Items filtered by date: Thursday, 23 August 2018

The total value of capital importation into Nigeria dropped by $790 million in the second quarter of 2018, the largest decline in more than two years when the nation’s economy was at the brink of recession.

The capital importation data obtained from the National Bureau of Statistics (NBS) show that the total value of capital imported into country in the second quarter of 2018 fell to $5.51 billion from $6.30 billion recorded in the preceding quarter.

An analysis of the data by our correspondent showed that the value dropped by 12.53 percent, making the $790 million depreciation the highest since the first quarter of 2016 when capital importation declined by $845.98 million from $1.56 billion.

However, when compared on a year-on-year basis, the total value of capital importation in the review quarter rose by 207.63 percent from $1.79 billion recorded in the second quarter of 2017.

According to the data, Nigeria imported highest capital from United Kingdom, United States of America and the United Arab Emirates with values of imported capital accounting for 32.15 percent, 22.20 percent and 9.72 percent of the total value of capital imported from 39 countries in the review quarter.

During the period, foreign portfolio investment and other investment dropped by 9.76 percent and 24.07 percent respectively, while foreign direct investment paltry rose by 5.97 percent.

The statistics bureau in its report attributed the decline to the drop in both the foreign portfolio investment and other investment.

The two types of investment accounted for $4.22 billion, representing about 96 percent of the entire capital imported into the country in the second quarter of 2018.

Investment indicators in Nigeria have been unimpressive lately as foreign portfolio investors continued to divest their assets from the country ahead of the 2019 general elections and following the recent interest rate hike by the United States Federal Reserve Bank.

The persistent exit of the investors led the domestic market into a bear market – more than 21 percent drop from its recent peak – last week as the All-Share Index of the Nigeria Stock Exchange fell to 34,663.48 points, while the market capitalisation shed N219 billion to close at N12. 66 trillion on Monday before the Eid-El-Kabir Holiday.

Ripples Nigeria investigations also showed that the development had taken its toll on the nation’s external reserves, causing the country to lose over $1.43 billion in less than two months as the reserves settle at $46.373 billion as of Friday, August 17, 2018 since it peaked $47.799 billion on July 2, 2018.

 

The Guardian

Published in Business

President Muhammadu Buhari on Monday signed an Instrument of Accession to the International Cocoa Agreement (ICA), 2010.

The pact was the seventh ICA adopted at the United Nations Cocoa Conference in 2010 following the contribution of ICA, 1972, 1975, 1980, 1986, 1993 and ICA, 2001 to the development of the world cocoa economy.

The ICA, 2010 was administered by the International Cocoa Organization, which was established by the ICA, 1972 and functions through the International Cocoa Council, the highest authority of the organization.

A statement signed by the Senior Special Assistant on Media and Publicity to the President, Garba Shehu, said that decision followed the approval by the Federal Executive Council (FEC) for Nigeria to accede to the agreement.

Following the execution of the instrument of accession, Nigeria undertakes “faithfully to abide by all the stipulations therein contained” in the agreement, according to the statement.

“Among other benefits, the agreement is expected to strengthen cooperation between exporting and importing member countries; improve their cocoa economies through active and better focused project development and strategies for capacity-building,” the statement read.

It is also expected to build on the successes of the 2001 Agreement by “implementing measures leading to an increase in the income of cocoa farmers and by supporting cocoa producers in improving the functioning of their cocoa economies.”

The statement added that the 2010 agreement would also “deliver cocoa of better quality, take effective account of food-safety issues and help establish social, economic and environmental sustainability, so that farmers are rewarded for producing cocoa that meets ethical and environmental considerations.”

According to the United Nations Conference on Trade and Development, the ICA, 2010 was agreed with a view to strengthening the global cocoa sector, supporting its sustainable development and increasing the benefits to all stakeholders.

It highlighted eleven objectives as rationales for the pact, they comprise to; promote international cooperation in the world cocoa economy; provide an appropriate framework for discussion on all cocoa matters among governments, and with the private sector; contribute to the strengthening of the national cocoa economies of Member countries; obtain fair prices leading to equitable economic returns to both producers and consumers in the cocoa value chain.

