Category: Money

By Chikodi Okereocha

 

 

Nigeria’s Finance Act 2020 enjoys 92 per cent public support, PricewaterhouseCoopers (PwC Nigeria) has stated.

In a new survey released yesterday, PwC stated that on the survey on changes to laws from the Finance Act, the majority of respondents were most excited about the reduction of minimum tax from 0.5 per cent to 0.25 per cent of turnover.

The survey was the outcome of PwC’s virtual “Executive Roundtable on the Finance Act 2020 and Economic Outlook for 2021” held on Monday.

The event was targeted at chief executive officers, C-Suite executives and Micro, Small and Medium Enterprises (MSMEs) and focused on the impact of changes to existing laws by the Finance Act 2020 and other significant government policies to businesses and taxpayers in Nigeria.

The survey said on the changes to laws from the Finance Act, the majority of respondents were most excited about the reduction of minimum tax from 0.5 per cent to 0.25 per cent of turnover.

Country Senior Partner PwC Nigeria, Uyi Akpata,  noted that considering the impact the COVID-19 pandemic on the economy, it was important for businesses to understand the forces shaping the economy in the year.

He said such knowledge will help them minimise potential risks and take advantage of the fiscal policies the government had enacted to stimulate the recovery of the Nigerian economy.

In her keynote address, the Minister of Finance, Budget & National Planning, Mrs. Zainab Shamsuna Ahmed, emphasised the administration’s commitment to enabling economic recovery and stimulating inclusive growth through policies and interventions designed to foster economic resilience and business sustainability.

She said the Finance Act 2020 was aimed at supporting vulnerable households and businesses while improving fiscal discipline and procurement efficiency, enhancing economic competitiveness, encouraging domestic investors and enhancing macro-economic stability amid the challenges posed by the pandemic.

Also, Partner and Chief Economist, PwC Nigeria, Dr. Andrew S. Nevin, noted the 10 themes that policymakers and businesses needed to consider in the year.

He said Nigeria must find its development path, and that achieving this will include finding innovative ways to act on unlocking Nigeria’s vast dead assets to stimulate growth, harnessing the power of the Diaspora, and driving export growth through services.

He listed others to include the need for growth to be spread across the country, and not just in a few urban centres; improving on the country’s low investment and gross capital formation; moving its thriving informal sector to the formal sector; improving on the business environment, and ease of doing business.

Others were the need to addressing Nigeria’s big three distortions (exchange rate, power, and subsidies); shifting its focus from the Gross Domestic Product (GDP) lens to Sustainable Development Goals (SDGs), and prioritising climate change.

Nigeria holds as much as $900 billion worth of dead capital in residential real estate and agricultural land. The value of the Federal Government’s abandoned properties alone, according to the Nigerian Institute of Builders, is projected to be about N230 billion.

Also, about half of Nigeria’s population lives in cities, of which almost 80 per cent of them are living in substandard conditions. Finding the political will to act and unlock Nigeria’s dead real estate assets will have a transformative impact on the lives of Nigerians.

Of the 10 themes, another important theme to consider was Nigeria’s Gross Fixed Capital Formation, which in 2019, stood at less than 20 per cent. And PwC estimates that Nigeria would need an investment rate of at least 26 per cent – 28 per cent of GDP to achieve seven per cent growth.

 

Nigeria’s economy, Nevin further noted, is distorted by the exchange rate; fuel subsidy regime; and the power sector. He said addressing these three big distortions will be taking the giant step to restructure the country’s economy holistically; achieve the seven per cent GDP growth, and improve the lives of the average Nigerian.

 

Fiscal Policy Partner and West Africa Tax Leader PwC Nigeria, TaiwoOyedele, who shared insights on how the Finance Act 2020, and other significant changes that have been made to existing laws, will shape Nigeria’s tax environment in 2021, noted that there were no easy choices or a silver bullet given the limited fiscal space for incentives and to deliver on counter-cyclical measures.

 

He commended the policy direction of the government not to introduce new taxes or increase the rate of existing taxes. While commending the government for the reduction in minimum tax rate, he advocated for a permanent removal of the tax which often tax companies that are vulnerable especially when they are loss making.

