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Wednesday, 23rd June 2021
8:04:34pm

Economy

Articles related to economy

Angola's public debt contracted by the government on the external market is sustainable, a finance official of the country said on Wednesday.

During the launch of the Citizen's Budget 2021, Patricio Neto, director of the department of studies and international relations of Angola's Finance Ministry, said the latest assessments made so far by the International Monetary Fund indicated that the country should recover from its current economic recession.

The official added the government plans to better inform the public about how it intends to spend its revenue on improving health and education and supporting Angolan families.

The Citizen's Budget 2021 is a document prepared in partnership with the United Nations Children's Emergency Fund to enable the public to better understand the origins of revenues and expenses made. 

-Xinhua

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Sub-Saharan Africa’s economy is expected to increase by 3.4 percent in 2021, recovering from 1.9 percent contraction witnessed in 2020, the International Monetary Fund (IMF) said on Thursday.

According to the latest report titled “Regional Economic Outlook for Sub-Saharan Africa,” the region’s growth will be supported by improved exports and commodity prices, along with a recovery in both private consumption and investment.

The findings show that per capita output in the region is not expected to return to 2019 levels until after 2022 and in many countries, per capita incomes will not return to pre-crisis levels before 2025.

Abebe Aemro Selassie, director of the IMF’s African Department, said that the region is continuing to grapple with unprecedented health and economic crisis.

“Since our last assessment of the regional economic outlook in October 2020, the region has confronted a second pandemic wave, which outpaced the scale and speed of the first. And many countries continue to face or are bracing for further waves, particularly as access to vaccines remains scant,” Selassie added.

He observed that many Sub-Saharan African countries are struggling to vaccinate essential frontline workers.

CGTN

Angola can expect interest from Gemcorp Capital LLP, which is already invested in the nation’s energy sector, when it offers for sale a potential 30% stake in oil company Sonangol EP. 

Under President Joao Lourenco, one of Africa’s biggest oil producers has implemented reforms in recent years as part of an effort to draw investment and mitigate a decline in output. The process is at an early stage, but Sonangol has estimated the value of the stake it plans to sell at about $6.4 billion, according to board member Baltazar Miguel. 

“We’ll have a look at the right moment,” after the government decides on a process to move forward, Parvoleta Shtereva, head of investments at London-based Gemcorp, said in an interview. The private-equity firm is already in a joint venture with Sonangol to build Angola’s Cabinda refinery, as well as being a lender to the government. 

Angola’s economy is dependent on an oil sector which accounts for one-third of GDP and over 90% of exports, according to the World Bank. While volatile crude prices have demonstrated the nation’s vulnerability, it’s still largely focused on drawing investment into its industry, which is suffering a long decline.

“Diversification is needed, the investment is needed, but you would need security of energy supply for pretty much every industrial process,” said Shtereva, who considers the nation’s reforms and efforts to be generally underestimated. The Cabinda plant is expected to start operating next year, utilizing local crude and reducing fuel imports.

China Debt

Angola also leads sub-Saharan African countries in borrowings from China, most of which is in the form of resource-backed loans. That could add a degree of complexity to Sonangol’s stake sale, which is targeted for the end of the year or early 2021, Finance Minister Vera Daves de Sousa said in November

“Any valuation of the company needs to take into account Angola’s depleting oil fields and high costs of production, as well as Sonangol’s opaque pre-export finance contracts,” said Robert Besseling, an analyst at London-based Pangea-Risk. “A sale of non-core, non-oil assets will attract some interest from local private investors in Angola, but a privatization of core oil assets will mostly be shunned by international investors.”

-Bloomberg

The Zimbabwean government is mobilising additional funds to undertake an assessment on possible sites for wind farms after initial bids for the project markedly exceeded the budget earmarked for the project, according to Energy and Power Development Minister Zhemu Soda.

In 2017, the Zimbabwe Energy Regulatory Authority (ZERA) invited bids from interested contractors to carry out a feasibility study on potential sites where wind power stations could be established.

But the project was put on hold in 2018 as prices quoted by bidders far exceeded the budget.

The exercise was meant to create an accurate knowledge base of the wind resource available in Zimbabwe through measurement and analysis to help the country plan for renewable energy projects.

The intention was to measure wind speed and direction at these sites and remotely collect data for 24 months at a hub height of 100 meters.

The data and information generated were expected to be used in designing large-scale wind power projects, off-grid or mini-grid electric plants, use for water pumping and climate research.

Minister Soda said Government intends to generate 100 MW from wind power by 2025.

-EV Winds

Angola is seeking to increase the share of its population with access to electricity.

France and the the World Bnak have underwritten 344 million euros to help connect the provinces of Benguela, Huambo, Huila and Luanda to the national grid.

The southern African country is looking to create a 60% electricity access rate by 2025. 

The beneficiaries of the project include households, industries, businesses and small to medium sized enterprises in Angola, with the aim of increasing access to cheaper, more reliable and sustainable electricity.

Constraints in the supply of electricity and piped water are often pointed out by private investors as the main barriers to Angola's industrialization goals.

"Currently in Angola, only one third of the population has access to electricity under good conditions. The objective is, firstly, the modernisation and extension of the electricity network in the four biggest provinces of Angola, but also to work on improving the performance of the public companies in the sector, the three public companies in the production, transport and distribution sector. We are going to create a project management unit at the Ministry of Water and Energy that will supervise the technical issues in the three public companies in the sector to ensure that the project progresses under good conditions and that the financial means are well used," said Louis Antoine Souchet, head of the French Development Agency in Angola.

Under the plan, the government will create three separate agencies responsible for generation, transmission and distribution. The move is aimed at eliminating waste and to achieve efficiency.

The transmission lines are expected to move from the current 2850 kilometers to 15,600 kilometers by 2025 on lines of 60 kilovolts, 220 kilovolts and 400 kilovolts.

Paris is also supporting Luanda to transform its rural areas by funding projects delivering piped water to small towns. Angola is urbanizing fast but its towns are not properly planned and lack social amenities.

In addition to the energy sector, French cooperation supports projects in Angola linked to rural development and the extension of the urban water network that have already benefited approximately 900,000 inhabitants of the most disadvantaged neighbourhoods.

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