BUSINESS
in that province, just in the gas sector.
The initial USD55-billion to USD60-billion
has to be spent by 2024 because these
companies have off-take agreements in
place to deliver gas in the next five years.
The second tranche of that investment is
expected in 2023/4.
In the meantime, there has been an
influx of oil and gas exploration companies
searching for good deposits outside of
the Palma/Pemba area. A number of
companies are exploring blocks near
Nacala and Beira and there is even
exploration as close as 100km north of
Maputo, which is extremely exciting from
a South African perspective.
According to Bonnett this is not just a
once-off project rolling out over five years.
“These are projects that will last for 30
to 40 years. It’s not simply about building
an LNG train and then everybody goes
home. There are operations, maintenance,
and cities that develop around this
infrastructure, there is an enormous
amount of development in these areas,”
he says.
“Furthermore, Cabo Delgado, the
province where the oil and gas finds
have been made, also hosts some of the
world’s biggest high-quality jumbo flake
graphite deposits, and those are only
about 100km from Pemba. In addition,
there are great deposits of gemstones
like rubies and massive agricultural and
tourism potential in that area. It is really
an integrated opportunity in a corridor
stretching for about 400km from Pemba to
Palma. There are many, many opportunities
in Mozambique,” Bonnett adds.
It’s not about the actual LNG
infrastructure. In that part of
Mozambique there is almost no
infrastructure, so infrastructure like
roads, power, water and sanitation
needs to be put in place. There will be
more than 50 000 workers on site, and
they will need permanent housing and
recreational facilities. It is not only about
extracting and exporting gas.
Other hotspots in Africa
In addition, the whole eastern seaboard
of Africa has huge potential and could
provide business opportunities for
many years to come. Kenya, Tanzania,
Rwanda and Ethiopia are set to grow
at phenomenal rates over the next few
years. Kenya and Uganda are both making
concerted efforts to start delivering oil as
soon as possible, and there is a healthy
regional rivalry of who will deliver first.
These projects are not on the same level
as what is happening in Mozambique, but
they are also not insignificant. The value
of Uganda’s Lake Albert project is about
www.equipmentandhire.co.za
The Zambezi River (in picture) has been a barrier to trade in Southern Africa. A bridge
between Kasane in Botswana and Kazangula in Zambia, expected to open at the end
of 2020, is expected to boost regional trade in the whole region.
USD10-billion and in Kenya the figures
looks similar.
In West Africa, Nigeria remains a key
market, even with forex issues at present,
with Cote d’Ivoire and Ghana as other key,
fast growing economies. Both of these
are also gateways to the newly developing
mining jurisdictions in the Sahel to the
north, which is also starting to attract
much attention from donors and investors
to stabilise and grow the area that is seen
as a gateway for migrants to Libya and
eventually Europe. Moreover, both Senegal
and Mauritania are growing hubs for oil
and gas development, with a number
of large projects being developed or
underway, which offers good opportunities
for our companies. The numbers are not
the same as those in East Africa, but the
fit with our natural export profile is better.
According to Dedasaniya Africa’s
fastest-growing economies are centred
around East Africa and mainly in Ethiopia,
Kenya, Rwanda and Tanzania. Government
investment in Ethiopian infrastructure
projects has enabled the growth in
manufacturing and other industries, and
the country has become the fastest
growing economy in sub-Saharan Africa.
“The construction sector in Ethiopia
expanded by 16% in 2018 and is the
largest industrial sub-sector in the country
accounting for 71.4% of the industries
sector,” says Dedasaniya.
African countries will continue
spending a larger percentage of their GDP
to stimulate growth. On a global scale,
developing countries that invest over 30%
of their GDP in infrastructure, have been
among the fastest growing economies in
the world. Dedasaniya says that a country
like Ethiopia has spent more than 31% of
GDP on infrastructure for the last 10 years,
which explains the country’s phenomenal
growth. South African suppliers that fail
to see the opportunities in the rest of
Africa, will have to continue playing the
guessing game in South Africa, and hope
they survive. Fortune favours the brave,
and South African companies are well
positioned to take advantage of their
geographical advantage.
Crossing the mighty Zambezi River
with a ferry from Kasane in Botswana to
Kazangula in Zambia, has for many years
been the great bottleneck preventing
proper regional trade between countries
south of the river, and those in the Great
Lakes region of Africa. According to
reports, the new Kazangula bridge will be
completed by the end of 2020, replacing
the atrocious and sometimes dangerous
ferry service.
According to an article in the Getaway
magazine, the 923m long and 18.5m
wide bridge will make it possible to drive
from Durban in South Africa to Botswana,
Zambia, Zimbabwe, Malawi, the DRC, and
up to Dar-es-Salaam in Tanzania, forming a
critical link in Africa’s North-South Corridor.
So, despite dismal economic indicators in
South Africa, plant and equipment owners
should start knocking on the African door
sooner rather than later.
APRIL 2020
21