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00:00:04of
00:00:09of a
00:00:43It's 10 a.m. a weekday, it's time to do business. Welcome to 55
00:00:47minutes of current and relevant business conversations right here on
00:00:50of business morning. I'm Innie John Mekua and we start business as usual
00:00:54from a global space where oil priz is held today on optimism
00:00:58about improved supply. after President Donald Trump said
00:01:02that Russia and Ukraine
00:01:04of will not be targeting each other's energy facilities,
00:01:08while Iran has reached out to Saudi Arabia after the Houti
00:01:11attacks against the kingdom and was huge
00:01:15one over the weekend, so for this
00:01:19of morning of we see that it's not, it's a red color, it's down
00:01:23more than half up per
00:01:25of 0.58%, $104.12 a
00:01:29barrel. and also WTI is down
00:01:320.77% to
00:01:34$91.14 a barrel and of
00:01:38course we know um there is an energy sease fire in the war
00:01:42between Russia and Ukraine. both parties have agreed
00:01:45they will not break it according to President Trump um this although was
00:01:49shared in the social media statement Ukrainian President
00:01:53Vlodom Zelenski has said in the social media that Ukraine supports the
00:01:57cease fire and it is important. that Russia supports
00:02:01it as well, prospects of more Russian Ukraine
00:02:05of hitting market after deal with the US have already
00:02:09uh reason after Trump said that Moscow will supply
00:02:13more than four million tons of diesel to the
00:02:16global market under deal that he struck with Putin
00:02:20during a phone call
00:02:24and um let's see what all of that is doing to movement around the
00:02:28straight of Homo. at this time, this was taken about
00:02:3230 minutes ago, we see as at now in the last
00:02:3524 hours, there's no ship that's transiting the
00:02:39straight of homos and we thought things had
00:02:43improved, but it doesn't look like it, however there are
00:02:46140 vessels
00:02:48of waiting to go
00:02:50of of through the straight, um, 55
00:02:52a
00:02:53of of them are tankers, 15
00:02:57of of them uh ball carriers and others make up 70
00:02:58of them um when it comes to the war risk insurance that's at
00:03:027.5% at this time we've seen the worst at
00:03:058.5% and now is at 7 7.5% normal
00:03:09rate is 0.15% and there's been a 50 time increase
00:03:13when it comes to the risk premium uh in
00:03:17of this period and the daily throw puts we see er
00:03:200.5% off what is normal tanker spot rate at
00:03:25of 1,162 um and
00:03:27then two more than 2ous. than what is
00:03:30normal, then in the last eight hours we've seen US and Iran
00:03:34negotiations
00:03:35of of deadlocked, Iran claims US supply or us reply to
00:03:39the seven points reopening is insufficient, we remember
00:03:42that and so
00:03:44in - negotiation negotiations between the United States and Iran
00:03:47um has been stalled
00:03:50a for some time
00:03:52now and
00:03:55of um coming back to Nigeria how all of this is
00:03:58feeding in of
00:04:00of course um
00:04:02of um that's media briefing by the minister of finance and
00:04:06coordinating minister
00:04:07of the economy uh subsidy or
00:04:10of not, but mean we've now decided to call it federal government's 30 day field
00:04:14discount, that's what the
00:04:16in minister said we should call it, so this is
00:04:20it, federal government third day feel discounts um federal
00:04:23government
00:04:24of notes that the price of
00:04:25of petrol has increased uh from 830 to
00:04:29one
00:04:31of 400 per liter, guess that is why this conversation is coming and of course in the political
00:04:35scene, it's a big deal from the opposition, and now the response,
00:04:39i saw one
00:04:39of the opposition candidates saying that this is an idea stolen
00:04:43from them by this administration president, well i don't
00:04:47know about about that, and then we see
00:04:51of restoring petrol to its pre-reform prize, according to
00:04:55uh the minister uh could cost the government over
00:04:5920. trillion nara annually uh because of course
00:05:03there's the call of restoring petrol subsidy, so
00:05:07the minister is noting that if that happens um it could
00:05:11cost the government 20 trillion
00:05:13so that means the government has been saving at least 20 trillion
00:05:17naar since um subsidy was
00:05:20removed um i don't think that's away from the
00:05:23conversations we should be having is also part of it although they would
00:05:27say that this has gone mostly to the state and we'll see that in just
00:05:31a minute and they also note that if
