The Nation Newspaper

Tag: Economy

  • ‘Sustainability reporting beneficial to economy’

    ‘Sustainability reporting beneficial to economy’

    Chief Executive Officer, NGX Regulation Limited (NGX RegCo), Mr. Olufemi Shobanjo, has commended the Financial Reporting Council of Nigeria (FRCN) for its pioneering role in advancing sustainability reporting standards across the African continent.

    Speaking at the Regulatory Roundtable for Sustainability Reporting in Nigeria, hosted by FRCN in Abuja, Shobanjo commended the FRCN’s proactive approach and leadership in driving sustainability education and adoption of sustainability financial reporting standards. “The FRCN has demonstrated remarkable foresight and commitment to corporate transparency and sustainable business practices,” Shobanjo said.

    The commendation comes in light of Nigeria’s groundbreaking move in June 2023, when it became the first African nation to adopt the International Sustainability Standards Board (ISSB) standards. This initiative saw the introduction of IFRS S1 and S2, which focus on sustainability and climate disclosures respectively.

    According to him, the potential long-term benefits of this adoption, include increased investor confidence, improved corporate governance, and enhanced comparability of sustainability information across different markets.

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    He emphasized the significance of this achievement, stating, “By taking this bold step, the FRCN has not only positioned Nigeria as a leader in corporate reporting but has also set a benchmark for other African nations to follow.

    Shobanjo highlighted some significant developments, including NGX RegCo’s collaboration with ISSB and FRCN to assess the readiness of listed companies and the rollout of a phased roadmap for standard adoption set for March 2024. He noted that companies such as Seplat Energy and MTN Nigeria have already integrated these standards into their financial reporting.

    “This roundtable is designed to equip stakeholders with a comprehensive understanding of the roadmap and compliance requirements, fostering transparency and sustainability,” Shobanjo said. He encouraged attendees to use the insights from the event to effectively navigate the new reporting standards.

    He concluded with NGX RegCo reaffirming its commitment to support the FRCN and other regulatory bodies in the ongoing implementation and refinement of these sustainability reporting standards.

  • Economy and the need for urgent action

    Economy and the need for urgent action

    SIR: On Tuesday, August 13, President Bola Ahmed Tinubu presided over a significant Council of State meeting. In attendance were former presidents, vice presidents, a former Chief Justice of the Federation, and several key ministers. The highlight of the meeting was the president’s stance that Nigeria’s democracy must not be undermined. “Any change of government must be through the ballot box not through violence, insurrection, or any other unconstitutional means,” he asserted.

    This is a position that all patriots, fully support.

    However, while the president’s commitment to democracy is commendable, it is crucial that his economic policies reflect the urgency and needs of the people. Nigerians expect the leadership to hit the ground running from day one. Truth is that the nation is in a precarious state, and decisive, people-centred action is required.

    Today, wealth in Nigeria is increasingly concentrated in the hands of a select few, while the majority are left to struggle without access to basic necessities like quality education, healthcare, housing, and employment. It’s not that Nigerians begrudge the success of the rich; rather, they simply want access to the essentials for a decent life. Unfortunately, many ordinary citizens are being deliberately subjected to hardship by leaders driven by greed. Endemic corruption has become the norm, and the promise of equal opportunities seems like a distant dream, despite the blessings of natural resources across the six geopolitical zones.

    Read Also: Defence industry can drive our economy if properly harnessed, says Nwoko

    Poverty remains a pervasive issue. Nigeria is a land rich with potential – oil and gas in the south, commerce in the Southeast, fertile land in the North. There is no excuse for hunger or deprivation. The government should prioritize modern farming systems, where a single machine can achieve in an hour what once took a thousand hands. State governors must fully support federal initiatives, but these efforts must go beyond the token gestures like distributing rice, which too often ends up siphoned off by officials or recycled into the market. Nigerians are not beggars; we have the talent and drive to achieve greatness, but we need an enabling environment, affordable fertilizers, and access to reliable electricity.

    The time for excuses is over. The government must adjust to the realities on the ground. The removal of fuel subsidies and the floating of the naira have brought unbearable hardship to the common people. These policies need to be revisited. We elected this government to make Nigeria work for everyone, not just the privileged few. A stitch in time saves nine.

    • Tajuddeen Ahmad Tijjani, Azare, Bauchi State.
  • Expert x-rays dynamics in global financial economy

    Expert x-rays dynamics in global financial economy

    Lukman Otunuga, a Senior Financial Market Analyst at FXTM—a leading provider of financial education in forex, stocks, indices, and commodities—has provided an outlook on the global financial economy for the week.

