Oil prices steadied on Tuesday after a week of gains as the prospect of increasing U.S. exports dampened bullish sentiment that has driven Brent to more than two-year highs above $60 per barrel.
Iraq's move to increase oil exports from its southern ports by 220,000 barrels per day (bpd) to 3.45 million bpd to make up for supply disruptions from its northern Kirkuk fields also weighed on prices, traders said. Benchmark Brent was down 10 cents at $60.80 a barrel by 1050 GMT, not far off July 2015-highs reached earlier this week, and up around 37 percent since their 2017 lows last June.
U.S. light crude was 10 cents lower at $54.05, still near its highest since February and also not far off its highest for more than two years. Traders and brokers said investors were adjusting positions after price rises of around 5 percent in October. Despite generally upbeat sentiment, some analysts also warned the market was overbought, having risen too far, too fast.
"U.S. shale output could keep a lid on prices over the medium to long-term," said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers.
U.S. light crude has been trading at a discount of around $6.70 to Brent making it attractive to refiners. U.S. crude production has risen almost 13 percent since mid-2016 to 9.5 million barrels per day (bpd).
"The large differential has opened the door on regional arbitrage, driving a spike in U.S. crude exports over recent weeks," BMI Research said in a note.
Despite Tuesday's price dip, sentiment remained positive, fueled by a pledge by the Organization of the Petroleum Exporting Countries, Russia and other exporters to hold back about 1.8 million barrels per day (bpd) in oil production to tighten markets. While the actual cuts aren't quite as high as the target, analysts say overall compliance has been strong.
"The OPEC deal compliance has been very firm, with rates averaging 86 percent since January," according to Bank of America Merrill Lynch.
The pact runs to March 2018, but Saudi Arabia and Russia have voiced support to extend the agreement.
OPEC is scheduled to meet officially at its headquarters in Vienna, Austria, on Nov. 30.
"The fear of oversupply could easily turn to a fear of undersupply if inventories keep declining like they have been and demand continues to grow," said William O'Loughlin, investment analyst at Rivkin Securities.
Regional cement maker Pretoria Portland Cement (PPC) says it has received an offer from a global building materials and solutions company, LarfargeHolcim, challenging an earlier offer from Fairfax.
PPC, which operates 11 cement factories in South Africa, Botswana, the Democratic Republic of Congo, Ethiopia, Rwanda and Zimbabwe is subject of several takeover bids, including from Nigeria’s Dangote.
LafargeHolcim is a leading global building materials and solutions company which produces cement, aggregates and ready-mix concrete, with a footprint in 80 countries. Acquiring PPC will see the Swiss-based firm combining its African assets with South Africa’s largest cement maker.
Both Larfarge and PPC have operations in Zimbabwe.
“PPC shareholders are advised that PPC has received a non-binding expression of interest (“EOI”) from LafargeHolcim, which contemplates a combination of certain African assets, a partial cash offer and a special dividend,” PPC said in a statement on Friday.
PPC said LafargeHolcim intended to submit a firm offer next month after a due diligence process.
“LafargeHolcim intends to submit a Firm Intention Offer during the week commencing 20 November 2017, following the completion of a due diligence process,” PPC said.
PPC said the Fairfax Africa Investments Proprietary Limited (Fairfax) partial offer, which was announced early last month, was still proceeding in accordance with the independent board process. It has previously indicated that Fairfax’s R2 billion offer undervalues the company.
Dangote Cement made its pitch to acquire the company’s entire share capital, also last month. Last month PPC reported that volumes at its Zimbabwe operation rose 25 percent in the period between January to August on increased production at its new Harare mill.
- The Source
Until a couple of years ago, all financial institutions and investment banks were celebrating ‘Africa Rising’, in a symphony of compliments that should have cautioned any reasonable African leader as well as citizens on the continent.
But what did they really mean when they were saying that Africa was rising? They simply meant that its gross domestic product (GDP), which is the conventional measure of economic growth, had been growing (on average) at a faster rate than in other regions of the world.
Of the world’s top 10 countries in real GDP growth rates for 2012, five were indeed African. Libya topped the list, with an astounding 124%, followed by Sierra Leone with 15.2%, Zimbabwe with 13.6%, Niger with 11.8% and Ivory Coast with 10.1%. A year later, in 2013, South Sudan was Africa’s best performer, with 29.3%. Ever since, other very fast growing economies included Angola, Chad and the Democratic Republic of Congo.
