The Nation Newspaper

Tag: growth

  • NIA to sustain stability, growth through micro insurance

    The Nigeria Insurers Association (NIA) has embarked on closer interaction with the  informal sector to ensure stability and growth for businesses, its Director-General, Sunday Thomas, has said.

    He made this known while speaking at the conference/fair in Lagos. The event had market women, traders, artisans and non-governmental organisations (NGO) in attendance.

    He said that insurance is a viable tool for mitigating losses among the less privileged.

    He noted that the conference/fair is their first ever on Micro Insurance subsector and also their first deliberate effort to reach out to the informal sector of our economy.

    He stressed that the insurance industry regulator, the National Insurance Commission (NAICOM) has sets out the framework, road map, market and regulatory strategic directions for the operation of micro insurance in Nigeria.

    He said: “This conference is put together by the Micro Insurance committee of the Nigeria’s Insurers Association. Our aim is to bring together all stakeholders concerned with micro insurance in Nigeria with the overall objective of ensuring that both the demand side and the supply side of micro insurance are in sync together.

    “It is also meant to create awareness for our member’s micro insurance products for informal sector of the economy. It is common knowledge that insurance culture is very low among the informal sector and it would take deliberate effort like this to win the confidence of this sector.

    “The country diagnostic study says less than 1 per cent of the adult population in Nigeria have access to a voluntary insurance policy.  Nigeria is among the least countries in terms of insurance contribution to GDP which is around 0.72 per cent.”

    He said the sector is regarded as “a grossly untapped opportunity” because we have not yet appealed to the informal sector which constitute over 80 per cent of the Nigerian population.

    “For the NIA, the obvious way forward is to through closer interaction with this sector, intensive capacity building and greater expertise in micro insurance, providing unique micro insurance services, development of people friendly products, and improved innovative distributive system.”

    “Micro insurance is targeted at the informal sector and the low income masses. It is the most veritable too for mitigating losses from unexpected accidents and disasters.  Low income groups are invariably exposed to innumerable risks. Micro insurance works on the phenomenon of risk transfer mechanism characterized by low premiums and low coverage limits.

    “As an industry we will continually seek for opportunities to court the friendship of this sector. For us the future of our industry most probably lies in what we do with this sector and how they the sector accepts our products and services. We are optimistic that the relationship we are starting today will continue to blossom and get stronger”, he noted.

  • Lagos: Leveraging on SMEs for growth

    Lagos: Leveraging on SMEs for growth

    Dwindling oil revenue has since forced a rethink in strategy in favour of Small and Medium Enterprises (SMEs). The Lagos State government is blazing the trail through deliberate policies and special programmes aimed at galvanising SMEs and engendering the development of the non-oil sector. Assistant Editor OKWY IROEGBU-CHIKEZIE reports that this is in the hope of boosting industrialisation.

    The capacity of Small and Medium Enterprises (SMEs) to serve as the engine of economic growth and development is not lost on the Lagos State government. With the growing emphasis on diversifying the economy, following the crisis in the international oil market where the price of Nigeria’s crude oil has been falling, Governor Akinwunmi Ambode’s administration has turned to SMEs for succour.

    Specifically, the state is encouraging SMEs through deliberate polices, special programmes and projects, in collaboration with relevant agencies, in the hope of generating employment, creating wealth, and boosting industrialisation. The administration is looking inwards and initiating policies and programmes targeted at engendering the development of the non-oil sectors where SMEs are dominant players.

    For instance, at a mini-trade fair of locally-produced goods, organised by the Lagos State government, last week, to commemorate the ‘African Industrialisation Day,’ Ambode said the policy thrust of his administration embraces the private sector as a key stakeholder and prime mover of the economy.

    “In the light of this, the provision of promotional tools that encourage the establishment and growth of businesses remains one of the major priorities of this administration. The Lagos State Traffic Management Authority (LASTMA) is repositioned towards ensuring the free flow of traffic across the state, while all agencies of government have been mandated to provide prompt services to the members of the public,” Ambode said.

    He assured that his administration would continue to formulate and implement policies and programmes that would consolidate the state’s position as the industrial and commercial hub of Nigeria, with the objective of creating employment, eradicating poverty and promoting sustainable economic development.

