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Manufacturing Index shows 11 ‘performing’ businesses in Nigeria

The Central Bank of Nigeria [@cenbank] has released the latest Purchasing Managers’ Index (PMI) for July 2019 and it shows that Nigeria’s manufacturing sector keeps expanding with 11 thriving manufacturing businesses.

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Manufacturing Index shows 11 'performing' businesses in Nigeria

The Central Bank of Nigeria (CBN) has released the latest Purchasing Managers’ Index (PMI).

The report which is for July 2019 showed that Nigeria’s manufacturing sector has continued to expand.

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According to the CBN’s report, 11 businesses in the manufacturing sector recorded improved growth in July.

Basic Highlights: The apex bank’s report tracked the activities in both the manufacturing and services sector. The index tracked new orders, business activity, production levels, supply delivery time, employment and supply delivery time.

Manufacturing PMI stood at 57.6 index points in July, from 57.4 points index recorded in the previous month. This means Nigeria’s manufacturing sector grew for the 28th consecutive months in July 2019. Of the 14 sub-sectors surveyed, 13 reported growth in the reviewed month in the following order:

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  • petroleum & coal products
  • transportation equipment
  • cement
  • printing & related support activities
  • paper products; food, beverage & tobacco products
  • furniture & related products
  • fabricated metal products
  • nonmetallic mineral products
  • plastics & rubber products
  • primary metal
  • chemical & pharmaceutical products and electrical equipment.

Meanwhile, the manufacturing production level, new orders, supplier delivery time, employment level and raw material inventories all grew at a faster rate in the month.

[READ: Foreign investors’ inflows outpace outflows as election-fever wears off]

The non-manufacturing PMI equally expanded at a faster rate in July. The composite PMI for the non-manufacturing sector rose to 58.7 points as against 58.6 points recorded in the previous month. All 17 surveyed sub-sectors recorded growth in the following order:

  • management of companies
  • arts, entertainment & recreation
  • finance & insurance
  • repair, maintenance/washing of motor vehicles
  • construction; real estate rental & leasing
  • agriculture
  • health care & social assistance
  • information & communication
  • accommodation & food services
  • wholesale/retail trade
  • water supply, sewage & waste management
  • transportation & warehousing
  • electricity, gas, steam & air conditioning supply
  • professional, scientific, & technical services
  • educational services and utilities

Top thriving businesses: One of the key indicators in determining whether a business is witnessing decline or not is the inventory. Companies make money when they sell products and services, and for those whose inventories pile up, it is a sign that sales will decline.

The rise in orders is evidently a sure sign that businesses are attracting the right customers and consequently recording growth.

Hence, the CBN’s report showed that 11 businesses in the manufacturing sector recorded an increase in new orders, which implied improved business transactions. Below are the businesses listed by the CBN.

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Businesses thriving in Nigeria’s Manufacturing Sector

  1. Cement production
  2. Chemical & pharmaceutical products
  3. Electrical equipment
  4. Fabricated metal products
  5. Food, beverage & tobacco products
  6. Furniture & related products
  7. Nonmetallic mineral products
  8. Plastics & rubber products
  9. Primary metal
  10. Printing & related support activities
  11. Textile, apparel, leather & footwear

Businesses declining or with no change

  1. Petroleum & coal products
  2. Paper products
  3. Textile, apparel, leather & footwear

What the rising PMI means: The PMI for the manufacturing sector has continued to maintain a rise for over two years, and this means the sector has maintained its expansionary trend. This may translate to growing the economy.

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  • Actually PMI has formed an extremely important indicator for investors looking to form an opinion on economic growth.
  • Meanwhile, it should be noted that rising PMI does not necessarily mean positive growth in the manufacturing sector.
  • For instance, in the third quarter of 2018, despite the rise in PMI, data showed the sector recorded a negative growth rate of 0.11%. Also, the sector grew very slowly in Q1 2019.
  • The slow growth recorded in the sector in Q1 2019 may be traceable to low investment.
  • A data released by the National Bureau of Statistics showed that foreign investors’ confidence dropped due to the general election, thereby capital importation into manufacturing dropped by 40% ($252 million).

[READ FURTHER: Foreign investors are avoiding these sectors like a flea]

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Patricia

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Business

Austin Avuru retires as CEO of Seplat petroleum, to receive huge benefits

According to the notice, Avuru will be considered a “good leaver” on his retirement.

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Austin Avuru retires as CEO of Seplat petroleum, to receive huge benefits, Seplat to acquire more oil & gas assets after Eland's acquisition

Co-founder and Chief Executive Officer of Seplat Petroleum Development Company Plc, Austin Avuru has retired as CEO of the company, but will remain on the board as a Non-Executive Director.

