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  • Summit on safety, investments for Thursday

    Summit on safety, investments for Thursday

    Safety Consultants and Solution Providers Limited, one of the nation’s leading fire safety experts, has intensified efforts for this year’s summit on safety and securing business interests and investments.

    Antonia Beri, a strategist of the company, noted that this year’s edition is of more significance considering the number of fire incidents across the nation.

    Its theme is: “Securing Business Value, Investments and Assets.” It is billed for April 3, at the Black Diamond Hotel in Lekki, Lagos.

    Beri noted that the theme was carefully chosen to attract stakeholders and investors to foster meaningful conversations.

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    “Top-tier executives can engage with industry experts, thought leaders and seasoned advisors on securing business values in a rapidly evolving landscape.

    “Through keynote addresses, panel discussions, and technical workshops, attendees will gain actionable strategies to enhance financial security,” she said.

    She said the many fire incidents in the country would have been avoided if more attention had been paid to safety regulations, thus the summit was coming at a very strategic and critical time going by the safety issues the nation has been contending with.

    Those expected to speak at the summit include the Chief Executive Officer of Boulevard Hotel, Ekene Nnabuihe, General Manager and Chief Executive Officer of NAK Steel Rolling and Processing Mill Limited, Tukur Lawal, and Group Chief of HSSE and Sustainability at Dangote Group, James Adenuga, among others.

    Beri said the Lagos State Safety Commission would be involved.

    “We also have to bring in government agencies like the Lagos Fire Safety Regulatory Commission to ensure that these issues are mitigated and these accidents that have become prevalent and jeopardising the lives and safety of the people.

    “We are looking at critical stakeholders like architects, engineers and implementers. This is an urgent call to come together and find a solution to these things,” she added.

  • ‘$30b investments attracted in 17 months’

    ‘$30b investments attracted in 17 months’

    • Tinubu: reforms working
    • Customs crosses N5.07tr revenue target

    President Bola Ahmed Tinubu yesterday reappraised his administration’s reform programmes, saying they have resulted in the country attracting $30b in investments in almost 17 months.

    Tinubu also said that peace had returned to parts of the nation previously known for insurgence, violent crimes, and crude theft.

    ‘’In the significant search for Foreign Direct Investment, in less than two years in office, my administration has received over $30 billion from foreign investors. This achievement demonstrates that our policies yield positive results, making Nigeria increasingly attractive for domestic and international investors, ’’ the President said.

    Tinubu, spoke through the  National Security Adviser, Mallam Nuhu Ribadu, at a news conference by the Comptroller-General (CGCs) in  Abuja.  

    He was a guest speaker at the conference, which had the theme “Nigeria Customs Service Engaging Traditional and New Partners With Purpose.”

    He said that the security situation in the Niger Delta had improved to the extent that crude production hit  1.8 million barrels per day as of Monday. 

    He said: “People in many parts of our country today are living in peace. Go to the Niger Delta, things have changed. Today, we have gotten up to 1.8 million barrels of crude oil. We have not seen this for a long time. The  Southeast is getting to be at peace with itself and the rest of our country.” 

    Tinubu explained that on assumption of office on May 29 last year, he set out with a clear and unwavering vision to strengthen the country’s economic base and deliver positive growth and development for the benefit of all.

    He said 18 months later, the vision remains unchanged.

    Tinubu added:  “In pursuing this vision, we have built upon existing foundations while introducing necessary reforms to adapt to our evolving economic realities.

    ‘’Our focus has been on strengthening what works, refining what needs improvement, and introducing new initiatives where gaps exist.

    ‘’We recognised that specific economic policies, though useful in their time, needed to be realigned with current global economic dynamics to better serve our national interests and the well-being of our people.”

    Tinubu stated that due to the determination and unity of his cabinet,  corrupt practices are being drastically reduced.

      “Early this year, February and March, we had this crisis of the food shortage and food security, we came in as a team and within a short period of time, we stopped many businessmen that used to export food items. 

    “You know when the Naira collapsed it was a stampede taking things out of our country. There was a day within 24 hours Customs and all of us together arrested more than 500 trucks,” he said.

    He also said that his reforms have made it difficult for embezzlement of funds to happen in the Central Bank of Nigeria (CBN).

    “CBN  is clean. Nobody is making one dime there unlike up to 2023. I can also assure you that the Naira will be stabilised. Just wait and see,’’   said the President.

    On subsidy, the President reiterated that the days Nigeria was subsidising petrol used in neighbouring countries were forever gone.

    He said many oil marketers were feeding fat on the subsidy regime.

    Tinubu added that being a slush fund, subsidy accounted for the establishment of numerous petrol stations in the country. 

    He said: “The marketers are now saying they are supplying Ghana, they are supplying Cameroon.

    “Before,  it (petrol) was all coming through Nigeria.    

    “Nigeria is the only country in the world where everybody is an oil marketer. But the welfare(subsidy) they were enjoying is gone forever.

    Ribadu stated that gains of the reforms have made many world leaders either request   President Tinubu’s visit to their countries or indicate interest in paying working visits to Nigeria.

    “  Today, the whole world is looking for President Tinubu. I just came back from India, the Prime Minister is coming on the 15. The President of Germany is coming.

    “They have invited him to the G20 meeting. The President of France is looking forward too.  There are more than 30 requests for President Tinubu to visit and many are also looking forward to coming here,” the NSA said.

    Customs crosses N5.07tr annual revenue target

    The Nigeria Customs Service (NCS) yesterday said  it collected N5.97 trillion in revenue from January to November 12, 2024, surpassing its 2024 target of N5.07 trillion.

    Comptroller –General of the service  Adewale Adeniyi, who made this known,  said he  was sure that the target would be exceeded by 10 percent before   December 31.

