Business Culture Economy Energy

African Energy Chamber Report Analyzes Effect of COVID, Russian Conflict on Oil Markets, Economy (By NJ Ayuk)

In Africa, the twin shocks of COVID-19 and Russian aggression have torn through a society vulnerable to even far milder upsets. Although the continent was showing modest recovery from the economic devastation that accompanied COVID-19 shutdowns, progress has been erased by rising food, fertilizer, and fuel costs. Despite International Monetary Fund (IMF) estimates that real GDP growth will be 4% in 2023 — with some countries, such as Senegal and Ghana, expected to reach 5% — concerns are that economic expansion won’t trickle down to the everyday African household. The International Energy Agency (IEA) says that yearly inflation has increased to “astronomical levels” in Ghana, Ethiopia, South Africa, Nigeria, and Kenya.

Citizens have taken to the streets in response to the rapid and unrelenting cost of living hike. As a result, political stability is wavering in some areas. The fiscal growth that promised to expand millions of Africans’ access to electricity has ground to a halt: Energy poverty continues to prevail.

It’s almost impossible to imagine things being disrupted even more. But when Europe bans Russian oil starting Dec. 5, 2022, then follows it with a second ban, this time on Russian refined products taking effect Feb. 5, 2023, it is expected to tighten energy markets even more and send prices of Brent crude — the European benchmark — higher than usual, at least in the short term.

In the wake of the conflict in Ukraine and Western sanctions, Russia’s crude production is likely to decrease by an average of 1.65 million barrels per day (bpd) over the period 2022 – 2030.

But as international oil companies exit Russia’s upstream sector, equipment and technology shortages could reduce output even more.

What does removing approximately 1.65 million barrels per day (bpd) of Russian oil from the market mean for African producers and African people? Is the future likely to be as turbulent as the present?

The fiscal growth that promised to expand millions of Africans’ access to electricity has ground to a halt: Energy poverty continues to prevail

The African Energy Chamber’s well-researched and data-rich State of African Energy 2023 Outlook, published in October, describes the effect of geopolitics, demand shock, tight supplies, production outages, and downward price pressures on Africa and the world.

The Upside

With the pandemic retreating and travel restrictions lifted, energy demand shot into high gear in 2022 while supplies struggled to catch up. Though Brent prices were predicted to climb, they far exceeded expectations — and that was even before armed conflict in the heart of Europe drove them up, at least temporarily, to $139 per barrel.

While higher oil prices have contributed to inflation in much of the world, they’ve actually been a lever against it in some exporting countries, such as Angola. Angola’s gross oil revenues increased 75% during the second quarter of 2022 compared to the same period in 2021. The country’s annual budget was based on oil selling for $59 per barrel, less than half the recent high. Although the U.S. plans to release 180 million barrels of Strategic Petroleum Reserves (SPR) volumes over the next six months, and virus lockdowns in China are softening demand and putting downward pressure on prices, the African Energy 2023 Outlook predicts Brent will remain above the $100 per barrel mark throughout the rest of 2022, averaging around $105.

Growth Potential

For the most part, the African Energy 2023 Outlook says, global oil and condensates production will grow in the short term, with increases in output from OPEC’s Middle East members and North American shale flows offsetting the drop in Russian production. Overall, global average production is expected to grow from 80.6 million bpd in the first half of 2022 to 85.3 million bpd for 2023.

During that same period, though, African crude oil and condensates — which represent about 8% of total global volume — will likely remain flat overall. There will be some outliers, however. For example, the report says that in the absence of additional geopolitical difficulties, output from Nigeria, which is already the continent’s top producer, is expected to grow in 2023, although some of that reflects recovery from outages early in 2022. Production in Libya, which also experienced outages, is projected to increase at a faster clip; the African Energy 2023 Outlook sees Libya surpassing Algeria and Angola to become Africa’s second-largest producer.

There’s more to the story than an uptick in Libyan production, however. Lack of production growth in Algeria and declining output from Angola will contribute to the change in Libya’s status.

The African Energy Chamber’s State of African Energy Outlook 2023 also discusses:

  • How recession fears will affect oil demand and supply.
  • Who will fill the gap left by sanctions against Russian energy?
  • The long-term implications of war on Russia’s energy landscape.
  • Where Brent prices will go from here.
  • How energy policies are shifting toward energy security and affordability and less on climate concerns. 

