Sterling Bank’s N100bn commercial paper’ll boost market confidence

Sterling Bank’s N100bn commercial paper’ll boost market confidence

The registration of the Sterling Bank Plc’s N100bn commercial paper programme will boost confidence in the Nigerian financial market, according to FMDQ OTC Securities Exchange.

The CP, which was signed on the FMDQ platform, came barely after the listing of the Wema Funding SPV Bond.

This registration followed the due approval of the FMDQ Board Listings, Markets and Technology Committee and served to further instil confidence in the Nigerian financial market, given the current economic climate, the FMDQ said in a statement.

The statement added, “An FMDQ quotations service avails, among others, credibility for quoted CPs and global visibility via the FMDQ website and the FMDQBloomberg Trading System (E-Bond).”

Having successfully commenced and developed its listings and quotations process, FMDQ said it had contributed to the growth and competitiveness of the Nigerian fixed income market.

The firm added, “The timely and efficient registration of the Sterling Bank CP programme is a validation of one of the core mandates of FMDQ towards revolutionising the Nigerian debt capital market.”

THIS IS WHAT WENT DOWN AT THE 2016 TOUR OF TECH

The Tour of Tech 2016 took place from November 15-20 and included events such as the High Growth Africa Summit Speakers’ Dinner, 500 Startups Investors Dinner, GitHub meetups with the Lagos developers’ community and Fashion + Tech: A Night With Pioneers. Yvonne Wassenaar, CIO of New Relic (NYSE: NEWR), Grieg Coppe, CSO of Intuit, Monique Woodard, partner of 500 Startups, five GitHub employees, and a cohort of private investors participated in the tour.

These are the main highlights of the 6-day event:

High Growth Africa Summit

During Tour of Tech 2016, Ingressive launched High Growth Africa Summit, a two-day conference teaching African founders how to launch, scale, and fund their high growth African businesses. It is backed by Silicon Valley: Intuit, New Relic, Google Launchpad for Developers, GitHub, and 500 Startups, and convened 150 global investors and 350 tech founders.

The High Growth Africa Summit Speakers’ Dinner

The High Growth Africa Summit Speakers’ Dinner was an elegant dinner party hosted by Ingressive at the home of the American Consulate General in Lagos, Nigeria. The dinner party was in honour of the many esteemed and incredible guest speakers many of whom flew thousands of miles to attend the High Growth Africa Summit. It was a well-deserved celebration after an impactful and successful summit and a wonderful opportunity for guests to network and interact in a relaxed social setting.

The 500 Startups Investors Dinner

The 500 Startups Investors Dinner, co-hosted by 500 Startups and sponsored by Aluko & Oyebode at Sky Lounge Rooftop, Eko Hotel & Suites held. It was an informative and enjoyable evening that featured many passionate about the power of technology to transform African businesses and over 50 global investors focused on tech in Africa including our partner and special guest Monique Woodard. Monique Woodard, venture partner at 500StartUps and co-founder of Black Founders is currently leading the charge in the $25 million micro fund being raised by 500 Startups to make early stage investments in black and latino founders.

Fashion Meets Tech

‘Fashion + Tech: A Night With Pioneers’ was an exclusive evening for pioneers of fashion and investment. The evening featured a bohemian style fashion show sans the runway in which models will mingle with guests and showcase designers pieces like living art. Special guests attending the event this year included: Ugo Mozie, a high fashion designer and stylist for many A-list celebrity clientele including Beyoncé, Justin Bieber, and Pharrell; Monique Woodard, Founder of 500 Startups’ $25 Million Black & Latino Fund; and a few designers such as Tokyo James, Ayo Van Elmar, Virtue Clothiers, Oroma Cookey-Gam and Joko Edu. We addressed fashion trends and Nigeria manufacturing with those ready to invest and collaborate.

Tour of Tech has brought companies including Y Combinator (their investments include Airbnb, Dropbox, Stripe, etc.), 500 Startups ($200M leading global VC & seed fund with 1300+ startups under management), and Techstars (largest global incubator) to Nigeria to meet local tech ecosystem, then invest in deals.

