Navigating Nigeria’s economic transitions

Welcome to today’s edition of 234Digest! I’m Samuel Okocha, the curator and editor, bringing you important updates from Nigeria’s economy and business environment. Today, we're delving into Nigeria’s easing of crowdfunding regulations, the blocking of Shell’s onshore oilfields sale, and the upgrades in banking technology to avoid transfer failures. We’re also covering the ups and downs of Dangote’s refinery operations, interest rate hikes to curb inflation, economic reforms backed by the World Bank, and the latest developments in the trial of Binance executive Tigran Gambaryan. It’s just past 2:30am across Nigeria as I send this newsletter scheduled for Friday, but I’m pumped to keep the momentum going as I transition from a weekly staple to daily snappy highlights from Tuesdays to Fridays, with a deeper dive edition on Sundays

Today’s briefs

Crowdfunding regulations eased

Nigeria’s Securities and Exchange Commission plans to relax regulations on crowdfunding, opening new avenues for smaller firms to raise cheaper financing amid rising interest rates. Small and medium-sized companies have struggled with the overly restrictive rules introduced in 2021, which have limited their ability to raise debt and capital online. SEC Director-General Emomotimi Agama stated in an interview that the current limits on the amount that can be raised are a constraint that needs addressing.

Shell’s onshore oilfields sale blocked

In another significant development, Nigeria's oil regulator has rejected Shell’s proposed $1.3 billion sale of its onshore oilfields to Renaissance group, citing the buyer's lack of qualification to manage the assets, Reuters reported. Shell announced its exit from Nigeria's onshore and shallow water operations earlier this year, focusing instead on more lucrative deep offshore fields. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) declined to approve the sale, questioning Renaissance consortium's capability to manage the assets.

Banking technology upgrades

Meanwhile, commercial banks in Nigeria are upgrading their technology infrastructures to avoid a repeat of the transfer failures experienced during the now-withdrawn Central Bank of Nigeria’s cashless policy. Customers currently face short-term frustrations due to these upgrades, which aim to improve banking capacity and cope with increased online banking demand. Adedeji Olowe, founder and CEO of Lendsqr, emphasized the long-term benefits of these improvements.

Dangote’s refinery ups and downs

On the business front, African billionaire Aliko Dangote is wealthier than ever now that his long-awaited Nigerian oil refinery is operational. The Dangote Refinery, the world’s largest single-train oil refinery, has the potential to make Nigeria self-reliant for fuel. However, despite doubling his net worth to $27.8 billion, Dangote faces challenges akin to building a dream house only for the roof to start leaking, writes Devon Pendleton for Bloomberg. This analogy captures the operational teething problems the refinery is experiencing, such as initial production hiccups and the complexity of handling diverse crude types. Despite these challenges, the refinery's success could significantly boost Nigeria's economy, reducing dependence on imported refined petroleum products.

Interest rate hikes to curb inflation

Turning to monetary policy, Nigerian central bank Governor Olayemi Cardoso defended recent interest-rate increases as necessary to curb sky-high inflation, with the World Bank supporting the country’s sweeping economic reforms. Cardoso emphasized the importance of continuing orthodox monetary policy to bring price stability. The World Bank praised Nigeria’s significant policy reforms, including ending a decades-old petrol subsidy and devaluing the currency, which have begun to yield benefits.

World Bank backs economic reforms

In fiscal news, Nigeria is beginning to reap the benefits of significant policy reforms instituted by President Bola Tinubu. The country’s fiscal deficit has reduced from 6.2% of GDP in the first half of last year to 4.4% in the first half of this year. The World Bank highlighted robust growth in service sectors, stability in the oil sector, and improvements in the foreign exchange market as positive outcomes of these reforms.

Adjournment of Binance executive's trial

A Nigerian court on Friday adjourned the trial of detained Binance executive Tigran Gambaryan after it was stalled because he could not appear in court due to illness. Gambaryan, a U.S. citizen and head of financial crime compliance at Binance, has been in detention in Nigeria since late February and has been charged with laundering more than $35 million. Gambaryan and Binance deny the charges. Federal High Court judge Emeka Nwite in Abuja postponed the trial to Oct. 25 to allow him to get medical attention. Judge Nwite denied Gambaryan bail a second time last week, citing the prison's ability to address his medical needs.

Quote of the day

"Success is walking from failure to failure with no loss of enthusiasm." - Winston Churchill

Photo of the day

And that’s all for today’s 234Digest. Wishing you a wonderful weekend ahead! If you’re new here and find the insights and updates valuable, consider subscribing now to ensure you receive every edition in your inbox. Until Sunday!