FG yet to purchase Covid-19 vaccines – Minister of State for Health
Reps oppose school resumption date, ask for 3 months extension
Nigerian government spends equivalent of 83% of revenue to service debt in 2020
Crypto investors lose $530 million within a day
Top 10 Nigerian tech companies and capital raised in 2020
COVID-19 Update in Nigeria
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Business News
Konga’s turnover increases by 800%, as company claims to be self-sufficient
The acquisition of @ShopKonga by @ZinoxTechNG seems to be yielding positive results as the e-commerce company has made a turnover growth of 800% since the acquisition which took place last year.
The acquisition of Konga by Zinox Group seems to be yielding positive results, as the e-commerce company announced that it has made a turnover growth of 800% since the acquisition which took place last year.
Although the details of Konga’s financial result were not made public, Co-Chief Executive Officer of the company, Prince Nnamdi Ekeh, said the company had recorded an impressive turnover since Zinox acquisition of Konga in February 2018. He said the company’s growth was in line with investors’ expectations.
[READ ALSO: Jumia explains how its “interconnected ecosystem” will help drive growth]
The e-commerce business is yet to be profitable for online-marketplace companies in Nigeria, however, Konga in the past had reiterated that it would be the first e-commerce company to hit profit by 2021, despite the presence of strong competitors like Jumia.
E-Commerce companies in Nigeria (and Africa at large) have generally struggled overtime to make profits. Not only does the online retail sector have a high-entry barrier, but the cost of sale is also usually high, thereby making profitability nearly impossible. This challenge has led to companies such as Efritin shutting down their operation.
“E-commerce is not just an extremely expensive project anywhere in the world with initial huge losses. It is a very complicated business,” Ekeh said about the e-commerce business.
Konga store
Ekeh also disclosed that the company recorded cost reduction within eighteen months after the acquisition, adding that Konga is self-sufficient, “We have reduced cost by over 45% and also achieved growth of over 800% in the past 18 months. We are working very hard to meet investors’ expectations. It is true we are incurring huge losses now based on the e-commerce business model. However, we have 36 months of cash reserve to build Konga as a success.
“We are ambitiously scaling Konga, and that is why we launched a successful Konga Travels and Tours that is currently making huge waves in the travel booking industry. In addition, we have other approved projects and new lines of businesses that are set to be unveiled soon.
“We have spent the last year restructuring the business and positioning it on a very solid footing. This is evident from the huge strides we have recorded over the period and the several other viable business units and subsidiaries that have taken flight within the Konga Group. Indeed, we are preparing to lead in this space.”
[READ ALSO: What Is A Stock Split and How It Affects You]
Note: Sixteen physical stores and hubs are currently being operated by Konga in Lagos, with more than that across Nigeria.
Coronavirus
FG yet to purchase Covid-19 vaccines – Minister of State for Health
According to a disclosure made by the Minister of State for Health, the FG is yet to purchase any COVID-19 vaccine.
The Federal Government has said that it is yet to purchase any Covid-19 vaccines as the country is still assessing the prices of different shots, their availability and the logistics required for a nationwide roll-out.
This is coming at a time when developed economies are rolling out the vaccines in their countries and concerns have been raised about the availability of the Covid-19 doses in the African continent.
This disclosure was made by the Minister of State for Health Adeleke Olurunnimbe Mamora, during a telephone interview with Bloomberg.
What the Minister of State for Health is saying
Mamora said that once the government determines which vaccines are accessible and affordable, authorities then have to consider storage and distribution issues as they prepare to give shots to 200 million people.
He said, “We haven’t made any purchases at this point in time.’’ He added that the government expects to have a definitive plan by the end of January.
Nigeria is working with the World Health Organization backed COVAX programme and hopes to receive its first doses in January. The Minister for Finance, Budget and National Planning, Zainab Ahmed, had said that the country is working on what type and quantity of Covid-19 vaccines to procure and financial provision will be made in the 2021 budget for the vaccines.
