Recently in Africa Category

First, the bad news.

Although Africa has vast fossil and renewable energy sources, only twenty percent of its population has direct access to electricity and in some rural areas, four out of five people are completely without power. According to the UN, over 600 million Africans currently do not have access to electric power. A depressing 70 percent of Sub-Saharan Africa's population is living without access to clean and safe energy for their basic needs such as cooking, lighting and heating, making energy poverty among the most urgent issues facing Africa. Worldwide, more than 1.4 billion people worldwide have no access to electricity, and 1 billion more only have intermittent access.

Over 2.5 billion people, almost half of humanity, rely on traditional biomass - wood, coal, charcoal, or animal waste to cook their meals and heat their homes, exposing themselves and their families to smoke and fumes that damage their health and kill nearly two million people a year. More than 95 percent of these people are either in sub-Saharan Africa or developing Asia.

The good news?

According to the Managing Director of Nigeria's Bank of Industry (BOI), Evelyn Oputu, total investments in renewable energy in Africa rose from $750 million in 2004 to $3.6 billion in 2011. To put this in a global context, worldwide investment in renewable energy has risen from $33 billion in 2004 to $211 billion in 2011.

And the future?

According to a report issued in August 2011 by Frost & Sullivan entitled "Mega Trends in Africa: A bright vision for the growing continent," investment in renewable power in Africa is set to grow from the 2011 total of $3.6-billion in 2010 to $57-billion by 2020, a staggering 1,583 percent increase in nine short years. According to the document, "The key growth sectors will be wind power, solar power, geothermal power and foreign direct investment (FDI) into energy and power infrastructure."

The reason for the spectacular projections? Africa's combination of a massive unmet demand, including remote communities, allied to an abundance of renewable power potential in the form of solar, wind and geothermal potential. To give but one example, Only seven percent of Africa's hydropower capacity has been developed up to now.

Africa is not yet locked into the inefficient, oft-polluting infrastructure of many Western countries. Accordingly, Africa with modern efficient technologies could build a renewable energy infrastructure that could bypass the inefficient, fossil fuel-centered energy infrastructure systems of the developed world.

Modest starts in renewable energy have already begun across the continent. Wind power projects in Africa are planned or under way in Egypt, Ethiopia, Kenya, Morocco, Nigeria, Tunisia, and Tanzania - including Kenya's 0.3 gigawatt Lake Turkana project and 0.7 gigawatt of capacity under construction in Morocco, while Cameroon, Kenya, Tanzania, and Uganda all have existing biomass power capacity or plans for future development.

Solar? South Africa has its planned solar park in Upington, intended to contribute 5,000 megawatts to the national electrical grid, while North Africa's Desertec is the largest solar power project ever conceived, designed at a potential cost of $500 billion to provide a significant portion of the electricity needs of participating countries in the Middle East and North Africa (MENA) region and up to 15 per cent of Europe's electricity needs by 2050.

Africa's ambitions have the support of the United Nations, where in 2010 the General Assembly unanimously endorsed a resolution designating 2012 as "The International Year of Sustainable Energy for All." UN Secretary-General Ban Ki-moon has set three inter-linked objectives to support the goal of achieving "Sustainable Energy for All" by 2030, which are ensuring universal access to modern energy services, doubling the rate of improvement in energy efficiency and doubling the share of renewable energy in the global energy mix.

The UN Sustainable Energy for All incorporates a number of initiatives focusing on Africa, including World Bank Group's Lighting Africa, the Paris-Nairobi Climate Initiative, the Africa-European Union Energy Partnership, and the Global Alliance for Clean Cookstoves, as well as the EU's decision to make access to sustainable energy a development priority through its "Agenda for Change." A number of countries, including South Africa, are also leading the way with national initiatives.

But these initiatives are relatively recent and need financial support to prosper. It was only in September 2010 that African and European leaders launched the Africa-EU Renewable Energy Cooperation Program (RECP) at the First High-Level Meeting of the Africa-EU Energy Partnership (AEEP) in Vienna.

AEEP's agenda is nothing if not ambitious, as its targets on renewable energy to be reached by 2020 include 10,000 megawatts of hydropower facilities, 5,000 megawatts of wind power capacity, 500 megawatts of solar energy capacity and tripling the capacity of other renewables, such as geothermal, and modern biomass.

The downside to this picture? Three things - the need for massive amounts of investment capital, a problem attendant to massive amounts of cash - corruption, and the continent's changing political landscape, which is already impacting the Desertec North African solar initiative as the Arab Spring roils the south coast of the Mediterranean.

But both the need and potential are there - all that are currently lacking to make the future predictions a reality are cash and political will.

