Airtel Seeks NCC Support for SMEs to Drive Economic Recovery
By Adedapo Adesanya
Airtel has advocated support from the Nigerian Communications Commission (NCC) for Small and Medium Enterprises (SMEs) to stimulate economic recovery in the post-COVID-19 era.
This came as the commission reaffirmed its commitment to ensuring accelerated licensing of new spectrum that would usher in new technologies which include 5G, broadband satellite services, high altitude platform services, and others.
This assertion came at a virtual webinar organised by the Nigerian-British Chamber of Commerce (NBCC) tagged Nigeria’s Telecommunication Industry-Post COVID.
Speaking at the event, Mr Segun Ogunsanya, the Managing Director of Airtel, in his presentation, said that the SMEs were most hit by the impact of the COVID-19 pandemic and Airtel had created incentives and discounts for them to support their businesses.
This, he said, was the company’s ultimate objective to reduce the digital divide between those who have access to the internet and those who do not.
According to him, access to the internet is key and imperative because it acts as a leveller that provides information opportunities to small and big businesses alike.
Mr Ogunsanya said that contrary to conventional thinking, the telecommunications industry recorded a decline in its revenue in the first month after the lockdown.
President Muhammadu Buhari announced a total lockdown in Lagos State, Ogun and the Federal Capital Territory in March 2020 to curb the spread of the COVID-19 virus.
The said that the pandemic had transformed the conventional ways of carrying out businesses, with online engagements becoming more popular.
“The impact has been huge on social and economic activities but we thank the authorities for creating a good environment for the virus to be contained very quickly.
“The telecoms industry is not isolated from the main economy and you can see the impact on the five key areas of the GDP.
“There was an initial reduction in consumer spending on telecoms services and products and a rise in the demands for data services at the initial stage of the lockdown.
“We got a decline in the second quarter and a lot of pressure is being put on us to increase capital expenditure as a result of increased backhaul requirements,” he said.
Mr Ogunsanya urged telecommunications industries to live up to their key responsibility of creating the right access either through mobile broadband, fibre or wireless connectivity to improve the future trend of businesses in the country.
“We need both fibre and wireless because it’s slightly more difficult to leave fibre but easier to spread the wireless access.
“We have seen a shift from coverage and capacity to customer experience, but data requires a lot of bandwidth.
“We’re focusing more on the kind of experience we’re giving our customers,” he said.
Executive Vice Chairman/Chief Executive Officer of the commission, Mr Umar Danbatta, noted that “We will create additional areas of investments with the opening of new spectrum, especially for broadband deployment in both urban and rural areas, and facilitate fibre deployment through initiatives such as the information communication.
“NCC is committed to the provision of infrastructure, transparency and ease of doing business in Nigeria,” he said.
Mr Danbatta, represented by Mr Babagana Digima, Head, Digital Economy Department, NCC, added that some operators had reported an increase in data usage and volume of calls.
This had, in turn, raised the demands for better network connectivity and improved internet coverage, especially in the rural areas, he said.
He said that the telecommunications industry was committed to the delivery of better service and internet infrastructure that would provide quality service and experience as well as address customers’ complaints.
“Some of the complaints raised by the customers during the pandemic were attributed to poor mobile network signals’ absorption and low internet speed.
“The immense contribution of the telecommunications industry during this pandemic is undoubted because it has managed to keep people connected, informed, entertained and enlightened about the disease which has helped in curtailing its spread.
“Governments worldwide, especially in developing countries like ours, have since recognised the need for telecommunications’ infrastructure.
“The pandemic has laid bare the urgency of such interventions,” he said.
Also, Mrs Bisi Adeyemi, the Deputy President of NBCC, stressed the importance of the telecommunications industry on small businesses due to the evidence of more reliance on data and voice connectivity.
“People across the world have had to rely on technology to deal with the new realities of working from home.
“It has, therefore, become necessary to evaluate the impact of the industry on creating an enabling business environment and economic growth,” she said.
