New initiatives mulled by the Nigerian-British Chamber of Commerce (NBCC) could drive trade volume between Nigeria and the United Kingdom (U.K.) above projected N7.7 trillion (£20 billion).
The plan led by a ‘stern decision’ to promote made-in-Nigeria products, particularly non-oil goods as well as to harness the potential of Nigerians living in U.K. This could beat the projection that the trade volume between the two countries could hit £20 billion by 2020, the President NBCC, Dapo Adelegan, said while unveiling plans to mark the 40th anniversary celebration of the Chamber in Lagos.
The plans are expected to aid the current administration’s drive to boost export of non oil products and boost the country’s foreign exchange earnings thereby helping the Naira to withstand pressure from major currencies. It will also promote standard that would fast-track acceptance of Nigerian made products as well as encourage local industries, particularly small and medium-sized enterprises (SMEs).
But the government would have to sustain efforts and policies to encourage made-in-Nigeria products, Adelegan said, while listing the chamber’s contribution to national development, particularly in garnering business sustainability in different sectors of the economy. He said: “Despite recession, I see the trade surpassing £20 billion, which was earlier projected for 2020. The value of trade between Nigeria and the U.K. is about £8 billion, and oil makes up 60 per cent of this figure before.”
To him, the days when oil products topped table of trade volumes are gradually fading away, disclosing that foods and condiments accounted for about a billion pounds of export in 2015.
Part of the activities to mark the group’s bilateral relationship between the two countries include a trade Mission to the U.K. in May, focusing on the maritime, mining and mineral resources sectors, finance and investment. There will also be a lecture and photo/arts exhibition in March, including a documentary of milestones covered in the past 40 years, cocktail and launch of NBCC Abuja branch golf tournament in April.
Other activities include a Gala dinner and dance as well as patrons’ investiture first week in June and visits to Anambra, Lagos, Ogun and Ondo states.
Adelegan, who lamented the country’s economic situation, stressed the need for the business community not to allow political officeholders frustrate the future of the economy, adding that there is urgent need for diversification.
Patron and former president of the chamber, Akinola Akintunde, urged members and non-members to sign deals for the supply of non-oil products during the chambers trade mission to U.K., noting that many made-in-Nigeria products would be exhibited at the event.
The chamber’s Deputy President, Akin Olawore, expressing optimism, said the group’s initiative would stabilise the economy, and harped on the importance of promoting made-in-Nigeria products. Olawore also promised that NBCC would continue to improve the Nigeria-UK trade relations.
The strategy adopted by the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele to rebuild the country’s foreign exchange reserves has been identified as one of the primary reasons the country’s Eurobond issue was oversubscribed by 780 per cent last week, THISDAY has learnt. Investigations have shown that as of last week, Nigeria’s foreign reserves, which had hit $29.5 billion, climbed to $30.5 billion – the highest in more than 12 months – following the success of the Eurobond.
A CBN official, who accompanied Emefiele and others in the federal government delegation on the Eurobond road show to the United Kingdom and United States of America, informed THSDAY that the strategy adopted by the governor worked wonders in boosting investors’ confidence in the Nigerian economy and the country’s ability to meet its foreign obligations. He also disclosed that with the single-mindedness exhibited by the CBN governor to rebuild FX reserves, he has set a target to grow reserves to $35 by the middle of 2016 and $40 billion by the end of the third quarter of this year. The official, who preferred not to be named but is one of the architects of the central bank’s FX policy, held the view that contrary to the argument by several analysts that devaluing the currency and allowing a true float of the naira would attract foreign investors, it is actually the accretion of foreign reserves that would instill confidence in the economy. “With a comfortable level of FX reserves, foreign investors will be assured that once they want to take their funds out, they can do so without hindrance.
“If you noticed, once reserves fell to as low as $21 billion, investors were not attracted to the Nigerian economy, irrespective of whether we devalued or whatever we did with the FX market. “As long as they felt that you had insufficient reserves to meet your foreign obligations, they were not going to remain comfortable about investing in the Nigerian economy. They continued to exit the economy. “For example, look at South Africa and Kenya which have floating exchange rates, yet they have found it difficult to attract investors. They continue to flee their economies in droves.
