In recent years the Annual General Meeting of Guaranty Trust Bank Plc
have been a celebration of what remains the most profitable banking
operation in Nigeria. This brand equity has been exported to make the bank
a successful international brand. At present the number of foreign
subsidiaries with the bank’s Group is 10 with total investment of about
N40billion. GTB plans to continue with this growing trend in its global
strategy.
Saturday 26 December 2015
Friday 25 December 2015
Zenith bank Plc: Sustains high Assets Quality
•Jim Ovia, Chairman Zenith Bank & •Peter Amangbo, MD/CEO.
Zenith Bank second generation banks that stormed the Nigerian banking industry with verve and determination to revolutionise the way banking services were operated in the country. From inception the bank alongside a few others established a niche in the mid-upper class market segment and used differentiation and technology to climb the industry ladder within a relatively short period of time.
Today, in different measures of bank performance Zenith Bank has become a reference name and a trail blazer.. By most size metrics its either number one or two in the industry and this underscores the leadership role it plays after being in operation for just 24 years.
As at end 2014 total assets was N3.43 trillion having expanded by whopping N545 billion just in one financial year. It also operates in five countries including United Kingdom while international expansion is continuing.
Zenith Bank is one of the few financial institutions in Nigeria that have taken advantage of the Global Depository Receipt programme to achieve cross-boarder listing in the London Stock Exchange. It listed USD850 million worth of shares.
Deposit Liabilities and Liquidity Risk
As at 2014, customers held deposit accounts worth N2.27 trillion, adding approximately N280 billion that year. Only two other banks competed with Zenith on this industry measure of size. This is a mark of depositors’ confidence and loyalty. The bank has also demonstrated its readiness to meet obligations at all times.
In 2014 the bank invested N1.55 trillion in cash and near cash assets in readiness to meet any demand. This accounted for about 45% of entire assets, just as qualifying liquid asset to vulnerable deposit ratio was about 41%. Only two banks matched this level and relative measure of sound liquidity positioning the industry.
Managing Risk Asset and Asset Quality Issues
Following the trend already established Zenith Bank and two others are in the forefront of credit to the economy using several genres of facilities. By end 2014, Zenith Bank had about N1.61 trillion worth of loans outstanding with significant positions in the telecom sector as well as oil and gas. This meant an increase of about N458 billion in just one year.
But interestingly only 2% of the loans outstanding were classified as non-performing in line with the CBN prudential guideline. This impairment rate has been consistent with the preceding years. Only seven banks achieved this level of quality assets in 2014. This reflects disciplined approach to credit risk management, meaning that even as risk assets expanded massively with increasing complexity of management the bank did not compromise quality in pursuit of earnings.
Capital Adequacy
In the competition for market leadership the level of capitalization has been recognized as very critical and of prime consideration. In 2014 Zenith Bank reported shareholders Fund of N513 billion, up from N473 billion in 2013. Figures available suggests that Zenith is the leader in the industry using absolute levels of capitalization. Analysts believe that the size of the Zenith Bank capitalization was a deliberate market leadership strategy which it had pursed for over a decade now, preparing it for challenges in the economy and the banking industry.
Relating the capital base to the risk adjusted asset portfolio reveals a relative Basel1 measure of 21% which came down from about 24% in 2013 following the growth in loan portfolio. This comes slightly lower at 20% under Basel11, ensuring that a sizeable 4% margin of safety existed on the regulatory minimum of 16% required for systemically important banks like Zenith.
The bank could afford to remain at current capital and grow risk assets substantially without compromising standards. But as we prepare to publish the 2015 analysis soon we are already seeing a strengthened position.
Source: Business Vanguard.
Thursday 24 December 2015
FCMB Group Plc consistent with good performance
FCMB Group Plc is one of the oldest private sector indigenous operators
in Nigeria’s financial system in 1977 as City Securities Ltd (CSL).
It then operated as a Stockbroker, Issuing House and Registrar. CSL gave
birth to First City Merchant Bank Ltd in 1982. It converted to commerical
banking trading as First City Monument Bank Ltd in 2001 and became a public
company listed on the Nigerian Stock Exchange in 2004. Following Central Bank
of Nigeria’s directives embedded in Regulation 3 of 2010, the bank in 2011
converted to a group structure.
FCMB Plc became a private lĂmited company and a subsidiary of the group,
and same for CSL Trustees Ltd, FCMB Capital Markets Ltd, and CSL
Stockbroker Ltd. FCMB Ltd (The Bank) is the group’s flagship with about
2.7 million customers, 3100 full time staff and 248 branches spread across the
country. The bank is also a parent to FCMB (UK) Ltd and Credit Direct Ltd (a
micro finance lender).
