Welcome to this week’s On Our Radar, our summary of developments from the past week that will have a significant impact on emerging markets, and, crucially, exactly why they are relevant to foreign investors.
These summaries are taken from excerpts of our Country Insights and Horizon Engage Interactive services – if you would like to receive our full reporting and analysis from our team of regional experts and former ambassadors on any of these developments, please click here for more information.
This week’s banner image is of Brazilian Mines and Energy Minister Alexandre Silveira with President Lula da Silva (attribution: Palacio do Planalto, Creative Commons 2.0), who features in the stakeholder influence section at the bottom of the newsletter.
Country Insights Roundup
Australia: New Queensland Government Pulls the Plug on Country’s Largest Hydrogen Project
What happened: The newly elected Queensland government led by the Liberal National Party pulled all funding from Australia’s largest green hydrogen project, which will almost certainly result in the collapse of the $8bn initiative.
Why it matters: The Central Queensland Hydrogen (CQ-H2) project was Australia’s largest when it commenced development after a feasibility study was completed in June 2022. We understand that around $60mn has already been spent on the project, which comprised an impressive consortium of international partners like Iwatani and Marubeni (Japan), Keppel (Singapore) and Stanwell (Australia).
What happens next: While there has been no official word from Stanwell or other partners, we believe they are unlikely to stump up the money meant to come from Stanwell. Things do not look promising at all for this project’s future.
Greece: Mitsotakis in Firing Line Over Handling of Tempe Accident
What happened: PM Kyriakos Mitsotakis finds himself at the most vulnerable point in his premiership after mass public demonstrations erupted over the Tempe rail crash, which killed 57 people in 2023.
Why it matters: The New Democracy government would likely survive any censure motion from a fractured opposition, but the process could significantly damage Mitsotakis’s credibility and staying power.
What happens next: Mitsotakis’s botched attempts at damage control, including a rumored reshuffle to lessen the impact of potential prosecutions over the crash, could make his position tenuous.
India: 100% Budget Increase for National Green Hydrogen Mission
What happened: On 1 February, Finance Minister Nirupama Sitharaman announced India’s federal budget for 2025-2026, which allocates about $69mn for the National Green Hydrogen Mission. This is a 100% increase from the previous federal budget.
Why it matters: When the Mission was first launched in 2023, much of the initial spending was earmarked for the Strategic Interventions for Green Hydrogen Transition (SIGHT) program, which supports domestic electrolyzer manufacturing and provides incentives for green hydrogen production. A smaller amount was allocated for pilot projects and Mission “components.”
What happens next: Investors should monitor details about the line items of the new budgetary allocation as they emerge. If much of the funds are allocated to SIGHT, following the Mission’s general pattern, that would suggest the government is concerned it’s not moving quickly enough toward the production-by-2027 goal. A healthy allocation to pilot projects would suggest that things are moving well, with the Mission preparing to start testing initiatives before formal production begins.
Iraq: Next Steps in the Baghdad-Kurdistan Oil Saga
What happened: The passage of the amended budget is a real breakthrough for Kurdistan’s oil exports, but oil marketing arrangements must follow.
Why it matters: The Iraqi elite is moving quickly to try to get itself out of the crosshairs of the new Trump administration’s sanctions efforts.
What happens next: Judge Faiq Zaydan is the actor with the fastest-growing power, while his rivals — such as PM Sudani and Judge Jassim Abboud — appear to be falling behind.
Kazakhstan: Nuclear Expansion
What happened: Kazakhstan has expanded its nuclear energy ambitions to at least three planned plants. We expect the government to select a contractor by mid-2025.
Why it matters: This shift reflects Kazakhstan’s efforts to reduce dependence on fossil fuels, diversify nuclear partnerships and mitigate geopolitical risks, particularly regarding potential Russian involvement and Western sanctions scrutiny.
What happens next: With Rosatom’s dominance in question and Western-backed EDF and CNNC emerging as strong contenders for the first plant, the government will have to balance geopolitical concerns when finalizing vendor selection.
Namibia: Supreme Court to Decide Whether Election Was Free and Fair
What happened: The Supreme Court will begin deliberating a legal challenge by the opposition IPC to the 2024 election results next week.
Why it matters: Although the challenge will likely be dismissed, if it does not, Namibia could face a constitutional crisis. Organizing a fresh vote before 21 March would be logistically impossible and, for investors, push the country into political and economic uncertainty.
