Even the almighty Blackrock, with asset under management of close to $9.5 trillion, cannot solve the current paralysis in Nigeria as iShares Frontiers fund goes: “BlackRock, one of the world’s leading asset managers, has announced plans to liquidate its iShares exchange-traded funds (ETFs) valued at $400 million, citing unprofitable business conditions in Nigeria and Kenya..The fund will cease trading and the creation and redemption of creation units will halt after market close no earlier than August 12, 2024.’

Nigeria needs to promptly reverse the Naira floating and/or fuel subsidies, as both cannot happen simultaneously. If not, the bleeding will continue as Nigeria cannot attain stability with both in the next five years. 

I write this with pain because unless we fix these policies, many challenging moments await as I wrote in June 2023:  “Nigeria’s floating of its currency, while progressive, will cause severe perturbations in the economy – and a stable state may not come as most experts have predicted.” And I repeat, a stable state will not come.

Making this observation does not make me unpatriotic; I am patriotic, and I continue to invest in Nigeria. Our leaders must #lead.

The Naira Floating Policy Is Bad Policy

When the Naira floating policy was announced in June 2023, what did you say? Here is mine (in quote). And I have noted that floating the Naira is the worst economic policy in Nigeria since IBB introduced Nigeria to SAP, which ended up financializing our economy, out of manufacturing.

SAP created the “modern” financial sector without the “making things” component, as men became rich through financial instruments with no need to build or make anything!

Remember, I am not an activist, but an economics student of OA Lawal, the legendary author of O’Level Economics textbook. I am happy Sir OA Lawal was also against the policy. He spoke in July 2023, according to the Tribune https://lnkd.in/dCAg39yC,:

“RENOWNED economist and author, Dr. O.A Lawal has told the Central Bank of Nigeria (CBN) to stop the Naira floating policy it introduced on the advice of the World Bank and the International Monetary Fund (IMF).

“Lawal, who spoke in an interview with the Nigerian Tribune said that the nation’s economy cannot withstand a floated Naira, adding that the World Bank and the IMF would destroy the Naira completely if care is not taken.” -Dr. O.A Lawal . Eziokwu, gaskiya, otito.

In a move to expand its market reach, the Dangote Refinery is planning to establish a terminal in the Caribbean, facilitating the export of petroleum products to North American countries.

This announcement was made by Aliko Dangote, the president and CEO of the refinery, during Afreximbank’s Trade and Investment Forum held in The Bahamas on Wednesday.

The African richest man highlighted the refinery’s capability to efficiently supply petroleum products to the Caribbean region, promising delivery within 18 to 20 days.

“I know the price in the Caribbean in terms of petroleum products is very high. We produce it cheaply. We can always bring it here. We can set up a terminal and we’ll be able to fix their needs,” he stated.

The proposed bilateral agreement aims to construct a terminal specifically for this purpose, ensuring that the Caribbean region benefits from more affordable petroleum products. Dangote explained that cheap energy could significantly boost the local economies by accelerating growth.

Apart from petroleum products, Dangote also announced plans to export cement to the Caribbean. The Dangote Group’s cement production capacity is expected to increase from nearly 52 million tons to about 62 million tons by the end of next year. This expansion enables the conglomerate to meet the demands of the Caribbean market effectively.

Dangote articulated the potential for a mutually beneficial relationship, stating, “It’s not only about the oil. We now have a capacity of almost 52 million cement capacity. By the end of next year, we will be at 62 million of cement capacity. We are not only saying that we can bring in from Nigeria or from Africa.”

He further explained that if the Caribbean countries have essential ingredients like limestone, the company could set up local production facilities within 28 months, promoting self-sufficiency in the region.

“We’ve done that before in Africa and we should be able to free them up from the shackles of other people,” he added.

Targeting Broader Markets

The Dangote Refinery, with its massive 650,000 barrel-per-day refining capacity, is set to revolutionize the oil and gas sector. Once operational, it will be the largest refinery in Africa and Europe, significantly impacting the $17 billion Africa-European market by reducing the continent’s dependence on imported petroleum products from Europe.