COVAX is a global initiative backed by the World Health Organization which aims to provide equitable access to Covid-19 vaccines, especially to poor countries.
What you should know
- It can be recalled that Bloomberg had reported that experts and a state governor had expressed doubts about the ambitious plan by Nigeria to vaccinate as much as 40% of its population this year due to lack of resources and infrastructure.
- The Chief Executive Officer of Nigeria’s National Primary Health Care Development Agency, Faisal Shuaib, said on Thursday the country expects to receive 100,000 doses of Pfizer Inc’s shot at the end of January through the Covax initiative.
- Nigeria has officially reported 107,345 Covid-19 cases, with 1,413 casualties, but testing is not easily accessible for most people, with only about 1.1 million tests conducted so far.
Economy & Politics
Nigerian government spends equivalent of 83% of revenue to service debt in 2020
The Federal Government of Nigeria achieved a debt service to revenue ratio of 83% in 2020.
The Federal Government of Nigeria achieved a debt service to revenue ratio of 83% in 2020. This is according to the information contained in the budget implementation report of the government for the year ended December 2020.
According to the data seen by Nairametrics, total revenue earned in 2020 was N3.93 trillion representing a 27% drop from the target revenues of N5.365 trillion. However, debt service for the year was a sum of N3.26 trillion or 82.9% of revenue.
Nigeria’s debt service cost of N3.26 trillion has now dwarfed the N1.7 trillion spent on capital expenditure of N1.7 trillion incurred in 2020. This is also the highest debt service paid by the Federal Government since we started tracking this data in 2009.
The total public debt (External and Domestic) balance carried by Nigeria as of September 2020 stood at N32.22 trillion ($84.57 billion). Included in the total debt is a domestic debt of about N15.8 trillion.
What this means: Nigeria’s debt to GDP ratio is estimated at about 22%, one of the lowest in the world and much below what is obtainable in most emerging markets.
- However, the challenge has always been the debt service to revenue ratio, a metric that reveals whether the government is generating enough revenues to pay down its debts as they mature.
- Since the first recession experienced in 2016, Nigeria has struggled with higher debt service to revenue ratio as revenues slid in direct correlation with the fall in oil prices.
- Nigeria’s government spent about N2.45 trillion in debt service in 2019 out of total revenue of N4.1 trillion or 59.6% debt service to revenue ratio.
- At 83%, 2020 ranks as the highest debt service to revenue ratio we have incurred. Before now it was 2017 with 61.6%.
Breakdown of what debts were serviced
The following amount was spent on debt service during the year
- To service domestic debt, the government spent N1.755 trillion in 2020 as against a budget of N1.87 trillion.
- For foreign debts, a sum of N553 billion was spent against a target budget of N805.47 billion. The drop here is likely a result of lower interest rates on foreign borrowing as well as very limited borrowing from the foreign debt market during the year.
- The government only contributed N4.58 billion into its sinking fund instead of the budgeted N272.9 billion.
- The sinking fund is required to set aside funds that will be used to pay down on other loans such as bonds when they mature in the future.
- Finally, a sum of N912.57 trillion was spent on servicing CBN’s loans, granted via its Ways and Means provisions.
- Nairametrics reported last week that a total sum of N2.8 trillion was extended by the CBN to the FG as Ways and Means.
What happens next: In 2021, the government projects a debt service of N3.1 trillion against revenue of N6.6 trillion or a debt service to revenue ratio of 46.9%.
- The government plans to spend N4.3 trillion on capital expenditure during the year.
Tech News
Top 10 Nigerian tech companies and capital raised in 2020
These are the top 10 tech companies and the capital they raised in 2020.
African startups raised over $1 billion in funding in 2020, with Nigerian startups raising 17% of this amount – 55.37million in Q1 2o2o and 28.35million in Q2 2020, according to Techpoint.
These are the top 10 rankings of the highest fundraisers for 2020.
