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Africa Needs to Develop Auto Sector Strategy – Nemeth

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Nemeth and Buhari

The Chairman of African Association of Automotive Manufacturers (AAAM), Mr. Jeff Nemeth has said that Africa needs to have deliberate policies and systems to grow its auto sector.

AAAM was inaugurated on November 25, 2015 by founding members BMW, Ford, General Motors, Nissan, Toyota and Volkswagen, focusing on key markets of the African Continent.

Jeff Nemeth said, “The aim of the African Association of Automotive Manufacturers is to unlock the economic potential of the African continent by promoting a policy environment that is conducive to the development of the automotive sector.”

He said, “As the African continent becomes increasingly important within the global economy, it is crucial that we develop an auto sector strategy backed up by incremental investments in infrastructure, skills development and in-market localisation programmes.”

Nemeth, who is the President and CEO of Ford Motor Company Sub-Saharan Africa Region, stated this in his brief speech at the launch of the Ranger 2.2 Automatic drive in George, South Africa, recently.

According to him, “This (auto sector strategy) will make new vehicles more affordable, boost the industrialisation of the economy and lead to the growth of middle income households, which will be the main driver for new vehicle sales.”

He said, “Outside of South Africa, which has a well-developed world-class automotive industry, Nigeria is recognised as a strategic market over the long term due to its demographics.

Quoting available statistics, he said, “Although Nigeria is recognised as Africa’s largest economy, the automotive sector is relatively small, with an estimated 44 vehicles per 1,000 inhabitants, according to Deloitte Africa’s Automotive Insights, published in April 2016.

“This is far below the global average of 180 vehicles per 1 000 inhabitants, and lower than other developing regions such as Latin America (176) and Asia, Oceania and the Middle East (79),” the report indicates.

“One of the biggest challenges we face in Africa is the lack of reliable data on the number of new and second-hand vehicles sold on the continent, as very few countries have formal reporting or legislative structures to monitor the automotive sector,” Nemeth adds. “This is exacerbated by the large number of second-hand imports, with only a small proportion of new cars sold due to the high import duties and lack of affordable financing options.”

He said AAAM’s mandate, thus, is to engage with government, industry bodies and representatives from the motor sector to provide advice on opportunities to formalise, develop and grow all aspects of the local automotive industry.

This, he said includes promoting an investor-friendly regulatory framework that would support the development and implementation of policies to establish a viable automotive manufacturing industry on the continent that includes both assemblers and suppliers.

Nemeth said, “To unlock this market potential will require greater government and private sector partnerships to develop a formal legislative environment that is conducive to longer-term growth. It needs a more robust automotive strategy that promotes a sustainable and stable environment in support of local manufacturing operations.”

A delegation from AAAM, led by Jeff Nemeth, recently, visited Nigeria to engage with government and industry leaders.

The programme included high-level discussions with President Muhammadu Buhari, along with government ministers and representatives from Nigeria’s National Automotive Design and Development Council (NADDC) and the National Automotive Manufacturers’ Association (NAMA).

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

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Oil

The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

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Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020

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Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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