Collins Nweze

GROUP Managing Director/CEO, Access Bank Plc, Herbert Wigwe, Executive Secretary/CEO, Nigerian Investment Promotion Commission (NIPC), Yewande Sadiku, Director of Research & Chief Economist, Nigerian Economic Summit Group (NESG), Olusegun Omisakin, among others, will be speaking at the Vantage Forum, a business and economic  event organised by The Elevation Church (TEC).

TEC has hosted Vantage Forum for six years and this year’s edition is themed ‘Harnessing business opportunities through innovation in Africa’s 1.3 billion people Market.’

Vantage Forum 2020 will hold on Thursday at the Pistis Conference Centre, Jakande, Lekki, Lagos

On why the church is organising a business event, TEC Lead Pastor, Godman Akinlabi said  that Vantage Forum is the church’s contribution to the development of corporate Nigeria.

“Vantage Forum is a veritable platform for crafting broad-based agendas that can stimulate economic growth for the country, and the African continent as a whole,” he said.

”At TEC, we recognise the nexus between the church and national development. The gospel of Christ is not only about going to heaven but also living an impactful life on earth. This is why capacity building has become an essential part of our policy as a church and Vantage Forum is one of our capacity building initiatives,” he continued.

Akinlabi added that the church wants people to develop their potential and play in their various fields with ‘a sense of vision and leadership’.

According to the Chief Operating Officer of TEC, Tunji Iyiola, Vantage Forum 2020 has a rich repertoire of activities, including conversations about leveraging on economic trends for business success. There will be panel sessions, question and answer sessions, and an exhibition for businesses. There will also be a fresh focus on the African continent.

“Quite a number of our attendees have interests beyond Nigeria, and it is imperative that this year, we expand our scope to cover the African economic landscape,” Iyiola said.

According to the Chairman, the event’s Organising Committee, Theo Adewale Onadeko, with the inauguration of the African Continental Free Trade Agreement (AfCFTA) in 2018, commercial interest in Africa is on the increase. “It’s the big idea we are talking about, an economy with a population of 1.3 billion and a GDP of $2.5 trillion,” he said.

Collins Nweze

ECONOMIC managers, analysts  and financial sector leaders have released their 2020 projection on the economy at the Nigerian-British Chamber of Commerce (NBCC) first Breakfast Meeting in Lagos.

The event with theme: “2020 Economic Outlook” was attended by Managing Director/CEO Financial Derivatives Company Limited,  Bismarck Rewane, and the British Deputy High Commissioner, Harriet Thompson.

Rewane, who was the keynote speaker, shared his projections on likely economic, social and geopolitical trends for 2020 across the diverse sectors of the economy.

He said the country will experience tighter monetary policies due to inflation increasing to an average of 11.4 per cent.

Thompson stated that creating partnerships that attract quality investment to drive growth and create jobs were top priorities of the United Kingdom.

“We want to help Nigeria get the investment it needs and ensure that our existing investors are joined by new ones,” she said.

Harriet expressed her excitement that Nigeria would be playing a lead role at the upcoming UK-Africa Investment Summit in the United Kingdom.

NBCC Director of Programmes and Membership, Ayomide Olajide said: “The Breakfast Meeting aimed at providing an opportunity for key business leaders to engage, foster business relationships and proffer solutions to projected outcomes in the unfolding year.”

The next NBCC breakfast meeting holds next time. It has as theme “Private-Public Partnerships – How to make it work”.

Taofik Salako

SEPLAT Petroleum Development Company Plc plans to acquire more assets in the exploration and production sector of the Nigerian oil industry while aggressively pushing for organic growth.

Chief Executive Officer, Seplat Petroleum Development Company Plc, Mr. Austin Avuru, said one of the indigenous company’s key mandate is to leverage opportunities in the oil and gas industry through acquisition of more oil and gas assets.

Avuru spoke at the Nigerian Association of Petroleum Explorationists (NAPE) January 2020’s technical and business meeting on mergers, acquisitions and divestments in E and P business held in Lagos.

The expression of interest by Seplat came on the heels of the company’s recent announcement of the completion of its Eland Oil and Gas Plc’s acquisition deal on December 17, 2019.

Avuru said Seplat had positioned itself as an early mover through the acquisition of a 45 per cent operated interest in OMLs 4, 38 and 41 from Shell, Total and Agip in 2010; thus, becoming the first Nigerian independent to acquire a package of oil and gas blocks directly from the major international oil companies (IOCs) as part of a disposal process.

Following this landmark deal in 2010, Seplat further grew its portfolio through the acquisition of a 40 per cent interest in the OPL 283 marginal field area from Pillar Oil. In 2015 acquired further interests in OML 53 and OML 55 from Chevron Nigeria Limited. Seplat grew production at OMLs 4, 38 and 41 from 14,000 bopd as at acquisition to a peak rate of over 84,000 bopd.

According to him, Seplat has demonstrated its ability to work its assets and produce its reserves despite external negative factors such as downtime and losses.

