In a recent report by the Gates and Melinda Foundation, 41% of women in Nigeria are entrepreneurs, compared to only approximately 10% in the US and 5.7% in the UK. The report further shows that Nigeria has the highest percentage of female business owners in the world. While according to Global Entrepreneurship Monitoring’s annual report, women outnumbered men in the entrepreneur space in countries like Ghana, Nigeria, and Zambia.
This trend is further emphasized by the reality that the average trader or store owner in Nigeria is more likely to be a woman than a man. Setting up a small business is more common for women in Nigeria than men. In some marketplace, there are more female traders than males.
For the pioneering female entrepreneurs in the country, the journey has been tough, but despite the rocky beginnings, their doggedness, dynamism, unparalleled energy and passion in the face of daunting odds, have made them remarkable role models for women and all classes of entrepreneurs across Africa.
On this week’s edition of founder’s profile, we take a look at one of Nigeria’s finest female entrepreneurs, Dr. Mrs. Stella Chinyelu Okoli, Founder of Emzor Pharmaceutical, and a woman who has not only engrained her name and company on the minds of Nigerians, but also carved a space for herself in history as a businesswoman of repute.
Early Life and Background
Stella was born in the ancient city of Kano, Northern Nigeria, in 1944 to the family of Felix Ebelechukwu and Margaret Modebelu from Nnewi, Anambra State.
She started her formal education in 1954 at All Saints Primary School in the industrial city of Onitsha, before proceeding to complete her secondary school education in 1964 at Ogidi Girls Secondary School (Ogidi is the birthplace of literary icon, Chinua Achebe).
Stella proceeded to the University of Bradford in the United Kingdom from where she obtained a Bachelor’s degree in Pharmacy. This academic achievement was followed by a M.Sc. in Biopharmaceutics which she obtained from the University of London, Chelsea College in 1971.
Stella started her career at the Middlesex Hospital as a Ward/ Clinical Pharmacist, and later had a brief stint as a Pharmacist at Boots Chemist, London.
On her return home to Nigeria, she worked at Massey Children Hospital, Lagos before she joined a pharmaceutical manufacturing company, Park Davies Nigeria Ltd (now Pharma-Deko Plc), as a medical representative and later as a sales manager.
Her venture into private business
In January 1977, Stella started Emzor Pharmaceutical with the initial name, Emzor Chemists Limited, as a small pharmacy retail shop in Shomolu, Lagos. The name was coined from her children’s names (Emeka, Uzoma, and Edward). By 1981, Stella’s entrepreneurial drive led her into the drug importation busines, where she imported both ethical and over the counter (OTC) drugs to meet the health needs of Nigerians. The small Emzor Chemist has since become one of the leading pharmaceutical companies in Nigeria, with over 50 products since its incorporation in 1984.
Ironically, when she floated the Emzor brand in 1977, not a few of her friends and colleagues wondered if she knew what she was getting herself into. They had wondered how she could survive the turbulent world of business, particularly manufacturing. But over 35 years down the line, Stella has not only proved the cynics wrong, but she has also emerged as one of Nigeria’s women billionaires in the business world.
Challenges while starting her business
According to Stella, one of the major challenges she faced while starting her outfit was the unfavourable government policies at that time which favoured foreign multi-national companies to the detriment of local companies.
According to her:
”There have been policies over the years that have favoured the trading multi-nationals, to the detriment and disadvantage of those of us who have invested in the development of the manufacturing aspect of the industry. They are foreigners and could divest, pull out their funds or go back home to their countries. I couldn’t go anywhere, hence, I was forced to do the best I could to ensure the quality and the growth of the industry was maintained. We just had to do our best the only way we knew how.”
She also identified double taxation, drug faking and unlawful importation of drugs into the country as major challenges faced over the years.
