Business, World News

FG about to slash levy on imported cars from 35% to 5%.

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The federal government has concluded plans to slash the levy to be paid on imported cars from thirty-five percent to five percent.

This is contained in the draft bill of the 2020 finance bill to be presented to the national assembly.

The bill becomes law after it is passed by the legislature and assented by President Muhammadu Buhari.

Details of the bill shared by the presidency also show that the import duty of tractors and motor vehicles for the transportation of goods has been slashed from 35 percent to 10 percent.

The bill also grants tax relief to companies that donated to the COVID-19 relief fund under the private sector-led Coalition against COVID-19 (CACOVID).

To improve ease of doing business, the bill also proposes that software acquisition now qualifies as capital expenditure.

Zainab Ahmed, the minister of finance, budget, and national planning, had previously explained that the reduction in import duties and levies is targeted at reducing the cost of transportation.

“The reason for us is to reduce the cost of transportation which is a major driver of inflation especially food production,” she told state house correspondents at the end of the federal executive council (FEC) on Wednesday, November 18.

In 2019, Hameed Ali, the comptroller-general of the Nigeria Customs Service had urged the federal government to reduce the levy paid on imported cars to 10 percent.

At the time, Ali argued that the levy, which is paid in addition to the 35 percent import duty, has discouraged importers; causing them to divert their importation to neighbouring countries and heightened smuggling.

Business

Nigerian Inflation Rate Rises on Surging Food Costs

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Nigerian inflation quickened for a 14th straight month in October on rising food prices caused by border closures, dollar restrictions and banditry attacks that are preventing farmers from producing food.

Consumer prices rose 14.2% from a year earlier, compared with 13.7% in September, Abuja-based National Bureau of Statistics said Tuesday in a report published on its website. The median estimate of five economists surveyed by Bloomberg was 14.1%. Costs rose 1.54% in the month.

Key Insights

  • This is the fifth year inflation has exceeded the central bank’s target range of 6% to 9% and will probably continue accelerating due to an end of fuel subsidies, currency weakness, typical price hikes related to the festive season and a recent order by President Muhammadu Buhari that restricts dollar access for food and fertilizer imports. That will drive traders to the parallel market for foreign exchange, where they will pay a lot more.
  • Food prices have been a key driver of inflation in Africa’s largest economy. The food index, which accounts for more than half the inflation basket, rose 17.4%, compared with 16.66% in September. Floods, violent farm attacks, and clashes between herders and farmers weigh on supply, though the government’s softening stance on border closures in place since August 2019 may reduce pressures.
  • An unexpected cut in the key interest rate by 100 basis points in September will probably mean the central bank will hold the rate at 11.5% next week as it seeks to support a recovery in Africa’s largest economy, even as inflation remains sticky.

Business

Nigeria: Businessman taps into demand for student accommodation

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UK-born Abayomi Onasanya believes students are like seeds that can grow into trees, given the right environment. This provided him with a fertile business idea: to build affordable student accommodation and each development would be named after trees.

An earlier business venture ignited the idea. Many of the students he employed in his Lagos call centre were “half-baked” and struggled with basic computer skills. “I realized the students travel miles to get to university and the accommodation is often overcrowded and lacking in basic amenities; sometimes it’s just a shack. The students had so many challenges that distracted them from their studies and achieving their full potential.” Good, clean, affordable housing could improve this, benefitting businesses and the country in turn.

How it started

After moving to Nigeria 15 years ago, Onasanya got involved in real estate development, building 200 residential units in Lekki in Lagos and selling them to young professionals. In 2013, the recession hit and the market crashed. He decided to step back and re-evaluate his options.

During his time out, the idea for Student Accommod8 was born. The company develops and operates purpose-built student housing. It buys land, obtains design and planning permissions, runs a tender process for contractors, and builds and furnishes the apartments before renting to students.

The first development, Pine House, was slightly different. Onasanya took a derelict building near the University of Lagos and turned it into a 43-bed high-end student residence. All rooms are en suite, which is unusual for student housing, with communal kitchens, lounges, a cafeteria and a mini-mart, as well as laundry rooms and a manager’s office.

Pine House was branded – like a Marriot or Hilton hotel – and processes and procedures were devised that would be uniform across each development. “This was important because, as we began to scale the business, standard operating manuals and rules and regulations would make it easier for everybody including management,” Onasanya says. It took 18 months from conceptualization to opening the first residence in October 2016. By the end of the year, it reached 100% occupancy.

Growing the business

Once there was a successful model to scale, Onasanya went on to build Sycamore House in Ago-Iwoye, Ogun State; and Cedar House in Ibeju-Lekki, Lagos State. These are bigger residences with 384 and 140 beds respectively, on land acquired in conjunction with the university. With these Onasanya also experimented with higher-end, mid-level and basic, more affordable accommodation. “The first few years were all about testing what would work and we realized the basic product was where the demand was. There is no-one who does student housing the way we do it in Nigeria; there was no data or track record to tell us where the market is. By building at three different levels, we were trying to understand the market,” he explains. “Today, we have about 600 beds with a development pipeline of about 3,000 beds in different stages of construction.” All this will be at the basic end of the market.

Taking on the competition

A basic bed costs $600 per annum and includes water, lights and security (wi-fi is an optional extra) in decent locations. “We are consistently at a 100% occupancy at every one of our buildings,” Onasanya says.

