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BusinessDay 16 Apr 2018

Monday

Monday 16 April 2018 NEWS L - R: Ivy Ojigbede, group retail sales manager, Investment One Financial Services; Oluyori Ezekiel, managing director, Investment One Stockbrokers International Limited, and Oluchi Amorha, communications officer, Investment One Financial Services, after the launch of the company’s All Stars League initiative in Lagos, at the weekend C002D5556 BUSINESS DAY A15 fivethings for your new week Fascinating business facts 35 Zimbabwe is to sell shares in 35 state-owned firms, including telecoms and mining entities in the latest step to revive the economy under new political leadership, Finance Minister Patrick Chinamasa said on Friday. Targeted firms include mobile carriers NetOne and Telecel, fixed line operator TelOne and savings bank POSB, all owned by the state. Shares in 17 government-run mines would also be sold. Like most parastatals, the mines, which mainly produce gold, have struggled over the years due to lack of capital and mismanagement, forcing some to close. Stakeholders pick holes in FG’s attempt to sell Yola Disco, Afam plant OLUSOLA BELLO Stakeholders in the power sector say it is improper for the Federal Government to put Yola Electric Distribution Company up for sale, given that it is performing better than most of the other Discos that are privatised. They wonder if the real value of the Disco would be realised if it is sold now in view of the fact that the circumstances that made the core investor to return it to the government, which was insecurity, is still very much prevalent. They also frown at the situation in which the government is yet to refund the core investors, Integrated Energy and Distribution Marketing Company (IEDM), the $80.5 million that was the value negotiated after the return of the company, and is putting it put for sale. A former managing director of Ikeja Electric said: “It is crazy to want to sell Yola Disco now considering the performance of the sold ones. Presently Yola is performing better than most Discos despite the fact that it is still being run by civil servants. If the government had given the old management a third of the over N1 trillion intervention fund it has pumped into the system since privatisation could country would have been singing a different song.” Another executive director of one of the Discos queried the rationale behind the government selling the asset while still owing the former core investors, and described the action of the government capable of causing disincentive to other investors. “Whoever wants to buy the asset must be seeing what others are not seeing. I only hope that they do proper due diligent before throwing themselves into it,” he said. According to some others that spoke with BusinessDay, the Boko Haram insurgency is big challenge to any investor, as it seems intensified, even though the government claimed that the group has been technically defeated. They also cited the problems of the Fulani herdsmen, another major factor threatening investments in that region. The Fulani’s herdsmen problem has led to displacement of a number of people in Taraba and Adamawa states, which were considered as relatively peaceful before now. They said it would be difficult for any investor to want stake his money on the company, given the level of uncertainty prevailing in the areas covered by the distribution company. Efforts to get the reaction Bureau of Public Enterprise (BPE) on the views expressed by stakeholders, especially on why the refund of N80.5 million the former core investor is being delayed, was not successful. 40 National Microfinance Bank (NMB), Tanzania’s biggest bank by market capitalisation, is ready to participate in a needed consolidation of Tanzania’s fragmented banking sector, its chief executive said. Tanzania’s banking sector, hit by bad loans and low lending, would be healthier if smaller banks were taken over by larger ones, Ineke Bussemaker told Reuters. The East African nation has about 40 licensed banks, but the sector is dominated by a handful of big lenders. Netherlands-based Rabobank Group is NMB’s biggest shareholder with a 34.9 percent stake, while the Tanzanian government owns 31.9 percent. $3.5bn Kenya’s second-biggest infrastructure project since independence five decades ago, a $3.5 billion inter-city expressway, will be delayed amid concerns by lawmakers that East Africa’s largest economy is taking on too much debt, the company building it said. The nation’s debt could rise to 58 percent of gross domestic product by the end of June, from 40.6 percent in the 2011-12 fiscal year, according to World Bank estimates. $100m Russian IT services company IBS has postponed its planned initial public offering due to the Moscow market volatility caused by imposition of fresh US sanctions against the country. IBS said last week