According to a notice sent to the Nigerian Stock Exchange and signed by the company secretary Mrs Edith Onwuchekwa, the resignation took effect on July 31, 2020.

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READ MORE: Seplat denies swindling FG of N600 billion despite co-conspirator’s guilty plea

What this means

According to the notice, Avuru will be considered a “good leaver” on his retirement and receive his remuneration and benefits as such.

The Remuneration Committee has confirmed that Avuru will receive “a lump sum payment in lieu of notice equal to his salary, benefits, and pension allowance until November 18, 2020” as well as other security and travel benefits.

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He would also receive a loss of office payment equal to 12 months’ salary, as compensation and in accordance with the Nigerian market practice.

READ ALSO: Seplat’s Austin Avuru no longer has direct shares in company 

In line with the provisions of the Directors’ Remuneration Policy approved by shareholders of the Company at its 2018 AGM, he will also receive a pro-rata bonus (in cash) to reflect his time as CEO during the financial year, and same “will be provided in the Company’s Directors Remuneration Report for 2020 and subsequent years”.

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Seplat will also vest awards made in form of deferred shares in 2019 and 2020 at the normal vesting dates, and subject to the achievement of the relevant performance conditions, and Avuru will be subject to the post-employment shareholding requirement for two years.

The company management and board appreciated Avuru for his ‘excellent leadership’ in growing the company to become a notable player in the Nigerian and wider African hydrocarbon industry.

READ: Okomu Oil Palm ‘s profit declines by 43.22% as at Q3 2019  

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Backstory

On November 18 2019, Seplat Petroleum Development Company Plc announced that Mr Austin Avuru will be retiring as CEO at the end of July 2020.

This is in line with Avuru’s earlier plans to retire sometime around his 62nd birthday.

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Buhari orders payment of stranded NDDC scholarship students, commission gives reason for delay

The delay, it was revealed, was caused by the sudden death of the then EDFA of the commission.

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Buhari orders payment of stranded NDDC scholarship students, commision gives reason for delay, President Buhari Democracy Day speech

President Muhammadu Buhari has ordered the Niger Delta Development Commission (NDDC) to immediately pay the fees and stipends of the stranded Nigerian scholars who have been facing hardships abroad.

This was disclosed in a press statement by the NDDC and signed by the commission’s Director for Corporate Affairs, Charles Obi Odili, on Tuesday, August 4, 2020.

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Odili revealed that the delay in the remittance of the fees for these scholars was caused by the sudden death of the then Acting Executive Director for Finance and Administration, EDFA, of the commission, Chief Ibanga Etang.

READ MORE: Corruption probe: NDDC claims to have spent N81.5 billion in 7 months

Odili stated, “Under the Commission’s finance protocol, only the Executive Director (Finance) and the Executive Director (Projects) can sign for the release of funds from the Commission’s domiciliary accounts with the Central Bank of Nigeria, CBN. With the death of Chief Etang, the remittance has to await the appointment of a new EDFA’

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Odili stated further that, “Senator Akpabio, the Honourable Minister, said President Buhari who has been briefed on the protest by students at the Nigerian High Commission in London, has ordered that all stops be pulled to pay the students by the end of this week. We expect a new EDFA to be appointed this week. As soon as that is done, they would all be paid.”

It would be recalled that the plight of the Nigerian scholars came to the fore after it was revealed, the terrible conditions they were going through in foreign countries since not being able to pay their tuition fees. These revelations caused outrage on social media with many blaming the government for not caring enough for its people.

READ ALSO: Akpabio denies accusing Reps of receiving 60% of NDDC contracts

The non-payment of the allowances and tuition fees of the students by NDDC is coming amid the corruption and financial mismanagement allegations that have been rocking the commission for some months now.

The students said they are going through a lot of hardship due to lack of funds from the NDDC and are unable to engage in menial jobs to survive because of the impact of the coronavirus pandemic.

Following up with its own intervention, the Chairman of Nigerians in Diaspora Commission (NIDCOM), Abike Dabiri-Erewa, asked the NDDC as a matter of urgency to pay the allowances, tuition fees and other incentives of students under their scholarship scheme.

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READ ALSO: Earning BTCs without Having To Pay Money

She said that last month, she wrote a letter to the Minister for Niger Delta Affairs, Godswill Akpabio, drawing his attention to the plight of the Nigerian students under the NDDC scholarship scheme in Europe.

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NIPOST’s new charges could have ruined the e-commerce/logistics industry

The backlash NIPOST got from SME proved enough to get the attention of the FG.

