JOHANNESBURG: North America has a population of about 500 million, and two-fifths of them are on Facebook. In Africa, with more than 1 billion people, just 120 million use the social network.
That’s an opportunity Facebook can’t ignore, though the region poses challenges unlike those the company has faced in more developed markets.
To spur growth on the continent, Facebook next month is opening an office in an affluent suburb of Johannesburg.
The sales office will be headed by Nunu Ntshingila, 51, chairman of WPP Plc’s Ogilvy & Mather agency in South Africa, who will oversee Facebook’s business in the region.
The company will find that winning customers in Nigeria or Kenya is tougher than in Nebraska or Kansas.
Africa has few fixed Internet connections, so Facebook’s original website isn’t well known. And while mobile Internet is booming, data is expensive and smartphones are rare, with most people using cheaper, less capable devices called feature phones that can’t run Facebook’s full mobile application.
“This is one of the places where our next billion users are coming from,” said Nicola Mendelsohn, Facebook’s vice president for Europe, the Middle East and Africa. “It would be a massive missed opportunity. Africa matters.”
To win over consumers concerned about the cost of data or who live in areas with bad signals, Facebook is partnering with mobile-phone companies to offer what it calls Internet.org, which gives people free airtime when they access Facebook and a few dozen other selected websites. And it will soon introduce Facebook Lite, a low-bandwidth app that uses just a fraction of the data of the standard application.
“There’s no point sending a video to someone with a 2G connection,” Mendelsohn said in an interview. “You really want to make sure that you’re delivering the right messages to right devices in the right way.”
For the world’s largest social network, Africa holds vast potential. Facebook has been blocked by China’s censors since 2009, and in Russia it trails local sites such as VKontakte and Odnoklassniki.
As sales growth slows, Facebook is working to broaden the reach of its advertisements, which generate more than 90 percent of its revenue.
A further challenge in Africa is the cost of smartphones, which are rarely subsidized with long contracts as they are in Europe and the US MTN Group and Vodacom Group, with a total of more than 225 million subscribers on the continent, are trying to change that by selling house-brand smartphones for less than $50.
Chris Gilmour, an analyst at Absa Asset Management in Johannesburg, said Facebook must be patient to succeed in Africa. While the potential is huge, the region is notoriously difficult for outsiders to crack.
“Facebook has the capacity and skills and they will succeed, it’ll just take longer,” Gilmour said.
“Africa is a fantastic prospect but it is a long-term prospect.”
The shares have gained about 11 percent this year, valuing the company at $243 billion.
One way to keep data charges low is with what Facebook calls “missed call ads.” Advertisers place links in Facebook newsfeeds.
When those are clicked, the advertiser rings the user with a promotion — and foots the bill for the call.
“We were conscious of airtime, which is the problem of most of the population in Africa,” said Gil Sperling, co- founder of Popimedia, a Facebook partner in Johannesburg that uses the technology. “You need a product that’s actually useful to them on a feature phone.”
Ntshingila will take over the new Johannesburg’s office in September.
She joined Ogilvy & Mather in 1999 and was the agency’s South Africa CEO for seven years before becoming chairman in 2012.
Her mission is to persuade businesses and advertising agencies to promote themselves through Facebook.
“Increasingly marketers are focused on what is the next frontier,” said Carolyn Everson, Facebook’s vice president of global marketing.
“There’s going to be an incredible opportunity to develop a consumer base in Africa.”
Facebook to open Johannesburg office to boost users in Africa
Facebook to open Johannesburg office to boost users in Africa
Saudi Arabia, Philippines ink first energy cooperation agreement
RIYADH: Saudi Arabia and the Philippines have signed their first agreement on energy cooperation, marking a milestone in their bilateral relations and supporting the Kingdom’s sustainability drive.
