The Women’s Day edition of the United Bank for Africa (UBA) Business Series recently held in Lagos presented opportunity to equip the bank’s customers, especially the women with the strategies to help build successful businesses.

The economies of great nations thrive on the strength and output of Small and Medium Enterprises (SMEs), widely seen as engine of growth.

The benefits of providing capacity building and funding for SMEs are huge. Banks with foresight are therefore taking steps to invest and support SMEs in the interest of the economy.

United Bank for Africa (UBA) Plc is one of the banks that is investing and supporting SMEs. The bank used the opportunity provided by the Women’s Day edition of the United Bank for Africa (UBA) Business Series tagged ‘Her Story’ and meant to celebrate the 2024 International Women’s Day (IWD) to demonstrate its commitment to SMEs, especially women-led businesses.

During the event, held at the bank’s headquarters in Lagos, successful female business entrepreneurs used the event to advise SME operators and would-be business owners to focus on meeting specific needs of customers and also promoting tier own self-development.

These, the speakers said would create a path towards building prosperous brands in the short and long-term.

During the hybrid event, entrepreneurs emphasised the need for SMEs to invest in themselves and have a proper working business structure as tips that will help build and grow their businesses.

The co-founder and CEO of Good Hair Ltd, Chioma Ikokwu; Founder of African Naturalistas, Atilola Moronfolu; Founder of Hello Perfect, a leading skin aesthetics and laser clinic in Nigeria, Onyeka Michael-Ugwu and Actress/Founder and Chief Executive Officer, NOUA Skin, a luxury boutique skin studio based in Lagos, Oshuwa Tunde-Imoyo, were panellists at the special women’s edition of last quarter’s UBA Business series who spoke on the theme: “Her story”.

Ojukwu who emphasised the need for meaningful partnerships and collaborations in business said, “It is important to start by solving a problem, you have to separate your lifestyle from your business and ensure that you are intentional about what you put out there. Also, get straight to the point about what you are offering your customers, no need beating about the bush,” she stated.

Buttressing Chioma’s point, Onyeka told business owners and would-be entrepreneurs to surround themselves with the right people as these are the people that will help tend to the growth of the business. “I always tell people, build a team that can give their best to your business. When you treat your team right, they will put their all into growing your business,” she said.

Atilola who was all about the advantage of a proper business structure to one’s business, said, “Get your structure right, you need to have a standard operating procedure that works whether you are physically present or not. Also, it is very important to separate your personal finances from your business finances, that way, your business learns to thrive on its own,” she explained.

On her part, Oshuwa spoke about education and investing in one’self, as she added that business owners need to hone their skills, and should not be afraid to ask for help when they need it. “I agree with Atilola and Onyeka about collaborations and I also subscribe to learning new things by investing in educating yourself, this will translate into better business decisions,” she said.

UBA’s Group Head, Marketing and Corporate Communications, Alero Ladipo, who commended the panelists for taking time off their busy schedules to share their knowledge, said UBA organises these business series frequently as they go a long way towards equipping customers, especially the women with the strategies to help build successful businesses.

“We believe that SMEs, especially those run by the females, are the engine of growth in any economy, and so, at UBA, we invest in educating our customers and Small business owners on tips that will help them run successful businesses that can impact the world,” Ladipo said.

United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees’ group wide and serving over 35 million customers globally. Operating in 20 African countries and in the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge technology.

More initiatives to support SMEs

The UBA recently instituted $100 million new loans to SMEs and other businesses across Africa that are focused on green finance projects.

UBA’s Group Managing Director, Oliver Alawuba, broke the news during the partnership signing agreement between the bank and the African Guarantee Fund (AGF) held at the UBA Head Office in Lagos. He said the move aligns with the bank’s commitment to fostering economic development and reducing poverty.

“The facility aligns with our objective to power businesses. Through this, we will lend to women-led SMEs at cheaper rates. It will demonstrate our commitment to gender equality. We will actively engage governments to create loans. It is a transformative initiative for fostering economic development,” Alawuba said.

The AGF will under the agreement provide $50 million Portfolio Guarantee for the SMEs and green finance projects that will benefit from the facility.

The AGF will further facilitate extensive capacity building for the borrowers, with special focus women-led businesses and green finance projects across the 20 countries where UBA operates in Africa

Alawuba reiterated the bank’s commitment towards supporting SMEs in Africa, especially to women-founded and managed businesses.

He said the bank’s robust network, which is spread across the 20 countries in Africa and major global financial capitals remain big advantage.

He said, “This guarantee will serve as a catalyst for the bank’s intervention for SME business, women-led and environment friendly businesses, enabling us to further extend our reach and impact. Additionally, the extensive capacity development initiatives planned for our SME customers across 20 African countries align with our vision to empower businesses, drive innovation, and foster sustainable growth.”

“I am particularly excited about our focus on advancing the AfCFTA initiative, reaffirming UBA’s $6 billion commitment to SMEs across Africa. This initiative, announced in September last year, demonstrates our dedication to supporting the economic integration of our continent,” he further said.

“Moreover, our commitment to promoting gender equality in our business is reflected in our collaboration with the Affirmative Finance Action for Women(AFAWA) protocol. Through this we will provide loans to women-owned SMEs at more concessional rates, with customer friendly collateral terms, aiming to bridge the significant financing gap faced by women in Africa, amounting to $42 billion,” Alawuba noted.

In the same vein, capacity development platforms are to be extended for free or at highly discounted rates while the partners will engage with governments across Africa to create and activate business environments that are more women friendly. It will also expand the bank’s Green Finance propositions across Africa.

Also speaking, the Group CEO of African Guarantee Fund, Jules Ngankam, said the partnership between two pan-African institutions who are both at the forefront of catalysing growth and development of SMEs will significantly drive economic growth across the continent.

“Small and medium enterprises despite being the backbone of all African economies – they account for 90 per cent of the private sector and 60 per cent of all jobs – are perceived as risky and therefore have limited access to financing. Through this guarantee facility and the technical capacity development grant support, we will de-risk SMEs with a priority on those that are owned or led by women and those that are within the green sector.

This partnership is sequel to the announcement made by United Bank for Africa (UBA) Plc, and Africa Continental Free Trade Area (AfCFTA) Secretariat in September 2024 which will help the Bank drive its $6 billion commitment to SMEs across Africa under the AfCFTA initiative.

Support for Intra-Africa trade

Intra-African trade is also a key area of strength for the UBA. The bank’s  presence in 20 African countries is mainly to drive intra-African trade. Its partnership with AfCFTA is also to drive inter-African trade.

Also, the UBA is at th forefront of the partnership involving Afreximbank’s  Pan-African Payment & Settlement System (PAPSS), a payment system for settlement of business transactions across Africa.

So, intra-African trade is important and Africa needs to trade more with each other and that will further improve our economic development across the continent.

Alawuba recently disclosed that UBA is a bank focused on African development. A lot has been happening in Africa and we recently met with development partners to discuss agenda for Africa’s development.

He said: “Some of our customers also share the same development agenda for Africa. And I believe that this is our time, this is the time for UBA, to work with other development partners and corporate organisations across Africa to develop the resources and opportunities that are available in Africa.”

“We are today present in 20 African countries and four other countries outside Africa. We believe that Africa has tremendous opportunities and we need to have partners, institutions that will be able to harness these opportunities for the people. So, UBA is well-positioned to facilitate business within Africa and the rest of the world”.

He said that the most important thing today is for Africa to drive financial inclusion, adding that a lot of Africans that are left out of the banking industry and that is where UBA comes in.

“UBA is in the forefront of using digital technology to drive financial inclusion. And we think that we need to build strong African institutions that will be able to support infrastructure development, support SMEs and the development of our continents.”

“Our goal is to work with several development partners who share the same vision, the vision that Africa needs to move and improve development in the continent. And this development has to be done by Africans working with like minds who believe that Africa must move forward,” he said.

Funding support for economy

The UBA also recently received a $175 million facility from the Africa Development Bank (AfDB) Group.

The fund will be channeled towards enhancing its support to the private sector and financing of infrastructure development in Nigeria.

This facility comprises a $100 million in long-term senior debt, $50 million of trade finance medium-term senior debt and a $25 million risk participation programme. The announcement was made following AfDB’s Board of Directors nod for the facility.

The long-term senior debt will enhance UBA’s capacity to finance projects in Nigeria in the key sectors of infrastructure, agriculture and related value chains, as well as manufacturing, energy, and SMEs.

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 In view of the current volatile and complex economic environment that has caused several local firms to close and global brands to leave Nigeria, what do you think should be the key imperatives for businesses?

You are right that in Nigeria and indeed globally, we are seeing a level of disruption that arguably, we have not seen in a generation. It is unfortunately a fact that some companies will fail, as we are seeing, while some others will survive and thrive.

While several interlinked factors set successful companies apart – a winning strategy, organizational resilience, innovation DNA, and a great culture – perhaps the single most dominant factor is leadership. And by leadership, I do not only mean business leaders or leaders in the C-Suite but the leadership team of a firm including frontline managers and so-called middle managers who we believe are the unheralded heroes of many a successful business. I believe Nigeria businesses need to begin to focus more on developing these frontline and middle managers.

 Shouldn’t the focus be on CEOs and the C-Suite?

While the CEO can play an outsized role in the success of any organization, what great CEOs and business leaders realize, and this is a position we hold and promote, is that they can only be as effective as their management team which includes these frontline and middle managers I mentioned.

What we have seen in our work is that most organisations in Nigeria do not realize the importance of their managers and when they do attach some importance, are not deliberate in upskilling and empowering them and in providing the organizational environment for them to thrive.

And we have also seen how this has placed a ceiling on their productivity and corporate performance. So, while it might seem counterintuitive, what I think organisations should be focusing on now is building out their management cadre.

 Could you share more on why you think organizations should be investing in their middle management now and how it is a pathway to their survival and success?

Not just their middle management, but their frontline managers too. But, let me be clear. I believe that for organisations to survive and succeed now and beyond this period of uncertainty, they will need to turbocharge their performance which will require harmonizing their strategy, management practices and investments as part of a larger, dynamic system.

