Oil Fall: 84 million barrels of Nigerian crude stranded at sea
Published Sunday, May 03, 2020 @ 19:56 CET
An estimated 84 million barrels of Nigerian crude oil is currently stranded at sea, a report by Wall Street Journal has said.
In an April 27 report, the newspaper said cargo ships filled with Nigerian crude had nowhere to go and Nigerian oil companies were competing to fill the “last few empty tankers still left at sea”.
The tankers are reported to be coming from production fields managed by Royal Dutch Shell and Exxon Mobil.
According to experts, it would be risky to shut down production in some oil fields as the wells are “too old to be restarted once they go idle”.
However, a situation where companies run out of vessels would make shutting the oil fields inevitable.
“When there are no more vessels to load the crude, then the entire world collapses,” Kola Karim, the chairman of Shoreline Natural Resources, was quoted to have said.
“You will have serious, serious security implications. Unrest.”
According to the Wall Street Journal, a tanker was turned back from the US Gulf Coast and it returned to the Canary Islands, where other Nigerian-hired ships are idled.
The COVID-19 pandemic has resulted in reduced demand for crude oil across the world and a price war between Saudi Arabia and Russia worsened an already bad situation.
In response to the fall in crude prices, Nigeria slashed its 2020 budget and reduced the budgeted crude benchmark.
The Organisation of Petroleum Exporting Countries (OPEC) and its allies (OPEC+) also agreed on a graduated supply cut that is scheduled to last till April 2022.
Nigeria currently has 1,918 active cases of the coronavirus in addition to 385 recoveries and 85 deaths.
The Nigeria Civil Aviation Authority (NCAA) has suspended Turkish Airlines from operating into the country over persistent baggage delays. The suspension takes effect on December 16 The regulatory authority said the airline would remain suspended until it is ready to operate into the country with the right aircraft size and bring passengers into the country together with their checked-in baggage.
The NCAA, in a letter: NCAA/ DG/12/16/60 directed to the airline’s Country Manager and dated December 11, 2019 signed by the Acting Director General, Captain Abdullahi Sidi, said the baggage backlog had been ongoing for two weeks. The letter read: ”The Nigeria Civil Aviation Authority (NCAA) wishes to extend its compliments to Turkish Airlines and also express its serious displeasure about the recent cases of not bringing passengers into Nigeria together with their checked-in baggage.
“These incidents, which has been going on for two weeks, has become so bad that the most recent flight arrived without 85% of passengers’ baggage onboard. Our Airport Authority have been facing serious crises controlling the passengers at the airport whenever they arrive without their baggages. “This issue has made passengers to carry out several mob actions at our airport and it is a great threat to our airport facilities “In view of all these, and the series of meetings held with Turkish Airlines personnel, which did not yield any solution to the problem, the NCAA is therefore, left with no option than to direct Turkish Airline to suspend its operations into Nigeria until such a time when the airline is ready to operate with the right size of aircraft that can transport all passengers with their baggage at the same time.
“If no remedial action is carried out by your airline, this suspension shall be effective from the 16th December, 2019.”.
Business: Africa in looming debt crisis, China could be responsible
| Published Tuesday, November 06, 2018 | 15:55 GMT
Africa is facing a looming debt crisis, say leading development economists.
"Almost 40% of sub-Saharan African countries are in danger of slipping into a major debt crisis" according to the Overseas Development Institute, ahead of a major conference on debt being held in London this week.
And the relationship between African nations and China is often seen as a significant part of the problem.
Its critics say that major infrastructure projects carried out by Chinese companies in Africa are too expensive, and burden the host countries with enormous debts they can't hope to repay.
The Chinese government is adamant that its economic relationships with African countries are mutually beneficial and rejects suggestions that it is using debt to expand global influence.
So is China really responsible for Africa's growing debt burden?
Africa's debt burden
The International Monetary Fund (IMF) has recently warned that Africa is heading towards a new debt crisis, with the number of countries at high risk doubling over the past five years.
The World Bank now classifies 18 countries as at high risk of debt distress, where debt-to-GDP ratios surpass 50%.
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The total amount of external debt for the continent is estimated at $417 billion.
Around 20% of African government external debt is owed to China, says the Jubilee Debt Campaign, a charity which campaigns for the cancellation of poor countries' debt.
