Category: Money

The World Bank Group has linked the shrinking value of the naira and currencies of most developing economies to uptick in food and energy prices.

It, in a report on the food and energy crises, it explained that under the United States dollar terms, the prices of most commodities have declined from their recent peaks amid concerns of an impending global recession. 

The naira exchanges at N440/$ at the official market, and above N760/$ at the parallel market. The local currency is projected to depreciate by 20 per cent next year. 

From the Russian invasion of Ukraine in February 2022 through the end of last month, the price of Brent crude oil in U.S. dollars fell nearly six per cent. 

The bank said that because of currency depreciations, almost 60 per cent of oil-importing emerging-market and developing economies saw an increase in domestic-currency oil prices during this period. 

“Nearly 90 per cent of these economies also saw a larger increase in wheat prices in local-currency terms compared to the rise in U.S. dollars. 

‘’Elevated prices of energy commodities that serve as inputs to agricultural production have been driving up food prices,” it said. 

During the first three quarters of the year, food-price inflation in Sub-Saharan Africa, and Eastern Europe and Central Asia, averaged between 12 and 15 per cent. 

“Although many commodity prices have retreated from their peaks, they are still high compared to their average level over the past five years,” said the World Bank’s Vice President for Equitable Growth, Finance, and Institutions, Pablo Saavedra, said. 

“A further spike in world food prices could prolong the challenges of food insecurity across developing countries. An array of policies is needed to foster supply, facilitate distribution, and support real incomes.”

After surging by about 60 per cent in the year, energy prices are projected to decline 11 per cent next year. Despite this moderation, energy prices next year will still be 75 per cent above their average over the past five years.

“The combination of elevated commodity prices and persistent currency depreciations translates into higher inflation in many countries,”  Director, World Bank’s Prospects Group and EFI Chief Economist, which produces the Outlook report, Ayhan Kose, said. 

“Policymakers in emerging market and developing economies have limited room to manage the most pronounced global inflation cycle in decades. They need to carefully calibrate monetary and fiscal policies, clearly communicate their plans, and get ready for a period of even higher volatility in global financial and commodity markets.”

The bank said the outlook for commodity prices is subject to many risks. “Energy markets face significant supply concerns as worries about the availability of energy during the upcoming winter will intensify in Europe,” it said. 

Higher-than-expected energy prices could feed through to non-energy prices, especially food, prolonging challenges associated with food insecurity. A sharper slowdown in global growth also presents a key risk, especially for crude oil and metals prices.

“The forecast of a decline in agricultural prices is subject to an array of risks. First, export disruptions by Ukraine or Russia could again interrupt global grain supplies. Second, additional increases in energy prices could exert upward pressure on grain and edible oil prices,”  Senior Economist in the World Bank’s Prospects Group, John Baffes, said. 

The Group Chief Executive Officer of Access Corporation, Herbert Wigwe, has called for improved funding for child education and commitment to quality learning.

He spoke following the bank’s donation of R2.6 million to support child education during the Polo Day held in South Africa, adding that the Tier-1 bank will continue to provide underprivileged children access to quality learning.

The event education funding will pass through the Nelson Mandela Foundation in South Africa.

Wigwe urged African leaders to prioritise child education adding that there are different studies that have highlighted the increasing number of South African children who drop out of school at early stages due to different reasons including poor performance, lack of funding, among others.

He therefore called for the recognition of the importance of child education to nation-building and stakeholders playing their part to ensure hope is restored to children, communities, South Africa and indeed, the entire continent.

According to the bank chief, 12 years ago, the Access Corporation had decided to act and positively impact the lives of underprivileged children in Africa, and the project that started with impacting 400 children in Nigeria has seen financial institution change the lives of over 14,000 in underserved communities.

He reiterated Access Bank’s goal through the Access Bank Polo Day is to ensure that all children, no matter where they live or what their circumstances are, have the chance to access quality education, and ultimately inspire them to dream more, learn more, do more, and become more.

Access Bank Plc hosting of the second edition of the Access Bank Polo Day in South Africa at the famed Val de Vie Polo Club in Cape Town, aligns with the bank’s commitment of the bank aligns with its plan to making a difference in society through philanthropy. 

The event was organised in partnership with Fifth Chukker, the Polo Day had delivered on some commendable fundraising accompanied by plenty of polo.