However, to succeed at this, they need a strong management team. Several studies have shown a strong correlation between organizational health and performance and having strong managers. Having a strong cadre of frontline and middle managers is not just a nice to have, it is a business imperative because these managers are vital to the success of any change or transformation effort.

They are the ones who translate the strategy into work streams and projects and help bring the strategic goals to reality. They do the real work interacting with customers in the real world and interfacing with staff at the frontlines.

 Are there other roles that middle management staff play to drive organisational growth?

They also play a key part in talent management. We know that managers are the biggest determinant of employees’ experiences, satisfaction and performance at work. It is the relationships that they build that enhance team dynamics and improve productivity and performance.

They have an outsized impact on the way employees work, their productivity, their unit performance and consequently the organizational performance. This is particularly critical for businesses operating in Nigeria as their managers will be the ones that have to create a workspace that does not worsen already tense personal circumstances (given the increasing cost of living) and one that employees want to come to. Thus, creating psychological safety and reducing attrition.

Given how much impact these managers have on the success of an organisation, local organisations need to begin viewing managers as “value multipliers” and acknowledging that investing in developing strong managers will deliver substantial economic returns.

So, what should organisations do to build up their management capacity?

First, the goal should be to create a critical mass of top-performing managers. What you do not want are toxic, poor-performing managers that sow discord and reduce productivity across the organisation. Just like top-performing managers can have an exponential influence for good, so also can toxic managers create disproportionate negative outcomes. Second, organisations will need to redesign their organisational structure, the job roles of these managers and the reward system to ensure that they are set up for success. Then they will need to provide robust capacity development programmes.

So, they are going to need to redesign the job roles so that managers can better focus on the things that really matter – coaching, communicating strategic priorities, guiding work and performance management. While redesigning the reward system and organisation structure is necessary to provide a flexible career pathway for managers, it does not necessarily require them to be promoted out of their current roles even though they will still see their rewards increase.

Are there other things that organizations should do to ensure their workforce achieve maximum productivity and organizational growth?

And very importantly, organisations will need to create a management development program that will equip potential and emerging managers with the skillset required to be effective managers. Too often, employees are given managerial roles without any prior preparation for the role and they are expected to learn on the job. This hardly ever works and is one of the reasons you see a lot of poor-performing, disgruntled or burnout managers.

Why do you think that investing in middle management is a profitable venture for organisations?

We know investing in middle management eventually yields an exponential return because of the several success stories we have been a part of. We have seen remarkable results in organisations that we have supported with revamping their management development journey and targeted training for their managers.

Most of them have successfully built a strong management bench and leadership pipeline that has given them a competitive advantage and a deep resilience to surmount the current challenges. We have also helped provide individual managers with a sense of personal development via our globally recognised management accreditation and diploma. 

To reiterate, investing in frontline and middle managers is an investment in the future of any organization. By providing them with the skills, tools, and knowledge they need to succeed, organizations can create a culture of continuous improvement that can drive innovation and growth. This can lead to a self-reinforcing system of growth and development that can sustain the organization over the long term.

Could you tell us about StreSERT Integrated Limited and the values the company brings to clients’ businesses?

StreSERT Integrated Limited, SIL is an African-focused management consulting firm that partners with clients and stakeholders to create solutions that deliver significant impact and ultimately real and measurable success.

We work with African top businesses to generate great outcomes in both favourable and negative market circumstances and to ensure exceptional customer service practices

To achieve the kind of growth and impact required to turbocharge Africa’s people, organizations, and society into and beyond the fourth industrial revolution, we believe that local solutions to our peculiar thorny challenges are necessary. At SIL, we eschew the expected, delivering client solutions that are aspirational and real. We understand that exponential-sized impacts are required to bridge the gap between Africa’s potential and the gains of the fourth industrial revolution and we know that to create exponential change we need to move beyond regular ideas to accelerating solutions. In addition to all these, we support our clients through genuine partnerships that prioritize fact-based decision-making and collaborations. We undertake systematic diagnosis of specific challenges as a basis for developing solutions. Our solutions are delivered via a holistic approach, integrating our competencies in learning, consulting and insight generation to design and implement best-fit strategies.

What is the most interesting experience you have had as the Managing Consultant of StreSERT Integrated Limited, and what advice do you have for other chief executives in running successful businesses?

I have had many interesting experiences on this journey of building a successful business, both positive and negative.

As challenging as it has been building from scratch, the process has been that of growth; learning and development in all forms. The process of resolving the myriad of issues that confront businesses in our environment has been a mixed bag of intrigue, complexity and sometimes interesting developments.

If any of these experiences are noteworthy of mention, I have particularly found interesting and rewarding the opportunity to source and build talents from scratch and see them develop and exhibit quality leadership skills that are in turn being transferred to the younger ones. All of these resulted in the successes we have seen over the years.

My advice for others looking at running a successful business will be to, in the first instance, maintain focus and develop the competencies required for the business of choice.

Develop a strong foundation upon which the business will grow and be successful – a foundation that clearly defines the business objectives, vision, mission and values that will drive the business; all communicated in a simple way to everyone in the business.

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At Imoyo’s Service of Songs held in Lagos, Wigwe spoke glowingly of his ex staff’s commitment to duty and expertise in crisis management.

About three weeks down the line, Wigwe was also gone. On Friday night, a chopper transporting him crashed and killed him as well as about five others in California, USA.

While the business world mourned Wigwe’s sudden demise, his courageous business deals remained a reference point for generations to see.

Aided by strong public sector penetration, Access Bank, founded from the scratch by Aigboje Aig-Imouhuede and Herbert Wigwe in 2002, began operation after securing banking license from the Central Bank of Nigeria (CBN). It operated initially as a one-branch small bank at Burma Road, Apapa, Lagos.

Access Bank Plc surprised pessimists that gave it little or no chance for survival when it started operation over two decades ago. An industry leader with group total assets of N20.9 trillion as at June 2023, Access Bank’s success story has proved pundits wrong.

The bank under Wigwe had from the onset, prioritised raising capital, mergers and acquisitions-based growth. These blueprints  were synchronised into the steps it took in the later years and defined the banking giant it turned out to be.

Today, Access Bank is a full service commercial bank operating through a network of more than 600 branches and service outlets, spanning three continents, 12 countries and 36 million customers. This makes it the largest bank in Nigeria and Africa’s leading bank by customer base.

Speaking during the listing of Access Bank as a Holding Company at the Nigerian Exchange (NGX) on April 28, 2022, Wigwe, recalled the bank’s success story and supports that kept it going.

Access Bank’s future started looking bright in 2012 after it acquired Intercontinental Bank Plc, one of Nigeria’s largest bank by customer base in that era. When the dust generated by that acquisition settled, it returned with another trophy- the takeover of Diamond Bank Plc, a grassroots lender with formidable spread across the country, which was completed in March 2019.

The bank sustained its passion for acquisitions. In 2021, it bought 78.15 per cent stake in the African Banking Corporation of Botswana Limited (BancABC Botswana).

It further invested $60 million to acquire a stake in South Africa’s Grobank; purchased d Cavmont Bank from the Zambian arm of Namibian financial services group Capricorn, for a nominal fee of 1 kwacha ($0.0014) and opened a unit  in Mozambique.  With 14 subsidiaries in Africa, Europe and Asia, Access Bank   leapfrogged  from an obscure lender to one of the five largest banks in Nigeria in terms of assets, loans, deposits, branch network and profitability.

Aside these acquisitions, Access Bank under Wigwe has gained reputation of an aggressive lender with strong loan recovery drive. Its foothold in public sector, especially Lagos State where it funds major infrastructural projects as well as grassroots presence set it miles ahead of the competition.

In April 2022, Access Bank adopted a Holding Company (HoldCo) structure and  named Wigwe  the Group Managing Director/ Chief Executive Officer of Access Holdings Plc. This transformed the bank from core banking into full financial service holding company from May 1, and trading as Access Corporation.

Wigwe said: “Our focus is to become an aggregator in Africa as we build a global payment gateway, provide trade finance support and correspondent banking across Africa’s key markets. We are diversifying our earnings away from volatile markets and orchestrating operations from the global payments gateway, he explained during third quarter 2021 results announcements in Lagos”.

Wigwe kept his eyes on African dominance

Access Corporation wants to deepen its African presence and continue to expand its customer base as the core aims of its latest five-year strategic plan. Presenting the plan in Lagos Wigwe said: “We are setting out a new and ambitious five-year strategy which will put Access Bank at the forefront of Africa’s changing financial landscape by creating a universal payments gateway to dominate international trade and inter-African payments.”

The new strategy will be digitally led, will focus on retail banking growth and consolidation in wholesale markets, be customer-focused and analytics-driven with robust risk management; strong global collaboration in key gateway markets and the creation of a universal payments gateway.”

 “In the next phase of its transformation programme,” according to the presentation, “Access Bank will embark on series of bold initiatives. At home, the goal is to be the number one bank in Nigeria by growing the retail customer base, the Small and Medium-scale Enterprises client base, and by dominating the top 100 Nigerian corporates.

However, the bank’s Africa expansion suffered a minor setback when Access Bank Plc called off the proposed acquisition of Sidian Bank Limited,

Access said the Kenyan Bank had failed to fulfil some requisite acquisition conditions agreed by both institutions. This brought to a halt its agreement with Centum to acquire the entire 83.4% shareholding held by the investment company in Sidian Bank Ltd.

  “Although regulators have all been supportive in engagements around the transaction, certain conditions precedent including those required of Sidian Bank which were needed to prudently complete the transaction have not been met and the parties were unable to reach an agreement on the variation of these conditions in a manner to deliver the desired outcome for the parties,” said Sunday Ekwochi, company secretary of Access Holdings Plc.

 However,  Access Bank under Wigwe already made a strategic entry into the highly-competitive Kenyan financial ecosystem through the acquisition of Transnational Bank Plc of Kenya (now Access Bank Kenya) in 2020.

The bank’s other subsidiaries include Access Bank (Gambia) Limited, Access Bank (Sierra Leone) Limited, Access Bank (UK) Limited, Access Bank (Ghana) Limited, Access Bank (D.R. Congo), Access Bank (Rwanda) Limited, Access Bank (Guinea) Limited, and Access Bank (Mozambique) Limited.

