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  • Stimulating savings, investments

    Stimulating savings, investments

    Nigeria ranks within the lowest rung of global savings and investments. Ironically, Nigeria stands high on the global list of infrastructural deficit and financing gap. Savings and investments are at the core of Nigeria’s ambitious Economic Recovery and Growth Plan (ERGP). In this report, Capital Market Editor Taofik Salako examines the challenges and opportunities to boost the Nigerian capital formation

    The maiden offer of the Federal Government of Nigeria Savings Bond (FGNSB) made two salutary effects on the economy. The epochal offering opened up opportunities for the retail and sundry minority investors and savers to participate in sovereign issue.

    With the minimum subscription fixed at N5, 000 and a double-digit annual coupon or interest of 13.1 per cent payable quarterly on the two-year bond, it was perhaps the sweetest offer for that category. But it also brought home the low level of savings and investments in the economy.

    Despite the country’s population of about 170 million, the maiden FGNSB only received a nationwide total subscription of 2,577 bids with total size of N2.067 billion. It was a commendable start but it unearthed the underlying cause of Nigeria’s economic instability and susceptibility-paucity of savings and investments. The results aligned with other facts.

    The United States Central Intelligence Agency (CIA) estimated Nigeria’s Gross National Savings (GNS) at 13.10 per cent, 131st position among 180 countries tracked by the US agency. Nigeria occupied the lowest rank within the emerging countries bloc of Brazil, Russia, India, China, South Africa and Nigeria (BRICSN). China ranked atop the global chart with 46 per cent while India ranked third with 30 per cent. Brazil and South Africa had 17 per cent and 16 per cent.

    Nigeria’s Economic Recovery and Growth Plan (ERGP) also lent credence to this, with the GNS indicated at 11.29 per cent in 2016. The GNS is the difference between the Gross National Disposable Income (GNDI) and Total Consumption (C) and it serves as underlining benchmark to determining the national savings and investment culture, wealth creation and standards of living.

    GNDI aggregates the gross disposable incomes of all resident institutional sectors. The GNS comprises of personal savings, business savings and government savings with the exception of foreign savings.  The ERGP indicated GNDI at 101.73 per cent of the Gross Domestic Products (GDP) in 2016 while Total Consumption was put at 90.44 per cent. Gross National Income (GNI) was estimated at 97.48 per cent. The GNS is a vivid illustrator and it tells the stories of the economy, culture and habits. The higher the GNS, the higher the savings culture and vice versa. A relatively high and steady GNS contributes to national capital formation and development. The depth of domestic capital formation often determines the terms, access and flexibility of foreign capital.

     

    Missing links

     

    The low level of savings and investments also reflects in the nature and scope of participation in the capital market. Less than four per cent of the Nigerian population are investors in the nation’s capital market and only about six per cent of the domestic investors participate in mutual funds, otherwise known as collective investment schemes (CIS).

    These compare with an average of 15 to 20 per cent among several emerging economies. The absence of a large domestic investors’ base has been major factor in the long-running depression of the stock market. With the slowdown in foreign portfolio investments, Nigerian equities have been under intense sell pressure, forcing most companies into significant undervaluation.

    Reports on capital importation by the National Bureau of Statistics (NBS) and foreign portfolio investments (FPIs) by the Nigerian Stock Exchange (NSE) underlined the linkage and susceptibility of the capital market to the volatile fluctuations of foreign investors.

    According to NBS, Capital importation declined by 46.9 per cent to $5.12 billion in 2016 as against $9.6 billion in 2015, the lowest value since the NBS started tracking the inflow in 2007.

    FPI, which directly relates to the stock market, recorded the highest decline of 69.8 per cent while foreign direct investment (FDI) dropped by 27.8 per cent. A full-year foreign portfolio investment (FPI) report by the NSE showed that total foreign transactions decreased by 49.51 per cent from N1.03 trillion in 2015 to N517.55 billion in 2016.

    It was the lowest in six years and it was the first time that domestic transactions would outpace foreign transactions since 2011. The drag-on effect also saw domestic transactions decreasing by 28.02 per cent from N880.56 billion in 2015 to N633.82 in 2016.