00:05:35petrol is supposed to be at 500 n for
00:05:38liter it will cost the government about 163
00:05:42millionaireira annually, and so that means that lot of
00:05:46bleeding going on there or would be going on there if they choose
00:05:50to return subsidy or to make petrol cost 500
00:05:54n for liter. subsidy removal has released 15.8 trillion
00:05:58na to the federation account between June
00:06:012023 and December
00:06:042025. And of course, we've seen this reflect in
00:06:08fact every month. We've seen
00:06:10that the state and federal government have been earning. more uh,
00:06:13i guess we should also put our attention there when it comes to the
00:06:17state and local government, because in that period from June to December,
00:06:21June, 2023, they have earned
00:06:2510.4 trillion naras gone to state and local
00:06:28government, so I guess while we try to
00:06:31hold the government at the center accountable, we should
00:06:35also remember that most of this allocation
00:06:39go to the state and the local government. and they are
00:06:43closer to the people and so they also have the
00:06:46responsibility to account for this
00:06:50extra funds that they've had since subsidy has been
00:06:53removed, can they point to projects,
00:06:57services that have changed you know since they started
00:07:01earning more? anyway, so um the new measures that we've
00:07:05had this discount and not subsidy, a
00:07:0830-day petrol discount at NNPC stations with priority, for
00:07:12public transport operators, i believe there's an app also connected
00:07:16to that, you know, so that's also part of it,
00:07:20lot of conversation going there, the walkability as usual, saying
00:07:24one thing um on television or to the media is one, but when we come to the
00:07:28reality of it, we had there's an app that is connected
00:07:32to that, and then people are asking how much impact really would this
00:07:36make, so that's it, 30 day petrol discount, if it to
00:07:39be um extended or not, will wait until the
00:07:43Thursday and it's supposed to be 1,350 for liter, that's
00:07:47a sealing proposed ceiling on xgun tree and landing cost
00:07:50subject to monthly review, so perhaps even if there'll be an
00:07:54extension um it might change, might be higher or
00:07:58lower, even though um the news is that even as at this
00:08:02morning lot of NNPC stations are selling above
00:08:06this,
00:08:10when forward crude sales plan. sales to domestic refineries,
00:08:14this has been in the conversation and we've seen dangote having to
00:08:17import lot of his raw material is
00:08:21crude feed as well as other refiners
00:08:25also um they've complained about feed stock
00:08:28and some the factors determining the price of
00:08:32fit stock um to them those modular
00:08:36refineries in the Niger delta mostly and all of that so
00:08:39crude sales we would need more conversation on this from minister obviously to
00:08:43break it down, we know he's in Thailand now, but I know um news always
00:08:47gets to him, cash transfers and subsidized credit, increase support for
00:08:51vulnerable households and small businesses, and you know
00:08:55while we see - improve macro numbers even getting
00:08:58applaud over the weekend from the world bank, the
00:09:02micro has not really captured that, so I guess
00:09:06that's what they want to achieve with this increased support, and then we also have to
00:09:10be careful with leakages when you talk about you some these
00:09:13- transfers and then also we have faster CNG roll out, of course we've been
00:09:17hearing the president talk a whole lot about CNG adoption, especially in the
00:09:21states and then the nation national strategic fuel reserve proposed to
00:09:25help reduce future supply disruptions, we haven't faced this a bit,
00:09:29mostly thanks to dangote, but of course um um should the
00:09:33federal government be depending on the private alone, let's elaborate more
00:09:37on this now - we have joining us for this
00:09:41conversation, chinan... He's the vice chairman African Energy
00:09:44Council to
00:09:58so first of all, let's get your thoughts,
00:10:00you know, on this discounts proposed by the
00:10:04government, the federal government, that
00:10:06is, yeah,
00:10:10so I think my thoughts here is that, It's very similar to what
00:10:13many Nigerians have in their minds, there's a lot
00:10:17of uh talk here or giving respite to ordinary Nigerians and
00:10:21I can completely understand and see what the federal government is doing.
00:10:25the question there is, is it too little
00:10:28and is it too late? i think that's what we should try to bear in mind.
