Dangote To Commence Coal Mining In Quarter 4

Aliko Dangote

Dangote Cement Plc, a subsidiary of Dangote Group, has disclosed plan to commence mining its own coal at Ankpa, Kogi State by fourth quarter of the year. The company also said that due to acute gas shortages in the country following disruptions occasioned by militancy in the Niger Delta region, it has switched its plant lines to coal to minimize cost and increase margin.

The Group Chief Executive officer, Mr. Onne van der Weijde, made the disclosure while addressing stockbrokers at the company’s Facts Behind Figures on the Nigerian Stock Exchange, NSE,. He assured that the quality of the coal to be mined by the company would be of high quality and good enough to be used 100 per cent without blending.

He stated that in the interim, Dangote Cement has started using locally purchased coal blended with imported one to assure optimal quality, while saying that the company could potentially run all its lines 100 per  cent on local coal at lower cost than gas. He said already, two coal mills at its Obajana Cement factory became operational in July, adding other coal mills will resume operation by the end of September.

“We decided two to three years ago to diversify and re-risk fuel supplies,” he said, adding “Klin fuel is the major cost of cement production; our group margins are affected by the mix of fuel in Nigerian klin. The preference is to run on gas because disruptions and maintenance have led to shortages since 2014, thus affecting our margins.

Also back-up LPFO is often not available locally, forcing production shutdowns prior to use of coal.” Continuing, he said, “gas is priced is US dollars, but paid in naira and therefore is affected by foreign exchange, FX. However, locally bought or mined coal will be priced in naira.

Reviewing the operation in the first half, H1, of the year, he said that Dangote Cement grew sales volume by 60 per cent, saying that the growth is expected to continue in the second half of the year. He noted that its factories in Tanzania and Congo are expected to commence full operation during the H2 and would contribute to drive volume going forward. The Group financial highlights for H1 showed 20.6 per cent growth in revenue to N292.2 billion; Group cement volume was up 59.6 per cent to almost 13.0Mt, while Nigeria achieved record sales volume of 38.8 per cent to more than 8.7Mt after price reduction.

However, earning before interest, taxes, depreciation and amortization, EBITDA, was down 10.2 per cent to N132.5 billion at 45.4 per cent margin on lower selling price, higher fuel costs in Nigeria and plants in ramp-up. Profit before tax was marginally down three percent to N124.9 billion, while post tax profit stood at N103.4 per cent, 15.1 per cent decline over N121.8 per cent in H1, 2015

Osinbajo, Ambode, Dangote express confidence in Nigeria’s quick economic recovery

•Lagos refinery, ready in first quarter of 2019 — VP

•Projects to create over 235 direct, indirect jobs — Ambode

•Lagos to get constant electricity supply from plant — Dangote

Vice President Yemi Osinbajo , Lagos State governor, Mr. Akinwunmi Ambode, and President of Dangote Group Alhaji Aliko Dangote, have expressed confidence in the speedy recovery of Nigeria’s ailing economy if  current efforts directed at revamping the economy are sustained. Osibajo also disclosed that the on- going construction of the   multi billion Naira Dangote refinery, located at Lekki Free Trade Zone, LFTZ, Lagos, will be ready in the first quarter of 2019.

The Vice President stated this, yesterday, when he led a delegation of government officials on inspection of  work at the  refinery, petro-chemical plant, pipeline gas producing plant and  fertilizer plant  being undertaken by Dangote Group at the LFTZ.

Eminent Nigerians present include the Chairman, Forte Oil, Mr. Femi Otedola; Minister of Power- Works and Housing, Mr. Babatunde Fashola; Minister of Solid Minerals, Dr.   Kayode Fayemi; Minister of Finance, Mrs. Kemi Adeosun; and Minister of Industry and Investment, Mr. Okechukwu Enelamah. Osinbajo said  government is harnessing the potentials of the private sector to accelerate the growth of the economy.

Also speaking on the projects Ambode said they will have  multiplier effect on the economy

Naira Crashes To 288/dollar At New Official Market 


The naira plunged by 31 per cent to 288.85 against the United States dollar on Monday at the close of trading at the newly established interbank market.

The local currency also depreciated at the parallel market where it closed at 346 to the greenback, down from around 330 and 335 on Friday.

The Central Bank of Nigeria had last week introduced new guidelines for the nation’s foreign exchange market with the adoption of a single structure through the interbank/autonomous window.

The naira, which was pegged at 197-199 per dollar before the emergence of the new forex policy, closed at 288.85 to the dollar on Monday, with the forces of demand and supply coming to play to determine the value of the nation’s currency after the CBN allowed it to float freely.

