EnuguSME, Author at Enugu SME Centre

CBN: Digital economy to drive growth, create jobs

CBN: Digital economy to drive growth, create jobs says Emefiele

To further expand the economic pie, Nigeria needs to build a solid digital economy, by focusing on digital infrastructure, especially internet connectivity, Godwin Emefiele, governor of the Central Bank of Nigeria (CBN) said on Saturday.

Other focus areas include digital literacy and skills, digital financial services, digital platforms, and digital entrepreneurship and innovation.

Represented by Adamu Lamtek, deputy governor, Corporates Services at a seminar for Finance Correspondents and Business Editors, held virtually in Lagos and Abuja, he said Nigeria, the biggest economy in Africa with one of the largest youth populations in the world, is well-positioned to develop a strong digital economy.

Consequently, he said there is a need to focus on accelerating improvements across five fundamental pillars of a digital economy, which are digital infrastructure, digital platforms, digital financial services, digital entrepreneurship, and digital skills.

In its effort to drive change and development, the CBN has over the last decade and a half worked to build an effective and efficient payment system.

The Payment System Vision 2020 strategy document was published in 2007 and the main objective of the strategy was to promote and entrench electronic payments, as the major channel for payment and settlement by all economic agents, away from the current dominance of cash-based transactions.

The robust regulatory framework put in place by the Bank opened up the payment system to innovation with several new players across the following licensing categories – Payment Service Banks, Payment Terminal Service Providers (PTSP’s), Payment Solution Service Providers (PSSP’s), Mobile Money Operators (MMO’s), Payment Terminal Application Developers (PTSA’s), and Agent Banking.

“A combination of these payment initiatives has immensely helped to create employment opportunities and to further our efforts at building a more financially inclusive economy,” Emefiele said.

Today a small or medium-sized enterprise in Ibadan is able to leverage digital channels to sell their products and services to a wider market beyond their immediate environment.

On cryptocurrency, Emefiele said, “let me use this medium to reiterate that the CBN did not place any new restrictions on the use of cryptocurrency in Nigeria.”

According to him, the recent directive only amplified an earlier regulation on the subject of cryptocurrency. The recent directive became necessary to protect the financial system and the generality of Nigerians from the risks inherent in crypto-asset transactions, which have escalated in recent times, with consequences on financial stability and implementation of monetary policy.

However, he said policy stand does not preclude Nigerians from harnessing the benefits of the underlying technology that supports crypto transactions, which is a distributed ledger, commonly referred to as the blockchain.

There are several examples where blockchain technology has been used to facilitate and improve transparency in the settlement of trade transactions.

“Our regulatory sandbox is available for fintech companies to explore the use of blockchain technology in areas that would be beneficial to the Nigerian economy,” the CBN governor said.

Speaking on ‘leveraging the digital economy to drive growth, job creation and sustainable development-the private sector perspective, Tope Fasua, CEO, Global Analytics Consulting Limited, said Nigeria should target double-digit growth powered by digitisation.

These 5 Nigerian stocks control 80% market capitalisation

Investors in Nigerian stock market have always been rotating around five stocks that control 80 percent of the entire market capitalisation according to EFG Hermes, an Egypt-based investment bank.

The major stocks in a rotating number include MTN N, Dangote Cement, Nestle, Airtel and BUA Cement.

In addition, the banks have been most active in the equities market but unfortunately, right now analysts have a neutral position on the banking sector.

Friday’s trading data on the Nigerian Bourse show that MTN closed at N157 per share, down -7.6 percent this year. MTN has 20,354,513,050 outstanding shares valued at N3.195 trillion.

Dangote Cement at N220 per share has lost 10.2 percent of its year-open value. The company has shares outstanding of 17,040,507,405 units valued at N3.748 trillion.

Nestle is valued at N1,375 per share. With outstanding shares of 792,656,252 units, Nestle Nigeria is valued at N1.089 trillion. Investors in Nestle have lost 8.6 percent of the company’s year-open value.

Airtel closed Friday, March 19, at N930, which represents an upward of 9.2 percent compared with its year-open value. Airtel has 3,758,151,504 outstanding shares valued at N3.495 trillion.

BUA Cement trades at N69.95, according to Friday’s data at the Nigerian Exchange (NGX) Limited. The stock has lost 9.6 percent of its value this year.

