₦airaland Forum

Billionaire investor and philanthropist Tony Elumelu is MoneyCentral’s Corporate Titan of The Year 2024.

Download the PDF Copy by Clicking below:

https://moneycentral.com.ng/wp-content/uploads/2024/12/MoneyCentral-for-23rd-December-2024-2.pdf

https://moneycentral.com.ng/wp-content/uploads/2024/12/Elumelu-Corporate-Titan.png


https://moneycentral.com.ng/companies/article/tony-elumelu-cfr-is-moneycentrals-corporate-titan-of-the-year-2024/

Chevron Corp. paid $3.16 billion in taxes, royalties and shared oil production to Nigeria in 2023, according to figures released in a filing Tuesday, seen by MoneyCentral.

The receiving agencies include the Federal Inland Revenue Service or FIRS which was paid $792.2 million by Chevron as taxes, the Niger Delta Development Commission which got $49.85 million and N20.89 million for community and social responsibility, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority which received the equivalent of $156.3 million for in-kind oil production entitlements.

Other payments made by Chevron include $1.67 billion oil production entitlements to the Nigerian National Petroleum Company Limited, and $462.52 million paid to the Nigerian Upstream Petroleum Regulatory Commission in form of royalties and fees.

Some of the projects where the payments came from include the Bayelsa/Natural Gas/Well, Delta/Oil/Natural Gas/Well, Offshore-Gulf of Guinea/Delta/Oil/Natural Gas/Well, and Offshore-Gulf of Guinea/Ondo/Oil/Well, according to Chevron.

Chevron revealed the figures for the first time under Section 1504 of the Dodd Frank Act, which was finalized in 2020 and had a publication deadline of this week.

https://moneycentral.com.ng/wp-content/uploads/2020/07/Chevron.png

https://moneycentral.com.ng/companies/article/chevron-paid-3-16-billion-to-firs-nuprc-nnpc-as-taxes-royalties-in-2023/

Shadomaan7:
It seems some people are just not interested in the success of Dangote refinery. They have been trying hard with different tactics to discredit the success of the refinery.

The truth is that the Refinery is slowly ramping up and has no where near the capacity for PMS claimed for now.

It will also not hit full capacity until 2025 year end.

Reports that the Dangote Refinery has delivered 111 million litres of petrol within three days (last Sunday to yesterday), to the NNPC has been debunked as impossible by oil industry experts.

Speaking to Vanguard, the Group Chief Branding and Communications Officer of Dangote Refinery, Anthony Chiejina, stated: “We have already loaded 111 million litres of petrol and the exercise is ongoing.

“We are refining and have no reason not to load. So, loading is ongoing and we will continue to provide the product to the market.”

Industry sources however told MoneyCentral that the Dangote brand Manager Chiejina was either misguided or uninformed about gantry loading capacity by trucks.

The maximum capacity of Fuel tanker trailers in Nigeria is between 45,000 to 50,000 liters.

For the Dangote Refinery to have supplied 111 million liters it means that it: “must have loaded 2,200 trucks with petrol in 3 days or 740 trucks a day with 50,000 litres capacity. That is basically impossible to achieve by road in 3 days,” another oil industry expert said.

However, data seen by MoneyCentral shows that the refinery is struggling to deliver the 16.8 million litres it promised to NNPC, and only supplied 5.82 million litres through 130 trucks in 2 days.

The data showed that the Gantry Loadings by trucks ex-Dangote Refinery: for Sunday 15/09/24 that NRL loaded 56 trucks equivalent to 2,486,842 litres, while on Monday 16/09/24, NRL loaded 50 trucks, equivalent to 2,221,773 litres, and AYM Shafa loaded 24 trucks equivalent to 1,120,465 litres, making a total of 74 trucks or 3,342,238 litres on Monday.

Total loadings for the 2 days were then equivalent to 130 trucks or 5,829,080 litres, barely 5.9% of the 2,200 trucks needed to supply the 111 million litres claimed by the Dangote Refinery spokesman.

The industry sources MoneyCentral spoke with said Chiejina needed to come clean to the Nigerian people, adding that the refinery has not supplied up to 111 million liters of petrol to the NNPC.

Beyond the lack of capacity utilization at the refinery to produce PMS there is also the lack of a system to evacuate products by vessels or sea which is yet to commence, the sources said.

https://moneycentral.com.ng/markets/article/experts-debunk-dangote-refinery-claims-it-supplied-nnpc-111m-litres-of-petrol-say-its-impossible/

https://moneycentral.com.ng/wp-content/uploads/2024/07/Aliko-Dangote-Refinery.jpg

derecho:
We are watching you guys.

90,000barrelsperday is only 36% of Nigeria's need?

An excuse for Tinubu to continue importing fuel

Nigeria received close to 250,000 barrels a day in petrol imports last year, according to data from analytics firm Vortexa Ltd.

Thats the data for 2023. If theres no petrol demand growth in 2024 and it stays flat then Dangote Refinery supply will be drop in bucket of demand. At least until 2025 ending.

Consulting firm Energy Aspects Ltd is forecasting about 90,000 barrels a day of petrol (PMS) production for the Dangote oil refinery in the fourth quarter of 2024.

At full output, the refinery is expected to be able to produce about 330,000 barrels a day (bpd) of petrol (about half of its capacity), according to Randy Hurburun, senior refinery analyst at consultancy Energy Aspects Ltd.

The 90,000 bpd output will be equivalent to about 36% of Nigeria’s 2023 demand.

Nigeria received close to 250,000 barrels a day in petrol imports last year, according to data from analytics firm Vortexa Ltd.

This means the Refinery will not solve the problem of fuel queues currently being experienced in the country.

Key to the plant’s gasoline output is a unit called a reformer, which produces blendstock for petrol. That’s started operating, with gasoline production expected to begin by the end of the week, Devakumar Edwin, Dangote Industries Ltd.’s vice president for oil and gas, said.

Key to raising output further is another unit called a residue fluid catalytic cracker.

The refinery will blend naphtha with reformate from the reformer to make gasoline that’s suitable for the west African market.

The President of Dangote Group, Aliko Dangote, this week presented the first sample of Premium Motor Spirit (PMS), commonly known as petrol.

Energy Aspects forecasts the refinery could increase petrol output to almost 250,000, but only by the second half of 2025.

https://moneycentral.com.ng/companies/article/dangote-refinery-to-meet-only-36-of-nigerias-petrol-demand-as-output-put-at-90000-bpd/

https://moneycentral.com.ng/wp-content/uploads/2024/07/Dangote-Refinery-Brazil.jpg

Ten listed firms including Nestle, Notore Chemicals and Dangote Sugar are technically insolvent as foreign exchange revaluation losses wiped out retained earnings leading to negative shareholder equity.

Negative shareholder equity occurs when the company’s liabilities exceed its assets, and in more financial terms, the company’s incurred losses that are greater than the combined value of payments made to shareholders and accumulated earnings from previous periods.