Her quest for knowledge
In her quest for growth and self-development, Stella attended several courses across the world, to broaden her knowledge and sharpen her leadership skill. Some of these include The Executive Management Programs for business owners at Harvard Business School, Boston (1997- 1999); implementing Strategic and Organisational Change at I.E.S.E. Business School, Barcelona Spain (1996); Chief Executive Program of the Lagos Business School.
She has also held several professional leadership positions which include Chairman of the Pharmaceutical Manufacturers Group of Manufacturers Association of Nigeria, member of Economic Summit of Nigeria and member of Health Matters Advisory Board of Nigeria. She served as a Non-Executive Director of Guaranty Trust Bank Plc from April 22, 2010, to July 24, 2014.
She was awarded Doctor of Business Administration (Honoris Causa) by Nnamdi Azikiwe University, Awka.
She is a recipient of the Member Order of Niger (MON), and Officer Order of Niger (OON) awards from the President of the Federal Republic of Nigeria, among others from several local and international distinguished groups.
After the unfortunate death of her son, Chike, in 2005, Stella started the Chike Okoli Foundation in 2006 as Non-Profit Organisation founded with the aim of fighting poverty and diseases by raising awareness on the Cardiovascular disease. She also runs the Chike Okoli Centre for Entrepreneurial Studies at Nnamdi Azikiwe University, Awka and has trained over 1,600 entrepreneurs/students in the science and spirit of entrepreneurship. It has also reached over 5,000,000 people across Nigeria on lifestyle interventions.
Dr. Stella married her late husband, Barr. Nnaemeka Okoli in 1970, with whom she had three children.
CBN adjust naira from N360 to N380 at SMIS
Reports reaching Nairametrics indicates the CBN has instructed bidders at its Secondary Market Intervention Sales (SMIS) to increase their bidding price to N380/$1 floor. The SMIS is the market where importers bid for forex using Letters of Credit and Form M.
According to our sources, the central bank informed banks that they will only accept bids from N380/$1 and above and no longer N360/$1 meaning those who bid lower will not get any forex allocation. Transaction success in this market is based on bids with those who bid higher than the floor as they are often in an advantageous position to secure forex.
This is essentially a huge attempt at unifying the naira and another adjustment of the exchange rate by the CBN. Recall the CBN Governor had informed investors that the bank will be unifying the exchange rate towards what is being traded at the NAFEX market where investors and exporters trade forex.
Nairametrics understands a circular has been sent to banks but we are yet to see it.
The SMIS window was created by CBN for importers to ease the pressure faced by businesses in the foreign exchange market through sales of foreign currency to authorized dealers (wholesale) or to end users through Authorized dealers. Businesses usually conduct their bid for forex at the SMIS window every two fortnight.
Currently, rates are set at a floor of N360/$1 and a ceiling of N385/$1. Thus bidders are expected to bid within that range. The higher the bid the better your chances at getting forex. It is unclear if there were any buyers that bid above N360 as we gather most of the importers were not informed of the changes in prices until today.
In February, the CBN has injected $218.41 million into the inter-bank retail Secondary Market Intervention Sales (SMIS). The dollar sold at the time meant for only agricultural and raw materials sectors, is in continuation of its intervention in the inter-bank foreign exchange market. In May, the central bank surprised the market by injecting estimated $90-$100million to the system.
Banks’ stakeholders express 4 main concerns bothering the sector right now
Banks are more concerned about the arbitrary nature and lack of understanding of the CRR debits.
Stakeholders in the Nigerian banking sector have raised concerns over four main issues that are threatening their investments at the moment.
These concerns range from the perceived “unorthodox monetary policy” moves of the apex bank, to FX liquidity issues, and of course the negative impacts of the COVID-19 pandemic.
These concerns were raised by the representative of some of the country’s top banks (Zenith Bank Plc, FBN Holdings Plc, United Bank for Africa Plc, Guaranty Trust Bank Plc, and Stanbic IBTC Holdings Plc) who recently attended Standard Chartered Bank’s 2020 Africa Investor’s Conference.