00:10:32in my mind, i think 66 n palita is decent, but i
00:10:36just don't think it goes far enough, but there's no doubt that we can see the
00:10:40intention. i think there are two things as well to think about here
00:10:44in, one is there's a political side of this dimension, this
00:10:47announcement, and then there's the economic side. i really think from economic
00:10:51standpoint, this does not work for lot of nigerians
00:10:54a discount. is way too small in my opinion, but I think from a political
00:10:58stand, expect to see that this is being used right now
00:11:02as a litm test, this is the first step, it's a lipness test where they're
00:11:05trying to gauge the outlook of nigerians and I think other things might
00:11:09follow. All right,
00:11:13so so China and and I'm glad you brought in the part the
00:11:16political uh, because lot of people say this is response
00:11:20to um pressure from the
00:11:42okay, all right, it seems we have a little bit of technicals with China and
00:11:46there. but mean, and and chenan did bring up that part of
00:11:50politics, because there's also the perspective.
00:11:54um, that this is just because politics
00:11:58election is around the corner and all of
00:12:16the issue of politics and of course it's it's election
00:12:19season campaigns are on, so everything mostly
00:12:23would have a... political sentiment somewhere around the
00:12:27corner,
00:12:28you know, and we've seen the opposition come to say, oh, this is an idea
00:12:32which they started, of course, we know uh
00:12:34that former vice
00:12:37president had started this conversation to
00:12:40say, oh, subsidy should be returned, and all of that, and lot of people
00:12:44believe this is reaction to that, and may just last for as
00:12:48long as the election season stays, but when we
00:12:52look deeper into it, um, the... minister had
00:12:55said that this is not subsidy, it's the
00:12:59NNPCL letting go of some of its
00:13:02games. I guess questions should also be asked if the
00:13:06NNPCL is letting go some of its gains to give
00:13:10circuit to the people, what are the implications
00:13:14to the books the NNPCL, to the national revenue at the
00:13:18end the day, you know, that also should be put into
00:13:21consideration. I
00:13:32was yeah i was saying first of all that you brought in the issue of politics
00:13:35and that's it's it's a common conversation that's been going on because
00:13:39it's election season in nigeria and all of that
00:13:43so um do you see this is
00:13:46just a way to just get votes win
00:13:50the hearts the people reduce the complaint or do you see this
00:13:54as what should actually be done for the
00:13:57economy and for the welfare the
00:14:00people, yeah,
00:14:04so it's a very smart question that you've asked me, and I'd
00:14:08say two ways, Nigerians have been
00:14:11crying and complaining about some sort of a cirka and a bit of
00:14:15respite, okay, since the reform of
00:14:172023 May was done, so both the reforms, I'm talking about, one, the
00:14:21effect reform, but then number two, the subsidiary reform, many people have... crying, I think
00:14:25it's gotten worse because the conflict we're seeing in the middle east,
00:14:29so that cry has always been there, I think we have to acknowledge that, that's number one,
00:14:33so Nigerians have been crying, has the federal government done anything since? not
00:14:37quite, now we are less than 60 days to
00:14:40election, and now we're seeing some sort of an intervention being done,
00:14:44now whether or not you look at it from a political standpoint or
00:14:47not, you have to acknowledge that the timing the
00:14:51intervention,
00:14:52it it it it certainly brings a lot to think... about there's no question about the timing
00:14:56the intervention now, i will choose my words very carefully, but i say this, if you
00:15:00listen to what mr. finance minister said
00:15:03yesterday, he said the discount, the 30-day discount
00:15:07is in the first instance, and i'm not paraphrasing, i'm quoting him in
00:15:11the first instance, meaning this is a litmous test
00:15:15that will be deployed and then some sort of feedback will be seen if he needs to be rolled
00:15:19to month two and month three, anyway, the point here is this, he said
00:15:23in the first instance, so "I do think that there could be a political angle,
00:15:27I'm
00:15:27not saying that for sure, but certainly the timing makes it a bit suspect, but without
00:15:31a doubt it's what Nigerians need, we desperately need them, but do we
00:15:35need some sort of a subsidy, bring..." back, we don't, and I'm very happy that
00:15:39they made it very clear that this is not a kind of subsidy, they
00:15:43call this a margin discount, so this
00:15:46is a discount on margin, I.e a discount on profit,
00:15:50not discount on cost, and I think described this
00:15:53really cleverly, he did say they are not selling below
00:15:57market price, so the price, the cost price of petrol stays the same,
00:16:01what they're doing is they're waving off the profit margin of
00:16:04NNPC, so NNPC is taking the hit. so I think this
00:16:08distinction needs to be made, but I think very clearly this the timing of
00:16:12this really makes it very suspect, it seems like there's a bit of a political angle
00:16:16here, but either way, Nigerians need some sort of respide,
00:16:20that's 100%, we do need that. Yeah, and and let's go to the
00:16:23NNPC part now, um, yes,
00:16:27Nigerians need respect and this is not a
00:16:30subsidy, but you know the distrust between the government and the government in
00:16:33Nigeria is, the gap is really huge, so I mean a lot of questions.
