The Nation Newspaper

Tag: capital

  • ‘No business is ever going to grow without access to capital’

    ‘No business is ever going to grow without access to capital’

    US-based Nigerian businessman/finance expert, Habeeb Fasuyi tells Gboyega Alaka why he is supporting Micro Small and Medium Enterprises (MSMEs) with loans without collaterals.

    What inspired your venture into loan business?

    That’s a bit of a long story, but I’ll try to cut it short. What actually inspired me was growing up and seeing a whole lot of petty traders who never had access to capital and consequently did the same business for more than thirty years but were never able to grow. The truth is there is never going to be any business that will ever grow or develop without having access to capital, either in form of borrowing, grant or share capital. Unfortunately, most of these petty traders never had that opportunity. I grew up with a friend whose mum had a corner shop or home front shop, which she had been running before he was born and which remained the same way and size throughout our primary, secondary and college; and she was never able to hire a single person. That means she never grew. And this was over a period of 20 years. Looking back, I can tell that what made her remain so was because she never had access to capital, which is the bane of millions of other petty traders.

    As a Nigerian, you may also understand that for a good number of these people, it is the fear associated with not being able to pay back and the consequences. How do you assuage this phobia?

    Good question; and that is what makes the difference between Option Financial Services and the rest. Our objective is in line with government objectives, not to create an interest rate that will kill the business owner. To start with, not all the small businesses would qualify for a bank loan, chiefly because of the stringent conditions, paperwork and the formalities required. We’ve been in the business now over 36 months, and in the process, we have been able to give over 750 million naira to small business owners; we’ve been able to help over a thousand business owners. However, not all of them will be able to qualify for this loan – because of the way the loan qualification is structured. This is why we came up with Daily Loan Solution initiative, which we launched December 5 last year. As a way of further alleviating the fear around loans, we have made the interest rate so easy and competitive at 10 per cent. Even the Central Bank of Nigeria (CBN) has pegged loan interest for commercial banks at 27.5 per cent. So if you really look at it, the interest doesn’t cover our overhead, salary and other expenses; which goes to show that it was designed with the objective of helping small business owners, not really for profit maximisation.

    Secondly, we want to make repayment, which is always the fear of people, easier, by making it possible for them to make repayment on daily basis, or weekly, if they like. Even though that comes at extra cost to us, we want to make it easier for them who sell every day and make profit every day. We have gone further to make it easier for them by excluding Saturdays and Sundays; irrespective of whether they operate and make sales on those days. It was designed for those who may ordinarily not qualify to access loans from regular or other financial institutions, or grants.

    I find the ‘no collateral’ part interesting. Don’t you think that is risky, and that people could disappear with your money?

    If we’re scared, we’re not going to be in business. Are we trying to put in measures to forestall such? Yes. The reason this set of people do not have access to loans in the first place is because they cannot provide collateral. Also, not all of them are bad. So we’re still going to take that risk, but it’s going to be calculated risk; not blanket risk. It’s going to be what our Underwriting Department are going to be able to look into very well; not that everybody that applies qualifies. We’ve got to be able to verify that you’ve been in business; and you have some character witnesses to get at least a minimum of one guarantor that can vouch for you. However, if this happens despite all these precautions, what makes the difference between Option Financial Services and the rest is that we still sit down with our customers and see how to restructure the repayment. Part of the reasons our bad debt or non-performing loans have been so small is because we are not so callous with the borrower; we believe that if they succeed, we succeed. So far we’ve had less than one percent non-performing loans.

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    How do you ensure such level of compliance?

    We monitor them, we remind them. Do we have non-compliance? I’d say almost none. But do we have delays – say making payment like days later? Yes, we’ve had that, but we’ve been able to work around it. We have sales reps that are on-field, who follow-up with them and who alert us if any of them is going to have problems. So we move in and try to save the situation. We had a case of a customer, whose husband died and as a result was unable to pay; so we decided to give the client like two weeks before we followed up to discuss the way forward.  These are things that ordinarily, other finance organisations might not be able to do.

    How well do those who need this ‘Daily Loan Solution’ facility know about it?

    It’s picking up. Part of the objectives of the launch we did on December 5, 2024 in Lagos was to let people know about it. Between the launch date, Friday and the following Monday, two working days, we received over 600 loan applications. Even community leaders, Obas and Iyalojas are reaching out to us. Our target is to reach at least 5,000 small business owners in the second quarter of this year. But even that is like scratching the surface in a country where you have over 40million people in the small business bracket.

    What’s behind your decision to focus only on Lagos?

