Aliko Dangote, billionaire businessman has announced that the introduction of the naira-for-crude policy will lead to a 40% reduction in foreign exchange demand. He made this statement on Tuesday as he officially launched the production of petrol at the Dangote refinery located in Lagos.
Dangote, speaking on Arise TV, said, “I will like to salute the people of Nigeria and the government of President Bola Tinubu for creating the environment for us to thrive and also achieve this monumental of giving energy to our people for growth, and prosperity.
“I want to thank President Bola Tinubu for creating this idea of Naira for crude and Naira for the product. Doing that will give a lot of stability to the Naira and remove 40 per cent of the demand for dollars. That’s not just it, there is a lot of round t
Dangote emphasized that it would enable the tracking of loaded trucks, thereby facilitating an easier calculation of national fuel consumption.
“Now that we have this refinery working, it will show the true consumption of Nigeria. We can track each loaded truck and we will try as much as possible to track the loaded ships. Trucks, we can tell you where they are and for some of the products we have, we can tell you the consumption,”he said.
In April, the Federal Government announced that indigenous refineries now have the option to purchase crude oil in either naira or dollars. Additionally, it revealed that Nigeria’s total crude oil and condensate reserves had increased to 37.5 billion barrels as of January 1, 2024, with a life index of 68.01 years.
When operating at full capacity, the Dangote Refinery, is capable of processing 650,000 barrels of oil per day, converting over half of that into petrol.
This article was written by Tamaraebiju Jide, a student at Elizade University
Applications for the 2024 Aurora Tech Award for women innovators and entrepreneurs are now open from September 2, 2024, till November 21, 2024.
The award, which is open to women tech entrepreneurs from around the world, offers opportunities to showcase their innovations.
In the last two consecutive years, African innovators have won home the coveted top prize, offering an exciting opportunity for female tech visionaries across Africa to step into the global spotlight and make their mark once again.
This year, the award returns with expanded opportunities, increased financial support, and an ongoing commitment to nurturing the next generation of women tech leaders.
In recognition of the vital role women play in the tech industry, the prize fund for the award has been significantly increased with new prize distribution as follows: 1st Prize: $30,000; 2nd Prize: $20,000; 3rd Prize: $15,000; 4th Prize: $10,000 and 5th Prize: $10,000.
The application process for the award includes three stages of assessment: longlist, midlist, and shortlist.
After an initial evaluation by venture fund analysts, 100 participants will be selected for a pitching session with fifteen of them to be advanced to the final shortlist.
Aside that, shortlisted participants will also benefit from an enhanced mentoring program offering sessions with leading industry experts. This mentorship will span 2 to 2.5 months and will provide critical insights and guidance to help participants refine their projects and implement strategic changes.
To be eligible to participate, women entrepreneurs must meet the following criteria and these include ownership or co-ownership of a startup, the startup should have received funding or seed round less than or equivalent of $4million, startup must be 5 years or less, and a minimum viable product to showcase.
Speaking on the new development, Operations Excellence and Sustainability Director at inDrive, Asya Vildtstated that the company remains committed to women’s empowerment adding that supporting women in tech isn’t just about leveling the playing field but about unlocking the full potential of innovation.
“Women entrepreneurs bring fresh perspectives that are essential for solving today’s complex problems. At inDrive, we are committed to creating opportunities that empower women to lead in technology, as their success drives positive change across industries and communities. The Aurora Tech Award reflects our belief in the power of diverse leadership to shape a better, more sustainable future,” Vildt said.
Folake Owodunni, 1st prize winner of the 2024 Aurora Tech Award and founder of Emergency Response Africa in Nigeria, emphasized the importance of this platform, stating, “I don’t dwell on whether it’s because I’m a woman, or because of my color, or simply personal dislike.
“As entrepreneurs, we build resilience. We optimize for those who understand or align with us in some way. They don’t have to agree with everything, but at least there’s common ground”.
Also commenting, 3rd prize winner of the 2024 Aurora Tech Award and Founder of Deaftronics in Botswana, Sarah Phiri-Molema said winning the Aurora Tech Award has truly accelerated the company’s development and opened new doors.
“We participated in various other competitions, increased our visibility, especially outside our home country, and attracted the attention of international investors and potential partners.”
The Aurora Tech Award was established in 2020 to recognize and empower women founders of IT startups who are driving innovation and breaking down barriers. Both finalists and winners of the award will be announced between March and May 2025. Interested applicants can submit their entries through the Aurora Tech Award website athttps://www.auroratechaward.com/
The Dangote oil refinery is set to supply a total of 25 million liters of petrol to the Nigerian market daily, beginning in September. According to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), this supply will be increased to 30 million liters per day from September onwards.
In a brief statement released on Tuesday, the NMDPRA announced that it met with the Nigerian National Petroleum Company Limited to discuss and reach a conclusion upon the local supply of crude oil to the Dangote refinery.
“At the NMDPRA headquarters in Abuja, NNPCL reached an agreement to commence crude oil sale and supply to Dangote Refinery in local currency.
“The refinery is now poised to supply an initial 25 million litres of PMS into the domestic market this September. And will subsequently increase this amount to 30 million litres daily from October 2024,” the NMDPRA said on its X page.
Report reveals that President of the Dangote Group, Aliko Dangote, formally announced that the 650,000-capacity oil refinery in Lagos has commenced petrol production.
Aliko Dangote, the President of the Dangote Group, stated during a live broadcast on Tuesday that the supply of petrol to the Nigerian market will significantly transform the country’s energy landscape.
Expressing gratitude to President Bola Tinubu for approving the sale of crude oil in naira to local refineries, Dangote acknowledged that many had doubted the feasibility of the $20 billion refinery commencing petrol production. He assured that the refinery’s capacity would not only meet local demands but also cater to the needs of sub-Saharan Africa.
This article was written by Tamaraebiju Jide, a student at Elizade University
Following receipt of the approval of its shareholders in April 2024, Nigerian Breweries Plc (“Nigerian Breweries” or the “Company”) has now received clearance of the relevant documents from the Securities and Exchange Commission and NGX Regulation Limited.
The Company plans to raise ₦599,098,517,648.00 (Five Hundred and Ninety-Nine Billion, Ninety-Eight Million, Five Hundred and Seventeen Thousand, Six Hundred and Forty-Eight Naira) by way of a Rights Issue (the “Issue”).
A total of 22,607,491,232 (Twenty-Two Billion, Six Hundred and Seven Million, Four Hundred and Ninety-One Thousand, Two Hundred and Thirty-Two) Ordinary Shares of 50 kobo each in the share capital of Nigerian Breweries are being offered to shareholders whose names appear in the register of members as of the Qualification Date being 12 July 2024.
The Issue shall be on the basis of eleven (11) new Ordinary Shares for every five (5) Ordinary Shares held as of the Qualification Date and at an Issue price of ₦26.50 per Ordinary Share.
The Issue is part of Nigerian Breweries’ Business Recovery Plan to strengthen the Company’s capital base by deleveraging its balance sheet, eliminating certain FX-related exposures and reducing bank borrowings, thereby giving the Company greater financial flexibility to promote business growth and continuity.
Vetiva Advisory Services Limited and Stanbic IBTC Capital Limited are acting as the Lead Issuing House and the Joint Issuing House to the Issue respectively, to assist the Company in managing the Issue process. The acceptance list for the Issue is expected to open on 02 September 2024 and close on 11 October 2024.
At the signing ceremony held on 28 August 2024, the Managing Director, Nigerian Breweries, Mr. Hans Essadi, explained that the Issue represents an opportunity for shareholders to support the company’s strategic vision and participate in the next phase of its growth.
