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Tag: Growth

  • KEN HARRIES; Executive-Legislature cooperation as enabler of national stability, growth and opportunities

    KEN HARRIES; Executive-Legislature cooperation as enabler of national stability, growth and opportunities

    By Ken Harries Esq

    A nation’s executive and legislature are like two oars propelling the same canoe. If one oar pulls with force while the other drifts lazily, the canoe spins in circles. If both row in opposite directions, the vessel tilts dangerously, and progress stalls. But when the oars dip and pull in rhythm, the canoe glides forward with speed and stability.

    This is the image that comes to mind when looking at the current relationship between Nigeria’s Executive led by President Bola Ahmed Tinubu and the National Assembly under Senate President Godswill Godswill Akpabio.

    The synergy is clear for everyone to see. The tone is cooperative without being compliant. The result is a smoother flow of governance where policy initiatives move more quickly from conception to law, and oversight questions are handled in a way that seeks solutions rather than political theatre.

    It is not perfection. One may even say it is not yet Uhuru. But it is an encouraging change from some turbulent chapters in Nigeria’s democratic journey.

    ● Lessons from the past

    Nigeria’s democratic history is littered with bruising confrontations between the two arms of government under focus. In the early years of the Fourth Republic, the fierce battles between President Olusegun Obasanjo and Speaker Ghali Umar Na’Abba led to stalled bills and endless impeachment rumours and threats.

    Similarly, the rift between President Goodluck Jonathan and Speaker Aminu Tambuwal froze legislative progress for months. The protracted cold shoulders between President Muhammadu Buhari and Senate President Bukola Saraki meant that major budgets arrived late and key reforms stalled.

    Those moments remind us that while confrontation can be a safeguard for democracy, unchecked hostility is costly for the advancement and stability of the nation. The economy slows. Investor confidence dips. Ordinary citizens wait longer for essential services. This is why the present collaborative climate, if maintained, could be one of the most significant enablers of national stability, growth and opportunities.

    ● Cooperation without capitulation

    To be clear, cooperation today does not mean the National Assembly has become a rubber stamp to the Executive. Recent sessions have shown lawmakers asking hard questions. The Senate’s grilling of the Nigerian National Petroleum Company Limited on the use of savings from the removal of fuel subsidy was both firm and focused.

    Additionally, the House of Representatives’ probe into electricity tariff hikes forced the Ministry of Power and the Nigerian Electricity Regulatory Commission to explain policies in plain terms. The Akpabio-led Senate summoned the Central Bank of Nigeria to defend its measures on foreign exchange stability and new bank charges.

    Furthermore, it should be noted that there have also been pushbacks. Certain budgetary proposals from the Executive had been revised after legislative scrutiny. The National Assembly resisted attempts to rush through the passage of sensitive loan requests without proper documentation. The Aviation Ministry faced tough questioning over delays in airport concession agreements. Even agencies like the Nigerian Ports Authority and Nigerian Communications Commission have been compelled to submit overdue reports.

    Such moments show that a cordial relationship does not erase the Legislature’s constitutional duty to check excesses. Instead, it channels disagreements into productive dialogue rather than destructive stalemate.

    ● Shared goals, national gains

    It goes without saying that when the Executive and Legislature work in concert, the delivery of democracy dividends becomes more achievable. Policy implementation is faster because enabling laws pass without unnecessary delay. Oversight reports lead to policy adjustments that are timely rather than reactive.

    Under Akpabio’s leadership of the National Assembly, appropriation bills have been passed in good time, enabling the Executive to keep fidelity to budget implementation. Constituency projects have been better aligned with national development priorities. Collaboration has also aided in passing laws that advance infrastructure growth, youth empowerment, and regional balance.

    One example is the Nigerian Steel Development Act, a legislative milestone that supports the revival of the Ajaokuta Steel Complex and other steel projects. Another is the creation of development commissions for the geo-political zones, designed to address decades of marginalisation. These initiatives may be executive-driven, but without legislative commitment, they would have languished on the order paper.

    ● The Akpabio doctrine: Pragmatism over politics

    The 10th National Assembly’s style under Senate President Godswill Akpabio reflects a political craftsmanship that prizes results over theatre. As a former governor and minister, Akpabio understands the constraints the executive faces, but he also wields legislative authority with a measured firmness that demands accountability.

    Working closely with Speaker Tajudeen Abbas, Akpabio has redefined the tone of engagement between the two arms of government, replacing confrontation with dialogue focused on finding solutions.
    Economic reforms have been handled with a calm efficiency that belies their complexity.

    An example of how this has worked in practice is the Central Bank Act (Amendment) Bill, vital to stabilising the naira and strengthening monetary policy oversight. The bill was passed within months rather than languishing for years.

