Cardoso emerges new Central Bank of Nigeria Governor

President Bola Tinubu has given his approval for the appointment of Dr. Olayemi Michael Cardoso as the new Governor of the Central Bank of Nigeria (CBN) for an original term of five years, pending evidence by the Nigerian Senate. This action aligns with Section 8(1) of the Central Bank of Nigeria Act, 2007, which grants the President of Nigeria the authority to elect the CBN Governor and four Deputy Governors, subject to Senate evidence. 

Dr. Olayemi Michael Cardoso 

Also, President Bola Tinubu has backed the nominations of four new Deputy Governors for the CBN for an original term of five, pending Senate confirmation. The appointees are: Mrs. Emem Nnana Usoro, Mr. Muhammad Sani Abdullahi Dattijo, Mr. Philip Ikeazor, and Dr. Bala M. Bello.

These appointments reflect President Tinubu's Renewed Hope docket, with the anticipation that these appointees will lead essential reforms at the CBN. These reforms aim to boost the trust of both Nigerians and transnational partners in the Nigerian economic restructuring for sustainable growth and development.

Simha Asuquo contributes from Lagos, Nigeria. 

U.S.-Africa Business Summit set for July 11-14 2023 in Gaborone, Botswana

During a recent visit to Gaborone, Botswana, Corporate Council on Africa (CCA) President and CEO Florizelle “Florie” Liser was honored to meet with H.E. Mokgweetsi Masisi, President of the Republic of Botswana, who reiterated his Government’s commitment to successfully co-hosting the 15th U.S.-Africa Business Summit (USABS) in Botswana later this year.

Ms. Liser made the announcement with Minister of Investment, Trade and Industry, Hon. Mmusi Kgafela that the Summit will be held July 11-14 2023 in Gaborone.

President Masisi noted that key Cabinet officials who attended the meeting were ready to mobilize their ministries and work collaboratively with CCA and the private sector to organize a highly successful Summit.

Florie Liser with H.E. Mokgweetsi Masisi, President of the Republic of Botswana

The U.S.-Africa Business Summit is the Corporate Council on Africa’s premier annual event, bringing together African heads of state, senior U.S. and African government officials, and top CEO’s and senior business executives from the U.S. and Africa spanning major business sectors that are critical to the continent’s development. These include infrastructure, ICT / digital, health, energy, mining, agriculture, consumer goods, finance, tourism and creative industries.

The 15th USABS theme “Enhancing Africa’s Value in Global Value Chains” highlights an issue that was heavily discussed during the U.S. - Africa Business Forum, hosted by President Joseph R. Biden on the second day of the U.S.-Africa Leaders Summit in Washington, DC in December 2022. During the Forum, President Biden announced more than $55 billion in new U.S. government programs to support trade, investment and development in Africa along with more than $15 billion in new trade and investment deals made by private sector companies that were in attendance.

 CCA was proud to have co-organized the U.S.-Africa Business Forum which highlighted opportunities for greater collaboration between the U.S. and African private sector. This year’s CCA Summit will build on and advance those discussions, further deepening U.S.-Africa economic engagement and business ties.

 With a desire to keep the positive momentum going from the U.S.-Africa Leaders Summit and Business Forum, Ms. Florie Liser stated that " the U.S.-Africa Business Summit is an important platform and opportunity to again bring together U.S. and African government and private sector leaders to grow U.S.-Africa trade, business, and mutually beneficial gains for the people and businesses of both the United States and Africa.”

Minister of Investment, Trade and Industry the Honorable Mmusi Kgafela said, “We look forward to working with our partners at the Corporate Council on Africa to herald a new era of two-way trade and investment between Africa and the United States. We welcome U.S. private sector businesses to drive investment and technology that can enhance Africa’s role in key global value chains, create jobs, and spur economic growth here in Botswana and across the continent.”

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Non-fungible Tokens (NFTs) and the Future of Capital Raising in Africa

Since January, I have been approached by investors and projects owners alike who are looking to get projects funded or deals flowing. At the same time, I have been trying to estimate using available data the gap between infrastructure and energy funding. The figure we have been using is $250 billion a year between now and 2025. Given that the African population is set to double between now and 2050, we can expect that figure to be in the trillions unless the continent finds a way to successfully develop and fund energy projects to universally guarantee electricity access and infrastructure expansion.

Over the past few months, I have made a couple of observations of which the most prominent is that not all deals are made equal. Many investors want renewable projects but only deals above a certain size - $2 million is too small, for example, for many larger investors though this project size timeline is much shorter and can bring immediate impact. A project upwards of $2 billion is more attractive in terms of funding returns but the timeline to project completion could be up to a decade. Overall, there is a hesitancy to engage in hydrocarbon projects even though there are about a dozen markets actively touting their blocks, which, in oil and gas hotspots, could be easily tied into existing infrastructure.

Given the enormous funding gap, I truly believe there is an opportunity to revolutionize how projects are funded. My thesis is that more African energy projects should be crowdfunded either in fiat or digital currency and non-fungible tokens (NFTs) to ensure that these projects get developed, especially the smaller ones.

This could work in two ways. Firstly, through crowdfunding debt. A project needs to raise debt for a project to start. All agreements and feasibility studies have been completed and the project has a 30-year term agreed with the government. Investors can loan the project money with a fixed percentage of return over a two-to-three-year period. The project gets funded, and investors get a great return on their money. Some projects could deliver up to 30% return if successful.

