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Africa Headlines

Nigeria, Morocco seeks to expedite US $30 billion gas pipeline project – Nigeria and Morocco are seeking to expedite final investment decision on the gas pipeline project that will transverse the Sahara to Europe. Talks were revived by both governments this week. The pipeline, spanning approximately 5,300km from Nigeria to Dhakia, Morocco, with a spur to Spain, aims to facilitate the monetisation of Nigeria's gas resources and promote economic and regional cooperation among African countries. MOU were signed between Nigeria, Morocco, and other West African nations in 2023, reaffirming their commitment to the project. The project is seen a necessary to address energy gaps on the continent. The project was first conceived in in 2016. It is a very ambitious pipeline project to take advantage of Nigeria’s gas resources and meet Africa’s energy gaps and sell to Europe. When completed, it will be the second longest pipeline in the world, following the West – East gas pipeline in China.  The NNPCL emphasized the need for timely completion to address energy poverty in Africa.

Nigeria’s President works on new measures to tackle security in the Northern part of the country – Vice President Kashim Shettima has announced that President Bola Tinubu has approved "Pulaaku Initiative" as a measure to tackling insurgency and banditry in Northern Nigeria. With an initial allocation of N50 billion (US $50 million) aims to improve living conditions and livelihoods in selected states, starting with Sokoto, Kebbi, Katsina, Benue, Zamfara, Niger, and Kaduna. It will involve the construction of residences, roads, schools, and other essential facilities. Shettima made the announcement during a two-day roundtable on insecurity in Northern Nigeria, emphasizing the government's commitment to addressing insecurity and allocating a significant portion of the 2024 budget to the security sector. Former military head of state Gen. Abdulsalami Abubakar highlighted the importance of investing in education and the economy to address the root causes of insecurity, while emphasizing the need for synergy among security agencies and federal authorities. 

Nigeria’s federal government releases fund for bypasses on key highways – David Umahi, Nigeria’s Minister of Works revealed yesterday that President Bola Tinubu has approved funds for the construction of the Second Niger Bridge bypasses, the Lagos-Ibadan highway, and the Lafia bypass. Umahi revealed this during an inspection of the Lafia bypass road and the dualization of the 9th Mile, Enugu-Otukpo-Makurdi Road Project. The projects are critical to movements across the country. Umahi also mentioned that the President had approved immediate commencement of work on sections of the Abuja-Kaduna-Zaria-Kano Road, as well as the Lagos-Ibadan highway and the Second Niger Bridge bypasses. Umahi stated his preference for using cement concrete for the roads and highlighted the importance of incorporating a flyover in the project. Governor Hyacinth Alia of Benue State commended the federal government for fulfilling the dreams of the people of Benue and expressed gratitude to the President for his support.

Zambia: Rescue efforts continue to pull out 7 workers trapped in mine – Rescue efforts are continuing to pull out seven miners who trapped in a copper mine since Monday. Five Zambian employees and two Chinese workers were working at the Macrolink mine in Ndola when the incident occurred. The miners' relatives are anxiously waiting for their rescue and appealing to the government for immediate action. Augustine Kasongo, Copperbelt Province Secretary for Zambia, expressed gratitude for the equipment provided, although it was not sufficient for the task. The Chinese deputy ambassador to Zambia stated that an expert group from China would be arriving to assist in the rescue efforts. One miner managed to escape the shaft. The trapped miners were reportedly working at a depth of approximately 235 meters. Zambia is a major copper-producing country, and Chinese mining companies have made substantial investments in the sector.

Global Headlines

The U.S. economy grew at blistering 3.3% pace in Q4 while inflation pulled back – The US economy rubbished the talk of a soft landing or a mild recession that dominated analysis in late 2022 following rapid increases in interest rates to record to 2.5%, compared to 1.9% in 2022. The fourth quarter data released yesterday showed a GDP growth of 3.3%, beating consensus estimates of 2%. The strong growth recorded was on the back of robust consumer expenditure, increased government expenditure, and private investment. The best news was the continuation of the downward trajectory of inflation, recording 1.7% for December 2023, now below the 2% target. The most important implication of the numbers is what it means for interest path this year. The Fed has already suggested that it’s looking at three downward interest rates adjustments this year. Interest rate is currently 5.25% - 5.5%. Fed’s next meeting on interest rate is next week January 30 – 31. Analysts’ consensus is that a rate cut will come at least until the second meeting in March. For emerging economies like Nigeria, a rate cut will lower US yields and lower the yields on Nigeria’s Eurobond. US 10-year treasury is currently 4.14%, while the highest yield on Nigeria’s Eurobond debt is 10.4%, while domestic 10 year NGN bond is 14%.

UK halts trade negotiations with Canada over Cheese – The UK yesterday halted trade talks with Canada on the back of access to Canadian’s cheese market. There was an initial three-year agreement which expired end of 2023, but without a new one in place. The interim agreement followed Brexit. The plan was for a long-term bilateral trade agreement to preplace the Canada’s Comprehensive Economic and Trade Agreement (CETA) with the EU. This suspension of talks is the first time the UK has formally halted negotiations with a trade partner since leaving the EU trading regime. As a result, the UK's trading terms with Canada will be less favourable than when it was part of the EU's deal with the country. British car companies now face the prospect of higher tariffs to sell in the Canadian market, while higher tariffs on British cheese have already come into effect. Talks broke down over issues such as Canadian demands to relax the ban on hormone-treated beef and the UK's market access barriers for Canadian agriculture. Both sides expressed disappointment but remain open to future negotiations. In 2020, total goods trade between the UK and Canada was worth £19.2 billion.