The objectives also include to; promote a sustainable cocoa economy; encourage research and the implementation of its findings; promote transparency in the world cocoa economy, and in particular in the cocoa trade, as well as to promote the elimination of trade barriers; promote and to encourage; consumption of chocolate and cocoa-based products in order to increase demand for cocoa.

Others include to; encourage Members to promote cocoa quality and to develop appropriate food safety procedures in the cocoa sector; encourage Members to develop and implement strategies to enhance the capacity of local communities and small-scale farmers to benefit from cocoa production and thereby contribute to poverty alleviation; facilitate the availability of information on financial tools and services that can assist cocoa producers, including access to credit and approaches to managing risk.

Currently, Nigeria rely on crude oil as its major source of revenue, accounting for about 70 percent of its total revenue and over 90 percent for its export earnings. The nation’s economy recorded its worst decline since 1987 in 2016 on the back of drop in the prices of crude oil in the international market in 2014.

Nigeria recorded five consecutive negative Gross Domestic Product growth rates from -0.67 percent in Q1 2016 to -0.91 percent in Q1 2017. It officially emerged from recession in Q3 2017 after two consecutive positive GDP growth. A development which had prompted the Federal Government to devise other means to diversify the economy away from oil into solid minerals, agriculture, among others to forestall a recurrence of the 2016 economic distress.

With the latest agreement, Nigeria is now a cocoa exporting member of the International Cocoa Organization and the International Cocoa Council, implying cocoa could become another alternative source of revenue generation and foreign exchange earnings as global organizations renewed their efforts to develop the cocoa sector.

Published in News Economy
President Muhammadu Buhari will on Tuesday, next week inaugurate the $250million state-of-the-art International Breweries in Ogun State.
 
The brewery, said to be the biggest in West Africa, is located at kilometre 3, Flowergate Industrial Scheme, along the Abeokuta-Sagamu Expressway.
 
The Plant Manager, Tony Agah, speaking to journalists at the premises of the factory, said the plant is the brewer’s fourth brewery in Nigeria after those in Ilesa, Onitsha, and Port-Harcourt.
 
According to him, about 90 per cent of the company’s raw materials would be sourced locally, adding that it had already employed 300 staff.
 
 
Agah said the brewery would have significant multiplier impact on the value chain within Ogun State and its environs as well as provide direct and indirect employment for the people, and also support Nigeria’s foreign direct investment aspiration.
 
The Managing Director, Annabelle Degroot, speaking about the inauguration, described the plant as a major step towards its strategic goal of producing high-quality drinks locally.
 
Her words: “Objectively, International Breweries Plc is a brand that places a premium on quality. Bearing this in mind, we will spare no expense or effort in ensuring that Nigerians are treated to the best traditions in brewing, with outstanding recipes, superior ingredients, innovation and world class techniques. The outcome is to ensure satisfaction and enjoyment for our consumers.”
 
Degroot added that the plant would provide a great opportunity to engage qualified locals, who are excited about the prospects of forging a career with the brand, while thousands of both direct and indirect jobs would be created.
 
She said: “One of the objectives of the company is to create job opportunities for the people of Ogun State as well as Nigerians in general. The plant will also be instrumental in empowering farmers as most of the raw materials required will be sourced locally. This will, in turn, contribute to the economic development of the country.”
 
International Brewery is one of the 300 companies that the Governor Ibikunle Amosun administration has attracted to the State since assumption of power in 2011.
 
 
Tribune
Published in Economy
A foremost African airline, Ethiopian Airlines, has signed an agreement with Zambia’s Industrial Development Corporation (IDC) to invest in the newly established Zambia’s national carrier, Zambia Airways.
The latest development, which would see Zambia Airways take to the skies, came after East African nation had stayed for 24 years without a flag carrier.
 
The agreement was contained in a joint statement issued on Monday by the Group Chief Executive Officer of IDC, Mateyo Kaluba, and the Group Chief Executive Officer of Ethiopian Airlines, Telwolde Gebremariam, after the two parties signed the agreement in Lusaka, Zambian capital.
 
According to the statement, the national airline project of Zambia would be funded with an initial investment of $30 million with IDC – Zambian government – holding 55 percent equity, while Ethiopian Airlines would hold 45 percent share of the investment in the new venture.
 
