Economy
Drop in Nigerian Treasury Bills Yield Imminent
By FSDH Research
Yields on the Nigerian Treasury Bills (NTBs), particularly on the 364-day tenor, are likely to drop with the plan of the Debt Management Office (DMO) to refinance the NTBs through foreign debt.
The DMO hinted recently that the Federal Government of Nigeria (FGN) plans to issue about US$3bn in foreign debt of longer tenor, to refinance the domestic debt particularly the high-cost NTBs.
The plan is in line with the debt management strategy of the FGN for 2016-2019, with the overall objective of reducing its total cost of borrowing to achieve the country’s strategic target of an optimal debt mix of 60 percent and 40 percent for domestic and external debts respectively.
The debt management strategy also sets a target of domestic debt mix of 75 percent and 25 percent for long and short-tenored debts respectively.
Our analysis of the data from the DMO on the debt structure of Nigeria as at March 2017 shows that the total public debt stood at N19.16 trillion, made up of N14.93 trillion (78 percent) and N4.23 trillion (22 percent) in domestic and foreign debts respectively.
Although the external debt component at 22 percent as at March 2017 is far from the optimal mix of 40 percent, it is an improvement from 14 percent as at 2013.
If the DMO were to move the debt position as at March 2017 to the planned optimal level, it means that it would have to refinance about N3.43 trillion of the local debt in favour of the external debt.
Thus, we expect the external borrowing to grow faster than the domestic borrowing in the medium to long term.
The FGN’s component of the domestic debt stood at N11.97 trillion as at March 2017. NTB, which is the short-term debt, accounted for 30 percent or N3.60 trillion of the domestic debt of the FGN. This is higher than the target of 25 percent under the debt management strategy, meaning that the FGN could be issuing more of FGN Bonds than NTBs going forward.
This strategy will achieve two things: reduce the weighted average cost of borrowing for the government because the interest rate on the 364-Day NTB is higher than the interest rate on the FGN Bonds; and extend the tenor of the FGN debts.
Many corporate and individual borrowers have criticized the crowding out effect of the NTBs due to their high yields. The average yield on the 364-Day NTB in 2016 stood at 16.15 percent while the average yield between January 2017 and August 2017 stood at 22.91 percent.
From the monetary policy perspective, the high yields may be necessary to tame high inflation and protect the value of the local currency – it however constitutes a drain on the inadequate revenue of the FGN.
The International Monetary Fund (IMF) noted earlier in August 2017 that preliminary data for the first half of 2017 indicates significant revenue shortfalls, with the interest-payments to revenue ratio remaining high, at 40 percent as at the end of June 2017, and projected to increase further under current policies.
The DMO in its 2016 Debt Sustainability Analysis (DSA) report notes that the debt service-to-revenue ratio (for FGN only) breached the country’s specific threshold of 28 percent. The DSA report added that the FGN debt portfolio still remains highly vulnerable to persistent shocks in revenue, indicating a potential challenge in maintaining debt sustainability.
The total amount of debt service in 2016 stood at N1.20trn and represents 58 percent of the federal allocation disbursed to the FGN.
As at March 2017 the total debt service stood at N449 billion representing 82 percent of the total FGN allocation of N549 billion for the period.
We note that FGN revenue has been challenged in the last two years on account of a drop in oil revenue.
Thus, the plan of the FGN is to use the refinancing to lower debt service figures taking advantage of the relatively lower interest rate in the international financial markets. The FGN will have to put in place strategies to manage the currency risks associated with foreign borrowing.
The average yield on the FGN 6.375 percent July 2023 Eurobond from January till August 21, 2017 is 5.94 percent compared with 364-Day NTB of 22.91 percent.
The various efforts of the government should also increase revenue accruable to the country and the FGN.
By Aduragbemi Omiyale
About N878.7 billion was remitted to federal and state authorities in taxes, levies and duties by MTN Nigeria Communications Plc in the 2025 financial year.
According to details of the company’s 2025 Sustainability Report, this amount was 15 per higher than the previous year, helping the country achieve its target of expanding non-oil revenue and improving tax collection under its fiscal reform agenda, corporate tax contributions from major private-sector operators.
In 2023, MTN Nigeria paid N543.9 billion in taxes and levies, and a year later, it moved higher by about 62 per cent to N764 billion.
The N878.7 billion remitted to the government in 2025 covered corporation tax, value-added tax, spectrum fees, import duties, NCC levies and contributions under the Rural and Urban Terrestrial Infrastructure (RUTI) tax credit scheme, an initiative with deep roots in MTN Nigeria’s public-private partnership playbook.
The company has long embraced such mechanisms: it participated in the Road Infrastructure Tax Credit Scheme, under which it committed N202.8 billion towards reconstructing the 110-kilometre Enugu-Onitsha Expressway.