    He projected potential headwinds due to a recent four percent increase in Brent crude oil prices, which are currently hovering around $80 per barrel.

    Otunuga noted that the price of Brent crude, which has been rising since the start of 2024, has become a focal point in the global economic landscape, with prices fluctuating between $82 and $82.80. These figures, he explained, are part of the International Energy Agency’s monthly outlook.

    FXTM, which focuses on equipping individuals with the knowledge and tools necessary to navigate financial markets, has observed a degree of stability returning to global markets.

    This comes after fears of a U.S. recession sent shockwaves through the economy last week.

    Otunuga said: “Still, concerns over the health of the world’s largest economy linger with investors on high alert ahead of another busy week. With the US elections just months away, this negative development adds another layer of uncertainty. Much focus will be on the US CPI print, retail sales, and consumer confidence which are likely to shape expectations around how aggressively the Fed cuts rates.

    “Regarding the fourth largest economy in Africa, the main theme will be the latest CPI print. One of the key themes in Nigeria in 2024 has been runaway inflation which jumped to 34.2 percent in June – it is the highest level since 1996. However, the incoming CPI print is expected to show prices slowing in July, cooling to 33.2 percent compared to 34.2 percent in the previous month.”

    Read Also: FXTM to hold financial trading forum

    Narrowing it home, Otunuga said given the Central Bank of Nigeria’s (CBN’s) aggressive approach towards raising rates, signs of cooling price pressures will be a breath of fresh air for consumers.

    He said: “It is worth noting that the Central Bank of Nigeria has raised rates by a whopping 800 basis points in 2024. Looking beyond inflation, the next key event will be GDP published later this month. After expanding three percent in Quarter One, it will be interesting to see whether growth can be maintained in Quarter Two. In the Foreign EXCHANGE space, the Naira continues to gain against the dollar on the official exchange with the spot rate at N1589 as of Monday.

    “Regarding oil, it has extended its first weekly gain since early July thanks to geopolitical tensions in the Middle East. Rising oil prices may have a positive knock-on effect on the economy, especially when factoring in how a major chunk of revenues is acquired from oil sales.

    “However, this could be cancelled out by the rising cost of fuel imports which is costing Nigeria $600 million per month.

    “Still, this is set to be another big week for the global commodity due to the monthly outlook from the International Energy Agency. Talking technicals, Brent has gained over four percent since the start of 2024 with prices trading above $80 as of writing. Key levels of interest can be found at $7, $82 and $82.80.”

    Meanwhile, the next FXTM’s Financial Markets Trading Seminar will be held on August 17, 2024, in Lagos.

  • We’ll support circular economy

    We’ll support circular economy

    Lagos State Governor Babajide Sanwo-Olu has said his administration will continue to advocate for and implement policies that support a circular economy.

    According to him, the circular economy framework is not just an alternative, but a necessity for sustainable development.

    He spoke at the #Leavenoonebehind event, an initiative of the Lagos State Office of Climate Change and Circular Economy, themed ‘Recycling Lives and Engendering Worth’, held at the Special Correctional Center for Girls, Idi-Araba.

    Sanwo-Olu, represented by the Commissioner for Political Planning and Budget, Ope George, said the initiative is to ensure inclusivity, promote wealth creation, enhance living standards, and foster sustainability for marginalised communities.

    Read Also: Immigration suspends officer for alleged bribe solicitation

    He added that the realisation of the vision consolidates promises to intensify focus on vulnerable groups in the state, irrespective of their background, gender, circumstances, or social status so they can access opportunities and support, as well as enjoy the benefits of good governance.

    He said: “The Leave No One Behind Initiative has set a precedent, but our work is far from over. We must continue to advocate for and implement policies that support the circular economy. We must continue to invest in education and skills development for marginalised communities. And we must continue to strive for a world where no one is left behind.”

    Special Adviser to the governor on Climate Change and Circular Economy, Titilayo Oshodi, said the initiative was designed to empower over 20,000 girls and women with essential skills in circular economy practices.

    According to her, the achievement of the initiative represents a significant step towards a circular economy model, emphasising resource efficiency, cost savings, and environmental stewardship.

    She added: “The initiative has had a profound impact on both social and economic fronts. By empowering women to produce marketable goods from waste materials such as ottoman seats, mirrors, and jewellery, we have fostered economic independence and creativity.

