A former Attorney General of the Federation (AGF), Kanu Agabi, has said that politicians who rigged elections have no moral justification to call on God for help when they run into roadblocks.

Agabi stated this during an appearance on Channels Television on Sunday.

He asserted that those who nurse suspicion against elections in Nigeria have justifiable grounds to seek redress in court.

Agabi noted that the problem with Nigeria is not the 1999 constitution but those who are enforcing the laws.

“So, the problem is not with the laws but with “good people to enforce them. We need to reform ourselves as a nation,” he said.

Speaking further, the ex-justice minister said the courts are burdened with electoral cases because Nigeria’s elections come under “justifiable suspicions”.

He said, “We keep talking of reforming the judiciary. We keep attacking the judges, we stigmatise them, we abuse them, we insult but the truth is this: we have very good judges.

“The judiciary is not perfect but it is the best arm of government. The problem is this: On the judges’ lists, there may be 30, or 40 cases a day. How can he cope? As long as they go on struggling with that system, they cannot cope.

“The problem of the judiciary arises from the fact that the judges are overworked.

“Take the elections for instance. Do you know how many percentages of elections are challenged? Why? Because the elections come under justifiable suspicions. Those who suspect the elections are justified but if we reach a point where the elections are not opened to the kind of criticisms and suspicions that they have been suspected, then they can free up the courts.

“Primaries are rigged at the party levels. Giving a spiritual dimension, when you have stolen the office that you are holding, do you expect God to partner with you? Can you pray over that office? Can you use it to do any good? That’s the problem.

“St Paul said I am an Apostle of Jesus Christ by the grace of God. Whatever office you hold, you must be able to say the same thing. You must be able to say, ‘I am a governor by the grace of God’, ‘I am a senator by the grace of God’. If you can’t say that, your prayer in calling upon the name of the Lord in that office is an abomination.”

[NaijaNews]

Nigeria’s foreign exchange (FX) unification policy, implemented by the Central Bank of Nigeria (CBN) in June 2023, aimed to simplify the country’s multiple exchange rate system by consolidating it into a single market-driven rate.

The policy was designed to boost investor confidence, eliminate arbitrage opportunities, and address chronic FX shortages that plagued the economy.

However, one year after the policy’s implementation, the impact on tax revenues reveals an unexpected consequence.

While foreign companies have seen their tax contributions skyrocket, local firms have struggled to keep pace, revealing the deeper challenges facing Nigeria’s domestic economy.

Growth in Foreign CIT 

According to data from the National Bureau of Statistics (NBS), the one-year period following FX unification (Q3 2023 to Q2 2024) saw a rise in foreign Corporate Income Tax (CIT) contributions.

Foreign CIT increased by 140.5%, rising from N1.42 trillion in the pre-unification year (Q3 2022 to Q2 2023) to N3.41 trillion in the year post-unification.

In contrast, local CIT only grew by 35.1%, moving from N2.16 trillion to N2.92 trillion over the same period.

This disparity in growth suggests that naira devaluation has contributed significantly to taxes the Federal Inland Revenue Service (FIRS) gets from foreign firms.

The total CIT collected in the year following FX unification reached N6.33 trillion, a significant increase from the N3.58 trillion collected in the year before the policy change.

However, foreign CIT accounted for 53.8% of this total, up from 39.6% in the pre-unification period.

This indicates that foreign firms are increasingly driving Nigeria’s tax revenue, masking the sluggish growth in local firm contributions.

Local firms struggle under FX Pressures 

While foreign companies have benefited from FX unification, local businesses have faced more challenges.

In February, Nairametrics reported that the naira had lost about 68% of its value, marking a profound downturn since the implementation of the foreign exchange unification policy.

In the first six months of this year, Nigerians and businesses faced prolonged periods of exchange rate volatility, as the naira crashed by 40% between the end of December 2023 and June-ending.

