Under Secretary of State for Political Affairs Wendy Sherman delivers remarks on “The New Decade: Seizing Opportunities from a Transforming Africa,” at the U.S. Institute of Peace in Washington, DC on March 28, 2012.
General Electric Co. (NYSE: GE) and Nigeria signed an agreement for the U.S. company to build power plants as Africa’s most populous nation continues to privatize and expand its power generation capacity, Reuters said Monday. Nigeria, which has Africa’s second-largest economy, aims to increase its electricity generating capacity by 10 gigawatts, and GE will potentially invest 10 percent to 15 percent in individual projects.
The memorandum of understanding between Nigeria and the Fairfield, Conn., company is part of an effort to increase the number of Nigeria’s natural gas-fueled power stations, though the company has yet to confirm either the type or number of plants to be built.
Nigeria, which has the world’s seventh-largest natural gas reserves, hasn’t been able to build up capacity for its 162 million citizens. The nation produces one-tenth of the 40,000 megawatts need to provide the populace with power.
Nigeria’s lack of capacity has left much of the useful natural gas trapped underground.
President Goodluck Jonathan unveiled plans 18 months ago to privatize the nation’s electric industry, with state-owned generation and distribution assets sold off; however, strife in Nigeria’s northern sections caused by a violent Islamist insurgency and political disputes put other plans on hold.
The nation’s 7.68 percent growth in gross domestic product was mostly fueled by non-oil sectors, according to Reuters.
Given Nigeria’s population size and growing energy needs this makes sense. Another reason why this makes sense is that Nigeria has, produces, exports lots of gas and oil. Several African nations are looking at using nuclear energy as the best and most practical way to meet their growing energy demands. Nigeria has to look down that road as a way to diversify and not be just reliant on one energy source.
The new African Union headquarters was inaugurated by China’s President after being built and financed by China.
Chinese President Hu Jintao is expected to visit Addis Ababa this month to inaugurate a new African Union headquarters financed by China and built largely with Chinese labor. The project was launched when Moammar Gadhafi was maneuvering to move Africa’s diplomatic capital to Libya.Official African Union and Ethiopian sources confirm that President Hu will be in Addis Ababa January 28 to open what is being called “China’s gift to Africa.” The inauguration ceremony will be held the day before African heads of state hold their January meeting at AU headquarters for the first time. According to custom, African heads of state meet every January in Addis Ababa. But the summit previously has been held at the city’s United Nations conference center because the AU headquarters building was too small. Construction of new facility began in June 2009, when Addis Ababa’s position as Africa’s diplomatic capital was in doubt. The city has been home to the continental body since its founding, largely due to the influence of the late Emperor Haile Selassie, who was one of the driving forces behind creation of the Organization of African Unity in 1963.But in 2009, the late Libyan leader Moammar Gadhafi was the AU chairman, and he made no secret of his desire to build a grand new headquarters in his hometown of Sirte. That plan was thwarted, however, when China agreed to pay for a $200 million facility in Addis Ababa. It was built by the China State Construction Engineering Corporation, largely with Chinese labor. Ethiopian Prime Minister Meles Zenawi toured the new facility last week and hailed the close cooperation with China. He revealed that he had lobbied Chinese officials to build the new headquarters, donated land adjacent to the old AU campus, and exempted taxes on all imported construction materials. His remarks were reported by Chinese and Ethiopian state media, which were invited to cover the event. AU Projects Director Fantahun Hailemikael says the new facility will vastly improve the African Union’s institutional capacity. “Almost 48 years after foundation of the OAU (Organization of African Unity), the African Union is now able to have such a big facility that can fulfill its requirement in terms of office and in terms of conference,” he said. “The Chinese government generously has given this facility as a gift to Africa and the African Union.”The complex features a 2,500 seat amphitheater and a helicopter landing pad so visiting dignitaries can be flown in from the airport, eliminating the need for motorcades that tie up traffic. The office tower will become home to 700 of the 1,300 African Union staff members. The other 600 will remain in the old section.The new facility symbolizes China’s growing involvement in Africa, and individually with most of the 54 AU member states.In 2010, China moved ahead of the United States as Africa’s largest trading partner. The Chinese State Council, or Cabinet, reported trade with African nations reached $114 billion in 2010, as compared to $10 billion in 2000.Industry experts say 70 percent of the continent’s oil exports go to China.
This is a continuation of China’s soft power projection Africa.