    Altogether, total transactions at the stock market declined by 39.58 per cent from N1.91 trillion in 2015 to N1.15 trillion in 2016. The drag-on effect of the declining FPIs has continued to sustain a grueling depression since 2014, in spite of the near-consensus on the undervaluation of most stocks at the market. The stock market has been on a losing streak since 2014. Investors lost N1.75 trillion in 2014 and followed this with another loss of N1.63 trillion in 2015. Against the general expectation that political transition and new government would quicken a rebound, equities also closed 2016 with a net capital loss of N604 billion. Aggregate market value of all quoted equities on the NSE closed 2016 at N9.247 trillion as against N13.226 trillion recorded at the start of trading in 2014, representing a net capital loss of N3.98 trillion.

    “It has been established that there is significant relationship between savings, investments and economic growth. Savings is known in economic parlance to equal investments. Savings is also known as the amount left over when the cost of a person’s consumer expenditure is subtracted from the amount of disposable income that he or she earns in a given period of time. Savings is also the portion of disposable income not spent on consumption of consumer goods but accumulated or invested.

    Investment on the other hand is the purchase of a financial product or other items of value with an expectation of favourable returns in the anticipated future,” economist and head of research and investment advisory, SCM Capital Markets Limited, Sewa Wusu, noted.

     

    Behind the rot

     

    Most pundits said savings and investments reflect the macroeconomic environment and the deliberate policies of the government. AG Leventis (Nigeria) Plc Chairman, Mr. Ahmed Mantey, said a poor national economic performance would negatively impact savings and investments as households grapple to meet personal needs.

    “Worsening rates of unemployment and underemployment mean reduced household income and this puts a strain on disposable income to pay for goods and services,” Mantey noted on the reasons for the decline in consumer demand last year.

    Analysts at FSDH Merchant Bank also agreed on the macroeconomic influence on savings and investments. “The current high unemployment level in the country coupled with a drop in disposable income and the erosion of the purchasing power of Nigerians, have all contributed to low personal savings,” FSDH stated.

    FSDH noted that corporate wealth creation, which oils the wheels of personal savings and investments, has also been adversely affected by the harsh business environment that resulted from weak infrastructure, inadequate foreign exchange and rising cost of production, which have led to increased cost of running business in Nigeria and reduction in business profitability and retained earnings.

    Wusu stressed the importance of capital formation to national development. “Countries that had made sustained accumulation of capital investments as a result of savings have been able to achieve higher level of sustained economic growth. Nigeria has not been able to achieve that feat due to absence of laudable national savings policy. We are practically a consumption driven economy. This explains why we have failed in terms of developments in all spheres of critical infrastructure including education and health. The accumulation of fixed capital can only be possible through sufficient savings. We are constrained as a country by inadequate savings and investments,” Wusu said.

    According to him, savings create capital formation, which leads to technical innovation and progress to accelerate productivity, thereby increasing national output or economic growth.

    He added that savings would help to solve the problems of unemployment and balance of payment and eventually make the economy free from the burden of foreign debts.

    “The vicious circles of poverty in our country can be broken through sufficient savings, our slow rate of development as a country is attributed to the low levels of national savings that constraint our capacity to invest in capital formation,” Wusu pointed out.

     

    Ambitious targets

     

    The ERGP however expects Nigeria’s average savings to double within the next four years. The economic blueprint projects that GNI will rise steadily from 11.29 per cent in 2016 to 12.71 per cent in 2017 and consecutively to 15.53 per cent, 18.19 per cent and 21.31 per cent in 2018, 2019 and 2020.

    This projection also runs alongside that the economic growth would more than triple over the period. Real GDP growth is expected to recover from a contraction of -1.54 per cent in 2016 to a growth of 2.19 per cent in 2017 and subsequently to 4.80 per cent, 4.50 per cent and 7.00 per cent in 2018, 2019 and 2020.

    Private investment is also expected to grow steadily over the period. Private investment is projected to dip slightly from 10.42 per cent in 2016 to 10.20 per cent in 2017 but thereafter rise consecutively to 11.19 per cent in 2018, 12.68 per cent in 2019 and 14.58 per cent in 2020.

