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Positive Business Outlook in AOP Survey

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COVID-19 may not be hitting economic activity in Africa as hard as some news reports would suggest, with 60% of respondents to an Africa Oil & Power survey reporting a highly positive or positive outlook for their business for the next 12 months. An additional 56% of respondents to the survey, run from May-August 2020, said it was likely or very likely their company would commit to a major investment decision by next year.

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Despite unprecedented policy support in China, Europe and the United States, global GDP is expected to fall by 5.2% in 2020, according to the World Bank. Developing countries and emerging markets are expected to see GDP contract between 5-8% for 2020, causing between 71 million and 100 million people to be pushed into extreme poverty.

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Despite the drop in GDP, Africa is likely to find incredible opportunity on the international markets, especially as the COVID-19 crisis forces a shift towards keeping trade partners close to home — both from a physical distance perspective, and from a geopolitical context. Africa can and should reposition itself “as multinational enterprises from major economies may relocate production centers.

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Coordinated actions in attracting FDI and joint investment in regional public goods could boost local transformation and technology transfer,” the Organisation for Economic Cooperation and Development states in a recent report. Economic leaders like the United States and Europe are likely to look to the global south for new manufacturing bases.

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Survey respondents to the AOP survey agreed the impacts of COVID-19 will depend on how businesses and countries respond to the situation. “The positive or negative impact from the COVID-19 blow is very much dependent on how we react to the current situation,” one respondent said.

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Several factors are also vital for business to move forward, with 22% of respondents saying that borders need to be reopened without restrictions; 21% of respondents said there needs to be a vaccine and/or treatment for COVID-19; 13% said borders need to be reopened without restrictions and that the oil price needs to stabilize above $40/barrel.

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Others agreed future planning is vital, saying “Certainly, we are in a very challenging situation; however, we must plan ahead.”

Additionally, several companies won free delegate passes to AOP’s 2021 events for completing the survey. The winning companies are: Sky Eye Measurement, Canada; Nicmo Group, Botswana; Price Energy, Nigeria; Tempus v Petroleum, Namibia; and Stellae Energy, UK.

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Sihle Qekeleshe is a Web Editor at Energy Capital & Power. She has experience as a Copywriter and Editor in various industries.