• The devaluation of the naira by as much as 70% following the unification policy resulted in higher costs for local firms, particularly those reliant on imports for raw materials and goods.
• These rising costs have eroded profit margins, making it difficult for domestic businesses to match the growth seen by their foreign counterparts.
• Nairametrics earlier reported some of Nigeria’s leading companies incurred a combined forex loss of N1.7 trillion in the financial year 2023. The size and magnitude of the loss were so significant that it effectively wiped out the shareholder funds of some companies, forcing mega restructuring for others.
• Also, the NBS data shows that local CIT collections, while growing, have been inconsistent.
• After hitting N1.02 trillion in Q2 2023, local CIT dropped to N651.63 billion in Q3 2023 and further to N533.93 billion in Q4 2023.
• By Q1 2024, local CIT had fallen to N386.49 billion, before rebounding to N1.35 trillion in Q2 2024.

This volatility emphasizes the uncertain economic conditions facing local firms, who continue to grapple with inflation, supply chain disruptions, and the increased cost of doing business post-unification.

The Director-General of the Manufacturers Association of Nigeria (MAN), Mr. Segun Ajayi-Kadir, recently noted that the challenges facing the manufacturing sector, particularly due to the current macroeconomic conditions, are exacerbated by the ongoing foreign exchange volatility and high electricity tariffs.

Also, speaking to Nairametrics on the challenges of firms operating in Nigeria face, Olufemi Oyinsan, General Partner at The Continent Venture Partners (TCVP), said: “Companies in Nigeria struggle with dropping consumer purchasing power and the high cost of doing business, especially with energy and logistics. On top of that, they face challenges in repatriating profits due to currency devaluation. This makes it unsustainable for them to operate.” 

He further stressed the need for businesses to be creative and more capital-efficient, cutting unnecessary costs and focusing on optimizing resources.

Ike Ibeabuchi, Chief Executive Officer, MD Services, earlier told Nairametrics that foreign exchange stability could steer firms’ rebound and boost their capacity to create value.

More Insights 

The standard CIT rate in Nigeria is 30% of a company’s taxable profits for large companies (those with annual gross turnover of more than N100 million).

• Medium-sized companies (with turnover between N25 million and N100 million) are charged a CIT rate of 20%. Small companies (those with an annual turnover of less than N25 million) are exempt from CIT.
• The growing disparity between foreign and local CIT contributions raises concerns about the long-term sustainability of Nigeria’s tax base.
• While foreign firms have become the dominant source of CIT revenue, the slower growth of local firms highlights the vulnerabilities within the domestic economy.
• If local businesses continue to struggle under the weight of rising costs and inflation, their ability to contribute meaningfully to tax revenue may be further weakened, placing more pressure on foreign firms to sustain government revenues.
• Also, the reliance on foreign CIT could make Nigeria’s tax base more vulnerable to external shocks.
• Should global economic conditions deteriorate, or should foreign firms reduce their operations in Nigeria, the country’s tax revenues could take a significant hit.
• This highlights the need for policies that support local business growth and enhance the competitiveness of domestic firms in the post-unification economy.

[Nairametrics]

“Scramble for Africa” historically refers to the late 19th and early 20th centuries when European powers colonised and divided the African continent, seeking political, economic, and strategic dominance. Africa was mercilessly exploited, and to date, the scars remain. With its rich resources and sizable population, Nigeria became a prime target of British colonial authorities, a historical fact that underscores its continued strategic importance on the continent. Fast forward to the 21st century, and a new scramble for Africa is underway. This time, global powers compete for influence, resources, and markets rather than territories. Once again, Nigeria plays a central role in these geopolitical and economic dynamics.

In this modern scramble, the dynamics differ considerably. The focus has shifted from territorial to economic conquest wrapped in infrastructure investments, aid and strategic alliances. Leading global actors—such as China, the United States, the European Union, and emerging powers like Russia, Turkey, and India—vie for influence across Africa through diplomacy, trade deals, and development initiatives. While politically independent, Africa remains a stage for intense geopolitical competition, as the world’s most powerful nations recognise the continent’s potential and seek to secure a share of its resources and promising future.

Nigeria is pivotal in Africa’s trajectory as the continent’s most populous country and largest economy. The country is rich in oil reserves, has a rapidly expanding technology sector, and boasts an increasingly youthful and growing population. By 2050, projections indicate that one in four people will be African, and Nigeria is expected to account for a significant portion of that demographic shift. This youthful population, with its energy and potential, presents a promising future, making Nigeria a focal point in global power plays, with its future development and stability crucial for Africa and the world.