    Adeniyi attributed the feat to enhanced stakeholder collaboration, improved processes, and modernised systems.

    He said: “   I am pleased to announce that yesterday, 12th  November 2024, the Nigeria Customs Service hit its 2024 revenue target of N 5.07 trillion, collecting   N5,079,455,088,194.38 with more than a month remaining in the fiscal year.

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    “This exceptional performance – projected to exceed our target by 10 percent – validates our partnership-driven approach to revenue collection and trade facilitation.

    “ The achievement is not merely about numbers; it demonstrates how enhanced stakeholder collaboration, improved processes, and modernized systems can deliver tangible results for our nation’s economy.”

     He added that the service has scaled up its intervention as reflected in seizures worth N28.1 billion this year.

    The CG said the NCS   intercepted   48 containers of illicit pharmaceutical products due to the declaration of a state of emergency in major ports.

    Adeniyi added: “In fulfilling our enforcement mandate, we have achieved unprecedented success in protecting both our citizens and economy. The scale of our intervention is reflected in seizures valued at   N28.1 billion and counting in 2024 alone.

    “ These seizures span critical areas of national concern – from wildlife items and arms and ammunition to narcotics and pharmaceutical products.

    ‘’An important moment in our enforcement strategy was the declaration of a state of emergency at our major ports, which led to the interception of 48 containers of illicit pharmaceutical items and narcotics, significantly disrupting the flow of potentially harmful products.” 

     The CG however lamented the rate of management team members exited the service.

    He stated that  60 percent of them left in  2022, 36 percent in 2023, and  40 percent expected to quit this year.

  • Breaking Free from Tradition: The Case for Alternative Investments

    Breaking Free from Tradition: The Case for Alternative Investments

    Introduction

    Traditional investments such as stocks, bonds, and cash have long been the cornerstone of investment portfolios. However, in today’s ever-changing market landscape, investors are increasingly seeking ways to diversify their holdings and potentially enhance returns. This has led to growing interest in alternative investments, which offer unique opportunities beyond the realm of conventional assets. For access to their educational resources and guidance on exploring investment alternatives, consider this platform as a valuable resource. Additionally, their user-friendly interface simplifies the process of navigating through a myriad of educational materials and investment options.

    The Appeal of Alternative Investments

    Alternative investments hold appeal for several reasons. Firstly, they provide diversification benefits that extend beyond traditional asset classes. While stocks and bonds are subject to market fluctuations, alternative investments such as real estate, commodities, and private equity can offer uncorrelated returns, helping to mitigate overall portfolio risk. Additionally, alternative investments have the potential to deliver higher returns compared to traditional assets, particularly in periods of economic uncertainty. Furthermore, these assets can serve as a hedge against market volatility, as their performance may not be directly tied to broader market movements.

    Types of Alternative Investments

    Alternative investments encompass a wide range of asset classes, each offering its own unique characteristics and opportunities. Real assets, including real estate and commodities, are tangible assets that have intrinsic value and can provide both income and capital appreciation. Private equity involves investing in privately held companies, offering the potential for significant returns through growth and strategic initiatives. Hedge funds employ various strategies to generate returns, such as long-short equity, global macro, and event-driven investing. Venture capital focuses on early-stage companies with high growth potential, offering the opportunity to participate in the next generation of innovative businesses. Collectibles, such as art, wine, and antiques, can also serve as alternative investments, providing diversification and the potential for appreciation over time.

    Performance and Risk Considerations

    When evaluating alternative investments, it’s essential to consider their historical performance relative to traditional assets. While alternative investments have the potential to deliver higher returns, they often come with additional risks. Liquidity can be a significant concern, as many alternative investments have longer time horizons and may require lock-up periods before investors can access their capital. Furthermore, alternative investments may be subject to regulatory constraints and require sophisticated risk management strategies to mitigate potential downsides.

    Access and Investment Structures

    Accessing alternative investments typically requires meeting certain criteria, such as being an accredited investor. Accredited investors are individuals or entities that meet specific income or net worth requirements, as defined by securities regulations. Once eligible, investors can choose between direct investment opportunities or investment funds, such as private equity funds or hedge funds. Direct investments offer the potential for greater control and customization, while investment funds provide diversification and professional management. However, it’s essential to be aware of the regulatory considerations associated with alternative investments, including Securities and Exchange Commission (SEC) regulations and other legal requirements.

    Challenges and Misconceptions

    Despite their potential benefits, alternative investments are not without challenges and misconceptions. One common misconception is that alternative investments are overly complex and lack transparency. While some alternative strategies may indeed be complex, many investments are accessible to a wide range of investors and can be easily understood with proper due diligence. Additionally, fees and expenses associated with alternative investments can be higher than those of traditional assets, impacting overall returns. Conducting thorough due diligence and research is critical when considering alternative investments, as it can help investors navigate potential pitfalls and identify opportunities for growth.

    The Future of Alternative Investments

    Looking ahead, the future of alternative investments appears promising. The alternative investment market has experienced significant growth in recent years, driven by increasing demand from institutional and individual investors alike. Advances in technology are also playing a crucial role in expanding access to alternative investments, with online platforms and fintech solutions making it easier for investors to explore these opportunities. Furthermore, as economic and market conditions continue to evolve, alternative investments are likely to play an increasingly important role in diversified investment portfolios.

    Conclusion

    In conclusion, alternative investments offer compelling opportunities for investors seeking to break free from traditional investment approaches. With their potential for diversification, higher returns, and hedging against market volatility, alternative investments can serve as valuable components of a well-rounded investment strategy. While challenges and misconceptions exist, diligent research and careful consideration can help investors navigate the complexities of alternative investments and unlock their full potential for portfolio growth. As the investment landscape continues to evolve, embracing alternative investments may prove to be a prudent decision for investors looking to stay ahead of the curve.