Focus on the issues raised
According to an executive summary of the conference which was made available to Nairametrics, banks’ stakeholders are especially worried about the following:
- The negative impacts of CBN’s constant CRR debits.
- The issue of naira’s liquidity management.
- They are also worried about FX liquidity (or the lack thereof), as well as the exchange rate unification at CBN’s different windows. When will the CBN resume dollar sales to foreign portfolio investors in the I&E window?
- Lastly, banks’ stakeholders are worried about COVID-19 and its impacts on earnings outlook, loan restructuring, and asset quality.
Part of the document containing the executive summary of the conference said:
“Banks are more concerned about the arbitrary nature and lack of understanding of the CRR debits as it makes it difficult for them to plan. Most are increasing steps to reduce balances with the CBN to limit debits. According to the CBN, CRR balances with the CBN currently stand at N10tn, 22% of sector assets and 50% of sector deposits. This is negative for NIMs, but funding costs have also declined, dampening the impact. Most of the banks have presented loans to the CBN for restructuring but are still engaging with clients. According to the CBN, loans presented by the sector for restructuring account for 32.9% of total loans, implying an overall weakness in sector asset quality, which we will likely not see in asset quality deterioration by FY20e given the regulatory forbearance.
“Sector NPL ratio currently stands at 6.6% vs. 11% in April 2019. Banks continue to maintain their position of following strict credit processes to drive credit growth, and not grow loans aggressively due to pressure from the loan-to-deposit ratio (LDR) minimum lending policy of the regulator.
“The improvement in oil prices has also reduced the concerns of asset quality deterioration in oil and gas exposure. Obligors in the sector have a breakeven cost price at the USD30/bbl level. Some banks expect further devaluation in the currency at the official window, given the depressed FX revenue outlook from
lower oil prices, but acknowledge the backward integration drive of government to improve corporates’ sourcing of raw materials locally to reduce pressure on FX due to imports.”
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Recall that there have been different reports and forecasts about the recent negative pressures on Nigerian banks and how their earnings/profitability might take a hit. And this is probably the first time these banks are acknowledging and speaking up about these changes. It is unclear, at this point, what the CBN might do to remedy some of the concerns raised.
In the meantime, you may download the full report containing the key takeaways from the conference by clicking here.
Big 4 earn N 7.53 billion auditing Nigeria’s biggest companies
A ranking of which audit firms earned the most of 25 of the largest companies on the NSE.
The four biggest audit firms in Nigeria PWC, KPMG, Deloitte, Ernst and Young earned a sum of N7.53 billion as audit fees from Nigeria’s most capitalized firms in 2019.
The fees were earned by auditing 25 of the largest companies on the Nigerian stock exchange. According to data from Nairalytics, a research arm of Nairametrics, the four firms increased their revenue by 5% compared to N7.17 billion generated from the same companies in 2018. Nairalytics based its analysis on quoted companies as they are by law required to publish their annual reports. Private companies are not mandated to publish their annual reports in Nigeria.
Competition between the big 4 audit firms as they are classified intensified in the period under review as our research showed that PWC carted with the highest share having earned auditing some of the largest companies on the stock exchange. KPMG was a close second and is often thought to be the largest audit firm in the country by revenue when you add several other privately listed firms that they audit.
However, in this analysis, we looked at figures contained in the audited accounts of the largest 25 companies on the stock exchange who make up over 80% of market capitalization. The companies include, Access Bank, GT Bank, Dangote Sugar, Dangote Cement, Zenith Bank, UBA, Guinness Nigeria, NB Plc, Intl. Breweries, BUA Cement, NASCON, Dangote Sugar. Others include, Fidelity Bank, Total Plc, Flour Mills Plc, Transcorp, Seplat, Sterling Bank, FBNH, Stanbic IBTC, Union Bank, Custodian Investment, Nestle, Unilever and FCMB.