    Ambode, who was represented by the Commissioner for Commerce, Industry and Cooperatives, Prince Rotimi Adebolade Ogunleye, said Lagos was the most industrialised state in the country, accounting for about 80 per cent of the value added growth in the manufacturing sector.

    Apart from generating about 65 per cent of value added tax (VAT), with over 2000 industries, which constitute 65 per cent of the country’s total number of industries, he said Lagos was home to over 200 well capitalised and efficiently managed banking and financial institutions.

    This is in addition to accounting for nearly 60 per cent of the country’s Gross Domestic Product (GDP) and 65 per cent of national invest-ment with over 200 firms listed on the Nigeria Stock Exchange and 90 per cent of maritime foreign trade.

    Despite these intimidating credentials, Ambode said the administration was not unmindful of the challenges encountered by SMEs and other businesses in the state. He said government would continue to engage members of the Organised Private Sector (OPS) through various fora to addressing the challenges.

    Noting, for instance, that concerted efforts are being made to resolve various community-related issues between host communities and investors, he said the state government has created a number of incentives, including creating a one-stop shop of competitive infrastructure.

    He pointed out, for instance, that a number of investors have begun business operations in the Lekki Free Trade Zone. Notable among them is the Dangote Group, which, he said, is establishing a world-class refinery and fertiliser plant.

    Permanent Secretary, Ministry of Commerce, Industry and Cooperatives, Mr. Olalekan Abisoye Akodu, praised the state government for being responsive to the needs and challenges of members of the OPS, especially SME operators.

    He assured that the government was prepared to continue to offer windows of opportunity through policies, programmes and regular forum for interaction. He said this was in a bid to create a conducive investment environment for businesses to thrive.

    President, Doublem Enterprise Development Centre, Alhaji Muhammed Mustafa, said the growth of the economy could only be stimulated by deliberate policies targeted at  SMEs. He canvassed a collaboration between government and industrialists on incentives.

    According to him, this is one of the ways the ‘Asian Tigers’ achieved success; in addition to closing their borders to imported products and unhealthy competition against their local entrepreneurs.

    He said Nigeria should borrow a leaf from India, for instance, which, in 1972, came up with a policy that mandated banks to give business loans at four per cent for between four and 10 years moratorium,.

    Mustafa decried a situation where multinationals produce water, chin–chin, noodles and bread that should have been the exclusive reserve of local entrepreneurs. He regretted that this could only happen in Nigeria.

    He wondered how local companies can compete with multinationals if they are not given a leeway through deliberate policies of government. He  also wondered how indigenous entrepreneurs and SMEs can ever grow and serve as the engine of employment generation and wealth creation when the government is not in any way encouraging them.

    Decrying the high cost of funds, poor infrastructure provision, over regulation and unfair competition, Mustafa said: “Government is not sensitive to the needs of SMEs; state governments should have their plans for SMEs and not necessarily wait for the Federal Government.”

    He pointed out that small businesses are, indeed, the safest for banks to deal with because they can easily be reached unlike the multinationals where ownership is separated from management. “Government at all strata should be interested in giving them  loans  because if they succeed, they will pay taxes and they also have the capacity to employ more people, create wealth and eliminate poverty,” he added.

    An entrepreneur and Managing Director of Goshen Multi Nigeria Limited Mr. Segun Kuti-George, however, tasked government on the establishment of petrochemical industries.

    Kuti-George whose company manufactures kitchen tops, bath tubs, bowls, shower trays, and bank counters, among others, said his products have 75 per cent local material content, pleading with thegovernment to set up petrochemical industries.

    He regretted that Nigeria remained the only oil producing country in the world without petrochemical industries that manufacture resin, which is a major by-product of the petroleum industry.

    For the Managing Director, Vetinal Continental Products Ltd., Mrs. Victoria  Okonkwo, there is the need for government to support SMEs, which, according to her, are the only viable vehicle to curb unemployment.

    She expressed regrets that, despite the potential of SMEs to create wealth and generate employment, the much- touted N220 billion MSME Fund has not been disbursed because of stringent rules by banks.

    She said small companies, such as hers, could not meet stiff conditionalities, such as certificate of occupancy (C-of-O) for properties, which they usually don’t have. She said the machines and equipment of SMEs can be pledged for loans.