  • Economy suffers multi-billion naira losses to day of protest

    Economy suffers multi-billion naira losses to day of protest

    Experts expressed fears yesterday that burgeoning economic recovery will suffer a relapse due to disruptions and stalling of businesses by the protests across many cities.

    Protesters yesterday took to major cities and commercial centres across the country over high cost of living.

    Businesses, offices, banks, government secretariats, markets and other were either closed or rendered skeletal services.

    While protests were relatively peaceful in the nation’s commercial hub of Lagos, they turned violent in many states, especially in the commercial cities, such as Kano, Kaduna, which as big commercial centres.

    Protesters also vandalised several public infrastructures, with some states forced to declare curfews to protect lives and businesses.

    Experts’ estimate yesterday indicated that losses in the immediate period may exceed N2 trillion and could worsen considerably unless normalcy is restored.

    The economy recorded its second fastest first-quarter growth in six years in first quarter 2024, considerably above performance in corresponding period of 2023. In what signaled an all-inclusive rebound, economic growth was broad-based across several sectors including agriculture, industries and services.

    Agricultural growth recovered from negative in the first quarter of 2023 to a modest growth in the first quarter of 2024. Industrial sector’s growth was seven times faster in first quarter 2024 than in first quarter 2023.

    Also, the aggregate federal government revenue in the first half of 2024 was more than double of the corresponding period in 2023. The incomes were driven by oil and non-oil sectors.

    Oil revenue as a percentage of gross revenue increased from 11 per cent in the first half of 2023 to 30 per cent in the first half of 2024. Non-oil revenue surpassed its performance in the first half of 2023 and was 30 per cent above the 2024 Budget target.

    There were also notable improvements in the country’s foreign direct and portfolio investments. Foreign portfolio investments at the stock market more than tripled in the first half of 2024, its most robust performance in several years.

    But experts yesterday expressed the fear that the protests could have pronounced negative effect on the country’s economic performance, calling for concerted efforts to bring the situation under control and allow businesses to resume fully.

    At the stock market, investors lost N236 billion in the opening day of the protests. While the market rode on the back of its high-tech trading system to sustain uninterrupted trading all through the day, investors’ sentiment was negative.

    The Managing Director, HIghCap Securities, Mr. David Adonri, said protests could harm the economy and erode investors’ confidence.

    According to him, while the market’s movement may not be entirely due to the protests, trading traditionally reacts to price-sensitive information such as socio-political events, public policies and corporate fundamentals.

    Managing Director, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf said the protests portend grave dangers for an economy in a very fragile state.

    Read Also: Sanwo-Olu: we’re empowering Lagosians to build economy

    According to him, the protests could inflict an estimated daily loss of N400 billion, if not properly managed.

    He urged the organisers of the protests to call it off immediately, citing the dangerous trends in several states.

    Yusuf said: “The outcomes of the first day of the protests are very troubling. The protests are already spinning out of control and managing it is becoming very challenging.

    “The economies of many of states were completely grounded leading to huge economic losses. The risks to lives and properties has become significantly elevated.

    “Major sectors driving the Nigerian economy were either completely or substantially shut – financial services, maritime, trade and commerce, transportation, entertainment, information and communication technology (ICT), and hospitality.

    “The CPPE strongly appeals to the organisers to announce the immediate suspension of the protests to avoid a complete breakdown of law and order which could result in severe negative consequences,” Yusuf said.

    Yusuf said the consequences of the huge losses for the country and the citizens would be very severe.

    He warned: “There is a high risk of shut downs and disruptions in major sectors of the economy.  These include trade and commerce, manufacturing, entertainment, transportation, logistics, financial services, hospitality industry, agriculture, aviation, ICT, and construction sectors.

    “This is in addition to risks to lives and properties of innocent citizens and corporate bodies. Safety of government assets are also at risk.”

    Urging the protesters to consider the overall interest of the economy: “Experience has shown that the chances of protests degenerating into chaos and anarchy increases with the duration of the protests.

    “Prolonged protests create opportunities for hoodlums, miscreants and other criminal elements in the society to build momentum to unleash mayhem and destruction on the country.

    “Over 90 per cent of employed Nigerians are in the informal sector. Employees in this space are dependent on daily income and any disruption to their economic activities beyond 24 hours could snowball into a major social unrest. This underlines the country’s vulnerability to prolonged protests.”

    He urged the government to expeditiously implement its economic stabilisation plan to ease production costs and ultimately reduce inflationary pressures.

    Yusuf said: “Trade costs are still prohibitive and needs to be drastically reduced across board in a manner that would not undermine domestic production.

