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Dangote Refinery: I am confident Tinubu will sustain economy growth, says Buhari

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Buhari at Dangote Refinery

President Muhammadu Buhari on Monday described the Dangote Refinery as a significant milestone for Nigeria’s economy and a game changer for the downstream petroleum products market in the entire African region.

The president inaugurated the refinery in Ibeju-Lekki, Lagos, which is expected to enable Nigeria to achieve self-sufficiency in refined products and even have a surplus for export.

A statement by Femi Adesina, special adviser to the President on Media & Publicity, said that Buhari made the declaration while speaking at the commissioning of the refinery.

Heads of State from Ghana, Togo, Niger, Senegal and a representative of the President of Chad attended the event.

‘‘This mega industry we are commissioning today is a clear example of what can be achieved when entrepreneurs are encouraged and supported and when an enabling environment is created for investments and for businesses to thrive,” Buhari said.

‘‘I am confident that my successor, His Excellency Asiwaju Bola Ahmed Tinubu, will sustain the improvement in our economic and business environment and strengthen the framework of our public-private partnership policies to accelerate the pace of our economic growth and development.

‘‘I am happy to leave our economy in very competent hands.”

The Nigerian president, who commended Aliko Dangote’s leadership in executing the 650,000 barrels per day refinery, urged other entrepreneurs to emulate his example in driving economic growth and realising Nigeria’s economic potential.

He stressed the need for African countries to unite, integrate their economies, eliminate trade barriers, and rally their populations to achieve Agenda 2063 for the continent’s prosperity.

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‘‘I urge and encourage our other great entrepreneurs to emulate this iconic Nigerian industrialist and join the Government in accelerating our growth in order to realise our country’s globally recognised economic potential.

‘‘When I travel around Africa and meet and engage my brother Heads of State (and I am delighted some of their Excellences are here), I often sense a quiet expectation that our country is blessed with resources and human capacity to lead Africa’s rise to economic prosperity and the attainment of Agenda 2063 – ‘The Africa we all want.’

‘‘But to achieve the goals of Agenda 2063, Africa must come together – we must integrate our economies, eliminate trade barriers and energise our youthful population to scale up our production capacity.

‘‘We must create necessary conditions for our private sector to grow and partner with the public sector to accelerate economic growth across the continent.

‘‘We must not allow outside powers to use some of our leaders to destabilise our economic and political trajectory,’’ he said.

Buhari acknowledged the visionary investments made by the Dangote Group, under the leadership of Dangote, in transforming Nigeria’s economy through its involvement in critical industries such as cement and fertiliser.

He noted that investment in these sectors had been crucial in shifting Nigeria from heavy import dependence to a net exporter.

The president acknowledged that Nigeria’s economy had faced significant challenges over the years, including deficits in economic infrastructure, insurgency, and external crises such as the Global Financial Crisis, oil price collapses, the COVID-19 pandemic, and the Russia-Ukraine war.

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‘‘The consequence of these challenges constitutes a severe strain on our economy, limiting Government’s ability to provide basic infrastructure without resorting to huge borrowings.

‘‘Our Government, therefore, took the decision to focus attention on creating an enabling environment for the private sector to thrive and fill the enormous gap in investments not only in infrastructure but also in all critical sectors.

‘‘We recognise that without the active participation of the private sector and a strong commitment to public-private partnership, our economy would continue to remain severely challenged and our economic growth impeded.

‘‘Government, therefore, will and should continue to provide an enabling environment and encourage innovative public-private partnerships in all sectors of our economy,’’ he said.

The President emphasised the administration’s commitment to this approach, citing Executive Order 007 of 2019, which facilitated the rehabilitation/construction of many roads by private sector investors using a Tax-credit scheme.

‘‘It is my hope that the succeeding Administration will continue to apply such innovative schemes in partnership with the private sector to accelerate the provision of critical infrastructure in particular roads, power and gas pipelines,’’ he said.

Business

Why we prioritised $7.5b FX backlog clearance, by Cardoso

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CBN raises capital base for mega banks to N500bn

The Central Bank of Nigeria (CBN) decided to settle $7.5 billion forex backlog owed, to build investor confidence in the domestic economy and build lasting credibility for the country.

CBN Governor, Olayemi Cardoso disclosed this yesterday during the BusinessDay CEO Forum 2024 with the theme: “Leadership In Tough Economic Times”, held in Lagos.

Speaking during the Fireside discussion, the CBN boss said he was advised against making the backlog clearance a priority at the inception of his tenure, because of the impact it will have on the country’s dollar position.