This undermines future dividend payment and there are concerns about heightened sell off of shares.

https://moneycentral.com.ng/wp-content/uploads/2024/08/Firms-negative-equity.png

That’s a double whammy for companies who are reeling from rising input costs, weak consumer demand, and decrepit infrastructure.

Of course, the sharp devaluation of the Naira by the central bank led to a rise in the cost of settling foreign currency obligations. Manufacturers import a large chunk of their raw materials, which exposes them to currency risk.

Dangote Sugar Refinery (DSR) Plc posted negative shareholders’ funds of (N64.72 billion), the first in its existence as a N193.12 billion foreign exchange revaluation loss tipped the largest producer of the sweetener into N144 billion loss after tax. The largest producer of the sweetener imports 93 percent of raw sugar needed to meet production.

FT Cocoa suffered a negative shareholders’ fund of (-N3.51 billion); Nigeria Breweries Plc, (-N21.21 billion); Nestle Nigeria Plc, (N104.85 billion); P Z Cussons Plc, (-N47.16 billion); MTN Nigeria Plc, (N577.74 billion); Notore Chemical (N87.68 billion) Plc; Eterna Oil, (N1.33 billion) Plc, Japaul Paul and Oil Plc (-N397.12 million), RT Briscoe Plc, (N8.73 billion0), and Tourist Company of Nigeria Plc (-N49.91 billion).

The currency devaluation and subsidy that balloon inflation rate has dealt a great blow on a fragile economy, which made some companies exit the country.

The naira has depreciated against the US dollar by 69.47 percent under the current administration led by President Bola Ahmed Tinubu amid the implementation of foreign exchange reforms.

The precarious situation has put the owners of these firms between a rock and a hard place and analysts who spoke to MoneyCentral said the prevailing macro uncertainties means these entities will have to raise capital which will be injected into their businesses to keep them afloat.

Notore Chemicals Plc says it is seeking an equity capital injection of up to N106 billion and MTN Nigeria has renegotiated tower lease contracts to help stem impact of the FX lossess on the balance sheet.

https://moneycentral.com.ng/exclusive/article/nestle-notore-dangote-sugar-top-list-of-firms-with-negative-equity/

https://moneycentral.com.ng/wp-content/uploads/2023/08/NGX.jpg

The 650,000 barrels a day Dangote oil refinery will be ramping up just as global refining margins fall from historic highs adding to another layer of uncertainty for the $20 billion project.

The refinery has operated at around 50% capacity his year and produced between 325,000 bpd to 375,000 barrels per day (bpd), but the EBITDA contribution from it has been far below analyst’s projection.

“The Dangote group’s consolidated EBITDA margin is projected to dilute from 33% in 2023 to 9.1% in 2024 due to the low-margin refinery business, which began operations in February 2024 and poor utilization across the business lines,” Fitch Ratings said in a recent update when it downgraded Dangote Industries Limited (DIL).

Earnings from turning crude oil into petroleum products have fallen this year, driving refineries in some parts of the world to cut production.

The crack, or margin, for a typical refinery in Singapore processing regional benchmark Dubai crude ended at $3.59 a barrel in July. This is about half of where the profit margin started the year, with a peak so far in 2024 of $9.91 a barrel on Feb. 13. They surged as high as $20.4 between 2019 and 2023.

Lackluster demand growth, largely reflecting China’s economic turmoil, and surging global capacity are largely the culprits.

Globally, refineries will process about 900,000 barrels a day, more crude this year than they did last, according to International Energy Agency calculations.

The refining industry’s problems have shown in company earnings. Chevron Corp. missed estimates largely on weaker refining. France’s TotalEnergies also fell short of estimates as a result of weakness in its refining business.

Phillips 66 revised down its estimates for utilization rates and will bring forward planned maintenance.

“It’s back to what was normal before all these exceptional years,” Patrick Pouyanne, chief executive officer of TotalEnergies SE, Europe’s largest refiner, said during an earnings call late last month.

“Refiners know they have to come back to reality and to deliver good results with lower margins.”

https://moneycentral.com.ng/exclusive/article/low-refining-margins-is-another-headache-for-dangote-as-big-profits-fade/

https://moneycentral.com.ng/wp-content/uploads/2024/07/Dangote-Refinery-Brazil.jpg

The Lagos State government under Governor Babajide Sanwo-Olu has provided a N79 billion credit guarantee to a little known Voda Infrastructure Management Limited, a development company appointed by the state to undertake construction of its two projects,

The projects include Massey Children Hospital and Opebi Link Bridge.

The guarantee is a total of NGN79 billion term loans and bond issuance obtained by Voda for the respective projects from commercial banks and bondholders.

The payment obligations (including coupon, principal repayment and other charges) on the loans and bond issue are backed by irrevocable standing payment orders issued by the state as a first-line monthly deduction from its expenditure accounts domiciled with the banks and IGR accounts respectively.

It is unclear why Lagos State did not issue the bonds directly and use the proceeds to fund the projects. Voda Infrastructure Management Limited led by CEO Akindeji Akinniranye, was registered some 4-years ago in September 2020, according to CAC data.

The Lagos State Government’s gross debt (including contingent liabilities) increased to N2.7 trillion in March 2024, due to adverse exchange rate movement as a high portion of the state’s debt, above 53% is foreign currency (FCY) denominated.

Leverage metrics have as such deteriorated and net debt to total income weakened to 1.8x in 2023 (2022: 1.6x), free cash flow (FCF) coverage of gross debt declined to 23% in 2023 from 36% in 2022, and net interest coverage reduced to 4.8x in 2023 from 6.4x in 2022, due to higher finance charge from the elevated debt.

Lagos state has an ongoing plan to refinance the foreign currency loans with local debt,

“We do not expect this to materialise in the near term as it will have negative consequences on the interest cover and the debt maturity profile,” GCR Ratings said in a note.

https://moneycentral.com.ng/moneycentral-west/article/sanwo-olu-gifts-voda-infrastructure-n79bn-credit-guarantee-as-lagos-debts-hit-n2-7trillion/

https://moneycentral.com.ng/wp-content/uploads/2023/07/Babajide-Sanwo-Olu.jpg

Salewa97:
Fitch can say what they want, but Dangote is a master at navigating challenges. With his track record, I believe he’ll find a way to turn this situation around. The refinery is too vital for Nigeria’s future to fail!

We shall see!!

Fitch Ratings has downgraded Dangote Industries Limited (DIL) due to what it says is the significant deterioration in the group’s liquidity position and uncertainty related to its ability to refinance maturing debt related to the syndicated loan raised to finance construction of Dangote Oil Refining Company (DORC).

Further delays in meeting the funding requirements would significantly increase the likelihood of financial restructuring or default and lead to further rating downgrade, according to Fitch.

“The downgrade reflects significant deterioration in the group’s liquidity position following lower than expected disposal proceeds, operational and financial underperformance compared to our prior expectations, also affected by local currency devaluation, and lack of contracted backup funding to repay its significant debt facilities maturing on 31 August 2024,” Fitch Ratings said in an update released Monday.