With a market capitalisation in excess of N2.368 trillion, investors continue to hover around BUA’s shares outstanding of 33,864,354,060 units.

“The last results show that costs of risk were quite low in an environment where the macro and the risks have been very high and so there’s concern around that. There’s concern around asset growth and quality, whether it can be sustained. There’s also concern around Return on Equity (ROEs),” Lilian Olubi, chief executive officer of EFG Hermes Nigeria Limited, said.

At a virtual meeting recently on “Shifts in investor appetite in East & West African equities – both foreign institutional and local investors”, she said a key variable that has affected the way the locals behave in the market has been the interest rate environment.

“As yields are inching back up as we have seen and expect to continue given the high inflation rate, what we are seeing now is the current rotation out of equities. The trend before now was when the rates were a bit low, a lot of the Pension Fund Administrators (PFAs) came back to the market in measure terms but they came numberless,” Olubi said.

“Now we are seeing them retreat from that action. Even though the yields are inching up, we still have a negative real return environment given how high the inflation rate is. But currently, the PFAs and most of the local Investors are keener on nominal returns,” she said.

“Part of the problem is the way that they report; they have unit price reporting on a daily basis,” she said.

Olubi said this adds a lot of pressure that the volatility of the stock market does not make friendly for their reporting. This, she said, is exacerbated by the transfer window that has just been opened to allow people to move across PFAs, and there is the pressure of returns because it has been a major barometer for investors’ decisions.

“Even with the equities, there is some lack of depth and breadth, so you have about five stocks that control 80 percent of the entire market capitalisation. Investors have always been rotating around these stocks,” Olubi said.

“A lot of them are already open and close to their internally set limit for these securities, so they are happy to exit and go back to the wider port of investing and so it is a quiet time for local sides.”

She said the retail players seem to have a more herd-mentality viewpoint and they tend to follow how the institution plays.

“So there’s some inactivity on that side as well. Right now, things are low. The local investors really need a lot more product range to go into and so we are looking actively as to how that comes out along the other macroeconomic concerns that continue to prevail on the market and the economy as well,” she said.

Union Bank grows full year pre-tax profit by 2.8% to N25.4bn

Union Bank has released its audited financial statements for the year ended December 31, 2020. The bank’s results on the Nigerian Exchange (NGX) Limited for the full year period shows sustained growth in key income lines and significantly improved fundamentals notwithstanding a constrained operating environment largely due to the impact of the Covid19 pandemic.

Union Bank’s investments in technology and building a progressive work culture over the past eight years, enabled a swift response to the pandemic that allowed our workforce transition to remote working while maintaining the productivity required to deliver these strong set of results in 2020.

Here are the bank’s financial highlights

Profit before tax: up 2.8percent to N25.4billion (N24.7billion in FY 2019); Gross earnings: down 1.9percent to N156.9billion (N159.9billion in FY 2019); Net operating income after impairments: up 8.3percent to N103.4billion (N95.5billion in FY 2019); and Net interest income before impairment: up 10.1percent to N56.9billion (N51.7billion in FY 2019) due to reduced interest expenses.

Non-interest income: up 1.6percent to N44billion (N43.3billion in 2019) driven by growth in net trading income as well as revaluation gains; Operating expenses: up 10percent to N78billion (N70.8billion in FY 2019) due to an increase in regulatory and technology expenses; andGross loans: up 23.8percent to N736.7billion (N595.3billion in FY 2019) driven by targeted lending to key sectors of the economy.

Also, Customer deposits went up 27.6percent to N1.13trillion (N886.3billion in FY 2019) reflecting the bank’s agility in delivering a compelling range of products to our customers during the pandemic and increased adoption of our digital channels; non-performing loans ratio: down to 4percent from 5.8percent (FY 2019) driven by a disciplined recoveries strategy (N7.2billion in 2020), a more robust loan book and key restructurings to support customers during the pandemic.

Subject to shareholders’ approval, a dividend of 25 kobo per 50 kobo share is being proposed.

In December 2020, the bank’s Chief Executive Officer, Emeka Emuwa announced his retirement effective March 31, 2021. Following a successful search process, the Board has appointed Emeka Okonkwo, an Executive Director currently leading the Bank’s Corporate Banking business, to succeed him. Emeka Emuwa served as CEO for eight years and led the Bank’s transformation and repositioning as a key player in the Nigerian financial space.