By Taofik Salako, Deputy Group Business Editor

 

The board of directors of Access Bank Plc has approved the bank’s audited report and accounts and payment of cash dividends for the 2020 business year.

They met at the weekend to consider the banking group’s audited consolidated and separate financial statement for the year ended December 31, 2020.

In a regulatory filing after the meeting, Access Bank stated that the board approved the financial statements and the payment of a final dividend for the immediate past business year. The Central Bank of Nigeria (CBN) will, however, still review the results and recommendations.

According to the bank, the audited results will be released to the investing public upon the approval of the CBN.

Shareholders of Access Bank had received a total dividend of N23.1 billion as cash payouts for the 2019 business year. Shareholders received N14.22 billion as final dividend for the 2019 business year in addition to interim dividend of N8.89 billion earlier paid by the bank, bringing total dividend for the year to N23.11 billion.

With this, shareholders received a final dividend of 40 kobo per share in addition to interim dividend of 25 kobo per share, representing a total dividend per share of 65 kobo. The dividend per share of 65 kobo represented an increase of 30 per cent on total dividend of 50 kobo per share paid for the 2018 business year.

Most analysts expected Access Bank to sustain impressive dividend payout.

Access Bank recently secured the initial approval from the CBN to restructure its operating structure from a commercial banking group to a financial services holding company (holdco).

In a regulatory filing at the stock market, Access Bank stated that it has received CBN’s Approval-in-Principle to restructure to a holdco.

Group Managing Director, Access Bank Plc, Mr. Herbert Wigwe said the proposed holdco structure would enable the bank to further accelerate its objectives around business diversification, improved operational efficiencies, talent retention as well as robust governance.

He said the restructuring and strategic acquisitions across the continent will result in a more connected African banking network that builds on Access Bank’s existing foundation and enhances its value proposition to stakeholders, including customers and employees.

According to him, shareholders will benefit from the economies of scale of a larger banking network, including the associated cost efficiencies arising from the bank’s federated information technology system and replication of investments in innovative products across a wider range of markets.

He outlined that a broader and connected Africa network remains a core strategic focus for geographic earnings growth and diversification, which will further enhance profitability and risk metrics.

He added that with these transactions, Access Bank will be well placed to promote regional trade finance and other cross-border banking services, further leveraging its presence in key global trade corridors in the United Arab Emirates (U.A.E.), United Kingdom (U.K.), China, Lebanon and India.

He explained that the Mozambique transaction will be funded from the capital invested by the bank in Access Bank Mozambique and will result in the Access Bank Mozambique becoming the seventh largest bank in the country, up from 20th.

He pointed out that as an enlarged business, Access Bank Mozambique will have an enhanced capacity to play a more impactful role in the growth of the Mozambican economy, particularly in the emerging oil and gas sector, an industry that Access Bank has deep experience in.

He noted that a presence in South Africa will serve as a cornerstone for further momentum in delivering on Access Bank’s mission to be Africa’s gateway to the world as the proposed transaction is expected to provide access to the largest banking market in Africa and enable Access Bank to consolidate its Southern African and broader African footprint with enhanced capabilities to fulfil the needs of multi-national clients.

“We have consistently said that we are focused on building the scale needed to become a leading African bank; one that leverages our experienced and growing talent base and key stakeholder partnerships towards driving sustainable impact and profitability. Today’s announcement demonstrates further commitment to delivering our strategic aspirations of becoming Africa’s Gateway to the World in line with our vision to be the World’s Most Respected African Bank,” Wigwe said.

He said the transactions will significantly strengthen the bank’s presence in Southern Africa and further its footprint for growth in the SADC region.

“With a broader presence across the continent, Access Bank will be better placed to support our customers who are increasingly looking towards intra Africa growth. The proposed transactions will accelerate the Bank’s momentum towards delivering world class banking services to an expanded customer base across Africa. Our goal remains to reach and impact 100 million unique customers across the continent,’’ Wigwe said.

Access Bank’s planned expansion to eight African countries will come with huge gains from the 1.3 billion people targeted in the African Continental Free Trade Agreement (AfCFTA) deal. The bank’s strong digital banking platforms will play well in enabling electronic payments across countries of operation and beyond. The lender is  not only focusing on key markets to support regional trade and targeting new opportunity markets but positioning its operations as a trade and payments gateway to the world, writes COLLINS NWEZE.

