EnuguSME, Author at Enugu SME Centre

Federal-Ministry-of-Finance-Budget-and-National-Planning-the-Minister-of-Finance-Zainab-Ahmed-min

Federal Government Denies Printing N60bn To Share In March

The Federal Government has debunkfed claims that it printed N60 billion to support federal allocations to states in March, describing the comment made by the Edo State Governor, Godwin Obaseki as untrue and saddening.

The Minister of Finance, Budget and National Planning, Zainab Ahmed explained that despite Obaseki’s worry that Nigeria is in ‘huge financial trouble’, the country’s debt profile is still within sustainable limits.

Recall that Edo State Governor was quoted as saying at the Edo transition committee stakeholders engagement last Saturday that, “When we got Federation Account Allocation Committee (FAAC) for March, the federal government printed additional N50 billion- N60 billion to top-up for us to share.

“This April, we will go to Abuja and share. By the end of this year, our total borrowings are going to be within N15 trillion-N16 trillion.”

But the Minister of Finance in a statement by Yunusa Tanko Abdullahi
Special Adviser, Media & Communications, maintains that what is distributed at the monthly FAA meetings were generated revenue from government institutions available to the public at the ministry’s website.

Ahmed said: “The issue that was raised by the Edo State Governor for me is very, very sad because it is not a fact.

“What we distribute at FAAC is a revenue that is generated and in fact, distribution of revenue is a public information. We publish revenue generated by Federal Inland Revenue Service (FIRS), the Nigerian Customs Service (NCS) and the Nigerian National Petroleum Corporation (NNPC), and we distribute at FAAC.

“So, it is not true to say we printed money to distribute at FAAC; it is not true. On the issue of borrowing, the Nigerian debt is still within a sustainable limit.

What we need to do, as I have said several times, is to improve our revenue to enhance our capacity to service not only our debt, but to also service the needs of running government on day-to-day basis. So our debt currently at about 23 percent to GDP is at a very sustainable level if you look at all the reports that you see from multilateral institutions,” Ahmed concluded.

SOURCE

Sell-offs in microfinance banks over recapitalisation

Ahead of April’s deadline for the first threshold of recapitalisation exercise in the Microfinance Bank (MFB) sub-sector, some operators that do not have the capacity to meet up have decided to sell off their ventures.

Some of the micro lenders that have sold off their businesses include Cardinal Rock MFB, Cowries MFB, Aguda Titun MFB, First Ideal MFB, High Street MFB, Money Wise MFB, Owotutu MFB, Irolu MFB, and Royal Blue MFB, among others.

“Most buyers are ex-bankers. Some of them acquired the micro banks when they were about to leave the bank or after they had left,” top official of a microfinance bank told BusinessDay.

The Central Bank of Nigeria (CBN) had in October 22, 2018, reviewed upward the minimum capital requirement of the three categories of MFBs as follows – Unit microfinance banks from N20 million to N200 million, State MFBs from N100 million to N1 billion, and the National MFB from N2 billion to N5 billion.

In consideration of the impact of the COVID-19 pandemic on economic activities in the country, the regulator in 2020 revised and extended the deadline for compliance with the minimum capital requirement for microfinance banks by one year.

Consequently, MFBs operating in rural, unbanked and under banked areas (Tier 2) are expected meet the N35 million capital threshold by April 2021 and N50 million by April 2022.

MFBs operating in urban and high density banked areas (Tier 1) are expected to meet the N100 million capital threshold by April 2021 and N200 million by April 2022; State licensed MFBs are to increase their capital to N500 million by April 2021 and N1 billion by April 2022, and National MFBs are expected to meet minimum capital of N3.5 billion capital by April 2021 and N65 billion by April 2022.

However, more than two-thirds of licensed MFBs in Nigeria may close shop if they fail to meet the recapitalisation deadline, the first threshold of which should be due by the end of this April.

Of the 874 licensed MFBs, about 612 may be affected, although the final deadline will be in 2022. These banks were established to meet the financial needs of Nigeria’s low-income earners.

“I am having a feeling that most MFBs with National licence will survive,” a MBF CEO told BusinessDay on phone.

The National licensed MFBs include LAPO MFB, AB MFB, NPF MFB, and Paralex MFB, which have migrated into regional commercial bank.

Some of these big micro banks stand ready to acquire the ones that are not able to meet their capital requirements as a way of saving the sector from collapsing.