The bank’s target is to establish its presence in 22 African countries as well as some strategic locations outside the continent so as to diversify its earnings and take advantage of growth opportunities in Africa.

Wigwe’s life, passion, philanthropy and commitment to education

Herbert Onyewumbu Wigwe, was born on August 15, 1966 in Isiokpo, Port Harcourt, Rivers State. As the CEO of Access Holdings Plc, Wigwe’s impact in the finance world was spectacular.

Wigwe had a degree in Accountancy from the University of Nigeria and further education in Banking and Finance, Financial Economics, and an executive program from Harvard Business School.

His career began at Coopers & Lybrand, Lagos, before joining to Guaranty Trust Bank, from where he later teamed up with Aig-Imoukhuede to invest in Access Bank.

Aside banking, Wigwe was also passionate about education and philanthropy. His passion for philanthropy led him to establish the Herbert Wigwe Foundation, fostering education and entrepreneurship in Nigeria.

The establishment of Wigwe University with a $500 million investment, earned him a spot in Nigeria’s educational sector.

With a focus on management, science, engineering, and the arts, Wigwe University was set to provide world-class education, blending traditional methods with innovative technology.

The university, situated in Isiokpo, Port Harcourt, was approved by the National Universities Commission in June 2023. Its curriculum was designed to address critical sectors such as finance and technology, while also nurturing leadership and entrepreneurial skills.

Wigwe University promised not just academic excellence but a holistic approach to education. Sports, arts, and practical experience were integral parts of its curriculum, ensuring that students received a well-rounded education.

The university’s inaugural batch was expected to be a diverse group of 1,400 students, with plans to increase enrollment significantly over the next five years.

“At Wigwe University, we stand by our promise to bring you a world class education like no other. Our strength lies in the diversity and expertise of our faculty. With over 35 per cent of our faculty from different continents of the world, Wigwe University brings a wealth of global knowledge to your doorstep.”

“Our faculty members are not just educators, they are mentors, that will guide you towards academic excellence and help you navigate the complexities of your chosen field with a truly international perspective,” the school wrote on its website.

The post The Man Herbert Wigwe and His Business Exploits appeared first on TheBlast NG.

Excerpts: 

Investing in the economy comes with lots of risks.  What do you think are the major risks that scare investors from the economy?

In Nigeria, there three main risks. There is exchange rate risk,  inflation risk and regulatory risk. Those are the three main risks that any Nigerian business should worry about. 

Most of the other risks can be mitigated on their own. But these three are difficult to control. It is not your fault that exchange rate is over N1,000 to a dollar. It is not like you have made the wrong investment, it is simply that the economy just happens that way.

On inflation, you are not the reason cost of goods and services are going up. It is outside of your control. And then, regulatory risks because government as well have a mind of its own. Government can make business very difficult for you, and can as well facilitate business for you.

When government becomes a risk to business, it is very difficult to contain. Whether it is through taxes, fines, fees  or policies that can just end your business. 

People can talk of insecurity, power supply chain challenges, these ones can be mitigated. But you see those three- exchange rate, inflation and government risks, they are the most difficult ones.

And we face them here at Nairametrics. Our work tools, are affected. Previously, we can buy four laptops with N1 million. Now, you can’t even buy two laptops at N1 million. So, imagine if I want to hire 10 research analysts that will be a huge cost. 

People always argue that businesses will maintain same profitability when inflation-related costs are passed to consumers. What are your views on that? 

Well, I think that’s is a misconception. People think inflation is just about increasing the cost of doing business. Inflation is also the reason why you have a staff, who you are paying salary, but will go and connive with the supplier to steal from you. He has to pay his bills. It is also the reason you call a carpenter, to come and work for you, and you paid him, but you don’t see him again. Inflation is why someone will call you, and say please lend me N100,000 and I will pay you back next month, and he will not pay you back.

It is also why you have family that calls you all over the country, for help. Inflation is why someone calls and tries to defraud you.

Its very pervasive under hyper inflation. Inflation is why you have staff, who struggle to come to work. Not that they do not want to come to work, but because they can’t pay the transport fares. You can increase the prices of your goods, but can you also increase their salaries?

How many businesses, can increase the prices of their goods by 28.2 per cent? Even if you do, remember your cost is also going up, so your margin is almost the same.

So, inflation is huge problem. Inflation is why you buy Coke and you are not sure it is Coke that is inside the bottle. That’s inflation, because someone is trying to cheat, so that he can survive. 

So, during hyper inflation, you see a lot of fake products and stealing. That’s why at Nairametrics, we write a lot about inflation. Inflation can also cause massive unrest. You see that  Labour Unions are protesting. That’s inflation. Minimum wage of over N30,000 cannot do anything for anybody.

The Central Bank of Nigeria (CBN) has instituted inflation targeting framework for the economy. Why do you think they are optimistic about getting the inflation rate down from current 28.2 per cent rate?

I do not think that what they are doing is any much different from what the previous central bank team did. So, inflation globally, is two types- supply side and demand side.

Demand side inflation is typically tackled with monetary policy. Supply side is when people have too much money in circulation and purchasing power is high, so there is lot of demand.

And so, the only way you can combat that is by raising interest rate. That is what happens in most developed economies. Raising rates, discourages borrowing, and that reduces spending and that has a way of reducing inflation.

In Nigeria’s case, we had increased Monetary Policy Rate  but at the same time, the supply side is actually more pervasive. 

The supply side deals with logistic issues, insecurity, government policies, ease of doing business and exchange rate to a large extent. 

So, what the previous CBN leadership did was that rather than abandon the supply side for government, they started to fix that themselves. 

That was why they pursued development finance, and funded power, agriculture, aviation. The CBN was pumping money into these sectors, which could not borrow from banks. They thought it could fix the supply side and reduce importation by encouraging local production. 

By the way, inflation dropped to about 11 to 12 per cent at some point, and it started rising after Covid-19 pandemic, and intervention funds increased money supply. 

For inflation to come down, is beyond making bold statement. It requires a lot of work. You have to address exchange rate issues, ease of doing business. It not monetary policy that will solve it, it is government that will fix these issues.

In what way does inflation affect interest rate in an economy?

Inflation is also a challenge for interest rate. Interest rate will remain high, and that will also impact businesses. If inflation is 28.2 per cent, what do you think interest rate will be? Banks that are lending below inflation, are doing so probably at a loss, even if they use 10 or 12 years average inflation rate. Banks will always raise interest rate because of inflation. 

The interesting thing, is that we are looking for foreign investors to come into Nigeria. The foreign investors will not come into Nigeria if we do not raise interest rate to be at least higher than Monetary Policy Rate or matching inflation rate.

Which means that every dollar from foreign investors should earn at least 10 per cent or more for them. And that is very expensive for an emerging economy like Nigeria to afford. 

If we cannot afford to pay foreign investors that money, they are not going to come in. We rely on capital importation, which should fetch about $20 to $25 billion yearly from foreign investors. Right now, we are not in any way close to $5 billion. You see why exchange rate is where it is. To get them in, you have to increase interest rate. You see, it is a huge quagmire. 

What other options are available for the economic managers to support the exchange rate?

The other option is to go to countries to seek for investments. That’s why you see the President going to Saudi Arabia, Europe trying to woo investors in by getting those countries to bring their companies to Nigeria through Foreign Direct Investments (FDIs).

That is actually a better, way, but FDIs usually take time. Their money does not go out quickly. Their money stays in your country. But for you to attract FDIs, your incentives must be very, very good.

So, you have to promise them 24 hours power, good roads, security, easy clearing of goods at the ports, skilled manpower, and so on.

For instance, if government convinces Apple to set up Nigeria office. Where are you going to set it up? Is it in Lagos, Ogun, Abuja ? Do you have the facilities they need to run, skilled manpower that can do that?

What do you think will happen to the naira if the FDIs are not coming in as quickly as expected?

I don’t mind losing this argument, but we will likely see weaker naira down the line before it starts to stabilise because the indicators don’t look good yet.

It is good that we are clearing backlogs, that will serve as confidence booster. But what will attract the sort of forex we need as a country, will take a while. As an import-driven economy, people source dollars to import their goods. They then sale in naira, and mop up another round of dollars for imports. As you are taking out the dollars, what is coming in as exports earning is small. A lot of the things you see happening, is a cycle. 

Let’s talk about diversification of assets. What are your views when it comes to asset diversification in investment? 

I think every investor should take steps to diversify his or her portfolios. There are several routes one can explore to increase wealth. That also helps to spread risks. One needs investments in bonds, fixed income, stocks, real estate and so on. It also depends where you are in life, as investment ethos should support where you are in life, in terms of age. 

Tell us about the Nairametrics journey and success story so far?

We started in Ire Akari Estate, Lagos in about 10 years ago. Then we moved to Opebi and other places within Lagos. Then we opened the Abuja Desk. We also plan to open Ikoyi Office in Lagos. This is just like our 10th year. As a website, Nairametrics.com should be 10 years this year. But as a company, it was set up in 2015. Initially, we started just like a Blogspot named Ugometrics.com.

We decided  to make it a business in 2015, so that we can reach a lot of people and attract investment.   Then, I decided I will not be the only one writing. I decided to get other people involved. 

We wanted something to capture the essence of what Nairametrics is about, which is the economy, money, investment and Naira depicted that for me. At that time, there were not much platforms covering the Nigerian capital market. Not that many.

The market has come to recognise Nairametrics for the quality of its market reports. And you were named the Entrepreneur of the Year 2023 by Ernst & Young (EY). How would you react to that?

It was a huge surprise. To be honest, I did not even think I was  going to be considered as Entrepreneur of the Year by EY. It was an interesting interview, because EY had a panel, very vibrant panel at EY office in Ikoyi, Lagos.

There were several people that were interviewed. It got to my turn and I faced six people panel. They started asking me about the business, the revenue stream and business model, and so on. Of course, I was answering genuinely. And they already had the report and audited account, because those were part of entry for that award. At the end of the day, they gave me a good advice on how to proceed and what to do as we grow. Then, I left. Then,  few weeks later, I was given the award. 

What was the level of work and investments you did to achieve this degree of success?

