Economy
Rising Crude Oil Prices Worries NNPC
By Adedapo Adesanya
The Nigerian National Petroleum Corporation (NNPC) has expressed worry about the rising crude oil prices in the international market and its adverse effect on Nigerians.
The Group Managing of the corporation, Mr Mele Kyari, rather than being positive about the development, described it as a “chicken and egg” situation.
Mr Kyari, speaking at the virtual Citizens Energy Congress tagged Securing a Sustainable Future Energy System through Strategy, Collaboration and Innovation on Thursday, noted that oil prices had started exiting the comfort zone set by the NNPC and was becoming a burden.
The forum was organised by DMG Events, a London-based Public Relations company, which said the occasion was to provide an opportunity for players to reset the energy agenda post-COVID-19 and connect the divergent and polarising perspectives.
The state oil corporation had put the comfort zone globally at $58-$60, saying that for the NNPC, anything above $70-$80 will create major distortions in the projections of the corporation and add more problems to the company.
And currently, Brent crude oil prices are within the $73-$74 per barrel mark, raising issues like the payment of petrol subsidy, which has made it unable to contribute to the Federal Account Allocation Committee (FAAC) on two occasions.
Mr Kyari expressed the concern that as the commodity price rises, buyers of Nigeria’s crude may be compelled to accelerate their investment in renewable sources of energy, thereby leaving the industry in a predicament.
He said: “In a resource-dependent nation like Nigeria when it gets too high, it creates a big problem because your consumers shut down their demand. Demand will go down and obviously even as the prices go up, you will have less volume to sell.
“So, it’s a chicken and egg story and that’s why in the industry, when people make estimates for the future, they always make it about $50 to $60. Nobody puts it beyond $60.
“But for us as a country, as prices go up, the burden of providing cheap fuel also increases and that’s a challenge for us but on a net basis, you know, the high prices, as long as it doesn’t exceed $70 to $80, it’s okay for us.”
According to him, Nigeria will have no problems supporting the restoration of about 5.8 million barrels a day that the Organisation of Petroleum Exporting Countries (OPEC) still has offline since the pandemic, due to the curbs in production quota imposed by the oil cartel.
He said adding that number to demand will stabilise and probably bring oil prices down to about $60 level or a little below $60, stressing that that’s a comfort zone for every producing company or country.
“I don’t see them (Nigeria) having any difficulty agreeing to add additional volume to cushion the effect of these high prices for this period,” he said.
He stated that Nigeria is already producing well below its capacity because, in early 2020, the country actually produced up to 2.4 million barrels of oil per day for both oil and condensates.
With declining investments in the oil sector, Mr Kyari stated that in a short time, most likely the next five years, the world may experience an energy crisis if the current situation is not properly managed.
“But we know that a number of things are going on in the transition journey at renewables. Many oil companies are transiting to renewables in the future. And that means that emphasis will be on gas and I see a very turbulent next five years and potentially some stability in the next 10 years,” he said.
He described the transition to renewables as a reality, adding that for Nigeria, what is clear is that the country is deficient in infrastructure and, therefore, needs resources from oil to exit poverty.
He stated that for Nigeria, to transit means to go for a low-carbon option and move towards more gas development than the liquids, adding that in the long term, the country needs to find a way out of dependence on oil.
“Renewables are real and we are making efforts to go in that direction, but obviously, our first step is to develop our gas resources.
“In this industry, you can’t do anything except you have the financing and financing is now clearly constrained both in terms of available resources and the decision of some of the shareholders of some of the lending institutions,” he said.
He added that although everyone seems to be talking about peak oil, there is no reference to gas, which contains lower carbon.
Mr Kyari said: “Everybody is saying that in the next 10 years, we will get to peak oil. But nobody has said peak gas. And it’s very difficult to distinguish the two because as you get peak oil, in many cases, you know, oil is produced alongside gas.
“Yes, it’s possible, it can be in 10 years time but you also know that what we are doing today in the industry is also curtailing investment and meeting the transition target in 2050.
“What that means is that in five years’ time, you could be in a situation of shock and this shock will mean that people will have to put more money into producing the liquids and that means that it will defer the date for liquid oil and potentially pushing it by 20 to 30 years.”
By Aduragbemi Omiyale
The presidential candidate of the Labour Party in the 2023 general elections, Mr Peter Obi, has expressed worry over plans by the administration of President Bola Tinubu to spend about $11.6 billion on debt servicing.
In a post on his social media platform on Monday, the opposition politician criticised this move, saying it is not good for the country.
He also said this action “should concern anyone interested in the country’s economic future and long-term development.”
The former Governor of Anambra State kicked against the penchant of the government to borrow from various sources without anything to show for it.
“There is nothing inherently wrong with borrowing when it is guided by prudence and directed toward productive investment, he noted, stressing that countries such as Japan, the United Kingdom, the United States, the United Arab Emirates, Singapore, and Indonesia are all heavily indebted, yet their borrowings are largely channelled into education, healthcare, infrastructure, and innovation – sectors that generate long-term economic returns and sustain repayment capacity.”
According to him, “despite high debt levels, their obligations remain more manageable because they are tied to measurable productivity.”
He said, “Nigeria’s situation, however, is markedly different. A huge proportion of past borrowing has been directed toward consumption, with limited visible or sustainable developmental outcomes to justify the scale of indebtedness.”
“It is also important to note that a huge portion of the debt currently being serviced was accumulated under the Tinubu administration itself, while borrowing has continued at a significant pace. The administration’s recent external borrowing alone includes about $6 billion (from First Abu Dhabi Bank in the UAE—$5 billion, and UK Export Finance via Citibank London—$1 billion), a further $1.25 billion under consideration from the World Bank, and an additional $516 million arranged through Deutsche Bank, bringing the latest known external loan commitments to roughly $7.8 billion. In addition, domestic borrowing through monthly bond issuances continues to add to the overall debt stock,” the businessman also stated.