    Because we have limited resources. We want to start from where the need is more; where the highest number of small business owners reside. Lagos is the capital of the financial power of Nigeria. Lagos is where more than 50 percent of small business owners in Nigeria reside. As we succeed, we shall progress to other neighbouring states and regions.

    Tell us a bit about your background.

    I grew up and did all my schooling here in Nigeria. I studied accounting at Yaba College of Technology (HND); thereafter, I went to the Federal University of Technology, Akure for my MBA (1996). I lectured for a while in YabaTech and UNILAG (visiting lecturer), before setting up an accounting class, FAST (First Attempt Success Tutors) in Gbagada, where I was Director of Studies. In 1997, I brought to Lagos the satellite campus of FUTA (1997); at the same time, I was working with GlaxoSmithkline (GSK). Later I travelled to the United States where I did my CP exams and then moved for my PhD. Currently I have four companies in the US: Sharf Pointers Financial Services, an auditing and accounting services company; we currently have over1000 clients. I also have Ultimate Tax Relief, which focuses on taxes – tax compliance and tax resolution. Because of the rate of our success in the US, we have also set up the same company in Nigeria to replicate that success and be of help to Nigerians. We later added Option Financial Services.

  • Gbolarumi, Arulogun make Olubadan coronation committee

    Gbolarumi, Arulogun make Olubadan coronation committee

    A former Deputy Governor Hazeem Gbolarumi and former Commissioner for Information in the administration of late Governor Abiola Ajimobi, Mr Toye Arulogun, have been named members of the Olubadan coronation committee inaugurated by Governor Seyi Makinde.

    Makinde inaugurated the committee for the coronation and presentation of staff of office to the Olubadan-designate, Oba Owolabi Olakulehin, at the Governor’s Office, Secretariat, Ibadan.

    According to a statement by the Commissioner for Information, Prince Dotun Oyelade, the committee is headed by the Commissioner for Local Government and Chieftaincy Matters, Mr Ademola Ojo.

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    Other members of the committee include Oyelade, Commissioner for Culture and Tourism, Dr. Wasiu Olatunbosun; Commissioner for Women Affairs and Social Inclusion, Mrs Toyin Balogun; son of the incoming Olubadan, Prince Folaseke Owolabi-Olakulehin; Chief Onikepo Akande, His Royal Majesty, Oba Abiodun Kola-Daisi; His Royal Majesty, Oba Lateef Gbadamosi Adebimpe; Bishop Ademola Moradeyo; CP Sunday Odukoya (Rtd.); Mogaji Abduljeleel Adanla and Senior Special Assistant to the Governor on Local Government and Chieftaincy Matters, Hon. Ramota Agberemi-Dabo.

     Makinde had approved the coronation of Olakulehin as the 43rd Olubadan and subsequently fixed July 12 for the coronation and presentation of the staff of office.

  • Institute to support minister on human capital development

    Institute to support minister on human capital development

    The Registrar, Chartered Institute of Project Managers of Nigeria, Henry Mbadiwe has said the institute would support the Minister of Industry, Trade and Investment, Doris Uzoka-Anite in the areas of Human capital development.

    He made the pledge during a visit to the minister in Abuja.

    The registrar said the institute was open to supporting the minister in the planning, delivering and monitoring the Ministry’s initiatives for national development.

    He said: “Part of what was mentioned was that the Institute has started with immediate effect to put together standardisation practices for the profession in Nigeria: against these standards will professionals in project management all over Nigeria be trained and certified to practice.

    “We will start to work with other membership regulatory bodies that interface with projects across the country to ensure that we have one view on how to standardise the project sectors and to ensure that all stakeholders in project delivery have a voice in shaping the sector.

    “We will further our work in creating a project management delivery methodology for practicing project delivery in an ethnic, religious, political, culturally diverse country such as Nigeria called: Delivering Unified Controlled Agile Project (DUCAP).

    “We will further deepen our work with the National University Commission (NUC) in ensuring that the project management curriculum for Nigerian Universities that we were part of creating continue to get updated as the profession advances.”

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    “We will work with the organised private sector, other Ministries, Departments and Agency (MDAs) of government to ensure that they have the necessary skills to abide by the law as regards ensuring that no unqualified person is allowed to practice project management without a licence.

    “Furthermore, we will ensure that we put enforcement processes in place for those who would want to take the law for granted. First to help them not to break the law, but also not to shy away from making sure that offenders are punished in accordance with the law.”

    The minister appreciated the Council’s visit and reminded the Council that its responsibilities are so important to the nation and that it would be of immense benefit to utilise the Institutes expertise in project managing various initiatives being run within the ministry and the nation at large.

    She assured that the ministry has and is always willing to work with the Institute (CIPMN) and to support it anyway it could to ensure that its mandate is achieved.

