FG Zainab Ahmed

FG Admits Revenues Crashing, Says Nigeria Faces Hard Times

by with No Comment financeNews

The Minister of Finance, Budget and National Planning, Zainab Ahmed, on Monday admitted that Nigeria’s economy was facing a difficult time, saying states must improve their internally generated revenues.

READ ALSO: FBNQuest Recommends Commercial Papers and Bonds as Stable Funding Sources for SMEs and Corporates

Ahmed, who stated this in an interview on a daily breakfast show on the Nigerian Television Authority, Good Morning Nigeria, stated that the money shared at the March  Federation Account Allocation Committee meeting was short of N50bn.

The minister was speaking on a controversy generated by a claim by the Edo State Governor, Godwin Obaseki, that the Central Bank of Nigeria printed N60bn in March to augment the money shared at March FAAC.

But the minister and the CBN Governor last week dismissed Obaseki’s claim.

In the interview on the NTA on Monday, the finance minister stated the country’s economy was stabilising from the recession, which the country exited a few months ago.

She, however, added, “These are very difficult challenging times because revenues are low and the demand for expenditures are very high understandably because we have to keep intervening to make sure the pandemic is contained as well as the economic impact it has caused.

“In our case in Nigeria, the crash of the crude oil prices really hit us very hard in terms of revenue. We have very low revenues, we have very high expenditures. What we have done so far is just to provide some stability to make sure salaries are paid, pensions are received every month;  that we send funds to the judiciary and the legislature; that we meet our debt service obligations.

“That’s what we are doing. It also means we have had to borrow more than we have planned before the COVID-19 started because we need to still continue to invest in infrastructure using our national budget. We borrowed to invest in key projects such as roads, rail, airports, seaports and several other investments that are required in health and in education and upgrading the social standards and quality of life of our people and Nigeria is not unique as several countries of the world went into recession.

“Almost every other country has had to borrow more than it planned. It means we expanded our economy deficit very fast in 2020. 2021 is a year that we see as the year of recovery.”

According to him, government hopes to achieve a growth of three percent in 2021, adding that some of the multilateral institutions are putting it at 2.5 percent.

She stated,  “It is a very difficult time. I can explain to you how difficult it is, not just for the Federal Government but also for the states. We see increasing reductions in our FAAC revenues; FAAC revenues are the revenues that we put together every month, that are collected from both oil and non-oil sectors from the collection of the NNPC (Nigerian National Petroleum Corporation) the FIRS (the Federal Inland Revenue Service) and all other revenues collection agencies.

“ So, FAAC reduces and whenever FAAC reduces, it is a very difficult situation and in the past one year, we have tried to fall back on some specific accounts that are meant to be saved; savings that when you have such a situation, you fall back on the resources and augment.

“So, we take funds based on Mr President’s approval either from Excess Crude or Stabilisation Account or in some cases, President approved for us to take funds from LNG (Liquefied Natural Gas) dividends. In the month of March, we had a shortfall of FAAC that was about N50bn; we didn’t have enough accrued in any of those accounts other than some N8.5bn that we took from exchange rate differential account so we added that and we ended up with the FAAC of N605bn.

“An average FAAC that is healthy for us is N650bn, so it means we had a shortfall of about N50bn. The states to be honest wanted us to go and borrow from the central bank to augment FAAC.”

She stated that advice by states was rejected, adding that the three levels of government were asked to manage what was available.

“So, it was very surprising when we had a sitting governor saying that the CBN had printed money for FAAC. That was very unfortunate because it was not true. The FAAC information is published so you can see the revenue contributed by each of the agency; that is what we shared.

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Doctors strike

Finance Minister, Reps Meet Over Doctors’ Strike Next Week

by with No Comment News

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,

READ ALSO: Governor Ortom Launches Savings Scheme In Benue For Hajj Programme

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”.

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Obaseki

Nigerian economy: We are in huge financial trouble – Obaseki

by with No Comment Businessfinance

“We say remove fuel subsidy, they say no. This April, next week again, we will go to Abuja to share. By the end of this year, our total borrowing is going to be in excess of 15 to 16 trillion”. Obaseki.

