Thursday, July 30, 2015

Ghana Oil Woes

When the Ghana shipped its first barrels of crude oil in 2010, then-president John Atta Mills pledged to build new roads and a deep-sea port, expand the power grid and create an aluminum industry.
Five years later and Ghana’s economy is sinking. The government was forced to seek an emergency loan from the International Monetary Fund of almost $1 billion, the currency was the worst performer in Africa against the dollar in the first half of the year and power cuts of 24 hours at a time are crippling businesses.

The promise of an oil windfall led Ghana on a borrowing spree. Feted by donors for its stable democracy in a region known for coups and civil conflict, the West African nation attracted investors hunting for high yields. Spending controls weakened at the same time as gold and cocoa prices fell. Soon Ghana went from being almost debt-free to being downgraded by credit-rating companies.
“It’s clear that Ghana did fall prey to the oil curse in the sense of the expectation that oil money was going to solve all its problems,” Philippe de Pontet, Africa director at Eurasia Group, said from Washington. “That had a perverse impact on government planning, spending and behaviors.”

After posting the fastest economic growth in Africa in 2011, Ghana’s expansion of 4 percent in 2014 was the slowest in 20 years. This month it raised its 2015 deficit target to 7.3 percent of gross domestic product to account for lower-than-expected revenue from oil.
Ghana is among producers from Iran to Russia to Nigeria that are struggling with lower-than-expected crude revenue. They are whipsawed by a global supply surplus that caused the price of Brent crude to drop about 50 percent in the past year.

It’s a long way from 2007, when Ghana rode a wave of optimism after London-based Tullow Oil Plc discovered a large offshore reserve. The World Bank estimated in 2009 that the oil boom would boost government revenue by a third and transform an economy that stood at $16 billion at the time.
When Mills opened the first oil tap in December 2010, he pledged to avoid the mistakes of other African oil producers and save revenue for future generations. The resource comes with “serious responsibilities” and the government “must ensure oil is a blessing, is not a curse,” he said.
Ghana began racking up foreign debt less than two years after it was one of a group of highly indebted poor countries granted large write-offs. 

The government sold its first global bond of $750 million in 2007 and, following the oil discovery, received a $3 billion loan from China in 2011.
Authorities have sold $1 billion in Eurobonds in each of the past two years and plan to auction at least another $1 billion this year. The yield on the Ghana’s dollar debt maturing in 2023 is up 130 basis points, or 1.3 percentage points, to 9.286 percent since it was sold in July 2013.
Public debt has almost doubled since 2007 to reach 68 percent of gross domestic product. The country may be headed for default in the next few years, Bloomberg Intelligence’s Mark Bohlund wrote this week.

“Government has borrowed and borrowed,” said Mohammed Amin Adam, head of the Accra-based African Center for Energy Policy. “If you look at borrowing and spending behavior, it quickly reached unsustainable debt levels on the back of oil expectations.” Part of that borrowing was used to pay higher wages after Mills implemented a new salary structure for more than 600,000 civil servants in 2010. The wage bill more than doubled to 5 billion cedis ($1.5 billion) in 2011 and increased by 47 percent the year after that. Mills died in office in 2012. He was replaced by John Dramani Mahama, who has failed to stem debt levels or solve the energy crisis.

His government has blamed falling commodity prices for much of the crisis as it cut budgeted revenue, while pointing to oil prices for the cedi’s decline. Two phone calls and a text message to the mobile phone of Finance Minister Seth Terkper weren’t answered.

The IMF loan, agreed to in April, has provided the government with some breathing space and given investors reason to come back as authorities pledge to keep spending under control. The cedi has recouped all its losses of the first half of the year. And it has gained 26 percent against the dollar since June 29, when the IMF gave a positive assessment of Ghana’s budget targets.

 “With the IMF coming in, the government is being more cautious in terms of borrowing,” said Bernard Anaba, a policy analyst at the Integrated Social Development Centre, an Accra-based research group. “I’m optimistic that the accumulation of debt will slow down.”
The cedi has plunged 58 percent against the dollar since the beginning of 2011, reaching a record low of 4.49 on June 29. Inflation reached 17.1 percent in June. Santiago Cuneo, an economist at RVX Asset Management based in Miami, said he had owned Ghanaian debt before but wouldn’t jump at it now.

