Nigeria's economy gets a boost

Hello and welcome to this week's edition of the 234Digest! I'm Samuel Okocha, your guide to the latest developments in Nigeria's business and economy.

Although we're a day late, I'm excited to maintain the momentum and bring you the key stories from last week. As we kick off a new week, we're setting the tone for another exciting edition. And don't forget, our daily updates are just around the corner - stay tuned! For now, let's dive into the top stories from last week that will shape the week ahead.

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Top stories of the week

• Dangote refinery begins test runs for gasoline production, with full operation expected by mid-September, set to reduce Nigeria's reliance on imported fuel

• Nigeria energy company Oando completes acquisition of Nigerian Agip Oil Company (NAOC) from Eni, strengthening its position in Nigeria’s oil and gas sector.

• Nigeria's state oil firm NNPC posts 28% rise in annual net profit and declares dividend, a boost to Nigeria's economy

• NNPC owes almost half of revenue target in subsidy debts, a concern for the country's fiscal health

• MTN Nigeria grapples with naira devaluation and operational challenges, impacting its revenue and profitability

• Yaga, a South African second-hand clothing marketplace, plans to expand into Nigeria, tapping into the country's growing market for affordable fashion

Deeper dive: Dangote refinery nears gasoline output, boosts local crude use

Nigeria's Dangote refinery is nearing a major milestone. It's currently testing gasoline production, with full operations expected by mid-September, according to industry monitor IIR Energy. This development comes as the refinery shifts towards greater use of domestic crude, with over 80% of its feedstock coming from domestic sources in the third quarter, as reported by Bloomberg.

Why it matters: The Dangote Refinery, a $20 billion venture by Africa's richest man, Aliko Dangote, is nearing full gasoline production, a crucial step for Nigeria's energy independence.

Current situation:

• Located on the outskirts of Lagos, the refinery began operations in January 2024.

• It has so far produced diesel and other distillate fuels, with gasoline production expected by mid-September after previous delays.

By the numbers:

• The refinery can process 650,000 barrels per day.

• In the third quarter, over 80% of its crude feedstock will come from domestic sources, up from less than 75% previously.

The broader context: This shift towards using more local crude oil is significant for Nigeria, potentially reducing its reliance on imported fuel and stabilizing the naira by easing foreign exchange demands.

Challenges: Despite progress, further delays in gasoline production are possible. Additionally, Nigeria's domestic crude production constraints could impact supply.

Looking ahead: From October 1, 2024, the Nigerian government plans to sell crude to the Dangote Refinery in naira, which could further stabilize the local currency and support the refinery's operations. This initiative aims to ensure a steady supply of crude and reduce the need for imports from the U.S. and other countries.

Quote of the day: "The future belongs to those who believe in the beauty of their dreams." — Eleanor Roosevelt

Photo of the day

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