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Investors Scramble for Nigeria’s Bonds Despite Recession

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Investors are lining up to buy dollar bonds Nigeria is expected to issue soon despite the country’s first recession in a quarter of a century, a currency crisis and budget shortfalls driven by low oil prices.

On the face of it, the $1 billion ($A1.3 billion) of bonds Nigeria hopes to sell by the end of March might seem unattractive, especially at a time sentiment towards African debt has soured after Mozambique missed a coupon payment.

But investors hungry for higher returns in a low interest rate environment reckon Nigeria’s benign debt levels, recovering foreign exchange reserves and a potential yield above seven per cent are reasons enough to look beyond the country’s economic woes.

“Nigeria’s starting position is one of low debt so if they price it attractively they will be able to get it done,” said Claudia Calich, who manages an emerging market bond fund at M&G Investments.

Nigeria’s Eurobond has been a long time coming. A year ago, Nigeria appeared to have shelved the idea in favour of a loan from China, but it embarked on an investor roadshow for the bond late last year in the United States and Britain.

Nigeria is Africa’s biggest economy, a member of the Organization of the Petroleum Exporting Countries and vies with Angola for the position of top oil producer, but that also means it is very exposed to fluctuations in the oil market.

The last time Nigeria issued dollar-denominated bonds in July 2013, oil was comfortably above $US100 a barrel but the slump in prices from $US115 in June 2014 to just $US28 a barrel by January 2016 has hurt the West African country’s economy.

Crude oil sales account for two-thirds of government revenue and about 90 per cent of foreign exchange earnings so the price slide, coupled with a resurgence in militant attacks on oil facilities in the Niger Delta, have had a severe impact.

According to the World Bank, Nigeria’s economy probably shrank 1.7 per cent in 2016, underperforming an average growth rate of 1.5 per cent across sub-Saharan Africa and way behind high-flying economies such as Ivory Coast.

Foreign investment has almost ground to a halt, hobbled by a slide in the naira currency – which trades on the black market at about 40 per cent below the official rate of 300 per dollar – and expectations the currency may have to be devalued again.

World Bank data shows net foreign direct investment tumbled to just over $US3 billion in 2015 from nearly $US9 billion in 2011 and the government needs to borrow $US3.5 billion internationally this year to balance a record 2017 budget.

International lenders such as the World Bank and African Development Bank (AfDB) are also holding back on loans until Nigeria comes up with a plan to make its economy more resilient.

Yet, bond investors seem undeterred.

They argue that a Eurobond issued in dollars will shield them from currency risk and, compared to its African peers, Nigeria has a low ratio of public debt to annual economic output, implying that default is not a worry.

The ratio of Nigeria’s total public debt to gross domestic product is 22 per cent compared with 46 per cent in Gabon, 62 per cent in Ghana or 73 per cent in Angola, according to estimates by Bank of America Merrill Lynch.

While businesses in Nigeria are having trouble getting hold of dollars, the country’s foreign exchange reserves are on the rise again. They hit an eight-month high of $US26.6 billion at the start of 2017 and have since climbed to $US28.9 billion.

“The government has access to hard currency even if they are restricting the access of other agents in the economy,” said Kieran Curtis, investment director at Standard Life Investments, who also plans to look at Nigeria’s upcoming bond issue.

Curtis reckons that Nigeria’s low debt ratios will allow it to borrow more cheaply than Ghana. Nigeria’s existing 2023 dollar bond yields about 6.7 per cent, or 170 basis points lower than Ghana’s 2023 bond.

Egypt, which has a credit rating of B-minus/B3/B from the main agencies, was marketing $US4 billion of Eurobonds in three tranches on Tuesday, offering a 10-year bond at 7.5 per cent. Nigeria is rated one to two notches higher at B/B1/B plus.

Nigeria’s last 10-year bond sold in July 2013 had a 6.375 per cent coupon but Exotix Partners head of fixed income research Stuart Culverhouse said a new issue would have to offer a yield of 7.0 per cent to 7.5 per cent.

“(Nigeria) might have to accept that people are charging more for them because of the situation. It could be a reality check,” he said.

If the country were to press ahead with reforms to alleviate pressure on the naira before issuing a bond, it could help lower the cost of borrowing, M&G’s Calich said.

“Then they could bring a new deal at tighter spreads. The big question is the currency regime.”

Although oil prices are now expected to stabilise above $US50 following OPEC’s decision to curb output, there are a few more clouds on the horizon.

The budget deficit for 2017 risks ballooning further as the government tries to boost the economy with record spending on roads and power.