“We view the lack of DIL’s audited accounts for 2023 as a corporate governance issue.”

DIL has immediate debt servicing requirements related to the syndicated loan raised to finance the construction of Dangote Oil Refining Company (DORC).

Dangote Refinery has a nominal production capacity of 650,000 barrels per day (bpd) of refined oil products, which will be sold in both the Nigerian domestic and international markets.

During the First Half (1H) 2024 the refinery operated at around 50% capacity and produced between 325,000 bpd to 375,000 bpd.

“The EBITDA contribution from DORC has been far below our previous projection,” Fitch said.

Major currency devaluation in 2023, also caused the Dangote group to record a significant FX loss of N2.7 trillion in 2023 as the company faces a mismatch between USD denominated debt and domestic revenues. Fitch expects the devaluation to continue at a higher pace in 2024 leading to more losses.

The group plans to divest a 12.75% stake in DORC in 2024. The group intends to service its significant syndicated loan maturing in August 2024 from the equity divestment.

“However, timely divestment and meeting the imminent maturity is highly uncertain in our view,” Fitch said.

Fitch expects DIL’s EBITDA margins in cement production to drop further in 2024 following softer retail demand for cement particularly in the Nigerian market as well as limited ability to pass on increased raw material cost to consumers.

Fitch downgraded the National Long-Term Rating to ‘B+(nga)’ from ‘AA(nga)’ and senior unsecured debt rating issued by Dangote Industries Funding Plc to ‘B+(nga)’ from ‘AA(nga)’.

Fitch has simultaneously placed the ratings on Rating Watch Negative (RWN). The RWN reflects uncertainty related to the group’s ability to refinance maturing debt.

https://moneycentral.com.ng/exclusive/article/fitch-cuts-dangote-industries-on-worsening-liquidity-possible-default-on-refinery-debts/

https://moneycentral.com.ng/wp-content/uploads/2023/06/Aliko-Dangote.jpg

Lagos State has material exposure to foreign exchange (FX) risk as its already huge debt load is set to continue to rise in the medium term as a result of the steep devaluation of the naira.

The states external debt with development lenders increased to 54% of Lagos’s direct debt at end-2023 up from 43% at end-2022, due to the fast naira depreciation since June 2023, according to Fitch Ratings.

“We expect Lagos’s debt stock to keep increasing, driven by an expected over 1000 NGN/USD exchange rate over our scenarios from 900 NGN/USD at end-2023. Our scenarios consider that Lagos could hit N3 trillion of debt stock by 2026,” Fitch said in a Ratings update.

The government of President Bola Tinubu, who completed a year in office on May 29, devalued the naira twice in the past year in a bid to lure investors and restore the currency’s credibility.

The naira has already fallen from N951/$ at the end of December 2023 to N1,488/$ at the end of June 2024.

Lagos is also exposed to higher interest rates and refinance risk as bond issuances represented 19% of its N2.1 trillion debts at end-2023.

Home to 25 million residents, the Internally Generated Revenue (IGR) represented over 70% of Lagos’s N1.19 trillion operating revenue in 2023 and is driven by taxes such as personal income tax (PAYE).

Fitch does not view Lagos as reliant on government transfers from the Federal Account Allocation Committee (FAAC), as statutory allocations (excluding VAT) represent less than 10% of Lagos’s operating revenue.

Fitch believes that Lagos will more likely absorb possible revenue shocks by reducing its operating margin towards 35%-40% from the average 47% over the past five years.

“We expect Lagos’s net adjusted debt to reach N3.6 trillion in 2028 (from N2.1 trillion at end-2023), under a scenario in which the NGN/USD exchange rate remains above 1000,” Fitch said.

https://moneycentral.com.ng/markets/article/lagos-n2-1-trillion-debt-to-surge-on-naira-devaluation/

https://moneycentral.com.ng/wp-content/uploads/2024/07/Lagos-2.jpg

CyrusVI:
Silly reportage
What metrics do they use to rank these and what exactly pushed others forward and this one backward, just like FIFA ranking

Wetin concern GEJ for this one now

The ranking, published by London-based immigration consultancy Henley & Partners, uses data from the International Air Transport Association to rank 199 passports’ access to 227 travel destinations.

The last time Nigeria passport ranked relatively high was in 2014 when GEJ was in office. Now our passport rank closer to Venezuela and Yemen passports.

Nigeria’s Passport strength has fallen most sharply in the Henley Passport Index rankings over the past decade, with the highest point being in 2014 at 79th position when former President Goodluck Jonathan was in office.

The ranking, published by London-based immigration consultancy Henley & Partners, uses data from the International Air Transport Association to rank 199 passports’ access to 227 travel destinations.

Nigeria’s Passport strength rank came in at 92 for the year 2024, according to the latest rankings seen by MoneyCentral.

Nigeria which dropped (-13) is in bad company with the likes of Venezuela (-17), Yemen (-15), Syria (-13), Senegal (-11) and Bangladesh (-11) whose rankings fell the most over the ten year time period.

https://moneycentral.com.ng/wp-content/uploads/2024/07/passport-2024.png

On the flip side, the countries that have climbed the highest in the Henley Passport Index rankings over the past decade include: UAE (+46), Colombia (+27), China (+24), Georgia (+24), and Peru (+17).

Singapore edged past France, Germany, Italy and Spain to reclaim bragging rights as having the world’s most powerful passport.

Having a Singapore passport means getting visa-free entry to a record 195 global destinations, putting the city state at the top on the Henley Passport Index. The four European countries, which held the No. 1 spot earlier in the year, are now in second place along with Japan.

Seven nations take the third spot for the first time. Passport holders from Austria, Finland, Ireland, Luxembourg, Netherlands, South Korea and Sweden can enter 191 places hassle-free.

The US dropped one spot to eighth place, extending its decade-long slide down the index. The former passport powerhouse held a joint first place with the UK a decade ago. The UK now ranks fourth.


https://moneycentral.com.ng/wp-content/uploads/2024/07/Passport-2024-New.png

“The ability to travel visa-free to a wide array of destinations is no longer merely a convenience,” said Henley’s Chief Executive Officer Juerg Steffen. “It’s a powerful economic tool that can drive growth, foster international cooperation, and attract foreign investment.

Africa’s richest billionaire, Aliko Dangote, recently decried difficulties faced by him while travelling on the African continent as he said he needed 35 different visas on his Nigerian passport.

Afghanistan’s travel document, which allows visa-free entry to 26 destinations, remains the world’s weakest.

https://moneycentral.com.ng/exclusive/article/nigerias-passport-strength-dropped-13-spots-since-jonathan-left-office/

https://moneycentral.com.ng/wp-content/uploads/2023/07/Nigerian-Passport.jpg

In April 2020, Visa Inc (listed on the New York Stock Exchange) acquired 19.95% of Interswitch Holdings Limited, a Nigerian payments firm for a cash consideration of $200 million. This valued the company at just over $1 billion.

For full Year period that ended March 2020, Interswitch reported revenues of N33.49 billion equivalent to $93m as the average exchange rate in 2019 was 360.0594 NGN per dollar.