The CBN said it cleared a total foreign exchange demand backlog of $4bn with a dollar exchanging for N280 at the foreign exchange market.

The apex bank, in a statement issued on Monday by the Acting Director, Corporate Communications Department, Mr. Isaac Okoroafor, expressed satisfaction with the performance of the market on its first day.

The statement reads in part, “Nigeria’s new foreign exchange market made a robust take-off on Monday, June 20, 2016, clearing all the backlog of $4bn pent-up demand for foreign exchange, with the naira exchanging at 280 to the United States dollar.

“The objectives of the CBN to clear the forex demand backlog, perform its role as strictly a market intervention participant, and re-launch a functioning and efficient interbank market were met.

“The CBN, in line with its desire to promote a transparent, liquid and efficient market, and in order to engender market confidence and ensure credible price formation, intervened in the market through a special secondary market intervention sales addressing the issue of the FX demand backlog by clearing $4.02bn through spot and forward sales.

“This served in no small way to stimulate price discovery, with the determination of a marginal rate of $/280.00 through the special SMIS process. So, we can state to you categorically that the FX demand backlog has now been cleared and behind us for good.”

Okoroafor assured market participants and the general public that the bank was committed to making the FX market globally competitive, credible, transparent, liquid and efficient.

Our correspondents gathered that the naira was trading around 270 to a dollar in the early hours of trading on Monday with no deals consummated by the banks as dealers were only interested in buying.

A currency analyst at Ecobank, Mr. Kunle Ezun, said when the market opened in the morning, the naira went up to 285 to the dollar and later came down to 255 to 260 before the CBN intervened in the market by selling over $500m at the rate of N280 per dollar.

He said, “We didn’t have any firm deals; no deal was consummated until when the CBN intervened and gave the rate at 280 and that became the rallying point for the market. We saw price discovery; different banks were quoting on two-way quote for the naira and dollar.

“We saw a lot of quotes today; banks were willing to quote but everybody was willing to buy, not to sell until the CBN came to the bank later in the day to sell. When the CBN sells to you, you are expected to sell in the market. So that created activity in the market.

“What we had today (Monday) is more like a market depreciation of the naira to 280. Tomorrow (Tuesday), you may see appreciation of the naira or further depreciation. It depends on how much the CBN is willing to supply to the market. If they are able to supply what they supplied today in two or three times consecutively, the market will be calmed and the naira will appreciate in the next few days.”

The Head, Research and Investment Advisory, Sterling Capital, Mr. Sewa Wusu, said the naira closed at 288.85 after a little bit of oscillation, adding, “The interplay of demand and supply has started. I think the proper value of the naira will be determined as time goes on and more dollars will also come.”

He, however, said foreign portfolio investors might still be on the sidelines to watch developments to see how the current mechanism would play out before they would begin to have some level of comfort on the level of dollar liquidity.

The President, Association of Bureau De Change Operators of Nigeria, Alhaji Aminu Gwadabe, said the naira fell to 346 against the dollar at the parallel market, because “the interbank market has not effectively taken off.”

He said, “There is no way demand can reduce at the parallel market now because the 41 imported items are still banned from accessing official forex market,” he said, adding that the backlog of dollar demand was far higher than $4bn.

“Up untill now, many correspondent banks have yet to send their unmet obligations to the Central Bank of Nigeria. And for the foreign inflow that we are expecting, there is still lack of confidence by the investors as to how liquidity is going to be sustainable so that when they want to move out, they won’t have the problem of dollar scarcity. So, they are watching to see how liquid the market will be, and that will take a couple of weeks before this can be unravelled,” Gwadabe explained.

There may be “higher volatility until the market becomes more functional,” Bloomberg quoted the Head of Africa Strategy at Standard Chartered Bank Limited in London, Samir Gadio, as saying in an e-mailed response to questions.

Banks Shut Doors On Bureau De Change’s, Politically-Exposed Persons


 Amidst intensified anti-corruption siege on banks by the Economic and Financial Crimes Commission, EFCC, Bureaux de Change, BDCs, may have come under severe vetting by the banks with indications that some of them would have their accounts closed.

Vanguard investigations also reveal that bankers are now keeping close watch on their marketers with a view to compelling strict adherence to the banks’ Know-Your-Customer, KYC, rules where abuses may attract a sack. The Central Bank of Nigeria, CBN, headquarters, Abuja Industry operators say the developments were sequel to recent revelations in some of the corruption probes which indicted about seven banks as active collaborators in the fraudulent transactions involving some public officers.