But GDP tells us nothing about the health of an economy, let alone its sustainability and the overall impact on human welfare. GDP is simply a measure of market consumption, which has been improperly adopted to assess economic performance.
Rebuilding Libya after the civil war has been a blessing for its GDP growth. Similarly, building the South Sudanese economy from scratch has invariably meant astronomic growth. Both these countries’ economies indeed bounced back from annihilation. Libya’s GDP growth was -66% in 2011, while South Sudan’s was -52% in 2012. As expected, their growth was short-lived. Libya went negative in 2013 and so did South Sudan right after.
In 2013, I warned against celebrating Nigeria’s economic “miracle” at the time when the country was about to become the continent’s largest economy. I indicated that Nigeria’s economic expansion was ephemeral, unsustainable and extremely unequal, which would soon trigger social conflict and a prolonged recession. Most media, business and a number of colleagues ridiculed my predictions. But I was right: the country’s approach to growth was self-destructive. No surprise Nigeria has fallen into one of the worst recessions on the continent.
And the list of these growth disasters continues. In 2016, only two African countries were in the top ten global GDP growth contest – Ethiopia and Ivory Coast.
But rather than reflecting critically on why this is happening, the continent’s politicians are putting their heads in the sand and simply hoping for more growth. This is very dangerous in the current global economic landscape. Economic growth is slowing down almost everywhere and there is little chance it will return to Africa in the foreseeable future.
Critical reflection missing
There are important structural reasons why one should be suspicious of the ‘Africa rising’ discourse. Most fast growing African economies are heavily dependent on exports of commodities and foreign direct investment.
This makes them easily affected by the volatility of international markets. It also gives a false perception of national income. Indeed, most of the profits generated by foreign companies add to the “domestic” GDP but are highly unlikely to remain in the country.
Rather than obsessing over whether African economies are rising or not, the focus should be on how to make African people thrive. And these are two different things. Indeed, the problem with the continent’s current model of industrial growth is that it privileges the formal at the expense of the informal, big corporations at the expense of small businesses, large centralised infrastructure at the expense of decentralisation. In the end, this growth leads to more inequality and environmental destruction.
Rather than big business districts, African countries need labour intensive economies. As the only continent that will experience exponential population growth in the next decades, Africa will soon be faced with a major unemployment problem. This can only be addressed through widespread networks of small businesses, which are the real creator of good jobs, and doing away with the dominance of a few corporate giants, which are shedding jobs and are increasingly reliant upon automation.
The Africa Progress Panel, a think tank chaired by former UN secretary Kofi Annan, highlighted the crucial role smallholder farmers can play in making Africa food secure. It also noted that small farmers ensure sustainable livelihoods to people. And it pointed to the need to move beyond “big-grid” high carbon infrastructure and to renewable energy to turn conventional top down economic growth “on its head”.
In their own analysis, energy production must be “democratized” so that
Africa’s poorest and most vulnerable people could be reached through renewable energy on terms that drive down energy costs, stimulate small and medium-sized enterprises, generate jobs and reduce pollution-related health risks.
Innovators point the way
In my new book, Wellbeing Economy: Success in a World Without Growth, I show numerous examples of African innovators using new communication technologies to support networks of small businesses and micro-enterprises.
Mobile connections are widespread across Africa. This means that there is an unprecedented opportunity to improve coordination between producers and consumers, cutting middlemen and the dominance of big retailers. On top of this, developments in other new technologies, from 3D printing to energy production through small-grids powered by renewable resources, are making SMMEs ever more competitive. From farming to manufacturing, the future may very well be dominated by customisation rather than mass production.
As summed up by Joe Kraus, one of the leaders of the dot.com boom of the late 1990s, the availability of new manufacturing technologies, which diversify production and multiple markets for local producers, makes the shift to a decentralised economy easier than ever. He says:
the 20th century was about dozens of markets of millions of consumers. The 21st century is about millions of markets of dozens of consumers.