However, Nigeria also faces many domestic challenges that complicate its ability to maximise the benefits of this shadow battle for influence by global powers. These issues include endemic corruption, ineffective political leadership, and security concerns. These issues have created a fragile environment for economic growth, even as foreign powers, as part of their grand strategy, seek to invest in the country’s resources and infrastructure to position their countries for influence and economic advantage. 

In recent years, a series of high-profile international summits have been held aimed at solidifying relationships with African nations. These summits, often referred to as an ‘old trick’ in international diplomacy, remain effective in the modern scramble for Africa. They serve as platforms for global powers to compete for influence and partnerships, highlighting the continued importance of Africa in the global geopolitical landscape. 

Unfortunately, Africa has learnt nothing from history. Some notable examples of these partnership summits include the Russia-Africa Summit, the U.S.-Africa Leaders’ Summit, the European Union-African Union (AU) Summit, the Tokyo International Conference on African Development, and China’s Forum on China-Africa Cooperation (FOCAC).

Each of these summits represents a strategic attempt by global powers to strengthen ties, secure economic partnerships, and cement their geopolitical foothold in Africa. For instance, the European Union’s Global Gateway project, announced at the EU-AU Summit, seeks to counter China’s Belt and Road Initiative (BRI) by offering substantial investments in African infrastructure. Likewise, the U.S.-Africa Leaders’ Summit highlighted a $55 billion investment plan over three years, reflecting a renewed focus by Western powers on regaining influence in a continent where China’s presence has become increasingly dominant.

China’s FOCAC remains a crucial pillar of its engagement with Africa. At the 2024 FOCAC summit, China pledged USD 51 billion for 30 infrastructure projects across Africa, positioning Beijing for more significant influence on the continent. Meanwhile, emerging powers like India, Turkey, and the Gulf states are also working to deepen their ties with African nations, creating more comprehensive partnership options for African leaders.

In this evolving global chessboard, the question remains: Is Nigeria a pawn in the hands of international powers, or can it become an active player shaping its destiny? Nigeria’s vast natural resources, demographics, expanding technology sector, and strategic location make it an attractive playground for foreign investment and global geopolitics. However, the country’s ability to benefit from this renewed battle for global influence hinges on its ability to navigate the complex landscape of international diplomacy and partnerships, in addition to the quality of domestic governance , the power of immigration , the rise of Ai and ICT and its positioning in the new global economic order. This is purely a function of leadership that has understanding and requisite navigational skill. 

At present, Nigeria faces a delicate balancing act. On one hand, foreign investments can drive much-needed infrastructure development, job creation, and technological advancement. However, the ever-present risk of economic dependency and the challenge of maintaining sovereignty exists. China’s large-scale infrastructure investments, often funded by loans, have sparked concerns over Nigeria’s rising debt burden and the potential for long-term economic vulnerability. These concerns underscore the need for Nigeria to adopt a cautious approach, ensuring that foreign partnerships do not compromise the country’s sovereignty or its long-term developmental goals. This delicate balance requires strategic decision-making and a clear understanding of Nigeria’s long-term interests in the global geopolitical landscape.

Nigeria’s potential to play an active role in the African continent and emerging global dynamics is inextricably linked to its domestic stability, achieved by strengthening democratic institutions, improving security, promoting inclusive development, and maintaining a favourable investment  environment. Nigeria inevitably must build a strong economy as the foundation for effective foreign policy. We cannot continue to tumble from one economic policy to the next and expect to be given strategic importance in this new war for influence by powerful global nations on the continent.

Nigeria’s leadership is central to its success in this new scramble for Africa. Without visionary and strategic leadership capable of understanding global dynamics and advancing Nigeria’s long-term interests, the country risks being left behind in the race for international influence. The need for such leadership is urgent, as Nigeria’s leaders must prioritise its strategic autonomy, leveraging its vast resources and human capital to negotiate favourable terms with global powers.

Nigeria needs to be more active in a world where geopolitical competition intensifies. Its foreign policy must proactively build alliances with traditional and emerging powers while safeguarding the nation’s long-term interests. The country’s leaders must recognise the importance of actively shaping Nigeria’s future and Africa’s collective destiny. Nigeria, with its potential and resources, has a significant role in shaping the continent’s future. 