The memorandum of understanding, signed by Saudi Energy Minister Prince Abdulaziz bin Salman and the Southeast Asian country’s Energy Secretary Raphael Lotilla in Riyadh, aims to establish a broad framework for collaboration across various energy sectors.
The agreement encompasses critical areas such as petroleum, natural gas, refining, and petrochemicals, as well as electricity, renewable energy, and energy storage solutions. Both nations are committed to enhancing energy efficiency initiatives as part of their joint vision for a sustainable future.
This comes as Saudi Arabia aims to generate 50 percent of its energy from renewable sources by 2030.
In an interview with Arab News, Lotilla stated that this is the first time that such an agreement is being signed between the two governments.
“The MoU as a framework covers many areas; in fact, the entire scope of the energy transition. Our ambitions are not at the same levels; we are a bit behind because it’s 50 percent by 2040, so we have much to learn from Saudi Arabia,” he said.
The official added: “Our president was always impressed with the fact that even if Saudi Arabia is, right now, the leader in terms of fossil fuel production, it has a progressive outlook and is looking at the transition that would benefit not only itself but also the planet.”
Lotilla highlighted the Philippines’ demographic advantage, describing the nation as being in a “demographic sweet spot” due to its young and expanding workforce, projecting that it could become a trillion-dollar economy by 2030, alongside Indonesia and other regional leaders.
This energy partnership builds on robust existing ties, with Saudi Arabia hosting around 800,000 Filipinos and bilateral trade being valued at over $400 million annually. The MoU seeks to extend collaboration beyond fossil fuels, incorporating new technologies, climate solutions, and renewable energy initiatives.
“We are looking, for example, at the energy efficiency and conservation measures that Saudi Arabia has adopted,” Lotilla said, pointing to cooling systems as a vital area of focus.
Both countries experience high energy demands driven by extreme temperatures, with El Niño pushing electricity demand in the Philippines up by 14 percent last year.
The agreement emphasizes climate change mitigation technologies and endorses the Circular Carbon Economy framework promoted by Saudi Arabia, which aims to reduce toxic emissions through capture, reuse, storage, and transport technologies.
“Energy storage is also another area that we would like to explore with Saudi Arabia,” Lotilla said.
He continued: “We hope to discover more indigenous natural gas, and carbon capture, storage, and utilization are important as we develop those indigenous sources. These are just among the things that we are looking at.”
Additionally, Lotilla indicated that the agreement lays the groundwork for investments in renewable hydrogen projects. “The experience of Saudi Arabia when it comes to oil and gas exploration would be important because it uses essentially the same technology, except that it is renewable hydrogen that is going to be drilled for,” he said.
The potential for biofuels is significant, given Saudi Arabia’s refining capabilities and the Philippines’ agricultural resources. Lotilla noted the possibility of producing sustainable aviation fuel from nonstandard coconuts, as the Philippines produces 15 million metric tonnes of coconuts annually — second only to Indonesia.
The government is also exploring the use of banana biomass for biofuel production, opening up avenues for additional investments.
Lotilla stressed the critical need for infrastructure development, particularly in transmission networks, saying: “The Philippines is an archipelagic country, and we need to connect the different islands through submarine cables. One area of investment is in building that infrastructure, and that’s where the investor can also get fair returns.”
The MoU fosters private sector cooperation, encouraging partnerships with energy-focused companies and reflecting both nations’ intent to leverage business expertise to drive innovation and development.
The flexible nature of the agreement allows both countries to pursue additional collaboration areas, ensuring a responsive approach to emerging energy trends and challenges.
The Philippines is also seeking Saudi Arabia’s assistance in achieving 100 percent electrification in the Bangsamoro Autonomous Region for Muslim Mindanao, which currently has less than 50 percent household access to electricity.
Lotilla emphasized the significance of this initiative for economic and human development, saying: “This would require some $200 million of investments, and we are trying to attract private investors as well as sovereign funds to help us attain that 100 percent electrification goal by 2028.”