Before starting a development, he commissions a feasibility study and once work is in progress, he launches a marketing campaign three months before opening. “Student Accommod8 is positioned as a brand. Once the students see the accommodation, they are fairly sure what is on offer.” The accommodation is paid for in advance. Sponsoring student events is part of building the brand and, by the time a new development opens, the waiting list outstrips the number of beds available.

Student Accommod8’s big advantage is scale. About 90% of the market is made up of mom-and-pop establishments. “A landlord with 12 beds will have to pay for a security guard and spread this cost over these rentals. We have hundreds of beds to carry the cost.” As the business scales up, the beds become more affordable.

Universities also provide competition with residences often housing 2,000 to 3,000 students. However, these buildings are often badly maintained with no water or sewerage. “They are able to compete because they charge very little, but they are not an ideal place to live,” Onsanya says. His establishments are managed in a structured way with strict rules, visiting hours, spot checks and CCTV cameras.

“Competition is good. The accommodation shortage is so dire, we are only just beginning to scratch the surface. From our research, there is a gap of about 1.8 million student beds in Nigeria alone.”

Connecting rooms and people

Onasanya has a background in technology and his company has a digital platform called Connect Central, where rooms can be booked and maintenance issues reported. It is similar to an intranet or an enterprise resource planning (ERP) and is constantly being developed. “We envisage it to be a platform that we can give to other third-party owners to use to manage their accommodation, so it’s something that we want to develop over the next few years.”

Paying for it

Onsanya initially raised finance in the form of soft loans from family and friends. In 2018, the company secured its first institutional capital of $1.3 million from a Nigerian fund, Consonance Kuramo Special Opportunities Fund 1, that invests in high-growth early-stage companies in east and west Africa. This was instrumental for business growth.

The following year, the company raised $3 million from the Nigeria Infrastructure Debt Fund, a listed fund that focuses on providing debt capital to key infrastructure companies. Student Accommod8 is currently raising an additional $10 million to help build up the business to 5,000 beds. “One of the challenges in a business that is asset-heavy, such as ours, is the ability to deploy the capital,” he discloses.

Power and other challenges

The biggest obstacle in Nigeria is electricity, so each of the sites operates on solar energy and generators.

Title registrations and dealing with government are further hurdles. “Permits and approvals typically take a bit longer than we would like.” The cost of licences is on the high side, too. “There’s a lot of advocacy on our part to get the state governments to understand we are here to help.”

It’s also necessary to be more than just money-minded. Boisterous students away from home for the first time are challenging but, fortunately, there have been no major incidents so far. “There are situations where we have to take off our business and commercial hats and put on a guardian’s,” he notes.

Living through a pandemic

Lockdown due to the Covid-19 and a shift towards online learning was a bit of a disaster but their off-campus developments helped mitigate risks. “Residences have been closed since March this year. Our worst-case scenario sees students returning next March but we have enough of a cushion to operate until then. We have reduced our overheads and head office staff,” he explains.

In Nigeria, online learning hasn’t yet taken hold because of connectivity and power issues. “Culturally, African parents want their children to leave home to go to university and get the campus experience,” Onsanya says and he doesn’t anticipate this changing anytime soon.

Expansion plans

Onasanya spotted gaps in the market in Ghana and Zambia and a 208-bed development in Lusaka will open in January. In Accra, the construction of a 143-bed development will start in May. He chose these two countries because of Ghana’s centrality in West Africa, while Zambia provided him with a market in the south of the continent without venturing into the saturated South African market.

“Diversification is necessary because the market in Nigeria can be quite unpredictable.”

In the next five years, Onasanya hopes to reach about 15,000 beds across the three countries for which he’s still raising capital. “The issue with student housing is that it is a never-ending pit of expenses,” he says. “You constantly have to invest in it.”

Learning from mistakes

If he had to start over again, Onasanya reveals he would focus on the basic end of the market straight away, instead of doing more high-end and mid-level developments, but overall he is pretty happy with the way things have gone so far. He may also have picked a more efficient design as it affects everything from pricing to bills, management and time to build and, with hindsight, a perfect design from the get-go would have been ideal.

Affordable is better

The biggest trend in Nigeria’s property industry is the demand for affordable housing. There was a boom in luxury, high-end properties but that market has become saturated and the focus is now on affordable pricing for the general market.

“What we are seeing is a lot of capital finance going into construction and real estate purchases,” Onasanya says. The buyers are professionals in telecoms, banking and insurance sectors. “Housing that is low-end, basic and out in the sticks is still doing okay but it’s not booming as much as the middle-class stock.”

Business, World News

Recession for the first time in Indonesia

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photo of a man sitting under the tree

Indonesia in recession for first time in 22 years

"the rainbow village" in Semarang, central Java, attracts hordes of visitors.

Indonesia has fallen into its first recession in 22 years as the coronavirus pandemic continues to take it toll.

South East Asia’s biggest economy saw growth fall 3.49% in the third quarter of the year, compared to the same period in 2019.

Following a fall of 5.32% in the second quarter of 2020, this has pushed Indonesia into a recession.

The last time this happened was during the 1998 Asian financial crisis.

Authorities in Indonesia have predicted that 3.5m people could lose their jobs due to the coronavirus downturn.

Indonesia has the highest infection rate in the region.

