Headlines news for the day – First Ideas Limited

Headlines news for the day

Growing Fuel Queues in Nigeria; Why and Way Forward

 – In recent weeks, Nigerians have been facing a severe fuel crisis as we have observed long queues at several fuel stations across the country. Worsening shortages has triggered the re-emergence of the black market and allowed some retailers to sell Premium Motor Spirit (PMS), popularly known as “petrol”, above the approved price range set by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). Source United Capital Research Read More

Fuel Queues Grow Longer After FG Sufficiency Claim

– The queues for Premium Motor Spirit, popularly called petrol, grew longer on Thursday after the Federal Government’s claims that there was enough PMS in Nigeria that would last for 34 days. Source Punch Read More

Farouq Demands Minister’s Clarification of Budget Padding Allegation

 – The Minister of Humanitarian Affairs, Disaster Management and Social Development, Sadiya Farouq, has said that she had written to the Minister of Finance, Budget and National Planning for clarification on the N206billion slated for security weapons in her ministry’s 2023 budget. Source Punch Read More

 Dangote Cement 9M 2022 Result: Net Earnings Down as Finance Cost Rises by +590%

 Dangote Cement’s growth slowed in 2022 as its net earnings slipped by -17.16% from N405.48bn in 9M 2021 to N335.9bn in 9M 2022. The cement producer experienced declining sales and production volume due to inflationary pressure, energy supply disruption, and plant maintenance in specific regions. Source Proshare Research Read More

Lafarge Cement 9M 2022 Result: Revenue Rises as Finance Costs Dip -46%

 Lafarge Africa’s 9M 2022 result showed strong top and bottom-line growth. The increases resulted from higher product prices and a -46.01% decline in finance costs. The group’s return on equity (ROE) and return on assets (ROA) rose to 0.48 and 0.66, respectively. Source Proshare Research Read More

CBN Publishes Financial Markets Department H1 2022 Activity Report

 – The growth signals in the global economy witnessed a shock in the first half of 2022, occasioned by the effects of the Russia-Ukraine crisis that broke out, with huge negative impacts: rising energy and commodity prices, supply chain disruptions, geo-political tensions and weak global growth prospects, among others. Source CBN Read More

CEO Remuneration 2022: Introduction to Top Earners by Industries

– This section seeks to provide a succinct overview of the relationship between the performances of various industries within the Nigerian economy for the year 2021, and the remunerations received by the Chief Executive Officers (CEO) of the listed companies underneath each sector. Source Proshare Research Read More

World Bank Chief Says Poorest Countries Owe $62 bln on Bilateral Debt

 The world’s poorest countries now owe $62 billion in annual debt service to official bilateral creditors, an increase of 35% over the past year, World Bank President David Malpass said on Thursday, warning that the increased burden is increasing the risk of defaults. Source Reuters Read More

AMCON Liabilities hit N5.7tn – CBN Report

 – Asset Management Corporation of Nigeria’s liabilities stood at N5.72tn as of the end of the first half of 2022. The Financial Markets Department of the Central Bank of Nigeria disclosed this in its ‘Half-year activity report 2022’ released on Thursday. Source Punch Read More

CoinW Unites with Regional Partners in Abuja

 – On the 19th of November, 2022, The World’s Leading Cryptocurrency Exchange and Asset Trading Platform, CoinW, organized a VIP Day event for regional partners, in the capital city of Abuja, Nigeria, to onboard new partners, and leverage the Nigerian market, providing users in the country to be part of the CoinW business and vision. Source CoinW Read More

Investing in Resilient Internet Will Enhance Inclusive, Sustainable Growth in Africa

 African countries have been urged to invest in building resilient internet infrastructure to tap digital opportunities and accelerate social and economic transformation on the continent. Source United Nations Economic Commission for Africa Read More

NDPB Extends Deadline on Designation of DPOs by MDA to January 2023

 – The Office of the Head of the Civil Service of the Federation under Dr. Folasade Yemi-Esan has issued a Guideline on Personal Information Technology Devices (PITeD) Provision and Usage in Ministries, Departments and Agencies (MDAs). Source TechEconomy Read More