Secondly, through crowdfunding equity. A project needs to raise a percentage equity funding to attract larger institutions who will structure and loan the rest. The owners of the project have already invested all their working capital into completing pre-feasibility studies and there is little scope of sovereign guarantees due to historical mismanagement of funds. Investors can crowdfund to own an equity stake in the project and make the project more attractive to institutions. Equity owners later receive annual dividends over the lifespan of the project. With off take agreements in place from the beginning of the project, this could make the deal even sweeter.

Neither of the above is revolutionary as both strategies are often employed in the start-up scene. However, given the investment gap and how few Africans have a stake in their own energy futures, this could prove an interesting theory.

Then, in my opinion, I started to get a bit creative. I’ve been paying a little attention to crypto, blockchain, web3 and NFTs. I am not an expert by any means and the NFT pump mostly disinterested me until I started to hear about real-world utility. NFTs can be used to prove authenticity and ownership, and this has instant utility in the world of event ticket reselling and luxury fashion. A few weeks ago, I read a few articles about the tokenization of real estate in Miami whereby investors could “mint” a real-estate token giving them part ownership of the building. There must be an analogue linking of the deed to the token but after that point, the token is on the blockchain and can be transferred to future owners. In this respect, the barrier to entry is much lower. Instead of finding a 10% deposit for an apartment, real-estate NFTs could be minted for as little as the creator sets it at.

Could this be applied to African energy projects? I think so!

Let’s look at the above scenarios with a web3 lens such as energy asset NFT – debt. In this regard, the project raises capital via a cryptocurrency. Ethereum based technology makes sense, especially Polygon or Solana. Investors mint an energy debt NFT in order to raise capital for the project. NFT holders are rewarded through holding the NFT throughout the debt term by earning additional cryptocurrency interest known as distribution. The NFT can be sold at any point to a new owner on the blockchain and the sale can also trigger smart contracts ensuring a royalty to the project owner or the wider community where the project is taking place.

Secondly, let’s look at energy asset NFT – equity. This is where things could get interesting. If you tokenize a whole asset – such as a solar farm, oil block, or biogas plant - it means that anyone (with access to a smartphone, WiFi and a cryptocurrency) can own part of a real-life asset. What I like about this idea is the democratization of the energy asset ownership. It is not just energy companies, finance institutions, governments that get to get to own our infrastructure but anyone including everyday Africans and those in the diaspora. While NFTs cannot pay a dividend as they only prove ownership, the value of the NFT will naturally rise over time as a project comes online and starts to cashflow. Owning 1,000 tokens of an oil block pre-production will become far more valuable when the asset is producing, especially at $100 per barrel. Token owners can be rewarded in cryptocurrency or fiat when distributions are paid out.

I think the key thing here is transparency in ownership and transparency which sets the continent up for long-term success. If token holders are also constituents in the project vicinity, it brings an additional layer or accountability and governance. An NFT could contain voting rights, and future sales generate royalties that are directed back into the local community.

By Kelly-Ann Mealia

Source: APO Group on behalf of Energy Capital & Power.

United States condemns use of excessive military force in Nigeria

The United States has strongly condemned the use of excessive force by military forces who fired on unarmed demonstrators in Lagos, causing death and injury. 

The U.S calls for an immediate investigation into any use of excessive force by members of the security forces.  Those involved should be held to account in accordance with Nigerian law.

The right to peaceful assembly and freedom of expression are essential human rights and core democratic principles. 

“We call on the security services to show maximum restraint and respect fundamental rights and for demonstrators to remain peaceful.  We extend our condolences to the victims of the violence and their families”. Michael R. Pompeo, Secretary of State

Source: State department

United Nations Economic Commission for Africa (ECA) and Institute of International Finance (IIF) Host Private Investors virtual parley

The United Nations Economic Commission for Africa (ECA) and the Institute of International Finance (IIF) released the following statement after a virtual meeting of delegates representing African finance and development ministries, and the private creditor community to discuss the role of the private sector in supporting low-income countries through the COVID-19 crisis, and driving post-pandemic development.

“We all agree that access to private capital is essential to economic growth and development, the post-COVID-19 recovery, as well as raising living standards and creating greater prosperity across Africa. Given the importance of private capital, and its growing role in Africa over the last decade, it is crucial that countries with market access and the appropriate macroeconomic framework continue to have the opportunity to this access as a complement to concessional financing. A number of these countries have pursued policies to increase investor confidence, attract investment, obtain greater market access, and lower their cost of capital – these efforts must be encouraged. Similarly, new initiatives to help further lower the cost of capital must be encouraged and implemented swiftly - such as the creation of repo markets for frontier issuances as part of the Liquidity and Sustainability Facility. Where additional liquidity can be provided it must be the priority.”

 Regarding the upcoming discussions about the G20’s Debt Service Suspension Initiative (DSSI) at the International Monetary Fund and World Bank Annual Meetings, the group noted that extending the bilateral DSSI through 2021 would allow much-needed debt relief. All creditor countries are encouraged to participate fully in an extended DSSI.

Representing the private sector, the IIF has helped coordinate the views of over 100 of the world’s foremost asset managers, banks, and other financial institutions providing private finance to nations and companies through Eurobonds, syndicated loans, trade finance and other credit structures across the continent of Africa. These investors bring significant expertise and experience in Africa and other emerging markets and represent total assets under management in excess of $45 trillion.

 

Source: United Nations Economic Commission for Africa (ECA)