PWC grew its income from N3.39 billion in 2018 to N3.59 billion in 2019. Its earnings are diversified across banking, brewery, consumer goods and cement sectors. The banking sector contributed a significant 91.8% (N3.29 billion) of its total income, one of which includes GT bank, the most capitalized bank on the stock market. The audit firm received N791 million from the bank representing 23% of total revenue earned by the firm.
PWC was on the books of MTN Nigeria in 2018, earning N271 million from auditing their accounts but has been replaced by another firm, Grant Thornton in 2019. However, it replaced that loss with a N389 million increase in income from banking between 2018 and 2019.
Banking – 2018 N2.9 billion/ 2019 N3.2 billion.
Brewery – 2018 N98 million/2019 N98 million
Cement – 2018 N39 million/2019 N114 million
Consumer Goods – 2018 N71 million/2019 N80 million
Telecomm – 2018 N271 million/ 2019 Nil
Companies – Access Bank, FBNH, GT Bank, UBA, Guinness Nigeria, International Breweries, BUA Cement, Dangote Sugar, NASCON.
The international audit firm grew its earnings by 5.5% from its 8 clients on our list from N2.37 billion received in 2018 to N2.51 billion in 2019. The banking sector remained a dominant source of revenue for the audit firms with about 76% of total revenue accrued. Zenith Bank paid KPMG about N892 million in audit fees in 2019 representing 35.6% of the audit firms’ earnings auditing top firms. Zenith Bank is also Nigeria’s most profitable bank. KPMG also audited a diversified list of quoted companies across the banking, cement, consumer goods and oil & gas sectors.
Banking – 2018 N1.8 billion/ 2019 N1.88 billion.
Cement – 2018 N128 million/2019 N128 million
Consumer Goods – 2018 N404 million/2019 N443 million
Oil and Gas – 2018 N36 million/ 2019 N46 million
Companies – FCMB, Stanbic IBTC, Union Bank, Zenith Bank, Lafarge, Flour Mills Plc, Unilever, Total Plc.
Ernst and Young came third on our list with a total earning of N746 million in 2019 from five companies on our tracker list. The five companies include, Fidelity bank, Sterling bank, Custodian Investment, Transnational corporation and Seplat Petroleum.
However, the firm’s earnings recorded a slight decline when compared to N752 billion recorded in 2018. This was due to the reduction in audit fees received from Seplat Petroleum. EY only has two banks on its list and this includes Fidelity and Sterling Bank both contributing a combined N414 million in earnings last year.
Banking – 2018 N413 million/2019 N414 million
Oil and Gas – 2018 N180 million/2019 N170 million
Others – 2018 N159 million/2019 N162 million.
Companies –Fidelity Bank, Sterling Bank, Seplat, Transcorp, Custodian Investment
The oldest indigenous accounting firm in Nigeria earned a total of N691.6 million in audit fees in 2019 compared to N660 million in 2018. Surprisingly, Deloitte does not have any of the major banks included in our list but works with Ahmed Zakaria to audit the accounts of one of the largest cement company in the country, Dangote Cement. Other companies on the list include, Presco, Nigerian Breweries, and Nestle Nigeria.
Deloitte in Nigeria is a merger between Akintola Williams and Deloitte Global.
Agriculture – 2018 N29 million/2019 N31.6 million
Brewery –2018 N57 million/2019 N61 million
Cement – 2018 N539 million/2019 N561 million.
Consumer Goods – 2018 N35 million/2019 N38 million
Companies – Presco, NB, Dangote Cement, Nestle.
A look at what happened in 2017
A similar study carried out by Nairametrics in 2017 showed that the big 4 audit firms earned a sum of N6.4 billion as audit fees in 2016 with PWC scooping the most earnings of N2.5 billion followed by KPMG with N2 billion. Ernst and Young also earned about N1.1 billion in 2016 and Deloitte earned N530.2 million in audit fees.