So far, sound bites from Nigeria’s foreign affairs minister, Yusuf Maitama Tuggar, seem reasonable, but action is more important. Nigeria is championing the 4D principle, Democracy, Demographics, Development and Diaspora. We led the UN tax reforms but till date we are yet to appoint  a permanent representative in the global body to further advance our agenda items. Nigeria has yet to appoint substantive ambassadors for all our missions in nearly one year, yet we expect the world to take us seriously in diplomatic engagements. Regional leadership in West Africa and the continent should be our natural forte, but we also are not getting it right. 

As one of Africa’s largest economies, Nigeria is uniquely positioned to lead the continent in defining its collective positions in dealings with external powers. However, this requires smart diplomacy and a Pan-African approach, whereby African nations present a united front in their negotiations with global actors. If African nations act as individual entities, they risk being divided and conquered by more considerable powers with far more excellent resources and strategic leverage.

Africa’s ability to thrive in this new era of global competition depends on its capacity to unite as a bloc to secure mutually beneficial deals with external partners. By adopting a coordinated Pan-African strategy, African nations can negotiate from a position of strength, ensuring they benefit from foreign engagement rather than being exploited.

The new scramble for Africa presents both opportunities and risks for Nigeria. Foreign investment offers a pathway to infrastructure development, economic growth, and technological innovation. However, the risk of neocolonialism and economic dependency looms as Nigeria and other African nations rely on external capital for their development. A culture of dependence on aids and foreign capital often creates a disincentive for critical thinking and institutional development. 

Nigeria’s future will depend on its ability to manage these external influences, prioritise national interests, and strengthen its internal governance. With strategic foresight and effective leadership, Nigeria can turn the renewed global scramble for Africa into an opportunity for national development, positioning itself as a key player worldwide. However, if Nigeria fails to navigate these challenges, it risks repeating past mistakes and falling prey to the forces that once sought to dominate it.

The historical and contemporary scrambles for Africa share similarities in the way foreign powers seek to exploit Africa’s resources for their benefit. However, the modern scramble is driven by economic partnerships rather than direct colonisation. With exemplary leadership, Nigeria can be central to this new global competition as one of Africa’s most influential countries. While foreign investments bring growth opportunities, Nigeria must navigate the challenges of dependency, corruption, and internal security issues to ensure that it benefits from the new scramble without repeating past mistakes. Nigeria’s future depends on its ability to manage foreign relations while prioritising its national interests and development.

Borno State Governor, Prof Babagana Zulum, has decried the influx of unaffected persons to the camps of the real victims of the last Tuesday’s flood that devastated the state.

The Governor stated this on Monday while flagging off the distribution of relief materials to victims of the Maiduguri flooding who are taking refuge in about 36 internally displaced persons camps.

The flood which shattered Maiduguri following the overflowing of the Alau Dam, displaced nearly 2 million people within Maiduguri metropolis and environs.

The flag-off ceremony took place on Monday at Bakasi Camp along Damboa Road in Maiduguri.

Relief materials distributed to each victim include a bag of 25kg of rice, a carton of pasta and N10,000 cash.

Speaking to journalists, Governor Zulum decried the influx of people who were not affected by the flood to the IDP camps, thereby making it difficult for smooth operations.

He said, “We observed that it is no more sustainable to continue receiving people in the camps because many people that were not affected are tripping to the camps.”

In addition to distributing relief materials, the governor also announced plans to comprehensively assess the affected areas, which will inform future interventions.

He stated, “So we decided to mobilise the resources and ensure that each affected victim had the relief items.”

“We have also concluded arrangements that we shall do the assessment at the communities to verify the actual number of those that were affected.”

The Director-General of the National Emergency Management Agency (NEMA), Zubaida Umar, highlighted her agency’s interventions for victims of the flood disaster.

She noted that the agency has been providing shelters and mobile water purifiers to provide clean drinking water to those affected since the flooding began.

Meanwhile, Governor Zulum has acknowledged receiving food donation from the Federal Ministry of Agriculture, NEMA, and Nigerian National Petroleum Company Limited (NNPCL) to support the victims of the disaster.