He added that electrification would significantly impact student learning and workforce productivity, helping to uplift one of the country’s most impoverished regions.
In another interview with Arab News, Rommel Romato, chargé d’affaires of the Philippine Embassy in Riyadh, stated that the agreement creates numerous promising economic opportunities for Filipino businesses.
“With this MoU, we expect to achieve better outcomes, particularly an increase in exports from the Philippines to Saudi Arabia and for the Philippines to tap into the vast Saudi market. We also anticipate more joint ventures between Philippine businesses and their counterparts in the energy sector, among others.”
Beyond energy
Both countries are exploring collaborations in agriculture, technology and tourism, as well as healthcare and education.
Lotilla acknowledged that current bilateral trade between the Philippines and Saudi Arabia exceeds $400 million annually, though the trade balance currently favors the Kingdom, which exports more to the Asian country than it imports.
This trade imbalance stems from Saudi Arabia’s primary exports to the Philippines — including petroleum and related products — while the Philippines exports agricultural goods and services of lower monetary value in comparison.
Closing Bell: TASI sheds points to close at 11,959, Nomu sees 1.28% rise
RIYADH: Saudi Arabia’s Tadawul All Share Index closed at 11,959.67 points on Monday, losing 109.54 points, or 0.91 percent.
The MSCI Tadawul 30 Index also fell 13.98 points, or 0.93 percent, to finish at 1,496.69.
The parallel market Nomu saw a gain of 321.54 points, or 1.28 percent, to conclude at 25,444.92.
The main index posted a trading value of SR7.3 billion ($1.94 billion), with 80 stocks advancing and 140 declining. Nomu reported a trade volume of SR107.6 million.
Despite TASI’s slowdown, Etihad Atheeb Telecommunication Co. saw growth in its stock as its share price surged 9.95 percent to SR107.20. Middle East Specialized Cables Co. followed next with its share price jumping 6.28 percent to close at SR43.15.
Al Majed Oud Co. was also among the top performers, climbing 5.82 percent to SR167.20. Middle East Healthcare Co. and Al-Etihad Cooperative Insurance Co. increased 4.66 and 4.54 percent to SR71.80 and SR22.58, respectively.
Conversely, Al-Baha Investment and Development Co. recorded the most significant dip, declining 7.89 percent to SR0.35.
ACWA Power Co. and Abdulmohsen Alhokair Group for Tourism and Development also experienced falls, with their shares dropping to SR441 and SR2.81, reflecting declines of 7.35 and 5.07 percent, respectively. Batic Investments and Logistics Co. and Fawaz Abdulaziz Alhokair Co. also reported losses.
Nomu’s performance was bolstered by Shatirah House Restaurant Co., also known as Burgerizzr, which saw a 29.97 percent jump to SR18.82.
Fesh Fash Snack Food Production Co. and Amwaj International Co. also recorded notable gains, with their shares closing at SR11.94 and SR45.60, marking an increase of 12.01 and 7.29 percent, respectively. Jahez International Co. for Information System Technology and Mayar Holding Co. also fared well.
On Nomu, Mohammed Hadi Al Rasheed and Partners Co. was the worst performer, declining by 10 percent to SR75.60. Other underperformers included WSM for Information Technology Co. and United Mining Industries Co., whose share prices dropped 5.13 percent and 4.71 percent to SR37 and SR32.40, respectively.
Yaqeen Capital Co. and Raoom Trading Co. were also among the worst performers.
Jarir Marketing Co. announced its financial results for the first nine months of the year recording a SR7.7 billion in sales, a 2.2 percent increase compared to the year before.
The company saw a marginal decrease in its net profits, recording SR698 million this year, compared to SR699 million the same period last year, according to a bourse filing.
The company’s growth is mainly due to the increase in sales of the smart phones section and the computer and tablets section.
The company’s gross profit also increased by 2.5 percent, which is higher than the percentage of increase in sales due to the relative improvement in the profit margin of smart phones as a result of the discounts received from vendors, the company stated.
