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Category: Business

  • CBN announces appointment, redeployment of directors

    The Central Bank of Nigeria (CBN) has announced the appointment and redeployment of some directors.

    A statement from the CBN on Thursday said Mr. Yusuf Philip Yila, a Director with the bank and the Managing Director, NIRSAL Microfinance Bank (NMFB), has been redeployed to the position of Director, Development Finance Department, with effect from today.

    Yila succeeds Dr. Mudashiru Olaitan, who retires on January 26, 2020.

    Other movements include the redeployment of Mr. Kofo Salam-Alada from the Consumer Protection Department to the Legal Services Department as well as the movement of Mr. Samuel Okojere from the Payment System Management to the Banking Services Department, to replace Mr. Dipo Fatokun, who retired last December.

    The CBN also okayed the appointment of Mr. Clement Buari as Director, Strategy Management Department; Haruna Mustafa, director, Consumer Protection; Bello Hassan, Director, Other Financial Institutions’ Supervision Department; Dr. Ozoemena Nnaji, Director, Trade and Exchange Department; and Mr. Musa Itopa Jimoh as Director, Payment System Management.

    Meanwhile, Mr. Abubakar Abdullahi Kure has been appointed Acting Managing Director of NIRSAL Microfinance Bank.

  • Total Transactions on NSE Drop 20% in 2019 to N1.9trn

    Total Transactions on NSE Drop 20% in 2019 to N1.9trn

    The total value transactions on the floor of the Nigerian Stock Exchange (NSE) from January 2019 to December 2019 depreciated by nearly 20 percent (precisely by 19.8 percent), data obtained by Business Post has revealed.

    In the Nigerian Stock Exchange’s Domestic & Foreign Portfolio Investment Report for December 2019, it was revealed that last year, transactions valued at N1.9 trillion were recorded at the bourse, lower than the N2.4 trillion achieved in 2018.

    From the figures, foreign portfolio investors (FPIs) contributed 48.9 percent (N943 billion) of the total trades, while local investors had 51.1 percent (N986 billion). When paired with 2018, FPIs contributed 50.7 percent (N1.22 trillion) to the transactions, higher than the 49.3 percent (N1.19 trillion) added by domestic investors.

    It was observed that in the last quarter of 2019, the involvement of foreign investors continued to wane from October to November and to December. In October 2019, FPIs recorded transations worth N103.7 billion and in November, it dropped to N86.8 billion, before falling to N63.1 billion last month.

    However, at the domestic side, it was wavy as it stood at N59.4 billion in October, N85.8 billion in November and N64.8 billion in December 2019.

    In the whole of 2019, foreign inflow into the stock market was N419.1 billion, lower than N576.5 billion in 2018, while the foreign outflow stood at N523.4 billion, lower than N642.7 billion in 2018.

    When the participation of domestic investors is analysed, retail investors contributed N477.3 billion to the NSE total transactions for last year, lower than N524.6 billion contributed in 2018, while institutional investors contributed N508.2 billion to the trades, lower than N660.7 billion in 2018.

  • Elumelu Advocates Massive Capital Investment for Africa

    The Chairman, United Bank for Africa(UBA), and Founder, Tony Elumelu Foundation, Tony Elumelu has advocated massive private capital investment as well as increased support to youth development as catalysts for driving the much needed economic growth on the continent.

    Elumelu said this while speaking on a panel at the  UK-Africa Investment Summit 2020, in London. He stressed the need to invest in critical sectors of the economy such as electricity and human resources, noting that this will galvanise the continent, taking into consideration the huge population which Africa currently boasts of.

    According to Elumelu, “Africa needs massive private capital investment to enable us drive the sectors that will develop the economy, especially sectors like power. Access to electricity is very critical if we are to develop our continent. We have a huge youth population in Africa and I think that is our biggest resource as a continent. So, in order to talk about the development of our continent, we must prioritise this segment and focus on how to empower them.

    “Empowering the youths will help us create jobs and alleviate poverty and I think that this empowerment must start from creating an enabling environment, from making sure we have roads, mass transportation systems and most importantly, fixing the problem of shortage of electricity on the continent.  If we do all of this, we will unleash the enormous potential that resides in Africa and in these young people.”

    Through his foundation, the Tony Elumelu Foundation, (TEF), in the past 5 years, over 9,600 youths have been empowered across the continent with seed capital, mentoring and networking to grow their businesses and enable them contribute to economic development. 

    Throwing more light on what TEF has been able to achieve, he said, “During lunch, I interacted with some alumni of the Tony Elumelu Entrepreneurship programme who said they were beneficiaries of $5,000 support in 2015 from the TEF, and today, they have just completed raising U$3million becoming one of the biggest food chain providers in Rwanda. These are some examples of what such interventions can do. We support, give them an enabling environment, provide a platform and think of our prosperity in a sustainable fashion,” Elumelu explained.