Stock Market Gains N1.5trn After Tinubu Vows to Jump-Start Economy
By Dipo Olowookere
The first trading session on the floor of the Nigerian Exchange (NGX) Limited after the inauguration of Mr Bola Tinubu as the new President of Nigeria closed higher by 5.22 per cent on Tuesday.
Yesterday, the stock market did not open its doors to investors due to the public holiday declared by the federal government for the inauguration of the country’s 16th President.
During his inaugural speech, Mr Tinubu promised to make the business environment friendly to investors, stating that he would ensure a minimum of 6 per cent economic growth, unify the exchange rate regimes, address multiple taxes, improve the electricity supply, and others.
These assurances touched the right places and spurred stock investors to buy up some equities in anticipation of good times ahead.
It was observed that most of the sectors of the bourse leapt to levels last seen in years, as the banking space rose by 8.20 per cent. The consumer goods improved by 6.48 per cent, the industrial goods sector appreciated by 6.08 per cent, the energy index increased by 4.04 per cent, and the insurance counter grew by 2.29 per cent.
Consequently, the All-Share Index (ASI) jumped by 2,764.47 to 55,738.35 points from 52,973.88 points, and the market capitalisation rose by N1.495 trillion to N30.340 trillion from N28.845 trillion.
Business Post reports that 64 equities appreciated in price at the close of business today, and 12 shares ended on the losers’ table, indicating a very strong investor sentiment boosted by a positive market breadth index.
The strong demand for stocks on Tuesday pushed the prices of Deap Capital, FCMB, Nigerian Breweries, Jaiz Bank and Eterna higher by 10.00 per cent to 22 Kobo, N4.62, N42.35, N1.10, and N7.70, respectively.
On the flip side, Ikeja Hotel lost 10.00 per cent to trade at N2.16, NCR Nigeria depreciated by 9.80 per cent to N2.76, Tantalizers fell by 8.00 per cent to 23 Kobo, International Energy Insurance went down by 6.98 per cent to N1.20, and Consolidated Hallmark Insurance depleted by 6.56 per cent to 57 Kobo.
The most active stock of the trading session was Access Holdings, transacting 199.6 million units valued at 2.5 billion, FBN Holdings traded 127.9 million units worth 1.8 billion, Transcorp sold 95.7 million units worth N309.2 million, UBA exchanged 82.0 million units valued at N831.5 million, and GTCO transacted 76.4 million units worth N2.2 billion.
Data showed that a total of 1.1 billion stocks worth N15.8 billion exchanged hands in 9,916 deals on Tuesday compared with the 461.8 million stocks valued at N7.7 billion traded in 6,520 deals last Friday, implying an increase in the trading volume, value and number of deals by 133.49 per cent, 105.20 per cent, and 52.09 per cent, respectively.
Adesina Tasks Tinubu on Fiscal Stability
By Adedapo Adesanya
The president of the African Development Bank (AfDB), Mr Akinwumi Adesina, has tasked President Bola Tinubu to reduce the high cost of governance and ensure fiscal stability.
He made the disclosure during his speech at the Inauguration Lecture for the New President of Nigeria on May 27, 2023, in Abuja, noting that, “The starting point must be macroeconomic and fiscal stability. Unless the economy is revived and fiscal challenges addressed boldly, resources to develop will not be there.”
He noted that Nigeria currently faces huge fiscal deficits, estimated at 6 per cent of the Gross Domestic Product (GDP).
“This has been due to huge federal and state government expenditures, lower receipts due to dwindling revenues from crude oil export, vandalism of pipelines, and illegal bunkering of crude oil.
“According to Nigeria’s Debt Management Office, Nigeria now spends 96 per cent of its revenue servicing debt, with the debt-to-revenue ratio rising from 83.2 per cent in 2021 to 96.3 per cent by 2022.
“Some will argue that the debt to GDP ratio at 34 per cent is still low compared to other countries in Africa, which is correct, but no one pays their debt using GDP.
