EFG-Hermes Holding, a financial service corporation, has said that investments across certain sectors of the Nigerian economy would receive boosts when the COVID-19 pandemic ease by September, 2020.
The sectors, according to the experts, that would attract more investments and patrons after the pandemic subsided are Agriculture, Digital payments, health, consumer goods and capitalised financial institutions among others.
This was disclosed by experts during a virtual investors conference organised by EFG-Hermes and attended by Nairametrics.
Head, Frontier research, EFG-Hermes, Kato Mukuru, explained that the sectors will be investors delights post-COVID, as more investments would be attracted to them and they are essential products/services consumers can not do without. He said,
“The good thing about COVID-19 is that it has forced new sectors to come through. More local and foreign investors will be going into food cultivation, processing, storage and distribution to take advantage of the expansion in the industry.”
Mukuru added that Nigeria’s biggest financial institutions would also attract new investments and customers as most lenders are deficient in capital and many will need capital to stabilise after the pandemic.
“There are clients that are looking at very good opportunities and we are discussing with them. I know a local investor who is looking to do hospitals post Covid-19. We have started that dialogue,” he added.
The lockdown introduced by the Federal Government created opportunities for some operators in the digital payment space, as many moved from cash to digital payments.
Also, a crash in the price of crude oil, the nation’s major revenue earner intensified effort by the government to diversify income sources by supporting investments in agriculture and processing industries.
Despite current challenges facing the Frontier Emerging Markets (FEM), Mohamed Ebeid, co-CEO of the Investment Bank at EFG Hermes, explained that changes in the macro picture might create new opportunities for countries, markets and companies.
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He said, “We do see the prospect of some relief from immediate pressures, with an easing of FEM portfolio outflows expected as major central banks continuing to implement large expansionary programs.
‘We could also see a floor put under commodity price drops as major oil producers solidify their commitment to large output cuts. Investors and executives will nevertheless have to navigate a changed landscape, where previously more-or-less hidden structural trends come to the fore and accelerate.”
Ebeid added that the main objective of the Virtual Investor Conference was to provide participants with first-hand insights from key international players, spurring further investment in FEMs.
Transport fare watch: Motorcycle “Okada” commuters paid less in January 2021
Commuters on motorcycle per drop (Okada) paid less in January 2021 than they did in December 2020.
The average fare paid by commuters for journey by motorcycle per drop decreased by 11.60% month-on-month and increased by 95.22% year-on-year to N259.33 in January 2021 from N293.36 in December 2020, according to the National Bureau of Statistics (NBS) report for the month of January 2021.
According to the report, commuters in Taraba (N400.80), Yobe (N400.15) and Rivers (N400.00) paid the highest journey fare by motorcycle per drop while commuters in Adamawa (N84.22), Katsina (N134.90) and Kebbi (N152.05) paid the lowest journey fare by motorcycle per drop.
Other key highlights
- The average fare paid by commuters for bus journey intercity decreased by 0.25% month-on-month and increased by 39.55% year-on-year to N2,346.41 in January 2021 from N2,352.19 in December 2020.
- Commuters in Abuja FCT (N4,482.24), Lagos (N3,300.23) and Sokoto (N3,300.00) paid the highest bus journey fare intercity while commuters in Bayelsa (N1,600.45), Bauchi (N1,640.20) and Enugu (N1,687.45) paid the lowest bus journey fare within city.
- The average fare paid by commuters for bus journey within the city decreased by 0.66% month-on-month and increased by 74.75% year-on-year to N352.15 in January 2021 from N354.49 in December 2020.
- Commuters in Zamfara (N600.00), Bauchi (N522.75) and Ekiti (N458.77) paid the highest bus journey fare within city while commuters in Oyo (N189.46), Abia (N205.22) and Borno (N240.79) paid the lowest bus journey fare within city.