Governor Godwin Obaseki of Edo State, an economist and former investment banker, at a public forum recently painted a gloomy picture of the Nigerian economy. Below are his exact words:

READ ALSO: FAAC: Nigerian states share N9trn in 4 years, yet some owe salaries

At the end of the month we all just go to Abuja, we collect money and we come back and we spend. My brothers and sisters, I am an economist, and I am an investment banker; we are in trouble. Huge financial trouble!

We say remove fuel subsidy, they say no. This April, next week again, we will go to Abuja to share. By the end of this year, our total borrowing is going to be in excess of 15 to 16 trillion. My worry is that we would wake up one day, like Argentina, the naira would be 1000, 2000 to a dollar, and it would keep moving. You can imagine a family, you don’t have money coming in, and you just keep borrowing and borrowing without any means or idea of how to pay back.

And nobody is looking at that; everybody is looking at 2023. Everybody is blaming Mr President as if he is a magician, Obaseki.

So, that change in the world economy which is now affecting Nigeria is going to be one of the major factors that will affect our politics going forward; whether we like it or not.

SOURCE LINK

BANKLY

Bankly gets $2m seed funding to financially include 2m Nigerians

by with No Comment Businessfinance

In the next three years, over 2 million Nigerians are likely to gain access to financial services thanks to a $2 million seed funding raised by Bankly on Wednesday.

READ ALSO: Here’s why investment-interest in Eko Atlantic is high despite economic slowdown, land price

Founded in 2018 by Tomilola Adejana and Fredrick Adams, Bankly is looking to put a bank in the pocket of Nigeria’s 36m unbanked adults. Bankly’s primary strategy is to deploy money agents across the country. Haven started with about 2000 agents, Blankly plans to expand to a 15,000 agent network with its new funding.

The latest seed fundraising led by Vault and Flutterwave with participation from Plug and Play Ventures, Rising Tide Africa and Chrysalis Capital.

“We’re thrilled to have closed this milestone fundraise and to have such seasoned fintech investors who understand the market join us on this journey to bank Nigeria’s unbanked. Our goal has always been to reach the last mile using a fast-moving consumer strategy.

Now we have built the agent network and are poised to serve customers directly via offline and online channels. Partnerships, collaboration, and a deep understanding of the needs of the unbanked will be vital to our success,” said Tomilola Adejana, CEO and Co-founder of Bankly.

Bankly plans to increase its 35,000 customer base in cash dependent communities.

To achieve this, the company plans to grow the number of its physical “cash in” points by expanding its 15,000 person agent network and plugging its API into partner networks. Bankly will also develop direct-to-consumer (DTC) products for its customer base that will be available through its app and USSD channels.

Over the next three years, Bankly aims to grow its customer base to 2 million unbanked Nigerians, supporting the aims of the Central Bank of Nigeria’s National Financial Inclusion Strategy.

“Given our over 20 years experience in Nigeria’s fintech industry and previous exits, we strongly believe that Bankly understands the nuanced needs of this market – not to mention the team, strategy, and technology — to succeed in bringing affordable financial services to the unbanked.

We are delighted to participate in this financing round as Bankly moves into its next growth stage,” said Idris Alubankudi Saliu, Partner, Vault.

Bankly allows ajo participants to save their money using both online and offline methods.

Customers can deposit and withdraw cash with a Bankly agent or make payments using its app or USSD function.

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ESME Money BootCamp

ESME Money BootCamp

by with No Comment Enugu SME News

Be a part of this 1-Day ESME Money BootCamp

Cost of food keeps increasing

Rent, Education, Healthcare didn’t stop either

READ ALSO: The Enugu Skill Up Project exercise.

The youth and #MSMEcommunities asked and we listened.

Insights from the gathered data tops that steady flow of income, cashflow, savings and investment opportunities is what the people want.

This is why on Saturday, 27th March 2021, the Head of Enugu SME Center, Hon. Arinze Chilo-Offiah and Tosin Olaseinde of the Money Africa will share the little known strategies of how money works, and help you understand financial trends.

Be a part of this 1-Day ESME Money BootCamp.

Register for FREE here:
http://www.enugusme.en.gov.ng/moneybootcamp

P.S:-
Date: Saturday, 27 March 2021
Time: 9am- 3pm
Venue: Oaklands Hotel- Delta Hall

Small businesses

Small businesses get N53b to create 1 million jobs

by with No Comment Businessfinance

The Bank of Industry yesterday disclosed that it had  disbursed N53 billion to Micro, Small and Medium Enterprises (MSME), thereby creating jobs for about one million Nigerians.