“Although other income increased, but the net profit slightly declined at 0.2 percent, affected by the increase in selling and marketing expenses, general and administrative expenses, and non-operating expenses,” the filing added.
Jarir closes its Monday trading session at SR13, a 0.15 percent increase.
OPEC further trims global oil demand outlook for 2024, 2025
RIYADH: Global oil consumption will increase by 1.93 billion barrels per day in 2024, down from a previous estimate of 2.03 million bpd, according to OPEC.
The monthly report of the alliance indicates that global crude demand will rise by 1.64 million bpd in 2025, a decrease from the earlier forecast of 1.74 million bpd. This marks the group’s third consecutive downward revision.
The Vienna-based organization said the revision was “largely due to actual data received combined with slightly lower expectations” for some regions.
OPEC also said that the world economy will witness a growth of 3 percent and 2.9 percent in 2024 and 2025, respectively – a projection unchanged from last month.
The organization said that the market remains well above the historical average of 1.4 million bpd seen before the pandemic, primarily propelled by strong air travel and road mobility, as well as growing industrial, agricultural, and construction activities.
OPEC’s oil demand growth forecast remains above the projection made by the International Energy Agency in September.
IEA said that global oil demand is on course to increase by 900,000 bpd in 2024 and 950,000 bpd next year, driven by China’s economic slowdown and widespread adoption of electric vehicles.
OPEC said that global oil demand is expected to reach 104.1 million bpd in 2024 and 105.8 million bpd in 2025.
The alliance also trimmed its forecast of Chinese market growth to 580,000 bpd from a previous projection of 650,000 bpd growth.
Amid these revisions, in September OPEC raised its forecasts for world oil demand for the medium and long term in an annual outlook, driven by growth led by India, Africa, and the Middle East and a slower shift to electric vehicles and cleaner fuels.
According to the alliance’s annual report, world crude demand in 2028 will reach 111 million bpd and 112.3 million bpd in 2029. The 2028 figure is up 800,000 bpd from last year’s prediction.
OPEC forecasted that there will be 2.9 billion vehicles on the road, up 1.2 billion from 2023.
Despite electric car growth, vehicles powered by a combustion engine will account for more than 70 percent of the global fleet in 2050, affirming strong oil demand growth for the long term.
Saudi Arabia’s PIF expands green investments to $19bn across 91 projects
- Saudi sovereign wealth fund has allocated $457 million for these projects, with $372 million for eight green building projects
- Remaining $18.9 billion were allocated to 73 under construction projects spanning the same categories
RIYADH: Saudi Arabia’s Public Investment Fund has expanded its green project investment plan to over $19.4 billion, covering 91 eligible projects in areas such as renewable energy and clean transportation.
In its second ‘Allocation and Impact Report,’ PIF provided an update on the allocation and impact of its green bonds as of June 30.
The new paper revealed that “PIF has currently identified a capital expenditure portfolio of over $19.4 billion of eligible green projects, of which $8.5 billion has been earmarked to be allocated under PIF’s two green bonds,” referring to those issued in 2022 and 2023 — totaling a combined $8.5 billion.
According to the report, there are 18 operational projects categorized under renewable energy, energy efficiency, green buildings, clean transportation, as well as sustainable water management, pollution prevention, and sustainable management of living natural resources and land use.
The Saudi sovereign wealth fund has allocated $457 million for these projects, with $372 million for eight green building projects.
The remaining $18.9 billion was allocated to 73 under construction projects spanning the same categories, with green buildings also taking the largest share at $6.3 billion for three projects.
Prominent green projects
PIF’s green bond proceeds are being funneled into a wide range of projects to reshape Saudi Arabia’s future. One of the most prominent undertakings is Red Sea Global, a tourism development owned by PIF.
