The Nation Newspaper

Author: The Nation

  • Home ownership: Affordable mortgage rates as panacea

    Home ownership: Affordable mortgage rates as panacea

    The housing sub-sector is a reflection of how an economy is being managed. Operators say Nigeria has a housing gap of over 20 million and insist that except government acts fast, the gap may continue to grow wider with many homeless. Chief Executive Officer of  GMH Luxury, Ayo Olanrewaju Kuyebi, in this interview with OKWY IROEGBU-CHIKIEZI, spoke on several issues including how synergy between government and private sector could stimulate the sector, mortgages, incessant building failure, others

    There has been incessant collapse of buildings across the nation with analysts giving various reasons for the menace. What in your opinion is the way out?

     To be candid, I have suffered building failure before now as a result of inexperience and building wrongly. The experience inspired me and brought me to where l am today. At a point in my career, I had to demolish 11 units of terrace houses in Magodo due to construction on the major canal, the canal lane was blocked. If you know Magodo and Magodo brooks, what  is separating the two, is a canal, some people said it’s land and they blocked the canal and our project was at the receiving end. I know the force of nature and how water behaves, we had an option whether to pull down the building or to ensure the canal stays but since we don’t have control over the canal, we pulled down the buildings; in the process we lost about N370 million.

    We lost the money but none of our investors lost because we relocated some and refunded some. Truth hurts, but we are not going to deliver a project that cannot stand  the test of time. We will not pass on a project that would not last, we would rather cancel it. In the cause of our eight years of developing houses, we have had to cancel two projects as a result of environmental and foundation failures. The reasons why we have incessant collapse of buildings is because developers are trying to patch things up; you can’t give what you don’t have, recent building failures point to that.

     What are the other reasons you can deduce for this scourge?

    Gone are those days that housing collapse only occur in the rainy season, now we have multiple structure housing collapse any time. The high level of quacks and low barrier to entry has given rise to the upsurge. We have emergency developers, people  who run into some millions or sponsored by those who have money and they start building. You can’t beat experience and hard work. For instance, while l was working for a firm , l once coordinated three projects at a time, one in Ilaje Bariga, Makoko and Agunlejika in the Cele area of Lagos and shuttled all these sites daily. In those sites, we constructed different structures at that time. After l left to establish my business, l chose to do luxury homes in the upscale market.

    How can government address the challenge of homeownership?

    To make homeownership  a reality for a broader section of the population, a comprehensive approach is needed. To improve the mortgage system in Nigeria, the government can collaborate with financial institutions to offer more affordable mortgage rates. I will suggest that government can establish housing funds or subsidies to assist low-income earners with down payments and also implement credit scoring systems to assess borrowers’ creditworthiness accurately.

    Furthermore, they can also reduce bureaucracy and streamline the mortgage application process; encourage private sector participation in the mortgage market. The government can strengthen regulations that govern the mortgage and real estate sectors. This includes creating legal safeguards, improving transparency, and ensuring that foreclosure processes are clear and efficient. High-interest rates, limited access to affordable mortgages and a range of challenges have frustrated the aspirations of many Nigerians to own their homes.

    How can we come out of the huge housing deficit?

    The housing deficit is huge no doubt but we are  saying that between 2017 to 2022 in India, their government was able to deliver over 17 million housing units by giving a subsidised loan to their citizens. The same thing was done in Brazil in 2009 and also in South Africa. Why can’t our policy makers learn those good things and implement them to benefit the citizens.

     Lagos State government came up with a rent- to- own initiative, what is your take?

     Rent-to-own initiative can be beneficial for increasing housing affordability. It allows individuals to gradually acquire property while living in it. Whether it’s a good move or not depends on the specific details and implementation. Such initiatives can help the middle class and low-income earners, provided they are well-designed and transparent. As good as  this initiative is, GMH isn’t considering rent- to- own for now.

     In which sector do you play in the industry?

    The poor mortgage system has continued to frustrate housing programmes in Nigeria.

    GMH Luxury caters to both the middle class and super-rich income bracket. We offer various payment plans that accommodate different financial capacities and our properties are strategically located in areas that cater to these demographics. We have properties on the Island in Lekki and Ikoyi.We also have properties on the mainland, in Gbagada. This approach reflects our commitment to serving a range of income groups with diverse housing options.

     Why is slush fund associated with real estate investment in Nigeria?

    No doubt, combating corruption and money laundering through real estate is a complex system, what we do is to ensure that we receive money through appropriate channels. If you want to buy into our project you have to pay through the legal and transparent manner. With us there are legal ways of making payment, anything after that, we will not involve ourselves.

    Read Also: Naira to close strong on $34.8b year-end diaspora remittances target

    What are some of the challenges facing developers?

    The major challengers are high cost of fund; bank can only give you facility for 30 per cent.

    We also have massive naira devaluation and 90 per cent of finishing materials for real estate is actually imported. The current dollar rate is nothing to write home about, so it is a sector that the government really needs to pay attention to. The infrastructure available at the moment is over stretched, so the government needs to create new towns and consider the population, because there is no provision for population expansion.

