The Nation Newspaper

Tag: capital

  • Lottery grips the nation’s capital

    Lottery grips the nation’s capital

    A game of chance is gaining stature in Abuja, attracting celebrities, GBENGA OMOKHUNU reports

    Lottery is becoming very popular in Nigeria. It may seem revolutionary but it is not entirely a new thing. It started with pools betting which has been around for a very long time. This revolution is now fueled by several things which include access to media, technology and the internet, which have now brought lottery even to our mobile phones.

    Some companies worth hundreds of millions of Naira have in the process of building their brands embarked on vigorous publicity to attract massive followership. The passion lottery evokes has contributed immensely to the popularity of so many games.

    Not minding the recession, Abuja residents and other people across the country now have fun and play the recently lunched ‘Give and Take’ lottery game in Abuja.

    Since the launch, the lottery jackpot price which was N15 million has now been increased to over N18 million because the last draws have produced no winners.

    Managing Director, of Give ‘N’ Take lottery Limited, Jolly Enabulele, at the launch of the national jackpot game said it is the first of its kind in Nigeria aimed at creating millionaires like never before in the country.

    He said the company is passionate about giving back to the society adding that this would be done by engaging in good causes as part of the Corporate Social Responsibilities.

    He said, “In the National Jackpot game, Lottery players would genuinely win millions and even billions of Naira every week as Give ‘n’ take lottery limited, one of the leading lottery companies in Nigeria rolls out the first National Lottery Jackpot on June 25, 2017 here in Abuja the Federal Capital Territory, (FCT),

    “We plan to hold draws every Sunday, featuring Nigeria celebrities from across the entertainment industry. It is important to state here that our big jackpot prize which starts from N15 million shall be rolled over if no winner/winners emerge at any draw in addition to a percentage of the total money realized for that week, This simply means that there will be a bigger jackpot prize in our next draw and the rollover shall continue until eventually winner/winners emerge.

    “Segun Arinze and Linda Osifo are hosting the game show every week…We thank God we have been able to achieve a lot successfully and Nigerians will have the privilege of playing a game that is not foreign but our own.”

    He said the company had offices in over 24 states adding that: “We have the web play. People can go to the web to play. This means we are all over Nigeria. Every part of Nigeria will benefit from this noble cause.”

    The Acting Director-General, National Lottery Regulatory Commission, (NLRC), Mr. Adamu Sifawa confirmed the authenticity of the lottery and urged Nigerians not to panic.

    Acting Director, Administration and Finance of the commission, Mr. Robert Bolokor also called for the utilisation of lottery funds to revamp the sports sector in the country.

  • ‘It’s not capital that counts in starting a business’

    Abiola Akinhanmi is the Chief Executive Officer of  Berth and Charis. Her outfit deals in handmade leather,  print footwear, handbags, purses and tailoring services. The outfit recently entered into a partnership with private schools to enlighten pupils on how to be creative and identify their areas of interest. She shares her passion with GBENGA ADERANTI

    WHAT do you do?

    Aside the fashion and training we currently engage in, there’s also the project to suppress sexual molestation against children, especially the girl-child and sex education for the upper classes which has been gaining ground in a lot of schools. We have an upcoming event where we want to enlighten and dialogue with parents on the importance of safeguarding their children from sexual molestation and early exposure to sex. It’s called the ‘print event’. We’re hosting parents whose children are so dear to them.

    What were you doing before you started this line of business?

    I started this business some months before I graduated. We were on strike in school. I decided to get busy. After graduation, I started from my dad’s dining room and that was it. That was 2009.

    What informed your choice of business?

    I have always been in love with shoes, bags and leather wristwatches. I was so much obsessed with wristwatches, footwear and bags to the point of spending my school fees on them. I love watching my collections to the point where my hunger for food will  vanish

    If you were not doing this, what would you have been doing?

    If I was not doing what I’m doing now, I would probably be in a wrong business… maybe electronic repairing.

    Why are you so passionate about this business?

    I have great passion for this work because it gives me satisfaction. It’s like cloning Donald Trump and being able to remote control him.