[Leadership]

The Nigerian National Petroleum Company (NNPC) Limited has released an updated breakdown of the estimated price of petrol purchased from the Dangote Refinery.

On Monday morning, the NNPC provided a chart detailing the refined petrol it acquired from the refinery on Sunday.

Payments for the September 2024 petrol supply, according to NNPC, are being made to Dangote Refinery in US dollars, with Naira transactions scheduled to begin on October 1, 2024.

“NNPC Ltd. has released the estimated prices of Premium Motor Spirit (PMS), also known as petrol, sourced from the Dangote Refinery, for distribution at its retail outlets nationwide.

“These prices are based on negotiated terms between NNPC Ltd. and Dangote Refinery, taking into account current international gasoline prices and the prevailing foreign exchange rate, in accordance with the Petroleum Industry Act (PIA) 2021.

“NNPC Ltd. confirms that it is making payments in USD for the September 2024 PMS supply, with Naira payments starting on October 1, 2024.

“We assure Nigerians that any discounts received from Dangote Refinery will be fully passed on to the public,” the statement from NNPC reads.

While the data of the estimated price to be sold around the country remains the same, the analysis of the transaction it had with Dangote Refinery was modified.

In the initial statement released on Monday, a Nigerian Midstream and Downstream Petroleum Regulatory Authority fee of N8.99 was listed, while the revised version showed a fee of N4.495.

The first breakdown included an inspection fee of N0.97, a margin fee of N26.48, and a distribution fee of N15.

However, in the updated release, the inspection and margin fees were removed, and the distribution fee was adjusted to N42.45.

In addition, the second statement introduced a Midstream and Gas Infrastructure Fund fee of N4.495.

[DailyTrust]

The Independent National Electoral Commission, INEC, has said it will not yield to the call of the Peoples Democratic Party, PDP, to redeploy the Resident Electoral Commissioner, REC, Anugbum Onuoha.

DAILY POST recalls that Onuoha has been a subject of controversy over his relationship with the Minister of the Federal Capital Territory, Mr Nyesom Wike.

Governor Godwin Obaseki of Edo State and Wike have not been in good terms after Wike supported his second term bid when he defected to the PDP.

The governor and the national leadership of the PDP have expressed fears that Onuoha would influence the election to favour the All Progressives Congress, APC.

The PDP chairman in Edo State, Anthony Aziegbemhin, had submitted a formal protest letter to INEC Chairman, Mahmood Yakubu, demanding Onuoha’s immediate redeployment.

The letter read in part, “The ties between these two are too close to ignore as they share familiarities and are also close associates.

“The said Edo REC is a cousin to the Minister of the FCT, Mr. Wike. He also served as a former Commissioner and Special Adviser for Lands, Survey, and Housing to Mr Wike during his tenure as Rivers governor.”

Responding, the Chief Press Secretary to the INEC Chairman, Rotimi Oyekanmi, emphatically said that the REC would not be redeployed, urging the PDP to focus on the process of the election rather than Onuoha.

“The REC for Edo State will not be redeployed. The governorship election will be conducted on September 21, 2024 in 4,519 polling units, not in the REC’s office.

“In the same manner, polling unit results will be declared by the respective Presiding Officers after the voting, ballot sorting and counting processes, in the presence of accredited party agents and other stakeholders.”

[DailyPost]

Gunmen suspected to be members of the Indigenous People of Biafra (IPOB) have bombed one of the police stations, killing three policemen in the process in Anambra state.

The Nation reports that the incident occurred around 10 a.m. on Monday, September 16, in the Orumba South Local Government Area.

Following the attack, Joint Security Forces—including the Military, Police, Navy, Civil Defence, and Vigilance groups—recovered five unexploded bombs at the scene. 

Reports indicated that the assailants were attempting to enforce the Monday sit-at-home order when they clashed with security personnel.

While eyewitnesses reported three fatalities and additional injuries, Tochukwu Ikenga, the spokesperson for the state police command, confirmed that two policemen were killed in the attack.