  • Banks seek more investments in FinTech, human capital

    Commercial banks have been advised to make more investments in financial technology (FinTech) and the relevant specialised human capital for the growth of the financial system.

    Chartered Institute of Bankers of Nigeria (CIBN), President, Uche Olowu who gave the advice at the institute’s investiture in Lagos,  said  investment in specialised human capital is, particularly, significant given the domination of technological solutions, which are taking over human jobs.

    According to a report by the McKinsey Global Institute, 60 per cent of all occupations have at least 30 per cent of activities that are technically automated. Furthermore, the report states that roughly one-fifth of the global workforce will be impacted by the adoption of Artificial Intelligence (AI) and automation and by 2030, it is estimated that robots will replace 800 million workers across the world. The World Economic Forum, further projects that by 2055, nearly half of all work in all occupations would be automated.

    Additionally, the PricewaterhouseCoopers (PwC) states that the effects of automation would not only alter the jobs available to humans but also the perceived value of these jobs.

    “It is also pertinent to mention that the increasing competition in the digitised banking environment would no longer be between banks but with non-banking institutions,’’ he said.

    FinTech and big tech firms such as Google, Amazon, Facebook and Apple are now capturing more of the banking value chain.  Furthermore, payment service banking is set to further disrupt the banking industry. For example, as at July 2019, telecoms such as MTN and Airtel Nigeria had been granted licenses by the Central Bank of Nigeria. PwC suggests that from 2025 to 2035, a market economy would readily exist without traditional banks,” he said.

    Olowu said that any bank staff who wishes to survive and thrive within the industry over the next 10 to 20 years must adapt and become relevant to the future of banking.

    “Indeed professionals and would-be banking professionals must reposition themselves for relevance in the changing environment. Such statistics as stated above confirm that in the future workplace, we may not be competing for jobs with other humans but with robots,” he said.

    Continuing, he said that in the age of digitisation it is important to stay relevant regardless of the cadre of employment you fall under. “Banking professionals must consistently keep in touch with current trends in their field of expertise and the impact such trends would have on your job role. Aspiring bankers are also expected to gain a full understanding of the emerging technical skills sought after in the industry. Constantly keeping tabs on trends and required skills would increase your value professionally and in turn your relevance,” he added.

    The Guest Speaker and Managing Director/CEO, Ecobank Nigeria, Patrick Akinwuntan, said that financial institutions are faced with growing technological changes and have had to respond through the adoption of and adaptation to potentially disruptive technologies in their business models and in their broad corporate strategies. This is all in a bid to remain relevant, increase convenience and productivity and make banking simple for individuals and businesses alike.

    He said the banking sector has undergone some changes,  will undergo added disruption. “Yesterday, we had nothing like the digital apps in use today, tomorrow we are certain of further disruption underlined by artificial intelligence, machine learning, robotics, big data analytics among others,” he said.

    “To reposition in a competitive environment, you must evaluate and understand the trends that would impact the industry now and into the future. Are these trends positive or otherwise? Are the impacting trends long or short term? Are they irreversible or not? Additionally, one must also be clear on what is relevant to the market, be clear on market outcomes and constantly evaluate these outcomes. We note that repositioning decisions hold positive or negative outcomes with regards to personal and vocational value,” he said.

  • ‘Mutual funds are better options for savings, investments’

    Cordros Capital Limited Group Managing Director (GMD) Mr. Wale Agbeyangi leads one of Nigeria’s most vibrant investment banking groups. In this interview with Capital Market Editor Taofik Salako, he speaks on the investment market outlook, wealth creation and management and other issues.

    Why do people need to trust fund managers with their funds rather than managing them themselves?

    Fund managers are licensed by the Securities & Exchange Commission (SEC) to perform investment management functions and this regulation ensures fund managers act in the best interest of their clients always. It is important to note that understanding the inherent risks involved in investing is of the utmost importance when making an investment decision and fund managers have the necessary infrastructure and expertise in identifying successful investments. Some of these infrastructures, which include portfolio analytics and risk management software, are readily not available to all individual investor.  So, the fund managers are better placed to manage the intricacies of the market and still deliver competitive returns. They relieve the investors of the challenges that come with investment decision making, thus enabling them to direct their energy to additional productive ends.

    What are the attractions of collective investment schemes compared with direct personal investing in similar assets as contained in the portfolios of the collective investment schemes?

    For many potential investors in the retail segment, the procedures as well as the financial requirements of investing in the financial market constitute stumbling blocks. Mutual funds simultaneously offer affordability and professional management. The financial capacity needed to achieve the standard portfolio diversification is clearly not within the reach of most retail investors. Investing activity requires involvement of experts in making, buy or sell decision and the average retail investor does not have the capacity to engage the entire gamut of experts to full dimension the possible risks and returns at every point in time.

    What is your assessment of the outlook for the Nigerian investment markets?

    Despite the attractive valuations of the Nigerian equity market, outlook remains negative in view of the political risk and external factors that have affected frontier and emerging markets. Nigerian equities valuation is currently attractive relative to history and other frontier market equities. Judging by the fundamental drivers of equities performance – the economy, currency condition, and corporate earnings – we think the local market’s discount valuation to frontier market peers is not justified, but will likely remain so for the rest of 2018. This, in our view, presents opportunity for strong foreign portfolio investors (FPI) consideration of the local risk assets over most of frontier market peers, in the event that the external concerns causing uneasiness across emerging and frontier markets settle one year from now. We believe sell-offs over the last quarter of the year will enhance the attractiveness of equities, and will expand opportunity for new highs in 2019, amidst continued favourable currency condition, supportive macro-environment, and improving earnings.