GitHub and New Relic back Tour of Tech

GitHub hosted a meetup, sponsored by Cafe Neo, where they trained local developers and gave out free GitHub accounts and access to their training. Over 80 of Nigeria’s top developers joined the meetup.

The tour was a successful one. Both GitHub and New Relic backed Tour of Tech.

Monique Woodard of 500 Startups and Joseph Glickman of Glickman Family Trust are carrying out due diligence on several investment opportunities. Monique encouraged several to join 500 Startups next cohort. The Glickman Family Trust is in diligence with several agritech companies they seek to back.

GitHub has financially supported several local computer science training programmes including Imisi3D. There are also several business partnerships and non-public investments that were established out of the High Growth Africa Summit and Tour of Tech.

HOW COCOA FARMERS CAN UTILISE THE BANK OF AGRICULTURE’S LOANS

Apart from clean water, access to adequate food is a primary necessity for the world at large and agriculture is the hub of food production. However, the oil boom of the 1970s made the Nigerian government look away from the agricultural industry, with cocoa as its main cash crop.

But now, Nigeria’s dwindling oil revenue has caused the federal government and key stakeholders to rethink and re-strategise in favour of agribusiness. As part of efforts to bring Nigeria out of the current recession, Bank of Agriculture (BOA), has disbursed 21.5 billion naira to 107,200 farmers nationwide.

During the Agric-empowerment program which took place at Osogbo, the state capital of Osun, the Bank of Agriculture Zonal Manager, South-West Region, Mrs Idiat Folorunso announced the beneficiaries of the fund. The program was initiated by a leading traditional monarch in Yoruba land, the Ooni of Ife, Oba Adeyeye Enitan Ogunwusi, because of his dedication to cocoa revival in the western Nigeria.

Consequently, with cocoa farmers getting old, so are the trees and the youth are not being motivated enough to emulate the weak generation of farmers. Folorunso stressed that the bank will always encourage young farming entrepreneurs and that the initiative is created to foster food production towards promoting self-reliance for major agricultural products.

The need to boost cocoa production in Africa not only Nigeria is generating serious concern among the stakeholders in the cocoa industry and hence the need to organise various forums for stakeholders to look for a way of improving the productivity, competitiveness, market access.

To work towards an increasing agricultural productivity, farm land must be rehabilitated, varieties must be utilised to maximum and planting of shorter generation of trees to close the deficiency gap must be embraced.

For instance, Kip Tom, an Indiana farmer explains how technology has enhanced soil testing, the analysis of soil can tell the amount of fertiliser needed for a particular land of cultivation. Now, with a more modernised form, Tom says for effective productivity a consultant applies algorithms to soil testing in order to make proper corrections for years to come.

Farmers, who have access to funds, can afford to purchase high-quality cocoa plantlets. These helps farmers revitalise their crops with disease resistant and higher-producing trees.

Likewise, maximising available resources, over a three-year period, a typical cocoa farmer will be able to double her farm income and even triple it in the 4th – 5th year.

Current productivity levels are simply not enough to support the cocoa farmers in order to make future provisions for their families. However, farmers can begin to reinvest in their own farm and build them to their full potential.

Now, to make an effective plea, farmers with the purpose of enjoying better bargain for their products should have easy access to proper allocation, with the Bank of Agriculture loans.

Above all, to ensure that the country’s cocoa remain competitive alongside other cash crops like coffee, rubber and oil palm farmers need better propagation technologies and improved varieties capable of withstanding today and tomorrow’s threat.

However, Oba Ogunwusi emphasised that strong partnerships needed to be put in place to raise the price determinant of cocoa for farmers and not only for the end users of cocoa.

Therefore, the marketing board for cocoa should be re-established so that farmers can have direct access to multinational and indigenous companies that make use of the crop.