The event was attended by several dignitaries from across the continent including the Chairman, Coronation Capital, Aigboje Aig-Imoukhuede and his wife, Ofovwe Aig-Imoukhuede; Chairman, Access Bank PLC, Dr Ajoritsedere Awosika; Chairman, Fifth Chukker Polo and Country Club, Adamu Atta, Doreen Wigwe among others.

The first edition of the Access Bank Polo Day raised the sum of R360,000 for the Nelson Mandela Children’s Trust Fund (NMCF), while additional funds generated from the sale of artworks at the event went to the Foundation.

The Compliance Institute, Nigeria (CIN) says making the Beneficial Ownership Disclosure a requirement for company registration by the Corporate Affairs Commission (CAC) is crucial to the success of the fight against corruption, banditry, terrorism and illicit trade.

The President of the Institute, Pattison Boleigha, stated this in Kano during the one-day CAC Customers and stakeholders training on the beneficial ownership disclosure principles and electronic filing system for financial statements by registered entities.

Boleigha stressed that Nigeria’s fight against many vices will be won by leveraging the opportunities being provided by the CAC reform initiatives.

The compliance chief therefore, applauded the giant stride and called on the customers, stakeholders, and public to continue to support the Commission as it continues to modernise its operations in line with global best practice.

Speaking on the Beneficial Ownership Disclosure Principle, Registrar-General and CEO of the CAC, Garba Abubakar, said the initiative was to support the present administration’s fight against corruption.

Abubakar recalled President Muhammadu Buhari’s commitment to the Open Government Partnership Initiatives at the London Anti- Corruption Summit in 2016.

On the electronic filing system, Garba Abubakar revealed that the accounting software drew inspiration from the extensible business reporting language (XBLR) standard, in line with global best practices and added that the system would be made available to other regulatory bodies in the country to ensure synergy.

Group Managing Director, Damilola Awe,  Centrifuge Information Technology Ltd, a software development in the financial technology space, described it as an online account filling system by CAC supported by EU-ACT for regulated entities such as civil society organizations, Non-Governmental Organizations, integrated trustees, private limited liability companies, and other business entities.

Awe said the EFS, is an offshoot, a module or feature addition of the parent software Company Registration Portal (CRP), that allows annual financial statement filings electronically.

Earlier in a presentation by Priscilla Orukpe and Helen Odoma, Oasis Management Company, spoke on the imperatives of the Beneficial Ownership Disclosure Principles.

In a remark, Femi Olorunyomi, Deputy Director Academics, Nigerian Law School Kano, applauded the reform initiatives of the Commission and urged it to visit the law school campuses across the country to highlight some of the reforms.

Olorunyomi said that the call was necessary in view of the various innovations introduced by the Companies and Allied Matters Act (CAMA) 2020, and the ever increasing complex nature of company law in Nigeria and the world.

During the event, goodwill messages and presentations were received from NBA Kano, ICAN Kano District, ICAN Duste District, and NASME, among others. Most of the stakeholders and customers who spoke at the event applauded the CAC and therefore urged it to host more of such engagements and sensitisations.

Tag- CAC, Beneficial Ownership Disclosure Principle, CIN, Corruption, banditry, terrorism, illicit trade; Compliance Institute, Nigeria.

The International Monetary Fund (IMF) has advised Nigeria and other oil exporters in sub-Saharan Africa to target buffers of around five to 10 per cent of gross domestic product to manage large swings in oil prices. 

In a report released yesterday, the Fund said that for many countries, this means they will need to maintain annual surpluses up to one per cent per annum over a 10-year period.

“As noted in our latest regional economic outlook, oil prices have fluctuated from lows of $23 per barrel to a peak of $120 over the last two years, resulting in highly uncertain revenues in oil-dependent economies,” the Fund said. 

It said most oil exporters in the region haven’t accumulated enough savings to insure against unpredictable oil price changes. In fact, sovereign wealth funds in sub-Saharan Africa hold assets of just 1.8 per cent of gross domestic product—compared to 72 per cent in the Middle East and North Africa —forcing countries to borrow or draw down financial assets when oil prices fall.

“As a result, in the decade through 2020, the region’s oil producers have grown over 2 percentage points slower per year than non-resource intensive countries. Debt service costs have also been almost twice as high than in other sub-Saharan African countries,” the IMF said

“Moreover, as countries transition to low-carbon energy sources, oil revenues could sharply decline. By 2030, oil revenues in the region could fall by as much as a quarter and by 2050, by half. Building buffers now would help the region’s oil exporters navigate the transition toward clean energy while managing oil price fluctuations”.