By the close of business in 2014, the Group operated with total assets
valued N1.2 trillion haven grown by 16% in the preceding year. The Group had
523,442 shareholders out of which 345 were foreign investors
Capital Adequacy
As at close of 2014, shareholders fund of FCMB Group had accumulated
some N160 billion up from N143.7 billion in 2013. The increase resulted largely
from accretion to reserves. The Group decided to retain significant part of
earnings in the business to pursue future growth opportunities. The bank’s
Risk Management committee is mandated to ensure that capital levels remain
adequate and consistent with prescribed ratio by regulators.
The bank’s computation actual risk weighted asset ratio yielded a
Basel II ratio of 19% against 18% in the previous year. This leaves the bank
with sufficient margin of safety as it expands business and risk assets size.
Customer Service, Deposits and Liquidity
In 2014, the bank won 481,643 new accounts made up
mostly of retail customers. Total deposit liabilities amounted to N734
billion. Net deposits grew by just 2.7% from the preceding year’s level
reflecting the challenges faced by the bank in building up deposits during
the year. In managing these accounts to minimise liquidity risk, the bank
relies on maturity and re-pricing gap analysis to ensure that obligations
are met on continuing basis. However, during the year, proportion of assets
classified as cash and near-cash securities declined to about 40% from 48%.
Obviously, the level of liquidity appeared sufficient to satisfy demands
of the bank’s counter parties, and meet regulatory requirements. The level and
extent of decline could not have in the opinion of our analyst, been the major
factor in the near stagnation of deposits as they favourably compares with
capacities shown by other banks in the market.
Earnings and Profitability
In 2014FCMB Group leveraged on its diversified business structure to
report a gross earning of N148.7 billion against N131 billion in 2013. Interest
component was N117.98n billion of 79% of total. Interest expense virtually
closed flat at N45 billion leading to increased at interest margin of N72.6
billion.
Net charges arising from impairment of assets rose from N7.98 billion to
N10.64 billion. Although operating expenses (including personnel costs)
increased by about N6.2 billion, increase in the top line was overwhelming lead
to higher profit after tax of N22.10 billion against N16.0 billion in the
previous years. With this satisfactory business outcome even in the face
of challenging financial market conditions, the directors were pleased to pay a
cash dividend of 25k per share for which shareholders were very delighted. Many
others were not able to pay cash dividends during the period.
Asset Quality
During the year, FCMB took more risk by winding down certain cash and
cash-related positions to expand the level of risk assets. This appear to be a
response to higher reserve requirements that locked in some liquidity during
the period. Accordingly the bank had go grow lending from N462 billion to N633
billion in order not to unduely suffer reversal in earnings and profitability.
At the end of the year, about 3.6% of the total loan was classified as
non-performing according to criteria prescribed by regulation. This reflected a
marginal improvement from 3.9% achieved in 2013. Though marginal, this
improvement is remarkable in the sense that the bank expanded credit by a net
figure of about N171 billion.
Accordingly credit was expanded rapidly even as the rate of impairment
went down. The Group has skilled credit analysts who are fully guided by
internal rating framework and lending politics. They employ a 9 grade loss
severity model to reflect expected makers in approval and pricing
decisions. We believe that in the application of this framework in 2014,
FCMB was relatively efficient in loan origination and other processes leading
to repayment or recovery of facilities.
Source: Vanguard BusinessWednesday 23 December 2015
Banking industry environment: 2014 -2016 Challenges
The continuing headwinds in the economy may be
defining the sustenance of the resilence banks have demonstrated in their 2014
operations. A consecutive year of severe negative operating environment may end
up signposting both 2015 and 2016 as seasons of locust after signficant rises
in performance indicators in the previous three years.
Much cannot be understood in the study of Nigeria’s banking industry in
the last two years without the background provided by the first major regulator
induced consolidation in the industry under Prof. Chukwuma Soludo led Central
Bank of Nigeria, CBN, in 2004 – 2009.
lndustry analysts believe Soludo was set to build a better banking
industry by share size in all respects especially capital base. By that the
banks would be in better position to support economic development and less
susceptible to the risks of bank failures, which had almost become the common
phenomenon of Nigerian banks. Up until then banks were challenged with issues
of persistent liquidity, poor asset quality and undetrcapitalisation. Banks
also depended majorly on public sector deposits.
