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Business News

CBN lists major constraints affecting businesses, as borrowing rates projected to rise 

The CBN has released its ‘January 2020 Business Expectations Survey Report’ detailing the challenges affecting businesses in Nigeria.

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The Central Bank of Nigeria (CBN) has released its ‘January 2020 Business Expectations Survey Report’ detailing the challenges affecting businesses in Nigeria.

The CBN, through its Statistics Department, listed high-interest rates of Nigerian banks as one of the many constraints preventing business growth within the country.

CBN Entrepreneur loan, 7 Tips for Financing Your New Business, SMEDAN invests N103.5 million in Sokoto entrepreneurs  

According to the regulatory body of the banking industry, the business environment in Nigeria has been challenging for companies due to unfavourable economic climate, insufficient power supply, financial problems, competition and high-interest rates, which have been a discouraging factor for small and medium enterprises in need of credit facility.

In a statement issued by CBN, it was disclosed that, “Respondent firms identified insufficient power supply (66.2 points), high-interest rates (57.1 points), unfavourable economic climate (54.6 points), and financial problems (52.8 points).

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“Others are unclear economic laws (51.9 points), unfavourable political climate (46.3 points), competition (45.3 points) and insufficient demand (44.2 points) as major factors constraining business activity in the current month.”

The problem for ease of doing business: Basically, most companies in Nigeria power their electricity themselves through the use of generator. This is because the power supply has not been stable within the country, where about $12 billion is spent annually by businesses and individuals on generators. So, this affects their revenue and profit. Rather than investing their capital for the growth and expansion of the business, the firms are burdened with the power issue.

[READ MORE: CBN injects $218.41 million in SMIS)

Also, policy uncertainty has been a constraint for businesses because it creates unfavourable economic climate. The latest example is the ban on bike-hailing businesses in Lagos, which was announced months after the governor reiterated its commitment to regulating the bike-hailing market for efficiency.

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Also, the Finance Act by the administration of President Muhammadu has been hindsight for many businesses and individuals.

Meanwhile, the high-interest rates have been a problem for businesses in Nigeria, as banks begin to use it to stabilise their revenue at a time banks’ other sources of revenue, like e-transaction charges, were slashed by the CBN.

The banks have been offering loans at high-interest rates, rendering the value of the loan insignificant for the debtor. Despite this, borrowing rates are expected to rise in the current month, next month and the next twelve months because businesses will always need capital to operate.

There’s still hope in the business environment: Despite the major constraints listed, companies are optimistic of expansion and employment in the coming month. According to the survey report, the employment outlook index by sector showed that the industrial sector had the highest prospect for employment in the next month, followed closely by the services sector, wholesale/retail trade sector and construction sectors.

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SMEs, business

SME

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While for expansion, the services sector indicates the highest disposition to expand, the wholesale/retail trade sector, the construction sector and the industrial sector also show the prospect of expansion in the next months. The optimism is faced by NECA’s projection that unemployment would increase to 33.5% in 2020, from 23.1% in 2019.

The CBN survey report also stated that the business environment expects improvements in economic conditions in the current month, next six months and next twelve months.

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Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

5 Comments

5 Comments

  1. Tunde Soyemi

    February 10, 2020 at 8:18 pm

    We simply cannot just run this economy by ourselves, let’s contract this job out. We are only good at identifying the problems

  2. Bashir

    February 12, 2020 at 6:10 pm

    Hello,
    I am suggesting the cbn and fg. To remove interest for smes. You should buy and sell the materials to them and add your profits in. to be non-interest loan.

  3. Bliss

    February 13, 2020 at 3:44 am

    They only sing praises to companies and also make funds available for them to manufacture product, are the companies going to sell directly to consumers themselves the answer is no.
    So why is CBN not talking about making loan available for distributor and dealer companies and at low interest rates so that they can easily pay back and also make the product available,affordable and also contribute to the economy by creating job and wealth for the our country.

  4. Bliss

    February 13, 2020 at 3:59 am

    (When they Say SMEs they are not talking about traders, distributors and dealers ,they are talking about manufacturing Companies alone.)
    They only sing praises to companies and also make funds available for them to manufacture product, are the companies going to sell directly to consumers themselves the answer is no.
    So why is CBN not talking about making loan available for trader ,distributor and dealer of companies and at low interest rates so that they can easily pay back the loan and also make the product available,affordable and also contribute to the economy by creating job and wealth for the our country Nigeria.

    Reply

  5. D

    January 6, 2021 at 10:01 pm

    Great article – Its really sad businesses and entrepreneurs are doing the job of a government e.g producing their own electricity. NG really need to sort that out ASAP.

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Coronavirus

Cost of Ivermectin soars after research suggest 75% chance of cutting Covid-19 deaths

Ivermectin prices have risen after Research published by the International Ivermectin Project Team shows drug can reduce Covid-19 deaths

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As Azuka laid down in bed feverish, he had resigned to his fate believing he was not going to make it to the next day.

