Page 5 - AfrOil Week 04 2020

AfrOil COMMENTARY AfrOil
 So far, it has not been successful, as authorities in Tripoli have not been able to release the money because of the LNA’s blockade of export facili- ties, he explained.
Representatives of the GNA and LNA have been discussing proposals for lifting the block- ade, which has the potential to inflict widespread and profound harm on the national economy, he reported. “Acting illegally by blocking Libyan oil production will just lead to the further impov- erishment of the Libyan state and erosion of the rule of law,” he said.
Knock-on effects
He also called on other countries to take action to help Libya, saying: “The international com- munity has to understand that if it tolerates or even rewards those who break the law in Libya, then it will be complicit in the end of the rule of law in our country. And that means more cor- ruption, more crime, more injustice and more poverty.”
This is true not just in Libya but also across the whole region, he said. If oil exports are not resumed, he argued, “you will see it repeated, not just in Libya but potentially across the whole of the Middle East and North Africa, as people who feel they have a grievance decide it’s worth tryinganoilblockade.”
Meanwhile, he described the LNA blockade as “a disaster and a nightmare.” Recent events could leave the GNA without the money it needs to pay public-sector employees throughout the country and prevent NOC from taking the proper steps to ensure that forcibly idled pipe- lines do not suffer corrosion from the crude oil left in them.
Central bank chief weighs in
Sanalla’s words echoed statements made by Sadiq al-Kabir, the head of Libya’s Tripoli-based central bank, on January 24.
Since oil accounts for 93-95% of the country’s
PIPELINES & TRANSPORT
NNPC, Chinese banks to sign financing deal for AKK pipeline
total revenue and generates enough money to cover 70% of total state spending, the suspen- sion of production is “a bullet in the head that will hurt Libya and the Libyan people,” al-Kabir told Reuters in an interview.
“We really hope the crisis is resolved as fast as possible because it hurts everyone,” he added. The blockade has also complicated negoti- ations between the GNA and the central bank on the adoption of a budget for 2020. Al-Kabir explained that authorities in Tripoli had been hoping to avoid a budget deficit this year – and were optimistic about their chances, since the country introduced reforms and reported eco-
nomic growth in 2019.
In the end, though, the GNA might not be
able to avoid a deficit in 2020. The latest clashes with Haftar’s troops have put the internationally recognised regime in the difficult position of needing to pay for weapons and logistical back- ing for its own military without having easy access to funds it might use for these purposes.
Al-Kabir also indicated that he did not expect Libya to bounce back quickly. “We hope that there will be support from the international community to resume the production and export of oil, in a quicker way,” he said.™
“ the LNA blockade
Sanalla described
of oil export facilities as ‘a disaster and a nightmare’
NOC chief Mustafa Sanalla (Photo: 218tv.net)
NIGERIA
NIGERIAN National Petroleum Corp. (NNPC) is close to wrapping up a deal with Chinese lend- ers on a credit that will help cover the cost of the Ajaokuta-Kaduna-Kano (AKK) natural gas pipeline project.
State-owned NNPC reported earlier this week that it expected to finalise the $2.5bn loan agreement with the Bank of China (BoC) and the Industrial and Commercial Bank of China (ICBC) before the start of the second quarter. Sinosure, the Chinese government’s export
credit agency, will act as guarantor for 85% of total project costs, it said.
Nigerian officials began negotiating the deal with representatives of the Chinese banks in late 2018, during the most recent summit on Sino-African co-operation. They ended up securing a loan equivalent to nearly 90% of the $2.8bn price tag for the AKK pipeline.
The AKK link will follow a 614-km north- ward route from the left bank of the Niger River in Kogi State to the capital city of Kano State.
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