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BusinessDay 12 Apr 2018

34 BUSINESS DAY

34 BUSINESS DAY C002D5556 NEWS Investors bet on FinTech companies to grow earnings DAVID IBEMERE Investors are betting on FinTech companies to boost their capital as online peer-to-peer lending (p2p) continues to get approval of Nigerians as an alternative source of funding. P2p lending, also known as social lending or crowd lending, is a way of lending to individuals or businesses through online services that match lenders directly with borrowers without using traditional bank or credit union. The growth in the sector has been predicted to reach $897.85 billion globally, expanding at a significant compound annual growth rate (CAGR) of 48.2 percent to 2024, with Transparency Market, a research firm, sounding out Nigeria as one of the key markets propelled by the rise on internet penetration. With banks still reluctant to lend to all but those with the cleanest credit histories, p2p exchanges in the last two Mining confab set to provide opportunity for young Nigerians, investors DANIEL OBI Commercial value of Nigeria’s solid minerals sector is calculated at trillions of dollars. It is also said that the country loses about $40 billion annually in untapped gold mineral alone. While Nigeria is seeking for more revenue and creation of jobs, unfortunately, the domestic mining that suppose to offer millions of jobs is underdeveloped, as it currently accounts for only 0.5 percent of Nigeria’s GDP. Therefore, to deepen investors and young Nigerians interest in the sector, especially when songs of shift from oil and diversification is getting louder, a conference on the mining sector scheduled for May 30 – June 1, 2018, put together by the private sector is providing a training opportunity NPA plans to grant new 5-year concession agreement to Lilypond Terminal AMAKA ANAGOR-EWUZIE Managing director of the Nigerian Ports Authority (NPA), Hadiza Bala Usman, says the authority is concluding plans to renew the concession agreement with the concessionaire of the Lilypond Container Terminal in Ijora (ie. APM Terminals), an off-dock terminal in Lagos, owed by the NPA. BusinessDay understands that the concessionaire of the terminal is also making serious plans to establish an export processing and logistics facility at the terminal, especially for agric produce and other nonoil goods, if the concession agreement is renewed by years have seen exponential growth in the number of players to over 15 players, which include Kia Kia, Fint, Zefund, Ren money, instafunds, Aella credit, C24, Creditville, Cs Advanced, Kudi money, Lidya, Pay connect, Snap credit, Zedvance, EZUlike, among others. Although financial advisers point out that the services are still new and lack the safety net offered by traditional lenders, some investors who spoke with BusinessDay admit the rates on offer are attractive for providing loan. Chigozie Madu, a banking and finance lecturer in Delta State Polytechnic, told BusinessDay, “Despite the attraction for investors it comes with a risk as there is no harmonised framework for the sector, the only available is the legal and regulatory framework that is generally applicable to financial institutions. However, the money deposited is not protected by the financial bodies, meaning losses have to be borne by individual lenders.” for young Nigerians to acquire professional skills and knowledge about different aspects of mining portfolios. Organisers of the conference with the theme ‘exploring young talents and professionals for ingenuous and competitive mining solutions for economic growth in Africa’ scheduled at Eko Hotels said the training and workshop sessions during the conference will cut across the key mining knowledge areas which includes technical, management and financial development. The Dipsolution Africa Mining Exhibition and Awards workshop will be certified and facilitated by industry knowledge partners, Kabiru Arogundade, the programme director, told BusinessDay He said the pan-African event would create a opportunity for sponsors, partners the NPA. Currently, the concession agreement, which was formerly given to APM Terminals, has long ended as the former concessionaire awaits NPA to renew the agreement. Speaking in Lagos on Tuesday, when the management of the Infrastructure Concession Regulatory Commission (ICRC) led by its acting director-general, Chidi Izuwah, paid her a working visit, Usman said the NPA management had resolved to key into the business model meant for the Lilypond Terminal, which she stated would improve service delivery in the terminal. She charged all concerned with the working Despite this, Jumai Ademola, a financial analyst, said he had deposited his money across Fint, Kia Kia and his returns had been consistent. “P2p lenders could in time replace traditional banks,” he said, noting that the “social lending” offered a solution to the problems that ordinary people face when trying to access personal loans, an innovative alternative that was going to shake up the banking sector.” “In the last few months, we get more lenders who want to deposit money with us,” Kola Alabi, founder of Kashnow, said. “Our borrowers using the site are rated according to their credit history, and lenders can choose to provide them with loans directly, or spread their loans across a pool of borrowers. “Although the default rate among borrowers has crept up slightly in recent months, we are operating a very rewarding programme both for our investors and borrowers,” Alabi said. and other interested companies to sell and promote their products and services to diverse audience. “Exhibitors will have the opportunity to meet oneon- one with their target audience while promoting their business to over 1,000 key participants and over 5,000 exhibition visitors across Africa and other continents,” Arogundade