Although, the Bank of Agriculture’s Anchor Borrowers Program (ABP) is the most recent scheme that provides support through the supply of inputs and technical advice to farmers, another 40 billion naira has been put away for special purposes to ensure proper implementation of the program nationwide.

AFRICA’S RICHEST MAN, ALIKO DANGOTE, IS THE SECOND MOST POWERFUL BLACK PERSON IN THE WORLD

AFRICA’S RICHEST MAN, ALIKO DANGOTE, IS THE SECOND MOST POWERFUL BLACK PERSON IN THE WORLD

There are nearly 7.4 billion people on planet earth, but Aliko Dangote is one of the 74 men and women who make the world turn”, says Forbes in their newly released World’s Most Powerful People list. He is regarded as Africa’s wealthiest man with a current net worth of $12.2 billion.

Forbes recently ranked Aliko Dangote as the second most powerful black person in the world after Barack Obama (#48), Africa’s second most powerful person, and the 68th most powerful person in the world. The accolade to the business tycoon is unending as his swaying influence in Africa is unmatched.

Coming second in Africa after Egyptian President, Abdel Fattah el-Sisi, the Nigerian billionaire has been a dominant force to reckon with in Africa’s development as his investments serve as a decision tool for foreign investors.

The testament to the billionaire’s power was felt in Tanzania in November as one of his factories, Dangote Cement in Mtwara temporarily shut down as a result of high operational costs and non-fulfillment of obligations by the Tanzanian Government. It took President John Magufuli himself to instigate a timely intervention, which if delayed, could have led to a loss of jobs, and shattered investors’ confidence in Tanzania.

The billionaire through his group–Dangote Group–has a presence in 16 countries in Africa.

Some highlights of his achievements this year include:

In February, Dangote announced his “rice for all” project in Nigeria. The project aimed at creating self-sufficiency in rice production in Nigeria. The business mogul stated that his group was starting an outgrower scheme by partnering with 5,000 local farmers and 20, 000 hectares for rice cultivation. The project has commenced in Jigawa state. His Group of companies is working with 5 other Nigerian states to expand its rice production by developing 150, 000 hectares across the country within in the next few years.

In June, Dangote Group of Companies, owned by the Billionaire acquired equity in the African Export-Import Bank (Afreximbank). He stated the reason for making the investment was to promote regional integration and intra-African trade.

Aliko Dangote was appointed this year alongside Jay Ireland, president and CEO of General Electric Africa as the Co-Chair of US-Africa Business Centre Board of Directors.

The business mogul is currently building the continent’s largest refinery and petrochemical company. The refinery is expected to have the capacity to refine 650, 000 barrels per day and create 235, 000 direct and indirect jobs.

DRONES ARE THE FUTURE,BUT AFRICA NEEDS TO CONSIDER THE RISKS OF COMMERCIALISING THEM

Wether used commercially for industrial inspections, aerial photography, border patrol, emergency deliveries and crop surveys or recreationally by millions, drones or Unmanned Aircraft Systems (UAS) have the potential to become a multi-billion dollar business and deliver problem-solving technologies across numerous industries. However, more drones in the skies could also raise a number of new safety concerns, ranging from collisions and crashes to cyber-attacks and terrorism. To ensure safe UAS operations, it is necessary to train and educate operators of drones as well as having a systematic registration.

“There have already been enough incidents and near-misses to date involving UAS to generate concern that the likelihood of collisions and other loss events will grow as numbers multiply,” says James Van Meter, an Aviation Practice Leader at Allianz Global Corporate & Specialty (AGCS).

What are drones made for?

Drones or UAS are made for menial or dangerous tasks such as preventing work accidents like employees falling off the roof on building inspections. UAS also have the potential to both solve problems and save costs in future across a number of other industries, throughout the developing world and in disaster relief situations. Emerging uses include delivering blood and vaccines to remote locations in Africa, fighting grass fires, pest control and even delivering pizza and coffee.

