Economy
Economic Downturn, Elections Frustrate Sale of GSK Agbara Factory
By Dipo Olowookere
The sale of the Agbara factory of GlaxoSmithKline (GSK) Consumer Nigeria Plc in Ogun State is yet to be concluded, Business Post has learned.
In 2019, the board of the biopharma company said its manufacturing plant in Ogun State would be shut down by the third quarter of 2021 as the firm was restructuring its business model.
According to a statement released on the development, GSK said the production of its drugs and other products would be handled by a “suitable third party local manufacturer,” saying this was the best strategy to “better serve the Nigerian patients and consumers,” as this development will “not impact GSK’s broader commitments to global health in Nigeria and across Africa.”
It explained that, “This restructuring, which would be effective in Q3 2021, involves working with local contract manufacturers for the supply of GSK’s products, where possible.
“This would support the building of local expertise, transfer of technical knowledge and improve local production capacities in the country.”
Business Post gathered that the GSK Agbara factory was to be offloaded in 2022, but it suffered a setback because buyers were sceptical about the outcome of the 2023 general elections and the macroeconomic environment in Nigeria.
This forced the management to offload some parts of the factory in bits, according to the information contained in the audited financial statements of the organisation for 2022.
GSK said at the time it shut down the factory, the plant and machinery, furniture and fittings, and motor vehicles were worth N666 million, N28 million and N21 million, respectively, with plans to have them sold “within a one-year period.”
“However, due to circumstances that arose in the course of the year, which were previously considered unlikely, some of the assets were not sold as at December 31, 2022,” a note from the results stated.
Explaining the reason for this, the company said, “In 2022, the Nigerian economy took a downturn, and the negative perception of the occurrence of the 2023 general elections in Nigeria made businesses stall on making capital investment decisions which affected the sale of these assets.
“The group took necessary action to respond to the change in these circumstances through direct engagement with potential purchasers to complement the bidding approach originally planned.
“Furthermore, the assets have been impaired and are being actively marketed at a price that is reasonable to their fair value, given the change in circumstances.
“During the year, plants and machinery and motor vehicles with carrying amounts of N29.7 million and N4.8 million, respectively, were disposed of during the year through several bidding processes. Net gains of N7.1 million, which arose from the disposals, have been reported in other gains and losses in the statement of profit or loss under the non-operating segment. There are no cumulative income or expenses included in other comprehensive income relating to the assets held for sale.
“Subsequent to 31 December 2022, additional disposals with a carrying amount of N114 million have been made as at the date of approval of these consolidated and separate financial statements. Negotiations and contracting are currently ongoing with several potential buyers for the remaining assets yet to be disposed of, and the directors expect that all assets will be sold in 2023,” it said.
The 2023 general elections were conducted by the Independent National Electoral Commission (INEC), and Mr Bola Tinubu of the ruling All Progressives Congress (APC) was declared the president-elect, though his mandate is being challenged by Mr Peter Obi of the Labour Party and Mr Atiku Abubakar of the Peoples Democratic Party (PDP).
On Thursday, GSK released its financial statements for last year, and the board proposed the payment of a 55 Kobo dividend to shareholders.
This was after the organisation grew its revenue for the year to N25.4 billion from the N22.5 billion achieved in the preceding year, as the profit before tax closed at N1.2 billion as of December 31, 2022, in contrast to N945.8 million as of December 31, 2021, with the post-tax profit closing at N771.2 million compared with the previous year’s N658.8 million.
By Adedapo Adesanya
President Bola Tinubu on Friday presented a budget proposal of N58.47 trillion for the 2026 fiscal year titled Budget of Consolidation, Renewed Resilience and Shared Prosperity to a joint session of the National Assembly, with capital recurrent (non‑debt) expenditure standing at 15.25 trillion, and the capital expenditure at N26.08 trillion, while the crude oil benchmark was pegged at $64.85 per barrel.
Business Post reports that the Brent crude grade currently trades around $60 per barrel. It is also expected to trade at that level or lower next year over worries about oil glut.
