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Nigerian banking sector attracts $15.7 billion foreign investments in 5 years



The Nigerian banking sector is one of the viable destinations for foreign investors in the country as it attracted over $15.7 billion in foreign investments in the past 5 years, representing one of the most attractive sectors in the Nigerian economy.

This is based on analysis carried out by Nairalytics, the research arm of Nairametrics from data obtained from the Central Bank of Nigeria (CBN).

According to the data, Nigeria recorded $68.87 billion in foreign inflows between 2017 and 2021, with the banking sector accounting for over 22.8% of the total capital imported, which was only bested by the local equities market.

The Nigerian banking sector has been growing in leaps and bounds over the years, with several tech start-ups springing up in the space. A number of these firms have raised significant amounts since they launched operations in the country while some have hit unicorn status (valued above $1 billion).

The emergence of financial technology firms in the country, all competing for market share while disrupting conventional banking methods has increased the level of activities as investors have come to identify the sector as a profitable one.

A further look at the breakdown of Nigeria’s gross domestic product shows that the financial sector has also expanded all through the five-year period under review. Notably, the sector grew by 10.53% in real terms in 2020, which is lower than the 13.34% annual growth recorded in the previous year.

However, the growth recorded in the past two years, outweigh the preceding years. For example, the banking sector recorded real GDP growth of 2.4%, 1.41%, and 1.92% in 2019, 2018, and 2017 respectively. This shows that the sector traction grew significantly in the last two years.

Fintech startups with notable fundraise

A brief glance at the Nairametrics deals book tracker, which collates deals consumed by Nigerian companies across various sectors, shows worth noting deals by Nigerian financial technology firms.

  • In August 2021, Nigerian fintech firm, Opay raised a sum of $400 million in a financing round led by SoftBank Vision Fund 2, which valued the company at $2 billion. The fund raised in 2021 is following a $120 million Series B raised in 2019.
  • Earlier in the year, African-focused payment company, Flutterwave, announced the close of a $170 million Series C round, which raised the company’s valuation to $1 billion and saw it achieve unicorn status.
  • In the same year, Nigerian fintech startup, FairMoney also $42 million from a Series B round led by US hedge funds and Investment firm, Tiger Global.
  • Amongst others on the list of fintechs that have raised notable funding from foreign companies and investors in the past five years include, Chipper Cash, Mono, Joovlin, Sendbox, TeamApt etc.

Top 10 sectors with the highest foreign inflow

In the past five years, between 2017 and 2021, Nigeria received a sum of $68.87 billion as capital inflows (FDI, FPI, and loans). However, the shares sector accounts for a large chunk of these inflows, with $23.37 billion, representing 33.9% of the total fund.

This is not out of the ordinary, as foreign investors often time go to the Nigerian equities market and other mutual funds to invest.

According to the NGX domestic and foreign portfolio investment report as of February 2022, foreign investments in the local equities market accounted for 24.75% of the total transactions, with a sum of N38.96 billion recorded as foreign inflows between January and February 2022.

The banking sector followed on the list with $15.74 billion, financing with $11.09 billion, while the manufacturing sector received $4.52 billion in foreign inflows in the period under review.

Bubbling under

  • Servicing – $3.37 billion
  • Hotels – $3.36 billion
  • Telecommunications – $2.69 billion
  • Trade – $1.59 billion
  • Agriculture – $1.36 billion
  • Oil & gas – $668.7 million

Source : Samuel

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Ethiopia defaults on $33 Million bond payment



Ethiopia officially entered default territory on Tuesday, becoming Africa’s third nation to do so within a span of three years. The failure to make a $33 million « coupon » payment on its sole international government bond underscores the country’s severe financial challenges exacerbated by the COVID-19 pandemic and a recently concluded two-year civil war in November 2022.

Ethiopia had previously announced its intention to formally default earlier this month. The payment, originally due on December 11, had a technical grace period extending until Tuesday, thanks to a 14-day clause in the $1 billion bond agreement.

Sources familiar with the situation reported that, as of the close of business on Friday, December 22, the last international banking working day before the grace period ended, bondholders had not received the expected coupon payment. Despite requests for comments, Ethiopian government officials remained silent on Friday and throughout the weekend.

This anticipated default aligns Ethiopia with two other African nations, Zambia and Ghana, which are currently undergoing a comprehensive restructuring process under the « Common Framework. »

Ethiopia initially sought debt relief under the G20-led initiative in early 2021. The civil war delayed progress, but in November, facing depleted foreign exchange reserves and surging inflation, Ethiopia’s official sector government creditors, including China, agreed to a debt service suspension deal.