“We have not bought anyone but if they approach us we will buy, of course, we will do due diligence. We have done due diligence for one and it did not work. So, we are looking at one in Kano but they are not following up. I think many eventually would want to sell,” a source from LAPO Microfinance Bank Limited, said.

A bank from Kano State has approached LAPO but it is yet to conduct due diligent on the bank. The problem with some of these microfinance banks is that their books are too bad that when you buy them you buy “wahala.”

However, if their financials are bad, there might be some aspect of them that are good, that is, other values, such as good staff.

“The approach is simple, they approach us or we approach them, give them form to fill to complete their profile, we appoint a company to do financial analysis for us and once that is done we take our decision.

“We take them case by case. If for instance 20 approach us and we discover that all the 20 are good, then why not. On the other hand, if three approach us and we discovered that they are not good, we will not buy. The bottom line is that we are open to acquisition but the financial decision would be based on how good they are. The second thing is, one of the reasons is that it is a way of saving the sector,” the source said.

The Unit MFBs are likely going to be the ones that would be swept away at the end of the recapitalisation exercise.

The CBN on March 31, 2021, issued a letter to Suisse MFB to shore up its capital but the owners of the bank, Christ Embassy, is not making effort to comply with the directive, a source close to the bank told BusinessDay.

On November 12, 2020, the CBN revoked the operating licences of 42 failed MFBs.

According to Yusuf Gyallesu, national president, National Association of Microfinance Banks (NAMB), affirms that sell-off is one of the options presented to the MFBs in push for recapitalisation.

“It is the last option after you try all means and it does not work, instead of losing the licence, you sell it and someone will continue from there,” he says.

Some strong MFBs and their models

LAPO MFB provides a wide array of direct-lending solutions, both to group and individual, plus specialised lending products such as asset-based lending.

Renmoney, leveraging technology to make financial inclusion, states, “Everyday, we strive to understand our customers and leverage technology, data and innovation to deliver outstanding service experiences.”

Baobab MFB has gained recognition for its ability to combine financial sustainability with positive social and environmental impacts. As an industry leader, Baobab Group rigorously applies internationally recognised best practices of good governance and institutional ethics.

EdFin MBF birthed out of the need for quality education in Nigeria. The bank, dedicated solely to funding the education eco-space in Nigeria, aims to positively disrupt the standard and quality of education in Nigeria by providing the much-needed financial resources and services to the education sector.

EdFin is focused on facilitating a more enabling environment for private schools in order for them to be able to offer quality education that would ensure improved learning outcomes in such schools and ultimately in Nigeria.

The Nigerian Microfinance sector is strategically designed and positioned to provide formal financial services to the grassroots, with a focus on delivering micro-savings and microloans services towards improving financial inclusion in Nigeria.

A recent evaluation of this industry has shown gaps concerning Digital Financial Services and a significant opportunity to strengthen players in this regard, according to EFInA.

Edo plans to train 15,000 software engineers, programmers

At least 15,000 software engineers and programmers will be trained over the next few years in Edo State, Governor Godwin Obaseki said on Monday.

The governor also promised to continue to pursue policies and programmes to enhance digital transformation for businesses in the state with a view to increasing their competitive advantage, improving performance and boosting growth.

Obaseki, who boasted that Edo State was ready for digital transformation in e-commerce, reassured that his administration remains committed to creating enabling environment for investors to succeed.

He gave the assurance when he received Leo Stan Ekeh, founder and chairman, Zinox Group, who was on a courtesy visit at the government house in Benin City.

“What are the critical factors required for successful digital transformation, which leads to things like e-commerce? First is electricity. You recall that we did a deal with Azura Power; we did another deal with a Chinese company. We are building electricity infrastructure and thinking about closed networks in other parts of the state,” Obaseki said.

“The second critical factor is people; training the people to think technology and use technology to do the things they need to do.

“The goal of this administration is to train nothing less than 15,000 software engineers and programmers over the next few years,” he said.

He, however, lamented the disruptions caused by COVID-19 pandemic, saying over 150,000 jobs were created in the state in three years as against minimum of 200,000 jobs earlier promised during electioneering in 2016.

According to him, these jobs were not going to come from the government but enterprises and business activities undertaken by the citizens.

Earlier, Ekeh commended the governor for creating a structure where various businesses can thrive.

Bitcoin Market Cap Hit $1trn, Above Apple, Amazon

Bitcoin market capitalisation has notched the $1 trillion mark putting it ahead of Apple and Amazon.

Data from cryptocurrency trading simulator, Crypto Parrot indicates that it took bitcoin just 12 years to hit the current capitalisation, the least time frame than four leading traditional assets.

