Japan’s State Minister of Finance, Mr. Keisuke Suzuki made this known during the 7th Tokyo International Conference on African Development (TICAD 7) held in Yokohama.
He said both Japan and the Bank have set a target of $1.75 billion each, from 2020-2022, to enhance the fourth phase of EPSA to spur private-sector-led sustainable and inclusive growth in Africa.
“Building on the successful achievements so far, Japan and the Bank have decided to upgrade EPSA in both quality and quantity to meet financial needs for infrastructure development as well as for the private sector development in Africa,”
“I wish that the new EPSA initiative will lead to business, investment promotion, and job creation in Africa,” Mr. Suzuki noted.
According to the President of the African Development, Akinwumi Adesina,
“Today marks another day to celebrate the strong and impactful partnership between Japan and the African Development Bank. The African Development Bank and the Japan International Cooperation Agency (JICA) are long-term partners for promoting the development of Africa. EPSA helps to deliver much needed to support the private sector,”
“Under EPSA 4, JICA and the African Development Bank will provide co-financing of $3.5 billion. This is a significant increase over EPSA-3. Increase is what we need to meet the needs of Africa. Increase is what we need to raise the level of our ambitions for Africa.
“Increase is what we need to build upon the solid foundations of co-financing over the last 13 years, and deliver even greater and more impactful development results in the years ahead. Now, let us arise with renewed vigor. Let us deliver even greater impacts for African countries through EPSA 4,” Dr. Adesina concluded.
The ongoing EPSA3 (2017-2019), Japan and the African Development Bank are cooperating closely to provide the targeted joint amount of $ 3 billion. [8/30, 3:29 PM] mbilawisdom: Japan, AfDB announce $3.5bn support for Africa’s private sector
The Abuja Chamber of Commerce and Industry (ACCI), has described President Muhammadu Buhari’s renewed economic and diplomatic shuttle to Japan and Russia as a commendable step in line with Nigeria’s economic growth plan.
A statement issued by Prince Adetokunbo Kayode, ACCI President, on Thursday in Abuja, said that the diplomatic shuttle was also in line with demands of the new African free trade plan.
Kayode, also a Trade and Tax Consultant, described the trip to Japan as a rewarding exercise in Nigeria’s drive to advance its economic interests and lead Africa as the biggest economy and population.
“We commend the President for providing the necessary leadership for Africa in Japan as he participated in several meetings which yielded positive agreements, especially in terms of placing Nigeria’s economic interest in the front line of discourse.
“The consolidation of mutually beneficial ties with the Japanese is not lost on business stakeholders.
“More critically is that the president supports Japanese alternative programme for African infrastructure renewal which emphasises quality rather than quantity of infrastructural projects on the continent.
“While in Japan, the president also held bilateral talks with the South African President, a meeting very critical because of recent threats to Nigerian businesses in South Africa,’’ Kayode said.
He recalled that the President had secured a major Japanese support for the upgrade of power transmission facilities in Lagos.
Kayode said that the Japanese trip would consolidate and deepen infrastructure support for Nigeria from its government:
“Economic diplomacy is the watchword now in global diplomacy. As our President is firming up deals in Japan, he will no doubt pursue this diplomacy further by attending the Russian Africa Forum in October 2019.
“As President Buhari has also reached out to Germany which signed a major power deal with Nigeria few weeks ago, the next point of call is Russia to advance our steel, mining, defence and manufacturing sectors.’’
Kayode further commended the President for implementing a paradigm shift in the national economic focus of Nigeria.
He advocated continued pursuit of the new policy shift, urging presidential attendance at the 2019 Russia — Africa Forum in Sochi, Russia in October.
“Nigeria must be present to anchor our national interests as well as provide leadership for Africa,’’ he added.
Nigerian publicly-listed companies experienced an awful mid-year 2019 as players reported lower margin largely driven by significant jump in production and operational costs.
The construction industry in Africa’s most populous country is one of the most vibrant in the continent. But industry players especially the indigenous ones are struggling to stay afloat in Nigeria’s tough operating environment characterized by intense competition and limited prospects for business growth given the slow pace of economic expansion.
