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IMF concludes Mission to Malawi

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LILONGWE – A team from the International Monetary Fund (IMF), led by Mr. Tsidi Tsikata, visited Lilongwe and Blantyre from March 18 to April 3, 2014 to conduct discussions for the fifth review under Malawi’s Extended Credit Facility (ECF) arrangement.

The mission held discussions with Finance Minister Maxwell Mkwezalamba, Reserve Bank of Malawi (RBM) Governor Charles Chuka, Deputy Finance Minister Cornelius Mwalwanda, Secretary to the Treasury Newby Kumwembe, Attorney General Anthony Kamanga, other senior government and RBM officials, a broad range of national stakeholders outside government, as well as representatives of Malawi’s development partners. The mission expresses its gratitude for the constructive spirit in which all its discussions were held.

At the end of the mission, Mr. Tsikata issued the following statement:

“Since our last visit in November 2013, policy implementation has taken place in a difficult environment with mixed results. Against the backdrop of the suspension of substantial external assistance due to the “cashgate” scandal, fiscal policy has been appropriately restrained and has contributed to stabilizing the exchange rate. However, the resulting expenditure compression has taken a heavy toll on the delivery of public services.

“Overall fiscal conditions will remain tight for the remainder of the fiscal year 2013/14, but strong revenue performance and the release of some external financing will allow some relaxation of the stringent constraints observed over the past two quarters.

“In discussing the fiscal outlook, the mission urged the authorities to be mindful of fiscal risks associated with potential contingent liabilities arising from the operations of state owned enterprises, including the Agricultural Development and Marketing Corporation (ADMARC), the National Food Reserve Agency NFRA, the Malawi Rural Development Fund (MARDEF) and the National Oil Company of Malawi (NOCMA).

“The authorities have made progress in addressing governance and public financial management (PFM) weaknesses, including through implementing the government’s Action Plan. Going forward, it will be important to adapt the Action Plan into a strategic and comprehensive PFM reform program, including by reflecting the findings and recommendations of the preliminary forensic audit report government received in February 2014.

“The mission welcomes the accumulation of international reserves by the RBM and its plans to further boost the level of reserves during this year’s tobacco season in order to provide the economy with a buffer against exogenous shocks. This will also allow the RBM to effectively intervene in the foreign exchange market to manage excessive volatility in the exchange rate arising from the highly season pattern of private foreign exchange inflows.

“Inflation remains high at nearly 25 percent, with the disinflation process complicated by the expansion of liquidity associated with RBM purchases of foreign exchange. The mission therefore recommends that the RBM tighten monetary policy more aggressively.

“Performance in relation to the targets and benchmarks for the fifth review was mixed. Most of the quantitative targets for end-December 2013 were met, including the target on net international reserves and net domestic borrowing by the government. However, the targets on the net domestic assets of RBM and on reserve money were missed by significant margins. The pace of implementation of structural benchmarks was slower than programmed, but almost all are now near completion.

“The mission and the authorities reached understandings on the broad parameters of the budget for the fiscal year 2014/15. Discussions will continue in the coming weeks to firm up the framework that will be presented to cabinet. Since the budget will be submitted to parliament by the government that will be formed after the May 20 elections, the mission proposes to return to Lilongwe in June to confirm the understanding reached during this mission, before it submits its report to IMF management and the Executive Board. Completion of the review would enable Malawi to receive a disbursement of SDR 13 million (about US$20 million) from the IMF.”

The Extended Credit Facility (ECF) has replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s main tool for medium-term financial support to low-income countries by providing a higher level of access to financing, more concessional terms, enhanced flexibility in program design features, and more focused streamlined conditionality. Financing under the ECF currently carries a zero interest rate, with a grace period of 5½ years, and a final maturity of 10 years. The Fund reviews the level of interest rates for all concessional facilities every two years.

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Marketers Eye Portion of FG’s Petrol Discount

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The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has urged the Federal Government to add its member-stations to the petrol discount programme.

It cautioned that the current arrangement could limit the reach and deny vast consumers in underserved communities the benefits of the 30-day discount window.

The PETROAN also urged the FG to allocate at least 30 percent of the discounted petrol volume to outlets operated by its members.

READ ALSO: Tanzania Nears Completion of $42bn Equinor, Shell-Led LNG Project

The calls followed last week’s announcement by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, of a petrol discount at Nigerian National Petroleum Company Limited (NNPC Ltd) retail outlets, with priority given to public transport operators nationwide.

According to the National Publicity Secretary, Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, the exclusion of independent marketers could undermine the programme’s effectiveness, particularly in communities where NNPC retail outlets have limited presence.

He argued that independent marketers, with their extensive nationwide distribution networks, were better positioned to extend the benefits of the intervention to consumers in remote and underserved areas.

“Independent oil marketers have over 90 percent coverage and presence in the nooks and crannies of this country. You are giving NNPC that is situated only in the town. So how do the poor masses, whom you intend to ensure that this petroleum product will alleviate their sufferings, how would they now get it?” Ukadike asked.

He said the association was not opposed to the government’s policy but insisted that independent marketers should be included to ensure wider access to the discounted product.

“But it’s government policies; we are not against government policies, but let it be all-inclusive; let independent marketers be part of it,” he said.

Ukadike also urged the government to extend the discount period to 60 days, citing logistical challenges that could delay the movement of petrol from coastal depots to other parts of the country.