This makes China the largest single creditor nation, with combined state and commercial loans estimated to have been $132 billion between 2006 and 2017.
A further 35% of African debt is held by multilateral institutions such as the World Bank, with 32% owed to private lenders.
There's one important caveat: this data is hard to verify. "China is not a member of the OECD (Organisation for Economic Cooperation and Development) and they do not participate in the OECD's Creditor Reporting System," said Christina Wolf, an economics expert at Kingston University. But China has pledged to invest $60bn in Africa by the end of this year.
Media captionChina is set to have invested $60bn in Africa at the end of 2018
Countries in deepest debt to China
Most of China's loans to Africa go into infrastructure projects such as roads, railways and ports.
In 2015, the China-Africa Research Initiative (CARI) at John Hopkins University identified 17 African countries with risky debt exposure to China, potentially unable to repay their loans.
It says three of these - Djibouti, Republic of Congo and Zambia - remain most at risk of debt distress derived from these Chinese loans.
In 2017, Zambia's debt amounted to $8.7 billion - $6.4 billion of which is owed to China.
For Djibouti, 77% of its debt is from Chinese lenders. Figures for the Republic of Congo are unclear, but CARI estimates debts to China to be in the region of $7bn.
Image copyrightGETTY IMAGESImage captionPresident Xi with South African President Cyril Ramaphosa (left) and Equatorial Guinea's President Teodoro Obiang.
Fewer strings attached?
Compared to institutions such as the IMF, World Bank and Paris Club (a group of 22 creditor nations not including China,) loans from China are seen by some as much quicker, cheaper, and come with fewer strings attached.
The United States in particular has been highly critical of China's approach.
Earlier this year, ahead of a visit to Africa, the then US Secretary of State, Rex Tillerson, said China's lending policy to Africa "encouraged dependency, utilised corrupt deals and endangered its natural resources".
China's response was forthright. Its ambassador in South Africa, Lin Songtian, said China was proud of its influence in Africa and that Mr Tillerson's comments were part of a smear campaign by the United States.
"China is just like any other lender," says Gyude Moore, a former Liberian Government official, and "China's strategic interest is in African countries paying back debts."
There are many examples of China supporting programmes to help with debt repayments, says Mr Moore, who's currently a visiting fellow at the Centre for Global Development.
And ultimately, it is up to African nations themselves to accept or reject Chinese loans.
But a severe lack of infrastructure, and the desperate need for modern transport links in many of the poorest countries, make China's ready offer of substantial loans for such projects often difficult to turn down.
And what's clear is that Africa's debt problem is far wider than its relationship with China.
However, China's increasing involvement with the continent and its commitment to providing loans for large-scale projects, mean that any solution to Africa's debt problems must address its relationship both with Beijing and with private Chinese companies operating on the continent.
| Published Tuesday, 11 September 2018 | 16:37 GMT
Africans deserve to know details of shady deals their leaders sign with China
Chinese President in African economic invasion
China's footprints are all over the African continent, signing deals with many countries. However, the finer details of China-Africa loans are often kept secret. There are concerns that African countries are mortgaging their natural resources as collateral for the loans. The China-Africa deals ought to be transparent, and the public has the right to scrutinise the agreements.
The news of China taking over Sri Lanka’s port and 15000 hectares of land on a 99-year lease recently raised questions and debate on the African continent about the kind of agreements African presidents are signing with China. The deal which has raised eyebrows was signed between two state firms, Sri Lanka Ports Authority (SLPA) and China Merchants Port Holdings.
The South African parliament, led by the minority leader from the Democratic Alliance (DA) Mmusi Maimane, demanded to know from President Cyril Ramaphosa “the terms of Eskom’s $2,313,143,580 (R33 billion) loan with the Chinese Development Bank.” Maimane gave President Ramaphosa 14 days to table the terms in parliament “in the interest of openness and transparency.” Eskom is South Africa’s electricity public utility.
Many other African countries have made trade murky deals with China. Zambia’s President Edgar Lungu has signed off on at least $8 billion from the Chinese. According to Africa Confidential, talks are underway for a Chinese company to take over Zesco, a state-owned power company in Zambia. Africa Confidential, in a report titled Bonds, bills and even bigger debts revealed that Zambia National Broadcasting Corporation (ZNBC) is already being run by the Chinese. There are concerns that the Kenneth Kaunda Airport is likely to end up in the hands of the Chinese if Zambia doesn’t pay its debts.