Here’s video report about the grand opening:
Ambassador Michael Battle, U.S. Ambassador to the African Union and Steve McDonald, Director of the Africa Program at the Woodrow Wilson International Center for Scholars have a conversation about U.S. engagement with the African Union, moderated by Deputy Assistant Secretary Cheryl Benton, at the Department of State in Washington, D.C. on March 16, 2012.
Algeria has signed a contract with Russian state arms exporter Rosoboronexport for 120 additional T-90 main battle tanks. In 2006 Algeria purchased 180 of the type. Algeria signed the contract for the T-90s in September last year, according to the Russian daily economic newspaper Vedomosti, which quoted sources close to Rosoboronexport and Russian Technologies. The 120 tanks are valued at around US$470 million. “These contracts were concluded on a background of increasing instability, after the revolts in Tunisia, Egypt and the war in Libya,” said the newspaper. In 2009 Rosoboronexport completed deliveries of 180 T-90s to Algeria. Russia has concluded billions of dollars worth of deals with Algeria, which is ranked as the world’s eighth largest weapons importer and accounts for 13% of Russian arms sales, Pravda reports. Other Russian weapons purchases include two Tiger (Project 20382 corvettes, two Project 636 Improved Kilo class submarines, MiG-29, Su-30MK and Yak-130 aircraft and S-300 surface-to-air missiles. Algeria bought much of the weaponry as part of a massive arms package worth US$7.5 billion during the visit of Russian President Vladimir Putin to Algeria in March 2006. The deal included the purchase of 28 Sukhoi Su-30MKA and 34 MiG-29 multirole fighters (28 single-seat MiG-29SMTs and six two-seat MiG-29UBTs) as well as eight batteries of S-300PMU-2 air-defence missile systems and 24 Almaz-Antei 2S6M Tunguska 30 mm/SA-19 self-propelled air-defence systems. Deliveries of the MiG-29s was suspended and the 15 aircraft that had arrived returned to Russia following quality problems, but the Su-30s were accepted without issue. In addition, Russia will deliver 30 T-90s to Turkmenistan after signing a contract late last year. Russia is also in talks with Kazakhstan, Azerbaijan and Indonesia, reports Pravda. Under a 2010 contract Russia supplied Turkmenistan with 10 tanks. The recent orders are scheduled to make Russia the world’s largest tank exporter this year ahead of China, according to Mikhail Barabanov, the editor of Moscow Defence Brief. Last year Russia exported a record US$13.2 billion in weapons last year, despite losing Arab clients, such as Libya, during the Arab Spring and facing stiff competition from China. A quarter of sales went to India and 15% went to Algeria last year, Federal Service for Military-Technical Cooperation chief Mikhal Dmitriyev was quoted by Vedomosti as saying. This year Russia plans to export US$13.5 billion of weaponry, up from US$10.4 billion in 2010. Vladimir Putin has pledged to give Uralvagonzavod, which makes the T-90, 64 billion roubles (US$2.165 billion) over the next few years. Although Russia has embarked on a massive military modernisation programme, it does not plan to buy T-90s for its army for a while as it is cheaper to upgrade T-72s. However, earlier this month Deputy Prime Minister Dmitry Rogozin said that the Russian army will continue to buy armored vehicles, despite comments by the Chief of Staff of the Armed Forces, Army General Nikolai Makarov, who stated that the Russian Ministry of Defense in the next five years will not make such purchases. The T-90 is a modernised version of the T-72, but although developed from the T-72, it uses a 125 mm 2A46 smoothbore tank gun, a new engine, and thermal sights. Standard protective measures include a blend of steel, composite armour, and Kontakt-5 explosive-reactive armour, laser warning receivers, Nakidka camouflage and the Shtora infrared anti-tank guided missile (ATGM) jamming system.
Algeria has been on an arms buying spree ranging from its navy to its army. Though it faces no major enemy, invasion, the Algeria’s armed forces are directed towards the country’s western border with Morocco and Western Sahara, areas which territorial disputes. Previous arms deal between Russia and Algeria was covered here. Here is some video of the T-90 in action
A large gas discovery off the coast of Tanzania has been made.
