Economy
Sub-Saharan Africa Yet to Return to Robust Growth Rates—Report
By Dipo Olowookere
Latest report from Nielsen Holdings Plc, a global performance management company providing a comprehensive understanding of what consumers Watch and Buy, has revealed that the Sub-Saharan Africa was yet to fully get back on its feet after going low in 2016.
Nielsen, in its 5th Nielsen Africa Prospects Indicator (APi) report, said the region was yet to uplift itself from the two-decade economic low reached last year, bringing a slight easing of pressure but certainly not a return to the robust growth rates previously experienced.
However, despite the turmoil and heavy constraints; it was emphasised that Africa’s ‘heavyweights’ namely Nigeria, Kenya and South Africa, cannot be ignored and remain a long-term priority for any business focused on Sub-Saharan Africa.
The latest report included a comparative ranking of eight African countries, drawn from multiple datasets, collected across the Macro Economic, Business, Consumer and Retail dimensions.
It was observed that manufacturers and retailers seeking to stay one step ahead in Africa’s complex markets needed to move beyond ‘business as usual’ – they simply cannot keep doing the same things and expecting a different result.
Commenting on the report, Nielsen Executive Director Thought Leadership Emerging Markets, Ailsa Wingfield, stated that, “No one size fits all and no total continent, country, city, consumer or channel approach is enough to ensure sustained success in Sub-Saharan Africa.
“Similarly, successful brands, advertising and activation in other developing markets do not provide the passport to growth in Africa’s complex markets and challenging climates.”
Challenging…but impossible to ignore
Considering this, it’s clear that the sub-continent’s two most significant economies, Nigeria and South Africa, are slowly turning around from recent declines to low levels of growth, however, the consolidated prospects for these two powerhouse economies continue to be subdued. Of the countries measured in Nielsen’s 5th Africa Prospects report, South Africa slips two positions to sixth place and Nigeria remains in eighth place.
South African consumers have expressed declining sentiment regarding their job prospects, personal finances and time to buy. With higher average GDP per capita – double that of Nigerians and Angolans and triple that of Kenyans – bigger in-store spend and an openness to new, innovative products, South Africa presents the strongest consumer prospects in SSA.
However, the reality is that a cautionary consumer mindset has led to more risk averse spending behaviour and a heightened focus on saving, especially in the areas of out of home eating, entertainment and fashion, followed by an acute awareness of price for consumer packaged goods. To counter this businesses have been drawn into more promotional activities, eroding brand equity and margins.
Kenya relinquishes top position due to fading macro-economic indicators and a declining business outlook amidst an unsettling election period. Economic growth slowed to 4.7% in the first quarter of 2017 brought about by drought and the credit slowdown. Rapidly rising inflation has driven food prices to five-year highs, which has plagued consumers and retail trading conditions. Consumers are less confident about their personal finances; their spare cash is limited, and their mindset remains cautionary with them opting to save rather than spend.
A continued missed opportunity
Cote d’Ivoire once again leads the APi overall ranking with strong macro-economic and retail prospects, but the country is dealing with deteriorating political stability and declining cocoa prices, which could lead to an economic deficit and pressure on household income, amplifying the already weaker consumer prospects.
Despite the country displaying strong indicators for growth, consumer prospects remain low. This is in part due to product fulfilment issues, with manufacturers failing to meet Ivorian consumers’ needs as they relate to a range of factors including: convenience, tradition, taste, ease of use, portability, scarcity and accessibility.
Cameroon comes into focus
Cameroon has risen to fourth position, is its highest rank to date. With a diversified natural resource base, rapid urbanisation and GDP per capita on par with Kenya, and higher than Uganda and Ethiopia, it is easy to understand its stronger consumer and retail prospects.
These are, however, offset by weaker macro-economic and business prospects. The economy is vulnerable to external impacts due to a reliance on commodities, and this, coupled with low investment in critical infrastructure, frequent power outages, and weak governance, has resulted in elevated costs of doing business. Cameroon has also been identified as one of the most challenging countries in the world to start a new business, limiting potential investors and preventing the economy from growing at its full potential.
Ghanaian Optimism
Ghana maintains fifth position on the APi, but this masks some of the ongoing improvement in the macro-economic, consumer and retail dynamics. It has also been rated as the best business prospect for successive periods. Economic advances in 2017, with growth rising to 6.6%, is spurred on by progress in the oil and non-oil sectors. Food inflation continues to decelerate easing the pressure on consumer wallets, resulting in an increasing number of Ghanaians spending more in store, more willing to try new things and positively influencing the previously weaker retail outlook.
Overall, the APi report shows that Africa continues to offer one of the greatest gifts of untapped growth, but requires bold strategies. Those invested or investing in Africa therefore need to reassess and implement in a more purposeful, precise and persistent manner in pursuit of consumer needs.
“Africa offers marketers one of the final destinations to develop and execute product, marketing and retail solutions from a clean slate perspective, which are differentiated, generate demand and deliver value yet there still seems to be a vacuum within these areas.
“On the plus side this points to significant potential for innovation and growth – what is required now is a steady investment by manufacturers and retailers into making these untapped opportunities work for them,” Wingfield further said.
With vast retail landscapes and widespread, diverse consumers it’s therefore all about precision over mass tactics in Africa coupled with exceptional product, marketing and retail innovation to capitalise on Africa’s prospects.
