(These are key developments within the week across Africa that are worth watching.)
In this edition:
- Africa may see better days ahead, Standard Chartered says
- Kenya to host hydrogen plant by French company
- Chinese company to build $250m lithium battery factory in Nigeria
- US recognizes Niger coup d’etat, to keep troops
Africa may see better days ahead, Standard Chartered says
The value of exports from Africa will hit the trillion-dollar mark by 2035 buoyed by the implementation of the African Continental Free Trade Agreement (AfCFTA)) from the current US$645 billion, according to a study by Standard Chartered Bank.
“This represents an annual growth rate of 4 percent from now until 2035,” according to “The Future of Teade: Africa Report” released in Marakhesh, Morocco this week during the annual meetings of the World Bank and the International Monetary Fund. Prepared by PwC Singapore for Standard Chartered, the report sees the emergence of “high-growth corridors” across the continent as the East African region increases engagement with Indian Ocean countries and Asia while North African trade with Europe expands, with both corridors bringing in a combined US$200 billion in annual trade by 2035.
East Africa is expected to experience a 15 percent growth in trade followed by a 13 percent increase in West Africa, well above the global average of 4.2 percent through to 2035, according to the report.
If implemented faithfully, the AfCFTA “can radically reshape future growth and development” across the continent, according to Jose Vinals, the group chairman of Standard Chartered. “It will enable higher value-add supply chains and more diversified exports, allowing member states to reduce historical commodity dependence.”
With increasing connectivity and the introduction of the Pan-African Payments and Settlement System, trade among African countries will reach US$140 billion by 2035, representing about 15 percent of the continent’s total exports.
Problems remain in achieving full continental cohesion given that there are eight existing regional bodies or economic communities to which members belong that sometimes run contrary to AfCFTA objectives, according to the report. Yet, the continental free trade area may help overcome some of these existing problems by providing new frameworks, such as the creation of common rules of origin that give access to each country’s market, Standard Chartered said.
Kenya chosen as site for hydrogen plant by French company
HDF Energy, a French company that builds large-scale green energy facilities, has initiated plans to build its first ever green hydrogen plant in Kenya at an estimated cost of US$500 million.
The plants will take two years to develop and will generate a total of 650 megawatts of power from renewable hydrogen working in conjunction with solar power, providing clean energy to areas not covered by either hydro or geothermal power sources.
The system works with solar cells generating power that is stored in batteries. The stored power is in turn used through a process called electrolysis to fire hydrogen stored in fuel cells to generate power during the night.
The solar segment will generate 180 megawatts of power that will combine with 500 megawatts of hydrogen-based storage. Apart from solar, the HDF technology can also run on wind to produce and store green hydrogen to provide power on demand. HDF is exploring similar ventures in several African countries including South Africa, Namibia, Uganda, DR Congo and Uganda.
Chinese firm to build lithium-battery factory in central Nigeria
A Chinese company, Ganfeng Lithium Battery Limited, is building a US$250 million lithium-battery factory in Nigeria that will use deposits of the mineral found in the West African country.
It’s a move welcomed by the new government of President Bola Tinubu, which seized upon the project launch last Thursday to outline its policy direction on the country’s minerals.
“I must say congratulations to this company for this uncommon feat,” Minister of Solid Minerals Dele Alake said at the project site at Endon in Nasarawa state, some 80 kilometers north of the capital, Abuja. “Under this administration, we shall do everything possible to discourage the carting away of our solid minerals without value addition.”
Pan Quen, the president of Ganfeng Lithium Industry Limited, the parent company of the Nigerian subsidiary, said construction work will take two years. On completion, the factory will process 18,000 tons of lithium daily toward an annual capacity of 4.5 million tons, he said.
It is expected that the plant will directly employ 2,500 people with another 15,000 getting jobs indirectly tied to the project. Pan sees other Chinese investors following suit once he makes a success of his venture.
Under Tinubu’s predecessor Muhammadu Buhari, the government said it rejected a proposal from electric-car maker Tesla to exploit Nigeria’s lithium because it didn’t include local value-adding processing. The country’s rich reserves of minerals including gold, tin, columbite, coal, bitumen, pearls and aquamarines were for decades overshadowed by its oil wealth.
U.S. accepts Niger coup, to keep anti-jihadist troops
The U.S. officially designated the change of power in Niger in July that toppled former President Mohammed Bazoum as a coup d’etat.
This official position, which is in pursuance of U.S. law, means that some of the military assistance and cooperation agreements between both countries, including a foreign assistance programme worth US$200 million will remain suspended pending a return to democracy, the U.S. State Department said in a statement.
All U.S. aid to Niger will now be limited to “life-saving humanitarian, food, and health assistance to benefit the people,” according to the statement. “The United States also intends to continue to work with regional governments, including in Niger, to advance shared interests in West Africa.”
In other words, the U.S. will recognize and deal with the junta led by General Abourahamane Tchiani and continue to work with it in countering jihadist threats to West Africa. But other aid will remain suspended until democracy is restored.
Furthermore, the U.S. is no longer asking for the reinstatement of Bazoum, just for his release from detention. The U.S. will get to keep its troops in Niger to keep an eye on things. France, which has been compelled to withdraw its troops, appears to be the biggest loser to the plot which unfolded on the morning of July 26, with what widely seen as the imprint of Russia.
Kenya’s Ruto in China for road and belt forum
President William Ruto of Kenya is among leaders in China for the third edition of the Belt and Road Forum for International Cooperation, Beijing’s flagship project for an infrastructure project linking Asia, Europe and Africa.
More than 140 countries are reported to be sending representatives to the forum to mark the 10th anniversary of the road and belt initiative.
Italy to delay Africa summit until next year
Italy will delay a planned summit between its Prime Minister Giorgia Meloni and African leader until next in the latest fighting between the Palestinian group Hamas and Israel.
The meeting originally slated for November was to discuss issues including migration and Italy’s energy security. Meloni has been outspoken on issues of migration, with the country being a major staging point for migrants seeking to reach Europe, including blaming France for impoverishing its former African colonies and creating a flood of people seeking to reach Europe from those territories.
Nigeria’s oil output at the highest in almost two years
Nigeria pumped 1.57 million barrels of crude oil and condensates in September, the highest output the OPEC member has achieved since January 2022 as it faced sabotage and high-level theft.
Out of the output, crude oil accounted for 1.3 million barrels, with the rest being condensates, a lighter form of crude closer to kerosene in its properties. Improved export income will ease current foreign exchange squeeze and provide revenue to a government largely reliant on borrowing.
- Senegal’s consumer price index fell to 3.8 percent in September as inflation cooled to the lowest in about two years.
- Ghana’s September inflation also slowed but remained within historic highs at 38.1 percent.
- In Namibia the inflation rate rose to 5.4 percent in September.
- Rwanda’s September prices also quickened to 13.9 percent.
Nigeria to release September inflation figures
Eswatini to announce September inflation
South Africa to release September inflation figures.
Insights Newsletter is published by Afrika Insights, an Ontario, Canada-based business advisory and publishing firm. Email: email@example.com