    Okonkwo also decried the huge cost operators incur due to poor infrastructure, especially electricity supply, which adds to their cost of production and is passed to the consumer.

  • How BATNF is driving economic growth of smallholder farmers

    How BATNF is driving economic growth of smallholder farmers

    In Nigeria, as in most parts of Africa, rural areas are essentially home to smallholder farmers who produce the bulk of the food consumed locally thereby contributing in no small measure in ensuring food security for the nation, alleviating poverty, and helping government to actualise development goals.

    According to experts, smallholder farmers constitute over 70 per cent of the labour force in the agricultural sector. Unfortunately, their productivity has often been impeded by various factors some of which include inadequate credit facilities, poor policy implementation, poor access to market, lack of infrastructure, dearth of information on agriculture best/latest practices and shortage of improved technology along the value chain. Other inhibiting factors are inadequate cottage level processing facilities, preference for imported food ingredients to their local varieties, poor access to climate smart varieties and breeds, and conflicts between farmers and pastoralists.

    Regrettably, government’s effort at tackling the problem and mitigating the constraints faced by this category of farmers has not made far-reaching and lasting impact due to lack of funds and dwindling revenue from oil. Sometimes when the right policy framework exists and the needed infrastructure and initiatives are put in place, these well thought-out policies are usually not properly implemented or abandoned shortly after takeoff.

    For instance, the Cassava Bread initiative, which mandates 10 to 20 per cent inclusion of cassava flour, was part of measures intended to make Nigeria self-reliant in the production of some staple food crops thereby saving foreign exchange spent on flour importation.

    In spite of the pomp that greeted its inauguration by the previous administration and the publicity and media attention it received, the initiative is yet to get any traction.

    Reports indicate that Nigeria will save N300 billion annually from substituting wheat with cassava. This deliberate attempt at encouraging local production of staple foods, in the view of economists, is capable of expediting the resuscitation of the nation’s economy. Also, the initiative, apart from achieving import substitution and boosting export potentials and earnings, can help create more jobs and enhance the growth of agro-allied companies.

    Unfortunately, in recent years, import substitution strategy for development through agriculture has been repeatedly sabotaged by some agriculture produce importers under different guises, with the local farmers usually at the receiving end. The recent abuse of waivers on the importation of rice into the country readily comes to mind here.

    Determined to ensure that government policies and stimulus packages are inclusive of smallholder farmers, the British American Tobacco Nigeria Foundation (BATNF) recently organised a dialogue session on smallholder farmers and sustainable agriculture, which held in Lagos State. The session, themed ‘Agricultural Policies and the Nigerian Smallholder Farmers,’ was the climax of the activities of an executive working group set up by BATNF in January 2015 to undertake a careful multi-stakeholder review of the ATA and related agriculture policies and programmes.

    The group was also saddled with the responsibility of establishing the extent to which these policies support poor farmers and small and medium agribusinesses in wealth creation and increased productivity.

    In his opening address at the event, Director of Legal and External Affairs, British American Tobacco Nigeria (BATN), Mr Freddy Messanvi, described the Dialogue Session as “part of the BATNF’s advocacy platform aimed at facilitating access to policy-making decisions about smallholder farmers” who produce the bulk of the food Nigerians consume.

    The session provided an opportunity for agriculture experts and resource persons to dissect ATA, other extant agricultural schemes and matters related to agriculture business in Nigeria. It was noted that some of the critical areas that ATA has succeeded in affecting the lives and livelihood of smallholder farmers is in organising them into cooperative groups. There was also a consensus that government and the organised private sector should give impetus to the effort of smallholder farmers by providing for them the right incentives and financial support systems, as well as strengthening existing infrastructure to assist farmers in eradicating hunger and poverty.

    Prof Ben Ahmed of the Institute of Agricultural Research (IAR) and Ahmadu Bello University (ABU), while speaking on the impact of the ATA, noted that the contributions of the International Fund for Agricultural Development (IFAD)-assisted Rural Finance in Nigeria (RUFIN), which was integrated into ATA, helped in the formation of farmer groups that were linked to micro-finance banks (MFBs).

    ATA’s potential in diversifying the Nigerian economy and attracting foreign direct investment was also underscored by other speakers.