    Similarly, tax reforms, initially a lightning rod for criticism, were refined through a series of consultations with stakeholders instead of being rushed through Parliament.

    In the same vein, security policy has been treated as a shared national burden rather than an executive-only responsibility. When the Presidency sought emergency funding to address terrorism and banditry, the Senate approved it without delay, but not without conditions.

    The package was tied to commitments for holistic approaches, including job creation and community policing, signalling that the legislature expected a comprehensive strategy beyond military action alone.

    Meanwhile, oversight has been firm but fair, grounded in the belief that transparency improves governance rather than embarrasses officials. The Senate’s scrutiny of incentives granted to the Dangote Refinery, its audits of several ministries and agencies, and its probing of subsidy utilisation have been conducted in a tone that invites solutions rather than fuels political drama.

    It is a style that rejects needless grandstanding in favour of mature statecraft. As Akpabio, who is Chairman of the National Assembly, once remarked during a plenary debate, “Our duty is to govern, not to grandstand.”

    ● The cost of discord

    On the issue of disagreements between the executive and the legislative arms of government, the question is not whether there will be friction or not. It is simply unavoidable as we are talking about human beings, and friction is a part of human relations.

    Moreover, a healthy democracy thrives on debate, dissent, and the exchange of strong arguments. The problem comes when such friction turns into open warfare between the arms of government. The last thing Nigeria needs is a return to the days when budget defence sessions became shouting matches, or when political manoeuvring blocked appointments for months on end.

    In today’s challenging economic climate, prolonged executive-legislature feuds could derail the Renewed Hope Agenda before its foundations are secure. Inflation remains high, insecurity persists in several regions, and the need for foreign direct investment is urgent. Stability at the top of governance is not a luxury; it is a socio-economic necessity.

    ● The significance of this moment

    Nigerians should not underestimate how rare this level of institutional harmony is in our democracy. It has not come by accident. The leadership style of Akpabio is a blend of assertiveness and tact. He has chosen the path of engagement rather than confrontation, of quiet negotiation rather than noisy standoff. President Tinubu, on his part, has embraced a hands-on approach that listens to legislative concerns rather than dismissing them.

    Of course, there will be moments when this harmony is tested. The real measure will be how both sides handle inevitable disagreements. Will they return to the canoe and row together, or will they risk spinning in place while the river of national challenges rushes past?

    ● Rowing towards an uncommon legacy

    For now, Nigeria’s governance canoe is moving forward. It is not yet at full speed, but it is no longer stuck in the rapids of mutual suspicion. The oars are in the water, pulling with some measure of rhythm, and a lot of the credit has to go to Senate President Godswill Akpabio because of his pragmatic approach to governance.

    If this partnership is sustained, the result could be faster delivery of infrastructure, more effective economic reforms, and more tangible gains for citizens.

    In the end, good governance is not about who shouts loudest in the chambers or who claims victory in the headlines. It is about whether the two oars of Nigeria’s democracy can keep pulling together long enough to carry the country to safer, more prosperous shores. That, more than anything else, will determine whether this moment in our political history is remembered as a transformative turning point or a missed opportunity.

    •Ken Harries Esq is an Abuja based Development Communication Specialist.

  • UBA delivers N153 billion profit, records 11% balance sheet growth

    UBA delivers N153 billion profit, records 11% balance sheet growth

    Africa’s Global Bank, United Bank for Africa (UBA) Plc, has announced its audited results for the full year ended December 31, 2021, reporting impressive performance in key financial metrics.

    The 2021 financial result filed by the bank at the Nigerian Stock Exchange (NSE) on March 4, 2022, showed that gross earnings rose significantly to N660.2 billion representing an increase of 7 percent compared to N616.8 billion recorded at the end of the 2020 financial year.

    Total assets grew by 11 percent to an unprecedented N8.5 trillion in the year under review, up from N7.7 trillion in 2020, thus marking the first time the Bank’s assets will cross the N8 trillion mark.

    Despite the huge challenging business and slow economic recovery in most of its countries of operations, UBA’s Profit Before Tax was impressive with a 20.3 percent growth to N153.1 billion, compared to N127.3 billion at the end of the 2020 financial year; while Profit After Tax rose grew by 8.7 percent to N118.7 billion in 2021, compared to N109.2 billion recorded the previous year.

    Similarly, net loans grew by 7.7 percent growth to N2.8 trillion, whilst customer deposits rose by 12.2 percent to N6.4 trillion, compared to N5.7 trillion in the corresponding period of 2020, reflecting increased customer confidence, enhanced customer experience, successes from the ongoing business transformation programme and the deepening of its retail banking franchise

    In the year under consideration, the bank’s operating income rose by 10% to N443 billion compared to N403 billion in the prior year, whereas operating expenses closed the period at N279 billion.