    In the fixed income market, we expect current buoyant liquidity to persist on the back of inflows from maturing Open Market Operations (OMO) bills, bond coupon payments, and the budgetary allocations to state and local governments. Despite market liquidity, our expectation of higher yields in the fixed income market in the near term is anchored on domestic monetary policy direction, capital flight amid higher yields in safe haven assets, political uncertainty stemming from the upcoming general elections, and government borrowing to fund the 2018 budget. We are of the opinion that the Monetary Policy Committee (MPC) will increasingly focus on managing currency risks by issuing securities at higher yields. They will, however, continue to use Open Market Operations (OMO) to control money supply versus altering the Monetary Policy Rate (MPR) in our view.

    What do you think should be done by all stakeholders-government, regulators, operators to deepen domestic savings and investments?

    We need a collective effort from both the regulators and the operators. The Securities & Exchange Commission has done a lot in this regard as the industry is a lot more regulated and the investing publics are better informed about the opportunities that mutual funds offer. However, we  think both the operators and regulators can still do a lot more with regards to financial literacy and adequate wealth management strategies. Operators also need to come out with more investment solutions that cater to the various needs of investors. Government can also look at providing incentives and enabling environment that encourage savings and investments.

    What are the challenges being faced by assets managers?

    One of the major challenges is the issue of adequate capitalisation. You need adequate capital to be able to meet the requirements for success in the industry. The industry is highly driven by technology and with specialised skill requirement. The need for huge investments in technology and people to achieve the required scale and low-cost positioning could be high and thus a significant barrier to entry.

    Also, adequate capital is needed for a robust research platform, capacity building and information and communication technology (ICT). Besides, in order to ensure security and safety of funds under management, asset management firms must build strong internal capacity in investment and risk management frameworks. We also face a major challenge in the area of effective distribution channels at minimal cost. You can also talk about paucity of investment options, which limits the spread and horizon of asset managers.

    How do you forestall conflict of interest in managing mutual fund, especially when your related party is involved in an investment under consideration?

    At the moment, there is no regulation that disallows engaging the services of an issuing house that is a sister company when coming out with a public offer. However, in engaging professional parties for an offer, we have selection criteria that we consider. Two of the criteria include professional fee and track record in similar transaction. However, in the actual fund management business, we ensure that trades are done through several brokers and not limited to our securities business.

    Given the propensity of the average retail Nigerian investor to direct investing, what do you think should be done to encourage the culture of collective investment scheme?

    The low level of financial and wealth planning education is a major drawback. The people lack proper understanding of the importance of savings and the different vehicles tailored to an individuals’ risk tolerance. Educating the populace on the need to start investing at an early stage will encourage increased culture of collective investment scheme. Operators and regulators should organise seminars and workshops focused on financial literacy. Also, while the regulators have done a lot with regards to sanitising the industry, they should also ensure that operators of fraudulent schemes are brought to book.

    Long-term investments rest on the assurance that the asset management firm will sustain over the long-term to grow and reward the investor, what assurance do investors in mutual funds have in the event of insolvency or corporate crisis involving the asset management firm?  

    Firstly, mutual funds in Nigeria are registered with the Securities and Exchange Commission (SEC) and all Fund Managers are required to be registered and regulated by the SEC. The regulatory oversight ensures the safety of investors’ funds and ensures that the Fund Managers are transparent with the methods with which investors’ funds are utilised. In addition, all mutual funds are required to employ the services of a Trustee. The Trustee essentially represents the investors and their interests. The trustee’s role is to monitor the fund manager, making sure that the funds under their management are being managed in the best interest of the investors.

    Also, mutual funds require that monies deposited by investors as well as any assets purchased with the money must be held by a Custodian. A Custodian is an independent company, solely tasked with protecting customers’ funds and investment by maintaining the safety and custody of all assets of its clients.

    So, in case of insolvency or corporate crisis involving the asset management company, the funds under management would be transferred to another fund manager by the regulators, in this case – Securities & Exchange Commission, since the assets reside with the Custodian and not the Fund Manager.

    What are the competitive advantages of Cordros Asset Management Limited (CAML) compared with others? Why should people entrust their savings under your management?

    Our people are our foremost competitive advantage. We have a committed and visionary board with a highly skilled and competent workforce. Our investment process and strong research-based investment approach ensure competitive investment performance. The Cordros brand has grown significantly in the mutual fund space and we believe having a strong brand, backed by a track record of performance, is critical to retaining market share and achieving future profitability. Also, CAML has built a strong internal capacity in investment and risk management and leverages technology in achieving product distribution.

    What makes the Cordros Milestone Funds unique and competitive?

    With the Cordros Milestone Fund, the decision on how to invest for milestone goals becomes less difficult. It is structured in such a way that individuals can invest in the Fund closest to the time when they intend utilising the fund. The Cordros Milestone Fund invests with an initial mix of securities that seek capital growth and gradually shift to those that seek capital preservation and income as the target date approaches.

    The changing asset allocation according to the pre-determined path, the glide path, is the key feature of the milestone fund and is a real advantage over the do-it-yourself approach towards saving for future goal. The time horizon till the target date determines the appropriate mix of investments over the life of the fund. Historical records show that while stocks and other growth assets are volatile in the short term, they usually outperform income assets over a long-term horizon and provide an inflation hedging benefit.

    What are the unique advantages of Cordros Money Market Fund?

    Cordros Money Market Fund’s competitive advantage lies in the proven expertise of our people, processes and performance. We have skilled and dedicated financial professionals that manage the affairs of the Fund. In terms of processes, we try to ensure that client’s redemption is paid within 24 to 48 hours. Also, we always ensure that quarterly dividends are paid within the first two working days of a new quarter. With performance, the fund has had one of the best performances in terms of yield in comparison to other money market mutual funds and yield on the comparative benchmark in the last two years.

    Generally, what are the track records of returns of assets under your management compared with average returns in the market?