Thursday 17 December 2015
Top 10 performing stocks
Unilever Nigeria Plc emerged investors toast last week, rising by 15.75
per cent or N4.95 to close at N36.38 from N31.43, followed by Eterna Plc, which
appreciated by 12.42 per cent or N0.20 to close at N1.81 from N1.61. UACN
Property Development Co Plc went up by 10.14 per cent or N0.67 to close at
N7.28 from N6.61; Dangote Flour Mills Plc trailed behind by 9.52 per cent or
N0.22 to close at N2.53 from N2.31; Ikeja Hotels Plc rose by 8.44 per cent or
N0.27 to close at N3.47 from N3.20, while Chemical and Allied Products Plc
appreciated by 7.76 per cent or N2.95 to close at N40.95 from N38.00 per share.
World manufacturing output grew 2.7% in third quarter —UNIDO
The United Nations Industrial development Organization (UNIDO) has
released its international industrial statistical database on world
manufacturing output for the third quarter of 2015, saying it grew by 2.7 per
cent.
In Africa manufacturing output rose by just 0.1 per cent.
In the report, Shyam Upadhyaya, UNIDO Chief Statistician, said the
organisation regularly releases the statistics on current growth trends of
global manufacturing at country and regional level, adding that for the first
time in recent years, the growth trend in industrialized economies was upward
compared to declining trend in developing and emerging industrial economies.
Said the report: “Manufacturing output grew by 1.5 per cent in
industrialized economies, up from 0.9 per cent in previous quarter. In developing
and emerging industrial economies, the growth rate dropped to 5.0 per cent,
down from 5.3 per cent in previous quarter.
“Eurozone industrialized countries have further improved their growth
thanks to an increase in commodity export prompted by lower energy costs and
the depreciation of the euro against major world currencies. By contrast,
manufacturing in the United States was upset by a stronger dollar and a
consequent loss of exports.
“Lower growth was observed in East Asian industrialized economies,
especially in Japan where manufacturing output fell by 0.4 per cent in third
quarter of 2015. In contrast, manufacturing output rose in Malaysia and the
Republic of Korea.
“Among the developing and emerging industrial economies, China’s
manufacturing grew by 7.0 per cent, which was lower rate than previous quarter.
China’s declining growth has raised concerns in other emerging industrial
economies.
In Latin America, manufacturing output fell by 3.3 per cent. The largest
loss was observed in Brazil, where in third quarter manufacturing output
dropped by 11.0 percent. Declines in manufacturing output to lower extent were
also observed in other countries in the region, including Columbia and
Peru.
Asian economies were less affected by China’s declining growth. India’s
growth rate rose to 4.6 per cent in the third quarter compared to 3.7 per cent
in the previous quarter. Similarly, manufacturing output rose in Indonesia by
4.2 per cent and in Vietnam by 12.5 per cent.
In terms of sectors, in industrialized countries production growth rates
increased in high-technology sectors such as electric goods, communication
equipment and motor vehicles. The production of motor vehicles increased
in major car producing countries of Europe, especially France, Germany and
Italy, an indication of improving consumer spending on durable goods.
In Latin America, where there was low growth, the textile industry has
been one of the badly affected sectors.”
Source: Vanguard Business By Franklin Alli, with agency report
Tuesday 15 December 2015
Access Bank leads innovation advocacy to transform Nigeria’s leadership
Access bank Plc has led the call for Nigeria to adopt innovative
approaches in its bid to transform its leadership for a better, prosperous
society. The Chief Executive Officer/Group Managing Director, Access Bank,
Herbert Wigwe made the call while speaking at the 2nd Access leadership
conference held in Lagos. According to Wigwe, the question around
leadership and innovation is perhaps more pertinent in Nigeria today that just
had a successful transition into a new leadership.
He said: “If we can change the world with very simple question, what if?
What if our literacy rate in Nigeria is 100 percent? What if everyone in
Nigeria had access to education? What if the fight against malaria and HIV was
won? What if our infrastructure enabled economic success and opportunities for
all Nigerians? And the banking industry could contribute to all these lofty
goals by providing the best quality products and services at the cheapest
prices for all Nigerians.
This conference will enable each and every one of us to ask the
question, what if? The question around leadership and innovation is perhaps
more pertinent in Nigeria today that just had a successful transition into a
new leadership.”
While noting that the conference brought together global business
leaders, innovators, entrepreneurs, politicians, civil society leaders to
discuss important topics that affect all sectors, he added, “Despite the fact
that there are global differences and economic challenges all over the world,
there are also significant opportunities which we must all grasp both for home
grown talents and for international investors. Whereas such an environment may
bring its own challenges to the business world, we also know that such environment
will create tenacious leaders, courageous politicians and innovative chief
executives.
