NBAD Middle East & African Monitor - 16 January 2017
There Will Be “No Renegotiation” Of Nuclear Deal – Iran
Iran’s Deputy Foreign Minister, Abbas Araghchi, yesterday said that his country would not accept any attempt by the incoming US administration to re-negotiate the P5+1 agreement which was signed back in 2015, as the world awaits the inauguration of President Trump. "Our nuclear negotiations with the Americans are finalized and we have no other political talks with them. In our view, everything is over," Araghchi said. His statement follows similar comments on the issue by Ayatollah Ali Khamenei who warned recently that "If they tear it up, we will burn it.” During his election campaign Trump severely criticized the accord, calling it “the worst deal ever,” but as with every other major policy issue his team continues to send our mixed messages in terms of what strategies will be actively pursued once he becomes President. Trump’s pick to be his Chief of Staff at the White House, Reince Priebus, underlined this lack of clarity yesterday when commenting on the Iran agreement and saying; "I think it’s on life support. I’ll put it that way. But I’m not here to declare one way or another ultimately where this is going to go."
Chinese Dependency On Oil Imports Set To Rise
According to recent analysis undertaken by the Independent Chemical Information Service, China’s dependence on the import of foreign crude in order to meet its overall demand could rise to 70% by 2020 compared to 64% last year. The ICIS says the main reason behind this forecast is an ongoing a drop in domestic production, which itself is caused primarily by the fact that most of the country’s active fields are aging and thus becoming more expensive to operate. Meanwhile the state-owned China National Petroleum Corporation has said it expects the country’s demand for oil to rise by 3.40% this year to 11.88 mio bpd.
US May Lift Some Sanctions On Sudan
President Obama signed an executive order late last week which could see a number of US trade and energy related sanctions on Sudan lifted in 6 months’ time. However his administration has also warned that the proposed amendments will only take effect if the Sudanese government continues to take “positive steps” especially in the area of resolving regional conflicts, combatting terrorism and improving the humanitarian situation in Sudan. Full details of the sanctions set to be lifted are outlined in this statement issued by the US Treasury.
Moody’s Assigns “Stable Outlook” To North African States
In its latest review the Moody’s ratings agency has assigned a stable outlook to Egypt, Morocco and Tunisia, on the back of what it sees as the continued momentum of economic reform led growth despite each country’s social, political and security challenges. "Improving growth momentum and access to external funding sources under IMF programs in 4 of 5 countries in the Levant and North Africa supports our stable credit outlook for the region. Moreover, the lower for longer energy price environment has provided further support to the region's gradual external rebalancing and has helped to offset subdued tourism, foreign direct investment, and reduced financial transfers from GCC countries,” a senior official from the agency was quoted as saying.
Egypt Optimistic On Attracting Foreign Investors
Egypt’s Finance Minister, Amr El Garhy, said yesterday that he believes total foreign investment in Egyptian bills and bonds could reach US$10 bio within a year as the government’s ongoing economic reform program helps to restore confidence in the country. "Getting to US$10 or US$11 billion will happen gradually and with reassurance that the measures of the economic reform program are happening gradually and in a sound manner. The more people see that we are achieving good results in our reform program, the more they will be interested in investing so it is possible, within a year, to reach those levels,” El Garhy was quoted by Reuters as saying. The total amount of foreign investment in Egyptian instruments is currently estimated to be around US$1 bio.
USD/NGN Approaches 500.00 In The Parallel Market
The Naira was reportedly changing hands at 497.00 in the unofficial market last Friday due to the ongoing shortage of hard currency and despite a recent attempt by the association of bureau de change operators to narrow the gap between the official rate of 315.00 and the parallel rate. Meanwhile the Central Bank chief, Godwin Emefiele, was quoted last Thursday saying that the bank was continuing to look at ways to boost FX liquidity and restore investor confidence, adding however that there were no plans to devalue the local currency again.
Samsung Says US$1.3 Bio Project In Saudi Arabia Cancelled
South Korea’s Samsung Engineering has announced that a US$1.3 bio request to build a power and desalination plant in Saudi Arabia was cancelled by the ordering company on Saturday, following proposed changes to the original contract.
Inflation In Angola Continues To Rise
Inflation in Angola rose to 41.95% y/y in December compared to 41.15% in November. Despite this the Central Bank decided to keep its benchmark lending rate unchanged at 16.00% at its most recent MPC meeting. This year is set to be an extremely important one for Angola as the nation prepares for the appointment of its first new President in over 37 years.
Did you know that there are only around 880 mountain gorillas left in the world and half of them are found in Uganda?
Glenn Wepener, Executive Director & Geopolitical Analyst Middle East & Africa
National Bank of Abu Dhabi
Tel: +971 2 6110 127
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