Showing posts with label Business. Show all posts
Showing posts with label Business. Show all posts

Monday, March 18, 2024

Video - Dangote refinery in Nigeria to import crude from U.S.



The announcement comes as the Dangote refinery intensifies moves to start pumping out refined products. The facility is targeting an initial processing rate of 350,000 barrels a day before ramping up toward its full capacity.

CGTN

 Related stories: Dangote wants to set up trading arm for Lagos mega refinery

Dangote oil refinery to help solve fuel shortage in Nigeria

 

 

Tuesday, March 5, 2024

Dangote wants to set up trading arm for Lagos mega refinery

Africa's richest man Aliko Dangote is planning to set up an oil trading arm, likely based in London, to help run crude and products supply for his new refinery in Nigeria, six sources familiar with the matter said.

The move would reduce the role of the world's biggest trading firms, which have been negotiating for months to provide the refinery with financing and crude oil in exchange for products exports. The giant 650,000 barrel-per-day refinery is set to redraw global oil and fuel flows and the trading community is closely watching the way it will operate.

Dangote, whose wealth is estimated by Forbes at $12.7 billion, did not reply to several comment requests.
BP, Trafigura and Vitol among others have met Dangote in Lagos and London in recent weeks to offer loans for the some $3 billion in working capital the refinery needs to buy large amounts of crude, trading sources told Reuters.

The traders asked the refinery to repay loans with fuel exports but so far they have signed no deals as Dangote worries they would reduce his control of the project – and potentially his profit, the sources said. Dangote has also met state-backed firms in his search for cash and crude.

"He is going to try and do it himself," an industry source told Reuters. Sources told Reuters 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.

The refinery took nearly a decade to complete -- and came in at a cost of $20 billion, some $6 billion over budget.

The plant has refined around 8 million barrels of oil between January and February and will take months to get to full capacity. So far, Vitol has prepaid for some product cargoes to help the refinery buy crude, while Trafigura has swapped some crude oil in exchange for future fuel cargoes, sources with knowledge said. Geneva-based Vitol and Trafigura declined to comment. 

By Julia Payne and Libby George, Reuters 

Related story: Anti-graft body of Nigeria visits Dangote Group in forex probe

Dangote oil refinery to help solve fuel shortage in Nigeria

Monday, March 4, 2024

Businesses in Nigeria turn to Moniepoint instead of traditional banks

Chidi Ebule keeps at least 10 payment machines on the check-out counter of his grocery store in Lagos, so his customers can use cards from any bank or fintech company they prefer. But in recent months, he has needed to use only one machine for most transactions: the one provided by local fintech major Moniepoint.

“I try to use another POS [point of sales] machine, [but customers] will say, ‘Please don’t put my card in that. Use Moniepoint,’” Ebule told Rest of World. “The customer knows there could be an issue when you use the other [terminals], and he does not have power over the bank.”

Moniepoint’s light-blue payment machines have become ubiquitous across Nigeria — from megastores in Lagos to roadside shops in Kano. Shoppers prefer it to other options because Moniepoint offers a lower-than-average transaction decline rate and instantly reverses transactions in case of failed payments. The Lagos-headquartered company, founded in 2015, has expanded its footprint across the length and breadth of Nigeria, and is now available across all 774 local governments in the country, according to its website.

“Merchants don’t care about lofty claims about financial inclusion. All they want is to see their transactions have gone through and get the instant payment alert,” Nchedolisa Akuma, senior fintech analyst at market intelligence firm Stears, told Rest of World. “Moniepoint appears to be quite intentional about market intelligence and gathering real-time market intel, which made them quite nimble.”

In 2023, Moniepoint reportedly recorded 5.2 billion transactions, worth over $150 billion. The same year, it ranked second in the Financial Times’ list of Africa’s fastest-growing companies. By January 2024, around 2.3 million businesses were using Moniepoint’s payment machines, a company representative told Rest of World. The bulk of Moniepoint’s earnings come from the transaction charges on its point-of-sales machines and its online payment gateway. It also has a microfinance bank license and offers business loans.