said. Describing the mining conference as one event with multiple opportunities, the programme director also said that there will be deal fair during the conference. This is aimed at building partnership/ investment around mining projects while creating a golden opportunity for participants in different categories to explore new business dimension and make exclusive investment and partnership deals. document for the review of the terminal’s agreement to speed up the processes that would allow for the swift consideration and possible approval for a five-year renewal being sought by management of Lilypond. According to Usman, the Authority is determined to support the completion of all deep seaport projects across the country, considering their potential to the future maritime activities in Nigeria. “The early completion of the deep port projects will not only facilitate operational efficiency in the nation’s maritime but would further strengthen the Federal Government’s policy of the Ease of Doing Business,” Usman said. Thursday 12 April 2018

Thursday 12 April 2018 TEXEM to discuss building successful organisations that endure happen by chance; strong partnerships and cooperation are key. For too long, a lack of cooperation has blighted our great continent’s development.” But change is happening, he pointed out. Nearly all Africa’s leaders recently signed the framework agreement to set up the African Continental Free Trade Area which, when implemented, will be the biggest free trade agreement since the establishment of the World Trade Organisation. Should all African countries join the continental free trade area by 2030, it will create a market of 1.7-billion people with a consumer and business spending capacity of $6.7-trillion. Separately, but compli- TEXEM, a business management training outfit, is inviting editor of a top British journal in May to discuss with senior managers in Nigeria what it takes to build a successful business organisation. The training is against the background of a research carried out by the National Federation of Independent Business (NFIB) in the USA, which showed that 56 percent of new companies fail within just four years of establishment. Evidence shows that the failure rate even for established brands in Nigeria is worse. It is therefore vital for senior executives to consistently develop strategic leadership skill sets to position their organisation for success. Due to the propensity for Nigerian organisations to fail as a result of the harsh contextual realities inherent in Africa’s largest economy, Respite for Nigeria airline operators as Afreximbank partners Russia on aircraft acquisition IFEOMA OKEKE Respite is finally here for airline operators as African Export Import Bank (Afreximbank) Wednesday partnered the Russian Export Centre to provide brand new aircraft for operations in Nigeria. This partnership is coming at a time airlines operators have struggled to pay 26 percent interest loan to banks to acquire new aircraft, and facing strenuous conditions from United States and European countries on aircraft leasing. Announcing the partnership in Lagos, Rene Awambeng, global head, client relations, Afreximbank, said the bank had entered into a strategic partnership with the Russian Export Centre, the export bank of the Russian Federation, to promote aviation in Africa, so that it could meet one of its strategic goals. The Russian aircraft type is the Sukhoi Superjet, a low cost Amid controversy, Lagos tells businesses to report ‘illegal billing’ on boreholes JOSHUA BASSEY Amid controversy and public outcry against its imposition of charges on borehole drilling in Lagos, the state government has asked residents and business organisations to report cases of ‘illegal billing’ or borehole closure by its officials. Babatunde Durosinmi- Etti, commissioner for the environment, at a meeting with heads of agencies and parastatals under his supervision, including Lagos State Water Regulatory Commission and Lagos Water Corporation, warned that the government would not allow the closure of any borehole, except where leaders need actionable and practical toolkits that would assist them to drive effectiveness, efficiency, innovation and lasting legacies. In a move to ensure businesses in Nigeria excel in these hard times and beyond, Texem UK Limited has developed an executive development programme titled “Building Successful Organisation that Endures: Aligning Purpose, Process, Performance and People”- a unique opportunity that executives cannot afford to miss. To gain insights on how to develop innovative, commercially valuable and sustainable competitive edge, Texem is inviting the world-renowned professor, Pawan Budhwar, editor-in-chief of British Academy of Management, and professor of Work Psychology at Aston Business School on May 2 and 3, 2018, at Eko Hotel, Victoria Island Lagos. aircraft, a 100-seater aircraft, depending on the configuration, with enough legroom and Italian Style Interior. “The Russians have invested significant amount in research and development in their aircraft which are very efficient in terms of fuel consumption and are ecologically very friendly. “We have partnered with Russian Export Centre, to provide solutions so that African entrepreneurs either private sectors, national airlines, private sectors, operators of airlines can acquire these aircraft through asset structures to meet our objective of moving people from one part of the country to another,” Awambeng said. He explained that part of the partnership is to work with Nigerian authorities to certify the Russian aircraft to be able to operate in Nigeria, adding that the bank will enter commercial negotiations such was found to be contaminated and unfit for domestic use. It would be recalled that the Manufacturers Association of Nigeria (MAN) led by its president, Frank Jacobs, during a