Economy
Lagos to Borrow Fresh N125bn for Infrastructure from Bond Sales
By Sodeinde Temidayo David
The Lagos state government is planning to approach the capital market to raise funds worth N125 billion through the sale of bonds to execute some projects in the state.
This is not the first time the commercial capital of Nigeria is exploring the local debt market to source capital for infrastructure.
In 2020, the state government raised N100 billion from the debt market with the issuance of 10-year notes at 12.25 per cent. The exercise commenced on Tuesday, December 31, 2019, and closed on Monday, January 13, 2020.
On Thursday, August 19, 2021, the Commissioner for Finance for Lagos, Mr Rabiu Olowo Onaolapo, while representing Governor Babajide Sanwo-Olu at an event, said the government was planning to borrow N125 billion through the largest bond issuance in the domestic capital market by a sub-national government.
According to the Commissioner, the bond would be targeted to fund infrastructure and pressing capital projects.
“This year, we are going all out again to deliver a N125 billion bond, we are out there to even beat our own record and this would be directly targeted towards infrastructure,” Mr Onaolapo said.
Speaking on the theme of the workshop organised by the Chartered Institute of Stockbrokers (CIS) held in Abuja, Leveraging the Financial Markets to Achieve Double-Digit Economic Growth for Nigeria, the Commissioner said Nigeria still has a lot to do to achieve double-digit growth as the country has been experiencing a declining growth, which has a negative impact on the human capital indices.
He further explained that the double-digit growth can be actualised through massive investment in the role sector of the economy, to post productivity, create employment opportunities and reduce the rate of poverty.
He assured that Lagos will play a significant role in delivering the economy towards a sustainable double-digit economic performance.
“Lagos will play its own role even though it is the smallest state in the country,
“We believe we have a significant role to play, we believe we are a key stakeholder in this economy,
“And being the commercial hub, we will continue to play our role in ensuring the nation delivers the double-digit economy that we want,” the Commissioner said.
He further explained that, “Lagos believes that for Nigeria to succeed, we have to play a big role and that is exactly what we’ve been doing.”
He also gave the opinion of the Lagos State government on how the financial market can achieve a double-digit economy.
“The financial market clearly has a critical role to play in supporting the role sector with the needed capital.
“This also places a responsibility on professional stockbrokers, who are the major players in the financial and capital market,” he disclosed.
He added that one of the key roles that must be put into consideration is the continuous education and awareness of citizens on the opportunity available in investing in stocks and other securities, stating also that the state considers this to be a key factor and other issues including the government monetary and fiscal policies, regulatory branches, which was delivered in the workshop.
Business Post reports that the CIS put the programme together yesterday to identify the gaps in the government’s utilization of the financial market and the way forward and achieving the pace necessary to make double-digit growth a reality.
Double-digit growth is a compound annual growth rate of 10 per cent or more over a period of eight years or longer In the Gross Domestic Product (GDP) of the nation.
By Adedapo Adesanya
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) could impose fines of up to five per cent of the annual turnover of petroleum operators found guilty of serious anti-competitive practices in the midstream and downstream sectors.
This was contained in the draft regulations of the proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations, 2026.
According to the proposal, errant companies of serious offences such as price-fixing, bid-rigging, market allocation, abuse of market dominance and other conduct capable of causing significant harm to competition could be fined between three and five per cent of their annual turnover.
It further proposed that persistent or serious offenders may also have their licences suspended or revoked, while the NMDPRA may impose daily penalties on operators that fail to comply with its orders or continue prohibited conduct after being directed to stop.
The draft regulation stated: “Where the Authority determines, after investigation and due process, that a licensee or any other person has engaged in anti-competitive conduct or breached any provision of this Regulation or the Act, it may impose administrative fines as provided herein.
The maximum administrative fine shall not exceed five per cent of the annual turnover of the offending undertaking for the preceding financial year.
“For purposes of these regulations, ‘annual turnover’ means gross revenues or sales derived from the regulated business activities in Nigeria. Where multiple entities or group structures are involved, the Authority may consider the turnover of the group, subsidiary, or segment most directly involved in the infringement.”
“Where a licensee or person fails to comply with an order or directive of the Authority, a daily penalty may be imposed for each day the violation continues.
“Where a prohibited practice continues after a final order, the daily penalty could rise to between N10m and N50m. Before imposing a fine, the NMDPRA would issue a Notice of Intention to Fine setting out the facts and findings, the nature of the infringement, the basis for calculating the proposed fine and the proposed deadline for payment,” it proposed.
By Adedapo Adesanya
Nigerian billionaire, Mr Femi Otedola, the chairman of First HoldCo, has acquired an additional 147.74 million shares of the financial services group through his investment vehicle, Calvados Global Services Limited.
According to a regulatory filing obtained from the Nigerian Exchange (NGX) Limited on Monday, Mr Otedola purchased the stocks valued at N20.68 billion.
The notice said the investor purchased about 147,737,699 ordinary shares at N140 per share on August 14.
The transaction increases Mr Otedola’s stake in the financial services group from 11.99 billion shares (26.1 per cent) to 12.13 billion shares (26.4 per cent).
The acquisition comes less than two weeks after the billionaire bought 138.04 million ordinary shares for about N18.11 billion.
Prior to that, Mr Otedola had said he had invested more than N600 billion of his personal wealth in the bank, describing the investment as a “long-term generational commitment” rather than a turnaround play.
Responding to speculation about increasing his stake, Mr Otedola said his investment philosophy favours majority control.
“My investment threshold is always over and above 51 per cent,” the billionaire had said.
“One of my key investment principles is that firm shareholder control, with due regard for minority interest, is a key ingredient to executing reforms and restructuring to deliver value to all stakeholders.”
The bank’s share price had recently risen to an all-time high of N140 per share, pushing its market capitalisation to N6.37 trillion.
In recent months, Mr Otedola has also made other high-profile investments outside the banking sector, including the acquisition of a luxury residence in London’s exclusive Mayfair district, further expanding his international real estate portfolio.
He is also believed to have participated in a financing arrangement involving the Dangote Refinery, providing funds to support its working capital needs as the facility scaled up operations.
By Adedapo Adesanya
The duo of FrieslandCampina Wamco Nigeria Plc and Central Securities Clearing System (CSCS) Plc pulled down the NASD Over-the-Counter (OTC) Securities Exchange by 0.89 per cent on Monday, August 17.
The price of FrieslandCampina went down by N9.85 to N160.00 per unit from N169.85 per unit, and CSCS Plc depreciated by 96 Kobo to N98.50 per share versus N99.46 per share.
As a result, the market capitalisation further lost N23.90 billion to end at N2.656 trillion, in contrast to the preceding session’s N2.68 trillion, and the NASD Security Index (NSI) dropped 39.81 points to close at 4,426.02 points from 4,465.83 points.
During the trading session, the share price of Industrial and General Insurance (IGI) Plc was up by 1 Kobo to 55 Kobo per unit from 54 Kobo per unit.
Yesterday, the volume of securities transacted by market participants decreased by 79.3 per cent to 652,081 units from 3.2 million units, the value of securities slid by 78.2 per cent to N10.7 million from N375.7 million, and the number of deals went south by 54.4 per cent to 21 deals from 46 deals.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 79.6 million units transacted for N5.8 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million.