A lot of sleepless nights. A lot of work. I was running Nairametrics with a 9 to 5 job, for a long time. When I started, I had just left a company I was working for at the time. There were setbacks. I had an opportunity to buy a house in the US with about $100,000 I had at that time. With that, you could buy a good three or four bedroom apartment in the US at that time.

I was caught between doing that, and investing in Nairametrics. I took the money and invested it in Nairametrics. I furnished the office and provided working tools for the staff. And we started. I did not get outside capital at all. When we started , I  needed people I could trust, people that are like family.

We did not generate one kobo for about three years. I was just splitting my salary from paid employment with staff. 

There were lots of challenges, employee turnover, sleepless nights and so on. Most times, when I came back from work, I focused on the website, write the story myself. It involved a lot of work and sacrifices. I had a lot of problem with my family. My wife was upset that I was not always having time for the kids. 

I also took my 9 to 5 job very seriously. My believe is that one can do three or four jobs, but just make sure you are doing all of them well. 

It involved a lot of dedication and hardworking and we continued. 

Around that time, one of my other friend based in the US decided to be a Partner, because I needed someone who is also technically competent. He works as an investment banker in the US. He is also a Chartered Accountant like me. 

He came on board, and we started driving the business. I thought that for what we were trying to do, it cannot be just one person. I also did not want Nairametrics to be like any regular Nigerian website. I wanted the content to be unique. I wanted a situation that when you read the content, you will know that its an expert that is writing. So, that means that people that write for us must be experts in their areas of specialization. 

We got our first major cheque in 2019. I can’t forget that day. We got like six months salary. It was a breakeven point. That was the only first time I did nit use my money to pay salary. Covid was also a breakthrough year for us.

The CBN has said another round of banking sector capitalization is coming.  Which segments of the economy do you think has the biggest chances of driving the $1 trillion economy government target by 2030?

If there are industries that could drive Nigeria into $1 trillion economy, then you have to look at pension funds, and mutual funds. Those are industries or sectors that mobilise private capital as equity, not as debt. 

Banks represent about five per cent of GDP. Power is not even up to one per cent of the GDP. Power has potential to be bigger. Look at Arts and Entertainment, there are less than one per cent of GDP. Those are the areas that should jumpstart the GDP not banks. 

I understand their point is that they can do that by having bigger banks. No. It is by having bigger pension funds, mutual funds and private equity companies. These are the guys that can come and invest in companies, and wait for those companies to mature. 

Those that invested in Facebook, when it was zero market capital in 2004, when it started. When Facebook went public in 2012, it was bigger than the entire Nigerian capital market. 

Facebook started with private capital, not banks. I think bank recapitalisation is to improve the health of the financial sector. We understand that some banks need to improve their Capital Adequacy Ratios. A lot of banks are enjoying regulatory forbearance, and they will need to increase capital adequacy ratio. 

What are your views on dollarisation of the economy and the risks that come with it?

One of our biggest fears is not avoiding dollarisation. Dollarisation is a spiral, which means getting into a never-ending downward trend. That’s why you have to be wise. Dollarisation happens because you are afraid, that inflation will keep eating up your naira. But as you keep buying dollars, the exchange rate will be depreciating again, and it is spiral. It is of great concern.

There is a sense of hurry, that the government also has. Even government dollarises. When they privatise assets, the assets are sold in dollars. Even at the ports, the fees you pay are converted in dollars, as well.

Government machinery itself is essentially dollarised and other segments of the economy follow. They only way to solve dollarisation, is to have a stable exchange rate. People need to have confidence in their local currency, which means that inflation also needs to reduce. You need to restore confidence in your local currency, otherwise, people will dollars their assets. People will only hold the currency that will guarantee their survival.

The post Nigeria needs more than bold statements to rein in inflation – Nairametics Funder- Obi-Chukwu  appeared first on TheBlast NG.

Key issues that have dominated the Nigeria’s economic landscape in the last decade include how to address lingering foreign exchange shortages and halt medical tourism spendings estimated at $1.5 billion annually.  

As these concerns raged, the Central Bank of Nigeria (CBN), International Monetary Fund (IMF), World Bank and other multilateral institutions have consistently advised economic managers on best approaches to tackle them.

While the CBN under Godwin Emefiele’s leadership  advocates supporting the fundamentals of the Nigerian economy through diversification from oil to non-oil sectors, the IMF and World Bank seek halt to capital controls to attract foreign capital investments.  

The Nigerian Sovereign Investment Authority (NSIA) sees investments in critical sectors of the economy, especially healthcare sector as prerequisite to halting medical tourism spendings, step needed conserving forex and supporting domestic economy. 

Obviously, the Nigeria’s healthcare infrastructure has since independence, been underdeveloped with shortage of medical personels and dilapidated facilities. 

For instance, medical professionals in many specialized medical fields such as cardiology, oncology, nephrology, neurology, orthopedics, and many other areas are in short supply, with only about 35,000 doctors despite needing 237,000.

With these challenges,  Nigerians with health challenges now travel to India, the Middle East, Europe, and other far-flung places to get care when they should receive treatment within the country. When this happens, patients also incur associated costs for logistics, accommodation, caregivers, and emotional support systems.

Worried by this development, the Nigeria Sovereign Investment Authority in 2018 took a bold step by setting up the NSIA Healthcare Development and Investment Company (NHDIC) to transform the domestic healthcare sector and elevate the quality of service to international standards. Five years since taking that step, the implications of this decision have been far-reaching.

The NSIA’s approach was to consider the healthcare sector from both a social impact and commercial returns standpoint. The Authority hinged its strategy on co-locating NSIA healthcare centres of excellence within federal tertiary medical institutions.

This approach would enable the Authority provide equipment, operatorship, working capital and technical expertise while the designated partner institution would provide land, clinicians and expertise, and patient traffic.

Managing Director and Chief Executive Officer, NSIA Aminu Umar-Sadiq said “Over the past five years, we have built a strong and successful portfolio of healthcare service delivery centres. The transfer of the Enugu Centre for upgrade and rehabilitation is one of the steps in our journey towards making healthcare accessible and affordable for all Nigerians. The Centre is one of the 23 centres to be upgraded for Oncology and Diagnostic services.”

He said NSIA invested $22 million in three-flagship projects and in so doing, created NSIA-LUTH Cancer Centre, Lagos, (NLCC), NSIA-Kano Diagnostic Centre, Kano, (NKDC), and NSIA-Umuahia Diagnostic Centre, Umuahia, (NUDC), concurrently.

Operational since 2019, the NLCC has treated over 7,000 patients to date. When it opened its doors, NLCC was the first to install a linear accelerator in Nigeria and today, remains the centre with the highest number of linear accelerators in West Africa.

Umar-Sadiq said the Centre is equipped with several top-of-the-line medical equipment including three linear accelerators, a brachytherapy system, a 1.5 Tesla MRI, a 128 slice CT scanner, a mammogram, digital X-rays, ultrasound scanners and laboratory pathology systems among others.

The NKDC, Kano and NUDC, Umuahia provide comprehensive radio imaging and laboratory diagnostic services. The centres have recorded unprecedented success in terms of exponential growth in client patronage. To date, both centres have rendered diagnostic services to nearly 120,000 clients within just three years of operations.

All three centres have recorded excellent success commercially and delivered significant social impact for the benefit of Nigerians.

In the next five years, the NSIA  will be building 23 new modern medical diagnostic centres, three Oncology centres, and six Catheterization Laboratories across the country’s six geopolitical zones.

In a bid to achieve this, the NSIA  took over the management of the Enugu Diagnostic Centre, effectively making Enugu State to effectively joins Lagos, Kano and neighbouring Abia State where NSIA’s impactful healthcare projects are already saving lives and bringing succour to the people.

The NSIA also launched two of its flagship companies namely the NSIA Advanced Medical Service Ltd (MedServe) and Equilease Systems Limited (Equilease).

MedServe is being set up to serve as the vehicle to deliver NSIA’s healthcare expansion objectives. Its goal is to provide high quality and affordable healthcare services and ensure equitable geographic access to these services across the country.

The company will develop, equip, and operate NSIA’s expanding portfolio of healthcare centres and offer first class medical services nationwide.

On the other hand, EquiLease is a specialized equipment leasing service provider. Conceived as a market disruptor, the company will provide medical equipment leasing services, leveraging its strategic advantage to catalyze investments in healthcare institutions and facilitating the acquisition of equipment to improve the quality of healthcare in Nigeria.

“Equilease will partner with medical equipment manufacturers to offer innovative financing and leasing programs for advanced medical equipment. At the onset, it will offer services exclusively to MedServe as an anchor client until the concept is proven. The transfer of the Enugu State Medical Diagnostic Centre from the Enugu State Government to the Authority is part of the three-part event,” NSIA said.

Following the transfer, the Centre will be rehabilitated and upgraded to deliver both Diagnostic and Oncology services covering automated laboratory services ranging from imaging to radiotherapy, chemotherapy, brachytherapy and much more.

The Centre will be managed and operated by MedServe while re-equipping will be delivered through the leasing services provided by EquiLease.

The complete overhaul of the Centre’s infrastructure will position the facility to meet the growing demand for quality healthcare services in the Eastern region of the country and beyond.

The official transfer is off the back of the agreements signed in September 2022 where both parties committed to it.

The handover of the facility signposts the commencement of NSIA’s healthcare expansion programme which will be executed in two phases.

Under the programme, the NSIA will develop 23 new modern medical diagnostic centres, three oncology centres, and seven catheterization laboratories across the country’s six geopolitical zones.

Umar-Sadiq described MedServe and Equilease as transformative, market-disrupting entities that will deliver a unique set of connected solutions to bridge the gaps in Nigeria’s healthcare industry.

He added that the outcome from the creation of these entities is expected to strengthen the industry’s value chain and unclog the constraints created by insufficient financial investments, inadequate manpower capacity and substandard services.

He said, “NSIA also recognizes that a significant number of existing medical facilities and indeed care providers are unable to afford new equipment, in part on account of the high upfront costs and currency mismatch constraints. These centers therefore settle for inadequate equipment, or indeed none at all.

To address these challenges, NSIA has also created a wholly owned company, called Equilease Systems, which will help to reduce the burden of equipment acquisition by qualified hospitals, medical facilities and care providers by providing bespoke leasing solutions to medical facilities by entering into strategic partnerships with original equipment manufacturers.