In 2025, the RUTI scheme reached 50% completion after securing approval for an additional N23 billion tax credit aimed at expanding fibre and telecoms infrastructure in underserved communities, a model the company argues supports infrastructure development without requiring direct public expenditure.
The report also highlighted the firm’s growing domestic economic footprint, with 62 per cent of procurement spending directed to Nigerian suppliers in 2025. This was up from 59.6 per cent a year earlier.
MTN Nigeria said the policy aligns with the federal government’s local-content objectives and supports sectors including civil construction, logistics, software services and power infrastructure.
The organisation’s operational footprint expanded to 2,087 active base stations nationwide, while active mobile subscribers stood at 85.4 million by the third quarter of 2025. Active data users rose to 51.1 million, supported by smartphone penetration of 65.1 per cent.
During the year, MTN Nigeria renewed its 800MHz spectrum licence for another 10 years, to December 2034, and secured regulatory approval to lease additional spectrum from T2 Mobile, formerly 9Mobile, across 17 states and the Federal Capital Territory.
By Adedapo Adesanya
The Nigerian National Petroleum Company (NNPC) Limited is considering a new partnership model that could give Chinese investors a majority 51 per cent stake in the Port Harcourt and Warri refineries as part of efforts to revive and commercially reposition the struggling national assets.
Details of the proposed arrangement emerged after NNPC signed a Memorandum of Understanding with China’s Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park Operation and Management Co. Ltd. for what the national oil company described as a “potential technical equity partnership”.
The agreement, signed on April 30 in Jiaxing City, China, involved NNPC’s chief executive, Mr Bayo Ojulari, Sanjiang Chemical Chairman, Mr Guan Jianzhong, and Xinganchen Chairman, Mr Bill Bi.
According to reports, the framework is modelled after the Nigeria LNG structure, where investors hold majority equity, participate in governance and remain actively involved in operations over the long term.
Under the proposed arrangement, the Chinese firms are expected to help complete outstanding engineering and rehabilitation work at the Port Harcourt and Warri facilities while also providing operations and maintenance services aimed at delivering sustainable, world-class refinery performance.
Beyond restarting the plants, the partnership is expected to target capacity expansion, improved refining yields, cleaner fuel production and stronger profitability.
The agreement also opens the door to broader industrial ambitions, including petrochemical integration and gas-based industrial projects built around the refinery corridors.
Recall that Mr Ojulari, at the signing ceremony in April, described the deal as a major breakthrough following more than six months of negotiations.
“All parties recognise mutually beneficial opportunities for the development and long-term sustainable profitability of NNPC’s refining assets in Nigeria and the collective weight required for success,” he said.
He added that the MoU marked an important step towards identifying technical equity partners capable of restarting and expanding Nigeria’s state-owned refineries.
“The MoU is a significant step on the journey towards identifying potential technical equity partner(s) to restart and expand NNPC’s refineries and to explore opportunities in co-located petrochemical and gas-based industries,” Mr Ojulari stated.
Reports indicate that the arrangement remains non-binding and subject to technical, financial, legal and regulatory reviews before any final commercial agreements can be executed. Due diligence will cover engineering performance, operational viability, financial structure, commercial feasibility and legal compliance.
The Port Harcourt refinery rehabilitation contract had earlier been awarded to Italian engineering giant Maire Tecnimont, while separate repair efforts were also launched at the Warri refinery.
By Aduragbemi Omiyale
The total issued and fully paid-up shares of Eterna Plc are almost 2.2 billion after the listing of additional shares of the company on the Nigerian Exchange (NGX) Limited this week.
Precisely on Wednesday, an additional 882,064,158 ordinary shares of the organisation were listed on Customs Street, a regulatory notice confirmed.
These extra stocks were from the rights issue of the firm, issued to shareholders at N22.00 per unit on the basis of three new ordinary stocks for every existing four ordinary stocks held as at the close of business on Thursday, November 27, 2025.
Eterna wanted to sell a total of 978,108,485 units, but investors only picked 882,064,158, indicating a subscription rate of 90.18 per cent.
At midweek, the new equities were brought to the stock exchange for listing, increasing the total issued and fully paid-up shares of the company from 1,304,144,647 units to 2,186,208,805 units.
“Trading licence holders are hereby notified that an additional 882,064,158 ordinary shares of 50 Kobo each of Eterna Plc were on Wednesday, May 20, 2026, listed on the daily official list of NGX.
“The additional shares arose from the company’s rights issue of 978,108,485 ordinary shares of 50 Kobo each at N22.00 per share on the basis of three new ordinary shares for every existing four ordinary shares held as at the close of business on Thursday, November 27, 2025.
“With the listing of the additional 882,064,158 ordinary shares, the total issued and fully paid-up shares of Eterna Plc have now increased from 1,304,144,647 to 2,186,208,805 ordinary shares of 50 Kobo each,” the notice signed by the Head of Issuer Regulation Department at NGX RegCo Limited, Mr Godstime Iwenekhai, stated.
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