In addition to the Caribbean, Dangote revealed ambitions to supply refined products to the Brazilian market and other North American countries.

“Our capacity is too big for Nigeria. It will be able to supply West Africa, Central Africa, and also Southern Africa,” Dangote remarked during a panel discussion in Rwanda a few weeks ago.

Widening the Scope: From Oil to Steel

The Dangote conglomerate is not just stopping at oil and cement. It is broadening its business scope, marking a significant presence in various industries. Recently, Dangote announced plans to enter the steel production sector, further diversifying its industrial footprint.

“We want to make sure every single steel that we use will come from Nigeria,” Dangote said, underlining the company’s commitment to local production and self-sufficiency.

This ambitious move into steel production follows the successful launch of a Sinotruk assembly plant in Lagos. The plant, established in collaboration with China’s Sinotruk, aims to meet the growing demand for commercial vehicles in Nigeria and across Africa.

This venture is expected to boost local manufacturing capabilities and reduce dependence on imported trucks, aligning with the broader vision of industrialization and economic development in the region.

The plan to establish a terminal in the Caribbean, along with the potential export of cement and the vast refining capacity of the Dangote Refinery, underscores the company’s strategic efforts to become a major player in the global oil and gas market. This expansion, which promises economic growth for the regions involved, is also expected to highlight the significant role of African enterprises in the global economy.

The Central Bank of Kenya (CBK) has announced plans to issue payment licenses to Fintech firms that operate in the country, following the amendment of the National Payment Act.

The move signifies a huge shift from CBK’s previous stance, opening up Kenya’s payment market. Recall that in 2022, CBK via a circular ordered local financial institutions including banks and mobile money service providers to cut links with fintechs, citing unspecified threats to the country’s financial systems. The regulator emphasized that the firms were operating without authorization.

Part of the circular reads,

“It has come to the attention of the Central Bank of Kenya (CBK) that Flutterwave Payments Technology Limited (Flutterwave) and Chipper Technologies Kenya Limited (Chipper) have been engaging in Money Remittance and Payment Services without licensing and authorization by CBK. You are therefore directed to immediately cease and desist from dealing with Flutterwave and Chipper”.

However, the latest amendment is poised to unlock opportunities for fintech companies, streamlining their operations and enhancing their ability to innovate and expand.

Speaking on the amendment, CBK’s governor Kamau Thugge disclosed that the regulator is working to amend the National Payment Systems Act of 2011. This is aimed at establishing a legal framework that will allow fintech firms to operate legitimately.

In his words,

“We are in the process of updating and amending the Payments Act, basically coming up with a new act. We hope to be able to finish that soon and also the regulations and that would guide our way forward in terms of payments service providers space”.

The proposed changes are poised to be a big win for remittance and payment providers who have faced investigations by Kenyan authorities on allegations of money laundering.

Also, CBK’s proposed changes to the National Payment Systems Act to allow the registration and licensing of fintech startups could solve a legal gray area that has slowed down the expansion of fintech in the country.

Notably, the amendments to the National Payment Systems Act will no doubt introduce a more flexible and comprehensive regulatory framework for payment services. Key aspects of these changes include; a streamlined licensing process, Enhanced regulatory clarity, and consumer protection.

Streamlined Licensing Process:

The revised will simplify the licensing process for fintech companies, reducing bureaucratic hurdles and accelerating the time to market for new payment solutions. This move is expected to attract both local and international fintech firms to Kenya, fostering a competitive and innovative financial ecosystem.

Enhanced Regulatory Clarity:

By providing clear guidelines on compliance requirements, the CBK aims to reduce ambiguity and improve regulatory transparency. This clarity will help fintech companies better understand their obligations, reducing the risk of non-compliance and associated penalties.

Consumer Protection:

The act will ensure that users of payment services are safeguarded against fraud and other risks. This focus on consumer trust is crucial for the widespread adoption of digital payment solutions.

The amendments to Kenya’s National Payment Systems Act represent a significant breakthrough for the fintech sector. By creating a more conducive regulatory environment, the CBK is paving the way for innovation, growth, and increased investment in digital payment solutions.