Saudi Arabia & UAE Forge Closer Alliance.
The first meeting of the ‘Saudi-Emirati Coordination Council’ was held this week and will form a key part of an ongoing strategy to consolidate the already close ties between these two nations. Members of the new council include 16 government ministers from both countries and are tasked with enhancing cooperation in the areas of economics, education, politics and defence. In this regard 44 joint-projects, including the establishment of an investment fund for SMEs, have already been identified and are due to be implemented within the next 5 years. "We have a historic opportunity to create an exceptional Arab model of cooperation. Our solidarity and unity protect our interest, strengthen our economies and build a better future for our peoples. We are the two largest Arab economies, forming the two most modern armed forces. The economies of Saudi Arabia and the UAE represent a gross domestic product of one trillion dollars, our joint exports rank fourth globally and amount to US$750 billion, plus AED 150 billion annually invested in infrastructure projects, which generates huge opportunities for bilateral cooperation," Sheikh Mohammed bin Zayed Al Nahyan, was quoted as saying at the meeting by the Khaleej Times newspaper, adding that this new coordination council supports the objectives of the GCC. You can read more details on this strategic development here.
More International Firms Are Cutting Their Ties With Iran.
Despite ongoing efforts by the EU to persuade the US administration to exclude those European firms already active in Iran from any secondary sanctions, the number of companies suspending or reducing their business ties with Tehran continues to grow. The French automotive giant PSA was the latest corporation to make such a move by announcing its withdrawal this week from two joint-venture projects in Iran, as the US prepares to re-impose a comprehensive two-stage sanctions regime on the country in August and November this year. Meanwhile six European energy firms; Total, Eni, Repsol, Hellenic Petroleum, Sepsa and Saras have begun reducing the amount of oil they purchase from Iran according to a recent Reuters article.
Sudan Ends Military Links With North Korea.
Sudan’s Foreign Ministry said in a statement this week that it was cancelling any existing defense contracts with North Korea and preparing to join UN NPT sanctions against Pyongyang. This announcement looks to be tied to efforts by the Sudanese government for their country to be removed from the USA’s ‘state sponsors of terrorism list.’ “Sudan’s government would like to affirm that its defence production sector has canceled all contracts with North Korea, and ended all relations, direct or through a third party,” the foreign ministry’s statement read.
Egypt Prepares To Launch Sovereign Wealth Fund.
Egypt’s government has released more details over its decision to create the country’s first sovereign wealth fund and which will be launched later this year in order to raise additional revenues and better administer underused state assets. A bill approving the establishment of the fund was passed in May, and the government hopes to kick start it with up to EGP200 bio in initial capital, and sourced via the privatization of certain state-owned firms . The government will own the fund outright, but the private sector will reportedly be permitted to purchase controlling stakes in related sub-funds and affiliated companies. It will first begin investing in Egypt’s agricultural, manufacturing, pharmaceutical and tourism sectors. "Egypt has a wealth of assets and companies that have not been properly used and mismanaged over many years, and we are ready to start a real partnership with the private sector to render them productive and more advanced," the Planning Minister, Hala El Saeed, was quoted as saying by Bloomberg yesterday.
FDI Flows Into Africa Dropped By 21% In 2017 – UNCTAD.
UNCTAD’s latest world investment report highlighted a 23% drop in global FDI flows last year, with Africa, the Caribbean and Latin America experiencing the greatest falls. Total FDI worldwide slipped to US$1.43 trillion in 2017 from US$1.87 trillion the previous year. In Africa total FDI flows fell 21% to US$42 bio a 10-year low, and this drop was most apparent in those countries that remain reliant on commodities to drive their respective economies. Even East Africa, which is still the fastest growing region on the continent, experienced a 3% drop in overall FDI inflows to US$7.6 bio, but that was better than West Africa which saw its total FDI received decline by 22% to US$5.7 bio. Egypt attracted the largest FDI inflows in 2017 (US$7.4 bio) although this was still 8.80% down on 2016. The best performing single country in percentage terms was Kenya, whose FDI inflows jumped by 71% to US$672 mio last year.
Five Banks In Saudi Arabia Approved As Primary Dealers.
Saudi Arabia’s Finance Ministry yesterday appointed 5 local banks as primary dealers in local government securities as a part of its effort to develop a more actively traded domestic debt market. The five primary dealers are; Alinma Bank, Bank al-Jazira, NCB, Samba Financial Group and Saudi British Bank.
Morocco To Conduct First Islamic Bond Issuance.
Morocco’s Finance Minister, Mohamed Boussaid, said yesterday that his country was preparing to issue its first ever sovereign SUKUK within the next few weeks. The issue will be denominated in local currency and the amount is expected to be MAD 1 bio.
SNC-Lavalin Wins US$1.9 Bio Contract In Oman.
Canada’s SNC-Lavalin Group said yesterday that it had been awarded a US$1.9 bio contract to design and build a chemical plant outside Muscat in Oman.
Algeria Looks To Amend Energy Law.
Algeria’s government has reportedly approached a US law firm and other international consultancies to help it construct a new energy law in an effort to reduce red tape and attract fresh foreign investment into its oil and gas sector.
Etihad Rail Project Expands.
Construction on Stages 2 and 3 of the Emirates Railway network is reportedly soon to be underway, with 600km of rail set to be added to the current 264km long network by 2024.
Did you know that despite being one of the driest and hottest places on earth, the Sahara Desert is home to an estimated 500 species of plants and around 70 species of animals ?
Glenn Wepener, Executive Director & Geopolitical Analyst Middle East & Africa
First Abu Dhabi Bank
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