Shell leaves Nigeria’s Onshore after 68 years.

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Africa Headlines

Shell leaves Nigeria’s Onshore after 68 years – The history of Nigeria, the discovery of oil in commercial quantities, the oil boom of the 1970s, and Niger Delta’s environmental degradation and hostilities can never be told without the mention of Shell. After this history, Shell announced yesterday it was selling its Nigerian onshore assets for US $2.5 billion. Any follower of the oil and gas industry will not be surprised by the announcement as Shell has been actively trying to sell the assets in the last few years. After this sale, Shell involvement in Nigeria is now limited to the less problematic offshore assets. Shell assets include OML 18, OML 29, and the Nembe Creek pipeline. Shell had become frustrated with the onshore assets on the back of oil theft and incessant pipeline vandalisation that has crippled investments in the industry and led from a peak of 2.5 million bpd production in November 2005 to  a struggling 1.5 million bpd today. The sale process is still subjected to Nigeria’s government authorisation.

Naira Plunges To 1300/US $ on the streets – There now appears a resignation that the Naira’s downward spiral will continue for a while. Yesterday, it traded for N1,300 to the US $ on the streets, after just crossing the N1,000 mark about three months ago. Two weeks ago, it traded N1,200 to the US $. It trades at a weaker rate of N1,315 on the Binance crypto platform. On the Nigeria Foreign Exchange Market (NFEM), as seen on FMDQ, the Naira closed trading at N878.57 to the US $, but supply to NFEM has decreased by 89% in the last week (No surprise here). There is now a palpable concern that we are back to the 1980s and 1990s when US $, rather than be a means of exchange for international trade and commerce, is now just Nigerian’s preferred store of value but an “asset” class. Compared to real estate, equity, bonds, the holding of US $ in Nigeria has “outperformed” all. The consequences are even more palpable as production and productive activities largely dissipates, driving up inflation and worsening exchange rate crisis.

Tanzania reinstates Kenya airways’ Nairobi – Dar es Salaam route – After 24 hours, the Tanzania government reinstated Kenya airways permit to fly in and out of Dar es Salaam. The Tanzania government had banned the airline following Kenya’s earlier denial of Air Tanzania, Tanzania’s national carrier cargo flights into Nairobi. The Tanzania Civil Authority (TCAA) argued that the decision by Kenya violated the 2016 Memorandum of Understanding on air services between the two countries. Before the ban, Kenya airways fly 30 times weekly to Dar es Salaam, its most frequent international routes, with estimated 1 million people visiting Tanzania for tourism purposes. Both Kenya and Tanzania are not landlocked countries, with Kenya the largest economy in the region. It is not clear what diplomatic moves and agreements have been reached.

Kagame, Blinken meet in Davos – The U.S. Secretary of State Antony Blinken met with Rwandan President Paul Kagame during the World Economic Forum in Davos. Blinken expressed the United States' commitment to supporting peaceful resolutions and preventing conflicts between Rwanda and Congo, particularly in the eastern Democratic Republic of Congo (DRC). He commended Kagame's leadership in seeking a positive and peaceful way forward and looked forward to discussing the matter further. The Congolese President, Felix Tshisekedi, has accused Rwanda and Kagame of providing military support to the M23 rebels, a group made up of Congolese Tutsi fighters who have captured towns in mineral-rich North Kivu. The United Nations and human rights organizations have also accused M23 of committing atrocities, including rape and mass killings, and allege that Rwanda backs the rebels. Rwanda, however, denies any association with the M23 rebels. In December, a 72-hour cease-fire was agreed upon by Congolese security forces and rebel groups to ease tensions in the eastern part of the country near the Rwandan border, just days before Congo's presidential election.

Global Headlines

US To Designate Iran-backed Houthi Rebels as Terror Group – The United States is reportedly preparing to designate the Houthis, an Iran-backed militant group in Yemen, as a global terrorist group. The decision, expected to be announced soon, comes in response to ongoing Houthi attacks on commercial vessels in the Red Sea, a crucial shipping route. The attacks have continued even after the US launched strikes on Houthi targets in Yemen. The increased attacks by Houthi rebels are seen as a response to Israel's conflict with Hamas in Gaza. The designation falls under an executive order aimed at disrupting terrorist funding. It reverses a decision made three years ago by then-Secretary of State Antony Blinken to remove the Houthis from the list, a move aimed at facilitating the delivery of humanitarian aid to Yemen. The designation would allow the US government to block the assets of individuals and entities providing support to the Houthis, as well as their subsidiaries, front organizations, or associates, with some exceptions.

China’s population continues to decline – Latest population data from China shows that it declined by 2 million in the last year, second time in a row. The country’s population is now 1.4 billion as the country’s birth rate falls to 6.39 per 1,000, down from 6.77 a year before, and the lowest since 1949. The country’s work force, that is those from 16 to 59 also declined by 10.8 million while the number of those above 60 increased by 17 million from 2022. China’s population declined for the first time in 2022 and allowed India to take over and become the largest populated country in 2023, and it appears this patten will continue. The decline in the country’s population comes amidst deflationary concerns and lower growth compared to history. The latest GDP growth was 5.2% according to the country’s statistics authority. China has thus joined most European countries in which the population pattern is shifting to more old people than young, with long term implications for the size of working population, consumption, and growth. 

Apple gets its first 'good' news of 2024 – According to data from the International Data Corporation (IDC) worldwide quarterly mobile phone tracker, Apple became the top smartphone maker in 2023, surpassing Samsung. Apple's success can be attributed to increased smartphone shipments and being the only one among the top three companies to experience growth. In the fourth quarter, Apple shipped 80.5 million iPhone units, reflecting an 11.6% year-on-year increase. With a 20.1% market share, Apple surpassed Samsung, which held a 19.4% market share, to become the leader in global smartphone shipments. Xiaomi secured the third position with a 12.5% market share. While Apple contributed to Samsung's decline, IDC noted that the Android market is becoming more diverse.