    How much did you invest in the business? And how much is it worth right now?

    I invested very little at the start of the business. Now, I want everybody to know that it is not capital that really counts at the start a business but commitment, tenacity, faith and putting God first. I have achieved a lot by my commitment to my customers. Giving value to their patronage is greatly important. Cherish your customers, give them more than requested and you are sure of going places.

    Any regret doing this business?

    No, not at all. I love what I do. People show me a lot of love when they see me working in the workshop and the end product is great .

    What challenges are you facing?

    I would speak for all entrepreneurs now. The challenges we face are all centred on electricity, increase in the cost of raw materials and low embrace of made-in-Nigeria goods.

    In what are the ways do you think government can assist SMEs?

    The government can assist SMEs  by providing a platform for accessible funds and a body that would monitor businesses accessing the funds. Business owners shouldn’t be given funds and be left  alone to face the challenges thereafter. Some business owners divert funds. Secondly, government should stop bringing foreigners into the country to train  Nigerians on how to make ankara bags and shoes. Isn’t that funny? We should be making a lot of money training foreigners the beautiful things we can make from our fabrics.

    How do you think you can assist government and youths in areas of employment creation?

    Can we actually assist the government? I think the government should open up centres  where creative materials would be taught and produced. That is employment after training. For example, you get trained in shoemaking for some months, after you’re certified excellent, you get employed. The instructors would also be creative personnel in various fields. We have Indians and Chinese establishing here in Nigeria and our youths are being used under terrible working conditions. Government  should not encourage our youths to roam  the streets.

    What are you doing to make your business outlive you?

    My business would definitely outlive me because I’m passing it to my children in future . I’m seeing the  picture of my business becoming an household name passed down to other generations.

  • Nigeria records $908m capital inflow in Q1

    Nigeria recorded $908 million capital importation in the first quarter ended March this year, capital importation report for the period has indicated.

    Of the 36 states and the Federal Capital Territory, Abuja, Lagos, Akwa-Ibom, Ogun, Oyo and Rivers states attracted the interest of foreign investors in the first quarter of this year. They received  $908.268 million that came into the country in the first three months of the year as capital importation.

    As the commercial nerve center of Nigeria, Lagos State accounted for 95 per cent of the capital inflow in the first quarter of the year.

    A total of $865.718 million  flowed into the state which houses the Nigeria Stock Exchange and the head offices of the commercial banks, as well as the telecoms companies in the country.

    Foreign investors also put in $18.361 million into one of the tourism hubs in the country, Akwa-Ibom, while there was an inflow of capital importation of $14.867 million into the seat of Federal Government, FCT, Abuja.

    Up-coming industrial hub, Ogun state also had a capital importation of $5.351, while Oyo and Rivers states recorded capital inflow from outside the country in the first three months of the year, totaling $3.419 million and $550,000 respectively.

    The total value of capital imported into the country in the first quarter, according to data released by the National Bureau of Statistics, was put at $908.268 million, representing a 27.75 per cent improvement, when compared to the volume of capital imported into the country in the first quarter of 2016.

    The amount that came in was however 41.36 per cent smaller than the value of capital imported in the previous quarter, and was the second lowest value recorded since 2007, although the NBS said it was yet to include in the data the amount involved in a high-profile sale of local bonds which was held in the first quarter due to a lag between subscription and actual payment.

    Meanwhile the origin of the capital imported showed that the largest capital came from the United Kingdom which accounted for $302.47 million, representing 33.5 per cent of the total capital imported into Nigeria in the first quarter of the year. This was a 37.36 per cent decline compared to the amount that came in from the country in the last quarter of 2016

  • Fed Govt’s capital projects releases hit N1.2tr in 2016, says minister

    Fed Govt’s capital projects releases hit N1.2tr in 2016, says minister

    The Federal Ministry of Finance said yesterday it released over N1.2 trillion for capital expenditure in the 2016 fiscal year.

    Details of the N1.2 trillion capital releases, the ministry said, are “in line with government’s increased focus on capital expenditure”.

