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FG May Hike Pump Price, Devalue Naira, Others This Year

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FSDH Research, trusted providers of market intelligence has said that certain key events, both at the global level and in Nigeria, will influence economic and business activities in 2019.

 

FSDH Research examines a few of these events and discusses the implications for businesses and investments in Nigeria.

 

The expected hike in interest rates in major advanced countries will lead to an increase in global yields and may put pressure on currency in Nigeria.

 

There are strong indications that the US Federal Reserve, Bank of England and European Central Bank will increase interest rates in 2019. The expected increase in the interest rate in the international market may also lead to an increase in the interest rate in Nigeria because of monetary policy adjustments to reduce capital flight.

 

Nigeria may lose a substantial amount of its projected crude oil revenue due to a limit on crude oil production and the drop in the global crude oil price. This may also lead to a drop in the supply of foreign exchange into Nigeria, resulting in a possible depreciation or devaluation of the Naira.

 

Nigerian businesses should look for local alternatives, where possible, for the raw materials needed for their production process.

 

They should also limit or eliminate foreign debt, particularly if they do not have foreign exchange receivables to mitigate the possible foreign exchange risk.

 

FSDH Research also advises that businesses should put in place appropriate foreign exchange hedging strategies. The Q3 2018 Balance of Payment (BoP) report that the Central Bank of Nigeria (CBN) published shows that earnings from crude oil and gas accounted for 94.4 percent of total export earnings during the period.

 

The external trade report that the National Bureau of Statistics (NBS) published for Q3 2018 shows that crude oil exports accounted for 85 percent of total exports. Therefore, any adverse movement in crude oil price or production has high negative implications on the Nigerian economy.

 

Although FSDH Research expects the general election in 2019 to be peaceful, its outcome will determine economic activity and business in Nigeria.

 

A peaceful election will ensure stability of the Nigerian economy and pave the way for the flow of investments, both Foreign Direct Investments (FDIs) and Foreign Portfolio Investments (FPIs) into Nigeria. Certain longterm business and investment decisions may be taken immediately after the election if the current government retains power.

 

However, if there is a change in power, investors may wait until after the presidential inauguration on May 29 before they take long-term investment decisions, to give them enough time to access details of the policies of the incoming government.

 

There are certain macroeconomic realities that the Nigerian government must contend with in 2019.

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FSDH Research believes the fiscal deficit in 2019 may be higher than in 2018, and higher than what is projected for the year 2019. In order to execute certain plans that will move the economy forward, government may have to increase borrowing or partner with private sector operators on key projects.

 

An increase in borrowing will increase the interest rate, while partnership with the private sector will expand economic activity and create new job opportunities.

 

Already, the ratio of government’s debt service to revenue is high and at an unsustainable level. Therefore, additional debt, in an environment of rising interest rates, may reduce government’s ability to execute critical programmes that will improve the business environment.

 

While fixed income investors may enjoy higher yields in 2019 than in 2018, businesses may suffer under rising interest costs.

 

FSDH Research analysis shows that electricity and the pump price of Premium Motor Spirit (PMS) are two key prices that government will need to adjust in 2019 to free up funds for developmental purposes.

 

The adjustment may increase the inflation rate in the short-term, but it will benefit the economy in the long-term. More investments are required in the power sector than are currently available.

 

However, the sector may not attract investment in the absence of a cost-reflective tariff. Government already allows an off-grid power supply arrangement based on ‘willing buyer, willing seller’. The tariff at which this arrangement is settled is higher than the tariff for the power from on-grid supply. Appropriate policy responses from government and strategies from the business community may ameliorate the likely negative impacts of these key events in 2019.

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E-Financial

Oluloye, 67-Year-Old Woman Accused of Hacking, Stealing N16m from First Bank

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Wuraola Folashade Oluloye, a businesswoman, has been arrested for allegedly hacking a First Bank Plc account and stealing a customer’s N16.2million.

 

Oluloye, 67, was Tuesday brought before an Igbosere Magistrates’ Court, Lagos, by the Lion Building Police Division, Lagos on five counts of fraud and fraudulent diversion, according to a charge marked B/33/2019.

 

George Nwosu, prosecution counsel told the court that the defendant was arrested following a complaint by First Bank through Mr. Solomon Akhanolu, head of the Department of Forensic Auditors.

 

Nwosu told the court that the defendant committed the alleged offences between last October 16 and December 31, at First Bank’s Agidingbi Branch, Lagos.

 

The court heard that Oluloye allegedly hacked the account of Emefiele Ogbor, a First Bank customer with account No 3014419974.

 

She withdrew N16,200,000 and transferred same to her accounts in Stanbic IBTC, Union, Sterling and First banks.

