Page 9 - DMEA Week 47 2021
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DMEA POLICY & SECURITY DMEA
IMF advises Nigeria to remove
‘retrogressive’ subsidies
AFRICA THE International Monetary Fund (IMF) has “General government interest payments are
advised the Nigerian government to remove expected to remain high as a share of revenues
what it called “retrogressive” fuel and electricity making the fiscal position highly vulnerable to
subsidies in early 2022 as part of its fiscal policy. real interest rate shocks and dependent on cen-
The IMF also said in the concluding state- tral bank financing.”
ment of its 2021 Article IV Mission to Nigeria The IMF mission stressed the need to fully
that, while the economy is recovering from a remove fuel subsidies and move to a mar-
historic downturn, the outlook is for a subdued ket-based pricing mechanism in early 2022 as
recovery, in part due to slow FX reforms and stipulated in the 2021 Petroleum Industry Act.
uncertainties regarding the ability to repatriate “Nigeria’s past experiences with fuel subsidy
foreign funds, which have discouraged new cap- removal – all of which have been short-lived
ital inflows. and reversed – underscore the importance of
Despite higher oil prices, the government fis- building a consensus and improving public trust
cal deficit is projected to widen in 2021 to 6.3% of regarding the protection of the poor and efficient
GDP, reflecting implicit fuel subsidies and higher and transparent use of the saved resources.”
security spending, and remain at that level in In addition, the IMF said, implementation
2022, it said. of cost-reflective electricity tariffs as of January
“Over the medium term, without bold reve- 2022 should not be delayed.
nue mobilization efforts, fiscal deficits are pro- “Well-targeted social assistance will be
jected to stay elevated above the pre-pandemic needed to cushion any negative impacts on the
levels with public debt increasing to 43% in poor particularly in light of still elevated infla-
2026,” it said. tion,” it added.
Germany to open Angola energy
office with focus on hydrogen
AFRICA GERMANY will open an energy office dedi- Angola’s state-run oil and gas operator
cated to hydrogen in Angola, as part of planned Sonangol has signed an MoU with Germany’s
bilateral cooperation in the energy sector that Gauff & Company Engineering to build a green
will later include renewables such solar and hydrogen facility, as announced on November
wind, Ver Angola reported on Monday (Novem- 15 at Africa Energy Week.
ber 22). Paulo Guedes, Songangol’s Director of
German ambassador Stefan Traumann, Renewables, who spoke at Africa Energy Week,
whose previous diplomatic postings include said that key stakeholders, location, costs and
a stint as general consul in Nigeria, made the market opportunities had yet to be identified,
announcement after delivering his credentials to The Energy Year reported earlier.
Angolan President Joao Lourenco late last week. Sonangol has developed a portfolio of solar
“[We] plan to open a hydrogen office here in energy developments, including projects with
Angola to cooperate in this area with the govern- Eni and TotalEnergies, with the aim of produc-
ment. I am very optimistic that we will be able to ing 385 MW of solar power by 2027.
do many things in this area,” he said.
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