    Components of ATA and other agricultural policies reviewed by BATNF Executive Working Groups (EWGs) include the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Growth Enhancement Scheme (GES) and Climate Change, as well as the various Crops Enterprise Value Chain developments.

    Most of the presentations made by the various working groups looked at the current situation of ATA, the achievements made so far, the major challenges and shortcomings, and how they can be tackled. In their recommendations, they urged government to work with enduring policies that are well thought out.

    A notable concern raised by stakeholders about agriculture business in Nigeria is the ignorance of smallholder farmers of ATA as well as their exclusion from financial incentives offered by NIRSAL. It was observed that this barrier is due to the notion generally held by commercial banks that majority of smallholder farmers cannot meet their requirements and thus are not bankable.

    However, few banks, such as Stanbic IBTC, FCMB and UBA, were commended for being supportive to smallholder farmers. As a remedy, it was suggested that the traditional financial system, ‘Esusu,’ (thrift institution), which most of them have successfully practised for years, should be understudied and incorporated into the NIRSAL scheme so as to help meet the needs of the framework that is achievable for them.

    The Stakeholders Dialogue Session was necessitated by the need to provide a robust and expansive policy framework for the nation’s agricultural sector in line with the current administration’s resolve to enhance practices and output of the sector.

    It is the expectation of stakeholders in the agricultural sector that the findings made by the working groups and recommendations put forward to government on how to revamp the economy through small-scale agriculture would be critically examined by the incoming minister of agriculture so that it will not amount to another exercise in futility.

  • How BATNF is driving economic growth of smallholder farmers

    How BATNF is driving economic growth of smallholder farmers

    In Nigeria, as in most parts of Africa, rural areas are essentially home to smallholder farmers who produce the bulk of the food consumed locally thereby contributing in no small measure in ensuring food security for the nation, alleviating poverty, and helping government to actualise development goals.

    According to experts, smallholder farmers constitute over 70 per cent of the labour force in the agricultural sector. Unfortunately, their productivity has often been impeded by various factors some of which include inadequate credit facilities, poor policy implementation, poor access to market, lack of infrastructure, dearth of information on agriculture best/latest practices and shortage of improved technology along the value chain. Other inhibiting factors are inadequate cottage level processing facilities, preference for imported food ingredients to their local varieties, poor access to climate smart varieties and breeds, and conflicts between farmers and pastoralists.

    Regrettably, government’s effort at tackling the problem and mitigating the constraints faced by this category of farmers has not made far-reaching and lasting impact due to lack of funds and dwindling revenue from oil. Sometimes when the right policy framework exists and the needed infrastructure and initiatives are put in place, these well thought-out policies are usually not properly implemented or abandoned shortly after takeoff.

    For instance, the Cassava Bread initiative, which mandates 10 to 20 per cent inclusion of cassava flour, was part of measures intended to make Nigeria self-reliant in the production of some staple food crops thereby saving foreign exchange spent on flour importation.

    In spite of the pomp that greeted its inauguration by the previous administration and the publicity and media attention it received, the initiative is yet to get any traction.

    Reports indicate that Nigeria will save N300 billion annually from substituting wheat with cassava. This deliberate attempt at encouraging local production of staple foods, in the view of economists, is capable of expediting the resuscitation of the nation’s economy. Also, the initiative, apart from achieving import substitution and boosting export potentials and earnings, can help create more jobs and enhance the growth of agro-allied companies.

    Unfortunately, in recent years, import substitution strategy for development through agriculture has been repeatedly sabotaged by some agriculture produce importers under different guises, with the local farmers usually at the receiving end. The recent abuse of waivers on the importation of rice into the country readily comes to mind here.

    Determined to ensure that government policies and stimulus packages are inclusive of smallholder farmers, the British American Tobacco Nigeria Foundation (BATNF) recently organised a dialogue session on smallholder farmers and sustainable agriculture, which held in Lagos State. The session, themed ‘Agricultural Policies and the Nigerian Smallholder Farmers,’ was the climax of the activities of an executive working group set up by BATNF in January 2015 to undertake a careful multi-stakeholder review of the ATA and related agriculture policies and programmes.

    The group was also saddled with the responsibility of establishing the extent to which these policies support poor farmers and small and medium agribusinesses in wealth creation and increased productivity.