By Modupe Gbadeyanka
The federal government, the 36 states of the federation and the 774 local government areas have received N1.727 trillion from the Federal Accounts Allocation Committee (FAAC) for December 2024.
The funds were disbursed to the three tiers of government from the revenue generated by the nation in November 2024.
At the December meeting of FAAC held in Abuja, it was stated that the amount distributed comprised distributable statutory revenue of N455.354 billion, distributable Value Added Tax (VAT) revenue of N585.700 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.046 billion and Exchange Difference revenue of N671.392 billion.
According to a statement signed on Friday by the Director of Press and Public Relations for FAAC, Mr Bawa Mokwa, the money generated last month was about N3.143 trillion, with N103.307 billion used for cost of collection and N1.312 trillion for transfers, interventions and refunds.
It was disclosed that gross statutory revenue of N1.827 trillion was received compared with the N1.336 trillion recorded a month earlier.
The statement said gross revenue of N628.972 billion was available from VAT versus N668.291 billion in the preceding month.
The organisation stated that last month, oil and gas royalty and CET levies recorded significant increases, while excise duty, VAT, import duty, Petroleum Profit Tax (PPT), Companies Income Tax (CIT) and EMTL decreased considerably.
As for the sharing, FAAC disclosed that from the N1.727 trillion, the central government got N581.856 billion, the states received N549.792 billion, the councils took N402.553 billion, while the benefiting states got N193.291 billion as 13 per cent derivation revenue.
From the N585.700 billion VAT earnings, the national government got N87.855 billion, the states received N292.850 billion and the local councils were given N204.995 billion.
Also, from the N455.354 billion distributable statutory revenue, the federal government was given N175.690 billion, the states got N89.113 billion, the local governments had N68.702 billion, and the benefiting states received N121.849 billion as 13 per cent derivation revenue.
In addition, from the N15.046 billion EMTL revenue, FAAC shared N2.257 billion to the federal government, disbursed N7.523 billion to the states and transferred N5.266 billion to the local councils.
Further, from the N671.392 billion Exchange Difference earnings, it gave central government N316.054 billion, the states N160.306 billion, the local government areas N123.590 billion, and the oil-producing states N71.442 billion as 13 per cent derivation revenue.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.65 per cent gain on Friday, December 13, boosted by three equities admitted on the trading platform.
On the last trading session of the week, Okitipupa Plc appreciated by N2.70 to settle at N29.74 per share versus Thursday’s closing price of N27.04 per share, FrieslandCampina Wamco Nigeria Plc added N2.49 to end the session at N42.85 per unit compared with the previous day’s N40.36 per unit, and Afriland Properties Plc gained 50 Kobo to close at N16.30 per share, in contrast to the preceding session’s N15.80 per share.
Consequently, the market capitalisation added N6.89 billion to settle at N1.062 trillion compared with the preceding day’s N1.055 trillion and the NASD Unlisted Security Index (NSI) gained 19.66 points to wrap the session at 3,032.16 points compared with 3,012.50 points recorded in the previous session.
Yesterday, the volume of securities traded by investors increased by 171.6 per cent to 1.2 million units from the 447,905 units recorded a day earlier, but the value of shares traded by the market participants declined by 19.3 per cent to N2.4 million from the N3.02 million achieved a day earlier, and the number of deals went down by 14.3 per cent to 18 deals from 21 deals.
At the close of business, Geo-Fluids Plc was the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with the sale of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.
In the same vein, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with the sale of 108.7 million units for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with a turnover of 297.3 million units worth N5.3 billion.
By Adedapo Adesanya
The Naira appreciated further against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N1.50 or 0.09 per cent to close at N1,533.00/$1 on Friday, December 13 versus the N1,534.50/$1 it was transacted on Thursday.
The local currency has continued to benefit from the Electronic Foreign Exchange Matching System (EFEMS) introduced by the Central Bank of Nigeria (CBN) this month.
The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.
The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN.
Market analysts say the publication of real-time prices and buy-sell orders data from this system has lent support to the Naira in the official market and tackled speculation.
In the official market yesterday, the domestic currency improved its value against the Pound Sterling by N12.58 to wrap the session at N1,942.19/£1 compared with the previous day’s N1,954.77/£1 and against the Euro, it gained N2.44 to close at N1,612.85/€1 versus Thursday’s closing price of N1,610.41/€1.
At the black market, the Nigerian Naira appreciated against the greenback on Friday by N30 to sell for N1,650/$1 compared with the preceding session’s value of N1,680/$1.
Meanwhile, the cryptocurrency market was largely positive as investors banked on recent signals, including fresh support from US President-elect, Mr Donald Trump, as well as interest rate cuts by the European Central Bank (ECB).
Ripple (XRP) added 7.3 per cent to sell at $2.49, Binance Coin (BNB) rose by 3.5 per cent to $728.28, Cardano (ADA) expanded by 2.4 per cent to trade at $1.11, Litecoin (LTC) increased by 2.3 per cent to $122.56, Bitcoin (BTC) gained 1.9 per cent to settle at $101,766.17, Dogecoin (DOGE) jumped by 1.2 per cent to $0.4064, Solana (SOL) soared by 0.7 per cent to $226.15 and Ethereum (ETH) advanced by 0.6 per cent to $3,925.35, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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