When it first launched, Moniepoint was named TeamApt, and built software for traditional banks. In 2019, it obtained a government license for agency banking — a model that allows companies to act as intermediaries between banks and their customers.

“We just felt that banks are not executing these things the right way, and can we get into this space and execute it right?” Tunde Olofin, managing director of Moniepoint’s banking arm, told Rest of World.

So far, Moniepoint has raised over $57 million from investors such as QED Investors, Quantum Capital Partners, and Global Ventures. The company’s growth is aided by its network of more than 600,000 on-the-ground “business managers,” who earn commissions for onboarding business owners to the platform and distributing the POS terminals, Olofin said.

In early 2023, when Nigeria experienced an acute cash crisis after the government changed the currency’s design, Moniepoint came to the rescue of many small businesses.

Oberry Agamah, who owns a phone accessories shop in Lagos, told Rest of World she started using Moniepoint’s payment machines during that time. The ones provided by other banks could not process transactions smoothly, she said, due to the pressure on the country’s banking infrastructure.

Before she began using the Moniepoint machines, Agamah’s business suffered: She struggled to process customers’ transactions, and had to deal with shoppers who bought goods and disappeared after making unsuccessful digital transfers.

“Before, receiving transfers in our normal accounts was hell — they wouldn’t go in time, and customers were going away with our money,” Agamah said. “The experience with Moniepoint is very nice, and it has made my business very easy in the aspect of receiving transfers, and I receive [them] very fast.”

Moniepoint’s systems are designed to expand based on the volume of transactions, Solomon Amadi, the company’s vice president of payment infrastructure, told Rest of World. “Many of the other players in the industry don’t have a lot of control over their core banking, [but] we do … and we have optimized that process well enough that the customer is priority,” he said.

In June 2023, Moniepoint’s closest rival in Nigeria was Chinese-owned fintech OPay — backed by SoftBank Vision Fund and Sequoia Capital China. OPay had a 37% share of the Nigerian point-of-sales agents network, according to the Nigerian Financial Services Report. Moniepoint came in second with a 20% share.

But Moniepoint is better placed than its rivals because of the bouquet of financial services it offers, Olaoluwa Oyedele, vice president of growth and product at Lagos-based fintech startup Earnipay, told Rest of World.

“Moniepoint has a couple of license categories that allow them to do different things,” Oyedele said. “They have a microfinance bank license which allows them to collect deposits, and a payment terminal service provider license which allows them to issue POS terminals. With these two license categories working hand-in-hand, they can target offline payment businesses or industries. That is where they have built a very impressive distribution network. The offline payment, for context, is the biggest payment opportunity in Nigeria.”

Moniepoint’s business managers — well-known members of local communities who serve as liaisons between the company and its users — are central to its growth, Edidiong Uwemakpan, vice president of communications, told Rest of World.

To build this network, “we studied a number of informal networks in the country … [including] the National Union of Road Transport Workers, churches, and people with branches everywhere,” Uwemakpan said. “How are these people able to collect money from everyone and balance their books? Because at the end of the day, what we were building were human branches across the country.”

The business managers don’t get a salary but receive a sign-up fee of 8,500 naira ($5.44), and monthly commissions on the transactions made through each POS terminal they manage.

“If you work hard and make enough people sign up for POS, you are in business, you are in money,” Fabusoye Tolu, a Moniepoint business manager, told Rest of World. “You earn commissions, and that is even far better than earning a salary because if you earn a salary, it will be capped at a particular figure. With commissions, your earnings do not have a limit.”

Tolu declined to disclose how much he earns from commissions, but said he often targets big businesses that generate high cash flow so that he can earn more at the end of the month.

By Ope Adetayo, rest of world

Related stories: Video - Nigeria caps foreign exchange position for banks

Central bank of Nigeria to replace policymakers as shakeup continues

Friday, March 1, 2024

Heineken sells stake in Nigeria's Champion Breweries

Heineken has agreed a deal to sell its interest in Champion Breweries, the Nigeria-based beer business.

The Dutch giant is to offload its majority interest in the Champion Lager owner to EnjoyCorp, a local holding that says it is “building a portfolio of food, beverage and hospitality brands”.