visit to Governor Akinwunmi Ambode in April 2017, raised the alarm over high charges placed on member companies by Lagos State Water Regulatory Commission on sinking of boreholes. Jacobs said: “We have received complaints from our members of charges up to N800,000 by the Lagos State Water Regulatory Commission. We are constrained to draw your attention to recent activities of the Lagos State water Regulatory Commission, on which we C002D5556 BUSINESS DAY 35 NEWS Investors edgy as 10% rise in transaction fail to lift property prices in Q1’18 CHUKA UROKO For investors in the Nigerian property market, it is not yet ‘uhuru’ as property prices remain unchanged despite the slight improvement in the country’s macro-economic environment and an estimated 10 percent rise in closed transactions at the end of the first quarter of this year (Q1 2018). Close market watchers note that the market has seen a significant change this year, as against what was seen in the second quarter of last year, although the change is still very gradual. “We can say that things have started getting better in terms of closing transactions, which can be measured,” Gbenga Olaniyan, CEO, Estate Links, said in an interview. The 13-month economic recession exited in Q2 2017 dealt a devastating blow on real estate sector such that construction activities were paralysed; completed houses could not find buyers or tenants, and demand became flat with residential vacancy rate rising to almost 50 percent in the highbrow locations. Up till now, both residential and commercial property prices are still flat, which, analysts say, provides opportunity for home buyers, businesses, and investors that are patient and have long term view of the market to move cash to the market. This becomes all the more compelling considering that prices will surely go up, as many people are not building now and, according to Olaniyan, those who are doing developments are going to deliver at prices that will L-R: Hakeem Adeniji-Adele, chief technology officer, Microsoft Nigeria; Joel Ogunsola, executive director, Tech4Dev; Akin Banuso, general manager, Microsoft Nigeria; Olusegun Mimiko, former governor, Ondo State, and Ukinebo Dare, senior special adviser to the Edo State Governor on Skills and job creation, at the launch of the Basic Digital Education Initiative (BDEI) at the Microsoft Nigeria office, Lagos. have received numerous complaints and petitions from our members. “It is pertinent to draw your attention to the fact that there is no country in Africa and for that matter any state in Nigeria that is charging licensing fee for borehole or any charge for water abstraction. The association believes that the state has the responsibility to provide water for which the citizens would pay. “Companies are forced to provide their own water because of the inadequacy of public water supply. Asking companies to pay for this would appear that we are being penalised for making up for the inadequacy of government to provide this vital utility. … but analysts see prices rise as construction cost goes up IATA calls for greater cooperation on Africa aviation MIKE OCHONMA Collaboration between aviation stakeholders in Africa is essential if the sector is to realise its full potential and accelerate the development of the continent. This was the word of Raphael Kuuchi, International Air Transport Association (IATA) vice president, Africa, in his address to the African Airlines Association Aviation Stakeholders Convention in Zanzibar. “Over the next 20 years, air travel is forecast to grow at nearly 6 percent per year in Africa,” he highlighted, saying, “This represents significant opportunity. Fulfilling this potential will not reflect new market realities. Completed houses that came to the market a year ago at N50 million per unit, for instance, are still selling at that old price, but because construction costs keep rising despite the lull in the market, those that are being developed now will go for higher prices. “I see a situation where, because developments have slowed down, the economy is recovering, and money is trickling into people’s pockets, property prices which had been flat for so long, has to go up because a developer who borrows to build cannot sell at today’s price any longer,” Olaniyan said. It is expected, however, that with the economy starting to pick up, if in a whole week early last year sellers were getting three serious enquiries, they are sure to get 10 this time around, though as it is now, a lot of the prospective tenants are still inspecting and raising funds, which raises hope that one day transaction will happen. One segment of the market where prospects are not so clear is retail, which was heavily impacted by the fall in the value of the naira. A retailer who was bringing in goods at $100 before the devaluation of the naira had N16,000 as his cost and so, he could sell what he brought in for N20,000. Now, if the same retailer brings in his goods at the same $100, his cost has moved from N16,000 to N36,000, but the buyers are not yet ready to pay N40,000 and so, that poses challenges to him, leading to his decision to leave the mall. mentarily, the African Union recently also launched the Single African Air Transport Market, intended to bring the “Open Skies” concept to Africa and increase the continent’s air transport connectivity. In those other regions of the world in which Open Skies policies have been implemented, the results have been increased air traffic, economic growth and job creation “We expect no less in Africa. An IATA report indicates if just 12 key African countries opened their air transport markets, the increased connectivity would foster 155 000 additional jobs and the creation of an extra $1.3-billion in annual GDP (gross domestic product) in those countries,” he affirmed.

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