     We also have the problem of getting title documents and land grabbing has continued unabated in Lagos State and other parts of the country. To address the problems of title documents and land grabbing, the government can consider the following steps; it must simplify land registration to make it more efficient and accessible to the public.

    The government must also digitalize land records by investing in technology to create and maintain up-to-date digital database of land records to reduce the likelihood of land disputes.

    It must also regularise land ownership, especially in informal settlements, to provide legal titles to residents. There is the need to strengthen security, improve the security of land documents and increase law enforcement efforts to prevent land grabbing.

    We also have massive naira devaluation and 90 per cent of finishing materials for real estate is actually imported. And the current dollar rate is poor, it is a sector that government really needs to pay attention . The infrastructure available at the moment is over stretched, so the government needs to create new towns and consider the population, because there is no provision for population expansion.

     Problem of getting title documents and land grabbing has continued unabated in Lagos State and other parts of the country, what is your advice to the government on this?

    To address the problems of title documents and land grabbing, the government can consider the following steps: It must simplify land registration, streamline the land registration process to make it more efficient and accessible to the public.

    The government must also digitalise land records. They should use technology to create and maintain an up-to-date digital database of land records to reduce the likelihood of land disputes.

    The other one step is land regularisation, the government must regularise land ownership, especially in informal settlements, to provide legal titles to residents.

    They must strengthen security, improve the security of land documents and increase law enforcement efforts to prevent land grabbing. 

    In what sector of the building strata are you operating?

    GMH Luxury caters to both the middle class and super-rich earners. We offer various payment plans that accommodate different financial capacities and our properties are strategically located in areas that cater to these demographics. We have properties on the Island in Lekki and Ikoyi.

    We also have properties on the mainland, in Gbagada. This approach reflects our commitment to serving a range of income groups with diverse housing options.

    What are you doing differently from other developers?

    What I did differently when I started my own company was that if you called me for piling, what I would do wasto educate you on how you could do a soft check on your project site. I  would explain to you what to look out for, when you get to the site, I would give you a cost implication to that effect and give all the information you need, even as a layman for you to know.

    Why did you choose this line of business?

    I decided on the building sector to make an impact as at that time, pilling was very complicated, people doing it at that time didn’t have the technical prerequisite to undertake such projects and the rate of foundation failing at that time was alarming. I took it upon myself to venture into piling, promising myself to do something differently and ensure that every client got value for their money.

    In 2010, the little money I gathered was aroundN 570 ,000; I used it to start up a company called Jostrut Consult Limited.  I put the money into the fabrication of what is called a dandle rig. It’s a smaller pilling ring locally manufactured and when this was done, I called on people of like mind, we formed partnership on the project.

    Currently, the firm, Jostrut Consult has grown up to become a company that has over 500 million in both equipment and cash in the bank.

    I know what it takes to climb that pedestal,  anything I must get, I must earn it and go into what is called self-development, I have worked on several projects pro-bono because the first thing is to  deliver value then, I can now tell you what I am going to take.

       Majority of time you will be cheated, but one thing stands out, the experience you have garnered during the process, cannot be taken from you.

    I have worked freely in several places, not only in Alimosho, I have worked freely in Banana Island, if you want to give me work in Alimosho and Banana Island, I will give consideration to the one in Banana Island, even if they are not going to pay me, because of the exposure and experience that I am going to gain there in.

     My motto has always been that delayed gratification is access to experience, because the quality of materials that you will be exposed to when you work in Lekki is not the same as when you work in Alimosho or  when you work somewhere in Ogun State.

     Majority of time you will be cheated, but one thing stands out, the experience you have garnered during the process, cannot be taken away from you.

    I have worked freely in several places, not only in Alimosho, I have worked freely in Banana Island, if you want to give me work in Alimosho and Banana Island, I will give consideration to the one in Banana Island, even if they are not going to pay me, because of the exposure and experience that I am going to gain there in.

  • Nigeria, Saudi mull dual listing at stock exchanges

    Nigeria, Saudi mull dual listing at stock exchanges

    • Aramco may be listed on NGX

    Nigeria and Saudi Arabia are considering a mutual arrangement that allows companies to list on both the Nigerian Exchange (NGX) and Saudi Stock Exchange.

    Group Chairman, Nigerian Exchange Group, Dr. Umaru Kwairanga hinted at the plan for dual listing with the Saudi Exchange, stressing that President Bola Tinubu’s economic reforms have created room for investment in Africa’s largest economy.

    Kwairanga, who spoke on the sidelines of the Saudi-Africa Summit in Riyadh, said that the summit was an opportunity to seek cooperation between the Saudi government and the Nigerian business environment.

    He noted that the summit was an opportunity where the Nigerian government felt that there is a need to showcase itself and that the new government has come with a lot of new reforms which other countries in Africa and beyond are looking at.

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    “We believe with our population, and many other advantages we have opportunities to showcase, to Africans, Arabs based out of Saudi Arabia,” Kwairanga said.

    He expressed optimism over opportunities in the NGX amid foreign exchange (forex) scarcity challenges.

    “One of the discussions we had is on dual listing between the Saudi Stock Exchange and the NGX. We had a discussion with the Minister of Environment and his officials, looking at how our biggest companies quoted on NGX going to leverage this.

