Page 12 - AfrOil Week 11 2020

AfrOil
PROJECTS & COMPANIES
AfrOil
UGANDA
THE head of Angola’s largest fixed-income fund manager said last week that his country’s gov- ernment would have to act quickly to counter the impact of falling oil prices.
Rui Oliveira, the CEO of BFA Asset Man- agement, told CNBC Africa that Angola had not taken the steps necessary to guard against major fluctuations in world crude markets. Offi- cials in Luanda drew up the budget for 2020 on the assumption that oil prices would average $57 per barrel, and they did so at a time when this figure appeared to be relatively conservative, he noted. As a result, the downturn that followed Russia’s rejection of the OPEC-plus agreement on March 6 and brought prices down to around $30 per barrel took them entirely by surprise, he said.
“This is a very tumultuous time. We sort of woke up to this really bad situation in the market [over the weekend following March 6],” he said. “I can see our policymakers were not exactly prepared for such an announcement, and that is clear from our budget for 2020.”
Oliveira went on to say that Angola’s govern- ment had not yet formulated a clear response to the crisis. “This definitely shook our economy,” he said. “I’m just not sure how we’re going to respond in the next couple of weeks or the next couple of months. As I said, we just woke up to this, so I’m really curious to see how the govern- ment is going to respond.”
Meanwhile, he said, one of the factors that makes the Angolan government’s job more complex is the fact that oil prices took a dive almost immediately after Moody’s Investors Service downgraded the country’s sovereign rat- ing. (As it happens, the ratings agency cited the bearish crude market as a factor in its decision, even though it took this step before the collapse of the OPEC-plus deal.)
“Sometimes a thousand years happen in one
week, and I think that’s exactly what we’re going through,” he said. “We are very anxious. I’m not quite sure how the next couple of months are going to be for local financial markets.”
Oliveira urged the Angolan government to take steps to bring foreign direct investment (FDI) back to the country. In the long term, he added, Luanda ought to open up its market and pursue economic diversification initiatives. “We have to focus on trying to be an economy that is based on diversification, based on maybe the services line-up [and] tourism, maybe looking to other commodities as fast as we can,” he told CNBC Africa. ™
Rui Oliveira of BFA Asset Management (Photo: AngoNoticias)

Silt and detritus had been accumulating at the port since summer, and heavy rains have pre- vented crews from routine dredging operations. According to local reports, the port has now been dredged to the necessary depth.
Shortages have dissipated, and the govern- ment has claimed there is enough fuel to last for several months. In a statement, however, Pres- ident George Weah’s office said that importers’ licences would be suspended so that authorities could verify whether they were fit to operate.
Information Minister Eugene Nagbe con- firmed to Reuters that Total, the largest fuel
importer, had had its licence temporarily sus- pended, but that its review could be fast-tracked. The French major stores its fuel in private facili- ties. As of press time, Total had not commented on the matter.
According to the presidency’s official state- ment, importers that overdrew from storage will have 90 days to pay for what they took beyond their quota. It also noted that the deputy man- aging director of Liberia Petroleum Refining, which operates the state’s reserve tanks, had been fired “for gross negligence and fraudulent activities.” ™
Head of Angolan fixed-income fund sees lower oil prices squeezing economy
P12
w w w . N E W S B A S E . c o m Week 11 18•March•2020