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Economy

Forex Scarcity Posing Serious Threat to Manufacturing Industry

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By Adedapo Adesanya

Scarcity of foreign exchange is taking a toll on the Nigerian manufacturing industry as the global oil price crisis is hindering the importation of raw materials.

The industry’s difficulties are the latest signs of strain in Nigeria’s foreign exchange regime which was devalued in March following crash in the oil market.

According to a Bloomberg report on Tuesday, members of the Manufacturers Association of Nigeria (MAN) have been unable to access hard currency for the past five weeks.

There also seems to be an estimated $1 billion backlog of unmet dollar demand in the country, according to investment bank, FBNQuest, and this is telling on businesses that rely on imports such as pharmaceuticals, electrical products and automobile businesses.

According to the President of MAN, Mr Mansur Ahmed, on Monday, “Everybody is trying to remain afloat.

“Certain sectors will suffer more than others, notably those companies that are heavily dependent on imports.”

The Central Bank of Nigeria (CBN) recently assured foreign investors looking to repatriate their funds to be patient as it will be done in an orderly manner, in line with the apex bank’s procedure.

With the depreciation facing the Naira across the various markets, manufacturers are now turning to domestic suppliers for raw materials, machinery and spare parts which are very expensive.

The association called on the CBN to review rules hindering the ability of lenders to extend credit. This includes “policy contradictions” that require banks to lend 65 percent of their deposits – a measure aimed at stimulating credit – while keeping 27.5 percent of their capital with regulators, which makes a “lesser quantum of money available for lending,” the group said in the statement.

Manufacturers are also seeking lower interest rates and bigger loans, the size of which “has shrunken greatly” as increased borrowing by the government crowds out companies.

On Monday, Business Post reported that the Naira traded at N445 per Dollar at the black market; N386 per Dollar at the Investors segment; and N361 per Dollar at the internship rate.

Meanwhile, the 12-month Naira forwards were trading at N514 per Dollar on Monday, suggesting investors see the currency falling to around that level in a year.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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Economy

FG Pledges Single-Digit Loans for Small Businesses

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By Adedapo Adesanya

The federal government has pledged to support Micro, Small and Medium Enterprises (MSMEs) with single-digit loans so as to boost their businesses.

This was disclosed by the Minister of State for Industry, Trade and Investment, Mrs Maryam Katagum, on Friday when members of the Nigerian Association of Small and Medium Enterprises (NASME) visited her in Abuja.

According to her, there is a lot of commendation at the recent retreat President Muhammadu Buhari had with the ministers for the MSMEs.

“In his closing speech, Mr President specifically said that every support will be given to ensure that MSMEs have access to credits.

“That is what we always preach and we will give every support to the MSMEs as the engine of economic growth to have access to credits at single digits,” Mrs Katagum said.

The Minister, who pointed out the critical role MSMEs play in growing the economy, said this role was further heightened during the COVID-19 lockdown.

“Even the woman selling groundnut or `akara’ couldn’t come out to practice her passion. Everybody felt the effect of the lockdown.

“We have to appreciate President Muhammadu Buhari for interventions that were provided for MSMEs during the lockdown.

“And once it was identified to put in some mechanism to stop the economy from going under, our ministry is one of the ministries asked to make submissions to see how to keep the economy going and ensure free flow of goods and services across the country.

“Our proposal was very easily accepted and the sum of N75 billion was allocated and we made a lot of progress.

“Average Nigerians appreciated the efforts and we have seen them giving their testimonies and right now we are on the last track which is the guaranteed off-take scheme,” the Minister said.

She appealed to the association to identify innovative ways that the Federal Government can assist MSMEs.

“As partners, your association has to start thinking of new innovative ways that we can assist MSMEs, it’s not just the finance.

“So, when you give them the money, they don’t know what to do with the money so you need to intensify the capacity building and sharing of information to know what is happening and where,” she said.

On his part, the President and Chairman of the governing council of NASME, Mr Abdulrashid Yerima, expressed the association’s commitment to deepening the relationship with the ministry.

Mr Yerima appreciated the ministry for including NASME in various committees set up by the government to support the development of MSMEs in Nigeria.

He, however, sought the appointment of members of the association to the boards of parastatals under the ministry and solicited the ministry’s support for inputs into human capital development for the association.

“Our association serving in the board of revenant agencies under the ministry will help us to make informed inputs into the policies of the agencies that impact MSME growth and development in Nigeria.

“Also support for capital development for our association is crucial for the development of skills and manpower to upscale MSMEs especially NASME,” Mr Yerima said.

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Economy

IGR: Osinbajo Expresses Worry Over Governors’ ‘Laziness’

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By Adedapo Adesanya

Vice President Yemi Osinbajo seems to be worried about the inability of state governors to be innovative in boosting their respective Internally Generated Revenue (IGR).

