Economy
27% of Nigerian Adults Financially Healthy, 34% Vulnerable—Report
By Adedapo Adesanya
The latest report from Enhancing Financial Innovation and Access (EFInA) has revealed that only 27 per cent of adults in Nigeria are financially healthy.
Business Post reports that financial health is reached when someone has funds in place to meet his short, mid and long-term needs and this could be in terms of income, savings and retirement planning.
In a survey titled The EFInA Access to Financial Services in Nigeria 2020, it was also revealed that 39 per cent of Nigerian adults are financially coping, while 34 per cent are financially vulnerable.
“Nigerians require a range of useful, affordable, and accessible financial services to meet all of their needs.
“Many Nigerian adults continue to rely on different types of providers to meet those needs; while the use of banks increased in 2020, so did the use of unregulated services such as savings groups and village associations,” the CEO of EFInA, Ms Ashley Immanuel, said at the presentation of the report.
It was also noted in the report that Nigeria, which prides itself as Africa’s largest economy, is lagging behind in its target for financial inclusion strategy for 2020, though it said more Nigerian adults are financially included, the National Financial Inclusion Strategy targets were not met.
The method points to strategies used to sets targets for overall financial inclusion, which counts Nigerians that use either formal financial services or informal financial services not nationally regulated, such as savings groups.
The report noted that, “Growth in digital financial services and agent banking highlights opportunities to drive faster progress toward financial inclusion, particularly for excluded groups such as women, rural and Northern Nigerians.
“For the first time, more than half of Nigerian adults are using formal (regulated) financial services.”
The report explained that 51 per cent of Nigerian adults use commercial banks, microfinance banks, mobile money, insurance, or pension accounts, up from 49 per cent in 2018.
“This has largely been driven by growth in banking, with 45 per cent of Nigerians banked in 2020, up from 40 per cent in 2018.
“The overall financial inclusion target was 80 per cent by 2020; EFInA data shows that only 64 per cent of Nigerian adults were financially included by the end of 2020.
“This means that 36 per cent of Nigerian adults, or 38 million adults, remain completely financially excluded.
“In addition, large gaps in financial access remain for some of Nigeria’s most financially excluded groups,” it said.
By gender inclusion, the report showed that women continue to be more financially excluded than men, with only 45 per cent of women using formal financial services, compared with 56 per cent of men.
“Adults in Northern Nigeria continue to be significantly more financially excluded than those in the southern zones, and rural adults are still more excluded than those in urban areas.
Young adults, between the ages of 18-25, are significantly more likely than older adults to be financially excluded.”
While further commenting on the report, Ms Immanuel disclosed that “At our current rate of progress, we will not reach the 2020 financial inclusion targets until around 2030.
“However, we can reach these targets much faster if we follow paths taken by other African countries that have seen rapid financial inclusion growth due to mobile money.
“EFInA’s Access to Financial Services in Nigeria Surveys show that the use of digital financial services and agent networks started to grow significantly between 2018 and 2020. Phone ownership has also increased, with 81 per cent of Nigerians now owning mobile phones.
“Now is the time to build on this initial progress and drive faster financial inclusion growth through digital financial services such as mobile money.
“We can do this by creating an open and the level playing field for a wide range of providers, creating the right environment for fintech to thrive, and encouraging partnerships between different providers.”
She explained further that financial inclusion can benefit individuals, families, and businesses, supporting key outcomes such as GDP growth.
The EFInA Access to Financial Services in Nigeria Survey highlights a significant market opportunity for financial service providers to address Nigerians’ financial needs.
It was noted that only 2 per cent of Nigerian adults are insured, but 18 million uninsured adults say they would be interested in micro-insurance.
Only 7 per cent of Nigerian adults have pension accounts, but 24 million adults without pensions are making regular savings for their retirement. While only 45 per cent of Nigerians are banked, 35 million unbanked Nigerians own mobile phones and could be reached with mobile money.
Mrs Gail Warrander, Economic Development Team Leader, Nigeria for the UK’s Foreign, Commonwealth & Development Office, remarked that “The EFInA Access to Financial Services in Nigeria 2020 Survey shows that Nigeria has made progress on financial inclusion but there’s still a way to go.
“The report models how the journey to the financial inclusion goal can be speeded up by encouraging the scale-up of mobile money.
“I firmly believe that the majority of those excluded, especially women and youth, could then enjoy the convenience of financial services, including using remote payments systems.
“This survey is full of rich data for policymakers, development partners and financial services companies to use,” she said.
Also speaking, the Deputy Governor, Financial Systems Stability (FSS), Central Bank of Nigeria (CBN), Mrs Aishah Ahmad, noted that “financial inclusion is a strong lever for bridging income inequality, combating poverty and preserving social harmony.
“The CBN has accordingly been at the forefront of the efforts to drive financial inclusion in Nigeria by championing the development & implementation of Nigeria’s National Financial Inclusion Strategy led by the CBN Governor.”
The Deputy Governor and Chair of the Financial Inclusion Technical Committee stated that “Despite the progress achieved to date, critical groups remained excluded including women, rural dwellers and citizens in the northern area.
“To address the issue with women, CBN launched a Framework for Advancing Women’s Financial Inclusion in Nigeria in 2020 and is leading the industry to implement the framework, which we expect to lead to a significant increase in women financial inclusion in Nigeria.”
By Adedapo Adesanya
Energy stocks influenced the 4.76 per cent loss recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, December 5.