    Power, Works  and  Housing received the largest allocation of N307,411,749,682,    followed by Defence and  Security, N171,900,597,013 and Transport and  Aviation, N143,121,925,241.

    Other sectors are Agriculture and Water Resources;  and Education and  Health.

    These sectors accounted for 62 per cent of the cash released.

    Minister of Finance, Kemi Adeosun said: “We have focused our capital spend on priority sectors to stimulate economic activities and job creation. Despite the challenges in 2016, the Federal Government was able to achieve fully cash-backed capital releases of N1.2 trillion, which is a reflection of our commitment to infrastructure development.”

    These capital releases exclude the capital element in releases to statutory agencies, such as the Independent National Electoral Commission (INEC) and the Judiciary.”

    The government, the minister said: “Intends to attract private capital to complement government spending in these key areas”.

  • $380bs lost to capital flight, says Content Board

    $380bs lost to capital flight, says Content Board

    Nigeria lost about $380 billion to capital flight  before the enactment of the Nigerian Content Law, Nigerian Content Development and Monitoring Board (NCDMB) Executive Secretary Simbi Wabote has said.

    According to Wabote, before the Law’s coming, fabrication, engineering, and procurement were done abroad, resulting  in the huge cash loss in 50 years.

    About two million jobs were lost during the period.

    According to Wabote, the narratives then were that nothing could be done in the country. Plants and modules fully fabricated offshore together with the technical, and even non-technical, manpower were ‘imported’ into the country without any structure in place to achieve knowledge transfer. The level of Nigerian Content was far less than five per cent.

    The NCDMB chief said with the Nigerian Content Act in place, the country had achieved $5 billion in-country spend as against the $10 billion target at the start of the journey in 2010. He said Nigeria currently has two world class pipe mills and five impressive pipe coating yards, adding that 36 per cent of marine vessels are now owned by Nigerians with four active dry docking facilities in Port Harcourt,  Onne, and Lagos.

    He said over 35,000 jobs had been created on the back of implementation of the Act, while over 7000 had enrolled on NOGIC JQS leading to employment. He stated that the Board is in discussion with an ICT consultant to use the JQS to capture more enrolments.

    According to him, the oil and gas industry content development Act which came into being in 2010 was intended to increase the level of participation of Nigerians and Nigerian companies in the industry. With the Act, the government had established its plan to increase indigenous participation in the industry in terms of human, material and economic resources.

    The implementation of the Act, he said, would considerably change the current business and operating structure in the nation’s oil and gas industry particularly for the international oil service companies.

    Wabote said the board had recorded significant benefits from oil and gas projects and operations for the country, adding there are more indigenous players in the Nigerian oil and gas industry now than any other time before the Act.

    He stated that the Nigerian companies were executing major engineering, procurement, construction and installation (EPCI) projects including integration of FPSO topsides in-country. Again, there is more in-country spend, adding that more Nigerians are taking over technical and senior positions in the international oil companies (IOCs), and are now in the hands of Nigerians.

    Wabote said efforts had also been made in the area of domiciliation of oil and gas equipment manufacturing, adding that a lot more would be achieved when the Board’s proposed Oil and Gas Parks come on stream in the coming year.  “Our strategic outlook is to increase Nigerian Content in-country value retention from current level to 70 per cent within the next 10 years,” he added.

    Under the Act, he said, the Board had developed capacity of local supply chain for effective and efficient service delivery to the oil and gas industry without compromising standards, to implement and enforce the provisions of the Nigerian Content Act of 2010.

    He said: “The Act had addressed key parameters required for sustainable local content practice including regulatory framework – an enabling regulatory framework backed with the appropriate legislation.

    Local content thrives where there is vigorous research and development (R&D) guideline to drive development of home-grown technology.  Countries that had witnessed appreciable local content level attributed the growth to the priority attention given to research and development.

    “Periodic gap analysis was essential to determine gaps that needed to be closed in the areas of skills, facilities and infrastructure capacity building. Structured capacity building intervention was essential to offshoot domiciliation of capabilities in-country while fiscal and monetary incentives are essential to attract new investments and keep existing businesses buoyant where necessary.