 

Download The State of African Energy: 2023 Outlook at https://bit.ly/3NbQLtD.

Leave a Comment

Your email address will not be published.

You may also like

Agriculture Business Culture Economy

FG TO STREAMLINE EXISTING SORGHUM VARIETIES TO ENHANCE SELF-SUFFICIENCY, OTHERS

post-image

 

Federal Government has reiterated its commitment to streamline the existing sorghum varieties in the country to enhance Self-sufficiency, income generation, Food and Nutrition Security amongst others.

The Minister, Federal Ministry of Agriculture and Rural Development, Dr. Mohammad Mahmood Abubakar revealed this while receiving report of the Sorghum Technical Committee, in his office, in Abuja, recently.

He stated that the objective of streamlining the existing sorghum varieties was to find other ways of improving productivity, value addition and quality of sorghum produce, noting that the exercise was crucial as it would enhance farmer’s income, attract more youth to sorghum cultivation, meet national demand as well as contribute to the growth of the Gross Domestic Product.

In his words” This cannot be achieved without the collaborative efforts of all Stakeholders of which farmers, Seed producers, Input providers and international Institutes are part”.

He recalled that the technical committee arose from a sorghum stakeholders meeting on…

Read More
Business Economy

African startups are weathering the funding storm with acquisitions

post-image

A new report from Africa’s foremost digital economy consultancy, TechCabal (https://TechCabal.com) Insights has revealed that acquisitions have become more frequent in Africa’s tech ecosystem, showing signs of a maturing market. According to the report, 2021 saw 32 acquisition deals on the continent. At the end of Q3 2022, there were about 43 acquisition deals, signaling a consolidation trend.

 

 

After two years of continuous growth in VC investment, funding announcements have hit a plateau. Startups have resorted to cutting costs to extend their runway, and acquisition deals have become necessary for survival, particularly with startups operating in the same market. The number of acquisitions between startups operating in the same market increased from 31% in Q2 to 52% in Q3 2022.

 

The State of Tech in Africa Report compiled by TechCabal Insights, also found that the average seed ticket size remained stable at $2.5M in…

Read More
Business Economy Society Technology Technology Trends

Multimillion-dollar boost for small business as more African countries join MultiChoice Africa Accelerator Programme

post-image

Following the success of the MultiChoice (www.MultiChoice.com) Africa Accelerator (https://bit.ly/3OtthRz) Programme, which secured $16 million (USD) of funding for six emerging businesses last year, the programme has been expanded to eight more countries across Africa.

 

Many more small businesses in Africa’s technology sector now have the chance to benefit from the 2023 programme, which provides the skills and opportunities needed to attract transformative business funding.

“We’re really excited to be expanding the MultiChoice Africa Accelerator Programme to more African countries,” said Calvo Mawela, MultiChoice Group CEO, announcing the launch. “It’s part of our long-term commitment to growing and multiplying Africa’s technology potential, which is critical to our future growth.”

The MultiChoice Africa Accelerator Programme, which kicked off during Global Entrepreneurship Week,  is aimed at established start-ups and small enterprises in specific technology sectors – healthtech, agritech, fintech, edutech, the circular economy and the creative industries.

“There…

Read More
Announcements Business Culture Events Technology Tourism Trends

Spark Africa set to hold the largest tech gathering in Africa; the Africa Technology Expo.

post-image

 

Spark Africa, The African Technology Leader has announced the company’s readiness to host the African Technology Expo, a gathering of tech enthusiasts and stakeholders with the aim of promoting indigenous African talents and innovations.

This was disclosed by the Convener of the event and CEO of Spark Africa, Nnaemeka Clinton, during a Press briefing.

According to him;“Nigeria has over 30 Million People with viable ideas, about 10,000 startups and over 200 of these startups are fintech.

