Connect with us
SSN
Advertisement
IZIKJON
Advertisement
forex
Advertisement
Stanbic IBTC
Advertisement
Binance
Advertisement
Esetech
Advertisement
Patricia
Advertisement
Fidelity ads
Advertisement
app

Blurb

Crazy Lagos traffic: The good, the bad, and the frustrating

One of the worst things that can happen to anyone is being stuck in Lagos traffic during early morning rush hour.

Published

on

Lagos traffic

Sitting beside the smelly and loquacious bus driver, Gloria observed the traffic through a cracked windscreen. She watched the assorted vehicles, all of which were stretched out along the pothole-ridden road and moving at snail’s pace. And then she heaved a heavy sigh, overwhelmed with worry just as she glanced at her wrist watch for the umpteenth time. It was minutes past 8 am and the young woman was nowhere near her workplace. She worried that she might lose her job.

On a normal day, Gloria would leave her house in Egbeda as early as 5 am in order to be at work by 8 am. Just like the hundreds of thousands of Lagosians who live on the mainland and work on the Island, this is the best way to beat the early morning traffic in order to be punctual at work. But Gloria’s early morning routine had to change when last month her neighbour —who also used to leave home early for work — was kidnapped, robbed, and murdered by criminals who pretended to be commuters and a bus driver.

As I sat beside Gloria, who was between the bus driver and myself, I continued to engage her whilst the traffic persisted. She works as a personal assistant to a certain female CEO/Founder of a small cosmetics company. She dislikes this job very much, no thanks to her “bitchy boss” and the poverty pay she receives every month. But she said her greatest challenge is the traffic she faces every day as she commutes to and from work.

Traffic in Lagos

Understanding the problem and the challenge it poses

Despite its status as one of the world’s megacities, Lagos suffers major infrastructural deficits. Much like the rest of the country, the city’s transportation system is in urgent need of improvement. And for as long as the Government continues to do very little to solve this problem, the estimated twenty-one million residents in the city will continue to bear the brunt of the challenges posed by it.

According to a civil servant who pleaded for anonymity,

“The Lagos metropolis is replete with the old and decayed infrastructure that was built by the colonialists years ago. As it appears now, the Government doesn’t seem too keen on fixing this mess. Of course, we the people suffer for it.”

Indeed, one of the worst things that can happen to anyone is being stuck in Lagos traffic during early morning rush hour. Unfortunately, this is a reality most Lagosians deal with on a daily basis. And they might have even gotten used to it, especially the mild drama that typically unfolds in a Lagos bus — passengers arguing with the bus conductor/driver, and someone trying to sell a drug that can supposedly cure every ailment imaginable, including HIV/AIDS.

But no matter how much one gets used to the entertaining aspects of commuting to work in Lagos, the truth remains that nothing makes up for being stuck for hours in traffic. According to Mr. Akin who works in the FMCG sector,

“there is something utterly uncomfortable about being in a cramped, stuffy, and slow-moving bus filled with many strangers. You would inhale different types of cheap perfumes, sweat, and exhaust fumes, all while worried that you might just get to work late and get queried.”

 How traffic affects workers’ productivity and overall organisational output  

After spending about one hour thirty minutes in traffic on the way to the office, it is understandable that workers may feel a little tired and even cranky when they clock in. Therefore, before they can get into the right frame of mind to work, lots of minutes go by. Mind you, this means less time spent working. According to Ms Bunmi Oni who works in Human Resources, this is how traffic affects workers’ productivity.

How are companies dealing with this problem?

As expected, many companies have long identified the challenge posed by the peculiar traffic situation in Lagos, whilst taking various unique measures to address it in their own ways. For instance, some companies have a policy never to employ potential candidates no matter how qualified they are, except such candidates live close to where the job is located, usually on Island. Cynthia, who now works with a PR firm in Ikeja, said her job application was once clearly turned down because she was living in Amuwo Odofin.

Other companies (especially the bigger ones) simply pay their staff more money in order to encourage them to live closer to where the work is. Some of these companies also ensure to provide their own buses which will typically pick up staff members from strategic locations across the city and convey them to work.

Yet, a vast majority of Lagos workers like Gloria, mentioned earlier, must find their way to work every day. Her company is not interested if she must risk her life by leaving home as early as 3 am just so she’d resume early at work. As a matter of fact, companies like the one Gloria works for simply do not care about the distress employees go through to be at work. All they care about is that employees must deliver at all costs or risk their jobs.

bitcoin train

Now, let’s examine the negative impact and economic benefits of Lagos traffic

A few years ago, outgoing Lagos State Governor, Akinwunmi Ambode, said that the Government loses an average of N42 billion per annum due to the perpetually bad traffic situation in the city-state. While it is unclear how the Governor arrived at this figure, it seems plausible enough because the traffic crisis in the city is indeed a full-blown one. The question though is, what has his administration done over the past four years to address the problem?

