Reps Summon Dangote Refinery, NMDPRA Over Downstream Sector Tensions

Abuja — The House of Representatives Joint Committee on Petroleum Resources has invited the Dangote Petroleum Refinery and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to an emergency meeting following a dispute that threatens stability in Nigeria’s downstream petroleum sector. Chairman of the committee, Ikenga Ugochinyere, disclosed this after an emergency meeting held in Abuja on Monday, warning that escalating tensions between key industry players could undermine recent gains achieved in fuel supply, pricing, and regulation. Ugochinyere said the committee’s intervention had become necessary as Nigeria continues efforts to stabilise the petroleum market in the post-fuel subsidy era. “We are guarding the hard-won stability in the downstream sector. Sustainable solutions require that we identify and address the critical issues, which is why we have invited the leadership of Dangote Refinery and the NMDPRA,” he said. The lawmaker explained that the renewed tension followed concerns and allegations raised by Africa’s richest man, Alhaji Aliko Dangote, against the petroleum regulator. He noted that several petitions submitted to the committee relate to the issuance of import licences and questions surrounding the capacity of domestic refineries to meet Nigeria’s daily petroleum consumption. According to Ugochinyere, the committee will comprehensively examine all outstanding matters when both the refinery and regulatory authorities appear before lawmakers. He stressed that resolving the disagreement is critical to maintaining investor confidence and ensuring uninterrupted fuel supply amid ongoing reforms in Nigeria’s oil and gas sector.

Court Orders Winding Up of Dantata & Sawoe Over $1.4m Debt to Zutari Consulting

The Federal High Court in Abuja has appointed a liquidator to oversee the winding up of Dantata & Sawoe Construction Company Limited following its failure to pay a $1.4 million debt owed to Zutari Consulting Nigeria Ltd. Justice Mohammed Umar, in a ruling on Wednesday, granted Zutari Consulting’s application for the appointment of a liquidator after finding that Dantata & Sawoe had been given sufficient time to settle the debt but continued to present excuses. The debt arose from a settlement agreement over a $1,257,592.83 claim related to subcontract design work executed by Zutari Consulting on the Dangote Fertilizer Plant project in Lekki, Lagos. Zutari’s counsel, Mr. Chris Ekemezie, told the court that an arbitration conducted in London under the International Chamber of Commerce (ICC) ruled in his client’s favour on April 7, 2021. The arbitral tribunal found Dantata & Sawoe liable for the unpaid sums, which also included ZAR 2,136,623.39 and £4,364.38. Despite multiple adjournments and a 30-day grace period granted in September 2024 for settlement, Dantata & Sawoe allegedly failed to pay, offering instead to remit only 75 per cent of the total amount, a proposal Zutari rejected. Justice Umar, noting the company’s “unwillingness to honour its financial obligations,” appointed Joseph Abiolu, FCA, as liquidator in line with Sections 571(d), 572, and 573(1)(b) of the Companies and Allied Matters Act (CAMA) 2020. The case has been adjourned until February 18, 2026, for the liquidator’s report.

Cairo Meeting: We Seals $43.7bn Trade, Investment Deals —Afreximbank

Afreximbank says about 43.7 billion dollars worth of trade and investment deals were sealed at the just concluded Intra-African Trade Fair (IATF2023) held in Egypt. Kanayo Awani, Intra-African Trade Bank, Afreximbank Executive Vice-President, said this at the Post-Event Virtual News Conference held in Cairo, Egypt on Tuesday. Awani said the 43.7 billion dollars worth of trade and investment deals sealed was against the projected figure of 43 billion dollars which was set, describing the event as a success. She said the third edition of the IATF2023 attracted no fewer than 1,939 exhibitors, with 45 African countries represented. Awani said from the 45 African countries represented, 42 had pavilions, saying this was a remarkable achievement. She said that 16 non-African countries were represented at IATF2023, bringing the total number of countries to 61. “We did promise to come back and give you conclusive key indicators after doing the necessary audits. “In terms of participants of attendance both in-person/virtual, we ended up with 28,282. In terms of the number of exhibitors, I think we had announced 1,615 at the close of the trade fair but following our audit, it was 1,939. we had actually targeted 1,600.” She said that by their own estimation and standard set, the IATF2023 was a huge success because they exceeded many of their parameters. Awani said the trade fair was a platform used to connect buyers and sellers, saying we were aware that the contracts that were being negotiated had to be financed in one form or the other. “As Afreximbank, we ensured that financial institutions and non-banking financial institutions were part of the trade fair to provide the necessary financing and expand access to finance on the continent.” Awani said that the IATF2023 was a huge platform to access finance. “The IATF is not just a platform to grow intra-African trade but a platform for banks to grow access to finance.” The Afreximbank, working with the African Union and other strategic partners, inaugurated the Intra-African Trade Fair in 2018 as a key initiative to support the African Continental Free Trade Area (AfCFTA).