Domestic and foreign investors are weary of Nigeria’s investment funds, Head of Research at Coronation Asset Management, Guy Czartoryski, has said.

His reasons are diverse. He said for many years international investors, including individual savers, have found it difficult to participate in funds invested in Nigeria as their number and size have dwindled.

He said the adoption of Global Investment Performance Standards (GIPS), including mark-to-market accounting of traded securities, will enable Nigerian mutual funds to feature on international fund comparison sites.

Supported by reliable and globally comparable performance data, Nigerian mutual funds will attract global investment, positioning mutual funds as the country’s default destination for discretionary savings.

He said: “A decade ago, a large number of international funds invested in Nigeria, run by money managers out of the United Kingdom and other European markets, South Africa, the United States and Singapore. The existence of these funds made it possible for ordinary investors to participate in Nigerian capital markets. When the oil price crashed in 2015, sparking a recession in 2016, the performance of these funds also collapsed. Most funds shrunk in size, merged, and some were simply wound up”.

Nigeria’s more recent challenges aside, over recent decades the global fund management and investment world has also moved on.

“Especially in the wake of the 2008 global financial crisis, regulators around the world have applied much more stringent compliance standards to the global mutual fund industry. To remain active in global capital markets mutual funds, asset managers and advisors have been forced to keep up with global best practice. This always means adopting Global Investment Performance Standards (GIPS). The result is that, today, “independent financial advisors don’t want to be seen to be recommending funds that are not GIPS-compliant and approved,” says Czartoryski.

To enable credible global fund comparison services like Morningstar, Yodelar and the Financial Times Funds Comparison Service to include Nigerian mutual funds on their platforms Nigeria needs to adopt GIPS. GIPS adoption will dramatically increase international and local investment in the country’s asset management industry “increasing the range and ability of savings instruments available to global savers, including Nigerians living abroad,” says Czartoryski.

GIPS require “the correct evaluation of mutual funds, showing clear linkage between the prices of their assets and value,” adds Czartoryski. Unfortunately for Nigeria, it is currently impossible to calculate, let alone accurately compare, the value of most of the country’s mutual funds because there is no universally applied method of valuing these funds. Furthermore, some funds pay dividends and offer various forms of guarantee while others don’t. “All these variations in valuation complicate comparisons,” reports Czartoryski.

Yet by far the most confusing aspect of this picture – and the Nigerian mutual fund industry’s biggest barrier to global capital market participation – says Czartoryski is “the use of both market-to-market and amortised cost accounting.”

In an age where the whole world has broadly adopted mark-to-market fund evaluation, moving away from the previously popular amortisation method, Nigeria remains an outlier, “forfeiting the global capital flows that would transform Nigeria from a country that saves in banks to a country that saves though much more rewarding mutual funds,” says Czartoryski.

In brief, the amortised valuation method provides a theoretical projection of fund value based on the metrics of each fund’s underlying securities at the time of their purchase. The mark-to-market valuation method reports a fund’s fluctuating value based on the current values of its underlying securities in the market.

Amortised valuation remains popular in Nigeria, especially amongst fund managers, as it makes it easier to sell funds. From the start, the amortised method shows predictable returns over time, even if in practice these returns are not always achieved, and certainly not consistently. Mark-to-market valuation, however, without claiming the ability to predict returns over time, provides a more accurate, real-time, valuation of funds.

Since the value of underlying securities are influenced by prevailing market interest rates as well as other variables like inflation, by regularly reporting fluctuations in the multiple metrics that determine fund value, “the mart-to-market method describes real value much more accurately as value shifts over time,” reports Czartoryski.

Despite Nigeria’s ambivalence in valuation approaches, the global asset management industry, as well as legislators the world over, have decided – in both practice and legislation – that the only way to compare fund managers’ performance is for all funds to mark-to-market their positions as GIPS demand.

Ghana recently reminded fund managers to enforce mark-to-market rules, giving extensive guidance as to the benefits of mark-to-market and adherence with international standards. At least one Ghanaian fund manager responded by giving clients the mark-to-market value of holdings as well their amortised value.

“Our own Securities and Exchange Commission (SEC) rules clearly favour mark-to-market fund evaluation,” observes Czartoryski. While implementation is currently patchy it is likely only a matter of time before either the regulator, market forces, or a combination of the two ensure broad-based compliance.

