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Africa Accounts for $4.1b Non-oil Export Under AGOA

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  • Africa Accounts for $4.1b Non-oil Export Under AGOA

The United States Government has stated that Nigeria and other African countries accounted for $4.1 billion worth of non-oil trade under the Africa Growth and Opportunity Act (AGOA).

According to the Assistant U.S. Trade Representative for Africa, Florizelle Liser, the scheme has resulted in a four-fold increase, from $1.4 billion in 2001 to $4.1 billion in 2015, in the continent’s non-oil trade with the country.

Worried by the infrastructural deficit impeding trade growth, the U.S. recommended that African countries should focus on infrastructure development, in particular, electricity and transportation, and should build new roads, bridges and railways to link major trade hubs that would improve economies of scale.

Liser added that African governments should also support the ability of commercial banks to modernize and finance small and medium-sized businesses and should strategically identify sectors that could benefit from AGOA and develop them, she said.

In a presentation at the headquarters of the African Export-Import Bank (Afreximbank) during the maiden edition of the Afreximbank Trade and Development Seminar Series, Ms. Liser said that sectors that had benefitted most from AGOA included automobiles, apparel, footwear, prepared fruits and vegetable, nuts and cut flowers.

“AGOA has had success in helping many African countries diversify their export portfolios,” continued Ms. Liser, who added that hundreds of thousands of jobs had been created as a result of the Act.

Noting that Africa currently accounts for only two per cent of U.S. trade, she said that supply-side constraints, including unreliable electricity and transportation, poor ports, lack of transnational highways, and poor access to the internet were among the impediments to trade development on the continent.

Other factors included low intra-Africa trade, which result in low economies of scale, and the difficulties faced by African producers in meeting U.S. agricultural and other standards, she added.

Ms. Liser identified other Africa-focused trade development initiatives by the U.S. to include the Millennium Challenge Corporation, which had set aside $7.9 billion, or 68 per cent of the total compact portfolio, for Africa.

According to her, the Corporation, which, at $3 billion, is the lead contributor to the U.S. Government’s trade capacity building assistance to AGOA-eligible countries, has dedicated 20 of its 33 compacts to African countries.

Other initiatives included Power Africa, the trade-related capacity programme administered under USAID and unveiled by U.S. President Barack Obama in 2013; Trade Africa, the USAID’s initiative to increase internal and regional trade and expand trade and economic ties; and the U.S. Overseas Private Investment Corporation, the government’s development finance institution which mobilizes private capital to address critical development challenges and which provides investors with financing, political risk insurance, and support for private equity investment funds, when commercial funding cannot be obtained elsewhere.

Earlier, Afreximbank President Dr. Benedict Oramah said that the fact that despite the size of the U.S. market and the preferential access granted to African countries for 15 years under AGOA, the continent had remained a marginal player in that market, raised questions about why Africa had been unable to better penetrate the market and about what could be done for it to take full advantage of the opportunity presented by AGOA.

The President noted that a deficit of product diversification had been singled out as a key hindrance to Africa’s access the U.S. market, and announced that Afreximbank, had identified the development of industrial parks and special economic zones as a strategic path to accelerating the industrialization of African economies and diversifying their exports.

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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Oil Rises to $43.76 Despite Falling Oil Demand

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Oil price

Brent Crude Rises to $43.76 Per Barrel on Friday

Oil price extended its gain on Friday despite OPEC and other experts predicting a further decline in demand for the commodity.

The Brent crude oil, against which Nigerian oil is priced, rose from $39.44 per barrel on Tuesday to $43.76 per barrel on Friday before pulling back to $43.42 per barrel.

The oil surged after reports showed that US oil producers were shutting down due to hurricanes and also that crude oil inventories dropped by over 9 million barrels in the week ended September 11, 2020.

The commodity started its bullish run a day after OPEC lowered its demand outlook for the year through the first half of 2021, saying recovery without COVID-19 remained slow.

“Once again, OPEC+ meets against a worrying backdrop of soft global oil prices and an uncertain demand outlook,” Cailin Birch from The Economist Intelligence Unit told CNBC via email on Thursday.

“We maintain our view that Brent crude prices will average just over $42 a barrel in 2020, assuming that OPEC+ partners reconfirm their commitment to output cuts at their September meeting,” Birch said.

Another expert, Tim Bray, a senior portfolio manager at GuideStone Capital Management, through an email said “I do not believe we should expect any material change of course out of the OPEC meeting this week when they review market fundamentals, in part because compliance with previously agreed production cuts has been high,” Tim Bray, senior portfolio manager at GuideStone Capital Management, told CNBC via email.

“It might set the stage for action at future meetings, however,” Bray said.

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Coronavirus: European Investment Bank (EIB) Approves € 12.6bn Financing for Transport, Clean Energy, Urban Development and COVID-19 Resilience

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Outgoing President of the European Central Bank, Mario Draghi and incoming Christine Lagarde.

€ 3.1 billion for COVID-19 public health and business financing; € 3.5 billion for private sector investment and working capital schemes; € 3 billon for clean energy and energy efficiency investment around the world; € 2 billion for Naples-Bari high speed train link largest loan in EIB history.