“However, since the International Monetary Fund (IMF) announced in November that it had approved a $12 billion standby facility for Egypt, the country has been attracting almost $300 million a month. “What this means is that investors need to feel comfortable with your level of FX reserves and your ability to meet your obligations when they fall due. “So instead of the CBN getting distracted by the debate over devaluation or no devaluation, it has focused on reserves accretion, which as you know help to attract investors during the Eurobond sale last week. “Given what we know, the target by the CBN is to increase reserves to $35 billion by the middle of this year and $40 billion by the end of the third quarter,” he said. The official said the accretion of FX reserves could be attributed to two factors – the improvement of oil prices following the agreement by OPEC and Russia to slash oil production by 1.2 million barrels per day, and the relative peace achieved in the Niger Delta. “The oil price rally coupled with improved output from Nigeria have resulted in increased foreign earnings in recent months. “If you recall, about a year ago, revenue from the sale of crude oil fell to less than $400 million a month, but now Nigeria is making between $600 million and $700 million, enabling the CBN to save more,” he explained.
He was quick to add, however, that whatever savings the central bank is making must be complemented by a comprehensive fiscal and industrial strategy by the ministries and agencies of government. “A fiscal and industrial strategy is still required, because saving FX reserves alone will not give you the silver bullet,” he said. The official also allayed concerns that the savings being made by CBN could delay payments of maturing trade obligations and in turn continue to exert pressure on the FX market. He said: “The CBN remains committed to funding maturing trade obligations through FX forwards on the interbank market. “Importers with eligible transactions have nothing to be concerned about, as the central bank will continue to support them through the forwards arrangement already in place on the interbank market. “Also, confidence is growing that the speculative attacks on the naira in the parallel market would subside, because with the accretion of reserves, the CBN will have a schedule that would enable it to meet demand through FX forwards.” Also, THISDAY learnt that with the tenure of two deputy governors of the Central Bank of Nigeria (CBN) gradually drawing to a close, some Nigerians have started jostling for the top jobs.
Specifically, while the Deputy Governor, Economic Policy, Dr. Sarah Alade, who has been in the position since March 26, 2007, is expected to step down next month, the tenure of the Deputy Governor, Operations, Alhaji Suleiman Barau would come to an end by the end of this year. Both of them would have served two terms of five years each when their tenures expire. Section 8 (1) of the CBN Act 2007 states that “the Governor and Deputy-Governors shall be persons of recognised financial experience and shall be appointed by the President subject to confirmation by the Senate on such terms and conditions as may be set out in their respective letters of appointment”. To this end, THISDAY learnt that politicians seeking the plum jobs for their cronies as well as economists and other financial market experts who feel they are qualified for the jobs are already lobbying officials in the presidency. “There is intense lobbying for the CBN deputy governors’ jobs. Those seeking for these jobs are already putting their contacts in the presidency under pressure,” a source who pleaded to remain anonymous said.
The CBN Act is silent on whether a deputy governor can be appointed from within the central bank on the recommendation of the CBN governor. But there have been instances where directors of the central bank have been elevated to the position of deputy governors. There have also been instances where a CBN governor made the recommendations and were approved by the president. For instance, prior to her appointment as deputy governor, Alade was Director, Banking Operations Department. In that capacity, she served as Chairman Board of Directors, Nigeria Interbank Settlement System (NIBSS) and was the Secretary, National Payments System Committee (NPSC). She is from Kwara State, and in line with the federal character principle, she would likely be replaced by someone from any of the states in the North-central geopolitical zone. As deputy governor (Economic Policy), Alade superintends the Economic Policy Directorate comprising the Research, Monetary Policy, Trade and Exchange, Statistics Departments and Financial Markets Departments. Also as the Chairperson of the Monetary Policy Implementation Committee (MPIC), she interfaces with operational departments and coordinates technical inputs for the Monetary Policy Committee (MPC). Barau, who is expected to step down by December, is from Kaduna State and would also likely be replaced by someone from the North-west region of the country. He superintends the Banking and System Payment Directorate, Branch Operations, Currency Operations, Information Technology and Reserve Management.
Jaiz Bank Plc, a non-interest financial institution is targeting a profit After Tax (PAT) of N5.56 billion by the end of the 2021 financial year from the current N1.34 billion position.
The bank disclosed this while addressing stockbrokers at the company’s, Facts Behind the Figures, shortly after it listed by the introduction 29.46 billion shares of 50 kobo each at N1.25 per share worth N36.83 billion on the floor of the Nigerian Stock Exchange (NSE).
The listing, which added about N37 billion to the market capitalisation of the Exchange, according to the bank, would promote liquidity for the bank’s shares; enhance value of the company and increased transparency.