    In its usual tradition of rewarding shareholders, the Bank proposed a final dividend of 80 kobo for every ordinary share of 50 kobo for the financial year ended December 31, 2021. The final dividend which is subject to the affirmation of the shareholders at its Annual General Meeting will bring the total dividend for the year to N1 as the Bank had paid an interim dividend of 20kobo earlier in the year.

    Commenting on the result, the Group Managing Director/CEO, Kennedy Uzoka, said that notwithstanding the tight and challenging operating environment, UBA continues to deliver significant performance.

    He said, “The year 2021 can best be described as a year of global recovery; economies around the world began to witness early-stage recoveries, as supply chains recover from the devastating disruptions suffered in 2020.

    Consequently, UBA recorded remarkable 7% growth in top line to N660 billion (USD1.56bn), and profit before tax (PBT) of N153.1 billion, up 20.3% from the prior year. Net Loans and advances grew by 7.7% to N2.8 trillion with exposure mostly to resilient economic sectors including oil & gas, agriculture and manufacturing. Deposit from customers grew 12.2%, crossing the N6 trillion mark, to N6.4trillion.”

    The GMD explained that the quality of UBA’s portfolio as well as the strength of the bank’s credit risk management frameworks and policies remain the bedrock of the positive results that the bank has been recording over the years, adding that the current performance highlights UBA’s relentless customer focus, and leverage on its key strategic levers – People, Process and Technology.

    “Looking forward, I am particularly excited about our ongoing Enterprise Transformation Program which is designed to enhance the bank’s process agility, service delivery and customer experience. We are also making sizeable investments in cutting-edge technology and cyber security, to keep our innovative digital banking offerings above the curve, as we tool and re-tool our human resources to compete and win in a rapidly changing and evolving landscape. This will ensure the bank continues to achieve respectable top and bottom-line growth through the medium to long term” the GMD stated.

    UBA’s Group Chief Financial Official, Ugo Nwaghodoh, who corroborated the GMD’s comments, said, once again, the bank has shown resilience. It achieved sizeable growth and strengthened its balance sheet despite the slow pace of economic recovery that characterised the year 2021.

    “Through active and diligent assets and liabilities management, the bank was able to protect its net interest margin and achieved a downward moderation of Cost of funds (CoF) by 70 basis points to 2.2% from 2.9% in the prior year.

    According to him, the group’s capital adequacy ratio at 24.9% was well above the required regulatory minimum and reflects a strong capacity for business growth. “The Group’s non-performing loan ratio improved further to 3.6% from 4.7% at the end of 2020. This testifies to the quality of UBA’s loan portfolio even as the bank remains relentless in its resolve to drive down the Cost-to-Income ratio, which stood at 63.0% at the end of the year.”

    Nwaghodoh added that the bank achieved further strides in growing its business and gaining market share across its pan-African operations, with the region accounting for 63.2% of the Group’s profitability, compared to 55.4% in 2020; Loans and advances as well as Deposit in the region were also up 14.5% and 27.3% respectively from a year earlier.

    In his concluding remarks, the CFO stated “We recognise the changing competitive landscape and are proactively positioning to consistently deliver on our strategic objectives and commitment to shareholders.”

    United Bank for Africa Plc is Africa’s global bank, offering banking services to more than twenty-five million customers, across over 1,000 business offices and customer touch points in 20 African countries. With a presence in the United States of America, the United Kingdom and France and more recently the United Arab Emirates, UBA is connecting people and businesses across Africa through retail; commercial and corporate banking; innovative cross-border payments and remittances; trade finance and ancillary banking services.

  • World Bank raises Nigeria’s growth projection to 2.4% in 2021

    World Bank raises Nigeria’s growth projection to 2.4% in 2021

    The World Bank on Wednesday raised its 2021 economic growth forecast for Nigeria to 2.4 per cent, but said this still falls behind the sub-Saharan growth forecasts of 3.3 percent in 2021 and 3.5 per cent in 2022.

    The World Bank disclosed this in the latest edition of its Africa’s Pulse Report.

    The World Bank said the rebound is currently fueled by elevated commodity prices, a relaxation of stringent pandemic measures, and recovery in global trade.

    However, the bank said growth still remains vulnerable given the low rates of vaccination on the continent, protracted economic damage, and a slow pace of recovery.

    The Bank stated:”The analysis shows that current speeds of economic recovery in the region are varied, with the three largest economies, Angola, Nigeria, and South Africa, expected to grow by 0.4 per cent, 2.4 percent, 4.6 percent respectively.

    “Excluding South Africa and Nigeria, the rest of SSA is rebounding faster at a growth rate of 3.6 percent in 2021, with non-resource-rich countries like Côte d’Ivoire and Kenya expected to recover strongly at 6.2 and 5.0 percent, respectively.