Source: http://oilprice.com/

By. John C.K. Daly of Oilprice.com

Over the last few years, thanks largely to Hollywood's "pirates of the Caribbean" franchise, maritime buccaneers have acquired a highly romantic image.

The reality of modern piracy is far removed from the images peddled by Tinseltown. In the most recent nautical attack, Somali pirates on 6 July attacked the 900-foot Brillante Virtuoso, which was carrying over 141,000 tons of fuel oil from Ukraine to Qingdao, China, 20 miles off the Yemeni port of Aden. The vessel's 26 crew members abandoned ship after the attackers fired an RPG round into their sleeping quarters.

According to ship manager Central Mare Inc., the vessel and its cargo were recovered, despite the fact that the rocket-propelled grenade started a fire on board.

While piracy is a worldwide annoyance, its epicenter is now the failed nation state of Somalia, where brazen hijacking of vessels in the Indian Ocean as far away as the Seychelles have in the past decade netted the maritime miscreants billions of dollars.

Though little noticed, tankers have been targets of opportunity for both pirates and terrorists for some time.

While media attention has focused on Somalia, the problem is global. On 16 January 1999 the 131,654 DWT-ton French-flag tanker Chaumont was attacked by pirates while transiting the Malacca Straits' Phillip Channel in Indonesian waters near Singapore. The attackers tied up the crew and the fully loaded tanker sailed at full speed through one of the world's busiest shipping lanes for 70 minutes without anyone at the helm.

In waters nearby the site of today's attack, in October 2002 the 299,364 DWT-ton French tanker Limburg was rammed by an explosives-laden boat off the port of Ash Shihr at Mukallah, 353 miles east of Aden. A crewman was killed and the double-hulled tanker was breached. The impact on the Yemeni economy was immediate, as maritime insurers tripled their rates. Al-Qaida later claimed the attack.

Acting Nigerian President Goodluck Jonathan has moved decisively and rapidly to unify the Government under him, dismissing -- on March 17, 2010 -- the entire Cabinet which had been appointed by the now-incapacitated Pres. Umaru Musa Yar'Adua. This followed his move, the week before, to appoint Lt.-Gen. Aliyu Mohammed Gusau as the new National Security Advisor, a post which oversees all the intelligence and security services as well as the Armed Forces.

Sources told GIS/Defense & Foreign Affairs late on March 18, 2010, said that about half the ministers would be invited back into the new Cabinet.

The new cabinet would be announced within two weeks, and this should end the divided loyalties of the outgoing cabinet members, many of whom owed allegiance to Yar'Adua, and even to former Pres. Olusegun Obasanjo.

GIS/Defense & Foreign Affairs was able to confirm late on March 18, 2010, that Pres. Yar'Adua is still, in fact, alive, and on frequent kidney dialysis. However, given the fact that he has been in deteriorating health from this condition for a number of years, and the fact that doctors were unsure whether he would have even survived the past few days, there is now no question of him returning to office.

Acting Pres. Jonathan, who has taken over the function of Head-of-State and Head-of-Government, does not have time on his side. There are strong pressures to pretend that Pres. Yar'Adua is still recovering, and merely waiting to be restored to health and to office. The body which would ratify a transition of full power to Vice-Pres. Jonathan -- now Acting President -- is the Senate which must act to confirm a successor if the National Executive Council pronounces the President no longer fit to hold office, but if the President is declared no longer capable of holding office, and the full authority of the Presidency is passed to Dr Jonathan by Senate vote, then the office of President of the Senate could -- under existing political party practice (within the ruling People's Democratic Party) -- rotate to a senator from a different region.

If the Vice-President was to move from his additional duties as Acting President to President, then a new Vice-President would need to be chosen. Meanwhile, there is still considerable in-fighting among the various Abuja power groups, and particularly within the group around the extremely ambitious and avaricious Mrs Turai Yar'Adua. No Nigerian First Lady has been able to wield the power which Mrs Yar'Adua amassed rapidly because of the declining health of her husband, and many orders were sent out by her in his name.

Quite apart from the hold which the wife of Pres. Yar'Adua has on a coterie of her husband's staff and supporters -- which gave her considerable access to influence and money until the past week -- there are many rice bowls attached to the status quo, such as the Presidency of the Senate and the Speakership of the House of Representatives. There has been little incentive, from the personal standpoint of many in the Abuja hierarchy, to change things, and thus the fiction is preserved that Yar'Adua is still President.

Now, however, in the face of decisive action by Acting Pres. Jonathan, the camp around Mrs Yar'Adua is fracturing and bickering. Moreover, the success which Acting Pres. Jonathan has had in galvanizing the Nigerian polity in a matter of a few weeks has made him popular.