The players – Julius Berger (JB) and Arbico posted weaker profitability footing on the heels of higher cost. The combined direct cost of both companies nearly doubled to N104 billion in half-year 2019, representing 87 percent increase over N56 billion recorded a year earlier.
“The current state of the economy underscores the unimpressive performance of the sector,” said Emmanuel Noko, senior economist at M&C Research Institute.
“The fortunes of the sector are tied to stronger oil prices and faster economic growth. These are what give impetus to fund more capital projects by government.” Noko added.
While Julius Berger, the biggest listed player in the industry by market value, saw net income climb 9 percent higher to N2.8 billion in the six months through June 2019, from N2.6 billion a year ago, Arbico incurred N38 million net losses, after posting N71 million profit last year.
The net margin of Julius Berger slumped to 2.2 percent mid-year 2019 from N3.6 percent last year, while Arbico reported a loss margin of 1.4 percent compared with 3.3 percent in half-year 2018.
Meanwhile, direct cost margin of JB and Arbico trended to 77 percent and 82 percent respectively in half-year 2019, from 74 percent and 80 percent last year.
Industry players say construction companies have been grappling with higher costs since the naira was devalued in 2017 which has led to a spike in the cost of importing building materials to the country.
“The cost of construction in Nigeria is one of the highest in Africa. This is even because over 65 percent of materials are sourced abroad,” Damilola Ijalade, a broker at DEE Property Consult said.
This implies that a weakening naira translates to a higher burden for construction firms purchasing raw inputs abroad.
The Nigerian construction industry is dominated by foreign players like Cappa & D’Albterto, ITB and CCECC, who keep getting bulk of government contracts, leaving the ‘powerless’ indigenous ones with crumbs to feed on.
There have been downsides to this as these companies have been known to import resources and even skilled labour as opposed to using local manufactured resources and promoting local content and promoting local content.
Although currency devaluation and economic downturn of 2016 impacted private sector investment, public spending on infrastructure has surged in recent years and expected to rise in short to medium-term.
Cash-strapped Nigeria is financially incapacitated to close the country’s huge infrastructural gap estimated at N3 trillion and this has prompted fiscal authorities to borrow cash from the private sector.
In addition to series of bond issuances that should ease budgetary constraints and boost capital spending, fiscal authorities have resorted to private-public partnerships to deliver big-ticket projects, which should keep the industry on the path of positive growth going forward.
The construction has been on a positive growth trajectory for three straight quarters through the first three months of 2019 when it grew 3.2 percent outperforming the broader economy that expanded some 2 percent.
The implementation of the 2019 fiscal budget coupled with Buhari-led administration’s commitment to fix decrepit infrastructures hurting businesses and investment, these experts expect to help accelerate growth going forward.
About 1,973 private sector institutions that failed to comply with the Pension Reform Act 2014 have lost the opportunity to participate in Federal Government businesses and contracts in the current year.
The institutions were refused pension compliance certificate by the National Pension Commission (PenCom) due to non-remittance of pension contributions for the appropriate period and/or non-provision of group life insurance policy for their employees.
This follows an agreement PenCom reached with Bureau of Public Enterprises (BPE), Bureau of Public Procurement (BPP), and ministries, departments and agencies of government as part of efforts to deepen compliance with the pension law.
According to PenCom, during the first quarter of 2019, the Commission received 6,630 applications for the issuance of compliance certificate out of which 4,657 certificates were issued, while 1,973 applications were declined.
The Commission in the first quarter report stated that the sum of N45.90 billion was remitted to 105,382 employees’ Retirement Savings Accounts (RSAs) by the 4,675 organisations that were issued with compliance certificates.
Susan Oranye, executive secretary, Pension Fund Operators Association of Nigeria (PenOp), said compliance among employers and actual remittance were critical for the continued sustenance of the scheme.
Oranye said it was rather unfortunate that some employers that have three employees and above have not thought it wise to embrace the scheme for the benefit of their employees and their organisation. Compliance, she said, not only enhances employees’ commitment to duty and increased productivity but also opens door for the institutions to partake in government contracts.