Commenting on the results, Emeka Emuwa, CEO said: “The Bank has delivered a strong set of results notwithstanding the impact of COVID-19 on our operations and the wider economy, enabling the Board of Directors to continue to return value to shareholders with a proposed dividend payment for the second year in a row. This demonstrates the strong foundations we have built, as we continue to deliver against our target of becoming a leading financial institution in Nigeria.

“For the full year, we grew across key income lines. Net income after impairments grew 8.3percent from N95.5billion to N103.4billion and translated into 2.8percent growth in Profit Before Tax to N25.4billion from N24.7billion.

The core of this performance is driven by the growth in our loan book, with 23.8percent increase in gross loans, to N736.7billion from N595.3billion in 2019.”

Speaking on the FY 2020 numbers, Chief Financial Officer, Joe Mbulu said: “We are pleased with both our top and bottom-line performance in 2020, in light of the impact of the pandemic and economic challenges.

Significant inflationary pressures and the translation of currency depreciation drove growth in our cost base, however we maintained strong control, limiting operating expense increase to 10percent (N77.9billion from N70.8billion), well below the rate of inflation. Consequently, we saw marginal increase in our cost to income ratio to 75.4percent from 74.1percent.

Our customer deposits hit a milestone during the year, crossing the N1trillion mark to N1.131trillion from N886.3billion in FY 2019, an increase of 27.1percent.

Low cost deposits were up by 17percent, constituting 68percent of total deposits helping to push cost of funds down by 1.4percent.

FG Refineries Earn N21bn, Lose N778bn

FG Refineries Earn N21bn, Lose N778bn In Five Years

The government-owned refineries, being run by the Nigerian National Petroleum Corporation, reported a total loss of N778.71bn from 2015 to 2019, an analysis of data collated from their financial statements has shown.

The refineries generated total revenue of N21.12bn in the five-year period as they operated at below their full capacities.
The refineries, which are located in Port Harcourt, Kaduna and Warri, have a combined installed capacity of 445,000 barrels per day.
The country relies largely on importation of refined petroleum products as its refineries have remained in a state of disrepair for many years despite several reported repairs.

Port Harcourt Refining Company generated a total revenue of N10.33bn from 2015 to 2019, but posted a loss of N229.14bn.
The refinery generated zero revenue in 2019; N1.46bn in 2018; N4.82bn in 2017; N3.37bn in 2016, and N683.52m in 2015.

Kaduna Refining and Petrochemical Company reported revenue of N4.17bn and a loss of N307.27bn in the five-year period.
The refinery generated revenue of N37.17m in 2019, compared to zero revenue reported in 2018. Its revenue had risen to N2.24bn in 2017 from N1.47bn in 2016 and N418.76m in 2015.
It posted a loss of N65.99bn in 2019, N63.64bn in 2018, N111.89bn in 2017, N30.19bn in 2016 and N35.56bn in 2015.
https://insidebusiness.ng/161525/fg-refineries-earn-n21bn-lose-n778bn-in-five-years/

GTBank reports full year PBT of N238.1billion

Guaranty Trust Bank plc, GTB, has released its audited financial results for the year ended December 31,2020 to the Nigerian and London Stock Exchanges.

A review of the result shows improved performance across all key financial metrics in the face of theunprecedented challenges brought on by the COVID-19 pandemic, reflecting the quality of past decisionsand reaffirming its position as one of the best managed financial institutions in Africa.

The Group reported profit before tax of N238.1billion, representing a growth of 2.8percent over N231.7billion recorded in the corresponding year ended December 2019.

The Group’s Loan book (Net) grew by 10.7percent from N1.502trillion recorded as at December 2019 to N1.663trillion in December 2020, while Customers’ deposits increased by 38.6percent from N2.533trillion in December 2019 to N3.509trillion in December 2020.

Guaranty Trust Bank’s Balance sheet remained well structured, diversified and resilient with Total assetsand Shareholders’ Funds closing at N4.945trillion and N814.4billion respectively.