Essaadi further disclosed that the proceeds of the Issue will be channeled towards payment of its foreign and local currency denominated obligations, thereby eliminating foreign exchange risk and revaluation losses and enhancing long term profitability and sustainable value creation for its shareholders.
In his remarks, the Managing Director, Vetiva Advisory Services Limited, Mr. Olutade Olaegbe, commended the management of Nigerian Breweries for their visionary leadership and their commitment towards executing the Issue.
He also thanked the Company for trusting Vetiva Advisory services Limited and Stanbic IBTC Capital Limited to advise on this landmark transaction and expressed confidence that the Issue would encourage other global multinational companies to approach the equity capital markets to meet their strategic objectives.
Full terms of the Issue will be set out in a Rights Circular to be mailed directly to qualifying shareholders of the Company, which will contain a Provisional Allotment Letter and the Acceptance Form. All shareholders should read the Rights Circular and, where in doubt, consult their Stockbroker, Fund/Portfolio Manager, Accountant, Banker, Solicitor or any other professional adviser for guidance before subscribing.
Mamador, a leading premium food brand in Nigeria in the Vegetable Oil and Spread segments, has called on Nigerian women to give utmost priority to their wholesome health and maximize the opportunities available with their financial resources.
This was the submission of the Head of Marketing, PZ Wilmar, Chioma Mbanugo who delivered the welcome remarks during the 5th edition of its annual August Meeting held on Friday, August 30, 2024.
Speaking on the theme titled “Nourish to Flourish: Elevating Health and Wealth”, Mbanugo noted that the annual August Women meeting by Mamador is not only a communal gathering but a notable platform to celebrate women for their roles and contribution to society.
She described the August Women meeting as a laudable gesture that attests to the power of togetherness.
“As a brand, Mamador is committed to the financial and physical well-being of Nigerian women nationwide. The old saying that ‘Health is Wealth’ encapsulates our presence here and explains why we should prioritize our health while we try to build wealth. We appreciate everyone for joining us to celebrate Nigerian women who regardless of the limitations, or barriers are the epitome of diligence, resilience, and relentless quest for success,” she said.
Speaking on the topic’ Parenting in this Generation’, certified Family and Parenting Coach, Sandra Oluwadare explained that women owe it a duty as shapers and molders of destinies to be intentional in the way and manner they raise kids. Oluwadare emphasized the need for women to take care of themselves to enable them confront threats that can hinder them from effective parenting of their kids.
She stated that with the right vision, values, and system and nurturing connection for bonding and influence, women can deliver on their roles as effective parents amidst threats such as digital overload, online safety, social media influence, changing family dynamics, social and academic pressure, and work-life integration among others.
Lending his voice on the topic titled “Health and Food Choices”, health influencer and medical doctor, Egemba Chinonso, popularly known as Aproko Doctor stated that women must endeavor to eat or consume healthy foods if they want to live a healthy life.
Also speaking, award-winning dancer and fitness coach, Kaffy Shafau remarked that women’s minds are critical in keeping healthy lifestyles, urging them to keep fit and take care of their mental health.
Speaking on the topic “Wealth and the Woman”, finance and wealth coach, Sola Adesakin tasked women to understand their priorities and map them out according to their finances.
According to Adesakin, 50% of their earnings should be invested in what they consider necessary while 30% and 20% should be channeled toward savings and personal care and development respectively.
Commenting on the topic “You are a Business”, certified financial education instructor, Tomie Balogun stressed the need for aspiring women entrepreneurs to have a good understanding of business structure and figures as these remain the foundation for sustainable growth, decision-making, and overall success of any business.
“We need to surround ourselves with individuals who understand the challenges we face and can offer mentorship. As business owners, challenges can be powerful motivators for growth, innovation, and success while setbacks come as a learning experience,” Balogun said.
In her remarks, Veteran Nollywood actress, Ngozi Nwosu charged women to be ready and determined to confront challenges that may arise in the cause of their career or their family life.
At the end of the elevator pitch which saw participation from different women entrepreneurs, Vennile Pads emerged winner while Maka Marvi and Farhms Food and Sauce Global Limited came second and third respectively.
The winner of the elevator pitch receives two million naira cash grant while the first runner-up and second runner-up got one million naira and five hundred thousand naira respectively.
The Dangote Petroleum Refinery has issued a stern warning that it will begin exporting its Premium Motor Spirit (PMS), commonly known as petrol, if the Nigerian National Petroleum Company Limited and other local petroleum dealers refuse to patronize it.
Devakumar Edwin, the Vice President of Oil and Gas at Dangote Industries Limited, announced on Monday during the Brekete Family live show that the Dangote Petroleum Refinery has commenced the production of Premium Motor Spirit (PMS). He expressed frustration with local oil traders who have opted to import diesel and aviation fuel, hindering the domestic sales of Dangote’s petrol.
“We have been exporting aviation fuel, we have been producing kerosene, we have been producing diesel, but yesterday, we started the production of PMS. So, that was the last stage. The only thing now left out is petrochemicals.
“So, the good news for the country is we have started producing PMS from our refinery since yesterday (Sunday),” he confirmed.
Asked if the petrol would be sold locally, Edwin replied, “Well, I explained how there has been a kind of a blockade from lifting our products within the country. The traders have been trying to block (it), and so now we have been exporting our petroleum products. PMS, we are ready to pump in as much as possible to the country.
“But if the traders or NNPC are not buying the product, obviously, we will end up exporting the PMS as we are doing with the aviation jet and diesel,” he declared.
Edwin expressed astonishment at the unexpected challenges encountered by Dangote Industries Limited as the company prepared to commence operations at its petroleum refinery. He recalled the initial vision of adding value to domestic raw materials, lamenting that Nigeria continues to export crude oil and import refined petroleum products after more than three decades.
“The philosophy is to take the crude, and instead of exporting the crude, refine it, add value; export the finished products, and supply the finished products locally. But unfortunately for us, we started facing challenges with the crude supply.
“What is happening today? We are struggling to get the crude. We are now importing the crude from the US, we are importing from Brazil, and from other parts of the world. So, the whole philosophy has gone upside down. After all these decades, we are exporting crude, importing products,” he added.
He stated further, “The same thing is continuing. We are not getting enough crude allocation, and the crude is still being exported. We are forced to import crude from outside. Yes, we are getting some crude locally, but it’s not adequate.”
Commenting on the laws governing domestic crude supply obligations, he said, “As per the laws, no crude can be exported, unless all the local refineries requirements are met. That is specified in the Petroleum Industry Act. But we are struggling to get the crude.”
He revealed that the company has started the construction of four crude tanks of 120 million litres capacity each to store imported crude due to low local supply.
“In fact, if you see the refinery, we are building four new crude tanks, each of the tanks has 120 million litres capacity. We have to construct the tanks because we are not getting the local crude. We import from overseas, which means we should have enough stocks due to the shipping time,” he maintained.
Local Demand Shortage
Edwin revealed that the refinery has only achieved a utilization rate of less than 5 percent due to insufficient local patronage despite possessing a gantry capable of loading 2,900 tankers daily .
“Go and see our product gantry, we can load 86 tankers at any given time. We can load 2,900 tankers of petroleum products every day, but we are not even loading five per cent, because those who are interested in the trading business, feel that probably this local production is going to affect their established interest, so they are not allowing our products to be sold locally.
“They are not coming to lift our products. So, what are we doing? We are exporting the products.
“Yes, the refinery can survive, we can import the crude, we can export petroleum products, and we can survive. But is that why he invested in the refinery?” he queried.
On fuel quality, Edwin noted that the refinery has the best laboratory in the world, boasting “No refinery can come and challenge that they have more equipment than us,” he stated.
