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Dangote Refinery will Sell Products in Naira – Oil Marketers

By
Samuel Nwite
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0

In response to recent speculations surrounding the currency in which refined petroleum products from the Dangote Petroleum Refinery will be sold, oil marketers have sought to allay concerns by stating that the products will be dispensed in the local currency, the naira, and not in US dollars.

The clarification comes amidst the ongoing registration exercise for marketers by the refinery. On Tuesday, MOMAN, IPMAN, and DAPPMAN members were announced by Dangote Refinery as registered members for product distribution. These three major associations, collectively constituting 75 percent of the total market in Nigeria, are integral to the supply chain, facilitating fuel distribution to approximately 150,000 retail outlets across the country.

The $20 billion Dangote Refinery, which commenced the production of Automotive Gas Oil (diesel) and JetA1 (aviation fuel) on January 12, 2023, has, encountered various concerns that need addressing before it initiates the distribution of its products. One of the prominent concerns is the establishment of a pricing template for refined products.

According to The Punch, officials of the Nigerian Midstream and Downstream Petroleum Regulatory Authority have been engaging in discussions with the refinery’s management to finalize the pricing structure for the products.

A significant aspect of the concerns relates to the use of the US dollar in the supply chain. Given that crude oil, the primary raw material for the refinery is an international commodity traded in dollars, questions arose regarding whether the refined products would also be sold in dollars, especially since the plant is located in a free trade zone.

Chief Ukadike Chinedu, the National Public Relations Officer of IPMAN, responded to these concerns, acknowledging that crude oil is indeed purchased in dollars but assuring that this would not dictate the currency for selling refined products in the Nigerian market.

“The legal tender in Nigeria is the naira. The cement being sold by Dangote Cement is done in naira, not in dollars. So why should one think that he will now sell fuel in dollars? Except for the offshore sales for those who want to move the refined products out of Nigeria using vessels to transport them to other countries. Such customers may get theirs in dollar equivalent,” Ukadike explained to The Punch.

The ongoing debate about the currency in which Dangote Refinery will transact its products gains significance against the backdrop of the escalating price of the dollar in Nigeria’s forex market. With crude oil supplied in dollars, some have assumed that the refinery would also adopt the dollar for its product sales.

To put a permanent end to this, Ukadike said that the Nigerian government needs to close up the widening gap in the foreign exchange rate.

“If the exchange rate for the dollar is low, petroleum products would have been cheap in Nigeria because the products are imported. So I believe that Dangote will definitely sell the products in our local currency, which is naira,” Ukadike asserted.

When asked whether marketers had been briefed on the currency for product sales, considering that crude oil is supplied in dollars, Ukadike clarified that the pricing template had not yet been finalized. He stated, “No, the pricing template has not come out. What is going on now is legislation. The template is not yet out. And I must state that there is no way the NNPC will bring out its template in naira and Dangote will bring out its own in dollars. It is not possible! So for the cost of their products, I think they are still trying to fix the prices with the regulatory agencies of the Federal Government.”

The Dangote Petroleum Refinery, with a colossal capacity to refine 650,000 barrels of crude oil per day, has been touted as a crucial solution to the rising cost of petroleum products resulting from the removal of fuel subsidies.

Since its inception, the refinery has received six million barrels of crude oil at its two Single Point Mooring (SPM) locations located 25km from the shore. The initial crude delivery took place on December 12, 2023, and the latest cargo was delivered on January 8, 2024.

In a statement issued by the President of Dangote Group, Aliko Dangote, he affirmed that the products would be available in the market within the month, pending regulatory approvals. Dangote said that the refinery will make a difference in the Nigerian petroleum sector.

“This is a game changer for our country, and I am very fulfilled with the actualization of this project,” he said.

As the registration process for marketers continues and discussions with regulatory authorities progress, the finalization of the pricing template will be a crucial step for Dangote Refinery in addressing concerns and ensuring a smooth transition into the distribution phase. Emphasis is on the commitment to transacting in the local currency, underlining the refinery’s alignment with established business practices within Nigeria.

The anticipation for the refinery’s contribution to stabilizing petroleum product prices remains high, awaiting the formal announcement of the pricing template and subsequent product availability in the market.

