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 Modupe Gbadeyanka
All individual taxpayers in Lagos State have been advised to file their annual tax returns ahead of the March 31 deadline.
This appeal was made by the Lagos State Internal Revenue Service (LIRS) in a statement issued by its Head of Corporate Communications, Mrs Monsurat Amasa-Oyelude.
The notice quoted the chairman of LIRS, Mr Ayodele Subair, as saying that timely filing remains both a constitutional and statutory obligation as well as a civic responsibility.
The statutory filing requirement applies to all taxable persons, including self-employed individuals, business owners, professionals, persons in the informal sector, and employees under the Pay-As-You-Earn (PAYE) scheme.
In accordance with Section 24(f) of the 1999 Constitution of the Federal Republic of Nigeria, Sections 13 &14(3) of the Nigeria Tax Administration Act 2025 (NTAA), every individual with taxable income is required to submit a true and correct return of total income from all sources for the preceding year (January 1 to December 31, 2025) within 90 days of the commencement of a new assessment year.
“Filing of annual tax returns is not optional. It is a legal requirement under the Nigeria Tax Administration Act 2025. We encourage all Lagos residents earning taxable income to file early and accurately.
“Early and accurate filing not only ensures full adherence with statutory requirements, but supports effective monitoring and forecasting, which are critical to Lagos State’s fiscal planning and long-term sustainability,” Mr Subair stated.
He further noted that failure to file returns by the statutory deadline attracts administrative penalties, interest, and other enforcement measures as prescribed by law.
To enhance convenience and efficiency, all individual tax returns must be submitted electronically via the LIRS eTax portal at https://etax.lirs.net. The platform enables taxpayers to register, file returns, upload supporting documents, and manage their tax profiles securely from anywhere.
In keeping with global best practices, Mr Subair reiterated that LIRS continues to prioritise digital tax administration and taxpayer support services. He affirmed that the LIRS eTax platform is secure and accessible worldwide. Taxpayers requiring assistance may visit any of the LIRS offices or other channels.
By Adedapo Adesanya
The Nigerian National Petroleum Company (NNPC) Limited has said the Gas Master Plan 2026 targets over 230 per cent scale-up of Liquefied Petroleum Gas (LPG) supply from 1.5 million tonnes per annum (MTPA) to 5 MTPA this year.
The Executive Vice President for Gas, Power and New Energy at NNPC, Mr Olalekan Ogunleye, unveiled the strategic direction of the NNPC Gas Master Plan 2026, outlining an aggressive expansion drive to position Nigeria as a regional and global gas powerhouse.
Mr Ogunleye delivered the keynote address at the 2026 Lagos Energy Week, organised by the Society of Petroleum Engineers (SPE), where he detailed plans to accelerate gas development, deepen infrastructure and significantly scale domestic supply.
According to him, the Gas Master Plan targets a scale-up of LPG or cooking gas supply from 1.5 MTPA to 5 MTPA, alongside expanded feedstock for Mini-LNG and Compressed Natural Gas (CNG) projects.
“The NNPC Gas Master Plan 2026 is a blueprint to unlock Nigeria’s vast gas potential and translate it into tangible economic value,” Mr Ogunleye said.
He added that the strategy would also drive exponential growth in Gas-Based Industries, GBIs, strengthening local manufacturing, fertiliser production and power generation.
“Our renewed focus is on turning abundant gas resources into inclusive economic growth and improved quality of life for Nigerians,” he stated.
Mr Ogunleye said the plan aligns with the Federal Government’s Decade of Gas initiative and the presidential production targets of achieving 10 billion cubic feet per day by 2027 and 12 BCF/D by 2030.
Industry leaders at the event, including executives from Chevron Corporation, Esso Exploration and Production Nigeria Limited, Midwestern Oil and Gas Company Limited, Abuja Gas Processing Company and Shell Nigeria Gas, commended the plan and praised Ogunleye’s leadership in driving implementation excellence.
The new blueprint signals NNPC’s determination to anchor Nigeria’s energy transition on gas, leveraging infrastructure expansion and domestic utilisation to consolidate the country’s status as Africa’s largest gas reserve holder.
By Adedapo Adesanya
Vice President Kashim Shettima has attributed the Naira’s recent depreciation to the intervention of the Central Bank of Nigeria (CBN) in the foreign exchange (FX) market, stating that the currency could have strengthened to around N1,000 per Dollar within weeks if the apex bank had allowed market forces to prevail.
The local currency has dropped over N8.37 on the Dollar in the last week, as it closed at N1,355.37/$1 on Tuesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), after it went on a spree late last month and into the early weeks of February.
However, speaking on Tuesday at the Progressive Governors’ Forum (PGF), Renewed Hope Ambassadors Strategic Summit in Abuja, the Nigerian VP said the intervention was to ensure stability.
“In fact, if not for the interventions by the Central Bank of Nigeria yesterday, the 1,000 Naira to a Dollar we are going to attain in weeks, not in months. But for the purpose of market stability, the CBN generously intervened yesterday.
“So, for some of my friends, especially one of our party leaders who takes delight in stockpiling dollars, it is a wake-up call,” the vice president said.
He was alluding to CBN buying US Dollars from the market to slow down the rapid rise of the Naira.
Latest information showed that last week, the apex bank bought about $189.80 million to reduce excess Dollar supply and control how fast the Naira was gaining value.
The move was aimed at preventing foreign portfolio investors from exiting Nigeria’s fixed-income market, as large-scale sell-offs could heighten demand for US Dollars, intensify capital flight, and exert further pressure on the exchange rate.
Amid this, speaking after the 304th meeting of the monetary policy committee (MPC) of the CBN on Tuesday, Governor of the central bank, Mr Yemi Cardoso, said Nigeria’s gross external reserves have risen to $50.45 billion, the highest level in 13 years.
This strengthens the country’s foreign exchange buffers, enhances the apex bank’s capacity to defend the Naira when needed, and boosts investor confidence in the stability of the Nigerian FX market.
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