The number 2 man, speaking at the maiden edition of Ekiti State’s investment forum in Ado-Ekiti, has, therefore, tasked them to think out of the box and act like a sovereign state so as to make them challenge countries of the world.

“Thinking differently, there is a need for a sub-national to think like a sovereign state. You have a bigger GDP (gross domestic product) and even more revenues than many nations.

“There is a different mindset when you are sure of a monthly allocation of cash at least enough to pay salaries, whether you generate income or not. This is the challenge. The so-called Dutch disease, one becomes complacent,” he said.

“But what if you had to take responsibility for all those who reside within your borders, pay all salaries, from internally generated revenue?” he queried.

Drawing a parallel, he said that Lagos State improved its IGR from N600 million monthly in 1999/2000 to about N45 billion today, adding that the illegal seizure of the allocations to the state by the then federal government was the shock that forced the state to rethink.

Speaking further, Mr Osinbajo noted that although a state within a federation is not a nation, it must behave like one, to further boost its economic development.

“The economy of the sub-national is a peculiar animal. The state within the federation is not a nation, but it must behave like one, it derives some resources from the federal pool, and generates some income, the overall sum will provide infrastructure and services to the community.

“The size of the sum and the quantum of opportunity available to provide livelihoods for the populace will depend on how the state enables local and external investors, small and large to put their resources into business and commercial activity business in the State.

“The funded portion of the state’s budget is after all a mere fraction of the sum total of economic activity or income-generating activity, formal or informal within the state. So, the attractiveness of a state to commerce is a radical issue,” Mr Osinbajo said.

He asserted that “the very lives and livelihoods of the people within the borders of the State, whether the people will live prosperous and happy lives, be educated, have access to affordable medical care, depends on it.”

He then encouraged them to key into the benefit from a private-sector led economy, noting that the model is the right way to go, as the business is the standpoint of the private sector, while governments should as much as possible facilitate, or at best, collaborate.

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Economy

NGX Group Finally Lists 1.964 billion Shares, Trades at N17.75

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NGX Group lists 1.964 billion Shares

By Aduragbemi Omiyale

A total of 1,964,115,918 shares, representing the issued share capital of the Nigerian Exchange (NGX) Group Plc, were successfully listed on the trading platform of NGX Limited on Friday, October 15, 2021.

Business Post reports that the stocks were listed on the exchange today by introduction at a unit price of N17.75, higher than the N14.68 per unit it last traded on the NASD Securities Exchange on Friday, October 8, 2021, it the shares used to be traded.

This newspaper gathered that at the exchange today, investors traded about 3.6 million units of the company’s equities worth N63.2 million in 31 deals and closed flat at N17.75.

It was listed on the main board of the NGX having satisfied the listing requirements of the exchange and obtained relevant regulatory approvals.

The company is on the bourse in the financial services and capital market infrastructure sector, with the ticker NGXGROUP.

The top members of staff of the company were honoured today with the closing gong ceremony and the Chairman, Mr Abimbola Ogunbanjo, in his speech, stated that, “Today’s listing of NGX Group on NGX is another milestone attained pursuant to the group’s 2018 – 2021 corporate strategy.

“Our shareholder base has more than doubled since our demutualisation in March 2021 and our valued shareholders will benefit from the enhanced liquidity that listing on the exchange will facilitate.

“This listing will also enable a much wider universe of potential investors and market participants to share in our growth journey.

“As a board, we embrace the letter and spirit of the listing requirements and we are committed to transparent disclosure, proactive stakeholder engagement and exemplary corporate governance.”

Also speaking, the Group Managing Director/Chief Executive Officer of NGX Group, Mr Oscar Onyema, disclosed that, “Today’s listing of NGX Group on the nation’s premier exchange will enable institutional investors globally as well as the Nigerian public to invest in Nigerian Exchange Group Plc.

“With strengthening market dynamics, serving the largest economy in Africa, NGX Group’s listing allows us to expand in key capital market infrastructure verticals and look beyond Nigeria’s borders, as we deliver on our growth plans to become Africa’s leading capital market infrastructure group.”

As for the CEO of NGX, Mr Temi Popoola, he described the listing as a milestone, expressing his excitement about the development.

“We congratulate the board and management first on a successful demutualisation and on its subsequent listing. This move is particularly exciting, as it will position NGX Group to provide liquidity to members while stimulating the capital market ecosystem to grow at the same pace as the economy.

“Today, we reiterate our commitment to being a trusted partner to NGX Group and other listed companies as we continue to build a platform that allows our listed companies, investors and other stakeholders to maximise value in our market,” he said.

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