    “We are going to take companies like Aramco to be listed on the NGX. We intend to replicate what we did on the London Stock Exchange (LSE) with the Saudi Stock Exchange regarding dual listings.

    “Last month we were with Mr. President in NASDAQ. We had so many discussions on many business opportunities.

    “So, it will attract a lot of investors into the Nigerian economy and I believe this government is doing a lot regarding reforms.

    “We need to come and showcase investors and you can see the way people have applauded Nigeria’s delegates that have come for this conference,” Kwairanga said.

  • Courteville, Capital Hotels delist shares from NGX

    Courteville, Capital Hotels delist shares from NGX

    Courteville Business Solutions Plc and Capital Hotels Plc have delisted their shares from the Nigerian Exchange (NGX), ending decades of operations as publicly quoted companies.

    The entire issued share capital of Courteville was delisted at the weekend, following similar delisting of Capital Hotels Plc.

    The two companies reverted to private limited liability status after their core investors acquired shares held by minority shareholders.  

    Capital Hotels was incorporated in January 1981 as a private limited liability company and became a public liability company in May 1986. Capital Hotels is the owner of Sheraton Abuja Hotel, which commenced business in January 1990.

    The entire issued share capital of Capital Hotels was delisted after the new core investor acquired minority stakes and opted to revert to private limited liability company.

    22 Hospitality Ltd had acquired 66.13 per cent controlling equity stake in Capital Hotels, which owns Abuja Continental Hotel, formerly known as Abuja Sheraton Hotel. NIPCO Plc, an integrated downstream company that acquired former Mobil Oil Nigeria Plc, is the sole owner of 22 Hospitality Limited.

    Bows Nigeria Limited, which held 67.01 per cent of the issued share capital of Courteville had earlier this year launched a Mandatory Tender Offer (MTO) to buy the 32.99 per cent held by the other shareholders of the company at 48 kobo per ordinary share.

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    Shareholders of the company had in July 2022 passed special resolutions approving the delisting and re-registration of the company as a private company under the Companies and Allied Matters Act 2020 by the name of Courteville Business Solutions Ltd. It was also resolved that the company’s memorandum be amended.

    Capital Hotels is an associated company of Ikeja Hotel, another publicly quoted company that controls a chain of hotels directly and through other subsidiaries and affiliates including Tourist Company of Nigeria (TCN) Plc and Capital Hotels Plc. Ikeja Hotel owns Sheraton Hotel, Ikeja, Lagos. TCN owns Federal Palace Hotel, Lagos while Capital Hotels owns Abuja Sheraton Hotel. The Ibru family owns the single largest individual shareholding in Ikeja Hotel.

    Courteville had braced the trails as the first e-business solutions company to be listed at the stock market. A leading e-business solutions company in Sub-Sahara Africa, Courteville is the patent owner of the AutoReg Business Solutions Platform.

    The company has grown from a mono product company to be in 18 states in Nigeria, and also operational in Jamaica. It had also evolved into a company with a portfolio of multiple solutions and services that cut across various industries.

  • Sterling’s The Alternative Bank, Gambian bank explore collaboration

    Sterling’s The Alternative Bank, Gambian bank explore collaboration

    The Alternative Bank (TAB), the non-interest subsidiary of Sterling Financial Holdings Company and The Gambia’s Banque Sahelo-Salarienne pour l’Investissement et le Commerce (BSIC) have launched a business relationship expected to lead to cooperation on many areas. 

    BSIC is on a two-week exchange programme at TAB with a view to promoting collaboration between the non-interest banking sectors of Nigeria and Gambia’s financial services sectors.

    Managing Director, The Alternative Bank (TAB), Hassan Yusuf, said the four-member delegation from BSIC is embarking on study tour of TAB’s operational and business processes as part of the prerequisites stipulated by The Gambia’s Central Bank to establish an operational window for a non-interest bank in The Gambia.

    Yusuf explained that the visit will help nurture stronger relationships between TAB and BSIC.

    According to him, the exchange programme has the potential for significant impact on Gambia’s financial landscape specifically, and the broader scope of the continent’s non-interest banking market.

    Team Lead, Banque Sahelo-Salarienne pour l’Investissement et le Commerce (BSIC) and Director of the Islamic Banking Window, Mr. Malick Joof said the visit provided an opportunity to learn first-hand in one of the most technologically advanced financial services markets on the continent.

    “With this visit, we can take forward learnings that will further improve our operations in Gambia, and hopefully begin to lay the foundations for collaborations with the potential to expand ethical banking across the continent,” Joof said.

    Read Also: NNPCL restores production of 275,000bopd

    BSIC was established in April 1999 by the Community of Sahel-Saharan States, CEN-SAD, with a mission to serve as the financial vehicle for the economic integration of the CEN-SAD nations, and to facilitate the regional integration of the African continent.

    The BSIC group operates in 14 African countries and aspires to be a prominent banking group on the continent, distinguishing itself as the sole bank providing investment and commercial services in the Gambian banking industry.

