The Central Bank of Nigeria has expressed its readiness to support the refinery, fertiliser and petrochemical complex being built by Dangote Industries Limited in Lagos by providing foreign exchange for the importation of equipment.
The central bank said the project, when completed, would fetch the country about $6bn in foreign exchange yearly through the export of products from the plants.
The refinery, which has crude processing capacity of 650,000 barrels per day, is expected to come on stream by mid-2018, with major products such as petrol, high speed diesel and Jet A1, while the fertiliser plant is expected to start production next year.
Most of the refinery process units have been designed by M/S UOP as a managing licensor, while the balance process units are being designed by M/S Jacobs, Dupont/MECS, Ineos and Air Liquide, the company said.
The Governor, CBN, Mr. Godwin Emefiele, who spoke during a tour of the project site on Sunday, said, “About two and a half to three years ago, Alhaji Aliko Dangote actually came to the banks. At that time, I was an operator, and he said he wanted to go into fertiliser, petrochemical as well as refinery business.
“We started with the fertiliser side of it; but today, these three projects are costing them about $14bn (N2.8tn), out of which he is contributing 50 per cent. I have come here to see so that I can also tell Nigerians that we need to give support to people like Aliko Dangote for what they are doing for Nigeria. This is a time when we are talking about diversifying our economy away from oil.”
Noting that the plants would produce ammonia, urea, propylene, polypropylene and other petroleum products, Emefiele said, “These are products that we today import into the country. If we calculate how much the country spends on the importation of these products into Nigeria, consuming foreign exchange, this stands at close to 35 to 40 per cent of our import needs.
“We expect that by the time these projects are completed, they will not only meet our domestic needs, Dangote will be exporting these products to the point where he will be selling foreign exchange to Nigerians and the Central Bank of Nigeria to the tune of almost about $6bn a year.
“That is the kind of projects that we think we should support, and we think we need to encourage more Nigerians to begin to think like Aliko Dangote. If you have somebody who has contemplated a project of $14bn and he is contributing 50 per cent as equity into that project, we have to give him foreign exchange to import the equipment. We need to support companies like this.
Emefiele said before he became the CBN governor, Dangote had come with a bill of almost $4bn for the importation of the equipment.
According to him, the CBN told Dangote to commit to the importation of the equipment and that the bank would stagger the repayment and offer its support by providing foreign exchange.
He added, “And that is what we are doing and that is the kind of support we can give to people like this who are contemplating moving Nigeria away from an importer of all these products to an exporter.
“Indeed, we are not even selling $4bn to Aliko Dangote. If he needs naira, we will give him naira at concessionary rates. If he needs dollar to import the equipment, we will do so because he doesn’t need raw materials by the time the projects come on stream.”
Naira Appreciates Slightly to N1,542.58/$ at NAFEM
The Naira appreciated marginally against the United States dollar, closing at N1,542.58/$ at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday.
This modest gain represents a 2.9 percent appreciation from the previous day’s rate of N1,598.54, highlighting a nuanced fluctuation in the currency’s value.
According to data sourced from the FMDQ Securities Exchange, a platform overseeing FX trading in Nigeria, the Naira’s journey throughout the trading day was marked by an intra-day high of N1,755 and a low of N1,050.
Moreover, the total foreign exchange turnover surged to $172.14 million, indicating a 47 percent increase from the previous day.
Despite the Naira’s marginal gain at NAFEM, concerns persist regarding the widening gap between the official and parallel market rates.
The Naira’s depreciation to N1,900 against the dollar in the parallel market before it moderated to N1,687 later in the day.
Analysts and Bureau De Change operators foresee further pressure on the Naira, with predictions of a potential all-time low of 2,000/dollar at the parallel market in the coming weeks.
The demand for the greenback continues to fuel volatility, prompting regulatory actions from entities like the Economic and Financial Crimes Commission (EFCC) and the Central Bank of Nigeria (CBN) to curb speculative activities.
As stakeholders monitor the currency’s trajectory, the CBN’s efforts to address forex liquidity challenges and stabilize the Naira remain under scrutiny amidst evolving market dynamics.
Police and EFCC Personnel Raid Bureau De Change Outlets in Ibadan’s Sabo Area
In a concerted effort to curb illicit currency dealings and stabilize the nation’s currency, Nigerian security operatives, including police and Economic and Financial Crimes Commission (EFCC) personnel, launched a raid on Bureau De Change (BDC) outlets in Ibadan’s Sabo area.
Sabo, a prominent district in Ibadan, the capital of Oyo State, serves as a central hub for currency exchange activities in the region.
Videos circulated on social media platforms captured the dramatic scene as armed security personnel and their convoy descended on the bustling Sabo Road.
The raid comes amidst growing concerns over the depreciation of the Nigerian naira, which hit record lows against major foreign currencies, including the dollar.
Sources revealed that the naira’s value reached alarming levels, with exchanges as high as N1980 to $1 on the parallel market and N1780 on the official market.
President Bola Tinubu’s administration has intensified efforts to crack down on individuals involved in currency racketeering, aiming to restore stability to the nation’s economy.
The clampdown signals a firm stance against illegal currency trading and serves as a deterrent to those engaging in speculative activities.
While the raids may disrupt illicit operations, they also underscore the government’s commitment to restoring confidence in the financial sector and promoting transparency in currency exchange practices.
Rand Surges as South Africa Taps into Reserves to Alleviate Debt Burden
South Africa’s currency, the rand, surged against major currencies as Finance Minister Enoch Godongwana announced the country’s decision to tap into its reserves to tackle its debt burden.
The move revealed in the budget presentation before the upcoming critical elections aims to stabilize South Africa’s economy while bolstering social spending.
Godongwana outlined plans to restructure reserves held at the central bank, releasing a substantial sum of 150 billion rand ($7.9 billion) over three years.
This strategic maneuver targets the Gold and Foreign Exchange Contingency Reserve Account (GFECRA), which has seen a remarkable increase in paper profits to 507.3 billion rand.
Investors responded positively to the announcement with the rand strengthening by as much as 0.8% against the dollar.
The decision to access reserves to manage debt levels and fund critical sectors like education, healthcare, and welfare underscores South Africa’s commitment to financial stability and social development amid challenging economic conditions.
While the move signals short-term relief and positive market sentiment, economists remain cautious, emphasizing the need for sustainable growth strategies independent of reserve depletion.
The utilization of reserves is a critical measure aimed at steering South Africa through its fiscal challenges and ensuring economic resilience in the face of uncertainty.
Billionaire Watch4 weeks ago
MacKenzie Scott Sells Off $10.4 Billion Worth of Amazon Shares
Naira4 weeks ago
Dollar to Naira Black Market Exchange Rate January 26th, 2024
Fintech4 weeks ago
Opay’s Deadline Looms: Users Urged to Update BVN and NIN to Avoid Transaction Restrictions
Forex4 weeks ago
Dollar to Naira Black Market Exchange Rate January 25th, 2024
Company News3 weeks ago
UAC Posts N12.7 Billion Profit Before Tax in 2023
Forex3 weeks ago
Dollar to Naira Black Market Exchange Rate February 1st, 2024
Forex3 weeks ago
Dollar to Naira Black Market Exchange Rate February 2nd, 2024
Banking Sector3 weeks ago
CBN Accuses Banks of Hoarding $5 Billion in Foreign Currencies