Flutterwave
The startup provides digital payments infrastructure and services which enable global merchants, payment service providers, and pan-African banks to accept and process payments across various channels.
It raised a $35M Series-B round led by US venture capital firms Greycroft and eVentures in January 2020. The funding was invested in technology and business development to grow market share in the countries it operates in.
54gene
The startup is equalizing precision medicine by including underrepresented Africans in global genomics research. It raised $15M in a Series A funding round in April 2020 led by Adjuvant Capital – a life sciences fund backed by the International Finance Corporation, Novartis, and the Bill & Melinda Gates Foundation.
These new funds will be used to address the gap that exists in precision medicine for people on the African continent.
Aella Credit
The startup is a one-stop app for all your financial needs. Aella makes it super easy for anyone to borrow, invest, and make payments. It secured a $10 million debt financing round from a Singaporean company – HQ Financial Group.
The new capital raised from Singapore is expected to facilitate the credit company’s effort to provide financial inclusion to many more of the people who are currently unbanked across Nigeria, West Africa, and other emerging markets.
Helium Health
The startup has become the leading provider of full-service technology solutions for healthcare stakeholders in Africa. It raised a $10 million Series A round in April 2020.
Global Ventures and Africa Healthcare Master fund (AAIC) co-led the investment round. Helium plans to use the latest funding round to hire and expand to North and East Africa, including Kenya, Rwanda, Uganda, and Morocco.
Kuda Bank
The startup provides a full banking service on your smartphone. It secured a US$10 million seed round in November 2020 – the biggest seed round ever to be raised in Africa, led by Target Global with participation from Entrée Capital and SBI Investment.
The funding will be used to help accelerate its growth plans and keep up with customer demand. Specifically, funds will be used for key hires, product development, and to expand operations across Africa.
Trade Depot
The startup is a Nigerian B2B eCommerce company that utilizes an end-to-end distribution platform aimed at connecting the world’s top consumer goods companies directly to retailers in Africa.
It raised $10-million in a pre-Series B equity round co-led by Partech, International Finance Corporation, Women Entrepreneurs Finance Initiative (We-Fi), and MSA Capital in July 2020.
The new investment will enable Trade Depot to continue connecting international brands with small businesses in Nigeria, expand into other African cities, launch a suite of financial products, and credit facilities aimed at supporting its retailers.
Field Intelligence
The startup is helping governments and businesses make good on the promise of healthcare in the fastest-growing parts of the world by making the pharmaceutical supply chain radically simple, affordable, and easily accessible.
It raised a $3.6 million Series A round in March 2020, led by Blue Haven Initiative, with investors including Newtown Partners via the Imperial Venture Fund and Accion Venture Lab.
The investment will be used to scale Shelf Life expansion throughout Nigeria and Kenya, as well as the development of additional services for Shelf Life clients and their patients.
MedSaf
The startup connects suppliers to hospitals and pharmacies directly to make the pharmaceutical supply chain more efficient. The health start-up raised $3.5M in a seed funding round in December 2020. It will use this funding to expand to other African countries.
Auto Chek
The company is an automotive technology company that aims to build solutions for the African market. It raised $3.4 million in pre-seed funding round in November 2020, co-led by TLcom Capital and 4DX with inclusion from Golden Palm Investments, Lateral Capital, Kepple Africa Ventures.
Auto Chek will use the investment to grow its Nigerian and Ghanaian markets, invest in its tech, and grow its team.
Despite the ravaging impact of Covid-19, Nigerian tech start-ups raised millions of dollars in funding. We hope to see more investors in the first quarter of 2021.
Rensource Energy
The startup allows qualifying companies throughout Nigeria and West Africa to start selling Power-as-a-Service (PaaS) to their customers.
It raised $3 million from Proparco, with the support of the European Union under the Africa Renewable Energy Scale-Up facility (ARE Scale-Up). The funding will be used to contribute to facilitating energy access in the context of a significant and growing energy gap in Nigeria and support the development of innovative solar energy solutions.