The Managing Director of JAIZ Bank, Hassan Usman, explained that the bank is also projecting to grow its total income from N6.63 billion in 2017 to N16.19 billion in 2021. “It is also in fulfilment of an earlier promise made at inception of the bank to the shareholders and the public. Our listing today, I am sure will elicit public confidence that non-interest banking provides alternative model that will contribute to the socio-economic development of our country.”
Usman said the bank has a dividend policy that strikes a balance between retaining sufficient cash in the business to finance its organic growth strategy and rewarding its shareholders, who have come a long way in supporting the bank’s vision since its initial public offering (IPO) in 2003. According to him, the bank’s corporate plan outlines the way forward with the strategies, priorities and activities it will focus on to achieve its financial goals.
“Based on our projection, we anticipate to have a pay-out ratio of not less than 50 per cent over our current plan period,” he said. Speaking on core strategic pillars for the actualisation of the financial projection, Usman said: “Our corporate plan outlines our way forward, with the strategies, priorities and activities we will focus on to achieve our financial goals.
“We have set out on a path of reinvention of the banking landscape in the country. This journey over the next few years will focus on changing how banks should operate to better improve the lots of the community, while delivering on their commitments to the investors. We are focused on building on our culture of ethics and taking the necessary business decisions to align our perspective with client expectations,” he added.
The Chairman of the Company, Dr. Umar Abdul Mutallab, said the bank has gone through long struggle, which according to him was over.
He noted that despite being an Islamic bank, the financial institution is meant for all irrespective of religion, class or culture and urged Nigerians to embrace the non-interest bank as they stand to gain a lot from the bank.
The acting Managing Director of the National Economic Reconstruction Fund (NERFUND), Mr. Ezekiel Oseni has said the fund was unable to pay staff salaries while majority of the staff had been laid off owing to the N17.5 billion owed it by recalcitrant debtors. He has therefore appealed to the Economic and Financial Crimes Commission (EFCC) to help recover the outstanding amount.
According to him, eight percent of the total customers, who borrowed money accounted for over 81 percent of total non-performing loans. Speaking during a courtesy visit to the EFCC in Abuja, Oseni said since he assumed office in August last year, he had engaged with 135 customer, who borrowed between N1million to N5million and had been making efforts to repay. But the challenge according to him, lied with the big debtors who owed between N50million and above- and have sworn not to pay back simple because it was public funds.
Others said it was only their own share of the national cake, he told the anti-graft officials. Majority of the loans lacked requisite collaterals and were merely backed by guarantees from past political office holders. Some of the big debtors were said to have resorted to endless litigation to frustrate recovery efforts. He said the situation has rendered the fund broke and currently unable to pay staff salaries while many had recently been sacked, with more to follow if nothing was done to arrest the situation.
Oseni, therefore, asked the EFCC to set up a special task force in NERFUND to help in the investigation and recovery of N14.2 billion owed by the so-called big debtors. Responding, Chief of Staff to the acting EFCC Chairman, Mr. Ola Olukoye on behalf of his boss, Ibrahim Magu, assured the NERFUND of maximum cooperation, adding that the request was within its area of jurisdiction. He further assured the NERFUND boss that the commission would be ready to assist in the recovery after a memorandum of understanding is signed to that effect.
NERFUND was set up to provide needed medium – to long-term financing to viable Small and Medium scale production enterprises. The grand objectives are to increase the quantum of goods and services available for local consumption and export, provide needed employment, expand our production base and add value to the economy.
It is designed to aid in the cake-baking process, and as such, fund disbursements by the NERFUND will be based on competitive efficiency”. Since there is more demand for the NERFUND loans than the resources currently available can satisfy, only the most viable projects may benefit from the programme. Your challenge is to put together one of the most viable projects to benefit from the NERFUND programme. The NERFUND has been very successful in reorientating the nation towards a production culture from the old trading culture. So far, the NERFUND has approved loans for one thousand four hundred and ninety seven projects, valued at over N5billion.
The Nigerian Stock Exchange (NSE) yesterday recorded the second listing for the year as it admitted 29.464 billion ordinary shares of Jaiz Bank Plc on its daily official list at N1.25 per share by introduction.
The listing added about N37 billion to the market capitalisation of the NSE. Shareholders of the bank had unanimously endorsed the listing of the shares at an extra-ordinary general meeting in November, 2016.
Speaking at the listing ceremony, the Managing Director/Chief Executive Officer of Jaiz Bank, Hassan Usman said it would promote liquidity for the bank’s shares, enhance value of the company and increased transparency.