“I believe that for the benefit of the citizens, the workers, and the economy as a whole, those in authority – BPE, the Bureau of Public Procurement and even the ministries, parastatals and agencies – should insist on compliance with the Pension Act as a precondition to participate in government contracts, irrespective of the size and nature,” she said.
To enhance compliance with provisions of the Pension Reform Act in respect of group life insurance and contribution remittances, PenCom in February 2019, in an advertorial titled ‘Notice to All Employees on Their Rights to Life Insurance Policy and Pension Contributions’, charged workers to demand for their rights.
“This is to remind all employees in the public service of the federation, Federal Capital Territory and States that have implemented the Contributory Pension Scheme as well as private sector, that it is their rights, under section 4(5) of the PRA 2014, to have life insurance policy taken on their behalf by their employers for an insured amount not less than three (3) times their annual total emolument,” the advertorial read.
“Please note that employees are also required to ensure that all pension contributions deducted from salaries and/ or contributed by employers are remitted to the Pension Fund Custodian (PFC) by the employer not later than seven working days from the date of payment of their salaries,” it read.
The Commission advised employees to report to the Commission where the employer fails to procure the minimum required life insurance policy in their favour, submit the evidence of compliance with life insurance policy to the Commission and place the certificate in a conspicuous place within the organisation, and remit the deducted pension contributions into their Retirement Savings Accounts.
In accordance with the provisions of Section 4(5) of the Pension Reform Act (PRA) 2014 and Section 5.5 of the Guidelines for Insurance Policy for Employees, employers of labour covered by the PRA 2014 are required to submit copies of the insurance certificate with the schedule of benefits to the PenCom.
The insurance certificate should state that all employees are covered up to an amount not less than three times their respective annual total emoluments (ATE).
Employers that have not yet submitted copies of insurance certificate to the Commission were advised to do so before March 31 each year, failing which PenCom would consider such employers in default of Section 4(5) of the Pension Reform Act (PRA) 2014.
The United Kingdom is to assist Gombe State Government in the areas of skills acquisition and youth empowerment for four years.
Programme Manager Skills for Prosperity of British High Commission, Mr Terseer Nyulaku, said, during a courtesy call on Governor Inuwa Yahaya in Gombe, that the intervention was to ensure that young people acquire valuable skills to make them employable and also create jobs for themselves.
He said the programme being implemented in the six Geo-political zones of Nigeria, had Gombe State representing the Northeast and would be implemented between 2019 and 2023.
“At the end of the day, by the year 2023, we hope to see a number of young people and women employing others in their business,” he said. Mr. Nyulaku said they had currently started assessing the local economy of the state to enable them come up with skills that would be beneficial to the target groups.
On his part, Deputy Governor, Dr. Manasseh Daniel Jatau, thanked the British High Commission for choosing Gombe State out of the six states in the zone, saying the skills acquisition programme was necessary for the development of the state.
He pledged that his administration had placed emphasis on skills acquisition for unemployed youths, so as to make them productive. “We have seen a lot of qualifications that are running in the street cannot help themselves. And we believe that skills acquisition is necessary if the state is to develop and the nation at large,” he said.
The future of commercial banks is gradually slipping into the hands of telecommunication companies, and this doesn’t bode well for the Nigerian lenders, as the inroad into mobile money market by network providers is likely to make banks redundant soon.
Before the entrance of the GSM firms in Nigeria’s telecommunication industry in 2001, having a mobile phone and getting across to people within seconds, no matter how far they were, was something akin to a miracle. They had made the seemingly impossible to become easy. But no matter how much of a feat it had accomplished, no one expected it to grow into an industry capable of making financial payments. Drawing a correlation between network providers and bank functions was far-fetched, but fast track to 2019, and they are now officially recognized as operators of payment service bank (PSB).
Mobile money is the payment of services or financial transaction between a buyer and merchant through mobile phone. The payment system is also called mobile payment and mobile wallet. Individuals can buy goods and pay for services through the use of USSD code or mobile app.
The quest to bring banking closer to the under-served for financial inclusion has accelerated the value of telecoms firms. The idea of allowing telcos to operate as mobile money service providers had been frowned at in the past, but all that is changing, as Central Bank of Nigeria (CBN) has come to realize that achieving its 80% financial inclusion is impossible without the likes of MTN Nigeria, Airtel, Glo and other telecoms firms.