Most tech events in Africa and Nigeria specifically do not solve the issue of helping our unique talents with viable tech ideas translate their ideas to startups.
This isn’t about creating an avenue for motivation and encouraging networking amongst African talents alone, that is good, however, the “working the talk” is by transforming their ideas into startups.
The Africa Technology Expo, the largest tech gathering in Africa is different, this year’s debut edition is aimed at converting over…

Read More
Announcements Business Economy Technology Technology Trends Telecoms

ON THE UPCOMING AUCTION OF TWO (2) LOTS OF 3.5GHZ SPECTRUM

post-image

 

The Nigerian Communications Commission (the Commission), in line with Section 121 of the Nigerian Communications Act 2003 (the Act) has the responsibility to manage and administer Spectrum resources for the communications sector in an efficient and effective manner. This is for the socio-economic benefit of the country.

Accordingly, it is the Commission’s responsibility, as the industry regulator, to ensure that harmonized and standardized Spectrum resources are made available in a timely manner to ensure its optimal utilization. The impact of the Commission’s regulatory activities in this regard is evident in the contribution of ICT, and telecommunications in particular, to the Gross Domestic Product (GDP) of the country.

The Act allows available Spectrum resources to be licensed through different methods. Spectrum licensing via Auction is one of the most transparent methods of assigning Spectrum resources globally. It is important to note that the Commission in response to requests for more Spectrum lots…

Read More
Business Economy News Technology Technology Trends Telecoms

NCC-CSIRT Urges Adoption of Two-Factor Authentication as Somnia Ransomware Targets Telegram Accounts

post-image

 

In response to the discovery of a new attack that compromises victims’ VPN (Virtual Private Network) accounts to compromise messaging app, Telegram, the Nigerian Communications Commission’s Computer Security Incident Response Team (NCC-CSIRT) has advised users to adopt two-factor authentication to protect their Telegram accounts and to not download unknown Advanced IP Scanner Software.
Ukrainian cyber experts discovered the attack, which uses Vidar Malware (Vidar Stealer) to steal Telegram session data, which in the absence of configured two-factor authentication and a passcode, allows unauthorized access to the victim’s telegram account and corporate account or network.

The malware, which exploits unauthorized access to users’ Telegram accounts and corporate accounts to steal data, targets platforms across iOS, Android, Linux, Mac and Windows Operating Systems.

“The Ukrainian CERT alleged that a Somnia Ransomware was created to be used on Telegram that tricks users to download an installer that mimics ‘Advanced IP Scanner’ software, which contains Vidar…

Read More
Business Economy Energy

KOLMANI OIL AND GAS PROJECT HAS ATTRACTED OVER $3BN INVESTMENT IN FOSSIL ENERGY – PRESIDENT BUHARI

post-image

 

– Restates Net Zero Carbon Emission By 2060

President Muhammadu Buhari has declared that his administration attracted over $3bn investment in the Oil and Gas Sector at a time of near-zero appetite for investment in fossil energy.

Speaking Tuesday in Bauchi at the Flag-off Ceremony of the Kolmani Integrated Development Project, a fully integrated in-situ development project comprising upstream production, oil refining, power generation and fertilizer, President Buhari said:

“Considering the land locked location and the huge capital requirement, the economics of the project is a challenging proposition. Consequently, from the outset, I instructed NNPC Limited to utilize and leverage their vast asset portfolio across all corridors of its operations to de-risk the project to attract the much-needed investment.

“It is therefore to the credit of this administration that at a time when there is near zero appetite for investment in fossil energy, coupled with the location challenges, we are able to attract…

Read More
Business Culture Economy Technology Technology Trends

uqudo Paves The Way for Digital Identity in Africa

post-image

uqudo’s (https://uqudo.com/) CEO, Mohamed Fagiri recently spoke on “Building Global Bridges: How to Access New Markets” at the Africa Tech Festival, the leading tech festival connecting innovators and changemakers across the continent. Mohamed shared his insights on scaling start-ups and building key products that can transform the world.

 

 

A digital identity company that is building an “identity layer” that makes customer onboarding safe, efficient and cost-effective in a digital world, uqudo has seen major growth in the past few months. Providing digital identity verification for key fintech players in the EMEA region, uqudo has also partnered with numerous entities in the African region to enhance digital identity in the continent.

 

The World Bank and Africa Development bank estimate that of the 1.3 billion people in Africa, 50% are smartphone users. With the population projected to increase in the next few decades, smartphone penetration will also see drastic…

Read More