Economy
Business Confidence in Nigeria Falls in February Amid Rise in Input Costs
By Modupe Gbadeyanka
Business conditions in Nigeria slowed to 51.0 in February 2024 from 54.5 in January 2024, as price pressures intensified in the private sector at an unprecedented pace in over a decade of data collection, the Stanbic IBTC Bank Purchasing Managers’ Index (PMI) has revealed.
A statement from the lender disclosed that the improvement in business conditions was the weakest since the recovery in the private sector began last December.
It stated that input costs surged higher in the period under consideration as a result of higher fuel prices and exchange rate weakness, which drove up material costs.
The latest rise in overall input costs was by far the sharpest since the survey began in January 2014, with around 78 per cent of respondents signalling an increase over the month.
It was observed that both input costs and output prices increased at the sharpest rates on record, with rising prices impacting demand. As a result, rates of expansion in output and new orders slowed sharply over the month, while employment decreased for the first time in 10 months, as business confidence dropped to the lowest on record.
The report stated that output price inflation also hit a fresh record high in February as firms passed through rising input costs to their customers.
Steep price pressures acted to limit new orders in the private sector. Although new business increased for the third successive month amid some positive signs of underlying demand, the rate of expansion slowed sharply and was the weakest in this sequence.
This was also the case with business activity, which increased only slightly, as rising activity in the agriculture and services sectors contrasted with falls in manufacturing and wholesale & retail.
Signs of weakness in the private sector led companies to lower their staffing levels for the first time in ten months, albeit marginally.
Purchasing activity was also scaled back following a marked expansion in the previous survey period. Firms were able to keep on top of workloads, however, and reduced outstanding business for the first time in three months.
A desire to be able to respond to new orders promptly meant that companies continued to increase their inventories. Meanwhile, suppliers’ delivery times shortened again.
Unprecedented inflationary pressures amid currency weakness and signs of demand softening meant that business confidence dropped to the lowest on record in February.
Firms remained optimistic regarding the year-ahead outlook for activity, however, often reflecting business expansion plans and hopes for an improvement in economic conditions.
“Stanbic IBTC Bank headline PMI slowed to its weakest level since December 23, moderating remarkably to 51.0 in February from 54.5 in January.
“Employment level dropped below the 50.0 no-change mark for the first time in 10 months while the output and new order’s expansion both weakened significantly in the month.
“These weaknesses were in line with the sharp local currency depreciation, increase in fuel prices, and rapidly rising food costs in February, thereby driving overall cost pressures in the month.
“These lingering pressures may push domestic demand low, limiting growth potentials in Q1 of 24,” the Head of Equity Research for West Africa at Stanbic IBTC Bank, Mr Muyiwa Oni, said.
By Modupe Gbadeyanka
An unauthorised Bureaux De Change (BDC) operator, Mr Faruk Umar, has been convicted and sentenced to six months imprisonment by Justice Chukwujekwu Aneke of the Federal High Court sitting in Ikoyi, Lagos.
Justice Aneke on Wednesday, February 5, 2025, held that Mr Umar was guilty of the offence levelled against him by the Economic and Financial Crimes Commission (EFCC).
The judge also pronounced a fine of N50,000, in lieu of the prison sentence, which should be paid into the Consolidated Revenue Account of the Federation. His phone was also forfeited to the Federal Government of Nigeria.
Mr Umar’s road to the correctional centre began when he was arrested by operatives of the EFCC for dealing in foreign exchange transactions without a requisite licence from the Central Bank of Nigeria (CBN).
He pleaded guilty to a one-count charge raised against him, which read, “That you, Faruk Umar, sometime in August 2024 at Eko Hotel Area, Victoria Island Lagos State, within the jurisdiction of this court, engaged in a foreign exchange transaction other than through the official foreign exchange market and you thereby committed an offence contrary to Section 11(1) (a) of the National Economic Intelligence Committee Establishment, (ETC) Act, 1994 and punishable under Section 11(2) of the same Act.”
The convict, alongside others, was arrested on August 26, 2024, following intelligence on the activities of illegal BDC operators at the Eko Hotel area of Victoria Island, Lagos.
He was subsequently arraigned by the Lagos Zonal Directorate of the agency on a one-count charge bordering on fraudulent foreign exchange transactions.
After he pleaded guilty, the prosecution counsel, C.C.Okezie, sought to present an investigative officer of the EFCC, Hamisu Sanni, to review the facts of the matter.
Sanni narrated that the convict confessed to being involved in buying and selling of foreign currency without a licence from the Central Bank of Nigeria, CBN.
He told the court that Mr Umar’s phone was subjected to forensic examination, adding that “It revealed over 40 conversations related to forex transactions with other individuals.”
Thereafter, Okezie, through Sanni, tendered in evidence the confessional statements of the convict as well as findings from the investigation. He, therefore, prayed the court to convict him as charged and also sentence him accordingly.
