Nigeria Archives - African Financial & Economic Data

14 Jun

Barclays Africa to join the Nigerian Stock Exchange as a broker

Barclays Africa plans to join the Nigerian Stock Exchange as a broker in July and is exploring opportunities in three other African countries, in a move to create access for foreign investors looking to tap into markets on the continent.

Garth Klintworth, head of markets for Barclays Africa Group, on Thursday said its subsidiary Absa Nigeria had acquired a securities licence in Nigeria, part of a wider plan to increase it presence in west Africa’s biggest economy.

Nigeria’s stock exchange, the third largest in Africa, has in the last few years said it was reviewing applications from leading global investment banks to join its trading floor to increase foreign investment in one of the world’s least tapped emerging markets.

Africa’s fintech industry has scored another big-ticket investment win

The streak of big-ticket investment in African fintech companies shows no signs of stopping.

Cellulant, the digital payments solutions company operating in 11 African countries has raised $47.5 million in its Series C round—one of the largest for a solely Africa-focused venture-funded company. The round was led by The Rise Fund, an impact investment fund run by TPG Growth, the US-based private equity group, with participation from Endeavor Catalyst, Satya Capital, Velocity Capital & Progression Africa.

First founded in Nigeria and Kenya in 2004, Cellulant has since expanded to nine other African countries and around 12% of Africa’s mobile consumers can make payments using its solutions. Its reach is down to partnerships with over 90 banks and several mobile payments platforms across the continent. The company says it will be expanding to two more countries following the investment.

The deal marks Rise Fund’s first investment in Africa since raising $2 billion last October. The fund’s backers include Andra AP-fonden, the Swedish pension fund and the Washington State Investment Board. It also lists music star Bono and billionaire Richard Branson on its board.

The investment in Cellulant is the latest endorsement of the key role African fintech companies are playing in bridging the crucial payments and financial inclusion gaps on the continent. Over the past three years, the sector has garnered momentum and has become the most attractive for investors on the continent.

Almost a third of funding raised by African startups in 2017 was in the fintech sector as investors bet on consumers turning to more formal financial services in a region where just 17% of the population have banking accounts. Venture funding for African startups jumped by 51% to $195 million in 2017.

Fintech was the biggest attraction for investors with 45 startups raising one-third of total funding. The success of mobile money technology like M-Pesa in Kenya and across East Africa has long shown the potential for other underserved markets. M-Pesa’s success is likely also behind for the increasing presence of mobile networks in the African financial sector and the convergence of the two sectors.

Read the full story at Quartz Africa

02 May

Nigeria bans cough syrup with codeine after addiction outcry

Nigeria has announced a ban on the production and import of cough syrup containing codeine after a BBC investigation into its role in an addiction epidemic.

A health ministry spokesman told the BBC remaining stocks in shops could be sold with a prescription.

The BBC investigation showed the syrup being sold on the black market to be used by young Nigerians to get high.

It recorded a number of pharmaceutical figures selling the drug illegally.

The joint probe by the BBC’s new investigation unit, Africa Eye, and BBC Pidgin prompted a swift response from people across the country, including Nigeria’s first lady, Aisha Buhari, who said in an Instagram post she was “deeply saddened” by the rise of the problem, especially in the north of Nigeria.

“I call on all security agencies, lawmakers, judiciary, drug manufacturers, civil society, regulators, teachers, parents, neighbours and you to take this as a personal war and halt the menace,” she added.

However, Olajide Oshundun, the Ministry of Health’s assistant director of information, said the ban was a result of months of work by a committee, which submitted a report into the widespread abuse of the medication on Tuesday.

Read the full article here: BBC News

24 Apr

Buhari Healthy And Will ‘Easily’ Win Nigeria Vote, Minister Says

Nigerian President Muhammadu Buhari is healthy and his policies will “easily” win him re-election in the vote planned for February, Information Minister Lai Mohammed said.

“He is very strong and well,” Mohammed said in an interview on Sunday. “I have never lost sleep over the re-election. Buhari will easily win.”

Buhari, 75, announced this month that he’s seeking re-election, putting an end to speculation on his plans after he spent a total of five months in the U.K last year for treatment of an undisclosed ailment.

That, as well as continuing attacks by Islamist militant group Boko Haram, herdsmen-farmer clashes, the economic slump in 2016, and an anti-corruption crusade critics have called partisan prompted some politicians such as former President Olusegun Obasanjo to urge him not to run again.

Buhari must also rebuild the coalition of the ruling All Progressives Congress that brought him to power in 2015, after some defections to a similarly fractured opposition People’s Democratic Party. He defeated the PDP by tapping into public anger over its record for corruption and mismanagement while governing Nigeria since the end of military rule in 1999.

While the PDP hasn’t announced its candidate for the elections, a likely contender is Atiku Abubakar, a former vice president who defected from Buhari’s party last year. The 71-year-old lost to Buhari in the APC primaries but supported him as the candidate in 2015.

Buhari’s government points to some progress against Boko Haram militants, such as breaking their grip on territory. Still, attacks continue almost daily.