A new economy founded on networks of small businesses, a post-industrial form of artisanship and integrated smallholder farming is the best chance for Africa to develop sustainably as well as to generate the decent and fulfilling jobs that millions of Africans rightfully aspire to.
The National Elections Commission of Liberia (NEC) says the ballot papers for Tuesday’s presidential re-run election have arrived in the country.
NEC said in a statement on its website that the materials were imported from Slovenia and that they landed at the Roberts International Airport in Monrovia on Saturday. It said the ballot papers “were later conveyed to a safe location under heavy security escort by officers of the Liberia National Police’’.
The run-off election holds on November 7 and is between ex-football star, George Weah of the Coalition for Democratic Change (CDC) and incumbent Vice President Joseph Boakai of the ruling Unity Party (UP).
Messrs. Weah and Boakai secured the highest number of votes among 20 candidates in the first round of the elections on Oct. 10. While Mr. Weah secured 596,037 votes or 38.4 per cent, Mr. Boakai polled 446,716 votes, representing 28.8 per cent of the total 1,641,922 votes cast.
A winner needs 50 per cent plus one vote to succeed outgoing President and Noble Prize winner, Ellen Johnson Sirleaf, who is stepping down after serving out her tenure.
“The second round of election on November 7 will fulfill the legal requirement of 50 plus one per cent, if a particular candidate is to be declared winner. Both CDC and UP fell short of that requirement. “Of the total votes cast, CDC recorded 38.4 per cent, while UP got 28.8 per cent. The rest of the 20 candidates fell short of 10 per cent of the total votes,’’ NEC said.
Kenyan President Uhuru Kenyatta has been re-elected for a second term after securing more than 98% of the vote in a highly-contentious rerun election that was boycotted by his main opposition rival.
The announcement caps months of drama and sporadic bouts of deadly violence following a landmark decision by the country's Supreme Court to nullify the previous election in September, which Kenyatta also won, citing irregularities.
On Monday, Kenya's Independent Electoral and Boundaries Commission (IEBC) announced 56-year-old Kenyatta had received 98.25% of votes cast in the last week's rerun. His main rival, 72-year-old veteran opposition leader Raila Odinga who refused to participate in the poll, garnered just 0.96% of the vote.
Turnout for the election -- in which voting had been indefinitely suspended in several protest-hit constituencies -- was low, with just 38% of the country's 19.6 million registered voters casting a ballot, according to the IEBC's final tally. The IEBC chairman Wafula Chebukati, however, said that he was satisfied the voting body had delivered "a free, fair and credible election."
Poll reveals a deeply polarized Kenya.
The opposition parties, including Odinga's National Super Alliance (Nasa) coalition, now have seven days in which to contest the result by launching a legal challenge, Kenya's Ministry of Information told CNN. The courts then have 14 days in which to rule on such petitions. Kenya's Supreme Court previously overturned the original August 8 results that handed victory to Kenyatta after Odinga claimed the results had been hacked.
When the IEBC failed to provide Kenya's highest court with access to its computer servers, the court ruled the results were fraudulent and ordered a rerun within 60 days. The vote was held on October 26, but Odinga had earlier announced he was quitting the rerun because the IEBC had not adequately implemented reforms.
Odinga urged his supporters to boycott the election, and activists tried to stop the vote. Odinga told CNN on Friday that the low turnout amounted to a "vote of no confidence" for Kenyatta and his administration, adding that the opposition would pursue all legal avenues available to put the government under pressure going forward.
This view was disputed by Kenya's deputy president William Ruto, who on Sunday repeated a claim that low voter turnout was due to "orchestrated" violence, "sponsored" by the opposition party. Odinga, Ruto said, "organized militia" to prevent election officials and materials from their polling stations.
Violent clashes have broken out over the election, with 24 people killed in the immediate wake of the initial vote, according to the Kenya National Commission on Human Rights. At least six have died in connection to the runoff, officials said. The politically motivated violence has renewed tensions between Kenya's ethnic groups, whose bonds are often stronger than the national identity. Kenya has at least 40 ethnic groups.
Kenyatta is a member of the country's largest community, the Kikuyu, originating in the country's central highlands. The Kikuyu have long been accused of wielding strong economic and political power in the country.
Odinga is part of the Luo community, which some say has become increasingly marginalized in recent years.