    “Sub-Saharan Africa is set to emerge from the 2020 recession sparked by the COVID-19 pandemic with growth expected to expand by 3.3 per cent in 2021.”

    According to World Bank’ analysis in Pulse Africa, a biannual analysis of the near-term macroeconomic outlook for the region’s growth for 2022 and 2023 will also remain just below four per cent, continuing to lag the recovery in advanced economies and emerging markets, and reflecting subdued investment in SSA.

    However, Chief Economist for Africa at the World Bank, Albert Zeufack, noted that faster access to Covid’19 vaccines would speed up SSA growth in 2022 and 2023.

    He said “Fair and broad access to effective and safe COVID 19 vaccines is key to saving lives and strengthening Africa’s economic recovery.

    “Faster vaccine deployment would accelerate the region’s growth to 5.1 per cent in 2022 and 5.4 per cent in 2023 as more containment measures are lifted, boosting consumption and investment.”

    The Bank projected that the region’s fiscal deficit, at 5.4 per cent of Gross Domestic Product, in 2021, is expected to narrow to 4.5 per cent of GDP in 2022 and three per cent of GDP in 2023 as a result of prudent monetary and fiscal policies as factors.

    A positive trend, according to the report, is that African countries have seized the opportunity of the crisis to foster structural and macroeconomic reforms.

    It said that several countries have embarked on difficult but necessary structural reforms, such as the unification of exchange rates in Sudan, fuel subsidy reform in Nigeria, and the opening of the telecommunications sector to the private sector in Ethiopia.

  • Nigeria’s GDP records 0.51% growth in 2021 first quarter

    Nigeria’s GDP records 0.51% growth in 2021 first quarter

    Nigeria’s Gross Domestic Product (GDP) has recorded a growth of 0.51 per cent (year-on-year) in real terms in the first quarter of 2021.

    The National Bureau of Statistics (NBS) disclosed this in the latest Nigerian Gross Domestic Product Report released on Sunday.

    It noted that the new figure represented two consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020.

    The rate of growth recorded in the first quarter of 2021 was slower than the 1.87 per cent rate recorded in the first quarter of 2020.

    However, the figure was higher than the 0.11 per cent recorded in the fourth quarter of 2020, indicative of a slow but continuous recovery.

     

    “Nevertheless, quarter on quarter, real GDP grew at -13.93% in Q1 2021 compared to Q4 2020, reflecting a generally slower pace of economic activities at the start of the year.

    “In the quarter under review, aggregate GDP stood at N40,014,482.74 million in nominal terms. This performance is higher when compared to the first quarter of 2020 which recorded aggregate GDP of N35,647,406.08 million, indicating a year-on-year nominal growth rate of 12.25 per cent,” the report read.

    It added, “The nominal GDP growth rate in Q1 2021 was higher relative to 12.01 per cent growth recorded in the first quarter of 2020, as well as the 10.07 per cent growth recorded in the preceding quarter.

    “For better clarity, the Nigerian economy has been classified broadly into the oil and non-oil sectors.”

    The GDP report revealed that the oil sector contracted by 2.21 per cent, compared to the -19.76 per cent recorded in the fourth quarter of 2020, while non-oil GDP grew 0.79 per cent, lower than the 1.69 per cent positive growth in the preceding quarter.

     

    According to the NBS, the growth in the non-oil sector was driven mainly by the Information and Communication (Telecommunication) sector.

    Other drivers included agriculture (crop production); manufacturing (food, beverage, and tobacco); real estate; construction, human health and social services.

    “In real terms, the non-oil sector accounted for 90.75 per cent of aggregate GDP in the first quarter of 2021, higher than its share in the first quarter of 2020 which was 90.50 per cent but lower than 94.13 per cent recorded in the fourth quarter of 2020,” the report said.

    The second consecutive real GDP growth showed that the economy was slowly recovering after slipping into a recession following the negative growth rates recorded in the second and third quarters of 2020.

  • Fidelity Bank Announces 53.9% Growth in 1st Quarter Profit Before Tax of N10.1bn

    Fidelity Bank Announces 53.9% Growth in 1st Quarter Profit Before Tax of N10.1bn

    Top Nigerian bank, Fidelity Bank Plc, has recorded a strong financial performance in the first quarter of 2021, posting appreciable growth in profits for the period ending 31 March 2021.

    Details of the unaudited results, released at the Nigerian Stock Exchange (NSE) show that Profit before Tax (PBT) grew by 53.9% from N6.6bn in 2020 to N10.1bn for the corresponding period of March 31, 2021.
    Similarly, Net revenue in the period increased by 13.4% from N30.3bn in Q1 2020 to N34.4bn in 2021, just as the bank recorded growth in other performance indices.