Many also see the budget’s oil output projection of 2.2 million barrels per day as optimistic. Oil production, curbed by persistent attacks in the Niger Delta, was just 1.63 million barrels a day in the third quarter and was still below 1.8 million barrels per day in December.

Second, while emerging economies have been tapping the market in near-record numbers in January, sub-Saharan African borrowers have been absent and Mozambique’s coupon miss has not helped.

But Calich said there were no such fears for Nigeria.

“It will take a big shock to get into that kind of distress … we are far from that at this point.”


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UK Pledges €1Bn to Fight against Malaria in Nigeria

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The UK has pledged £1 billion to Nigeria’s fight against malaria and other diseases from 2024 to 2026.

UK Pledges €1Bn to Fight against Malaria in Nigeria

Ebere Anyachukwu, health adviser at the British High Commission, announced this on World Malaria Day in an interview with NAN.

This contribution supplements existing funds from other donors and will primarily support the procurement of insecticides, treated bed nets, malaria diagnostics, and chemoprevention efforts.

“There are some states in Nigeria where malaria is seasonal. Those are states where chemoprevention is used to prevent children from coming down with malaria,“ he said.

“In those states, malaria spreads in a few months within a year, and during that period, there is a high level of malaria transmission in children, resulting in lots of deaths.”

The health adviser said children in such states are usually given malaria drugs, whether or not they have the infection.

He said the UK is a big contributor to the global fund, currently supporting about 13 states in Nigeria.

He listed the states to include Adamawa, Delta, Gombe, Jigawa, Kaduna, Kano, Katsina, Kwara, Niger, Ogun, Osun, Yobe and Taraba.

“With the global funding support, there has been a significant reduction of malaria-related deaths in children in Nigeria,“ Anyachukwu said.


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60 Hearty Cheers to Chioma Ekeh, Africa’s Leading Unusual Female Tech

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The story has often been told in tech circles of how a relatively unknown Nigerian female student became a sensation of sorts among the international student population back in the early 80s in India owing to the unusual course of study she was undertaking.

60 Hearty Cheers to Chioma Ekeh, Africa’s Leading Unusual Female Tech

Chioma Ekeh

Electing to study Mathematics at Bachelor’s degree level – a course that required not only battling differential equations, calculus, advanced algebra, and so on, but also pitting one’s wits against that of wizened professors – is not a task for the faint-hearted. But that was the path that this unusual lady took at Punjab University, located in the culturally rich and aesthetically pleasing city of Chandigarh, India.

It was a decision that would lead Chioma Ekeh (nee Emelonye) along the path of meeting the love of her life, a certain Leo Stan Ekeh and returning to Nigeria with him to play a leading role in shaping the course of technology distribution in Africa.

Undoubtedly, unusual may also be a word that defines Chioma and Leo Stan Ekeh’s remarkable journey together. A power couple and exemplary partners who have worked together for over 30 years building a successful technology empire is a rarity, one that is not often seen.

That sojourn to India and her subsequent career trajectory laid the groundwork for the impressive reputation Chioma Ekeh has built in the highly competitive technology space. Business associates and representatives of global brands never fail to cite her intellect and brainpower.

Job seekers who cross her path during interviews often recall being asked to solve a simple arithmetic problem. For those who eventually become employees, there is never-ending adulation.

Her husband, Leo Stan Ekeh, describes her as the integral analytics, the backbone behind the brilliant success of the Zinox Group where she has continued to support all the businesses across the board.

Such is the cerebral aptitude of this unusual woman that she is reported to have taken the stage once at a company-wide business review to present a financial report punctuated by humongous accurate numbers, figures and percentages, all from memory and without recourse to any notes, a device or an actual presentation document.

Born on April 25, 1964, the story of the impressive diffusion, accessibility, useability and affordability of cutting-edge technology devices and solutions in Nigeria and indeed, sub-Saharan Africa will be grossly incomplete without a detailed citation on Chioma Ekeh and the leadership role she has played – one she has continued to play as a silent innovator and disruptor–alongside her legendary spouse.

A Fellow of the Chartered Institute of Certified Accountants (FCCA, UK), Mrs. Chioma Ekeh is the brains behind TD Africa, a regional technology distribution powerhouse headquartered in Nigeria and with branches across Africa and in four other continents.

A company she led from start-up stage, TD Africa with Chioma Ekeh as CEO, pioneered ICT distribution in Sub-Saharan Africa and has remained the industry leader by market share in the region and the biggest provider of credit to resellers.