A handful of bank Chief Executive Officers (CEOs) have talked tough regarding the readiness of commercial banks for the inclusion of telecoms in the mobile money market, however, putting the lenders and telcos side by side, it’s evident that the CEOs will be singing a different tune when this becomes fully operational.
The likes of Ifie Sekibo, Managing Director and CEO of Heritage Bank, Nnamdi Okonkwo, MD/CEO, Fidelity Bank, and some others have all stated that the presence of telecoms in the mobile money service brews no fear.
Such is expected, as market rivals are known to never speak of themselves as inferior to competitors; but if statistics are anything to go by and with comparison to other market in Africa where mobile money is thriving, banks are gradually heading towards that “inferior” direction if the threat posed by telcos is not handled properly.
Numbers are against banks
It would be unwise to bet against telecoms firms in the mobile money market, considering the position they hold and number of subscribers they each possess. While banks had only until recently began to drive traction to their mobile payment platforms, network providers have been building their customer base since their entry into the Nigerian market.
In the telecoms sector, all network providers account for over 122.2 million subscribers, with interested mobile money operators such as MTN Nigeria and Airtel Africa accounting for 52.2 million and 31.9 million respectively. This is more than the number of customers in GTBank, Zenith Bank, Access Bank, UBA and other banks. The total number of active bank accounts is 72.9 million.
The subscriber number of Airtel Nigeria is more than the number of app downloads of these banks put together. And when you add MTN, Glo and 9mobile to the list, the chances of the lenders acquiring sizeable market share in the mobile money market become slimmer.
GTBank, Zenith Bank, Access Bank all have about 1 million downloads, but note that not all downloaders make use of these apps, and having multiple apps for each bank account is stressful, so telcos provide a seamless payment system that doesn’t require multiple accounts or cards.
While these banks have tried to simplify their transaction processes with USSD codes, the codes are not as popular as the network provider’s USSD among Nigerians.
History favours Telcos
The inclusion of telecoms as payment service banks by CBN was encouraged by the rate of financial inclusion success in Kenya. The country’s financial inclusion is pegged at 95%, and this is because of MPesa, Africa’s first mobile money platform.
MPesa was created by telecoms firm, Safaricom, to close the gap between the under-served and financial transactions. When Saraficom’s mobile money began, there were 3000 ATMs (Automated Teller Machines), but the volume dropped by 1000 because Kenyans no longer visited banking halls to make payments.
The expansion of Kenyan banks also slowed in response to bank customers’ behavioural changes regarding transactions. Also, account opening dropped, since Kenyans began to prefer using mobile phones to send, receive and store money. But in order not to be devoured by the onslaught of telecoms-sponsored MPesa, the banks in Kenyan drafted an initiative to partner MPesa to stay afloat; that move has paid off well.
Divide and conquer
Since the function of banks is not limited to payment or financial transactions, one might think the bank’s relevance is still vital enough to be significant to Nigerians, however, the responsibility of providing loans to customers to help inject capital in the business is not restricted to Nigerian banks only.
The functions of banks have been split over the years. While network providers only recently received the nod to operate mobile money without loan service, Fintech companies and Venture Capitalists have been offering needed capital to Nigerian businesses especially start ups and have become perfect substitutes of banks for monetary needs; even rating agency, Moody, has argued that commercial banks might soon lose their services to Fintech firms due to their growing popularity.
This division of bank duties has reduced the essence of banks in Nigeria. Their monopoly over payment and monetary transactions has been lessened, and already, the inclination of the middle-class and lower-class towards them regarding loans isn’t favourable.
In the report of FUGAZ for the year ended 2018, the companies loan to customers dropped except for UBA. GTBank recorded N1.2 trillion in 2018 compared to the N1.4 trillion of 2017. Access Bank also recorded N1.993 trillion in 2018 from the previous year’s N1.995 trillion. Zenith dropped from N1.9 billion to N1.7 billion in 2018. While this drop in some quarters could be attributed to banks cutting back loans given, it could also be argued that Nigerians are reducing their dependence on banks.