Why Femi Otedola is buying tons of Dangote Cement shares

By
Ndubuisi Ekekwe
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0

Not hard to understand why Femi Otedola is buying tons of Dangote Cement shares. Yes, you can check the following things on a Dangote Cement investment:

  1. Cement industry market leader with more than 65% of the market share.

  2. Dividend-paying which has been consistent for years.

  3. Founder-majority-owned, aligning that dividend-paying culture to the desire to have personal liquidity for other ventures. Aliko Dangote controls about 85% of Dangote Cement.

  4. Industry-leading gross margin which makes the company a rainmaker on making profits.

  5. Dominant in regions still at pre-industrialization phase which means more cement will be needed in Nigeria, Ethiopia, etc.

  6. High barrier of entry which is a great moat that no other person can launch to reshape the competition overnight.

  7. Etc Etc.

Indeed, provided you are sourcing the funds within Nigeria, why not? But if you are importing funds, the equation changes as you must consider the exchange rate stability. Otedola has truckloads of money within Nigeria to invest.

Students: there are three types of investors, where would you classify Otedola?

-Growth Maker: you buy low and wait for the value of the company to grow quickly.

-Value Picker: they focus on extremely beaten down equities.

– Income Chaser: these people do not necessarily care if the value of the stocks they hold go up or not, their major focus is the company’s ability to pay dividends.

Let us have an investment class on the Nigerian stock exchange; trade profitably everyone!

Meanwhile, Otedola is back to Forbes top 20 of richest billionaires in Africa

  1. Aliko Dangote – $13.9 billion
  2. Johann Rupert & family – $10.1 billion
  3. Nicky Oppenheimer & family – $9.4 billion
  4. Nassef Sawiris – $8.7 billion
  5. Mike Adenuga – $6.9 billion
  6. Abdulsamad Rabiu – $5.9 billion
  7. Naguib Sawiris -$3.8 billion
  8. Mohammed Mansour – $3.2 billion
  9. Roos Bekker – $2.7 billion
  10. Patrice Motsepe – $2.7 billion
  11. Issad Rebrab & family – $2.5 billion
  12. Mohammed Dewji – $1.8 billion
  13. Strive Masiyiwa – $1.8 billion
  14. Aziz Akhannouch & family – $1.7 billion
  15. Othman Benjelloun & family – $1.4 billion
  16. Youseff Mansour – $1.3 billion
  17. Yassen Mansour – $1.2 billion
  18. Christoffel Wiese – $1.2 billion
  19. Michiel Le Roux – $1.1 billion
  20. Femi Otedola – $1.1 billion

Comment on Feed

Comment 1: Femi Otedola’s investment in Dangote Cement seems to be a strategic move, considering the points you’ve highlighted Prof. His decision to invest in a market-leading company with a strong dividend history and a significant barrier to entry could be seen as aligning with the traits of an Income Chaser. However, given the company’s potential for growth in pre-industrial regions and its dominant market share, one could also argue that elements of Growth Investing are at play. Otedola’s unique position allows him to capitalize on local opportunities without the added complexity of currency exchange risks. It’s a nuanced strategy, blending an understanding of local market dynamics with a focus on both value and income.

Femi Otedola Explains Strategic Investment in Dangote Cement

By
Samuel Nwite
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0

Foremost Nigerian businessman, Femi Otedola, provided detailed insights into his recent substantial investment in Dangote Cement, highlighting its strategic importance for long-term wealth preservation and economic development.

In a statement from his media office, Otedola explained the rationale behind his move, emphasizing the unique attributes of Dangote Cement that prompted his investment decision.

Otedola’s decision to acquire substantial shares in Dangote Cement followed his divestment from Transnational Corporation of Nigeria (Transcorp), where he sold 2.6 billion units of shares, amounting to 6.3%. The shares were strategically acquired by Tony Elumelu, the largest shareholder of United Bank for Africa, marking a significant development in the Nigerian business landscape. Otedola’s subsequent investment in Dangote Cement underscores his continued commitment to impactful ventures in the country.