He said: “The Joint Security Forces comprising of the Police, Army, Navy, Civil defence and other Security Agencies recovered five unexploded improvised explosives and are on the trail of arsonist and armed successionist group members, who in the early hours of today 16/9/2024 attacked the Umunze Police Station. 

“The suspected Armed Proscribed Group invaded the Police Facility with improvised explosives, shooting sporadically and fire caught part of the Station. 

“Unfortunately, two of the Police Operatives on duty during the gun battle in a bid to resist the assailants from causing more havoc paid the supreme price. Their bodies have been recovered and taken to the morgue”. 

Meanwhile, he said the Commissioner of Police Nnaghe Itam visited the scene, on a spot assessment to reinforce and reassess security deployment.

[TheNation]

The World Trade Organisation Director-General, Ngozi Okonjo-Iweala, has announced her intention to seek another four-year term as head of the trade organisation.

She disclosed this in an interview with Reuters on Monday, stating that she hopes to complete “unfinished business” from her first mandate.

Okonjo-Iweala, who served as Nigeria’s finance minister, took office in March 2021 as the first female and African head of the 30-year-old trade body. Her current term expires on 31 August 2025.

She said, “I would like to be part of this chapter of the WTO story, and I stand ready to compete for the position,” Okonjo-Iweala said, citing a letter she plans to send to the trade body’s main decision-making body.

“For my second term, I intend to focus on delivering,” she added, mentioning that among her priorities are addressing “unfinished business.”

These priorities include finalising a deal on ending fisheries subsidies, achieving a breakthrough in global agriculture negotiations, reforming the WTO’s struggling dispute system, and decarbonising trade.

Officially, she has until the end of November to decide whether to apply again.

However, the African-led initiative to start early, which began in July before U.S. President Joe Biden withdrew from the election campaign, was seen as a move to secure her second term ahead of the U.S. vote in November.

Under WTO consensus rules, this would be possible if no other candidates come forward and all member states support her.

In 2020, the administration of former U.S. President Donald Trump blocked her appointment, a move seen by some as an attack on an organisation he had previously described as “horrible.”

She secured U.S. backing when Joe Biden succeeded Trump in 2021.

Asked whether both she and the WTO could be successful if Trump were re-elected, she said: “I don’t focus on that because I have no control.”

[Punch]

Many Nigerians are understandably shocked that petrol being pumped out of the Dangote refinery (DR) will not be selling at a relatively affordable price at the pumps, or a little cheaper than the imported variety. Long conditioned to subsidised products, they had expected that a locally produced petrol will offer a huge relief from the cost-of-living crisis they’ve been enduring since last year. Hope was heightened when the government announced recently that Dangote will buy Nigerian crude oil in naira and sell his products within the country in the same currency. In many social media platforms and talk shows, Nigerians have been busy analysing the refinery’s production economics and explaining why we should be buying cheap fuel soon.

‘’Why would Dangote not sell his petrol cheap or cheaper than imported product when he is not bearing cost of shipping; LC charges; wharf charges; insurance and other costs borne by importers?’’, a disgruntled university professor wrote last week. Another person noted on X, ’’Anything above N766 per litre from Dangote is back to square one’’. One other commentator wrote, ‘’Queuing for fuel is not our problem. If Dangote’s fuel is not cheaper than what we have now, then the whole thing is not worth it’’.

I had always known that Dangote’s fuel will not come cheap, but I did not expect that it would go as high as about N1,000/litre. When I visited the refinery in July as part of a media tour, I had remarked during the question-and-answer session that Nigerians were looking forward to buying petrol from the refinery at between N400 and N600 per litre, against the retail price of over about N700 per litre then. My remark drew a chuckle from the man himself.

Just this morning, NNPC announced that it would sell Dangote petrol at various prices, depending on location. In Lagos, for example, the product will sell at N950 per litre at its stations; N980 in Rivers; N960.22 in Oyo; N999.22 in Kaduna, Sokoto and FCT and N1,079.22 in Borno. NNPC will make a margin of N26.58 per litre, after incurring distribution cost of cost N15/litre; inspection fee of N.97/litre and NMDPRA fee of N8.99/litre. On Sunday, NNPC had told us that it purchased petrol at N898/litre (it actually paid 55 cents/litre) from Dangote.