    New on the job Nneka Onyeali-Ikpe, MD/CEO of Bank commenting on the results said:

    “We commenced the year showing impressive double-digit growth in profitability and improved performance across key efficiency indices whilst ensuring our business model continued to deliver strong positive results in line with our guidance for the 2021 financial year.

    Gross Earnings increased by 7.7% YoY to N55.1bn on account of 66.7% growth in non-interest revenue to N12.1bn from N7.2bn in Q1 2020. In absolute terms, the increase in NIR came from FX related income, digital banking income and account maintenance charge etc. as total customers’ induced transactions across all our service channels increased by 30.4% YoY and 17.1% QoQ.

    Net Interest Margin remained unchanged at 6.3% compared to 2020FY as the drop in average funding cost offset the decline in average yields on earning assets. Average funding cost dropped to 2.5% from 3.6% in 2020FY due to a combination of improved deposit mix and a slight moderation in average borrowing cost. This led to 26.2% decline in total interest expenses, which translated to 17.1% increase in net interest income to N28.8bn despite a 4.3% increase in interest bearing liabilities. We refinanced our 7-Yr N30.0bn Tier II Bonds issued in 2015 at 16.48% p.a. with cheaper 10-Yr N41.2bn Tier II Bonds priced at 8.5% p.a., which led to a 61bpts drop in average borrowing cost to 4.5%.

    Operating Expenses increased by N1.3bn (6.2%) to N23.0bn largely driven by N4.3bn growth in regulatory charges (NDIC & AMCON Charges). Excluding the increase in regulatory charges, total operating expenses would have dropped by 13.8% (6.1% QoQ) to N18.6bn from N21.6bn in Q1 2020 (Q4 2020: N19.8bn).

    Total Deposits increased by 3.1% YTD to N1,751.3bn from N1,699.0bn in 2020FY, driven by 5.5% increase in low cost deposits (Demand: 6.2% | Savings: 4.1%). Foreign currency deposits increased by 15.7% YTD (N46.9bn) and now accounts for 19.7% of total deposits from 17.5% in 2020FY, as we harness the benefits of our renewed drive in Diaspora Banking as well as the recent CBN Naira-for-Dollar Incentive Scheme for diaspora remittances to Nigeria.

    Retail Banking continued to deliver impressive results as savings deposits increased by 4.1% YTD to N441.6bn and we are on course to achieving the 9th consecutive year of double-digit growth in savings deposits. Savings deposits was responsible for 32.9% of the absolute growth in total deposits and now accounts for 25.2% of total deposits compared to 25.0% in 2020.

    Net Loans and Advances increased by 7.6% YTD to N1,426.3bn from N1,326.1bn in 2020FY. However, the actual growth was 6.8% while the impact of the currency adjustment (2020FY: N400.3/$ – Q1 2021: N407.6/$) accounted for a 0.8% YTD growth in the loan book. Cost of risk came in at 0.4% and the NPL ratio dropped to 3.6% from 3.8% in 2020FY.

    Other Regulatory Ratios remained above the required thresholds with liquidity ratio at 33.9% and capital adequacy ratio (CAR) at 18.4% from 18.2% in 2020FY.

    We are committed to sustaining our growth trajectory and achieving the long-term strategic aspirations of the Bank as we look forward to delivering another set of good results in the next quarter”.

  • IMF projects six per cent growth for global economy

    IMF projects six per cent growth for global economy

    The International Monetary Fund (IMF) says the global economy is projected to grow at six per cent in 2021, moderating to 4.4 per cent in 2022.

    The April 2021 World Economic Outlook (WEO) was presented on Tuesday in Washington D.C. by Gita Gopinath, the fund’s Chief Economist at the ongoing IMF/World Bank Spring Meetings which began on Monday.

    The report said that the projection was coming after an estimated contraction of –3.3 per cent in 2020.

    The IMF said that the contraction for 2020 was 1.1 percentage points smaller than projected in the October 2020 WEO.

    This, it said reflected the higher-than-expected growth outturns in the second half of the year for most regions after lockdowns were eased and as economies adapted to new ways of working.

    “The projections for 2021 and 2022 are 0.8 percentage point and 0.2 percentage point stronger than in the October 2020 WEO, reflecting additional fiscal support in a few large economies and the anticipated vaccine-powered recovery in the second half of the year.

    “Global growth is expected to moderate to 3.3 per cent over the medium term, reflecting projected damage to supply potential and forces that predate the pandemic, including aging-related slower labour force growth in advanced economies and some emerging market economies.

    “Thanks to unprecedented policy response, the COVID-19 recession is likely to leave smaller scars than the 2008 global financial crisis.”