In his statement, Otedola stated, “This astute investment in Dangote Cement is part of my overall strategy to ensure long-term wealth preservation.”

He said that the move reflects his confidence in the capacity of Dangote Cement to play a pivotal role in propelling Nigeria and Africa into a much-needed era of industrialization.

The billionaire investor expressed his belief in Dangote Cement’s potential to substantially contribute to the economic growth of Nigeria and the broader African region. He noted that the company is the only cement company in Nigeria with two export terminals, boasting a combined export capacity of 8 million tons per annum.

Confirming his significant acquisition of shares in Dangote Cement, Otedola highlighted the strategic importance of the company’s position in the market. He stated, “Dangote Cement’s export capabilities and extensive operations across sub-Saharan Africa are essential for regional economic integration and growth.” This underlines his confidence in the company’s ability to generate foreign exchange for Nigeria and support businesses contributing to the country’s economic resilience.

As sub-Saharan Africa’s largest cement producer, Dangote Cement boasts an annual production capacity of 51.6 million tons across 10 countries. Otedola pointed at the company’s extensive footprint in the industry, highlighting its dominance and crucial role in driving economic growth across the region.

“The recent expansion of Dangote Cement, including the new 6 million-ton plant in Itori, Ogun state, enhances its export capacity and emphasizes the company’s contribution to Nigeria’s economic diversification,” Otedola remarked.

He sees the company’s commitment to expansion as a positive signal for its role in supporting economic development initiatives.

Otedola’s investment in Dangote Cement aligns with his vision of long-term wealth preservation and the principle that shareholders should be the primary beneficiaries of a company’s success.

He stated, “In my investment decisions, I focus on long-term wealth preservation and ensuring shareholders are the ultimate beneficiaries of a company’s success.”

Dangote Cement’s unique position with two export terminals offers a substantial opportunity to earn foreign exchange crucial for Nigeria’s economy, according to Otedola. He believes that the company’s extensive pan-African presence makes it an ideal investment choice, contributing to the nation’s economic growth.

The billionaire businessman acknowledged Dangote Cement’s track record of dividend payments, exceeding N2.1 trillion in recent years, and its commitment to sustainable business practices.

“Companies like Dangote Cement, which consistently deliver value to their shareholders, are fundamental for sustainable economic growth,” Otedola asserted.

Moreover, Otedola noted the evolving regulatory space in Nigeria, emphasizing Environmental, Social, and Governance (ESG) compliance. He said that companies adhering to these principles are more likely to ensure transparency, accountability, and long-term value creation.

“Dangote Cement’s strong corporate governance and impressive ESG compliance track record make it an ideal investment choice,” stated Otedola.

Otedola stated that his investment in Dangote Cement is a strategic decision reflecting his belief in the company’s ability to positively impact Nigeria’s economy. It aligns with his commitment to fostering a culture of responsible investment and serves as an encouragement for others to consider investments that contribute to economic growth and stability.

Stakeholders believe that Otdola’s investment in Dangote Cement serves as a call to action for Nigerians to invest in companies that offer financial returns and play a crucial role in the nation’s economic growth and stability.

U.S.-Nigeria Trade Council, Rhodes-Vivour, Warn of Economic Consequences Over Lagos Plastic Ban

By
Samuel Nwite
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0

Titus Olowokere, President of the U.S.-Nigeria Trade Council (USTC), has voiced his concerns over the economic ramifications of the Lagos State government’s ban on single-use plastic containers.

The ban, announced on Sunday, has stirred debates on striking a delicate balance between environmental conservation and economic sustainability.

Olowokere, though acknowledged the importance of environmental conservation and sustainability, raised concerns about the potential adverse effects on the Lagos state economy.

In his statement, he urged the government to carefully weigh the economic impact of the ban and collaborate with stakeholders to implement sustainable waste management strategies.

“Lagos state relies heavily on plastic manufacturing and packaging industries that employ thousands of people. This ban directly affects not only industry workers but also countless small-scale entrepreneurs who depend on the plastic sector for their livelihoods,” noted Olowokere.