Full Impact CapitalAdequacy Ratio (CAR) remained very strong, closing at 21.9percent, while Asset quality was sustained as NPLratio and Cost of Risk (COR) closed at 6.4percent (Bank: 5.9percent) and 1.2percent (Bank: 1percent) in December 2020 from 6.5percent (Bank: 6.2percent) and 0.3percent (Bank: 0.2percent) in December 2019 respectively.

Commenting on the financial results, the Managing Director/CEO of Guaranty Trust Bank plc, SegunAgbaje, said; “2020 was arguably the most challenging year that the world has faced in decades. In suchunprecedented times, we sought to live out the full extent of our values; safeguarding lives and livelihoodsfor our people, our customers and across the communities where we operate. We were on solid footinggoing into 2020; the strength, scale and liquidity of our balance sheet, coupled with the quality of our pastdecisions and the efficacy of our digital-first customer-centric strategy gave us the resilience and flexibilityto navigate the economic shocks and market volatility that dominated the year.”

He further stated that; “Amidst the many challenges that persist, we remain ardent believers in Africa’sgrowth potential. Our world is increasingly digital, and we see it opening new and exciting opportunities forempowering people and uplifting our communities. With our commitment to deepening customerrelationships and intense focus on delivering innovative financial solutions, we enter 2021 well-positionedto lead this new world.”

Guaranty Trust Bank plc continues to post the best metrics in the Nigerian Banking industry in terms of allFinancial Ratios i.e. Post-Tax Return on Equity (ROAE) of 26.8percent, Post-Tax Return on Assets (ROAA) of 4.6percent, Full Impact Capital Adequacy Ratio (CAR) of 21.9percent and Cost to Income ratio of 38.2percent.

Equities market gains over N100bn as investors buy Zenith, GTBank, others

The record positive seen on Custom Street came as investors realise the equities market offers reentry opportunities for value hunters as prices of most counters hit record lows.

Trading on the floor of the Nigerian Exchange (NGX) Limited closed in green zone on Thursday as investors raised stakes in stocks like Zenith Bank Plc, Eterna Plc, GTBank Plc, Dangote Sugar Refinery Plc and Lasaco Plc.

The record positive seen on Custom Street came as investors realise the equities market offers reentry opportunities for value hunters as prices of most counters hit record lows.

The All Share Index (ASI) of the Bourse stood higher by 0.54percent to close at 38,914.84 points, from 38,706.13 points recorded the preceding day.

The negative return year-to-date (YtD) stood lower at -3.37percent. This week alone, the equities market has increased by 0.69 percent, while this month it has declined by 2.22 percent.

Also, the value of listed stocks on the Bourse increased by N109billion, from the preceding day high of N20.251trillion to N20.360trillion.

Eterna Plc led the gainers league after its share price moved from N4.62 to N5.08, up by 46percent or 9.96percent.

Lasaco also advanced, from N1.2 to N1.3, up by 10kobo or 8.33 percent. Zenith Bank moved up from preceding day low of N20.5 to N22, up by N1.5 or 7.32percent.

GTBank rose from N28 to N29.8, adding N1.8 or 6.43 percent while Dangote Sugar moved from N16 to N17, up by N1 or 6.25 percent.

Unity Bank, GTBank, Zenith Bank and FBN Holdings were actively traded stocks on the floor of Nigerian Exchange (NGX) Limited. In 4,040 deals, investors exchanged 1,468,421,633 units valued at N5.853billion.

SOURCE LINK

SMEDAN opens N5m loan application portal for SMEs

The Small and Medium Enterprises Development Agency of Nigeria, SMEDAN, says it will open its portal Tuesday for receiving applications from small business owners for N1.2 million to N5million loans.

The Director-General and Chief Executive Officer of SMEDAN, Dikko Radda, in a statement issued by the Corporate Affairs Unit of the Agency, said the loans would be funded from the SMEDAN-BOA Matching Fund Programme for small businesses.

Mr Radda said the opening of the programme portal would be a promotional intervention meant to deliver credit to the small businesses to enhance enterprise output, competitiveness and jobs creation.

He also stated that the disbursing entity, under the programme, shall be the Bank of Agriculture, BOA.

“Target beneficiaries for this programme shall be labour-intensive micro or small enterprises (MSEs), operating in the real sector.

These shall ideally be innovative value-added products that are establishing footprint in the Nigerian market, and require additional funds to increase output,” the Director General said.