    Most pundits said while the targets are achievable much depend on government’s policies and coordination of the macroeconomic forces.

    “I think the government has a vital role to play in boosting private or national saving through crafting the required policies that raise people out of poverty. The level of income for the common man who is not educated is still very small to induce any savings. This explains why many people in our country are still under the poverty trap due to weak earnings capacity. So, the bulk of these people cannot save. What they think about is consumption and how to fend for their poor families. I think there is need for government to set out a national agenda or craft a policy on national savings to foster domestic savings that will help to increase the level of economic growth in this country. Our gross national savings at 11.29 per cent is too low compared to other developing countries of the world,” Wusu said.

    Securities and Exchange Commission (SEC) Director-General, Mr. Mounir Gwarzo, said the adoption of the National Savings Strategy Scheme, which is part of the Capital Market Master Plan, would boost savings and investments.  He noted the need for stakeholders in the financial system to increase campaigns for financial literacy.

    Gwarzo pointed out that SEC has been working with other stakeholders to develop early education programmes on capital market for pupils. SEC is leading efforts aimed at developing curriculum for the introduction of capital market studies in the primary and secondary schools in Nigeria in collaboration with the Nigerian Educational Research and Development Council and other stakeholders.

    Managing Director, United Capital Plc, Mrs Oluwatoyin Sanni, said lack of adequate knowledge on the workings of the financial system, especially the capital market, is one of the main reasons for loss of investment and poor investors’ confidence.

    Chartered Institute of Stockbrokers (CIS) President, Mr Oluwaseyi Abe, said the Federal Government should lead other stakeholders to develop a frontal purpose-driven domestic savings and investment policy that will encourage Nigerians to save and invest domestically as part of long-term plan for sustainable national development.

    He noted that a large domestic investors’ base would enhance the development of the nation’s capital market and reduce the extreme volatility usually driven by inflow and outflow of the dominant foreign investors by instituting policies aimed at encouraging the participation of Nigerians in the nation’s capital market.

    According to him, while the capital market would continue to depend on the interplay of foreign portfolio funds and domestic funds, it is only the presence of a large domestic investors’ base that can mitigate the volatility of the capital market.

    “At the heart of the capital market is the issue of participation of local investors. Expectedly, it is the local investors who ultimately will bring stability to the equity market. The critical issue now is that the Federal Government and other stakeholders must be prepared to address the need to encourage our local investors to return to the market,” Abe said.

    Fund Managers Association of Nigeria (FMAN) President, Dr. Ore Sofekun, said increased savings will accelerate economic growth.

    “If we really want to develop our country, we have to save for long term. In United Kingdom, average investors save their money for six to seven years. The day a child is born, parents begin to save for his or her university education as both primary and secondary school education is free,” Sokefun, who is also the Managing Director of Investment One Venture Capital, noted.

    FSDH emphasised that careful coordination and consistency of fiscal and monetary policies are important to stimulate and sustain savings and investments. According to the investment banker, to stimulate personal savings, the savers must be assured that the real value of their savings will be preserved in the medium to long-run while there must also be safe investments to attract savings by ensuring that the returns earned preserve real value for the savers.

    “An environment of high inflation rate discourages savings and promotes current consumption. To stimulate business savings, the business environment must be competitive to enable businesses operate in a profitable manner. As businesses can fund future expansion from business savings or retained earnings, it thus increases their ability to raise future savings. In addition, government and its agencies must be disciplined in creating institutions and structures that will promote government savings. This can happen through careful planning at the central and state levels,” FSDH stated. FSDH added that government can also provide fiscal incentives such as removal of taxes on certain classes of investment schemes that encourage savings.

    There is no gainsaying the importance of savings and investments to national development. A deeply entrenched savings and investment culture can also serve as antidote to the seeming obsession for immediate wealth that continue to erode national values and fuel stinking national corruption. As government begins the implementation of its economic blueprint, stakeholders are unanimous on the need to prioritise key initiatives and programmes to drive savings and investments.

  • FGN Savings Bond targeted at poor, says DMO D-G

    The Director General of Debt Management Office (DMO), Abraham Nwankwo has stated the new Federal Government of Nigeria Savings Bond (FGNSB) was designed to give them a stake in government.

