Using Nigeria’s oil to diversify the national economy

Africa Brief: Pharmaceutical firms, Malawian donor aid, fuel pipeline and more

Oil thieves blacken Nigeria’s waterway

Oil bunkering – hacking into pipelines to steal crude then refining it or selling it abroad – has become a major cost to Nigeria’s treasury, which depends on oil for 80% of its earnings. Many local Nigerians would obtain these oils and refine the oil to sell to the local and foreign market to make a living even though they know this is illegal. Nigerians can make $60 (about R523) in a day by oil bunkering.

Because of this, Nigeria’s legal refineries have been left empty by decades of mismanagement and corruption, with the result that fuel stations in the world’s 12th largest oil producing country often run out of supplies. Major General Johnson Ochoga, who leads a military campaign against bunkering said almost 2 000 suspects had been arrested and 4 000 refineries, 30 000 drums of products and hundreds of bunkering boats were destroyed in 2012.

For the full story, read Oil thieves blacken Nigeria’s waterway by Akintunde Akinleye, published in The Star, Business Report on 16/01/2013.

Burundi tax revenue collection up 12%

Country’s revenue board said that Burundi’s tax revenues rose 12% to 528bn francs (R3bn) in 2012 from a year ago due to efforts to stop tax evasion and corruption. It said the amount collected last year exceeded the 520bn francs projected earlier. The country was ranked among the top five improved economies in the World Bank’s 2013 Doing Business report.

For the full story, read Burundi tax revenue collection up 12% by Reuters, published in The New Age on 16/01/2013.

Pharmaceutical firms eye Africa

Sub-Saharan Africa offers significant opportunities for South Africa’s pharmaceutical manufacturing firms, as a growing middle class and an increasing burden of disease push up demand for medicines, according to research by Frost & Sullivan. Frost & Sullivan research said pharmaceutical sales in sub-Saharan Africa generated revenues of $2.28bn in 2011 and were forecast to reach $5.02bn in 2018.

There are four pharmaceutical firms listed on the JSE: Aspen Pharmacare, Adcock Ingram, Cipla Medpro and Litha Healthcare. Aspen Pharmacare has factories in Kenya and Tanzania, while Adcock Ingram manufactures drugs in Ghana, and has a presence in Kenya.

Partnerships with local manufacturers would become increasingly important if other African countries moved towards public sector tenders that gave preference to locally made medicines, as SA had done.

For the full story, read Pharmaceutical firms eye Africa by Tamar Kahn, published in Business Day on 17/01/2013.

Banda tries to keep donors sweet as reforms make Malawians bitter

President Joyce Banda, devalued the kwacha by a third against the dollar to meet conditions set by the International Monetary Fund (IMF) for a resumption of donor aid. The currency has lost another 29 percent since then, making it the worst-performing unit in Africa. Now the Consumer Association of Malawi has organised a march in the commercial hub of Blantyre, Lilongwe and Mzuze to draw attention to an inflation rate that has reached 33 percent and the currency devaluation.

The economy is performing badly as about half of the population of 15 million live on less than $1 (R8.75) a day, according to the IMF, while’ the government relies on donor funds to finance 40 percent of its budget. The march would take place every month until the government responded to its demands, including Banda cutting her travel spending.

For the full story, read Banda tries to keep donors sweet as reforms make Malawians bitter by Brian Latham and Frank Jomo, published in The Star, Business Report on 17/01/2013.

David Okwara

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