With this division of bank duties, the future of banks is on a cliff edge, and operation in banking halls will be rocked to its foundation, which might result in job loss. The 4th industrial revolution has stretched the banking sector so far that lack of innovation by Bankers Association of Nigeria might leave the traditional financial market counting their losses.
Lessons from Kenya
Some banks are calling for the CBN to impose regulatory conditions on telecoms interested in mobile money operation, in order to curb its growth. This shows how fearful they are getting, but now is not the time to make requests that will result in unfriendly competition and rule out collaboration, because that’s the saving grace available to banks.
It should be noted that lenders in Kenya initially went on the offensive against network operators, but as time went by, more Kenyans ported to telcos mobile money service. To put an end to this migration, Kenyan Bankers Association liaised with Safaricom’s MPesa to create M-Shwari to offer loans to mobile money users; this stopped what could have become a banking crisis in Kenya.
Banks can’t operate alone in the 4th industrial revolution era, they need to pitch tents with the telecoms companies, rather than compete against them if they are to survive the crisis lurking around to consume them.
The longevity of banks in Nigeria now depends on how banks handle the competition from telecoms and how innovative the financial players are, as they need to do more than create apps or USSD codes to sway or maintain customers.
Real estate stakeholders say there is an urgent need for paradigm shift to resolve the challenges of affordability mismatch resulting in unsold and unoccupied developed houses, especially in major cities.
According to them, the paradigm shift should be a review of dynamics from market-driven pricing system to end user-driven pricing to ensure that houses are provided for those who need and can afford them.
The call for the review of systems was part of the resolutions reached at the 13th Abuja International Housing Show, and had been presented to the government and its several housing agencies for implementation, according to the organisers.
The documented resolutions, a copy of which was obtained by The PUNCH, also included a call for the creation of enabling policies around land title documentations, with government playing a larger role in assisting investors and supporting local building industries and materials.
Stakeholders also demanded a fast track of the passage of foreclosure bill into law to legally resolve default issues in the sector.
They called for the review of Land Use Act, the Federal Government Housing Loans Board bill, the Federal Mortgage Bank of Nigeria bill and the National Housing Fund bill.
They said there was a need for the Federal Government to advance the ongoing partnership between the Mortgage Banking Association of Nigeria and the Central Bank of Nigeria with regard to the underwriting standards which could increase housing and mortgage affordability for the masses.
Among other resolutions, they called for the adoption of high impact training that would support research and data generation by major stakeholders within the industry and building the right skill ecosystem through job-driven training programmes spearheaded by private sector industry participation for adoption of trainees.
They also called for the institutionalisation of collaboration and partnerships between large-scale industry players to enhance mass housing provision and affordability.
They equally called for the creation of standard data base in African countries especially in Nigeria that could be universally accepted to collate data, identify data gaps, integrate, optimise and expand knowledge set to meet current demands.
Life Above Poverty Organisation (LAPO) microfinance bank is targeting N154 billion loan disbursement to support Micro, Small and Medium Enterprises (MSMEs) this year (2019) as against the N137 billion disbursed to them last year.
Godwin Ehigiamusoe, the Managing Director of LAPO microfinance bank, made this disclosure at the bank’s 8th Annual General Meeting (AGM) held in Lagos.
“There is a huge funding gap for Micro, Small and Medium Enterprises, so as a microfinance bank, committed to help bridge that funding gap, our major operation is supporting credit. We prioritise giving loan to those businesses. This has been our commitment right from when we were a non-profit organisation,” Ehigiamusoe was quoted.
Why MSMEs funding: The role of SMEs in enhancing economic growth and development has overtime been widely acknowledged globally. Economic wealth all over the world is created through enterprises and the expansion of their output.
SMEs contribute to the economy by creating value through the production of goods and services, thus enhancing the gross domestic product. They also generate employment by creating much-needed jobs in the economy as well as expanding the export sector largely through linkages with large firms that produce for the foreign sector.
Lack of adequate funding has been the major challenge Nigerian SMEs have raised concerns about. The SMEs stakeholders have overtime lamented the absence of adequate credit facility startups and business expansions.