    He was addressing leaders of market unions and leaders of middle income earner organisations in an advocacy/sensitisation workshop on the FGN Savings Bond in Onitsha.

    He said over the years, government has issued bond, but it remained elitist bonds, which were sold as wholesale bond to privileged individuals, corporate companies and organisation.

    “All these super rich individuals bought it as wholesale bond, but the difference we have in the FGNSB is that we are making these bond available to the ordinary Nigerians. There are a lot to benefits I  investing in the FGNSB. First is that it is an opportunity for the common man to have a stake in the country. You can boost of having borrowed to the federal government,” he said.

    “Again, your investment has interest accruing to you, straight into your bank account, and your interest is tax free. There are many benefits. By Monday next week, the savings bond will open, and it will remain open for five days. We will also disclose the interest rate, and everyone is at liberty to buy. You can invest from as little as N5,000 to as high as N50 million,” Nwankwo said.

    The workshop featured teachings on the workings of bond, and how to purchase them. DMO’s Director of portfolio management, Oladele Afolabi took participants through a lecture on the bonds, while reeling out the list of accredited stockbrokers.

    Chairman of Niger Bridgehead market, Emmanuel Anagu who spoke on behalf of other market leaders, at the event stated that he is truly convinced that the DMO meant well for the poor by taking the workshop to traders in Onitsha.

    “Before now, we hear of sales of federal government bond, but it is usually for the very rich, but today the federal government has brought it down to us, but what we ask is that we must make this workshop a regular one to drum it into the mi D’s of our people.” The DG also reiterated the importance of the purchase of the savings bond, saying that it could serve as a means of saying for the future.

  • Fed Govt raises N2.07b from retail savings bond

    Fed Govt raises N2.07b from retail savings bond

    • Mulls selling $100m forward

    The Debt Managment Office (DMO) yesterday said it raised N2.07 billion  ($6.6 million) from a new two-year savings bond intended for retail investors.

    Nigeria forecasts a budget deficit of N2.36 trillion  this year, half of which it aims to fund through domestic borrowing.

    The DMO has said it offered the bond to help broaden the country’s funding base. It will be available for purchase on a monthly basis and have a maximum subscription of N50 million. It carries a coupon of 13.01 per cent.

    Meanwhile,  traders say the Central Bank of Nigeria (CBN)  plans to sell $100 million in currency forwards yesterday to be delivered within the next 60 days.

    The bank has been injecting more dollars into the system to meet the needs of importers since February. It’s trying to boost supply in the market and narrow the margin between official and black market rate.

    The local currency closed at 410 to the dollar on the black market on Wednesday, stronger than the previous 430 to the dollar. It weakened to 307.75 to the dollar on the interbank market, compared with 307.50 a dollar previously.

    The March auction attracted subscription from over 2,500 applicants during the five-day sale period, the DMO said, adding that the next sale will be on April 3.

    The government plans to increase public spending by almost 20 per cent this year and has obtained parliament’s approval for a $500 million Eurobond, after raising $1 billion from international debt market last month.

    Outstanding total debt rose to N17.4 trillion last year from N12.6 trillion in 2015 and is set to increase further, as Africa’s biggest economy grapples with its first recession in a quarter of century, caused by low oil prices.

  • Share suspension: Resort Savings effects board changes

    Seven days after it was suspended on the Nigerian Stock Exchange (NSE), the board of Resort Savings and Loans Plc met yesterday in Lagos and appointed a new chairman and substantive Managing Director for the  mortgage institution.

    At the 90th board meeting at it’s head office in Ikeja, Lagos, the directors of the company appointed Jideofor. Chukwuocha as the new chairman, replacing Chief Babatunde  Adefarati.  The board also appointed Mr. Ola Oyinloye as the substantive Managing Director of the company. Chief Adefarati resigned from the board amidst scuffle for the chairmanship of the company.

    Chukwuocha, an astute businessman, has been a director of Resort Savings since 2012. The company secretary to the company, LPC Solicitors, has been mandated to notify all regulatory authorities of the decisions of the board.