READ ALSO: Price of petrol could rise as uncertainty looms in the global market

BOI’s Executive Director, Micro-Enterprise Directorate, Mrs. Toyin Adeniji, made this known during the graduation of the first batch of the participants of the Post-COVID-19 Economic Strategy Pilot Training Programme at the   Local Government Service Commission office, in Abere, Osogbo.

Adeniji said: “We have disbursed over N53 Billion to MSMEs in different sectors, thereby facilitating the creation of an estimated one million direct and indirect jobs.

“BOI provides subsidised loans to MSMEs at a single digit all-inclusive interest rate, which has helped to stimulate economic activities in the MSME sector.

Osun State Governor Adegboyega Oyetola said his administration had adopted a proactive strategy to stimulate the economy of the state which hitherto was adversely affected by COVID-19.

He also presented cash seed loans to 2,000 successful trainees of the Skills Upgrade and Entrepreneurship Training Programme.

Oyetola added that his administration had put in place, a workable strategy and   measures by making skill upgrade training, a priority in its 2020 budget as part of efforts to cushion the effects of the  global economic downturn and prepare for the worst circumstances that might arise.

The governor noted that the programme was designed to generate 15,000 direct and indirect sustainable job opportunities for the people annually.

He said his  administration had set aside ¦ 100 million for disbursement to beneficiaries of the scheme as seed loans of ¦ 100,000 only to each participant.

His words: “As an institution charged with providing security and welfare for citizens, our government, on coming to office two years ago during the world economic downturn adopted a proactive strategy to prepare for the situation and the worst circumstances that might arise.

“Under the Skills Upgrade training programme, we were able to re-focus, re-engineer and expand the scope, knowledge and relevance of artisans and people who lost their jobs to make them relevant under the new normal orchestrated by Covid-19.”

The Commissioner for Commerce, Industries, Cooperatives and Empowerment, Bode Olaonipekun, said the programme was put together by the government as part of efforts to address the adverse effects of the COVID-19 pandemic and ameliorate the disruptions to the livelihood of citizens.

He said 2, 000 participants were all trained in 15 different types of skills and empowered with startup loans to support their businesses.

SOURCE LINK

IMF

Risks facing Africa requires urgent IMF special fund

by with No Comment Businessfinance

The risks facing Africa and the rest of the world make the issuance of additional International Monetary Fund (IMF)’s Special Drawing Rights (SDRs) more urgent, according to a report released on Tuesday by Afreximbank.

Special drawing rights are supplementary foreign exchange reserve assets defined and maintained by the Washington based IMF.

READ ALSO: Concerns grow over stoppage of food supply to southern Nigeria

SDRs are the IMF’s reserve asset, and are exchangeable for dollars, euros, sterling, yen and Chinese yuan or renminbi. The IMF has so far allocated SDR 204.2 billion, equivalent to roughly $285 billion.

Deploying additional SDRs will bolster investor confidence and strengthen Africa’s economic recovery, besides preventing liquidity crises from morphing into solvency crises, the report says.

The risks facing Africa’s growth outlook include weaker-than-expected recovery among the continent’s key trading partners; abrupt tightening of financing conditions; a premature return to fiscal consolidation; climate change and extreme weather events that could cause food prices to spike; and longer-lasting COVID-19 infection rates.

Most of these are contingent on the pandemic’s evolution, which could undermine the recovery process and weaken governments’ capacity to respond effectively to prolonged hardship.

Another risk facing Africa’s growth is if vaccine deployment is hindered by supply bottlenecks or some citizens’ reluctance to be vaccinated – as has been the case in parts of Europe – new waves of infection could rage. Slow growth in Africa’s main trading partners could inhibit the region’s resurgence through lower export demand and reduced investment.

According to the report, the development impact of such a move will also be broad-based and longer-lasting. It will benefit low-income Debt Service Suspension Initiative (DSSI) eligible African countries as well as those larger nations, like Nigeria and Kenya, that opted out of the G20 initiative to preserve access to international capital markets and will play a key role in the region’s recovery as major drivers of intra-African trade.

READ MORE: BUSINESS DAY

SMEs

Nigeria’s SMEs Get FSD Africa Lifeline For Financial Inclusion

by with No Comment financeNews

As the COVID-19 pandemic takes a toll on businesses across countries, the UKaid has announced an incentive package to support the growth and stability of small and medium enterprises in Africa including Nigeria.