He added that the petroleum refinery has adopted what he called the Euro 5 grade, saying this is the grade that is acceptable in Europe or the US.
“Our product can be exported to any part of the world, the best in quality, the lowest in sulphur. In terms of pollution, we have no pollution. So, we are producing the best quality products. That is how we are already exporting our product.
“Our aviation jet fuel has gone to Europe, and we are exporting our diesel. So, the refinery has been successfully launched and producing the products,” he added.
The Dangote boss disclosed that one of the philosophies of the business is that wherever it is going to operate, the business should be highly environmentally friendly.
And then, also, every business we go in, we focus on the cost of production and the energy efficiency. And the same thing, philosophy, has been adopted here. So, as we start producing, we find that the energy costs are the lowest.
Dangote not monopolist – Vice President, Dangote Group
Devakumar Edwin, the Vice President of Oil and Gas at Dangote Industries Limited, has expressed concern that some individuals continue to accuse Aliko Dangote, the President of the Dangote Group, of being a monopolist. Edwin emphasized that Dangote’s primary objective in business is to generate wealth and create job opportunities while pursuing profitability.
He revealed that the substantial profits earned by Dangote are being reinvested within the country, contributing to increased wealth creation and boosting the Gross Domestic Product (GDP).
“So, we invest our profits and borrow, and we are investing. This is how Alhaji Aliko has been investing in businesses.
“We are making money, yes, but where is the money going? It is not going to Dubai, it is not going to Switzerland, to some bank accounts. It is not going to buy properties. When I joined him in 1991, Alhaji Aliko had a house in the United States, he had a house in the United Kingdom; everything is sold today, and he is still living in his 35-year-old house.
“He has not even added more houses within the country. Everything he’s putting into manufacturing, creating employment and creating wealth, and yet he is being called a monopolist,” he stated.
Industry sources have confirmed that the Dangote Premium Motor Spirit (PMS), commonly known as petrol, is expected to be released into the Nigerian market shortly. According to sources, the government and the Dangote Group are currently finalizing the details for the distribution of the product.
A government official has hinted that the sale and distribution of the PMS are being coordinated with the Federal Government. The source added that at present, only the Nigerian National Petroleum Company Limited (NNPC) will be authorized to sell the Dangote fuel.
Dangote petrol was initially scheduled to be released to the market in June. However, the refinery faced challenges, including a shortage of crude oil and a dispute with the Nigerian Midstream and Downstream Regulatory Authority, which accused the refinery of producing substandard diesel.
The intervention of the Federal Government that crude oil should be supplied to the refinery in the local currency seems to be yielding the desired result.
Reports reveals Dangote and other local refineries have repeatedly accused international oil companies of not selling crude to them. Recently, the Federal Government announced that the crude deal would commence in October.
The management of Dangote Group also alleged that the IOCs insisted on selling crude oil to its refinery through their foreign agents, saying the local price of crude oil will continue to increase because the trading arms offer cargoes at $2 to $4 per barrel, above Nigerian Upstream Petroleum Regulatory Commission official price.
The group also alleged that the foreign oil producers seem to be prioritising Asian countries in selling the crude they produce in Nigeria.
Reports from last month states that the Dangote refinery engaged in an exchange of words with the NUPRC over the alleged supply of 29 million barrels of crude oil to the refinery.
The Dangote Group had alleged the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) of failing to adequately enforce domestic crude supply regulations, claiming that the refinery has not received sufficient crude oil domestically.
In response, the NUPRC has refuted these allegations, stating that it has facilitated the supply of over 29 million barrels of crude oil to Dangote from January to June 2024. The commission argued that it has been instrumental in ensuring the domestic supply of crude oil to Dangote and other refineries through the monthly production curtailment platform.
However, the Dangote Group has swiftly denied receiving 29 million barrels of crude oil from any source, further intensifying the dispute between the two entities. Experts said the shift was aimed at discouraging banks from holding excess liquidity at the central bank and promoting increased lending activities.
Additionally, these changes are expected to affect the banks’ cost of funds, which will impact the interest rates they offer on loans and deposits.
At the close of the past week, the deposits of banks at the CBN stood at NN3.42tn, the highest in August. The deposits for the previous three weeks combined were N3.57tn. The next day following the announcement, banks had deposited about N1.09tn.
A CBN circular signed by the Director of the Financial Markets Department, Omolara Duke, stated the Standing Deposit Facility rate had been increased to 25.75 per cent on deposits up to N3bn, while deposits exceeding the amount will attract a lower rate of 19 per cent for Commercial and merchant banks, while payment service banks will receive 25.75 per cent on deposits up to N1.50bn with amounts above this threshold earning 19 per cent.Related News
The CBN’s latest adjustments are expected to have an impact on the banking sector. By raising both SLF and SDF rates, the central bank aims to curb excess liquidity, which is often a precursor to inflation.
Recall that at the end of the February MPC meetings, members of the committee blamed excess cash in circulation for the accelerating inflation in the country. The latest CBN data showed that currency in circulation surged to an unprecedented N4.05tn in July 2024, marking an all-time high.
The CBN also provides a Standing Lending Facility window, a short-term lending window for banks and merchant banks, to access liquidity to run their day-to-day business operations. At the end of August, banks had borrowed over N3.02tn.
Meanwhile, Afrinvest in in its monthly market report projected that the operationalisation of the SDF asymmetric corridor reinforces rally expectations.
“Notably, the CBN has cut the interest rate on excess deposits by commercial and merchant banks above an initial N3.0bn limit to 19.0 per cent, down from 25.75 per cent. This effectively lowers the theoretical floor for T-bills, assuming other factors remain constant.
“Lastly, we estimate N1.2tn inflows from maturing T-bills (N622.7bn) and FGN bond coupons (N563bn) to improve liquidity dynamics,” the firm stated.
This article was written by Tamaraebiju Jide, a student at Elizade University
The deposits of banks with the Central Bank of Nigeria reached a weekly peak of N3.42 trillion at the close of the previous week.
The Central Bank of Nigeria’s (CBN) announcement of the operationalization of the Standing Deposit Facility asymmetric corridor to +500/-100bps from +100/-300bps around the monetary policy rate within the week resulted in a surge in bank deposits.
The Standing Deposit Facility (SDF) rate, which applies to deposits made by banks at the Central Bank of Nigeria (CBN), was raised to 25.75 percent. Concurrently, the Standing Lending Facility (SLF) rate was adjusted to 31.75 percent.
During the previous MPC meeting of the CBN, the committee members had voted to raise the MPR by 50 basis points to 26.75 per cent from 26.25 per cent, adjust the asymmetric corridor around the MPR to +500/-100 from +100/- 300 basis points while retaining the cash reserve ratio of deposit money banks at 45 per cent and merchant banks at 14 per cent and retaining the liquidity ratio at 30 per cent.
Experts believe that the recent policy adjustments are intended to discourage banks from hoarding excess liquidity at the Central Bank of Nigeria and encourage them to lend more. These changes are expected to influence the banks’ cost of funds, which could, in turn, affect the interest rates they charge on loans and offer on deposits.
At the end of the previous week, bank deposits with the CBN reached a new high for August, totaling N3.42 trillion. This figure represents a significant increase compared to the combined deposits of the three preceding weeks, which amounted to N3.57 trillion.
The next day following the announcement, banks had deposited about N1.09tn.
A CBN circular signed by the Director of the Financial Markets Department, Omolara Duke, stated the Standing Deposit Facility rate had been increased to 25.75 per cent on deposits up to N3bn, while deposits exceeding the amount will attract a lower rate of 19 per cent for Commercial and merchant banks, while payment service banks will receive 25.75 per cent on deposits up to N1.50bn with amounts above this threshold earning 19 per cent.