00:16:37about to be asked, what is the benefit of NNPCL
00:16:41letting go some of its profits? now um, the minister
00:16:45had said that this is in the first instance, is there
00:16:48a is there um, is this something that can be
00:16:52sustained? uh, when we now come to the NNPCL,
00:16:55letting go some their profits, what does that do to our revenue as a
00:16:59country, as the economy, at the bottom line, where does this
00:17:03sit? that's a very good question, again you've asked me, the
00:17:07few...
00:17:07i want to draw the attention of nigerians to number one, do not
00:17:11forget that we're not operating as NNPC
00:17:14anymore, the company is now
00:17:16NNPCL, the l is very important, it's a limited
00:17:20company meaning is some sort of a public company, that's the implication, if it's
00:17:24a public company then it should be run under governance codes that is a public
00:17:28company, it should not have government government intervention, so I
00:17:32think the first contradiction is to see that the finance minister of a
00:17:36country is coming out. to adopt a policy and say NNPC needs to
00:17:40follow on the real governance, if you look at the real governance code of
00:17:43companies, government should be completely independent of
00:17:47this, because it's a it's a it's a it's a public company, at the moment, it's sort
00:17:51of a public company, so I think that's number one, number two is the question of
00:17:55if the profit of NNPC is going away because it's being
00:17:58incumbered and used in this discount, then how
00:18:02profitable will this company be, what will be the cash flow of this
00:18:05company, does
00:18:06it look attractive? for um investment, so if you're
00:18:10if you're someone and you want to put your money into NNPC when it finally
00:18:13list, does it even make sense? what does that mean for the governance of this
00:18:17organization? since finance minister can stand up and give a
00:18:21blanket
00:18:22uh you know sort of initiative where they can take discounts out the
00:18:26company and the running the company. so I think these are the questions that
00:18:30Nigerians need to ask. of course it puts pressure on NNPC, which means that
00:18:34NNPC will become even less profitable than it has been. which
00:18:37ultimately means also that if you're investing in NMPC it carries huge
00:18:41governance risk in there. i think these are the fundamental things that uh we
00:18:45have to consider. if it's an independent company, it should be independent to undertake
00:18:49what it
00:18:55important, he said that this is some sort of a promo, the NNPC is doing a promo
00:18:58i do agree you there is a
00:19:10and I'm glad and I'm glad and I'm glad she and that you talked about you know the
00:19:13fact that the future of NNPCL is
00:19:17is what comes to questions that the independence of it,
00:19:21because we are trying to be like Saudi
00:19:24Aramco where we would get private capital into
00:19:28NNPCL, and now we see the
00:19:31government giving like a
00:19:35ruling concerning the running. the company,
00:19:39so I mean, how much confidence can
00:19:41investor have on NNPCL
00:19:44if um, we're going to see anything can happen, the
00:19:48government can have an idea, and they decide that NNPCL is
00:19:52is what is going to be used as a buffer a
00:19:56company can give up some of its profits
00:19:59because the government needs to give buffer, and and this
00:20:02raises another set of questions for NNPCl as
00:20:06a company. at concerning its
00:20:08independence, so the way to
00:20:12think about this is this, if you are investor and you sat in the
00:20:16new york stock exchange, the london stock exchange, and
00:20:20NNPC goes into IPO, his initial public
00:20:23offer, it is incredibly weakened from a governance
00:20:27standpoint, you look at the governance the company and you'd question it so
00:20:30much, why, because if an intervention can be made by the
00:20:34state, okay, into this organization, then "there's very little
00:20:38independence and governance system, I think this is the kind of thing now,
00:20:42unfortunately, if you IPO under these sort of
00:20:45circumstances, you will not be able to command top