    In his opening address at the event, Director of Legal and External Affairs, British American Tobacco Nigeria (BATN), Mr Freddy Messanvi, described the Dialogue Session as “part of the BATNF’s advocacy platform aimed at facilitating access to policy-making decisions about smallholder farmers” who produce the bulk of the food Nigerians consume.

    The session provided an opportunity for agriculture experts and resource persons to dissect ATA, other extant agricultural schemes and matters related to agriculture business in Nigeria. It was noted that some of the critical areas that ATA has succeeded in affecting the lives and livelihood of smallholder farmers is in organising them into cooperative groups. There was also a consensus that government and the organised private sector should give impetus to the effort of smallholder farmers by providing for them the right incentives and financial support systems, as well as strengthening existing infrastructure to assist farmers in eradicating hunger and poverty.

    Prof Ben Ahmed of the Institute of Agricultural Research (IAR) and Ahmadu Bello University (ABU), while speaking on the impact of the ATA, noted that the contributions of the International Fund for Agricultural Development (IFAD)-assisted Rural Finance in Nigeria (RUFIN), which was integrated into ATA, helped in the formation of farmer groups that were linked to micro-finance banks (MFBs).

    ATA’s potential in diversifying the Nigerian economy and attracting foreign direct investment was also underscored by other speakers.

    Components of ATA and other agricultural policies reviewed by BATNF Executive Working Groups (EWGs) include the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Growth Enhancement Scheme (GES) and Climate Change, as well as the various Crops Enterprise Value Chain developments.

    Most of the presentations made by the various working groups looked at the current situation of ATA, the achievements made so far, the major challenges and shortcomings, and how they can be tackled. In their recommendations, they urged government to work with enduring policies that are well thought out.

    A notable concern raised by stakeholders about agriculture business in Nigeria is the ignorance of smallholder farmers of ATA as well as their exclusion from financial incentives offered by NIRSAL. It was observed that this barrier is due to the notion generally held by commercial banks that majority of smallholder farmers cannot meet their requirements and thus are not bankable.

    However, few banks, such as Stanbic IBTC, FCMB and UBA, were commended for being supportive to smallholder farmers. As a remedy, it was suggested that the traditional financial system, ‘Esusu,’ (thrift institution), which most of them have successfully practised for years, should be understudied and incorporated into the NIRSAL scheme so as to help meet the needs of the framework that is achievable for them.

    The Stakeholders Dialogue Session was necessitated by the need to provide a robust and expansive policy framework for the nation’s agricultural sector in line with the current administration’s resolve to enhance practices and output of the sector.

    It is the expectation of stakeholders in the agricultural sector that the findings made by the working groups and recommendations put forward to government on how to revamp the economy through small-scale agriculture would be critically examined by the incoming minister of agriculture so that it will not amount to another exercise in futility.

  • Investment in IT key to Nigeria’s growth, says NAICOM chief

    Investment in IT key to Nigeria’s growth, says NAICOM chief

    Nigeria must invest heavily in technological development and management, which will in turn aid growth and suitable competitiveness in various sectors of the economy, Commissioner for Insurance, National Insurance Commission (NAICOM), Mohammed Kari has said.

    He made this call at the maiden conference on Management, Technology and Development of the Abubakar Tafawa Balewa University (ATBU), Bauchi, Bauchi State.

    The Commissioner, therefore, challenged the University’s Faculty of Management Technology to reach out to insurance sector to maximise its contribution of technology in the country and ensure some relationship is developed soonest.

    He noted that as robust as the curriculum vitae (CV) of the faculty was, as read out by the Dean, it was sad to see that it is yet to have a partnership with ithe nsurance sector.

    He said investment in technology is necessary if the country is to maximise the contribution of technology to innovation and productivity in industry.

    He noted that to ensure this, the government needs to address key action areas, which include translating research to business, provide incentives to innovate, local and international collaboration, and technology adoption.

    He said: “Taking full advantage of research and realising the full innovation dividend for the economy requires significant improvements in the translation of research to business. Many systematic and cultural barriers exist, as well as market failures that can be profitably addressed by government action.

    “Incentivising and facilitating businesses, particularly small to medium enterprises, to efficiently adopt new technologies can further lift innovation, productivity growth and competitiveness. Improving collaboration in Nigeria between businesses and publicly funded research institutions including the universities, will significantly enhance innovation. International collaboration is also critically important. Both domestic and international collaboration will improve the productivity and competitiveness of Nigerian technology based firms.