“Debt is paid using revenue, and Nigeria’s revenues have been declining,” he warned.
He lamented that Nigeria now earns revenue to service debt—not to grow, and advised the government to remove the inefficient fuel subsidies, a decision he adhered to on Monday.
In his words, “Nigeria’s fuel subsidies benefit the rich, not the poor, fuelling their and government’s endless fleets of cars at the expense of the poor. Estimates show that the poorest 40 per cent of the population consume just 3 per cent of petrol.
“Fuel subsidies are killing the Nigerian economy, costing Nigeria $10 billion alone in 2022. That means Nigeria is borrowing what it does not have to if it simply eliminates the subsidies and uses the resources well for its national development.”
He advised that rather support should be given to private sector refineries and modular refineries to allow for efficiency and competitiveness to drive down fuel pump prices.
“The newly commissioned Dangote Refinery by President Buhari—the largest single train petroleum refinery in the world, as well as its Petrochemical Complex—will revolutionize Nigeria’s economy,” he announced.
The former Nigerian minister of agriculture also said the country must urgently look at the cost of governance.
“The cost of governance in Nigeria is way too high and should be drastically reduced to free up more resources for development. Nigeria is spending very little on development.
“Nigeria is ranked among countries with the lowest human development index in the world, with a rank of 167 among 174 countries globally, according to the World Bank 2022 Public Expenditure Review report.
“To meet Nigeria’s massive infrastructure needs, according to the report, will require $3 trillion by 2050. According to the report, at the current rate, it would take Nigeria 300 years to provide its minimum level of infrastructure needed for development.
“All living Nigerians today, and many generations to come, will be long gone by then! We must change this. Nigeria must rely more on the private sector for infrastructure development to reduce fiscal burdens on the government,” he hammered.
He also tasked the Tinubu administration to raise tax revenue, as the tax-to-GDP ratio is still low.
“This must include improving tax collection, tax administration, moving from tax exemption to tax redemption, ensuring that multinational companies pay appropriate royalties and taxes and that leakages in tax collection are closed.”
However, he noted that simply raising taxes is not enough, “as many question the value of paying taxes, hence the high level of tax avoidance. Many citizens provide their own electricity, sink boreholes to get access to water, and repair roads in their towns and neighbourhoods.”
“These are essentially high implicit taxes. Nigerians, therefore, pay the highest ‘implicit tax rates’ in the world.
“Governments need to assure effective social contracts by delivering quality public services. It is not the amount collected, it is how it is spent and what is delivered. Nations that grow better run effective governments that assure social contracts with their citizens,” he added.
Nigeria’s Dollar Bonds Rise After Tinubu Inauguration
By Adedapo Adesanya
Nigeria’s dollar bonds rallied after President Bola Tinubu was officially conferred as the 16th president of Nigeria, a day that he announced plans to scrap the fuel subsidy programme, unify the exchange rate regime, as well as reduce high interest rates.
Bonds with a maturity date of 2047 jumped 3.3 per cent to 66.750 cents on the Dollar.
The debt instrument due in 2049 gained 2.9 per cent, and those maturing in 2051 advanced 3.5 per cent.
The gains came as markets in London and the US reopened following national holidays as well as a day after Mr Tinubu’s speech at his inauguration on Monday.
On fuel subsidy, Mr Tinubu said, “Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.
“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime, which has increasingly favoured the rich more than the poor.”
He said that since there was no provision for subsidy in the budget from July 1, noting that the policy would be removed.
He also planned to bring Nigeria into a unilateral exchange rate regime to help staunch the continued FX crisis that has gripped investors and average Nigerians.
“The Central Bank must work towards a unified exchange rate. This will direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy,” he said.
He also assured both local and foreign investors that his administration would move to reduce the high interest rate that has stymied faith in Nigeria being a destination for good investments.
“Interest rates need to be reduced to increase investment and consumer purchasing in ways that sustain the economy at a higher level,” Mr Tinubu said.
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