Economy
GCR Affirms AA+(NG) Rating on Dangote Cement
By Modupe Gbadeyanka
The long term and short term national scale issuer ratings of AA+(NG) and A1+(NG) respectively have been affirmed on Dangote Cement Plc by Global Credit Ratings (GCR).
In a statement issued by the rating agency last Monday, it further said the cement company’s outlook has been accorded as stable.
Explaining why it accorded the ratings on Dangote Cement, GCR said it took cognisance the firm’s strong position as one of the world’s top 20 cement companies by installed capacity.
Management plans to revise its expansion pipeline, in view of foreign currency restrictions and unutilised capacity in Nigeria.
Medium term commitments have been limited to grinding plants in Cote d’Ivoire and Ghana, while execution of the rest of the capex plan will depend on foreign currency availability.
Nigeria remains the dominant area of operations and accounted for 69% and 90% of revenue and EBITDA respectively in FY16 (FY15: 79% and 91%).
Dangote Cement Plc is Africa’s leading integrated cement group and subsidiary of Dangote Industries Limited (DIL), a diversified multinational corporate with operations spanning building materials, packaging, logistics, real estate, food and beverages, as well as real estate.
Rapid fixed capital accumulation increased the company’s installed capacity to c.46 million tonnes per annum (mtpa) across 10 countries by 1H FY17, from just 8mtpa in 2011.
The group has secured clinker sufficiency in Nigeria, and as a low-cost producer, is well positioned to absorb exogenous shocks without incurring material earnings variability.
Its strategic vision is to remain Africa’s leading producer of cement and aims to be the leader in quality, costs and services across all operations, with a market share of at least 30% and a first or second position in each market.
The group achieved 20% CAGR in revenue in the five years under review, registering turnover of N615.1bn in FY16.
Dangote Cement’s strong top line performance was underpinned by dominance of the domestic market, which enabled it to absorb sharp price compression to secure volume traction. Some regions within Pan-African operations also reported strong sales growth in 2016. Combined with marked energy and distribution cost escalation, challenges in Tanzania and Ghana, as well as a weaker Naira, the EBITDA margin shed c.12 percentage points to 41.7% (five-year average 53.8%). Nevertheless, EBITDA eased just 2% to N256.8 billion in FY16.
Repricing in the domestic market bolstered the EBITDA margin to 49.2% in 1H FY17, while increased productivity and the bedding down of additional international capacity are expected to see it average at a strong 55% in the medium term.
Operating profit reduced by 12% to N182 billion in FY16, before increasing 67% YoY to N162.8 billion in 1H FY17 at a wider 39.5% margin (FY16: 29.6%). Dangote Cement’s margins remain well above those of its peers.
Cash generation remains sound, albeit discretionary cash flow coverage of net debt has eased to new lows in FY16 and 1H FY17 (65%; 48%), and the short term debt exposure was high at 71% of total debt at 1H FY17 (FY16: 59%). Net interest cover remains adequate (FY16: 4.3x; 1H FY17: 8.5x), and is expected to trend within range for the current ratings in the medium term.
Despite an aggressive cumulative outlay of N813.6 billion on capex in the five and a half years under review, Dangote Cement also paid out N573.2 billion in distributions, which represented 63% of cumulative net income.
This has seen total borrowings more than double from N181.2 billion at FYE13 to N432.6 billion at 1H FY17, of which 47% represented DIL (Naira denominated) loans.
In addition to proven shareholder support, note is also taken of established relationships with strong funders, N120 billion in trade finance credit lines, as well as plans to access debt capital markets to reduce reliance on shareholder loans and enhance funding flexibility and improve the debt maturity profile. International operations do provide a natural currency hedge, albeit constrained by the erratic performance trajectory in some regions.
Although net gearing and net debt to EBITDA have risen from very conservative levels reported prior to FY14, they remain aligned to the ratings, at 39% and 79% respectively as of 1H FY17 (FY16: 32%; 100%). Stressed scenarios indicate that metrics are expected to remain within range over the rating horizon, assuming a tapered capex plan (amongst other considerations).
An upgrade will be dependent on the proven ability to sustain high capacity utilisation domestically in the medium term and the successful bedding down of international capacity enhancements translating to strong Pan-African free cash flows and sustained conservative gearing metrics for the Group.
Conversely, slower than anticipated economic growth in key territories, delays in rolling out public infrastructure projects, foreign currency scarcity, the adverse movement in foreign exchange rates, punitive regulatory changes and competitive pressures may constrain demand and/or pricing flexibility. This could adversely affect earnings and result in liquidity strain, increased gearing metrics and impede debt service, placing downward pressure on the ratings.
By Adedapo Adesanya
Businesses in the country expect the Naira to gradually appreciate against the US Dollar between now and January 2027, according to the Central Bank of Nigeria’s (CBN) July 2026 Business Expectations Survey Report released on Thursday.
The report showed that the Business Confidence Index (BCI) remained positive throughout the review period despite perceived macroeconomic challenges. It noted that all sectors expressed optimism about the economy, with the electricity, gas and water sector posting the highest Business Confidence Index of 59.4 points and the strongest expansion prospects for August 2026.
According to the report, “In July 2026, the Business Confidence Index was 5.7 points, reflecting continued optimistic sentiment among formal businesses.”