He said the Equilease will also launch its operations by first entering a leasing arrangement with MedServe for its required medical equipment, allowing Medserve focus on the operatorship and optimal utilization of its equipment. In addition to leasing, Equilease will also test the possibility of expanding its services to include in sourcing of operations and maintenance as well as other value-added services.

On conclusion of the proof-of-concept period between EquiLease and Medserve, Equilease can then commence offering external clients a comprehensive leasing solution for their medical equipment needs, borrowing from all the key learnings of its proof-of-concept engagement with Medserve.

“So, today Enugu joins Lagos, Kano and neighbouring Abia State where NSIA’s impactful healthcare projects are already saving lives and bringing succour to the people. NSIA is excited at the prospect of playing a central role in improving the quality of medical services and expanding healthcare infrastructure across the country starting with Enugu, through Medserve and EquiLease.”

Speaking on the development, Governor of Enugu State, Ifeanyi Ugwuanyi,  said the journey to achieving the strategic partnership between the federal government through the NSIA and his administration was one of the deliberate, bold and courageous steps taken by his government to stem the tide of healthcare deficit in the state.

He stressed that the project would address the issues of capital flight, medical tourism and preventable deaths arising from the lack of diagnostic testing centres in part of the country.

“With this, Enugu State will be one of the few states equipped with world-class healthcare infrastructure and amenities,” he said.

NSIA Non-Executive Director, Dr. Ogechi Pascal-Ejiogu said the NSIA, in partnership with the Federal Ministry of Health, has signed a series of agreements to modernize and expand healthcare services through private sector participation.

Under these agreements, she explained that the NSIA is looking to developing the capacity of specialist hospitals and diagnostic centers to provide advanced medical services across the country under phase II of its healthcare expansion programme.

She stated that the Enugu State Diagnostic Centre will be the NSIA’s first in this phase.

According to her, “Our vision is to elevate the Centre to world-class status. We intend upgrading the centre using state-of-the-art equipment so that both patient and nearby hospitals are supported with accurate and timely medical results regarding health conditions.

“The centre will also provide oncology treatment. It will double as a cancer care centre for the south-east and south-south region.

“When we are done with the rehabilitation and re-equipping, it will be transformed into a full-service location for diagnostics and oncology.

“Under the auspices of His Excellency, Governor Ugwuanyi and the good people of Enugu State, we shall assume ownership of the Enugu State Diagnostic Centre and commence the process of retrofitting it into a world-class diagnostic centre, fitting for the people of Enugu and environs to receive first class service”.

She noted that the NSIA board remains passionate and committed to addressing the gaps in Nigeria’s healthcare ecosystem and also to providing high quality medical services across the country.

“Our goal is to reverse medical tourism and simultaneously transform Nigeria into the Africa’s medical hub. More importantly, we believe that access to quality medical services is a fundamental human right and all Nigerians deserve to have it,” she concluded.

Enugu State Governor-elect, Dr. Peter Mbah, commended the efforts and partnership between the federal government and the administration of Governor Ifeanyi Ugwuanyi of Enugu State over the official handover of the state-of-the-art Enugu Diagnostic and Oncology Centre built by the state to aid quick and early diagnosis of diseases and for the treatment of cancer.

While describing the event as laudable and remarkable in the history of the state, the Governor-elect who was represented by the Deputy Governor-elect, Barr. Ifeanyi Ossai, said the centre would help to attend to the medical needs of not only the people of the state but the southeast zone and the country at large.

The post Tackling forex shortages, medical tourism with healthcare investments  appeared first on TheBlast NG.

The devastating effects of rising inflation are felt by households and businesses across the nooks and crannies of the country. 

That is why price stability is one of the  core mandates of the Central Bank of Nigeria (CBN), which has adopted inflation targeting framework to bring inflation under check.

The inflation targeting framework, which replaces the exchange rate targeting framework, will be implemented with the backing of the people.

As part of the preparations to ensure its success, the CBN  Monetary Policy Department held the 2022/2023 Annual Retreat  in Lagos where stakeholders pointed way forward for Nigeria’s journey to price stability. 

CBN Director, Monetary Policy Department, Mahmud Hassan , said moving from exchange rate targeting framework to inflation targeting framework aligns with the apex bank’s determination to bring inflation upsurge under control  in line with its price stability mandate. 

He said inflation uptick has remained a major concern to the CBN and now is the time to use all monetary policy tools to bring it under control.

Already, data from the National Bureau of Statistics (NBS) showed that  marginal increase in headline inflation (year-on-year) in March 2023 to 22.04 per cent; February 2023 to 21.91 per cent from 21.82 per cent in January 2023. 

Also, broad money supply (M3) which is a key ingredient in inflation uptick grew by 13.14 per cent (annualized) in February 2023 (year-to-date), below the 2023 provisional annual benchmark of 17.18 per cent. 

This was driven largely by the growth in Net Foreign Assets (NFA), which was attributed to the increase in foreign asset holdings of the CBN and decrease in foreign claims on Other Depository Corporations (ODCs). 

Speaking on the  theme: ‘Monetary Targeting Policy Framework in Nigeria – An Appraisal of its Continued Relevance to the Price Stability Mandate’ ,  Hasssan disclosed that monetary policy has had to contend with shocks including the global financial crisis.

The event was attended by Jack Ree, from the International Monetary Fund; Prof Robert Mudida, Director of Research, Central Bank of Kenya (CBK); and Dr. Philip Abradu-Otoo, Director of Research, Bank of Ghana (BoG); staff of the monetary policy department of the CBN, among other stakeholders. 

Hassan said the various oil price shocks, Covid-19 pandemic, and most recently, the war between Russia and Ukraine have resulted in various shocks to the global economy, requiring changing responses to subdue both the monetary and fiscal authorities in the advanced and emerging market economies.

To address these shocks, he said the CBN migrated  from an exchange rate targeting framework to phased migration to inflation targeting framework.

He said the CBN has been controlling the growth of the money supply to achieve price stability but over time, the effectiveness of that strategy in achieving price stability in Nigeria has been called into question. 

“One of the main challenges has been the difficulty of accurately measuring and controlling the money supply in the face of financial innovation and the growth of non-bank financial institutions. In addition, the relationship between the money supply and inflation has become less predictable in recent years, further complicating the use of monetary targeting as a policy tool,” he said.

Hassan added: “Ultimately, the central bank will need to interrogate the continued relevance of the monetary targeting framework to address the series of new and developing shocks impacting the Nigerian economy, as well as the advantages the inflation targeting framework may hold for us as a central bank”. 

Also speaking CBN Deputy Governor, Economic Policy Directorate, Dr. Kingsley Obiora, said economies have witnessed harsh economic conditions which they had to deal with over the past few years. 

He said crude oil prices have fluctuated significantly over the past few years, making managing the exchange rate and inflation significantly difficult for monetary policy. 

He explained that at inception, the CBN adopted an exchange rate targeting framework with the Nigerian Pound exchanging at parity to the British Pound Sterling. The policy target under this framework was the maintenance of the viability of the Balance of Payments (BoP) and controlling inflation in the domestic economy. 

Obiora said that in today’s economy, rapid technological advancements and increasing competition are changing not only the way we do business but also the definition of money. 

“The rapidly changing macroeconomic environment has meant that the continued reliance on money supply growth as a reliable guide to the trend of price development has become questionable, not just among central bankers but also among academics,” he said. 

Obiora said  the relationship between money supply growth and the money multiplier has become increasingly blurred due to the observed instability in the money multiplier, making it difficult to set appropriate targets for money supply growth.

“It has become pertinent against this backdrop for the CBN to consider the pros and cons of a transition to a new monetary policy framework in a bid to improve our ability to continue to anchor inflation expectations,” he stated.

Headwinds persist

The increasing headwinds at home and abroad constitute major reason for the inflation targeting framework. For instance, the Monetary Policy Committee (MPC) met on 20th and 21st March, 2023, faced with new and existing headwinds, undermining the full recovery of the global economy. 

The CBN  in March raised the benchmark lending rate to 18 per cent in an aggressive push to contain the nation’s inflationary pressure.

In January, the MPC raised its benchmark lending rate from 16.5 percent to 17.5 per cent in a sustained push to control inflation and ease pressure on the naira.

Speaking during the meeting, CBN Governor, Godwin Emefiele said listed the headwinds as the recent bank failures in the United States and Switzerland, amidst widespread monetary policy tightening, which introduced a new dimension to the risks confronting the global financial system, as well as, the persisting high but receding global inflation. 

He said the continued hostilities between Russia and Ukraine and its implications to the smooth functioning of the global supply chain also remain a critical strain to the recovery of global output growth. 

He disclosed that in the domestic economy, output recovery progressed at a relatively moderate pace, while headline inflation trended upwards, albeit less aggressively, driven mainly by a marginal increase in food inflation. 

Growth vs price stability 

Data from the National Bureau of Statistics (NBS) showed that Real Gross Domestic Product (GDP) grew by 3.10 per cent in 2022. 

In the fourth quarter of 2022, it grew by 3.52 per cent (year-on-year), compared with 3.98 per cent in the corresponding period of 2021 and 2.25 per cent in the preceding quarter. The economy maintained a positive growth trajectory for nine consecutive quarters, since exiting recession in 2020. 

The improved performance was driven largely by sustained growth in the services and agricultural sectors, a rebound in economic activities associated with economic recovery and continued intervention in growth enhancing sectors by the Bank. Staff projections showed that output growth recovery is expected to continue into 2023 and 2024. 

Data on CBN’s interventions in domestic economy, showed that between January and February 2023, the apex bank disbursed N12.65 billion to three  agricultural projects under the Anchor Borrowers’ Programme (ABP), bringing the cumulative disbursement under the Programme to N1.09 trillion to over 4.6 million smallholder farmers cultivating or rearing 21 agricultural commodities on an approved 6.02 million hectares of farmland across the country. 

The bank also released the sum of N23.70 billion under the N1.0 trillion Real Sector Facility to eight  new real sector projects in agriculture, manufacturing, and services. Cumulative disbursements under the Real Sector Facility currently stands at N2.43 trillion, disbursed to 462 projects across the country, comprising 257 manufacturing, 95 agriculture, 97 services and 13 mining sector projects. 

