10 Nov

Exporting to Nigeria: Tips and insights

Nigeria is still, by a slim margin, the biggest economy in Africa, despite the economic woes of the past two years. A population of anything between 180 million to 200 million people makes its consumer market in particular of great interest to investors, manufacturers and exporters around the world. The country manufactures relatively few of the products it consumes and despite efforts to increase local industry, it remains largely import dependent.

However, despite the multitude of opportunities that Nigeria presents to exporters, getting a product into the market can be a challenging exercise.

Nigeria’s main port complex is in the commercial capital of Lagos, a city of an estimated 20 million people – a major market in itself – but also the shipping gateway for imports and exports for the whole nation.

The facility, comprising the Lagos Port Complex and Tin Can Island Port in the Apapa area of Lagos city, is one of the busiest in Africa. It is also by far the main portal for trade into and out of this large country, processing 97% of containers. The only other port of size, Onne, is focused on the oil and gas industry around Port Harcourt, and there are a few other, smaller, ports.

As a result, there is usually serious congestion at Lagos. The high volumes are just part of the problem. Other challenges include poor infrastructure, inadequate and often poorly functioning equipment, the demands of different agencies located there, onerous bureaucracy and general issues related to officialdom.

Clearance time in Lagos port is between seven and 14 days. Once clearance is complete, it takes, in a best-case scenario, 48 hours to get the product out of the port. However, this can take longer depending on other factors, as currently being experienced with the rebuilding of the access road to the port, and any problems in the manifest or other documents.

Having a competent cargo clearing and forwarding company is vital to navigate the process. Exporting to Nigeria requires detailed knowledge of requirements. A simple mistake in documentation or process can lead to cargo sitting in port for weeks or even months, with hefty demurrage charges.

It is important for an exporter to be on top of any changes in documentation and import requirements. Do not wait for the importer in Nigeria to alert you to what is needed; rather do your own homework.

Read more: Exporting to Nigeria

11 Oct

Eterna Plc Gets Exclusive Rights For Distributing Castrol Oil in Nigeria

Eterna Plc. has officially launched Castrol Oil into the market of Nigeria. This follows the company’s 2015 distribution agreement with Castrol. It is also worthy to note that Eterna was granted the license to blend and distribute Castrol Automobile and Industrial lubricants at its Sagamu, Ogun state facility.

Some of the Castrol products launched into the market include Castrol Edge- fully synthetic oil with fluid strength technology. Castrol Magnatec- semi-synthetic oil instant protection from the start and Castrol GTX Essential-trusted protection for your engine.

“I am proud to announce that the latest addition to the Castrol GTX family “Castrol GTX Essential” was produced for the first time in the world at our plant in Sagamu this August. This is a clear demonstration of the confidence reposed in our manufacturing capabilities by Castrol,” said Mahmud Tukur, Managing Director of Eterna PLC.

Eterna and Castrol’s journey

According to Mahmud Tukur, the journey began as far back as 1991 through the vision of the company’s founder, Otunba Tunji Lawal Solarin, when Eterna started importing and distributing Castrol Lubricants in Nigeria. A robust marketing structure was set up and with increased market sales, Eterna began to manufacture lubricants locally through a third-party facility on an interim basis.

The aim was always for the company to own its blending facility and this dream became a reality when Eterna secured a US $940,000 loan from the International Finance Corporation (IFC) in 1995 to construct what was to eventually become one of the best and most modern lubricant manufacturing plants in Africa. Castrol designed the plant and provided the required technical support during construction ensuring that the plant met global standards.

Twenty years later, Eterna’s 15,000MT capacity state-of-the-art lubricant manufacturing plant, which is fully owned by its subsidiary, Eterna Industries Limited, is one of the only three Castrol accredited blending plants in Africa. The plant is located in Sagamu, Ogun state on a sprawling 5 hectares of Prime Industrial Real Estate.



22 Sep

The Innovative Platform Revolutionising Book Publishing In Nigeria

It is true what is said of necessity, of it being the mother of invention. No one would agree more with that proverb than an innovator and start-up founder like Okechukwu Ofili, whose frustration with the publishing and distribution industry in Nigeria propelled him to create OkadaBooks, an e-publishing platform that is revolutionising book publishing in Nigeria.

Prior to establishing the platform, Ofili was an engineer who wrote and made illustrations part-time. “… Because I was an engineer, when I faced publishing and distribution difficulties, instead of sitting down and complaining I said ‘how can we engineer a solution?’ and that’s how I stumbled upon OkadaBooks.” In an industry that is plagued by piracy, fraud and a dearth of adequate publishers and distributors, Ofili’s OkadaBooks is a breath of fresh air, the refreshing change that the industry so desperately needs.