    The recently launched TAB is actively offering digital products and services to customers, employing an unconventional approach to e-commerce, investments, asset financing, and renewable energy solutions. These include AltMall for e-commerce, AltInvest for ethical retail investments, AltPower for affordable renewable energy solutions, AltDrive for new and pre-owned vehicle financing, and WasteBanc for monetizing recyclable waste. In addition to these offerings, TAB provides personalised financial consultations, tailored solutions, and one-on-one guidance to help customers achieve their financial goals.

  • Royal Exchange gets approval for N2.06b recapitalisation

    Royal Exchange gets approval for N2.06b recapitalisation

    Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), has approved the plan by Royal Exchange to raise N2.06 billion in new equity funds from existing shareholders.

    Royal Exchange yesterday confirmed that SEC has given it the nod to sign off the offer documents for the rights issue, after which the offer will open around November 29, 2023 or any other date approved by SEC. The company said the offer would be opened for some 28 days.

    Royal Exchange, which is pursuing a voluntary recapitalization of its businesses, plans to issue 4.116 billion ordinary shares of 50 kobo each to existing shareholders at 50 kobo per share.

    The rights issue will be pre-allotted on the basis of four new ordinary shares of 50 kobo each for every five ordinary shares held as at the close of business on Monday, March 06, 2023.

    The board of directors of the group had earlier submitted application to the NGX for the approval of the rights use and subsequent listing of the issued shares after the completion of the offer.

    Shareholders of Royal Exchange had authorised the board of the company to raise new equity capital of up to N2.06 billion from existing shareholders.

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    At an extraordinary general meeting, shareholders approved resolutions authorising the issuance of 4.112 billion ordinary shares of 50 kobo each to existing shareholders with a view to raising N2.058 billion.

    The meeting mandated the board to fix the offer price and shareholders also waived their pre-emptive rights to allow the company offer unsubscribed shares to interested investors, on the same terms as the rights issue.

    An investment fund set up by the German government recently acquired 39.25 per cent in Royal Exchange General Insurance Company (REGIC) Limited, a subsidiary of Royal Exchange. The investment fund- InsuResilience Investment Fund (IIF) was set up on behalf of German government by KfW and managed by Swiss-based Impact Investment Manager BlueOrchard Finance Limited. 

    The proceeds of the acquisition would help REGIC to spur growth by increasing its risk capital and supporting its underwriting capacity in agriculture, thus extending its outreach to low income farmers.

    Based in Luxembourg, IIF was set up by KfW, the German Development Bank, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). The overall objective of IIF is to contribute to adaptation to climate change by improving access to and the use of insurance in developing countries.

  • ‘Fiscal policy actions to trigger FX reform success’

    ‘Fiscal policy actions to trigger FX reform success’

    Complementary fiscal policy actions are required for the ongoing reforms in the financial markets by the Central Bank of Nigeria  to record expected gains, the 2023 Nigerian Banking Sector Report has predicted.

    The report by Afrinvest, which will be launched tomorrow in Lagos, with theme: “Getting Nigeria to Work Again!”, highlights the need for the  new CBN leadership to be geared towards reversing the unorthodox policy measures of the last administration, restoring market confidence in the CBN’s autonomy, and prioritizing the core goals of price and exchange rate stability.

    “Nonetheless, we believe that achieving all of these in a short-term would be a herculean task, given that complementary fiscal policy actions are required for the CBN to record gains,” it said.

    “In the meantime, we canvass that the authorities double down on efforts to check insecurity, curb oil theft, tame inflation, anchor market yield on Monetary Policy Rate, and improve the business environment. Also, we believe that the sustained high demand for FX in the parallel market due to lingering weak supply in the official market coupled with inefficient processing time, would continue to undermine the objective of these measures.”

    “As regards the impact of the measures on the banking industry, we expect the re- introduction of the willing buyer, willing seller model to support a modest positive upside for the FX transaction income of banks going forward,” the report.

    The event will attract dignitaries from private and public sectors,  market leaders and stakeholders in the financial sectors who will discuss key issues that are necessary to get the country’s economy return to path of growth and development.

    The Special Guest of Honour, Minister of Finance and Coordinating Minister for the Economy Mr. Wale Edun, will use the opportunity to present steps being taken by  the government to stabilize key segments of the economy.

    The panelists for  the event include – Amal Hassan, Founder/CEO, Outsource Global; Robert Dickerman, Chief Executive Officer, Pinnacle Oil & Gas; Odunayo Eweniyi, Cofounder/Chief Operations Officer, Piggyvest;  Anthony Okungbowa Esq., Head of Service, Edo State Government and Sadiq Kassim, Director, Corporate Affairs, TGI Group.

    The annual report, which has for years shaped the direction of market developments and gave clear guidance to domestic and foreign investors on the state of the economy  will this year provide same advantage to financial market players and economic managers.

    The Managing Director, Afrinvest West Africa Limited, Ike Chioke, said the report will provide insight on global economic review and outlook, global monetary policy review and outlook, global banking sector performance and outlook, evolving trends in the global banking industry and domestic macroeconomic review and outlook.

    Issues round domestic forex market performance and indicators, price stability, provide insight on the strategic agenda for the new Central Bank of Nigeria Governor.

    The report emphasised that  the unorthodox strategy of the immediate past administration at the CBN failed to preserve the bank’s core objectives – price and exchange rate stability – given the historical low ebb of key monetary indices.

