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OPEC: Dangote’s 650,000bpd Facility to Account for More Than Half of Africa’s Additional Refining

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The Organisation of Petroleum Exporting Countries (OPEC) has said the much-awaited Dangote Refinery’s refining capacity would account for more than half of Africa’s expected total additional distillations in the medium term.

The international oil cartel which stated this in its latest World Oil Outlook (WOO), disclosed that the addition was estimated at 1.2 million barrels per day in the medium term, stressing that the refinery which has a capacity of 650, 000 barrels per day, would take the lion’s share.

Apart from the asset owned by Africa’s richest man, also expected to begin production in the near future are that 100 tb/d refinery to be built in Soyo, Angola, the 110 tb/d Hassi Messaoud refinery expansion in Algeria, the 160 tb/d Midor refinery expansion in Egypt, the 10 tb/d Brahms modular refinery in Guinea and the 110 tb/d Pointe Noire II refinery in the Republic of Congo.

In addition, Ghana and Senegal are also expected to commission new units, most of which are modular, to address fast-growing demand in Africa.

“In Africa, medium-term distillation additions are estimated at around 1.2 mb/d. More than a half of this number is accounted for by Nigeria’s Dangote refinery (650 tb/d).

“According to recent reports, its commissioning is likely to be delayed from 2022 to 2023, partly due to financial issues. Furthermore, Nigeria is likely to see the addition of a number of small modular refineries with capacities of up to 20 tb/d over the medium-term, thus adding much needed capacity in the country,” OPEC stressed.

“Elsewhere, a new 100 tb/d refinery is likely to be built in Soyo, Angola in 2025. In North Africa, a modest expansion is expected in Algeria (Hassi Messaoud) and Egypt (Midor and Assiut).

“Finally, several sub-Saharan countries, including Ghana, Guinea, Senegal and the Republic of the Congo are expected to commission new units, most of which are modular. With these expansions, the region will look to address fast growing demand, but it could also potentially reduce product imports from other regions,” OPEC noted.

In addition to the Dangote refinery, rehabilitation is going on in Warri and Port Harcourt and work on the Kaduna refinery will start soon, with the report stating that if the refurbishments succeed, Africa could expect even higher outputs and utilisation rates in the long term.

“These additions could lead to refinery throughputs increase from 1.8 mb/d in 2021 to 4.8 mb/d in 2045, based on strong demand growth and refining capacity additions in both the medium- and long-term,” it added.

OPEC acknowledged that the downstream market has tightened significantly over the last year, driven by strong oil demand growth, a decline in available refining capacity and geopolitical uncertainties.

During the medium-term (2022-2027) it noted that around 7.3 mb/d of the Middle East (1.6 mb/d) and Africa (1.2 mb/d).

“Refining capacity additions in other regions are minor and mostly limited to the expansion of existing refineries,” it added.

In the long-term, (2022-2045) OPEC stated that global refining additions are projected at 15.5 mb/d, with a significant slowdown in the rate of additions towards the end of the projection period.

“Almost 90 per cent of additions are located in the Asia-Pacific, the Middle East and Africa,” it said.

The medium-term balance, it stressed, points to a tightening downstream market relative to 2021, with the estimated deficit of potential refining capacity relative to required refining capacity set to peak around 2.7 mb/d in 2023 and 2024.

“Due to the demand growth slowdown and continuous capacity additions, the deficit is set to decline to around 1.4 mb/d in 2027,” the report said.

The Dangote integrated refinery and petrochemical complex in the Lekki Free Zone, near Lagos, Nigeria, is expected to be the world’s biggest single-train facility, upon commissioning.

Estimated to cost about $20 billion, the refinery will produce Euro-V quality petrol and diesel, as well as jet fuel and polypropylene and will likely generate 4,000 direct and 145,000 indirect jobs.

The new refinery will double Nigeria’s refining capacity and help in meeting the increasing demand for fuels, while providing cost and foreign exchange savings. It is estimated to have an annual refining capacity of 10.4 million tonnes of petrol.

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CBC ORGANISE 3RD EDITION OF CAMEROON BUSINESS FORUM

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The Commercial Bank of Cameroon brought together economic actors the public and private sectors customers and non-customers alike, start-ups and others, to concert at their third edition of Cameroon Business Forum that held (at the Krystal Palace Hotel) in Douala on Thursday November 3 with the theme “financing agro-industry…” and other subjects and how it can be made the flagship project of reducing dependence on imported goods and then made to chart a resilient economic growth for the future of this country.

Following their motto of “Lets build the future”, the bank expressed their appreciation for the impressive turn-out of the participants and that the forum was, in a wider sense, a place to exchange views, learn from each other and equally create partnerships and find solutions to the common goals of overcoming the challenges faced brought about by the HIV-AIDS, COVID-19 pandemics, and the inflation in the market place brought about by the Russian-Ukraine invasion, and to reduce poverty.

There were a whole series of challenges and suggestions that were discussed, some of which were the question of the acquisition of land to invest in second-generation agriculture which was a daunting task to overcome, the one-man show in the DNA of Cameroonians instead of forming cooperatives which has been a success-story in other parts of the world and equally on the continent, the scarcity of financing and guarantees on investments, bureaucracy, governance and the lack of adequate state participation in its role as facilitator, infrastructural problems, lack of transparency and a host of others. Participants would want to meet with representatives of the related ministries in the fourth edition for these reasons.

The mounting inflation and because no one knows how long it will it take, the continued rise in interest rates making financing more expensive to the investor and more, made participants tilt towards the idea of substituting imported inputs for local products or import substitution, among others. Niko Milianitis of the European Investment Bank (EIB) of the EU said those to assist the import substitution projects are the state multilateral organisations such as the IFAD, FAO, AIDB, EIB, multilateral banks, private foundations, regional banks etc.. Such projects must have sufficient promoter capital, technical expertise, sound managerial capacity, well-developed business plan,

feasibility studies, co-financing, renewable energy, gender and research and development etc.