00:20:48dollar, you'd struggle." to command top dollar because people would
00:20:52import some sort of risk onto any capital that they're going to put
00:20:56into this organization, so I think these are some the contradictions that
00:21:00we see, but if I just focus on Nigerians for a split second,
00:21:04this here provides huge, I'd say decent
00:21:07opportunity for ordinary Nigerians,
00:21:10$66ar per liter is you know
00:21:14decent but not far enough, which translates I think roughly to about
00:21:163,600 for a 50 liter container. for fuel,
00:21:20it's not um, you know, it's not massive, but I think it's a good start, what they need to do
00:21:24is to explore other ways uh that this can be deepen so that the
00:21:28cost of transportation can go much lower and translate to real
00:21:32uh sugar to lot of nigerians, we haven't
00:21:36seen the reflection of that prize yet, so we still wait to see it,
00:21:40even for that um know the soccer that you you said Nigerians actually
00:21:44need and
00:21:56still on energy, Nigeria's energy sector continues to grapple with the
00:21:59challenge of translating its vast natural
00:22:03resources into reliable and affordable energy
00:22:06supply. The 2026 Harvard Business School
00:22:10Association of Nigeria Energy Conference provides a
00:22:14platform for addressing one the country's longstanding economic
00:22:17challenges, the disconnect between oil and gas production,
00:22:21infrastructure and power
00:22:22delivery.
00:22:27Nigeria's energy challenge goes beyond the availability of natural
00:22:30resources with infrastructure gaps, poor revenue collection and
00:22:34distribution bottanex way in on the sector. These were among the
00:22:38issues highlighted at the 2026 Harvard Business School
00:22:41Association of Nigeria Energy Conference where industry leaders
00:22:45called for better integration across the oil and gas and power value
00:22:49changes.
00:22:50s not the result is an energy system in which abundant
00:22:54resources exist with supply constraints,
00:22:56infrastructureds and high cost for
00:23:00businesses and household. oil, gas
00:23:03and and power cannot continue to be
00:23:06viewed or managed in isolation, they are interconnected as one part of an
00:23:10energy ecosystem. the present before us is
00:23:13therefore, how
00:23:15it's to produce money, but how to integrate our resources, policies,
00:23:18infrastructure and capital. for
00:23:22industry leaders, addressing these challenges will require more than
00:23:26increasing production, would also mean improving the links between
00:23:29energy supply, in the world energy story,
00:23:33Nigeria's cars should not be food no, whether it comes
00:23:37in the main text, depends on something every engineer in
00:23:41this room understands, depends on the joints, the
00:23:45places where one part the system meets
00:23:49the next. In August,
00:23:53speaking
00:23:53of
00:24:00sentence, we are rich in gas or we are shot
00:24:04in energy, policy makers announce
00:24:07aggressive goals including the federal government's plan to completely
00:24:11clear legacy debts by 2027 while we
00:24:15structuring market design to optimize domestic gas
00:24:18utilization and power. generation in power
00:24:22sector today we're trying to fix the that end
00:24:25the problem which is the distribution, we have
00:24:2840%, if you don't
00:24:32meter how you
00:24:35get today, so this government in the last six months we deploy
00:24:38over 700, country, our plan is to
00:24:42deploy 7.5 million meters in the next
00:24:46to the
00:24:47years along
00:24:48the value chain what you will you generate
00:24:51u you will about
00:24:545ous and then you're able to distribute our
00:24:57400 and the reason why you are doing and out the
00:25:0040 you're able to distribute you collect maybe
00:25:0460% and that's what
00:25:06in
00:25:09the in the cumulated debt that we have to genes
00:25:12i want to tell you on behalf the president today that
00:25:16this date are stand with us annually?
00:25:22"We are going to have this impact every
00:25:25year. For Nigeria, the challenge is not
00:25:29only hernessing its energy resources, but ensuring the
00:25:33deliver reliable power and sustainable economic
00:25:36value.