    “Also, technological innovation is key to building industry competitiveness, through increasing productivity and reducing costs, realising commercial opportunities from research investment, and creating new areas of competitive advantage.”

    He rated technology and its application as one of, if not the main driver that can fast track any meaningful development.

    He pointed out that there is no denying the fact that the changes in technology have affected most industries worldwide. According to him, globalisation, which dominates the world today, was influenced mainly by information technology.

    “Information technology (IT) has transformed the process of production, product design, raw materials sourcing, transport, manufacturing, health care, marketing, service delivery and even general management.

    “There is also no denying the fact that industrial competitiveness has enabled countries to increase their presence in international and domestic markets whilst developing industrial sectors and activities with higher value added and technological content,” he added.

  • Fed Govt inhibits downstream growth- ex-PPPRA’s boss

    The Federal Government should be blamed for the abysmal performance recorded in the downstream sub-sector of the oil and gas industry not private operators, former Executive Secretary, Petroleum Product Pricing Regulatory Agency (PPPRA), Mr Reginald Stanley, has said.

    He said the actions of successive governments showed that they were not ready to formulate policies to accelerate the growth of the sector.

    He said the Federal Government did more damage to the downstream sector by not deregulating it.

    Stanley said the decision of the government to hold on to the regulation of the sub-sector was killing initiatives, adding that the development has stalled the development and implementation of ideas that would drive activities in  the sector.

    Stanley, while speaking during a stakeholder’s forum in Lagos, said it is either the government improve the growth of the downstream sub-sector by deregulating it, or allow it to suffer more problems.

    He said: “Angola, Ghana, India and other countries have deregulated the downstream segment of the petroleum industry, and they are better for it. Nigeria cannot be an exception if it really wants to move the capacity utilisation in the downstream above its current capacity of 25 per cent.

    He added: “We (as Nigerians) should be able to learn a lesson from Ghana that deregulated its downstream sub-sector, and has since then, been having it good in the area of production of petroleum products fuel, fixing of their prices, making the products available to consumers, among other issues.”

  • ‘Improved power key to business growth’

    ‘Improved power key to business growth’

    Stakeholders  have agreed that improved power supply is vital to business growth in Nigeria.

    They gathered at a seminar organised by Mantrac Nigeria Limited to inform its customers about Caterpillar products, facilities, product support services, and new product options.

    The event, held in Lagos emphasised the growing need for improved power supply in the country. Speaking on “Power to grow your business,” the stakeholders applauded the country’s quest for improved capacity to generate power, maintaining that in the interim, private power solutions remained the most viable option open to business to augment the shortfall in power supply.

    The Managing Director of Mantrac Nigeria Limited, Caterpillar’s sole representative in Nigeria, Mr. Edmund Martin-Lawson, said: “The focus of the seminar is to enlighten the business community on the power to do business. Without power we won’t have energy; without energy we can’t produce. We need power everywhere and what we are saying today is that we have the power systems to grow business and move forward.”

    He noted that the world was now moving forward so rapidly and hybrid power systems that utilize solar energy and battery are now available to support the power needs of businesses. “Nigeria needs over 20,000 megawatts (Mw) of power but unfortunately what is being generated now is far too low. That is why there is need to bridge the gap between what is available and the power goals the country wants to realize in future,” he said, noting that the available products which meet customer needs ranged from hybrid, fuel to heavy diesel sets.

    “Definitely it is important for Nigeria to have power. The country has been growing steadily for some time. If we have increased power supply capacity, the growth rate which is currently in single digits will definitely be in double digit. What that means is that this country and economy definitely need extra power to move industries and businesses forward.

    “In the interim, that shortfall will come from power systems providers who have the capacity to provide the needed power equipment that will add more power through the country’s IPP project,” he said.

    Caterpillar’s Territory Manager, Stefan Laszenwski who is based in Geneva, Switzerland, assured of his company’s readiness to assist the country with power solution equipment to help in realizing her ever growing power needs. He said the in-thing in the world at the moment was progress, emphasizing that Nigeria needed to move forward and availability of power was key to such forward move.