Leadership in a transformational world not only benefits from
innovation, but it demands it. Innovation is no longer an option, it is an
absolute necessity.” Earlier in an opening address, Lagos State Governor,
Akinwunmi Ambode said: “We live in a world where transformation in every sphere
of human endeavour is taking place at a dizzying pace. Since that historic feat
when humans took a voyage to the moon, technology has so much developed that we
now send man into the space. Just over a decade ago, mobile phones were almost
unknown on this continent.
Today, there are over 160million mobile phone lines in Nigeria alone. It
is a fact that we now use mobile phones to do almost everything from making
phone calls to transferring money. “As the theme of this conference
instructs, we must continue to innovate. We must always remind ourselves that
for innovation to be meaningful, it must inform transformation.
This is what will bring about the transformational leadership in
whatever spheres of endeavours we apply ourselves. And of course, ineffective
and untimely innovation can only result in motion without movement, leadership
without transformation. Those who refuse to innovate will vegetate. Indeed we
live in an interesting times, an era when our abilities to influence the
society depends very much on how we are able to bring innovate ideas to bear on
our responsibilities.”
Source: Vanguard Business-By Jonah Nwokpoku
Monday 14 December 2015
Bank of England Inflation Anxiety Mounts With Oil Below $40
The Bank of England’s inflation worries may already be coming to
fruition.
Brent futures dropped to a seven-year low on Friday, a day after Mark
Carney and the Monetary Policy Committee said low oil prices and subdued wage
gains are increasing the risk that price growth will take longer to pickup than
they currently anticipate. Data this week will shed more light on the outlook,
with the statistics office due to publish reports on consumer prices and pay.
While the Federal Reserve is heading for the first increase in its key
rate since 2006, the BOE’s inflation anxiety indicates it remains some distance
from such a move. In its December policy statement -- when the MPC held the
benchmark at a record-low 0.5 percent -- it warned low headline price growth
may be feeding through to pay settlements.
More insight into the monetary policy outlook will be offered at noon on
Monday, when BOE Deputy Governor for Markets and Banking Minouche Shafik speaks
at the Institute of Directors in London. On Tuesday, U.K. data is forecast to
show that the annual inflation rate was just 0.1 percent in November, far below
the bank’s 2 percent target.
The statistics office may say on Wednesday that basic earnings growth
probably cooled to 2.3 percent in the three months through October from 2.5
percent a month earlier. That would mark the weakest reading since the first
quarter. The report may also show the unemployment rate held at 5.3 percent,
matching September’s reading which was the lowest in more than seven years.
No Hurry
“We’re looking for whether the flattening in wage growth is turning in
to a slowdown,”’ said Chris Hare, an economist at Investec and a former BOE
official. “The weakness in near-term inflation and the questions the MPC raised
on wages shows they aren’t in any hurry to raise rates.”
The question of why prices remain subdued even as the labor market
tightens and the economy expands formed the backdrop for the BOE’s commentary
last week, and was the reason eight of the nine policy makers didn’t want to
tighten policy. The central bank noted that while there may be temporary
volatility in the wage data, “it could also be that lower headline readings of
inflation have acted to limit recent nominal pay growth, despite the tightening
labor market.”
Brent for January settlement dropped as much as 66 cents, or 1.7
percent, to $37.27 a barrel on the London-based ICE Futures Europe exchange. It
slid $1.80 to $37.93 on Friday, the lowest close since December 2008.
U.S. officials are also balancing a strong labor market against feeble
inflation. Fed policy makers meet Dec. 15 and 16 to consider the first increase
the federal funds rate since June 2006. Almost all of the 98 economists in a
Bloomberg News survey predict a quarter-point increase, ending a seven-year era
of near-zero rates.
The MPC is still under no pressure to follow the U.S. Fed,” said Paul
Hollingsworth, an economist at Capital Economics in London. While inflation is
set to accelerate in the coming months, it “should still take a very long time
to return to the 2 percent target,” he said.
Source: BloombergBuiness
Friday 11 December 2015
FG signs MoU with Huawei to train 2000 Nigerians on ICT
ABUJA–The federal government yesterday signed a Memorandum of
Understanding, MoU with a Chinese technology firm to provide 2000 Information
and Communication Technology, ICT trainee jobs to young Nigerians in 2016 under
the “Huawei’s Seeds for the Future program.”
