A Week in Nigeria: 17 November
Highlights from Reuters coverage of Nigeria over the last seven days
In this week’s round-up: MTN opts to double down in Nigeria despite troubles, GE pulls out of rail deal, plus another Eurobond.
- MTN Group will apply for a mobile banking licence in Nigeria and plans to launch the service there around the second quarter of next year, its CEO said, further entrenching the South African telecoms company in its biggest but increasingly problematic market. It comes despite disagreements that have seen Nigerian authorities seek a total of $10.1 billion from Africa’s biggest telecoms company. Nigeria announced last month that it would allow telecom companies to provide banking services, aiming to give millions of Nigerians without bank accounts access to so-called mobile money services, a policy that has been very successful in Kenya. If granted a licence when it applies in the next few weeks, MTN would launch the service in a country where 115 million Nigerians, or 60 percent of the population, does not have a bank account, according to the World Bank.
- And, still on the telecoms sector, Nigeria’s regulator cleared Teleology’s takeover of 9mobile, the country’s fourth biggest operator, ending a long bidding process for the debt-laden company that started a year ago. Investment holding company Teleology, which was set up by 12 telecoms industry veterans led by ex-MTN Nigeria executive Adrian Wood, said it had appointed new directors to run 9mobile, following approval from Nigerian Communications Commission (NCC). Teleology was picked as preferred bidder for 9mobile in February, following a bid process arranged by Barclays Africa, after a debt default forced 9mobile’s lenders to step in.
- Nigeria raised $2.86 billion in Eurobonds across three maturities, to help fund its budget deficit, in a sale that the government said was three times oversubscribed. It priced the bonds with maturities of seven, 12 and 30 years at 7.625 percent, 8.75 percent and 9.25 percent, respectively. Nigerian officials have been meeting investors at a roadshow organised by Citi and Standard Chartered in London this week prior to issuing the Eurobond.
- The issue was Nigeria’s sixth Eurobond sale. The bond will help Nigeria fund its budget deficit for 2018 and other financing needs, it said. The upper house of parliament last month approved the Eurobond issue but advised the government to limit foreign borrowing and boost revenue. Last year Nigeria sold $3 billion in Eurobonds, part of which it used to fund its 2017 budget. It was followed by a $2.5 billion Eurobond sale in February to refinance local currency bonds at lower cost.
- General Electric Co has pulled out of a long-term concession deal with the Nigerian government to maintain and operate narrow-gauge rail lines in the West African country. The Nigerian railway concession project was worth around $2 billion for two lines connecting northern cities to others in the south. The government had been due to enter into negotiations last year with GE over a railway project, although Nigeria’s upper house of parliament had said it would probe the railway concession over possible violations by Nigerian officials. The concession was meant to cover about 3,500 km (2,200 miles) of existing narrow-gauge lines from the southwestern commercial capital, Lagos, to Kano in the north and from southeastern oil hub Port Harcourt to Maiduguri in the northeast. General Electric said it has handed over the leadership of a consortium chosen to run the rail concession to South Africa’s Transnet.
- An investigation by the Nigerian Senate into whether state oil firm NNPC improperly withdrew money has expanded with the amount under investigation doubling to over $2.2 billion, a committee of lawmakers said. The Senate last week voted to probe withdrawals of $1.05 billion by Nigerian National Petroleum Corporation (NNPC), from NLNG, a venture owned by the state oil firm and foreign energy companies, without approval. The chairman of the committee on gas said lawmakers had found more withdrawals in excess of what they originally set out to investigate. They asked NNPC and central bank officials to provide documents to back up the alleged withdrawals, carried out at various periods between 2016 to 2018.
- The managing director of NNPC was interviewed by our Reuters colleagues in Abu Dhabi during which he said Nigeria will increase its oil production to 1.8 million barrels per day in 2019 and raise condensate production to 0.5 million bpd. He said Nigeria currently produces 1.6 million bpd of oil and 0.4 million bpd of condensate.
- And we reported on how Nigerian millennials are using small, social media-savvy travel firms to drive domestic tourism. From lush forests sheltering waterfalls and warm springs in the west to the Alpine-like mountains of the east, from festivals to historical sites, attractions are in no shortage in Nigeria. We profiled two of those firms and interviewed holidaymakers exploring their country.
- Unlike African tourist destinations such as Kenya, South Africa and Tanzania, Nigerian governments have invested little in nurturing the tourism industry. Nigeria brought in $1.09 billion from international tourism in 2016, the latest year available, according to the World Bank. By comparison, Tanzania received $2.16 billion and South Africa $8.81 billion.