Economy
Moody’s Downgrades Dangote Cement National Scale Rating
By Dipo Olowookere
The national scale rating of Dangote Cement Plc has been downgraded from Aaa.ng to Aa2.ng. This action was taken by Moody’s Investors Service and it was to factor a weaker Nigerian government rating.
Last Wednesday, Moody’s announced a change in the sovereign outlook of Nigeria’s ratings to negative from stable. Consequently, the rating agency took actions on the ratings of Dangote Cement and two other companies operating in the country; IHS Netherlands Holdco B.V. (IHS) and Seplat Petroleum Development Company Plc (Seplat).
In a report released on Saturday, Moody’s said it believes that the credit quality of these companies is inevitably tied to the economic and political developments in Nigeria, with earnings and cash flows generated in Nigeria.
“The soft Nigerian economic growth has translated into limited expansionary activity in the wider consumer and business environments, leading to deteriorating corporate earnings and weak consumer spending. The rating agency expects low real GDP growth in Nigeria of 2.5 percent for 2020,” a statement from the firm said.
In the statement, Moody’s said it affirmed the B1 corporate family rating (CFR) of Dangote Cement and then changed the rating outlook to negative from stable.
Concerning the downgrading of the national scale rating to Aa2.ng, the agency said it considers the cement giant’s strong intrinsic credit quality balanced against the meaningful linkage and limited ability to withstand stress at the Nigerian sovereign or macroeconomic level.
It noted that the firm has a very strong credit profile, however, as Africa’s largest cement producer, it has material production concentration to Nigeria which generates around 69 percent of revenues.
“The B1 CFR is one notch above the sovereign rating because of the company’s strong credit metrics including debt/EBITDA of 1.0x, the track record of demonstrated financial support from a larger and more diversified parent, Dangote Industries Limited (DIL), and funding in local currency,” it stated.
“The cement industry is energy intensive and the mining and manufacturing process for cement production consumes large amounts of coal, electricity and water. Dangote’s production meets domestic emission standards and has implemented measures to increase energy efficiency.
“In terms of corporate governance, the company is 85.1 percent owned by Dangote Industries Limited, which is owned by its founder and chairman, Aliko Dangote. This does present key man risk in Moody’s view given that Mr Dangote continues to play a pivotal part in the fortunes of the company,” the report said.
Moody’s noted that given the negative outlook on the Nigerian sovereign and strong linkages to the Nigerian economy, an upgrade is unlikely in the near-term. It added that the outlook could be changed to stable if the Government of Nigeria’s rating outlook is changed to stable.
“Upward pressure on the ratings is constrained by the Government of Nigeria’s local currency issuer rating of B2 as we consider a strong interlinkage with Dangote Cement’s ratings due to the high revenue contribution from its domestic operations which constrains the company to be rated one rating level above the sovereign,” it said.
However, it warned that the ratings are likely to be downgraded in the case of a downgrade of the Government of Nigeria’s rating.
It said this could also occur if the government of Nigeria introduces special taxes, levies or other punitive measures in respect of Dangote’s profits or cashflow.
It stated that another government’s actions that could result in a downgrade could be if the operating margins falls below 20 percent on a sustained basis; if the adjusted debt to EBITDA trends above 4x or adjusted EBIT to interest expense trends below 2.5x and if liquidity becomes pressured.
If further said it could downgrade the rating if Dangote Cement moves away from its conservative financial policies, most notably matching of the currency of its underlying cash flow generation to that of debt commitments.
By Adedapo Adesanya
The Nigerian Insurers Association (NIA) has disclosed that seven additional insurance companies have secured full recapitalisation approval from the National Insurance Commission (NAICOM), bringing the industry-wide recapitalisation exercise to a successful conclusion.
In a statement on Friday, NIA Chairman, Mrs Ebelechukwu Nwachukwu, said the milestone represented significant progress towards building a stronger, more competitive and trusted insurance market in Nigeria.
She said the seven companies, alongside the 41 insurance companies and two reinsurance companies earlier approved, had demonstrated resilience, financial discipline and corporate strength by successfully completing the final verification process.
“Having successfully navigated the rigorous final verification process, these companies, alongside the earlier approved 41 insurance companies and two reinsurance companies, have demonstrated exceptional resilience, corporate fortitude, and financial discipline,” Mrs Nwachukwu said.
She added that the successful recapitalisation had positioned the companies to deliver greater value to policyholders and contribute to deeper insurance penetration nationwide.
Mrs Nwachukwu commended NAICOM for its regulatory oversight during the exercise, describing the commission’s approach as fair, structured and focused on strengthening market integrity.
“NAICOM’s strategic foresight and structured execution have elevated the Nigerian insurance industry, reinforcing its position within the broader financial sector as a substantially stronger, highly resilient, and globally competitive market,” she said.
The NIA chairman reaffirmed the association’s commitment to supporting insurance companies as they adapt to new regulatory requirements under the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
She said the association would continue to work with NAICOM to promote a sustainable and future-ready insurance sector.
Mrs Nwachukwu also assured policyholders, investors and other economic stakeholders that the recapitalised industry was better positioned to support economic growth.
