Economy
Moody’s Downgrades Dangote Cement Rating to B1
By Modupe Gbadeyanka
The corporate family rating (CFR) of Dangote Cement Plc has been downgraded by Moody’s Investors Service to B1 from Ba3.
A statement issued by Moody’s said Dangote Cement’s probability of default rating was downgraded to B1-PD from Ba3-PD, but said the firm’s national scale rating (NSR) remains unaffected at Aaa.ng with outlook on the ratings still stable.
Explaining the reason it downgraded the cement producer’s ratings, Moody’s said it was as a result of the downgrade of Nigeria’s rating to B2 from B1.
“We have downgraded Dangote Cement because it is not totally immune from Nigeria’s continuing economic challenges which the country’s government has been slow in responding to,” stated Douglas Rowlings, Vice President, Senior Analyst and lead analyst for Dangote Cement Plc at Moody’s.
“But Dangote Cement’s rating is one notch above the Nigerian sovereign’s to reflect its resilient and strong credit profile and management’s continuing success in navigating Nigeria’s tough operating environment,” added Mr Rowlings.
Dangote Cement’s B1 CFR, one notch above the Government of Nigeria’s B2 rating considers the company’s stronger intrinsic credit quality balanced against the meaningful linkage and limited ability to withstand stress at the Nigerian sovereign or macroeconomic level.
The CFR also reflects the track record of demonstrated financial support from a larger and more diversified parent, Dangote Industries Limited (DIL).
This affords additional parent level financial strength by being part of a broader diversified group of companies under the DIL umbrella, the rating agency said.
Dangote Cement has a very strong credit profile, and would likely be rated higher without its linkage with Nigeria, in part because of its leverage which registered 1.3x gross debt/EBITDA for the last 12 months ended September 30, 2017, Moody’s said in a statement issued on November 10, 2017.
This is significantly low relative to global peers, even those rated investment grade. The strong standalone profile also incorporates high operating margins trending above 50%; high interest coverage as measured by EBIT/interest expense trending above 8x over the next 18 months; and conservative funding policies with debt funding matched to the currency of cash flow generation and prudent financial policies which will ensure sustenance of strong credit metrics through operating and project build cycles, it added.
The statement noted that Dangote’s sales and margins continue to benefit from the ongoing activity in the Nigerian economy.
Nevertheless Dangote remains at this stage strongly linked to Nigeria and its economy, with 89 percent of its EBITDA anchored in the country for the 9 months ended September 30, 2017.
Its investments in new plant capacity in other sub Saharan countries will provide more diversification in future but it will take several years before there is a meaningful diversification of revenue, profits and cashflows away from the Nigerian economy. Pan-African volumes expected to reach 40% of total sales volumes by 2020.
The ratings also factor in the relatively small scale level of cement production when compared to global peers along with production of 23.6 million tonnes (mt) for the Financial Year Ended (FYE) 31 December 2016; and a concentration of production in Nigeria, representing around 68% of revenues for the FYE 2016.
DCP’s ratings are further predicated upon a continuing growing cement market share of 65% in Nigeria as Africa’s most populous country and its largest economy where GDP is expected to reset to growth levels of around 2.5% in 2017 despite the ensuing low oil price environment; protected domestic production in the various African markets in which it operates, given on-going restrictions on imports; and competitive advantage brought about by an intention to always be the lowest cost cement producer in the markets where it operates, with a differentiated offering in Nigeria through access to low cost coal as an energy resource and a comprehensive fleet network, the statement further said.
Under Moody’s forecasts DCP’s liquidity profile is sufficient to meet the company’s cash needs over the next 12 months. Moody’s estimates that funds from operations generation of N641 billion ($1.8 billion) for the next 12 months and an unrestricted cash balance of N130 billion ($361 million) as of September 30, 2017 are sufficient to cover maintenance capex of N11 billion ($31 million), planned expansion capex of N198 billion ($550 million) and dividends of N254 billion ($705 million). Uncommitted expansion capex will require external funding.
This will be supported by DCP’s four committed trade finance facilities for a total amount of N130 billion ($401 million) to be used to cover import payments via issuance of letters of credit.
Additionally, DCP’s liquidity benefits from proven ongoing support from DIL. Although Moody’s does not expect that DCP would require liquidity support from DIL, the rating agency expects that this would be forthcoming if ever needed.
It stated that the stable ratings outlook reflects Moody’s expectation that DCP will continue to maximize output from existing plants outside Nigeria, while continuing to observe conservative financial policies. At the same time, the stable outlook assumes the ability to refinance maturing debt predominantly due to DIL through a Nigerian naira denominated bond issuance.
Moody’s said a downgrade of DCP’s rating would result if there was a move away from its conservative financial policies most notably its matching of the currency of its underlying cash flow generation to that of its debt commitments.