It attributed the positive sentiment mainly to increased demand (22.3 per cent), economic diversification (21.4 per cent), and improved access to finance (15.0 per cent). However, respondents identified inflation (27.7 per cent), energy-related challenges (23.4 per cent), insecurity (22.4 per cent), and heightened geopolitical uncertainties (16.5 per cent) as the major factors weighing on business confidence.
On the outlook by broad sector, the central bank said confidence remained positive across all sectors in July. The Industry sector recorded a modest improvement, with its index rising to 11.5 points from 10.5 points, while the Services sector increased to 3.6 points from 2.9 points.
By contrast, the Agriculture sector recorded a significant moderation, with its index falling to 3.4 points from 12.2 points.
Despite this, the apex bank said the six-month outlook remained upbeat, with confidence indices across all sectors indicating positive expectations over the review period.
On the macroeconomic outlook by region, the report noted a divergence in sentiment, with businesses in Northern Nigeria expressing stronger confidence than their Southern counterparts in July. Nevertheless, respondents across all regions maintained positive expectations for August.
By Aduragbemi Omiyale
A programme, tagged Probate and Unclaimed Monies Awareness and Investor Clinic, has been organised by the Securities and Exchange Commission (SEC).
The event, held on Thursday, August 6, 2026, was put together to educate investors and beneficiaries on how to recover unclaimed monies and inherited investments in the Nigerian capital market.
It is part of a nationwide awareness campaign launched by the capital market regulator in collaboration with Meristem Registrars and Probate Services Limited to improve investor protection, financial literacy and confidence in the capital market.
According to the Director General of the agency, Mr Emomotimi Agama, the campaign is to help investors and beneficiaries understand the procedures for recovering investments due to them while strengthening public confidence in the Nigerian capital market.
Thousands of investors and beneficiaries across the country remain unaware that they may be entitled to unclaimed funds arising from scheme consideration, return monies or inherited investments belonging to deceased relatives, largely because they are unfamiliar with the required documentation and claims procedures.
“Investor protection remains at the heart of the Commission’s mandate. Through this awareness campaign and Investor Clinic, we are bringing regulators and market operators together to help investors and beneficiaries understand the claims process, recover investments due to them and strengthen public confidence in the Nigerian capital market,” the SEC DG stated.
At the programme, participants received one-on-one support from SEC officials, registrars and other capital market professionals on issues relating to unclaimed investments, share ownership, probate, share transmission and beneficiary claims.
By Adedapo Adesanya
President Bola Tinubu has reaffirmed plans to list the entire Nigerian National Petroleum Company (NNPC) Limited on the Nigerian Exchange (NGX) Limited.
The President made this known on Thursday while receiving a delegation of the NGX Group Plc at the State House, Abuja.
The team was led by the NGX Group chairman, Mr Umaru Kwairanga, and its chief executive, Mr Temi Popoola. The President was briefed on the capital market’s growth from about N30 trillion in 2023 to N160 trillion.
According to a statement by the Special Adviser to the President on Information and Strategy, Mr Bayo Onanuga, President Tinubu said the planned listing of NNPC would form a key part of his administration’s ongoing economic reforms.
He described the move as part of broader reforms aimed at expanding investment opportunities for Nigerians and deepening the country’s capital market.
“One day, not just the arms and legs, the totality of it will be listed on the Nigerian Exchange,” he said.
The President also reaffirmed that his administration’s target of building a $1 trillion economy remained achievable, citing Nigeria’s population and human capital as major advantages.
“I can see the excitement in the room. All I can do is to celebrate you all today. When we took over, it was very challenging. I had to talk to myself and define my background to accept the assets and liabilities of my predecessor. I asked for the job, and I have to do it,” President Tinubu said.
Reflecting on the administration’s monetary reforms, the President praised the Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso’s role in restoring confidence in the financial system.
“My capable partner in one of the thinking and reasoning days was Yemi Cardoso, whom I put at CBN. We were in the negative with monetary policy and the reserve. We had N30 trillion printed, and there were liabilities. I thank you very much, Yemi Cardoso,” he said.
President Tinubu said the performance of the stock market reflected broader improvements in the Nigerian economy.
“If the stock market is doing well, then we are doing well. We can teach this in classrooms to our undergraduates. If they can be in the classroom without the harrowing feeling of how to pay and what to pay, then we can build a nation of success and prosperity. My assurance to you is that I won’t stop reading, thinking and supporting you,” he said.
The President also reiterated his belief in private sector-led investments, recalling his longstanding support for the Dangote Refinery project.
“If we can push the private sector to invest in the economy wisely, then we will grow. It is one reason why I backed Aliko Dangote even before I became President. God bless the soul of Muhammadu Buhari. We discussed how we can support the private sector to go into the refinery business,” he added.
On his part, NGX Group CEO Temi Popoola told the President that the total value of listed equities had increased from nearly N30 trillion when the administration assumed office in 2023 to about N160 trillion, with projections to reach N230 trillion before the end of the year.
“The picture today is that when you took office in 2023, the total value of stocks listed in Nigeria was just shy of N30 trillion. Today, Mr President, that figure is N160 trillion. By the end of this year, with the listings we are seeing in our market, we expect that figure to rise to N230 trillion,” Popoola said.
He added that the Nigerian All-Share Index had risen from 52,000 points to 244,000 points, while the reforms had created an estimated 500,000 to 900,000 new millionaires, attributing the market’s performance to the administration’s reforms and expressing confidence that Nigeria could attain a $1 trillion economy before 2030.