At the budget presentation today, Mr Tinubu said the expected total revenue for the year is N34.33 trillion, and the proposal is anchored on a crude oil production of 1.84 million barrels per day, and an exchange rate of N1,400 to the US Dollar.
In terms of sectoral allocation, defence and security took the lion’s share with N5.41 trillion, followed by infrastructure at N3.56 trillion, education received N3.52 trillion, while health received N2.48 trillion.
Addressing the lawmakers, the President described the budget proposal as not “just accounting lines”.
“They are a statement of national priorities,” the president told the gathering. “We remain firmly committed to fiscal sustainability, debt transparency, and value‑for‑money spending.”
The presentation came at a time of heightened insecurity in parts of the country, with mass abductions and other crimes making headlines.
Outlining his government’s plan to address the challenge, President Tinubu reminded the gathering that security “remains the foundation of development”.
He said some of the measures in place to tame insecurity include the modernisation of the Armed Forces, intelligence‑driven policing and joint operations, border security, and technology‑enabled surveillance and community‑based peacebuilding and conflict prevention.
“We will invest in security with clear accountability for outcomes—because security spending must deliver security results,” the president said.
“To secure our country, our priority will remain on increasing the fighting capability of our armed forces and other security agencies by boosting personnel and procuring cutting-edge platforms and other hardware,” he added.
By Aduragbemi Omiyale
The deadline for the recapitalisation of the Nigerian pension industry has been extended by six months to June 2027 from December 2026.
This extension was approved by the National Pension Commission (PenCom), the agency, which regulates the sector in the country.
Addressing newsmen on Thursday in Lagos, the Director-General of PenCom, Ms Omolola Oloworaran, explained that the shift in deadline was to give operators more time to boost the capital base, dismissing speculations that the exercise had been suspended.
“The recapitalisation has not been suspended. We have communicated the requirements to the Pension Fund Administrators (PFAs), and we expect every operator to be compliant by June 2027. Anyone who is not compliant by then will lose their licence,” Ms Oloworaran told journalists.
She added that, “From a regulatory standpoint, our major challenge is ensuring compliance. We are working with ICPC, labour and the TUC to ensure employers remit pension contributions for their employees.”
The DG noted that engagements with industry operators indicated broad acceptance of the policy, with many PFAs already taking steps to raise additional capital or explore mergers and acquisitions.
“You may see some mergers and acquisitions in the industry, but what is clear is that the recapitalisation exercise is on track and the industry agrees with us,” she stated.
PenCom wants the PFAs to increase their capital base and has created three categories, with the first consists operators with Assets Under Management of N500 billion and above. They are expected to have a minimum capital of N20 billion and one per cent of AUM above N500 billion.
The second category has PFAs with AUM below N500 billion, which must have at least N20 billion as capital base.
The last segment comprises special-purpose PFAs such as NPF Pensions Limited, whose minimum capital was pegged at N30 billion, and the Nigerian University Pension Management Company Limited, whose minimum capital was fixed at N20 billion.
By Adedapo Adesanya
Three securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Thursday, December 18.
According to data, Central Securities Clearing System (CSCS) Plc led the losers’ group after it slipped by N2.87 to N36.78 per share from N39.65 per share, Golden Capital Plc depreciated by 77 Kobo to end at N6.98 per unit versus the previous day’s N7.77 per unit, and FrieslandCampina Wamco Nigeria Plc dropped 19 Kobo to sell at N60.00 per share versus Wednesday’s closing price of N60.19 per share.
At the close of business, the market capitalisation lost N16.81 billion to finish at N2.147 billion compared with the preceding session’s N2.164 trillion, and the NASD Unlisted Security Index (NSI) declined by 24.76 points to 3,589.88 points from 3,614.64 points.
Yesterday, the volume of securities bought and sold increased by 49.3 per cent to 30.5 million units from 20.4 million units, the value of securities surged by 211.8 per cent to N225.1 million from N72.2 million, and the number of deals jumped by 33.3 per cent to 28 deals from 21 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value with a year-to-date sale of 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
Similarly, InfraCredit Plc ended as the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units exchanged for N524.9 million.
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