Nothing is for sure except death and taxes – in our parts
the latter maybe optional but no one can get away from the first.
Last week Oil futures broke below $45 a barrel after a brief
rally in May that saw it climb to $52 a barrel. Tis despite the best efforts of
the Organisation of Petroleum Exporting Countries (OPEC) to talk the price up.
They met a few weeks ago to extend cuts in production as a way to keep oil
prices up.
About 45 years ago OPEC created an energy crisis that saw
oil prices jump to the princely $12 from the previous $3 a barrel. This came
about when they placed an embargo on the US and other western economies for
supporting Israel in the Yom Kippur war.
As of 2016 OPEC controlled 44 percent of world exports and
73 percent of the world’s proven reserves. So supply decisions made by the 14
member organisation have a telling effect on world prices.
Recent event suggest that’s not true anymore.
"A few factors have changed in recent years. Some of the oil exporters who gauged themselves on the $100-plus a barrel prices of a decade ago have seen their economies come and unstuck. Venezuela and Angola come straight to mind but you can add Nigeria to the mix...
These countries have an urgency to keep pumping the black
stuff just placate their local populations. Then there is the return of Iran
from the cold. An embargo on their oil exports was lifted last year and again
politico-economic realities dictate that they generate more and more revenues.
But an even more interesting development is the shift of the
US from being a net importer of oil to a net exporter in the last five years or
so.
Modern technologies mean the US can not only make more
marginal oil fields viable but also means then can extract oil from existing
and abandoned oil fields. As a result of this surge in production a ban on oil
exports was lifted two years ago. And in the first quarter of this year the US
exported up a million barrels day.
As the biggest consumer of oil this is significant because
it takes away OPEC’s influence in the global markets.
Last week it was reported that the company behind WordPress,
the blog enabling service, will be closing its San Francisco office because not
enough workers are coming to work in person. Workers are choosing to work at
home or offsite more and more these days making the expense on office space
optional or redundant altogether.
Advances in communication technology now mean that the need
for brick-and-motar working environments is becoming a dated concept.
And finally last week it was reported that the number of
south Sudanese refugees in Uganda has risen to 900,000 with no sign of the
influx abetting. In some areas the refugees now outnumber the locals putting
unbeareable strain on already inadequate physical and social infrastructure. It
is safe to say that like the Rwandan influx of the 1950s we can expect that the South Sudanese are
here for the long haul.
This changes in energy, labour and movements of people
around the world are radically changing economies and impacting politics in
ways previously unimaginable.
Whoever thought in the heady days of $100+ a barrel oil that
the middle eastern economies would be struggling for survival like they are
today. The shut out of Qatar last week is a symptom of these growing tensions.
Whoever thought barely a decade ago that the office as we
know it, the center of every business would become obsolete.
And a decade ago with the optimism of a newly independent
South Sudan still hanging the air thought the world’s newest state would
implode so spectacularly.
"There are other developments happening before our very eyes that are fundamentally changing the traditional factors of production of land, capital and labour, which mean that the way we think, project and plan our economic futures will have to change...
Last year they say that at least sg44trillion passed through
the various mobile money platforms in Uganda. This is about one and half times
the new budget and it is growing by the day. These are monies that were not in
the formal financial sector that have been liberated from under our mattresses,
socks and bras.
Already the various telecom providers are tapping into his
flow to lend money bringing formal credit to a whole new layer of economic
actors. That it takes less than a minute for a loan approval – literally, means
the traditional lending houses will have to speed up their own processes to
remain relevant or lose their relevance altogether.
You think not?
Already our face to face interactions with our bankers are
down to near zero. Banks are rethinking opening new branches and are pushing
for more technology usage and collaboration with other economic actors to
extend their reach. The way technology is going it’s not inconceivable that the
bank as we know it, in a decade will be no more with all of our transactions
being carried out online and not with punching keys on our keyboards or phones
but by telepathy with the same devices!!!!