    “High cargo clearing cost is a major factor driving inflation which needs to be fixed urgently. Revenue drive should be managed in a manner that does not impose additional pressures on citizens and corporate bodies.

    “There is also an urgent need to prioritize fiscal frugality and transparency in public sector in all tiers and across all levels of government coupled with appropriate signaling and messaging that reflect current economic conditions. 

  • Economy: What the numbers are saying

    Economy: What the numbers are saying

    By Temitope Ajayi

    On Thursday in Abuja, Minister of Finance Wale Edun addressed a press conference and gave a mid-year report on the economy. The minister told the press what President Tinubu’s administration had done in the last year to address some of the structural imbalances in the economy, working with the fiscal and monetary authorities.

    The minister, who will henceforth address a quarterly media briefing on the state of the economy, highlighted that the economy grew faster in the first quarter of 2024 than in the first quarter of 2023.

    According to him, economic activity in the first quarter of 2024 was not only faster than the first quarter of 2023, but it was also the second fastest first-quarter growth in the last six years.

    Edun noted that the economic growth was broad-based across several sectors, including agriculture, industries, and services. The minister specifically mentioned that the agricultural sector recovered from a negative position in the first quarter of 2023 to a modest growth in the first quarter of 2024. As the minister pointed out, the industrial sector also grew seven times faster in the first quarter of 2024 than in the first quarter of 2023.

    Read Also: Nigeria, USA sign MoU to strengthen economic ties

    Edun linked the positive economic performance and upswing to the government’s well-coordinated fiscal and monetary policies.

    On the revenue side, the Coordinating Minister of the Economy explained that aggregate federal government revenue in the first half of 2024 was more than double of the corresponding period in 2023. According to the minister, the growth in government revenue was due to the reconfiguration and improvement in government finances, with oil revenue as a percentage of gross revenue increasing from 11 per cent in the first half of 2023 to 30 per cent in the first half of 2024.

    Here are the numbers as presented by the minister:

    Non-Oil Revenue

     The government’s determination to mobilise non-oil revenue has consistently delivered impressive results. For the half-year 2024, non-oil revenue not only surpassed the revenue in the first half of 2023 but was also 30 per cent above the 2024 budget target without any increases in taxes.

    National Debt Burden

    The Tinubu administration in the words of the minister has been working to manage and reduce the national debt to create better fiscal headroom for economic management. In dollar term, Edun pointed out that Nigeria’s debt burden has reduced and the government’s fiscal deficit has improved.

    “Our debt has fallen in dollar terms from $108 billion to $91 billion. Additionally, the government has diligently serviced all its loans and obligations with no recourse to ways and means of financing. The government has met all its obligations,” Edun said.

    Ways and Means

     In the last year, the administration has exited the Ways and Means debt trap due to better management of the fiscal space, as the federal government, under the leadership of the president, has not relied on borrowing from the CBN Ways and Means to fund its obligations. Edun pointed out that part of the inflationary pressure the country is currently experiencing was a result of the past abuse of Ways and Means. The federal government has paid back the previous N7.3 trillion obligations within a year of President Bola Tinubu’s administration.

    Debt Service to Revenue

     In meeting its debt obligations to avert any form of default, the Federal Government of Nigeria, for decades, has been spending more than half of its revenue on debt servicing. By the end of June 2023, the federal government was spending 97% of total revenue to service debt. In the last year of President Tinubu, the country has recorded a positive trend in the debt service-to-revenue ratio. Currently, the debt service-to-revenue ratio has declined from 97 percent in the first half of 2023 to 68 percent in 2024, indicating the government’s strong position in managing its debt obligations.

    Budget Deficit

     It has been a major priority for the economic managers to reduce the budget deficit. To achieve this, the federal government, in the last year of the Tinubu administration, improved government revenue collection and blocked a lot of leakages. Edun noted that the 2024 budget deficit has moved in the right direction, with a target of 4.1 per cent of GDP, an improvement from the 6.1 per cent deficit recorded in 2023.

    “On an annualised basis, we are at 4.4 per cent, so you can see we are effectively very, very close to the budgetary target,” Edun said.

    Foreign Inflows

    The government’s efforts to attract more foreign inflows into the economy continue to yield good outcomes. The minister said the government will continue the reforms and improve the business environment to engender confidence further. Edun underscored the government’s efforts to attract foreign inflows; including implementing the national single window project, which he said will generate $2.7 billion annually in economic benefits. The minister added that the government’s accelerated stabilisation and advancement plan has already attracted $500 million in investment in the gas sector, with $7 billion more on the side-lines waiting to come in.

