Economy

West African Economies’ Risk-Reward Score Improve

Published

6 years ago

21/06/2018

By Dipo Olowookere

Increased political stability, improved commodity prices and effective public economic reforms led to an improvement of the risk-reward score in several West African economies, according to the 2018 Africa Risk-Reward Index from Control Risks and Oxford Economics.

Ghana leads these positive developments for West Africa, recording the strongest improvement in its risk-reward score in Africa, after Zimbabwe and Egypt. Both Nigeria and Senegal benefit from a greatly improved risk score.

Tom Griffin, Senior Partner for West Africa at Control Risks, comments that, “In 2017 many West African governments have embarked on an impressive journey to implement the right reforms for economic growth and improvement of investors’ confidence.

“Since coming to power in January 2017, Ghana’s government has continued to undertake a programme of macroeconomic reforms which have focused on reducing the deficit and external debt. In the last year, this had a particularly positive impact on issues such as credit and exchange risk.

“At the same time, Ghana has attempted to improve the business environment for investors by reducing the bureaucratic and taxation burden, as well as laying out plans for further investment activity in the oil and gas and manufacturing sectors.

“In Nigeria, the recently initiated Economic Recovery and Growth Plan has begun to tackle some of the economy’s challenges, including corruption and an infrastructure deficit.

“The plan has also sought to remove bottlenecks to improve the ease of doing business, which in turn boosts investors’ confidence.

“In the last three years, Senegal’s Emerging Senegal Plan has already led to steady growth, reaching close to 6.4% in 2017.

“The reduction in its risk score is one of the most positive changes in the 2018 Africa Risk-Reward Index and can be explained by structural reforms to improve the business environment, strengthened macro-economic fundamentals and a controlled debt management policy.”

Further findings of the report showed that Angola’s leadership change has not yet improved its reward score, but its risk score has gone down: Angola’s new president, João Lourenço, has acted with remarkable speed and decisiveness to consolidate his authority. Efforts to dismantle his predecessor’s networks have provided new opportunities for foreign investment in sectors previously dominated by companies linked to the former president and his family. Combined with an improved regulatory environment, investors can seek opportunities predominantly in the oil and gas, diamond, and telecommunications sectors. Reward score: 3.65 / risk score: 6.55.

South Africa – slightly increased reward score and reduced risk score as political uncertainty eases: Investor confidence has increased since Cyril Ramaphosa assumed the presidency in February 2018. The implementation of policies – intended to consolidate fiscal expenditure and tackle corruption in public institutions and state-owned enterprises – increases opportunities for doing business in South Africa. But deeply entrenched patronage networks and electoral pressure ahead of the 2019 general elections will contribute to a slow recovery of South Africa. Reward score: 4.78 / risk score: 4.74

Kenya’s reward score remains one of the highest in sub-Saharan Africa, but the government’s external debt burden raises concerns: Winning the election in 2017, Kenya’s leading Jubilee Party of Kenya continues its pro-business policies. However, concerns arise over the government’s external debt burden, with a new USD 2bn Eurobond issued in February even as the proceeds of a previous issue have yet to be fully accounted for. Furthermore, improving relations between the government and the opposition will be instrumental in ensuring that political tensions do not undermine economic growth, and more prudent fiscal and macroeconomic policies are needed to maintain positive economic prospects. Reward score: 6.36 / risk score: 5.51

Côte d’Ivoire, with a forecasted real GDP growth rate of 7% in 2018, continues its impressive economic recovery, but great challenges remain: With reforms to the business environment and efforts to bring foreign investors back after the 2010-2011 crisis, Côte d’Ivoire has achieved amongst the highest growth rates in the world in recent years, and sectors such as construction, telecommunications, banking and retail have seen considerable growth. However, severe obstacles to a full recovery persist, including political interference and corruption, socioeconomic discontent, shortcomings in security-sector reform, and growing competition ahead of the potentially volatile 2020 presidential poll. Reward score: 6.51 / risk score: 6.24.

Senegal – growing investment and a reduced risk score presage continuous growth: Under the Emerging Senegal Plan, growth has increased steadily over the last three years, reaching close to 6.4% in 2017. Growing exports, a more diversified economy and increased interest from large international investors as a result of the promising offshore oil and gas discoveries make Senegal one of the poster children in sub-Saharan Africa. The reduction in its risk score is one of the most positive changes in the 2018 Africa Risk-Reward Index. Reward score: 5.76 / risk score: 4.56

Morocco – economic reforms improve the country’s resilience and make its exports more competitive, but social discontent remains a challenge: With one of the lowest risk scores on the 2018 Africa Risk-Reward Index and a relatively stable reward score, Morocco’s economic reforms prove to be a success. Medium-term growth will be enhanced by continued reforms to facilitate foreign investment, access to finance, quality of education and the business environment, as these represent the primary constraints to competitiveness and doing business. However, social-economic unrest over poor living conditions persists particularly in interior regions. Reward score: 5.77 / risk score: 4.10.

Economy

FAAC Disburses 1.727trn to FG, States Local Councils in December 2024

Published

8 hours ago

14/12/2024

Modupe Gbadeyanka

By Modupe Gbadeyanka

The federal government, the 36 states of the federation and the 774 local government areas have received N1.727 trillion from the Federal Accounts Allocation Committee (FAAC) for December 2024.