He noted that Seplat also began to invest in its gas business in 2010 in response to the Nigerian government’s initiatives to improve the debilitating impact of poor power generation and supply in the country by opening the domestic supply obligation pricing to market forces.

He assured that the company is strategically positioned to access Nigeria’s main gas demand centers with current well stock delivering around 300MMscfd.

“We are delighted to successfully complete the acquisition of Eland, which further enhances Seplat’s footprint in Nigeria and provides opportunities for enhanced scale, diversification and growth. We welcome our new colleagues and Nigerian partners as we look forward to working together in this exciting phase of our development,” Avuru said.

The Guest Speaker at the meeting, Mr. Mascot Ogunjemiyo, who highlighted the various merger and acquisition cases in the Nigerian oil and gas industry so far, said mergers, acquisitions and divestments in the industry were capable of promoting efficiency and further drive growth.

Collins Nweze

BAOBAB Microfinance Bank has grown its shareholders’ funds to N3.9 billion.

The increase followed  the directive by the Central Bank of Nigeria (CBN) that all microfinance banks shore up their capital to N3.5 billion by April.

Baobab Microfinance Bank,  Managing Director/Chief Executive Officer Olanrewaju Kazeem  said the capital came from retained earnings as against its initial plan to raise the cash from rights issue.

He said:  “The Central Bank expects that by April, this year, our shareholders funds should be N3.5 billion, and a minimum of N5 billion by 2021. I am happy to say that at this point, our shareholders fund is over N3. 9 billion, coming from retained earnings.”

The bank chief said the level of profitability and growth achieved by the bank made it to go for the retained earnings option. He said the bank became fully capitalised based on the CBN requirement by last October.

He said the bank is targeting  about N6 billion shareholders’ funds by the end of the year.

Olanrewaju stated that the bank is well-prepared to support Small and Medium Enterprises (SMEs) and the economy with several products and its digital transformation.

“Today, what you can simply see is that, we are becoming a financial supermarket. For mini-micro’s, we have products for them. We talking of loans as little as N10,000 and N20,000. And then, you have the micro’s; maybe above N50,000 to like N500, 000. And then we have the Micro-Plus, which is a little above that but less than a million. And then we have the SMEs proper, which is anything above N1 million,” he said.

He said the bank disbursed loans worth N20 billion to over 62,000 customers last year. “This we expect that we are going to grow this year. Our outstanding loan book is more than N10 billion. For 2020, we are targeting nothing less than N35 billion.”

Also, he added that, till date, the bank has been able to support businesses. “About 190,000 customers have been able to access our loans, with value above N65 billion.  We expect that these numbers would go up this year, given that we would be doing what we have been doing before, and then we are bringing in technology and agency banking. So, we expect a very rapid growth,” he stated.

On the competition in the industry, he said: “We believe that we have very loyal customers and don’t think we have any issues with the existing customers, and what we are proposing to the market, giving our skills, competence and our history, plus technology that we are bringing in now, we believe that it’s going to be the market shaker for 2020. We are not afraid of going into the market if competition because we think at this moment, we would be able to deliver what we have planned.”

By Collins Nweze

The African Development Bank currently seeks investments from global pensions and commercial financiers to help fund the continent’s infrastructure gap of as much as $170 billion. This infrastructure need presents an investment opportunity, especially for Infrapreneurs.

Infrapreneurs, as used in the context of this article, refers to Entrepreneurs or business owners who are typically in corporate businesses but desirous of developing Large-Scale projects such as Toll Roads, Power Plants, Renewable Energy, Gas Plants, Airports, Large Scale Real Estate Projects, and so on.

While the government should provide an enabling environment for infrastructure to happen, the Private Sector should equally play a leading role in major infrastructural developments. For Infrapreneurs to overcome the obstacles often associated with project delivery process, it is necessary to develop a string of “Infrastructure Finance” capabilities, in order to attract capital from investors.

Our survey at Brickstone reveals that 80 per cent of entrepreneurs who show interest in the development of Infrastructure do not currently have the knowledge and capacity to develop and execute these projects. Our research further reveals that though most Entrepreneurs have the inabilities to demonstrate in-depth knowledge of their Large-Scale projects to Institutional Investors, they often find it difficult to secure (in the bag) the right equity funding needed to attract the necessary fund required for the project.

The inability to demonstrate the much-needed knowledge as well as the seemly gap in the quality of the knowledge of Large-Scale Projects by most entrepreneurs has been the obstacle standing in the face of such Entrepreneurs securing the required funding for projects from (African) investors.

Our research equally shows that most Infrapreneurs have challenges making progress with their projects because of the limitation imposed by the paucity in knowledge and capacity building in financing projects centering on Infrastructure development. Consequently, the African Infrastructure private sector has also not been able to take its rightful place in project development and delivery.