    Inflation and High Cost of Living

    To address the current high cost of living and bring more relief to the masses, the minister again pointed out that the government has implemented several initiatives and interventions, including a strategic input programme to increase the supply of food, a pivot to Compressed Natural Gas (CNG) fuel for mass transit vehicles, and providing lower-cost financing for the manufacturing industry and production. Edun, who sympathised with Nigerians for the current hardship, which he also noted will soon blow away, expressed optimism that inflation, despite being “quite sticky at the moment,” will decelerate and come down due to the government’s commitments and actions.

    Edun said: “Clearly, as part of the reform program, on the monetary side, monetary policy has been tightened. CBN has been proactive in adjusting the monetary policy rate to address inflation head-on, which is in line with its legal mandate.”

    • Ajayi is the Senior Special Assistant to the President on Media and Publicity.

  • Repositioning the economy and what the numbers are saying | Temitope Ajayi

    Repositioning the economy and what the numbers are saying | Temitope Ajayi

    On Thursday in Abuja, Minister of Finance, Mr Wale Edun addressed a press conference and gave a mid-year report on the economy.

    The Minister told the press what President Tinubu’s administration had done in the last year to address some of the structural imbalances in the economy, working with the fiscal and monetary authorities.

    The Minister, who will now address a quarterly media briefing on the state of the economy, highlighted that the economy grew faster in the first quarter of 2024 than in the first quarter of 2023.

    According to him, economic activity in the first quarter of 2024 was not only faster than the first quarter of 2023, but it was also the second fastest first-quarter growth in the last six years.

    Mr. Edun noted that the economic growth was broad-based across several sectors, including agriculture, industries, and services.

    The Minister specifically mentioned that the agricultural sector recovered from a negative position in the first quarter of 2023 to a modest growth in the first quarter of 2024. As the Minister pointed out, the industrial sector also grew seven times faster in the first quarter of 2024 than in the first quarter of 2023.

    Mr. Edun linked the positive economic performance and upswing to the government’s well-coordinated fiscal and monetary policies.

    Read Also: FCE Katsina to commence degree programmes in 2025

    On the revenue side, the Coordinating Minister of the Economy explained that aggregate federal government revenue in the first half of 2024 was more than double the corresponding period in 2023.

    According to the Minister, the growth in government revenue was due to the reconfiguration and improvement in government finances, with oil revenue as a percentage of gross revenue increasing from 11 per cent in the first half of 2023 to 30 per cent in the first half of 2024.

    Here are the numbers as presented by the Minister:

    1. Non-Oil Revenue: The government’s determination to mobilise non-oil revenue has consistently delivered impressive results. For the half-year 2024, non-oil revenue not only surpassed the revenue in the first half of 2023 but was also 30 per cent above the 2024 budget target without any increases in taxes.

    2. National Debt Burden: The Tinubu administration in the words of the Minister has been working to manage and reduce the national debt to create better fiscal headroom for economic management. In dollar terms, Mr. Edun pointed out that Nigeria’s debt burden has been reduced and the government’s fiscal deficit has improved.

    “Our debt has fallen in dollar terms from $108 billion to $91 billion. Additionally, the government has diligently serviced all its loans and obligations with no recourse to ways and means of financing. The government has met all its obligations,” Edun said.

    3. Ways and Means: In the last year, the administration has exited the Ways and Means debt trap due to better management of the fiscal space, as the Federal Government, under the leadership of the President, has not relied on borrowing from the CBN Ways and Means to fund its obligations.

    Edun pointed out that part of the inflationary pressure the country is currently experiencing was a result of the past abuse of ways and Means. The Federal Government has paid back the previous N7.3 trillion obligation within a year of President Bola Tinubu’s administration.

    4. Debt Service to Revenue: In meeting its debt obligations to avert any form of default, the federal government of Nigeria, for decades, has been spending more than half of its revenue on debt servicing. By the end of June 2023, the Federal Government was spending 97% of total revenue on service debt.

    In the last year of President Tinubu, the country has recorded a positive trend in the debt service-to-revenue ratio. Currently, the debt service-to-revenue ratio has declined from 97 percent in the first half of 2023 to 68 percent in 2024, indicating the government’s strong position in managing its debt obligations.

    5. Budget Deficit: It has been a major priority for economic managers to reduce the budget deficit. To achieve this, the federal government, in the last year of the Tinubu administration, improved government revenue collection and blocked a lot of leakages. At the media briefing, Mr. Edun noted that the 2024 budget deficit has moved in the right direction, with a target of 4.1 percent of GDP, an improvement from the 6.1 percent deficit recorded in 2023.

