Business News
#PMBMidterm: Here is a snap summary of how the banking industry has fared?
Not as well as expected
Nigeria and Nigerians are today marking the second year anniversary of the Buhari administration and scorecards are coming in from different sources on almost every aspect of the economy. However, one of the most critical sectors of the Nigerian economy remains the banking sector. How has this sector fared during the 2 years of President Buhari’s administration? Vanguard reports on the performance of a few of the industry’s indicators within the past 2 years.
- Asset Growth: According to the Central Bank of Nigeria, the industry’s regulator, total assets/liability of banks rose to N32.1 trillion in February from 28.4 trillion at end of June 2015 while banking industry assets and liabilities grew by 14.2 per cent per cent, as against average annual growth rate of 25 per cent.
- Public Patronage: Nigerians increased their patronage of commercial banks significantly during the period under review as the Nigeria Interbank Settlement System, NIBSS, revealed that 18 million new bank accounts were opened increasing the number of bank accounts to 98 million by the end of March 2017, from 80 million as at the end of June 2015. The number of active bank accounts also rose by almost a quarter to 67 million.
- E-payment: Probably the section witht the highest growth, the CBN revealed that the volume and value of epayment transactions in 2016 shot up by 132 per cent and 82 per cent respectively, to 942 million transactions worth N71 trillion
- Non-performing loans: As expected, the economic recession coupled with the depreciation of the Naira has meant that the number of non-performing loans has soared. The value of bad loans increased by 234% to N2.1 trillion at the end of December 2016 from N628.54 billion as at June 2015, the worst ever in the industry’s history. The effect of this was also seen in the NPL ratio as it increased to 14% from 5%.
In summary, the 2-year analysis does not give much to cheer about for the banking industry as the economic setback has meant that growth has been severely impeded while the risks associated with non-performing loans are posing more problems than previously anticipated. However, the silver lining in the cloud remains the potential for growth in the retail sector as more Nigerians are achieving financial inclusion while e-payment is now becoming more of a norm than a rarity. This avenue could provide a channel for growth in the industry.
Coronavirus
Nigerian Governors who have tested positive for Coronavirus
Six Nigerian governors have contracted the novel coronavirus, but some have recovered.
On Saturday, July 4, Ebonyi State Governor, David Umahi announced that he had tested positive for COVID-19. This makes him the 6th Governor to have tested positive for the virus that has infected over 11 million and killed no less than 532,000 people globally.
Kaduna State Governor, Nasir El- Rufai was the first governor confirmed to have been infected and recovered in April.
Bauchi State Governor, Bala Mohammed, was also infected in March and was reported to have recovered on the 9th of April.
Oyo State Governor, Seyi Makinde, announced that he tested positive on 30th, March, 2020 and his recovery was reported on the 5th of April.
Ondo State Governor, Rotimi Akeredolu, tested positive last week on June 30th and Delta’s Ifeanyi Okowa announced that he and his wife had tested positive on July 1.
So far, the governors who have tested positive for COVID-19 are:
1. Nasir el-Rufai
2. Bala Mohammed
3. Seyi Makinde
4. Rotimi Akeredolu
5. Ifeanyi Okowa
6. David Umahi
Energy
BUA cement to build power and cement plants in Adamawa state
BUA Cement’s newest plant in Sokoto is expected to be operational in 2021.
BUA Cement has announced plans to build a 50 megawatts power plant and 3 million metric tonnes cement plant in Lamurde and Guyuk local governments in Adamawa States.
BUA Cement which is Nigeria’s second-largest cement producer by volume with plants in Sokoto and Edo States, with the projects wants the boost the country’s power supply and increase the local production capacity for cement.
This was disclosed by the Chairman of BUA Cement, Abdul Samad Rabiu, in a press statement on Sunday, July 5, 2020, in Lagos.
The BUA Cement Chairman who led the company’s management team on a courtesy visit to the Adamawa State Governor, Ahmadu Umaru Fintiri, after preliminary findings showed that Guyuk and Lamurde areas had quality limestone.
According to Rabiu, “Preliminary findings show that the two local governments of Guyuk and Lamurde are reputed to have good quality limestone deposits and BUA Cement is ready to begin the investment in the state.
“BUA will use new technologies to supply power to the proposed cement plant and communities of Guyuk and Lamurde in addition to providing three thousand direct and five thousand indirect jobs.
“Guyuk Cement Plant will be a major investment in the North-East by BUA, while we solicit the support of Gov. Umaru Fintiri to set up the factory in Guyuk.”
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He added that while the company has invested billions of dollars in various sectors across Nigeria, it has taken a decision to source its raw materials locally and therefore urged the Adamawa state government to support BUA to actualize the GUYUK Cement project.
The Adamawa State Governor, Ahmadu Fintiri, in his response assured the Chairman and management team of BUA, that the state government would provide all the necessary support and make available whatever was needed to make the projects a reality.
BUA Cement’s newest plant in Sokoto is expected to be operational in 2021 and expects that its total production capacity will get to 14 million metric tonnes of cement per annum upon the completion of Guyuk Cement Plant.
BUA Cement has been having a running battle with Dangote Cement over the ownership of 3 mining sites in Obu and Okpella in Edo State. The mining sites have been subject of legal tussle between the 2 biggest cement companies in the country.
Coronavirus
GSK, Sanofi to agree $624 million deal with UK for COVID-19 vaccine
Both GSK and Sanofi said that they are placing more priority on quality rather than speed.
British and French pharmaceutical giants, GlaxoSmithKline (GSK) and Sanofi are close to reaching a $624 million (500 million pounds) deal with the United Kingdom (UK) government for the supply of 60 million doses of coronavirus vaccine as many countries move for possible COVID-19 treatments.
Reports suggest that the UK was considering an option to buy the vaccine should the human trials, which are due to commence in September 2020, turn out successful.
The funds would be paid in stages as the vaccine progresses, with the final payment made on delivery.
In order not to be left behind, the UK government has been engaging a wide range of companies both at home and abroad to negotiate access to vaccines. They said that the right announcements of these arrangements will be made as and when agreements with any of these companies are finalized.
The British business ministry’s spokeswoman, who confirmed that the ministry is handling Britain’s supply of potential COVID-19 vaccines, said talks were going on with different parties about access to possible vaccines but didn’t confirm if GSK/Sanofi project was one of them.
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According to the ministry official, ‘’The Government’s Vaccines Task Force is actively engaging with a wide range of companies both in the UK and abroad to negotiate access to vaccines.”
“Appropriate announcements of these arrangements will be made as and when agreements with any of these companies are finalized and signed.”
Sanofi is presently working on 2 possible COVID-19 vaccines, one of which uses an adjuvant made by GSK to potentially boost its efficacy. The timeline for its clinical trials is behind the likes of Moderna Inc, the University of Oxford in collaboration with AstraZeneca Plc and an alliance of BioNTech and Pfizer Inc, whose projects all made headlines by moving to human trials as early as March.
Both GSK and Sanofi said that they are placing more priority on quality rather than speed in developing a vaccine.
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