“Obviously as we operate the airline, we will facilitate the financing necessary for its growth. It is expected that the new airline will operate 12 aircraft and carry over 1.9 million passengers by 2028,” the statement read.
 
The airline will initially operate routes across Africa, before extending its network to Europe, the Middle East and Asia.
 
Ethiopian Airlines noted the investment in Zambia Airways is consistent with its Vision 2025 Multiple Hubs Strategy in Africa.
 
“As an indigenous and truly Pan-African airline, we believe that African carriers will only get their fair share of the aviation industry and the African market through partnerships with other African carriers,” it said.
 
The Ethiopian national carrier, the only consistently profitable carrier in Africa serving about 70 global cities and 60 across Africa from its hub in Addis Ababa with a fleet of over 100 aircraft, plans to set up four airlines on the continent this year.
 
Presently, the air company which already owns stakes in carriers in Malawi and Togo, is ranked the largest carrier in African continent by revenue and profit, according to the International Air Transport Association.
 
Last week, the airline said it was one of the airlines being considered to partner with the Federal Government of Nigeria on the country’s newly launched flag carrier, Nigeria Air.
 
Nigeria is planning to set up a new national carrier about fifteen years after the old Nigeria Airways ceased operations in the country.
 
In July, the Nigerian government officially unveiled the name and logo of the country’s new carrier at the Farnborough International Public Airshow in London, United Kingdom.
 
According to the Minister of State for Aviation, Hadi Sirika, the new national airline would be private sector-led and driven through Public Private Partnership (PPP) arrangement, with the government owning not more than five percent equity and zero interference.
 
 
Source: NAN
Published in Business
Thursday, 23 August 2018 16:07

Nigerian govt to extend micro-credit loan

As part of measures to tackle rising poverty rate in the country, the Federal Governemnt said it had concluded plans to extend its Government Enterprise and Empowerment Programme (GEEP) scheme to two million small-scale enterprises in the country.

Speaking at a town hall meeting in Lagos on Wednesday as part of events to mark this year’s edition of Eid-el-Kabir celebrations, Vice President Yemi Osibanjo said the scheme, called TraderMoni, was part of government’s effort to support small businesses.

“The other thing we have done is Government Enterprise and Empowerment Programme, a micro-credit scheme for market women and others. We are doing one now for petty traders that is called TraderMoni.

“We are going to do at least 100,000 in Lagos and two million across the country. The traders here in Bariga must benefit from it. We also have the one for people far bigger than that which is called GEEP.

“I want to emphasise that everything we are doing, our focus, first of all, is to ensure that people are taken out of poverty. Our country is very big; over 200 million people, with many young people coming out every day. Aside from that, we also want to ensure that anybody who is doing anything at all, who is trading, artisans, mechanics; we are able to support them,” he said.

TraderMoni is one of the three micro-credit loan schemes under GEEP, one of the National Social Investment Programmes (NSIP) of the Federal Government.

Two weeks ago, the Federal Government announced that it had disbursed MarketMoni loans to 31,594 microenterprises in Lagos State through the Bank of Industry (BOI).

“The GEEP scheme includes loans in different categories called TraderMoni, MarketMoni, and FarmerMoni. In December 2016, disbursement commenced across the country, and as of today, there are over 350,000 beneficiaries across all 36 states of the nation including the FCT,” a statement from BOI read.

According to the statement, the interest-free loans do not require any collateral and are repayable within six months with a grace period of two weeks.

 

Business Insider

Published in Business
Nigeria’s revenue from oil export hit an estimated $26 billion between January and July this year as the price of global oil benchmark, Brent crude, rose to the highest level in two weeks on Wednesday.

According to the new OPEC Revenues Fact Sheet recently released by the Energy Information Administration (EIA), revenue from oil export rose by 30 percent to $34 billion in 2017 from $26 billion in 2016.

The oil price appreciation followed a sharp drop in the United States crude inventories and the country’s sanctions on Iran, the third-largest producer in the Organisation of the Petroleum Exporting Countries (OPEC), causing tighter supply of the commodity.

The price of Brent crude, against which Nigeria’s oil is priced, rose by $1.38 to $74.19 per barrel, the highest since August 8, while US West Texas Intermediate (WTI) gained $1.28 to $67.12 per barrel.