The Central Bank of Nigeria’s (CBN) recent policy adjustments are expected to have a significant impact on the banking sector. By raising both the Standing Lending Facility (SLF) and Standing Deposit Facility (SDF) rates, the central bank aims to reduce excess liquidity, which is often a precursor to inflation.
Recall that at the conclusion of the February Monetary Policy Committee (MPC) meetings, committee members attributed the escalating inflation rate in the country to excessive cash in circulation. The CBN’s latest data revealed a record-breaking surge in currency in circulation to N4.05 trillion in July 2024, marking an all-time high.
The CBN also provides a Standing Lending Facility window, a short-term lending window for banks and merchant banks, to access liquidity to run their day-to-day business operations. At the end of August, banks had borrowed over N3.02tn.
Meanwhile, Afrinvest in in its monthly market report projected that the operationalisation of the SDF asymmetric corridor reinforces rally expectations.
“Notably, the CBN has cut the interest rate on excess deposits by commercial and merchant banks above an initial N3.0bn limit to 19.0 per cent, down from 25.75 per cent. This effectively lowers the theoretical floor for T-bills, assuming other factors remain constant.
“Lastly, we estimate N1.2tn inflows from maturing T-bills (N622.7bn) and FGN bond coupons (N563bn) to improve liquidity dynamics,” the firm asserted.
This article was written by Tamaraebiju Jide, a student at Elizade University
Nigeria has reiterated its commitment to strengthening ties with Indonesia, concentrating on the untapped economic potential that can be unlocked through the joint efforts of the two nations. This pledge was made during the Second Indonesia-Africa Forum held in Bali, Indonesia, from September 1 to 3, 2024.
Representing President Bola Tinubu at the event, Minister of Information and National Orientation, Mohammed Idris, participated in high-level multi-stakeholder partnerships and joint leadership sessions, which highlighted Nigeria’s desire to build a stronger partnership with Indonesia.
He listed shared strengths in areas like economic development, energy, mining, food security, healthcare, and the digital economy. Idris expressed Nigeria’s eagerness to leverage these strengths to drive inclusive and sustainable growth.
“The Indonesia-Africa Forum is a catalyst for a new era of cooperation, aimed at propelling both our countries toward a brighter and more prosperous future.
“Nigeria is committed to leveraging our shared strengths and resources to focus on critical pillars such as economic transformation, energy and mining, food and health security, and the digital economy.
“These are the foundations upon which our future cooperation will be built, driving inclusive and sustainable economic growth beneficial to all our nations,” Idris noted.
The forum emphasized the significant economic and demographic weight of Africa and Indonesia, representing a combined population of over 1.7 billion and a total GDP of $4.4 trillion.
The event convened heads of state, government officials, business leaders, and stakeholders to deliberate on ways to boost economic cooperation and tackle global challenges. Discussions centered on Nigeria’s pivotal role in driving the African Union’s Agenda 2063.
Idris underscored President Bola Tinubu’s comprehensive agenda for economic reforms, security, governance, and social development, as well as his leadership in fostering regional trade and stability through the Economic Community of West African States.
Nigeria’s active participation in the African Continental Free Trade Area was noted as a critical driver for boosting intra-African trade and industrialization.
The event, which featured delegates from 22 African countries and five non-African countries, also paid tribute to the 1955 Asia-Africa Forum, known as the Bandung Spirit, which laid the foundation for Asia-Africa relations.
Participants called for increased trade, investment, and development cooperation between the continents, with an emphasis on Africa transitioning from a raw material exporter to a production hub.
The trans-Saharan gas pipeline projects involving Nigeria, Algeria, and Morocco were specifically highlighted.
The Indonesia-Africa Forum serves as a vital platform for enhancing economic relationships between Indonesia and African nations. It promotes dialogue, encourages partnerships, and supports sustainable development through collaboration in essential sectors such as trade, investment, energy, and the digital economy.
This article was written by Tamaraebiju Jide, a student at Elizade University
Nigeria’s external debt servicing soared by 53.63% in the first seven months of 2024, reaching $2.78 billion. This marked a considerable increase from the $1.81 billion recorded in the same period last year.
According to data from the Central Bank of Nigeria, disclosed in the weekly International Payments data, the highest monthly payments occurred in May ($854.36 million), next occured January ($560.51 million) and July ($542m).
The highest amount paid on external debt servicing, in the past year, was $641.69m in July 2023, followed by $400.47m in March 2023. Other months remained below $300 million, with the lowest amount recorded in June 2023 at $54.35m. The trend of lower payments continued throughout the year.
The Central Bank of Nigeria allocates a siginificant portion of its weekly international payments to servicing external debt.
According to the Debt Management Office, Nigeria’s debt stood at N121.67tn as of the end of the first quarter. The DMO report read, “Nigeria’s total public debt stood at N121.67tn ($91.46bn) as of March 31, 2024. The comparative figure for December 31, 2023, was N97.34tn ($108.23bn). Total domestic debt was N65.65tn ($46.29bn), while total external debt was N56.02tn ($42.12bn).”
DMO, speaking in details about the debt, said, “The increase in naira terms of N24.33tn is being misinterpreted as new borrowing. The amount represents new borrowing of N2.81tn as part of the new domestic borrowing of N6.06tn provided in the 2024 Appropriation Act, new domestic borrowing of N4.90tn as part of the securitisation of the N7.3tn Ways and Means Advances approved by the National Assembly, as well as, the depreciation in the official naira exchange rate from $/899.39 in Q4, 2023, to $/N1,330.26 in Q1, 2024.”
Tajudeen Ibrahim, the director of Research and Strategy at Chapel Hill Denham, supported the DMO’s view that the weakening of the naira was partly responsible for Nigeria’s increased debt burden. He also identified an additional contributing factor.
“One, there is a foreign currency translation impact on the debt servicing, and the second factor is the actual increase in the debt value itself because, in the period that you are looking at, Nigeria has taken on more debt both internationally and locally. Nevertheless, there is some element of currency devaluation in the figure that you are looking at,” he said.
Market analysts have cautioned that Nigeria could become trapped in debt if it keeps taking on more loans at a higher interest rate. With its poor credit rating, Nigeria struggles to find cheaper financing, leading to increasing debt servicing costs that could cut into government spending on essential services or infrastructure.
Experts suggest that Nigeria should either stop borrowing altogether or focus on using loans to fund capital projects rather than day-to-day expenses.”
In May, international rating agency, Fitch Ratings revised Nigeria’s outlook on Nigeria’s Long-Term Foreign-Currency Issuer Default Rating to positive from stable, affirmed the IDR at ‘B-’ and also projected that debt servicing will hit $4.8bn in 2024.
“Government external debt service is moderate, expected at $4.8bn in 2024 and $5.2bn in 2025 (with $2.9bn of amortisations, including a $1.1bn Eurobond repayment due in November). The government plans to meet its external financing obligations through a combination of multilateral lending, syndicated loans, and potentially from commercial borrowing,” Fitch said in its commentary.
Despite the current administration’s emphasis on domestic borrowing from the capital, it still relied heavily on foreign exchange bank swaps, which made up about 30% of Nigeria’s foreign reserves.
In 2023, the FGN’s external debt service payments increased by $1.1bn to $3.5bn in FY2023, comprising US$1.9bn and $1.6bn in market and non-market debt payments, respectively. FG also projected a spending of N8.25tn to service its debt in 2024.
President Bola Tinubu stated that his administration is committed to stopping the vicious cycle of overreliance on borrowing for public spending and the resulting stress on the management of scarce government resources caused by debt service.
At the subnational level, 22 states have spent a total sum of N251.79bn to service debt borrowed by past administrations within nine months of assuming office, a Sunday PUNCH report in July indicated.