In this exclusive interview with Ventures Africa, Ofili, who had recently quit his job to focus solely on growing his platform, discusses not just the challenges of running a start-up but also the fascinating surprises that make the hustle worth it.

Ventures Africa (VA): What’s the story of Okada books?

Okechukwu Ofili (OO): Okada books started when I moved back to Nigeria in 2010. I had just published a book called How Stupidity Saved My life and I did what every author would do, I went on radio to promote it, I put it in bookstores and I was lucky enough to get my book to sell. But there was a point where I was being owed over N1.5 million and every time I went to the bookstore, I was told, “Oga come back tomorrow, the manager is not around.” They kept posting me. So I did a social media campaign where I said: “XYZbookstore, pay me my money.” I did that and it got a buzz because I was writing for Bella Naija and Ynaija at the time and I had a large followership.


21 Sep

Business innovation: He’s banking the unbanked in Nigeria and beyond

Because his business company is reaching 6 million people … and counting. “I knew that whatever I wanted to do had to pass the big idea test.” For Tayo Oviosu, 39, that big idea was Paga, now the largest distribution network for financial services in Nigeria, reaching more than 6 million people.

For Oviosu, the premise behind his company is simple: “We’re not trying to replace the bank; our goal is to help make it easier for people to get paid. We are building a payments and digital bank, and our vision is Pan-African, but Nigeria is the first point. We want to bank the unbanked in Nigeria.”

But a decade ago, when he returned home from the U.S., he had a different plan. With experience working at Cisco Systems and a degree from Stanford Business School, he would clock five years at a private equity firm, launch a business and then move into the venture capital industry. The steps were laid out — until Oviosu quit his private equity job six months in. “I had always said the day I consistently stop enjoying my job is the day I quit,” he says.

Pen and paper in hand, Oviosu spent weekends making lists of potential businesses he could start on his own. And his big idea? Paga, which he started in 2009 with money he’d saved from more than 10 years in the private sector.

According to a report by Enhancing Financial Innovation and Access, a development organization that promotes financial inclusion in Nigeria, 41.6 percent of Nigerian adults are financially excluded, or “unbanked,” as Oviosu calls them. That figure translates to more than 40 million Nigerian adults who lack access to basic financial services like bank accounts and debit cards.

“How can a country truly reach its potential if you don’t provide financial services to the mass market?” Oviosu asks.


19 Sep

Nigeria announces $5.8 billion deal for record-breaking power project

The government of Nigeria has announced the award of a $5.8 billion contract to build what will be the largest power plant in the country.

The 3,050-megawatt Mambila hydroelectric power project in the state of Taraba will be delivered by a consortium of Chinese state-owned construction firms.
The megaproject will feature four dams between 50 and 150 meters tall, and take six years to complete, the Minister of Power, Works and Housing, Babatunde Fashola, told reporters in Abuja.
The Chinese Export-Import Bank will finance 85% of the development, with the Nigerian government contributing 15%.
Minister Fashola claimed the project will deliver far-reaching benefits.
“(Mambila) will have a transformational effect on all of Nigeria’s socio-economic development,” he said through a government spokesman, “It will have considerable positive impact on electricity supply nationwide, productivity, employment, tourism, technology transfer, rural development, irrigation, agriculture and food production.”

False starts

The Mambila hydropower plant has been in development for over 30 years, but previous administrations have made little progress.
In 2007, the Nigerian government awarded a $1.4 billion contract to two Chinese construction firms for a 2,600-megawatt plant, but the agreement broke down soon after.
Attempts were made to revive the deal without success. But the deadlock was broken by conversations between the presidents of China and Nigeria in 2016, according to the spokesman of Nigerian President Muhammadu Buhari.
“The major breakthrough in the execution of this project was achieved when President Muhammadu Buhari initiated discussions at the level of the President of the Peoples Republic of China in the course of his State Visit (in 2016),” wrote government official Garba Shehu.
The meeting resulted in the creation of a consortium of Chinese companies to deliver the project, according to Shehu, and an agreement that the Chinese government would commit finance to it.
19 Sep

Nigerian Tech Entrepreneur Is Building An African Digital Powerhouse

Over the last 15 years, Africa has seen significant mobile telecoms growth and now data is being viewed as the ‘new oil’ on the continent.

Founder of the Terragon Group, Elo Umeh, a 35-year-old Nigerian with a knack for mobile, digital innovation and creative solutions, has made overcoming data access and reach on Africa’s most pervasive device the mission of the company he founded 8 years ago. With a vast amount of experience in the mobile telecommunications industry having worked in different countries in Africa – Nigeria, Kenya, Uganda, Ghana and Cote d’Ivoire – Umeh has consulted widely for various organisations in the telecommunications and banking sectors, including the International Finance Corporation (IFC) on management of rural telephony initiatives, mobile payments in West Africa and the deployment of new products.

