Earlier this month, Nigerian online betting company, BetKing, announced its sponsorship deal with The Football Kenya Federation (FKF). This was adjudged the biggest sponsorship deal in the history of Kenyan football.
Valued at $11 million (1.2 billion Kenyan shilling), the new sponsorship deal will end in 2025. According to the FKF, each club in the Kenyan league will receive 8 million Kenyan Shillings a year ($1= 107.85 Kenyan shillings) thanks to this partnership.
BetKing replaced local Kenyan betting firm, SportPesa, after the company stopped all its sports sponsorships in Kenya following a dispute with the Kenyan Government over taxes. Following this new deal with BetKing, the Kenyan league would now be called the BetKing Premier League.
Other Nigerian companies in Kenya
It should be noted that BetKing is not the only Nigerian-owned company that is doing great things in Kenya. Instead, the company joined the likes of Access Bank, UBA, and GTBank, and Dangote Cement which also operate in the East African country.
Access Bank Plc: Just last week, Nairametrics reported that Access Bank completed the acquisition of Kenya’s Transnational Bank Plc, a medium-sized commercial bank.
United Bank for Africa Plc: UBA officially entered the Kenyan market in 2009 “as part of a concerted effort of by UBA Group to expand its African footprint,” the Bank says on its website. Since that entry, Kenya has been contributing positively towards UBA Group’s objective of buildings a strong African banking brand.
At the moment, the tier-1 Nigerian bank operates 3 branches in Kenya’s capital Nairobi. As of 2019 year-end, customers’ deposits increased to KSh 6.9 billion from KSh 6.6 billion during the preceding year, even as loans to customers increased to KSh 3.6 billion from KSh 3.4 billion. Overall, UBA recorded a total net profit of KSh 67.6 million in 2019, compared to KSh 53.1 million in 2018.
Guaranty Trust Bank Plc: GTBank entered the Kenyan market in 2013, after a 70% acquisition of Fina Bank Group. Following the successful completion of the acquisition process, Fina Bank’s name was changed to Guaranty Trust Bank Kenya Limited. The bank’s shares are currently held in the following order – 70% owned by GTBank Nigeria, 7.81% by Dhabaria Limited, 7.99% by Dhanji Hansraj H. Chandaria, 7.03% by RARE Limited, and a 7.17% by Mr. Rameshkumar Manubhai Patel.
GT Bank Kenya Limited reported a Profit after Tax of KSh 347.32 million as at the end of 2019 and balance sheet of KSh 41.2 billion.
CcHUB: On the tech side, Nigeria’s Co-creation Hub (CcHUB), a technology and innovation Centre, announced in September 2019 that it acquired Kenya’s iHub for an undisclosed fee. Nairametrics reported that the deal was expected to foster a direct innovation link between Kenya and Nigeria which are two of Africa’s most active markets for VCs and startup formation.
Flutterwave: Another Nigerian tech company with a presence in Kenya is Flutterwave. The firm plays a major role in Kenya’s IT ecosystem through its existing third partner logistic provider called Sendy in Kenya.
Interestingly, Nigeria’s commercial presence in Kenya transcends banking, sports betting, and tech. In terms of church business, Nigeria also has a domineering presence in the East African nation. For example, Nigerian religious organization, Winners Chapel International, opened the largest East African Church auditorium in Kenya in 2013; a 15,000 sitter arena. Construction began in 2005 and was inaugurated in 2013 by William Ruto, Kenya’s Deputy President.
Harnessing the advantages of AfCFTA
The growing number of Nigerian-owned companies looking to take advantage of inter African trade aligns with the ratification of the African Continental Free Trade Area (AfCFTA) which the African Union hopes will accelerate intra-African trade and boost Africa’s trading position in the global market. Kenya was one of the first countries to ratify the document in May 2018. The African Union hopes to fully launch the agreement in January 2021.
With the ratification of the African Continental Free Trade Area (AfCFTA), we could see an influx of other Nigerian companies making big moves in East Africa. Gtbank’s and UBA’s successes are proof that Africa is ripe for development. Africa is a market to 1.2 billion people and the AfCFTA ratifications aim to reduce business barriers like tariffs in Africa which would make it even easier for Nigerian companies to do business not only in Kenya, but around the continent.