Mark-to-market is the only way to avoid surprises when fund holders come to sell their holdings.

Over the long term, adoption of mark-to-market accounting and GIPS is a pre-requisite to “building trust in mutual funds as reliable and safe wealth preservation and growth tools that every Nigerian should feel confident using,” says Czartoryski.

Currently, the absence of uniform mark-to-market valuation across the Nigerian asset management industry is an obstacle to competition.

Fund managers using the amortised accounting method will report steadily increasing values to the fund’s unit holders. Fund managers following the mark-to-market valuation method will report fluctuating values to the funds’ unit holders, though the cash flows provided by the underlying securities are no different. While the mark-to-market method will more accurately reflect the value of the fund in real time, using the different values reported by both methods makes genuine comparison impossible, “crippling the consumer’s ability to accurately judge value and performance,” explains Czartoryski.

President, Compliance Institute Nigeria (CIN), Pattison Boleigha, has called for the eradication of corruption and illicit funds flow, saying it has remained a major problem in Africa.

He spoke at the institute’s sixth induction and investiture.

He said the theme of the ceremony: ‘Compliance Culture and Corporate Governance: Role of Compliance Officers in the Public and Private Sector’, was apt, acknowledging that the decadence in Nigeria was due to lack of compliance.

He stated that the institute would  retore compliance culture.

“We position our breed of compliance officers to bring into play, new controls that can enable us to fight corruption and produce appropriate programmes, where they’ll build compliance programmes to fight corruption proactively.”

He said with the fresh crop of inductees, Nigeria would be equipped to combat the terrorism financing.

He said the event was aimed at instilling discipline and a culture of compliance in Nigerians, restating the institute’s commitment to the implementation of Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) in the financial services sector.

He said the institute’s objective was borne out of a desire to close the capacity gap in compliance knowledge and the low level of a compliance culture in Nigeria and Africa.

The CIN chief said the institute planned to expand the cost of enhancing compliance culture in Nigeria beyond the financial industry to others like oil and gas, telecoms and manufacturing, among others to integrate the compliance issues in those sectors into its curriculum.

He revealed that CIN is currently pursuing its chartered status at the National Assembly and the Bill is going for a second reading.

He added that the institute is focused on getting the Bill passed into law before the end of the 9th Assembly.

Speaking, Director, Banking Supervision Department, Central Bank of Nigeria (CBN), Haruna Mustafa, said the issue of compliance could not be over-emphasised in any corporate entity, especially in the light of increasing security threats occasioned by cyber-attacks, financing of weapon of mass destruction, money laundering financing and other vices, which are inimical to economic growth and national development.

He lamented that the dearth of professional compliance officers in banks and other financial institutions remained a major challenge.

He said more banks and financial institutions, that have come on board in recent times, increased the challenges the CBN and other regulators would face with respect to compliance with rules and regulations.

He called on the institute not to leave no stone unturned to develop robust mitigants in the risk factors peculiar to the financial sector, to ensure that criminals and saboteurs fail in their attempts to game the system.

He said the collaboration and support given by the CBN, underscores the importance of compliance in the sector.

He assured that the CBN would continue to partner with the institute to raise the bar, as the target remains zero tolerance for non-compliance with regulations.

Speaking on ‘Overview of the Compliance Institute, Nigeria’s Role in Strengthening the Compliance Function’, Director-General, Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA), Edwin Harris, said compliance is central to safety, economic development, fight against corruption and elimination of illicit financial flow in every country.

Noting that Nigeria had set a pace for other countries in West Africa to follow, he said CIN was driving the cause in Africa.

He urged governments to provide detailed support in advancing the course on compliance to reduce corruption without having an impact on the financial system.

According to him, fighting corruption in the country requires the cooperation of these financial officers.

Immediate past Director, Valuation and Compliance, GIABA,  Bunu Nduka, said Nigeria is blazing the trail, especially on compliance with respect to addressing money laundering and terrorism financing.

Expressing hope that in the next few years Nigeria would be fully compliant in addressing issues of money laundering and terrorism financing, he said the fight against money laundering was a dynamic process and with the level of compliance Nigeria had attained, “We hope that the crimes will become minimal, where Nigeria will become a safe and sound environment where to live.

“Today Nigeria has shown commitment by establishing the institute and it is our hope that within the next few years, Nigeria will continue to support other member states in the region to ensure the issue of compliance is addressed.