According to the report, PIF has allocated $1.7 billion of green financing for The Red Sea and AMAALA, as of 30 June 2024.
PIF’s investment qualifies under the ‘Green Buildings’ category in the Green Finance Framework, which means that new or existing commercial or residential buildings must get a third-party certified green building standard to be eligible for funding.
The Framework published in 2022 is used as the basis to issue green bonds, sukuk, loans and other debt instruments, known as green financing instruments.
PIF said in the report that RSG is committed to regenerative tourism destinations that preserve and enhance the natural environment.
Spanning 32,000 square km, RSG’s portfolio includes The Red Sea and AMAALA projects, which will offer up to 11,000 keys across 80 hotels, as well as residential and hospitality assets built with sustainability at their core.
As for the impact of this project, the report added that to date, “there are nine green buildings that are already operational, including four hotels, four residential clusters and one management office.”
On average, these buildings achieve 20 percent energy savings compared to conventional buildings, totaling 18,000 MWh per year. As these assets are independent of the national grid and are 100 percent solar powered, they avoid 36,000 tCO2e annually.
“When all the assets are completed across both destinations, total avoided emissions will exceed 600,000 tCO2e per year,” the report said.
Under the “Sustainable Water Management” category, the report added the NEOM Water Distribution project. PIF’s contribution to this project included fully funding NEOM’s water transmission and distribution pipelines and allocating over $1 billion to support nine water transmission projects across the region.
“This key category emphasizes that investments and expenditures in projects and infrastructure must enhance water-use efficiency,” the wealth fund said.
To date, a 12-bay tanker filling station supplying 18,000 cubic meters per day of potable water and a 30-kilometer section of distribution pipeline is already operational, the report revealed.
It said that an additional three filling stations and over 500 kilometers of water transmission pipeline are currently under construction, adding: “Once completed, these assets will improve resilience and support de-risking of water scarcity in Saudi Arabia.”
Measurable impact and ESG leadership
Projects funded by PIF’s green bonds are set to generate enough renewable energy to power 160,000 homes annually and save 7.7 million MWh through energy-efficient technologies, including the installation of over 211,000 energy-efficient bulbs and 6,000 HVAC systems.
In the area of water sustainability, PIF’s investments in desalination and wastewater treatment are projected to treat 49.4 million cubic meters of wastewater and desalinate 1.2 million cubic meters of seawater each year.
Green building projects funded by the bonds are expected to save 711,000 MWh annually, supporting Saudi Arabia’s efforts to cut energy consumption and carbon emissions.
PIF’s green finance strategy is also setting global benchmarks. As a founding member of the One Planet Sovereign Wealth Funds initiative, PIF is integrating climate change into its investment strategies.
Ranked seventh globally and first in the Middle East in the Global Sovereign Wealth Fund’s Governance, Sustainability, and Resilience Scoreboard, PIF’s efforts highlight its global environmental, social and governance leadership.
To ensure transparency and accountability, PIF has established an ESG and Sustainability Steering Group.
The body meets quarterly to monitor fund allocation, track project impacts, and ensure all green bond investments align with PIF’s Green Finance Framework. This governance structure underscores PIF’s commitment to sustainability and strong ESG practices.
A global first for green bonds
In October 2022, PIF issued its first-ever $3 billion multi-tranche green bond, described as “the first green bond by a Sovereign Wealth Fund.” This was followed by a larger $5.5 billion offering in February 2023, both of which were well-received by global investors.
By June 2023, PIF had allocated $5.2 billion of the $8.5 billion raised to environmentally-focused projects. It had identified a green project portfolio worth $11.7 billion, with $8.5 billion designated for bonds.
Already, $1.3 billion has been used for initiatives like renewable energy, energy efficiency, and sustainable water management.
Of the $706.2 million from the October issuance, $458.6 million went to green buildings, $138.2 million to energy efficiency, and $45.2 million to water management. Similarly, $629.2 million from the February issuance was allocated to renewable energy, energy efficiency, and clean transportation.