What happens next: All eyes are on 24 February, the deadline set by the Supreme Court to deliver its judgment.
Nigeria: Komolafe Threatens to Pull Export Permits, Cites DCSO Rules
What happened: Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Chief Executive Gbenga Komolafe said he would deny companies export permits for cargoes originally intended for local refining if operators do not meet domestic crude supply obligations.
Why it matters: Komolafe’s order shows the impact of Nigeria’s rising refinery capacity on upstream operators and the importance of domestic gasoline production to the government’s economic agenda: locally produced fuel is seen as crucial to cooling 35% inflation.
What happens next: The hardline tone from NUPRC shows Komolafe trying to prove his value to President Bola Ahmed Tinubu: He is unlikely to admit implementation is part of the problem, even if it risks Tinubu’s and his Special Advisor on Energy Olu Verheijen’s ease of doing business efforts. Meanwhile, the Dangote Group will likely maintain its very public claim that it cannot secure sufficient Nigerian feedstock for its refinery, even if it receives local cargo offers.
Nigeria: Nigeria Weighs US-Gulf Relations with OPEC Quota Ask
What happened: President Bola Ahmed Tinubu’s energy team plans to ask OPEC for a bigger oil quota as the government tries to build on recent gains. Production is close to a four-year high of 1.5mn bpd.
Why it matters: Raising production beyond 2mn bpd would give the Nigerian government budgetary breathing room and could buy favor with an otherwise disinterested White House. Tinubu needs to balance this with recent positive investor signals from the UAE and Saudi Arabia towards Nigeria.
What happens next: Considering Angola’s and the UAE’s divergent experiences of higher quota requests, the outcome of Nigeria’s ask is hard to call. The government must also brace for its higher production to come alongside softer global prices; its 2025 budget is pegged to $75/bbl.
South Africa: Trump Threats Will Hurt Investor Sentiment
What happened: Trump threatened to cut funding to South Africa for treating “certain classes of people very badly” and confiscating land.
Why it matters: The United States is a major trading partner and provides funding for the country’s HIV/AIDS program. A breakdown in economic ties would significantly impact key sectors and negatively impact investor sentiment.
What happens next: Ramaphosa will justifiably cry misinformation, but South Africa is unlikely to simply turn away from its BRICS membership, ties with China and Russia and ICJ case against Israel that have put it in the Trump administration’s crosshairs.
United States: Trump’s Tariffs Raise More Questions Than Answers
What happened: President Trump announced 25% tariffs on Canada and Mexico and 10% on China, but only the Chinese tariffs went into effect.
Why it matters: Trump’s threat and last-minute withdrawal of tariffs show that economic statecraft is being decided entirely at his whim.
What happens next: Canada and Mexico tariffs will be reviewed within the month. This may become a regular cycle of threats until they are eventually enacted.
Stakeholder Influence Tracker: Alexandre Silveira, Brazilian Mines and Energy Minister
Luiz Inacio Lula da Silva announced that he wants Alexandre Silveira to remain in his role as Mines and Energy Minister. The comments come after growing speculation that Lula was looking to replace Rui Costa as chief of staff with Silveria.
Lula added that he is in no hurry to announce a cabinet reshuffle and lauded Silveira’s work.
In our view, his plaudits for Silveira reflects two developments. First, Lula supports Silveira’s call for a new refinery to free Brazil from having to import diesel and gasoline. This is a controversial proposal given the remarkable cost overruns at the Abreu e Lima refinery in Recife constructed during the Lava Jato corruption scandal.
We also believe that Lula’s comments signal he is engaged in ongoing discussions with Gilberto Kassab about having Rodrigo Pacheco possibly taking over the Justice Ministry.
The key unknown is whether Lula would consider appointing somebody from Kassab’s Social Democratic Party (PSD) to replace Costa. Silveira would have been an option in that scenario.
And while we believe that Lula and Kassab will reach agreement, both will have to balance their preferences with appeasing the new lower chamber president, Hugo Motta. Motta wants to quickly consolidate his influence with the administration.
Another conclusion is that Silveira wants to stay at the Mines and Energy Ministry. We believe that is because he believes he can continue to expand his political base in his home state of Minas Gerais and further develop his national profile.
Find Out More
These summaries are taken from excerpts of our Country Insights and Horizon Engage Interactive products – if you would like to receive our full reporting and analysis from our team of regional experts and former ambassadors on any of these developments, please click here for more information.
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