While agriculture is a major component of its economy, Indonesia relies heavily on tourist dollars.

Millions of foreigners fly to Bali each year in search of deserted beaches, terraced rice fields and sprawling Hindu temples.

But their numbers have dropped sharply since Indonesia closed its borders to non-residents, like other countries battling with the pandemic.

The 3.49% fall in economic growth during July to September is slightly worse than the 3% that economists had predicted.

The capital city Jakarta went into a second semi-lockdown for four weeks starting in mid-September with rising cases straining its health system.

“All in all, Indonesia’s economy is past its weakest point, but with the domestic outbreak not under control yet, economic activity is likely to remain under pressure,” wrote ANZ bank.

Government officials have pledged to accelerate spending to counter the pandemic’s impact and push Indonesia’s gross domestic product (GDP) back into growth.

Business

Iraq and Nigeria undermined OPEC’s efforts

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Shafaq News / Iraq and Nigeria undermined OPEC’s efforts to boost crude oil prices, even as the organization and its allies postponed production increasing, according to Bloomberg.

OPEC production extended their rally by 470 thousand barrels per day in October, taking the total to 24.74 million barrels per day.

“Iraq and Nigeria are falling behind on their cutting commitments for the month of October.”

Iraq, OPEC’s second-largest producer violated OPEC’s decision pumping 3.78 million bpd in October — some 160000 bpd more-, while Nigeria was among the other laggards, pumped about 1.61 million bpd.

Last April, OPEC+ agreed to cut supply by a record 9.7 million bpd from May 1 to offset the virus- and lock-down-induced demand slump, bringing to an end the period of flooding the market.

Iraq had previously violated its commitment to reduce production and then pledged to reduce by one million barrels per day, or one percent of global supplies.

Business

EFCC Invites Babatunde Fowler Over Alleged Fraud

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The former Chairman of the Lagos State Internal Revenue Service, Babatunde Fowler, appeared before the Economic and Financial Crimes Commission on Monday, sparking speculations he has questions to answer over his tenure.

Back then we can

Fowler, who also served one term as the Chief Executive of the Federal Inland Revenue Service, FIRS, was summoned to the Lagos State Zonal Office of the EFCC on Monday morning, and, he appeared in person.

As at the time of filing the report, an EFCC source familiar with the invitation said Fowler was still being interrogated in Lagos.

The source hinted that contrary to speculations, Fowler was not invited in connection with his stewardship at the FIRS but in relation to his tenure at the Lagos Internal Revenue Service based on a petition.

However, later in the day, the Spokesman for the EFCC, Wilson Uwujaren, confirmed the invitation of Fowler to Vanguard.

Wilson said that Fowler was invited and he responded but did not give further details on what the petition against him contains.

Business

#EndSARS: We’re still quantifying our losses – BRT

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The Operators of the Bus Rapid Transit (BRT) in Lagos say they are still quantifying the losses incurred by the two-week suspension of operations, occasioned by the violence that trailed the recent #EndSARS protests across the country.

The Head of Corporate Communications of the organisation, Mr Mutiu Yekeen, stated this in an interview with newsmen on Sunday in Lagos.

“Like every other company that has been affected by these crises, we are still trying to quantify our losses as an organisation.

“We have not been able to operate for 14 days, and this has affected our business negatively. As an organisation, we are currently quantifying our losses,” he said.

Yekeen, who said that the firm commenced operation on Friday, assured the commuters that it would resume full operations to reduce the hardship which commuters were currently going through.

“We are going to operate maximally as an organisation. We have a lot of buses on our corridor.

“We have started operations. We will do our best to ensure that people get to their destinations within record time,” he said.

He said that the firm had always put safety of commuters and its members of staff as top priority.

Newsmen report that the violence and massive destruction of public and private investment and property by hoodlums in the aftermath of #EndSARS protests had led to the stoppage of operations by the firm.

Newsmen also report that the Lagos Bus Service Limited (LBSL), operator of the government-owned Marcopolo high capacity buses, has yet to resume in the state since the suspension of operations, occasioned by the #EndSARS protests.

Following the development, many commuters in the state have been experiencing untold hardship commuting from one place to another.

Business

Nigeria received $26.94bn in foreign donations in six years

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Nigeria received the sum of $26.94 billion as development assistance funds from international donors from 2015 to 2020, Minister of State for Budget and National Planning Clement Agba said on Tuesday.

He made the disclosure in Abuja while briefing the House of Representatives Committee on Civil Society and Development Partners on transfers and disbursements to government agencies, donor fund receipts, civil society and non-governmental organizations in Nigeria.

$2.34 billion was received in 2015, $1.15 billion in 2016, $774.93 million in 2017, $22.02 billion in 2018, $655.64 million in 2019 and $5.64 million in 2020.

The donations, according to Agba, came from the United Nations Development System, the European Development Fund and China.

Other donors include the German International Cooperation, Japan via the Japan International Cooperation Agency, Korean International Cooperation Agency, Department for International Development and United States Agency for International Development.

The minister said his ministry did not receive donor funds and, for that reason, could not transfer or disburse what it did not receive.

He added that the country did not qualify for budget support as it was not classified as “very poor” but a lower income country that was only eligible for projects/programmes.

“The implication of this is that donors do not give us the funds for management. Rather, donors work with the sectoral stakeholders to fund the projects directly, after identifying the needs by the MDAs/states, in line with the Paris Declaration on Aid Effectiveness.

