COVID-19 has had a significant impact on the global economy, with surging infections, cities under lockdown, businesses shutting down, travel restrictions, and staff layoffs. Forbes recently reported on the four basic ways the virus is impacting the world. First, supply chain failures because of the impact of the pandemic on China. The second harm results from the direct effects of illness in lost work by those who are sick or attending to the sick. The third and biggest impact to date is the indirect effect of quarantines, travel restrictions, restaurant and store closures, and so forth. These are weighty and trigger the fourth implication which is a surge in demand shocks as the incomes of many people diminish.
According to a recent report by the United Nations Development Programme, the socioeconomic impact of COVID 19 on poor and developing countries will take years to recover from, with income losses in developing countries forecast to exceed $220bn. It estimated that nearly half of all jobs in Africa could be lost.
In Nigeria, people began the year 2020 with high hope of measuring increased financial inclusion by the end of the year. The effect of the pandemic has hit hard on the federal government as the country is now facing U.S dollar shortages due to the crash in oil prices. It has also impacted low-income households and businesses due to government measures to curb the spread of the virus.
Most states have banned all public gatherings and closed major markets and schools. The federal government recently announced lockdowns in commercial hubs, including Lagos, Ogun State and the nation’s capital, Abuja. These measures are having sweeping implications on the low income and financially excluded population with high reliance on their informal day-to-day business transactions for survival. According to the EFInA Access to Financial Services in Nigeria 2018 survey, 44.3 million adults own businesses and about 23 million adults earn their income daily or weekly.
What does this mean for financial services agents?
Financial services agents are also being affected as they are experiencing diminishing transactions and income due to the closure of a significant number of businesses and low economic activity. Other challenges faced by agents as a result of the pandemic include limited support from the financial service providers that hired them, as most financial institutions have implemented working remotely. Agents now rely on rebalancing through ATMs where they face cash withdrawal charges, increasing their cost to serve. They are also coping by rebalancing through accessing funds from family and friends, a method that can be unreliable.
Financial services agents are faced with more threat of harassment by law enforcement agents including the police and local council officials who lack knowledge of agent banking during the lockdown. Upon this realisation, some providers have offered special banners that read ‘Approved Essential Financial Institution’ to minimise agent harassment during this crisis.
The Central Bank of Nigeria in its recent press release excluded super-agents from the list of financial institutions exempted from government lockdown restrictions. This has triggered conversations among industry stakeholders about whether agents should operate during this period. Because transacting at an agent location requires some in-person engagement, some suggest that allowing agents to continue to operate is not worth the risk. On the other hand, agents can serve as critical access points for financial services that are essential, such as sending money to family members whose income has suddenly been interrupted due to restricted movement. Countries such as the U.S., UK, Italy, Spain, China and South Korea are opting to quarantine potentially contaminated cash to reduce the risk of spreading the coronavirus. The World Health Organization has not said that coronavirus can be transmitted through cash; however, they are advising consumers to switch to contactless payments to reduce risk. It is important for the financial services agents to be enlightened on precautionary measures to protect themselves, customers and reduce the risk of spreading the virus.
Call to Action
Agent banking is an important rail for providing financial services, especially in hard to reach areas. Both the federal and state governments are coming up with various palliative stimulus measures such as cash transfers and distribution of foodstuffs to cushion the effect of the pandemic. Agent networks should be a veritable channel to distribute these palliatives to households. Although exact figures are difficult to determine, there may be approximately 300,000 financial services agents spread across the country. The Nigerian government can use financial services agents to drive account opening among beneficiaries of cash transfer programmes, which will not only cushion the effect of the pandemic but also contribute to Nigeria’s financial inclusion drive.
Financial service providers (FSPs), on the other hand, should come up with measures to support agents during this pandemic period. This could be through provision of soft loans, equipping agents with personal protective equipment (PPE), and online training on precautionary measures that agents can take to reduce the risk of infection. FSPs also need to seek business collaboration that can stimulate transaction flow at agents’ locations to help agents remain active and profitable.
