Business
Russian shares fall rapidly after U.S. sanction
MOSCOW – On Friday, Russian shares fell sharply as investors took fright at tougher than expected U.S. sanctions against President Vladimir Putin’s inner circle over Moscow’s seizure of Crimea from Ukraine.
The United States added 20 names to its sanctions blacklist, including Kremlin banker Yuri Kovalchuk and his Bank Rossiya, oil and commodities trader Gennady Timchenko and the brothers Arkady and Boris Rotenberg, who are linked to big contracts on gas pipelines and the Sochi Olympics, as well as Putin’s chief of staff and his deputy, the head of military intelligence and a railways chief.
In one immediate consequence, U.S. credit card companies Visa and MasterCard stopped providing services for payment transactions with Russia’s SMP bank, owned by the Rotenberg brothers, the bank said.
President Barack Obama said Washington was also considering sanctions against key economic sectors including financial services, oil and gas, metals and mining and the defense industry, if Russia made military moves into eastern and southern Ukraine.
Diplomats said the mere mention of such a possibility would chill investment in Russia, charging an immediate price for Moscow’s action in Crimea and serving as a potential deterrent to going further.
The EU also extended its personal sanctions to another 12 middle-ranking Russian and Crimean officials.
Though the MICEX share index lurched about 3 percent lower when trade opened, Putin mocked Obama’s announcement of the visa bans and asset freezes on the money men and security officials who accompanied his rise from the mayor’s office in Saint Petersburg in the 1990s.
But he said Moscow should refrain from further retaliation against the United States for now.
Prime Minister Dmitry Medvedev, however, made clear that Russia would step up financial pressure on Ukraine.
He said the former Soviet republic should repay Moscow $11 billion under a gas supply contact that should be scrapped because it no longer applied.
Medvedev said the Kharkiv agreements under which Russia was to provide cheap gas in return for the lease of the Sevastopol naval base in Crimea were “subject to denunciation”, giving Russia a legal right to sue for money back from Ukraine.
Altogether, Kiev owed Moscow $16 billion, he added.
EU LEADERS MEETING
Russia’s parliament rushed to complete ratification of the annexation of the Black Sea region while European Union leaders met in Brussels to discuss steps to reduce their long-term dependence on Russian energy.
The Federation Council upper house approved a treaty on Friday incorporating Crimea into Russia after the State Duma lower house did so a day earlier.
The 28 EU leaders underlined their support for Ukraine’s new leadership, rejected as illegitimate by Moscow, by signing a political agreement with interim Prime Minister Arseniy Yatseniuk and promising financial aid as soon as Kiev reaches a deal with the International Monetary Fund.
The signing “recognizes the aspirations of the people of Ukraine to live in a country governed by values, by democracy and the rule of law, where all citizens have a stake in national prosperity,” European Council President Van Rompuy said at the ceremony. The accord contained no offer of EU membership.
The IMF is to report next Tuesday on advanced talks with Ukraine on a major loan program that would be linked to far-reaching reforms of the former Soviet republic’s shattered economy.
Polish Prime Minister Donald Tusk said the EU leaders were discussing using their collective bargaining power to stop Russia playing off European countries against each other in gas contacts. Up to now, each EU state has negotiated its own deal with Moscow, and some refuse even to share contract details with the European Commission or EU partners.
“We are working hard to make at least one step forward in the area of making community purchases of energy,” Tusk told reporters on arrival for the second day of an EU summit.
“In fact it is all about making the EU stronger as a whole versus energy exporters, so that we have a bigger bargaining power, so that we can act more as a community. In simple terms, it is about common purchases of energy.”
TUG OF WAR
An East-West tug-of-war has mounted since Russia occupied Crimea, home to its Black Sea fleet and a majority of ethnic Russians, following the overthrow of pro-Russian Ukrainian President Viktor Yanukovich by street protests last month.
Three months of protests were triggered by Yanukovich’s refusal to sign an association agreement with the EU, the political part of which was signed on Friday.
The EU leaders agreed to impose asset freezes and visa bans on 12 more mid-ranking Russian and Crimean officials and to consider wider economic sanctions if Russia further destabilizes the situation in Ukraine.
But they said Europe did not have a legal basis to extend the personal sanctions against Putin associates without proof of their direct involvement in the violation of Ukrainian sovereignty.