    We have track records of outperforming the average benchmark indices and we have done very well to preserve our clients’ wealth, irrespective of the challenges in the polity. Since inception of Cordros Money Market Fund in October 2016, the fund has constantly maintained attractive yields in comparison to the benchmark yield. In 2017, average yield on the fund was 18.89 per  cent while average yield on the 91-day treasury bill was 16.66 per  cent. As at the end of September 2018, average yield on the Fund was 13.78 per  cent while average yield on the 91-day bill was 13.08 per cent.

  • Foreign portfolio investments decline by 65%

    Foreign portfolio investments in the stock market have declined by about 65 per cent as political risks and tough macroeconomic outlook continued to moderate investors’ appetite for equities.

    Latest report on foreign portfolio investments (FPI) showed that transactions by foreign investors dropped by N66.24 billion or 64.68 per cent to N36.17 billion in July 2018 compared with N102.41 billion recorded in June 2018.

    Trading data on domestic and foreign portfolio investments (FPI) at the Nigerian Stock Exchange (NSE) obtained by The Nation indicated a slump in foreign transactions, which dragged down the overall market turnover by 22.2 per cent. However, investors increased their turnover by 28.7 per cent.

    The FPI report used two key indicators-inflow and outflow, to gauge foreign investors’mood and participation in the stock market as a barometer for the economy. Foreign portfolio investment outflow includes sales transactions or liquidation of equity portfolio investments through the stock market while inflow includes purchase transactions on the NSE. The NSE report is generally regarded as a credible gauge of foreign portfolio investments in Nigeria as it coordinates data from nearly all active investment bankers and stockbrokers.

    However, for the first time in three months, FPI recorded positive net inflow with more inflow than outflow. Foreign inflow stood at N19.83 billion as against outflow of N16.34 billion in July 2018 as against inflow of N47.96 billion and outflow of N54.45 billion in June 2018.

    Total transactions at the NSE reduced from N187.78 billion recorded in June 2018 to N146.07 billion in July 2018. Domestic investors accounted for 50.48 per cent of total turnover in July 2018 as total domestic transactions increased by 28.72 per cent from N85.38 billion in June 2018 to N109.9 billion in July 2018. Domestic transactions were largely driven by the 55.48 per cent increase in the retail domestic participation which increased from N29.12 billion in June 2018 to N65.42 billion in July.

    Total transactions for the seven-month period ended July 2018 increased by 54.38 per cent from N1.129 trillion recorded in 2017 to N1.743 trillion in the year.

    Foreign portfolio investors were the dominant group in the equities market in first half of this year with about N800 billion. Foreign investors’ transactions accounted for N799.7 billion within the six-month period ended June 30, 2018, representing an increase of 85.9 per cent on N430.23 billion FPI trading recorded in the comparable period of 2017.

    Foreign investors had marginally outpaced Nigerian investors with 50.07 per cent of total value of transactions in first half of 2018 compared with the first half of 2017 when investors accounted for 54 per cent of total value of transactions.

    Domestic investors traded N797.47 billion worth of equities during the first half of 2018, 57.9 per cent increase on N505.03 billion traded in comparable period of 2017. Altogether, total transactions at the equities market rose from N935.26 billion in the first half of 2017 to N1.597 trillion in first half of 2018.

    The report, however, showed a negative trend in FPI trading with more outflows than inflows. Net FPI deficit stood at –N38.41 billion in first half of 2018 compared with net positive position of N1.71 billion recorded in the first half of 2017. Foreign inflows and outflows stood at N380.65 billion and N419.06 billion in first half 2018 compared with inflows and outflows of N215.97 billion and N214.26 billion respectively in the first half of 2017.

    Month-on-month analysis showed that FPI transactions totalled N102.41 billion in June, consisting of inflows of N47.96 billion and outflows of N54.45 billion. Total transactions at the equities market had dropped from N318.27 billion in May to N187.78 billion in June.

    The report indicated that foreign investors’ outflows from the equities market increased by 124.7 per cent to about N131 billion in May as against N58.25 billion in April. However, there was a 3.45 per cent decrease in foreign inflows to N62.06 billion in May as against N64.28 billion recorded in April.

    Total transactions at the equities market increased by 49.96 per cent from N212.23 billion recorded in April to N318.27 billion in May.

    A five-month report showed that the cumulative transactions from January to May increased by 97.13 per cent to N1.409 trillion in 2018 compared with N714.99 billion recorded in the same period of 2017.

    The latest report stated that the institutional composition of the domestic market increased by 97.87 per cent from N46.51 billion in April to N92.03 billion in May. The retail composition declined by 22.92 per cent from N43.19 billion in April to N33.29 billion in May.

    In April, there was a positive net foreign inflow of N6.03 billion in April 2018 and N36.91 billion for the four-month period ended April 2018. In the comparable period ended April 2017, Nigerian equities had suffered net FPI deficit of N79.73 billion. Further analysis indicated positive net foreign inflow of N30.88 billion in first quarter 2018 compared with a negative net foreign investment position of N86.36 billion in comparable first quarter of 2017.

    Month-on-month analysis had shown a positive trend in net foreign investment inflow throughout the first quarter 2018. Foreign inflow totalled N91.75 billion in January 2018 as against outflow of N74.64 billion. Foreign inflow and outflow stood at N44.89 billion and N38.33 billion respectively in February 2018 while foreign inflow and outflow recovered to N69.71 billion and N62.50 billion in March 2018.

    Total transactions at the equities market in the first quarter of 2018 had stood at N878.97 billion compared with N454.48 billion recorded in first quarter 2017. Nigerian domestic investors had accounted for N497.15 billion in first quarter 2018 as against N243.42 billion in comparable period of 2017.

    FSDH, however, noted that despite strong growth in the information and communication and the construction sectors, the two sectors can achieve higher growth rates given the enormous potentials inherent in these sectors.