Nigeria’s Booming Short-term Insurance Market

– Insurance has taken root in Nigeria. With awareness and trust in the concept of cover driven by a combination of legislation, market competition and technology, Nigeria’s Insurance sector is, today, a N500 billion industry. Source Coronation Insurance Read More

FIRS Grants Waiver on Outstanding Interests, Penalties Imposed by TaxPro Ma

– The Federal Inland Revenue Service (FIRS) says it has approved a one-off waiver of all outstanding interests and penalties imposed on established tax liabilities by the TaxPro Max until December 31, 2022. Source TheCable Read More


Ecobank Transnational Incorporated Plc Declares N117.41bn PAT in Q3’22 Results, (SP: N10.10k)

Ecobank Transnational Incorporated Plc released its Q3 2022 Unaudited results for the period ended September 30th, 2022.

Key Highlights

  • Gross Revenue grew by 10.8% from N686.77bn to N761.28bn.
  • Profit before tax stood at N168.69bn
  • Profit after tax stood at N117.41bn
  • Share Price Currently Stands at N10.10k


GCR Assigns First-time National Scale Ratings of BBB(NG) / A3(NG) to Edo State Government of Nigeria, Supported by its Moderately Diversified Economy; Outlook Stable


GCR Ratings (“GCR”) has assigned national scale long-term and short-term Issuer ratings of BBB(NG) and A3(NG) respectively to Edo State Government of Nigeria, with the Outlook accorded as Stable.

Rated Entity / Issue Rating class Rating scale Rating Outlook/Watch
Edo State Government of Nigeria Long Term Issuer National BBB(NG) Stable Outlook
Short Term Issuer N

Rating Rationale

The ratings reflect Edo State Government of Nigeria’s (“Edo State” or “the State”) moderately diversified economy and improved operating performance, with strong agricultural base. These rating strengths are, however, counterbalanced by the State’s continued dependence on federal transfers and its elevated debt.

Edo State is both an oil producing and agrarian state, but agriculture remains the mainstay of its economy. In agriculture, the State is one of the largest palm oil producers, with the presence of listed edible oil producing companies in Nigeria, while its crude oil production accounts for only 2.06% of the nation’s total production. Other notable industrial activities in the State include food processing, brewing, and cement manufacturing. All these have supported a moderately diversified economy with low unemployment rate and relatively educated workforces. The State is scaling up public/private partnerships to benefit from its agricultural strengths, providing the facilities necessary for further value addition, while also committing to clearing infrastructural backlog to attract more investments and further diversify its economy.

The State has evidenced steady growth in internally generated revenue (“IGR”) over the years, except in FY20 due to the COVID-19 disruptions. Edo State ranks among the top-10 States in Nigeria by IGR, supported by the improvement in its tax receipts which grew by 25% in FY21 and 3Q FY22 respectively, on an annualised basis. Nevertheless, the State (like most Nigerian states) remains exposed to macro-economic shocks and the vagaries in the Nigeria oil flows and global oil market due to its reliance on federal transfers, which accounts for about 70% of its total recurrent income over the review period. GCR expects growth in recurrent income to be dependent on IGR and VAT inflows over the rating horizon, considering the constrained fiscal position of the federal government.

Recurrent expenditure has been well managed over the review period, accounting for 48.8% of total recurring income as of 3Q FY22 (FY21: 53.7%), from 60.7% in FY20. The State has demonstrated controls over staff costs, which has historically accounted for below 31% of total expenses (also below GCR’s prudential limit of 33%) despite the implementation of the new minimum wage. This has supported robust capital expenditure of about N152bn over the last twenty-one (21) months to September 2022. GCR expects the State to continue to maintain a healthy consumptive expenditure, which should support a stronger capex implementation in the future.