Heineken is selling The Raysun Nigeria Company Limited, which owned an 86.5% stake in publicly-listed Champion Breweries, a business centred around one brewery and based in Uyo.

The financial terms of the deal were not disclosed by Heineken, Champion Breweries nor EnjoyCorp.

A Heineken spokesperson said: “The decision will allow greater focus on our core business in Nigeria, while finding a local investor with the ability to allow Champion to continue its development in the best way to suit local market conditions.”

In 2023, Heineken saw its sales volumes in Nigeria decline at a rate “in the high teens”, the Amstel owner said last month when it reported its annual results.

The group, which owns a 56.7% stake in the also publicly-listed Nigerian Breweries, said the devaluation of the Nigerian naira had fuelled inflation and hit consumers’ spending power.

Heineken’s group beer volumes dropped 4.7% in 2023 and the Amstel owner said two markets “represented more than 60% of the decline” – Vietnam and Nigeria.

In December, Champion Breweries promoted general manager Dr Inalegwu Adoga – a former Coca-Cola HBC and Heineken executive – to the positions of MD and CEO.

The most recently published set of financial accounts for the brewer covers the nine months to the end of September last year.

Revenue during the period fell 6.7% at N8.36bn. Champion Breweries made a loss from operating activities over the nine months of N46.7m ($28,881) – versus a profit of N1.76bn a year earlier – due to the lower sales and higher selling, distribution and admin costs.

It ran up a nine-month net loss of N77.7m, against a profit of N1.26bn in the first nine months of 2022.

The Heineken spokesperson added: “Champion has strong brands and talented people and we believe that the transaction will help secure a sustainable future for the business.”

In a brief statement on the Nigerian Exchange, EnjoyCorp said it expects the deal to be closed in the second quarter.

“The proposed acquisition will mark EnjoyCorp’s strategic entry into the beverage category underpinning the company’s long-term commitment to the African consumer,” it said.

Global Data

Video - Why Are Multinationals Like P&G, GSK and Sanofi Leaving Nigeria?



Nigeria's currency crisis has triggered an exodus of businesses from the country. At least four multinationals, including GSK, Bayer and Sanofi, have announced they're ending production, as a scarcity of dollars, a naira in freefall and rampant inflation slashes profits. Bloomberg's Jennifer Zabasajja reports.

Bloomberg 

Related stories: GSK pull-out from Nigeria causes medication shortage

Cost of living crisis causes exodus of doctors from Nigeria

Protests in Nigeria over skyrocketing inflation as local currency hits record low value

 

Thursday, February 15, 2024

New Dangote refinery in Nigeria to export first fuel cargoes

Nigeria's Dangote oil refinery has issued tenders to sell two fuel cargoes for export, the first from the newly commissioned refinery, trading sources with knowledge of the matter told Reuters.

The refinery, Africa's largest with a nameplate capacity of 650,000 barrels per day, was built on a peninsula on the outskirts of the commercial capital Lagos by the continent's richest man Aliko Dangote.

Nigeria has for years relied on expensive imports for nearly all the fuel it consumes but the $20 billion refinery is set to turn it into a net exporter of fuel to other West African countries, in a huge potential shift of power and profit dynamics in the industry. Dangote declined a Reuters request for comment.

The first cargo is 65,000 metric tons of low-sulphur straight run fuel oil, which Dangote has awarded to Trafigura and is due to load at the end of February, three of the sources said. Trafigura declined to comment.

At least one refiner said they had been offered the cargo by Trafigura without elaborating further.
The second tender is for about 60,000 tons of naphtha, three other sources said. Two of them added that the tender closes on Feb. 15. Loading details were not immediately available.

Sources told Reuters last week that the refinery was preparing to deliver its first fuel cargoes to the domestic market within weeks.

The two fuels on offer are typical products of running light sweet crude through a crude distillation unit (CDU) in a refinery without further upgrading capacity. It is expected to take months for upgrading units to be brought online, experts have said.

The refiner began buying crude in December last year and Nigeria's state-owned oil firm NNPC Ltd has been the main supplier. Dangote has also purchased some U.S. oil and is expected to receive 2 million barrels of U.S. WTI Midland in early March, according to LSEG and Kpler ship tracking.