Speaking at the signing of the MoU performed by the Minister for Labour
and Employment, Dr. Chris Ngige and that of Communications, Barrister Adebayo
Shittu, on behalf of the federal government and witnessed by the Chinese
Ambassador Mr. Gu Xiaojie, the Vice President, Professor Yemi Osinbajo stated
that “ICT is one of the quickest ways people can get decent jobs, so we think
this is absolutely important.”
He further said that the Programme was part of the change agenda of the
president Mohammadu Bihari’s administration to create jobs for the youth.
“In the change agenda, how to grow the economy is important, and we want
to create ICT hubs and support existing ones. We thank Huawei for this
initiative of advancing technology in Nigeria, apart from the job creation
itself”, he said.
Osinbajo revealed that in the face of the current poor rating of Nigeria
in the global rankings of business environments, president Buhari has already
given the Trade, Industry & Investment Minister the task of addressing the
challenges of doing business in the country.
He remarked that the relationship between Nigeria and China is a
strategic one, urging Chinese investors and business leaders to consider
Nigeria for manufacturing plants.
He said the Chinese investors “should encourage not just the selling,
but also the manufacturing of products in Nigeria.”
Also speaking at the event, the Chinese Ambassador,Xiaojie, stated that
China was in partnership with the Buhari presidency in the “change” agenda,
especially in areas like Agricultural modernization, industrialization,
infrastructure, trade and investment, poverty alleviation, and peace and
security among others.
Meanwhile, Mr. Richard Cao, the Vice President of Huawei West Africa
signed for the Chinese Information Communication and technology firm.
The 2000 trainees would be selected and supervised by Ministries of
Labour and Communications.
Commending the initiative, Labour and Employment Minister, Ngige said
that “China has blazed the trail,” with the job creation MOU with the Buhari
presidency.
This was as his counter-part in Communications, Shittu also hailed the
Programme, urging the firm to consider setting up a technology institute or
polytechnic in Nigeria.
Also speaking, the Vice President of Huawei West Africa, Cao said that
“Huawei has long been committed to developing Nigeria’s ICT sector, and is
working hard to build a Better Connected Nigeria. At the same time as
delivering cutting-edge ICT technologies and services to Nigeria, we are also
committed to fostering a skilled local ICT workforce.”
He added that “as a leading global supplier of ICT products and
solutions, Huawei will continue to share its global experience in the
development of the ICT industry with the Nigeria government. We hope to become
a strategic partner to the Nigeria government in the future ICT planning and
development, and will continue to expand our contributions and training
programs in Nigeria.”
Source: Vanguard-By Levinus Nwabughiogu
Thursday 10 December 2015
How Microsoft unlocked potentials of social entrepreneur achieve dreams
Despite the fact that the
world is now a global village as a result of technology, the truth of the
matter is that there are still so many youths in developing countries with
little access to computers, or even an understanding of how it works.
Sometimes, it may not be access challenge but the manner in which
science and technology was introduced to them.
At nine years, Saviour Okusenogu had already familiarised himself with the computer, and one of his pastime was reading the Microsoft Encarta Encyclopaedia.
At nine years, Saviour Okusenogu had already familiarised himself with the computer, and one of his pastime was reading the Microsoft Encarta Encyclopaedia.
This development opened up a world of possibilities to him, helping him
to develop an interest on how things work, and how to make things work in a way
that will positively affect the lives of those around him.
Interestingly, this year, Okusenogu, now 17-years-old, saw his dream
come true when he was announced one of the grand prize winners of the Microsoft
YouthSpark. Okusenogu will be representing youth from Nigeria, along with other
winners representing youth from Chile, Ecuador, Greece, India, Nepal, United
States and Uruguay.
“When I initially heard of the news, I was amazed, very excited, and of
course happy. It’s a rare privilege for my project to be chosen out of
thousands. I feel like I’ve been handed the power to make change happen. I just
feel so blessed,” he said.
The Microsoft Youth Spark Challenge for Change, which started three
years ago, is a contest that tasks young people from around the world to submit
an idea that addresses a social issue through technology in their communities.
The platform “is a global initiative that increases access for all youth to
learn computer science, empowering them to achieve more for themselves, their
families and their communities”.
The idea which helped Okusenogu win the Microsoft YouthSpark prize was
developed as an undergraduate, using Microsoft tools like Microsoft PowerPoint
and Visual Studio.
In the university, he discovered that majority of his fellow students
were not too concerned about developing solutions to the world’s problems.