“It is also in fulfillment of an earlier promise made at inception of the bank to the shareholders and the public.. Our listing today, I am sure will elicit public confidence that non-interest banking provides alternative model that will contribute to the socio-economic development of our country,” he said.
On the future outlook of the bank, the CEO said going by the growth trajectory which averaged 30 per cent per annum, Jaiz Bank’s prospects are bright. The projection for the next five years indicates a gross revenue of N16 billion by 2021 and profit before tax of N7.9 billion.
According to him, the bank’s corporate plan outlines its way forward with the strategies, priorities and activities it will focus on the achive its financial goals.
“We have set out on a path of reinvention of the banking landscape in the country. This journey over the next few years will focus on the changing how banks should operate to better improve the lots of the community, while delivering on their commitments to the investors/shareholders. We are focused on building on our culture of ethics and taking the necessary decisions to align our perspective with client expectations,” he said.
Speaking on dividend policy of the bank, Usman said it has a policy that tries to strike a balance between retaining sufficient cash in the business to finance its organic growth strategy and rewarding its shareholders which have come a long was supporting the banks’s vision since its initial public offering of 2003.
Jaiz Bank commenced operations in 2012 with three branches in Abuja, Kano and Kaduna after it was granted a regional operating license from the Central Bank of Nigeria. The branches have since increased to 27 as at the end of 2016.
IBM is investing $70 million in building much-needed digital, cloud, and cognitive Information and Technology (IT) skills to help support a 21st century workforce in Nigeria, South Africa, Kenya and other parts of Africa.
The initiative, “IBM Digital – Nation Africa”, provides a cloud-based learning platform designed to provide free skills development programmes for up to 25 million African youths over five years, enabling digital competence and nurturing innovation in Africa. The Digital – Nation Africa is designed to boost overall digital literacy, increase the number of skilled developers able to tap into cognitive engines, and enable entrepreneurs and prospective entrepreneurs grow businesses around the new solutions.
The initiative will be supported by the United Nations Development Programme (UNDP), which has a special focus on fostering market-driven ICT skills in Africa and the Middle East.
Foremost underwriting company, Standard Alliance Insurance Plc, has formally merged with its sister company, Standard Life Assurance, to become a one big insurance company, underwriting life and non-life insurance businesses. The court-sanctioned merger makes Standard Alliance Insurance Plc a leading composite insurance company with a shareholders fund of N6.392billion and asset base of N13.651billion.
Speaking on the merger, the Group Managing Director, Standard Alliance, Mr. Bode Akinboye, explained that “the merger was a deliberate and strategic decision by the boards of both companies to form a frontline composite insurance company which will play a leading role in the nation’s insurance sector with the ultimate goal of making the company the most preferred place to invest in.”
Akinboye further said that “the emergent composite company means combined professional and result-oriented workforce. Standard Alliance Insurance Plc is now better poised to continue to provide more innovative products and deliver on its promises to all stakeholders. In another development, Mrs. Orerhime Emerhor-Iwuagwu, Executive Director, Standard Alliance Insurance Plc, has resigned her appointment. Mr. Akinboye thanked her for invaluable contributions to the company.
The MTN Group on Wednesday gave indications that it would for the first time announce a loss in its financial results, blaming the development largely on the N330bn fine imposed on it by the Nigerian Communications Commission in October 2015.
Besides the N330bn fine it agreed in June 2016 to pay over three years, MTN said it also suffered “foreign exchange losses in a number of operations, losses from joint ventures and associates, additional depreciation resulting from prior hyperinflation adjustments in MTN Irancell, the Zakhele Futhi tax and share-based payment charges and professional fees incurred in respect of the settlement of the Nigerian regulatory fine and planned listing.”
In a statement on Wednesday, MTN said its financial results were “further expected to be negatively impacted by the underperformance of MTN Nigeria and MTN South Africa in the first half of 2016.”
The statement read in part, “MTN Nigeria’s first-half performance was impacted by the disconnection of 4.5 million subscribers in February 2016 in compliance with the Nigerian Communications Commission subscriber registration requirements. The withdrawal of regulatory services, which was resolved in May 2016, the weak economy and the depreciation of the naira against the dollar also negatively impacted MTN Nigeria’s performance.
“Consolidated results in rand terms from Nigeria were affected by the weaker naira in the second half of the year. The disappointing results from MTN SA in the first six months were largely due to the poor post-paid performance.”
Apparently encouraged by the future outlook outlined by the management of Neimeth International Pharmaceuticals Plc on Tuesday, some shareholders of the company increased their demand for the equity at the stock market yesterday.