    “As the new CBN leadership takes over, Nigerians and the banking industry are on the lookout for a positive and timely turnaround of stifling banking regulations and major monetary indices – exchange rate, inflation rate, and Foreign Portfolio Investment & Foreign Direct Investment flows,” the report said.

    The report also provided highlights of the   2022 Nigerian Banking Sector report themed “Brace for Impact” which coincided with the onset of fresh global risks as the receding Covid-19 pandemic left deep footprints.

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    “This evolution of risks shifted focus from economy-stimulating policies to the introduction of guard rails for overheating economies. Specifically, the emergency adoption of the Modern Monetary Theory playbook in response to the pandemic dovetailed into a glut of financial liquidity. Although the broad stimulus deterred prolonged global recession, the absence of a commensurate productivity boost drove real and financial sector prices higher and threatened real output recovery,” it said.

    It explained that the central banks have since embarked on historic policy normalisation and disinflation campaigns which – as theory predicts – curtail bank credit creation, constrain capital investment, and drag consumer spending.

    Beyond 2023, the report explained that the prevailing macroeconomic headwinds of elevated prices, higher-for-longer interest rate, currency volatility and escalating debt crisis portend systemic risk to the global banking and financial sector.

    It gave insights on what will play out in the debt market and how it will affect the central banks and economies of debt-prone nations.

    Already more than $5 trillion of global corporate debt will mature in 2024, based on International Monetary Fund -IMF reporting, requiring refinancing at significantly elevated interest rates. Banks cannot afford material increase in bad loans, as they have sizable unrealised losses on disappointing non-loan assets.

    “Central banks have their hands full; the increasing debt burden on governments due to the tight financial markets would require some debt monetization, and fiscal bailouts might not be expansive enough to cover troubled banks. Hence, we anticipate critical revisions to global banking guidelines should the tightening cycle persist,” it said.

    It noted that over the last 12 months to September 2023, CBN’s regulations have largely focused on improving the operating environment for banks and OFIs in line with changing global dynamics, incentivizing financial services integration, and restoring sanity in the post-botched Naira redesigned policy implementation.

  • Experts canvass more local investments in Nigeria’s tech industry

    Experts canvass more local investments in Nigeria’s tech industry

    Experts in the technology sector have said that for Nigeria’s tech industry to expand, there is need for more participation from local investors, in addition to foreign investments.

    The experts, who spoke at the DETAIL Private Equity and Tech Business Series with the theme “Insights: Legal Reforms in the Tech Ecosystem”, reiterated that Nigeria continues to be an attractive tech investment destination in Africa.

    According to experts, Nigeria is the top destination for technology startup capital in Africa, cornering 20 per cent of about $5 million invested in tech startups in the continent in 2022.

    They said Nigeria is poised to continue making progress in the digital space with tech entrepreneurs dotting the landscape.

    The experts included Yvonne Johnson, Co-Founder of Indicina; Olufemi Shobanjo, Head, Broker Dealer Regulation Department, NGX Regulation Limited; Mobolaji Adeoye, Managing Partner, Consonance Investment Managers; Tomiwa Aladekomo, Chief Executive Officer, Big Cabal Media; and Ladi Asuni, Partner, Emerging Technology, Data & Analytics, KPMG.

    They highlighted the major trends that have impacted and continue to reshape Nigeria’s tech landscape, including funding and capital cycles, evolving customer expectations, and the regulatory reforms.

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    In addition, they said the implementation of the naira redesign policy also created an in-road for agency banking among other global trends.

    The panel session, moderated by Temidayo Ajayi Bello, Partner, DETAIL Commercial Solicitors, identified the key five pillars for market creation which included major considerations for investment entities to include human capital, social capital, real assets, digital infrastructure and financial services.

    According to them, investors should place structure guardrails and benchmarks for startups in their portfolio investments to comply with in order to ensure appropriate governance.

    Experts said Environmental Social Governance (ESG) also has a key role to play, with governance being more primary within the Nigerian context, to prevent the failure of startups.

    They added that the overall role of ESG will ultimately advance the Nigerian tech industry.

    Experts noted that Nigerian Exchange (NGX) recently launched a Technology Board with less stringent regulatory requirements for startups with an operational track record and market capitalization of N425 million.

    They said although recent foreign exchange policies have dealt a major blow to players in the tech industry, startups can mitigate this risk by having a global outlook in their products and services offerings, and focus less on regulated industries like banking and insurance.

    They added that startups can also expand their global footprint through strategic international partnerships and provide service products such as software-as-a-service.

  • Afreximbank, UBA, Anambra, others strike $1b deals

    Afreximbank, UBA, Anambra, others strike $1b deals

    • AfCFTA can lead to paradigm shift

    African Export-Import Bank (Afreximbank) struck financing deals worth more than $1 billion with several leading business entities and governments across the continent.

    The third day of the third Intra-African Trade Fair (IATF2023) in Cairo, Egypt concluded with attendees witnessing the signing of financing and other agreements between Afreximbank and several leading entities across the continent including United Bank for Africa (UBA) and Anambra State.