He, therefore, called for applications from all suitably qualified micro, small enterprises located in the Federal Capital Territory, FCT, Kaduna and Oyo states to apply for the programme.

Mr Radda added that prospective beneficiaries, who must be registered with SMEDAN, would get the loans on business-friendly terms, including waiver of collaterals.

SOURCE LINK

MTN EnGauge Platform Unveils to Transform SME Business Transactions

MTN Nigeria has launched a new unified customer engagement platform, EnGauge, designed to enable small-to-medium enterprise business owners to seamlessly administer transactions with customers, potentially increasing their productivity significantly.

Developed in partnership with Ajua™, a leading African start-up, MTN EnGauge is an agile application that offers innovative customer management solutions, including digital payments using a unique USSD code, CRM tools, customer feedback channels, debt management and tracking, business and product promotions through mobile and social media channels.

The solution is downloadable on the Google Play store and only available on the MTN network (for now) with a monthly subscription of N500 and a yearly subscription of N5,500. Following installation and registration, businesses are automatically provided with a unique USSD code that allows their customers to interact, transact and communicate with them in real-time.

With MTN Engauge, entrepreneurs can securely receive payment, track transactions with each of their customers and glean valuable insights to serve them better based on their preferences and buying behaviour. “MTN EnGauge is the ideal platform for business owners and entrepreneurs to thrive in the ‘new normal.’ Entrepreneurs have had to re-organise their core business models through backward and forward integration to maintain relevance. The EnGauge mobile application helps make this possible and seamless,” said Lynda Saint-Nwafor, Chief Enterprise Business Officer, MTN Nigeria.

To showcase the platform, MTN held a live demonstration session via Zoom, where business owners were presented with the benefits of adopting the solution.

“The fundamental engine of business growth is customers. By design, EnGauge solves most of the challenges SMEs experience, from digitally engaging their customers to cash management,” said Kenfield Griffith, the Founder and CEO of Ajua. “With MTN as a partner and their reach across the continent, we believe MTN EnGauge will have a positive and impactful trajectory, driving transformational business growth for SMEs,” he added.

MTN EnGauge was launched to the Y’ello 200 in February, beneficiaries of MTN’s Revv Programme, thus fulfilling the telco giant’s promise that the SMEs will be first to enjoy solutions from her stable.

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NEC: Poor electricity, multiple taxations killing MSME

ABUJA—A Sub-national Environment Survey report submitted to the National Economic Council, NEC, has identified poor electricity supply, deplorable road infrastructure and multiple taxations as some of the challenges impeding the growth of Micro, Small and Medium Enterprises (MSME) in Nigeria.

The report was submitted to NEC by the Special Adviser to the President on Ease of Doing Business, Dr Jumoke Oduwole during the virtual meeting at the Presidential Villa, Abuja. Addressing State House correspondents after the meeting presided over by Vice President Yemi Osinbajo, Dr Oduwole said her office would be working with the states to resolve the issues.

