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This newsletter reads in many ways like Nigeria is under construction. Banks are cleaning up after a oil-sector loan went bust, the naira briefly found some stability, and the government is fixing multiple ports.

Let’s get into it.

The Nigerian National Petroleum Company Limited has signed an MoU with Sanjiang Chemical Company and Xinganchen (Fuzhou) Industrial Park Operation and Management Co. Ltd to revive the Port Harcourt and Warri refineries.

If this feels familiar, it’s because it is. These are the same refineries that have been “almost back” for years, currently sitting idle after yet another shutdown in 2025. The difference this time is less about what is being fixed and more about who is doing the fixing and how they’re being incentivised.

Revamp and renovate

NNPC isn’t just talking about getting the refineries running again. The plan now includes upgrading them to produce cleaner, more profitable fuels, while also expanding into petrochemicals and building gas-powered industrial hubs around them. The vision is to turn these sites into integrated energy and industrial centres, not just places where crude goes in and fuel (hopefully) comes out.

The $25 billion elephant in the room

Here’s the part hovering over the entire announcement: Nigeria has already spent over $25 billion trying to rehabilitate these refineries over the past decade, with very little to show for it.

Projects have been delayed, restarted, overfunded, and underdelivered. Even the recent $1.5 billion Port Harcourt rehab didn’t translate into sustained operations. So when another revival plan shows up, it’s going to get some eye rolls.

This time is (technically) different

What NNPC is betting on now is structure. Instead of hiring contractors to fix things and leave, they’re looking at technical equity partners — companies that actually have a stake in the assets and, by extension, a reason to keep them running efficiently.

What’s in it for everyone: Contractors will get paid for completing projects. Partners will get paid when the business works. The hope is that this reduces the cycle of expensive fixes followed by quiet breakdowns.

The Dangote factor

All of this is happening in a very different refining landscape, shaped heavily by the Dangote Refinery. For the first time in a long while, Nigeria has a functioning large-scale refinery that could meaningfully reduce imports.

If NNPC’s refineries actually come back online alongside it, Nigeria could move from chronic fuel importer to something closer to a regional supply hub. That’s the upside being hinted at here.

So, what’s real right now?

At this stage, it’s still just an agreement to agree. The real test is execution, which is where nearly every previous refinery effort has fallen apart.

The strategy is more grounded than before. The ambition is bigger than before. But the track record is still very much there.

So yes, it could work. But until these refineries are actually running, and staying running, it’s best to keep an eye on this one.

✈️ Nigeria is losing billions through its own ports: A report by the Sea Empowerment and Research Centre estimates Nigeria loses up to $8 billion a year to under-declared exports, misinvoicing, and poor documentation—especially in solid minerals. Nigeria also exports raw materials cheaply, imports finished goods at high cost, and misses out on $15–$20 billion annually from not adding value locally. The root issue poor systems. Weak oversight, messy documentation, and heavy reliance on foreign shipping (which takes up to $9 billion yearly in freight out of the country) have turned ports into pipelines for economic loss. The fix to meticulously digitise, track, record everything but “anyhowness” doesn’t want to leave Nigeria alone 😓. Until records are better, Nigeria’s trade structure will keep being at a disadvantage

🤝 Nigeria is orchestrating a glow up: Under Bola Ahmed Tinubu, there’s a coordinated push from new ministries to policy resets, all aimed towards exploring the country’s “blue economy” and positioning it as a trade hub, especially as the African Continental Free Trade Area opens up regional commerce. Nigeria already handles most of its trade through ports, but inefficiency, congestion, and weak systems have allowed smaller countries to take a bigger share of West Africa’s cargo. So the plan is to rehabilitate major ports, expand capacity, and digitise processes to compete on speed and reliability, not just geography. The plan is to invest $1 billion in port upgrades, expansion beyond Lagos, new deep seaports, and digital systems to cut paperwork and delays. There’s also a push to connect ports to the rest of the country through rail and logistics corridors, because fast ports don’t matter if goods get stuck inland. Nigeria has over 60% of the region’s GDP but handles just 25% of its cargo, so this is a great way to catch up, and early signs (like higher revenue, improved security, and more investor interest) suggest that things are looking up. If execution holds up, Nigeria could finally align its trade infrastructure with its economic size.

💸 More real-economy funding: Sabou Capital, a Nigeria-based fund, has secured backing from the Mastercard Foundation Africa Growth Fund to invest in SMEs across West Africa, targeting businesses that are already making money but can’t quite “look investmest-ready” enough to get more funding. Sabou will distribute $300k–$2 million cheques into sectors like agriculture, logistics, fintech, and climate. Sabou Capital is betting that with some funding plus hands-on support, these overlooked companies, especially those outside the major cities, can scale. It also taps into a broader shift: funding globally is moving beyond fintech into real-economy sectors again.

Nigeria’s banking sector is going through a major stress test triggered by a large unpaid loan tied to oil services company Nestoil. The key issue is the way the loan was structured: multiple major banks jointly funded it through a syndicated arrangement estimated at $2 billion, meaning they all share exposure. When repayment problems started, the impact immediately spread across the entire banking system.

The banks involved: United Bank for Africa, Access Holdings, First HoldCo, FCMB Group, and Ecobank Transnational Incorporated, along with other lenders like Union Bank and Afreximbank. As repayment issues worsened, these banks were forced to recognise that a significant portion of the loan may not be recovered.

The impact has been immediate. Some of the funders have recorded significant profit declines. For example, UBA set aside over ₦331 billion, while Access Bank more than doubled its loan loss provisions. Because profits were heavily reduced, several banks have also suspended dividend payments for the 2025 financial year. This was not a voluntary decision—it follows a directive from the CBN under Governor Olayemi Cardoso, which requires banks to fully account for bad loans before distributing profits to shareholders.

The root of the problem is Nigeria’s heavy exposure to the oil and gas sector, which still makes up a large portion of bank lending. At the end of 2024, exposure to this sector was estimated at ₦21 trillion. These loans were often based on expectations of stable oil revenues and project execution. When performance fell short or cash flows tightened, repayment capacity weakened across multiple borrowers at once, including Nestoil.

To recover funds, banks have moved into legal enforcement. Courts have granted orders allowing them to freeze assets, seize collateral, and pursue recovery of debts. However, these processes are slow and often contested, meaning recovery could take years and may not fully cover the outstanding amounts. In the meantime, capital that could have supported new lending is tied up in recovery efforts.

The broader effect is a tightening of the banking system. With profits under pressure and capital being used to absorb losses, banks are becoming more cautious about new lending. This could slow credit growth in the short term, especially for large industrial and oil-related projects that depend heavily on bank financing.

Regulators argue that this painful adjustment is necessary. By forcing banks to recognise losses now rather than delay them, the CBN is trying to prevent hidden risks from building up in the system. The goal is to reset bank balance sheets so they are stronger and more transparent going forward, even if it means lower profits and no dividends in the short term.

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