The government is using diplomatic means to convince Boko Haram to cease hostilities that may involve an amnesty for fighters of the group whose nine-year-old insurgency has claimed the lives of millions of people and threatened the northeast with famine.

“We are using third parties, including foreign parties, through back channels,” Mohammed said. “But the challenge is that there are many factions.”

To read the full article, click here.

12 Apr

Nigeria’s Wheat Plan Falters With Imports Set to Surge

Nigeria’s decades-old program to boost wheat production and reduce imports worth more than $4 billion a year has faltered with farmers cutting output because of soaring input costs, leaving foreign suppliers to meet rising domestic demand, officials and farmers’ groups said.

The latest harvest is coming in slowly and output will drop in the current season, Zakari Turaki, head of cereals research at the Lake Chad Research Institute, based in the northeastern city of Maiduguri, said in a phone interview.

Many farmers say that the government of President Muhammadu Buhari, which took office in 2015, suspended a program to support strategic crops, including wheat subsidies, causing many of them to abandon the grain.

“The problem is that farm inputs, like seeds, are not subsidized and the poor farmer cannot afford to buy it,” said Mala Kachalla, a wheat farmer who spoke by phone from the northern city of Zaria. “Some of our farmers imported winter seeds as they’re cheaper. Unfortunately, this type doesn’t grow in this part of the world, because here we grow spring wheat.”

Nigeria produced an average of 80,000 tons of wheat a year for decades until the introduction of a new variety in the 2012-13 season that tripled the average yield as more areas were cultivated, according to the Lake Chad Institute.

Output fell sharply to 60,000 metric tons in the 2016-17 season after reaching a peak of 350,000 tons in 2013-14, according to Turaki, with farmers also hurt by the Boko Haram Islamist insurgency in some of the growing regions. He sees a further production decline in the current season to 50,000 tons.

In contrast, Nigeria’s wheat imports, which reached 4.6 million tons in 2017, are expected to expand by 9 percent to 5 million tons next year and double from that by 2030, according to the U.S. Department of Agriculture, as demand surges for wheat-based foods such as pizza, pasta and bread. The West African nation estimates it spends $4 billion to $5 billion annually on wheat imports.

To read the full article, click here.

12 Apr

Nigeria Rate-Cut Hope Lives as Inflation Slows to Two-Year Low

Nigerian inflation slowed for a 14th straight month in March, taking consumer-price growth below the benchmark interest rate for the first time in two years and opening the door for a rate cut.

Consumer inflation in Africa’s most-populous nation decelerated to 13.3 percent from a year earlier, the lowest rate in two years and below the benchmark rate of 14 percent.

Nigeria’s central bank left its main lending rate at a record high of 14 percent when policy makers met April 4 to continue fighting inflation that’s been above the target range of 6 percent to 9 percent for more than 2 1/2 years. Governor Godwin Emefiele said the bank would consider cutting rates from where they have been since July 2016 when inflation slows closer to single digits.

“Absolutely, they now have more scope to cut rates because of the pronounced drop in inflation,” Razia Khan, head of macroeconomic research at Standard Chartered Bank Plc, said by phone from London.

The median estimate in a Bloomberg survey was for annual price growth to slow to 13.6 percent. Inflation slowed from 14.3 percent in February, the Abuja-based National Bureau of Statistics said in a statement.

Food-price inflation decelerated to 16.1 percent in March the weakest rate of growth since July 2016, it said.

The cost of gasoline climbed to an average 9.4 percent in March to 163.4 naira ($0.46) a liter (0.3 gallon) from a year earlier, said the bureau, whose data includes unofficial pump prices. Nigeria currently caps gasoline retail prices at 145 naira per liter.

Food-price inflation decelerated to 16.1 percent in March the weakest rate of growth since July 2016, it said.

The cost of gasoline climbed to an average 9.4 percent in March to 163.4 naira ($0.46) a liter (0.3 gallon) from a year earlier, said the bureau, whose data includes unofficial pump prices. Nigeria currently caps gasoline retail prices at 145 naira per liter.

To read the full article, click here.

28 Mar

Nigeria’s Sahara Revives IPO as It looks to Pump More Oil

Nigerian energy conglomerate Sahara Group Ltd. said it revived plans for a share-sale as it looks to increase oil production four-fold to 100,000 barrels per day.

Lagos-based Sahara mulled an initial public offering in the Nigerian commercial capital and London in 2015, before falling crude prices forced it to backtrack.

“The IPO is now back on the table,” Tonye Cole, Sahara’s executive director and co-founder, said in an interview in Kigali, Rwanda. “After we made the announcement then, the entire market crashed, oil prices went down, and so we put the plans on hold.”

Cole didn’t provide a timeframe or say how much he wanted to raise. In 2015, he said he would look to sell as much as 25 percent of Sahara for $600 million.

Read the full article @Bloomberg

22 Mar

Smugglers Cheer as Nigeria Tries to Keep Foreign Rice at Bay

At Nigeria’s normally manic border post of Seme, Lasisi Fanu says business has all but ground to a halt.