 

The defendant subsequently withdrew the money from the four accounts and converted it to her use.

 

First Bank discovered the fraud during an audit and blocked the defendant’s bank account.

 

But when Oluloye showed up at the bank to make withdrawals, the police were waiting and she was arrested.

 

Folashade Olukoya granted Oluloye, chief magistrate who pleaded not guilty, N500,000 bail with two sureties in the like sum, among other conditions.

 

She remanded the defendant in Kirikiri Prison, Apapa Lagos and adjourned till June 24.

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E-Financial

Africa’s FinTech Sector Grows by 60% in 2 years says Disrupt Africa

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Africa’s FinTech sector is growing at a fast pace, with the number of start-ups operating in the space growing by more than 60% in the last two years, while funding has hit new records.

This is according to Disrupt Africa’s Finnovating for Africa 2019: Reimagining the African financial services landscape report, which finds the number of active FinTech ventures across the continent has grown to 491 from 301 in 2017.

According to the report, South Africa, Nigeria and Kenya remain the main three markets, with 141, 101 and 78 active ventures respectively, accounting for 65.2% of Africa’s FinTech start-ups.

“Yet the share of the overall total claimed by these three countries is in decline as the sector spreads across the continent, with FinTech start-ups tracked in 28 African nations. Though the big three markets are growing, the biggest developments are occurring in other markets, with countries like Uganda, Ghana and Egypt in particular seeing their local FinTech spaces explode,” according to Disrupt Africa.

A similar trend can be seen in terms of the type of platforms being rolled out by FinTech entrepreneurs, the company suggests.

Though start-ups in the payments and lending spaces remain the most prevalent, the fastest growth is occurring elsewhere, with the number of start-ups active in areas such as investtech and insurtech, for example, more than doubling in the last few years.

“Meanwhile, there is a marked increase in the amount of companies focusing on two or more distinct types of financial services, as African FinTechs begin to ‘rebundle’ and we see moves towards fully-fledged, all-service digital banks on the continent. This is a process that is quickening as the amount of funding coming into the sector grows. African FinTech companies have raised just shy of US$320-million in funding since January 2015, and last year’s total of US$132.8-million was the best year yet,” Disrupt Africa continues.

Gabriella Mulligan, co-founder of Disrupt Africa, said: “The financial services landscape in Africa is following a very unique trajectory, as compared to other geographies. Most remarkable about this trajectory, is that is it being driven by entrepreneurs and their home-grown innovations. We hope this report affords our readers an interesting insight into the FinTech revolution taking place across Africa.”

Tom Jackson, co-founder of Disrupt Africa, added, “No space has quite the potential impact of the FinTech space when it comes to impact – and profits – in Africa, with start-ups operating such platforms able to significantly address the major issue of financial exclusion on the continent and thus promote development in all sorts of other areas. It is exciting to see the speed at which the sector is developing, therefore, but also heartening to see the signs of maturation and consolidation that will ensure its ultimate success and longevity.”

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E-Financial

Ecobank Emerged ‘Best Retail Bank in Africa’ @ African Banker Awards

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Ecobank has been named Best Retail Bank in Africa 2019 at the prestigious African Banker Awards. The judges were especially impressed by how Ecobank’s state-of-the-art products, services, functionality and constant innovations provide 24/7 convenience, accessibility and affordability to meet the evolving needs and expectations of its customers across 33 African countries, whilst also successfully driving financial inclusion. Ecobank was also nominated for African Bank of the Year in the Awards. The Award ceremony was held last night in Malabo, Equatorial Guinea.

Ade Ayeyemi, Group CEO of Ecobank said: “We are honored to be recognized as Africa’s Best Retail Bank. This is testament to the success of our digital strategy and pan-African presence as we continue to drive financial integration, inclusive banking and playing a catalytic role in the transformation of Africa.”

“We are constantly innovating to meet the needs of Africans, from our multi-functional Ecobank Mobile App, which has changed banking in Africa, to our KYC-lite Xpress account opening for the unbanked and the under-banked, and our Rapidtransfer App, for cross-border remittances to Africa at minimal or no cost.

“Our Xpress Point agencies further deliver face-to-face banking to thousands in local communities. The traditional banking model is changing and Ecobank will continue to play a pivotal and pioneering role in meeting the banking needs of millions of Africans.”

Nana Araba Abban, Acting Group Executive, Consumer Bank said: “Ecobank is making banking accessible, convenient and affordable, and we are continuing to broaden our innovative range of best-in-class products, services and functionality to enrich our customers’ experience and stay a step ahead of their evolving needs and expectations. To win the prestigious ‘Best Retail Bank’ Award two years running strongly indicates that our strategy and service is working for ever increasing numbers of sub-Saharan Africans across our pan-African footprint.

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