    Other speakers on the panel include the President of the World Bank Group, Mr. David Malpass; the Chief Executive Officer, Development Partners International, Ms Runa Alam; and the Group Chief Executive Officer, Vodafone Group, Mr Nick Read.

    On his part, the World Bank President, Malpass, spoke of more focus on digital financial services, stating that investing in Africa will help to take the continent to another level, adding that there is need for more availability of electricity and good trade policies that will boost businesses on the continent.

    The UK Africa Investment summit 2020 which was opened by the British Prime Minister, Boris Johnson, for the first time ever, brought together African heads of states, business leaders and investors, to discuss future partnerships between the UK and African nations. Africa has many suitors he posited. ’The United Kingdom is who you should be doing business with. We have no divine right to this business, it is a competitive world but look  at what the UK has to offer. We are the partner of choice, of today, tomorrow and decades to come’ said Johnson as he addressed the African presidents and business leaders.

  • Nigeria’s Capital Market Contributes Less Than 10% to GDP – SEC DG

    Nigeria’s Capital Market Contributes Less Than 10% to GDP – SEC DG

    Acting Director-General of the Securities and Exchange Commission (SEC), Ms Mary Uduk, has said Nigeria was not utilising its full economic potential despite being able to accommodate a bigger and more attractive capital market.

    Head of Corporate Communications of SEC, Mrs Efe Ebelo, quoted Ms Uduk as saying in a statement that the country’s capital market contributes less than 10 percent to the Gross Domestic Product (GDP).

    She said Nigeria needs a larger capital market, pointing out that, “We think our economy is big enough to have a much bigger market.”

    “The capital market makes up less than 10 percent of the GDP of the country. If you look at other countries, even South Africa, it is over 100 percent of GDP.

    “We believe we have a large room for expansion and that is what we are pursuing,” the capital market expert said.

    Giving an update on the electronic filing system that will ensure efficiency, account for unclaimed dividends and curb any foul play in the capital market, Ms Uduk said the commission was working hard to ensure its met its planned commencement.

    The SEC chief said the regulatory body was also in the process of deploying software that would help to actualise the plan, saying, “That will make filing more efficient, easier for capital market operators to send in returns to us and make the market more transparent”.

    Ms Uduk said the commission was excited about electronic offering and was in support hence the need to develop the rules to guide its implementation, noting that, “We believe that electronic offerings will help solve the problems of unclaimed dividends so it is something we are backing seriously.”

    “Through electronic offerings, we will not have the problems of identity as we had in previous listings. It has a lot of advantages; it means that people who are not close by during an offering can invest.

    “We will be able to get the data we need for regulation; the offering is more efficient and it is cost saving. It is something we are working on; the rules will soon be out for everyone to use,’’ she said.

  • Crude Oil Slumps on Fear of Deadly Virus in China

    Despite an escalation brought by Libya’s oilfields blockage on Monday, oil prices fell on Tuesday as a deadly virus in China sparked fears of an economic slowdown.

    Prices had appreciated on Monday when supporters of military commander, Khalifa Haftar, closed a pipeline connecting Libya’s largest oilfields which led to a stop in oil production.

    As at Tuesday night, the Brent crude was trading down by 66 cents or 1.01 percent to trade at $64.54 per barrel, while the US West Texas Intermediate crude shed 29 cents or 0.5 percent to settle at $58.29 per barrel.

    China’s National Health Commission on Monday confirmed cases of the SARS-like coronavirus spreading between humans, which has already killed six people and infected over 300 people.

    This also affected global stocks which were down on Tuesday, with Asian markets posting the biggest drops due to the mounting concern over the rapid spread of the deadly virus in China.

    The substantial oil supply disruptions in Libya couldn’t keep prices up as the new virus threatens to upset the global market as panic held the market with performance lower in some countries.

    Some analysts said while it’s still early, the virus does not seem to be as lethal as SARS, which killed about 10 percent of patients. Reports show that Chinese authorities on Monday said that the virus was now being transmitted between humans, creating more concern of a mass epidemic.

    The coronavirus infection can create respiratory problems, coughing, fever and in more severe cases pneumonia, or acute respiratory syndrome and death.

    Looking ahead, if the threat posed by this new virus subsides, oil prices can do better even as the International Monetary Fund (IMF) cut back its 2020 global economic growth forecasts by a tenth of a percentage point to 3.3 percent because of sharper than expected slowdowns in India and other emerging markets.