By Ahmad Ghaddar, Reuters 

Related stories: Nigeria seeks operators for state-owned Port Harcourt oil refinery

Video - Nigeria eyes restart of four oil refineries by end of 2024

Wednesday, February 14, 2024

Video - Nigerians adopt unbanked saving system amid mounting economic challenges



Thrift saving, commonly known as Ajoo in Nigeria, is deeply ingrained in the country's informal community culture. Participants contribute a fixed amount every month. The entire sum is then handed to one member until the cycle completes, empowering them to pursue their financial aspirations without going through the bank.

CGTN

Related story: Video - Inflation, shortage of foreign exchange causing multinational firms to leave Nigeria

 

 

Monday, February 12, 2024

Video - Poultry farmers in Nigeria warn they're on brink of collapse in key industry



Faced with the triple threat of inflation, currency devaluation and a long-running cash crunch, many poultry farmers in Nigeria say they're on the brink of collapse. Nigeria's poultry industry is a hugely important pillar of the national economy as it provides more than 2 million jobs and has also attracted a significant amount of investment.

CGTN 

Related story: Video - Increased investment boosts poultry industry in Nigeria

 

Thursday, February 8, 2024

MultiChoice will pay settlement of $37.3 mln to Nigerian tax authorities

Africa's biggest pay TV company MultiChoice Group

said on Thursday its subsidiaries have reached a settlement with Nigerian tax authorities and agreed to pay a total tax amount of about $37.3 million.

Nigeria's Federal Inland Revenue Service (FIRS) froze MultiChoice Nigeria's accounts in 2022 and served MultiChoice Group with a 1.8 trillion naira ($1.27 billion) tax claim for its Nigeria operation and a $342 million claim for value-added taxes.

The group said in a statement the total tax amount of 35.4 billion naira to be paid by MultiChoice Nigeria and MultiChoice Africa Holdings will be offset against the security deposits and good faith payments made to date. 

Reuters


Tuesday, January 30, 2024

Video - Nigeria leather industry earnings projected to hit $1 billion by 2025



Leather sector players in Africa’s largest economy say the industry remains untapped despite its huge economic potential. They are calling on the government’s support.

CGTN

Related stories: Video - Nigeria’s ponmo cuisine under threat as the leather sector seeks growth

Nigerians warned against eating ponmo due to Anthrax outbreak

 

 

 

Tuesday, January 16, 2024

Nigeria seeks operators for state-owned Port Harcourt oil refinery

Nigeria's state-owned oil company NNPC Ltd on Monday tendered for operators of its Port Harcourt oil refinery in the Niger Delta, which is expected to begin production in the first quarter of this year, the company said.

The refinery, which is undergoing an upgrade, will begin by processing 60,000 barrels per day (bpd), and NNPC expects to operate at the full capacity of 210,000 bpd later this year.

NNPC said in a public notice that it wanted to engage reputable and credible operations firms "to operate and maintain one of its refineries, Port Harcourt Refining Company, to ensure reliability and sustainability towards meeting the nation's fuel supply and energy security obligations".

The oil company said prospective operators should have a turnover of at least $2 billion since 2019, evidence of their latest credit rating and experience in running refineries.

NNPC said on Jan. 4 that it would complete test runs at the Port Harcourt refinery this month before resuming production.

The refinery, which was shut five years ago, is among state-owned refineries that have been mothballed for years, but which the Nigerian government is trying to revive to end the country's reliance on imported refined products.

By MacDonald Dzirutwe, Reuters



Shell to Sell Nigeria Onshore Oil Business for $1.3 Billion

Shell Plc agreed to sell its Nigerian onshore oil business to a consortium of local companies for more than $1.3 billion.

If approved by the government, the transaction would fulfill Shell’s long-term goal of extracting itself from a challenging operating environment in the Niger Delta region, while retaining a presence elsewhere in the country. Beyond the initial price tag, Shell said it will receive additional cash payments of as much as $1.1 billion on completion.