Import substitution is not only to reduce dependence on imported goods but also to export goods produced to other countries to gain foreign currency reserves so it is expected to create jobs and reduce poverty.

In the closing remarks the General Manager Leandre Djummo said “we must continue to seek solutions to or problems. We also have problems to overcome equally with the Ministry of Finance but we will always continue to seek solutions. And the objectives of this forum have been met.”Text Box: Participants flank the General Manager Leandre Djummo ( 5th from left )

To a senior Consultant Gabriel Eugene Damfeu on the challenges of import substitution, he said as we embrace import substitution we have to look for a corresponding market to export the products. “We are all aware that it is the international market that has the biggest market and we are in the CEMAC Zone, so we have to have the capacity to export, we also have Nigeria as our natural market so producers have to design the plan and the goods to conquer the domestic market. The big return is to invest adequately to have an export capacity. The other problem is to have large production site.. This land problems are usually solved by the state through creations of zones, to have economies of scale or to invest large quantities to reduce cost and meet the challenges of exporting.”

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AFRICAN DEVELOPMENT BANK OFFERS NEW FINANCIAL STIMULUS TO THE CHAMBER OF COMMERCE

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In their visit to the Chamber of Commerce in the economic capital Douala, the African Development Bank has disclosed some internal  reforms in favour of extending adequate financial stimulus to the private sector notably small and medium sized enterprises in Cameroon and the Central African region as a whole.

The Resident Representative of the ADB, Serge N. Guessan, announced that the bank’s consultative visit is also to gather ground-breaking strategies on Cameroon’s future Strategic Document (SD) which is about to expire at this year’s end.

Mr Guessan said emphasis will be laid on their global objectives of structural transformation in order to realize an all inclusive and sustainable economic growth directed especially in the transformation of agriculture or agro-industrialisation, improving human capital and of course governance. The sun of XAF 1.500 billion has been allocated for such development.

He elaborated that the upcoming strategic plan resources will have to be channeled especially in zones which had been largely neglected for years yet have enormous economic potentials such as in the Eastern and Extreme North regions as well as ensuring the regional integration in CEMAC, bearing in mind Cameroon’s potential as the bread basket and economic locomotive of the Central African region.

The ADB financial stimulus plan of eight years (2023-2030) is made up to coincide with Cameroon’s National Development Strategy (SND 30) which is a significant reversal of the bank’s usual five-year development plan.

According to ADB research findings, today in Africa the private sector contributes 70% (percent) of investments and the same on the GDP while it creates 90percent of the workforce or employment.

Honourable Christophe Eken welcomed the ADB stand as a very significant shift in the right direction. He said that agro-industrial projects had always been the centre-piece of the Chamber’s perennial objectives but had always had problems of financing long-term projects when they sought so from commercial banks. The Chamber’s economic actors are multisectoral.

To overcome these challenges, they have learned from the pandemic to promote digitization among its members and other stakeholders. So, a digital platform has been launched whereby they intend to screen the projects of economic operators to insure its authenticity to impact strongly on the developm  ent of communities in Cameroon, before recommending such projects to the ADB, to consider at least 50 percent of their financing, guarantees and the mitigation of risk.

His Royal Highness Nfon Mukete also reiterated their gratefulness to ADB for bringing long term guarantees and stimulus packages whi  ch commercial banks could not

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BANGE  BANK MAKES FIRST ENTRY IN BVMAC

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The National Bank of Equatorial Guinea or BANGE Bank in collaboration and through the Central African Stock Exchange or BVMAC, as increased its share capital base by XAF 10.311.000.000 after  50.000 shares were bought at FCFA 206.220 a share.

The announcement was made at a solemn ceremony at the headquarters of the Central African Stock Exchange (BVMAC) on September 28 in Douala, in the presence of the Governor of the Littoral Region Ivaha Diboua Samuel, the President of the African Development Bank, top Management officials of Bange Bank, the President of APPECAM, and senior Officials of Commercial Banks and BEAC, the COSUMAF President and other dignitaries.

Prior to this event, the Central African Banking Commission, as per COBAC decision no. D 2022/091 reached in an ordinary session held in July 13, 2022 in Douala, had cleared BANGE bank to increase its capital. Bange bank is also entering at a time that the ministry of Finance representing the state,  has decided to mobilize the sun of XAF 200 billion through the central African system to sponsor state projects as one of the objectives of the 2022 finance law. BANGE bank through these activities, will be required to use the lending ECMR 6.25% net 2022-29 when engaged in the capital market of BVMAC in Cameroon.

BANGE bank has as capital about XAF 55.8 billion where the state has a majority share of 64% followed by enterprises at 25% and 11% for others. It employs over 600 workers and is one of the biggest in the region.

This new increase in capital of XAF 10.311 billion is said to be the first stage of adding another XAF 40 billion or so to the said capital.

So the question was thrown to no one else but the Board Chair on what all these monies will be used for. Martin Chrisantos Ebe Mba analysed that the upgrading of human capital is at the onus of the bank’s main concerns, so they intend to create the bank’s academy for that purpose and to consolidate their cash basis and reduce risks.

He went on to say that they are determined to internationalise the presence of the bank in America, France, China and of course in Cameroon. He mentioned the building in Akwa and those in Hilton and T-Bella in Yaoundé and another branch to be created in Kribi as part of their expansion projects.

The other part of the capital would be to supply credit to all classes of businessmen who will qualify to have it, for that is what the name BANGE represents, he concluded.

The representative of the ministry of finance, for his part, appreciated the efforts of all those stakeholders who contributed to realize the occasion.

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