    The report said that the United States of America was expected to grow by 6.4 per cent and China by 8.4 per cent in 2021.

    The report, however, said that emerging market economies and low-income developing countries had been hit harder and were expected to suffer more significant medium-term losses.

    For Sub-Saharan Africa, growth was estimated at 3.4 per cent, with South Africa at 3.1 per cent and Nigeria at 2.4 per cent.

    The IMF said that there were divergent impacts with output losses particularly large for countries that relied on tourism and commodity exports and for those with limited policy space to respond.

    It added that many of the countries entered the crisis in a precarious fiscal situation and with less capacity to mount major health care policy responses or support livelihoods.

    According to the report, the projected recovery follows a severe contraction that has had particular adverse employment and earnings impacts on certain groups.

    The IMF said youth, women, workers with relatively lower educational attainment and the informally employed had generally been hit hardest and income inequality was likely to increase significantly because of the pandemic.

    “Close to 95 million more people are estimated to have fallen below the threshold of extreme poverty in 2020 compared with pre-pandemic projections.

    “Moreover, learning losses have been more severe in low-income and developing countries, which have found it harder to cope with school closures and especially for girls and students from low-income households.

    “Unequal setbacks to schooling could further amplify income inequality.”

    Gopinath said that once the health crisis was over, policy efforts could focus more on building resilient, inclusive and greener economies, both to bolster the recovery and to raise potential output.

    She also said that priorities should include investing in green infrastructure to help mitigate climate change, strengthen social assistance and social insurance to arrest rising inequality.

    Also, introduce initiatives to boost productive capacity and adapt to a more digitalised economy and resolve debt overhangs.

    She added that policymakers should continue to ensure adequate access to international liquidity.

    According to Gopinath, major central banks should provide clear guidance on future actions with ample time to prepare to avoid taper-tantrum kinds of episodes as occurred in 2013.

    “Low-income countries will benefit from further extending the temporary pause on debt repayments under the Debt Service Suspension Initiative and operationalising the G20 Common Framework for orderly debt restructuring.

    “Emerging markets and low-income countries will benefit from a new allocation of the IMF’s special drawing rights and through pre-emptively availing themselves of the IMF’s precautionary financing lines, such as the Flexible Credit Line and the Short-Term Liquidity Line.

    “Even while all eyes are on the pandemic, it is essential that progress be made on resolving trade and technology tensions.”

    She also urged countries to cooperate on climate change mitigation, digitalisation, modernisation of international corporate taxation and on measures to limit cross-border profit shifting, tax avoidance and evasion.

    The spring meeting which is being held virtually will end on Sunday.

  • Nigeria stock market ends 2020 with 50.03% growth

    Nigeria stock market ends 2020 with 50.03% growth

    The nation’s bourse on Thursday closed 2020 upbeat, appreciating by 50.03 per cent, with the All-Share Index crossing the 40, 000 mark on the last trading day, in spite of COVID-19 pandemic.

     

    Specifically, the All-Share Index which opened trading for the year at 26, 842.07 rose by 13, 428.65 points or 50.03 per cent to close at 40, 270.72.

     

    Similarly, the market capitalisation rose by N8.098 trillion to close at N21.056 trillion from the opening year figure of N12.958 trillion.

     

    According to analysts, the market was positively impacted by policies introduced by the Central Bank of Nigeria (CBN), which favoured the stock market.

     

    They noted that the apex bank policies impacted positively on Nigerian stocks, with the stock market recording the highest growth in six years.

     

    According to Bloomberg, the Nigerian equities benchmark index in Africa’s largest economy recorded its highest return in 2020, the best among 93 equity indexes it tracked.

     

    Consequently, it emerged as the world’s best performing stock market year-to-date.

     

    Commenting on the market performance, Uche Uwaleke, a financial economist and Professor of Capital Market at Nasarawa State University, Keffi, described 2020 as a year of bumper harvest.

     

    “The major reason is the fact that other competing asset classes such as fixed income securities lost their attractiveness owing to CBN policies which lowered yields.

     

    “Naturally, investors preference shifted to the riskier equities market that offered returns higher than inflation rate.

     

    “The way to sustain the momentum is for the CBN to continue to ensure a low interest rate environment through accommodative monetary policies that tend to support economic growth,’’ Uwaleke said.

     

    Meanwhile, an analysis of the stock market activity on Thursday showed that the uptrend was driven by price appreciation in medium and large capitalised stocks including MTN Nigeria and BUA Cement, BOC Gases, Northern Nigeria Flour Mills (NNFM) and C & I Leasing.

     

    BOC Gases dominated the gainers’ chart in percentage terms, gaining 10 per cent to close at N9.57 per share.