Dangote, BUA Cements spend whopping N204.925bn on power

Nigeria’s two biggest cement factories, Dangote Cement and BUA Cement spent a whopping sum of N204.925 billion on fuel and power during the half year ended June 30, 2023. A look at the financials showed that Dangote Cement spent the sum of N157.020 billion during the half year 2023 as against N129.957 billion in 2022 representing a growth of 20.82 per cent. Following the high cost of sales, profit after tax grew marginally by 3.77 per cent to N178.603 billion for the half year 2023 as against N172.104 billion in 2022. The cost of sales grew by 18.80 per cent to N383.088 billion from N322.461 billion. Similarly, BUA Cement spent N47.905 billion on energy in the first half of 023, representing an increase of 9.92 per cent over N43.580 billion reported in 2023. Profit after tax was N63.616 billion in 2023 as against N61.363 billion in 2022, accounting for an increase of 3.67 per cent while the cost of sales stood at N114.943 billion in the half-year of 2023 from N97.503 billion in 2022, representing a growth of 17.88 per cent. Dangote Cement on the other hand complained that it recorded lower volumes due to surging inflation.   According to the company’s six months of unaudited results, sales volume for pan-African operations was up 11.6 per cent compared to 4.9Mt in the first half of 2022. The total pan-African volume accounts for 40.4 per cent of Group volumes in the half year. Chief Executive Officer of Dangote Cement, Arvind Pathak said:  “Dangote Cement delivered positive results in the first half of the year. Our Nigeria operations achieved a 22.6 per cent recovery in sales over the first quarter, which was impacted by the general elections and the cash crunch. However, the steep currency devaluation in mid-June slowed this volume recovery and increased the already inflated operating cost.” According to data, the profit after tax of these companies stood at N242.219 billion from N233.467 billion in 2022 representing a 3.75 per cent increase. The profits were impacted by the rise in production cost of sales which was driven mainly by an uptick in raw materials cost and cost of energy. The rising cost of sales swallowed much of the earnings following rising inflation and high exchange rate. The cost of sales for the firms stood at N498.031 trillion for the half year 2023 as against N419.964 billion in 2021, accounting for a growth of 41.15 per cent.

Naira falls record all-time low of N900 at parallel market

The naira plunged to a record low of N900/$1 on the parallel market on Tuesday, as demand for foreign currency outstripped supply with traders quoting the exchange rate as high as N900/$1 for “inflows” and N895/$1 for cash trades. The peer-to-peer market, where cryptocurrency traders exchange forex, also saw the exchange rate soar above N900/$1. Meanwhile, in the official Investor and Exporter Window, the exchange rate closed at N774.78/$1 while the NAFEX rate was N776. The official market also faces supply constraints, with daily turnover averaging $80 million since July. Forex traders attributed the depreciation of the naira to supply constraints saying there were more buyers than sellers in the market and that the situation was unlikely to improve anytime soon. When asked about the source of the increased demand, traders mentioned a diverse set of buyers, including importers, foreign travellers, and speculators. There are concerns among some traders that the state of depreciation is unlikely to improve as demand continues to rise unchecked. Analysts explained that there was a huge backlog of unmet forex demand in the official market, estimated at $8-10 billion. Some of this demand also spills over to the parallel market, as buyers struggle to find enough supply to meet their needs in the official market. The exchange rate between the naira and dollar has weakened by 16 per cent since the reunification of the exchange rate windows. This compares to a depreciation of 2.5 per cent between January 1 and June 14th. The exchange rate weakened by 22.9 per cent in the whole of 2022. The naira has been under pressure in the parallel market for several weeks, as the supply of forex from official sources remains inadequate. On July 1st, the beginning of the second half of the year, the exchange rate in the parallel market was around N772/$1. However, a surge in demand from various segments of the economy, such as importers, foreign travelers and speculators, has triggered exchange rate volatility.