Reports gathered revealed that the states obtained fresh loans of N310.99bn between July 2023 and March 2024, despite increased monetary allocations from the Federation account.
The information was obtained from the budget implementation reports of each state sourced from the Open Nigerian States, a budgIT-backed website that serves as a repository of government budget data. BudgIT is a Nigerian civic organisation promoting transparency.
Although in August, Nigeria debuted a $500m domestic FGN US dollar bond under its $2bn programme. The bond offering was presented at a hybrid event in Lagos and aimed to attract pension funds, banks, and individuals living in or outside of Nigeria and foreigners living in the country.
Analysts projected that the offering would boost the external reserves to help stabilise the Nigerian currency.
A Professor of Capital Market at Nasarawa State University, Uche Uwaleke, observed in a commentary sent to our correspondent that bond issuance holds a lot of promise to investors and the economy in general in several ways.
Highlighting the potential, Uwaleke, who is also the President of Capital Market Academics of Nigeria, said, “It provides an opportunity to earn a risk-free return on investments given that dollar deposits with banks attract little or no interest, the interest payable to bondholders is exempt from income tax, and it allows retail and institutional investors to diversify their portfolios.
“It provides an alternative, cheaper source to meet the government’s financing needs in a period where the cost of servicing domestic debt is made more expensive by hawkish monetary policy. It should help to strengthen the naira since the dollars raised will be available for intervention in the forex market.”
He added that high demand for the debut bond would embolden the government to further explore the domestic dollar bond market, thus reducing its participation in the naira bond market, a development that would free up capital for the private sector.
However, an economist, Marcel Okeke, warning of the danger of dollarisation of the economy, said, “There is the danger of dollarisation of the Nigerian economy – especially in this case of a dollar-denominated local bond.”
Okeke, a former Chief Economist of Zenith Bank Plc, added, “Overtly or covertly, therefore, the ongoing issuance of domestic dollar-denominated bonds is outright dollarisation of the economy. Period!
“Section 15 of the CBN Act 2007 states that, ‘The unit of currency in Nigeria shall be the Naira which shall be divided into one hundred kobo.” Section 20 (1) of the Act states that ‘The currency notes issued by the Bank shall be legal tender in Nigeria at their face value for the payment of any amount.’ The ongoing dollar-denominated bond sale in Nigeria, therefore, is an official dollarisation or the introduction of what the IMF calls a ‘bi-monetary’ system.
“The domestic dollar bond issuance and its implied entrenchment of a bi-monetary system by the Federal Government of Nigeria leaves the economy with a dicey outlook. This implicit dollarisation of the Nigerian economy portends a further weakening and relegation of the naira.”
This article was written by Tamaraebiju Jide, a student at Elizade University
The benchmark yield on the Federal Government of Nigeria (FGN) bond fell below 19% in the secondary market due to increasing demand from domestic investors following a stronger economic performance in the second quarter of the year.
According to data, Nigeria’s gross domestic profit increased by 3.19% during the country’s first disinflation. Economic reform would put Nigeria on the path to progress, economists said, pointing out that negative naira fluctuations remain the elephant in the room.
According to market consensus, the consumer price index will fall further in the remainder of the year, reducing the negative real return obtained on fixed income securities investments.
Market analysts said the moderation in negative real return to 6.65% in the fixed income market as a result of inflation rate (33.40%) versus benchmark interest rate (26.75%) has been responsible for the ongoing rally in the secondary market.
Already, the Debt Management Office has started to reduce bond supply at the primary market as the authority has met more than 70% of the 2024 target in the debt market. Surprisingly, the debt office sold more than the total offer at the last auction, raising expectation that bond supply might improve again in the September auction.
Yesterday, the bond market rallied. Hence, yield contraction was seen at the short (-20 bps), mid (-18 bps), and long (-15 bps) segments of the curve. Fixed interest securities analysts at AIICO Capital Limited said in a note that most of the interest was directed towards the 2031 and May 2033 FGN bonds.
Across the benchmark curve, Cordros Capital Limited told investors that the average yield declined at the short (-12 bps), mid (-10 bps), and long (-15 bps) segments.
Analysts attributed the yield contraction across the tenor to demand for the JAN-2026 (-32bps), JUN-2033 (-25bps), and APR-2037 (-95bps) bonds, respectively. The market ended bullish with an 18-bps decline in the average yield to 18.78%.
The Nigerian naira rose by 80 basis points against the US dollar in the foreign exchange (FX) market on Monday, owing to strong demand pressures.
The market expects the monetary authorities to hold an FX auction in September to reverse the negative trend against the naira in the official currency market.
The FX problem has persisted, prompting the monetary authority to sell OMO bills at a rapid pace ahead of retail Dutch auction sales in September.
To increase FX supply in the market, the apex bank has been selling OMO bills in the primary market at a rapid pace, indicating a weak net external reserves balance.
Bizwatch Nigeria reported that the Central Bank of Nigeria (CBN) reintroduced the Retail Dutch Auction System in August as part of its attempts to channel foreign currency to FX consumers.
The Naira appreciated by 0.80% versus the US dollar on the official market, closing at ₦1,585.77 per US dollar.
The exchange rate is predicted to decline further due to the anticipation that NNPCL’s external reserves will be affected even more as a result of its $6 billion debt to fuel suppliers.
The Naira saw further demand pressure as it depreciated by 0.31% to ₦1,625 per US dollar in the parallel market. Data from the Central Bank showed that external reserves declined further $36.321 billion following successive outflow in August, 2024.
Crude oil prices extended losses In the global commodity market due to higher OPEC+ production in October and a sharp drop in output from Libya, along with sluggish demand in China and the U.S.
However, the market rebounded towards the close of trading. Brent prices increased by 0.62% to $76.71, while WTI prices gained 0.94% to reach $74.24. Gold prices also increased by 0.22% to $2,533.10 per ounce.
The Central Bank of Nigeria (CBN) launched September 2024 with another open market operation, offering investors N500 million in OMO notes. One-year OMO bills decreased by 7 basis points at the auction, closing at 21.80%, down from 21.87% the previous week.
Last week, the CBN sold N1.63 trillion in OMO notes to investors, primarily deposit money banks and international portfolio investors, at reasonable rates. Reflecting the need to increase foreign exchange inflows into the economy, the CBN offered N500 billion in normal maturities, and the rate on one-year OMO notes fell once more.
Similar to the prior auction on August 27, 2024, sales only took place for the 365-day instrument, according to CardinalStone Securities Limited. Analysts reported that stop rates for the 365-day OMO bill came in lower at 21.80% compared to 21.87% at the previous auction.
In the secondary market, investors reacted to developments in the primary market auction. Investors increased their interest in OMO bills, and thus dragged yields lower. Traders said the average yield declined by 4 basis points to 22.8% in the OMO bills segment in the secondary market on Monday.
Equity investors on the Nigerian Exchange (NGX) platform gained more than N123 billion, with UBA, ETranzact, and Oando Plc topping the gainers chart.
Due to buying activity, the NGX key performance indicators increased by 0.22%, while the year-to-date return increased at the start of the week. According to data, the market index, also known as the All-Share Index, increased by 213.94 basis points today, or 0.22%, to close at 96,793.95.
The equities market saw increased investor interest in large and medium-cap stocks such as OANDO, CONOIL, UBA, and others. However, market activity decreased slightly, with the total volume and total value traded for the day falling by 13.21% and 75.05%, respectively.
In its market update, Atlass Portfolios Limited said approximately 498.12 million units valued at ₦11,036.57 million were transacted across 13,149 deals.