     

    NNFM followed with 9.95 per cent to close at N6.74, while C & I Leasing rose by 9.94 per cent to close at N5.20 per share.

     

    FCMB Group rose by 9.90 per cent to close at N3.33, while BUA Cement appreciated by 9.87 per cent to close at N77.35 per share.

     

    Conversely, FTN Cocoa Processors led the losers’ chart in percentage terms, losing 9.59 per cent to close at 66k per share.

     

    Eterna followed with a loss of 9.09 per cent to close at N5.10, while AIICO Insurance declined by 8.87 per cent to close at N1.13 per share.

     

    International Breweries dipped 8.32 per cent to close at N5.95, while Ecobank Transnational Incorporated shed 7.69 per cent to close at N6 per share.

     

    Also, the total volume of traded rose by 90.57 per cent as investors bought and sold 710.06 million shares worth N10.08 billion in 4, 396 deals.

     

    This was in contrast with a total of 372.93 million shares valued at N11.50 billion achieved in 5, 186 deals on Wednesday.

     

    Transactions in the shares of AIICO topped the activity chart with 205.99 million shares worth N234.23 million.

     

    Access Bank followed with 99.65 million shares valued N898.55 million, while Japaul Gold and Ventures traded 85.74 million shares worth N49.59 million.

     

    FBN Holdings sold 48.31 million shares valued at N342.91 million, while Zenith Bank transacted 44.04 million shares worth N1.09 billion.

  • Nigeria’s growth vulnerable to external, domestic risks – World Bank

    Although Nigeria’s economy continues to recover from the 2016 recession, the country’s growth outlook is vulnerable to external and domestic risks, including geopolitical and trade tensions that may affect inflows of private investment, the World Bank has said.

    The bank, which stated this in its Nigeria Economic Update report published yesterday, noted that Nigeria’s “GDP growth remains below the estimated population growth rate of 2.6 per cent, resulting in declining real per capita incomes.”

    The Nigerian Economic Update is prepared twice a year (Spring and Fall) to appraise stakeholders interested in economic and social developments, prospects and policies.

    According to the World Bank, unless the country’s authorities urgently implement reforms to revive economic growth and lift employment, Nigeria risks becoming home to a quarter of the world’s destitute people in a decade.

    The bank said: “In the aftermath of the recent oil shock, Nigeria’s living standards began to decline as sustained high population growth rates exceed the growth rate of the economy. In 2018, about half of all Nigerians were estimated to be living in extreme poverty. The vulnerability of those living below the poverty line is worsened by the adverse security situation in the North, which has displaced a large population that has amplified the high incidence of poverty in the North-East.”

    Projecting a 2.1 per cent growth for Nigeria in 2020 and 2021, the bank called on the Federal Government to increase domestic revenue, remove trade restrictions and improve the predictability of economic policy.

    It also urged the government to remove fuel subsidies and reduce central bank lending to targeted sectors that, according to it, crowds out lenders.

    The World Bank said: “The cost of inaction is significant. Under a business-as-usual scenario, where Nigeria maintains the current pace of growth and employment levels, by 2030 the number of Nigerians living in extreme poverty could increase by more than 30 million.”

    However, the World Bank in the report entitled, “Jumpstarting Inclusive Growth: Unlocking the Productive Potential of Nigeria’s People and Resource Endowments,” noted that Nigeria had the opportunity to advance reforms that will speed up economic growth.

    It pointed out that although Nigeria created about 450,000 new (net) jobs in 2018, partially offsetting the loss of 700,000 jobs in the previous year, the country’s labour force is growing rapidly, adding that in 2018 over five million Nigerians entered the labour market, which resulted in 4.9 million more unemployed people in the last year.

    It noted that while some states had recorded progress in the area of job creation, the jobs were not enough to absorb the number of fresh entrants into the labour market.

    Specifically, it said: “Positive news is emerging from a subset of states that are creating enough jobs to keep up with the growth of their labour forces. In the year following the recession (between the first quarter of 2017 and the first quarter of 2018), 10 states saw some positive job creation, but the number of new jobs was not enough to absorb the new entrants into the labour force.

    “The situation improved by the third quarter of 2018, as four states (Lagos, Rivers, Enugu, and Ondo) created more jobs than the entrants to the labour market, and as a result these states reduced unemployment.”

    The Bretton Woods institution also emphasised that increasing productivity would be key to supporting robust growth and job creation in Nigeria.

    It stated: “Nigeria’s economic productivity is low by international standards. Productivity has grown slowly, and since the recession, it has been declining, affecting growth. The productivity gap between Nigeria and comparator countries reflects both its lower relative stocks of physical and human capital and the inefficiency with which inputs (capital and labour) are transformed into outputs.