“For the purpose of clarification, the Federal Ministry of Finance, Budget and National Planning is responsible for coordinating Nigeria’s multilateral and bilateral economic cooperation, including development Aid and Technical Assistance Programmes by signing of Cooperation Agreements, facilitating the implementation of programmes and projects as well as monitoring and evaluation.”

Agba went further to say the ministry has a duty to coordinate the bilateral and multilateral institutions, non-governmental organizations, international non-governmental organizations and civil society organizations.

“Interventions in these identified areas are done directly in collaboration with the relevant ministries, departments and agencies as well as states and local government areas through their implementing agencies.

“In view of the above, procurement is carried out directly by the donors,” he said.

Business

UK reopens visa application centres in Nigeria

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The United Kingdom High Commission has announced the reopening of its visa application centres in Nigeria.

This is coming barely one week after it shut down its visa application centres in Victoria Island, Abuja and Lagos over the crisis arising from #EndSARS protests in the country.

The UK made this known in a statement on its Twitter.

It noted, however, that its centres would not open on Thursday due to the public holiday in Nigeria for Maolud Nabbiyy.

The notice was titled ‘update on UK visa application centres in Nigeria’.

Part of the notice read, “Our TLS contact visa application centres are now open in Nigeria. Following the recent closures, we are working hard to process all outstanding applications.

“We thank you for your continued patience and understanding. Please note Thursday, October 29, is a public holiday in Nigeria and our Visa application centres will be closed.”

Meanwhile, a judicial panel in Lagos on Tuesday began an inquiry into the shooting of peaceful protesters last week and broader police brutality that had sparked demonstrations and unrest.

The state had been rocked by violence since demonstrators were gunned down in the economic hub on October 20, sparking international outrage and rioting.

Amnesty International says 12 people were shot dead by the police and army at two locations, in assaults shared widely on social media.

The #EndSARS protests in the state drew support from celebrities around the globe and turned into one of the biggest challenges to the governing elite in years. 

Overall, Amnesty International says 56 people have died nationwide since the demonstrations began. 

The situation has calmed in Lagos since days of rioting but looting and violence rumbles on in pockets around the country.

Business

Nigeria Needs Innovation and Science Investment to Help Control Covid-19

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Nigeria, like other African countries, wasn’t spared from the spread of the coronavirus pandemic. To overcome this challenge, countries have been advised to keep testing, treating and isolating to reduce infections.

Nigeria has been expanding its capacity to test. The country’s laboratories can carry out about 18,000 tests per million daily, but this can be improved. The country ought to be doing about 40,000-50,000 tests daily.

Nigeria successfully controlled Ebola and is applying some of the lessons learned. But COVID-19 presents new challenges as scientists are still trying to understand the novel virus.

This novelty highlights the importance of continuous investment in science, research and development. The African Centre of Excellence for Genomics of Infectious Diseases, Redeemer’s University, Ede, is one of the few research institutions in the country with the ability to carry out whole genome sequencing. It’s therefore one of the few centres working on the frontline of the pandemic. It collaborates with the second main institution, the Nigerian Centre for Disease Control.

Rwanda is an example of a country that has invested in healthcare and provides an environment for innovation. For example, Rwanda’s Health Ministry announced the use of smart robots to administer temperature checks, monitor COVID-19 patients’ status and keep medical records.

The robots were created to speed up service and help protect the lives of health workers. Other innovations include drones to raise COVID-19 awareness, spraying kiosks, and step-and-wash handwashing facilities. Rwanda is currently celebrated as a success story, having recorded only 5017 cases and 34 deaths, as of 23 October.

To control this pandemic and prevent a future one, Nigeria needs to start investing heavily in science research. Nigeria was one of the 10 African heads of state and government that endorsed a target to allocate 1% of gross domestic product to research and development in 2002. But progress towards this target has been slow.

Scientific responses

On 1 March 2020, an Italian man was identified as the first case of COVID-19 in Nigeria by the National Center for Disease Control. Within three days of receiving the specimen, the African Centre of Excellence for Genomics of Infectious Diseases assembled a full genome of SARS-CoV-2. This was the first sequenced genome of the virus from the African continent.

This was immediately made available to the global scientific community to help inform the public health response, improve surveillance and facilitate drug, diagnostics and vaccine development.

The centre remains at the frontline of Nigeria’s response by carrying out daily diagnosis of suspected COVID-19 samples. At its disposal are state-of-the-art sequencing and advanced bioinformatic tools to understand the epidemiology, evolution, spread, and virulence of the virus. This has generated data that have informed covid-19 rapid diagnostics development, vaccine design and production, as well as policy formulation. The data have contributed significantly to the international scientific community.

One of the innovations by the centre is a COVID-19 self-screening tool tailored for Nigerians to assess their risk of exposure. This phone app tool factors in not just scientific and epidemiological data but also the socio-cultural diversity of the country. The screening is available in English and different languages spoken in Nigeria.

Since the app was released, over 4,100 Nigerians have completed the test with over 6,800 users and a traffic of over 84,000 as at August 29, 2020. The tool has been effective in reducing panic, improving health access and reducing response time.