    The President of the institute, Prince Akinola Babalola, assured the minister that the Institute will not entertain any attempt to circumvent the efforts by troublemakers and meddling interlopers set out to deceive the unsuspecting public by setting up and running shadow organisations in the of CIPMN.

  • Total capital importation hits $1.03b in Q2 2023

    Total capital importation hits $1.03b in Q2 2023

    The National Bureau of Statistics (NBS) at the weekend revealed that total capital importation dipped by 32.90% to $1.03 billion in second quarter 2022 from the $1.53billion in second quarter 2023. 

    Its document titled: “Capital Importation Q2 2023,” said “In Q2 2023, total capital importation into Nigeria stood at US$1,030.21 million, lower than US$1,535.35 million recorded in Q2 2022, indicating a decrease of 32.90%.”

    According to the document, when compared to the preceding quarter, capital importation fell by 9.04% from US$1.132.65 billion in Q1 2023.

    NBS said other Investment ranked top accounting for 81.28% (US$837.34 million) of total capital importation in Q2 2023, followed by Portfolio Investment with 10.37% (US$106.85 million) and Foreign Direct Investment (FDI) with 8.35% (US$86.03 million).

    The document noted that the production sector recorded the highest inflow with US$605.04 million, representing 58.73% of total capital imported in Q2 2023, followed by the banking sector, valued at US$194.58 million (18.89%), and Shares with US$68.63 million (6.66%).

    According to the data, Capital importation during the reference period originated largely from the United States with US$271.92 million, accounting for 26.39%, followed by Singapore and the Republic of South Africa with US$177.44 million (17.22%) and US$136.95 million (13.29%) respectively.

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    The document added that Lagos State remained the top destination in Q2 2023 with US$778.06 million, accounting for 75.52% of total capital, followed by Abuja (FCT), with US$194.28 million (18.86%).

    NBS also said First Bank of Nigeria Limited received the highest capital into Nigeria in Q2 2023 with US$323.13 million (18.23%), followed by Citibank Nigeria Limited with US$187.77 million (12.23%) and Rand Merchant Bank with US$126.03 (6.47%). 

  • ‘FG must prioritise investment in human capital development”

    ‘FG must prioritise investment in human capital development”

    King’s College, Lagos, as part of activities marking its 114th anniversary, will hold its Kingsweek this week. A former President of the Nigerian Bar Association (NBA), Olumide Akpata, who is the Chairman, Kingsweek 2023 Planning Committee, shares insights on the programme. Excerpts:

    Q: What informed the theme of the 2023 Kingsweek celebration and how does it impact the education sector?

    A: At every turn, one is confronted by the myriad of problems that afflict our country and there is seeming consensus that it is a failure in leadership, over time, that has brought us to this rather sorry pass. However, this situation appears to be somewhat of a paradox because when you look around, within Nigeria and in the diaspora, you find legions of Nigerians, trained in schools like our King’s College, who are more than equipped to lead and who are doing precisely that in their respective fields of endeavour but who somehow never get a look-in or, sadly, have become passive when it comes to political leadership in Nigeria. Why is this so? Why are these set of people “outside looking in” while the ship of state flounders? These and many other allied questions, that have agitated our minds for a while now, essentially informed the theme for this year’s Kingsweek: ’Dismantling the Barriers: Creating a pathway for the emergence of effective leaders in Nigeria’.

    The plan is to intensely interrogate this issue in the course of the Kingsweek and hopefully proffer solutions to what is obviously an endemic problem with mortal consequences for our nationhood. There is no gainsaying that the outcome of our deliberations will have implications for the country’s entire education sector as I think, for starters, it will become very obvious to our education policy-makers that, going forward,  they will need to be more deliberate and forward-thinking about developing curricula that not only focuses on how to train prospective leaders of this country but also ensures they are future-ready. It goes without saying that the world these leaders will need to thrive in, looks a lot different and far more complex than what we know today. As such, it is paramount that we design the education of our future leaders to ensure they have all it takes to compete with their peers from other climes, especially in view of the global 4th industrial revolution, which is well underway.

     What is the biggest challenge facing youth leadership in the country and how are organisations like the King’s College Old Boys’ Association (KCOBA) helping in solving them?