There seems little doubt but that Mrs Yar'Adua, who is believed to have amassed perhaps hundreds of millions of dollars in the brief period of her husband's Presidency, will face legal action by the government which succeeds her husband.

For the time being, however, it may well even suit Acting Pres. Jonathan to not fight this situation, as long as he is able to get Nigerian governance back on track. He has the credentials, and now the leverage, to work credibly on calming the Niger Delta crisis, given that he is from the region as the former Deputy Governor, and then Governor, of Bayelsa State, one of the key Delta energy-producing areas, and a state with considerable unrest. He is also demonstrating that he is far more capable than most analysts had thought, even though he has lacked a strong political power base of his own in the past.

A maritime boundary dispute between Ghana and Côte d'Ivoire that erupted this month casts doubt on future international oil claims near the contested area and raises questions about the reaction of foreign investors to the uncertainty.

Earlier this month, Côte d'Ivoire appealed to the United Nations to delineate its offshore border with Ghana, a bid seen as controversial since Russia's Lukoil discovered oil reserves only days before off Ghana's coast. Ghana's Jubilee field will also begin operations later this year and give the country commercial oil-producer status.

Ghana found oil in 2006 and analysts estimate it has one billion to two billion barrels in proven oil reserves; Côte d'Ivoire is probably in the same range or has slightly less oil.

The Ghanaian parliament passed a boundary commission bill this week, according to media reports, which have also asserted that Côte d'Ivoire does not expect discussions to regress into a fight over oil rights. The commission would outline the country's land borders and mark the limits of its maritime boundaries.

While an actual war may not be looming between the African neighbors over the rightful ownership of offshore resources, potential "unclear title right at the margin" will most certainly be a problem, argued Peter Pham, director of the Africa Project at the New York-based National Committee on American Foreign Policy and an associate professor at James Madison University in Harrisonburg, Virginia.

"I think both sides have a stake in settling this, because if there's uncertainty, no one is going to invest anywhere near the disputed area for fear of having bought a license that's worthless," Pham cautioned.

A change of "one or two degrees" with respect to where a line is drawn out to sea can have a "huge impact 100 miles offshore," and neither side will be in a position to profit from resources found there, Pham told OilPrice.com.

The Côte d'Ivoire challenge is being closely monitored by U.S. companies. The West African region, located in an Atlantic basin, is close to the United States and attracts U.S. companies, said Sebastian Spio-Garbrah, a New York-based analyst covering Africa at the Eurasia Group, a research and consulting firm.

Nigeria's controversial oil industry bill is expected to eventually pass but the government may find it tough to later shift gears as international oil firms targeted under the legislation scale back their investments.

The Nigerian parliament is debating the Petroleum Industry Bill, an attempt at oil-sector reform in which Abuja can negotiate "downward" a foreign firm's share of profits and impose higher royalties and taxes, said Peter Pham, director of the Africa Project at the New York-based National Committee on American Foreign Policy and an associate professor at James Madison University in Harrisonburg, Virginia.

Despite potentially spending billions of dollars, a firm not seen as "fully exploiting" an oil block may risk having it turned over to a Nigerian upstart instead, Pham added.

While it is theoretically possible to alter the oil law in the future, "as a matter of practical politics" it will be tough, he argued. Even if the bill passes in the coming days, it will be at least 18 months before a new parliament revisits the law, "assuming it wants to," he noted.

By that time, international oil companies will have been "scared off," as blocks are revoked and given to Nigerians "loath" to surrender them, he said.

"In short, undoing damage would be difficult because there will be new entrenched interests with a stake in the new status quo."
Others are not so sure.

Backers of the hotly-debated bill will eventually see production and investment fall, perhaps by $3 billion annually, which might prompt them to "change the laws a bit and bring more people in," argued Sebastian Spio-Garbrah, a New York-based analyst covering Africa at the Eurasia Group, a research and consulting firm.

At the moment, the country is "just not in the mood for being reasonable" and wants to "own" the industry, which has been dominated by names like Chevron and Total, Spio-Garbrah told OilPrice.com. While local firms may lack the "technology of the Exxons," he noted, the "Pollyannish" government believes Nigerian firms can perhaps later hire oil-services companies to help out.

The country's oil industry needs to be deregulated because the Nigerian National Petroleum Corp. is "clearly inefficient," Pham said. But gaining political support for restructuring the state monopoly has meant adding other financial measures to the bill targeting international petroleum giants that will jeopardize future foreign investment, he cautioned.

The country was already hurting, as militant activity in the Niger Delta forced production off shore. The government instituted an amnesty program last year for fighters willing to change their ways that brought some normality to the region.