    FSDH pointed out that observed contraction in the real estate sector can be reversed if government at all levels partners with private sector operators to provide affordable housing units for Nigerians.

  • Economy: Automobile investments to the rescue

    To the Federal Government, turning the economy around is a task that must be accomplished. It has adopted an automotive policy that will restore assembly plants, develop local content and reduce pressure on the balance of payment. Edo State Government has keyed into the diversification strategy by sealing a $500 million auto assembly plant deal with Chinese investors. COLLINS NWEZE writes on the deal’s expected impact on the economy.

    WHERE is global focus on the automobile industry. The sector is being watched with keen interest as an engine of growth with capacity to generate employment opportunities.

    Besides, it is viewed as a sector that can encourage the growth of other satellite industries, enhance technology transfer and serve as catalyst for the expansion of the economy. And the Federal Government is not leaving anything to chance. It is beaming the searchlight on the sector as part of ways to diversify the economy from oil.

    As a matter of fact, the government plans to revamp the automobile policy and set up auto parks to promote the sector, the Minister of Industry, Trade & Investment, Okechukwu Enelamah has disclosed.

    Speaking at the Nigeria-German Business Forum in Lagos, the minister said the government will also grant fiscal incentives, including a five-year tax holiday for pioneer foreign businesses.

    “Revamping the auto policy is in the works. The auto-policy is being finanalised and signed into law,” he said, adding that the turnaround in auto-industry will happen very soon.

    According to the minister, the government will continue to support foreign companies operating in Nigeria through fiscal incentives.

    Many states are already helping the government to explore business and economic opportunities in the automobile industry.

    Edo Automotive Industry Investment Forum

    The administration of Governor Godwin Obaseki recently organised the Edo Automotive Industry Investment Forum as part of efforts to link the vast economic opportunities in the global auto industry.

    The forum was in line with the state’s economic diversification strategy, in addition to the $500 million auto assembly plant deal between Edo State Government and Chinese investors.

    At the forum, the first of its kind in Benin City, were 36 chief executive officers of leading global auto brands and component suppliers. They include representatives of BMW, NISSAN, Toyota, Volkswagen, Ford, Bosch, Jaguar, and Deloitte, a consulting company as well as Uber.

    Others were representatives of the global auto makers, including: Graffiti SA, Nissan, Toyota, Deloitte, Gauteng Infrastructure Financing Agency (GIFA), Automotive Industry Development Center, DataDot Technology, Standard Bank of South Africa, International Finance Corporation and Afropulse Group.

    The meeting between the Edo State government and chief executives of German, Japanese, American, British and other European car manufacturers, was premised on the emerging investor-friendly climate in the state and how the companies can leverage on the Benin Auto Park’s proximity to the Benin Industrial Park.

    The forum offered the opportunity to unveil the state government’s agenda for the auto sector and the opportunities for investors. The prospective investors had the opportunity to visit the auto trading site on Sapele Road and the future trading site at the Industrial Park, also on Sapele Road.

    It also featured a session on the state government’s blueprint for the automotive sector which includes job creation for Edo people, the local sourcing of car components amid an environment of high exchange rate regime and volatility, which makes local sourcing of components cost-effective.

    In his presentation, Chairman and Managing Director of Volkswagen South Africa, Thomas Scheafer, said: “We have the mandate of our parent companies to be here. What we are trying to do in Nigeria is to reach out in a brotherly fashion and say to you, ‘come on, let’s get this done.’ For years, we have been discussing with the government. But, now, we are committed to finding out ways on how to get Nigeria to where it should be and play its role on the continent.

    “Edo State will be the nucleus for us as Nigeria as a large automotive industry that is worth exploring. Nigeria is good for at least two million cars a year. That will multiply the jobs on the continent. So where does it start?

    Speaking on Governor Obaseki’s commitment to driving the state’s diversification as a major pull, he said: “We invested in Rwanda, one of the smallest countries on the continent. Why? Because they have great policies and because they wanted to create employment. In Rwanda, we put our money where our mouth is. We are ready to invest in Nigeria and today, we are happy with what we have seen in Edo State and the commitment of the governor.”

    Director, Sales/Operations, Nissan South Africa, Jim Dando, said the automotive industry was excited about the wave of diversification in Nigeria, particularly in the automotive sector, noting that it was great news that Edo State government was taking the lead.

    He said: “We have been discussing the industrialisation of Nigeria for some time now. With the previous government, we were able to create an industrial and automotive policy. What we need to do now is to put the automotive policy in place and drive it with states like Edo.”

    To the Director-General of the National Automotive Design and Development Council, Jelani Aliyu, the Benin Auto Park has at least two scenarios for growth, “with this support by the state government, I see the state becoming a hotbed for automobile sales. The first instance will see the state grow from supplying used cars to brand new cars. Also, we see the influx of automobile component makers, who are also here.”

    Obaseki told investors that the state has a thriving automotive market that services the Niger Delta market, parts of the North and even South Western Nigeria, as “Benin City boasts of a stock of not less than half a million cars. We want the companies to work within and even go beyond what the national automotive council provides.

    According to Aliyu, across the globe, the automotive industry plays both strategic and catalytic role in economic development with its contribution to the Gross Domestic Products (GDP).

    For instance in South Africa, the auto industry alone contributes seven per cent of GDP as it is considered as critical component of the economy where it generates 350,000 jobs translating as the second largest employer of labour. The industry also boasts of a market of 600,000 new cars with zero importation with 12 per cent of exports.

    In Egypt, it employs directly and indirectly, 600,000 people in and attracted an investment of over $5 billion. It is the second source of foreign exchange after the Suez Canal.

