VenturesNow

Nigeria’s Dangote intends to establish a trade division for his Lagos refinery

Published

9 months ago

March 6, 2024

According to six sources acquainted with the situation, Aliko Dangote, the richest man in Africa, intends to establish an oil trading company, perhaps headquartered in London, to assist in managing the supply of crude and other products for his refinery in Nigeria.

The largest trading companies in the world would play a smaller part in the refinery’s operations. These companies have been negotiating for months to give the refinery funding and crude oil in exchange for product exports.

The world’s oil and fuel flows are about to be redirected by the massive refinery that can produce half a million barrels per day, and the trading community is closely monitoring its operations.

Trading sources told Reuters that BP, Trafigura, and Vitol, among others, met with Dangote in Lagos and London in recent weeks to provide loans for the roughly $3 billion in working cash the refinery needs to purchase large amounts of petroleum.

The sources claimed that although the traders wanted the refinery to repay debts with petroleum exports, they have not yet signed any agreements because Dangote fears this would lessen his influence over the business and maybe his profit. In his chase for money and crude, Dangote has also engaged with state-backed companies.

“He is going to try and do it himself,” an industry source told Reuters. Sources told Reuters that the new trading team will be led by ex-Essar trader Radha Mohan. He joined Dangote in 2021 as director of international supply and trading, according to his LinkedIn profile. Two sources said the team was in the process of hiring two new traders.

Other sources quoted by Reuters claim Trafigura has exchanged some crude oil for upcoming gasoline cargoes, while Vitol has paid in advance for some product shipments to assist the refinery in purchasing crude. Vitol and Trafigura, both located in Geneva, declined to comment.

Dangote, whose estimated net worth is $12.7 billion, according to Forbes, did not respond to multiple calls for comment.

The $20 billion Dangote refinery, whose operations were delayed by obstacles such as NNPCL, the state oil company of Nigeria, not being able to provide raw crude,. The refinery took about ten years to build and cost $20 billion, about $6 billion more than estimated. It will take months for the plant to reach full capacity; between January and February, it refined about 8 million barrels of oil.

Related Topics:DANGOTE REFINERY Featured Nigeria

Click to comment

VenturesNow

Food prices drive second straight monthly hike in Nigeria’s inflation

Published

3 days ago

November 17, 2024

Ifeoluwa Dada

According to official statistics released on Friday, Nigeria’s inflation rate increased for the second consecutive month in October, rising to 33.88% in annual terms from 32.70% in September, mostly as a result of increasing food costs.

In an attempt to boost economic development and strengthen public finances, President Bola Tinubu devalued the naira and reduced subsidies, which caused inflation to spike in the second half of last year.

As the effects of the naira devaluation started to lessen in July of this year, a slew of hikes in the price of petroleum and devastating floods that destroyed crops once again exacerbated pricing pressures, making the greatest cost-of-living crisis in decades worse in Africa’s most populous country.

According to the National Bureau of Statistics, price increases for basics such as rice, maize, bread, potatoes, and cooking oil prompted food inflation to surge from 37.77% in October to 39.16% year over year.

This year, more than 1.5 million hectares of agriculture have been damaged by torrential rain and floods in 29 of Nigeria’s 36 states, leaving millions hungry and displacing large numbers of people.

In an effort to curb inflation, the central bank has raised interest rates five times this year. On November 26, it is expected to make its final rate decision of the year.

VenturesNow

MTN financial report reveals drop in group service revenue

Published

3 days ago

November 17, 2024

Ifeoluwa Dada

Due to operational difficulties in Sudan and the depreciation of the Nigerian naira, MTN Group, Africa’s largest telecom provider, announced on Thursday an 18.5% decline in service revenue for the third quarter that concluded on September 30.

With 288 million users in 17 African regions, MTN said that its group service revenue dropped from 156.3 billion rand ($6.99 billion) in the same quarter of the previous year to 127.4 billion rand.

Despite stating that “the naira was less volatile on a sequential basis in Q3 than in preceding quarters,” the business reported a 48.7% decline in MTN Nigeria’s income due to the currency’s depreciation.

Due to a stronger Ugandan shilling than the previous year, Uganda’s largest contributor, MTN South Africa (MTN SA), expanded by a meagre 3.3%.

Due to “subscriber registration regulations in Nigeria and a decline in users in Sudan, where the conflict has displaced millions of people,” the business reported that its subscriber base increased by 1.6% to 288 million.

Given the higher demand in Nigeria despite the legal obstacles, MTN plans to increase its capital expenditures, which it expects would total between 28 and 33 billion rand for the entire year.