Under the 100 for 100 Policy on Production and Productivity (PPP). The bank also released N3.01 billion under the Nigerian Electricity Market Stabilisation Facility (NEMSF-2) for capital and operational expenditure of distribution companies (Discos) aimed at improving their liquidity status and aid their recovery of legacy debt. This brings the cumulative disbursement under the facility to N254.39 billion.

According to Obiora,  inflation is not an end, but means to an end adding that output should be meaningful to the people. 

“We are dealing with slow growth but high inflation. Aggressive monetary policy tightening is happening but it is having adverse effects on banks at the global arena. The three banks that collapsed in the US are phenomenal. In all of these, Nigeria financial system is still stable,” he said.

For instance, what started with the collapse of Silicon Valley Bank on March 10 was followed by strains in other US regional lenders before the failure of Credit Suisse a week or so later and most recently of the US’s First Republic.

According to him, Nigeria has had double digit inflation in the last eight to nine years, raising questions on whether monetary policy is helping to moderate inflations.

He said now is the time to change to a new model that will address inflation fears for the economy.

Emefiele speaks on inflation spike

Emefiele had last year lamented rising spate of inflation and the impact of foreign exchange shortage on achieving national development goals. 

For him,  inflation rate is at an unacceptable level and higher inflation needs to be tackled with tools that can potentially constrain the economy’s fragile output growth and cause stagflation.

Emefiele explained that due to the resumed uptick of inflation rate in February 2022, the MPC raised its policy rate several times adding that the monetary policy tightening measures have led to subdued aggregate demand pressures expected to ease inflation.

He explained that the combined efforts of the monetary and fiscal authorities to ramp up food supply and tackle age long structural challenges are also expected to moderate inflation expectations and drive down food and core prices in the medium-term.

Raising fears over monetary policy tightening,  a staff of Finance & Development of World Bank, Marjorie Henriquez, said central banks tightening monetary policy should expect loan defaults within their economies. 

In a report titled: “Early Lessons from Recent Banking Turmoil”,  Henriquez advised central banks against monetary policy tightening adding that the central banks should adopt other tools to achieve price stability. 

She said the short-term interest rate is the principal instrument in a tightening cycle, and a liquidity injection can be implemented to deal with financial stability problems without jeopardizing price stability. 

In recent years, central banks have proactively intervened as liquidity providers and learned to do this in a timelier manner than in the past.

Other analysts recommended that a broad-based harmonisation of fiscal and monetary policies towards addressing the identified structural constraints raising inflation figures will significantly help to moderate inflationary pressure in the medium term.

The post Tackling inflation hurdles with new tools  appeared first on TheBlast NG.

In a string of expansions across the African continent, Access Corporation says  the AfCFTA enables it to channel resources and networks to areas within the continent that were previously untapped.

These expansions and efficient deployment of technology  have impacted positively on the bank’s performance in its recently released financials and enhanced its commitment to service delivery

The gains of cross-border transactions and efficient deployment of technology for financial services access across Africa cannot be underestimated. 

No other programme gives the continent power to explore its potential in banking and other financial services as the African Continental Free Trade Area (AfCFTA) implementation.

The AfCFTA is already providing the mileage for many financial institutions to channel resources and networks to areas within the continent that were previously untapped.

According to the World Bank, the AfCFTA presents a major opportunity for African countries to bring 30 million people out of extreme poverty and to raise the incomes of 68 million others who live on less than $5.50 per day.

With the implementation of AfCFTA, trade facilitation measures that cut red tape and simplify customs procedures would drive $292 billion of the $450 billion in potential income gains.

The World Bank, led by its Group President, David Malpass, said implementing AfCFTA would help usher in the kinds of deep reforms necessary to enhance long-term growth in African countries.

“The scope of AfCFTA is large. The agreement will reduce tariffs among member countries and cover policy areas such as trade facilitation and services, as well as regu­latory measures such as sanitary standards and technical barriers to trade. Full implementation of AfCFTA would reshape markets and economies across the region and boost output in the services, manufacturing and natural resources sectors,” the bank said.

Even the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele encouraged Nigerian businesses to explore the AfCFTA advantage and serve as a significant hub for international and domestic companies seeking to do businesses in the West, Central and East African Markets.

In series of expansions across the African continent, Access Corporation’s Chief Executive Officer, Herbert Wigwe says  AfCFTA to expand its footprints across the continent and bring improved benefits to customers and returns to shareholders.

With networks across many African countries, Europe and Asia, Access Corporation is relying on technology to deliver quality services to its customer and huge returns to investors. 

Clearly, at the end of the day, the massive continental expansion which the  financial institution embarked upon few years back appears to have started yielding the expected benefits. Wigwe appears not be slowing down on his mission to position the financial institution as the gateway to Africa. He is redefining banking services with courage and commitment to not only domestic economic, but also the continental economic growth. 

For instance, from Nigeria to Rwanda, South Africa, Mozambique, Kenya, Zambia, among several others, the expansionist adrenaline rush in Wigwe saw him last month securing final  regulatory approval for Access Bank Zambia Limited, a subsidiary of its flagship subsidiary, Access Bank Plc, from the Central Bank of Zambia for the acquisition and merger of African Banking Corporation Zambia Limited (Atlas Mara Zambia) into its existing operations.

Key metrics growth sustained

Access Corporation has consistently outperformed the market on the growth of key metrics and its recently released financial results did not fall short of investors’ expectations

Access Corporation Plc (Access Holdings), last week presented its first quarter 2023 earnings on the floor of the Nigerian Exchange Limited (NGX), which reflected positive trajectory.

The first quarter financial performance was released same day as the bank’s full year 2022 financial results.

However, the first quarter 2023 results established that the bank got off on the right foot and may end the year 2023 better than its 2022 performance.

Precisely, the first quarter 2023 unaudited results showed that the Holding Company’s (Holdco) gross earning maintained its upswing as it increased to N424.917 billion in the review period, higher than the N295.736 billion recorded in the first quarter of March 2022. 

Its profit after tax which declined marginally at the end of 2022, improved in the first quarter of 2023, to N71.636 billion, compared to N57.825 billion it realised in the first quarter of 2022.

Also, Access Corporation’s total assets increased to N15.742 trillion as at the end of March 2023, up from N14.998 trillion recorded at the end of December 2022, loans and advances grew to N5.038 trillion in the review period, from N5.108 trillion as at December 2022, and customer deposits of N9.941 trillion as of March this, higher than the N9.2 51 trillion recorded at the end of December last year.

Interestingly, the bank’s full year results also released same day did not fall short of investors’ expectations, despite the harsh operating environment.

Access Holdings’ total assets as at December 31, 2022, stood at N15 trillion, while its gross earnings crossed the N1 trillion mark to hit, N1.388 trillion, stronger than that of its peers in the league of tier-one banks.

Additionally, deposits from its customers increased to N9.25 trillion, higher than N6.955 trillion in 2021, while loans and advances to customers also went up to N5.557 trillion, from N4.446 trillion as at full year, 2021. 

The management also proposed a final dividend of N46.21 billion, representing N1.30 per share to its shareholders for the year ended December 31, 2022. However, the Group’s profit before tax declined by 5.1 per cent from N176.8 billion in 2021 to N167.7 billion in 2022.

AfCFTA advantage 

A crucial arena the Access Corporation seems very focused in its quest for offering of trade facilitation services to its African business community is the use of an efficient payment and settlement design being developed to power transactions in the AfCFTA, with about 52 countries already aboard.

The emerging consensus is that Africa still trails Europe, Asia and the United States among other regions in its continental trade below 10 per cent of global trade.

For example, over the past 50 years, records show that while trade with the West comes with very few or zero bottlenecks, intra-African trade are usually mitigated by so much tariff and non-tariff barriers, including payment challenges, which an Access Corporation can leverage to extend its reach across Africa and beyond in the years ahead.

According to the African Development Bank (AfDB) led by Akinwumi Adesina , intra-Africa exports amount to only 16.6 per cent of total trade in the continent.

But the signing of the landmark trade agreement in the African Continental Free Trade Area Agreement (AfCFTA), in 2018 which commits countries to remove tariffs on 90 per cent of goods, progressively liberalise trade in services and address a host of other non-tariff barriers opened a new vista for Nigerian and other lenders in Africa to become more competitive.

Though much work still needs to be done, the agreement created a single African market of over a billion consumers with a total Gross Domestic Product (GDP) of over $3 trillion, which would make Africa the largest free trade area in the world. 

Fundamentally, this means that any lender with relevant structures can leverage payment and settlement opportunities in the continental space to make more impact.

Perhaps not surprising Access Holdings’ exploited its Afrocentric leaning and opened up branches in major financial centres of the world to enable it focus more on improving trade on the continent and earn more revenue for its shareholders.

An alert, sure-footed leader, Wigwe noted: ”We recognise and embrace the change that is currently happening and, as we have previously demonstrated, we will lead. Access Corporation will be a driving force in the ongoing digital revolution to the benefit of our stakeholders.

“This transition will allow us to offer more career development opportunities across portfolio companies for our employees, allowing us to attract and retain the best talent in an increasingly global marketplace. We will unlock more value for our customers by focusing on distinct business opportunities with high growth rates globally, such as payments and consumer lending.”

It is given that a good vision pulls in ideas, people and other resources. It creates the momentum and will to make change happen. It inspires individuals, complementary organisations and institutions to commit, to persist and to give their best.

Technology banking 

Globally, banking is driven by technology. Gone are the days when banking was restricted to locations, specific time of the day and accessible/understandable to the upper, educated class of the society.

Today, banking happens anywhere and everywhere, with technologically-inclined financial institutions taking the lead.

For Access Holdings Plc, trading as Access Corporation, and led by Wigwe, technology is redefining and simplifying banking. It has also brought banking to the doorsteps of almost every household. 

Wigwe has also deployed professionalism, discipline and persistence in leading the change in the traditional narrative of the banking sector in Nigeria and the continent.

From deep understanding of compliance issues and the need to use  right technology infrastructure to support payments and remittances, without taking incremental risks, Wigwe has taken the banking giant to the next level.

