular Front party.

Significance: While reconciliation doesn’t yet mean an alliance between the former ruling parties the Democratic Party of Côte d’Ivoire (PDCI) led by Henri Konan Bédié and the Ivoirian Popular Front (FPI) led by Laurent Gbagbo, that is clearly the directionality as the country anticipates a presidential election in October 2020, less than 18 months away. Reconciliation between the FPI and the PDCI, essentially whom the FPI succeeded as the Ivoirian government in 2000, would mean the consolidation of a political alliance founded upon ethnic and regional affinities intended to electorally displace the Alassane Ouattara-led government. The final piece to consolidating a electorally successful national political alliance will be for Bédié’s PDCI and Gbagbo’s FPI to reach accord with the political movements led by former president of the Ivoirian national assembly Guillaume Soro, who is actively campaigning in the northern regions of Côte d’Ivoire, which is Ouattara’s home base.   

Mozambique: Anadarko signed a long term joint sales and purchase agreement with JERA and CPC. 

Significance: The agreement to purchase 1.6 million tonnes per year of liquified natural gas from Anadarko’s Rovuma 1 project underscores the on-track outlook for a final investment decision by Anadarko to be announced on June 18. The co-purchase agreement with JERA and CPC means Anadarko has secured markets for 12.78 million tonnes per year of LNG output from Mozambique, following earlier agreements with Centrica and Tokyo Gas, Shell International Trading Middle East, Singapore Trading and Marketing, Tohoku Electric, Électricité de France, PTT, and Bharat. Achieving sales and purchase agreements earmarking 12.78 million tonnes of LNG per year means Anadarko has acquired commitments for effectively its full output of 12.88 mtpa of LNG to be produced from its proposed two-train facility following construction and first gas as early as 2023. 

South Africa: The National Executive Committee of the ruling African National Congress met to review outcomes and appointments following the country’s general elections held May 8. 

Significance: The National Executive Committee comprises the ruling party’s senior representatives (who number more than 80) whose leadership shape and direct the party’s policy priorities, which in turn shape and direct South African government policy priorities. The diverse participation in the National Executive Committee meeting, to apparently include former President Jacob Zuma, would convey the uniformity of the African National Congress, as opposed to the individuality of an elected personality, in commanding the policy orientation of the country’s newly elected government. While Cyril Ramaphosa will be reelected on May 25 the president of South Africa, on a structural level the African National Congress party leader does not enjoy independence of action and must comply with ruling party policy imperatives, to include land expropriation without compensation and the nationalization of the country’s Reserve Bank, as means to solve for unemployment and socioeconomic dissent. 

Tanzania: The speaker of the national assembly questioned a parliamentary committee why the country’s Bagamoyo port project has not progressed.

Significance: The $10 billion Bagamoyo port project is intended to provide Tanzania a deep water port acting as an appropriate terminus for the country’s standard gauge railway project that is under construction and which is to ultimately link to Africa’s Great Lakes region. The country’s primary existing port at Dar es Salaam faces congestion and infrastructure constraints that had led the prior Jakaya Kikwete administration to prioritizing the development of Bagamoyo, which is located just to the north of the coastal commercial capital city. That the Bagamoyo project has not progressed would reveal likely funding difficulties with Chinese lenders, which is a concern that neighboring Kenya recently experienced when it was denied $3.5 billion in funding for the expansion of its standard gauge railway project. Possessing a robust standard gauge railway but not a commensurate coastal port would undermine the intended efficacy of Tanzania as a supply chain corridor linking to central Africa. 

Zimbabwe: The government’s parliamentary legal committee is reviewing the constitutionality of the Maintenance of Peace and Order Bill, as well as the Zimbabwe Investment Development Agency Bill.

Significance: The constitutionality review of the Maintenance of Peace and Order Bill should be one of the final procedures before the legislation is signed into law, replacing the Public Order and Security Act. Failure as yet to repeal the controversial Public Order and Security Act, as well as the Access to Information and Protection of Privacy Act (AIPPA), are two known legislative obstacles that impede the lifting of Western sanctions (primarily by the Europe and the U.S.) on Zimbabwean officials, which include President Emmerson Mnangagwa. Becoming law doesn’t necessarily mean Western sanctions on Zimbabwean officials will be lifted, as good governance behavior will need to be seen by the EU and U.S. before their sanctions would be repealed. But only following the lifting of Western sanctions, and especially U.S. sanctions, can Zimbabwe regain meaningful engagement with Western multilateral financial institutions particularly the World Bank and International Monetary Fund.

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