     I think the greatest challenge to youth leadership in Nigeria is a lack of faith! On the one hand, of the older generations in the capacity of the younger ones to take charge and actually do a good job. And on the other hand, of the younger generations i.e. their trust or confidence in the intentions of the older generations to serve their best interest and not continue to pursue policies that appear focused on stunting their advancement and/or will result in disadvantages as they look to compete in a rapidly evolving world. Take my generation for example, we were once proclaimed “the leaders of tomorrow!”. Now, we are over 50 and that so-called “tomorrow” has come and gone. Yet, save for a few isolated cases here and there, we are nowhere near assuming leadership in Nigeria….not to mention the generations coming behind us. It is actually quite pathetic….the sheer waste of the energy, vigour, passions and potential of our youth. KCOBA, strives to lead by example, by preparing our younger members for leadership and actually encouraging them to vie for and occupy positions of leadership in the Association. For example, I was the General Secretary of the Association over 10 years ago, when I was still in my thirties. You will agree with me that, for a School that was well over a hundred years old at the time – with old boys who were well in their 80s and who were still actively involved in the affairs of the Association, that was a very welcome development. The remarkable thing is, this was no fluke, because my successor was actually my junior, when we were at KC. The wider society needs to take a cue from KCOBA.

     How does KCOBA structure its Kingsweek programmes to ensure that it can mobilise both the private and public sectors to address challenges facing the college in terms of infrastructure?

    Actually, for many years now, at least since 2007 when we began the countdown to the Kings College Centenary, the focus of the KCOBA, during our annual Kingsweek Celebrations, has been mainly on infrastructure in the College and as a result thereof, in the last 15 years we have been able to galvanise our old boys and, through them, the public and private sector within and outside Nigeria to work with the Association in maintaining, improving and augmenting the facilities and infrastructure at King’s College. This effort has yielded massive results as we have been able, over this period, to attract interventions in excess of N3B from old boys, corporate organisations, agencies of the Federal Government, the Lagos State Government, amongst others.

    When it comes to grooming quality leaders, Nigerians increasingly list corruption, godfatherism as obstacles. How can these pressures be tackled?

    The answer is simple and straightforward. By enthroning merit! This must be our national policy. I have no problems with affirmative action…in its various iterations…zoning; women and youth empowerment; quota system etc. These are aberrations that are sometimes necessary in the life of any nascent nation. However, two key considerations must remain paramount. Firstly, this deviation from the norm cannot remain open-ended and secondly: merit must never be sacrificed. So, if we agree that an office is zoned to the Northwest or Southeast? No problem. However, we must insist on producing the very best from the Northwest or Southeast, as the case may be, and this must result from an open and transparent process. This is how the continued emergence of quality leaders can be guaranteed whilst ensuring equity and inclusivity. However, when the enthronement of mediocrity becomes the national dictum in the name of affirmative action, it can only result in catastrophic consequences, as has become evident in our polity.

    Partnership with the private sector is very critical to maintaining the vision of King’s College. How do you see the role of well-meaning individuals in the quest to enthrone qualified and capable leadership at the Federal and Sub-national levels in Nigeria?

    This definitely goes without saying. The task of ensuring that there is a steady and unbroken process, call it a factory line, for producing the next generation of leaders in this country is one that must be undertaken through the collaborative efforts of all stakeholders. In other words, the construct for designing and operating this conveyor belt of future leaders cannot comprise and must not be the responsibility of government alone. It requires active and consistent collaboration with the private sector and successful individuals with high achievements across various endeavor. We say in Nigeria, “it takes a whole village to raise a child”…by extension, it will take enormous collaboration between government and the private sector to raise, mentor and empower Nigeria’s next generation of leaders. At the KCOBA we have never lost sight of the Kings College Charter which, essentially, is to train Nigeria’s future leaders and we regularly collaborate with individuals and organisations that share the same vision. 

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    For Kings college to be celebrating 114 years as an educational institution, it must have gone through many challenges. What are some of the high points in the schools’ quest to maintain excellence in grooming next generation leaders?

    Having been very involved in the activities of the KCOBA in the last 20 years I have experienced, first hand, the many challenges confronting both the management of the School and the Association in our joint quest to maintain standards at Kings College – with a view to ensuring that the School continues to bring forth the next generation of qualitative leaders for Nigeria and indeed Africa. Top of the list would be what used to be the rather haphazard mode of admission into the College. At a point, it was simply bizarre, with the yearly intake into the College growing in geometric proportions without any corresponding adjustments in budgetary allocation and, more importantly, without any improvement in or significant expansion of the existing facilities. However, I am happy to report that the KCOBA has been able to successfully combat this existential problem and things have  significantly improved as far as admissions is concerned. Nonetheless, the problem of inadequate and decrepit facilities persists and this is what keeps us, the old boys, awake at night. We are deeply concerned about the present physical condition of our School as this remains a major impediment to the School’s ability to live up to its mandate.

    When you look at economic indices like high unemployment rate, low budgetary allocation to the educational sector among others. What advice do you have for the present Federal government to address these issues?

