Small firms to drive East Africa’s oil and gas sector development
11 June 2014 – According to several oil executives, smaller oil explorers willing to take financial and operational risks will lead the development of East Africa’s oil and gas industry, while majors ditch riskier projects as margins fall.
East Africa has emerged as a significant prospect for the export of liquefied natural gas (LNG) because of the size of its natural gas discoveries and proximity to Asia’s major LNG consumers. Furthermore, the US Geological Survey estimates that more gas lies off the shores of Kenya, Tanzania and Mozambique than off Nigeria, Africa’s biggest energy producer.
However, high development costs and low profit margins in the gas sector worldwide have made large oil and gas companies more hesitant to commit to risky and expensive investments and this paves the way for smaller explorers, such as Tullow Oil and Ophir Energy, who typically focus their efforts on one region or country in the hope of maximising any returns.
Mobile Data Revolution in Sub-Saharan Africa
12 June 2014 – Voice-call traffic is to double and mobile internet usage is expected to increase 20 times between 2013 and 2019 in SSA – twice the anticipated global expansion, Swedish company Ericsson said in its June 2014 Sub-Saharan Africa Mobility report. The rapid growth of 3G and 4G technology across the region follows the recent launch of under-USD 50 smartphones, said Ericsson.
The popularity of social media, content-rich apps and video content accessed from these cheaper smartphones has also contributed to the growth. Consumers in Kenya, South Africa and Nigeria are increasingly using video TV and media services from their smartphones, the report stated. SSA’s mobile penetration of 70% is fast approaching the global rate of 92%, Ericsson said. The report predicted 3G technology will become the dominant technology across the region by 2017, outstripping 2G to become the region’s primary form of mobile connection. The report predicts that 75% of mobile subscriptions will be internet inclusive (3G or 4G) by 2019.
Kenya budget opens up for more speculation
13 June 2014 – Yesterday Treasury secretary Henry Rotich presented to Parliament a rare tax-neutral budget that courted speculation as the contents of the Finance Bill are reported to have excluded what the House expected.
National Assembly Majority Leader Aden Duale added to the suspicion of what is in store for taxpayers when he revealed that the Finance Bill, which contains the official tax measures, was not ready. “The law allows us at least 90 days to present the Bill to Parliament for debate,” he said without explaining why Rotich broke away from the tradition that has had it tabled in the House on Budget day.
Imara Investing in Africa report