A keynote speaker at TMT Finance Africa which recently took place in London, Elo Umeh is the current co-chair of the Mobile Marketing Association in Nigeria. He talks to me about being a significant player in a fast-growing market.

What has fuelled your entrepreneurial drive?

My love for digital has come from the iPhone. As an undergraduate in Lagos people couldn’t communicate unless they queued along with 30 or 40 people for hours to use a public phone. The government held a monopoly on phone lines and provided relatively substandard service, so not much was happening from a commercial standpoint. The development of mobile communications was a real gamechanger and from the beginning it began to make a significant impact across the continent. I realized it was going to change everything.

Why create a technology business?

I saw the potential of reaching an untapped market, that struggled due to the lack of basic infrastructure, therefore, development of communications, transportation, power and could be bridged through the innovation that potentially was being heralded by the launch of the smartphone in 2007.

Read more: How Nigerian Tech Entrepreneur Elo Umeh Of Terragon Group Is Building An African Digital Powerhouse

18 Sep

Interswitch Nigeria Sees Delayed IPO Concluded by End-2019

Interswitch Ltd., a Nigeria-based payments-processing company, expects to complete its delayed dual listing in London and Lagos before the end of 2019.

The initial public offering to raise as much as $1 billion had been scheduled for 2016 and was delayed because equity markets were not as “favorable as we would have liked,” Interswitch’s divisional chief executive officer for switching and processing, Akeem Lawal, said in an interview.

“We will come back to it because it is an important part of our strategy,” Lawal said on the sidelines of a conference in Nairobi, Kenya’s capital. “It will happen before the end of 2019.”

Lawal was in Nairobi to promote Interswitch’s use of quick-response, or QR, codes to drive merchant payments using mobile phones. While MasterCard Inc. and Visa Inc. already have similar methods, the two companies have agreed to make them interoperable with others and negotiations are under way to add more systems including Safaricom Ltd.’s M-Pesa service.

More than 8,000 merchants have been added in Nigeria and Kenya since Interswitch introduced the system in July, and the company is targeting 80,000 in 12 months. Customers use their phone cameras to scan a merchant’s unique QR code displayed on the screen of the card reader to make payments at the till.

In Nigeria and Kenya 255,700 transactions have been made in the two months its been in operation. Ghana and Tanzania will be added within two months, and the company aims to have the system operational in 12 nations by February, Lawal said. Barclays Bank of Kenya Ltd., First Bank of Nigeria Ltd., Diamond Bank Plc and Fidelity Bank Plc are using the platform and three other lenders are in the process of being signed on, he said.

“QR has a unique advantage which has been demonstrated in China and India, because it is convenient, it is easier to use and the cost of deployment is low,” Lawal said.

[Via] Bloomberg – Interswitch Nigeria Sees Delayed IPO Concluded by End-2019

11 Sep

Nigeria and South Africa emerge from recession

Two of the largest economies in Africa are growing again after recessions.

Nigeria’s GDP expanded by 0.55% in the second quarter of 2017 year-on-year, according to the National Bureau of Statistics, ending five consecutive quarters of contraction. Quarter-on-quarter growth for the same period was 3.23%.
The South African economy grew by 2.5% quarter-on quarter for the three months to June 30 after two quarters of decline, according to official statistics.
Historic decline
Growth in Nigeria marks the end of its worst recession in 25 years.
Africa’s leading oil producer has been hard hit by falling prices for the commodity, which accounts for the majority of its export revenue.
But the oil sector has recovered slightly in the last quarter, with growth of 1.6% year-on-year.
Nigerian agriculture, which contributes around 23% of GDP, has also rebounded with growth of 3% over the same period.
Agriculture boom
South Africa’s recovery from a shorter recession has been supported by growth across a range of industries.
The agriculture sector expanded by 33.6% quarter-on-quarter, boosted by strong harvests of crops such as maize and wheat.
The finance industry also performed well with growth of 3.5%, and the mining industry expanded by 3.9%, supported by increased production of coal and gold.
But despite these positive indicators, Statistics South Africa warned that the recovery remains fragile as “longer-term indicators show subdued growth.”
[Via CNN]
01 Sep

Nigerian Investor Sets Up $135 Million Commodities Exchange

A Nigerian startup is developing a new agricultural commodities exchange in Africa’s most populous country to take advantage of the government’s efforts to boost farming output to reduce reliance on oil.

The exchange, Integrated Produce City Ltd., will be located near the southern city of Benin, about 300 kilometers (186 miles) east of Lagos, Nigeria’s commercial hub, a site accessible to nearby growers of cocoa, palm oil, rubber and cassava, Chief Executive Officer Pat Utomi said in an interview.

“The concept of a wholesale-produce market is to enable the farmer to fully dispose of his produce, instead of today where he loses 80 percent of his output” that rots before it can reach the market, Utomi said on Aug. 18 in the capital, Abuja.