Nigerian economy was battered due to the fall in the prices of crude oil in the international market in 2014, at the end of 2017, a development which led the country into its worst economy crisis since 1987 in 2016.

However, the country officially emerged from recession in Q3 2017 after two consecutive positive GDP growth. The economy shock occasioned by the drop in crude price prompted the Federal Government to devise other means to diversify the economy away from oil into solid minerals, agriculture, among others to forestall a recurrence of the 2016 economic distress.

But while the Mining and Quarry sector of the economy grew by 14.85 percent (year-on-year) in Q1 2018, 30.25 percentage points and 4.14 percentage points higher than the same quarter of 2017 and Q4 2017, the agriculture sector grew by 3.00 percent (year-on-year) in real terms in the review quarter, a decrease by 0.38 percentage points from the corresponding period of 2017 also a decrease by 1.23 percentage points from the preceding quarter.

Currently, Nigeria still rely on crude oil as its major source of revenue, accounting for about 70 percent of its total revenue and over 90 percent for its export earnings.

The Brent crude price rose to $66.87 per barrel from around $53 per barrel at the beginning of the year.

In May 2018, Brent rose above $80 per barrel for the first time since November 2014 but dropped afterward amid rising US crude inventories.

 

Source: The Ripples

Published in News Economy

In recent months, Africa has seen several big announcements of international multi-million-dollar awards to build more inclusive, sustainable economies in the region.

Jack Ma’s Netpreneur Award, France’s $76m Africa Start-up Fund, MIT’s Inclusive Innovation Challenge, and many other similar initiatives are recent evidence of this mindset shift. We believe Millennials are at the heart of this new trend.

Africa experiences double-digit GDP growth in many territories, rapidly accelerating rates of digitisation and urbanisation on the continent. Millennials are the world’s largest generation in size, and drive these positive trends: They make up more than a third of Africa’s 1.2 billion people, while inhabitants below the age of 19 account for around 51% - so they are one of Africa’s most critical assets.

All character stigma aside, they’re the most open-minded, ambitious generation yet, and are actively involved in the world around them. Millennials are disruptors and innovators, known in Western economies for their uncanny ability to topple entire industries.

These digital citizens may be “troublemakers” because they inherently question the status quo. A few policy makers see new social media, direct sharing of news and video, however we see opportunity only: They are innovators, tech-savvy, opinionated, enterprising and socially conscious. And nowhere is their influence more significant, and more necessary, than in Africa.

So “what African Millennials want” is an important question for every business, and especially ROAM. As the continent’s first true digital citizens, Millennials’ use of, and trust in, digital platforms like ours is critical to the future health of Africa’s digital economies. Whether searching for work on Jobberman, buying a home through BuyRentKenya, importing a car through Cheki, or purchasing furniture on Pigiame - our platforms are designed for easy usability and to offer consumers the freedom of both convenience and choice in their everyday lives. Every day, our platforms facilitate more than 25,000 qualified contacts to new opportunities.

Now that Millennials are full-blown adults, with considerable spending power and strong opinions about the kinds of services they want to use – not to mention the kinds of businesses they want to engage with – even the best-established organisations are sitting up and taking notice.

Here’s why Millennials are key in driving this mindset shift.

They’re first adopters when it comes to Africa’s digital transformation

Millennials in Africa were the first generation to truly feel the influence of digitisation on the ways they live, work and communicate. This has been fuelled in large part by the critical role of mobile connectivity, which has allowed the region to leapfrog over the legacy of poor infrastructure that continues to delay widespread adoption of fixed-line internet connections. A 2017 GeoPoll survey reports that social media is now the primary source of news and information for 60% of 18-to-35-year-olds in Africa, and that includes the way they research products they’d like to buy, brands they’d like to own, and employers they’d like to work for.

What’s more, the ripple effect of Millennial internet adoption extends to practically every other segment around them. Millennials are also introducing their seniors to the convenience of digital, breathing new life into Africa’s long-thriving informal economies and augmenting the consumer power and transparency even further. This also drives the maturity of tech and startups born in Africa, which has increased greatly in the last 2 years. The great success of companies such as Andela, or organisations like Meltwater Entrepreneurial School of Technology, are testament to this important development.