“Small measures in the EU are worth more than big measures in the United States,” a senior European official said, noting that EU trade with Moscow was 10 times the U.S. volume.
“It’s about cutting off Russia politically and diplomatically,” the official said, dismissing criticism that EU sanctions looked weaker than the U.S. measures.
Russian Deputy Finance Minister Alexei Moiseev said he expected no big immediate impact from western sanctions on Russia’s financial sector.
He also criticized the downgrading of Russia’s credit outlook by leading ratings agencies, saying there was no basis for the move. On Thursday, S&P and Fitch revised to ‘negative’ from ‘stable’ their long-term outlooks on Russia’s debt.
“Our creditworthiness has not changed, of course. We’re going to have a budget this year that will be better than expected,” Moiseev said.
In one glimmer of diplomatic progress, Russian Foreign Minister Sergei Lavrov said an agreement was near on sending a monitoring mission by the pan-European OSCE security watchdog. The EU had threatened to send its own monitors if Moscow continued to block a mandate at the Organisation for Security and Cooperation in Europe.
– REUTERS
Nigeria’s economic fortune is benefiting from the Middle East crisis, as the impact of capital inflows from stronger crude oil earnings has seen her foreign reserves climb to record $53.1 billion, beating the $51.04 billion year-end target.
Data available on the Central Bank of Nigeria’s (CBN) website indicated that the reserves closed at $53.1 billion on August 24, which is the highest level in almost 18 years.
Any analyses of the growth shows that the difference in reserves position places the Nigerian economy in good stead, because it can cover over 12 months import.
It is noteworthy that Nigeria’s external reserves fuel the CBN’s capacity to support the local currency and meet external obligations, have continued to rise steadily, since the face-off between the United States and Iran.
Further analysis of the data displayed by the CBN showed that the liquid portion of the external reserves stood at $52.5 billion.
Biztellers reports that Brent crude traded around $87 per barrel, within the week, well above Nigeria’s 2026 federal budget benchmark of $64.85.
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With the Middle East crisis not showing signs of abating, analysts believe the price rebound would largely bolster Nigeria’s fiscal revenues.
The line of thought is popular among those who know, because as a crude oil exporter, Nigeria will continue to earn more petrodollars, which they argue would support the domestic currency – naira’s stability, while pumping the volume of external reserves.
In its economic projections for 2026, the CBN targeted stronger oil earnings, foreign exchange market reforms and improved external capital inflows to achieve the year-end reserves projection.
According to analysts, the current reserves position reinforces the steady growth in Nigeria’s external buffers.
The founder/Chief Executive Officer of the Centre for the Promotion of Public Enterprise (CPPE), Dr Muda Yusuf, earlier hinted at a positive outlook for Nigeria’s external reserves as he does not see anything derailing the forex and fiscal reforms that have brought about stability and improvement in external reserves, as reported by The Nation.
Yusuf said: “Well, the outlook for me is positive because I don’t see anything derailing these forex reforms, fuel subsidy etc. It is these reforms that have brought about stability.”
The CBN data further showed that Nigeria’s external reserves have maintained a steady upward surge in recent months.
The reserves started June at $49.80 billion and crossed the $50 billion mark by June 5, reaching $50.12 billion.
On June 15, reserves had increased further to $50.81 billion before rising to the current position. The reserves stood at $51.9 billion on July 31, and continued.
The sustained increase reflects stronger foreign exchange inflows and improved liquidity conditions in the country’s external sector.
The CBN Governor, Olayemi Cardoso, said: “This strong buffer continues to reinforce investor confidence in the Nigerian economy and support exchange rate stability.”
The CBN’s decision to clear over $7 billion unsettled FX backlogs raised investors’ confidence in the economy, supporting dollar inflows and foreign reserves accretion, Cardoso added.
The CBN boss had explained that although he had no idea where the fund for the backlog clearance would come from, when he assumed office, he believed it was the right thing to do, and gave investors his word.
He said: “Credibility is at the heart of any central bank. If you don’t have credibility, people do not trust you and they do not invest in your economy. When I took office, I made a promise we would pay the backlog, the verifiable backlog of monies that were owed by Nigeria to third parties.
“And it was, at the time, estimated at over $7 billion US dollars. And to be honest with you, I had no idea how I was going to do it, but I just felt it was not something to be negotiated.”