Although, they were immersed in their academic pursuits, it was more of an act
based on orders, than a decision to impact lives through a positive action.
Nursing a passion to contribute change to the world, Okusenogu started
to think of ways he could contribute and make a difference in his community
through technology, and this was what inspired him to develop the BISET
Initiative (Become Inspired in Science and Engineering Technology) which would
encourage more young people in developing countries to become interested in
science and engineering. With the prize, Okusenogu would be working with two
engineering students from his institution.
Initially, when he shared his dream of helping others to learn science
and engineering in a fun way, many felt in a developing country it seemed
unlikely that a 17-year-old like him would be too concerned with preoccupying
himself with such a huge task as “developing solutions to the world’s problems,
but he persisted and continued to dream.”
With the dream now certain of becoming a reality with Microsoft’s
YouthSpark, Okusenogu however is quick to say, that beyond finding an
opportunity to achieve a dream, he is glad that many of his friends have
started growing interest in technology and how to access it to solve world
problems.
“I think of technology as an ingredient to make life easier and better
no matter the walk of life. I believe if more Nigerian youths could embrace
technology even more, there would be a great sprout in the social development
of Nigeria,” Okusenogu said.
Winners of the YouthSpark Challenge gets to visit Nicaragua to learn
about social entrepreneurship, and development issues. They also get a $2, 500
cash grant and a Microsoft technology bundle (Surface Pro3, Windows Phone, and
Office 365) to help them develop their projects further.
Source: Vanguard-By Emeka Aginam
Wednesday 9 December 2015
1.7bn people have no access to electricity—ExxonMobil
ABUJA: Over 1.7 billion people around the world have no access to electricity,
just as demand for energy will rise significantly in the nearest future,
the General Manager, Deep Water Operations, ExxonMobil, Mr. Oladotun
Isiaka, has said.
Isiaka, at the launch of the ExxonMobil’s ‘2015 Energy Outlook Series’,
in Abuja, disclosed that with the world’s population in excess of seven
billion, energy demand will continue to increase as the standard of living
improves, adding, “When the standard of living increases, the demand for energy
will also increase.
He argued that oil will still sustain the global energy need for the
next 100 years, adding that global demand for energy in the next 25 years would
be led by countries outside of the Organisation for Economic Cooperation and
Development, OECD.
According to him, the countries include Nigeria, China, and India,
noting that supply glut in the oil sector will continue into the foreseeable
future as supply outstrips demand in many countries.
He said: “The franking technology now avails us the opportunity to know
it is there. Based on this and the amount of energy we use as at today and what
we are projecting, what we use over 25 to 40 years, this tells us that we have
100 years of oil to support energy needs.
“Countries outside the Organisation for Economic Cooperation and
Development (OECD), including China, India, and Nigeria, would lead global
demand for energy in the next 25 years.”
Despite data showing that global reserves have risen to six trillion
barrels, Isiaka said this would last for only a hundred years based on today’s
energy consumption and projected future demands.
He noted that population increase, improved standard of living and
growth in the middle class, especially in India, China and other key growth
areas of the world, will continue to drive energy demands.
“Energy demand trends from 2010 to 2040 are expected to vary
significantly around the world, as countries move along very different
trajectories in terms of key demand drivers including population, demographics,
economic growth and income levels,” he maintained
He pointed out however that most of the growth in energy demand would
come from countries outside the OECD.
On the world’s oil reserve, he said: “In 1981, it was estimated to be
below 2 trillion barrels, then slightly above 2 trillion barrels by 1990, and
as of 2013, it was estimated to be six trillion barrels.
“It is not that the oil just got deposited there. It has been there for
millions of years, but it is the advancement in technology that has now availed
us the opportunity to know it is there and to be able to bring it to the tank.
“Ultimately, what you want is for the oil to go to the tank. And if you
do not have the capacity to bring to the tank, then it is going to stay there
forever.”
Source: Vanguard Business
Tuesday 8 December 2015
NIGERIA: FG proposes N6trn expansionist budget for 2016
The proposed budget is predicated on crude oil price of $38 per barrel and crude oil production of 2.2 million barrel per day.
The Federal Executive Council, FEC, also approved and submitted the Medium Term Expenditure Framework, MTEF, to the National Assembly.
In the current budget, the government submitted a budget proposal of N4.38 billion to the National Assembly which raised it to N4.9 trillion. The 2015 budget was predicated on crude oil price of $65 per barrel and crude oil production of 2.28 million barrel per day.