The culprits were the duo of 11 Plc and Nipco Plc,with the former shedding N32.17 to end at N291.83 per share compared with the previous day’s N324.00 per share, and the latter down by N21.00 to sell at N195.00 per unit versus the previous session’s N216.00 per unit.
Consequently, the NASD Unlisted Security Index (NSI) slumped by 170.16 points to 3,401.37 points from 3,571.53 points and the market capitalisation lost N101.81 billion to close at N2.035 billion from the N2.136 trillion quoted in the preceding session.
The OTC securities exchange suffered the decline yesterday despite the share prices of three companies closing green.
Central Securities Clearing System (CSCS) Plc was up by N1.80 to close at N39.80 per share compared with Thursday’s price of N38.00 per share, Air Liquide Plc appreciated by N1.09 to N11.99 per unit from N10.90 per unit, and FrieslandCampina Wamco Nigeria Plc grew by 78 Kobo to N56.57 per share from N55.79 per share.
During the session, the volume of transactions rose by 6,885.3 per cent to 18.2 million units from 4.3 million units, the value of transactions ballooned by 10,301.7 per cent to N389.7 million from N347.2 million, but the number of deals declined by 29.7 per cent to 26 deals from 37 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by Okitipupa Plc with 170.4 million units valued at N8.0 billion, and Air Liquide Plc with 507.5 million units worth N4.2 billion.
InfraCredit Plc also finished the day as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.
By Adedapo Adesanya
The Naira depreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, December 5, as FX demand pressure mounts.
The Nigerian currency lost N2.60 or 0.18 per cent against the greenback to close at N1,450.43/$1 compared with the previous day’s N1,447.83/$1.
Equally, the domestic currency declined against the Pound Sterling in the official forex market during the session by N4.48 to trade at N1,935.45/£1, in contrast to Thursday’s closing price of N1,930.97/£1 and shrank against the Euro by 43 Kobo to end at N1,689.17/€1 versus the preceding session’s rate of N1,688.74/€1.
Similarly, the local currency performed badly against the US Dollar at the GTBank FX counter by N2 to close at N1,455/$1 versus Thursday’s N1,453/$1 but traded flat at the parallel market at N14.65/$1.
As the country gets into the festive period, pressure mounted on the local currency reflecting higher foreign payments and lower FX inflows.
However, there are expectations that the Nigerian currency will be stable, supported by interventions by to the Central Bank of Nigeria (CBN) in the face of steady dollar Demand and inflows from Detty December festivities that will give the Naira a boost after it depreciated mildly last month.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450/$1 next week, buoyed by improved FX interventions by the apex bank.
As for the crypto market, it was down yesterday due to profit-taking associated with year-end trading. However, the December 1-Year Consumer Inflation Expectation by the University of Michigan fell to 4.1 per cent from 4.5 per cent previously and 4.5 per cent expected. The 5-Year Consumer Inflation Expectation fell to 3.2 per cent from 3.4 per cent previously and 3.4 per cent expected.
With the dearth of official economic data of late, these private surveys have taken on a new level of significance and the market banks of them to make decisions.
Cardano (ADA) depreciated by 5.7 per cent to $0.4142, Dogecoin (DOGE) slid by 5.1 per cent to $0.1394, Ethereum (ETH) dropped by 3.9 per cent to $3,039.75, Solana (SOL) declined by 3.8 per cent to $133.24, and Litecoin (LTC) fell by 3.7 per cent to $80.59.
Further, Bitcoin (BTC) went down by 2.6 per cent to sell at $89,683.72, Binance Coin (BNB) slumped by 2.2 per cent to $883.59, and Ripple (XRP) shrank by 2.1 per cent to $2.04, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
The oil market was up on Friday on increasing expectations the US Federal Reserve will cut interest rates next week, which could boost economic growth and energy demand.
Brent futures rose by 49 cents or 0.8 per cent to $63.75 per barrel and the US West Texas Intermediate (WTI) futures expanded by 41 cents or 0.7 per cent to $60.08 per barrel.
Investors digested a US inflation report and recalibrated expectations for the Federal Reserve to reduce rates at its December 9-10 meeting.
US consumer spending increased moderately in September after three straight months of solid gains, suggesting a loss of momentum in the economy at the end of the third quarter as a lackluster labor market and the rising cost of living curbed demand.
Traders have been pricing in an 87 per cent chance that the US central bank will lower borrowing costs by 25 basis points next week, according to CME Group’s FedWatch Tool.
Investors also focused on news from Russia and Venezuela to determine whether oil supplies from the two sanctioned members of the Organisation of the Petroleum Exporting Countries and allies (OPEC+) will increase or decrease in the future.
The failure of US talks in Moscow to achieve any significant breakthrough over the war in Ukraine has helped to boost oil prices so far this week.
A loss of Venezuelan oil production in case of a US military intervention will materially impact global benchmark prices as the market will have to replace Venezuela’s heavy crude.
Venezuela is estimated to pump about 1.1 million barrels per day of crude oil at present, so if the US-Venezuela tension escalation into an invasion in the South American country, this volume of crude would be at risk.
Reuters reported that the Group of Seven countries and the European Union are in talks to replace a price cap on Russian oil exports with a full maritime services ban in a bid to reduce the oil revenue that helps finance Russia’s war in Ukraine.
Any deal that could lift sanctions on Russia, the world’s second-biggest crude producer after the US, could increase the amount of oil available to global markets, weakening prices.
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