 

 

Access Bank will be leveraging on its spread across the African continent and deep investment in technology to reap gains coming from the  African Continental Free Trade Agreement (AfCTA).

The AfCTA trade bloc offers a potential market of over 1.3 billion people and a Gross Domestic Product size of over $3 trillion. According to The United Nations Conference on Trade and Development (UNCTAD), there is the potential for intra-African trade to rise to 15.5 per cent as a share of total African trade by 2022 compared with 10.2 per cent from 2010.

For many businesses, securing a seat at the stable ensures that Nigerians can influence negotiations and protect national interests.

While the agreement is not a silver bullet, due to structural barriers to trade, Group Managing Director, Access Bank Plc, Herbert Wigwe, said he saw many benefits to his bank and the various African economies within the AfCTA deal.

In a report titled: ‘Realigning for Growth’ released by the bank, Wigwe said Access Bank would be optimizing and taking maximum gain of the trade agreement by repositioning its operations and payment platforms  to  serve more customers across the continent.

He said Access Bank Group has consistently delivered growth and created value over time  and has  the largest customer base in Africa, with a significant share of digitally active clients. The bank is also becoming an aggregator in Africa by building a global payments gateway, offering holistic trade finance support and offering correspondent banking services.

It is also focusing on key markets to support regional trade by targeting new opportunity markets and positioning the bank as a trade and payments gateway to the world.

He identified eight African countries for a potential expansion as it seeks to benefit from the opportunities presented by the AfCFTA.

The bank already operates in 12 countries following a series of acquisitions spanning from Kenya to Nigeria. The markets of interest are Morocco, Algeria, Egypt, Ivory Coast, Senegal, Angola, Namibia and Ethiopia, according to an online presentation emailed by the Lagos-based lender.

It will also use its London-based unit as an “anchor for growth” to expand representative offices in countries such as India, Lebanon and China, Wigwe disclosed.

The African trade pact aims to bolster intra-regional commerce by lowering or eliminating cross-border tariffs, facilitating the movement of capital and people, promoting investment and paving the way for the establishment of a continental-wide customs union.

Access Bank plans to eventually expand into 22 African countries to cushion challenges in some markets, diversify earnings and take advantage of growth opportunities in the region.

The lender, which is looking to transition to a holding company this year, plans to open subsidiaries in insurance brokerage, consumer lending and agency banking as well as payments to boost revenue, Wigwe added.

The bank is equally transforming payments and remittances using cheap forex from international remittances to feed trade, leveraging AccessAfrica connections to wallets and payment platforms.

It is also building on partnerships with financial investors, Development Finance Institutions, among others and providing strategic support to protect and grow partners’ value.

Continuing, he said the bank has continued to deliver strong results and is focused on generating sustainable revenue across all income lines.

“The bank’s gross revenue grew 26 per cent to N592.8 billion (from nine-months 2018 to nine-months 2020  with steady growth across all income lines. Strong and diversified revenue growth has been driven by expansive retail banking growth and increased velocity of transactions,  optimising value chain of wholesale banking customers,  credit growth engine, prioritizing margin growth through efficiencies and delighting customers  at every digital payment touchpoint,” Wigwe said.

The bank chief explained that with the growth of its operations, the lender has  maintained a focus on efficiency in the last three quarters  through sustainable cost to income ratio of 50 to 55 per cent given investments in digital and growth over the next two years.

“Access Bank is driving Group revenue growth through retail expansion with the bank’s retail banking business grown consistently across all income lines, driven by strong focus on consumer lending, payments and remittances, digitization of customer journeys, and customer acquisition at scale”.

“We have maintained strong capital levels despite investments for growth, accumulating capital over time. Opportunities for growth will be supported by a digital strategy that will set us apart as a clear-cut digital leader. Our Africa expansion strategy is deliberate and disciplined, with a targeted focus and approach, supported by key enablers,” Wigwe added.