Visa basically bought Interswitch shares at a Price to Sales P/S valuation of 10.75x.

By Full Year 2023, Interswitch Holdings Limited had grown its consolidated revenue to N66.5 billion. However, the Nigerian Naira has been devalued to 1,500 NGN per dollar meaning those revenues are now worth about $44.3 million.

Applying the P/S Visa acquisition valuation would value Interswitch today at $476 million, according to MoneyCentral calculations.

Visa’s $200 million stake would then be now worth only about $95.2 million due to the devaluation.

It is important to note that Nigeria represents 94% of Interswitch Holdings Limited’s Group’s revenue. It also means Interswitch, Africa’s veteran fintech company has lost its unicorn title.

https://moneycentral.com.ng/exclusive/article/devaluation-takes-toll-on-interswitch-revenue-as-value-of-visa-stake-down-52/

https://moneycentral.com.ng/wp-content/uploads/2024/07/Interswitch.jpg

Geregu Power has become the first NGX listed company to release Half Year (H1), 2024 financial results, with 148% profit growth in the period as revenues hit N80.67 billion, just shy of the N82.9 billion of revenues it reported for the 2023 Full Year.

Geregu Power stock has been consolidating and marking time at the N1,000 per share , with investors waiting for positive news which they have now received in spectacular fashion.

Highlights of H1, 2024

Stock is now 33% cheaper as EPS jumps

Geregu Power Earnings Per Share or EPS jumped to N8.01 in H1, 2024. The company’s basic earnings per share of N8.01 (June 2023: N3.22 kobo) is based on the profit attributable to ordinary shareholders of N20,013,113,000, and on the 2,500,000,000 ordinary shares, in issue during the current and preceding period.

Geregu Power stock currently trades at 92.77 Price to Earnings ratio on a PE ratio trailing twelve months (TTM) basis.

When H1 2024 results are incorporated into the valuation for Geregu Power, and annualized (EPS of N16.02) on a forward PE basis the stock valuation becomes 33% cheaper with Price to Earnings ratio now at 62.4x, according to MoneyCentral calculations.

The Price to Sales (P/S) ratio also comes in cheaper at 15.6x from 21 currently.

Geregu Power H1 Results better than all of 2023

In a sign of accelerating growth, Geregu Power has recorded rapid growth in the First Half (H1) of 2024, with revenue for the period almost at par with what the firm recorded all of last year, and profit higher than FY 2023 numbers.

Revenue for the period came in at N80.677 billion, up 132.5% compared to H1 2023, and equivalent to 97.3% of total 2023 revenue.

Profit for the period rose a spectacular 148% to N20 billion, when compared to H1, 2023, and it was also equivalent to 125% of 2023 Full Year after-tax profit.

N7.69bn of term loans repaid in H1

Geregu Powers outstanding term loans fell by 27.6% to N15.09 billion in H1, 2024, compared to December 2023 as there was a repayment of N7.69 billion in the period.

N4.59 billion Interest received in period

Geregu Power Plc received N4.595 billion as interest in the H1 period made up of N3.615 billion from interest income on bank deposits and N980.32 million as interest income on related party receivables, showing optimal balance sheet management.

Geregu Power tax paid jumps 139% to N10.13 billion

In a sign of being a responsible corporate organisation, Geregu Power taxed paid in H1 (January – June 2024) increased by 139% to N10.13 billion, compared to N4.23 billion in June 2023.

This will be welcomed by the Nigerian government looking to increase its tax receipts and cut deficits.t
https://moneycentral.com.ng/markets/article/geregu-power-stock-now-33-cheaper-as-profit-hits-n20bn-in-half-year/

Both Transcorp Power Plc and Geregu Power Plc are the most capitalised Utility service firms and they both recorded better-than-expected earnings growth that surprised to the upside in the first quarter (Q1) 2024.

Geregu provides better value at its current price than Transcorp Power. It also has a higher return on equity (ROE).
Transcorp Power has better margins, and slightly bigger dividend yield.

Why you might want to choose Geregu:

Based on share price appreciation, Geregu is a better choice as its shares have gained 150.63 percent so far, which makes it the second best performing stock on the NGX.
Based on a lower price to earnings (P/E) ratio, Geregu looks to be the better value buy. A return on equity of 36.50 percent is higher than Transcorp Power, which means Geregu Powers’ management are efficient in utilising shareholders’ resources in generating higher profit.
Geregu has posted higher revenue growth in the first quarter of 2024.

Why you might pick Transcorp Power:

The dividend yield of 0.93 percent is higher than that of Geregu.
Transcorp Power net margin is higher than its peer rival’s, which makes it more efficient and profitable.

Growth catalyst for Geregu Power

Geregu Power Plc and Siemens Energy recently signed a Memorandum of Understanding (MoU) to jointly develop solutions for capacity expansion at the Geregu 1 power plant from its current capacity of 435mw to 500mw.

Relating to the latest deal, Geregu Power said it will lead to the establishment of a combined cycle operations to generate an additional 200mw and new builds using lower emission turbines with an added capacity of 500mw to birth Geregu 3, bringing Geregu Power Plc’s overall nameplate capacity to 1,200mw.

These initiatives, it stressed, are targeted at higher power output, improved efficiency, lower emissions, higher flexibility, longer equipment lifespan and maximising shareholder value through increased earnings.

Chairman, Board of Directors of Geregu Power Plc, Mr. Femi Otedola, led the Geregu Power Plc team while Mr. Dietmar Siersdorfer, Managing Director, Middle East and Africa led the Siemens Energy team.

Growth catalyst for Transcorp Power

Transcorp power is spending over N44bn ($44m) in capex in 2024 to help achieve 740 megawatts (mw) of available capacity by 2024 year end, with 240mw set to be added by this summer. The firm is in talks with 3 Discos to help receive excess power it produces that the national grid cannot handle.

The firm is investing to boost cost optimization, improve gas usage and efficiency, and boosting capex on turbines maintenance.

Its play in West African power pool which brings in 18% of revenue will help to reduce FX risk. The company currently accounts for 7.0% of Nigeria’s installed grid capacity but generates 10.0% of the country’s power needs, with its leadership position in the West African Power Pool (WAPP) and planned strategic alliances with DISCOs, eligible customers, and state governments leaving legroom for output growth in the near term.

Transcorp Power forecasts its annual revenues to surge to over N500 billion by 2031, from N142 billion in 2023, according to the CEO Peter Ikenga.

The final word on Geregu Power vs Transcorp Power

Whilst Transcorp Power has higher profit margins, Geregu has done a better job in turning the resources of its owners into a larger bottom-line as investors have been snapping up its shares since January.

https://i0.wp.com/moneycentral.com.ng/wp-content/uploads/2024/07/Geregu-vs-Transcorp.png?w=572&ssl=1

https://moneycentral.com.ng/exclusive/article/geregu-power-vs-transcorp-power-which-utility-stock-should-you-invest-in/

hkidola00:
but hes saying the truth ,how come dangote cant buy crude from nigeria and refine instead source it from abroad..