For years, financial services agents have played an important role in their communities by extending access to financial services to underserved Nigerians. They can now play a critical role in helping those communities through the COVID pandemic. We must work together to support agents in operating safely and to identify ways in which agent networks can help us weather the coming storm.
Written byHenry Chukwu Agent Networks Specialist at EFInA
Dangote Sugar appoints Ravindra Singhvi as GMD/Chief Executive Officer
Mr. Ravindra Singhvi has been appointed as the substantive Group Managing Director/Chief Executive Officer of Dangote Sugar Refinery Plc.
The Board of Directors of Dangote Sugar has appointed Mr. Ravindra Singhvi as substantive Group Managing Director/Chief Executive Officer of Dangote Sugar Refinery Plc, effective October 30, 2020.
This disclosure was made by the company in a notification of the resolution of its board meeting, to the Nigerian Stock Exchange.
The statement partly reads:
“Dangote Sugar Refinery Plc. wishes to notify the Exchange and the investing public that at the Board of Directors Meeting of the Company held today, Friday October 30, 2020, the Board approved (a) the Unaudited Financial Statement for the Quarter Ended September 30, 2020, and (b) the appointment of the current Ag. Managing Director, Mr. Ravindra Singhvi as substantive Group Managing Director/Chief Executive Officer of Dangote Sugar Refinery Plc. effective October 30, 2020.”
What you should know
Prior to his new appointment, Mr Singhvi had been the ag. Managing Director of Dangote Sugar Refinery Plc since 18th June, 2019, after serving as the company’s Chief Operating Officer.
The Board’s stance on the appointment
The Board has stated that it is “confident that he is a great asset to the Company, particularly at this time when it is on a rapid growth trajectory, in view of its recent acquisition and it’s several backward integration projects (BIP) to position itself for further job creation in local plantations and factories, import substitution and deeper contribution to national economic development.”
Mr. Singhvi is wished the very best in his endeavors.
About Mr. Ravindra Singhvi
He has over 39 years of proven experience in leadership positions in Manufacturing and Processes in Sugar, Petrochemicals, Cement, and Textiles products industries in India.
He is a Chartered Accountant with background in Company Secretarial Practice, Corporate Governance and Management, and holds a Bachelor’s Degree in B.Com (Hons) and Law(I) from the University of Jodhpur, India.
Prior to joining Dangote Sugar Refinery Plc, Mr. Singhvi had served as the Managing Director & CEO of NSL Sugar Limited, Hyderabad, India, and Managing Director, EID Parry (1) Limited, Chennai, India, one of top three sugar producing companies in India.
IGP says protesters attacked 205 public, private facilities
Data collated when the #End SARS peaceful protest started indicated that 14 states recorded major violence.
The Nigerian Police Force has stated that about 205 critical national security assets, corporate facilities and private properties were razed down and vandalized during the EndSARS protest, which was hijacked by hoodlums and arsonists.
This was disclosed by Mr Mohammed Adamu, the Inspector-General of Police, during a virtual conference of Senior Police Officers in Abuja, according to a news report by NAN.
Adamu disclosed that data collated between Oct. 11, when the #End SARS peaceful protest started as a demonstration, and Oct. 27, after it was hijacked by the vandals, indicated that 14 states recorded major violence.
He said that some of the states severely affected by this civil unrest are Lagos, Edo, Delta, Oyo, Kano, Plateau, Osun, Ondo, Ogun, Rivers, Abia, Imo, Ekiti, and the Federal Capital Territory (FCT).
The violence had resulted in attacks on critical national security infrastructure, other corporate and private properties, as well as injuries or fatalities to civilians, the police, and other security agents.
What you should know
- 71 public warehouses and 248 privately owned stores were looted in the course of the protests nationwide.
