- OPEC says its oil production jumped in June, above the demand forecast, led by gains in Libya and Nigeria, two members exempt from the cut aimed at eliminating excess supply. The cartel forecast that world demand for its crude will decline next year as rivals pump more, pointing to a market surplus in 2018 despite an OPEC-led output cut. Giving its first 2018 forecasts in a monthly report, OPEC said the world will need 32.20 million barrels per day of crude from its members next year, down 60,000 bpd from this year. OPEC officials nonetheless remain upbeat on the outlook. “We remain very optimistic … (about) helping the market to rebalance itself,” OPEC Secretary-General Mohammad Barkindo said at an industry conference in Istanbul. Oil rose above $48 a barrel on Wednesday as a report of falling inventories in the US raised hopes that the glut is easing.
- Nigeria plans to issue a 10-year promissory note to offset ₦2.7 trillion ($8.85 billion) owed to government contractors and employees, the finance minister said on Wednesday. Several states around the country raised money on the domestic bond market and from banks to fund infrastructure projects at the peak of oil prices. But as crude prices plunged many have found themselves unable to pay bills or salaries. A total of ₦2.7 trillion naira is outstanding, Finance Minister Kemi Adeosun told reporters in Abuja, after a cabinet meeting. Money is owed to state governments, contractors and oil marketers, she said, as well as power generation and distribution companies. Some ₦740 billion in pension and salary arrears and ₦1.93 trillion of other obligations are also outstanding, including to federal government contractors and suppliers. Adeosun said the programme required final approval from parliament.
- The Dangote Group will own 50,000 cows by 2019, and produce 500 million litres of milk per year. The group, principally owned by Africa’s richest man, Aliko Dangote, plans to invest $3.8 billion in sugar and rice and $800 million in dairy production in the next three years. According to the World Health Organisation estimates, Nigeria needs about 1.5 billion litres of milk annually. The US department of agriculture also puts Nigeria’s “insufficient” milk import at $225 million per year, stating that the country’s dairy market has a potential in excess of $3 billion. With Dangote’s drive, the group will produce a third of the country’s ideal demand and nearly all of its current import. According to Bloomberg, the company seeks to expand and deal with a shortage of dollars needed to import raw materials. The conglomerate plans to increase its production of sugar to 1.5 million metric tonnes a year by 2020 from 100,000 tonnes now and is seeking to add 1 million tonnes of rice.
- British insurer Prudential said it had bought a majority stake in Nigeria’s Zenith Life to give it access to the country’s fast-growing insurance market. It said it had also signed a deal with the Nigerian insurer’s parent Zenith Bank to sell life and other insurance products via the bank in Nigeria and Ghana. “Today’s announcement is an important milestone for Prudential and our growing portfolio of high-quality life insurance businesses in Africa,” said Matt Lilley, chief executive of Prudential Africa. Zenith Life, which had gross written premiums worth ₦3.3 billion Naira ($10.82 million) at the end of 2016, will be rebranded as Zenith-Prudential Life Insurance. Prudential did not say what size stake it had bought or how much it had paid. It already has operations in Ghana, Kenya, Uganda and Zambia on the continent.