“Since the IMF deal, there has been some improvement in the numbers but I’m afraid we’re going to see a weakening cedi,” he said. “Even if there’s progress on the fiscal side, the price of oil and the falling commodity prices are not going to help.

Source: BloombergBusiness

Monday, July 27, 2015

Sudanese documentary wins big at Durban International Film Festival

Beats of the Antonov was a big winner at the 36th Durban International Film Festival, taking home both Best Documentary and the freedom of expression award. The uplifting documentary is a celebration of the people of the Blue Nile and Nuba Mountains in Sudan, who fought with the South for independence but now remain trapped in a civil war in the North.

The jury awarded Beats of the Antonov R25 000 for Best Documentary “for its story, characters, relevance and visual interpretation,” and for a “story told with grace, while honouring the integrity of the people who gave them access as well as the subject matter.”

The jury for Arterial Network’s Artwatch Africa Award for freedom of expression, which carries a cash prize of R15 000, added, “This compelling film shows how the power of music, dancing and culture sustains the displaced people living in the remote war-ravaged areas of Southern Sudan.”
City Press similarly hailed Beats of the Antonov as “the must-see film at the Durban International Film Festival this year.” 

Scoring the documentary 9/10, reviewer Charl Blignaut said the "truly extraordinary film dances a line between cultural expression and an exploration of identity in a pure, textured and impossibly complex Fanonian sense… Beats of the Antonov is the purest kind of cinema. One man and a camera that unpeels a story of the unmakings and makings of identity through cultural production, one where the musician and the audience is unseparated, where music is able to express both lament and healing.”

The documentary also re-opened debate over the South African government’s decision to allow Sudan’s current president, Omar al-Bashir, to leave South Africa last month, flouting a court order and international convention. As Tymon Smith wrote in his festival review in The Times, the “excellent Beats of the Antonov… got tongues wagging.” As the headline of a Sunday Tribune op-ed said, “Zuma needs to see his Sudan documentary,” which positions the civil war in Sudan as a racist war driven by an anti-black notion of Arabisation.

"Omar al-Bashir, who is by all counts a black African, chooses to identify mainly as Arabic-Islamic,” hajooj told The Financial Mail. "This is not an issue until he, and previous Sudanese governments, impose this, at gunpoint, as a national identity on the rest of the 56 major ethnic groups that make up Sudan. This one-dimensional Sudanese identity creates marginalised second-and third-class citizens and an endless state of war in Sudan."

Beats of the Antonov has charmed audiences around the world, winning The People’s Choice Documentary Award at The Toronto International Film Festival and four other international awards. Sudanese filmmaker hajooj kuka directed and shot the documentary over two years, at immense personal risk. He also produced alongside South African Steven Markovitz, as a coproduction between Sudanese production company Refugee Club and South African company Big World Cinema. South African Khalid Shamis edited the documentary with hajooj in Cape Town.

Friday, July 24, 2015

Nigerian appointed World Bank VP

Former Director General of the Securities and Exchange Commission (SEC), Ms. Arunma Oteh has been appointed Vice President and Treasurer of the World Bank. Oteh was appointed DG of the SEC by President Goodluck Jonathan in 2010. World Bank statement announcing the appointment is quite detailed and highlights Oteh’s impressive career achievements. Below is a part of it.

Arunma, a Nigerian national, was most recently the Director General of the Securities and Exchange Commission of Nigeria. Appointed to a five-year term by the President of Nigeria in 2010, she led the transformation of the country’s capital markets industry into a major global presence.

She was a member of the Board of the International Organization of Securities Commissions (IOSCO) and the Chairperson of the Africa Middle East Regional Committee of IOSCO. Prior to joining the Securities and Exchange Commission (SEC) of Nigeria, Arunma was Group Vice President, Corporate Services, at the African Development Bank Group (AfDB). In this role she oversaw a number of departments, including human resources, information and communications technology, and institutional procurement.

From 2001 to 2006 she held the role of AfDB Group Treasurer, where she led AfDB’s fundraising and capital market activities across the world. Earlier roles at the AfDB, which she joined in 1992, included trading room management, investment portfolio coverage, and public sector lending. She also held other positions in capital markets and lending during the course of her career at the AfDB.
Arunma began her career in 1985 at Centre Point, where she executed debt and equity offerings in the Nigerian capital markets. 