- The average fare paid by air passengers for specified routes single journey increased by 0.02% month-on-month and by 18.27% year-on-year to N36,463.65 in January 2021 from N36,454.59 in December 2020.
- Passengers in Anambra (N38,600.00), Cross River/Jigawa/Lagos (N38,500.00), Bauchi (N38,400.00) paid the highest airfare while States with lowest airfare were Akwa Ibom (N32,450.00), Sokoto (N33,700.00), and Gombe (N35,000.00).
- The average fare paid by passengers for water way passenger transport increased by 3.68% month-on-month and by 38.58% year-on-year to N786.19 in January 2021 from N758.27 in December 2020.
- Passengers in Rivers (N2,280.00), Delta (N2,250.45) and Bayelsa (N2,200.10) paid the highest fare by water while states with lowest fare by waterway passenger transport were Borno (N245.10), Gombe (N290.77) and Kebbi (N340.00).
Why this matters
Transportation cost takes a huge portion of budget for most lower/middle-class Nigerians and as well takes not less than 20% of their take-home pay packages.
The drop in fares paid by the commuters on motorcycle per drop (Okada) is a welcome development.
Transport by motorcycle (Okada) has been popularly adopted in most cities by businessmen, government workers, and students to overcome traffic congestion, and for the advantage that it can navigate roads that are inaccessible to automobiles and buses, particularly in villages and urban slums.
The moment Emefiele predicted Nigeria will be out of recession in Q4 2020
The CBN Governor had expressed optimism last year that the country was going to come out of recession in Q4 of 2020.
It is no longer news that Nigeria, Africa’s largest economy, against all expectations exited recession as its Gross Domestic Product (GDP) grew by 0.11% in the last quarter of 2020 (year on year).
However, the Governor of the Central Bank of Nigeria, Godwin Emefiele, had expressed optimism last year that the country was going to come out of recession in the fourth quarter of 2020.
According to the report released by the National Bureau of Statistics (NBS), this is the first positive quarterly growth in the last 3 quarters following growth in telecommunications and agriculture which seem to make up for the sharp drop in oil prices and production.
The surprising rebound of the Nigerian economy is coming against the prediction of the country’s Minister for Finance, Budget and National Planning, Zainab Ahmed, who while speaking at the 26th Nigerian Economic Summit, said that Nigeria is expected to exit recession by the first quarter of 2021.
The CBN Governor had during the November 2020 Monetary Policy Committee meeting, predicted that the country was going to come out of recession by the fourth quarter of 2020.
This as he said that many analysts expressed doubts about that and were waiting to prove him wrong.
In a video during a press conference as seen by Nairametrics, Emefiele said, “You said that in November MPC, I was cautiously optimistic that fourth-quarter GDP will be positive thereby taking Nigeria out of a recession that I was aggressively optimistic that during the first quarter, we will exit recession. I am praying very seriously that my prayer should be heard because I know that people are waiting to put my neck on the chopping board to say that I do not know my work.’’
What you should know
- Despite Nigeria’s surprise exit from recession, experts have still expressed their reservations about the country’s weak economy which is faced with several challenges for businesses ranging from foreign exchange pressure, high unemployment level, increasing consumer prices, serious security challenges, weak investor confidence, etc.
- This is as the growth in GDP was primarily driven by the Information and Communication sector and the Agricultural sector.
- However, the surprise rebound of the economy means that Nigeria may recover faster than expected as crude oil prices and production increase this year.
- This also shows that the country needs to redouble its efforts in the growth of the non-oil sector which contributed 94.13% to Nigeria’s GDP.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Seplat falls into a loss in FY 2020
- 2020 FY Results: Cornerstone Insurance Plc reports a 61.1% decline in profit
- Ellah Lakes increases operating expenses by 33.36% in HY 2020
- 2020 FY Results: Nigerian Breweries reports a 54.3% decline in profits in 2020
- Abbey Mortgage Bank projects N51.08 million profit in Q2 2020.