00:25:41Away from energy now, let's see how the market fair last week, we saw
00:25:45second week of negative clues last week, the all share
00:25:49lost 0. 97% at
00:25:51248,363.55 equity
00:25:55cap closed at
00:25:56161.260
00:25:59trillion now activity uh for last we saw was
00:26:03mostly negative um at the close the week
00:26:07we had red volume or mostly positive volume
00:26:11was read but value and deals closed
00:26:14positive looking at the sectors for last
00:26:18week we saw um banking for instance lost
00:26:22a lot um 2.64%
00:26:26in the red consumer goods also down more than half a
00:26:29percent industrial goods slightly up
00:26:320.02% insurance 1.74%
00:26:36oil and gas 3.85% that was
00:26:39huge loss that we saw uh right
00:26:43there top gainers we
00:26:44had livestock feeds triple g
00:26:48and um guiney insurance they were the top
00:26:51gainers for last week the flip side we
00:26:54had um critical minerals a financial
00:26:58corporation plc abc transport and
00:27:02japon for goal dragging their sectors down at
00:27:05the close the week and of course that last week we did talk
00:27:09about uh top trades access zennith and united
00:27:13banks and and and we saw that um the
00:27:17non-release of some the audits financial audit is
00:27:21still feeding into sentiments in the
00:27:25market investors sentiments we saw um
00:27:28drag in uh investor sentiments going all out.
00:27:33right there now over the weekend uh we had
00:27:37good news from world bank for this administration uh
00:27:41the new updates on Nigeria's development and it
00:27:44has a pretty good news somebody said this is going to be a campaign
00:27:48line for uh the president bolatinu
00:27:51administration but let's
00:27:53look into it uh some of those things that wall bank has
00:27:57observed about Nigeria's
00:27:59economy and um the... men since this
00:28:03administration started, especially with the reforms, so I
00:28:07think top the list is the higher oil prices which the world
00:28:11is facing um, eminating from the conflict in the middle east,
00:28:15that has improved current account balance and fiscal
00:28:19revenues, but they note that it has also
00:28:22disrupted
00:28:23the this inflation trend um which the country
00:28:27had been uh observing from
00:28:312024. uh, but the world bank notes that
00:28:34the real GDP is up 4.2%
00:28:38in the first half of 2026, not slightly
00:28:41above the 4% average recorded between
00:28:442024 and 2025, driven largely
00:28:48by services, agricultural growth, uh, it
00:28:52picked up and then benefiting from rebound in
00:28:56lifestock and fisheries, while non-oil industry
00:28:59growth, though moderating slightly was supported
00:29:03by infrastructure investments and the world bank notes that
00:29:07inflation fell in 2025 from
00:29:1027.6% year on year to
00:29:1315.2% in December, supported by tight
00:29:17monetary policy, reduced exchange rate volatility, and
00:29:21since February 2026, headline inflation we see hoved around
00:29:2515.5%, and we know higher fuel prices and
00:29:29what's going on in the geopolitics, that's fed into that.
00:29:33lean season pushed prices up, the initial fuel price
00:29:37shock has begun to fade, core inflation resumed its decline, we saw
00:29:41that in the last inflation number, food inflation however remains
00:29:44elevated 19.6% august, that's
00:29:48upyear on year from 8.9% in January, another good
00:29:52news is in the country's current account uh there's a
00:29:55suppluss, it went up 12.0 billion
00:29:59dollars, that's about 7% uh of... the GDP in
00:30:03the first half of this year and that's up from
00:30:068.6% um 6.7%
00:30:09in the first half driven by higher oil export
00:30:13proceeds and lower imports and then the foreign
00:30:16exchange market that has remainedly low exchange rate
00:30:20volatility despite global risk reprising and they
00:30:24say that reforms have continued to broaden market participation and
00:30:28ease restriction on effects at the federal level um the
00:30:31world bank notes narrow that deficits narrowed from
00:30:355% of GDP in the first half of 2025 to 4% in
00:30:39the first half of this year supported by h federation revenue distributions,
00:30:43stronger federation, federal government,
00:30:47independent revenues and slow reported capital
00:30:50execution. moving to the state level, they note that higher
00:30:54federation transfer supported significant capital spending, public debt
00:30:57remains however moderate.