They are switched on

The socio-political power of the internet in Africa has become exceedingly apparent. The generation’s mandate to drive democracy, equality, transparency, tolerance and opportunity persists among Millennials and those generations after them – with both businesses and governments now under increasing pressure to deliver. If young consumers don’t like what they see, they will take their hard-earned money and business elsewhere.

They will likely do their part instead to uplift local SMEs and smaller players who understand them, more closely align with their needs and worldview. An example: Zamaan, a powerseller on Expat-Dakar.com, is delivering to your door, 24/7, for most competitive prices. Agility is his competitive edge, now with tech-enabled reach that will beat the global ecommerce landscape. 

They demand business excellence

Millennials are notoriously picky and fickle when it comes to the companies and brands they support, and the African business community is upping their game accordingly: improving their service offerings, dropping prices, and doing anything else in their power to retain a once-captive audience that has suddenly gained limitless access to products and services from their competitors.

Millennials also demand a greater level of oversight and online security in an age when online fraud, hacks and other cyberattacks are increasingly common. The old cliché about the so-called Nigerian 419 scam, it turns out, is not wholly unfounded. As a region with a long way to go to achieve digital maturity, Africa certainly isn’t immune to the trends of cybercrime, data leaks and ransomware that are proliferating worldwide today.

This is something that we at ROAM have always maintained as a top priority, and we approach it from two ends. The first is security. We strive to strike that delicate balance between free accessibility and tight security, and we leverage advanced technology to do so. Features like customer reviews, smart algorithms, blocking suspicious IPs, machine learning and cross-referencing data, and other sophisticated methods to keep scammers out of the ROAM ecosystem. Secondly, we reward excellent customer focus: For instance, Cheki’s “Winning Dealer” initiative awards dealers who provide outstanding customer service, creating a real competitive advantage for them.

These activities are all central to building trust with our local audience, and remain a key component of our strategy going forward. Expectations and rules of engagement are shifting wildly, and the business community will need to adapt to be part of the economic rise of the continent.

They “hustle”

Operating in a veiled, largely informal economy for decades, it comes as a surprise to many that entrepreneurship has a long and proud history in Africa. The explosion of the internet has given millions of Millennial-aged freelancers, artisans, microbusinesses, start-ups and participants in the booming “Gig Economy” the resources they need to transform their “hustles” into viable business opportunities. Encouraging this trend is key to stimulating economic growth in the region. Through them, every citizen has the power to become a microenterprise – freelancers, artisans and temporary labourers alike.

These digitally-enabled short-term and informal employment opportunities represent much-needed economic stimulus in a region still characterised by high rates of unemployment and poverty. Africa also continues to struggle to lower the barriers to education for its young citizens. Over time, some of these tech-driven, small-scale businesses will grow and flourish, providing even more employment opportunities and discretionary income for their workers, thereby stimulating both supply and demand simultaneously.

One thing is certain – African growth is driven by entrepreneurship. African Millennials do things differently, and are determined to rise to the social, political and economic challenges facing the continent today. Millennial entrepreneurship is at the root of ROAM’s history, driven by brilliant founders such as Ayodeji Adewunmi, Opeyemi Awoyemi, Olalekan Olude, Mapenda Diop, Kirk Gillis, Carey Eaton and many more. We will always see it as a key part of our mission to further enable this type of African-inherent entrepreneurship - now at a larger scale.

 

Credit: Clemens Weitz, CEO: ROAM (Ringier One Africa Media)

Published in Business

For more than a year now Rwanda has been campaigning enthusiastically to be the next leader of the Organisation Internationale de la Francophonie, an organisation of French-speaking states that have political, social and economic connections with France.

The new secretary-general will be chosen at the Francophonie’s upcoming summit in Armenia in October. Rwanda’s president, Paul Kagame, is already chair of the African Union, so if his country nets the Francophonie seat, it will lead two of the world’s largest regional and global organisations.

Rwanda’s minister of foreign affairs and co-operation, Louise Mushikiwabo, is campaigning to become the Francophonie’s secretary-general. She’s focusing on four main issues: increasing the influence of the French language around the world, elevating Francophone countries within political and economic international debates, tackling youth unemployment, and exchanging governance practices (encompassing everything from national reconciliation practices to better tax collection systems).

