JUBA, May 6 (Xinhua) -- The South Sudan said Friday it has kicked off plans to nationalize the country's oil industry in the next five years.
Awou Daniel Chuang, Undersecretary in the Ministry of Petroleum told journalists in Juba, the capital of South Sudan, that the ministry has started the process of readying the oil sector to be nationalized and stop dependence on foreign help.
"When we talk about local content, we talk about maximizing the benefits and to maximize the number of people who are working in the oil industry but it does not mean it will be 100 percent, we have already reached 90 percent. For us to reach that level of nationalization, it will not take us less than five years for us to have quality engineers and quality managers, IT can take us about five years," Daniel said.
South Sudan, whose oil fields were destroyed during the civil war, has largely employed foreign engineers to produce and export the country's crude oil to Sudan, where it is processed and sent to the international market.
Daniel said the ministry has constructed a geological data center that will be used for training and technical operations for the institution as part of the nationalization process.
He also said the government has purchased three aircrafts to be used for geological mapping of the areas in the country and it has as well constructed a hangar at the airport to facilitate the process.
Daniel, however, noted that the country's production of crude oil reduced by over 20,000 barrels per day over the last three years as a result of flooding in the country.
He said the South Sudan government is working with Egypt to build dykes and drenches to address the challenge of flooding.
South Sudan is the most oil-dependent nation in the world, with oil accounting for almost the totality of exports, and around 60 percent of its gross domestic product (GDP), according to the World Bank. - Xinhua
The increase, the second in three months, follows the announcement made by the government last Thursday.
Speaking on television, the minister in charge of energy blamed the increase on external factors.
"Indeed, following the global economic situation, notably the fragility of a convalescent economy, the war in Ukraine, supply disruptions and geopolitical tensions that followed, the world prices of several products, including fuel, have increased significantly. The price of a barrel of crude oil on the international market rose from US$70.8 on 2 December 2021 to US$103.67 on 27 April 2022, an increase of about 47%", announced Ibrahim Uwizeye, Burundi's Minister of Hydraulics, Energy and Mines.
Two days after the annoucement, the consequences were visible on the ground.
As early as Saturday, long queues in front of petrol stations were visible in the capital, Bujumbura.
Users came to fill up despite the price increase, to avoid the shortage.
"Today, it's fine because before, we used to spend several days on the waiting line, three or four days without being served. But in less than an hour, I get to the pump" said Burundian driver, Cyriaque Niyongabo.
Taxi drivers and transporters fear that this new increase will have an impact on their activity.
"The increase is very high. They are going up a lot. I ask that they lower it a little so that we, the transporters, can also work well and make a profit". (...) "Our customers complain a lot. They accuse us of taking advantage of the situation. But it's not us", complained taxi driver Alexis Ndihokubwayo.
Some service stations have run dry. Many vehicles are still waiting to be served.
The last increase was at the end of January 2022. - Francine Sinarzi, Africanews
Nairobi Securities Exchange (NSE) has found itself in a crisis attributed to scarcity of US dollars in the forex market.
The EastAfrican has learnt that the bourse managers are concerned with the drop in supply of the US currency with fears that it could hit foreigners who control more than 50 percent of the daily trading activity on the stockmarket.
The latest development has been compounded by the Russian-Ukraine crisis which has injected negative shocks to the global economy with spillover effects witnessed in other economies, manifested mainly through commodity price hikes.
“Obviously it is not good for foreigners. I think one of the reasons why Kenya has been an attractive investment destination is that we have a liberal foreign currency regime where you can at least take forex in and out. So when you begin to have this kind of restriction it does affect the appetite of foreign investors in the market.
‘‘But we are hoping that this is temporary and with time the situation will improve,” said Paul Mwai, chief executive of AIB-AXIS Capital Ltd and vice chairman of NSE.
“If it persists it will affect the overall foreign investor appetite for the local market. Actually the bigger concern for foreign investors would be that the shortage could be a sign of a currency that is weaker and that is being restricted. So foreign investors are being affected because people are expecting that perhaps the Kenyan shilling should be depreciating against the dollar. But I don’t think the unavailability of dollars could be a long term problem,” added Mr Mwai.
Foreign investor activity at the Nairobi bourse fell to 54.88 percent in the three months to March from 57.73 percent in the three months to December 2021, according to data from the Capital Markets Authority (CMA).
According to the market regulator, NSE has historically recorded foreign investor participation in the range of 60 percent to 70 percent between 2019 and the first half of 2021.
“However, with increased global economic shocks, the market has suffered loss in its foreign investor participation levels in recent months with March 2022 recording the lowest level of 47.89 percent,” says CMA
“This reflects the risk posed by increased capital outflows calling for the Kenyan industry to be more strategic in increasing the profile of domestic investors in the country. This is what has enabled countries such as China and the US to remain resilient over the years.”
According to CMA, the Covid-19 pandemic, the uncertainty on the 2022 elections and the seemingly tough economic context pose key risks to steadying the recovery of domestic capital markets.
Kenyan manufacturers raised red flag over the shortage of the US dollars in the economy more than two weeks ago, arguing that the move is putting more pressure on the local currency, making imports expensive and fuelling more inflation. The Kenya Association of Manufacturers (KAM) said the dollar crunch has strained relations with suppliers, at a time competition for raw materials has intensified globally due to rising demand amid lingering supply chain constraint.
The Kenya Bankers Association confirmed the dollar shortage in the market, and advised customers to alert banks much earlier in cases where large amounts of foreign currency are required to allow the lenders to source the same from the market.
The industry’s lobby group attributed the dollar shortage to strong demand in the market as companies remit dividends and meet their overseas supplier obligations in the wake of the strong post Covid-19 recovery.
“However the supply of foreign currency continues to grow supported by receipts from the country’s main exports and strong remittances inflows.
‘‘This we believe will stabilise in due course and the market will revert to normal,” Habil Olaka, the association’s chief executive said in a statement last week.
“In the meantime, the industry is in constant discussion with the Central bank to ensure that the current imbalances are addressed as quickly as possible to bring the market back to normalcy,” added Olaka.
The National Treasury said it will be reviewing the currency composition of its external debt to reduce currency volatility that has seen the cost of its US Dollar denominated loans increase by two percent in barely four months.
National Treasury director-in-charge of Debt Management Haron Sirma told The EastAfrican that the proposal is aimed at reducing foreign exchange costs related to exchange rate movements.
“On the external debt stock, we seek to match the currency composition with the country’s foreign exchange holdings to the extent possible,” said Mr Sirma.
“The characteristics of a country’s external debt by currency should mirror the foreign currency inflows through exports, remittances etc.,’’ added Dr Sirma.
This minimizes forex costs through exchange rate movement.”
The Kenya shilling posted its lowest intraday level of 116.04 to the US dollar on Tuesday (April 26), according to data compiled by Bloomberg
Kenya borrows externally in five major currencies with the bulk of it (67 percent) being in the US Dollars.
Others are Euro (19 percent), Japanese Yen (six percent), Chinese Yuan (six percent) and Sterling Pound (two percent). - JAMES ANYANZWA, The EastAfrican
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