“This agreement marks an important milestone for Shell in Nigeria,” Zoe Yujnovich, integrated gas and upstream director, said in a statement on Tuesday. The deal is “simplifying our portfolio and focusing future disciplined investment in Nigeria on our deepwater and integrated gas positions”

The buyer of the asset, known as Renaissance, is formed of exploration and production companies ND Western, Aradel Energy, First E&P, Waltersmith and Petrolin, all of which are based in Nigeria, according to the statement.

The announcement comes after a labored sales process that had to be halted in 2022 after a court ruling ordered Shell Petroleum Development Company of Nigeria Ltd. to pause its divestment plans pending the outcome of a court case related to allegations of pollution. Earlier this month, Nigeria’s Supreme Court upheld Shell’s appeal against this ruling.

Shell has pumped oil in Nigeria for more than half a century, but almost three years ago then-Chief Executive Officer Ben van Beurden signaled the company’s intention to exit its onshore oil positions. These operations have become increasingly difficult, with accusations of environmental pollution by local communities, as well as persistent oil theft that caused damage to infrastructure.

Following the sale, Shell will continue operating in the country through its deep-water oil business, Shell Nigeria Exploration and Production Company Ltd. Another unit that provides gas to domestic industrial and commercial customers, Shell Nigeria Gas Ltd., will continue operating as will solar firm Daystar Power Group. Shell will retain its 25.6% stake in Nigeria LNG, which produces and exports liquefied natural gas.

By Laura Hurst, Bloomberg

Tuesday, January 9, 2024

Video - Dubai looking to boost trade with Nigeria



Dubai International Chamber recently opened its seventh office in Nigeria. The wider oil-rich Gulf region is seeking to leverage its unique geography with sound investment opportunities in the region.

CGTN

Friday, January 5, 2024

Anti-graft body of Nigeria visits Dangote Group in forex probe

Nigeria's economic and financial crimes agency on Thursday inspected Dangote Group's books as part of investigations into possible past misuse of foreign currency sourced from the central bank, two sources at the agency said.


The Dangote Group, which counts cement and fertiliser manufacturing and sugar refining among its businesses, is owned by Africa's richest man Aliko Dangote. Dangote is also readying a 650,000 barrels per day oil refinery that cost $20 billion to build.

Under former Central Bank of Nigeria (CBN) governor Godwin Emefiele, the bank had multiple exchange rates and sold dollars cheaply to some businesses, including Dangote, to help them import raw materials.

A Dangote spokesperson did not immediately respond to requests for comment.

Two people at the Economic and Financial Crimes Commission (EFCC) said Thursday's search at Dangote offices in Lagos, was part of an investigation set to be expanded to other companies.

"We went to the head office of Dangote Group today to look into their books on the ongoing investigation on the abuse of the extant laws that govern the foreign exchange transaction during the tenure of Godwin Emefiele as CBN governor," one of the sources told Reuters.

"Here, we are talking about multiple exchange rates and others. It is an ongoing investigation and it was the turn of Dangote Group today," said the source, who declined to be named because he is not authorised to speak on the issue.

EFCC spokesperson Dele Oyewale declined to comment.

A second source confirmed the investigation, adding that at least one other listed Nigerian conglomerate would be targeted.

By Camillus Eboh, Reuters

Related stories: Dangote refinery receives first crude cargo in Nigeria

Dangote oil refinery to help solve fuel shortage in Nigeria

Thursday, December 14, 2023

Video - Inflation, shortage of foreign exchange causing multinational firms to leave Nigeria



Nigeria is urging multinational companies to remain in the country despite the tough economic conditions that exist there. Some of the companies say inflation and a shortage of foreign exchange have made operating in the country more difficult.

CGTN

Jumia to shutdown food delivery service in Nigeria

In a decisive move, Jumia is shuttering its food delivery service, Jumia Food, across its operating countries, including Nigeria, Kenya, Morocco, Ivory Coast, Tunisia, Uganda, and Algeria, by the end of December 2023. The company will now focus on its core physical goods business and the Jumia Pay platform across its 11 countries of operations.


“The more we focus on our physical goods business, the more we realize that there is huge potential for Jumia to grow, with a path to profitability. We must take the right decision and fully focus our management, our teams and our capital resources to go after this opportunity. In the current context, it means leaving a business line, which we believe does not offer the same upside potential - food delivery," said Francis Dufay, Chief Executive Officer of Jumia.