    “The vulnerability of Nigeria’s economy to volatile oil prices has also inhibited sustained productivity gains: labour has repeatedly shifted from agriculture to services when oil prices were high, then shifted back when oil prices were low, thereby limiting the economic transformation that is needed to produce more and better-paid jobs.”

    Further stressing the need for urgent implementation of reforms, the World Bank warned that Nigeria could slide back into recession if crude prices fall by 25 per cent to $50 a barrel.

    Speaking at the event, Mr. Shubham Chaudhuri, Country Director, World Bank Group, Nigeria, said that the country needed to make concerted efforts to boost productivity with a view to creating more jobs and accelerating economic growth.

    Mr. Marco Hernendez, Lead Economist of the bank, expressed worry that 100 million Nigerians live on less than $1.9 per day.

    According to Hernendez, with population growth estimated at 2.6 per cent, out spacing economic growth in the context of weak job creation, per capita incomes are falling.

    Mr. Babatunde Fowler, the Executive Chairman, Federal Inland Revenue Services (FIRS), called for stronger collaboration between the federal and state governments.

    Fowler also said there was need to utilise land optimally to establish projects and create jobs.

  • Fidelity Bank delivers double-digit growth in quarterly revenue

    Leading tier-two Nigerian lender, Fidelity Bank Plc, has continued to soar higher, posting a double-digit growth in the first quarter of 2019.

    In its financial statements for the period ended March 31, 2019 released today, the bank grew its gross earnings by 11.81 percent to N48.4 billion from N43.3 billion, while fee and commission income went up by 39.52 percent to N6.5 billion from N4.7 billion.

    In the period under review, the interest and similar income rose to N38.7 billion from N37.7 billion, with the impairment charge closing at N1 billion as at March 31, 2019 against N702 million as at March 31, 2018, with the fee and commission expense rising to N1.1 billion from N1 billion.

    In Q1 2019, Fidelity Bank increased its profit before tax by 33.96 percent to N6.7 billion from N5 billion, while the profit after tax rose by 28.38 percent to N5.9 billion from N4.6 billion.

    In the period under review, the earnings per share appreciated by 28.38 percent to 21 kobo from 16 kobo, with the shareholders’ fund growing to N202 billion from N179.7 million.

    A further analysis of the results showed that the bank improved its total deposits by 3.8 percent to N1 billion, while total loans increased by 13.7 percent to N966.3 billion, with the cost to income ratio rising by 68.4 percent.

    In addition, the company closed with a cost of risk of 0.5 percent, an NPL Ratio of 4.9 percent, Liquidity Ratio of 37.2 percent and a Capital Adequacy Ratio of 16.5 percent.

  • UBA’s capital buffer strong to support growth – Uzoka assures shareholders, customers

    Group Managing Director of United Bank for Africa (UBA) Plc, Mr Kennedy Uzoka, has assured shareholders of the company that the lender was strong enough to weather any storm.

    According to him, the present state of the bank’s financial status can support the growth target set by the management.

    He said UBA remains liquid and well capitalised with a capital adequacy ratio (CAR) ratio of 24 percent, which is well above the minimum level set by the Central Bank of Nigeria (CBN).

    Statutorily, the apex bank requires banks with international subsidiaries to maintain CAR of 15 percent, while banks without international subsidiaries are expected to maintain CAR of 10 percent, but the minimum requirement for the systemically important banks is 16 percent.

    CAR is a measurement of a bank’s available capital expressed as a percentage of its risk-weighted credit exposures.

    Speaking at the Annual General Meeting (AGM) of UBA in Lagos yesterday, Mr Uzoka said even under a BASEL III scenario, the capital buffer of the financial institution remains strong to support growth.

    He said politics will continue to shape the business environment in Nigeria and other African countries but however maintained that the company remains optimistic and will continue to deepen its play in target growth sectors that are benefactors of the government’s reforms and policies whilst banking new opportunities.

    Also speaking at the event, Chairman of UBA, Mr Tony Elumelu, said the company was on a stronger footing to gain market share in Nigeria and other 19 African countries where it operates.

    According to him, despite the relatively slow recovery of the economy, UBA’s retail deposit grew by 42 percent, a testament to its improved service channels and enhanced customer service.

    “Overall, the group recorded a profit before tax (PBT) of N106.8 billion. Our interest income also rose by 11 percent on the back of increased asset base and African operations contributed 40 percent of these earnings, reinforcing the positive outlook on our Group’s profitability over the medium to long term,” he said.

    During the meeting, shareholders approved the total dividend payment of 65 kobo per share, bringing the total dividend for the year 2018 to 85 kobo.

    They commended the board and management for the dividend in spite of unfriendly operating environment, noting that with the financial results, UBA has shown that it can make Africa proud being the biggest bank.