Binance

But despite the challenges posed by Lagos traffic, the interesting thing is that it does have its positive aspects. For instance, quite a lot of Lagosians make their living selling things to commuters who are stranded in traffic. Along Bank Anthony Way, which leads from Ikeja to Maryland, these hawkers can be seen all day selling everything from cold carbonated drinks to phone chargers and household utensils. One of them told me that he prefers selling to motorists because he cannot afford to rent a shop.

A young man hawking in Lagos traffic

Jaiz bank ads

Meanwhile, not every Lagos worker is affected by the traffic problem

It is important to note at this juncture that although this problem may seem like a widespread one, not everyone in Lagos is affected by it. This is because asides those who can afford to live close to where they work, there are also those who always commute against the traffic every morning and evening. Examples of these ones are those who live on the island part of Lagos but work on the mainland. This is because while the heavy traffic moves from the mainland to the Island in the morning, the reverse is the case in the evening, thereby making it possible for Island residents who work on the mainland to commute the Third Mainland Bridge without stress.

 What are the likely solutions to this problem?

To be fair, managing the city of Lagos must be quite the task. The city has an estimated population of more than twenty million people; more than the entire population of some Northern European countries. That notwithstanding, we all know that one of the ways to get the city to function efficiently is by fixing its infrastructural problems.

It is high time those in charge of administering the affairs of the city began to put in more efforts to address the issue of infrastructural inadequacy. Roads should be repaired/widened, even as alternative means of transportation like water and rail must be developed.

Meanwhile, companies should consider more humane approaches to dealing with this issue and the challenge it poses to employees. According to Mr. Jude Adigwe, an HR professional, one of such humane approaches is to come up with more flexible working hours. In his words

“I think we should take a more humane approach to this. We may want to revisit resumption time or possibly come up with flexible working hours. That’s more practical than offering loans to bring people to live closer to the workplace.

“Lagos is a peculiar state and one needs to look at the challenges peculiar to living in it. That said, I won’t soft-pedal on KPIs. They must achieve their performance goals.” -Adigwe 

In the meantime…

It is interesting to note that while the problem persists, some Lagosians have figured out better ways to cope with the traffic in the city. For example, a Nairametrics Twitter follower named Izzi Boye said he tries to “learn/improve on productive skills” during his commutes in Lagos traffic.

Others also read books on their android phones, or simply watch YouTube videos to keep their minds at peace. This goes to show how resilient Nigerians are and how they can withstand the daunting challenges they face as they pursue their daily activities.

app

Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs.He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor.Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan.If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

1 Comment

1 Comment

  1. Sydney

    November 23, 2018 at 5:04 pm

    Great article. Very relatable, im in traffic now

    But I don’t understand the title. It doesn’t cohere with the rest of the article.

    But I love the article.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Blurb

Nigerian Breweries leveraging, but stacking cash through rising input costs

The marathon continues for Nigerian Breweries with its 2020 financials.

Published

on

Humanity might need more booze to survive the increasingly daunting intricacies of life, but Nigerian Breweries 2020 financial statement is proof that even the best can get caught up in the reality of changing business lifecycles.

Nigerian Breweries Plc had floored the market providing both alcoholic and non-alcoholic premium quality beverages across the nation. But with brands like Star lager beer launched as far back as 1949, Gulder lager beer launched in 1970, and even the family-friendly Maltina introduced as far back as 1976, it is only natural that both the old and new generation competition gives them a run for their market share.

Much like other old money companies, Nigerian Breweries has done its bit to remain relevant in the industry from creating new variants of existing favoured brands to paying dividends consistently annually for the past few years. Yet within the same period, the company’s financial statements have been a testament to its streamlined market share and reducing profits. The marathon continues with its 2020 financials. The industry giant may as well be setting itself up for a debt quagmire peradventure its projections do not match the true reality of events.

2020 financials: A tale of higher costs & larger debts

2020’s unfavourable financial/ business environment led to the increase in the prices of raw materials and disruptions in logistics for many Nigerian-domiciled businesses including Nigerian Breweries. Raw materials and consumables witnessed a 17% increase despite the marginal growth in revenue.

While the group’s 2020 results revealed a 4.35% increase in revenue from N323 billion in the prior year to around N337 billion, these gains were curtailed by a higher-than-par increase in cost of sales which had risen by 13.9%, from the N191.8 billion expended in 2019 to N218.4 billion as its 2020 financials reveal and interest rates going way up.

The company’s lower operating expenses were not enough to salvage the disruption caused by the raging interest expense following increased charges paid on bank loans and overdraft facilities as well as the significant increase in overall debt. Between 2019 and 2020 alone, long term loans and borrowings increased by 974% from N4.8 billion to as much as N51.8 billion. Even trade and other long term payables increased by 35%.

In its financials, the company noted that it has revolving credit facilities with five Nigerian banks to finance its working capital. The approved limit of the loan with each of the banks range from ₦6 billion to ₦15 billion (total of ₦66 billion) and each of the agreements had been signed in 2016 with a tenor of five years. The Company had also obtained Capital and Working capital finance from the BoI in 2019.