Despite constituting 11% of Jumia's Gross Merchandise Value (GMV) in the first nine months of 2023, Jumia Food has struggled to achieve profitability since its inception. This means the total value of food sold on Jumia Food stood at $64 million (11% of $581 million) between January and September 2023. An indicator of the massive scale Jumia Food was operating at, but it doesn't necessarily amount to revenue or profitability.

Since its inception, Jumia Food experienced fluctuating fortunes, with a significant 82% year-over-year growth in 2021, reflecting the company's strong foothold in the food delivery segment. However, in 2023, the company saw a marked decline in Quarterly Active Consumers and Orders. A consequence of its shift to drive profitability by focusing on viable categories and reducing consumer incentives.

As for employees focused on Jumia Food, the company says a number of them will transition to the core physical goods segment, suggesting that some could be laid off.
The African food delivery landscape is complex

Parallel to Jumia Food's shutdown, Bolt Food, another significant player in the African food delivery market, announced its exit from Nigeria and South Africa in December 2023. Bolt Food's departure, despite its expansion efforts in major Nigerian cities like Lagos, is attributed to economic downturns, high inflation, and stiff competition from well-entrenched rivals such as Jumia Food, Gokada, and Uber Eats.

In contrast, Barcelona-based startup, Glovo has been deepening its presence in Sub-Saharan Africa with key partnerships with restaurant chains like Chicken Republic and Shoprite.

Chowdeck, another key player in Nigeria's food delivery market, has shown impressive growth, recently celebrating a significant milestone of delivering food worth over ₦‎1 billion ($1.2 million) in a single month. Chowdeck's recent partnership with Shoprite for grocery delivery marks a landmark moment in its expansion strategy.

However, there's a note of caution in interpreting Chowdeck's reported success with food delivery. When placed in context, Jumia's 9-month figure of $64 million amounted to ₦‎5.7 billion monthly, yet profitability was still an issue. This is not unique to Jumia.

Profitability remains a challenge for many players in the global food delivery landscape.

In the US, Doordash and Uber have burned millions in venture capital to control 96% of the on-demand food delivery business while barely making any profit.

With $1 billion in funding to date, Glovo seems to be part of that mould but has differentiated itself with early diversification of revenue and already operates in 25 markets.

A key point in Chowdeck's favour seems to be a capital-efficient model, as the CEO maintained in an interview that its growth to $1.2 million monthly GMV was purely organic.

The African food delivery market, expected to grow at a CAGR of 12.2% from 2023 to 2028, reaching $1.7 billion, presents a landscape of both opportunities and challenges. While partnerships and technological integration offer growth avenues, the path to profitability remains complex. The experiences of Jumia Food and Bolt Food, contrast with the expansion of Glovo and Chowdeck. Both are relatively early in Africa's food delivery landscape and there's still time to chart a different course.

By , Techpoint Africa

Related story: Nigeria's answer to amazon.com

Jumia is biggest e-commerce website in Nigeria

Monday, November 13, 2023

Nigeria to Lure Foreign Investment With Tax Incentives

Nigeria will boost incentives for foreign investors in an attempt to address a decline in capital coming into the country as part of the government’s plans to revive the economy.

The administration in Abuja will introduce measures to eliminate double taxation and allow speedy remittances of foreign money, Doris Uzoka-Anite, the minister of industry, trade and investment, said in an interview late Saturday in Riyadh.

“We have the free-trade zones where they can situate their businesses, export and import their raw materials without any taxes,” she said. She called it a “strong incentive” for foreign direct investment, which plunged 52% to $698 million in the six years through 2021.

Since taking office in May, President Bola Tinubu has instituted reforms to revive Africa’s biggest economy from almost a decade of decline. They include scrapping a $10 billion annual fuel subsidy and liberalizing the foreign-exchange market, which led to a more than 40% devaluation in the naira.

Nigeria has also been reviewing its bilateral agreements with countries to drum up investment. In September, it entered into several agreements with India that could see companies set up auto and steel factories in Africa’s top oil producer. A number of investors from India have begun to make their commitments tangible, Uzoka-Anite said.