In addition to daily screening of clinical samples, a real-time interactive map showing confirmed cases across Nigeria was developed by the African Centre of Excellence for Genomics of Infectious Diseases. It gives an overview of laboratory confirmed cases nationwide, using data from the Nigeria Centre for Disease Control.

The map is updated daily as new cases are confirmed and provides an immediate update on the outbreak. This helps the country to identify hotspots and make evidence-based decisions and policies.

Investment in science research is needed

Greater investment in research and development would help Nigeria create a pool of talent and expertise to develop solutions to other problems too.

Investment in science also means investment in the future of science – the next generation of scientists. This would require investing in tertiary education, professional development, and an environment that supports mentorship. It requires infrastructure such as laboratories, laboratory equipment and uninterrupted power supply to carry out experiments.

To achieve this, Nigeria needs political will coupled with commitment, partnerships and the right leadership. The country is lagging behind in science when compared to other African countries in the region but the current pandemic gives it an opportunity to make science a priority once and for all.

Business

Air Peace to Begin Lagos-Johannesburg Flight

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Air Peace will begin regular commercial flights from its Lagos hub to Johannesburg in South Africa, before the year ends, its management said.

This is just as the airline has resumed flights to Enugu and Asaba which were suspended following the curfew occasioned by the #EndSARS protest aftermath.

The airline said the Lagos-Johannesburg flight which would be the second International flight after Dubai flagged off last year, was in keeping with its vision to provide seamless connectivity across cities, adding that Lagos-Johannesburg-Lagos will be operated thrice a week.

It said it has made huge progress in meeting the stipulated requirements of the aviation authorities in both South Africa and Nigeria to enable it to launch flight operations into the country before the year runs out.

Its spokesman, Stanley Olisa, said South Africa is one of the destinations which the Federal Government had designated Air Peace to operate into.

He added that South Africa has always been on the radar of Air Peace as the airline is constantly reviewing its route network and looking at strategic ways of expanding it to provide immense value to Nigerians first and other Africans.

The spokesman noted that apart from South Africa, Air Peace has also been designated to operate commercial flights into Mumbai, London, Guangzhou-China, Houston, with other destinations still in the works.

Business

Wema Bank to address customers’ needs

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Wema Bank, one of Nigeria’s foremost banks has embarked on a number of schemes aimed at addressing the demands of its different customer base in this peculiar times.

The bank recently announced the opening of a new branch in Oregun, Lagos as it continues its strategic expansion to meet the demands of customers. In a statement made on Monday, 17 August 2020, the bank disclosed that the new branch, which is located at No. 41, Kudirat Abiola Way, Oregun, Lagos State, would strengthen its business in the state in line with its growth path.

“The new branch follows our strategic growth plan as we are committed to expanding our services to places where there are compelling business opportunities. The bank’s position on this has not changed,” said Executive Director Lagos Directorate, Wole Ajimisinmi.

This rides on a series of initiatives which the bank embarked on to cushion the effect of the pandemic on individuals, businesses and communities. As a response to the gruesome financial impact of the COVID-19 pandemic on businesses, one of the key initiatives the bank has taken to alleviate the financial strain of her borrowing customers is to suspend the loan repayments for small and medium scale enterprises (SMEs).

Furthermore, in its continuous bid to support customers in the fight against the pandemic and its financial implications, the bank launched collateral free loan products to support its customers. The loan offering which is open to healthcare businesses, school owners, as well as those dealing in trading or general commerce is available to the bank’s existing and new customers.

In an earlier communication, Wema Bank Managing Director, Mr Ademola Adebise said “As we critically pay attention to supporting players in the health sector, as a Bank, we are also constantly looking into how we can support our customers financially. We hope individuals and business owners take advantage of these programs for their financial well-being and to help keep their businesses afloat”.

The Bank is also set to reward its saving customers on the Royal Kiddies Account platform. As a drive towards supporting an early start to financial freedom, Wema Bank launched the Royal kiddies Account program, and now the Bank is set to reward its customers with school support funds in her 2020 Wema Educational Award. By opening a new account or topping up with a hundred thousand naira on an existing Royal Kiddies Account, customers can were able to gain eligibility to win the fifty thousand naira school support fund.

According to the Managing Director, Ademola Adebise “We are a caring bank and we won’t relent in our efforts to continually initiate programs that would be of immense benefit to our customers and their businesses. Considering it’s a continuous process of innovation for us at Wema bank, we encourage our customers and everyone to always look out for our initiatives, as I can assure you there is always something good from us for everyone”.

Business

Anxiety, as insurance firms brace up for huge claims

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There are palpable fears by firms and private individuals whose properties were vandalized and looted by hoodlums if the insurance industry in Nigeria has capacity to meet huge claims by those who insured their properties.

Some especially the Small and Medium Enterprises did not insure their operating premises and their wares and can not make claims. However Insurance firms in Nigeria are bracing up for potential claims, following the widespread looting and destruction of properties, vehicles, and other assets across the state.

Most government offices, banks, shopping malls, media houses, toll plazas, and private offices were set ablaze by suspected hoodlums after allegations of soldiers shooting in the air to disperse protesters on Tuesday night.

This triggered scores of skirmishes across the state with several vehicles, buildings, and properties set ablaze or looted by suspected hoodlums. It is envisaged that when normalcy is restored, businesses will start to take stock of their losses and someone will have to bear the cost. While most insurance contracts exclude damage to property from war, riots, or other forms of force, it is likely that some will pay for the risks.