Here's why per Bloomberg:

OPEC’s crude production remained steady for a third month, while some key members continued to pump above agreed limits.
The Organization of Petroleum Exporting Countries produced an average of 26.98 million barrels a day in June, or 80,000 a day less than during the previous month, according to a Bloomberg survey. Small reductions in Iraq and Nigeria drove the decline.

Nigeria's oil production has been falling for a while. We used to do 2.2mbpd but can barely manage 1.4mbpd now. Dangote cant buy crude from Nigeria because we dont have the crude to sell.

nedu666:
Is that the reason for rate hike? If I recall it was to tame inflation by reducing money supply not to increase foreign reserves. Moreover those foreign investors taking advantage of high interest rates will eventually repatriate their investment double what they brought in and in will be in dollars

Rates were hiked for a number of reasons chief of which was to support the naira by making naira assets like Treasury Bills and bonds attractive to foreign investors who want higher returns to compensate for high inflation.

A weak currency leads to imported inflation too.

There were 3 ways CBN could build reserves. 1) Exports of oil 2) Portfolio inflows by foreign investors 3) Remittances.

Oil exports are not bringing in much (NNPCs Kyari had to cry out yesterday and declare emergency on Nigeria's oil production) due to oil theft and lack of investment. So CBN has to focus on portfolio inflows and remittances..

Rate hikes by themselves dont fight inflation, it has to lead to a change in behaviour such as more people who had hitherto shunned your markets now bringing in dollars to invest. You will also agree that the biggest cause/driver of inflation in the past 1-year has been the collapse of the naira from $1/N480 when Tinubu came to office to around $1/N1,500 today.

The CBN has managed to stabilize the naira for now and building its dollar reserves higher to around $50bn like someone mentioned would bring more confidence and ability to defend the naira which can then easilly appreciate to $1/N1,000 or below, leading to more drop in inflation. Thats how they are linked.

Nigeria’s Central Bank (CBN) dollar reserves have rebounded to levels last seen in March 2024 amid hikes in the benchmark policy rate to attract portfolio flows.

Gross dollar reserves of the CBN rose to $34.34 billion on July 1st, a level it last hit on March 20th 2024, according to data on its website seen by MoneyCentral.

The CBN has hiked its monetary policy rate by 750 basis points since February, reaching 26.25 per cent in May, to help support the naira.

The naira currency is about the cheapest in the world on a real effective exchange rate or REER measurement, according to Charlie Robertson, Head of Macro Strategy, FIM Partners UK Ltd.

Investors are gradually embracing Nigerian debt markets which while still providing a high return in US dollars, now also give a high return in local currency trades.

Higher rates have helped to bid up naira assets as Capital inflows into Nigeria surged by 198 percent to $3.38 billion in the first quarter (Q1) of 2024, according to the National Bureau of Statistics (NBS). Foreign Portfolio Investment or FPI rose by 219.67 percent year on year in the period.

The CBN in the period cleared all valid foreign exchange backlogs of $7 billion, fulfilling a key pledge of Governor, Olayemi Cardosoo.

Cardoso in an interview last month said the central bank would support further measures to build the country’s reserves including a eurobond issue.

Africa’s most populous nation in May obtained $925 million from Afreximbank being the final tranche of crude oil-backed $3.3 billion prepayment facility intended to boost the supply of hard currency on the local foreign-exchange market.

The World Bank approved $2.25 billion funding to support Nigeria’s economic reforms last month which is expected to further boost foreign exchange liquidity.

https://moneycentral.com.ng/economy/article/cardoso-rate-hikes-payoff-as-reserves-hit-highest-since-march/

blackboy:
Corruption and misplaced priority. Russian is making so much money from selling their gas and oil cheap. But Nigeria is complaining of being broke and gas is being flared.
Gas that is supposed to be sold exported and used for power generation nnpc is not doing the needful cause they are satisfied and someone is not doing their job to make sure they work. Nnpc should be overhauled and investigated. But no ... They settle who big time to let this kind of nonsense continue.

The gas flared is about N1.7 trillion when converted. Thats serious waste in 1 year.

Nigeria flared about 5.83 billion cubic meters (bcm) of gas in 2023 worth a maximum of $1.89 billion in 2023, according to the latest World Bank’s Global Gas Flaring Tracker Report, released in June 2024.

The report provides the only independent indicator of gas flaring worldwide.

In 2023, global gas flaring at upstream oil and gas facilities increased by 9 billion cubic meters (bcm) to 148 bcm from 139 bcm in 2022, a 7 percent increase. At the same time, oil production rose by just 1 percent, leading to a 5 percent increase in global average flaring intensity, the amount of gas flared per barrel of oil produced.

At the current price of gas, the potential market value of the overall amount of gas flared in 2023 could have been between $9 Billion and $48 Billion.

Nigeria which flared approximately 5.83 bcm of gas in 2023 would have earned a maximum of $1.89 billion.

This assumes recovered gas would achieve a price range based on a Henry Hub natural gas spot price of $1.65 per million BTU and European Union natural gas import price of $9.085 per million BTU (both correct as of April 2024).

Most of the gas flared globally is produced in association with crude oil (associated gas). Flaring intensity is the volume of gas flared, in cubic meters, per barrel of oil produced.

The Russian Federation, the Islamic Republic of Iran, Iraq, the United States, República Bolivariana de Venezuela, Algeria, Libya, Nigeria, and Mexico remain the top nine flaring countries in 2023. Together, these nine countries are responsible for 75 percent of global gas flaring, but just 46 percent of global oil production.

Eliminating gas flaring would avert at least 381 million tonnes of carbon dioxide equivalent emissions being released into the atmosphere each year, according to the World Bank.

The global increase in gas flaring at upstream oil and gas facilities in 2023, which rose by 9 billion cubic meters (bcm) indicates a reversal of the reduction in gas flaring observed between 2021 and 2022, resulting in the highest volume recorded in the last five years and an increase in flaring intensity.

This suggests that the global efforts to reduce gas flaring have not been sustainable and urgent action is required if the world is to achieve Zero Routine Flaring by 2030.

Substantial reductions in gas flaring and flaring intensity are achievable through effective partnerships and the creation of solutions to monetize associated gas, the World Bank report notes.

This year’s report shared the sustained improvements in both Algeria and Venezuela. However, the increases in gas flaring in 2023 have far outweighed these improvements.

Each year, the trends revealed serve as a guide to governments, oil and gas companies, civil society, and international organizations, helping to enhance understanding of the global state of gas flaring.

“After a welcome reduction in 2022, global gas flare volumes rose by 7 percent to an estimated 148 billion cubic meters in 2023, taking the world back to levels last seen in 2019. With only six years left to achieve Zero Routine Flaring by 2030, the world needs to rapidly accelerate efforts to reduce gas flaring,” the report said.

https://i0.wp.com/moneycentral.com.ng/wp-content/uploads/2024/06/Gas-Flare.png?w=451&ssl=1

https://moneycentral.com.ng/markets/article/nigeria-flared-5-83bcm-of-gas-valued-at-1-89-billion-in-2023/

Nigeria’s Lagos (225th) and Abuja (226th) tumbled to bottom of a new global list of the world’s most expensive cities for expatriates due to currency fluctuations.