“With this recapitalization complete, the Nigerian insurance sector enters a transformative era. The industry is fully equipped to settle genuine claims promptly, absorb higher local and international risks, and serve as a cornerstone of financial stability, directly supporting President Bola Ahmed Tinubu’s vision of achieving a $1 trillion economy by 2030,” she said.
By Aduragbemi Omiyale
Capital market operators have been directed to immediately freeze the assets, funds, and other economic resources belonging to six individuals and three entities designated as terrorist financiers by the Nigeria Sanctions Committee (NSC).
This directive was given by the Securities and Exchange Commission (SEC) via a circular to all Capital Market Regulated Entities (CMREs), warning that failure to comply would constitute a violation of the Investments and Securities Act, 2025, and the SEC Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Rules and Regulations.
It said violations could attract regulatory sanctions, including fines, suspension of operations or revocation of registration, reminding capital market operators that all unusual or suspicious transactions must be promptly reported to the NFIU.
The regulator, which stated that the designations were made in line with the Terrorism Prevention and Prohibition Act (TPPA) 2022, listed the six individuals as Babangida Muhammed Adamu Hammajam, Abdullahi Umar Usman, Ibrahim Abubakar, Adamu Chiroma, Muktar Muhammad Adamu and Yakubu Ogirima Ibrahim. The three designated entities are Nine to Nine BDC Ltd, Generation Currency BDC Ltd and Abbal Bako & Sons Bureau de Change.
According to the SEC, Hammajama was listed on June 18, 2026, for involvement in terrorism financing and support for the Islamic State West Africa Province (ISWAP), while Usman was designated for providing material support to a designated terrorist organisation through repeated financial transactions.
The commission said Abubakar was listed for involvement in terrorism financing and membership of ISWAP, while Chiroma was designated for allegedly using Bureau De Change (BDC) operations and related corporate entities to facilitate the movement of funds linked to terrorist activities.
Muktar Muhammad Adamu was listed on June 15, 2026, for providing financial support and facilitating transactions linked to the financing network of the ISWAP Okene cell, while Ibrahim was designated for providing material and financial support to the ISWAP Kogi cell.
The SEC said the three entities were listed for their alleged involvement in facilitating and channelling funds connected to the ISWAP Okene financing network.
The commission directed CMREs to immediately identify and freeze, without prior notice, all funds, assets and other economic resources in their possession belonging to the designated persons and entities.
They are also required to report frozen assets and other compliance actions, including attempted transactions, to the Secretariat of the Nigeria Sanctions Committee.
In addition, the SEC directed regulated entities to immediately file suspicious transaction reports with the Nigerian Financial Intelligence Unit (NFIU) for further analysis of the financial activities.
It further instructed operators to report as suspicious transactions all cases of name matches in financial transactions, whether occurring before or after receipt of the sanctions list.
The regulated entities are also required to prohibit dealings with the designated persons and entities and continue monitoring for transactions involving them.
The SEC said any findings should be reported to the Nigeria Sanctions Committee through its designated reporting channel.
By Adedapo Adesanya
Dangote Sugar Refinery Plc, Nigeria’s biggest sugar producer, has raised N486 billion ($356 million) through an oversubscribed rights issue as the company moves to reduce its debt burden and strengthen its capital base after three consecutive years of losses.
The company, founded by Mr Aliko Dangote, raised the funds through the issuance of 8.1 billion ordinary shares at N60 per share, according to a filing with the Nigerian Exchange (NGX) Limited on Friday.
The development follows shareholders’ approval of the capital-raising plan at the company’s 20th Annual General Meeting held in April.
In a statement signed by the Company Secretary, Mr Temitope Hassan, the sugar firm said the rights issue is part of efforts to improve its financial position and provide funding to support its long-term growth plans.
The company’s directors are authorised to raise up to N500 billion through a rights issue, on terms and at a time to be determined by the Board.
Dangote Sugar increased its share capital to accommodate the new shares issued under the rights issue. The sugar producer’s board also authorised to allot the shares and the management of any fractional holdings in accordance with regulatory requirements.
The organisation said any shares remaining unallotted after the offer would be cancelled as permitted by law, describing the capital raise as one of the largest rights issues in Nigeria’s corporate history.
The capital raise comes against the backdrop of improved revenue performance but continued losses at the company.
In its 2025 audited results, Dangote Sugar recorded a 24.56 per cent increase in revenue to N829.2 billion, compared with the previous year. The growth was driven largely by strong demand for 50kg sugar, which generated N807 billion in revenue.
Retail sugar sales contributed N17.7 billion, while molasses and freight income generated N4.02 billion and N66.4 million, respectively.
Cost of sales increased by 11.35 per cent to N706.5 billion, largely due to raw material costs of N573.3 billion. This resulted in a gross profit of N122.6 billion.
Despite the improvement in revenue and gross profit, the company recorded a pre-tax loss of N72.2 billion in 2025, although this represented a significant improvement from the N270.8 billion loss reported in 2024.
Lagos remained the company’s largest market, accounting for 55.82 per cent of regional sales, followed by the North with 35.35 per cent, the West with 6.45 per cent and the East with 2.38 per cent.
The fresh capital is expected to provide Dangote Sugar with additional financial capacity as it works to reduce its debt obligations, strengthen its balance sheet and advance its long-term expansion plans.