“People thought, there was no need to prioritise the forex backlog clearance,” he said, “ but they failed to realise that the country was in a state of crisis, and loss of confidence.”

He said: “ Even without that, it is important, that you hold high your integrity. As a bank, your yes, must be yes, that is a big major step in building credibility. It is very tempting to push that aside, but ultimately, I was convinced that if we did not do that at that time, we would pay the price as a country.”

Cardozo said findings also showed that clearing of the FX backlog improved the country’s outlook, adding that foreign investors as well as multilateral organizations, such as the World Bank see this move as a bold intervention to improve the economy’s sustainability in the long run.

On the state of the naira, the CBN boss said that by the time he assumed leadership of the apex bank, the forex market was dominated by people who did not follow policy guidelines.

READ ALSO  Why we prioritised $7.5b FX backlog clearance, by Cardoso

His words: “When we assumed leadership at the CBN, we saw distortions from illicit flows, people not abiding by the rules, and it was very important we addressed that to make the market much better. We found pushback, as people who did things in a certain ways wanted to continue.

”He said at that time, a good number of investors came in, left and returned after they understood the CBN’s plans.

He said a lot of the swings in the market are beginning to settle because investors have a better understanding of the Nigerian market place.

“It is important for those on the other side to recognise that we will continue with what we are doing. We believe that with time, stakeholders are becoming more comfortable with the way the market is being run,” he said.

On the CBN’s policy that mandated International Oil Companies (IOCs) on how to repatriate their funds, he said the policy had push back.

He said the there was dialogue between the apex bank and IOCs, adding that the reassurances calmed them down, stating that more forex contributions are being expected from the oil sector.

On why the CBN insisted that retained earnings should not be part of banks’ recapitalisation capital, Cardoso said it was the need to ensure that the exercise produces resilient banking system.

“As long as I can see, the banks had enough time to prepare for this. Two years is a long time. They should take their time, no need to be in any rush. We want to build a resilient banking system, and that’s not what you would like to do overnight,” he said.

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Cardoso said the banks horizon has been expanded to accommodate different kinds of services. “We have no doubt that we must move to a more transparent system, in the banking industry, and the retained earnings exclusion will help achieve that,” he said.

The CBN chief also spoke on the rising interest rate and impact on economic growth. According to him, the interest rate is not set by the CBN, but the MPC which comprise of independent minded thinking people.

“The MPC members are people who are not given to emotion, but data. They go along with what the data say. The MPC has said their major target is to rein in inflation. We were all there when a lot of money got into the system. We saw the Ways and Means went into N27 trillion. We saw intervention funds stood at N10.5 trillion. These policies have their consequences,” he said.

He however, said that month-on-month inflation rate has dropped by 50 per cent and that remains a good signal for the economy, adding that doing things right, will help the country to achieve its desired economic growth.

Speaking on the qualities that may have contributed toward his being made CBN governor, he said it is his commitment to policies that impact positively on the lives of the people.

“One particular thing is very dear to me. As a policy maker, I am very, very committed, to one thing, and that is that at the end of the day, we make policies that impact positively on the man on the street,” he said, pointing out that listening is one very important attitude of his leadership style.

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“Also, communication is important. Nobody needs to tell you that you need to come out there to talk to the people. We have continued to talk to the media, to give an idea on the way forward,” he stated.

Source: The nation

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Dangote Refinery seeks fresh 11 million barrels US oil amid Nigeria’s struggles

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Dangote Petroleum Refinery on Tuesday announced a further reduction in the prices of both diesel and aviation fuel to N940, and N980 per

The Dangote Refinery has announced plans to acquire an additional 11 million barrels of crude oil from the United States, in a move that underscores Nigeria’s persistent oil production challenges.

The refinery, a cornerstone of the country’s ambition to become a net exporter of petroleum products, has found it necessary to supplement domestic supply with imports to meet its operational needs.

In a tender seen by Bloomberg, Dangote purchased five million barrels of West Texas Intermediate (WTI) Midland crude for delivery next month and in September. The company also started a tender process in which it’s looking to buy a further six million barrels of American crude for September.

The refinery near Lagos mostly runs on local crude supplies that can reach the plant from offshore terminals in as little as a couple of days.

It took in more than 41 million barrels of feedstock in the first half of the year as it completed test runs and gradually increased processing rates, tanker-tracking data show. Of that, about a quarter has been American supply.

Aliko Dangote, the chairman of Dangote Group said the refinery will continue to import crude oil as his refinery scales up production and seeks alternative supply contracts.