    IATF2023, Africa’s largest trade and investment fair, opened on November 9 and will run till November 15, 2023.

    Also, yesterday, Deputy Chairperson of IATF2023 Advisory Council and former President of Afreximbank, Jean-Louis Ekra said the African Continental Free Trade Area (AfCFTA) can break Africa’s colonial legacy of exporting raw materials and importing finished goods.

    Afreximbank signed a $150-million trade finance facility agreement with UBA under the Ukraine Crisis Adjustment Trade Financing Programme for Africa.

    The fund would be utilised to finance trade and trade-related transactions in support of UBA clients to facilitate increased financing of trade businesses in various sectors of the Nigerian economy to mitigate the adverse effects of the Russia-Ukraine crisis.

    The deal signed by Denys Denya, Executive Vice President, Finance, Administration and Banking Services, Afreximbank, and Oliver Alawuba, Managing Director of UBA, is expected to enhance confidence in the settlement of international trade transactions for strategic imports.

    Afreximbank had also signed a mandate letter to provide capital raise financial advisory services to the Anambra State Government of Nigeria for an estimated $200-million facility to support the development of three major projects in the state.

    The projects included Ikenga Mixed-Use Industrial City Project, Anambra Export Emporium and Akwaihedi Unubi Uga Automotive Industrial Park.

    The bank also signed an agreement to provide the state government with financial advisory services for the development of operational and governance framework for the Anambra Diaspora Fund, including capital raise financial advisory services for the Anambra Intra-City Rail Master Plan project and the Anambra Diaspora Fund.

    Kanayo Awani, Executive Vice President, Intra-African Trade Bank, signed for Afreximbank while Mark Okoye, Chief Executive Officer, Anambra State Investment Promotion and Protection Agency, signed for the state government.

    Another facility agreement, for $10 million, was signed with FDH Bank Malawi to support trade finance in Malawi.  Gwen Mwaba, Director, Trade Finance, signed for Afreximbank while George Chitera, Deputy Managing Director, signed for FDH Bank Malawi.

    Also, under a facility agreement with Banque Commerciale du Burundi (BANCOBU), Afreximbank will provide $55-million trade facilitation limits to BANCOBU to support importation of essential commodities, such as petroleum products, which are important for the Burundi’s trade and manufacturing sector.

    Rene Awambeng, Global Head, Client Relations, signed for Afreximbank while Sylvere Bankimbaga, Deputy Managing Director, signed on behalf of BANCOBU during a ceremony witnessed by Audace Niyonzima, Minister of Finance, Budget and Economic Planning, of Burundi.

    Afreximbank also signed an agreement under which it will provide a $40-million AFTRAF facility to Banque de Credit de Bujumbura (BCB) to support trade finance in Burundi. Signers were Rene Awambeng, Global Head, Client Relations, for Afreximbank and Roger Guy Ghislain Ntwungeye, Managing Director, for BCB.

    Also, a term Sheet for a $141-million intra-African investment finance facility was signed with Exodus and Company. Denys Denya, Executive Vice President, Finance, Administration and Banking Services, signed for Afreximbank while Progress Mambo, Chief Executive Officer, signed for Exodus and Company.

    Another term sheet for an Euro 140-million intra-African trade investment facility was signed with Ora SPV/Vista Group for funds to be deployed in Burkina Faso. Kanayo Awani, Executive Vice President, Intra-African Trade Bank, signed for Afreximbank while Simon Tiemtore, Chairman of Lilium Capital, signed for Ora SPV/Vista Group.

    The bank also signed a term sheet with ADI SPV/Vista Bank for a Euro 113-million facility to be deployed in Burkina Faso. The term sheet was signed by Kanayo Awani, Executive Vice President, Intra-African Trade Bank, for Afreximbank, and Simon Tiemtore, Chairman of Lilium Capital, for ADI SPV/Vista Bank.

    Another term sheet was with Lilium Gold for a $75-million senior debt facility for a strategic investment that will significantly enhance Burkina Faso’s mining infrastructure through the acquisition of the Boungou and Wahgnion gold mines. Helen Brume, Director, Project and Asset Based Finance, signed for Afreximbank while Simon Tiemtore, Chairman of Lilium Capital, signed for Lilium Gold.

    The bank also signed a term sheet with Sapro Mayoko for a $96-million iron ore mine development facility in Congo. The document was signed by Kanayo Awani, Executive Vice President, Intra-African Trade Bank, for Afreximbank and Paul Obambi, Chief Executive Officer, for Sapro Mayoko.

    Afreximbank also signed an agreement with Central Africa Building Society (CABS), Zimbabwe’s largest building society, to provide a $40 million line of credit to help build capacity among hundreds of small and medium enterprises (SMEs).

    Signed by Denys Denya, Executive Vice President, Finance, Administration and Banking Services, Afreximbank, and Mehluli Mpofu, Managing Director of CABS, the agreement is for three years and is aimed at fostering the growth of the SME sector by supporting productive sectors, such as agriculture, manufacturing and mining.

    The bank signed a heads of terms agreement with Arise IIP for the implementation of African Quality Assurance Centres (AQAC) projects in Benin and Gabon.

