NBAD Middle East & African Monitor - 20 January 2017
Saudi Arabia Is “The Greatest Story Never Told” – Dow Chemical CEO
During his speech yesterday at the World Economic Forum in Switzerland, Saudi Arabia’s Energy Minister, Khalid Al Falih, outlined how his country’s “audacious” Vision 2030 plan not only aims to diversify the economy away from its heavy reliance on oil by developing new industries, slashing red-tape and introducing business friendly reforms to help significantly boost the participation of the private sector, but would also focus on “soft factors” which will improve its citizens lives. “We are going to turn Saudi Arabia into a softer place, a more pleasant place to live. We are going to strive to make people happy within the Kingdom,” Al Falih stated adding that the government wanted to promote universal tolerance within Saudi society and create more job opportunities for the youth, especially women. Meanwhile the Arab News website quotes the CEO of Dow Chemical, Andrew Liveris, as saying that he has already begun to see a real alignment of the government and the private sector in the Kingdom stating; “This is a business-orientated government, transparency is as good as anywhere we operate in, including the US. I think Saudi Arabia is the greatest story never told, and I think we’ve got to tell it.” Apart from his current role at Dow, Liveris was recently selected to head a US manufacturing council by President-elect Trump.
Turkey’s Parliament Looks Set To Pass Controversial Reform Bill
An 18-article constitutional reform bill which could see the transfer of executive powers into the hands of the Turkey’s President, looks likely to be passed by the country’s parliament tonight, despite ongoing and vocal opposition by a number of MPs, as the AKP party and its allies have enough votes to achieve a simple majority. However in order for the bill to be ratified its proposals would then need to be put to a national referendum in either March or April. Some of the controversial proposals include; abolishing the office of the Prime Minister and thus granting the President the power to appoint vice-presidents and ministers, lowering the age limit of candidate MPs to from 25 years to 18, and while the President would only be allowed to serve two 5-year terms, if the bill is implemented, the reforms affecting his office are reportedly only be due to come into effect in 2019 following the next Presidential elections, meaning Erdogan could well remain in office until 2029.
UN & EU Reaffirm Support For Nuclear Agreement With Iran
Earlier this week officials from both the UN and the EU underlined their support for the P5+1 agreement and the ongoing implementation of the ‘Joint Comprehensive Plan of Action.’ “The United Nations shall continue to support the implementation of the JCPOA, in accordance with Resolution 2231 and other relevant decisions of the Security Council,” a UN spokesperson stated on Monday adding that the 1st anniversary of the accord was “a significant milestone in the historic agreement”. His comments were backed up by the EU’s Foreign Affairs representative, Federica Mogherini, who said; ““The JCPOA is a multilateral endeavor, achieved through diplomatic means and endorsed by a United Nations Security Council resolution. It was born out of the efforts of Britain, France, Germany, Russia, China, the United States and Iran, but it now belongs to the entire international community. The JCPOA provides benefits for all and creates opportunities for improved regional cooperation that should be seized by all. The full and effective implementation throughout the entire lifetime of the JCPOA remains essential and the EU has clearly affirmed its resolute commitment to this objective. We will continue to work hand in hand with all those willing to contribute to its full implementation and in achieving the objectives which brought us together.”
US Stealth Bombers Hit Targets In Libya
A Pentagon spokesperson announced last night that a pair of USAF B-2 stealth bombers and a number of MQ-9 drones attacked two ‘Daesh’ training camps close to the city of Sirte in Libya on Wednesday, killing more than 80 militants including some who had allegedly been preparing to undertake terror operations in Europe. “These were critically important strikes for our campaign and a clear example of our enduring commitment to destroy ISIL’s cancer not only in Iraq and Syria, but everywhere it emerges,” the spokesman said, adding that the US had coordinated the strikes with officials of Libya’s Government of National Accord in Tripoli.
Nigerian Senators Concerned Over Gap Between Official & Unofficial Exchange Rates
Nigerian MPs this week approved the government’s USD/NGN exchange rate of 305.00 for this year’s budget, however a number of senators expressed their concern over the growing disparity between the official market FX rate and the parallel one where the Naira was last reportedly changing hands at just under 500 to 1 US dollar. "We are worried by the huge gap, the Central Bank needs to do something about it and stabilise the currency. We must find a way of bridging the gap and restore investor confidence," the Deputy Senate President, Ike Ekweremadu was quoted by VOA as saying. His views were supported by an opposition member, Ben Bruce, who stated that "The pegging of the exchange rate at NGN 305 to one US dollar is not realistic, we have to allow the currency to float and attain a realistic exchange rate." Earlier this week the country’s Vice President, Yemi Osinbajo, admitted that the gap needed to be closed and that the two rates would be “unified” this year although he did not suggest any time frame.
Egyptian Stocks Fall On Talk Of Possible Stamp Duties
Egypt’s main stock index dropped over 3.50% yesterday following talk that the government was considering reintroducing a stamp duty on share transactions. There has been no official confirmation of this story, first suggested in a Reuters article which quoted two unnamed MOF sources as saying; "We are studying temporarily re-imposing a stamp duty on stock market transactions pending the return to a capital gains tax, which has been postponed since May 2015. Now is the right time to impose a tax on the bourse, as it is in its best possible state. The tax rate will be much higher than it was previously, which was 1 EGP per 1,000. We are now looking at the volumes and values of stock market transactions to make it fair." Egypt’s Investment Council last year extended the temporary suspension of the capital gains tax for a further three years, in an attempt to attract investors to the country.
Egypt’s Eurobond Roadshow Begins – Kuwait Prepares Its Own Debut US$ Issue
Egypt’s Eurobond issue is likely to take place as soon as its investor roadshow ends next week and could be as large as US$2.5 bio. Tenor wise 5, 10 and 30 years will be on offer with officials hopeful they will be able to attract investors in the longer end. The country is also reportedly considering issuing an US$ denominated Islamic bond this year although a decision on the timing and size of such has not yet been decided. Meanwhile Kuwait is reportedly close to finalising preparations for its first ever US dollar bond issue which is expected to be in the region of US$10 bio.
Airbus Receives US$8.6 Bio Order From Saudi Arabia
Airbus says it has signed a US$8.6 bio agreement to supply the Saudi Arabian based Flynas airline with 80 passenger aircraft.
Did you know that over 25% of all languages are spoken only in Africa, and that there are over 2,000 recognised languages spoken on the continent?
Glenn Wepener, Executive Director & Geopolitical Analyst Middle East & Africa
National Bank of Abu Dhabi
Tel: +971 2 6110 127
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