    The auto industry plays extensive role in driving the growth and development of Small, Medium and Micro-Enterprises (MSMEs) with respect to automotive parts, components and services and the attendant job creation. The Benin Auto Park will contribute to the plan by the Obaseki-led administration to support the growth of over 20, 000 micro, small and medium enterprises in addition to the creation of over 50, 000 associated jobs in the next four years.

    During a visit to auto dealers on the Benin-Sapele Highway by participants at the forum, a dealer with Idris and Sons Motors told the delegation that the corridor hosts at least 100 dealers, with thousands of vehicles in their inventory.

    Road to industrilisation

    Building an industrialised society demands a great deal of work. Aside the need for strong, supportive structures that drive innovation and mechanisation of process, there is also the unyielding vision of a leader to drive the process and ensure that in the long run, the vision is sustained.

    Hence, many industrial societies are sustained by formidable structures and institutions that ensure not only ample supply of human resources but also drive innovation among the populace.

    So, in a case where the focus is to ramp up manufacturing, it is only logical to groom the manpower, attract investors, and create the enabling environment for everyone to work harmoniously with the right policy framework.

    In Edo, Obaseki has his eyes on the ball. With a daunting vision to recast the state as an industrial hub in Nigeria, he is pulling every available string to attract investors, build local capacity and create wealth for the state and its people.

    The governor’s vision for driving industrial growth and development revolves around the belief that local capacity development is essential. This conviction informed his prioritisation of Technical and Vocational Education and Training (TVET), which according to him, is the bedrock of the vision to transform Edo into an industrial hub.

    To achieve this, the government under his watch, has embarked on the construction of workshops, classrooms, laboratories, resource centres and purchase of top-of-the-range equipment for the Government Science and Technical College (GSTC), in Benin City, formerly known as Benin Technical College.

    The reconstruction work will equip the college with requisite equipment for world-class technical and vocational education and training. The redesigning of the college is aimed at developing local capacity for the companies that are setting up in the state.

    As part of the state’s industrialisation drive, the rehabilitation of the college will provide a facility for model technical education to produce critical technical manpower for industries making in-roads into the state, in the wake of a spike in investments by manufacturing companies, among others.

    As part of the reconstruction work, nine existing buildings will be refurbished, while four classroom blocks, two workshops, a specialist training centre as well as general site for works and services, will be constructed.

    The college will be fitted with equipment that would enable students obtain skills and knowledge in various aspects of vocational education to enable them act as drivers of the industrialisation policy in the state in line with global trends.

     

    •To be Continued

  • Nigeria’s economic outlook bullish, needs more investments, says Renaissance Capital

    Nigeria’s economy has the potential to double its current performance within the next 12 months, but the government needs to support economic growth with more investments in basic infrastructure, especially electricity.

    In its latest primary macro outlook for frontier and emerging markets, Global Chief Economist, Renaissance Capital, Charles Robertson, said improving macro-economic fundamentals place Nigeria on a vantage point to significantly grow its economic performance in the period ahead.

    According to him, with good growth, currency stability and falling interest rates, Nigeria is an attractive frontier investment market.

    “We still think emerging markets (EM) and frontier markets (FM) are less than half-way through a structural bull market. The big shift in our thinking is on the oil exporters. Middle East and North Africa (MENA) is looking much healthier, from Egypt to the UAE in EM. We think Russia and SA can beat IMF GDP forecasts in 2018/2019. Nigeria is a big beneficiary in Africa,” he said in the report.

    The report, however, underscored the need for Nigeria and other African countries to invest substantially in infrastructural development to unlock growth.

    According to the report, with investment of about a quarter of Gross Domestic Product (GDP) in infrastructure, especially electricity, Nigeria can re-enact sustainable high growth that had been achieved by countries such as Bangladesh and Ethiopia.

    “But we need to see electricity supply at least double or treble per capita in East Africa and the rest of West Africa before industrialisation is realistic. Our base case is that countries that can’t industrialise or shift from subsistence agriculture into higher valued-added services can’t grow much above four to five per cent or one to two per cent in per capita terms,” Renaissance Capital stated.

    The report noted that “Africa is on the rise again, but to really take off, needs more investment and electricity in many of the countries”.

    The report pointed out that while there has been dramatic improvement in adult literacy in Sub-Saharan Africa (SSA), there are still acute shortfalls on electricity supply in East African and most of West African countries. Renaissance Capital holds that countries need between 70 to 80 per cent adult literacy to grow fast. The global investment banking firm also holds that countries must also have at least 300 to 500 kWh of electricity per capita to grow sustainably at a fast rate. To put that into perspective, one LCD TV requires about 240 kWh pa.

    While most EM countries meet both targets, including for the first time this decade Egypt and India, the situation is far more mixed in FM. Argentina and Vietnam meet the targets along with the countries in Emerging Europe. Morocco and Tunisia have joined them recently and so has Sri Lanka.

    “There appears to be one exception to this though. If you invest 25 per cent of GDP or more, then Bangladesh, Ethiopia and others demonstrate sustainable high growth can still happen. This is good news for Tanzania and perhaps Uganda but sends a clear message to Kenya, Nigeria, Egypt and Pakistan about their urgent need for electricity and investment,” Renaissance Capital stated.

    The report pointed out that sovereign outlook for the continent is positive, noting that the credit rating downgrade cycle in Africa has basically finished; and sovereign upgrades in 2019 is the story to start thinking about.

  • Kachikwu: Nigeria needs $100b oil investments

    Kachikwu: Nigeria needs $100b oil investments

    • Fuel scarcity ‘ll continue

    The Minister of State, Petroleum Resources, Dr. Ibe Kachikwu yesterday told Vice President Yemi Osibanjo that the Federal Government is expecting over $40billion investments in the oil and gas sector in the next five years. He said about $100billion is needed to revive the sector to contribute to the development of the nation.