“UAS in commercial use will increase greatly in the next decade because they are effective at carrying out menial or dangerous tasks,” said Thomas Kriegsmann, Senior Underwriter General Aviation, AGCS.

Insurers are also increasingly utilising UAS to make the risk assessment of construction or infrastructure projects easier and safer. Claims handling can also be made quicker and more effective by using drones to survey loss damage after major catastrophes.

The risks that comes with drones

There are several risks that come with drones which include collision and loss of control. A mid-air collision could happen if the pilot cannot see and avoid manned aircraft in time, especially those that normally fly below 500 feet, such as helicopters, agricultural aircraft and aircraft landing or taking-off. Reports of UAS sightings from pilots, citizens and law enforcement have increased five-fold over the past year in the US while there have been a number of near-miss incidents around the world including in China, Dubai, and the UK.

Loss of control can result from a system failure or if the UAS flies beyond signal range. AGCS sees a major risk in loss of control from frequency interferences and other factors. A pilot losing control of a UAS during a building inspection could result in a total liability easily in excess of $5 million, if the UAS crashed into a truck or shop, for example. Even a small UAS could cause as much as $10 million in damage alone when hitting an engine of an airplane.

According to Delphine Maidou, CEO of Allianz Global Corporate & Specialty Africa, an emerging peril is the potential terrorist threat from UAS targeting critical infrastructures such as (nuclear) power stations or live events. Other scenarios include hackers taking control during a flight, causing a crash, or hacking the radio signal and transmitting valuable recorded data from the aircraft from another control station (“spoofing”). There are also many public concerns over UAS around privacy issues.

In order to save the public from the risk of a mid-air collision, as well as physical or property damage or injury to others, manufacturers, owners and operators of UAS, as well as businesses that sell and service UAS needs to look into working with an insurance company. So–called drone insurance is a fast-growing area of the insurance industry and different coverages are available, depending on the type of use.

“Whether you run a coffee shop or a truck delivery business you need insurance to run your business. Drones are no different,” said Van Meter.

According to AGCS, commercial operators of UAS will require at least $1 million of insurance coverage to protect against risk exposures. Assuming growth projections for the commercial industry materialise there is potential for the drone insurance market to be worth over $500 million by the end of 2020 in the US. Globally, its value could approach $1 billion.

 

Nigeria’s economic development threatened by undeveloped financial sector

Nigeria’s economic development threatened by undeveloped financial sector

Nigeria’s relatively underdeveloped financial sector has been cited as one of the factors threatening the on-going efforts by the President Muhammadu Buhari led administration to move the nation’s economy away from oil dependence.

At the moment, the nation’s financial sector is focused more on consumer loans, with short tenor, rather than producer loans required to finance the diversification initiative of the government.

Muhammadu Sagagi, a Kano based economist, who made this observation, in Kano, noted that with the situation at hand, entrepreneurs in the country may not be able to finance long-term investment.

According to him, comparatively, Nigeria which is currently adjudged the largest Economy in Africa, has a small ratio of domestic credit to GDP, when compared with Africa’s second biggest economy, South–Africa.

“Nigeria has a relatively underdeveloped financial sector –with a small ratio of domestic credit to GDP compared to 80% in South –Africa, 40% in Brazil, 30% in Russia and slightly more than 20% in Indonesia and Kenya, respectively.

“Major issues affecting the development of the sector are: high cost of credit, excessive collateral requirements which in the country today is about 170 of loan, and focus on consumer loans, with short tenors, rather than producer loans”, he explained.

Sagagi added that less than 30% of Nigerian firms have a loan or overdraft facility from a bank, compared with 60 % in South Africa, and over 92 % in Brazil.

On the variation of loan disbursement in the country, he revealed that Lagos state, Nigeria’s economic capital receives 66% of total loans disbursed by banks to firms in the country. Other states in the South receive 33%, Kano and Kaduna 18%, and other states in the North receive 11% of these loans.

The increase in production cost being experienced by firms in the country as well as the stifle performance of markets, Economists observe, are undermining the incentives to take risk and invest in capital.