He said: ‘’The bank will go forward, focus on becoming an aggregator in Africa as we build a global payment gateway, provide trade finance support and correspondent banking across Africa’s key markets. We are diversifying our earnings away from volatile markets and orchestrating operations from the global payments gateway.”

Also, Access Holdings’s commitment to delivering services to at least one in every two Nigerians has been reaffirmed as it inaugurated and empowered 100,000 Access Closa Agents to provide more than banking services to existing and new customers across the nation.

With the number of Access Closa Agents spread across the 774 local government areas in the country, the bank has significantly grown access to finance and banking services to millions of previously un(der) banked Nigerians, while providing alternate streams of income for MSMEs, promoting financial literacy, and also advancing its ambition to bank one in every two Nigerians by 2025.

According to the bank, the exponential growth of its agent network was in fulfillment of the its promise to ensure easier and safer access to financial services for every Nigerian.

“As a bank driven by innovation, we must deliver better outcomes for customers in terms of speed, security, and service to enhance customer experience in all the locations that we operate.

$300m capital to drive African expansion

Access Bank, the commercial banking unit of Access Holdings Plc, received $300 million as capital investment from the parent company to further its expansion move within Africa, the bank announced.

“The investment takes the form of a Tier 1 capital qualifying mandatory convertible instrument and is expected to improve the bank’s shareholders’ funds and total ratios,” Access Holdings said in a statement.

The Central Bank of Nigeria has endorsed the investment, it added.

Access Holdings is expanding into new markets on the continent and branching out into new businesses permitted by its holding company licence in pursuit of its strategy to be “Africa’s gateway to the world.”

The group is nursing the hope that its newly launched payments subsidiary Hydrogen will be able to settle one out of every three transactions that come into the continent in the nearest future.

“As a leading financial institution in the continent, we remain foresighted in our approach to our growth and capitalisation needs,” Wigwe said.

“This investment is a capstone initiative following the US$500 million Additional Tier 1 capital raised by the Bank in 2021 and advances its vision to be the World’s Most Respect Bank.”

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Over the years, the role of women in the marketing and communication industry has evolved beyond administrative and support positions to C-Suite and core function roles. For example, in advertising, women have created some of the most iconic and memorable campaigns and have also been instrumental in driving the growth of social media platforms, which have become essential tools for business communication.

Instagram, one of the most popular social media platforms, is proof of women’s invaluable contribution to the industry. The app’s first employee and head of marketing, Eva Chen’s close work with influencers and brands, showcased the platform’s visual storytelling capabilities and established it as a vital tool for business growth. Fashion and lifestyle platform Pinterest also benefited from its first employee and creative director, Sahil Lavingia, who shaped Pinterest’s user experience into its current appeal.

These are only a few examples of women who have displayed exceptional prowess in marketing. Here are ten more examples of marketing’s strongest African voices in no particular order.

Sola Obagbemi, Corporate Communications Manager, Anglophone West Africa at Meta: Sola Obagbemi is currently the Corporate Communications Manager for Anglophone West Africa at Meta (formerly called Facebook with over 12 years of experience in brand strategy, communications, advertising, digital marketing, media management and growth marketing, she oversees the brand’s communications across Nigeria, Ghana, Liberia, Gambia, and Sierra Leone with great expertise and commensurate results.

She also worked as the Senior Communications Manager for Africa at Andela, leading strategic personal relations efforts that increased the brand’s visibility in her first six months of employment.

Motunrayo Babalola, Country Marketing Lead, Ekaterra

Motunrayo Babalola is a marketing professional with over 12 years of experience in the FMCG sector. She currently serves as Country Marketing Lead on the leadership team of Ekaterra Plant Based Limited. Her core expertise is in brand development, sales management, brand communication, team building, marketing strategy development and execution, including customer-brand relationship management.

She launched Lux Even Complexion with a high brand growth rate in 2019/2020 and Lifebuoy sanitiser with an outstanding result of a 25% increase in turnover rate. She also developed the framework for Unilever Nigeria’s Supermarket business in Lagos, with a 5% increase in the company’s turnover.

Adedoyin Jaiyesimi, Co-Founder, The Comms Avenue

Adedoyin Jaiyesimi is a marketing communication professional with over 15 years of experience. She is the Co-Founder of The Comms Avenue, a public relations and communications agency that focuses on creating and executing strategic communications plans for clients across various sectors.

She has successfully executed projects in various companies, including; the Bill and Melinda Gates Foundation, Specta by Sterling, Fountain of Life Church, and Heritage Bank. An adept communication expert, she runs training sessions for communication professionals and employees. She also lectures part-time at the University of Nairobi CIPR UK programme.

Onyebuchi Allanah, Senior Brand Manager, Maltina

Onyebuchi Allanah is an award-winning marketing professional with over six years of experience in merchandising, media buying, product launch, consumer and market intelligence, and media strategy. As the brand manager of Star Radler in 2021, she successfully planned the brand’s relaunch and catalysed the corresponding increase in the brand’s reach and revenue, as evidenced by an over 800%  boost in social media followership within a week of the brand’s relaunch.

With a vast experience in product innovation and driving brand equity and growth in Nigeria and DR Congo, Onyebuchi is highly adept at reviving and growing brands in the FMCG industry, creating new territories in white spaces and winning in channels by delivering successful customer experience across several markets in West and East African countries. Currently, she is the Senior Brand Manager of Maltina, one of Africa’s iconic malt drinks under Nigerian Breweries, where she develops and implements cutting-edge marketing strategies.

Bidemi Zakariyau-Akande, Founder/ CEO, LSF PR

Bidemi Zakariyau-Akande is the founder and CEO of LSF PR, a full-service public relations agency in Lagos, Nigeria, where she sets and oversees overall business goals and strategies. With over a decade of experience in the PR industry, Bidemi has worked with some of the biggest brands in Africa, including Uber, Heineken, and British Airways.

Adia Sowho, Chief Marketing Officer, MTN Nigeria

Boasting over a decade of experience in the telecommunications sector, Adia Sowho is an experienced marketing professional. She is currently the Chief Marketing Officer of MTN Nigeria, one of the largest telecommunications companies in Africa. Before this, she was the VP of Growth and Managing Director in Nigeria for Migo, a machine learning-powered instant credit platform. She grew the company’s user base to one million users and successfully led its expansion to Brazil. She also worked as the Director of Digital Business at 9mobile (formerly Etisalat Nigeria), where her partnership with startups led to the delivery of mobile content, advertisement and financial services to the company’s 23 million users.

Dolapo Otegbayi, Director of Specialised Nutrition, Friesland Campina

Dolapo Otegbayi is an experienced marketing professional with over a decade of experience in the FMCG sector. With a wealth of knowledge and expertise from being in the industry for over 18 years, she is currently the Director of Specialised Nutrition at FrieslandCampina, one of the largest dairy companies in the world, where she designs and leads marketing strategies for the company.

As the Head of Shopper Marketing Modern Trade and Alternative Trade Business, she initiated and successfully executed the Peak-My-Town project, which generated a 20% increase in revenue for the channel. In addition, her product strategy led to the launch of the Evaporated Milk in sachets for the first time.

Biodun Adefila, Chief Operating Officer, SO&U Limited

Biodun Adefila is a marketing communication professional with almost 20 years of experience in advertising and marketing. She is currently the Chief Operating Officer of SO&U Limited, one of the leading advertising agencies in Nigeria, where she designs and implements business strategies, policies, plans and procedures for high-impact projects, which have yielded an 18% growth increase for the company.

She is a strategic business leader with decades of experience in brand management, business process improvement, strategic planning, and business development.

Tola Elatuyi, Marketing Director, Sub-Saharan Africa, Pladis Global

Dr Tola Elatuyi is a marketing professional with over 20 years of experience in the FMCG industry. She is a seasoned professional with solid management experience across key markets and industries, working in a high matrix structure. At Unilever, where she held the post of Trade Category Manager in 2012, she developed the channel’s vision, standards and strategy to allow for a seamless triumph of the fusion of marketing and sales at the critical point of purchase.

In 2015, as the Marketing and Activations Lead in West Africa, she developed the best-in-class marketing communications plans, digital marketing and E-commerce, driving market share and doubling digit growth with a proven record of scalable and repeatable success models in  Marketing Mix Management.

Ediri Ose Ediale, CEO/ Executive Director, Advertisers Association of Nigeria

Ediri Ose Ediale is a seasoned expert in marketing and communications. With over a decade of experience in the industry, she has displayed prowess in media outreach strategies and creating and implementing product announcements, which she did while she was the Head of Corporate Communications at Capital Express Insurance in the early years of her career. She is currently the CEO/ Executive Director of the Advertisers Association of Nigeria. In addition, she is skilled in marketing management and digital strategy.

Women have demonstrated their dedication and capability and have played a pivotal role in shaping the marketing and communications industry, which has yielded significant results and improvement. This remarkable achievement deserves commendation and recognition.

The post Women’s impact on the Marketing & Communication Industry: Top 10 trailblazers making waves appeared first on TheBlast NG.

By Akpan Essiet

Governor Udom Emmanuel of Akwa Ibom State is unarguably one of the best governors in Nigeria in the last 7-8years in terms of delivery of dividends of good governance in every true sense of it. He has redefined “great performance in public office”, and has raised the bar when it also comes to preservation of public trust, probity, accountability and dedication to service.

In the last 7-8years, the good people of Akwa Ibom have been living in the state one would have imagined only existing on 3D prototype design and in their imagination with an extensive road network connecting towns, industries springing up all over the state, youths gainfully engaged and employed, and the flag of Akwa Ibom being flown all over the country by its’ Ibom Air.

A few highlights of the Udom Emmanuel’s administration which upped the standard of good governance and established him as the best in the country includes projects like the Ibom 3,000 project which was a demonstration of the much-needed  support and development for SMEs in the State as 3,000 youths from the 31 Local Government Areas were trained on improvement of their capacities in diverse vocational, technical, entrepreneurial and managerial skills in oil and gas sector.  Similar efforts were made in Agribusiness, ICT and SMEs to enable them secure gainful employment and create jobs .