According to NAICOM, Insurance companies paid a total non-life insurance claim of N64 billion in 2018 compared to N56.4 billion a year earlier. Out of this total, claims on fire insurance were about N9.1 billion while Motor Vehicle was N17.3 billion. The Insurance sector is currently reeling from the effect of the Covid-19 pandemic, with the sector posting a contraction of 29.53% in the second-quarter GDP report published by the National Bureau of Statistics (NBS). It is likely to drop into a recession when the NBS releases its third-quarter GDP report in a few weeks’ time.

President Muhammadu Buhari addressed Nigerians on Thursday, demanding an end to the violence in parts of the country as a result of the activities of hoodlums who took advantage of the EndSARS protests. “In the circumstances, I would like to appeal to protesters to note and take advantage of the various well-thought-out initiatives of this administration designed to make their lives better and more meaningful and resist the temptation of being used by some subversive elements to cause chaos with the aim of truncating our nascent democracy. For you to do otherwise will amount to undermining national security and the law and order situation. Under no circumstances will this be tolerated,” Buhari said. The President also called for an end to the street protests, requesting that protesters should engage the government. He also asked Nigerians to go about their “normal businesses” while demanding that security agencies protect lives and properties.

“And I call on all Nigerians to go about their normal businesses, and enjoin security agencies to protect lives and properties of all law-abiding citizens without doing harm to those they are meant to protect,” he added.

Business

Nigeria Repays Dues To Oil Majors

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The Nigerian National Petroleum Corporation (NNPC) has repaid most of the arrears it owes to international oil companies for joint venture operating expenses, recently repaying US$3 billion to Exxon and Shell, Bloomberg reported on Tuesday, citing a statement from the Nigerian state oil firm.

NNPC works in joint ventures with the major international oil producers in Nigeria, including ExxonMobil, Chevron, Shell, Total, and Eni. However, the stretched finances of the Nigerian company has led to arrears in its payments for contributions to the operating expenses of those joint ventures.

Nigeria still owes US$1.7 billion to the oil majors, but it has now repaid most of its dues.

In the latest installment of US$3 billion, Exxon received US$2.3 billion, while Shell received US$455 million, according to the statement reported by Bloomberg.

NNPC owes Shell another US$917 million and still must pay US$385 million to Eni, US$304 million to Total, and US$55 million to Chevron.

The payments to the oil majors could be a sign that the Nigerian company has shored up finances in recent years, as it also said in a rare financial release last week.

Last week, NNPC said in its second financial statement in over four decades that its losses shrank by 99.7 percent in 2019, while “the outlook for 2020 looks promising” as the state oil firm continued to slash costs.

NNPC said in its audited financial statement for 2019 that its loss last year fell to just US$4.4 million (1.7 billion Nigerian naira), compared to a loss of US$2.1 billion (803 billion naira) in 2018.

Earlier this year, NNPC published its 2018 audited financials as part of a drive for transparency at the company.

The significantly decreased losses in 2019 were mainly the result of cost optimization, operational efficiency, and renegotiation of contracts, NNPC’s chief financial officer Umar Ajiya said.

Business

Delta Airlines Cancels Two More Flights Over #EndSARS Protests In Nigeria

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Delta Airlines has cancelled two more flights earlier scheduled to come in and go out of Nigeria as a result of the ongoing #EndSARS protests in the country.

The airline cancelled Flight 248 from Atlanta, United States, to Lagos, Nigeria, and Flight 249 from Lagos to Atlanta scheduled for Tuesday night (today) and also Wednesday evening due to the tension caused by demonstration in the country.

Earlier, SaharaReporters revealed that Delta Airlines Flight 54 from Atlanta to Lagos was forced to return to America after first terminating its journey in Dakar, Senegal, with the entire crew and passengers on board.

Young people across Nigeria are calling for police reforms and improved governance but the peaceful exercise has now been overtaken by armed gangs attacking innocent civilians and wreaking havoc all over the place.

State governments have been forced to adopt various measures including the imposing of indefinite curfew to arrest the situation.

Business

Durex condom sales recover after virus rules relaxed

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The sale of Durex jumped when social-distancing rules were relaxed in the summer, says maker Reckitt Benckiser.

The consumer goods giant said growth in its health arm, which includes condoms and “sexual wellbeing products”, rose 12.6% in the last three months.

Sales of Dettol, Cillit Bang, and air fresheners also jumped, helped by workers improving their new home-office environment, Reckitt said.

Total group sales in the last quarter rose 13% to £3.5bn on last year.

“Relaxations of social distancing regulations resulted in improved demand for our sexual well-being products,” it said.

During the spring lockdown Reckitt saw a sharp drop in demand for condoms as people had less sex.

However, the company suggested on Tuesday that this spring fall could have a knock-on effect on its baby formula business next year, with an expected fall in the global birth rate.

“There is evidence that birth rates will be further lowered in coming quarters as a result of behaviour changes related to the pandemic,” it said.

“Our performance has been led by an increase in hygiene and health volumes,” said boss Laxman Narasimhan.

Sales of Dettol-branded sprays, wipes and liquid climbed more than 50% compared to the same period last year.

Airwick and Finish continued to grow strongly, with consumers continuing to spend more time at home compared to a year ago, the company said.