Consequently, Neimeth led the price gainers, rising by 4.9 per cent to close at N0.64 per share. The management of Neimeth had at the annual general meeting (AGM) held on Tuesday in Lagos unveiled plans to improve the fortunes of the company.
Shareholders had at the AGM expressed confidence on the management of the company led by its first female Managing Director/Chief Executive Officer, Dr. EbereIgboko-Ekpunobi.
Neimeth bounced back to profitability for the year ended September 30, 2016, recording a profit after tax of N65 million, compared with a loss of N335.684 million in 2015.
Turnover rose from N1.461 billion in 2015 to N2.002 billion in 2016, showing an increase of 36 per cent. Gross profit grew from N684.6 million to N1.225 billion, whileadministrative expenses reduced from N600 million to N527 million. The company also reduced finance costs from N92 million to N89.6 million in 2016. The company ended with profit of N95.361 million compared with N315.77 million loss in 2015.
Igboko-Ekpunobi, had attributed the positive performance to the company’s three strategic imperatives anchoring on a short term transformation, cost reduction and optimising efficiency.
According to her, the company employed three strategic imperatives to anchor its transformation in short -term. They are: revitalise sales and generate more revenue, reduce costs and optinmise efficiency and transform the organisational culture towards a new Neimeth.
She said cost of sale was 38 per cent of sales, enabling a 62 per cent production margin, which exceed the budget expectation of 56 per cent as a proportion of sales and last year’s performance of 47 per cent production margin.
Igboko-Ekpunobi disclosed that significant investments were made to re-engineer manufacturing operations. “New practices were adopted which contributed to better inventory management, production planning and coordination between manufacturing and sales activities most importantly, and the organisation culture was transformed toward a new Neimeth,” she stated.
The MD/CEO said in additional to the short-term focused strategies, the company also invested in research and development activities with a view to long-term growth.
Meanwhile, the stock market recorded the first gain this week as the Nigerian Stock Exchange (NSE) appreciated by 0.05 per cent to close at 25,460.45.
Exxon Mobil Corporation has announced estimated 2016 earnings of $7.8 billion, representing a 51 per cent decline from $16.2 billion in 2015.
The 2016 fourth quarter and full year results showed that the company made three important new discoveries in Guyana, Nigeria and Papua New Guinea to boost its portfolio in 2016.
While on an oil-equivalent basis, production of 4.1 million barrels per day was down slightly compared to 2015, liquids production of 2.4 million barrels per day increased 20,000 barrels per day.
The company attributed the increase to increased project volumes, mainly in Canada, Indonesia and Nigeria. However, the production increase from Canada and Nigeria was partly offset by field decline, the impact from Canadian wildfires, and downtime notably in Nigeria, apparently due to the production disruption caused by rig accident in Nigeria’s Qua Iboe.
ExxonMobil is also growing its exploration portfolio, capturing 16 exploration blocks in 2016 with three additional awards to be finalised in 2017.
Cash flow from operations and asset sales was $26.4 billion, including proceeds associated with asset sales of $4.3 billion in 2016.
According to the company’s 2016 fourth quarter and full year results, capital and exploration expenditures were $19.3 billion, down 38 per cent from 2015.
The results showed that oil-equivalent production was down slightly at 4.1 million oil-equivalent barrels per day, with liquids up 0.9 percent and natural gas down 3.7 per cent Despite the fall in 2016 earnings, the corporation, however, distributed $12.5 billion in dividends to shareholders Fourth quarter 2016 earnings were $1.7 billion, including the impairment charge recorded during the period. Excluding the impairment charge, earnings of $3.7 billion were up from the $2.8 billion reported in the fourth quarter of 2015, due to higher liquids realisations partly offset by weaker refining margins.
ExxonMobil’s Chairman and Chief Executive Officer, Darren W. Woods said the company demonstrated solid operating performance in 2016.
“Financial results for the year were negatively impacted by the prolonged downturn in commodity prices and the impairment charge. The company’s continued focus on fundamentals and our ability to leverage an attractive global portfolio through our integrated business ensures we are well positioned to generate long-term shareholder value,” Woods said.
ExxonMobil said it completed five major upstream projects during the year in Australia, Kazakhstan and the US, adding 250,000 oil-equivalent barrels per day of working interest production capacity. The company made three important new discoveries in Guyana, Nigeria and Papua New Guinea, and is growing its exploration portfolio, capturing 16 exploration blocks in 2016 with three additional awards to be finalized in 2017.
