11 Apr

Daily Watch – Trump okays weapons sale to Nigeria, Dangote to list refinery

  • US President Donald Trump is pushing forward with plans to sell up to a dozen aircraft to the Nigerian air force for the fight against Boko Haram, Reuters quoting unnamed sources reported on Monday, in a deal that could be worth up to $600 million. The Super Tucano A-29 aircraft, an agile, propeller-driven plane with reconnaissance and surveillance as well as attack capabilities, is made by Brazil’s Embraer. A second production line is in Florida, in a partnership between Embraer and privately held Sierra Nevada Corp of Sparks, Nevada. The Obama administration originally agreed on the sale, but delayed it after incidents including the Nigerian Air Force’s bombing of a refugee camp in January that killed 90 to 170 civilians. The Trump administration wants to push ahead to boost Nigeria’s efforts to fight Boko Haram and bolster hiring in the US by defence firms. “We’ve been told that the administration is going to go forward with that transaction,” a congressional aide said. Formal notification of the deal has not yet been sent to Congress but is expected shortly. Trump has said he plans to go ahead with foreign defence sales delayed under Obama by human rights concerns. “I can confirm to you that the U.S. has agreed to sell some fighter jets to us to support in the ongoing insurgency war,” a senior Nigerian military source said in Abuja.
  • The CBN is offering SMEs up to $20,000 per quarter, in an effort to prop up businesses whose access to foreign currencies has been overshadowed by larger companies, it said on Monday. The regulator now plans to sell shorter-dated dollar forwards to inject liquidity into the official market and try to support the naira, traders said on Monday. Also on Monday, the bank auctioned $100 million, it said, with traders saying the sales will be settled within one week and 30 days, compared with the 60-day contracts it had written previously. The central bank also sold $41 million for travel allowances and medical and tuition fees, it said in Monday’s statement. The local currency has weakened on both the official and black markets. The naira fell to ₦328.50 on the official market on Monday but later gained some ground to close at ₦306.15 after the regulator intervened. However, it slid past ₦400 on the black market.
  • The Nigerian arm of Abu Dhabi telecom group, Etisalat, is yet to agree on a deal to restructure a $1.2 billion loan with local banks after it missed a payment, a company source told Reuters. Etisalat Nigeria has said it is in talks with lenders to restructure the loan. The source, who is not authorised to speak to media, said that Etisalat and the group of 13 Nigerian lenders were yet to agree on a debt restructuring proposal. The source was speaking on the sidelines of Etisalat’s annual general meeting in Abu Dhabi on Sunday, where Chief Executive Saleh Al Abdooli declined to comment on the debt talks. Etisalat Nigeria did not respond to a request for comment. Nigerian regulators agreed with local banks in March to pursue a default deal rather than a receivership for Etisalat Nigeria so as not to deter investors and to avoid a wider debt crisis. Sources have said that Etisalat would consider selling its stake in the Nigerian entity after the debt deal is agreed.
  • The Nigeria Extractive Industries Transparency Initiative has called on the FG to conduct an independent investigation into the status and utilisation of all dividends and loan repayments by NLNG to the NNPC from 2000 to 2014. The Executive Secretary of NEITI, Waziri Adio, who made the call in Abuja said the NLNG paid $489.226 million (₦151.6 billion) in various forms of taxes to the Federal, States and Local Governments in 2016 alone. NEITI in the policy brief stated: “Since the Federation’s shareholding in NLNG is held through NNPC, dividends are paid to NNPC, which should remit same to the Federation. However, NEITI’s audits have revealed that until 2015, NNPC failed to remit the interests and dividends from NLNG to the Federation Account.” Adio also told journalists that the total outstanding dividends and loan repayments by NLNG to NNPC not remitted to the Federation Account stood at over $15.8 billion. He noted that these payments were traced to NNPC accounts by its independent auditors but observed that there was no trace of NNPC remittances to the Federation Account as required by sections 80(1) & 162 (1) of the Constitution.
  • Dangote Group CEO, Aliko Dangote, has said that Dangote Oil Refining Company Limited will be listed on the Nigerian Stock Exchange. Dangote disclosed this on Monday while speaking with journalists after beating the closing gong at the NSE in Lagos. He said when completed in 2019, the refinery would enhance local refining capacity and contribute to national savings currently being spent on the importation of crude oil and petroleum products. “Refining business is not a business that you make a 50 percent margin from; the margin is low but what you depend on is the volume of business that you have there, and that is the reason why we are building a 650,000-barrels-per-day refinery. It is a very large one,” he said. With four of his companies already listed on the NSE with a total market capitalisation of ₦2.9 trillion as at April 10  or 32 percent of the total capitalisation of the Nigerian bourse, Dangote said, “We will list every single company that we create between now and the end of my life.”