    However, the IMF said that the US-China trade deal signed on January 15 was another pointer that trade and manufacturing activity could do better. The bank maintained its 2020 forecasts for Brent and West Texas Intermediate (WTI) prices at $62 and $57 a barrel respectively.

  • Nigeria Eyes Top 70 Spot on World Bank Ease of Doing Business by 2023

    Nigeria Eyes Top 70 Spot on World Bank Ease of Doing Business by 2023

    Nigeria is working towards moving up the ranks of the first 70 countries in the World Bank’s Ease of Business ranking by 2023.

    This was made known by the Secretary to Government of the Federation (SGF), Mr Boss Mustapha, during his address at the ‘Night with Maritime Stars’ of the Nigerian Maritime Administration and Safety Agency (NIMASA) Corporate Dinner and Merit Awards held in Lagos.

    He said the previous result showed that Nigeria moved up 15 places from 146 to 131 last year and that the country could only improve more in this.

    He said this development was pushed by the assent of President Muhammadu Buhari of the Presidential Enabling Business Environment Council (PEBEC) in July 2016 which aims of minimize the constraints that come with running businesses in the country.

    The organization put together reforms geared toward making it more convenient for business owners to thrive.

    Mr Mustapha said that the government, in its bid to improve efficiency and productivity in the industry and country, had created the council to ensure an enabling environment for port efficiency.

    He added that with the country working harder with the PEBEC initiative, the 2023 target would be achieved.

    Speaking further at the event, he stated that, “Government will continue to support the maritime sector because on it rests opportunities for wealth creation and economic growth.”

    He said to achieve the set goal, there was still a long way to go, but there was a need to recognise the progress that had been made so far, appreciating the effort put in place by NIMASA as the agency contributed N16 billion to the nation’s consolidated revenue account last year.

    The SGF said that the progress made so far by the agency was due to the commitment and drive of its staff and stakeholders in the industry, hence the need to appreciate them.

    In 2019, Nigeria was tagged as one of the most improved economies in the world for running a business, based on quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

    And with the impact recorded in six key indicators noted by the World Bank, including making the enforcement of contracts easier, this placed Nigeria among the world’s top improvers.

  • Real reason I ordered closure of border – Buhari

    Nigeria’s President, Muhammadu Buhari has given real reason he ordered the closure of the nation’s borders against West African neighbours.

    He said the closure was only about rice smuggling, but also because arms and ammunition, as well as hard drugs were being ferried into Nigeria.

    Holding a bilateral meeting Monday in London at the sidelines of UK-Africa Investment Summit 2020 with President Nana Akufo-Addo of Ghana, the Nigerian Leader said he could not keep his eyes open, and watch youths being destroyed through cheap hard drugs, and compromised security caused by unbridled influx of small arms.

    “When most of the vehicles carrying rice and other food products through our land borders are intercepted, you find cheap hard drugs, and small arms, under the food products. This has terrible consequences for any country,” President Buhari said.

    He said it was regrettable that the partial border closure was having “negative economic impact on our neighbours,” but added that “we cannot leave our country, particularly the youths, endangered.”

    The President said the Sahel region was awash with small arms, which accounts for severe security challenges in Mali, Chad, Burkina Faso, Niger and Nigeria.

    “We are in fact the biggest victims,” he lamented.

    On time frame for reopening the borders, President Buhari said it would not happen till the final report of a committee set up on the matter was submitted and considered.

    “We will get things sorted out. Our farmers, especially those who grow rice, now have a market, and are happy, and we are also concerned about hard drugs and weapons. Once the committee comes up with its recommendations, we will sit and consider them,” the President said.

    President Akufo-Addo, while showing understanding of the need for Nigeria to protect her citizens, pleaded for “an expedited process, because the Nigerian market is significant for certain categories of business people in Ghana.”

  • T-Bills Investors to Demand Higher Rate Amid Rising Inflation

    T-Bills Investors to Demand Higher Rate Amid Rising Inflation

    The frequency at which stop rates of treasury bills are declining in recent times in Nigeria is giving some investors in that space something to worry about.

    At the last exercise held on Wednesday, January 15, 2020, the Central Bank of Nigeria (CBN) offered the debt instrument for as low as 2.95 percent. Two days later, the National Bureau of Statistics (NBS) released a report that showed that inflation rate for December 2019 increased to 11.98 percent from 11.85 percent in November 2019.

    From this, an investment in T-bills offering 3.95 percent seems bad because of a negative return of 9.03 percent. Normally, an investment should yield gains above inflation rate to be termed profitable.

    Worried by this, analysts at FSDH Research, said in a report on Friday that investors may begin to demand for higher treasury bills rates to cover for the rising inflation rate, which might likely stretch above 12 percent in January 2020.