    Laszenwski praised the country’s determined drive towards improved power generation, and noted that the country’s Independent Power Project (IPP) initiative could be enhanced with the latest range of equipment in his company’s stable. He said businesses and local communities could be boosted with products that could power several thousands of homes, islands, marine installations and Central Business Districts (CBDs). The products he said could run on gas, and with improved gas supply in the country, the era of poor power generation might be over soon.

    “I believe that what we at Mantrac are bringing in will improve the capacity of most Nigerian companies to do business,” he said. The option of gas-powered generators gives industrial customers up to 70 per cent savings on running cost.

  • Fidson records modest growth in profit

    Fidson Healthcare Plc fell back on internal cost management to reduce the adverse impact of considerable decline in turnover and sustain modest growth in profit.

    Key extracts of the third quarter report and accounts of the healthcare company for the period ended September 30, 2015 showed that it reduced total operating expenses and cost of sales by 30 per cent and 14 per cent respectively to mitigate the top-down impact of 18 per cent decline in sales. The reduction in expenses and costs enabled the company to grow pre and post tax profits by two per cent each.

    Turnover dropped to N6.16 billion in third quarter of 2015 as against N7.51 billion recorded in comparable period of 2014. Cost of sales however dropped from N3.4 billion to N2.9 billion while distribution and administration expenses also reduced from N3.13 billion to N2.19 billion. With these, profit before tax increased marginally from N685.8 million to N696.3 million while profit after tax inched up to N473.5 million in 2015 as against N466.4 million recorded in comparable period of 2014. Earnings per share thus improved marginally from 31 kobo to 32 kobo.

    Fidson Healthcare had increased cash payouts to shareholders by 50 per cent as the company’s earnings firmed up in 2014. The company distributed N225 million to shareholders as cash dividends for the immediate past business year ended December 31, 2014. Shareholders received a dividend per share of 15 kobo as against 10 kobo received in the previous year.

    The dividend increase was directly related to the improvements in the earnings of the healthcare company. Key extracts of the audited report and accounts of Fidson Healthcare for the 2014 business year showed significant growths in key fundamentals.

    The company’s profit before tax rose by 249 per cent from N249.6 million in 2013 to N870.8 million in 2014. Profit after tax jumped by 308 per cent to N631.8 million in 2014 as against N154.9 million recorded in 2013. Earnings per share thus increased from 10 kobo in 2013 to 42 kobo in 2014.

    Fidson had relied on impressive cost management and improving operating efficiency to drive the bottom-line. While its turnover rose by five per cent from N9.25 billion to N9.73 billion, it moderated cost of sales to four per cent growth and reduced operating expenses by nine per cent.

    The management of the company said its growth trend evidenced its ability to maintain its products’ market share in key therapeutic areas.

    “This is driven by innovative products, strategic marketing approaches, robust distribution channels as well as relentless efforts in ensuring quality and various anti-counterfeiting initiatives,” Fidson had stated.

    The management reassured that the company is also well positioned for huge growth opportunities, following the projection of a significant improvement in sales upon the completion of its ultra-modern WHO Good Manufacturing Practice (GMP) compliant plant. The plant is proposed to begin operation in 2015.

    The plant is expected to broaden the company’s products base, increase its capacity and consequently profitability and growth opportunities.

    Operations Director, Fidson Healthcare Plc, Mr. Biola Adebayo, said the new manufacturing plant, which will aggregate the existing manufacturing lines from other existing plant and add a new line for intravenous products, will be a game-changing investment that will further enhance Fidson’s leadership position in the healthcare industry and position it in good stead to compete for global healthcare funds and orders.

    According to him, the new plant would further enhance the local manufacturing capacity of the company with more than two-thirds of its products expected to be produced locally.

    He added that the new manufacturing plant, which is being built to WHO standards and certification, will enable Fidson to engage in contract or tall manufacturing for many global pharmaceutical companies, which want to manufacture their products in Nigeria but do not want to establish full-fledged manufacturing plants.

    Adebayo noted that the prospects for the company’s growth is huge pointing out that there are no more than three companies manufacturing its new line of intravenous products and the volume needed by the country is so huge.

     

     

  • NDIC: Poor funding stalling MSMEs’ growth

    The Nigeria Deposit Insurance Corporation (NDIC) has linked the challenges of micro, small and medium enterprises (MSMES) to their poor funding.

