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
TotalEnergies EP Nigeria has signed a Sale and Purchase Agreement with Vaaris for the divestment of its 10 per cent non-operated interest in the Renaissance JV licences in Nigeria.
The Renaissance JV, formerly known as the SPDC JV, is an unincorporated joint venture between Nigerian National Petroleum Company Limited (55 per cent), Renaissance Africa Energy Company Ltd (30 per cent, operator), TotalEnergies EP Nigeria (10 per cent) and Agip Energy and Natural Resources Nigeria (5 per cent), which holds 18 licences in the Niger Delta.
In a statement by TotalEnergies on Wednesday, it was stated that under the agreement signed with Vaaris, TotalEnergies EP Nigeria will sell its 10 per cent participating interest and all its rights and obligations in 15 licences of Renaissance JV, which are producing mainly oil.
Production from these licences, it was said, represented approximately 16,000 barrels equivalent per day in company’s share in 2025.
The agreement also stated that TotalEnergies EP Nigeria will also transfer to Vaaris its 10 per cent participating interest in the three other licences of Renaissance JV which are producing mainly gas, namely OML 23, OML 28 and OML 77, while TotalEnergies will retain full economic interest in these licences, which currently account for 50 per cent of Nigeria LNG gas supply.
Business Post reports that the conclusion of the deal is subject to customary conditions, including regulatory approvals.
“TotalEnergies EP Nigeria has signed a Sale and Purchase Agreement with Vaaris for the sale of its 10 per cent non-operated interest in the Renaissance JV licences in Nigeria.
“Under the agreement signed with Vaaris, TotalEnergies EP Nigeria will sell to Vaaris its 10 per cent participating interest and all its rights and obligations in 15 licences of Renaissance JV, which are producing mainly oil. Production from these licences represented approximately 16,000 barrels equivalent per day in the company’s share in 2025.
“TotalEnergies EP Nigeria will also transfer to Vaaris its 10 per cent participating interest in the 3 other licenses of Renaissance JV, which are producing mainly gas (OML 23, OML 28 and OML 77), while TotalEnergies will retain full economic interest in these licenses, which currently account for 50 per cent of Nigeria LNG gas supply. Closing is subject to customary conditions, including regulatory approvals,” the statement reads in part.
The development is part of TotalEnergies’ strategies to dump more assets to lighten its books and debt.
By Aduragbemi Omiyale
The trading licence of Monument Securities and Finance Limited has been revoked by the regulatory arm of the Nigerian Exchange (NGX) Group Plc.
Known as NGX Regulations Limited (NGX Regco), the regulator said it took back the operating licence of the organisation after it shut down its operations.
The revocation of the licence was approved by Regulation and New Business Committee (RNBC) at its meeting held on September 24, 2025, a notice from the signed by the Head of Market Regulations at the agency, Chinedu Akamaka, said.
“This is to formally notify all trading license holders that the board of NGX Regulation Limited (NGX RegCo) has approved the decision of the Regulation and New Business Committee (RNBC)” in respect of Monument Securities and Finance Limited, a part of the disclosure stated.
Monument Securities and Finance Limited was earlier licensed to assist clients with the trading of stocks in the Nigerian capital market.
However, with the latest development, the firm is no longer authorised to perform this function.
Economy
NEITI Advocates Fiscal Discipline, Transparency as FG, States, LGs Get N6trn in Three Months
By Adedapo Adesanya
The Nigeria Extractive Industries Transparency Initiative (NEITI) has called for fiscal discipline and transparency as data showed that federal government, states, and local governments shared a whopping N6 trillion Federation Account Allocation Committee (FAAC) disbursements in the third quarter of last year.
In its analysis of the FAAC Q3 2025 allocation, the body revealed that the federal government received N2.19 trillion, states received N1.97 trillion, and local governments received N1.45 trillion.
According to a statement by the Director of Communication and Stakeholders Management at NEITI, Mrs Obiageli Onuorah, the allocation indicated a historic rise in federation account receipts and distributions, explaining that year-on-year quarterly FAAC allocations in 2025 grew by 55.6 per cent compared with Q3 of 2024 while it more than doubling allocations over two years.
The report contained in the agency’s Quarterly Review noted that the N6 trillion included 13 per cent payments to derivative states. It also showed that statutory revenues accounted for 62 per cent of shared receipts, while Value Added Tax (VAT) was 34 per cent, and Electronic Money Transfer Levy (EMTL) and augmentation from non-oil excess revenue each accounted for 2 per cent, respectively.
The distribution to the 36 states comprised revenues from statutory sources, VAT, EMTL, and ecological funds. States also received additional N100 billion as augmentation from the non-oil excess revenue account.
The Executive Secretary of NEITI, Mr Sarkin Adar, called on the Office of the Accountant General of the Federation, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) FAAC, the National Economic Council (NEC), the National Assembly, and state governments to act on the recommendations to strengthen transparency, accountability, and long-term fiscal sustainability.
“Though the Quarter 3 2025 FAAC results are encouraging, NEITI reiterates that the data presents an opportunity to the government to institutionalise prudent fiscal practices that will protect the gains that have been recorded so far in growing revenue and reduce vulnerability to commodity shocks.
“The Q3 2025 FAAC results are encouraging, but windfalls must be managed with discipline. Greater transparency, realistic budgeting, and stronger stabilisation mechanisms will ensure these resources deliver durable benefits for all Nigerians,” Mr Adar said.
NEITI urged the government at all levels to ensure the growth of Nigeria’s sovereign wealth and stabilisation capacity, by committing to regular transfers to the Nigeria Sovereign Wealth Fund and other related stabilisation mechanisms in line with the fiscal responsibility frameworks.
It further advised governments at all levels to adopt realistic budget benchmarks by setting more conservative and achievable crude oil production and price assumptions in the budget to reduce implementation gaps, deficit, and debt metrics.
This, it said, is in addition to accelerating revenue diversification by prioritising reforms that would attract investments into the mining sector, expedite legislation to modernise the Mineral and Mining Act, support reforms in the downstream petroleum sector, as well as the full implementation of the Petroleum Industry Act (PIA) to expand domestic refining and value addition.
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