“It also makes economic sense for us to tender for crude. If we could source 100 percent Nigerian crude, then fine, but we can’t wait,” Dangote said at the Africa CEO Forum 2024.

“There is a bit of a problem for us to source the entire volume of crude that we’re looking for domestically because we need different types and mixes. Unless crude production improves – which we pray and hope for – we need to go elsewhere,” Dangote added.

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According to CAS, the refinery took delivery of 11 WTI cargoes, or 9 million barrels, between February and May, contrasting with around 18 million barrels of Nigerian crude deliveries.

Now, the move to secure a longer-term offtake agreement signals a commitment by the refinery to more permanently diversify its crude sources, coinciding with a period of extreme demand weakness for Nigerian supply.

“It’s a little surprising that they are seeking term WTI at this stage,” said one West African crude trader, noting demand weakness that pushed Nigeria’s flagship Bonny Light crude to a discount to Dated Brent for the first time since November on May. 17.

Nigeria’s state-run Nigerian National Petroleum Company (NNPC), also 20 percent equity holder in the project, has been widely expected to supply the bulk of Dangote’s crude demands, selling to the refinery in USD due to its location in the Lekki free zone.

But findings showed NNPC has struggled to meet its 300,000 barrels per day (bpd) of crude oil obligation to acquire a 20 percent stake in the Dangote Refinery.

The nation pumped about 1.28million barrels a day of crude and liquids in June, still far below its estimated production capacity of 2.6 million barrels a day. Crude theft, aging oil pipelines, low investment, and divestments from oil majors operating in the West African nation have all contributed to declining production.

Despite various assurances by the federal government and the Nigerian National Petroleum Company Limited (NNPC) of meeting the country’s Organisation of Petroleum Exporting Countries (OPEC) quota, Nigeria recorded an estimated 30 million barrels underproduction in the first four months of 2024.

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Despite massive spending to curb insecurity in the Niger Delta by the NNPC and the federal government, oil theft, assets vandalism and outright sabotage are rampant in the area where Nigeria extracts its oil from.

The country currently has a multi-billion-naira contract with local security groups in the region aside from the huge spending on the official security agencies deployed to curb the menace in the area.

Source: Business Day

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Monetary policy rate hikes stabilised the economy — Cardoso

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Central Bank of Nigeria

Olayemi Cardoso, the Governor of the Central Bank of Nigeria, has said that the Monetary Policy Committee’s hikes in interest rates were timely in stabilising the economy.

Speaking at the ongoing CEO Forum on the topic, ‘Revitalising Nigeria’s economy: strategic monetary policies for economic growth’ hosted by BusinessDay Media, he stated that the MPC is focused on taming the inflation rate and stabilising the naira.

He said, “The MPC is not oblivious to the fact that the country does need growth. If these hikes hadn’t been done at the time, the naira would have almost tipped over, so it helped to stabilise the Naira.

“Interest rates are not set by the CBN governor but by the MPC committee composed of independent-minded people. These are people not given to emotion but to data. The MPC clarified that the major issue is taming inflation, and they would do what is necessary to tame it.”

The Monetary Policy Committee has raised the MPR by a total of 650 basis points, bringing the rate to 26.25 percent in May 2024. According to the CBN governor, the hikes were necessary to soak up excess liquidity in the economy and will be short-lived, as the month-to-month inflation rate has already declined by 50 percent in 6 months, showing results.

“Sadly, we have a situation where ways and means soared to N27 trillion and interventions went to N10.5 trillion. Those have consequences. In a large respect, that’s what we’re paying for now. It is also a timely issue. It’s not something that I expect will remain with us forever. The ability to soak up the excess liquidity over time is also important to the MPC,” he said.

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Speaking on the issue of FX Volatility, Cardoso stated that the bank had to correct some dysfunctions in the financial system, such as illicit flows and people not abiding by the rules, to ensure market stability.

“Sometimes, there’s pushback from those who want to continue doing things a certain way. There’s also that need to show people that there will be consistency in our ways before the market will settle,” he said.

He noted that timely communication and market transparency have restored stakeholders’ confidence.

“There is no more front-loading of FX requests. Even the portfolio investors who left came back again. They were comfortable that there was a plan and that the plan was headed in a certain direction. These dysfunctions are beginning to smooth out due to the confidence and transparency seen in the markets,” the CBN governor said.

Source: Business day

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We’re here to stay, says Guinness

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We’re here to stay, says Guinness

Managing Director of Guinness Nigeria Plc, Adebayo Alli, has said the company is not planing to leave the country.

Alli noted the Guinness is improving despite challenges.