The USTC proposed a comprehensive and measured approach to address the environmental concerns without causing economic distress. Olowokere suggested alternatives to an immediate blanket ban, emphasizing the importance of public awareness campaigns and educational programs about sustainable waste management practices.

“We firmly believe that this ban will have detrimental effects on Lagos state economy and exacerbate the unemployment crisis. We urge the government to reconsider this decision and take into account alternative solutions that promote entrepreneurship, sustainable consumption, and waste management,” said Olowokere.

The council also advocated engaging with industry stakeholders to develop and adopt eco-friendly packaging alternatives, such as biodegradable materials, to minimize the environmental impact of packaging waste.

Olowokere spoke of the need for investment in recycling infrastructure, stating, “The establishment and expansion of recycling facilities will create new job opportunities and support the growth of a sustainable recycling industry in Nigeria.”

In terms of entrepreneurship development, the USTC urged supporting entrepreneurs to invest in alternative packaging materials and innovative waste management solutions. Collaborative efforts between the government, private sector entities, and civil society organizations were encouraged to develop and implement waste management projects that drive entrepreneurship and job creation.

The Lagos government on Sunday announced a ban on the use of styrofoam and single-use plastic with immediate effect.

In response to the ban on Monday, Gbadebo Rhodes-Vivour, the governorship candidate of the Labour Party, expressed strong criticism against the abrupt implementation in a press statement titled “Plastic Ban: Hasty Impulsive Decisions Are No Substitute For Critical Policy Making.” Rhodes-Vivour acknowledged the importance of addressing environmental issues but questioned the lack of a well-thought-out alternative policy.

“While I acknowledge the importance of addressing environmental concerns and the impact of plastic pollution in Lagos, I find the sudden implementation of this ban without a well-thought-out alternative policy deeply troubling,” said Rhodes-Vivour.

The statement raised questions about the government’s consideration for the thousands of retailers and small business owners whose livelihoods are closely tied to the production and sale of plastic products. Rhodes-Vivour questioned whether the government had evaluated the potential loss of jobs and the overall devastation this swift ban could bring to manufacturers and the associated value chain.

“Did the government care to think about what would happen to the thousands of retailers and small business owners, from Idumota to Oshodi and Ojota, whose livelihoods are tied to this product? Did it think about the potential loss of jobs and the utter devastation it would bring to manufacturers?” queried Rhodes-Vivour.

Rhodes-Vivour proposed a more sustainable and phased-out approach, suggesting alternative policy measures to address the environmental challenges posed by single-use plastics. These measures include public awareness and education programs, incentives for businesses to transition to environmentally friendly alternatives, investment in recycling infrastructure, regulated pricing of plastic bottles, and the implementation of Extended Producer Responsibility (EPR) policies.

The call for a measured and inclusive policy-making process aims to balance environmental concerns with the economic well-being of citizens and businesses in Lagos.

While the USTC and Rhodes-Vivour highlighted the economic concerns, the Lagos State Government remained resolute in its commitment to the ban, citing the serious environmental threat posed by non-biodegradable properties of styrofoam and single-use plastics, which block drainage channels in the state.

The Lagos State Government, in announcing the ban, said “Our state cannot be held hostage to the economic interests of a few wealthy business owners compared to the millions of Lagosians suffering the consequences of indiscriminate dumping of single-use plastics and other types of waste.”

Although the ban seems to be in synergy with growing global best practices on single-use plastics, the call for a measured and inclusive policy-making process aims to balance environmental concerns with the economic well-being of citizens and businesses in Lagos.

Russia and India Partner for Digital Economy as China Appears to U-turn on Gaming Crackdown

By
Paul Ugbede Godwin
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0

Russia and India have announced a new partnership to create a “digital economy” that will foster innovation and collaboration in various sectors, such as e-commerce, cybersecurity, artificial intelligence, and blockchain.

The partnership was formalized during the 21st India-Russia Annual Summit, where Prime Minister Narendra Modi and President Vladimir Putin signed a joint statement on cooperation in the digital sphere.

The joint statement said that both countries recognize the importance of digital transformation for economic growth, social development, and national security. They also agreed to enhance bilateral dialogue and exchange of best practices on digital policies, regulations, standards, and technologies. The partnership will also facilitate joint projects and initiatives involving government agencies, private sector, academia, and civil society.