    Under the heads of terms, Afreximbank will develop AQACs to offer conformity assessment services such as testing, inspection and certification services in Benin, Gabon and, possibly, other African countries in collaboration with Arise IIP within industrial parks developed by Arise to support park tenants and other industries outside to enable them meet local and export market requirements.

    The AQAC initiative was created by Afreximbank to support African countries to improve their capacity in complying with international standards and technical regulations so as to promote exports and facilitate intra- and extra-African trade while ensuring the safety of products for consumption in Africa.

    Gagan Gupta, Founder and CEO of Arise IIP, signed for the company while Oluranti Doherty, Director of Export Development, signed for Afreximbank.

    The bank also announced the conclusion of cooperation agreements with the Comoros National Investment Promotion Agency (ANPI – Invest in Comoros), the Kenya Private Sector Alliance (KEPSA) and the Kenya Association of Manufacturers (KAM), aimed at accelerating intra-African trade and investment.

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    The agreements seek to deepen collaboration with the institutions through sharing of ideas, exchange of business-oriented information to facilitate trade and investment, business matchmaking, grants, training, technical assistance and capacity building, inter-institutional cooperation and other agreed activities.

    They are intended to increase the impact of Afreximbank’s TRADAR Club, a member-driven network set up to empower international businesses and executives to transform trade and investments in Africa through trusted trade intelligence and advisory services.

    Also, a memorandum of understanding was reached with the International Centre for Regional Integration and Trade Research (ICRITR). It was igned by Kanayo Awani, Executive Vice President, Intra-African Trade Bank, for Afreximbank and Prof. Charles Okechukwu Esimone, Vice Chancellor, Nnamdi Azikiwe University, Awka, Nigeria, for ICRITR.

    Meanwhile, Ekra, who was delivering an opening statement as the Trade and Investment Conference of IATF2023 began yesterday in Cairo, pointed out the unsustainability of African economies relying on natural resources and commodities, saying that this dependence made them vulnerable to adverse trade shocks, liquidity constraints and macroeconomic management challenges.

    Arguing that the situation needed to be addressed urgently, especially as it had worsened the effects of the COVID-19 pandemic, geopolitical tensions and climate change, he said that “AfCFTA cannot fail, especially given that intra-African trade is estimated at 16 per cent” which was a level of trade that compared unfavourably with other regions.

    Ekra said that the low level of intra-African trade was explained by constraints such as limited trade and infrastructure including payments and settlement systems, lack of access to relevant market information, limited knowledge about business, sustained investment opportunities and limited platforms to connect buyers and sellers.

    He urged African countries to recognise that the AfCFTA was the missing link the continent needed and that it presented many trade and investment opportunities in manufacturing, export development, SME promotion and trade in services.

    Also speaking, Ali Basha, Minister Plenipotentiary from Egypt, welcomed guests to the conference and said that the panels hosted as part of the conference should not be missed. He urged all African nations to “work hand-in-hand to address the challenges of trade integration.”

    The ceremony showcased a hologram of Kwame Nkrumah, a former President of Ghana and a major advocate for African unity.

    In subsequent panels’ discussions, attendees heard contributions on a wide range of topics, including energy transition and industrialisation in Africa, transforming the manufacturing sector and promoting diversification of African trade.

    During a panel on energy transition and industrialisation in Africa, Dr. Ainojie Irune, Chief Operating Officer of Oando Energy Resources, emphasised the need for African leaders to be more impatient about developing the continent, arguing that energy was crucial to Africa’s development and the transition should benefit Africa where 40 per cent of the population live without electricity.

    Ms. Helen Brume, Afreximbank’s Director of Projects and Asset Based Finance, said that any discussion about transitioning to cleaner energy sources must consider that 600 million Africans still lacked access to electricity while 900 million do not have access to clean energy sources for cooking.

    During a panel on transforming Africa’s manufacturing sector, Olukayode Pitan, former Managing Director of Bank of Industry, Gagan Gupta, Founder and CEO of ARISE Integrated Industrial Platform, Manuel Mota, Deputy CEO of Mota-Engil, and Brian Deaver, CEO of the African Medical Center of Excellence, deliberated on the importance of establishing connectivity in Africa’s supply chains. They agreed that such a transformation would significantly improve the lives of Africa’s 1.5 billion inhabitants.

    According to them, with the key to a thriving manufacturing sector being dependent on African talent, investing in their education and training was crucial.

    A highlight of the day was the launch of the impact evaluation report of the $19-billion Dangote Refinery and Petrochemical Complex in Nigeria by Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank.

    Emeka Uzoigwe, Acting Director of Strategy and Innovation at Afreximbank, who noted that the complex was launched in 2018, emphasised the importance of the project’s insights for other African businesses as it had the potential to transform not only Nigeria but the entire West Africa.

    The Trade and Investment Conference is a component of IATF2023. It aims to optimise access to Africa’s connected markets through the AfCFTA. The trade fair is expected to attract over 1,600 exhibitors and 35,000 visitors, with trade and investment deals worth US$43 billion projected to be concluded during the event.