“From evaluation reports of member states, we see the significant impact of the institute and preventive measures are taken to ensure they are being guided in the conduct of financial businesses as well as those involved in non-financial businesses to become part of the institute.”

Experts said that with an increasingly changing global compliance landscape through renewed efforts by the global money laundering and terrorist financing watchdog, the Financial Action Task Force (FATF), the need for compliance professionals in combating crime, money laundering and terrorist financing has been brought to the fore by frontline experts in Nigeria and the West African sub-region.

The need, they said, is pertinent to bringing in professionals to enhance compliance culture and weave into the fabric of citizens’ common existence.

They argued that if compliance culture was adequately enhanced in Nigeria, the issue of corruption eating deep into the nation’s treasury would become a thing of the past.

Some of the corruption challenges highlighted, include the dynamic nature of financial crimes, emerging money laundering and terrorist financing (ML/TF) threats, advancement in technology and changing international standards.

Stransact (Chartered Accountants), the correspondent firm in Nigeria for the sixth largest international accounting firm, RSM, has cautioned against excessive currency regulation.

It spoke against the background of the Central Bank of Nigeria’s (CBN) reduction of daily withdrawal for individuals to N20,000 from  January, 9, 2023.

Its General Partner, Eben Joels, said such regulation could stifle the economy.

“We have a large number of rural population where internet penetration and cashless banking is still relatively low. We also have a high prevalence of illiteracy. These factors make the new policies on cash withdrawals and cash deposit a needless strangle hold at this time.

“This is the time we should be doing all to remove all regulatory bottlenecks, and lowering transaction costs,” he said.

Victor Athe, Partner, Tax Services, Stransact, agreed, saying: “A lot of informal players may resort to holding a lot of cash. This sector accounts for the majority of economic activities in the country.The goal of emerging economies like Nigeria should be to drive the increased formalisation of the informal sector, as much as possible.

“Currency regulations by itself cannot take the place of policing in checking widespread insecurity. The government should address the massive youth unemployment, which the National Bureau of Statistics puts at over 40 per cent in its recent report. The government should stimulate formal small businesses with demand and redesign policing around its federal structure.”

The CBN had, in a new policy, limited weekly cash withdrawals to N100,000 weekly (from over-the-counter, point-of-sale machines or automated teller machines) for individuals, while organisations could access N500,000 weekly.

CBN’s Director of Banking Supervision, Haruna Mustafa, who gave the directive, had  advised banks to load only N200 and lower denominations into their ATMs. This means Nigerians could only withdraw N20,000 daily from the ATMs when the order takes off.

POS operators, contractors, transporters and other business operators have  expressed concerns about the new policy.

The latest CBN policy also include plans to make only N100 and N200 notes available in ATM machines.

Joels further remarked that currency control could actually spike an economic crisis if not properly managed.  “In November 2016, India declared that the country’s two highest-denomination currency notes (Rs 1,000 and Rs 500) would be withdrawn immediately from the market. That policy, tagged “demonetization” was aimed at curbing black money and corruption. The immediate fallout was chaos, as the country scrambled to cope. Many people suffered, especially the poor, who had no access to credit cards or mobile wallets. Nigeria should learn the lessons from India without repeating her mistake”.

“If people start rejecting 200 and 100 Naira notes, that can’t buy anything anyway, and insist on Bank transfer for every transaction, things are likely to become more expensive. “Tampering with free movement of the currency sends a bad signal to the market that things are not right.”

• NIBSS: banks should invest more in technology

 

The Central Bank of Nigeria (CBN) has said the implementation of its cash withdrawal limit policy would help in reducing e-payment fraud.

Its Director, Payments System Management Department, Musa Jimoh, stated this during the Nigeria Electronic Fraud Forum (NeFF) meeting in Lagos.

He said the new policy would prevent criminals from defrauding innocent people.

Jimoh said: “As we envisage and begin to put some limits on the cash withdrawal that can happen daily, the incidence of fraud would also tame down,  because right now, they steal huge amounts of money, and then at about from 2 am to 3 am, they go to an ATM and withdraw everything.

“But, right now, with the policy on limits, you would not be able to take as much and the system will be able to trace and block such accounts before the money is taken away.

“So, this cashless limit is also a way of deterring fraudsters from taking other people’s money.’’

On the progress the CBN and NeFF have made in reducing e-fraud, the apex bank official said they have been able to barricade the payment infrastructure and the finance system against criminal activities.