Between 2023 and 2024, the most significant decreases in cost of living rankings were seen in cities in Africa (Lagos, Luanda and Abuja), South America (Santiago) and Eastern Asia (Osaka), according to Mercer’s 2024 Cost of Living report.

Currency devaluations have been a significant driver of these decreases. There have also been some reductions in the cost of high-end housing (e.g., in Santiago). The currency-induced falls in the cost of living for international assignees have happened even though inflation in many of these countries has risen.

For example, between March 2023 and March 2024, the inflation rate increased to more than 20% for both Nigeria and Angola.

Regional finance hubs Hong Kong and Singapore topped the table for most expensive cities, keeping Swiss destinations from the top spots for the second year in a row.

High rental costs saw the rival cities beat Zurich, Geneva, Basel and Bern to the top of the table.

Mercer’s ranking methodology encompassed 226 cities across five continents. It assessed the comparative costs of over 200 items in each location — from housing and transportation to food, clothing, household goods and entertainment.

To ensure consistency in city-ranking comparisons, New York City was utilized as the base city and currency movements were measured against the US dollar.

What this means for businesses


The cost-of-living crisis has already had a significant impact on the mobile talent employed by multinational organizations. High living costs have required some assignees to adjust their lifestyles and cut back on discretionary spending. Some employees have even struggled to meet their basic needs.

For businesses, this has made it more difficult to attract and retain top talent. It has also increased the costs of compensation and benefits, limited talent mobility options, and raised general operational costs.

It is therefore important for organizations to stay informed about the cost-of-living trends and inflation rates in the different locations in which they operate. They should also work to understand how price changes are affecting their employees. If they do not, they may not be able to effectively manage the impact of these challenges on their global talent.

Organizations should explore innovative solutions to address these issues — to ensure the well-being and satisfaction of their employees. Options include offering competitive compensation packages, providing support services and exploring alternative talent-sourcing strategies.

As there are multiple issues to contend with, any solutions should be tailored to meet the specific needs of the businesses, places and people involved. One effective approach is to seek input from employees and to engage in open communication — this can help address concerns and find solutions that work for both an organization and its employees.

https://moneycentral.com.ng/exclusive/article/lagos-abuja-ranked-worlds-least-expensive-cities-for-expats-in-2024/

https://i0.wp.com/moneycentral.com.ng/wp-content/uploads/2023/10/Abuja.png?w=456&ssl=1

helinues:
Good

Money money money!!!

Richest black man ever. Great feat

The Dangote Refinery would garner an enterprise value of up to $42.6 billion, according to MoneyCentral’s analysis of comparable global refiners, helping to push up Aliko Dangote’s net worth to $49 billion and 27th position, on the Bloomberg Billionaires Index.

Dangote, Africa’s richest man will jump more than 100 spots to become one of the top-30 richest people in the world, just behind Alain & Gerard Wertheimer of France, who are worth $52.9 billion each, as he closes in on a dual listing on the London and Lagos bourses for his 650,000 barrels per day refinery, by the end of the year.

Being among the top-30 richest persons in the world would be uncharted territory for any African or Nigerian and speaks to the unique ability of the refinery to cater to demand for fossil fuels that’s expected to grow on the continent in the coming decades, even as most of the rest of the world moves in the opposite direction.

https://i0.wp.com/moneycentral.com.ng/wp-content/uploads/2024/01/Dangote-Refinery-Production.png?w=430&ssl=1

Valuation analysis for Dangote Refinery

The refinery, Africa’s largest and newest was built on a peninsula on the outskirts of the commercial capital Lagos at a cost of $20 billion by the continent’s richest man Aliko Dangote and was completed in 7 years.

It can refine up to 650,000 barrels per day (bpd) and will be the largest in Africa and Europe when it reaches full capacity by 2025.

MoneyCentral’s performed two different analyses to try to ascertain a valuation for the refinery.

Capitalization method: [/b]For a new refinery or similar asset, the easiest and often used approach is to capitalize the total cost by a cost of equity over the period of incubation.

The Dangote Refinery cost $20 billion and it took an average of 7-years to build. Because not all the funds were expensed once, we modeled the cost of equity (dollar cost) at 12%, which is a premium over the cost of debt to Dangote and which compensates him for the risk he took and the fact that he may have pledged assets for some of the debt.

Using this approach, we arrived at a valuation of [b]$44.2bn.

Most other global refiners are seeing thinning margins plus overcapacity especially in Europe, while the same situation is starting to play out in America as Electric Vehicle adoption increases.

NNPC stake

In 2021, Nigeria’s national oil company (NNPC) took a 20% stake in the refinery project for $2.7 billion. For the government, it means a seat at the Board of the refinery and a steady flow of foreign exchange in the form of dividends, especially with the construction done, ongoing ramp-up and listing so near.

Enterprise value per litre method: We backtested or did a validity test on the results gotten from the capitalisation method, by looking at the multiple of refineries abroad using enterprise value per litre (to reflect difference in refining capacity).

Enterprise value is a measure of a company’s total value, often used as a comprehensive alternative to equity market capitalization that includes debt.

MoneyCentral gave Dangote Refinery a premium for likely higher margins because of the fact that the plant is new. It is a pseudo monopoly for now pending when the government owned refineries start operations as well as its access to cheap crude (from within and imports) and large demand in Nigeria and across Africa. It also has zero legacy environment issues that often weigh on the valuation of refiners in other parts of the world.

Our analysis shows Dangote Refinery garnering an enterprise value of $42.6 billion.

There’s a 2.5* premium applied compared to the average Enterprise Value per litre of other global refineries looked at including Valero, Pillips66 and Indian Oil Corp. (see chart).

https://i0.wp.com/moneycentral.com.ng/wp-content/uploads/2024/06/EV-Table.png?w=615&ssl=1

Aliko Dangote’s net worth today is $15.1 billion and 136th position, on the Bloomberg Billionaires Index. An addition of the 80% stake he owns in the Dangote Refinery equivalent to $34 billion would shoot his net worth up to $49 billion.

Valuation necessary as refinery ramps up, begins exports

The valuation analysis done by MoneyCentral is necessary as all current estimates of Dangote’s wealth exclude the refinery, even as it has begun production.

Dangote Refinery has started exporting naphtha to North Asian markets at a time when the clean tanker market is witnessing prolonged firmness.

Naphtha is a lightweight petrochemical feedstock that is separated from crude oil in the fractional distillation process along with kerosene and jet fuel.

The naphtha flow from Dangote is adding to the ton-mile demand in the clean tanker sector and this could be boosting the clean tanker market in the short- to medium term.

Oil trading firms Trafigura and Vitol are said to be marketing the products to end-users and is expected to lead to more competitive pricing.