Nigeria is boosting investment in agriculture to increase exports and cut food imports that cost it $3.2 billion in 2015, according to the National Bureau of Statistics. The economy of Africa’s biggest oil producer has been hit hard by lower output and prices of crude, which accounts for more than 90 percent of foreign income and two thirds of government revenue.

Integrated Produce City will have storage facilities, including refrigerated warehouses, and host processing plants on its 100-hectare (247-acre) site in Edo state’s Ugbokun village when it starts operating by the end of 2018, Utomi said. “It will be an export hub for produce,” where exporters will have access to large quantities stored in one place rather than sending agents to individual farmers to collect small amounts, he said.

The company has put up 20 percent of the required $135 million and is in talks with lenders and investors from South Africa, China and Australia for additional capital, Utomi said, declining to name them. Integrated Produce City signed an agreement with KPMG LLP’s Nigerian unit on Monday to help it raise more capital, Vitus Akudinobi, a spokesman for the new exchange, said.

Cocoa, palm produce, cashew nuts and rubber are among the products to be traded on the exchange. Others are fresh fruit and vegetables, grains and tubers such as cassava and yams. Local manufacturing companies will be able to buy agricultural goods at the exchange, he said.

Read the full story: Bloomberg Markets

29 Aug

Weathering Africa’s commercial real estate storm

real estate

The brilliant thing about working in Africa is the continent’s ability to change – and adapt – almost instantly. While at first glance this is often interpreted as a challenge or a risk, the importance of adopting a “glass-half-full approach has never been more essential than in Africa’s current real estate environment”, says Gerhard Zeelie, head of Africa property finance at Standard Bank.

In Africa, things can change very quickly.

In May last year, for example, Nigeria was in the throes of a US dollar liquidity crisis. Barely 12 months later this is largely resolved. Just as tweaking foreign exchange regulations along with positive market changes improved liquidity in Nigeria, an uptick in the oil and copper prices coupled with market-friendly, transparent forex regimes could, equally as easily, change Luanda or Lusaka’s commercial real estate prospects – overnight. Similarly, large global energy investments touted for Mozambique are currently dispelling default-driven negative sentiment as investors again turn positive about the region.

“The variables that threaten risk in Africa are equally what contributes to making the continent such a rich landscape of opportunity – especially in the continent’s real estate sector,” says Zeelie.

Africa’s commercial real estate sector is currently, without doubt, a tenants’ market. Despite a more settled Naira and easing USD liquidity in Nigeria, challenges importing goods – until recently prohibited for foreign currency allocation – is keeping smaller businesses and retailers under pressure, forcing landlords to continue offering tenants discounts, or capped USD-based deals. New malls remain at 50-60% occupancy levels as “tenants shy away from the more expensive USD-based rentals, or remain unsure of whether they will be able to get prohibited, non-essential, stock through ports”, says Zeelie.

Similar concerns follow the office rental environment as businesses adopt a wait-and-see attitude, deferring office moves, upgrades and corporate office expansions.

These kinds of challenges mean that commercial real estate developers are struggling to convert Africa’s resilient consumer demand into competitive rentals. “This is not only constraining income in the sector but also leading to a depreciation in the value of the continent’s real estate stock as, increasingly, space in new developments stands empty or achieves lower rentals than before,” observes Zeelie.

The intensity of the storm in the continent’s commercial real estate sector varies.

In Nairobi, for example, “a better regulatory setting, an easier business environment more generally, and a more diverse economy – with multiple earners of foreign exchange – collectively contribute to a more resilient tenant profile and higher occupancy, even though vacancies exist in certain nodes and sectors”, says Zeelie.

Kenya, or, more correctly, Nairobi’s commercial real estate market, is, however, the exception rather than the rule in Africa.

When projects don’t perform as anticipated, African commercial real estate developments require more patient funding structures which can be achieved through the correct ratio between debt and equity.  “Projects conceived in earlier, more positive, business environments on very different numbers, for example, should be restructured,” says Zeelie. While a restructure will often involve a higher level of equity finance, “the bank should also display some flexibility in its approach”, he adds.

For example, if financiers have a view on how long negative conditions may last in certain markets they may be able to extend the tenors or repayment terms of financing facilities – provided there is not a significant deterioration in the risk. Or, if clients have access to shareholder funds, it might be cheaper to put more hard currency into the structure. There may also be options to convert debt into local currency, provided there is enough liquidity in the market.

“Another solution could be to negotiate upfront payment of the present value of all lease payment with key tenants,” says Zeelie. Over the long term this provides these tenants with predictability – and probably a discount – while injecting much needed capital, now, into commercial real estate financing structures, enabling landlords to manage rentals with smaller clients in the short term.

source from How We Made It In Africa