This was followed with another batch of 8000 indigenes trained for the same purpose in a preparation for the industrialization of the State. The ICT training laid emphasis on digital acquisition required in the 21st century such as Coding, software architecture and engineering, and android engineering which encapsulates SOLID principles, writing clean code, application architecture and testing. Data-structures and Algorithms which are the needed skills set for the artificial intelligence driven future.

The Jubillee Syringe Manufacturing Complex, where many young people operating many equipment and machines and not as casual workers. I was told most of the workers and people undergoing training in maintaining, repairs and servicing of those machineries are youths from the host communities. This will enable them function well after the knowledge transfer and get gainful employment with the company. There is also Kings Flour Mills, where except the “Miller” who is Turkish, all other operators are Akwa Ibom youths and a process in place where youths of the state are undergoing training on acquiring the special skills towards being a miller.

The Dakkada Industries Limited where production of toothpick, plastics and tissue paper are done by youths of the State under the supervision of various technical partners, products from this place are of national and international standard. Production was later expanded just to meet up with the demands for their products and this translated to more jobs and Akwa Ibom youths with specialized training.

The skyline of Uyo will never remain the same again. The Dakkada Towers which many believed was owned by a multinational oil company because of the sheer size of the project is surely going to be the first of more to come. All the aforementioned policies and projects are things an average Ibomite read about and hoping to behold one day in his or her state.

Now it has happened, what is next?

There is always that sense of lack of motivation after satisfaction and fulfilment, especially when the ultimate may seem to have been achieved, but there is always need to sustain whatever greatness that has been achieved and also improve on it. There is always room to better the best.

I dare say Ibomites may have felt there could be nothing better or beyond the “Transformation Era” of former Godswill Akpabio. Alas, they were quick to soon realise that assumption was wrongly premised as Udom’s emergence on the scene has set the pace and made a very valid case for bettering the best which is what the ambition of Pastor Umo Eno represents to the good people of Akwa Ibom.

It will amount to stating the obvious that he (Pastor Eno) tick all the boxes to inspire the sense of déjà vu among Ibomites. A cursory assessment of his credentials and his proposed policy thrust which will form the essence of the social contract he is entering with the people of the state come May 29 2023, one will be buzzing with confidence and convictions that better times lies ahead.

His ARISE agenda which is a detailed document most certainly is complimentary to the Dakkada vision which would continue to advance the aspirations of a further progressive Akwa Ibom State. This is naturally expected as he has been a member of the team and the administration which conceived and has advocated the culture of Ibomites to greatness. With the ARISE agenda, Uno most certainly tickles the imagination, stirs aspirations and increases the expectation of people of the State as many expect it will translate not just into further improvement of their individual lives.  But also the collective advancement of the state’s socio-economic status and fortunes.

The promise to improve education through increased enrolment, improved teaching aid, improved condition of service, also on health and infrastructure with the promise to do more is an indicator that the best Ibomites are experiencing is about to get better. The projects and achievements, which brought the state to national reckoning is set to get bigger without a doubt.

One may ask on what is this conviction premised to which I say, my conviction is emboldened by the antecedents and demonstrated capacity of Umo Eno. His well articulated intentions to diversify the state’s economy, expand the revenue base, ensure financial stability, and also create income and opportunities which will in turn reduce poverty in the state. His vision to hasten the industrialisation vision of the state and ensure a creation of massive variety of Akwa Ibom brands will also attract increased foreign direct investment and also increase the Gross Domestic Product of the State.

There is also a great vision to bring governance closer to the people and more efficient through the promotion of e-governance enhanced workers’ welfare and public service excellence. This will be achieved through good governance practices with promotion of transparency, accountability, consultative, and an all-inclusive government in line with the values, character and mission of Pastor Eno.

His desire to create an enabling environment for business to thrive as well as wealth creation will support the growth of micro, small and medium scale enterprise. Ibomites are not just about to experience a new height of good governance, they will also benefit directly as there will be an evident rise in households’ income across the state. Pastor Eno has promised the state will not be left behind in the race for Metaverse and AI (Artificial Intelligence) as there will be massive investment into the ICT sector to produce a population competitive for the future in the horizon.

Trust me, when Pastor Umo Eno is voted into office and done with all these plans, governance witnessed in the last 7-8 years which is considered the best across the country would could only get better.

Akwa Ibom is set to get better.

Pastor Umo Eno is out to better the best on ground for the good and benefits of the people of Akwa Ibom.

The post Pastor Umo Eno: Bettering the best in governance  appeared first on TheBlast NG.

The redesigning of the naira by the Central Bank of Nigeria (CBN) presents diverse implications for the banking industry, businesses and economy. While it presents quick road to the adoption of e-payment services, it could lead to job losses in the banking sector, especially those that handle cash transactions.

The policy has seen drastic reduction of cash inn circulation from around N2.7 trillion to about N400 billion, and reduce cash transactions in banks.

The policy is also expected to put Banks Neutral Cash Hubs set up by the Central Bank of Nigeria and Bankers’ Committee to reduce cash management costs at risk.  

This development has led banks to begin quick review of their business model in line with new technological changes and CBN’s naira redesign and upgraded cash-less policies.

The cash-less policy which now limits daily cash withdrawal to N20,000 and ties such transaction to Bank Verification Number (BVN) means there will be less cash to handle in branches, putting the work of bank tellers at risk.

Financial sector status report said the new development could  lead to the scrapping of teller jobs in the next two to three years.

Already, banks are cutting down on bulk teller jobs, limiting cash handling to one or two tellers in every branch.

In a report titled: Repositioning for Relevance in a Competitive Environment former president, Chartered Institute of Bankers of Nigeria (CIBN), Uche Olowu,  had hinted that the business model of today’s banks is being challenged by technology.

He said that Artificial Intelligence and Robotics are changing the game in customer relationships and front office operations.

He said that jobs previously reserved for officers such as tellers may become obsolete adding that in the next two to three years, machines will be capable of performing approximately 30 per cent of the work currently done at banks.

He said that in recent years, banks have gone from investing in bank branches or other brick and mortar establishments to greater investments in financial technology (FinTech) and the relevant specialised human capital.

It was also noted that investment in specialised human capital is particularly significant given the domination of technological solutions which are taking over human jobs.

According to a report by the McKinsey Global Institute, 60 per cent of all occupations have at least 30 per cent of activities that are technically automated.

Furthermore, the report states that roughly one-fifth of the global workforce will be impacted by the adoption of Artificial Intelligence (AI) and automation and by 2030.

It is also estimated that robots will replace 800 million workers across the world.

The World Economic Forum, further projects that by 2055, nearly half of all work in all occupations would be automated. Additionally, the PricewaterhouseCoopers (PwC) states that the effects of automation would not only alter the jobs available to humans but also the perceived value of these jobs

“It is also pertinent to mention that the increasing competition in the digitised banking environment would no longer be between banks but with non-banking institutions. FinTech and big tech firms such as Google, Amazon, Facebook and Apple are now capturing more of the banking value chain.

Furthermore, payment service banking is set to further disrupt the banking industry. For example,  telecoms such as MTN and Airtel Nigeria had been granted licenses by the Central Bank of Nigeria.

PwC suggests that from 2025 to 2035, a market economy would readily exist without traditional banks,” he said.

Experts advise that  any bank staff who wishes to survive and thrive within the industry over the next 10 to 20 years must adapt and become relevant to the future of banking.

“Indeed professionals and would-be banking professionals must reposition themselves for relevance in the changing environment. Such statistics as stated above confirm that in the future workplace, we may not be competing for jobs with other humans but with robots,” they said.

In the age of digitisation it is important to stay relevant regardless of the cadre of employment you fall under. “Banking professionals must consistently keep in touch with current trends in their field of expertise and the impact such trends would have on your job role. Aspiring bankers are also expected to gain a full understanding of the emerging technical skills sought after in the industry. Constantly keeping tabs on trends and required skills would increase your value professionally and in turn your relevance,” they added.

For instance, the banking sector has undergone some changes,  will undergo added disruption.

There was previously nothing like  like the digital apps in use today, tomorrow we are certain of further disruption underlined by artificial intelligence, machine learning, robotics, big data analytics among others.

Banks are faced with growing technological changes and have had to respond through the adoption of and adaptation to potentially disruptive technologies in their business models and in their broad corporate strategies.

This is all in a bid to remain relevant, increase convenience and productivity and make banking simple for individuals and businesses alike.

Setbacks for Banks Neutral Cash Hubs

Also, the inauguration of Banks Neutral Cash Hubs meant to reduce costs and improve the efficiency in cash management value chain is also likely to ace major setbacks .

The cash collection centres, codenamed Bank Neutral Cash Hubs (BNCH), is expected to run on the technology deployed by the entities.

How this technology will work is stated in the guidelines for the BNCH released by the apex bank.

The regulator said the technology implemented by the BNCH must comply with the industry standards.

The BNCH, it said, will ensure that transaction information is transmitted. The technology deployed comprises a set of infrastructure modules that work with the platform provided by the Nigeria Interbank Settlement System (NIBSS) and that customers get value for transactions.

The CBN also directed that BNCH‘s payment instructions are executed, and  immediate reversal effected. Where there is a communication failure during a transaction, receipts or durable acknowledgements transactions must be generated.

Also, audit trail is maintained and made available on request while settlement information details are preserved for five years, and are made available via the Cash Activity Reporting Portal (CARP). (

The BNCHs are also required to put in place systems that address availability of services, data confidentiality and integrity, encryption of e-transactions.

Also to be addressed are customer accountability and non-repudiation of transactions, error messaging and exception handling, and the need to secure integration to the Cash Activity Reporting Portal (CARP).

The apex bank said the scheme would reduce costs and improve efficiency in the value chain.

“The financial requirements for an approval to operate as BNCH, which may be amended by the CBN as it deems necessary, include non-refundable application fee of N100,000; and non-refundable approval fee of N500,000.    ”The BNCHs are cash collection centres to be established by registered (licensed) processing companies or Deposit Money Banks (DMBs) based on business needs. They will be located in areas with high volumes of commercial activities and cash transactions. The hubs will provide a platform for customers to make cash deposits and receive value irrespective of the bank with which their account is domiciled,” the guideline added.

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