READ ALSO: Osinbajo Highlights Strength of SMEs

The UK aid-funded financial inclusion organisation FSD Africa made the announcement according to a statement by FSD Africa.

With COVID-19 impacting on small and medium sized businesses in Nigeria, a new Private Equity and Private Debt Programme from FSD Africa and the Private Equity and Venture Capital Association of Nigeria will aim to improve the long-term financing available for SMEs in key sectors of Nigeria’s economy, including agriculture and healthcare, the statement said.

It said that given the significant contribution of SMEs to Nigeria’s economy, FSD Africa’s programme hopes to address the obstacles to this sector’s growth.

While quoting a report by PwC, the statement noted that SMEs in Nigeria contribute 48% of national GDP, accounting for 96% of businesses and 84% of employment.

“Long term financing options are essential to ensuring that the SME sector can continue to play a significant role in providing employment opportunities and adding value to Nigeria’s economy.

“The programme will support the development of private capital markets to help SMEs to access long-term financing through technical assistance, grants and investment capital,” the statement said.

The statement added that FSD Africa and its partners will also be conducting sessions where key players in Nigerian investment, business and regulation will be invited to provide their specialised knowledge about the local private equity and debt environment.

SOURCE: The Fact

7262E121-9068-439A-AF58-E1AD6F26AE16

Raising stake in SMEs financing, growth in Nigeria

by with No Comment Businessfinance

From unemployment reduction to its contribution to government revenue, the benefits of a well-developed Micro, Small and Medium Enterprises (MSME) sector can never be over emphasized. Given their contributions, nations have set out plans to develop the MSMEs sector to achieve economic growth.
  
In high-income countries, MSMEs contribute well over 65 per cent of employment and about 48 per cent to the GDP, while in low-income countries; they contribute to about 30 per cent of employment and about 15 per cent of GDP.
 
READ ALSO: How Rwanda plans to enhance SME corporate governance


MSMEs have been generally acknowledged as the backbone to the success of developed nations, gaining popularity through the success rates in such developed economies that invested in the sector.
 
There also exists a relationship between the informal sector, MSMEs and economic development. In low-income countries, the contribution from the informal sector is rather high, unlike high-income countries where the contribution from the informal sector is low.

This gives room for the development of the informal sector, to reduce the gap between the formal and informal sector and allow the poor to actively participate in the economy
  
For the Nation to be among the 20 most economically advanced nations in the world by the year 2020, serious attention must be paid to the development of the MSMEs sub-sector in Nigeria
  
The contributions of MSMEs to the economic growth of countries have been very significant. SMEs are viewed as an engine of growth that contributes enormously to the nation’s Gross Domestic Product (GDP) employment generation, industrial output poverty alleviation, export promotion, and self-independence
 
In Nigeria, despite the fact MSMEs has been identified as a tool for economic development and provision of employment, variety of challenges seems to have a negative impact that constraint MSMEs from playing the vital role of stimulating economic development.
 
To this effect, First Bank of Nigeria Limited, Nigeria’s most valuable bank brand has over the years demonstrated an unwavering commitment to the business success of SMEs in Nigeria.
  
At the just concluded Ehingbeti, the Lagos Economic Summit, the Group Chief Executive Officer of First Bank, Adesola Adeduntan said the bank has a cocktail of products and bespoke solutions, specifically designed to help grow and sustain SMEs; enable them play out their business activities as well as fulfill their goals and aspirations.

In addition, the bank offers advisory services that are tailored to meet the needs and aspirations of their SME customers.
  
He said the bank is enthusiastic about the SME segment as one of the strategic platforms to stimulate economic development.
  
“We have SME CONNECT portal which serves as a advisory services platform to help them up their skills, supporting them to make accurate decisions and a number of banks have similar support system. We refine and update the portal. Our SMEs portfolio is quite sizeable considering Nigeria’s population.
  
“Our support for relevant businesses helps us come far especially the SMEs. We have been active in providing various financing instruments. The path to growth and development of the Nigerian economy is growing the SMEs segment,” he said
   
With a bouquet of bespoke products and services, First Bank is set to place SMEs ahead of their competition through collaborations with the business owners to provide flexible and dependable services, helping each SME fulfill life time dreams for their businesses.

Source: Newscentric