Just 3 days into the new year and all the fun he had, attending weddings and burial ceremonies in the east all seemed like a big mistake. He must have caught covid-19 at one of those events, he thought.

Since attending the last event, he fell sick and has been exhibiting the symptoms of Covid-19 and just waiting to die until someone recommended Ivermectin, a little known drug as a potential medicine that could help save his life.

READ: Only 68.8% of Nigerians believe Covid-19 is real – SBM Intel

A few days later he recovered and spread the news to friends and family – he believes Ivermectin cured him.

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The rush to purchase Ivermectin in Lagos has increased of late after stories similar to that of Azuka (not his real name) spread. As Nigeria’s caseloads rise past 120k cases, some Nigerians are increasingly worried about contracting Covid-19, rushing to pharmacies to purchase a drug that they all believe is the most portent to fight Covid-19.

READ: Hepatitis C drugs may be effective against COVID-19, virus may spread through high-rise buildings

What is Ivermectin?

According to the World Health Organisation, Ivermectin was originally produced in the 1980s as a veterinary drug used largely for nematode control in cattle, horses, pigs, and dogs and became the standard for control of the ectoparasitic disease, scabies. It soon became the world’s most profitable veterinary drug.

Since then, Ivermectin has been used on humans for controlling strongyloidiasis, a human pathogenic parasitic roundworm causing the disease strongyloidiasis. According to medical sources, it is also known in the US as threadworm, UK, and Australia as pinworms.

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In Nigeria, it has been used to treat worms, according to a pharmacist who spoke to Nairametrics.

READ: Nigeria, others to receive first-ever HIV generic drug for babies in the first half of 2021

“Originally it’s a worm expeller (Antihelminthic) used in the elimination of parasitic worms from the body. They use it in combination with doxycycline. They also use Vitamin C in combination with Axrthromycin.”

However, more recently, the drug is now being used for the treatment of Covid-19 pushing demands for the drug high across pharmacies in Lagos. A Nairametrics survey suggests the drug cost as high as N100,000.

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Another pharmacist who craved anonymity explains.

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“It was one of the available free drugs dispensed to patients at clinics in Nigeria – for eliminating different types of worms from the body. People usually don’t buy it from pharmacies because of the low price, thinking it’s not good quality tabled for expelling worms. It was not expensive and almost cost next to nothing, but now it sells for as high as N200 per tablet”

At N200 per tablet, a pack of 500 tablets could go for as high as N100,000. From all indications, the prices are unstable and could be purchased from as little as N20,000 per pack of 500 tablets to as high as N100,000. It all depends on demand and supply and who is under pressure to get a “cure”.

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READ: COVID-19: WHO warns against Gilead’s remdesivir drug approved by US FDA

Is the drug credible?

Several social media posts and videos allude to the efficacy of the drug in “preventing and curing” Covid-19 but this is yet to be certified by the WHO.

The drug however came into the limelight after a Financial Times article claimed the drug had a chance of cutting covid-19 deaths by up to 75%.

The article was based on research published by the International Ivermectin Project Team led by the University of Liverpool lecturer Andrew Hill. A Nigerian Olufemi Emmanual Babalola, from Bingham University/Lagos University, Nigeria is also part of the group.

READ: WHO study reveals new discovery about remdesivir drug’s effect on Covid-19 patients

Here is an excerpt of the result of the research conducted by the group

“Ivermectin was associated with reduced inflammatory markers (C-Reactive Protein, d-dimer, and ferritin) and faster viral clearance by PCR. Viral clearance was treatment dose- and duration-dependent. Ivermectin showed significantly shorter duration of hospitalization compared to control. In six RCTs of moderate or severe infection, there was a 75% reduction in mortality (Relative Risk=0.25 [95%CI 0.12- 0.52]; p=0.0002); 14/650 (2.1%) deaths on ivermectin; 57/597 (9.5%) deaths in controls) with favorable clinical recovery and reduced hospitalization. “

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Currently, the only other drug with the same level of worldwide unofficial approval for treatment of Covid-19 is Remdesivir, after it also showed an effect on improving recovery rate for Covid-19 patients.

READ: US Mission recognises Nigerian doctor who helped develop COVID-19 vaccine

The choice between waiting for a vaccine or self-medication

More recently, the search for cures for Covid-19 has been overshadowed by vaccine breakthroughs across the world. For most governments, preventing covid-19 is better than curing it which is why more effort is geared towards vaccine distributions and other preventive measures such as insisting on facemasks and introducing new lockdowns.

But for developing economies like Nigeria, where self-medication is prevalent, drugs like Ivermectin are easier to purchase over the counter as well as administer. Just like the demand for chloroquine, zinc, and vitamin C soared in the first wave of Covid-19, demand for Ivermectin is rising along with its price.