The BDCs were also said to have been heavily involved in several foreign currency denominated corruption cases currently under investigation by the EFCC, with some banks alleged to be working with the BDCs.

Development Bank Of Nigeria Takes Off July 


THE much anticipated Development Bank of Nigeria, DBN, will take off next month with $323 million (about N64 billion) capital base.

A breakdown of the figure shows that African Development Bank, AfDB, is supporting the DBN operation with $258.5 million, African Development Fund, ADF, $32, 590,000 and Delta $32,036,874, totaling $323.2 million or over N64 billion.

Investigations by Vanguard reveals that the proposed bank, an initiative of the past administration, was launched in March 2015 in Abuja but could not take off due to change in government and it is now ready to start operation from July 2016.

The DBN is a financial inclusion that will bridge the gap between the Bank of Industry and other commercial banks that could not satisfy the funding needs of Micro, Small and Medium Enterprises, MSMEs in the country. The principal mission of the bank is to increase financial inclusion by providing access to credit finance.

Also, the DBN will support medium to long-term lending to the MSMEs, with duration of up to 10 years and a moratorium of up to 18 months. This would enable borrowers in the sectors have a lengthy period to repay the loans from DBN unlike the Deposits Money Banks, DMBs.

Vanguard learned that the journey to set up the bank started in 2013 when the federal government set up a working group under the National Council on Privatization (NCP).

The working group came up with the recommendation, in addition to several other recommendations, that Nigeria needs a strong Development Finance Institution that will further open up access to finance for our micro, small and medium enterprises.

All over the world, development banks are set up to provide long-term finance (debt or equity) which commercial banks and the capital market cannot, or will not provide. Aside the development of small businesses and the encouragement of entrepreneurial activity, the broader aim of Development banks include the redistribution of income between social classes, diversification of industry, and of course, job creation.

Also, the Ministry of Finance stated that 20,000 beneficiaries would be given loans during the bank’s first year of operation.

Skye Bank Sacks 175 


Skye Bank Plc has laid off 175 of its staff in spite of the directive issued by the Minister of Labour and Employment, Dr. Chris Ngige, last Friday that banks should put on hold the current gale of retrenchment sweeping through the banking industry.

In a statement issued on Monday, the bank attributed the retrenchment of the affected staff members to their failing the bank’s appraisal exercise held in 2015.

According to the statement a combination of factors was taken into consideration in the annual exercise which ranged from low productivity to disciplinary issues.

The bank also explained that the affected staff were duly exited in line with the bank’s staff exit policy.

The staff disengagement exercise is coming 18 months after the bank’s integration with erstwhile Mainstreet Bank, which it acquired in October 2014.

The bank said it extended its appreciation to the affected staff for serving the bank, describing them as “members of the family” who would always be accorded deserving respect in their future dealings with the bank.

However, when Nigerian Tribune got to the branch opposite the PDP National Headquarters in Wuse Zone 5 where seven of the staff were affected by the retrenchment exercise, around midday, on Monday, some of the staff were seen talking in hushed tones while the cashiers attending to customers struggled to put up perfunctory smiles.

A staff, who spoke with our correspondent, lamented that those disengaged were paid only three months’ salary as parting benefits.

It was gathered also that another sack list would soon be released based on “age versus level”.

The source explained that “age versus” level means that the bank’s authority was presently matching the age of each staff with the grade level that the staff has attained to determine who would remain and who else to go.

Last week, the management of Eco Bank sacked over 1000 of its staff.

Ngige, in his reaction to the wave of sack in the industry had said in a statement that “Following spate of petitions and complaints from stakeholders in the banking, insurance and financial institutions, I hereby direct the suspension of the on-going retrenchment pending the outcome of the conciliatory meetings in the industry.

“This is as a result of the apprehension by my office of the various disputes in the sector in accordance and in compliance with the provisions of the labour laws of Nigeria,” it said.

“In this wise, all the retrenchments and redundancies done in the last four months and all proposed ones should be put on hold pending the outcome of the proposed stakeholders’ summit for the banking, insurance and financial institutions’ employers and employees, slated for the first week of July 2,’’ the statement read in part.

Naira Crashes To N285/$1 At Interbank Market

Despite the Central Bank of Nigeria yet to roll out the details of the new flexible exchange rate policy, which is a monetary system that allows the exchange rate to be determined by supply and demand, the nation’s currency naira has switched to N285 to a dollar at the interbank market, The Guardian reports.