    “The local content implementation received a boost in 2016 with the launch of the Petroleum Industry Roadmap by the present government. Key focus areas of local content including infrastructure development, new gas projects, skills acquisition and security in the Niger Delta were addressed.”

    Wabote reassured commitment to re-focus and re-dedicate energy at pushing through the Nigerian content into the next level through development and transfer of technology, creation of local employment across value chain activities, reduction in capital flight, integration of host communities into the oil and gas supply chain, and sustainable economic growth through sectoral linkages. He urged all industry stakeholders to support the delivery of the seven pillars of the petroleum industry roadmap.

  • ‘Nigeria’s human capital can compete anywhere’

    ‘Nigeria’s human capital can compete anywhere’

    Dr Kabir Kabo Usman, the Director-General, Centre for Management Development (CMD), has been in the saddle at the nation’s foremost human resources management outfit, created by the Federal Government under Act No 51 of 1976.

    However, Nigeria is yet to achieve optimum human capital development as glib quacks with briefcase companies have been masquerading as trainers and management consultants while the CMD with an annual budget of N28million has been buffeted by various challenges.

    Speaking in an interview with our correspondent, CMD’s boss who rendered account of his stewardship in the last few years said the Centre is making meaningful impact that would make his tenure and exit in less than one year from now a crucial chapter in Nigeria’s quest for human capital development.

    “I could remember on the 8th of January, 2010, when the Minister (of National Planning, Dr Shamsuddeen Usman) said, “You have been appointed the Director General! Go and transform the Centre for Management Development.” That was a very big challenge for me because I need to think in terms of a strategic plan, possibly a three-year plan or a five-year plan to get to the destination of the Centre,” he recounted.

    Usman who also doubles as the member of the Governing Board and Pro Chancellor of African Business School (ABS) is one of the fully accredited leading independent Business Schools in Africa, while thankful for the opportunity to serve at the highest level of CMD, said he met some challenges when he took over the helms of affairs but nonetheless remains eternally grateful for contributing his bit.

    “There were quite a lot of things I had to focus on. And I was trying my best to keep it simple. I said well, looking at the current situation, there might be about six key areas of my own interest to contribute my quota to transform the Centre and make it world class.”

    One of the first tasks he tackled headlong was staff development. To do that he had to undertake staff skills audit to ascertain their competences and capabilities.

    “We discovered there were capacity gaps, skills shortage areas and we really have to work very hard with a lot of my members of the team, with particular reference to very key directors. We have gone round the country to try to look for collaboration and partnerships particularly with relevant agencies that are coming to support us; from the UNDP, Chinese Counsellor and USAID, DFID, EU and others.”

    To reposition the Centre, he also had to look at its mandate as well as the Act of the Council (National Council for Management Development).

    “Part of our critical mandate is to advise the Minister of Budget and National Planning and we also have to make sure that there is quality assurance put in place about training in Nigeria in areas of management development in the country,” he stressed.

    “So that is what we had to do in the areas of addressing that to make sure that the Centre is relevant and is producing the result that is enshrined in our mandate.”

    Besides, he also had to establish zonal offices across the six geopolitical zones including: Makurdi, Kano, Gombe, Uyo, Owerri as well as Ibadan.

    “We also looked at CMD Office in Lagos and we made it operational. We brought in a lot of (activities) work. We did training for the Nigeria Police Force. We also had workshops and trainings about public private partnership, procurement, strategic leadership and middle management in terms of manpower.”

    According to him, upon critical assessment of the Centre, the management realised that the five departments were inadequate hence had to increase them to eight departments.

    Justifying the rationale for the increase, the Kano-state born technocrat said, this became necessary “Because we needed ICT so that we can improve the quality of methodology in terms of trainings in the e-learning platforms.”

    The Centre, he recalled, also looked at the accreditation of all management consultants operating in the country with a view to sieve those doing legit businesses to the quacks.