Unallocated funds are managed under PIF’s liquidity policy, ensuring all investments align with its ESG principles. Notably, the October issuance included a 100-year tranche, signaling PIF’s long-term commitment to sustainability.
The success of these bonds is evident in the February issuance being six times oversubscribed, with orders exceeding $33 billion, showing strong global investor confidence in PIF’s leadership in green financing.
Vision 2030 and PIF’s role in economic diversification
PIF’s green bond strategy is deeply intertwined with Saudi Arabia’s Vision 2030 — a transformative blueprint aimed at diversifying the country’s economy away from oil dependency and establishing new economic sectors that are future-facing and sustainable.
PIF is tasked with leading the charge, playing a key role in supporting the nation’s commitment to achieving net-zero carbon emissions by 2060.
The fund has set its target to reach net-zero emissions by 2050, positioning itself as an integral player in the global fight against climate change.
The organization’s mandate under Vision 2030 includes expanding non-oil gross domestic product, generating jobs, and enhancing local content, as well as nurturing a thriving private sector.
PIF is attracting sustainable investments into Saudi Arabia’s eco-conscious economy by issuing green bonds and funding critical projects in renewable energy, energy efficiency, water management, and pollution control, among others.
The initiatives are expected to contribute significantly to the Kingdom’s economic growth while ensuring environmental sustainability.
Saudi Arabia, Italy to enhance industrial ties during top official’s visit
JEDDAH: Saudi Arabia and Italy are set to strengthen their industrial and mining ties thanks to a visit by a senior official of the Kingdom to the European country.
Commencing his trip on Oct. 14, Saudi Minister of Industry and Mineral Resources Bandar bin Ibrahim Alkhorayef is set to explore mutual opportunities in key industrial sectors that align with the national strategy for manufacturing development, including the automotive, food, space, and marine industries.
The visit, which will continue until Oct. 16, includes stops in the capital, Rome, and Milan. It also aims to leverage the latest industrial innovation solutions and attract investments into promising sectors in Saudi Arabia, as stated by the Kingdom’s Ministry of Industry and Mineral Resources.
Saudi Arabia’s non-oil exports to Italy amounted to SR2.8 billion ($747 million) in 2023, while total non-oil imports from the European country reached SR21.8 billion during the same year.
The Saudi minister will engage with government officials and leaders in the private sector. He will also visit prominent Italian companies with the aim to facilitate knowledge transfer and smart manufacturing solutions for the Saudi industry while strengthening the economic ties between the two countries.
Alkhorayef is set to meet with Yousef Al-Mimni, vice chairman of the Saudi-Italian Business Council and will engage in discussions with Gilberto Pichetto Fratin, Italy’s minister of environment and energy security.
He is also scheduled to meet with Adolfo Urso, the minister of enterprises, to discuss enhancing industrial cooperation between the two nations.
Alkhorayef will further participate in a multilateral meeting organized by the Italian General Confederation of Industry, known as Confindustria, where he will engage with Barbara Cimmino, the federation’s vice president for export and investment attraction, along with prominent leaders from the Italian private sector.
The minister’s agenda includes a bilateral meeting in Rome with Toni Piech, chairman of Piech Automotive, a leading global automotive manufacturer, and Pierroberto Folgiero, CEO of Fincantieri, a company specialized in shipbuilding and marine products.
In Milan, Alkhorayef will kick off his visit with a tour of the Alessi Center, visit Leonardo’s aerospace division, and hold discussions with the company’s CEO.
The industry minister will also meet with Attilio Fontana, president of Lombardy’s regional government – whom he met in September – to explore ways to enhance bilateral ties in sectors crucial to the Kingdom’s Vision 2030 diversification strategy.
Alkhorayef is also scheduled to meet with Gianluca Di Tondo, CEO of Barilla, a leading food manufacturing company.