The trade deals signed by African leaders have not been revealed to the public. The 2018 edition of the Forum for China- Africa Cooperation summit held in Beijing, China. At the summit China pledged US$60 billion of financing to Africa. The question many have asked is: what is Africa offering China in return for the major loans? Trade and aid and loans come with clauses and conditions that are never revealed to the public. It is the citizens who end up paying for such trade deals. Grant Harris, a former Africa advisor to President Barack Obama said in a BBC interview that “China is a debt trap for Djibouti, Kenya and other African countries.”
Chinese corporations are all over Africa. In June 2017 a McKinsey & Company report estimated that there are more than 10,000 Chinese-owned firms operating in Africa.
What are Chinese corporations doing in Africa? That's a highly controversial issue.
The reason Chinese corporations are in Africa is simple; to exploit the people and take their resources. It’s the same thing European colonists did during mercantile times, except worse. The Chinese corporations are trying to turn Africa into another Chinese continent. They are squeezing Africa for everything it is worth.
This is the view several African politicians have. The Zambian politician Michael Sata was one of them. At least he was before being elected President of Zambia in 2011. He wrote a paper presented to Harvard University in 2007 that said “European colonial exploitation in comparison to Chinese exploitation appears benign, because even though the commercial exploitation was just as bad, the colonial agents also invested in social and economic infrastructure services Chinese investment, on the other hand, is focused on taking out of Africa as much as can be taken out, without any regard to the welfare of the local people.” (quoted in Scott D. Taylor's "The Nature of Chinese Capital in Africa, Current History, May 2018, p. 197)
Sata's bold position got some support by a deadly blast at an explosives factory partly owned by the Chinese state killing 50 Zambian workers.
Africa’s Equities Have Underperformed Emerging Markets
Globalization managed to skip Africa by for years. There were several reasons for this. Africa was considered to have poor infrastructure, political instability, and low income. "The trade in oil, gas, gems, metals and rare earth minerals wreaks havoc in Africa. During the years when Brazil, India, China and the other “emerging markets” have transformed their economies, Africa's resource states remained tethered to the bottom of the industrial supply chain," writes Tom Burgis in The Looting of Africa (New York: Perseus Books Group, 2015). While Africa accounts for about 30 per cent of the world's reserves of hydrocarbons and minerals and 14 per cent of the world's population, its share of global manufacturing stood in 2011 exactly where it stood in 2000: at 1 percent.
Everything changed when China came along. The country was desperate for raw materials and energy to power their growing manufacturing capacity. They put Africa on the globalization map. The continent was placed right next to Shanghai in terms of Beijing’s business priorities.
Africa was at the top of the Beijing economic agenda. It was an easy and convenient target. Chinese leaders sent business delegations to every capital in Africa year after year. These delegates secured infrastructure projects and proposed trade deals, converting Africa into a “second continent” for China. Metaphorically, that is.
Howard W. French describes the situation in the book China’s Second Continent (New York: Alfred A. Knopf, 2015), explaining; ““Sensing that Africa had been cast aside by the West in the wake of the Cold War, Beijing saw the continent as the perfect proving ground for some Chinese companies to cut their teeth in international business. It certainly did not hurt that Africa was also the repository of an immense share of global resources—raw materials that were vital both for China’s extraordinary ongoing industrial expansion and for its across-the-board push for national reconstruction.”
The long arm of globalization had touched Africa. Trade between China and the “second continent” of Africa reached close to $300 billion in 2015.
Not everyone feels that China is attempting to turn Africa into a Chinese colony though. One such person is Ching Kwan Lee, a professor at the University of California. Lee argued in the Specter of Global China: Politics, Labor, and Foreign Investment in Africa (University of Chicago Press, 2017) that the investments the Chinese state made in Africa weren’t made as “imperialists” or “colonialists”. Nor were ones by private corporations. Chinese corporations aren’t being motivated by profits. They have a long-term horizon in mind, and they make for good local citizens. The Chinese people in Africa pay their fair share of taxes to the countries they do business with. Lee goes so far as to contend that Chinese corporations actually promote African independence and autonomy, rather than the usual dependence that is associated with colonialism. China is helping Africa to stand by themselves, rather than making Africa dependent on them.