    “We have trained at least one thousand management consultants from 2010 to date and they are certified. For the Management Development Institutions and also the consultants that are operating across the country; we trained and certified over two hundred of them. So that they are doing the correct things and there are certain benchmark that is comparable to international standard. We work together with the International Standard of Americas and the ones in Europe to make sure that we are delivering training in that level.”

  • Shell votes $25b for capital projects

    Shell votes $25b for capital projects

    Royal Dutch Shell is earmarking $25 billion for capital investment this year, its Chief Executive Officer, Ben van Beurden has said.

    The Shell chief in the company’s 2016 annual report stated that the firm will maintain strict capital discipline and expect capital investment to be around $25 billion this year, which is at the lower end of the company’s $25-30 billion range for 2017-2020. “Our priority is to reduce debt following the BG deal and support shareholder returns into the future,” he said.

    According to him, Shell remains ready to invest in the most competitive projects.

    He said: “But we are working to reshape Shell into a more focused and resilient company by capping our investments for the next few years, while continuing to drive down costs and to sell assets.

    “Following the integration of BG, our Integrated Gas business has become an engine for generating cash and returns. The increased strength of our global gas business, combined with our other cash engines, should deliver rising free cash flow from around 2020.

    “We plan to continue prioritising growth in our deep-water and chemicals businesses beyond 2020. But we expect them to become major cash engines over the next decade. This should enable Shell to achieve the scale and profitability that will help us to adapt and thrive in the transition to a lower-carbon global energy system.

    “The evolving energy landscape offers exciting potential for future growth and further integration in our business. That is why we created a New Energies business in 2016 to explore and develop attractive commercial opportunities. We expect demand for oil and gas to continue to grow. But we also intend to build upon our portfolio and will continue to look at the potential of low-carbon biofuels, hydrogen, solar and wind as the energy transition unfolds. Our New Energies business intends to act with conviction and commercial realism – when the value for shareholders and society is clear.”

    “In the meantime, Shell’s existing oil and gas portfolio will help drive growth in free cash flow over the next few years, across a range of possible oil prices. The integration of BG has also reinforced the foundations for generating competitive returns from our core oil and gas businesses over the longer term. We have set an ambitious and clear path for the years ahead. We revitalised Shell in 2016 and I am confident that 2017 will be another year of progress in building our world-class investment case.”

    The Shell chief stated the company continued to streamline its downstream business–including divestments in Japan, Denmark and Malaysia – as part of its ongoing effort to improve efficiency by lowering costs and concentrating on our most competitive businesses.

    “Our divestment drive gained momentum during the year and we plan to continue selling assets in 2017 as part of our overall divestment programme of $30 billion for the 2016-18 period,” he added.

    The company’s income for the 2016 financial year was $4.8 billion compared with $2.2 billion in 2015. Earnings on a current cost of supplies basis were $3.7 billion, compared with $4.2 billion in 2015. It also distributed $15 billion to shareholders in dividends in 2016.

    Its overall production averaged 3.7 million barrels of oil equivalent per day (boe/d), compared with 3.0 million boe/d in 2015. This increase was largely driven by the acquisition of BG.

    Refining margins were weaker in our downstream business, while a modest rise in crude oil prices gave some support to our upstream earnings as the year progressed. This again shows the strength of the integrated energy company model.

  • Stock Exchange approves N218.6m new capital raising for DN Meyer

    Stock Exchange approves N218.6m new capital raising for DN Meyer

    Authorities at the Nigerian Stock Exchange (NSE) at the weekend approved the plan by DN Meyer Nigeria PLC to raise about N218.62 million in new equity funds from existing shareholders. The move will double the paid up share capital of the paint manufacturing company and raise total equity funds to above N900 million.

    A regulatory approval obtained by The Nation at the weekend indicated that DN Meyer Nigeria plans a rights issue of 291.49 million ordinary shares of 50 kobo each to shareholders on the register of the company as at Thursday September 8, 2016 at a price of 75 kobo.