It is no news that the company is involved in diversified lease arrangements. Following reclassifications made in 2019 to some of its lease assets, the 2020 asset base also witnessed significant increase in Right of Use Assets which increased by 288%% from N11.1 billion to N42.9 billion. Yet, the fact that in one year, interest expense on Lease Liabilities rose from N19.7 million in 2019 and to a whopping N4.171 billion shows that the company is taking way more debt than its books require.

But what’s it using all the cash for?

Beyond rising material costs, borrowing costs have been huge and the annual interest payment by virtue of these loans make the possibility of higher profits for the company a mirage. That said, the overall increase in total liabilities might not have been such a bad idea if the funds were being used to increase revenue and profits. But having a huge chunk of all that money in cash creates a different kind of challenge. Cash and bank values in its statement of financial position significantly increased by 377% from N6.4 billion in 2019 to N30.4 billion in 2020.

Is the cash being held to mitigate possible challenges of the volatile economy or are they being used to pay dividends? Even at a share price of N52 per share, the company’s price-to-book value sits at 2.5816, testament of its dire overvaluation. Consequently, there is an ardent need for the company to come up with newer ways to attract the wider market and keep its book in the green with a little less external funding.

Continue Reading

Blurb

Secret behind MTN’s blistering performance

Despite COVID-19 disruptions, MTN Nigeria’s 2020 financials showed marked improvements compared to its 2019-year-end.

Published

on

NCC, MTN’s parent company faults regulator’s recommendation for data price reduction, MTN Nigeria reacts to poor internet as network issues go beyond Nigeria 

MTN Nigeria Communications Plc (MTN Nigeria) released its audited financial results for the financial year ended December 31, 2020.

Despite a challenging 2020 to individuals and businesses caused by COVID-19 disruptions, MTN Nigeria’s financial and non-financial information showed marked improvements compared to its 2019-year-end as well as prior quarters of 2020 results that were impacted by the COVID-19 pandemic.

Indeed, the evolving pandemic which intensified lockdown, remote working, and work-from-home procedures, appeared to have led to increased adoption of MTN Nigeria data and digital services.

Specifically, year-on-year on non-financial information, mobile subscribers increased by 12.2 million to 76.5 million; active data users increased by 7.4 million to 32,6 million while the company’s mobile money business continued to accelerate with a 269.2 % increase in the number of registered agents to over 395,000 and 4.7 million active subscribers from approximately 553,000 in 2019.

Year-on-year on financial information, service revenue increased by 14.7 % to NGN1.3 trillion driven principally by voice (with revenue growth of 5.9 %) and data revenues (rising by 52.2 % led by increased data use and traffic); profit before tax (PBT) grew by 2.6 % to N298.9 billion; profit after tax (PAT) increased by 0.9 % to N205.21 billion; while Earnings per share (EPS) rose by 0.9 % to N10.1 (N9.93, 2019).

Nonetheless, significant increases were noted in its operating expenditure as well as capital expenditure. First, there was a 2.3 % increase in operating expenses arising from the rollout of new sites and the impact of naira currency depreciation affecting the costs of MTN Nigeria lease contracts. Secondly, EBITDA margin declined by 2.5 %age points to 50.9 % (from 53.4 % in 2019) There were also other significant cost rises including a 25.4 % increase in net finance cost, and 19.4 % increase in capital expenditure which had a 11.7 % knock-on increase in depreciation and amortization costs.

On the back of the year-end result, MTN Nigeria has proposed a final dividend per share (DPS) of N5.90 kobo per share to be paid out of distributable income and brings the total dividend for the year to N9.40 kobo per share, representing an increase of 18.7 %. MTN Nigeria paid N4.97 as final dividend for the year ended December 31, 2019. This was in addition to an interim dividend of N2.95, which brought its total 2019 dividend to N7.92 per share.

The proposed dividend implies a yield of 3.4%. Having paid an interim dividend of NGN3.50 in 2020, the proposed dividend, if approved, will bring the total dividend per share to NGN9.40 or c.19% higher compared with 2019.  We expect a positive reaction from the market due to the marked improvement in earnings. However, the market’s reaction may be dampened by negative investor sentiments on equities arising from the uptick in yields on fixed-income securities.

We expect that the introduction of additional customer registration requirements requiring subscriber records are updated with respective National Identity Numbers (NIN), and the continued suspension of the sale and activation of new SIM cards will affect subscriber growth.

MTNN share price remains unchanged at the end of trading yesterday at N174 per share.


 

Tade Fadare PhD, is an economist, and a professionally qualified accountant, banker and stockbroker. He has significant experience working or consulting for financial institutions in Europe, North America, and Africa.

bitcoin train
Continue Reading
Advertisement




Advertisement

Nairametrics | Company Earnings