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Minister denies approving NIPOST license fee increment , Isa Ali-Pantami, NCC to determine number of phone numbers entitled to an individual  

The Nigerian Postal Service (NIPOST) introduced new charges that would cause an increase in the costs of licensing for logistics and courier service providers which resulted in major outrage all over the internet and rightly so.

According to the Vanguard, International courier services like DHL and UPS were expected to pay N20M for a new license and N8M annually while national service providers were to pay N10M for the license to operate and N4M for annual renewal. As for the logistics companies operating within regions, they were to pay N5M for license and N2M annually while firms operating within states got N2M for licence and N800,000 for renewal. Courier firms within municipalities were to pay N1M license fee and N400,000 annually and for SMEs, the license was set at N250,000 while the annual renewal is N100,000.

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READ MORE: CBN holds N43 billion stamp duty charges from banks – FG

Reportedly, the General Manager, Corporate Communications, Franklin Alao, said in a statement that the new regulations were not planned to frustrate ease of doing business rather they aimed to promote growth of MSMEs. He said, “It is part of the strategies to ensure effective service delivery as consumers would know the capacities of the operators they are dealing with… Kindly note that consumers of the courier service would be better off as this will drive charlatans out of the industry. Genuine and serious operators would come back to celebrate this move.”

Fortunately, all through last week, the backlash NIPOST got especially online from SME proved enough to get the attention of the Federal Government because as the Premium Times reported, on Saturday, Isa Pantami, the minister of communication and digital economy rejected the proposed increment on the fees for courier services companies by the Nigerian Postal Services (NIPOST).

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READ ALSO: Nigeria’s tier-1 banks earn N18.4 billion from account maintenance charges in Q1 2020

Pantami said in a tweet, “Our attention has been drawn to an increase of license fee, which was not part of the regulation I earlier approved for you… Your Chair and PMG were yesterday contacted to put the implementation on hold and send a report to our ministry by Monday. Best Wishes”. Pantami also said “I know the economic challenges of NIPOST. However, looking at the economic hardships of our citizens, we need to suspend any move.”

This could have been really bad

The increase in charges would affect three main industries in the economy: e-Commerce, SMEs and ride-hailing.

  1. On Tech Round Up, we discuss time and again how the e-Commerce growth in Nigeria is directly propositional to logistics. As a statement of fact, an e-commerce firm’s level of functionality is heavily based on the strength of their logistics abilities. In essence, e-commerce will not work without the backing of an effective logistics structure.

With Covid-19 came a boom in the Nigerian e-commerce space. Last week, we discussed the increasing interests in M&A deals as MumsVillage and Baby Bliss merged to form the Bliss Group. Also, many consumers had since the lockdown, become dependent on online shopping- this without a doubt will affect these groups of individuals if the government should let this charge increase happen. It will without a doubt increase the prices of goods online and eventually, the boom in online shopping culture may drop drastically.

READ MORE: Gokada pivots into food delivery service 

  1. Small businesses are the backbone of our nation and the same can be said for most economies around the globe, this kind of outrageous increase on charges will only further discourage these already struggling businesses from operating. This increase in fees, if the minister had not interfered would have only made the entire situation of our economy worse. Allegedly, NIPOST had already started seizing delivery motorcycles and demanding fees up to N250,000 from some businesses. This is a lot of money right now especially with most of these small businesses and companies moving their operations online and using logistics to delve into untapped audiences.
  2. The Ride-Hailing Businesses too since the beginning of 2020 has had to readjust, restructure and reevaluate a lot of their offerings. For those firms who have delved into the logistics space full time, these charges may have completely ruined their already slim chance of surviving.

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It is a struggle out in these streets. Nigerians and the Nigerian economy has suffered severely in these last few months due to the pandemic- businesses, companies, industries and individuals have been left to bear some great losses and it seems the not so great news keeps on coming.

Another reason why this agenda to increase fees appeared fishy was because they seemingly announced this right after the NIPOST had purchased a fleet of delivery motorcycle- so was it their intent to intimidate or maybe strong-arm the competition and monopolize the sector? Maybe we will never know but it definitely did not sit well with many Nigerians, hence the outrage on the internet.

READ MORE: NIPOST ignores Minister’s e-payment order, collects cash on stamps, other services

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Even if these charges do get implemented, the NIPOST needs to allow enough time for the economy to stabilize rather than implementing an outright increase that could result in the shutdown of operations of those involved in logistics. There are smarter more mutually productive ways to coexist. These governmental bodies need to figure these out and implement them, it is important for governments and industries to work together to manage the changes that will improve our economy.

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