    All I would say is that governments, at all levels, must prioritise education. We must invest in the continuous enhancement of our human capital if we hope or plan to make any meaningful advancement as a nation. This particular issue is very dear to me. I had the privilege of delivering the 46/47th Convocation Lecture of the University of Benin in November 2021, and settled on the topic, ‘Re-Prioritisation of Education – A Panacea for the Obstacles Challenging National Development in the 21st Century Nigeria.’ It is not rocket science, and I am not saying anything new. Examples abound world-over. The nations that have made significant strides in human advancement have done so on the back of huge investments they made in training, developing and capacitating their human capital. China is currently on the verge of overtaking the US as the world’s largest economy and most advanced country, because it has spent the last 50 – 60 odd years prioritizing the education and up-skilling of its enormous human capital. In this country, we pay lip-service to education and human capital development. Yet, wonder why things have gone awry and the country appears stuck in inertia. In the last forty years there has been a steady and sustained deterioration of education in Nigeria – at all levels, and this flows from what I characterise as the gradual yet consistent de-prioritisation of education. Predictably, we are now seeing, all too clearly, the consequences of this tragic misplacement of our priorities. The answer as I have said earlier is that governments, at all levels, and indeed all Nigerians must re-prioritise education and by extension our overall human capital development. Our greatest strength and indeed potential, lies in our people. We must, as a matter of priority, educate, up-skill and empower our people.

    What has made King’s College different from other colleges?

    KC is just different. So, it really is not a question of “what has made KC different”, it was created different and it will remain that way. It was set up, one hundred and fourteen years ago, for a specific purpose…to groom leaders. So, we lead. We are in a class of our own. There is no argument about that…there cannot be.

    From your perspective as a King’s College Old boy, what critical steps would you recommend to make the education sector better?

    I think I have addressed this issue in a previous question. The task of improving the education sector in Nigeria starts with government at all levels. Government must as a matter of deliberate policy prioritise education. Funding is critical so also is strategic planning. We must educate our people with a view to ensuring that they are not only able to significantly add value to the economy, but as well, sufficiently equipped to compete and thrive in a world currently making quantum leaps in technological advancements. Look at India…see how they have become such a formidable force in technology. It didn’t happen by accident! Read about the Indian Institutes of Technology set up in 1961 pursuant to an Act of Parliament. That is the sort of intentional strategy you want to see implemented in Nigeria – along with the political resolve to ensure its success and sustainability. Recently, the Minister of Education set up a committee to fashion a roadmap for the education sector in Nigeria with emphasis on funding in tertiaries institutions. This is a welcome development. However the government of the day, and successive administrations must demonstrate an unusual political will to implement, sustain and institutionalise the positive recommendations of the committee.

    What are some of the projections of KCOBA in the next five years?

    I think this question is best suited for those at the helm of affairs of the Association. Suffice it to say however that the ownership and/or management of the College, by the KCOBA, remains a matter of primary concern and I would imagine that this is something we would like to achieve within this five-year time frame.

  • $900 capital idle, says PwC

    $900 capital idle, says PwC

    The country has between $300billion and $900billion worth of dead capital in residential real estate and agricultural land, PricewaterhouseCoopers (PwC) has said.

     It stated this in a report entitled:“Bringing dead capital to life, what Nigeria should do”.

     It added that the value of the middle market is worth between $60billion and $170billion.

    Dead capital is related to property, which is informally held, not legally recognised, and cannot be exchanged for financial capital.

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    This type of capital has pauperised millions of Nigerians because they are holding land property that has no title and cannot be traded on to create wealth. This is more so when the approval process for land is herculean and bureaucratic, especially in obtaining Cof O and obtaining a governor’s consent.

    Using estimates and assumptions, PwC estimated that we have 200 million population, 40 million households, with five members each.

    The report stated that a typical house in Nigeria is over capacitated with an occupancy rate of seven people to a room. Thus, approximately 95 per cent of household dwellings in Nigeria have no title or a contestable title. This means that vast land owned by Nigerians are worth nothing because there are no titles to them and can, therefore, not be traded on.

     PwC also maintained that the land tenure system is still largely in the communal and informal sectors, adding that sporadic efforts by the government on formalisation of property rights through certificate of occupancy in big cities in Nigeria were yet to meet the intended goal.

     It said: “Land ownership has been quite a stressful process as a result of the complex land tenure system.The current legal status overseeing the formalisation of land ownership is the Land Use Act, which was created to support fair access to land by establishing a certificate of occupancy system with fees and taxes but the Act has failed to establish a uniform land tenure system that governs ownership in the country.”

     The agency added: “Most citizens, especially in rural areas where land is not scarce, do not comply with the legal provisions of the Act and have no certificates on their land.