The main off-takers of Dangote Naphtha are SKN Energy in South Korea with 3 cargoes of heavy grade Naphtha said to have already shipped.

For feedstock, the refinery is seeking to buy millions of barrels of US crude over the next year as it ramps up processing rates.

The plant issued a so-called term tender for the purchase of 2 million barrels a month of West Texas Intermediate Midland crude for 12 months starting in July.

The call for US oil highlights how influential the plant will be in global crude and fuel trading.

Dangote Petroleum Refinery has also been supplying both diesel and aviation fuel to the domestic market since early 2024.

https://moneycentral.com.ng/markets/article/dangote-to-be-among-top-30-billionaires-on-42bn-refinery-valuation/

https://i0.wp.com/moneycentral.com.ng/wp-content/uploads/2023/06/Dangote.jpg?resize=1068%2C704&ssl=1

helinues:
Nice

The propaganda crews don dey arrive on the thread. Had the news said anything negative about Nigeria, verification is no needed, na instant swallowing.

Una go all dey alive to witness the progress and development of Nigeria inshallah

Wall street usually sniffs out opportunity 6months to a year before Main street. If the smart money is buying Nigeria, then a rebound is probably around the corner.

Leading global asset managers are giving a thumbs up to market reforms initiated by Nigerian President Bola Tinubu, who just completed 1-year in office.

More importantly, they are investing again in the capital markets of Africa’s most populous nation, after years of capital controls and unsustainable foreign exchange regime, under the leadership of the previous central bank Governor, Godwin Emefiele.

Chris Tennant, a fund manager at Fidelity International, one of the world’s largest investment companies, says this “ambitious reform agenda is showing early signs of success”, and the outlook for the country is improving.

Nigeria has been dogged by a severe lack of foreign exchange that has hamstrung international investors.

As oil prices tumbled at the start of the Covid-19 pandemic, Nigeria’s central bank introduced foreign exchange controls, in a move to alleviate a dollar shortage.

This made it very hard for foreign investors in Nigerian stocks to get their money out of the country when they sold up.

President Bola Tinubu gave investors hope when he took office last summer. He promised them he had “listened” and would ensure they would be able to repatriate their “hard-earned dividends and profits home” in his inauguration speech.

Nigerian stocks are the worst performers among major African economies in the past decade.

Over the past 10 years to the end of April 2024, the Kenyan market has fallen 12 per cent, the Nigerian market has fallen 89 per cent. This compares to the Kenyan market down 12 per cent, the Egyptian market down 46 per cent, and the South African index returning just 7 per cent.

Gregory Longe, portfolio manager of the Africa Frontiers Strategy at Cape Town-based Coronation Fund Managers, says “both Nigeria and Egypt have emerged as more appealing” after their respective central banks this year allowed their currencies to weaken significantly against the US dollar.

Longe adds: “More importantly, access to US dollars in both markets has improved. While still early days, this is a dramatic improvement for two markets plagued by dollar shortages since 2020.”

Mark Mobius, chair of the Mobius emerging opportunities fund, has become far more optimistic about Africa’s investment prospects, generally.

He says the most attractive countries right now are “South Africa, Egypt, Morocco, Nigeria and Kenya . . . Although the political situation and economic conditions in these countries are not necessarily ideal, that does not mean individual companies can’t do well.”

The veteran investor believes the most interesting sectors are broadcasting, retail, mining, and banks.

Companies with the “highest earnings growth and low debt” are the most compelling, he says.

Mobius warns that investors must work harder in Africa to uncover investment gems. But, scratch beneath the surface, he says, “and there are opportunities everywhere.”

https://moneycentral.com.ng/markets/article/tinubus-reform-agenda-impresses-global-asset-managers/

https://i0.wp.com/moneycentral.com.ng/wp-content/uploads/2023/08/Tinubu-2.jpeg?w=750&ssl=1

NOVA Merchant Bank Limited has announced plans to transition into a full-fledged commercial banking business following its acquisition of a national commercial banking licence.

The bank has set the stage for this significant shift and appointed Adebowale Oyedeji as the new Managing Director and Chief Executive Officer, effective January 2, 2024, upon approval by the Central Bank of Nigeria (CBN).

In a statement issued on Monday, the bank said that Adebowale Oyedeji, known for his extensive experience at the C-suite level within a major commercial bank in Nigeria, will succeed the outgoing MD, Nath Ude, whose tenure concluded on November 6, 2023.

The statement read that the Board of NOVA was thankful and sincerely appreciative of the work done by the outgoing CEO of the bank, Ude, since his appointment in 2020.

The bank added that “Adebowale’s wealth of hands-on experience combined with his strong track record of delivering revenue objectives, business turnaround, improved productivity, people management, operational efficiency, and risk control make him a perfect fit to captain the ship of NOVA Merchant Bank.

“He has held several executive positions in foreign and Nigerian environments, giving him the global perspective to leading a financial institution to success.”

Highlighting the accomplishments of Wale that influenced the Board to choose him as the new MD/CEO, the bank said that Wale, a graduate of the University of Ibadan and the University of London, served as the MD/CEO of Guaranty Trust Bank UK (a subsidiary of Guaranty Trust Bank Group) from 2008 to 2011.

Later, he held the position of Executive Director within the Guaranty Trust Bank Group from 2011 to 2018. During this tenure, he oversaw diverse corporate and commercial banking teams, leading transformative changes within the group.

Just before his appointment as the MD/CEO of NOVA, Wale was on the Board of Stanbic-IBTC as an Independent Non-Executive Director (INED) from 2020 to 2023.

Wale will lead the new executive team to implement the bank’s Accelerated Growth Initiatives (AGI) for the next 5-year plan of the bank, commencing January 2024.

Expressing enthusiasm for the role, Oyedeji stated, ““I am honoured to be the pioneer Chief Executive Officer of the proposed NOVA Commercial Bank, which is set to positively change the entire banking landscape.”

Phillips Oduoza, Chairman of the Board of NOVA Merchant Bank, commented on the appointment, emphasising the bank’s confidence in leveraging technology, innovation, and adept leadership to vie effectively for market share in commercial and retail banking. Oduoza expressed faith in Oyedeji’s capabilities to drive improved execution and financial performance.

Oduoza said, ““this appointment is a reinforcement of the Bank’s belief that with the right people and leadership, using technology and innovation, the Bank will compete favourably for market share in the commercial and retail banking space. The Board believes that Adebowale’s hands-on experience and communication skills combined with his strong leadership capabilities will help NOVA deliver improved execution and financial performance.”

https://moneycentral.com.ng/exclusive/article/nova-merchant-bank-transitions-to-commercial-banking-names-adebowale-oyedeji-ceo/

https://i0.wp.com/moneycentral.com.ng/wp-content/uploads/2024/01/NOVA-Dollar.png?w=422&ssl=1

It’s a nice cushy job, if you can get it!

Employees of the Nigeria Deposit Insurance Corporation (NDIC) earned a hefty N66.5 billion as employee benefits expense in 2023, equivalent to 25% of the Corporation’s total income for the year.