Cardoso explained that Nigeria needed to ensure that its integrity is maintained. Analysts believe the higher reserve level could enhance the CBN’s capacity to support exchange rate stability and meet external obligations.
Up to 30% equity in the upcoming Dangote Refinery in Kenya, has been placed on the table for East African countries, which makes about $1.5 billion worth of the planned project available to regional investors.
David Ndii, Kenyan President William Ruto’s economic adviser, disclosed this on Thursday at a capital markets forum in Nairobi, where he said Kenya would take a 10% stake while Ethiopia and Rwanda had also expressed interest.
Dangote’s planned refinery is expected to be developed in Lamu, a coastal town in southeastern Kenya, though the project was initially proposed for Tanga in Tanzania.
According to the billionaire industrialist, the decision to move the proposed location to Kenya was informed by commercial and technical considerations.
Ndii disclosed that Kenya’s proposed 10% participation would be worth approximately $500 million.
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He said the combined regional participation could amount to about $1.5 billion, with Dangote prepared to support the project if some participating countries are unable to commit as crude off-takers.
“The total for the region is about $1.5 billion,” he said. “I don’t actually see a challenge in doing that, and if some of them are not off-taking we will backstop.”
The proposed regional participation would give East African countries a direct equity interest in a major energy infrastructure project while potentially securing access to refined petroleum products for participating markets.
The United Nations Geoscheme (UNG) for Africa defines Eastern Africa as comprising 18 sovereign countries, alongside two French overseas territories, meaning the proposed 30% allocation could potentially involve a broader regional investor base beyond Kenya, Ethiopia and Rwanda.
The Nigerian authorities have been called upon to focus on strengthening domestic refining capacity.
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) made the call in a communiqué issued at the end of the three-day PENGASSAN Energy and Labour Summit (PEALS 2026).
It stressed the need for adequate protection for refineries operating in the country.
The PENGASSAN said Nigeria must reduce the economic inefficiency of exporting crude oil while importing significant volumes of refined petroleum products by creating an environment that supports domestic refining and other value‑adding activities.
The communiqué, signed by the union President, Festus Osifo, and General Secretary, Jerry Amah, stressed the need to protect refineries, including Dangote Refinery and Waltersmith Refinery.
The association said the expansion would enable Nigeria to retain a greater share of the value generated from its petroleum resources while creating jobs, conserving foreign exchange and stimulating industrial development. PENGASSAN linked the growth to wider opportunities in petrochemicals, gas processing and other downstream activities.
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The communiqué reads in part: “The summit called for sustained policies and investments to expand Nigeria’s domestic refining capacity and reduce the economic inefficiency of exporting crude oil while importing significant volumes of refined petroleum products. The need to protect refineries (such as Dangote Refinery, Waltersmith Refinery, etc.) within Nigeria’s jurisdiction was emphasised.
“Nigeria must progressively retain more value from its petroleum resources through domestic refining, petrochemicals, gas processing and other value‑adding activities capable of generating employment, conserving foreign exchange and stimulating industrial growth.
“Ultimately, the strength of Nigeria’s oil and gas industry will not be measured merely by the resources beneath the ground, but by the projects delivered, the value created, the Nigerian capabilities developed, the decent jobs sustained and the prosperity generated for the Nigerian people.”
The association also warned that abrupt policy changes, overlapping mandates, repetitive approvals and conflicting directives increase the cost of doing business and weaken Nigeria’s competitiveness for global energy capital.
The PENGASSAN called for faster regulatory approvals, digitalised processes and clearer timelines, arguing that the effectiveness of regulation should be measured by its impact on investment, production, government revenue, job creation and national value rather than simply by the number of licences or approvals issued.
On gas, the PENGASSAN advocated an integrated approach to developing Nigeria’s more than 215 trillion cubic feet of proven reserves, including investments in processing facilities, pipelines, storage, LNG, LPG and CNG infrastructure. It said gas should be deployed more aggressively for power generation, manufacturing, transportation, fertiliser and petrochemical production.
The association also urged stronger protection of workers’ rights, occupational safety and employment during mergers, acquisitions, divestments and asset transfers, saying sustainable investment requires skilled and fairly treated workers and that increased production must not come at the expense of workers’ lives and wellbeing.
In addition, the PENGASSAN said the next phase of Nigeria’s petroleum industry must focus on execution with measurable targets and clearly assigned responsibilities to ensure policies translate into projects, production, investment and sustainable employment.
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