    In a confirmatory email on the appointments, the board stated that the new appointments were part of efforts to reposition the mortgage company.

    Directors of the company stated that they expected the new chairman to bring his wealth of experience as a successful businessman to reposition the mortgage bank in its ongoing restructuring exercise.

    “The board wishes to assure its numerous customers and other stakeholders that the mortgage bank has been further strengthened than ever before to ensure that it sustains its high quality services in providing mortgage to Nigerians while supporting the policies of the Federal Government in making affordable accommodation available to Nigerians,” the board stated.

    The NSE had on Tuesday December 6, 2016 placed full suspension on the shares of Resort Savings as capital market regulators launched investigation into allegations of corporate governance abuses against the management and directors of the mortgage banker.

    A circular issued by the NSE and obtained by The Nation had indicated that Securities and Exchange Commission (SEC) had directed that a full suspension be placed on Resort Savings, implying that there will be no trading on the shares of the company.

    “In compliance with the provisions of Section 35 of the Investments and Securities Act, 2007 and in order to give effect to the above directive, the Exchange will suspend full trading in the securities with effect from Tuesday 06 December 2016. The suspension will remain in force until further directives from the SEC,” the circular indicated.

    Resort Savings has wriggled under losses over the years. Loss after tax rose from N1.57 billion in 2013 to N2.99 billion in 2014. Also, the Consumer Protection Council (CPC) recently stated that it has started investigations into alleged diversion of mortgage funds and other sundry fraud allegations against Resort Savings.

  • Book tour to teach savings, investments

    The founder of “The Smart Money Africa” movement, Arese Ugwu, is embarking on a book tour of her book, The Smart Money Woman: An African Girl’s Journey to Financial Freedom, to expose people, especially women to saving and investment techniques.

    The book tour will touch Lagos, Ibadan, Akwa Ibom, Warri, Abuja and Accra, Ghana and will include meet and greets, book readings, book signings, exclusive brunches and dinners, interviews, and other exciting events.

    Arese is engaging young Africans on the importance of financial literacy and the impact it has on helping them to get, keep and grow money.

    The book essentially tells a story of four girlfriends in Lagos that navigated incredible financial difficulties and emerged successful. Through the interesting scenarios of her fictional characters, Arese offers practical, step by step advice and solutions for a number of financial issues from investment and debt to budgeting and entrepreneurship.

    Chairman, Dangote Group, Alhaji Aliko Dangote, has described the book as an entertaining way to learn about money.

    President, Nigerian Stock Exchange (NSE), Aigboje Aig-Imoukhuede, said the book was a journey through personal finance written from a truly African context by a gifted young woman who seeks to reposition and redefine the way we think about the subject of personal finance.

  • Experts advise employees on savings, investments

    Financial experts have advised salary earners to develop their financial intelligence and embrace savings and investments early in their working life in order to secure their future.

    Experts, who spoke at the second edition of Warri Business Seminar, which took place in Warri, Delta State, identified the three major mistakes that salary earners usually made to include weak self management, bad money culture and poor investment culture.

    Speakers at the seminar included Mr Abayomi Adeyeri, chief marketing officer, Flobal Trust Limited; Mrs Omoefe Siakpere, founder, Klass and Korporate Consultants and Chris Ekpekurede, an engineer and founder, Breathrough Moment.

    The seminar was a huge success as individuals from different institutions and backgrounds came together and were incubated upon for several hours by coaches who have distinguished themselves in their various fields with outstanding testimonies.

    The topic of this year’s seminar was “The 3 BIG Mistakes Salary Earners make that ruin their future and make them constantly broke.”

    The participants were imparted with finance and investment knowledge and various techniques including  the blueprint of financial intelligence, fundamentals, of business startup, available smart investment options, and ethics in business, time and self-management as well as customer service awareness.

    Adeyeri salary earners must be aware that they have terminal exit point and should plan for such exit by cultivating regular savings and investments while the salary runs.

    Siakpere called for a change of attitude by focusing on important items that serve to preserve personal wealth and create supports for the family during and after active working life.

    Ekpekurede urged employees to be conversant with opportunities in their environment in order to provide them with viable exit plans in the face of voluntary or compulsory retirement.