Statoil and ExxonMobil have confirmed they made a large gas discovery in the Zafarani prospect offshore Tanzania in Block 2. Earlier this month, the company reported that Zafarani-1 had encountered gas shows in a good-quality reservoir. Statoil spudded the well in early January 2012 with the Ocean Rig Poseidon (UDW drillship). Logging results reveal that it is a high-impact discovery, far proving that the well holds up to 5 Tcf of gas-in-place. Zafarani-1 has encountered 393 feet (120 meters) of excellent quality reservoir with high porosity and high permeability, reported the operator. The gas-water contact has not been established and drilling operations will continue until total depth is reached. “This discovery is the first Statoil-operated discovery in East Africa and an important event for the future development of the Tanzanian gas industry. It is also a demonstration of how Statoil’s exploration strategy of early access and high impact opportunities strongly supports the company’s ambition for international growth,” said Executive Vice President for Exploration Tim Dodson in a statement Friday. “This discovery could potentially be a catalyst for large scale natural gas developments in Tanzania,” added Tanzania Petroleum Development Corporation Managing Director Yona Killaghane. The International Monetary Fund recently stated in a country report, “Tanzania’s prospects of becoming a major producer of natural gas by the end of the decade appear good. There could be large foreign direct investment inflows over the next five years, and a substantial increase in exports and government revenue beginning around 2020.” So far, roughly 26 licenses have been awarded in the country, making it the highest number in the East Africa region. Zafarani is the first exploration well that has been drilled in the license, which covers approximately 2,120 square miles (5,500 square kilometers). The water depth at the well location is 8,470 feet (2,582 meters). The well will be drilled to reach an expected total depth of around 16,730 feet (5,100 meters). Statoil operates the license on Block 2 on behalf of TPDC and has a 65% working interest while ExxonMobil Exploration and Production Tanzania holds the remaining 35%. In the case of a development phase, TPDC has the right to a 10 percent working interest.
This is huge for Tanzania. If all works out, the economic benefits are astronomical. In just a short amount of time, it has become a major player in the African energy market if all the assumptions remain true from the initial discovery. Being strategically located facing Asia, the fastest growing energy consuming region in the world, getting and shipping the gas won’t be that challenging, which only means more money stays in the country for development.
British entrepreneur Richard Branson will open 10 new clubs and invest in South Africa.
British mogul Sir Richard Branson has pledged to invest R1 billion in South Africa’s Virgin Active clubs. There are currently 98 Virgin branded gyms in the country, some of which will be upgraded, and 10 more clubs will be opened. Branson, who is visiting South Africa to unveil the Virgin Active gym in Maponya mall, Soweto, heralded the clubs a great success.“It’s one of the great success stories in Africa and SA, 98 clubs – why couldn’t it be 100 clubs? I think I’ll come back when the 100th club opens,” said Branson. “We have 10 clubs opening, which is the most we’ve ever had. We will be spending a billion rand over the next twelve months upgrading the current clubs and building new ones. I think as far as Virgin Active is concerned there will be a lot of expansions,” he said. Branson said that it was vital to keep investing, despite a turbulent economic period. “There are always unexpected challenges in business – for example, 9/11 had a hugely negative impact on my airline business and I lost 300 million dollars in a month. There are still opportunities even in difficult times and businesses need to get on their feet and create employment; they can’t depend on government to do it. “Despite the economic crisis we won’t stop investing, that is essential I think. Businesses need to play their part in getting the economy back on track.”
The U.S. will invest more in Ghana through the EXIM Bank. The investments will be focused on small businesses and medium scale enterprises.
The Vice Chairman of the bank, Wanda Felton, at a discussion with Ghana’s President John Evans Atta Mills at the Castle, Osu in Accra on Tuesday, said the extension of the bank’s operation was as a result of the West African nation’s freindly business environment. It was also part of the bank’s long term plan for more economic co-operation with Africa announced by US President Barack Obama in 2009, she added. Felton pledged to woo US investors to support the Ghanaian economy by letting them know the enormous potentials that exist in the country. The vice chairperson of the Export and Import Bank further said the bank would support American business interests in the country through which it sought to expand its business co-operation with Ghana. Ghana’s President John Atta-Mills welcomed the move, saying Ghana was ready to partner genuine investors for mutual benefit. Mills stressed the need to take advantage of positive opportunities and cooperation to address the challenges of doing business among the nations The bank supported the construction of the country’s hydro electric power, the Akosombo Dam and had was supporting the energy sector for the last decade, through rural electrification and the Self Help Electrification Programme. About US$575 million has been invested into the energy sector, small and medium enterprises in the last decade. Other areas of target interest are agribusiness, trade and commerce.
U.S.-Ghana relations have really taken off since Barack Obama became President of the U.S. From his first visit to Ghana in 2009, using it as an example of African democracy, good governance and competency, relations continue on an upward positive track. This has paid off as both nations come closer economically through trade and business as this is shown through this new agreement.