    “On an annualised basis, we are at 4.4 percent, so you can see we are effectively very, very close to the budgetary target,” Edun said.

    6. Foreign Inflows: The government’s efforts to attract more foreign inflows into the economy continue to yield good outcomes. The minister said the government will continue the reforms and improve the business environment to engender confidence further.

    Mr. Edun underscored the government’s efforts to attract foreign inflows, including implementing the national single window project, which he said will generate $2.7 billion annually in economic benefits. The Minister added that the government’s accelerated stabilisation and advancement plan has already attracted $500 million in investment in the gas sector, with $7 billion more on the sidelines waiting to come in.

    7. Inflation and High Cost of Living: To address the current high cost of living and bring more relief to the masses, the Minister again pointed out that the government has implemented several initiatives and interventions, including a strategic input programme to increase the supply of food, a pivot to Compressed Natural Gas (CNG) fuel for mass transit vehicles, and providing lower-cost financing for the manufacturing industry and production. Mr Edun, who sympathised with Nigerians for the current hardship, which he also noted will soon blow away, expressed optimism that inflation, despite being “quite sticky at the moment,” will decelerate and come down due to the government’s commitments and actions.

    Mr. Edun said: “Clearly, as part of the reform program, on the monetary side, monetary policy has been tightened. CBN has been proactive in adjusting the monetary policy rate to address inflation head-on, which is in line with its legal mandate.”

    – Ajayi is the Senior Special Assistant to the President on Media and Publicity

  • ‘Diversification of economy will help Nigeria grow’

    ‘Diversification of economy will help Nigeria grow’

    The Nigerian economy needs to be diversified from sole dependency on oil if things must get better, Prophet Demola Olusesi has said.

    Olusesi, who is Founder/Leader of the Cherubim and Seraphim Movement Church (Heirs of Salvation), Meiran Lagos State, stated this at the Church’s 10th Founders Day, Harvest Anniversary and building dedication.

    The cleric also urged the government to ensure security so there can be more manufacturing companies and then food security.

    He said: “We must develop other mineral resources and stop being dependent on oil if we want the economy to become better. “Another thing is that the government must ensure security of lives and property, especially so that we can have more manufacturing companies to give employment, and then farmers can access their farms to ensure food security. That is when we can talk of good development in Nigeria.”

    Read Also: 63,000 Nigerians lose Instagram accounts over scams

    The cleric also urged Nigerians to show and spread love, saying it will help the country in this difficult time.

    He said: “My message to Nigeria is that we must embrace love, everyone should show and spread the love of Christ. We all should have the selflessness and will to serve because if you put your brothers first, and love your neighbors, Nigeria won’t be in this state that we are today.

    “But because some people love themselves more than every other person, Nigeria is in a mess. That’s the problem we have with the leadership. People are very insincere, but if we can come together and be God-fearing, Nigeria will overcome its challenges.”

    On the 10th anniversary and church building dedication, the cleric thanked God for the grace, recalling the challenges and testimonies thereof.

  • Digital share offering set to transform economy

    Digital share offering set to transform economy

    • Global access to public offers, others
    • 40m new investors, N30tr new capital
    • Banks first issues on e-offering

    With few clicks, Nigerians and the global investing public can buy into share offerings at the Nigerian capital market in a momentous breakthrough that is expected to have profound transformation on the nation’s economy.

    The Nigerian capital market at the weekend fully automated its share offering process, creating a paperless primary issuance market that bridges geographical and other demographical barriers and opens up the underlying economic assets of the nation to all citizenry.

    Market pundits estimated that the e-offering platform could attract some 40 million new investors and enable about N30 trillion in capital raising in the short to medium term. It is expected to subsequently help in building strong investment culture as people become more expose to market offerings.

    The digital platform, known as NGX Invest is already running the ongoing public offers and rights issue by Fidelity Bank Plc and Access Holdings Plc. Other banks, including Guaranty Trust Holdings Company and FCMB Group are also expected to launch their offers on the platform immediately after offer opening.

    An initial digital public offering in 2021, which was a test run, attracted more than 150,000 new retail investors, 75 per cent of whom were female and 85 per cent under the age of 40, creating a new wave of investors.

    The NGX Invest, promoted by the Nigerian Exchange (NGX) and approved by the Securities and Exchange Commission (SEC), is currently running with public offer of shares and rights issue. It is expected to scale up to other securities issuances, including bonds and derivatives.