The Libyan government has been sounding off lately about boosting the profile of its oil and gas market, but it's questionable whether international companies will ignore the government's missteps in the industry - not to mention the recent lackluster energy finds - and keep injecting money into the North African country.

The head of Libya's National Oil Corp., Shokri Ghanem, has his eye on expanding gas exploration and production in a bid to raise exports to Europe, as well as privatizing oil refineries and the petrochemical sector, according to an interview he gave this month to the Oxford Business Group.

Once an international outcast for its penchant for terrorism and weapons of mass destruction, Libya now wants foreigners to take a greater stake in the oil market and in turn encourage local firms to play a larger role as well.

More than two-dozen companies from around the world are betting on Libya these days, said Ronald Bruce St John, an analyst for Foreign Policy in Focus, a Washington-based think tank. He has served on the international advisory board of the Journal of Libyan Studies and the Atlantic Council Working Group on Libya. The government of Muammar Gaddafi has relied on foreigners to scout for new wells and bolster current production, "if they're ever going to come close" to a target of three million barrels a day, he explained.

The burning question, though, is "how profitable would it be" for an overseas oil concern to forge ahead in the country's hit-or-miss exploration climate, a situation made even more dicey by Tripoli's erratic policy moves, St John told OilPrice.com. Libya's national oil company chief has talked about the need for foreign investment over the last few years, he noted, but this time Ghanem's words follow months of government bungling and less-than-stunning results in the oil and gas fields.

One of last year's biggest shocks was Gaddafi's suggestion to nationalize the country's oil and gas interests, a consideration that seemed to echo the early days of the Libyan revolution when the industry was partially nationalized. These words set the stage for the National Oil Corp. to renegotiate long-term contracts in Libya's favor with major oil companies operating in the country, such as Italy's ENI, the United States' Occidental, PetroCanada, France's Total and Spain's Repsol, St John added.

International investors were also a little unnerved by the Verenex Energy Inc. fiasco, St John added. He said the small Canadian oil exploration player was the only company to make a sizeable discovery - more than two billion barrels of oil - under strict EPSA, phase four, contracts awarded after 2005.

But Libya's interference in negotiations between Verenex and the China National Petroleum Co. over the sale of the Canadian firm's exploration contract drove down Verenex's share price by 30 percent and forced it to sell the contract to Libya at 70 percent of the original offer to China, he said.

Dampening enthusiasm still more, no company under these 2005 agreements has scored big in oil apart from Verenex, St John maintained.

So where does this all leave Libya and its nervous investors today?

A suitcase containing $1 million in shrink-wrapped bills, hand-carried into New York by the former president of Gabon for his daughter to buy a Manhattan apartment. Purchases of a stretch Hummer H2 armored limousine and C-130 Hercules military transport planes for a civil war in Angola. And a shell company named Sweet Pink used to funnel millions of dollars into the United States from Equatorial Guinea. These and other deals and money transfers took place in recent years because of inadequate controls on money laundering at large American banks and unregulated American lawyers, real estate agents and lobbyists, according to a Senate report released late Wednesday, Lynnley Browning reports in The New York Times.

Continue reading: U.S. Report Details Money Laundering

With a bewildering number of offshore jurisdictions out there, how do you find one that can suit a broad range of investment objectives?

What sets the Seychelles apart from the others?

A remote group of Paradise Islands somewhere in the Indian Ocean, at first glance the Seychelles don't appear to break any tax haven stereotypes. Yet with the global economic climate changing, and tax and privacy issues with it, that tax haven stereotype is itself in motion.

Seychelles has the smallest population of any state in Africa, however they hold the distinction of being, per capita, the most highly indebted country in the world according to the World Bank, with total public debt around 122.8% of GDP and ironically Seychelles remains the richest territory in Africa in terms of GDP per capita.

The Seychelles is a totally independent state generating its own income. Because of economic contraction (the economy declined by about 2% in 2004 and 2005 and lost another 1.4% in 2006 according to the IMF) the country was moving downwards in terms of per capita income; however, the economy came roaring back in 2007 growing by 5.3% due in part to the record tourism numbers, but also the booming building and offshore industries which also continue to set records.

In preparation for an article on the growth of Ghana as an African Tax Haven I've been filtering news about the dark continent. Never a shortage of intrigue on this topic, today I noticed an article in the BBC about the passing of French Mercenary Bob Denard. Now here was a man who believed that If you don't like the laws or the law makers of a jurisdiction then you should just take action and over-throw them.

In 1968 Denard and several hundred fighters tried to invade Katanga, in what is now the Democratic Republic of Congo, by bicycle.

His 1995 coup attempt in the Comoros involved arriving with 30 men in inflatable boats.

Source: BBC News