Bank of Industry (BoI), Benue Govt Seal N2bn MSMEs Financing Agreement

Bank of Industry (BoI), Benue Govt Seal N2bn MSMEs Financing Agreement

The Bank of Industry (Bol) and the Benue State government have launched a N2billion Micro Small and Medium Enterprises (MSMEs) development fund to boost the entrepreneurial potentials of citizens in the state.

Under the financing model, both parties will contribute N1billion each for on lending to mainly businesses that have high employment generating potentials and value addition to local raw materials.

Benue State Governor, Dr. Samuel Ortom expressed satisfaction over the initiative and commended the leadership of the bank under the acting Managing Director/Chief Executive, Mr. Waheed Olagunju for his foresight and remarkable strides since assuming office.

He urged President Muhammadu Buhari to appoint the acting BoI boss as substantive MD, noting that having worked in the bank for over two decades, he is more than qualified to lead the develop finance institution.

Nevertheless, Ortom appealed to entrepreneurs in the state to take advantage of the loan facilities, insisting that it would not be disbursed along party lines.

He said only those who have viable business proposals in the areas where the state currently has a comparative advantage would be given the financing support.

Meanwhile, Olagunju said the intention in the state brought the volume of MSME Funds being managed on behalf of 21 state governments to N18.3 billion.

Four out of the 21 states that had enrolled in the scheme, joined in the last eight months when the MD took over the office.

He added that the fund would help entrepreneurs in the state add values to their agricultural produce and boost employment generation potentials.

He urged the governor to create industrial parks where beneficiaries of the loans would be able to leverage on infrastructure facilities to reduce operation cost.

According to him, “I suggest the governor establish industrial parks, at least, one in each senatorial district where amenities will be provided and where other infrastructure will be provided. They will share the facilities.”

Commercial banks not friendly to agribusiness — NAGB

Commercial banks not friendly to agribusiness — NAGB

Deposit Money Banks do not lend to farmers at affordable rates because they are not in tune with agricultural demand across the country, the Nigerian Agribusiness Group has said.

According to the NAGB, commercial banks in Nigeria have a different approach when it comes to lending money for agriculture and should not be forced to lend to farmers at low-interest rates.

The National President of the NABG, Mr. Sani Dangote, said instead of forcing the DMBs to lend to farmers, the Federal Government should strengthen its Bank of Agriculture and recapitalise the institution in order to effectively serve the sector.

Dangote, who spoke at the 2nd Annual General Meeting of the group in Abuja, explained that based on the way the DMBs were structured, it would be difficult for them to lend effectively to farmers.

According to him, the banks should be left to fund the importation of heavy equipment and other similar inputs where they could get back their money within six months to one year.

“That is where their expertise is and I think we should leave them. Trying to bring them into agriculture will be a failure because their mindset is not in tune with farming and processing. So, there is no need forcing a marriage between the two. It won’t work,” Dangote said.

He said the NABG had emphasised the need for the government to recapitalise the BOA and make it a specialised bank for the sector to provide funding for agricultural produce on a long, medium and short-term basis.

He said the Bank of Industry should also be strengthened to work with the BOA in the aspect of processing agricultural produce.

Dangote said the group had also proposed that the government should segment funding of the sector to low, medium and high-risk areas.

He explained that high-risk areas would include the primary production of agricultural produce; medium would include agro processing, while low-risk would deal with the importation of fertiliser or agricultural equipment.

The NABG president also proffered measures through which the government could affectively tackle smuggling.

He said, “Government should look at areas where the country has local capacity and incentivise them. Once this is done, smuggling will become more difficult because there is local capacity. And within few months or a year, the locally produced products will have considerable edge over imported ones and then the issue of smuggling will fizzle out.”

Dangote observed that government did not lack ideas, rather it lacked the will to execute ideas, adding that the private sector was the execution arm.

“So, if the government can come with the right policies that are suitable to stakeholders and the private sector, it will be able to achieve its goals,” he said.