He hailed the firm’s trade partners for their collaboration towards its objectives, which have sustained its growth.

Alli spoke at a two-day event to mark Guinness Nigeria Trading Year 2024, which featured a conference/business meeting, gala and award night, at Eko Convention Centre, Lagos.

He applauded the partners, drawn from for their doggedness, despite challenging economic climate, saying Guinness has continued to experience exponential growth.

The managing director unveiled Guinness Nigeria’s new mission: “GN Transformed: Winning Differently,” allaying fears it may leave Nigeria.

Alli said: “We want to thank our partners for dedication to our business this past year.

“We know it hasn’t been smooth sailing, but your support has sustained our growth.

“Despite a challenging economic climate with inflation, currency issues, and lower consumer spending, Guinness Nigeria has grown.

“Moving forward, we will work with our partners to create products for Nigerians…’’

Introducing the mission statement for 2025, Commercial Director, Olusanya Adesanya, noted: “Guinness does not win alone. We win with our partners, customers, consumers, and communities.”

Adesanya said the mission reflects Guinness’ commitment to innovation, customer-centricity, resilience, empowerment, and growth.

Highlight of the awards was recognition of trade partners and employees.

Top performers received cash for their sales achievements and performance.

Among awards presented was CEO Award for Employee of the Year, won by Head of Commercial Finance, Mrs. Chinenye Alawode. Dr. Edmond Okafor of Eddinho Nig, was named Overall Best Distributor.

READ ALSO  Why we prioritised $7.5b FX backlog clearance, by Cardoso

Source: The Nation

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Naira falls to N1,561.98/$1, lowest level since March 2024

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The naira has experienced a notable depreciation on the Nigerian Autonomous Foreign Exchange Market (NAFEM) window, falling to N1,561.98/$1

The naira has experienced a notable depreciation on the Nigerian Autonomous Foreign Exchange Market (NAFEM) window, falling to N1,561.98/$1 on Wednesday, July 10, 2024.

According to data from the FMDQ Securities Exchange, this represents a 2% decline from the N1,532.58/$1 recorded the previous day.

This marks the third consecutive depreciation of the naira, occurring despite stronger external reserves and rising foreign exchange turnover.

The currency’s value has now reached its lowest level since March 18, 2024, when it stood at N1,597.25/$1.

The recent depreciation brings the naira perilously close to the N1,600 mark, occurring less than three weeks after it crossed the N1,500 threshold.

This trend raises concerns about the currency’s stability and the broader economic implications for Nigeria.

 

READ ALSO  Why we prioritised $7.5b FX backlog clearance, by Cardoso
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Senator proposes gold reserve bill to help CBN curb inflation, stabilise naira

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Senator proposes gold reserve bill to help CBN curb inflation, stabilise naira

A bill proposing the use of gold by the Central Bank of Nigeria (CBN) to curb inflation and stabilise the naira has passed second reading in the senate.

Natasha Akpoti-Uduaghan, a senator of the Peoples Democratic Party (PDP) representing Kogi Central, proposed the ‘Gold Reserve Bill’ to formalise the bank’s role in the gold industry.

The bill proposes a series of policies that would designate the bank as the off-taker of all gold produced in the country.

The senator proposed setting up a gold reserve authority which will ensure the regular supply of gold to the CBN for the maintenance and management of the Nigerian gold reserve.

The bill said the CBN governor will chair the gold reserve management committee.

Part of the bill said the objectives of the CBN will be to “ensure the stability of the national economy by using gold reserves as a financial anchor, providing a secure foundation for currency value and overall
economic health”.

It also said CBN will manage Nigeria’s gold reserves to mitigate inflation and deflation risks, thereby contributing to stable currency values and price levels in the country.

Another objective, according to the bill, is CBN will utilise the “gold reserves to support and stabilize the national currency in the foreign exchange market, ensuring a favorable position in international trade and finance”.

In the draft, the lawmaker proposed that CBN shall ensure, at “all material times and from time to time,” that its external assets consisting of gold coins or bullion are not less than 30 percent of its total
external reserve.

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Also, the bill seeks to exempt the importation of plant, machinery, equipment and accessories specifically and exclusively for gold mining operations from customs and import duties.

Since taking office in May 2023, President Bola Tinubu has sought to transform Nigeria’s mining industry to attract investors.

On June 23, Dele Alake, minister of solid minerals development, presented refined gold bars to the president, saying the first transaction of the commodity added $5 million to Nigeria’s external reserves.

Alake said the refined gold will be sold to the CBN to bolster foreign reserves.

Source: The Cable

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