I commend NNPC for these disclosures, and I should note that these prices are only obtainable for the month of September when NNPC is buying in dollars from the refinery. For October when crude would be sold in naira, the prices may change, depending on a few variables like the exchange rate and the crude oil price in the international market.

Clearly, the downstream market is now fully deregulated, and for the first time in our history, subsidy is truly gone. Nigerians should brace up for a market determined pricing structure that would be influenced by a few factors: price of crude oil; exchange rate; cost of refining; overheads; borrowing costs and insurance. Crude oil price will continue to be a major determinant of petrol price. Even when NNPC sells crude in naira to DR, the pump price would still be determined by the prevailing exchange rate. If Naira continues to slide, petrol price will increase, even if other factors remain unchanged.

This morning, crude oil is selling at about $72 and at the exchange rate of N1,600/dollar, Dangote would be buying a barrel of crude oil at about N115,200. Although there are many other products that are obtained from a barrel of crude oil, petrol will not come cheap because of other inherent costs in the production process. Dangote is highly indebted to Nigerian banks, and even before his refinery began production, he was already repaying and servicing his debts. He had told the media in July that he had incurred huge interest charges due to failed attempts in land acquisition in Ogun state and delays in construction in Lagos state due to communal issues. The accumulated interest charges and other interest costs will count in the pricing of his petrol.

I am sure that the refinery is fully insured by foreign insurers and huge premiums are paid yearly in dollars. According to loss adjusters in the United States, a refiner worth $1 billion will likely pay a yearly insurance premium of $2.5 million or more. You can imagine what Dangote Refinery, the world’s largest single-train refiner, worth about $20 billion, will pay every year as a premium. This will also be factored into its pricing structure.

Dangote’s costs of production must also be very high and this will impact heavily on the pricing of its products. The refinery provides everything for itself, including building three ports within the complex for its use in bringing in heavy equipment and building a huge 400 MW power plant to provide own electricity. In addition, DR has over 8,000 persons in its payroll. During construction, 29,000 Nigerians and 11,000 expatriates worked at the site. The huge wage bill would have to be taken care of by the selling prices of the products.

But despite the relatively high cost of Dangote petrol, this refinery is about the best thing that has ever happened to Nigeria’s industrialization and economic development in terms of the multiplier effects and expected uninterrupted fuel supply. Since the refinery will buy crude oil in Naira, that should ameliorate the impacts on the exchange rate. As the Naira firms up in the months ahead, I expect inflation to dip southwards. With all other factors remaining the same (they hardly do, anyway), prices of other items in the market should fall. The only reason petrol will sell cheap is if crude oil goes for as low as $40 per barrel or if the dollar exchanges for N800 or less. Both have significant implications for the economy, of course. But with tension mounting in the Middle East, cheaper crude oil is not likely soon.

I have taken note of the assurance from the finance minister, Wale Edun, that petrol price will fall as the refinery scales up production. Speaking at the refinery on Sunday, Edun said, ‘’We’re expecting that as this refinery, and even others, ramp up production, scale and achieve economies of scale, there should be the opportunity – and there is definitely the potential – to reduce their costs which should be passed on to consumers’’.

I agree, provided all other factors remain unchanged. Will they?

President Bola Tinubu has arrived in Maiduguri to commiserate with the government and people of Borno state over the recent flood incident. 

On September 10, flood displaced many residents in the Fori, Galtimari, Gwange, and Bulabulin areas of Maiduguri.

No fewer than 30 people have been reported dead from the flood which occurred following the collapse of the Alau dam.

Vice-President Kashim Shettima had visited Maiduguri shortly after the incident, describing it as the “most catastrophic” flood in Borno state in the last three decades.

Speaking during an on-the-spot assessment, Shettima said the impacts of the floods “exceeded estimation”.

Tinubu had directed the immediate evacuation of victims of the flood while he was away from the country.

The president left Abuja for China on August 29 but stopped in Dubai before arriving in Beijing on September 1.

After six days in China, Tinubu left Beijing for London where he met with King Charles III on September 12.

The President arrived Nigeria just before midnight on Sunday, September 15, and was received at the Nnamdi Azikiwe International Airport by some members of the administration and heads of security agencies.

[TheCable]