  • BOI closes financial gap in renewable energy investment

    BOI closes financial gap in renewable energy investment

    Managing Director, Bank of Industry (BOI), Dr. Olasupo Olusi yesterday called for the need to close the financing gap on global surge in renewable energy investments, energy-efficient projects, sustainable infrastructure, and other environmentally friendly initiatives.

    Olusi made this call at the Joint International CEO Forum 2023 in partnership with African Financial Alliance on Climate Change, Making Finance Work for Africa, African Development Fund, Financing Sustainable Development in Abuja, as he states that the  institutions should be resilient enough to attract affordable long-term finance through which it can implement green projects.

    According to him, “At BoI, we are very active in resourcing climate-friendly funds, including the recent credit line of 100 million Euros secured from the French Development Agency (AFD) for the expansion of green finance in Nigeria.

    The bank is also currently implementing an on-lending financing scheme through local financial institutions to support customers interested in adopting clean energy solutions.

    “We will continue to seek funding partners to complement our climate change agenda. We must also make Stronger Climate Commitments. To outpace the far-reaching effects of climate change, we as DFIs need to accelerate our own progress and increase our climate ambition. We need to hold ourselves accountable to commitments that are backed up with action.”

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    “The Bank is also signatory to the World’s foremost sustainability frameworks and are committed to mobilizing finance for sustainable development. Tapping into Our Renewable Energy Powerhouse Potential, several emerging economies have a huge potential for renewable energy and clean hydrogen due to our natural resources, bio-diversity and youthful population”.

    Chief Executive Officer, Citizen Entrepreneurial Development Agency Botswana (CEDA), Thabo Thamane said reports predict that if strategic actions are not taken to combat climate change, the world economy will lose more than 18 per cent of its current GDP by 2048, and the least developed countries, particularly those in Africa, Asia-Pacific, and Latin America, will suffer the worst consequences.

  • AEDC to execute more interconnected mini-grid projects

    AEDC to execute more interconnected mini-grid projects

    The Abuja Electricity Distribution Company (AEDC) has revealed its plan to establish more interconnected mini – grid projects after the commissioning of the 352.24KWP Toto Interconnected mini – grid project in Nasarawa State.

    In his remarks at the commissioning ceremony, its Managing Director, Mr. Christopher Ezeafulukwe, said “So, AEDC will leverage this success to forge stronger partnerships and collaboration that would see us execute more of this type of projects.”

    The project which AEDC put in place in partnership with PowerGen

    with support from the United States Trade and Development Agency (USTDA) is connected to 2000 customers.

    Ezeafulukwe added that as AEDC has  seen the product of effective partnership amongst Government agencies and the private sector, more unwavering support should be given to many more projects that today will inspire.

    He described it as a robust self-sustaining electricity market in Nigeria, noting it is a must for sustainability in the electricity supply.

    According to him, the successful execution of this unique interconnected mini-grid project by AEDC in collaboration with PowerGen and REA is a testament to the renewed commitment to optimize renewable energy and off-grid opportunities to complement its grid capacity to ensure sustainable electricity supply to its  customers.

    He said the model will help deal with the challenges posed by the undeniable fact that macro-economic realities of today make it commercially unviable for Distribution Companies to serve some locations within their coverage areas under the current grid arrangement.

    The Managing Director said for

    AEDC, the timing of event could not have been more apt.

    He added that with the new leadership, which the firm now has  on board and the transformation journey it embarked upon approximately two months the  project will serve as an impetus to be more innovative in dealing with the myriad of issues facing Electricity Distribution Companies (DisCos) in Nigeria.

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    He described the project commissioning as a unique catalytic interconnected minigrid project; a project that was initiated in 2020 by AEDC to explore innovative ways to better serve the customers.

     The project, he said, was borne out of AEDC’s desire to provide more reliable electricity supply to underserved communities like Toto.

    The Managing Director said AEDC had received some support from the United States Trade and Development Agency (USTDA) to explore innovative business models that would see the company, amongst other things, augment grid supply with off-grid sources such as mini-grids.

    He stressed that “We were quite excited when our partnership with PowerGen provided us the prospect of validating the Rural Interconnected Mini-Grid business model that had been developed through the generous support from USTDA and Rocky Mountain Institute (RMI).”

    He said the  choice of Toto Community in Nasarawa State for the pilot project was not difficult for the firm and its partners to make, given the economic potentials of the Community, which had been underserved.

     Even at the conception stage, according to him, AEDC could envision the massive transformative impact a successful interconnected minigrid project would have on Toto.

    Continuing, he said, “Our interactions with Toto Community showed excitement and immeasurable joy on the part of the members of the Community by the reason of this project.

    ” The economic development of Toto has already begun. Greater access to reliable electricity has paved the way for new businesses to thrive, and existing ones to expand, creating job opportunities and boosting local income. About 2,000 connections are targeted under this project.

    “The socio-economic impact on the Community will be exponential in the months and years ahead.

    ” The realization of this requires collaboration on the part of the Community on one hand, and AEDC and PowerGen on the other hand. “Accordingly, I charge the leadership and members of Toto Community to ensure that actions that are inimical to the continued provision of electricity supply to their Community through this project, are completely prevented. “They include vandalizatlon, theft of energy and infrastructure equipment, non-payment of bills, hostility and other acts of sabotage.”