800% over-subscription recorded by Nigerian's $1bn Eurobond

The Federal Government, yesterday, said that it had issued the $1 billion Eurobond with 800 per cent over-subscription, as foreign investors demanded for $7.8 billion, reflecting investors‘confidence in the nation’s economy.

In a statement yesterday, the Ministry of Finance said that the 15-year bond was priced at 7.875 per cent and will mature on February 16, 2032. According to the statement by Director of Information, Ministry of Finance, Salisu Dambatta:  “The notes will bear interest at a rate of 7.875 percent and will mature on February 16, 2032 with a bullet repayment of the principal. 

The republic intends to use the proceeds of the notes to fund capital expenditures in the 2016 budget. The notes represent the republic’s third Eurobond issuance, following issuances in 2011 and 2013. “The notes were approximately eight times over-subscribed with orders in excess of $7.8 billion compared to a pre-issuance target of $1 billion demonstrating strong market appetite for Nigeria. 

This is despite continued volatility in emerging and frontier markets and shows confidence by the international investment community in Nigeria’s economic reform agenda. “The offering attracted significant interest from leading global institutional investors.  

The notes will be admitted to the official list of the UK Listing Authority and available to trade on the London Stock Exchange’s regulated market. The republic will apply for the notes to be eligible for trading and listed on the Nigerian FMDQ OTC Securities Exchange and the Nigerian Stock Exchange. “The pricing was determined following a roadshow led by Mrs. Kemi Adeosun, the Minister of Finance, Senator Udoma Udo Udoma, the Minister of Budget and National Planning, Mr Godwin Emefiele, Governor of Central Bank of Nigeria, Dr. Abraham Nwankwo, Director-General of the Debt Management Office, DMO, and Mr Ben Akabueze, Director -General of the Budget Office, to key global financial centres.”

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Boko Haram is broke according to United Nations

The destructive Boko Haram group is currently plagued by financial difficulties, the UN Under-Secretary-General for Political Affairs, Jeffrey Feltman, has said.

According to the News Agency of Nigeria (NAN), Feltman stated this Tuesday while briefing the Security Council on the UN Secretary-General’s Fourth Report on the threat the group poses to international peace and security efforts to “check and roll it back”.

The UN envoy also revealed that Boko Haram was under intense military pressure, but warned against undermining its capacity to launch fatal attacks.

“ISIL-affiliate Boko Haram is attempting to spread its influence and commit terrorist acts beyond Nigeria.

“And Boko Haram remains a serious threat, with several thousand fighters at its disposal.

“It is, however, plagued by financial difficulties and an internal power struggle, and has split in two factions,” Feltman said.

While the previous reports on the subject had focused on South East Asia, Yemen and East Africa, Libya and Afghanistan, the fourth report focused on Europe, North Africa and West Africa.

It said ISIL had conducted a range of attacks in Europe since declaring in 2014 its intent to target the region.

Some of these attacks were directed and facilitated by ISIL personnel, while others were enabled by ISIL providing guidance or assistance or were inspired through its propaganda, it said.

The report stated that while the military offensive in Libya has dislodged ISIL from its stronghold Sirte, the group’s threat to Libya and neighbouring countries persists.

“Its fighters, estimated to range from several hundred to 3,000, have moved to other parts of the country.

“ISIL has increased its presence in West Africa and the Maghreb, though the group does not control significant amounts of territory in the region.

“The reported pledge of loyalty to ISIL by a splinter faction of Al-Mourabitoun led by Lehbib Ould Ali may elevate the level of the threat.”

Following the increased military pressure, Feltman said ISIL was now on the defensive militarily in several regions, but was also adapting to military pressure by resorting to covert communications such as the ‘dark web’.

“Although its income and the territory under its control are shrinking, ISIL still appears to have sufficient funds to continue fighting,” he warned.

Feltman noted that ISIL relies mainly on income from extortion and hydrocarbon exploitation, even though resources from the latter are on the decline.