UBA was the most traded stock in terms of volume, accounting for 11.02% of the total volume of trades, followed by ZENITHBANK (8.03%), OANDO (7.71%), ACCESSCORP (7.36%), and PRESTIGE (4.95%) to complete the top 5 on the volume chart.
Ticker: OANDO emerged as the most traded stock in value terms, accounting for 29.01% of the total value of stocks of traded on the exchange.
OANDO topped the advancers’ chart for today with a price appreciation of 9.95 percent, trailed by IMG with (+9.85%) growth, ETRANZACT (+9.80%), CONOIL (+9.72%), UPL (+9.13%), DEAPCAP (+9.09%) and twenty-two others.
Twenty-nine stocks depreciated, according to data from the Nigerian Exchange. LIVESTOCK was the top loser, with a price depreciation of -10.00%. Other decliners include RTBRISCOE (-9.86%), CORNERST (-9.63%), DAARCOMM (-9.59%), FTNCOCOA (-8.11%), and UCAP (-3.02%).
At the end of trading session, the market breadth ended marginally negative, recording 28 gainers and 29 losers. On the other hand, the market sector performance was positive.
Today, three out of the five major market sectors ended the day positive. The Oil & Gas sector advanced by +1.74%, followed by the banking sector which gained +1.09% while the Industrial sector by popped up by +0.05%.
The insurance and consumer goods sectors were down by -2.20% and -0.35%, respectively. Overall, the equity market capitalisation of the Nigerian Exchange increased by ₦123.19 billion to close at ₦55.60.
Dangote Refinery has begun manufacturing premium motor spirit or petrol, with Nigerian National Petroleum Company Limited as its first exclusive buyer. According to a recent Reuters article, the refinery, with a capacity of 650,000 barrels per day, is in the last phases of testing and will begin producing gasoline in the coming weeks.
Devakumar Edwin, vice president of Dangote Industries Limited, also stated that the national oil firm is willing to purchase its products just to meet local demand. “We are testing the product (gasoline), and subsequently it will start flowing into the product tanks.
“If no one is buying it, we will export it as we have been exporting our aviation jet fuel and diesel,” Edwin said. The report confirmed that the refinery is ready to roll out gasoline in the coming weeks as testing has begun in the 650,000 barrel per day petrochemical plant.
“In line with the Petroleum Industry Act (PIA), NNPC Ltd. Remains dedicated to its role as the supplier of last resort, ensuring national energy security. We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide,” NNPC said.
He did not, however, specify when the product will be available. It was previously reported that the NNPC admitted to owing international oil traders around $6 billion in subsidy commitments, a debt that has severely hampered fuel delivery to local marketers. The scarcity is caused by these traders suspending petrol imports to the NNPC due to unmet obligations.
While NNPC first denied the allegations, the company ultimately admitted that its outstanding debts had a significant impact on the country’s ongoing gasoline crisis. Recall that NNPC Limited recently recognized its debt to international oil traders, which has contributed significantly to the fuel supply constraint that is affecting local merchants.
It was earlier reported that NNPC owes these traders around $6 billion in subsidy obligations, prompting them to stop supplying imported petrol to the company. This financial strain has placed considerable pressure on the Company and poses a threat to the sustainability of fuel supply.
The recent announcement that NNPC will become the exclusive buyer of petrol from the Dangote Refinery could be a game-changer for the national oil company, which is struggling with substantial international debts.
By sourcing petrol exclusively from the Dangote Refinery, NNPC could significantly reduce importation and logistics costs, enabling local marketers to purchase fuel at lower prices.
This arrangement is expected to ease the ongoing fuel scarcity that has gripped the nation for over a month, with little progress from NNPC so far. With the capacity to meet both domestic demand and export to other African countries, the Dangote Refinery is set to play a vital role in stabilizing Nigeria’s fuel supply.
The Federal Executive Council has recently approved the sale of crude oil to the Dangote refinery in local currency, on the condition that the refinery will sell processed petrol to the country in the same currency.
Dangote Refinery has begun manufacturing premium motor spirit or petrol, with Nigerian National Petroleum Company Limited as its first exclusive buyer.
According to a recent Reuters article, the refinery, with a capacity of 650,000 barrels per day, is in the last phases of testing and will begin producing gasoline in the coming weeks.
Devakumar Edwin, vice president of Dangote Industries Limited, also stated that the national oil firm is willing to purchase its products just to meet local demand.
“We are testing the product (gasoline), and subsequently it will start flowing into the product tanks. “If no one is buying it, we will export it as we have been exporting our aviation jet fuel and diesel,” Edwin said.
The report confirmed that the refinery is ready to roll out gasoline in the coming weeks as testing has begun in the 650,000 barrel per day petrochemical plant.
“In line with the Petroleum Industry Act (PIA), NNPC Ltd. Remains dedicated to its role as the supplier of last resort, ensuring national energy security. We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide,” NNPC said.
He did not, however, specify when the product will be available. It was previously reported that the NNPC admitted to owing international oil traders around $6 billion in subsidy commitments, a debt that has severely hampered fuel delivery to local marketers.
The scarcity is caused by these traders suspending petrol imports to the NNPC due to unmet obligations. While NNPC first denied the allegations, the company ultimately admitted that its outstanding debts had a significant impact on the country’s ongoing gasoline crisis. Recall that NNPC Limited recently recognized its debt to international oil traders, which has contributed significantly to the fuel supply constraint that is affecting local merchants.
It was earlier reported that NNPC owes these traders around $6 billion in subsidy obligations, prompting them to stop supplying imported gasoline to the company. This financial strain has placed considerable pressure on the Company and poses a threat to the sustainability of fuel supply.
The recent announcement that NNPC will become the exclusive buyer of petrol from the Dangote Refinery could be a game-changer for the national oil company, which is struggling with substantial international debts.
By sourcing petrol exclusively from the Dangote Refinery, NNPC could significantly reduce importation and logistics costs, enabling local marketers to purchase fuel at lower prices. This arrangement is expected to ease the ongoing fuel scarcity that has gripped the nation for over a month, with little progress from NNPC so far.
With the capacity to meet both domestic demand and export to other African countries, the Dangote Refinery is set to play a vital role in stabilizing Nigeria’s fuel supply. The Federal Executive Council has recently approved the sale of crude oil to the Dangote refinery in local currency, on the condition that the refinery will sell processed petrol to the country in the same currency.
Nigeria’s Letter of Credit (LC) payments decreased by 57.04% in the first seven months of 2024, dropping from $912.35 million in 2023 to $391.91 million. This report is according to the Central Bank of Nigeria’s weekly International Payments Data on its website.
A Letter of Credit (LC) is a financial instrument used in international trade. It’s a written guarantee issued by a bank on behalf of a buyer (importer) to a seller (exporter). The bank promises to pay the exporter a specified amount within a set timeframe, provided the seller delivers the goods as agreed and presents the required documentation.
During the review period, Nigeria’s LC payments declined by approximately $520.44 million. This decline is attributed to factors such as the departure of multinational companies, increased customs duties, and a volatile foreign exchange market, which collectively hampered the country’s foreign trade.
An analysis of the CBN data reveals that the highest LC payments this year occurred in February at $102.59 million, followed by July at $79.65 million and January at $58.33 million.
In March, LC payments fell to $43.53 million from $269 million in the same month of 2023. They subsequently rose to $54.02 million in April before declining again to $21.48 million in May. June saw a slight recovery with payments reaching $32.26 million.
Speaking on the trend, the Managing Director of Arthur Steven Asset Management Limited, Tunde Amolegbe, opined that the decline was expected given the unstable exchange rate, skyrocketing customs clearing charges and of course the exit of major international companies and the closure of other manufacturing in the country.