Among the overviewed assets, Microsoft (MSFT) took almost half a century at 44 years to hit the $1 trillion valuations, representing 3.6 times more time than bitcoin. Apple (AAPL) required 42 years to hit the milestone, meaning bitcoin hit the mark 3.5 times faster than the electronics giant.

Elsewhere, it took Amazon (AMZN) 24 years to hit the $1 trillion in market capitalization representing double the period than bitcoin. Lastly, bitcoin took at least 1.75 times faster to hit the $1 trillion market cap when compared to Google’s (GOOG) 21 years.

The report explores the nature of growth between bitcoin and the highlighted mainstream assets over the past year.

“Based on bitcoin’s recent market cap rate growth, the asset will potentially surpass the highlighted traditional assets’ value at some point in the future. Although the technology stocks have soared from last year, none has been able to outperform bitcoin”, noted Crypto Parrot

Furthermore, as bitcoin adoption becomes more mainstream, it can amass a higher market cap than the traditional assets, according to the report “

“If bitcoin sustains the growth coupled with increased institutional adoption that will lower volatility, the market cap might surpass some mainstream assets. The achievement is possible considering the bitcoin market cap has exceeded other formidable players like Tesla.”

The adoption of bitcoin by institutions spells good fortunes for the asset in the future.

SOURCE

Counting on in-store transactions, Burger King berths in Nigeria

Burger King, an American quick-service restaurant (QSR) chain, has finally entered Nigeria with eye on the volume of in-store transactions that Africa’s most populous country offers.

The QSR chain will open its first stores in the country by the third quarter of 2021. One of the assumptions supporting Burger King’s aggressive entry into Nigeria is that at least 20 percent of Nigeria’s population is middle class. This is about 40 million people out of Nigeria’s 200 million-strong population. This compensates for the possible lack of repeat unique customers.

“We are proud to bring this iconic brand to Nigeria, and believe that our Nigerian guests will love Burger King flame-grilled sandwiches and other famous Burger King menu items, that guests can have their way,” says Antoine Zammarieh, managing director from Allied Food and Confectionery Services Limited, and who was managing director at Eko Hotels for 10 years, at the launch in Lagos, Tuesday.

In late 2000, QSR businesses started moving forward with the brands such as Mr Biggs. People familiar with the industry say that unfortunately Mr Biggs did not follow the rules and failed, but is in a revival mode.

KFC, an international restaurant brand followed, then Chicken Republic, Dominoes, Coldstone and some South African brands of QSR too. Some of the South African brands did not succeed and left.

Nevertheless, the QSR business has become one of the hottest businesses in Nigeria. It employs many and contributes to the country’s gross domestic product. The growing QSR industry offers Nigerians more options.

Zammarieh has lived in Nigeria for 38 years, and says there has been an evolution in the lifestyle of Nigerians. In today’s Nigeria, the husband and wife are working; unlike in the past when being a stay-at-home wife was common.

In fact, as the children grow up they are also quick to join the labour force. This means there is little time available to cook at home. Quick service restaurants fill this gap. This was not the case in the past because many women were stay-at-home wives, which is no longer sustainable.

“The Nigerian market is the number one in Africa with 210 million people of which 60 percent is youth. You cannot say this is not a good market for this kind of business,” Zammarieh states in an exclusive interview. “How to adapt your business to the market is the most important thing.”

Adaptation here means that flavours and menus have to fit local pellets. For Nigeria, adaption also means meeting up the demands of a market where there is a huge infrastructure deficit. It is not a plug-and-play kind of market. Plug and play meaning there is electric power, water and sewage systems that work. This is a foresight many new entrants into the market miss. This can lead to massive failures.

Oil Price Gains For 5th Consecutive Month

The average global crude oil prices have continued to rise for the 5th consecutive month, the Organisation of the Petroleum Exporting Countries said on Tuesday.

OPEC attributed the continued rise in international oil prices to the supportive oil market fundamentals deployed by the group to stem the earlier plunge in crude oil costs.

It disclosed this in the ‘Highlights of the OPEC Monthly Oil Market Report’ released on Tuesday and obtained by our correspondent in Abuja.

Commenting on crude oil price movements, the organisation said, “Spot crude prices rose for the fifth consecutive month in March on the back of continuing supportive oil market fundamentals.

“The OPEC Reference Basket increased $3.51 or 5.7 percent m-o-m (month-on-month) to average $64.56/barrel, the highest on monthly terms since January 2020.”