Downward pressure on the ratings could also arise should liquidity become pressured; adjusted debt to EBITDA trend above 4x; adjusted EBIT to interest expense trend below 2.5x; or operating margins fall below 20% on a sustained basis.
Any downward momentum on the Federal Government of Nigeria’s rating could also exert pressure on DCP’s ratings.
Similarly, the introduction of special taxes, levies or other punitive measures in respect of profits or cashflow by the government of Nigeria could put downward pressure on the ratings and/or outlook.
Upward pressure on the ratings is constrained by the Government of Nigeria’s local currency issuer rating of B2 as Moody’s considers a strong interlinkage with DCP’s ratings due to the high revenue contribution from its domestic operations which contains the company to be rated one rating level above the sovereign.
By Adedapo Adesanya
The chief executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr Saidu Mohammed, has revealed that bold economic reforms by President Bola Tinubu’s administration saved the country over N6 trillion on petroleum product imports in just the first nine months of 2025.
Mr Mohammed disclosed this while speaking at the Nigeria International Energy Summit (NIES) in Abuja, said the savings were the result of full downstream deregulation, harmonisation of the forex market, and the trading of crude and petroleum products in Naira.
He added that these bold moves have created stability in the downstream petroleum market, encouraged investment, and ensured a sufficient supply of petroleum products across the country.
The NMDPRA boss also revealed that the nation’s refining capacity is expected to surpass 1 million barrels per stream day (bpsd) in the medium term.
He said the surge in domestic refining capacity is being driven by a combination of new refinery investments, the rehabilitation of existing Nigerian National Petroleum Company (NNPC) Limited refineries, and strategic private-sector participation.
According to him, the planned investments in other refineries, along with issued Licences to Establish (LTEs) for new facilities, will continue to expand Nigeria’s refining footprint, reducing dependence on imported products and stabilising domestic supply.
He said: “For decades, our downstream value chain has been associated with negative sectoral performance indicators such as infrastructural deficit, weak market structures, sub-optimal supply chain efficiency, inadequate investment, poor regulatory compliance, and unacceptable operational safety and environmental indices.
“Today, I am pleased to affirm that this narrative is rapidly changing and that the sector is truly witnessing the early but irreversible signs of a renaissance-type transformation that is driven by bold reform; enabled by investment; and sustained by effective market and operational regulatory enablement.
“In the few years of the operationalisation of the new legal framework of the Oil and Gas sector in Nigeria (PIA 2021), Nigeria’s downstream sector has evolved into a fully liberalised market and is no longer defined by scarcity and supply uncertainty.
Supply stability has consistently ensured sufficiency of all Petroleum products. The pricing structure of the downstream sector is becoming more driven by the fundamentals of the market and generally attaining the stability level required for encouraging investment in this expansive sector of the economy.
“The supply chain landscape of the sector, which depended significantly on import of nearly all Petroleum Products for a long time, is rapidly transforming with growing supply through the nation’s domestic refining capacity, expanding gas-based alternative fuels, improved logistics, and increased private-sector participation.
“At the heart of this transformation stands the Dangote Petroleum Refinery, the largest single-train refinery in the world with an installed capacity of 650,000 barrels per stream day (bpsd), which is currently contributing a significant portion and in some cases 100 per cent of our domestic requirement of Petroleum Products. The optimal operationalisation of the plant’s installed capacity and future upscaling of the plant is undoubtedly needed to fulfil the national aspirations of making Nigeria a regional and continental energy hub.
“The capacity for enhanced domestic supply of Petroleum product in Nigeria will continue to grow as the planned investments in our refinery sector mature. We are optimistic that the issued Licences to Establish (LTEs) refineries, which are being progressed through various levels of completion, coupled with the rehabilitation of the NNPCL refineries, will improve the overall installed refining capacity in Nigeria to well over 1 million bpsd in the medium term.
“The bold economic reforms of President Bola Tinubu have created the renaissance that the downstream sector is enjoying and would continue to leverage upon for sustained sectoral growth in the future. The cumulative impact of the full deregulation of the downstream sector, the harmonisation of the forex market, the incentivization and deepening the use of gas and the trading of crude and product in Naira has reduced the fiscal economic losses of importing Petroleum Product by over N6 trillion in the 1st nine months of 2025.”
By Adedapo Adesanya
The federal government says Nigeria is targeting gas production of 10 billion standard cubic feet per day (bscfd) by 2030, positioning natural gas as a cornerstone of national energy security and economic prosperity.
The Minister of State for Petroleum Resources (Gas), Mr Ekperikpe Ekpo, said this while delivering a ministerial address at the ninth Nigeria International Energy Summit (NIES) 2026 in Abuja.
The Minister said the government’s efforts were yielding tangible results, with Nigeria’s gas production maintaining an upward trajectory in 2025, averaging between 7.5 and 7.6bscfd.