These goals are admirable, and they address some pressing issues facing many Francophone nations. But what makes Rwanda’s Francophonie campaign particularly interesting is the country’s complicated relationship with France. To this day, the two countries’ relations are strained – and many attribute the tension to France’s failure to accept its historical role in the 1994 genocide.

Dark times

Before the genocide began, the French and Rwandan governments had worked together closely for years. Then-president Juvénal Habyarimana shared close relations with his French counterpart, François Mitterand. Scholar Gerard Prunier has described how at the time, French officials distrusted the Rwandan Patriotic Front (RPF), then a Uganda-based rebel group of Rwandan exiles, which it considered part of an Anglo-American attempt to undercut France’s influence in central Africa.

This concern led France to boost its support of Habyarimana despite his government’s ethnic-based public policies, which hindered and victimised Rwanda’s domestic Tutsi population – and which ultimately set the stage for the genocide.

Habyarimana was killed when his Falcon 50 plane was shot down by unknown assailants on April 6 1994, triggering the mass murder of hundreds of thousands of Tutsi Rwandans. The plane itself was a French gift, and was piloted by a French crew.

What’s particularly troubling for the current Rwandan government and genocide survivors is the history of French assistance in the formation and training of the Interahamwe, the killing squads that spearheaded the genocide.

After the Rwandan Civil War began in 1990, France provided arms and sent military personal to Rwanda in order to train Interhamwe forces. Journalist Linda Melvern has researched the close relationship between French and Rwandan officials, and described how France sent military teams of “advisers” and “technical assistants” to prepare not only the Rwandan military but the Interhamwe to stop the RPF and their allies at all costs. France has never fully accepted its responsibility for the consequences.

Since taking power and leading the formation of a post-genocide Rwandan state, the RPF government has consistently held sceptical views of France and French identity. Post-genocide reconstruction has largely tried to turn away from French influence in politics and society. The most pressing example is the demotion of the French language.

Despite Mushikiwabo’s campaign to increase the language’s relevance in the international community, domestically speaking, French has been steadily demoted. It is no longer the country’s primary language (alongside Kinyarwanda) as it was in the past. Since 2008, English has overtaken French as the primary state-recognised foreign language, and Swahili was recently added to the list.

But the demotion of French isn’t just about France’s troubling history in Rwanda; it also reflects a generational shift. The bureaucrats and officials who fought in the Rwandan Civil War (1990-1994) and the genocide have slowly been replaced by a new generation of English-speaking Rwandans. Additionally, many Rwandan elites within the government and private sector consider adopting English a matter of necessity, since it’s generally perceived as the primary language of international trade.

Leading the way

Set against this background, Rwanda’s campaign to lead the Francophonie looks odd indeed. After all, back in 2009 the country went in the other direction by joining the British Commonwealth; among the organisation’s 53 members, only Rwanda and Mozambique lack any particular historical connection with the UK.

At the time, Mushikiwabo described Rwanda entering the Commonwealth as an opportunity for the nation’s development: “Rwandans are ready to seize economic, political, cultural and other opportunities offered by the Commonwealth network.” But there’s more to this move than meets the eye. In interviews since 2012, Rwandan informants within the government, private sector and civil society have often described to me how joining the Commonwealth was an “anti-French” decision.

So why is Rwanda campaigning to lead the Francophonie anyway? Just as it currently holds the chair of the African Union, Mushikiwabo’s campaign to lead the Organisation Internationale de la Francophonie is part of a larger project: to foster a new international identity and promote state interests around the world. Rwandan elites want the international community to perceive their country as a primary gatekeeper as they try to engage with Africa.

The Conversation

These leadership positions not only boost national self-esteem, but allow the Rwandan elite to strike international agreements that can foster development. The resulting relationships can be used not only to promote Rwandan interests, but to deflect international criticism for questionable domestic and regional human rights abuses and interfering with neighbouring states. If Rwanda wins the campaign for secretary-general, it will have to somehow not let its past history with France interfere with its grand plans for global influence.

Jonathan R. Beloff, Teaching Fellow, Department of Politics and International Studies, SOAS, University of London

This article was originally published on The Conversation. Read the original article.

Published in Opinion & Analysis
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