The $20 billion annual trade deal between Russia and Africa will be affected by Russia-Ukraine war, report has shown.
Also, Nigeria is expected to increase its oil and gas export to Europe following raging war between Russia and Ukraine which has resulted in sustained disruption to supplies from Russia.
In a report to investors titled: “War in Ukraine weighs on African FX”, AZA, global forex dealer, said African countries including Nigeria, Algeria, Tanzania and Mozambique could be in a position to boost exports of gas and oil to Europe and elsewhere in the face of the war.
Nigeria is a key LNG supplier to Europe and in 2021 exports amounted to 12.63 Billion cubic metres (Bcm), according to data from S&P Global Platts Analytics.
The biggest buyers were Spain with 49 cargoes supplied or 4.3 Bcm of gas equivalent; France (38 cargoes), Portugal (34 cargoes), and Turkey (15 cargoes), the data showed.
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Several LNG cargoes were also delivered last year each to Croatia, Greece, Italy, the Netherlands, and the UK.
Nigeria’s six-train LNG export facility has a capacity of 22.5 million metric tonnes (mt)/year (31 Bcm/year), but it is being expanded to 30 million mt/year with the addition of a seventh train.
Nigeria and the EU are already considering a “all options” for increasing the supply of Nigerian LNG to Europe, as Brussels continues its push to engage with its gas supply partners amid the standoff between Russia and the West over Ukraine.
Concern over Russian gas supply to Europe has seen the European Commission make significant diplomatic efforts in recent weeks to seek additional gas deliveries from alternative suppliers.
The AZA report added that Russia’s invasion of Ukraine has sent oil prices surging to their highest in eight years, putting increased pressure on oil-importing African economies such as Kenya, where the Shilling fell to an all-time low last week.
It said that while Africa-Russia trade, amounting to $20 billion of imports and exports last year, is likely to fall, the bigger impact for most Africans could be further increases in the price of food partly because Ukraine is one of the largest exporters of wheat, especially to the Middle East and North Africa.
The Central Bank of Nigeria (CBN) said Nigeria spends $2 billion annually on the importation of wheat.
CBN Governor, Godwin Emefiele said the bank was working to increase local wheat production and reduce importation by 60 per cent. The CBN also plans to address key problems in the wheat value chain through financing massive production of wheat in Nigeria and facilitating sustained availability of high yield seed variety in country and improve general productivity.
Wheat was the second highest contributor to the country’s food import bill, putting pressure on the country’s foreign reserve as over $2 billion was spent annually on the importation of over five million metric tonnes (MT) of wheat.
The apex bank data showed that only one percent or 63,000MT of wheat, out of the five to six million metric tonnes of wheat consumed annually, was produced locally