it would launch a flotation on the Moscow exchange and was said to be raising $100m by selling 30-35 per cent of its enlarged capital. Two days after that announcement, Washington said it was placing sanctions on seven Russian oligarchs, 12 of their companies and 17 Russia officials, leading to a run on the rouble and the largest daily fall in the Moscow stock market since 2014. $71.50 With oil at above $71 a barrel, OPEC is beginning to reformulate its target in terms of upstream investment rather than oil inventories, according to an analysis of recent statements made by ministers from member countries. “There is no such thing as a target price by Saudi Arabia,” the kingdom’s energy minister, Khalid al-Falih, told reporters on Wednesday (“Saudi Arabia happy with oil market, won’t let another glut form”, Reuters

A16 NEWS Coronation Merchant Bank records 66% growth in gross earnings HOPE MOSES-ASHIKE We will not betray your confidence in us, Buhari tells Nigerians TONY AILEMEN, Abuja BUSINESS DAY C002D5556 In spite of the tough operating environment witnessed in the financial market in 2017, Coronation Merchant Bank Group recorded 66 percent increase in gross earnings to N25.5 billion in full year 2017 financial result, as against N15.2 billion recorded in the previous year. Aside the strong earnings performance, the Group recorded a significant growth in its balance sheet in 2017. Total assets increased by 28 percent to N136.7 billion from N106.6 billion in December 2016, and shareholder’s funds increased to N29.5 billion from N25.9 billion - a valid testament to the resilience of the Group’s operations and its adaptability to current market realities and challenges. “The impressive results of the bank in the last three years demonstrate the effectiveness of our strategy, the quality of our past decisions and the commitment of our board and management to maximise shareholder value whilst actively expanding our franchise in select, high growth markets where we believe we have a competitive advantage,” Abu Jimoh, CEO of the bank, said. The bank’s interest income growth of 67 percent year/year and non-interest income growth of 57 percent in 2017 reaffirm the sustain- President Muhammadu Buhari has assured Nigerians living in the United Kingdom (UK) that his administration will work to justify Nigerian’s confidence in his administration. The President speaking in London on Sunday while receiving the Buhari Diaspora Support Organisation, led by Efe Sylvester, assured, “We will do our best to justify your trust in us, and that confidence won’t be abused.” A statement by special adviser to the President on media and publicity, Femi Adesina, said the President expressed happiness that the country had people who were ready to defend her. “You have shown courage and sacrifice. I assure you that your confidence in us won’t be abused, we will do our best to justify it,” he said. The group, a new force set up to counter the activities of other Nigerians who had been engaging in protest against the President at the Nigeria House in London, had expressed their confidence in the current administration’s efforts to rebuild the country. ability of its core business growth. “We will continue to gain momentum in our efforts to achieve more diversified earnings, as we strengthen our subsidiaries offerings,” Jimoh said at the annual general meeting held at the weekend in Lagos. Despite the high inflation rate, cost-to-income ratio increased marginally by 90 basis points to 46.1 percent compared to 45.2 percent in December 2016, reaffirming the bank’s commitment to rein in costs while improving operating efficiency. “We remain committed to providing our clients with superior financial services whilst generating attractive and sustainable returns for shareholders.” The bank recorded growth in loan book by 42 percent to N32.3 billion in 2017 from N22.7 billion in 2016. “While general economic conditions and the regulatory environment remain tight, we believe that our new business and lending strategies, embedded risk management culture and continuous cost savings will enable us stand firm throughout this period”. “In the coming years, we will focus on the disciplined implementation of our growth strategy to drive efficiency in all segments of our business leveraging fintech and process re-engineering,” Jimoh said. The President, who noted that Nigeria was gifted with tremendous human and natural resources, however, regretted that “failure of some of the leadership we had in the past led to our not being able to capitalise on resources to improve the lot of the people.” For him, “wicked people plundered the country, and kept Nigerians poor. Looking at the condition in which the current administration met the country, without savings and the economy badly vandalised, “we have not done too badly.” He reiterated that the damage done to the Nigerian economy