The 2016 proposed budget is about N1.62 trillion or 27 per cent higher than what was proposed for the 2015 budget. The crude oil bench mark for next year’s budget is lower than the current crude oil price of $41 per barrel.
Briefing State House correspondents after an emergency meeting of the Federal Executive Council, FEC, presided by President Muhammadu Buhari at the Presidential Villa, Abuja, yesterday, Minister of National Planning and Budget, Udoma Udo Udoma, stated that in view of the current economic realities, FEC predicated the budget on $38 of barrel of crude oil as benchmark for the MTEF.
He also said that the budget is premised on the hope that Nigeria will produce a total of 2.2 million barrels of crude oil per day.
He said: “At today’s Federal Executive Council meeting, the council approved the Medium Term Expenditure Framework, MTEF, which sets out the policies of government over the next three years. It sets out the fundamental economic underpinning of the budget.
“The highlights are as follows: we projected and we are working with $38 crude oil price, we consider that to be very conservative but because of the uncertainty, we felt that we should start with a conservative crude oil price.
“We are also working with 2.2 million barrels a day production. We believe it is achievable, particularly because with the possible passage of the Petroleum Industry Bill (PIB) which we are working to achieve, we believe that the production figure is a modest figure that we should be able to produce something higher than that.
Expansionist budget
“And so next year, we are looking at an expansionist budget. We are looking at a budget that will be N1 trillion more than last year. So, we are looking at a budget of about N6 trillion.
“Last year’s budget, including the supplementary, was about N5 trillion. So, we are looking at a N6 trillion budget. All the increases actually will be spent on capital, because there is the need to increase the capital because of the infrastructure issues that we have to address.
“We are projecting almost 30 per cent capital project, up from the 15 per cent or so that is in the current budget. We will try and reduce overheads, but keep personnel cost in check. We are not going to adjust it by much, but we are expecting some savings from the IPPIS system which we are using. So we are not cutting anybody’s salary, everybody will get their salaries.
“Following from this, the MTEF will be submitted to the National Assembly, and we expect a feedback from them, thereafter we will be working to try and get the budget finalized, it when the budget is finalized that you really see the details of what we intend to do. This is just a medium term economic framework.”
Funding
Flanked by the Minister of Information, Alhaji Lai Mohammed and Minister of State for National Planning, Zainab Ahmed, at the briefing, Udoma said budget would be further funded by increasing efficiency in income tax and borrowing. He also assured that the workers salaries would not be cut to keep in tandem with the economic challenges.
“We will get the funding from two sources. We are looking at trying to increasing our non-oil revenue. We are looking at trying to get more money from the various government agencies, policing their collection and trying to get more money from them. We will also look at keeping down our recurrent budget that means we are looking at savings that we can make from overheads.
“We will look at the efficiencies from our revenue collecting agencies like the FIRS, in terms of company income tax, in terms of VAT, and then the difference, we will have to borrow. But the level of borrowing that we anticipate will be well within the maximum allowed, which is three per cent of the GDP, because we want a prudent budget. We want a credible budget. So, we are working on that now.
“So we are not cutting anybody’s salary everybody will get their salaries, “he said.
Speaking on the exchange rate with regards to the budget, the minister stated that government was working with the projection from the Central Bank of Nigeria, CBN.
This was even as he stated that FEC was also looking into the issue of subsidy removal in the budget. On the exchange rate, we are working on the exchange rate that the Central Bank of Nigeria has given us, that is the rate we are working on. On whether subsidy will be retained, we are looking into that”, he said.
Meanwhile, President Buhari, before the commencement of the FEC meeting, sworn in additional permanent secretaries, Akindele Bamgboshe and Mamoud Isa Dutse.
Both were among the recently appointed 18 permanent secretaries who were not sworn in alongside their colleagues as they were abroad on official assignment.
Source: Vanguard By Levinus Nwabughiogu
Monday 7 December 2015
Why Nigeria SMEs die with first generation
File: SMEs returns
The question of why Nigeria has not been able to sustain generations of
successful businesses has been addressed differently by experts, but former
Federal Inland Revenue Service (FIRS) Executive Chairman, Mrs. Ifueko
Omoigui-Okauru, attributed it to poor visual ability. She cited Germany
as example of country that has maintained fifth generation of SMEs,
global and family businesses, in her keynote address at the 2015 WISCAR end of
year graduation and 4th award presentation ceremony with theme: “Women
Leading Change” in Lagos.