She earned her Bachelor of Science in Computer Science from the University of Nigeria and her Masters of Business Administration from Harvard University.
As VP and Treasurer, Arunma will manage and lead a large and diverse team responsible for managing more than $150 billion in assets.
Her top priorities will be to:
(i) maintain the World Bank’s global reputation as a prudent and innovative borrower, investor and risk manager;
 (ii) manage an extensive client advisory, transaction and asset management business for the Bank;
(iii) engage, in her capacity as one of the World Bank’s key representatives, with outside stakeholders including global private sector financial institutions, the financial media and the sovereign debt and reserve managers in client countries, as well as ratings agencies; and
(iv) collaborate extensively with the Finance Partners throughout the WBG, including with IFC and MIGA, expanding shared approaches, in particular around innovative financing for development and for key new projects.

Ms. Oteh was selected to this position through an international competitive search. Her appointment is effective on September 28, 2015.

Thursday, July 23, 2015

President Obama discusses AGOA

President Obama delivers remarks at a reception celebrating the African Growth and Opportunity Act, in the East Room of the White House, July 22, 2015.

Friday, July 17, 2015

Explosion in Damaturu as Muslims gather for Eid-el-Fitri prayers

Twin bomb blasts has been reported in Damaturu, Yobe state at the praying ground, where Muslim worshippers had gathered for the Eid-el-Fitri prayers. Death toll as at press time is 10. “The bomb was targeted at the prayer ground in the area and several persons that were injured were taken to General Hospital.”

Nobody immediately claimed responsibility for the blasts, but such incidents are usually blamed on Islamist group Boko Haram. On Thursday, some 50 people were killed in bomb attacks at a market in Gombe, around 200 km (120 miles) from Damaturu. Damaturu city experienced two suicide bomb attacks in May.

Tuesday, July 14, 2015

Adefuye, Ojukwu other Envoys Recalled by Buhari

President Muhammadu Buhari has recalled political appointees serving as envoys abroad. They were told to hand over to the highest ranking officer in their various locations. They include Bianca Ojukwu who had been in Spain, Chief Ojo Maduekwe (Canada), Dr. Dalhatu Tafida (UK), Professor Ade Adefuye (USA), Mr. Taofeek Arapaja (Jordan), Mrs. Fidelia Njeze (Switzerland), and Mr. Yemi Farounbi (Philippines).

They were among the 93 envoys posted out in June 2012. Of the 88 envoy nominees sent to the Senate by Jonathan at the time, only 84 passed the screening. Mrs. Bianca Ojukwu, who was nominated to represent Anambra State on the list of non-career category, had not appeared for screening but was confirmed nonetheless, her nomination coming barely a week after her husband died in a London hospital. The sack is the biggest since President Buhari assumed office on May 29.

Sunday, July 5, 2015

RCCG pastor, five others killed by Suicide Bomber

A suicide bomber has attacked a Redeemed Christian Church of God parish in Potiskum, Yobe State Nigeria. The attack occurred as worshipers were arriving for the Sunday Service. The pastor of the Church, a female parishioner and her two children are reported to be among the dead.

According to AFP the bomber entered the uncompleted Redeemed Christian Church of God at 9:55 am and detonated his explosives, killing the worshippers, including a woman and her two children as well as the pastor, they said. “Four worshippers died instantly while the fifth victim gave up shortly after she was taken to hospital,” according to a police officer involved in the evacuation.

Meanwhile, the General Overseer Pastor Enoch Adeboye is expected to make a statement with reference to the incidence and security in and around thousands of other parishes around the country.

Saturday, July 4, 2015

Boko Haram slaughter nearly 200 in 48 hours in Nigeria

Kano (Nigeria) (AFP) - Boko Haram carried out a fresh wave of massacres in northeastern Nigeria on Friday, locals said, and killing nearly 200 people in 48 hours of violence President Muhammadu Buhari blasted as "inhuman and barbaric".

Telecoms Coys in Nigeria burn $100M on Diesel Generators

Nigeria’s biggest telecommunications companies are spending close to $100 million a year on diesel fuel to keep their networks running due to the country’s poor electricity supply. Nigeria has the capacity to generate around 5,000 megawatts of electricity. In comparison South Africa with just over a third of Nigeria’s population generates around 40,000 megawatts. Even then, Nigeria’s supply is very erratic and is often far below its capacity.

Meanwhile, Kenya set to construct Africa’s biggest wind power farm, near Laisamis, 550km north of Kenya’s capital Nairobi.

Andrea Achudume