- African Leaders, Dangote Move to Change Continent’s Economic Narrative
African business and political leaders have expressed optimism of using the Afrochampions Initiative to change the continent’s socio-economic narrative through a consensus on seven key issues ranging from regional and continental integration to global representation.
Designed to promote economic development in Africa, the initiative among other issues, seeks to encourage the emergence of home-grown pan-African companies that will help to transform and integrate the continent through cross-border investments as well as reduce poverty rate.
Some of the target issues the initiative seeks to address include continental and regional integration, structural transformation, job creation and youth development, local content and SME development, taxation, environment, sustainability and governance and global representation.
The initiative, jointly chaired by African’s richest man, Alhaji Aliko Dangote, and former President of South Africa, Thabo Mbeki, called for greater integration of African economies to enable the continent to develop free trade among African Union member nations.
According to the promoters of the initiative, there is a need for Africa to create over 10 million jobs yearly to cater for its growing youth population and to achieve this, opportunities in the regional markets have to be harnessed by home-grown pan-African companies.
Speaking at the unveiling of the initiative, Vice President Yemi Osinbajo, noted that the Continents Free Trade Area Initiative (CFTA), launch of the African passport and free movement of persons showed how the continent intended to grow in regional integration, which also showed how quickly the continent could move.
He said the conference of the African Heads of State in July focused on a lot of those initiatives “and I am convinced that we are on the threshold of seeing a deeper and more integrated African market.’’
The Vice President explained that the move was a strategic priority for the country to enable a single integrated African market deep enough to exploit all the potential in the country.
He added that there was a sense of urgency in the public sector initiative, which the private sector would bring, noting that the administration believed in the Afrochampions initiatives.
“We think that it is the private sector that would do what is required to bring the urgency and the sense of mission to all the plans in the AU.
“We will like to see greater synergy and collaboration in the Africa champions while all the organs of the AU get involved in economic integration issues”.
He said that in the past few years it had become obvious to many African countries that both the momentum and common sense were in favour of the private sector leading the economies of the continent.
He further said the sector was championing the initiative to drive intra-African trade and commerce.
“The role of the public sector is to catalyse the umpire, to incentivise but whether we like it or not the private sector in Africa is already building world class grounds and trading everywhere,’’ he added.
Osinbajo noted that it was obvious that Afican giants had sprang up in manufacturing, banking sector and in telecommunications.
On his part, former President Olusegun Obasanjo expressed appreciation and commendation for the initiative and added that while the initiative had put the private and public sectors together, it needed to integrate the financial institutions.
He thanked the Vice President for attending the inaugural meeting, adding that his presence gave impetus to the partnership.
Obasanjo noted that the inaugural meeting was good and noted that one of the things that had not been done well in Africa was to sustain initiatives.
He mentioned the Lagos Plan of Action, the Abuja treaty, NEPAD as initiatives which had not achieved their purposes before going under.
“We should not allow this one to sleep; we should continue to fan the flame of Afrochampions initiative and may God help Africa,” he added.
Dangote on his part said the Afrochampions initiative is for African businesses to cater to African needs to accelerate development in the continent and create more jobs to tackle unemployment of youths in the continent.
He acknowledged that it is the first time that leaders from Africa’s multinational companies will meet, not to discuss their sector and ad-hoc investment opportunities, but to exchange views on Africa’s transformation and on what contributions they may have.
“This is the first time that we have created venue for regular and action-oriented dialogue with public decision-makers, for the benefit of our continent. And this is the first time that a forum is being create to discuss Africa’s economic relations with the rest of the world and on how we can find a new balance with other regions and foreign players and institutions.
“We do have to change the dynamics in a way that is more favourable to Africa and Africans because as Africa’s biggest multinationals, we owe a duty towards our communities, towards the next generation of young men and women who now want to become Pan-African entrepreneurs”, he added.
Silver Joins Haven Assets That Pullback on Dollar Strength
Silver Pulls Back on Dollar Strength
Silver pulled back on Friday after Donald Trump-led administration announced it was working on a new stimulus package to ease economic burden of the American people.
The United States dollar gained as investors jumped on it to hedge against US-China trade tensions.
Silver that has risen to almost eight years high of $29.84 on Thursday but pulled back after the US government announced its plan on a new stimulus package.
The haven asset, like Gold, pulled back to $27.97 on Friday during the New York trading session.
“While there are no early chart clues to suggest the gold and silver markets are close to major tops, both are now getting short-term overbought, technically, and are due for downside corrections in the uptrends,” Kitco Metals senior analyst Jim Wyckoff said in a note.
“And remember that with the higher volatility and bigger daily price gains seen at present, there will also be bigger downside corrections when they come.”
Gold Pullback on Dollar Strength on Friday
Gold Pauses its Bullish Runon Dollar Strength
Gold pulled back from its record rally on Friday after the US dollar received a boost from the new stimulus.
The world’s safe-haven asset pulled back from $2074 per ounce it traded on Thursday to $2030 on Friday during the New York trading session.
“We’ll see some pullback (in gold) from these levels with USD bottoming for a while and maybe even see some strength in the USD in the near term, which will reverse these gains but not entirely,” said Spencer Campbell, director at SE Asia Consulting Pte Ltd. “People will be looking to re-enter the market on any pullbacks in precious metals as the medium to longer term views are significantly higher.”
Gold rose to an all-time high of $2074 on Thursday after rising over 35 percent on the back of the COVID-19 pandemic. However, economic uncertainties due to the second wave of COVID-19 continues to support gold rally and expected to continue until a concrete solution or vaccine is discovered.
“There are mixed signals that the economy is recovering and some of the signs of recovery are relatively superficial as they show aggregate figures and not how medium and small enterprises continue to suffer,” said Jeffrey Christian, managing partner of CPM Group.
“We have a very long way to go before we see a proper economic recovery.”
Finances of International Oil Companies Suffered in the Second Quarter
Finances of IOCs Plunged Amid COVID-19 Pandemic in the Second Quarter
Global leading oil companies suffered substantial losses in the second quarter, according to their various financial statements published in recent weeks.
On Thursday, Royal Dutch Shell posted $18.9 billion loss in the second quarter of 2020, far below the profit of $3.5 billion posted in the same quarter of 2019.
This, the company attributed to the plunge in global oil prices in 2020 due to the COVID-19 pandemic. Shell warned that oil demand remained uncertain, adding that it had cut its exploration plans for this year from about 77 wells to just 22.
This was after the price of Brent crude oil plunged to $15 per barrel during the peak of COVID-19 pandemic while the price of West Texas Intermediate crude oil dipped to -$37 per barrel, the lowest on record.
Also, the company said it has reduced its capital expenditure for the year from the initial $25 billion to $20 billion amid a plunge in revenue and demand for the commodity.
Similarly, ExxonMobil reported a $1.1 billion loss, its biggest decline on record. The oil company also announced it would be lowing spending by 30 percent in 2020 to about $23 billion.
Among the various oil companies posting negative financial statements for the quarter was Chevron Corporation, the company reported $8.3 billion decline in the second quarter of the year. The lowest ever posted by the oil giant in almost three decades.
Chevron, therefore, warned that the havoc caused by COVID-19 pandemic in the energy sector might continue to weigh on earnings.
“While demand and commodity prices have shown signs of recovery, they are not back to pre-pandemic levels, and financial results may continue to be depressed into the third quarter of 2020,” Chevron’s Chairman and Chief Executive Officer, Michael Wirth, said.
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