Fortunately, Ivermectin is backed by research even though the researchers expressed caution as more trials need to be conducted.

READ: Nigeria records 1,964 new cases of Covid-19, highest daily surge

“Despite the encouraging trend this existing data base demonstrates, it is not yet a sufficiently robust evidence base to justify the use or regulatory approval of ivermectin. However, the current paucity of high-quality evidence only highlights the clear need for additional, higher-quality and larger-scale clinical trials, warranted to investigate the use of ivermectin further.

“The maximum effective dose of ivermectin needs to be clarified and new clinical trials should use a consistent multi-day dosing regime, with at least 0.4mg/kg/day. The appropriate dose and schedule of ivermectin still requires evaluation and the current randomized clinical trials of ivermectin need to be continued until ready for rigorous review by regulatory agencies.” International Ivermectin Project Team 

Asides Ivermectin, Nigerians have also resorted to traditional medicine such as a beverage of lemongrass, dogonyaro leaves, garlic, ginger, and bitter kola to prevent and cure Covid-19, despite orthodox vaccines proven to be effective.

Perhaps it is because no one is sure when the vaccine will get to Nigeria after it was initially meant to arrive in January and since pushed to February 2021. And even if it does arrive in Nigeria, most people do not believe it will get to ordinary Nigerians on time especially when they cite the way the Covid-19 palliatives was handled.

For now, the need for self-reliance is driving people towards any drug they believe can cure covid-19.

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Obituaries

Veteran talk-show host, Larry King dies at 87

Legendary longtime CNN talk show host, Larry King is dead.

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Larry King, the multiple award-winning TV and radio host has died at the age of 87.

King who had a long-running show on CNN, Larry King Live was a household name for his many interviews with political leaders, celebrities and newsmakers.

King’s death was announced on his official Twitter handle stating that he passed on Saturday morning at Cedars-Sinai Medical Center in Los Angeles, California, USA.

The statement read in part:

“With profound sadness, Ora Media announces the death of our co-founder, host and friend Larry King, who passed away this morning at age 87 at Cedars-Sinai Medical Center in Los Angeles.

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“For 63 years and across the platforms of radio, television and digital media, Larry’s many thousands of interviews, awards, and global acclaim stand as a testament to his unique and lasting talent as a broadcaster.”

The statement did not however, reveal the cause of death, but sources say King was hospitalised for COVID-19 in early January.

Since the news broke, friends, colleagues and admirers have taken to different social networks to express their sadness and condole with the family of the celebrated broadcaster.

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What you should know about Larry King

  • King rose to fame in the 1970s with his radio programme The Larry King Show, on the commercial network Mutual Broadcasting System.
  • He hosted the Larry King Live on CNN for 25 years, between 1985 and 2010, carrying out more than 30,000 interviews, including every sitting president from Gerald Ford to Barack Obama.
  • King also wrote a column for the USA Today newspaper for over 20 years.
  • After leaving CNN, King hosted another programme, Larry King Now, broadcast on Hulu and RT, Russia’s state-controlled international broadcaster.

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Financial Services

Niger Insurance Plc gets shareholders nod to restructure business

Niger Insurance Plc has announced plans to restructure its insurance business into distinct but mutually dependent business entities.

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Edwin Igbiti

Niger Insurance Plc has obtained shareholders’ approval to restructure its insurance business into general, life and business insurance, with each segment to be structured as a separate legal entity.

This is part of the resolutions passed at the 50th Annual General Meeting of Niger Insurance Plc., held on 20th of January, 2021 at Peninsula Hotel in Lekki, Lagos.

The decision to restructure the company is in a bid to make it more efficient and profitable to stakeholders, especially as efforts are geared towards overturning a loss of about 1,1723.2% Year-on-Year, earlier made by the company in its last reported financial statement, Q2, 2020, as reported by Nairametrics.

Other key decisions reached at the 50th AGM include;

  • The re-appointment of Mr Ebi Enaholo and Mrs. Olufemi Owopetu as Directors of the company.
  • Acceptance of the presented financial statement for the year ended December 31, 2019 and the report of the audit committee, directors and auditors.
  • Directors were authorized to fix the remuneration of the auditors.
  • Directors were authorized to appoint external auditors to replace retiring auditors of the company.
  • The appointment of four individuals as members of the audit committee.
  • A decision to restructure the company’s business capital was also reached.

In case you missed it: The shareholders of Niger Insurance Plc in the 49th Annual General Meeting approved the decision by the company’s board to raise additional capital to the tune of N15 billion, in a bid to meet the revised recapitalization targets for general and life insurance companies.

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What you should know: The House of Representatives had in December 2020 directed NAICOM to suspend the mandatory deadline for the first phase of 50%-60% of the minimum paid-up share capital for insurance and reinsurance firms.

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