    The launch of the e-offering came as the Nigeria National Petroleum Company (NNPCL) Limited prepares to launch an initial public offering (IPO) and become a publicly quoted company. NNPCL has projected a timeline of December 2024 to finalise its IPO process.

    Read Also: National policy on marine, blue economy for launch in December

    The launch of NGX Invest also coincided with banking sector recapitalisation, providing expected banks’ numerous offers for subscription and rights issues wider participation.

    Director-General, Securities and Exchange Commission (SEC), Dr. Emomotimi Agama said the e-offering platform aligns perfectly with the national agenda of opening up the Nigerian capital market.

    According to him, by digitalising and automating financial intermediation processes, the market is becoming more efficient, transparent, and inclusive.

    “At the Commission, our focus is on creating an enabling regulatory environment that promotes innovation without compromising compliance and investor protection. I commend NGX Group for its strategic investment in advancing our capital markets,” Agama said.

    Group Chairman, Nigerian Exchange Group (NGX Group) Plc, Alhaji (Dr) Umaru Kwairanga, said the new digital platform underlined the mutual commitment of all stakeholders to market development.

    He said the e-offering would undoubtedly contribute to boosting the participation of retail investors in the capital market. 

    “As we strive for the market to play a larger role in Nigeria’s economic development, the integration of technology, strong partnerships, and collaboration, alongside a positive policy environment, will be essential,” Kwairanga said.

    According to him, the digital platform was designed to streamline public offerings and rights Issues, ensuring an efficient, convenient, and seamless experience for managing primary market transactions.

    He added that the new initiative represented a significant leap forward in improving stakeholder experience within Nigeria’s capital market.

    Group Managing Director, Nigerian Exchange Group (NGX Group) Plc, Mr. Temi Popoola, expressed enthusiasm for the new platform noting its significance in NGX Group’s digital transformation journey and ability to enhance market access and foster economic growth.

    “We sincerely appreciate SEC and CBN for their strong support and leadership. Our intermediaries and partners, including the Central Securities Clearing System (CSCS), have been instrumental in achieving this success. This platform demonstrates our commitment to innovation and strengthening Nigeria’s capital markets, particularly as we support the banking sector’s recapitalisation efforts,” Popoola said.

    He noted  that NGX Invest is designed to significantly enhance the efficiency of public offering subscriptions and rights issue processes, streamlining operational workflows to better support issuers’ capital-raising efforts.

    Chief Executive Officer, Nigerian Exchange (NGX), Jude Chiemeka outlined that the platform’s transformative potential addresses the demand for a more efficient and transparent process in managing public offers and rights issues.

    “It will expedite reconciliation and allotment processes, reduce unclaimed dividends, and boost investor confidence. All stakeholders – including investors, registrars, issuing houses, brokers, banks, and regulators – stand to benefit significantly from this innovation,” Chiemeka said.

    Managing Director, Arthur Steven Asset Management, Mr Olatunde Amolegbe said the new platform represented another giant leap in the remarkable progress the Nigerian Capital Market have seen in the last few decades.

    “This falls in the class of the advent of the Automated Trading System (ATS) which revolutionised the way we trade as well as the CSCS which modernised the clearing and settlement of trades. Those two accelerated progress in the secondary market. I now fully expect the e-offering platform to do the same in the primary market sector of our market.

    “Not only will it reduce the cost of raising funds in the market as most of the processes will now be online, it also democratises the capital market by enabling a larger proportion of the population to participate in public offerings wherever they may be all around the world.

    “It also of course reduces the time between issuance and closing of primary issues which had been a major hindrance to issuers choosing to come to the market to raise funds as compared to going to the banks. I fully support this initiative and hope that the NGX will make it mandatory for all subsequent issues.

    “Easier access to long term capital through the capital markets means companies are able to execute their strategy plans, be it in terms of increasing capital utilization or expansion. This should ultimately lead to increased employment and economic growth,” Amolegbe said.

    President, Association of Capital Market Academics in Nigeria, Professor Uche Uwaleke said the impact of the digital platform for public offering and rights issues would certainly be positive for the capital market and the economy in general.

    According to him, the primary segment of the capital market, which is the true source of capital formation in any economy, has been inactive in Nigeria for many years due, in part, to the cumbersome nature of the market, the relatively high costs and the long time it takes issuers to conclude transactions in the market.

    “The launch of the e-offering platform will go a long way to streamline the processes, increase speed, reduce time-to- market, lower costs and make the primary market more efficient.