    “Issues around proper land registration and omo’nile also make it difficult to ascertain proper land ownership. About 97 per cent of land in Lagos is unregistered. This makes it difficult for banks to validate claims to land or for land occupants to use their land to create wealth.”

     The report noted that the difficulty in registering a property and obtaining a construction licence created obstacles to legality.

     It said: “With regards to registering a property, Nigeria ranks 184. In Lagos, it takes an average of 12 procedures and 105 days to register a property, costing up to 11.1 per cent of the property value. This process is made difficult due to the low quality of land administration in Lagos. This does not encourage formal declaration of assets and discourages people from registering their properties. Nigeria ranks 149 on the ease of obtaining a construction permit and requires 17 procedures, 118 days, and 27.5 per cent of property value. This encourages more informal construction of properties and increases risks in the real estate sector.”

    On obtaining construction permits, the report noted that Nigeria ranks 149 in the ease of obtaining a Construction Permit and requires 17 procedures, 118 days, and 27.5 per cent of property value, adding that this encourages more informal construction of properties and increases risks in the real estate sector.

    It observed that in urban land markets, it is expected that pricing systems, demand and supply, information systems as well as social interactions should increase the level of accessibility to land.

    PwC stated that however, the increasing population and multifarious land needs of urban households have put pressure on demand, hence leaving them a pricing system to dictate solely the allocation and distribution of land in the market. At current low-income levels, it said the urban household is prone to market segregation, adding that state’s intervention in creating and sustaining equilibrium and equitable access to land through the Land Use Act has created a myriad of problems.

    Concluding, the report  advised that the conversion of dead capital to live capital through structural reforms would help convert most of the capital in the informal economy, valued at 65 percent of GDP, into the formal economy.

  • Capital imports to Nigeria rise to $16.8b

    The value of capital imported into Nigeria rose 37.5 per cent to $16.8 billion last year, data  from the National Bureau of Statistics (NBS) showed yesterday.

    Much of this huge cash was spent on equities in the country, the NBS data indicated.

    The National Bureau of Statistics (NBS) yesterday said $10.43 billion of the headline cash went into equities and equity-related investment, with Britain topping the list of countries from which the funds came.

    Analysts said foreign funds have tentatively started to pick up shares on the Lagos bourse to position for a rally once the election is over.

    The country heads for a presidential election on Saturday. The vote is expected to be tight between President Muhammadu Buhari and Atiku Abubakar, a former vice president. More than 60 other candidates are running, but they are seen as having little chance of winning.

    Buhari has made rejuvenating the economy a key issue, hoping his record can secure him a second four-year term. Abubakar has touted pro-business policies, including floating Nigeria’s currency, the naira.

    Capital imports into Nigeria fell from a peak of $21.32 billion six years ago to $5.12 billion in 2016 as investment dried up in the wake of a currency restriction and recession in the country.

    NBS said fourth-quarter capital imports stood at $2.14 billion, down 60.2 per cent from the same quarter a year earlier.

  • Tales of a capital

    Recently, a foreign aid worker who had been working in the Northeast visited Abuja for the first time. He was taken aback by his experience in the capital city. He expressed how, for him, it was like visiting a different country. Knowing our country so well, one immediately understands what the foreigner meant. The dichotomy between Nigeria’s urban centres and the rural areas is sharp, and the difference cannot be clearer than in the city centre of Abuja, within the Federal Capital Territory, FCT.

    Compared to other metropolitan areas of Nigeria like Lagos, Port Harcourt and Kano, Abuja maintains a kind of serenity at its heart that attracts high net-worth individuals and the assumed middle class Nigerians who can afford to obtain property within the metropolis. Statistics from the United Nations show that the city grew by 139.7% between 2000 and 2010, making it one of the fastest growing cities in the world. With a population currently estimated to be around 2.4 million, available data also shows that more people across all social classes are opting for the relative calm of the city. This influx of people has led to the emergence of satellite towns and shanty communities such as are seen in Lagos.

    In earlier years, Abuja was thought of as a city for civil servants and top government officials that manage the bureaucracy of the federal government. Even today, ‘Abuja money’ is still synonymous with ‘government money’, but there is a growing variation of commercial activities that accompanies the growing population of Abuja. The ‘government money’ in circulation helps sustain a thriving real estate sector and infrastructural development. This in turn enables other associated businesses, like the quarries located in and around the city, to thrive. With thriving commerce, relatively good roads and generally calmer heads, it is not surprising that more people want to relocate to the capital.