Key is to show investors their money will be protected, she said. The minister was in Saudi Arabia as part of a Nigerian delegation meeting officials in the Gulf country after the two established a business council and joint chamber of commerce, industry, mines and agriculture. “We’re very keen on making sure that the investments happen very quickly,” she said.

Ruth Olurounbi, Bloomberg

Wednesday, November 8, 2023

Video - Analysts believe Nigerian companies not capitalizing on CIIE opportunities



The China International Import Expo continues in Shanghai. Organizers say it's an opportunity for global companies to tap into the burgeoning Chinese market. However, industry experts in Nigeria say companies there are not fully capitalizing on the opportunities the Shanghai fair is providing.

CGTN

Wednesday, October 18, 2023

Nigeria to require mining firms to invest in domestic processing

Nigeria is toughening up licensing rules for foreign mining companies to push them to boost processing and refining of metals like lithium and zinc within the country, its minister of mines said on Tuesday.

The policy announced by Dele Alake at a Nigeria Mining Week event in the capital Abuja will require mining companies to show business plans for so-called "value addition" before they are granted licences.

Alake said that the move is essential to help create jobs. "I am glad to mention that such an initiative is already on stream as some companies have already commenced operations in Nigeria," he said.

The minister referenced Ganfeng Lithium Industry Ltd, a Chinese company that is building a lithium processing plant in the central Nasarawa state, as an example of the type of investment the government is looking for.

The plant will process about 18,000 tons of lithium ore per day to manufacture batteries for electric vehicles, he said.

Nigeria is seeking to woo investors to a mining sector that has long been underdeveloped, contributing less than 1% to the country's gross domestic product.

Africa's top oil producer, which is also rich in gold, limestone and zinc, wants its mining industry to play a much bigger role in its effort to diversify the economy away from its reliance on oil.

Alake said the mining industry is been modernized and the government is investing in data collection, spending more than 15 billion naira ($19.6 million) over seven years to generate mineral data through a National Integrated Mineral Exploration Project (NIMEP).

"The preliminary reports from this project have unravelled massive discoveries which have literally put Nigeria on the world map of lithium-rich countries," he said.


Last month, Nigeria announced plans to start a state-backed company to help attract investments for the extraction of gold, coal, iron ore, baryte, lead, bitumen and limestone.

By Camillus Eboh, Reuters

Monday, September 4, 2023

Nigeria plans to set up solid minerals corporation

Nigeria plans to set up the Nigerian Solid Minerals Corporation, a state-backed company to help attract investments into the extraction of gold, coal, iron-ore, bitumen, lead, limestone and baryte, a minister said on Sunday.

"The proposed corporation will seek and secure partnership investment agreements with big multinational companies worldwide to leverage on the attractive investment-friendly regime operating in the country to secure massive foreign direct investment for the mining sector," Solid Minerals Minister Dele Alake said in a statement.

Nigeria wants mining to play a much bigger role in its economy by expanding its mineral extraction sector to diversify away from an overreliance on oil exploration.

Alake did not give a timeframe for when the new company would be set up. Existing enterprises - the National Iron-Ore Company and the Bitumen Concessioning Programme - will be reviewed to fit into the new company while a mines police force will be active from October to detect illegal mining, he said.

President Bola Tinubu has embarked on the country's boldest reforms in decades to try to improve Nigeria's investment climate and draw foreign investors to Africa's biggest economy.

Tinubu inherited a struggling economy with record debt, shortages of foreign exchange and fuel, a weak naira currency, inflation at a near two-decade high, skeletal power supplies and falling oil production due to years of underinvestment, crude-oil theft and pipeline vandalism.

His administration has said it will seek to promote investments rather than rely on borrowing to create jobs.

Tinubu plans to attend the forthcoming G20 summit to promote foreign investment in Nigeria and mobilize global capital to develop infrastructure.

The new corporation will engage local financial institutions, which have shied away from the mining sector in the past due to a long gestation period for projects, to promote investment, Alake said.

By Camillus Eboh, Reuters