in the years of plunder was massive, and that government was doing its best to recover some of the loot, but noted that it was impossible to identify and recover all. “If they had used 50% of the money we made, when oil prices went as high as $143 dollars per barrel, and stabilized at $100 dollars with production at 2.1 million barrels per day for many years, Nigerians would have minded their businesses. You could almost grow food on our roads, as they were abandoned. The stealing was so much, and they were so inept that they could not even cover the stealing properly.” Emefiele says AGSMEIS funds to reach N60bn by June … 358 entrepreneurs benefit as CBN, Bankers’ Committee commence disbursement HOPE MOSES-ASHIKE & ONYINYE NWACHUKWU Funds pooled by the commercial lenders under the Agribusiness/Small and Medium Enterprises Investment Scheme (AGS- MEIS) is already in excess of N26 billion, and is expected to exceed N60 billion by June 2018, CBN governor, Godwin Emefiele, said as disbursements of the funds began in Abuja, last week. The flag off saw the disbursement of about N118 million to 358 beneficiaries under the scheme that seeks to reasonably cut the present high unemployment rates in the country. The beneficiaries are youths who have been trained on various entrepreneurship, vocational and management skills across the country by Entrepreneurship Development Institutions Paga celebrates 9th year anniversary Paga is celebrating its ninth anniversary as Nigeria’s first and leading mobile money company. Founded by CEO, Tayo Oviosu in April 2009, Paga has provided easy means for simple mobile money transfers, bill payments and provision of financial services to over 8 million users on their platform through the years. Since 2009, Paga has created meaningful financial technology that has led the drive for financial inclusion which aims to bank over 70 million unbanked and underbanked Nigerians leveraging its web channels, mobile apps and short code (*242#). Paga has pioneered the mobile money industry objective by creating what is recognized as the single largest shared active agent network in Nigeria with over 14,000 agents. These agent outlets are widespread across the 36 states in Nigeria and they enable millions of Nigerians to perform simple money transfers and pay bills for life and business. Notable businesses and organizations like Dangote foundation, Ikeja Electric, Eko Distribution Company, JAMB, WAEC, UK Immigration among many more companies have leveraged the reach and impact of Paga to achieve payment collections and bulk disbursements. and Centres, such as Fate Foundation, Lagos Business School, House of Tara and Thrive Agric. The Bankers’ Committee had, at its meeting on February 9, 2017, came up with the AGSMEIS to improve access to affordable financing for MSMEs, particularly those operating in the informal sector of the economy, and to support the Federal Government’s efforts and policy measures to promote sustainable economic development and employment generation. As a commitment to the successful implementation of the scheme, all deposit money banks, voluntarily agreed to set aside and contribute 5 percent of their profit after tax (PAT) annually to finance eligible projects under the scheme. Quoting data from the National Bureau of Statistics (NBS), Emefiele said the rate of unemployment in Nigeria worsened marginally during the third quarter of 2017, and that this raised concerns and risks for the collective peace and progress across the nation. He noted that one of the most effective ways to tackle this scourge was through entrepreneurship development and easy access to affordable financing, which according to him, has been a huge challenge to entrepreneurship development in the country today. He regretted the financial intermediaries’ apathy to youth entrepreneurship and start-ups, which are usually perceived as being too risky, lacking relevant managerial skills and not possessing adequate collaterals acceptable for conventional credit. He said the situation therefore led the Bankers’ Monday 16 April 2018 Committee Retreat, to design and fund a suitable scheme that will not only reduce the huge financing gap for Macro Small and Medium Enterprises (MSMEs), but also fully commits to the pursuits of job creation, financial inclusion and inclusive growth for Nigerians, particularly the teeming youth population. The AGSMEIS has been designed to be implemented in three broad components, namely Direct, Indirect and Developmental components. Under the Direct component of the AGSMEIS, beneficiaries can access loans to a limit of N10 million, at interest rate of 5 percent per annum and a maximum tenor of up to seven years. There is also a moratorium period of 18 months on principal and six months on interest element, depending on the nature of the business.

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