By Aduragbemi Omiyale
Nigerian financial services provider VFD Group Plc impressed its shareholders with an 84.45 per cent improvement in its gross earnings in the 2024 fiscal year after making strategic investments in financial services, fintech, asset management, real estate, logistics, and capital markets.
In the financial statements released to the Nigerian Exchange (NGX) Limited, the company recorded N83.21 billion as gross earnings in FY 2024, higher than the N45.11 billion achieved in FY 2023.
It was observed that investment and similar income accounted for 85.54 per cent of the gross earnings with N71.17 billion versus N34.28 billion a year earlier, indicating a 107.62 per cent growth.
VFD attributed this to incomes from divestments, interest income from treasury activities, loans, advances and placements, and dividend income.
Further analysis of the results revealed that other income contributed 11.24 per cent to the gross earnings in the period under review with N9.35 billion compared with the N7.16 billion recorded in the preceding financial year.
This was majorly impacted by income from logistics and hospitality businesses, fair value gain on Investment property, and foreign exchange gains.
Business Post reports that the decision of the management to increase the staff strength to meet the increased level of business activities as well as salaries review to retain the staff raised the total expenses in the year by 49.49 per cent to N19.75 billion from N13.21 billion in the previous year.
A look at this line item showed that personnel expenses gulp 23.24 per cent of the total expenses after taking N4.59 billion versus N3.39 billion in FY 2023.
The organisation ended the year with a net profit of N10.41 billion compared with about N750 million in the preceding year after a payment of N2.05 billion as taxes versus N270.00 million a year earlier.
“In 2024, the group demonstrated a robust financial performance, underscoring the effectiveness of our investment strategy and the resilience of our business model.
“Strategic investments and divestments drove a significant increase in earnings and profitability during the year.
“We reinforced financial resilience, expanded our investment portfolio, and strengthened our governance framework, all while embracing digital innovation,” the chief executive, Mr Nonso Okpala, stated.
“Looking ahead to 2025, we are committed to capitalizing on emerging opportunities across Africa and the Western World, while consistently delivering long-term value for our shareholders, leveraging innovation, strategic partnerships, and disciplined execution to sustain our market leadership,” he added.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange returned to the green territory in Week 6 of 2025 after it closed higher by 2.1 per cent last week.
This increased the portfolios of investors by N37.43 billion to leave the market capitalisation of the OTC exchange at N1.804 trillion compared with the N1.766 trillion it closed a week earlier and the NASD Unlisted Security Index (NSI) went up by 0.46 per cent or 66.06 points to settle at 3,184.87 points, in contrast to the previous week’s 3,118.81 points.
In the week, the volume of equities transacted in the sixth trading week of the year shrank by 73.3 per cent to 31.3 million units from 117.0 million units, the value of securities traded slumped by 75.6 per cent to N53.2 million from N217.8 million.
Afriland Properties Plc ended the week as the most active stock by value with N12.1 million, Industrial and General Insurance (IGI) Plc recorded N10.7 million, FrieslandCampina Wamco Nigeria Plc traded N7.5 million, Geo-Fluids Plc posted N6.0 million, and 11 Plc recorded N5.1 million.
IGI Plc was also the most traded instrument by volume with 27.2 million units, Geo-Fluids Plc transacted 1.33 million units, Afriland Properties Plc traded 0.722 million, Food Concepts Plc exchanged 0.496 million units, and Mixta Real Estate Plc posted 0.375 million units.
Okitipupa Plc gained 33.0 per cent to end at N93.90 per unit versus N70.13 per unit, Mixta Real Estate Plc appreciated by 20.9 per cent to N3.42 per share from N2.83 per share, Food Concepts Plc grew by 14.6 per cent to N1.65 per unit from N1.44 per unit, and Central Securities Clearing System (CSCS) Plc soared by 10.6 per cent to N24.00 per share from N21.74 per share.
In addition, UBN Property Plc rose by 9.9 per cent to N2.22 per unit from N2.02 per unit, Afriland Properties Plc advanced by 4.6 per cent to N17.00 per share from N16.25 per share, FrieslandCampina Wamco Nigeria Plc surged by 2.8 per cent to N40.10 per unit from N39.01 per unit, and Geo-Fluids Plc added 2.7 per cent to end at N4.54 per share versus N4.42 per share.
On the flip side, Air Liquide Plc depreciated 10 per cent to N7.92 per unit from N8.80 per unit, Acorn Petroleum Plc dropped 8.7 per cent to finish at N1.26 per share versus N1.38 per share, IGI Plc plunged by 4.8 per cent to 40 Kobo per unit from 42 Kobo per unit, and 11 Plc moderated by 1.2 per cent to N253.00 per share from N256.00 per share.
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