    “Higher inflation is expected to cause upward pressure on the T-bills yields across the curve, as investors will demand a higher return to compensate for inflation risk,” the report said.

    On Friday, on the Nigerian treasury bills side, the market closed positive with average yields declining by 0.50 percent to settle at 3.45 percent from 3.95 percent at the previous session, with buying interest witnessed across the medium and long tenors. This compressed the average yields by 0.89 percent and 0.76 percent respectively.

    In the report, FSDH Research said the average OMO yields depreciated during the session across the curve by 0.02 percent to 13.10 percent from the previous level, 13.12 percent.

    Also, average yields on the long-term maturities fell by 0.12 percent, while yields on the short-term instrument increased by 0.04 percent.

    At the money market, the payment of bond coupon worth N106.1 billion by the Nigerian government positively impacted system liquidity on Friday. The inflow came as the average money market rates further reduced by 1.18 percent during the session to settle at 3.43 percent.

    The Open Buy Back (OBB) rate dropped 1.14 percent to 3.00 percent from 4.14 percent, while the Overnight (OVN) rate declined by 1.21 percent to 3.86 percent from 5.07 percent.

  • Nigeria public debt stands at N26.2 trillion – DMO

    Nigeria public debt stands at N26.2 trillion – DMO

    The Debt Management Office (DMO) says the total public debt as at September 2019 stood at N26.215 trillion.

    The Director-General of DMO, Ms Patience Oniha, made this known during a presentation of Public Debt Data as at September 30, 2019 in Abuja on Friday.

    Oniha explained that the debt comprised the Federal Government and 36 states and the Federal Capital Territory’s debts within the period.

    She said that the comparative figure for June 2019 was N25.701 trillion which implied that in the quarter July to September 2019, the total public debt grew by 2.0 per cent.

    She said that the total public debt as at September 2019 included promissory notes in the tune of N821.651 billion, which she said, were issued to settle the Federal Government’s arrears to oil marketing companies and state governments.

    The director general said that the 2019 Appropriation Act provided for a total new borrowing of N1.605 trillion split equally between domestic and external, adding that only the domestic component of N802.82 billion was raised due to the late passage of 2019 budget.

    “Among the highlight of the DMO’s achievements for 2019 was the issuance of a 30-year bond for the first time.

    “The introduction of 30-year bond was to meet the investment needs of long-term investors such as insurance companies and support the development of domestic financial markets in areas such as mortgages” she said.

    According to her, from the Federal Government’s perspective, the 30-year bond also contributed to reducing the refinancing risks of the public debt stock.

    Oniha stated that the borrowing was to finance specific projects and activities of the government as well as to finance deficit budget.

    She further explained that due process, which involved the executive and legislature, was followed.

    The DMO, however, expressed regret that the discussion around the debt was politically motivated.

  • CBN Reschedules First MPC for 2020

    The Central Bank of Nigeria (CBN) has moved the first monthly Monetary Policy Committee (MPC) meeting for the year to a different date earlier announced to the public.

    In a circular released by the apex bank, it was stated that the two-day meeting, which would be the 271st edition, has been rescheduled to take place on Thursday, January 23, and Friday, January 24, 2020.

    The central bank had initially asked members of the committee to gather for the meeting on Monday, January 20 and Tuesday, January 21 in Abuja to deliberate on some issues affecting the economy, especially the monetary aspect.

    However, the bank changed its mind and fixed the meeting for another day, without giving any reason for this.

    The apex bank only said in the statement that, “The 271st Meeting of the Monetary Policy Committee (MPC) has been rescheduled to hold” at the “MPC Meeting Room, 11th Floor, Wing C, CBN Corporate Headquarters, Abuja.”

    It further said members of the group will meet on the first day of the meeting, Thursday, January 23, 2020, at 10:00 am, while the time for day 2 of the gathering, Friday, January 24, 2020 is 8:00 am.

    Recall that at the last meeting, the MPC, by a unanimous vote, retained the Monetary Policy Rate (MPR) at 13.5 percent and also held other policy parameters constant, including the Cash Reserve Ratio (CRR) at 22.5 percent. The Liquidity Ratio (LR) was left at 30 percent, while the Asymmetric Corridor was kept at +200-500 basis points around the MPR.

    Last week, the CBN disclosed that it has retained the minimum 65 percent of Loan Deposit Ratio (LDR) in the interim in a circular signed by its Director of Banking Supervision, Mr Ahmad Abdullahi.

    The bank explained that it had noticed remarkable increase in the size of gross credit by the Deposit Money Banks (DMBs) to customers and directed all DMBs to maintain this level as well as ensure that average daily figures were applied to assess compliance.