He and other customs agents who help clear goods coming into Africa’s biggest economy from its smaller neighbour Benin say the long lines of trucks loaded with rice that used to jam the crossing have eased.

The slowdown is a result of import restrictions and tighter border policing as President Muhammad Buhari seeks to diversify the oil-dependent economy by boosting agriculture, especially rice production.

Two years ago, Buhari set 2018 as a target to end Nigeria’s status as the world’s second-largest importer of the grain after China and become self-sufficient.

He’s since overseen investments of almost $1 billion in farming and milling, virtually banned rice importers from buying foreign exchange, raised tariffs to as high as 60 percent and pushed the central bank to lend to farmers. Confident that his administration is making progress, he told rice growers this month that “our policies are working.”

But the numbers tell a different story: they suggest smuggling is rife because local producers are struggling to meet growing demand in Nigeria, whose 180 million people mix rice with tomatoes and spices to create jollof, practically a national dish.

Nigeria grew 3.7 million metric tons of rice in 2017, a 4 percent increase from a year earlier, according to the U.S. Department of Agriculture. At the same time, imports rose 19 percent to 2.5 million tons, the USDA said.

Most imports are smuggled in from Benin, which despite a population of 11 million — barely 5 percent of Nigeria’s population — is now the world’s biggest buyer of rice from Thailand, the number two exporter globally.

Official shipments to Nigeria plummeted by more than 95 percent in the past four years, while those to Benin have surged, according to the Thai Rice Exporters Association.

“This is Nigeria and people are cutting corners,” said Fanu, the customs agent. “They bring in the rice through the many unofficial border crossings further north. The government knows it. It’s very difficult to police.”

Source: https://www.bloomberg.com/news/articles/2018-03-21/smugglers-run-riot-as-nigeria-tries-to-keep-foreign-rice-at-bay

19 Mar

Milost Plans $1 Billion Investment in Nigerian Bank

Milost Global Inc. is looking to inject as much as $1 billion to recapitalize Nigeria’s Unity Bank Plc, which is struggling to build buffers after a slowdown in Africa’s biggest economy, according to two people familiar with the matter.

New York-based Milost offered to invest $700 million in equity and $300 million in five-year bonds that can be converted into shares in the Nigerian lender, said one of the people, who asked not to be identified as talks are confidential.

The private-equity firm will get an initial stake of about 30 percent in the Lagos-based bank in exchange for its first equity investment of $250 million, the person said.

The transaction is still subject to a due diligence as well as regulatory approvals, the people said. The first part of the deal may be completed in the second quarter, one of the people said.

The rest of the cash will be drawn down in intervals over a period of four years, provided Unity Bank has sufficient shares to issue to Milost, one of the people said.

Some small- and mid-sized Nigerian lenders are battling to rebuild capital levels after a slump in oil prices triggered a foreign-currency shortage and a contraction in the country’s economy in 2016 made it difficult for businesses to repay loans.

Unity Bank, which was formed out of the merger of nine banks between December 2005 and March 2006, said in April last year that it is in talks to sell its non-performing loans to avoid penalties after missing a deadline set by regulators on its recapitalization plans.

An investment in Unity Bank will be Milost’s third in a publicly traded Nigerian company since it agreed to pump $350 million into oil-services company Japaul Oil & Maritime Services Plc in February and to provide a $250 million financing facility to Resort Savings & Loans Plc. Several calls to the numbers listed on Milost’s website have gone unanswered.

To read the full article, click here.

14 Mar

Nigerian Inflation Slows for 13th Consecutive Month in February

Nigeria’s inflation slowed for a 13th consecutive month in February, but may still be too high for the central bank to start cutting rates from a record.

Consumer-price growth in Africa’s most populous nation decelerated to 14.3 percent from 15.1 percent in January, the Abuja-based National Bureau of Statistics said in an emailed statement. The median estimate in a Bloomberg survey was 14.6 percent. Prices rose 0.8 percent in the month.

Governor Godwin Emefiele said last month the Central Bank of Nigeria may reduce its benchmark from a record-high 14 percent before July if inflation drops closer to single digits. Price growth has exceeded the target range of 6 to 9 percent for 2 1/2 years partly due to increasing fuel and food costs, as well as a weaker currency that raised prices of imported goods.

The cost of gasoline increased an average 15 percent to 172.5 naira ($0.48) in February from a year earlier, according to NBS, which collects data including pump prices that are above the government’s official cap of 145 naira per liter.

The Monetary Policy Committee is scheduled to meet March 19-20 if at all, having missed its January gathering because it had insufficient members to form a quorum. That’s because lawmakers refused to confirm new members amid a political stalemate with President Muhammadu Buhari.

The committee has kept the policy rate at 14 percent since July 2016 as it tries to balance fighting inflation, propping up the naira, and supporting an economy that the International Monetary Fund forecast will expand 2.1 percent this year, strengthening a recovery after contracting in 2016.

Source: https://www.bloomberg.com/news/articles/2018-03-14/nigerian-inflation-slows-for-13th-consecutive-month-in-february