It added, “In the first three months of 2021, the ORB was up by $8.82, or 17.2 percent to average $60.22/barrel. Crude oil futures prices were higher in March extending previous monthly gains.”

OPEC stated that the ICE Brent front-month rose by $3.42 in March, or 5.5 percent, to average $65.70/barrel, and NYMEX WTI increased by $3.30, or 5.6 per cent, to average $62.36/barrel.

It noted that consequently, the Brent WTI spread widened to $3.34/barrel on a monthly average.

Brent, against which Nigeria’s crude oil is priced, rose by $0.63 to $63.91 per barrel as of 9:50pm Nigerian time on Tuesday.

Meanwhile, OPEC has increased its oil demand outlook for 2021 just as the bloc and its allies plan to unleash more crude supplies over the next few months, according to S&P Global Platts.

In its closely watched monthly oil market report released April 13, OPEC raised its demand forecast by 190,000 barrels per day from its March estimate, expecting consumption to average 96.46 million bpd this year, citing economic stimulus programmes and a further easing of COVID-19 lockdown measures.

Year on year, global oil demand was projected to grow 5.95 million bpd in 2021, compared with the 5.89 million bpd forecast in March.

SOURCE

Finance Minister, Reps Meet Over Doctors’ Strike Next Week

The leadership of the House of Representatives will next week meet with the Minister of Finance, Budget and National Planning, Zainab Ahmed over the industrial action by the Nigerian resident doctors in efforts for an enduring resolution of contending issues with resident doctors in the country,

Speaker, House of Representatives, Femi Gbajabiamila disclosed Tuesday that the meeting would be over how to ensure the execution of the Memorandum of Action entered into between the government and members of the National Association of Resident Doctors (NARD)

The Speaker, who meet with the executive of the National Association of Residents Doctors (NARD) led by the President, Uyilawa Okhuaihesuyi assured that the House would ensure an amicable and acceptable resolution of the contentious hazard allowance issue as well as other contentious issues.

It would be recalled that the resident doctors suspended the industrial action that began on April 1, 2021, after 10 days of its commencement.

The Speaker noted that though it was impossible to accommodate the hazard allowance in the 2021 National Budget, the House would work to ensure that it is included in the supplementary budget.

While commending the doctors for suspending the strike at the request of the House, the Speaker said, “Even the constitution talks about essential services, but there’s nothing as essential a service than that which seeks to save and protect lives.”

Saying that the House believes that “the labourer must earn his wages,” Gbajabiamila said “We’ll monitor issues being processed, the IPPIS, training fund, hazard allowances which the House championed at the peak of the Covid-19 crisis.

“All the issues will be addressed. We’re looking to come to a reasonable and acceptable hazard allowance as well as the training fund, which when the supplementary budget is introduced, we hope and expect to justify why this should be accommodated

“We will do everything we need to do to see how we can capture that.

“We are inviting Finance Minister next week so that we can talk and see how, as best as we can, accommodate all these issues and cement the Memorandum of Action”.

Governor Ortom Launches Savings Scheme In Benue For Hajj Programme

The Hajj Savings Scheme which aims to give all Muslims equal treatment and to help them achieve one of the tenets of the religion is a product of the National Hajj Commission of Nigeria (NAHCON) in collaboration with Jaiz Bank Plc to make it easier for all Muslims to travel to Saudi Arabia to perform Hajj.

Holy pilgrimage to Mecca at least once in a lifetime to perform hajj is one of the demands of the Islamic faith and Muslim looks towards its fulfilment. However, the state of the Nigerian economy which has now been worsened by the Covid-19 pandemic has made it difficult for many to achieve.

Speaking during the launch and sensitisation of the scheme in Makurdi, the governor, represented by Amirul Hajj, Sule Audu said his administration is committed to providing equal opportunity to all religions in Benue.

He said: “I will like to assure the Muslim Community in Benue State and NAHCON that the Benue State government will not relent in her efforts to see Muslims in the state enjoy equal right like other state indigenes and to participate in both national and international Islamic events.

The governor said that since Hajj is a mandatory religious duty for Muslims that must be carried out at least once in their lifetime, the HSS will assist “low income earners and the general public to make an installmental or gradual saving at their convenience, towards meeting their goal of going on Hajj.”

The governor requested Jaiz Bank to open a branch in Benue State for the people of the state to benefit from non-interest banking.