Maybe it would be best to avoid sharing this opinion with the Pakistanis and Sri Lankans that are heavily indebted to China. These are the people that are most at-risk of becoming modern-day colonies for Beijing.
British PM Theresa May Arrives South Africa, Holds Post Brexit Trade Talks
Britain’s Prime Minister Theresa May and South African President Cyril Ramaphosa take part in the ceremony to hand over the bell of the SS Mendi, on August 28, 2018 in Cape Town. MIKE HUTCHINGS / POOL / AFP
In her address, May talked about increased international cooperation for global development, building stronger, more stable African economies as well as a UK Ambition to be Africa’s number one investor among the G7 by 2022The British Prime Minister, Theresa May, has begun her three-nation African tour in South Africa where she has held a series interactive session with school children, business leaders and South Africa’s president Cyril Ramaphosa in Cape Town.
“By 2022, I want the UK to be the G7’s number one investor in Africa, with Britain’s private sector companies taking the lead,” May told business leaders in Cape Town.
The G7 groups’ major industrialised nations but does not include China, which has become a big investor on the African continent.
Her tour of South Africa, Nigeria and Kenya — May’s first to Africa since becoming premier in 2016 — is seen as an effort to reinforce Britain’s global ambitions after Brexit.
“I want to create a new partnership between the UK and our friends in Africa built around shared prosperity and shared security,” she added.
May is facing pressure at home from so-called Remainers sceptical of her ability to forge trade deals once Britain severs ties with the EU, as well as from Brexiteers fearful she will not deliver a complete break.
On her journey to South Africa, May suggested to travelling British press that a no-deal Brexit would not be a disaster for Britain and played down warnings of serious consequences for the UK economy.
Dance Steps
Former foreign minister Boris Johnson, whose July departure from the cabinet brought May’s government to the brink, said in his resignation speech that May’s current Brexit policy would hamper London’s ability to strike independent trade deals.
But May said Britain was well-placed and had many companies ready to invest in Africa.
On Tuesday, she announced a new four-billion-pound ($5 billion/4.4 billion euro) Africa investment programme. There were no immediate details about the initiative.
May added that Britain would also host an African investment summit next year, and would open new diplomatic missions across the continent.
The prime minister had earlier attracted mixed reviews for her tentative dance steps as she was greeted by singing pupils during a visit to a Cape Town school.
May also presented President Cyril Ramaphosa with the bell from the troopship Mendi, which sank in the Channel in 1917 drowning more than 600 mainly South African troops who were set to join the Allied forces fighting in World War I.
It was the worst maritime disaster in South Africa’s history and became a symbol of its Great War sacrifice.
The bell was given to a BBC reporter in 2017 following an anonymous tip.
Ramaphosa described the gift of the bell as “like returning their souls back to the land of their birth.”
South Africa Calls For Smooth Brexit
After talks with May, the president, who came to power this year, welcomed Britain’s role in his efforts to secure $100 billion of foreign investment to revive South Africa’s sluggish economy and soaring unemployment.
But he also added that he hoped Britain would soon conclude Brexit negotiations in a manner “that restores stability to economic and financial markets… as their exit also has an impact on our economy.”
May was expected to later visit Robben Island where former president Nelson Mandela was imprisoned for decades to commemorate the 100th anniversary of his birth.
May will head to Nigeria on Wednesday for meetings with President Muhammadu Buhari in the capital Abuja and with victims of modern slavery in Lagos.
On Thursday she will meet Kenyan President Uhuru Kenyatta, shortly after his return from seeing US President Donald Trump in Washington.
The prime minister will also see British troops in training action and tour a business school, before concluding the trip at a state dinner hosted by Kenyatta.
London and Brussels have yet to reach an agreement on the terms of Britain’s exit from the EU in March.
U.S.- China trade war escalates as new tariffs kick in
- Both countries to over deadline day
- Chinese stocks fall amid trade war tension
U.S and China Shipping containers are seen at loggerheads
BEIJING/WASHINGTON (Reuters) - The United States and China escalated their acrimonious trade war on Thursday, implementing punitive 25 percent tariffs on $16 billion worth of each other’s goods, even as mid-level officials from both sides resumed talks in Washington.
FILE PHOTO: Shipping containers are seen at a port in Shanghai, China July 10, 2018. REUTERS/Aly Song/File Photo
The world’s two largest economies have now slapped tit-for-tat tariffs on a combined $100 billion of products since early July, with more in the pipeline, adding to risks to global economic growth.