Jimoh continued: “We have actually tamed down the incidence of fraud. We have recovered so many lost funds and we are putting formidable systems around our payment infrastructure and financial system infrastructure such that fraudsters cannot penetrate.”

“In terms of percentage, it is between 30 and 35 per cent decline in incidences of fraud. Remember, there are attempts and they are successful ones.The number of attempts is high, which means that they have been attempting but they are not successful and some are successful and so money is taken away.

“And in terms of recovery, we also recovered high numbers in terms of the percentage of the monies recovered because of the different initiatives and systems that have been put in place to checkmate all those fraudsters and to track wherever the money is taken into.”

Also, the Managing Director of the Nigeria Inter-Bank Settlement System Plc (NIBSS), Premier Oiwoh, urged banks to invest more in technology to help reduce fraud.

Oiwoh reiterated the need for banks to invest in technology to curb fraud citing that artificial intelligence (AI), if used well, would help eliminate fraud.

Noting that one of the major problems in the nation’s banking industry is the reluctance to report fraud cases, he, therefore, called on the apex bank to ease the process of recovery and the need for each bank to set up a fraud desk.

He said: “Institutions should invest in Enterprise Fraud management (EFM), a fraud monitoring tool. A system is as effective as the person who sets it up. I don’t think the EFM that exists today works. EFM is supposed to be smart. It is an artificial intelligence (AI) that should intercept, analyse, interpret and take actions.”

Wema Bank Plc has called for more support for Fintech companies so Nigeria, like her peers, could optimally benefit from the possibilities that the Fintech industry offers. The bank made this call at The Fintech Summit (TFS) 2022 by Techpoint, which recently held in Lagos. Speaking at the summit,  the bank’s Head of Data and Analytics, Olamide Jolaoso, said that the country needs many Fintech companies to come on board to meet the wide spectrum of Nigerians’ Fintech needs. “Some people are of the view that there are already too many Fintech companies, especially start-ups in Nigeria, but I do not agree with them. We have a population of over 200 million people with varying financial needs and appetites that are yet to be satisfied by the existing Fintech service providers. We need more Fintech companies that solve many specific problems and not just a group of Fintech companies who are doing the same few things as we currently have,” he said.

He mentioned that Wema Bank has established itself as a dominant player in the Fintech space through the creation of ALAT, which has provided a platform for other Fintech companies to operate.

“Wema Bank created ALAT, the first fully digital bank in Nigeria, and on whose platform many Fintech companies run their operations. As an important player in that ecosystem, we see the need to grow the industry and create more opportunities for the upcoming players.”

He informed that ALAT By Wema, a branchless and paperless bank, was created to drive transformation and redefine experiential banking in Nigeria’s banking sector.

“The platform has eliminated the stress of having to walk into a branch that prospective customers face anytime they want to open an account. ALAT by Wema offers them a seamless sign-up process using a mobile phone, PC or tablet. Since the release of this award-winning app, the bank’s customers, who have come on board the app, have been full of excitement as it helps them save more.”

Jolaoso noted that Fintech companies are already the core fabric of our daily lives, creating apps that help millions of Nigerians to save, transact, invest and do an insurance. He also made a case for more measured investments in the Fintech industry for the growth and sustainability of the sector.

The Financial Institutions Training Centre (FITC) has called for collaboration between the Film Industry and Financial Institutions to stimulate funding and achieve greater impact on the economy.

FITC Managing Director/CEO, Chizor Malize, disclosed this during the 5th Edition of the Annual Seminar and Short Film Screening of Nollywood Creative Mind Forum (NCMF) held recently at Four Points by Sheraton, Victoria Island, Lagos.

In her keynote address themed: ’Finding Common Grounds for Collaboration Between the Film Industry and Financial Institutions’ Malize highlighted the excellent achievements that the industry has recorded and revealed the enormous opportunities that still exists within the same space. She said despite the huge potential in the Nollywood industry, the sector remains under-funded, a challenge that can be fixed with partnerships with key stakeholders in the economy.

She highlighted the industry’s frequent funding challenges forcing some filmmakers to seek external support and assistance, with stringent requirements attached to accessing such facility.

According to Financial Derivatives Company (FDC) Limited report, Nollywood was ranked as the world’s second-largest movie industry by volume, surpassing America’s Hollywood and coming just short of India’s Bollywood. However, the report says Nollywood is behind Hollywood and Bollywood in production quality and return on investments.