    It said inadequate funding of MSMEs remained a major challenge, adding that as at June 30, deposits mobilised by the 936 microfinance banks stood at N173.3 billion.

    Its Managing Director, Alhaji Umaru Ibrahim, who spoke at a  one-day sensitisation workshop for operators of microfinance banks (MfBs), said all hopes were, however, not lost. He said effective risk management would help MfBs to respond to risks and also promote profitability and objective decision making.

    He said the workshop with Deepening the practice of microfinance banking through effective enterprise risk management as theme, created q platform for the corporation to share experiences on latest developments in the sub-sector. Experience sharing, he said, would ensure the survival of such institutions.

    Ibrahim said for MfBs to access the N220 billion MSMEs fund launched by the Federal Government last year, they must demonstrate strong enterprise risk management capable of enhancing the eligibility criteria.

    “NDIC, as an insurer, reimburses deposit of microfinance banks up to a maximum limit of N200, 000 per depositor in the event of failure of such microfinance bank. The new average coverage level represents an increase of 100 per cent over the earlier coverage level of N100, 000,” he said.

    The NDIC chief said microfinance banks have to be interested in enhanced risk management frameworks and take necessary steps to improve their compliance levels with sound risk management.

    “For instance, an increase in the interest rate could make micro-loan repayment difficult. Furthermore, new loans could become less attractive for small borrowers due to affordability pressures. Therefore, micro-finance banks should be able to assess borrowers’ capacity and willing-ness to continue with loan repayments in the case of an interest rate rise. Lack of thorough and effective assessment of market risk could have devastating impact on banks,” he said.

    Represented by Director, Special Insured Institutions Department at the NDIC, Joshua J. Etopidiok, Ibrahim  also said the Central Bank of Nigeria (CBN) had in September, 2013 issued the “Revised Regulatory and Supervisory Guidelines for Microfinance Banks in Nigeria” aimed at not just introducing a risk-based approach to the supervision of microfinance banks, but also in response to the changing financial landscape.

    He said the enterprise risk management framework was “developed to provide a proactive process to assess the safety and soundness of all microfinance banks operating in the country. He warned that microfinance banks must reduce risks on their own terms through effective management oversight and performance evaluation.”

    Ibrahim said the term enterprise risk management, in the context of a microfinance bank, was “the process of controlling the likelihood and potential severity of an adverse effect”, adding that, NDIC would deploy Differential Premium Assessment System (DPAS) in determining Deposit Insurance Premium for micro-finance banks.

    He assured that NDIC would continue to train only microfinance banks, which are up to date in their premium payment to the corporation, adding that, the corporation’s ability to sustain its efforts in ensuring that all insured institutions remained on the path of sustainable growth and development, depended heavily on the premium contributions by insured institutions to fund the Special Insured Institution Fund (SIIF).

     

  • Lawmaker seeks selfless leaders to drive national growth

    A member of the House of Representatives, Mike Omogbehin has urged the country’s leaders to be selfless in order to drive national growth.

    Omogbehin, who spoke with reporters in Akure, the Ondo State capital, said what Nigeria needed was selfless leadership.

    According to him, this time calls for a sober reflection and at the same time, a stock-taking to examine where we were in the past and where we are now in order to chart a new course for the future.

    The Peoples Democratic Party (PDP) lawmaker said the development of the nation must be a collective agenda by all and sundry, irrespective of our political inclination and background. He also said Nigerians must continue to put Nigeria ahead of other agenda in our daily activities.

    He said:”It is only through our beliefs and determination to fast-track the

    development of Nigeria that we can achieve a reasonable and even

    development of our dream as a nation; hence the need for all hands to be on deck to build a virile society.”

    Omogbehin praised the ex-Nigerian leaders who had contributed their own

    quota to the development and unity of the nation, especially President Goodluck Jonathan for handing over power freely to the present administration after the last general elections.

    The lawmaker said ex-President Jonathan’s sacrifice in this regard needed to be appreciated at all times and the development also worthy of emulation by the present and future Nigerian leaders for a continued existence of the nation.

    Omogbehin urged Nigerians to always pray for their leaders to lead aright.

    He commended various religious leaders across the country for their fervent prayers for the peace and unity in the country.