He, however, added that the situation may improve even if it is slightly on the back of the tax waivers given recently for the importation of some essential food products.
“Stability in the FX market and a lower interest rate and harmonised tax regime should also help,” he concluded.
According to Bloomberg, the naira has fallen by about 70 per cent since May 2023 when President Bola Tinubu took office following the devaluation of the currency. Several attempts by the CBN to boost liquidity have yet to yield significant results.
The Director of Research and Strategy at Chapel Hill Denham, Tajudeen Ibrahim said “Nigerian businesses are paying down on their Letters of Credit. This is an indication of an improvement in the dollar liquidity in the Nigerian financial system, largely on the back of CBN’s policy response to the dollar shortage in the system.
“The CBN at the last RDAS auction did sell some volume of dollars to companies to help them pay down on their foreign currency loans. One of the major companies that has been paying down on their letters of credit is MTN. I reckon they have paid about $300m in LCs, so corporations have been clearing their LCs because of the negative impact it is having on their earnings and balance sheet.
“The outlook in Letters of Credit to my mind is positive because I expect improvement liquidity in US dollars inflow into the economy and I reckon that Nigerian companies will pay down further on their LCs.”
For economy and capital market analyst, Rotimi Fakayejo, dollar liquidity plays a role in the decline recorded in the LCs payments.
He said, “FX availability is inconsistent. At a point, the supply was less and the banks were given the leeway to get whatever they needed, but typical of the banks, they were targeting profit and I believe that slowed down the process. The slow or reduced supply from the CBN has so much impact.
“If importers want to import and there is no access to FX or the express undertaking of Letters of Credit on their behalf is not done, it will affect their business. Also, if what they are importing is becoming increasingly difficult to sell and the market is no longer friendly, then you will also see a reduction in the LCs.
“For instance, the importation of vehicles has reduced, whether new cars or tokunbo. People are buying more Nigerian used cars, but the customs duty we know is subject to the foreign exchange rate and the government is flip-flopping about it. Every time, what we see is an increase, so it has an impact.”
Fakayejo noted that the exit of multinationals from the manufacturing sector is not new and has now spread to the oil and gas industry
He said, “I believe with the slowdown in the LCs, the overall effect should be positive for the economy because less of our foreign exchange will be used on importation and local production should be the order of the day. I believe that the overall effect should be positive for us.
“Going forward, I don’t think the impact would be much. It is expected that by September, the local refinery will start producing and Dangote Refinery will start selling to the local market, which should mean more dollar availability because there would be less need to import PMS.
“So, we may see an improvement in the import receipts from the banks and increased LCs accessibility from the banks. I believe the slowdown is just for some time and the situation will improve.”
According to Tajudeen Olayinka, an Investment Banker and stockbroker, the decline in LC payments could be attributed to several factors. One possibility is a decrease in demand for imports due to the high cost of imported goods and consumer resistance. Another explanation is that importers may be exploring alternative financing options, such as open account trade, direct remittances, or bills for collection.
“The likelihood of these other credit options is very doubtful, given concerns of foreign exporters to poor credit ratings of local importers. Therefore, high cost of raising naira to finance imports and high exchange rate may be the other reasons for the observed slowdown in letters of credit issuances by Nigerian banks.
“The development has both positive and negative implications: (i)Positive in that it will create scarcity of foreign goods and a new desire to resort to local production to arrest scarcity, with improvement to Nigeria’s Balance of Trade and Exchange Rate of the naira in the long run. Negative, in that it will continue to cause a drag on the economy and high inflationary pressure in the immediate to near term,” he mentioned.
This article was written by Tamaraebiju Jide, a student at Elizade University
According to the international payment of the Central Bank of Nigeria, Nigeria spent $2.78 billion on servicing foreign debt in the first seven months of 2024. This amount accounts for 64% of the total $4.36 billion in official dollar payments made by the Apex Bank on behalf of the Nigerian government between January and July 2024.
Nigeria used up 46% of its total international payments on debt service in the same period last year. This represents a 39.13% increase in the percentage of payments directed towards foreign debt servicing in 2024.
The significant rise in the percentage of payments allocated to debt service suggests that Nigeria’s foreign debt obligations have grown substantially, surpassing the increase in overall international payments.
“The significant increase in debt servicing costs could be attributed to several points, including a larger debt stock, elevated interest rates on existing debt, or adjustments to payment schedules that have accelerated debt repayments.
Data interpretation
In January 2024, the external debt servicing payment rose from $112.35 million to $560.52 million, a 399% increase recorded in the same month of last year.
It further constituted 74% of the total international payments of $757.41 million made in the same month. This trend, although fluctuating, remained significant as the months progressed.
February 2024 saw debt servicing costs amount to $283.22 million, accounting for 67% of the $424.96 million in total international payments for that month. Also, there was a marginal decrease in debt servicing payments by 2% from the $288.54 million paid in the same month of 2023.
The following month, March 2024, witnessed a further decrease to $276.17 million, down by 31% from $400.47 million in the same month of last year, representing 65% of the total international payments of $424.71 million.
April 2024 recorded $215.20 million in debt servicing payments, which made up 47% of the $462.54 million total international payments. This was one of the lowest percentages observed in the year. However, there was a significant increase of 132% from the $92.85 million paid in April 2023.
The most evident rise occurred in May 2024, with debt servicing rising to $854.37 million, up by 287% from $221.05 million in the same month of last year, reflecting a considerable increase in debt stock.
It is also the highest monthly expenditure within the period. This figure represents 69% of the $1.24 billion in total international payments made in that month.
In June 2024, the debt servicing cost was $50.82 million, slightly lower by 6% compared to $54.36 million in June 2023.
It constituted only 14% of the $353.61 million total international payments made that month. This was the lowest percentage of the year, signifying a temporary relief in debt obligations at the end of the first half of the year.
Any ease was shortened as debt service payments surged to $542.50 million in July 2024, consuming a significant 78% of the country’s total international payments. Nonetheless, this figure marked a 15% decline compared to the $641.70 million paid in July 2023.
For the seven-month period between January and July, Nigeria’s total debt service costs reached $2.78 billion in 2024, a 19% increase from the $1.81 billion spent during the same period in 2023.
This ongoing increase showcases the escalating burden of debt service on Nigeria’s finances and points attention to the growing difficulty of managing the country’s external debt in the face of rising global financial pressures.
Key points
Reports earlier indicated that Nigeria’s foreign debt burden continued to grow, with the country spending approximately $1.12 billion on debt service payments in the first quarter of 2024.
As of the seventh month, Nigeria’s foreign debt service payments had more than doubled from their first-quarter level.
In a statement, the World Bank expressed alarm over the rising debt service costs plaguing developing nations worldwide. The bank’s Chief Economist and Senior Vice President, Indermit Gill, speaking on the height of the situation, warned that without swift and coordinated action, a global financial crisis could ensue.
Gill cautioned that the confluence of record-high debt and escalating interest rates has placed many developing nations on a perilous path that could potentially result in economic hardship and difficult resource allocation choices.
This article was written by Tamaraebiju Jide, a student at Elizade University
The low-level flypast marks three milestones for Emirates and South Africa; The flying display celebrates the return of the second daily A380 service on the Dubai-Johannesburg route from 1 September.
Emirates, the world’s largest international airline, takes to the skies to celebrate its longstanding and ongoing commitment to South Africa, with the country’s first ever A380 flypast. Running up the score, the remarkable low-level aerial showcase also marks Emirates’ first ever flypast in Africa and the first international airline to execute such a feat in South Africa.