    Warri business Seminar Limited (WBSL) was incorporated in 2015 to Impact on individuals and create an entrepreneurial mindset with the aim of alleviating poverty while also reducing pressure on government for support in terms of job provision. The founders of WBSL included Breakthrough Moment, Flobal Trust Limited and Klass and Korporate Consultants.

    Flobal Trust Limited is one of the capital market operators licensed by Securities and Exchange Commission (SEC) as corporate investment adviser in Nigeria and the founder is Mr. Abayomi Adeyeri, a former regional head with Ecobank Nigeria Limited. Klass and Korporate is a business start-up and development international consultancy outfit with offices in Abuja, Benin, Warri and the United Kingdom. Klass & Korporate Consultants, since Inception has facilitated the registration of over 500 SME’s in Delta State alone, thereby creating an entrepreneurial vehicle for both youths and investors.

    The founder, Mrs. Omoefe Siakpere, is a distinguished scholar of corporate and commercial law from the University of London.

    Breakthrough Moment is an inspirational radio programme which features regularly on Crown FM, Warri and has touched the lives of many youths and entrepreneurs in Warri and its environs and the Chief promoter is a retired staff of Shell Nigeria Ltd and author of several books, Chris Ekpekurede.

  • FCMB promotes savings culture among youths

    FCMB promotes savings culture among youths

    First City Monument Bank (FCMB) Limited has urged Nigerian youths, especially students, to expand their knowledge base on financial literacy and its principles. This, the bank stated, can be achieved by imbibing a savings and investment culture at an early age, which will help to empower them and secure their future in a sustainable manner.

    Speaking yesterday during an outreach programme organised by FCMB for students of Federal Government Girls College, Akure in Ondo State, the bank’s Vice President/Group Head, Corporate Affairs, Diran Olojo, who represented the Group Managing Director/CEO, Ladi Balogun, said imbibing financial principles at an early age will go a long way to help students and the youths manage their resources effectively, appreciate how money works and how it can be channeled to productive ventures.

    FCMB adopted the school for a full year as part of its financial literacy programme support. This adoption will result in the participation of the bank’s staff in various mentoring projects, the provision of teaching services to the students and other support activities during the next 12 months. In addition, the Bank also announced the donation of a power generating set to the school.

    The outreach session forms part of activities to commemorate the 2016 edition of the Global Money Week and Financial Literacy Day celebration, an initiative of the Bankers’ Committee in collaboration with the Central Bank of Nigeria (CBN). The financial literacy programme is focused on educating youths in Nigeria on the country’s economic environment, the importance of saving, financial control, planning and knowledge of basic financial concepts, amongst other benefits.

    Principal of Federal Government Girls College, Akure, Mrs. Florence Ejikeme, praised the Central Bank of Nigeria (CBN) and FCMB for committing both human and financial resources to execute the financial literacy initiative.  She described the outreach programme organised by the Bank as, ‘’an eye-opener and empowerment tool not just for students, but also the members of staff of the school’’.

  • World Savings Day: CBN educates students on savings culture

    The Central Bank of Nigeria (CBN), has emphasised the need for every Nigerians to imbibe the culture of saving so as to have better economy and citizenry.

    Speaking at a World Saving Day programme organised for students of St. Peters Unity Secondary School in Akure, the Ondo State capital, the state branch controller of CBN, Mrs. Adeyemi Yusuf, said there is need for parents and guardians to start training their children on how to save.

    Yusuf noted that CBN has decided to take its enlightenment programme to schools so as to lay a foundation in the minds of the children at their early age.

    According to her, students from14 secondary schools in the six geo-political zones benefited from the mentoring programme.

    Adeyemi said it is only savings that translate to investment; saying without it there cannot be investment, which also means there cannot be development.

    Her words: “Savings habit is not very encouraging in Nigeria, and I think it is not peculiar to Nigeria; it is worldwide. So, I think it is necessary for this kind of commemoration to come up and create awareness from time to time

    “The commemoration of the World Savings Day is one of the platforms the bank is using to raise awareness of children and youths on the importance of savings, which is expected to lead to an increase in the levels of financial literary, financial inclusion (number of people that have banking relationship with financial institutions) culminating in a stable and sound financial system and ultimately a positive economic environment”.

