Africa in the News – July 2018
Every month, Africa HR Solutions summarises the latest high-impact news for you. We aim to provide you with accurate and non-biased news from the African continent. This month, we take a look at Oil & Gas, Trade, Internet and Investment in Africa.
New Oil Discovery Offshore Angola
Italian energy company Eni has discovered new oil reserves offshore Angola. Early estimates suggest the newly found reserves contain between 230 to 300 million barrels of light oil.
Located at approximately 150 kilometres off the coast, the Kalimba-1 NFW well led to the discovery of the high-quality oil reserves. The discovery opens new opportunities for oil exploration, which was previously thought to be mainly gas prone, thus creating new chances for additional reserves.
Angola is a key Country in the strategy for organic growth of Eni, which has been present in the Country since 1980 and accounts currently an equity production of about 155,000 barrels of oil equivalent per day.
Africa’s Largest Free Trade Zone
On the 5th of July 2018, Djibouti opened the first phase of the Djibouti International Free Trade Zone (DIFTZ). This pilot zone of 240-hectares is only a fraction of the 4,800 hectares project, estimated at $3.5 billion. The first phase was launched with the help of China, which comforts its position as a global trade leader.
The International trade zone holds promise for Djibouti and will hopefully create employment for the country’s youth. More importantly, the country seeks to position itself as a trade and logistics hub for businesses hoping to access the rapidly growing African market.
The DIFTZ zone is part of an integral part of the ‘Belt and Road’ initiative – a multi-trillion Chinese project aiming to invest in numerous infrastructure projects in Asia, Africa and Europe. In Djibouti, the free trade zone will also be managed by three other Chinese companies.
Internet in Rural Kenya
Project Loon is one of the hottest innovations this month. Powered by Google’s parent company, Alphabet, the project aims to increase connectivity in rural areas in Kenya through the use of balloon powered internet. Google is reportedly in talks with telecom operators in Kenya to take the next step.
With a population of over 46 million people, mobile data subscriptions are consistently on the rise in Kenya. The country is also known to have one of the world’s fastest mobile internet speed of the continent. If implemented, the project will enable thousands of people located in rural and remote areas of Kenya to have access to internet.
Africa is the region with the lowest level of internet users in the world at about 22% only. A previous similar project launched by Facebook, named Aquila, was abandoned last month due to increase in competition. However, last year, Facebook successfully partnered with local carriers to provide the low-cost Express Wifi program to Kenya, Uganda and Nigeria.
Nigeria may soon build the world's largest oil refinery
Despite being a crude oil exporter, Nigeria imports a major bulk of its petroleum. This is mainly due to the lack of domestic refining capacity. To counter this, Aliko Dangote, Africa’s richest man, is raising capital to build the world’s largest oil refinery. The latter is reportedly investing more than 60 % from his own cash flow to make the project a success.
The project cost is estimated at around $14 billion. Dangote signed a loan of $650 million with the African Export-Import Bank (Afreximbank) for the project. Lenders would commit about $3.15 billion, with the World Bank’s private sector arm providing $150 million. Trade banks from China, India and some European countries are also in the mix, according to Dangote.
The Africa billionaire also mentioned he was looking to acquire more oilfields to feed the refinery, and ultimately break Nigeria free of its petroleum imports. Even more ambitious; the refinery is to be ready by the end of 2019 and start production in early 2020!