According to him, UN member states are concerned that ISIL will try to expand other sources of income, such as kidnapping for ransom, and increase its reliance on donations.

“ISIL is adapting in several ways to military pressure, resorting to increasingly covert communication and recruitment methods, including by using the ‘dark web,’ encryption and messengers,” he warned.

The report also focused on some some of the measures taken by member states and the UN, stressing the need to develop sustained and coordinated responses to the grave threat posed by ISIL and associated groups and entities.

Feltman said that there were 19 universal counter-terrorism conventions and protocols, as well as related regional instruments on international terrorism, and relevant UN General Assembly and Security Council resolutions.

“But we need to do more, as member states continue to face significant challenges to ensure effective international cooperation,” he said.

He warned that foreign terrorist fighters leaving the conflict could pose a grave risk to their homeland or to the countries they are travelling to or transiting through, such as Iraq and Syria’s neighbours, as well as countries in the Maghreb.

“Ultimately, it is the spread and consolidation of peace, security, development and human rights that will most effectively deprive terrorism of the oxygen it needs to survive,” he concluded.

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Nigeria aims to stop importing fuel by 2019

Nigeria will stop importing refined petroleum products by 2019, Ibe Kachikwu, the Minister of State for Petroleum Resources, said on Tuesday in Abuja.

Mr. Kachikwu said this at a public hearing on the review of petroleum pricing template for petrol organised by the House of Representatives.

He said that within two years, the Federal Government revived refineries that were non-functional to contribute about eight million out of over 20 million litres of petrol consumed in the country daily.

He explained that the Federal Government initiated a model which attracted foreign investors to partner with the Nigeria National Petroleum Corporation (NNPC) to repair the country’s refineries within the two-year period.

“This has consistently served as a target for this government so that by December 2018, NNPC must be able to deliver on some of the terms given them, one of which is to reduce petroleum importation by 60 per cent.

“Cognisant of the fact that Dangote is building one refinery, we expect to have an excess situation,’’ he said.

The minister said that Nigeria must also have the capacity to stop exporting crude oil.

According to him, selling crude oil is not different from selling agricultural produce in an unprocessed manner.

“The world is leaving that, every member of OPEC is leaving that because the pricing, volume and market challenges is now shifting from selling crude to selling refined petroleum products.

“That is what this country must do and there is a template we are working on.”

He said the ministry intended to create an enabling environment that would promote local refining of crude oil.

“The issue is not giving licences to illegality, the issue is how do we ensure that we create an investment environment that pulls individuals from illegal creek activities to legal business activities.

“We are looking at modular refineries, about 60 licences were given out just before this government came in and none of that was utilised because it requires a lot of money, land and crude security.

“But now we are going out to identify refineries, get individuals who can build refineries on the same platforms where our refineries are and identify some key specific modular refineries backed up by foreign investments working with state governments.

“Hopefully this will address the restiveness you see in the Niger Delta,’’ the minister said.

On the possibility of reducing the fuel pump price, Mr. Kachikwu said there was no padding in the petroleum pricing template for petrol currently sold at N145 per litre.

According to him, 71 per cent of the cost is for the production and freight, 18 per cent balance is covered by depot charges and retailers margin.

“In other words the storage tanks, the amount you get by verge of operating a filling station takes another 18 per cent, the output of those is already taking you to roughly about 90 per cent.

“The transportation is less than 10 per cent; we probably can do better, the templating is an insignificant 1 per cent or 2 per cent but that’s not where the problem is.

“The problem is with foreign exchange rate.

“There are two key elements in the template, how much you buy it is internationally fixed, it is not a Nigerian issue the cost of foreign exchange is a monetary policy issue.

“So at the time we did the template the Central Bank of Nigeria (CBN) monetary policy was N245, that was the basis upon which we calculated the pricing, today N305 is the exchange rate.

“And what we have tried to do is to ensure that anybody who sells us foreign exchange follows basically the instructions of the CBN in terms of the amount,’’ he said. (NAN)

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