Editor’s Note: December 04, 2018

Africa is the big loser of OPEC’s decline

Qatar on Monday announced that it will leave the Organization of Petroleum Exporting Countries (OPEC) on January 1, 2019.

The move reflects growing discontent among the cartel’s 15 member countries, which has seen its influence on global oil prices wane in recent years.

Sharp increases in US oil production, and the rise of the Russia – Saudi alliance under the ‘Opec Plus’ output reduction deal means non-members are increasingly calling the shots.

Smaller members, like Qatar, are being sidelined – and the big loser is Africa.

Seven of OPEC’s 15 members are from the continent, with Republic of Congo becoming the latest to join in June. 

While they account for a fraction of production – Saudi Arabia alone pumps more oil than Nigeria, Angola and Libya combined – this strength in numbers has raised hopes that the continent can exert more influence within OPEC, and by extension on oil prices.

This is obviously contingent on the organization retaining its clout, which is looking increasingly doubtful. It’s telling for example that non-member Russia unilaterally announced an extension to the output cut deal over the weekend, ahead of an OPEC meeting on Thursday.

Bad news for African producers, which already struggle for influence in global oil markets.

From The Continent

Tanzanian president John Magufuli has said the country intends to avoid taking on loans with stringent conditions, a thinly veiled reference to terms attached to debt from multilateral financial institutions like the IMF. This comes amid worsening relations with donors including the World Bank, and a week after Magufuli praised Chinese aid for its lack of conditionality. More: Africanews

Gabon’s president Ali Bongo has made his first public appearance since being taken ill in Saudi Arabia on October 24th in a video showing him with Morocco’s King Mohammed in Rabat, where he is recovering. His absence has raised concerns about a power vacuum in Gabon, which has been ruled by Bongo’s family for 50 years. More: Reuters

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The Global Perspective

The World Bank has announced $200bn of funding over the next five years to support countries in tackling climate change globally. This comes as thousands of government, business and civil society representatives meet for the latest round of international climate negotiations in Poland. More: World Bank

Democratic Republic of Congo’s state mining company Gécamines has signed a copper and cobalt production sharing deal with China’s Hongkong Excellen Mining Investment, according to a report by Reuters. This comes amid worsening relations with the mining industry over royalty hikes introduced earlier this year. More: Reuters

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