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Middle East & African Monitor – 22 August 2017

  • Nigerian President Marks His Return With Calls For Unity.
  • Operations At Libya’s Largest Oil Field Shutdown Again.
  • Algeria’s Prime Minister Dismissed - Trade Deficit Shrinks.
  • Bahrain Should Seek Other Revenue Sources – IMF.
  • Saudi Arabian Airports Prepare For Privatization.
  • Moodys Downgrades Tunisia Ratings.
  • Egypt To Repay US$4Bio Debt In 2018.
  • KSA Raises SAR 13 Bio Via SUKUK Issue.
  • UAE To Tax Tobacco & Cooldrinks.
  • Note: GCC Clearing Over The EID Holiday Period.

REGIONAL COMMENTARY

Nigerian President Marks His Return With Calls For Unity.
After spending 3 months in London for treatment on an undisclosed illness, President Buhari finally returned to Nigeria this past weekend but faces a growing number of economic and political challenges. In a televised address the President made no mention of his health but focused instead on criticizing growing calls for secession, particularly those pushing for an independent Biafra, “I was distressed to notice that some of the comments, especially in the social media, have crossed our national red lines by daring to question our collective existence as a nation. This is a step too far, we shall not allow irresponsible elements to start trouble. This is not to deny that there are legitimate concerns, every group has a grievance, but the beauty and attraction of a federation is that it allows different groups to air their grievances and work out a mode of co-existence,” he also discussed the militant group Boko Haram who have been responsible for the recent increase in attacks on civilian and commercial targets in the north of the country, “We are going to reinforce and reinvigorate the fight against elements of Boko Haram, which are attempting a new series of attacks on soft targets. I am charging the security agencies not to let the successes achieved in the last 18 months be a sign to relax, terrorists and criminals must be fought and destroyed relentlessly so that the majority of us can live in peace and safety.”

Operations At Libya’s Largest Oil Field Shutdown Again.
Sharara, Libya’s largest oilfield has declared another ‘force majeure’ and its operations have been shut down since Sunday after an armed group blockaded the Rayaina pipeline which in turn prevented the loading of crude at the Zawiya oil terminal. Sharara is operated via a joint venture by Libya’s National Oil Company, Repsol, Total, OMV, and Statoil and had only re-opened properly again in December last year after a two year blockade, however its production since has fluctuated widely due to disruptions from regular protests. It came back online in June, after being closed since the end of May, when employees at the plant staged a protest over working conditions and safety related issues. It is not clear yet of the reasons behind this latest disruption, but this event underlines the ongoing risk in trying to predict Libyan oil production.

Algeria’s Prime Minister Dismissed - Trade Deficit Shrinks.
The Algerian President, Abdelaziz Bouteflika, dismissed his Prime Minister, Abdelmajid Tebboune last week after the latter was just 3 months into the role. Tebboune was replaced by the veteran politician, Ahmed Ouyahia, who has served as PM three-times in the past . Meanwhile Algeria’s trade deficit fell by 42% to US$6.17 bio during the first seven months of this year compared to the same period last year. This improvement was driven by a rise in the country’s oil and gas exports, which remains the government’s primary source of revenue (70%), and a small decline in imports.  The government has imposed a series of import restrictions since the fall in energy prices in late 2014.

Bahrain Should Seek Other Revenue Sources – IMF.
The IMF recently completed its latest review of Bahrain and later issued a statement in which it acknowledged an improvement in Bahrain’s economic activity and financial market conditions, and that the current USD/BHD peg remained “appropriate,” but also called on the government to reduce its energy subsides further and explore other non-oil related revenue streams. You can read the entire IMF statement here: http://www.imf.org/en/News/Articles/2017/08/21/pr17331-bahrain-executive-board-concludes-2017-article-iv-consultation

Saudi Arabian Airports Prepare For Privatization.
An official within Saudi Arabia’s Civil Aviation Authority was quoted by the country’s state media outlet and Reuters yesterday saying that the government was planning to transfer ownership of all the Kingdom’s airports to the PIC as part of a drive to privatize them. “Companies will be set up for each airport under Saudi Civil Aviation Holding, a spin-off from the General Authority of Civil Aviation, which will continue to regulate the industry. The process of establishing companies will continue for all airports, and the civil aviation holding company in the future will be 100 percent owned by the Public Investment Fund," the official reportedly stated adding, that a company had already been established for Dammam's main airport, while the expanded King Abdulaziz International Airport in Jeddah will begin operating under the management of Singapore's Changi Airport Group during the second half of next year.

Moodys Downgrades Tunisia Ratings.
Moodys Investors Service yesterday downgraded its long-term issuer rating on Tunisia from Ba3 to B1 and maintained a negative outlook. In a statement the ratings agency said it decision to retain a negative outlook on the country reflected “the risk of a more sustained than anticipated decline in foreign exchange reserves with concomitant depreciation pressures which could fuel adverse public debt dynamics. It also takes into account Tunisia's increasing funding requirements in view of upcoming international bond redemptions starting 2019 amid reduced visibility about access to external funding sources, in addition to rising contingent liability exposures to the public banking sector, to the pension system and with respect to state-owned enterprises.”

Egypt To Repay US$4Bio Debt In 2018.
Egypt’s Central Bank Governor, Tarek Amer, was quoted by Bloomberg as saying yesterday that his country planned to repay between US$4 – 5 bio of its US$13 bio debt maturing next year while the balance would be extended. Meanwhile the CB sold EUR659.9 mio in one year T-Bills yesterday at an average yield of 1.797%

KSA Raises SAR 13 Bio Via SUKUK Issue.
Saudi Arabia raised SAR 13 bio via its latest local currency Islamic bond issuance while overall demand was reportedly around SAR 38 bio. The bond consisted of three tranches, 5Y (SAR 2.1 bio) &Y (SAR 7.7 bio) and 10Y (SAR 3.2 bio).  Official pricing has not yet been disclosed but a Bloomberg report suggested the following ranges:  5Y (2.65-2.75%), 7Y (3.10-3.20%) and 10Y (3.45-3.55%).

UAE To Tax Tobacco & Cooldrinks.
The UAE has finalized a law covering a new excise tax which will  be implemented on tobacco (100%) as well as energy and sugary drinks (50%).  These taxes are due to be introduced during the 4th quarter of this year according to a report by the National newspaper.

Note: GCC Clearing Over The EID Holiday Period.
Although the actual clearing dates over the EID Al Adha holiday period have not officially been announced by the respective central banks yet we suggest you try to avoid any GCC currency maturities between the 31 Aug – 4th Sep 2017.

22-08-2017

AND FINALLY…
Did you know that Camels close their nostrils to keep the sand out of them during a dust storm ? They also use a thin third eyelid to brush away sand that gets into their eyes.

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