    “Investors in the primary market are also likely to have a better experience including through reduced costs and reliance on brokerage services, which attract commissions. So, this development promises to attract more retail investors to the capital market as it will equally help to check the challenge of unclaimed dividends.

    “As with every digital powered innovation, efforts should be made by the NGX and the SEC to put in place adequate safeguards against security risks,” Uwaleke said.

    Managing Director, APT Securities and Funds, Mallam Garba Kurfi , said the new platform would open up the Nigerian market to the global investing public.

  • Reps deputy speaker seeks partnership with ITC to boost Nigeria’s digital economy

    Reps deputy speaker seeks partnership with ITC to boost Nigeria’s digital economy

    Deputy Speaker of the House of Representatives, Hon. Benjamin Kalu said at the weekend that the Nigerian parliament was ready to partner with the International Trade Centre (ITC) to boost the nation’s digital economy. 

    Kalu also hinted at plans by the Peace in South East Project (PISE-P) to establish food processing centres across the five states of the southeast.

    Special assistant on press affairs to the deputy speaker, Udora Orizu, said in a statement that Kalu, who spoke while playing host to a delegation from ITC however expressed concern that the insecurity in the South-East region has had a devastating impact on businesses and incomes

    Kalu acknowledged the immense contributions of the centre to the economic development of Nigeria and the entire West African region, saying, “Your work is truly commendable.”

    The deputy speaker spoke about the ongoing projects of the organisation in Nigeria and West Africa, which include, the EU-funded WACOMP program; the GIZ-funded ECOWAS Agricultural Trade (EAT) program; which has helped to boost Nigeria’s agricultural trade capacity and improved intra-regional agricultural trade, as well as economic resilience and food security; and the upcoming nationwide expansion of IDEAS in 2025, which he believed, will provide invaluable technical assistance to the agri-food e-commerce ecosystem across the country.

    Kalu told the delegation about the existing partnership between PISE-P and the Nigerian Communications Satellite (NigComSat) in building community digital hubs across some parts of the southeast.

    “We express our keen interest in collaborating with the ITC to leverage this initiative that we are currently building with NigComSat to use the community digital hubs for local onboarding and training in the IDEAS program’s digitization and e-commerce aspects. 

    “By utilizing the digital hubs established through the PISE-P and NigComSat partnership, we can provide targeted training and support to micro, small, and medium-sized enterprises (MSMEs). This collaboration will empower local businesses to thrive in the digital economy and enhance their competitiveness on a global scale”, Kalu said.

    He however expressed worry that the insecurity in the South-East region has had a devastating impact on businesses and incomes, stressing that, focusing on education, agriculture, and infrastructural development were non-kinetic measures crucial for restoring peace and stimulating development in the southeast region.

    “As we look forward to the nationwide expansion of the IDEAS program in 2025, we express a strong interest in the ITC collaborating with PISE-P as a key partner. PISE-P’s work in addressing socio-economic challenges and promoting peace and development aligns perfectly with the goals of the IDEAS program. Together, we can create a more resilient and inclusive digital economy, particularly in regions facing significant challenges.

    “It is essential to bridge the digital divide to ensure that all Nigerians have access to the opportunities presented by the digital economy. The disparity in digital access between urban and rural areas must be addressed to foster inclusive growth. 

    “We believe that through the combined efforts of the ITC, PISE-P, and the House of Representatives, we can implement effective strategies to provide digital access and literacy to underserved communities, ensuring no one is left behind in this digital transformation journey”, Kalu added.

    Speaking earlier, the ITC delegation led by Ms Natasha Aniekwu said the agency jointly owned by the World Trade Organization and UN, aims to promote trade, specifically across developing economies.

    She commended the Deputy Speaker for his several interventions to empower local businesses, adding that their program focused on making E-commerce more accessible and beneficial for SMEs, particularly in disadvantaged areas, and the agency’s interest in partnering with his office.

    Aniekwu said: “We are an agency jointly owned by the World Trade Organization and UN, we are based in Geneva Switzerland and our primary aim is to promote trade, specifically across developing economies, this means that we work a lot in Africa, in Asia and the Middle East. 

    “In Nigeria, we have a project office, currently situated within the ECOWAS commission. Our primary reason for coming is to speak to you about a Nigeria-focused program. We ran a pilot of this program for 6 months using Imo State as a pilot location, we got a lot of support from the Ministry of Trade. 

    “The major focus of IDEAs is to make E-commerce more accessible and beneficial for SMEs or business communities, particularly in disadvantaged areas or vulnerable locations.”