4 African Business May 2024

Business Intelligence News

New gold-backed currency ‘ZiG’ replaces Zimbabwean dollar

Libya has claimed the top spot as Africa’s leading oil producer, surpassing Nigeria for the first time, according to the Organization of the Petroleum Exporting Countries (OPEC). Undermined by an economic crisis, Nigeria has seen its production fall by 6.8% in one month. Despite ongoing political turmoil, in March Libya produced 1.24m barrels per day, edging ahead of Nigeria’s 1.2m barrels per day output. This shift underscores Libya’s resurgence in the oil sector despite its own internal challenges, while Nigeria is struggling to meet its government’s target of 1.7m barrels per day by 2024. The decline in oil production in Nigeria can be mainly attributed to theft, pipeline vandalism, and inadequate investment.

Zimbabwe on 5 April launched a new goldbacked currency named the “ZiG” (Zimbabwe Gold) in an effort to stabilise its volatile economy. It replaces the struggling Zimbabwean dollar, which had depreciated by three-quarters this year, and banknotes come in denominations ranging from 1 to 200 ZiG. The central bank aims to ensure the currency’s stability by backing it with gold or foreign exchange reser ves, aiming to avoid repeated hyperinflation crises. The ZiG marks Zimbabwe’s sixth attempt since 2008 to establish a new currency and reduce its dependence on the US dollar, which is still popular with many of the population and remains legal tender.

Libya overtakes Nigeria as Africa’s top oil producer

Nigeria to get $2.25bn World Bank loan and issue ‘diaspora bonds’

Nigeria is poised to secure a $2.25bn World Bank loan, with an expected board approval in June, as announced after the IMF/ World Bank spring meetings in Washington, D.C. The loan would include $1.5bn for development policy financing and $750m for programme-for-results financing – which releases funds when agreed results are achieved and verified. Additionally, the country plans to issue diaspora bonds later this year to bolster foreign exchange reserves, according to finance minister Wale Edun. “It is for about 40 years, 10 years moratorium and about 1% interest”, Edun said. “We expect that the Board of the World Bank will meet in June 2024 to consider the final approval of this financing package.”

Poisoning claimants granted permission to take on Anglo-American

The Johannesburg High Court has granted permission for claimants who allege lead poisoning caused by a lead mining operation in Kabwe, Zambia, to appeal an earlier judgment that dismissed certification of their class action against mining company Anglo American South Africa. Justice Leonie Wendell found that there were “compelling reasons to grant the appeal” against her earlier judgment, as “class action law is still being developed in South Africa”, and that “there are current matters of law of public importance which directly implicate constitutional rights.” The claim will go before the Supreme Court of Appeal of South Africa later this year. Anglo American said it will oppose any appeal relating to the “misconceived Kabwe claim”. Anglo American ran Kabwe from 1925 to 1974.

Below: Oil storage at Hariqa port in Tobruk, Libya. Below: Oil storage at H port in Tobruk, Libya. Below: Oil storage at H