One of the main objectives of the partnership is to create a common digital space that will enable seamless connectivity and data flow between the two countries. This will help to promote cross-border trade and investment, as well as foster innovation and entrepreneurship.

The partnership will also support the development of digital infrastructure and services, such as broadband networks, cloud computing, e-governance, e-health, e-education, and e-agriculture.

Another key aspect of the partnership is to enhance cooperation in cybersecurity and combat cyber threats. Both countries agreed to share information and best practices on cyber incidents, malware analysis, threat intelligence, and capacity building.

They also pledged to work together to prevent the misuse of information and communication technologies (ICTs) for terrorist or criminal purposes. The partnership will also support the development of a rules-based international order in cyberspace that respects the sovereignty, security, and human rights of all states.

The partnership will also explore the potential of emerging technologies such as artificial intelligence (AI), blockchain, big data, internet of things (IoT), and 5G. Both countries agreed to foster research and development, innovation, and collaboration in these fields. They also expressed their interest in developing common standards and norms for the ethical and responsible use of these technologies.

The partnership is expected to bring significant benefits for both countries in terms of economic growth, social development, and national security. It will also strengthen the strategic partnership between India and Russia that is based on mutual trust, respect, and friendship.

China appears to U-turn on gaming crackdown

In a surprising move, China’s state media has praised the positive effects of video games on young people, just months after imposing strict limits on gaming time for minors.

In September 2021, China introduced a new policy that banned children under 18 from playing online games for more than three hours a week, and only on Fridays, Saturdays and Sundays. The policy was aimed at curbing what the authorities called “gaming addiction” and “spiritual opium” among the youth.

Video games have a long and complex history in China, where they have been both embraced and rejected by the authorities and the public. In this article, we will explore how China’s attitude towards gaming has evolved over time, and what the recent state media praise of video games means for the future of the sector.

The rise and fall of gaming in China

China’s gaming industry began in the late 1980s and early 1990s, when arcade machines, home consoles and personal computers became popular among urban youth. However, in 2000, the government banned the import and sale of consoles, citing concerns over their negative impact on children’s physical and mental health. As a result, online games, especially massively multiplayer online role-playing games (MMORPGs), became the dominant form of gaming in China.

Online games flourished in China, attracting millions of players and generating billions of dollars in revenue. Some of the most successful titles included Fantasy Westward Journey, World of Warcraft and League of Legends. Online games also became a platform for social interaction, entertainment and cultural expression, as well as a source of controversy and criticism.

In the 2010s, China’s gaming market expanded further with the emergence of mobile games, which offered more convenience and accessibility to gamers. Mobile games also introduced new genres and modes of play, such as casual games, puzzle games and battle royale games. Some of the most popular mobile games in China included Honor of Kings, PUBG Mobile and Genshin Impact.

However, in a recent article published by the Xinhua News Agency, the official mouthpiece of the Chinese Communist Party, video games were described as an important form of cultural expression and a source of innovation and creativity. The article also cited several examples of how games can benefit education, health and social interaction.

The article’s tone was markedly different from the previous criticism and condemnation of the gaming industry by the state media and regulators. It also contrasted with the recent crackdown on other sectors such as tech, entertainment and education, which have faced increased scrutiny and regulation from Beijing.

Some analysts have speculated that the apparent U-turn on gaming may be a sign of a more nuanced and balanced approach to regulating the sector, as well as an acknowledgment of its economic and cultural value. China is the world’s largest gaming market, with more than 720 million players and $45.6 billion in revenue in 2020, according to research firm new zoo.

Others have suggested that the article may be a response to the backlash and discontent among gamers and parents, who have complained that the gaming restrictions are too harsh and unrealistic. Some have also pointed out that the article does not necessarily reflect a change in policy, but rather an attempt to soften the image of the authorities and appease the public.

Regardless of the motives behind the article, it seems that China’s stance on gaming is not as clear-cut and consistent as it may have seemed. Whether this will lead to any changes in the actual regulation and enforcement of the gaming sector remains to be seen.

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