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Middle East & African Monitor – 28 June 2017

  • “Qatar Must Change Its Behaviour” – Saudi Foreign Minister.
  • US Warns Syria Over Potential Chemical Weapons Use.
  • Oil Markets’ Obsession With Shale Is Obscuring Supply Risks – RBC
  • Independent Audit Into Mozambique Tuna Scandal Discovers US$700 Mio Hole.
  • GCC Markets Remain Subdued Due To Eid Holidays.
  • Tassili Airlines Places US$300 Mio Boeing Order.
  • DAMAC Wins US$1 Bio Contract In Oman.
  • Zambia’s External Debt Rises.

REGIONAL COMMENTARY

“Qatar Must Change Its Behaviour” – Saudi Foreign Minister.
Saudi Arabia’s Foreign Minister, Adel Al Jubeir, who is currently on an official visit to the US, warned yesterday that unless Doha seriously considered the list of demands put to it by the Kingdom and its allies recently, it risked being isolated indefinitely. "We’ve made our point, we took our steps and it’s up to the Qataris to amend their behaviour. If they don’t they will remain isolated, and if Qatar wants to come back to the GCC fold, it knows what to do. The idea that this is a blockade or a siege is not correct. Qatar’s airports are open, Qatar seaports are open. They just can’t fly over our territory, the idea that we are starving Qataris is not based on facts, they have access to the world, it just costs them a little more, and we said we are prepared to send food and medical supplies. However, the funding of terrorist groups, paying ransom to Shia militias, sending US$300 million to Iraq, most of it ending with Quds forces in Iran, this is not acceptable," Al Jubeir was quoted as saying in an article published by ‘The National’ newspaper, and added in a tweet via his Twitter account that;  “Our demands on Qatar are non-negotiable. It’s now up to Qatar to end its support for extremism and terrorism.”

US Warns Syria Over Potential Chemical Weapons Use.
The US Pentagon has claimed that one of its satellites had this week, observed suspicious activity at the same Syrian Airbase which was reportedly used to launch a Sarin gas attack on the town of Khan Sheikhoun earlier this year. A White House statement on this latest development read; The United States has identified potential preparations for another chemical weapons attack by the Assad regime that would likely result in the mass murder of civilians, including innocent children. The activities are similar to preparations the regime made before its April 4, 2017 chemical weapons attack. As we have previously stated, the United States is in Syria to eliminate the Islamic State of Iraq and Syria. If, however, Mr Assad conducts another mass murder attack using chemical weapons, he and his military will pay a heavy price.” This latest US warning to Damascus was criticized by a Russian government spokesperson yesterday, who was quoted by Reuters as saying; "I am not aware of any information about a threat that chemical weapons can be used. Certainly, we consider such threats to the legitimate leadership of the Syrian Arab Republic unacceptable." Meanwhile the office of recently elected French President, Emmanuel Macron, has said France and the US would act jointly if chemical weapons were used again in Syria.  

Oil Markets’ Obsession With Shale Is Obscuring Supply Risks – RBC.
The head of RBC’s commodity strategy team, Helima Croft, warned in an article published by the Australian Financial Review earlier this week, that crude markets may be "sleepwalking" into a crisis, especially with the ongoing and singular focus on US shale output, which is obscuring growing global geopolitical risks and other fundamental changes. "These things that should be constructive for prices just get dismissed because there's this view that the US can plug any supply problem that might arise, I think that's very naive," Croft was quoted as saying.

Independent Audit Into Mozambique Tuna Scandal Discovers US$700 Mio Hole.
A forensic audit into the accounts of three state-linked companies in Mozambique, recently undertaken by Kroll Associates, has reportedly revealed that more than 35% of US$2 bio in overseas bank loans taken by the Mozambique Tuna Company, Mozambique Assets Management and Proindicus S.A, is still unaccounted for. An FT article quotes a section of the Kroll report suggesting that the three companies listed above, which were all owned by Mozambique’s intelligence agency, had paid US$713m more for fishing boats, naval vessels, radar and other maritime security equipment than an expert evaluation believed they were actually worth. The IMF had demanded an external forensic audit of this specific debt last year, following revelations about the previously hidden loans granted to these companies in 2013 and 2014, and has now issued a statement on the Kroll report saying; "The publication of these documents constitutes an important step towards greater transparency regarding the loans. However, information gaps remain, in particular on the use of the loan proceeds. An IMF staff mission will visit Mozambique soon to discuss the results of the audit with the authorities and possible follow-up actions."

GCC Markets Remain Subdued Due To Eid Holidays.
UAE, Kuwait and Bahrain markets re-opened today after their 3-day Eid break although initial activity is light, and while SAR clearing is back to normal and some bank treasuries there open for trading, most government departments in Saudi Arabia will remain closed until the 9th of July. Meanwhile both the Qatari and Omani markets as well as their relevant institutions are shut until the 2nd of July.

Tassili Airlines Places US$300 Mio Boeing Order.
Algeria’s Tassili Airlines has reportedly placed an order for three Boeing 737-800 passenger aircraft in a deal worth more than US$294 mio.

DAMAC Wins US$1 Bio Contract In Oman.
The UAE based Damac International has been awarded a US$ 1 bio contract to develop Oman’s Sultan Qaboos port into a touristic and lifestyle destination, which will include hotels, residences, as well as a dining and retail outlets.

Tanzania’s C/A Deficit Shrinks.
Tanzania’s trade gap shrunk by 50% during the first quarter of this year to US$1.6 bio from US$3.2 bio in the previous 12 month period. This reduction in the deficit was driven in part by a fall in imports, but also by better tourism revenues and rising gold exports. Tanzania is the continent’s 4th largest gold producer.

Zambia’s External Debt Rises.
Zambia’s Finance Minister, Felix Mutati, has said that the country’s external borrowing position had widened to US$7.2 bio in May compared from US$6.86 bio at the end of 2016.

28-6-2017

AND FINALLY…
Did you know that remains of the largest ever known crocodile were discovered in Kenya ? The 27-foot-long predator named “Crocodylus Thorbjarnarsoni” likely swallowed early humans whole, and lurked in deep pools near the present-day Lake Turkana between two and four million years ago.

Glenn Wepener, Executive Director & Geopolitical Analyst Middle East & Africa
National Bank of Abu Dhabi
MarketInsights&Strategy@nbad.com
Tel: +971 2 6110 127

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