    The provisional allotment will be done on the basis of one new ordinary share for one ordinary share held as at the close of register on September 8, 2016. The rights issue price is a discount of about 10 per cent to DN Meyer’s share price of 83 kobo at the NSE.

    The latest audited report and accounts of DN Meyer for the year ended December 31, 2015 showed a turnover of N1.19 billion in 2015 as against N1.34 billion in 2014. Gross profit dropped from N592.24 million in 2014 to N505.38 million. Operating profit however improved from N72.01 million to N151.01 million. The company returned to profit in 2015 with a pre-tax profit of N60.46 million as against pre-tax loss of N37.36 million recorded in 2014. After taxes, net profit stood at N52.86 million in 2015 as against net loss of N36.58 million in 2014. Shareholders’ funds closed 2015 at N685.28 million as against N632.03 million in 2014. DN Meyer currently has a paid up share capital of N145.75 million consisting of 291.5 million ordinary shares of 50 kobo each.

    In the 2014 audited report, the external auditors to DN Meyer, Akintola Williams Deloitte, had expressed concerns about the going concern status of the chemical and paints company as recurring losses over the years and inability to inject additional equity funds built up huge deficit on the balance sheet.

    A new external auditors, BDO Professional Services, signed on the audited report for 2015 without any material emphasis or doubt on going concern.

    In the 2014 report, the external auditors noted that recurring losses and negative working capital plaguing the company “indicates existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern”.

    The auditors particularly drew attention to the fact that the DN Meyer group has sustained recurring losses over the years and recorded negative working capital. In the year ended December 31, 2014, the company posted a loss of N44.2 million while it also has a negative working capital of N161 million by the December 2014 year-end.

    Audited accounts of DN Meyer Group had shown that the company suffered a reversal in 2014. Turnover dropped from N1.59 billion in 2013 to N1.34 billion in 2014. As against pre-tax profit of N51.9 million in 2013, the company recorded a pre-tax loss of N37.36 million. After taxes, net loss stood at N35.58 million in 2014 as against net profit of N47.07 million in 2013.

    The board of the company, however, said the operations of the company have been improving and it will be in adequate position to generate needed cashflows in the years ahead.

    Auditors at Akintola Williams Deloitte had earlier in an independent audit report dated August 2013, highlighted the possibility of the working capital deficiencies and negative cash flow impairing on the sustainable operations of the company.  Negative working capital had risen by 11 per cent to N181 million in 2012 as against N163 million and N60 million in 2011 and 2010 respectively. Besides, the group recorded negative operating cash flows of N34 million in 2012. The board of the company blamed the legacy loans and the attendant financing charges for the continuing negative bottom-line of the company.

    One of the legacy companies, DN Meyer, has history of more than seven decades and was an iconic brand in its industry. Before its incorporation in 1960, it had operated for two decades. It converted to public limited liability and listed its shares on the Nigerian Stock Exchange (NSE) in 1979. In 1994, the then Dunlop Nigeria acquired majority equity stake of 68 per cent in the company and thus changed its name from Hagemeyer Nigerian Plc to DN Meyer Plc. In 2003, DN Meyer acquired the flooring and adhesives business of Dunlop Nigeria, thus extending its business operations from manufacturing and marketing of paints to adhesives and floor tiles.

    Dunlop sold its stake in DN Meyer in 2004 to ACIMS Limited and the Nigerian public through a combination of management buyout (MBO), thereby making DN Meyer a wholly Nigerian company. ACIMS sold its total equity stake in DN Meyer to Citiprops Limited in February 2010.

    DN Meyer is now owned by some 8,000 shareholders.Recent shareholding analysis showed that three shareholders held the largest stakes-Citiprops Limited held the largest 30 per cent equity stake, Bosworth Limited held 12.89 per cent while Mr Osa Osunde held 9.26 per cent.

  • NSE woos entertainers with long-term capital

    NSE woos entertainers with long-term capital

    Nigerian Stock Exchange (NSE) has expressed its readiness to provide a platform for artists and promoters in the Nigerian and African entertainment industry to raise long-term funds to boost the growth of the industry.