“Against this backdrop, Nigeria’s 2026 budget shows that health is N2.46 trillion, education is N2.56 trillion, and poverty alleviation is N865 billion, giving a combined total of about N5.885 trillion for these three critical sectors.
“By comparison, debt servicing at about $11.6 billion (approximately N17–N18 trillion, depending on exchange rate assumptions) is almost three times higher than the total allocation to health, education, and social protection combined. This imbalance highlights a troubling fiscal reality in which debt obligations increasingly crowd out investment in human capital and poverty reduction.
“Moreover, even within the limited allocations to these sectors, funds may not be fully released, and a significant portion of what is eventually released could be misappropriated,” he further stated.
Mr Obi said, “The central issue is not borrowing itself, but whether borrowed funds are being converted into measurable productivity, inclusive growth, and improved living standards. Without this, debt servicing shifts from being a temporary fiscal obligation to a long-term structural burden that constrains development and deepens economic vulnerability.”
By Adedapo Adesanya
Pathway Advisors Limited, an issuing house and financial advisory firm, has announced the successful completion of the Series 2 Commercial Paper issuance for Veritasi Homes & Properties Plc.
The Series 2 offer, issued under Veritasi Homes’ newly registered N20.00 billion Commercial Paper Programme, raised N16.76 billion, significantly above its initial N12.00 billion target on the back of strong institutional demand.
This issuance builds on the company’s track record in the Nigerian debt capital market and follows the recently concluded N10 billion 3-year 20 per cent Series 1 Fixed Rate Bond Issuance, further reinforcing investor confidence in Veritasi Homes’ strong credit profile.
The 364-day tenor instrument attracted robust participation from a diverse pool of institutional investors, underscoring sustained confidence in the Company’s financial strength, operating model, and governance standards.
Commenting on the deal, the Founder/CEO of Pathway Advisors Limited, Mr Adekunle Alade (MBA, FCA, M.CIod), noted that the outcome further validates investor appetite for well-structured transactions in the Nigerian capital market.
“The strong oversubscription speaks to the market’s confidence in Veritasi Homes’ performance, governance, and repayment track record. We are pleased to continue supporting issuers with strong fundamentals in accessing efficient funding.’’
He further highlighted that Veritasi Homes’ consistent market activities since 2022, including successful issuances and full redemption of matured obligations, continue to strengthen its reputation among institutional investors.
“Pathway Advisors Limited remains committed to maintaining its leadership position within Nigeria’s capital markets through the origination and execution of transformative, value-driven, and commercially viable transactions by deploying innovative financial solutions and facilitating strategic capital formation across critical sectors.
“We are committed to supporting credible corporates in accessing efficient short-term and long-term financing solutions within the Nigerian capital market,” he said in a statement on Monday.
Speaking on the transaction, the Managing Director/CEO of Veritasi Homes & Properties Plc, Mr Nola Adetola, described the outcome as a strong endorsement of the company’s fundamentals.
“This result reflects the resilience of our business model, our growing market reputation, and the continued trust of the investment community. We are grateful to all institutional investors for their confidence in Veritasi Homes.”
He added that the proceeds from the issuance will be deployed to support the company’s working capital requirements, enhance liquidity, and complete the ongoing development activities across its real estate portfolio.
Mr Adetola also commended Pathway Advisors Limited for its advisory and arranging role in the successful execution of the transaction.
By Aduragbemi Omiyale
The Securities and Exchange Commission (SEC) has approved the transition to the T+1 settlement cycle for capital market transactions from June 1, 2026.
This is coming some months after Nigeria moved from the T+3 settlement cycle to the T+2 settlement cycle.
The T+ settlement cycle is the number of working days required to complete a capital market transaction, such as the trading of securities, shares, and others, from the first day the trade was executed by an investor.
In a notice on Monday, the SEC, which is the apex capital market regulator in Nigeria, said it was authorising the new system to “promote an efficient, fair, and transparent capital market.”
Under the new arrangement, equities and commodities traded by investors at the market would be cleared and settled by the Central Securities Clearing System (CSCS) within one day.
The agency noted that the migration to a T+1 settlement cycle forms part of its ongoing market modernisation initiatives aimed at enhancing market efficiency and strengthening risk management. reducing counterparty exposure, improving liquidity, and aligning the Nigerian capital market with international standards and global best practices.
“Accordingly, all eligible trades executed in the Nigerian capital market shall settle one business day after the trade date (T+1),” a part of the statement noted.
It was stressed that “Friday, May 29, 2026, shall be the final trading day under the existing T+2 settlement cycle. Trades executed on Friday, May 29, 2026, and Monday, June 1, 2026, shall both settle on Tuesday, June 2, 2026. All trades executed from Monday, June 1, 2026, onward shall be subject to the T+1 settlement cycle.”
SEC tasked all capital market operators, securities exchanges, clearing and settlement infrastructure providers, custodians, registrars, issuers, and other relevant stakeholders to take all necessary measures to ensure full operational readiness and compliance with the new settlement framework.
“Market participants are expected to review and align their systems, processes, controls, and operational workflows ahead of the implementation date,” it further stated, promising to continue to engage stakeholders and monitor the implementation process to ensure an orderly and seamless transition.
The regulator said it remains committed to strengthening market integrity, enhancing investor confidence, and fostering the development of a modern. resilient and globally competitive Nigerian capital market.
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