VenturesNow

Nigeria considers US diaspora bond, seeks $1 billion monthly remittance

Published

4 weeks ago

October 25, 2024

Nigeria is aiming for remittance inflows of $1 billion per month and is thinking of issuing a diaspora bond in the US next year, the country’s central bank governor told Reuters on Thursday.

Since the present government started implementing extensive changes last year, Nigerians living overseas are eager to invest and have already more than doubled the amount of money they bring home, according to Central Bank Governor Olayemi Cardoso.

In an interview conducted on the fringes of IMF and World Bank meetings in Washington, D.C., Cardoso stated that a diaspora bond “could be on the horizon” in 2025 in the United States, which is home to the highest concentration of Nigerians living abroad.

“They want to invest … beyond just financially,” Cardoso said of Nigerians abroad.

“Our currency has now become extremely competitive and cheap. So they see the opportunity of taking positions in assets back home and in businesses back home.”

When President Bola Tinubu took over Africa’s oil-producing giant last year, he discovered a debilitating gasoline subsidy cost, a tightly controlled naira currency that was impeding investment, and a multi-billion dollar backlog of foreign exchange payments.

Cardoso was appointed by Tinubu in September 2023; Godwin Emefiele, his predecessor, is being tried for alleged corruption and criminal fraud.

With fuel prices five times higher and the naira worth only a fourth of what it was when Tinubu entered office, Cardoso said the bank’s attempts to win back investor confidence were succeeding. According to him, officials are aiming for $1 billion per month, and remittances reached $600 million in September from $250 million per month in the spring of this year.

“I would be surprised if we are not there by this time next year,” he said.

With reserves now worth over $40 billion, Cardoso stated that long-term attempts to diversify the economy away from oil could benefit from the weak naira.

“Now that our currency is relatively competitive … there should be the opportunity for those who have relied so much on importation to now beef up the productive activity that has so greatly eluded us over these years,” he said.

According to Cardoso, the bank will employ “vigilant” inflation monitoring and base interest rate choices on economic facts. He claimed that maintaining consistency in policy would attract longer-term foreign investment capital; investors were still evaluating the system at this point.

“Only time can show that you can stay the course,” he said.

Cardoso claimed that the government’s difficult decisions had received “an element of validation” from his talks with foreign Nigerians, investors, and rating agencies.

“It is necessary for people back home who have felt the brunt of a lot of these reforms to be able to … see that we are on the right course,” he said.

Related Topics:Featured Nigeria US diaspora bond

Click to comment

VenturesNow

Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

1 day ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.

VenturesNow

Dangote refinery begins petroleum sales to West Africa

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

In an indication to traders that the activities of its mega-refinery might soon disrupt regional fuel markets, Nigeria’s private Dangote Petroleum Refinery has started exporting refined petroleum products to neighbouring West African nations.

According to a Bloomberg story on Tuesday, a tanker had transported a consignment of petrol from the Dangote Petroleum Refinery to seas off the coast of Togo, a nearby West African nation. The article cited data from Vortexa, Kpler, Precise Intelligence, a port report, and a ship-tracking tool.

According to the source, a CL Jane Austen recently departed west after loading over 300,000 barrels from Dangote.

Recall that Mustapha Abdul-Hamid, the chairman of the Ghana National Petroleum Authority, stated last month that the nation is thinking of purchasing petroleum products from the Dangote refinery in order to reduce the approximately $400 million it spends each month on more costly exports from Europe.

Speaking at the OTL Africa Downstream Oil Conference in Lagos, the chairman of NPA, Ghana, said that by eliminating freight expenses, buying from Nigeria instead of Europe will lower the cost of other products and services.

“If the refinery reaches 650,000bpd a day capacity, all that volume cannot be consumed by Nigeria alone, so instead of us importing as we do right now from Rotterdam, it will be much easier for us to import from Nigeria and I believe that will bring down our prices,” Hamid said.

Two weeks ago, it was announced that the refinery would start exporting fuel to Namibia, Angola, and South Africa. Four more African nations—Niger Republic, Chad, Burkina Faso, and Central Africa Republic—had also begun talks with the refinery, it was said.

According to a very reliable source who spoke directly to one of our reporters, the management of the refinery with a capacity of 650,000 barrels per day was in the advanced stages of negotiations with the nations to begin lifting petroleum.

“I can confirm to you that talks are actually at the advanced stage with Ghana, Angola, Namibia, and South Africa, while the initial discussion is coming up with Niger, Chad, Burkina Faso, and the Central African Republic,” the source said.

The petroleum product shipment is currently floating off the coast of Lome, which is a well-liked location for ship-to-ship transfers, according to the source.

Furthermore, the final destination of the cargo of the CL Jane Austen is uncertain.

Despite being off Togo, the region is frequently utilised for ship-to-ship transfers, thus the gasoline may eventually be transported elsewhere.

“While the shipment is tiny in the context of the global gasoline market, it signals the ramp-up of Dangote’s production and the potential to export significant volumes of gasoline beyond Nigeria, which could upend regional markets.”

Last month, the refinery sent its first shipment of petrol by sea to Lagos, a neighbouring commercial centre.

Under the regulatory statute, the Federal Government last month terminated the state-owned oil company’s monopoly on purchasing gasoline from the plant for domestic use, but it has permitted the ongoing importation of fuel from the US and Europe.