    Focusing on the people, there are the government bigwigs and other heavy weights, who can be found in Asokoro and Maitama, and in some parts of Wuse II and Apo. The mansions erected in these areas, especially in Asokoro, rival the homes of the rich anywhere in the world. Curiously, and maybe unsurprising, many of the seizures of property that have been effected by the anti-graft agencies in their fight against corrupt government officials have been made in these areas. The display of wealth is stupendous, and these regularly empty mansions require a large number of support staff who are a significant part of the growing population of the city. Sadly, security agents of the state must be counted as part of these “support staff”.

    In many places in the highbrow areas, like Aso Drive, in Asokoro, one cannot just idle around on the street for more than a minute. Before you know it, an assortment of secret service agents and mobile policemen stationed or patrolling the streets will promptly appear to interrogate, with readiness to make an arrest if the response is unconvincing. The tight security is a far cry from that in the outskirts of the city and in other less prestigious areas, where petty crime, abductions and armed robbery are rife. It is a case of the poor robbing the poor, while the money bags sit in comfort and relative safety in their well-guarded mansions.

    The people considered to be middle class can be found in Wuse, Utako, Garki, Gwarimpa and other parts of Apo. This class of people are either civil servants close to the top or business people who have found a reliable “connection” to the money bags and government functionaries, enough to sustain their family in the pricey capital. They are the proprietors of businesses that cater to the wealthy or contractors that have perfected the fine art of “access”, especially to government projects and clientele. Where they are not civil servants, they are people whose repeated trips from their original locations have realized enough returns to purchase a permanent or second home in Abuja.

    The satellite towns, like Kubwa in the outskirts of the city, are home to a mixture of these “middle class” Nigerians and others below this class who come in from as far as neighbouring Kaduna and Nassarawa or outskirts like Gwagwalada, every day. The Mararaba/Nyanya/Karu residents and people from other satellite towns, outskirts and neighbouring states make up over 60 percent of workers that troop into the city centre every day. The little traffic situations that develop in the city usually occurs during the mass movement from and to these places early in the morning and at close of business. In Mararaba/Nyanya for instance, one may be reminded of the ‘madness’ of Lagos, as the area is densely populated, as one can imagine. Boko Haram’s limited foray into the capital in the past was largely concentrated in just this kind of places, with the considerably lesser security.

    The true nature of Abuja as “no man’s land” is aptly demonstrated at the close of the year, during the Christmas and New Year preparation and festivities. The city experiences a mass exodus of people who leave the capital to join their families elsewhere in Nigeria. The not so choked streets are near empty during this period, and businesses often feel the strain of reduced patronage during this time. Even the usually busy nightlife at weekends is reduced to a few trickles of people who, for one reason or the other, remain in the capital during this period. In this sense, the allure of Abuja is no match for the pull of family ties and kinship which the capital city cannot boast of, even amongst Northerners.

    It is safe to say that the foreign aid worker referred to in the beginning of this piece never ventured outside the city centre, into the shanty towns that dot the capital or the dense outskirts that house over 60% of the workforce. The foreign aid worker also may have not been forced to use the government provided transportation, similar to the BRT buses of Lagos – referred to as “El-Rufai buses – which are insufficient, and are packed like the famous Molues of Lagos. The private Kabu kabu cars and the associated touts they attract, with their unions and self-designed rules, fill the transportation void in most parts of the city. Slowly, the Lagos vibe is coming to Abuja, and if the population continues to increase the way it is, we may have Lagos-style traffic gridlocks in the city in less than two decades. The signs are already there.

    Many drivers now on the roads of Abuja relocated from places like Lagos, and the Lagos mentality is gradually seeping into Abuja roads. Other people, skilled and unskilled labour alike, are also making the move. Abuja is expanding and word is going round. The growth of the city spells opportunity, and opportunity in Nigeria cannot be reserved for the “privileged”. David Mark, former senate president, famously made the remark that “Abuja is not for everybody”, in reference to complaints by the mass of low level workers who grumbled about the cost of living in the city. It seems Nigerians disagree with the senator, with the continuing inflow of people into the capital. The surging population may soon begin to tell on the wealthy few, who are still insulated in their ivory towers in Asokoro, except the Federal Capital Territory Administration, FCTA, develops a plan to manage the inevitable population growth.

    The beauty of Abuja is a constant image of what can be, in all 36 states, with the availability of funding and careful management. Even though the capital is not a complete project as yet, it is miles beyond most Nigerian cities and the attempt to close the door of opportunity with high living standards is failing so far, precisely because of that disparity. All Nigerians want to live a better life, and until the rural communities catch up, the rural to urban migration will continue, especially amongst the teeming youth of this country.

  • Prestige Assurance seeks to increase share capital after reduction

    Prestige Assurance Plc is seeking to increase its authorised share capital to N3 billion of 6.0 billion ordinary shares of 50 kobo each.