According to her, “Businesses have said that electricity supply is beat low, the hours are low. Then, we will be working with the governors and federal agencies to look into areas like that. “SMEs also talked about road infrastructure, they talked about regulatory challenges, paying of taxes, the multiplicity of charges. “So, we will be working with the state’s internal revenue agencies to ensure that there is harmony.” Dr Oduwole disclosed that the report was a peer review document that would enable state governments to see how they are doing in comparison with other states in providing a conducive business environment. “So, the Ease of Doing Business Councils reports to the states’ executive councils and they implement the report just like PEBEC and FEC; so, the system is replicated across the country. “We believe that as we continue to drill down into Nigeria, progressively making it easier to do business, our productivity will increase as we support our SMEs. “We make sure that on competitiveness, we are working actively at it even as AFCFTA has gone into life and the journey of continuous improvement and institutionalization of the reform agenda is the top priority for the administration”, she said. She explained that the survey was conducted across Nigeria by the Presidential Enabling Business Environment Council, PEBEC, which has been on a nationwide tour, called iteration, since 2019, to meet and interview SMEs on their operations. “So, we decided to carry out an empirical survey; it was carried out by KPMG. “The methodology framework had earlier been approved by NEC as far back as 2018 and we have four homegrown indicator areas on which the survey is based which are infrastructure and security; transparency and access to information; the regulatory environment and skills and labour readiness in each state and the Federal Capital Territory.” Oduwole said that the objective of the report was to provide a status report of the state’s business climate and to provide a baseline on the business climate of each state. “It is also going to help states as they prepare for their sub-national World Bank Ease of Doing Business ranking which is done once every four years,” Oduwole stated. Also, briefing correspondents on the government’s plans to formulate a Monitoring and Evaluation (M&E) Policy on prudent public spending, Governor of Nassarawa State, Abdullahi Sule, said this is to strengthen accountability. Governor Sule said that the policy would also provide an “independent objective assessment of the merit of public policy strategies, programme as well as projects” and “a source of reliable meaningful information for the citizens to assess government policy.” According to Sule, the objectives of the National M&E Policy were “to establish monitoring and evaluation as a source of credible information so as to guide government’s decisions, planning, resource allocation and expenditure; to strengthen accountability and feedback by the government to Nigerians; and to provide effective guide for the MDAs for the conduct of M&E functions. “The policy will also enhance coordination and monitoring and evaluation processes within the Nigerian public sector for standardization in the practice of M&E. “We noted that the policy recommends that policies by our key programmes and projects must be evaluated and summary of evaluation shall be presented to the Federal Executive Council and the State Executive Council at the state levels. “We also noted that there’s going to need to establish a National Council on Evaluation under the chairmanship of the Minister of Finance who is responsible for the M&E.” Sule said that state governments were expected to domesticate the National Monitoring and Evaluation Policy for effective performance tracking as well as continuous monitoring.

Most MSMEs Can’t Withstand Shocks—Olurotimi

Businesses may have suffered their worst year in 2020, but this year will see Micro, Small, and Medium Scales Enterprises (MSMEs) thrive if they work on all the lessons learnt and use them to adapt to the changing landscape, Mr Seye Olurotimi, the founder of MSMEs Africa, has said.

Mr Olurotimi, while appearing as a guest on TV Continental’s programme called Business Nigeria anchored by Mr Tolu Ogunjobi, which was monitored by Business Post, noted that small businesses do not have shock absorbers, which he said affected them when the global economy was faced with an unprecedented health crisis last year.

In his words, “MSMEs don’t have shock absorbers to withstand what the big corporates could absolve and when COVID-19 came and forced people to stay back at home, a lot of them didn’t have the infrastructure to run their services.

“It affected the way they made money. So, people could not make money, couldn’t meet their obligations, some have debts. Many have had to lay off their staff because they could not afford them.”

Mr Olurotimi noted that the recession that came with the situation led many to grapple with a lot as it made it harder for them to meet up with a lot of obligations.

FG’s interventions good

However, he commended several interventions from the federal government, which he said some have benefitted from. But he noted that the programme could not meet the demands of the over 40 million SMEs in the country.

Mr Olurotimi praised the payroll scheme of the federal government, which helped to pay workers and not business founders for a specified period, adding that the Guaranteed Offtake Scheme helped to provide funds to produce goods and also provided avenue’s to help them sell these goods.

While lauding these schemes, he advised the FG not to “just give people money” but should “train them on how to use them,” submitting that “for every intervention, let’s create a part that trains people on how to manage businesses so as to build capacity.”

He further said that despite the considerable improvement made as regards the movement of Nigeria in the ranks of global ease of doing business, there was more the country could do. Nigeria moved 15 places to 131 from 146 out of the 190 countries assessed by the World Bank.

He charged the Presidential Enabling Business Environment Council (PEBEC) to do more, explaining that the rate that businesses spend on electricity, rent and transport are not sustainable for business.

Enugu SME Centre

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CBN: Digital economy to drive growth, create jobs

These 5 Nigerian stocks control 80% market capitalisation

Union Bank grows full year pre-tax profit by 2.8% to N25.4bn

FG Refineries Earn N21bn, Lose N778bn

GTBank reports full year PBT of N238.1billion

Equities market gains over N100bn as investors buy Zenith, GTBank, others

SMEDAN opens N5m loan application portal for SMEs

MTN EnGauge Platform Unveils to Transform SME Business Transactions

NEC: Poor electricity, multiple taxations killing MSME

Most MSMEs Can’t Withstand Shocks—Olurotimi

FG’s interventions good

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