The European Investment Bank (EIB) today approved € 12.6 billion of new financing for projects across Europe and around the world.

New financing agreed today includes more than € 3.1 billion of COVID-19-related investment to improve public health, strengthen public services and back investment by companies in sectors hit by the pandemic.

Since the start of the COVID-19 crisis, the EIB has approved € 20.1 billion to enable public and private partners around the world to better tackle health, social and economic challenges.

The EIB Board, meeting by video conference, also backed investment in agriculture, water, housing, telecommunications and urban development across Europe, as well as in Africa, Asia and Latin America.

“Fighting climate change and tackling the COVID-19 pandemic must go hand in hand to achieve a green recovery. The EU Bank is working around the world to help mitigate the impact of the pandemic on lives, jobs and businesses; and to ensure that investment focuses on sustainability, innovation, and on reducing the devastating impact of climate change. The 12.6 billion Euros of new EIB financing approved today show how we are working with thousands of local partners to make a long-term difference to people’s lives during these challenging times”, said Werner Hoyer, President of the European Investment Bank.

Largest ever EIB loan to transform travel in southern Italy

Passengers travelling between Rome, Naples and Bari will from 2027 benefit from reduced journey times, a quicker and environmentally friendly alternative to car transport, and improved connections thanks to the largest loan the EIB ever approved.

The EIB board gave the green light for a EUR 2 billion loan to support the construction of the new high-speed train link that will cut journey times by 1 hour and forty minutes between Naples and Bari. More than 2000 jobs will be created during construction and 200 once construction of the high speed line across a European cohesion region is complete.

The new green transport link, part of the Italian government’s “Unlock Italy” decree, will increase the competitiveness of raid transport, reduce carbon emissions and support social and economic development in southern Italy. It is part of the Scandinavia-Mediterranean Trans-European Network (TEN).

€ 3.6 billion to help businesses to better withstand COVID-19 challenges

Ensuring that entrepreneurs and employers can continue to invest and adapt to new challenges posed by COVID-19 is crucial.

Companies in the Baltics, Benelux, Cyprus, France, Italy, Spain, Ukraine, Moldova and Georgia as well as East Africa, Morocco, the Middle East and the Pacific will benefit from new targeted COVID-19 financing initiatives approved by the EIB today.

The new schemes, managed by local financial partners and banking intermediaries, will help reduce economic shocks, unlock new investment and enable targeted financing for sectors most vulnerable to COVID-19 uncertainties.

€ 3 billion for renewable energy and energy transition

Today’s board meeting agreed to support energy investment that will reduce energy use and increase generation of clean energy across Europe and around the world.

€ 1.6 billion will be used to finance small-scale local climate action projects in France, Italy and across the EU, managed by experienced financing partners.

Financing to support construction of new windfarms off the Dutch coast and in Bosnia, improve energy efficiency in Austria and Ukraine, renovate hydropower in Georgia, roll out smart meters in Lithuania and modernise electricity networks in Madeira and Hungary was also approved.

Millions of people across Africa and Latin America will be able to access reliable clean energy for the first time following EIB support for new off-grid solar schemes and energy transition.

€ 2.9 billion to improve urban and national sustainable transport

Rail transport in Italy is set to be transformed by EIB backed investment to upgrade rolling stock on the national network, alongside today’s approval of EUR 2 billion financing for the new high-speed line between Naples and Bari.

The EIB Board also agreed to support new investment to upgrade public transport in Sarajevo and Krakow, and to help improve a key motorway link in Bosnia and Herzegovina.

Improving urban development and social housing

Thousands of families will benefit from new large-scale social housing investment across France and in Germany under new financing programs approved today.

The EIB Board also agreed to support the New Slussen urban development project that will transform of the heart of the Swedish capital Stockholm.

Hospital patients will benefit from EIB support for construction of a new regional hospital in Tournai and approval of a national scheme to improve mental health facilities across Belgium.

A new scheme to support long-term healthcare investment in French regions underserved by medical services was also agreed.

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Crude Oil Rises Despite Demand Concerns as Hurricane Sally Disrupts Further Production

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Oil

Oil Prices Surge as Hurricane Sally Disrupts Oil Production

Oil prices rose on Wednesday despite weak demand after strong hurricane sally threatens to disrupted operations of US oil producers amid a big drop in oil inventories.

Brent crude oil, against which Nigerian crude oil is measured, rose from $39.34 barrel on Tuesday to $41.58 per barrel on Wednesday.

Accordingly, the US West Texas Intermediate crude oil gained 1.8 percent to $38.96 per barrel.

American Petroleum Institute (API), a weekly oil projection report, on Tuesday reported that US crude oil inventories declined by 9.5 million barrels in the week ended September 11, 2020. This, experts at ING Research said if close to the real number due later today, could provide support for global oil prices.

The experts said, “If we see a number similar to the drawdown the API reported overnight, it would likely provide some immediate support to the market.”

This coupled with the fact that with reports that 25 percent of US offshore oil and gas output was halted and export ports were shut as the storm crawled offshore along the US Gulf Coast bolstered oil prices on Wednesday.

Oil prices gained despite OPEC lowering demand for the year, saying weak global recovery amid rising cases of COVID-19 will impact demand for the commodity through the first half of 2021.

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