The Managing Director of Jaiz Bank Plc, Hassan Usman said as the Scheme grows over time, NAHCON and the various State Muslim Pilgrims Welfare Boards can have the liquid funds required to effectively plan hajj operations early, thereby securing better bargain for accommodation and other services for their pilgrims. The scheme can also be the key to making them highly self-sustaining in the long run.

The Chairman and Chief Executive Officer of National Hajj Commission of Nigeria, Zikirullah Kunle Hassan said the scheme is part of the reforms to make hajj operations in tandem with the global best practice.

He said under the Hajj Savings Scheme, subscribers can get reward of their intentions before actualising the journey, saying every Muslim can participate and will have the opportunity to perform the holy pilgrimage without having to sell off his or her assets.

SOURCE

UBA Organises Capacity Building Forum

As part of its commitment to support the growth and sustainability of micro, small and medium-scale enterprises (MSME) in the continent, the United Bank for Africa (UBA) Plc, is set to organise the next edition of its UBA Business Series.

The UBA Business Series which is a monthly event, is an MSME Workshop as well as a capacity building initiative of the bank where business leaders and professionals share well-researched insights on best practices for running successful businesses, especially in the face of the difficult operating environment that dominates the African business landscape.

Through this initiative, UBA has been assisting with essential tips to help businesses re-examine their models and strategies and ensure that they stay afloat and remain thriving, a statement from the bank explained.

The topic for the next edition of the series is, “Managing Performance for Business Growth,” and it will be held today, via Microsoft Teams.

At this session, the Managing Director, Secure ID Limited, Mrs Kofo Akinkugbe, will be sharing useful tips and insights on the key strategies of performance management to boost business growth.

Akinkugbe is the founder of SecureID Nigeria, a MasterCard, VISA and Verve certified Smartcard Personalization Bureau and Digital Technology company. She currently serves as the Managing Director/CEO, Secure Card Manufacturing, – a Smartcard manufacturing plant producing high security identity cards and documents for the Banking, Telecoms and Public sectors across Africa and beyond.

UBA’s Head, SME Banking, Sampson Aneke said of Akinkugbe, “with her vast experience garnered over the years from various sectors, she will help business owners understand how performance management strategies can be effectively implemented to ensure business growth.”

He emphasised UBA’s commitment and deep passion for small businesses, which according to him, remains the engine of any developing economy adding, “We know small businesses are the backbone of the economy in every country. In many climes, businesses with fewer than 100 employees account for 98.2 per cent of all businesses. This no doubt captures the importance of SMEs to a thriving economy which is why UBA is committed to seeing them flourish.”

SOURCE

Senate Summons NICON, AIICO, Others

Alleged Non-Remittance Of N17.4bn: Senate Summons NICON, AIICO, Others

The Senate Public Accounts Committee has summoned the management of the NICON Insurance Plc, AIICO Insurance and other insurance companies over their alleged failure to remit N17.4bn pension fund to t he Pension Transitional Arrangement Directorate.

The Senate hinged the summon on the 2016 report of the Auditor-General for the Federation which unraveled the alleged non-remittance of N17.4bn pension fund to PTAD.

Appearing before the panel on Monday, the Executive Secretary of PTAD, Dr Chioma Ejikeme, informed the lawmakers that PTAD took over the assets and liabilities of the defunct pension offices without a formal handing over.

She said, “On taking over, the directorate wrote all underwriters to make returns and remit whatever amount that was in their custody into a CBN dedicated account.

“Some of the underwriters responded to the request while some did not.

“The bank certificate of balances, accounting statements, three years financial statements and policy files requested by the federal auditor were not handed over to PTAD at the time of consolidation.

“These figures represent the claims by the underwriters with regards to their indebtedness.

“In order to ascertain the true position of legacy funds in custody of underwriters, the directorate appointed a consultant in 2018 who carried out forensic audit of nine out the 12 insurance underwriters and produced a final report on the recovery of the legacy funds and assets for PTAD.”

Enugu SME Centre

All posts by : EnuguSME

Federal Government Denies Printing N60bn To Share In March

Sell-offs in microfinance banks over recapitalisation

Edo plans to train 15,000 software engineers, programmers

Bitcoin Market Cap Hit $1trn, Above Apple, Amazon

Counting on in-store transactions, Burger King berths in Nigeria

Oil Price Gains For 5th Consecutive Month

Finance Minister, Reps Meet Over Doctors’ Strike Next Week

Governor Ortom Launches Savings Scheme In Benue For Hajj Programme

UBA Organises Capacity Building Forum

Senate Summons NICON, AIICO, Others

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