The NDIC employee benefits expenses which included N50.6 billion for staff cost, N7 billion spent on defined contribution pension costs and N8 billion for defined benefit expense, among other line items, actually rose by 20.6% in 2023, when compared to 2022 levels.

NDIC reported total operating income of N266.2 billion in 2023 up 23.6% compared to 2022 levels while Net operating surplus rose to N183.4 billion.

However, total operating expenses (which includes employee benefits expense, other operating expenses etc.) surged by 16.86% to N82.79 billion in the period.

Other operating expenses of N14.78 billion had its biggest line item as administrative expenses where N13.35 billion was spent with no breakdown.

The NDIC collected a total sum of N224.5 billion as deposit insurance premium from deposit money banks, primary mortgage institutions, microfinance banks, payment service banks and non-interest banks during the 2023 financial year which was transferred to the Deposit Insurance Fund (DIF) in accordance with Section 17 (6) of NDIC Act, 2023.

Value of the DIF as at 31, December 2023 was N1.65 trillion. This account represents the insurance premium received from insured financial institutions net claims paid out.

The NDIC -Nigeria Deposit Insurance Corporation, is an independent agency of the Federal Government of Nigeria. The purpose of the deposit insurance system is to protect depositors and guarantee the settlement of insured funds when a deposit-taking financial institution can no longer repay their deposits, thereby helping to maintain financial system stability.

To protect depositors and contribute to the stability of the financial system through effective supervision of insured institutions, provision of financial/technical assistance to eligible insured institutions, prompt payment of guaranteed sums and orderly resolution of failed insured financial institutions.

Meanwhile if you are a young Nigerian graduate looking for employment at the NDIC, good luck with that as there has been no official recruitment at the Corporation for years.

https://moneycentral.com.ng/exclusive/article/nice-job-ndic-employee-benefits-of-n66-5bn-gulp-25-of-total-income/

https://i0.wp.com/moneycentral.com.ng/wp-content/uploads/2022/03/Ndic.jpeg?w=450&ssl=1

With an economy worth over $2trillion in Purchasing Power Parity (PPP) terms, huge oil and gas reserves, strategic location and Africa’s most populous nation of more than 200 million people, Nigeria should be the continent’s most important American ally.

Instead, Nigerian President Bola Tinubu has had to watch from the sidelines as Kenyan President William Ruto literally eat his dinner as he is hosted to a lavish and glitzy state visit by President Joe Biden in an effort to strengthen US economic ties with Africa and counter Chinese and Russian influence across the continent.

Attendees at the dinner were treated to a three-course meal that included chilled heirloom tomato soup, beef short rib and butter-poached lobster, and a white chocolate basket for dessert. The courses were paired with wines from California and Oregon.

Ruto’s state dinner is the first for an African leader in 16 years and attracted prominent tech industry leaders attending including Brad Smith, the president of Microsoft Corp.; Ruth Porat, president and chief financial officer of Alphabet Inc; former Meta Platforms Inc. Chief Operating Officer Sheryl Sandberg and Ursula Burns of Teneo.

Microsoft also said this week it plans to build a $1 billion geothermal-powered data center in Kenya, part of a multi-year plan to dramatically increase cloud-computing capacity in East Africa.

The American tech giant meanwhile this month laid off its entire engineering team at its African Development Center (ADC) in Lagos, Nigeria, despite operating for five years, employing at least 120 engineers and more than 200 total staff members.

Microsoft set up its African Development Center in Lagos, Nigeria, and Nairobi, Kenya, in 2019 to expand its engineering talent pool, focus on student and community engagements, and invest in Microsoft programmes.

As Microsoft lays off the engineering team, the future of its African Development Center in Lagos hangs in the balance. With the core team gone, questions arise about the facility’s continuation.

NATO & CHIPs

President Biden designated the East African country as America’s first “major non-Nato ally” in sub-Saharan Africa, an acknowledgment of the growing security partnership between the countries.

The designation, while largely symbolic, reflects how Kenya has grown from a regional partner that has long cooperated with U.S. counterterrorism operations on the continent to a major global influence — even extending its reach into the Western Hemisphere.

Kenya will be the first sub-Saharan African country to receive the status.

The US also announced it’s proposing to make Kenya the first country in Africa to benefit from funding in the Chips and Science Act, according to White House officials. The administration intends to work with Congress to commit $1 million in assistance for Kenya to support assembly, testing and packaging in the semiconductor sector.

Questions around Tinubu’s legitimacy

A 2023 Country Report on Human Rights Practices, Nigeria, by the U.S. Department of State has shed light on various irregularities and challenges faced during the country’s 2023 elections.

While acknowledging that the elections largely reflected the will of voters, the report highlighted issues that marred the electoral process.

According to the April 2024 report, “Many independent observers assessed the results of the presidential, legislative, and state-level elections during the year reflected the will of voters, despite reports of voter suppression and vote buying, campaigning at polling stations, lack of ballot secrecy, violence, and intimidation.”

Niger vs Haiti

Sources tell MoneyCentral that Tinubu is seen by the US to have dithered in Niger, while Ruto has been decisive on Haiti. Kenya plans to deploy 1,000 paramilitary officers to the Caribbean country as part of a U.N.-backed effort to curb gang violence and hunger.

After the army seized power in Niger last year, the president of Nigeria Tinubu was at the forefront of demands that the junta step down, even warning that the West African bloc could use military force to oust the generals, while imposing tough sanctions and closing the border.

However just eight months later, Bola Tinubu has lifted all those restrictions.

In many ways, it is a huge climbdown for the regional bloc, Ecowas, but it is also personally embarrassing for Tinubu, analysts say, with former President Olusegun Obasanjo criticising Nigeria’s approach to the coup in the Republic of Niger.

The Biden administration has praised Kenya for stepping up in Haiti when so few other countries have agreed to do so.

“Kenya believes that the responsibility of peace and security anywhere in the world, including in Haiti, is the collective responsibility of all nations and all people who believe in freedom, self-determination, democracy and justice,” Ruto said. “And it is the reason why Kenya took up this responsibility.”

A difficult assignment is ahead for the Kenyan officers.

Haiti has endured poverty, political instability and natural disasters for decades. International intervention in Haiti has a complicated history. A U.N.-approved stabilization mission to Haiti that started in June 2004 was marred by a sexual abuse scandal and the introduction of cholera, which killed nearly 10,000 people. The mission ended in October 2017.

The United States has agreed to contribute $300 million to the multinational force.

Deals

The U.S. is expected to announce $250 million in new investments in Kenya through the U.S. International Development Finance Corporation, including $180 million for a major affordable housing project, a U.S. government official said. That will bring the U.S. financing institution’s portfolio in Kenya to nearly $1.1 billion. The corporation will also open an office in Kenya.

https://moneycentral.com.ng/exclusive/article/ruto-eats-tinubus-dinner-as-biden-makes-kenya-major-ally/


https://i0.wp.com/moneycentral.com.ng/wp-content/uploads/2024/05/Biden-Ruto.png?w=413&ssl=1