The policy, which throws naira into open market, paves way for one to walk into the bank and ask to buy forex at the market rate, hence, putting pressure on black market and Bureau de Change operators.
The new policy also means that banks and Bureau De Change (BDC) operators will have to source forex autonomously and sell according to market dynamics.

The interbank rate had run nearly at par with the official at N199 per dollar and N197 per dollar respectively before the pronouncements on the new foreign exchange measure.

The new rate represents about 43.2% increase from N199 to the dollar it previously traded, which according to analysts suggests that the market is gradually adjusting itself to the new direction, although the details are yet to be unfolded.

However, a look on the apex bank official website,
www.cbn.gov.ng has shown the naira is still pegged at N197.

Meanwhile, President Muhammadu Buhari has given the CBN the go-ahead to introduce flexibility in the naira exchange rate.

Speaking in an interview on Nigeria Television Authority (NTA), Garba Shehu, the senior special assistant on media and publicity to President Buhari said: “The president is opposed to devaluing the naira, he has said so repeatedly.

“He has given them leeway to introduce what he has called ‘flexibility in managing’ the currency’s value.”

Buhari said at the weekend that he supported a stable currency, though he would keep “a close look at how recent measures affect the naira and the economy.”

More details later…

Dubai Banks Order Closure Of Nigerians’ Accounts

Lagos — A diplomatic row seems imminent between the United Arab Emirates (UAE) and Nigeria, following a directive by the country’s central bank prohibiting Nigerians who do not work there from operating accounts in any branch of their local or foreign banks.
Nigerian journalist, Fidelis Mbah, disclosed this on Thursday May 7, 2015 with a series of tweets on his twitter handle, even as observers believe the move is partly to check money laundering activities of Nigerian politicians, a situation they say, has become common.

According to Mbah, those affected by the new policy include Nigerian politicians, students and business operators in the UAE.

Already, he continued, UAE banks have sent out notices to some of those affected, informing them that their accounts in the country’s commercial capital have been closed without further explanation.

Continuing, he said “some Nigerian politicians have been hiding under the pretext of paying children school fees to smuggle millions of dollars into the UAE.”

To signpost the seriousness attached to the directive, all such Nigerians whose accounts were closed following the policy, have been issued cheques equivalent to the amount they have in their accounts.

Dangote Tomato Processing Company Suspends Production

The newly established Dangote Tomato Processing Factory in Kadawa, Kano State, has suspended production, its Managing Director, Alhaji Abdulkadir Kaita, said. He told the News Agency of Nigeria (NAN) in Kano on Friday that the company, which commenced production in February, had stopped production due to the lack of raw materials.

He said that the company found it necessary to suspend production because there was no fresh tomatoes to process. He added that most of the tomato farms in Kano, Jigawa, Plateau, Katsina and Kaduna states were affected by a pest popularly known as “Tuta Absoluta” which killed all the tomato species there. The managing director noted that the pest had destroyed tomato farms in the affected states, making the price of the perishable commodity to go up.

The tomato processing factory boss, however, said production would commence during the next irrigation season, emphasising that the company had the capacity to process 120 tonnes of fresh tomatoes per day at full capacity

Increase In Fuel Price Crashes Naira To N345/$1

The Nigerian naira suffered a setback on Thursday, crashing to N345 against the dollar, following the federal government’s decision to liberalise sales of petrol.

The naira also exchanged at 475 to pounds less than 24 hours after the announcement was made by Ibe Kachikwu, minister of state for petroleum.
A bureau de change operator in Lagos where the dollar closed at N345 to the naira, told TheCable that many sellers were stranded.

“If you want to buy, we don’t have to sell, but if you want to sell, we can discuss,” Isiaka Mohammed, a trader, told TheCable in Lagos.

“We sold for 345 today, but many of us don’t have again to sell. If you want to buy now, you would not see to buy,” he said.
In Abuja, an operator said trading at the parallel market closed at the rate of 345 to the dollar, as against 322 to the dollar early Wednesday when the new pump price had not been introduced.

“We don’t understand how this is going, we closed market at N340 to the dollar, while pounds sold at 475,” he said.
The situation was the same in Kano. An operator in the state, said the dollar was selling for 325 in the afternoon, but is currently trading around 330.

With prevailing realities, the nation may be forced to devalue the naira, as round tripping is likely to persist in the days ahead.

Oil industry insiders had initially told TheCable that they would now have to source foreign exchange for importation of petrol from the parallel market, as the Central Bank emphasised lack of forex.

“All oil marketers will be allowed to import PMS on the basis of forex procured from secondary sources and accordingly PPPRA template will reflect this in the pricing of the product,” a source said.