“And the 30 days should be extended to 60 days. Because of the circulation of petroleum products, most times it takes two weeks for a truck to leave Apapa and get to Gombe, Maiduguri, because of the bad road and all the rest of them and loading process,” he added.

Similarly, PETROAN National President, Billy Gillis-Harry, urged the Federal Government to allocate 30 per cent of the discounted petrol volume to the association’s retail outlets to facilitate broader national distribution.

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Tanzania Nears Completion of $42bn Equinor, Shell-Led LNG Project

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In the bid to transform Tanzania into the East African regional energy hub, the country is on the verge of concluding an agreement with a consortium of energy companies, including a $42 billion LNG project.

It was gathered that the project is designed to tap the 47.13 tcf of gas discovered in Tanzania’s deep offshore fields, part of the country’s estimated 57.54 tcf in total discovered reserves, the sixth-largest in Africa, behind Nigeria, Algeria, Senegal, Mozambique and Egypt.

READ ALSO: Shell Identifies Keys to Nigeria’s Energy Future

Equinor and Shell would be the lead operators, alongside involvement from ExxonMobil Pavilion Energy and Medco Energi, while state oil major, the Tanzania Petroleum Development Corporation (TPDC), would also hold an equity stake in the project.

“It’s almost there,” Khamis Mussa Omar, Tanzania’s finance minister, told Reuters.

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Small Investors Take Centre Stage as Dangote IPO Nears Close

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President of Dangote Group, Aliko Dangote, has reaffirmed his commitment to ensuring broad-based participation in the Dangote Refinery’s Initial Public Offering (IPO).

In a statement, the industrialist announced that investors applying with ₦50,000 and below will receive priority consideration as the company seeks to democratize ownership of one of Africa’s most significant industrial assets.

Dangote made the declaration during the final leg of the nationwide IPO roadshow held in Port Harcourt, Rivers State, where investors, financial market experts, business leaders and other stakeholders gathered to discuss the investment opportunity and its implications for Nigeria’s economic transformation.

READ ALSO: Sahara Champions Global Shipping Collaboration for $20m Mercy Ships Healthcare Impact

Speaking at the event, Dangote emphasised that the IPO should be viewed not merely as an investment opportunity, but as a chance for Nigerians to become shareholders in a landmark enterprise that is reshaping the country’s industrial landscape.

“We will prioritise people with ₦50,000 and below,” Dangote stated, underscoring the Group’s determination to make the offering accessible to small and medium-scale investors across the country.

He noted that while international and African investors had already committed substantial capital to the refinery, the IPO now offers Nigerians a rare opportunity to participate directly in the ownership of a world-class industrial project built on Nigerian soil.

According to him, investing in the refinery goes beyond financial returns, representing a vote of confidence in Nigeria’s future, institutional development, corporate governance standards and industrial capacity.

“African investors have invested in this refinery. Now it is time for Nigerians to invest in themselves and participate in a project that is creating value, jobs and opportunities for generations to come,” he said.

Dangote also encouraged prospective shareholders to adopt a long-term investment perspective, noting that participation in the IPO presents a pathway to wealth creation, portfolio diversification and increased public engagement with the capital market.

He added that wider participation in the stock market would deepen financial literacy, promote a savings and investment culture, and enable more Nigerians to better understand how businesses create value and contribute to economic growth.

The roadshow also featured insightful presentations from leading economists and market analysts on the refinery’s economic significance and the broader opportunities associated with the public offering.
Renowned economist Bismarck Rewane highlighted the enormous economic potential of the South-South region and stressed the need to convert the area’s resource endowment into sustainable prosperity, infrastructure development and improved living standards. He also noted that the IPO presents an opportunity to deepen Nigeria’s capital market by encouraging citizens to participate actively in wealth creation.

Similarly, economist Dr. Muda Yusuf outlined the refinery’s far-reaching impact on economic diversification, domestic value addition, energy security, capital formation and employment generation.

According to Yusuf, the refinery represents far more than a petroleum-processing facility, serving as a catalyst for growth across multiple sectors including petrochemicals, packaging, manufacturing, logistics and other downstream industries.

He further emphasized that policy consistency, regulatory stability and sustained stakeholder engagement remain critical to maintaining investor confidence and attracting long-term capital into Nigeria’s industrial sector.

Speaking on the investment outlook, stakeholders urged prospective investors to consider the company’s operational performance, valuation metrics and long-term fundamentals when evaluating the offer.

Yusuf also described the refinery as a major example of domestic value addition, noting that its extensive local content and industrial linkages would significantly amplify its contribution to the Nigerian economy.

Discussions at the event further highlighted the importance of sound monetary policy, affordable financing and a predictable business environment in supporting investment-led growth and industrial expansion.

The Port Harcourt engagement was particularly significant for the South-South region, with legal luminary and business leader Paul Usoro expressing satisfaction at the level of participation from investors across the region.

“My joy is to see the South-South well represented,” Usoro said, stressing the importance of ensuring that investors from the region take advantage of the opportunity presented by the IPO.

The Port Harcourt event marked the final stop of the nationwide IPO roadshow, concluding a series of engagements designed to deepen public awareness and expand participation in what is widely regarded as one of the most significant capital market offerings in Nigeria’s history.

For Dangote Group, the objective remains clear: to provide Nigerians from all backgrounds with an opportunity to participate in the ownership of a transformative industrial enterprise while contributing to economic growth, employment generation and national development.

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