    He urged the government to quickly make some policies decisions to review the issue of cost of production, address Niger Delta and security issues.

    He said one or two of the International Oil Companies (IOCs) have been able to attain a production cost of $15 per barrel, stressing that “we need to get everybody else to buy into that model.”

    Three of the modular refineries, he said, are beginning to crystallise and will hit 10 this year and by the end of next year, real time delivery on refining will be in place to reduce the forx spent on fuel importation.

    He spoke at the closing ceremony and the media session of the first Nigerian International Petroleum Summit in Abuja.

    Responding, Osibanjo said many countries in Asia and other continents are developing alternatives to oil while some African countries are just joining the league of producers.

    He said the volatility of the market is a challenge that requires synergy among oil producing countries, adding that “for us in Africa, we have to make out the best to overcome these new resources before it is too late. Together, we can surmmount our hurdles faster than if we want to do it individually.”

    Osinbajo assured participants that the Nigerian experiences can be useful to African countries that have just joined the league of oil producers.

    He said the summit provided opportunities for collaboration among Africans for the encouragement of local content development.

    Although the Nigerian National Petroleum Corporation (NNPC) has been working hard to address the situation, the minister said there was no hope that the fuel scarcity situation in the country would change completely.

    “I don’t think (the scarcity has gone). I don’t think so because there are some importation that are taking going on and there are reserves that are being rebuilt. But I think what they have done is to manage some logistic angle somewhere there.”

    Kachikwu however expressed hope that as March approaches, products are going to become cheaper because of the summer issue. Some marketers who have efficiency issue might begin to bring in new cargoes to supplement.

    Kachikwu however explained that the $100billion should have come into the sector from gas infrastructure, gas flare-out investment and replacement of existing dilapidated pipelines. But what the country is looking forward to in the next five years included the “three very key projects Engina 200,000barrel per day, contributing $15billion, the Bonga about $10billion, the Zabazaba about $12billion. We have investments that are coming into the downstream refineries which is $2.5billion and $3billion.  We have the AK pipeline that is about $3billion. If you add up all of that, it is in excess of $40billion.

    “My point is that $40billion isn’t enough. We need to be targeting about $100billion investments in the sector to revive it for its maximum contribution.  That target is mostly from gas plant, infrastructure, gas flare out recycle investment which take a lot of money and the replacement of existing dilapidated pipelines.”

  • Workers: bad roads threaten $10b investments

    Workers: bad roads threaten $10b investments

    How can Apapa roads be restored? Hand them over to the  Nigerian Ports Authority (NPA), say Maritime Workers Union of Nigeria (MWUN), terminal operators, residents truck drivers and others.

    They said the bridges leading to the ports from Western Avenue, were under threat because of the huge number of trucks parked on them daily.

    Over $10 billion investments at the Apapa and Tin Can Island ports, they said, are threatened by bad roads.

    The roads, according to them, needed urgent attention to protect the bridges, save lives and reduce revenue losses at the ports.

    MWUN President General Comrade Adewale Adeyanju lamented that a large number of dockwor-kers were facing redundancy because vessels no longer  found the ports attractive for business.

    He said if the situation continued, the union would withdraw its services from the ports.

    “We have given an ultimatum, but it is not about ultimatum anymore, it is about total show down. If you go inside the port now, you can hardly see two vessels there, at ENL where we normally have up to six vessels, it is only one that is there, so there is diversion of vessels to other countries close to us and this is affecting our members, it is equally affecting the revenue drive of the terminal operators and the NPA

    “When the ships are not coming, the management may think otherwise, and to stop this, we have decided to come out and cry to the whole world that enough is enough

    “If the rain should start any moment from now, you will not see any vessel again in the port,” he warned.

    A senior Customs officer who pleaded not to be named, said it was difficult to evacuate cargoes from the ports, adding that this is reflecting on the revenue of many agencies like NPA.

    A senior official of a terminal, said: “Your paper reported last week that terminal operators owed the Nigerian Ports Authority several billions of naira, but you have forgotten that our own investments, which are over $10 billion, are in danger because of the perennial gridlock on Apapa roads.

    “Part of the agreement we had with the Federal Government before the ports were concessioned to us was that the government would fix the infrastructure and we shall invest in the port by bringing in modern equipment, which we have done but the government is yet to fulfil its own part and that is affecting our business and our returns to the government.

    “As sensitive and people-oriented government, there is need for President Buhari and the Federal Executive Council to direct the Minister of Works, Power and Housing Mr Babatunde  Fashola to hand over the roads  to NPA and end cargo divert to ports of neighbouring countries because of the gridlock on the road,” he said.

    He said many operators had abandoned Apapa, Mile 2 and Ijora roads, going to the ports via water.

    “But that has increased the vehicular traffic on the Third Mainland Bridge because we would first drive to CMS before taking boats to Apapa.

    “The implication of that to the economy of Lagos State is high because many truck drivers have abandoned the Oshodi/Apapa Express road and are now using the Western Avenue and the bridges along this corridor are suffering and if we allow one of them to collapse, the cost of re-fixing it would be huge for the government and higher than the cost of fixing the roads currently’’.

    Investigation showed that, the gridlock on the road has become endemic because of pot holes.

    Adeyanju said the state of the roads was affecting cargo dwell time and ports revenue.

    The National Public Relations Officer (PRO) of the Association of Nigerian Licensed Customs Agents (ANLCA), Dr Kayode Farinto, said ships’ waiting and turnaround time and cargo dwelling time were affected by the deplorable roads.

    “Fashola must be directed to hand over the roads to NPA. By the time that is done, our groanings and the hardship we are facing on these roads would be over. This is a government of the people and we have no doubt that it will listen to our hopes and aspirations. At the moment, NPA is handicapped because the roads fall within the purview of the Federal Ministry of Works, but I am sure that the government is a listening government.”