The tier-1 bank is also taking advantage of the expansion strategy to diversify its earnings and risk. It said  Nigeria will remain its largest market countries of presence targeting an impactful presence, reaping economies of scale, and leveraging digital and access to cheap funding sources.

Across Africa, there is an opportunity for Access bank to expand to high-potential markets.

Its Holding Company (HoldCo) will consist of four subsidiaries which include the Access Bank Group, Payments business, consumer lending and agency banking as well as insurance brokerage.

“We will therefore reorganise to capture these opportunities by transitioning to a HoldCo structure. Through this reorganisation, we will create new product revenues without taking additional risk for the enterprise, ensure diversification of earnings, and support outside of Africa expansion,” he said.

“Access Bank Group will consist of Nigeria, Africa and International subsidiaries while the Payments subsidiary will leverage the strong suite of the Bank’s assets. The Consumer Lending business has seen greater than 60 per cent growth in digital lending volume and value while the Insurance subsidiary will adopt a dynamic and creative approach to deliver value-added services focused to meet customer insurance needs,” he stated.

For instance, Access Bank is in partnership with Coronation Insurance to offer insurance products to the Bank’s customers. Access Bank-Coronation Insurance bancassurance is already available in Nigeria and Ghana.

Access Insurance Brokerage would adopt a dynamic and creative approach to provide a value- added insurance broking services focused to meeting customers’ insurance protection needs.

The bank says it recognises its unique role in preserving the environment in which we operate as well as positively impacting the society through responsible investing.

The AfCFTA plans to ease non-tariff barriers to trade on the continent, such as the reduction of red tape (which improves the time to export and import), removal of quotas and licenses, and easing of rules of origin, among others.

Also, it is expected that the agreement would lead to cheaper consumer goods prices which will drive improved wellbeing and promote access to cheaper intermediate goods for the industrial sector.

There is also the case for economies of scale as firms try to sell to the bigger African market, leading to increased efficiency. The last benefit is that countries would be more committed to industrialization to really benefit from the bigger African market as exports in much of Africa is currently primary commodities.

By Collins Nweze

 

 

As preparations for Ehingbeti, the Lagos Economic Summit holding on February 16 to 18, 2021, intensifies, the Organised Private Sector (OPS) has reaffirmed its commitment to the event, which it sees as a channel for setting developmental agenda for Lagos State.

At a stakeholders’ conference recently, the OPS stressed the need for the government to focus on infratructural development, job creation, waste management, among others.

“Chairman, Manufacturers Association of Nigeria (MAN), Ikeja branch Francis Meshioye, said: “The government should match manpower development with available needs to create room for employment.

“There are many companies domiciled in Lagos. It needs more industrial clusters to become the desired economic hub, adding that government should create viable links to channel goods from one cluster to another.’’

Director-General, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Ambassador Ayoola Olukanni, said attention needed to be focused on municipal solid waste.

Olukanni, who expressed support for the summit, said Lagos was still struggling with issues of waste management, which if not tackled, could become a disaster.

According to him, there is a national policy on waste management, waste to energy, and wealth, which should be one of the studies at the summit.

By Collins Nweze

Softwork, a leading platformwhich objective is connecting employers with freelancers, has upgraded its services. The firm  uses escrow, a third party payment plan that allows for refund.

The company’s re-launch   in Lagos at the weekend, gave the platform a new look and improved features.

Chief Executive Officer, SoftWork, Chigozie Okwara, said the platform is the bridge between the talented and those in need of certain skills.

He said: “Every individual signing up wants to work and exchange vital information in a safe and secure space. We have designed an online platform where freelancers- web designers, developers, video editors, digital marketers, graphic designers among others can meet.

“We have connected over 5,000 freelancers with employers and every day, we look for ways to verify any individual who signs up on the website. The verification is more intense to avoid fraudsters posing as freelancers or employers. There is the email verification process, Identity card verification by uploading National ID cards, Passport or Driving Licence to verify your identity. Without verification, jobs cannot be applied for. It is important employers get the worth for every price paid,” he said.

Okwara noted that distance was no barrier for work on Softwork, as clients can monitor every work carried out.

Since beginning operations fully in 2018, SoftWork has helped reduce the stress freelancers go through to get jobs, and helped employers get reliable services.