Improved hygiene

The company said that Covid-19 is accentuating trends such as “urbanisation and global warming, and their impact on their spread of infection, re-enforcing the necessity of improved hygiene”.

It also highlighted a growing demand for self-care and a growing importance of sexual health and wellbeing.

“As consumers have sought to embrace self-care for themselves and their families, we have seen growth in preventative treatments, such as vitamins, minerals and supplements,” it said.

“With a clear purpose – to protect, heal and nurture in the relentless pursuit of a cleaner and healthier world – we are uniquely placed to help tackle the challenges the world is facing,” said Mr Narasimhan.

Tuesday’s figures were well received by analysts. ”Reckitt Benckiser has cleaned up on our obsession with hygiene,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

“Our pursuit of cleanliness during the pandemic has been hugely beneficial for the group, and the signs are that the crisis is leading to a longer-term behaviour shift with consumers demanding reassurance that workplaces, shops and public transport are germ free.”

And Richard Hunter, head of markets at interactive investor, said: “Reckitt was already seeing the benefits of improving hygiene and self-care awareness, and the pandemic has moved growth to another level.”

Business

China’s Economy Continues To Accelerate Despite Covid-19 Pandemic

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BEIJING (AP) — China’s shaky economic recovery from the coronavirus pandemic is gaining strength as consumers return to shopping malls and auto dealerships while the United States and Europe endure painful contractions.

The world’s second-largest economy expanded by 4.9% over a year ago in the three months ending in September, official data showed Monday. Retail spending rebounded to above pre-virus levels for the first time and factory output rose, boosted by demand for exports of masks and other medical supplies.

The recovery is broadening out and becoming less reliant on government stimulus, Julian Evans-Pritchard of Capital Economics said in a report. He said growth is “still accelerating” heading into the present quarter.

China, where the pandemic began in December, became the first major economy to return to growth after the ruling Communist Party declared the disease under control in March and began reopening factories, shops and offices.

It is the only major economy that is expected to grow this year while activity in the United States, Europe and Japan shrinks.

The Chinese economy expanded by 3.2% over a year earlier in the three months ending in June, rebounding from the previous quarter’s 6.8% contraction, its worst performance since at least the mid-1960s.

The economy “continued the steady recovery,” the National Bureau of Statistics said in a report. However, it warned, “the international environment is still complicated and severe.” It said China faces great pressure to prevent a resurgence of the virus.

Authorities have lifted curbs on travel and business but visitors to government and other public buildings still are checked for the virus’s telltale fever. Travelers arriving from abroad must be quarantined for two weeks.

Last week, more than 10 million people were tested for the virus in the eastern port of Qingdao after 12 cases were found there. That broke a two-month streak with no virus transmissions reported within China.

Industrial production rose 5.8% over the same quarter last year, a marked improvement over the first half’s 1.3% contraction. Chinese exporters are taking market share from foreign competitors that still are hampered by anti-virus controls.

Retail sales rose 0.9% over a year earlier. That was up from a 7.2% contraction in the first half as consumers, already anxious about a slowing economy and a tariff war with Washington, put off buying. Online commerce rose 15.3%.

In a sign demand is accelerating, sales in September rose 3.3%.

“China’s recovery in private consumption is gathering momentum,” said Stephen Innes of AxiCorp in a report.

China has reported 4,634 coronavirus deaths and 85,685 confirmed cases, plus three suspected cases.

Economists say China is likely to recover faster than other major economies due to the ruling party’s decision to impose the most intensive anti-disease measures in history. Those temporarily cut off most access to cities with a total of 60 million people.

The International Monetary Fund is forecasting China’s economic growth at 1.8% this year while the U.S. economy is expected to shrink by 4.3%. The IMF expects a 9.8% contraction in France, 6% in Germany and 5.3% in Japan.

Private sector analysts say as much as 30% of China’s urban workforce, or up to 130 million people, may have lost their jobs at least temporarily. They say as many as 25 million jobs might be lost for good this year.

The ruling party promised in May to spend $280 billion on meeting goals including creating 9 million new jobs. But it has avoided joining the United States and Japan in rolling out stimulus packages of $1 trillion or more due to concern about adding to already high Chinese debt.

Business

Manufacturers want uniformity of electricity tariff

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The Manufacturers Association of Nigeria (MAN) has called for a uniform electricity tariff, saying the current structure favours some regions and strain others.

It called on the Federal Government to prevail on the electricity Distribution Companies (DisCos) to unify the tariff nationwide.

President of MAN, Engineer Mansur Ahmed, in a statement, said that the purpose of the call for uniformity is to create a level playing ground for manufacturers in Nigeria.

“These tariff differences in some instances are as high as 25 per cent, making it impossible to ensure fair competition amongst manufacturers. The resultant effect of this tariff differential is that manufacturers under the DisCos with higher tariff rate sell at a loss in order to sustain the market share and if action is not taken urgently, the affected manufacturers may be forced to close down with looming adverse effect on employment and the economy,” he said.

The inadequacy of electricity supply he said has been one of the major challenges hindering the competitiveness of the manufacturing sector in the country as manufacturers spend over 40 per cent of the production overhead on electricity leading to an increase in the cost of operation and prices of local goods.

Business, World News

A US based company acquires Paystack

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A Nigerian payments company Paystack has been acquired by a US-based payments giant, Stripes.

The deal is rumoured to be for over  $200 million.