- 51 civilian fatalities with 37 injured, and 22 policemen gruesomely murdered with 26 others injured were recorded during the protest.
- 10 firearms, including 8 AK 47 rifles, were carted away during the attack on police stations, and a locally made pistol had been recovered from elements operating under the guise of the EndSARS protest.
- 1,596 suspects have so far been arrested in connection with the violence and widespread looting across the country.
Explore the Advanced Financial Calculators on Nairametrics
Nigeria’s food Inflation rises by 110.5% in five years
Nigeria’s Food Inflation has risen by 110.5% between September 2015 and September 2020.
Nigeria’s food inflation has risen by 110.5% in 5 years, between September 2015 and September 2020.
A comparison of the Composite Food Index within the period under review indicated that food inflation rose from 181.8 index points to 382.7 index points.
This means that the price of food items has not only increased, but more than doubled in the last five years of President Muhammadu Buhari’s administration.
Explore the Advanced Financial Calculators on Nairametrics
Similarly, the All Items Index rose by 92.4% during the same period.
Food items that have witnessed significant increases
Data obtained from Nairalytics, the research arm of Nairametrics, revealed that:
- Foreign rice (Caprice) which sold for an average of N14,500 as of May 2019 is now sold for an average of N30,000.
- A 50kg bag of Ijebu garri that sold for N7,200 in May 2019, now costs N13,700.
- A 25-litre keg of vegetable oil sold for N9,750 in May 2019, now sells for N14,625.
- A piece of frozen fish which cost N417 in May 2019, now sells for N625.
Why are the figures going up?
The hike in the cost of staple food items could be attributed to the border closure directive of the federal government that was announced in August 2019.
It is projected to hit 20% by the first quarter of 2021, when the effects of the increase in petrol and electricity prices are accounted for.
Also, yield per hectare for most farming is well below global standards, driving up the cost of whatever is left to be sold to Nigerians.
Farmers also face insecurity, flooding, and sometimes famine affecting their ability to plant and harvest. Even after harvesting, supply chain challenges still persist, leaving farmers to contend with middlemen, transportation, and storage. The result is far less farm produce reaching the final consumer.
What they are saying
Prof. Steve Hanke, an American Applied Economist at the Johns Hopkins University in Baltimore, Maryland, USA, expressed his dissatisfaction over the performance of Buhari’s administration.
According to him, the Federal Government could do more than what it is doing; he described the administration as a failure over security of its citizens, unemployment, and inflation.
He tweeted, “President Muhammadu Buhari has failed. Nigeria is in the grip of chaos. Bandits control major highways.
“The government can’t protect its own citizens from Boko Haram or the corrupt Police. Unemployment stands at 27.1%, and Inflation, which I accurately measure every day and that soars at 30.37%/yr.”
.@MBuhari has failed. #Nigeria is in the grip of chaos. Bandits control major highways. The government can’t protect its own citizens from #BokoHaram or the #Corrupt police. #Unemployment stands at 27.1%, and #Inflation – which I accurately measure every day – soars at 30.37%/yr. pic.twitter.com/LZOzHWkiau
— Prof. Steve Hanke (@steve_hanke) October 28, 2020
What you should know
- On October 15, 2020, Nairametrics reported that Nigeria’s inflation rate rose to 13.71% (year-on-year) in September 2020, indicating 0.49% point higher than 13.22% recorded in August 2020. This was contained in the Consumer Price Index (CPI) report, released by the National Bureau of Statistics (NBS) about two weeks ago.
- According to the report, Nigeria has endured persistent increase in inflationary rate —growing from 12.13% in January to 13.71% in September—the highest recorded in 30 months.
- A closely watched component of the food inflation index rose by 16.66% in September 2020 — a 0.66% increase compared to 16% recorded in the previous month.
- On a month-on-month basis, the food sub-index rose by 1.88% compared to 1.67% recorded in August 2020.
- Meanwhile, the rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fish, fruits, and oils and fats.