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World’s largest refinery to cost $10bn; Dangote secures $650m loan

Africa’s richest man, Aliko Dangote, has signed a $650 million loan facility with the African Export-Import Bank for his oil refinery project in Nigeria, estimated to cost about $10 billion

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Africa’s richest man, Aliko Dangote, has signed a $650 million loan facility with the African Export-Import Bank for his oil refinery project in Nigeria, estimated to cost about $10 billion.

The seven-year term loan would attract a moratorium of five years, according to facility terms read out during the signing.

Dangote Group Executive Director Devakumar Edwin said that the oil refinery would be completed by December 2019.

He added that the company would borrow $3.3 billion for the project, arranged by Standard Chartered Bank. The remainder will be funded by equity and through export agencies.

Read Also: Ghana raises clean energy capacity by 40%, as gas flows at Sankofa

Dangote is building the world’s largest single oil refinery and aiming to address long-standing problems in Nigeria’s energy markets.

The refinery and petrochemical complex is located on 25,000 hectares of swampy land with a jetty to ferry products by sea within Nigeria and abroad including an undersea pipeline to transport gas.

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Nigeria’s central bank bans govts, banks, others from owning Bureaus de Change amid FX crisis

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Governments, commercial banks, merchant banks, other financial institutions (OFIs) and public officials are among the groups that the Central Bank of Nigeria (CBN) has prohibited from directly or indirectly owning Bureaus de Change (BDCs) amidst the country’s growing shortage of foreign exchange.

This was made public by CBN today in its Guidelines for the Management of BDCs in Nigeria. The apex bank stated that without permission, no one was allowed to conduct BDC activity in Nigeria.

The guidelines’ Section 2.0 stated: ”The following shall not be allowed to participate in the ownership of BDCs, directly or indirectly: Commercial, merchant, non-interest and payment service banks, OFIs, including holding companies and payment service providers, serving staff of financial services regulatory and supervisory agencies;

“Serving staff of regulated financial services providers, Governments at all levels, and public officers as defined in 5th Schedule Part IV of the Constitution of the Federal Republic of Nigeria;

“Non-Governmental organizations, cooperative societies, charitable organizations, academic and religious institutions, non-Nigerian non-resident natural persons, non-Nigerian resident natural persons, non-resident non-regulated companies, telecommunication services providers;

“Sanctioned individuals and entities, a shareholder in another BDC (whether directly or indirectly), or any other entity that the CBN may from time to time designate.”

The largest economy in Africa has matured foreign exchange forwards worth over $7 billion, which, despite the CBN’s assurances that the backlog will be cleared, is a major source of concern for investors as the naira continues to decline owing to currency shortages.

Approximately $2.5 billion of the backlog in sectors such as manufacturing, aviation, and petroleum has been fully paid.

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IMF sees progress on the Egypt credit programme despite Gaza’s pressure

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The International Monetary Fund (IMF) has reported that talks to expand Egypt’s loan programme are going well.

The IMF stated that Egypt needed a “very comprehensive support package” to deal with its economic problems, which include pressure from the Gaza conflict.

The principal programme revisions under the combined first and second reviews of Egypt’s current $3 billion loan were agreed upon by IMF staff and Egyptian authorities, according to IMF spokesperson Julie Kozack at a routine news conference.

She also stated that “authorities have expressed a strong commitment” to these reforms and declined to discuss details of the Egypt package as the negotiations are continuing.

Kozack while responding to questions on the impact on the talks of challenges posed by the expected entry of Gaza refugees into Egypt, said, “There is a need to have a very comprehensive support package for Egypt, and we’re working very closely with both the Egyptian authorities and their partners to ensure that Egypt does not have any residual financing needs and also to ensure that the programme is able to ensure macroeconomic and financial stability in Egypt.”

The IMF later clarified in a statement that the comprehensive policy package would “support the economic reform programme” in Egypt.

Due to the effects of the Israel-Hamas conflict, the IMF revised down its GDP growth estimate for the Middle East and North Africa and opened a new tab for 2024, which is 2.9%, down 0.5 percentage points from October. Egypt’s projected 3.0% growth rate in 2024 was downgraded by 0.6 percentage points.

According to Kozack, the IMF is still keeping an eye on the financial effects of the attacks on the Red Sea and Suez Canal, which are causing trade flows to reroute around the Cape of Good Hope in South Africa and increase the duration and expense of Europe-Asia travel.

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