He disclosed that domestic gas supply exceeded two bscfd for the first time, marking a historic milestone for power generation, industrial use and household consumption.
The Minister also said significant progress in environmental performance, with gas flaring reduced to some of the lowest levels recorded in recent years, in line with Nigeria’s commitment to end routine gas flaring by 2030.
He noted that investor confidence in the gas sector had been strengthened, citing Final Investment Decisions (FIDs) in key upstream gas projects supported by improved regulatory clarity under the Petroleum Industry Act (PIA).
“Across the midstream and downstream segments, pipeline infrastructure, processing facilities and gas-to-power projects have expanded, improving connectivity, boosting domestic utilisation and supporting cleaner cooking solutions, job creation and industrial stability.
“Under President Bola Tinubu’s Renewed Hope Agenda, government policy prioritises the expansion of domestic gas infrastructure while strengthening Nigeria’s presence in regional and global gas markets.
“This includes facilitating investments in gas processing, storage and distribution, as well as accelerating gas-to-power projects aimed at addressing energy poverty and enhancing industrial competitiveness,” he said.
The minister emphasised that Nigeria’s energy future was inseparable from peace, partnership and shared responsibility, calling on governments, investors, development partners, host communities and civil society to move from dialogue to decisive action.
“Our collective task is to build an energy system that powers prosperity, strengthens stability and supports regional integration,” he said.
He said Nigeria’s energy strategy is firmly aligned with global energy transition realities while responding to Africa’s unique development challenges, including widespread energy poverty, limited industrial capacity and inadequate access to reliable power.
“While the world moves towards lower-carbon systems, Africa must pursue a transition that is not only green, but also just, inclusive and development-driven.
“Nigeria is leveraging its abundant natural gas resources to balance climate responsibility with economic development, positioning gas as the backbone of industrial growth, job creation and expanded energy access,” he said.
By Aduragbemi Omiyale
The 2025 Made of Africa Awards, hosted by Nigerian Exchange (NGX) Group Plc, paraded an array of winners, including brokers, issuing houses, trustees, fund managers, listed companies, and other market participants.
The event was to reward excellence in value delivery, compliance, and market impact, with Transcorp, the Debt Management Office, CardinalStone, Chapel Hill Denham, and MTN Nigeria Communications as recipients.
Business Post reports that the other recipients were First Trustees Limited as the Best Trustees in Terms of Deal Value, Legend Internet as the Market Debut Excellence award winner.
Further, CardinalStone Securities emerged as Equity Trader of the Year and Broker of the Year, Capital Express Securities won ETPs Trader of the Year, and Stanbic IBTC Stockbrokers was named Fixed Income Trader of the Year. Chapel Hill Denham received awards for Fund Manager with the Largest Listed Fund Size and Market Operator with the Highest Value of Foreign Portfolio Investment Transactions.
Mainstreet Capital and APT Securities and Funds jointly won Issuing House with the Highest Number of Primary Market Equity Transactions, while Anchoria Advisory Services led in corporate bond issuances. Dangote Cement was named Best Issuer in Terms of Fixed Income Listings, BUA Cement received the award for Most Compliant Listed Company, and Transnational Corporation Plc was honoured for Capital Market Excellence in Equity. Network Capital was named the Most Compliant Trading License Holder, United Capital Securities won the Best Sponsoring Trading License Holder and Banwo and Ighodalo received recognition for legal advisory value in capital market transactions.
Special recognition went to the Debt Management Office for fixed income market development and to the Capital Markets Correspondence Association of Nigeria for capital market reporting, and Lambeth Capital/Bamboo Systems Technology were recognised for onboarding the highest number of new retail investor accounts.
The chairman of NGX Group, Mr Umaru Kwairanga, said the awards underscore the role of market stakeholders in strengthening investor confidence and improving market standards.
“Their achievements set a benchmark for performance, integrity and innovation across the capital market,” he said, adding that sustaining this level of discipline and transparency is essential to maintaining the trust of both domestic and international investors in Nigeria’s financial markets.
The chief executive of NGX Group, Mr Temi Popoola, said, “Operational efficiency and cooperation across the ecosystem are increasingly important as trading activity diversifies and investor expectations continue to rise.”
On his part, the Executive Commissioner for Operations at the Securities and Exchange Commission (SEC), Mr Bola Ajomale, said the awards underscore the value of compliance and transparency in market development.
“Recognition through the Made of Africa Awards reinforces the importance of adherence to market rules and standards. When operators demonstrate accountability and professionalism, it strengthens investor confidence, ensures market integrity, and supports sustainable growth across Nigeria’s financial markets,” he said.
The chief executive of NGX Limited, Mr Jude Chiemeka, said recognising strong performance across the ecosystem supports deeper market participation and long-term capital mobilisation.
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