China’s Commerce Ministry said Washington was “remaining obstinate” by implementing the latest tariffs, which kicked-in on both sides as scheduled at 12:01 p.m. in Beijing (0401 GMT).
“China resolutely opposes this, and will continue to take necessary countermeasures,” it said in a brief statement.
“At the same time, to safeguard free trade and multilateral systems, and defend its own lawful interests, China will file suit regarding these tariff measures under the WTO dispute resolution mechanism,” it said.
President Donald Trump has threatened to put duties on almost all of the more than $500 billion of Chinese goods exported to the United States annually unless Beijing agrees to sweeping changes to its intellectual property practices, industrial subsidy programs and tariff structures, and buys more U.S. goods.
That figure would be far more than China imports from the United States, raising concerns that Beijing could consider other forms of retaliation, such as making life more difficult for American firms in China or allowing its yuan currency to weaken further to support its exporters.
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“WE HAVE MORE BULLETS”
Trump administration officials have been divided over how hard to press Beijing, but the White House appears to believe it is winning the trade war as China’s economy slows and its stock markets tumble.
“They’re not going to give that up easily. Naturally they’ll retaliate a little bit,” U.S. Commerce Secretary Wilbur Ross said on CNBC on Wednesday at a Century Aluminum (CENX.O) smelter in Hawesville, Kentucky, which is restarting idled production lines due to Trump’s aluminum tariffs.
“But at the end of the day, we have many more bullets than they do. They know it. We have a much stronger economy than they have, they know that too,” Ross said.
Slideshow (4 Images)
Economists reckon that every $100 billion of imports hit by tariffs would reduce global trade by around 0.5 percent.
They have assumed a direct impact on China’s economic growth in 2018 of 0.1-0.3 percentage points, and somewhat less for the United States, but the impact will be bigger next year, along with collateral damage for other countries and companies tied into China’s global supply chains.
HARD LINE RATTLES BEIJING
The tariffs took effect amid two days of talks in Washington between mid-level officials from both sides, the first formal negotiations since U.S. Commerce Secretary met with Chinese economic adviser Liu He in Beijing in June.
Business groups expressed hope that the meeting would mark the start of serious negotiations over Chinese trade and economic policy changes demanded by Trump.
However, Trump on Monday told Reuters in an interview that he did not “anticipate much” from the talks led by U.S. Treasury Under Secretary David Malpass and Chinese Commerce Vice Minister Wang Shouwen.
Trump’s hard line has rattled Beijing and spurred rare criticism within the highest levels of China’s ruling Communist Party over its handling of the trade war, sources have said.
Beijing has denied U.S. allegations that it systematically forces the unfair transfer of U.S. technology and has said that it adheres to World Trade Organization rules.
The official Xinhua news agency said in a commentary on Thursday that China approached the latest round of talks in good faith, but that Washington remains vague about what it wants.
“As U.S. President Donald Trump said in his book on making deals, ‘the point is that you can’t be too greedy.’ The two sides would hence be advisable to define their top concerns in this round of talks and outline a roadmap, in a bid to find a way out of the current impasse and towards the final settlement of the issues.”
Washington’s latest tariffs apply to 279 product categories including semiconductors, plastics, chemicals and railway equipment that the Office of the U.S. Trade Representative has said benefit from Beijing’s “Made in China 2025” industrial plan to make China competitive in high-tech industries.
China’s list of 333 U.S. product categories hit with duties includes coal, copper scrap, fuel, steel products, buses and medical equipment.
Though it is too early for the trade battle to show up in much economic data as yet, tariffs are beginning to increase costs for consumers and businesses on both sides of the Pacific, forcing companies to adjust their supply chains and pricing, with some U.S. firms looking to decrease their reliance on China.
One executive at a major U.S. manufacturer in China told Reuters the uncertainty about the duration of the trade conflict was more damaging than the tariffs themselves because it made business planning difficult.
If the tariffs are in place for long, there will come a point at which the company would begin moving some sourcing and production out of China, a process that would be irreversible for several years once set in motion, the executive said, declining to be identified due to the sensitivity of the matter.
Reporting by David Lawder and Steve Holland in Washington and Tony Munroe and Michael Martina in Beijing; Editing by Kim Coghill
