₦airaland Forum

Dangote Group recently secured a $3.3billion loan with a syndicate of local and foreign banks to fund the construction of 400,000 barrels per day refinery and petrochemical plant in South-West Nigeria. The banks include Access, Diamond, Ecobank, Fidelity, First Bank, FCMB, GTB, StanChart, UBA and Zenith. Others are FirstRand Bank and Standard Bank of South Africa.

Going by Dangote’s record and reputation, the project’s success can be assumed. This will effectively break a twenty year jinx that prevented the realization of private refineries in Nigeria inspite of several licenses and government MoUs with foreign investors.

Interesting posers
- Is there a tacit government support for the refinery project going by the presence of the Vice President at the ceremony and subsequent visit to Aso Rock after signing?
- Is there a likelihood of complete removal of subsidy on or before the take-off date of the refinery in 2016?
- Are the existing public refineries doomed to a fate similar to NITEL? Their value will surely nose dive when Dangote’s refinery commence production and possibly leading other serious investors to also build more private refineries?
- How might the supposed “subsidy cabal” react as Dangote’s refinery will meet more than 50% of our local consumption?

Key lessons
- When there is a will there will be a way. For over twenty years a number of companies were given licenses to build refineries, till date not one has been built. The main excuse being subsidy and government control of petroleum prices.
- Banks and financiers prefer to put their money in too-big-to-fail projects. Virtuall all Nigeria's biggest banks and some of South Africa's are backing the deal.
- Success begets success. There is no doubt that Dangote’s track record and success in previous ventures is the main reason the banks are backing the project even though government has not stated that subsidy will be removed.
- It takes just one man to make a change.

The Central Bank of Nigeria (CBN) recently released a "Revised Guide to Bank Charges". Among other changes, the guide which became effective April 1 2013 required deposit money banks to pay a minimum of 30% of Monetary Policy Rate (MPR) as interest rate on savings account deposits.

With MPR presently at 12%, the minimum interest rate on savings accounts should be 3.6% p. a. However inspite of the directive and amid concerns and complaints raised in the media, a number of deposit money banks are yet to come in line with the approved rate guide three clear months since it became effective.

http://www.ratenigerianbanks.com/index.php/component/content/article/30-banks-yet-to-fully-comply-with-cbn-directive-on-interest-rate

Should Nigeria's National ID card scheme be handled by MasterCard when China recently blocked the operations of MasterCard and Visa. National interest should override any other consideration.


http://www.thisdaylive.com/articles/mastercard-to-power-nigeria-s-identity-card-programme/147159/

http://www.ft.com/intl/cms/s/0/ce3973f4-cb6c-11e2-8ff3-00144feab7de.html#axzz2V5T4zNNI

Recently read about China limiting the operations of MasterCard and Visa but Nigeria is handing over her National Identity scheme to MasterCard. This definitely is not in national interest...Nigeria is not smarter than China.
I hope our leaders are aware of the implications of their actions.


China has blocked MasterCard from processing credit card transactions in renminbi, raising concerns about Beijing’s willingness to fully open up the sector after the World Trade Organisation found that it unfairly restricted foreign card companies.

According to a document obtained by the Financial Times, the Chinese central bank ordered last month that EPayLinks, an online payment platform, stop issuing renminbi-settled credit cards in partnership with MasterCard.

http://www.ft.com/intl/cms/s/0/ce3973f4-cb6c-11e2-8ff3-00144feab7de.html#axzz2V5T4zNNI

http://www.thisdaylive.com/articles/mastercard-to-power-nigeria-s-identity-card-programme/147159/