About LAPO: LAPO is a microfinance bank that focuses on assisting the poor, especially the women, in raising their socio-economic status. It does not only act as a microcredit institution but also assists clients in overcoming problems beyond the lack of funds, such as illiteracy and environmental degradation (which often aggravates poverty).
The institution was founded by Godwin Ehigiamusoe while working as a rural co-operative officer in Delta State, Nigeria. LAPO started its activities in 1987.
The world is an increasingly complex, rapidly changing and volatile place and people talk about the uncertainty of the future a lot.
However, there is a lot we already know about the likely themes of the future. We can’t predict all of it, but we can play our part in inventing the future by what actions we take now.
The future is not tomorrow, but starts today. Are we doing enough to innovate now to influence the future?
In practice, that means we will need to look more forensically at our existing and new homes, developments and places, and take action now to improve their sustainability and our long-term impact on the environment.
From enhancing energy efficiency and implementing new technologies, through to adopting innovative construction methods such as offsite manufacturing, there are many opportunities that we could and should pursue that could help to shape a greener future for all.
We have learned that there is no one-size-fits-all solution for people looking for a home.
To be sustainable, communities need a choice of homes in a mix of tenures and at several price points.
So our focus should continue to be on housing numbers, but also types and tenures.
This includes investing in shared ownership and starter homes to give people the extra support they need to get onto the housing ladder, regardless of their age, financial circumstances or background.
We also know that our population is ageing fast, so we must find ways to ensure there is sufficient high-quality housing for the older generation.
Developing retirement properties that can meet the changing needs and expectations of older people will make a positive contribution to the wider housing market as well as local communities.
Increasingly, that will require us to alter the way we plan our cities, towns and villages, including paving the way for more retirement villages that improve the quality and experience of later life.
“If we don’t take the necessary steps now, experiment and be more proactive in our approach to housing delivery, we could face risks and missed opportunities”
This and housing for young people is also part of the answer to regenerating our emptying town centres.
Addressing these types of challenges isn’t easy, and there is still a lot to learn and implement. But if we don’t take the necessary steps now, experiment and be more proactive in our approach to housing delivery, we could face risks and missed opportunities.
Ultimately, the future is largely moulded by our actions now, so we should not be surprised by what it brings, whether that is positive or negative.
That is why our focus must be on learning what we need to do now to shape the best possible housing outcomes, including environmentally sustainable developments and high-quality thriving places that can meet the needs of all generations.
We can all do our part to invent the future by starting now.
David Cowans, group chief executive, Places for People
The Bank of Ghana (BoG) has given the assurance that funds are available to pay depositors of the 23 savings and loans companies and finance house companies that have been shut down.
“In line with the Government’s commitment to protect depositors’ funds, the Government has made funds available to enable the Receiver pay depositors after their claims are validated. The Receiver will in due course make an announcement with regards to when and where payments will be made,” a statement issued on Friday by the BoG said.
It said the Receiver, Eric Nipah would make known documents required from the affected depositors to facilitate the validation of claims and orderly payment of validated deposits.
The BoG revoked the licences of the 23 companies because they were highly insolvent.
The BoG also revoked the licences of two nonbank financial institutions, namely Express Funds International Ltd (remittance company) and Ghana Leasing Company Ltd (leasing company).
According to the BoG, the two entities have been insolvent and have been inactive for a number of years.
“This action is pursuant to Section 7 of the Non-Bank Financial Institutions Act, 2008 (Act 774), which mandates the Bank of Ghana to revoke the licence of a non-bank financial institution licensed under that Act if that institution among other things ceases to carry on business,” it said.
Thus, the BoG says it has completed the clean-up of the banking, specialized deposit-taking (SDI), and non-bank financial institutions (NBFI) sectors which began in August 2017.
“This follows the revocation of the licences of nine (9) universal banks, 347 microfinance companies (of which 155 had already ceased operations), 39 micro credit companies/money lenders (10 of which had already ceased operations), 15 savings and loans companies, eight (8) finance house companies, and two (2) non-bank financial institutions that had already ceased operations,” it said.