    Adeyemi stressed that those, who are in the habit of savings are contributing to the economy of the country, and making themselves bette, citizenry for Nigeria.

    “If we are saving, we are saving for ourselves, when you save for yourself it also affect the country at large,” she added.

    She called on the state government to leverage on the CBN initiative to further create awareness and sensitise the people on the importance of saving.

    A staff of Consumer Protection Department of CBN in Abuja, Mr. Damola Atanda, who gave a talk at the event, said there is need to train the system irrespective of amount of money they are given.

    He noted that students, who have developed a saving habit, have been included into the country financial system, adding that it would translate to more money in the economy.

     

  • Resort Savings woos investors to real estate products

    Investors in real estate products stand to benefit from security of their investments and good and stable returns on their investments.

    Head, Treasury and Investment, Resort Savings and Loans Plc, Mr. Jeff Ejemai, said for many investors who may still be in a quandary as to where to invest their money, investment in real estate is the way to go. Ejjemai made this observation recently in Lagos while unveiling the company’s investment product.

    According to him, investment in real estate guarantees a great return for the investor as it affords individual investors opportunity to tap into the vast housing market.

    “There is a deficit in housing which government alone cannot cater for, which necessitates the need for the private sector to invest. Any investor who puts his money into housing project now will surely reap a good return,” Ejjemai said.

    Commenting on the bank’s investment product, he said the aim of the product was to extend the opportunity for investors to invest in real estate noting that such investors will not only get good returns on their investments but would also be able to save money in reliable assets.

    He explained that Resort Savings is offering investors opportunity to invest and earn return adding that a fixed deposit ranging from N500,000 to N2 million provided by the investor will be the basis of the investment for which a fixed rate of return will be paid to the investor in the form of interest at an agreed period not less than six months. Minimum interest rate of 15 per cent per annum will be paid to such investors.

    He said Resort Savings and Loans will use funds to finance residential properties being constructed in Lagos and Abuja and any other state capital.

    He added that once the bank gets to a particular milestone in terms of the required amount of funds from the investor, it will invest the funds in other portfolios, which include Treasury Bills and bonds apart from the real estate.

    He noted that the level of risk in the real estate business is low adding also that the investors have a rock sure assurance that their capital will be safe.

    “It should be noted that capital gains can also be realised when the property is sold, making real estate a relatively longer-term investment,” Ejjemai said.

    He pointed out that there is a ready market for the estates given the paucity of housing in the country.

     

  • Resort Savings, Just Shelter team up on housing

    Resort Savings and Loans Plc, a mortgage bank quoted on the Nigerian Stock Exchange (NSE), has entered into a business collaboration with Just  Shelter & Allied Products Limited to provide mortgage facilities and marketing services widen the scope of housing provision to Nigerians through mortgages.

    Just Shelter & Allied Products Limited has developed 14 blocks with six three-bedroom flats in each block at David’s Court Estate Arepo, Ogun State.

    To facilitate the project, Resort Savings and Loans is granting the company the needed mortgage facilities to would-be purchasers. The NHF facilities through Federal Mortgage Bank of Nigeria (FMBN) are also available for the subscribers.

    Head, Estate Services Department, Resort Savings and Loans Plc, Mr. Alex Animasaun, said  the project, which covers 1,578 hectares, is the first phase of various housing units they are developing in Lagos and Ogun states.

    He noted that the project is located in the Arepo community and it’s about 10 minutes’ drive from Lagos State Secretariat, Alausa, Ikeja

    “A typical unit is made up of a large living room attached with visitor’s toilet, kitchen with all the fittings attached with a sizable store, master bedroom with bath, standard wardrobe, and other two rooms’ en-suite with shower. Other services within the estate are; generator, industrial borehole and overhead tank and adequate parking space among others,” Animasaun said.

    He assured that the estate is covered by global certificate of occupancy noting that selected subscribers are only expected to perfect their personal documents with the Ogun State Government.

    Animasaun urged existing and prospective customers of the mortgage bank to take advantage of the new development, assuring that Resort Savings would help with the loans to access the flats.