    Its Chief Executive Officer, Mr. Oscar Onyema, who spoke at a Music Week Africa event hosted by the Exchange in Lagos, said substantial capital is required for the music industry to achieve its potential in Africa.

    He said the NSE has positioned itself as the African Exchange of choice for African issuers and global investors looking to use capital markets to raise both equities and debt capital.

    “Globally, long term growth is often achieved through public quotation on an Exchange. We believe that this growth and more can only be achieved by having companies in the entertainment industry listed on the Nigerian Stock Exchange. As Nigeria’s foremost Exchange we are certain that we are well positioned to help your industry achieve its full potentials, as well as reduce the cost of raising capital and building infrastructure to be globally competitive,” Onyema said.

    He said the Exchange would continue to support the event that seeks to explore and develop the various aspects of the African and global music industry, with a view to creating jobs and wealth accumulation through the capital markets.

    According to him, with a total market capitalisation of N15.7 trillion across all of product categories, the NSE has implemented far-reaching transformational policies aimed at strengthening and providing products that are aligned to investors’ requirements, improve market access, while ensuring a fair and orderly market.

    He noted that these deliverables have improved investor confidence and repositioned firms listed on the Exchange as attractive investment opportunities, urging the entertainment industry to look seriously at leveraging the opportunities that abound in the  capital market.

    “We are, particularly, proud to partner with Music Week Africa to promote the business of music and accelerate the growth of this sector in Africa. The Music Week Africa platform provides opportunities for sector players, investors and collaborators to close deals, network, connect as well as increase their capacity to develop profitable and sustainable business models for the music and entertainment industry on the continent,” Onyema said.

  • Fed Govt plans N1tr capital base for Bank of Agriculture

    Fed Govt plans N1tr capital base for Bank of Agriculture

    •Lender to begin deposit taking

    The Federal Govern-ment is planning to capitalize Bank of Agriculture with N1 trillion ($3.2 billion) and will allow the lender to take deposits.

    The move becomes exigent as Nigeria seeks to boost farming output and reduce food imports.

    “We are looking at N25 million farmers” as stakeholders or depositors, Agriculture and Rural Development Minister Audu Ogbeh told Bloomberg in Abuja.  “We are probably going to take a major step by the end of this year, and by February, March, have a structure in place for the changes we want to carry out,” he said.

    Nigeria’s economy contracted in the first nine months of the year as output of oil, the government’s main source of revenue, dropped due to attacks by militant groups on pipelines in the Niger River delta and prices remained low.

    Farming, which mostly consists of crops including cocoa, accounts for more than 25 percent of gross domestic product, and has expanded every quarter of 2016, while factory output and mining, which includes the oil industry, shrank, according to the National Bureau of Statistics.

    The Bank of Agriculture will start lending for farming projects at an interest rate of less than 10 percent, or less than half of commercial market rates, Ogbeh said.

    The bank, created in 1972 to provide credit and technical support to farming projects, lent at least N41 billion to 600 businesses across Nigeria over 10 years, according to information on its website.

    “It’s good to invest in the bank, but they should ensure they have proper management to improve its performance and efficiency,” Musa Tarimbuka, the division head for agriculture at Fidelity Bank Plc, said by phone. “They have disbursed a lot of money over the past 40 years, and the non-performing loans are very high.”

    The Central Bank of Nigeria (CBN) kept its benchmark rate unchanged at 14 per cent on November 24 as it seeks to support an economy forecast by the International Monetary Fund to contract 1.7 percent this year.

    It’s also trying to curb inflation, which quickened to an 11-year high of 18.3 percent in October. Food prices rose 17.1 per cent from a year earlier, partly due to the high price of imported food after the naira lost almost 40 per cent of its value against the dollar following the abandonment of a currency peg in June.

    The government plans to distribute 110 rice mills across the country over the next two months at a subsidy of 40 per cent, Ogbeh said. These measures will help boost production and reduce food imports, which were worth about 1.2 trillion naira last year, according to statistics bureau data, he said.