Leverage and capital structure are key rating constraints. Edo State has reported high debt levels over the review period, with gross debt rising steadily to N208bn at 3Q FY22, from N141.8bn at FY19, largely utilised to finance capex implementation. Accordingly, key credit protection metrics have deteriorated, with net debt to recurrent income registering at high level of 154% at 3Q FY22 (FY19: 121.7%), whilst operating cash flow (“OCF”) to gross debt fell to 26.8% (FY19: 43%) and OCF coverage of net interest dipped to 3.9x (FY19: 11.8x). An additional rating concern is the quantum of its foreign currency loans, registering around 54% of total debt at end-September 2022, given the downside risk to the naira exchange rate. Positively, most debt is on concessionary terms, characterised by low interest rates and long maturities, thus reducing much of refinancing risk. However, the State, through a special purpose vehicle, is planning to raise additional debt of up-to-N25bn to finance some selected infrastructure projects. The debt will constitute contingent liability of Edo State, and the payment obligations secured by irrevocable standing payment order charged on the State’s statutory allocations, exerting pressure on future federal transfers. Over the rating horizon, GCR expects the metrics to trend around the FY21 level, as the uptick in the IGR balances the additional borrowings.

The State has demonstrated moderate liquidity coverage over the years, supported by its adequate operating cash flow and strong relationships with both local and international lenders, which has enabled solid access to diverse funding sources. The State has maintained a modest cash holding over the review period, supporting days cash coverage of recurrent expenses around 50 days. While the pressure on cash is expected to continue over the rating horizon, the exposure to liquidity events should remain moderate. GCR expects sources vs uses coverage to be around 1x over the outlook period.

GCR has factored government support into the ratings as the State benefits from ongoing funding support from the Federal Government of Nigeria through steady federal allocations, bailout, and palliatives where necessary. This is because the State fulfils a critical social service, being at the forefront of improving the day-to-day quality of life for the citizens. The federal allocation is a monthly statutory transfer due to the States, payable by the federation accounts allocation committee. However, this monthly transfer is largely susceptible to the vagaries at the international oil market and the Nigeria oil flows.

Outlook Statement

The Stable Outlook reflects GCR’s view that Edo State’s income will continue to rise over the outlook period, helping to sustain debt service metrics and moderate liquidity position.

Rating Triggers

A positive rating movement is contingent on sustained growth in IGR which reduces dependence on federal transfer to 50%, supports capex implementation and translates to improvement in leverage metrics.

A rating downgrade could emanate from 1) a material growth in debt without proportionate growth in revenue, resulting in further deterioration of the leverage metrics; 2) a significant increase in recurrent expenses which constrains CAPEX implementation; 3) a deterioration in liquidity profile.

Ratings History

Edo State Government of Nigeria

Rating class Review Rating scale Rating Outlook/Watch Date
Long Term Issuer Initial/Last National BBB(NG) Stable Outlook December 2022
Short Term Issuer Initial/Last National A3(NG)

Risk Score Summary

Rating Components and Factors Risk scores
Operating environment 6.75
Double Country risk score 7.50
Sector risk adjustment (0.75)
Business Profile 0.75
LRG profile 0.75
Operating performance 0.00
Management and governance 0.00
Financial profile (2.25)
Leverage & capital structure (2.00)
Liquidity (0.25)
Comparative profile 1.50
Government support 1.50
Peer comparison 0.00
Total Risk Score 6.75

Salient Points of Accorded Ratings

GCR affirms that a.) no part of the ratings process was influenced by any other business activities of the credit rating agency; b.) the ratings were based solely on the merits of the rated entity, security or financial instrument being rated; and c.) such ratings were an independent evaluation of the risks and merits of the rated entity, security or financial instrument.

The credit ratings have been disclosed to Edo State Government. The ratings above were solicited by, or on behalf of, the rated entity, and therefore, GCR has been compensated for the provision of the ratings.

Edo State Government participated in the rating process via teleconferencing and other written correspondence. Furthermore, the quality of information received was considered adequate and has been independently verified where possible. The information received from Edo State Government and other reliable third parties to accord the credit ratings included:

  • Edo State Government Audited Financial results for 2016 to 2021.
  • Edo State Government’s Auditor General Reports 2021
  • Budget performance report (Summary) as of September 2022
  • Multi-years approved budget 2022-2024
  • Debt facility details as of 30 September 2022


About the Author


First Ideas Limited is an investment and financial advisory company established in 1994 to provide advisory services to high net worth individuals, trust funds, financial institutions and medium sized companies in growth sectors.

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