    Shareholders of the insurance company are expected to vote today on special resolutions that will enable the board of directors of the company to create 1.55 billion ordinary shares of 50 kobo each.

    Prestige Assurance plans to increase its authorised share capital from N2.223 billion to N3 billion. Shareholders are also expected to vote on a resolution authorising the board of the company to distribute bonus shares of 41 ordinary shares for every 100 ordinary shares held by the shareholders.

    The company plans to capitalise N782.57 million from its share premium account to pay for the new shares issuance. The scrip issue will increase the company’s issued share capital from N1.91 billion to N2.69 billion.

    Prestige Assurance last week concluded share reconstruction exercise that resulted in cancellation of about 1.6 billion ordinary shares of 50 kobo each. The reconstruction was undertaken to remove bubble assets.

    The Nigerian Stock Exchange (NSE) on June 7, 2018 lifted the full suspension placed on trading in the shares of the company to mark the conclusion of the share reconstruction exercise.

    The NSE stated that Prestige Assurance had notified it that the exercise had been completed and the shareholders’ register updated accordingly before the Exchange decided to lift the suspension.

    Under the share reconstruction, Prestige Assurance had reduced its share capital from N2.685 billion or 5.370 billion ordinary shares of 50 kobo each to N1.909 billion or 3.817 billion ordinary shares of 50 kobo each in the issued and fully paid up ordinary shares of the company.

    This led to reduction of N776 million or 1.55 billion ordinary shares. “The share capital so reduced will be applied in writing off the capital of the company which is lost or unrepresented by available assets,” according to a regulatory filing on the reconstruction.

    Prestige Assurance had stated that the essence of the capital reconstruction was to enable it wipe out its accumulated retained losses of N776.511 million.

    The company noted that the reconstruction would reposition it on a trajectory for subsequent accumulated retained profit while creating more value to its shareholders.

    Besides, the reconstruction would allow the company to declare dividend and improve its perception in the market thereby making it more competitive.

    Shareholders of the insurance company had on Friday, August 18, 2017 at its 47th annual general meeting (AGM) in Lagos approved the share reconstruction and authorised the board of directors to take necessary actions to implement the share reduction.

    Established in 1952 as a branch office of The New India Assurance Company Limited, Mumbai, Prestige Assurance was incorporated as a limited liability company on January 6, 1970 and licensed to write all classes of non-life insurance in Nigeria. In order to reflect the majority shareholding of the public in the company, its name was changed to Prestige Assurance Plc on September 24,1992 in line with the indigenisation decree passed by government of Nigeria. After successful recapitalization in 2007 and subsequent rights issue in 2015, Prestige Assurance is a subsidiary company of The New India Assurance Company Ltd, Mumbai, which has majority equity stake of 69.5 per cent shareholding.

     

  • Support private sector with capital, LCCI urges NSE

    The Lagos Chamber of Commerce and Industry (LCCI) has advised the Nigerian Stock Exchange (NSE) to mobilise investment funds for the private sector.

    Its President, Babatunde Ruwase, who spoke during his visit to the NSE,  said the such support would facilitate the needed industrialisation. He said the two organisations have a lot to do together to promote private sector development and the advancement of the nation’s economy.

    He said: “We seek collaboration with the NSE in making this happen, especially in the mobilisation of capital for investors especially the indigenous ones. As you very well know, the cost of fund in the money market, as well as tenor of funds, are not in tune with the yearning of investors, especially those with a long term perspective. This has constrained the growth of key sectors, including agriculture, manufacturing, property, construction and infrastructure. All these sectors need affordable long term funds.”

    He said the capital market window naturally provides the good option for funding investments, adding that LCCI would like to see a better impact of the funding window.

    He said there is need to collectively strengthen advocacy to make pension funds available for the long term financing needs of the economy.

    “We should also work together to explore options of financing of small businesses. As in many other economies, SME’s are critical to economic development especially the creation of jobs and the promotion of inclusiveness in the Nigerian economy,” he said. Runwase said funding SMEs remains a major challenge in the country. “It has been difficult to unlock the potentials in the sector partly as result of this problem,” he stated.

     

    He said LCCI is concerned about the deterioration of values of trust and integrity in business practices.

     

    According to him,  monetary, fiscal and trade policies have significant impact on the performance of the stock market and private sector investments generally. He said it will be useful to collaborate to promote investment-friendly policies in the economy through regular engagements with the relevant authorities of government.

    “We need to attract more private capital [domestic and foreign] into this economy, especially now that it is obvious that the government does not have the financial resources to fix the economy,” he said.