Parallel negotiations with pension funds and other private sector creditors, who hold Ethiopia’s bond, collapsed on December 8. Subsequently, credit ratings agency S&P Global downgraded the bond to « Default » on December 15, based on the assumption that the coupon payment would not be fulfilled. The default places Ethiopia in a challenging economic position, requiring strategic measures to address its financial instability and navigate the complexities of debt restructuring.


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TotalEnergies ready to invest $6 billion in Nigeria



French energy giant TotalEnergies is ready to invest $6 billion (around €5.5 billion) over several years in Nigeria’s energy industry, particularly in gas and offshore projects, the Nigerian presidency has said.

« We are ready to invest $6 billion over the next few years. We are looking in depth at more opportunities for deepwater and gas production, » said TotalEnergies CEO Patrick Pouyanné, according to a presidential statement.

On Monday, Head of State Bola Ahmed Tinubu held talks with Mr Pouyanné in Abuja, the capital.

« Everything is in place. We just need to finalise the adjustments and changes needed to unlock the exceptional potential in oil and gas », continued Mr Pouyanné, according to the Presidency.

Nigeria is « very important » for TotalEnergies, which accounts for between 8% and 10% of the group’s total oil production, according to the CEO quoted in the press release.

For his part, the Nigerian president pledged to « remove all obstacles in the oil and gas industry ». « We are ready to work with you », he said.

The oil and gas major indicated that it « has a substantial portfolio of projects that could represent 6 billion dollars of investment over the next few years ».

Ten days ago, the Nigerian president’s office announced similar commitments from British oil and gas giant Shell, for USD 6 billion in offshore, natural gas and liquefied natural gas (LNG) projects.

Since his inauguration at the end of May, Bola Ahmed Tinubu has taken a series of economic measures aimed at attracting more foreign investment to this oil-producing country and member of OPEC.

A law, the Petroleum Industry Bill, adopted in 2021 after years of debate and delays, was already aimed at attracting more foreign investment in the oil sector through changes to regulations, royalties and taxes.

Nigeria has seen its oil production decline in recent years due to widespread pipeline theft, attacks, high operating costs and red tape, which have deterred investors.

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Nigeria, Cameroon missing in top 10 best international airports in Africa



Africa is emerging as a preferred global destination for travellers, driven by a thriving tourism and business sector. The continent’s aviation landscape is now a formidable force, fostering crucial connections between Africa and the global community.

Recently, Skytrax, a renowned international airline assessment organization, revealed its 2023 report on the Best Airports in Africa. South Africa dominated the regional ranking, with additional entries from Kenya, Morocco, Rwanda, and Mauritius.

1. Cape Town International Airport, South Africa

This is a premier international hub with modern infrastructure and a commitment to eco-friendly practices. The airport hosts 4.13 passengers per 10 square meters daily, catering to a discerning crowd.

2. King Shaka International Airport, South Africa

Located in Durban, it stands as a beacon of excellence among Africa’s best international airports. The terminal, covering 102,000 m2, can handle 7.5 million passengers annually.

3. Johannesburg International Airport, South Africa

Serving as the primary hub for domestic and international travel in South Africa. Since 2020, Africa’s fifth busiest airport with a capacity for 28 million passengers per year.

4. Casablanca International Airport, Morocco

Handled about 7.6 million passengers in 2022, ranking among the top 10 busiest airports in Africa. A hub for Royal Air Maroc, Royal Air Maroc Express, and Air Arabia Maroc.

5. Mauritius International Airport

A strategic gateway with direct flights to Africa, Asia, Australia, and Europe. Renowned for its commitment to passenger satisfaction and prime location.

6. Marrakech International Airport, Morocco

An international facility connecting Europe, the Arab world, and soon North America. Terminals designed to handle 2,500,000 passengers annually.

7. Addis Ababa International Airport, Ethiopia

Formerly Haile Selassie I International Airport, it’s the main hub for Ethiopian Airlines. Links Ethiopia and Africa to Asia, Europe, North America, and South America.

8. Kigali International Airport, Rwanda

Serving Kigali and playing a vital role in connecting Congolese, Burundian, and Ugandan cities. The terminal accommodates 1.5 million passengers annually.

9. Nairobi International Airport, Kenya

A key connection point to East African destinations, quadrupling its capacity to host 26.5 million passengers yearly.

10. Bloemfontein International Airport, South Africa

Formerly Bloemfontein International Airport, now Bram Fischer International Airport. An economic hub hosting over 300,000 passengers and 17,000 air traffic movements annually.

Source: africanews


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