The FDC report emphasized that over 2,000 movies and TV series produced yearly by  Nollywood are mostly in Yoruba, Hausa, Igbo, and English which are the most widely spoken languages in Nigeria, but the returns on investment are behind those of Hollywood and Bollywood.

The FDC report further disclosed that while the highest-grossing Nollywood movie, ‘The Wedding Party’ (2016) made approximately $1.176 million (N453 million), India’s Dangal (2016), grossed about $296 million (N113.8billion). The report added that it takes an average of $10,000 to make a Nollywood film compared to Hollywood’s average budget range of $70 million to $100 million while a premiere Hollywood blockbuster could cost between $200 million and $400 million. The Bollywood’s budgets range between $200,000 and $700,000.

“Lack of funding/financing is responsible for the low-budget nature of Nollywood movies. In recent time, we have seen the release of high-budget Nollywood movies. For instance, in 2018 the global powerhouse, Netflix, set up partnerships with Nigerian production companies, releasing Lionheart, and teaming up with Ebony Life studios, embarked on a string of Netflix-branded projects. This is more of a loss to the country as greater part of the returns goes to the NETFLIX a foreign institutional investor,” the FDC report stated.

“Just like Sports, Nollywood is too strategic, an economic dynamic to be left to the vagaries of government-inspired policy intervention alone. It requires a more rigorous and robust funding intervention that will become more amenable to a private sector-driven management dynamic, than what the solely government-driven control can yield,” she said.

According to Malize, a handshake between these two powerful sectors can only lead to prosperity.  She added that there are common grounds that can be reached between the Nollywood Industry and the Nigerian Financial Services Sector and listed the efforts of financial institutions on past projects such as:

The Bankers Committee led ongoing restoration and refurbishment of the National Arts Theatre, Iganmu, Lagos, tagged Lagos Creative And Entertainment Centre project; First bank led sponsorship of the movie titled “Ayinla” in 2020; UBA’s sponsorship of the Ebola movie titled “93 Days”- A story on how Nigeria faced    its first case of the Ebola virus and conquered it.

Others are the African Movie Award was another project sponsored by UBA as far back as 2008; Access Bank sponsored the 9th edition of Africa International Film Festival in 2019 and Ecobank sponsored “The Wait”- A movie inspired by the popular book from a renowned lawyer and entrepreneur, Yewande Zacchaeus, titled- God’s Waiting Room and a host of other movies.

These milestones, Malize stated, showed the financial services sector’s demonstrable support to the Nollywood Industry through the years, and commitment to continued development and growth of the sector.

“This will invariably increase the overall Gross Domestic Product (GDP) of Nigeria thus stimulating growth and development and better position the country as a powerhouse in Movie production,” Malize stated.

She emphasized the need for the industry to rethink and reposition as enterprises, demonstrate structure, financial prowess, show strong corporate governance, and longevity to keep them attracted to the Financial Services Sector.

Also peaking, the President, Nollywood Creative Mind Forum (NCMF), Mrs. Ijeoma Richards said that the event is an annual gathering of professionals within the Nollywood industry aimed at identifying and harnessing opportunities, providing mentorship and creating a viable platform for artistes to collaborate in not only sustaining the momentum but also in taking the industry to the next level.

She highlighted that professionals from the financial sector and the media were invited to see how both sectors can collaborate with Nollywood to identify new windows of openings and innovation to help develop the industry beyond where it is.

In his presentation, Mr. Kelechi Deca, Editor-in-Chief, African Economy Magazine, described the movie and entertainment sectors as strong vehicle for societal change. He advocated for more government support for the industry including collaborating with the professionals on intentional agenda setting towards changing the narratives about Nigeria.

Speaking on the theme: Entertainment as Vehicle for Positive Change and Development, he noted that in an age where culture drives economics, a lot of countries across the world are taking cultural economics seriously and deliberately harnessing opportunities within the sector, towards their national development and foreign policy formulation.

Deca called on the actors to always collaborate with people in different fields such as the media, finance, and academia, especially historians, linguists and other cultural activists to explore all aspects of development the entertainment industry can tap from.

The event was also attended by leaders in the Nollywood industry, financial and private sectors of the economy including Ekpeyong Bassey Inyang-Keppy, Actor, Producer, Film maker;  Edmond Enaibe,  Veteran Actor, among others.