Founded in 1999, TD Africa is Africa’s leading distributor of technology and lifestyle products, boasting an unmatched and growing network of partnership with global brands like HP, Microsoft, Apple, Starlink, IBM, Dell Technologies, Ring (by Amazon), Cisco, Lenovo, APC by Schneider Electric, Samsung, Bosch, Phillips, Logitech, Vivo, among several others. Under Chioma’s exemplary leadership, the company has achieved numerous milestones, earned a long list of local and international awards/accolades and ensured Nigeria and indeed Africa is reckoned with at the global table of technology conversations and discussion-making.

However, this remarkable story may have turned out differently, had Chioma not returned to Nigeria under the guidance of her husband.

Armed with a formidable Mathematics degree after completing her studies in India, Chioma had the world at her feet and was the toast of leading companies the world over.

Moving to the United Kingdom at the invitation of her husband, Chioma joined the exalted league of Chartered Accountants and thereafter, bagged an MBA at the reputable Heriot Watts University.In 1987, she joined Sterling Deveraux as an Investment Analyst, engaging in researchand analyzing assets, such as stocks, bonds, currenciesand commodities.

Her acumen and exceptional skills were growing in demand and before long, she left Sterling Deveraux, joining the London Borough of Lewisham as an accountant in 1988.

Between 1988 and 1991, Chioma’s sterling work saw her rise swiftly through the ranks at the London Borough of Lewisham, moving from Accountant to Senior Auditor and then to Financial Auditor.

Certainly, Chioma Ekeh had a clear path to becoming CFO and possibly CEO at the London Borough of Lewisham or even going on immediately to taking up other elevated roles at other organizations. But the love of motherland and the call of her husband – Leo Stan Ekeh – to return home to Nigeria with him and build a technology legacy for Nigeria and Africa proved too strong.

Back home, Chioma Ekeh’s initial area of responsibility was with Task Systems Ltd., the first of many companies in the Zinox Group set up by Leo Stan Ekeh.

She took up the position of Financial Controller and spent six achievement-filled years at Task before driving the vision of technology distribution birthed by her husband in launching TD Africa where she became the company’s pioneer CEO.

A quiet, unassuming tech icon, Chioma Ekeh has acquired a well-deserved status as unarguably one of Nigeria’s top three leading Women-in-Tech, a female technology business leader with extensive years of proven capacity in building high-performing teams and transforming businesses beyond stakeholders’ expectations.

In partnership with her husband, Chioma Ekeh has played immense roles in growing and nurturing partner businesses, launching several thriving new businesses and successfully closing some of the biggest acquisitions in the technology space in Nigeria.

The Tech Experience Centre – Africa’s first technology experience centre – located at Yudala Heights, a sprawling edifice in the heart of Victoria Island – is another project that has Chioma Ekeh’s indelible signature on it.

The launch of the Tech Experience Centre in October 2020 received high praise from the Nigerian government and representatives of global Original Equipment Manufacturers (OEMs).

Under her guidance, Celebrating You, an annual showpiece celebratory event hosted by TD Africa has become unarguably the biggest year-end event in the Nigerian technology industry for over a decade.

Also, she has spearheaded several CSR projects, including The Herwakening – an empowerment programme for female entrepreneurs– and Girls in ICT – a project targeted at encouraging young girls to take up STEM (Science, Technology, Engineering, Mathematics) disciplines and considering careers in technology.

As she turns 60, Chioma Ekeh deserves rarefied mention and unmitigated encomiums. An amazon, this unusual female tech icon who has shattered several glass ceilings, knows no fatigue and has continued to innovate, effortlessly leading from the front.

 

 


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Academic Technologists Propose N350,000 Minimum Wage

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National Association of Academic Technologists (NAAT), has proposed N350,000 as the new minimum wage for Technologists in the tertiary institutions.

Academic Technologists Propose N350,000 Minimum Wage

Comrade Ibeji Nwokoma, national pesident of NAAT, stated this at 5th National Delegate Conference in University of Abuja.

Nwokoma, said the proposal was based on the present economic situation in the country occasioned by the removal of fuel subsidy, high inflationary rate and the attendant hardship.

Nwokoma maintained that technology rule the world and advanced development and shaping the landscape of education in developed countries.

Prof. Tahir Mamman, minister of Education, said the federal government will soon introduce the policy that will make skill acquisition compulsory for primary and secondary schools.

The minister said global space is driven by technology which the advanced world is using to solve problems and gaining grounds.

The Union protect, defend, and promote the rights and well being and interests of all members and to advance the cause of members, employed in Nigerian Tertiary Institutions Universities, Polytechnics, and Colleges of Education.

The theme of the conference is, “Technology, a recipe for national development and socioeconomic growth in the 21st century: the Nigeria quest for a better tomorrow.”

 

 


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