Honouring its shared love for rugby with over 62,000 enthusiastic spectators, Emirates flew the world’s largest commercial passenger aircraft over Emirates Airline Park, just before kick-off of the much-anticipated Springboks vs All Blacks test match. Flying at an altitude of just 500 feet above the ground, the iconic Emirates double-decker aircraft saluted rugby and aviation fans, in its latest signature livery.
The Emirates A380 took off from O.R. Tambo International Airport at 16:00, travelling at a speed of 140 kts, reaching the stadium at 16:58, perfectly timed to follow South Africa and New Zealand’s national anthems. The impressive aerial feat follows months of thorough and cross-functional planning between stakeholders including multiple teams at Emirates, South African Civil Aviation Authority, Airports Company South Africa, Emirates pilots, Flight Operation Managers and Air Traffic Controllers working together with the Emirates Lions team. The teams worked together across every element of the aerial display, taking into account air traffic patterns at different times of the day with different weather and wind conditions.
UAE National Captain Mubarak Al Mheiri, A380 Deputy Chief Pilot commanded the flight, joined by Captain Khalid Binsultan and Captain Abdalla Al Hammadi, both Technical Pilots for the Airbus A380 and Captain Richard Fiess, A380 Captain. Captain Mubarak has flown with Emirates for 19 years and has completed over 7,200 hours in the cockpit of the iconic A380. He has commanded similar flypasts for Emirates, including UAE National Day celebrations (http://apo-opa.co/3yXQLen) for the past four years and headlining the commercial aircraft flypast formation at the 2023 Dubai Air Show (http://apo-opa.co/3Xrar3A). He also participated in the iconic flight promoting Expo 2020 (http://apo-opa.co/3TdcRAq), which saw an A380 fly around an Emirates Cabin Crew at the very top of the Burj Khalifa; the unprecedented formation flight with the Jetman (http://apo-opa.co/3TdcSV0) team back in 2015; and with the Red Arrows (http://apo-opa.co/3Tddj1o) in 2022.
Afzal Parambil, Country Manager of Southern Africa, Emirates said, “Tonight’s record-setting flypast is a powerful display of our unwavering commitment to South Africa. It represents not just an achievement of technical excellence, but encapsulates our ongoing partnership with key stakeholders in South Africa, including the Civil Aviation Authority, O.R. Tambo International Airport, Emirates Lions and, of course, the strong relationship we’ve built with our customers and travel partners here over the years. For almost three decades, we’ve unlocked an array of choices for our customers, by offering an outstanding on-ground and in-flight experience coupled with seamless global connectivity, and we’re not slowing down now. We look forward to the next 30 years, and beyond, of serving South Africa and spotlighting its many attractions to the world.”
Pieter Burger, Ellis Park Stadium Managing Director, said, “The flyover has become such a pre-match entertainment staple at the iconic Emirates Airline Park. First witnessed in 1995 at the final of the international rugby showpiece where the South African national rugby team was victorious, to have had this moment tonight against the very same opposition was a thrilling experience for fans watching at the stadium and at home.
We are extremely grateful to our long-time partner Emirates who were pivotal towards the success of this project, together with all other role players involved. From a lasting memory perspective, this will certainly be up there for those who had the privilege to witness the moment.”
The flypast also marks the return of Emirates’ second A380 service on the Dubai-Johannesburg route, enhancing more customer choice and travel options with Emirates’ iconic onboard products and world-class service. EK761 departs Dubai at 04.05, landing in Johannesburg at 10:15, with the return flight, EK762, departing Johannesburg at 13.25 and touching down in Dubai at 23.45, perfectly timed for onward connections to key destinations in the Far East, Europe and the Middle East.
Emirates is one of the world’s biggest supporters of rugby. In South Africa, Emirates’ investment in the sport is headlined by its steadfast title sponsorship of the Emirates Lions, including naming rights of the team’s home stadium, Emirates Airline Park. The airline also sponsors the action-packed Cape Town Sevens, a regular fixture on the Sevens World Series calendar and one of the most popular live sporting events in South Africa, regularly drawing over 100,000 spectators.
Globally, Emirates can be found at the centre of the action from grassroots to professional leagues as the sponsor of Rugby World Cup since 2007, with prominent presence planned at the upcoming 2027 World Cup in Australia.
Firmly established as a long-term partner of South African aviation, tourism, and trade, Emirates has been serving the market for 29 years, connecting over 20 million travellers to/from South Africa with more than 140 destinations on its vast global network, via Dubai. The airline serves customers traveling to and from South Africa with 42 weekly flights to Cape Town, Johannesburg and Durban, with additional connectivity to regional points across the country offered by its codeshare and interline partners South African Airways, Airlink, Cemair, and FlySafair.
Oil prices fell as data from China’s purchasing manager index revealed ongoing economic weakness. Brent futures closed 2.4% lower on the day, while the US benchmark West Texas Intermediate fell as well. The worldwide benchmark Brent crude price was $76.93 per barrel, while the American standard West Texas Intermediate (WTI) was $73.55 per barrel.
According to market observers, speculative positioning in the oil market is still limited due to demand concerns and uncertainties surrounding OPEC+ policies.
According to an ING report published on Monday, OPEC+ members are leaning toward sticking to their plan and progressively unwinding cuts beginning in October.
Given lingering demand concerns there had been a growing part of the market, analysts said who thought the group would delay any supply increases. The group may believe that supply disruptions from Libya provide an opportunity to increase supply.
Libyan supply disruptions continue as the country halted crude oil export on political reason. However, while output has been cut further in some fields, others are seeing production being restored. Three oil fields, including Sarir, Messla and Nafoura are restarting output.
‘It is not clear whether the resumption of operations at these fields signals progress in negotiations between Libya’s Western and Eastern governments.
“However, there are some suggestions that the restarting of these fields is to meet domestic demand rather than exports” ING commodities strategists Warren Patterson and Ewa Manthey said.
Bearish sentiment in the oil market has continued in early morning trading today. Chinese PMI data released over the weekend have raised further concern over demand. China’s manufacturing PMI came in at 49.1 for August, below the consensus of 49.5 and also the fourth consecutive month of contraction in manufacturing activity.
The number of oil rigs in the US remained unchanged this week, oilfield services company Baker Hughes data showed Friday. The number of oil rigs, an indicator of short-term production in the country, remained flat at 483 for the week ending August 30. The number of US oil rigs fell by 29 compared to one year ago.
The pump price of Premium Motor Spirit (petrol) may rise as the Nigerian National Petroleum Company, NNPCL, admits to financial difficulties. According to Bizwatch Nigeria, NNPCL’s spokeswoman, Olufemi Soneye, revealed on Sunday that the company was struggling due to high gasoline supply costs.
The business stated: “This financial strain has placed considerable pressure on the Company and poses a threat to the sustainability of fuel supply.” .
The admission verified a rumor that the protracted gasoline scarcity in the country is caused by NNPCL’s $6.8 billion debt to international oil suppliers.
The development suggests that NNPCL, Nigeria’s sole supplier of PMS, may no longer offer the product for N617 to N720 a litre.
Recall that the Major Energy Marketers Association of Nigeria (MEMAN) in July said that the landing cost of petrol was N1,117 per liter.
Though NNPCL has repeatedly denied paying fuel subsidies, it has recently admitted that it is only taking care of Premium Motor Spirit (PMS) importation shortfalls between the company and the federation.
Reacting to the development, MS Ingawa, aide to the Minister of Housing and Urban Development, Ahmed Dangiwa said NNPCL has the option of increasing pump price and raising money through asset sale.
“The only immediate options now are: “Increase the pump price of PMS to reduce the burden of subsidy on NNPCL. This will not even bring quick and enough money for NNPCL, or raise money through asset or equity sale to offset debt and properly plan”, he said on his X handle on Sunday.
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