For many in the Nigerian tech ecosystem, it was just a matter of time before this happened.

Founded in 2015 by Shola Akinlade and Ezra Olubi. Paystack sought to solve the challenge most Nigerians face when it comes to online payment transactions in Africa. 

By seamlessly connecting all multi-channel payment options with merchants across the country, it enabled them to accept payments from around the world, via credit card, debit card, and direct bank transfer on web and mobile.

This got the one-year-old startup into US-based seed-stage accelerator, Y Combinator where it received 120,000 US dollars in funding and access to global investors.

Later that year, it raised a seed funding of 1.3 million US dollars from Tencent, Comcast Ventures, Singularity Investments, Michael Seibel, Justin Kan, Jason Njoku’s SPARK.ng, Olumide Soyombo among other investors.j

But it was in 2018 Paystack put everyone on notice as it raised 8 million Dollars in Series A funding. With participation from global payments company, Visa, US-based accelerator, Y Combinator, and Tencent, it was Stripe, a similar payments company based in the US, who led the round.

Three years after launching, this brought the company’s total funding to a little over $10 million. And since then, the company hasn’t raised a follow-up round.

So far, Paystack now has more than 60,000 businesses using its platform and is looking to expand beyond Nigeria and Ghana where it currently operates.

According to the founders of Stripe, the company was looking to continue investing in product development, further global expansion and strategic initiative

The billion-dollar startup has been strategically investing in similar startups around the world. Having invested in Paystack (Africa) two years ago, it recently invested in Paymongo, a payments startupin the Philippines (Asia) last month.

For its global expansion into Africa, Paystack presented the perfect acquisition opportunity. But while this is the biggest acquisition deal to come out of sub-Saharan Africa and Stripe’s largest acquisition till date, both companies will continue to operate independently.

Business

FG extends suspension of new electricity tariff by 1 week

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The Federal Government has extended the suspension of the new electricity tariff by one week.

Prof. James Momoh, Chairman, Nigeria Electricity Regulatory Commission (NERC) said this when the ad hoc Technical Committee on Electricity Tariff submitted its interim report at a reconvene bilateral meeting between Federal Government and Organised Labour on Monday in Abuja.

The News Agency of Nigeria (NAN) reports that the new tariff was earlier suspended for two weeks and ended at midnight on Oct. 11, when the organised labour suspended the planned industrial action over agitation on the hike in electricity tariff on Sept. 28.,

It would also be recalled that the the committee which was Chaired by Mr Festus Keyamo, Minister of State for Labour is to examine the justifications for the new policy in view of the need for the validation of the basis for the new cost reflective tariff.

It was also agreed that while the committee carries the justification that electricity tariff should be reduced for two weeks.

Momoh while speaking, said the one week extension new tariff said was to enable the committee to review and work out modalities for the implementation of the agreement reached on the electricity tariffs structure.

Sen. Chris Ngige, Minister of Labour and Employment, while reading a resolution reached between the Federal Government, Organised Labour and the Ad Hoc Technical Committee on Electricity Tariff said that adoption of the work plan for effecting the resolutions has been reached.

Ngige said the resolutions adopted would be implemented by all stakeholders within the week by Sunday, Oct. 18.

According to him, the following amendments to the resolutions were adopted include, phase one immediate reliefs.

“Using of the Nigerian Electricity Supply Industry (NESI) VAT proceeds to provide relief in electricity tariff. This is to  leverage on the VAT from the NESI, the increases experienced by customers due to the transition to the Service Based Tariff will be reduced.

“That is Band A – 10 per cert reduction, Band B – 10.5 per cert reduction and Band C – 31 reduction,” he said.

He said on the acceleration of National Mass Metering Programme (NMMP).

It was adopted that for the distribution of the first one million meters, the Ministry of Power was to liaise with Central Bank of Nigeria(CBN), Nigerian Electricity Regulatory Commission (NERC) and Nigerian Electricity Management Services Agency (NEMSA).

He added that they are to start work by Oct. 12, to accelerate the roll out of meters with a target of December 2020.

The minister, therefore said that the meeting agreed that it would work towards bridging the metering gap.

“The Federal Government committed to provide six million meters and NERC is expected to compel the DISCOs to meet the metering needs of the customers,”he said.

Ngige  also said on the resolution adopted for the Local procurement for Meters for National Mass Metering Programme (NMMP) that organised Labour would to work with government to improve and ramp up local production capacity.

He  also said that the resolution adpoted on  salary protection for electricity workers was that NERC should ensure that the personnel costs of electricity workers should be placed on first-line charge on the Primary Collection Account.

He added that the process would commence from Monday , Oct.  12.

“On the issue of mandatory refund for any over billing during system transition by the DISCOs that NERC should implement immediately within October.

‘While on the freezing of customer band migration during the interim period that the revised NERC order will include specific guidelines on freezing band migration, ” he said.

Ngige also noted that the resolutions adopted for Phase two for the extensive review of key sector reforms include that the ad hoc committee would work from Oct. 12 to Dec. 12, to ensure that all outstanding issues are resolved and implemented.

He  also said the resolution adopted on gas pricing was that the Group Managing Director was co-opted into the Technical Committee to assist with the purpose.

He added that on resource capacity, the Managing Director, NEMSA is also co-opted into the Technical Committee to work with NERC on the metering assignments.

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