The funds were disbursed to the three tiers of government from the revenue generated by the nation in November 2024.

At the December meeting of FAAC held in Abuja, it was stated that the amount distributed comprised distributable statutory revenue of N455.354 billion, distributable Value Added Tax (VAT) revenue of N585.700 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.046 billion and Exchange Difference revenue of N671.392 billion.

According to a statement signed on Friday by the Director of Press and Public Relations for FAAC, Mr Bawa Mokwa, the money generated last month was about N3.143 trillion, with N103.307 billion used for cost of collection and N1.312 trillion for transfers, interventions and refunds.

It was disclosed that gross statutory revenue of N1.827 trillion was received compared with the N1.336 trillion recorded a month earlier.

The statement said gross revenue of N628.972 billion was available from VAT versus N668.291 billion in the preceding month.

The organisation stated that last month, oil and gas royalty and CET levies recorded significant increases, while excise duty, VAT, import duty, Petroleum Profit Tax (PPT), Companies Income Tax (CIT) and EMTL decreased considerably.

As for the sharing, FAAC disclosed that from the N1.727 trillion, the central government got N581.856 billion, the states received N549.792 billion, the councils took N402.553 billion, while the benefiting states got N193.291 billion as 13 per cent derivation revenue.

From the N585.700 billion VAT earnings, the national government got N87.855 billion, the states received N292.850 billion and the local councils were given N204.995 billion.

Also, from the N455.354 billion distributable statutory revenue, the federal government was given N175.690 billion, the states got N89.113 billion, the local governments had N68.702 billion, and the benefiting states received N121.849 billion as 13 per cent derivation revenue.

In addition, from the N15.046 billion EMTL revenue, FAAC shared N2.257 billion to the federal government, disbursed N7.523 billion to the states and transferred N5.266 billion to the local councils.

Further, from the N671.392 billion Exchange Difference earnings, it gave central government N316.054 billion, the states N160.306 billion, the local government areas N123.590 billion, and the oil-producing states N71.442 billion as 13 per cent derivation revenue.

Economy

Okitipupa Plc, Two Others Lift Unlisted Securities Market by 0.65%

Published

13 hours ago

14/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.65 per cent gain on Friday, December 13, boosted by three equities admitted on the trading platform.

On the last trading session of the week, Okitipupa Plc appreciated by N2.70 to settle at N29.74 per share versus Thursday’s closing price of N27.04 per share, FrieslandCampina Wamco Nigeria Plc added N2.49 to end the session at N42.85 per unit compared with the previous day’s N40.36 per unit, and Afriland Properties Plc gained 50 Kobo to close at N16.30 per share, in contrast to the preceding session’s N15.80 per share.

Consequently, the market capitalisation added N6.89 billion to settle at N1.062 trillion compared with the preceding day’s N1.055 trillion and the NASD Unlisted Security Index (NSI) gained 19.66 points to wrap the session at 3,032.16 points compared with 3,012.50 points recorded in the previous session.

Yesterday, the volume of securities traded by investors increased by 171.6 per cent to 1.2 million units from the 447,905 units recorded a day earlier, but the value of shares traded by the market participants declined by 19.3 per cent to N2.4 million from the N3.02 million achieved a day earlier, and the number of deals went down by 14.3 per cent to 18 deals from 21 deals.

At the close of business, Geo-Fluids Plc was the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with the sale of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.

In the same vein, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with the sale of 108.7 million units for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with a turnover of 297.3 million units worth N5.3 billion.

Economy

Naira Trades N1,533/$1 at Official Market, N1,650/$1 at Parallel Market

Published

14 hours ago

14/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The Naira appreciated further against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N1.50 or 0.09 per cent to close at N1,533.00/$1 on Friday, December 13 versus the N1,534.50/$1 it was transacted on Thursday.

The local currency has continued to benefit from the Electronic Foreign Exchange Matching System (EFEMS) introduced by the Central Bank of Nigeria (CBN) this month.

The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.

The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN.

Market analysts say the publication of real-time prices and buy-sell orders data from this system has lent support to the Naira in the official market and tackled speculation.

In the official market yesterday, the domestic currency improved its value against the Pound Sterling by N12.58 to wrap the session at N1,942.19/£1 compared with the previous day’s N1,954.77/£1 and against the Euro, it gained N2.44 to close at N1,612.85/€1 versus Thursday’s closing price of N1,610.41/€1.

At the black market, the Nigerian Naira appreciated against the greenback on Friday by N30 to sell for N1,650/$1 compared with the preceding session’s value of N1,680/$1.

Meanwhile, the cryptocurrency market was largely positive as investors banked on recent signals, including fresh support from US President-elect, Mr Donald Trump, as well as interest rate cuts by the European Central Bank (ECB).

Ripple (XRP) added 7.3 per cent to sell at $2.49, Binance Coin (BNB) rose by 3.5 per cent to $728.28, Cardano (ADA) expanded by 2.4 per cent to trade at $1.11, Litecoin (LTC) increased by 2.3 per cent to $122.56, Bitcoin (BTC) gained 1.9 per cent to settle at $101,766.17, Dogecoin (DOGE) jumped by 1.2 per cent to $0.4064, Solana (SOL) soared by 0.7 per cent to $226.15 and Ethereum (ETH) advanced by 0.6 per cent to $3,925.35, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.