Speaking on “Paradigm and Lens: Through Which We See” Okauru said, “We
don’t build on our successes, I have pondered on why after the first generation
of successful businesses, it is very difficult to move from one generation to
another generation in this country, compared to Germany, which is dealing with
fifth generation of SMEs, global businesses, family businesses.
The way we see affects what we do and the results that we get.” To
this end, she said that to lead a change, there is the need to first champion a
change in mindset, not just at the societal level, “but in ourselves.”
She added, “We really have not sat down to reflect what drives
successes, we need to champion a change in mindset. We need to build a mindset
of continuous research, innovation, inquiry, progress, learning, improving,
capturing, for instance capturing records whether public or private sector.
We are not good at capturing records; we don’t value records because we
don’t understand and value its importance. You cannot fight corruption without
record,” she said.
The discussants at the event include Prof. Remi Sonaiya, first
female presidential candidate, Mrs. Lynda Saint-Nwafor, Chief Technical
Officer, MTN Nigeria and Mrs. Yewande Sadiku, Executive Director, Stanbic IBTC
Bank, shared their experiences, advising on the way forward and how to succeed
as a career woman without reflecting negatively on the home.
Founder, WISCAR, Mrs. Amina Oyagbola, stated , “In my several years as a
professional, I have come to the full realization of the hard work, diligence
and creativity of the Nigerian Woman. WISCAR will continue to
deploy programmes and provide frameworks to enable young female professionals
achieve their potential and their aspirations.”
Meanwhile, WISCAR graduated its sixth stream of mentees and inducted the
seventh set who will go through the intensive twelve months structured Win with
WISCAR mentoring program.
Source: Vanguard-By Providence Obuh
Friday 4 December 2015
‘Entrepreneurs in 54 African countries to access $100m’
THE Tony Elumelu Foundation says it has earmarked $100 million (about
N20 billion) facility for entrepreneurs in 54 African countries under its
entrepreneurship programme (TEEP) for 2016.
The Foundation also invested a total of $4,860,000, including $1,405,000
in agriculture; $410,000 in education and training; and $365,000 in
manufacturing, in 2015.
In a statement, the Foundation CEO Parminder Vir OBE, said the second
annual round of the programme will commence from January 1 next year, adding,
“The programme is open to citizens and legal residents of all 54 African
countries. Applications for 2016 open on 1st January and can be made by any
for-profit business based in Africa in existence for less than three years,
including new business ideas.”
The CEO further stated that last year, the Foundation empowered 1,000
African entrepreneurs, selected from over 20,000 applicants, with start-up
investment, active mentoring, business training, an entrepreneurship boot camp
and regional networking across Africa.
“Entrepreneurs, with an average age range of 21-40, from 51 African
countries completed the programme and received $5,000 in seed capital for their
start-up businesses. The entries for 2016 programme will opens at 00:00am WAT
on 1st January 2016 and will accept applications until midnight WAT on March
1st, 2016.
To be eligible, entrepreneurs must complete the online application form
with questions on their background, experience and business idea, plans for
growth and proposed pan-African impact. Applications are reviewed by an
Advisory Board of distinguished African entrepreneurs.
“Africa does not need aid alone, it needs investment and it needs
entrepreneurs. TEEP brings both and our ability to bring capital and the
necessary support, for those who will help Africa harness its enormous
potential is creating extraordinary opportunities across the continent,” said
the CEO.
Stella Nakatudde, founder of ICT Company, Ella Solutions Ltd, based in
Uganda, said: “Since being selected for TEEP 2015, I have learned invaluable
life and business lessons, expanded and enriched my business network, opened
our first office, hired two staff and closed two web development deals. TEEP is
not just a means to start or propel your business; it is the torch that will
light your entrepreneurship journey for life and the pen that will script your
story in the new African Narrative”.
U.S Secretary of Commerce, Honorable Penny Pritzker commented “I am
pleased to see Tony Elumelu investing in entrepreneurs through The Tony Elumelu
Entrepreneurship Programme across Africa to work towards fostering communities
of innovation”.
“I set out to institutionalise luck with the Foundation and give back to
the Continent that made me.”
In the words of Tony Elumelu, the Founder of the Foundation,
entrepreneurship can chart a new course of development for Africa, with
Africans taking responsibility for wealth creation, creating value adding
businesses here in Africa and this is why I encourage applications from across
the continent, regardless of age, gender, religion or colour.
TEEP is driven by Elumelu’s philosophy of Africapitalism, which calls
for the African private sector to focus on long term investments that create
social and economic prosperity in Africa, and take the lead role in Africa’s
transformation.
Source: Vanguard Business - By Franklin Alli
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