Africa’s Top 10 Stories – August 2021
After years of delay, the Nigerian senate passed an oil and gas reform bill in early July 2021, which is set to affect every aspect of the local industry. Oil and gas are at the core of the country’s revenue stream and still present the best leverage for future growth, but developmental prospects have long been weighed down by widespread corruption and a poor regulatory environment. The new bill proposes a series of wide-ranging reforms including plans for the selling of shares in a reformed Nigeria National Petroleum Company, the replacement of regulatory bodies, and the reduction and streamlining of royalties. Additionally, the bill also outlines rules for environmental clean-ups, introduces new dispute-resolution mechanisms, and sets up a midstream government infrastructure fund to assist in mitigating environmental degradation. This move is the latest in a long string of oil and gas reforms across Africa, as local legislatures update oil and gas legislation while simultaneously attempting to ensure the maximum benefit for local communities and ecosystems.
The Southern African state of Zambia has ventured headlong into modernising some of its core utility installations this month. The Rural Electrification Authority (REA) has signed Memorandums of Understanding with its partners to integrate data collection and analysis into its efforts to electrify the underserved rural areas of the country. This will take place via a central platform – Edison – which will allow policymakers to gain clear insight into the state of electrification across the country. The REA hopes to increase Zambian electrical coverage to 51% by 2030. At the same time, the Zambian government has signed a US$310 million deal for the expansion of the Lusaka sewage system, which will be financed by several high-level development partners, including the African Development Bank, the European Investment Bank and the German Development Bank. The project will feature the construction of a sewage pipeline and service more than 525 000 families.
July has proven to be a key month for the expansion of the edible oils industry in Sub-Saharan Africa. In Nigeria, a collaboration of public and private investment initiatives are in efforts to secure the country’s place as a world leader in palm oil production. At the time of writing, both Okuma Oil Palm and Presco, the country’s largest palm oil producers, are expanding production capacity. Meanwhile, the government, in collaboration with the Edo state authorities, has launched the Edo State Oil Palm Production Programme, which sets out over 100 000 hectares of formerly state-owned land for palm oil production. To the east, the Rwandese-based Kayonza Distribution Company has invested US$10 million in the establishment of an edible oil manufacturing plant set to produce 100 tonnes by the end of 2021. Both of these initiatives highlight the move up the agricultural value chain in key African consumer states as a way of generating additional value from local produce while minimising imports.
Though much attention has gone toward renewable energy sources, hydrogen is fast becoming an attractive alternative as a heavy industry fuel source. Over the course of July, two African states – Morocco and South Africa – made positive strides in the hydrogen space. Morocco announced that it will be producing green ammoniac hydrogen by the beginning of 2022 via the establishment of a new local hydrogen firm; HEVO Ammoniac Maroc. Through a partnership with two global leaders in the space; Portuguese Fusion Fuel Green and American Consolidated Contractors Company, production is targeted at 10 000 tonnes by 2025. Meanwhile, in South Africa, energy and chemicals giant Sasol has announced a partnership with Toyota, which will see the development of a hydrogen-powered proof of concept mobility system. The latter development comes off the back of the government’s directive earlier in the year to investigate the requirements for getting a hydrogen economy off the ground. Sasol noted that it can start production within two years.
Though slow, development in offshore oil and gas production is beginning to take off in Senegal. Australian Woodside Energy has secured the majority stake in the Sangomar development located 100 kilometres south off the coast of the Senegalese capital Dakar. The company announced in the second half of July that it would soon begin phase one drilling at the offshore site, signalling an important step for the region, which boasts some of Africa’s largest yet untapped reserves of both oil and gas. This comes off the back of Woodside’s US$126 million farm-out of fellow Australian firm, Far Limited, just a few days prior, bringing its controlling stake in the field to 82%. Senegal’s state-owned petroleum company Petrosen controls the remaining 18%. Woodside is looking at initiating field development and then selling around half of its stake by the end of 2021. First production is expected to start by 2023.
New copper discoveries in Morocco and Zambia could bode well for both markets as global demand for the commodity picks up pace, and infrastructure projects that were placed on hold over 2020 recommence. The month got off to a strong start with the announcement by UK-based Altus Strategies that it had struck high-grade copper and silver deposits at three of its projects in Morocco – the discovery was further complemented later in the month by the company being awarded four new copper and silver exploration contracts, bringing its total portfolio in the country to 14. In parallel, geophysical surveys under the auspices of Castillio Copper are about to get underway in Zambia to determine the remaining reserves in the Luanshya and Mkushi Projects along the country’s copper belt region, which could provide a much-needed production boost as demand for battery minerals is set to ramp up in the coming years.