Understanding the need for knowledge exchange in Infrastructure Finance, Brickstone Africa has set up the Brickstone Dealcamp Series – a training series designed for African Infrapreneurs developing projects but lacking the knowledge of project and corporate finance principles in making deals happen. Under the training series, the team provides intense two or three Days Programmes, using best practice masterclass finance training tools specifically for Entrepreneurs involved in Large Scale projects in Energy, Infrastructure and Real Estate Sectors. The Project Finance Fundamentals for Infrastructure is one of the courses at the Brickstone Dealcamp Series. The trainings will hold in major African cities, including Abuja, Lagos, Port Harcourt and Accra. The training focuses on the infrastructure financing process over Three Days.

It is important for entrepreneurs to know that Infrastructure financing is a lengthy process that could take up to 1 or 5 years to active the financing close (i.e. raising the required capital which sometimes could be up to over $2 billion on a single project. This is an enormous undertaking by the Infrapreneur as it requires the infraprenuer to drive the project along Four major phases of the project development cycle.  a. Early Stage Development, b. Pre-Financing Stage, c. Financing Stage and d. Post Financing Stage.

These Four phases are extensively covered in the Brickstone Project Finance Fundamental teaches Infrapreneurs developing Large-Scale projects.

During the Early Development Stage, there are issues discussed which includes the Origination process of an Infrastructure project. We define an Infrastructure Project as a capital-intensive facility that requires securing a conditional right from a ceding authority pursuant to a tendering process or an unsolicited proposal to build an infrastructure facility under a contracted revenue (either on price or quantity or both).

Brickstone stresses that during the early development stage, Infrapreneurs must develop of Realistic Estimate of the Large-Scale project and ensure the revenues are sufficient to cover Capital and Operating expenses and repay project debt with an acceptable margin of safety.  The Early development Stage ends where the Infrapreneurs and Ceding Authority agree to proceed on Developing the Project. There are activities that may involve negotiating and formalizing on proceeding on the project development on an exclusive basis with the Infrapreneurs on an agreed Implementation Plan.

The Pre-Financing Stage is lengthiest of the stages and could occur for about one to five years. This is where most African Projects get stalled and not able to move forward. This stage includes detailing out transaction plan of the project with supporting transaction documentation needed such as Project Agreements, Information Memorandum and a Detailed Financial Model.

It is worthy of note that before a lender decides to lend on a project, such a lender must ensure the concerned project is financially and technically feasible by analyzing all the associated factors including the Financial Model and Project Agreements. The experience of the lender also come to bear at the point, as this determines how long the infrastructure financing process would take.

In order for the Financing Stage to happen, the Infrapreneur needs to acquire equity or loan from a financial services organization whose goals are aligned to that of the project. During this step, the borrower and lender negotiate the loan amount and come to a unanimous decision regarding the same.

As the project commences during the Post-Financing Stage, it is imperative to keep track of the cash flow from its operations as these funds will be, then utilised to repay the loan taken to finance the project.

By Collins Nweze

Members of the Central Bank of Nigeria (CBN)-led Monetary Policy Committee (MPC) will today converge on Abuja for a two-day meeting.

They are expected to take measures for more foreign capital inflow and curtail capital flow reversals and rising inflation which stood at 11. 98 per cent in December.

The 275th meeting of the MPC and the first for the year, is expected to keep all policy rates unchanged.  That decision will prevail despite rising calls from economic experts for the committee to lower benchmark interest rate.

Expectedly, the MPC will retain the Monetary Policy Rate (MPR) – benchmark interest rate at 13.5 per cent; Cash Reserve Ratio (CRR) at 22.5 per cent and Liquidity Ratio (LR) at 30 per cent as well as the retention of the Asymmetric corridor at +200 and -500 basis points around the MPR.

In emailed report to investors, Financial Derivatives Company Limited, said: “ Headline inflation increased by 13 basis points to 11.98 per cent from 11.85 per cent in November. This means that inflation averaged 11.39 per cent in 2019 from 12.15 per cent in 2018.

The increase in the consumer price index was partly due to higher money supply and seasonal demand in December. Rising inflation will be a key consideration of the Monetary Policy Committee (MPC) at its next meeting on January 23/24. This increases the probability that the Committee will tighten its policy stance”.

Other analysts said the committee will maintain status quo on all policy rates. He said the committee will not want to tamper with the policy rates at this period of electioneering.

Read Also: GTBank, Access Bank, Zenith Bank meet over final dividends

According to other analysts at the investment and research firm, developments in the global economy and financial markets are likely to be viewed with mixed feelings by the MPC.

At their last meeting, the MPC members assessed the macroeconomic environment in 2019 and noted the modest stability thus far achieved in domestic prices, output growth and the financial system.

The committee noted that the economy was on the right path but some key sectors continued to experience significant challenges.

The MPC, however, expressed concern about the tepid growth expectations and growing uncertainty in the global financial markets arising from the poor reception of the Brexit deal by British politicians, continuing trade war between the US and her major trading partners, as well as the commencement of U.S. sanctions on Iran.

The committee believed that although the domestic economy was recovering modestly from recession, however, the recovery was tepid and efforts should be stepped up to strengthen aggregate output and demand.