US imposes $15,000 visa bond on 15 African countries, others
The US has issued a visa rule requiring tourist and business travelers in some countries to pay a bond of up to $15,000 in addition to the visa fees.
The outgoing administration of US President, Donald Trump, on Monday, November 23, 2020, issued a new temporary visa rule that requires tourist and business travelers from 15 African countries and others to pay a bond of up to $15,000 in addition to the visa fees, which ranges from $16 to $300, in order to visit the United States.
According to TheCable, the US State Department said the visa bond pilot programme, expected to take effect from December 24 and end on June 24, 2021, is targeted at countries whose citizens have higher rates of overstaying B-2 visas for tourists and B-1 visas for business travelers.
The Trump administration said the six-month pilot program aims to test the feasibility of collecting such bonds and will serve as a diplomatic deterrence to overstaying the visas. Hence, overstay places significant pressure on Department of Justice and Department of Homeland Security.
The visa bond rule will permit U.S. consular officers to request tourist and business travelers from countries whose nationals had an overstay rate of 10% and above in 2019 to pay a refundable bond of $5,000, $10,000, or $15,000.
The countries whose tourist and business travelers fall into this category and subjected to the bond requirements are 24 countries, including 15 African countries. While these nations had higher rates of overstays, they sent relatively fewer travelers to the United States.
The countries include Afghanistan, Angola, Bhutan, Burkina Faso, Burma, Burundi, Cape Verde, Chad, the Democratic Republic of the Congo (Kinshasa), Djibouti, Eritrea, the Gambia, Guinea-Bissau, Iran, Laos, Liberia, Libya, Mauritania, Papua New Guinea, Sao Tome and Principe, Sudan, Syria, and Yemen,
Nigerian travelers escaped paying the temporary visa rule, as their overall score was below the threshold of 10% and above overstaying rate.
FG to buy only locally assembled vehicles for its use
The FG has disclosed plans to buy only locally assembled cars rather than imported foreign ones.
The Federal Government has announced plans to buy only locally assembled cars and discontinue the purchase of imported foreign ones for its use, as part of its bid to promote its policy on the local auto industry.
According to a report by Punch, this was disclosed by President Muhammadu Buhari in a speech delivered by Vice President Yemi Osinbajo, on Monday, November 23, 2020, at the opening session of the 26th Nigerian Economic Summit Group (NESG) Conference themed: “Building Partnerships for Resilience”
Osinbajo also explained that the Federal Government would buy locally assembled cars rather than imported foreign ones.
In his response on the issue of import duties which was raised at the summit during his presentation, the Vice President explained that the reduction of import duty on vehicles would help reduce the cost of transportation.
Osinbajo said, “The point of the reduction in levies on motor vehicles, commercial vehicles for transportation is to reduce the cost of transportation by reducing the cost of vehicles.
“With subsidy removal and the increase in fuel price and the pass-through to food prices, transportation costs had to be reduced. Now the automotive policy is directed at localizing the production of vehicles.
“So, the logic was to increase the duty and levies, so that local production becomes more competitive. But the annual demand for vehicles is about 720,000 vehicles per year. Actual local production is 14,000 vehicles a year.”
Osinbajo pointed out that the country’s local production capacity is grossly inadequate to meet serious national needs and this would ultimately lead to higher prices of vehicles and more pressure on other sectors of the economy that depends on transportation.
It can be recalled that in one of her outings, the Minister for Finance, Budget and National Planning, Zainab Ahmed, revealed that the major cause of the increase in inflation rate in the country is increased transportation costs.
Osinbajo, however, stated that the government was not giving up on the local auto industry.
“Two important things to note, the first is that we still have a relatively high duty at 35 per cent; So, there is still a disincentive for importation,” he said.
He added that the government was also promoting a policy of buying only locally manufactured cars. “The introduction of a new automotive policy in 2013, which is currently up for review, was geared towards discouraging the importation of wholly assembled automobiles and encouraging local production. It specifically allows local assembly plants to import completely knocked down vehicles at 0% import duty and semi-knocked down vehicles at 5% import duty, while importers will pay 70% on new and fairly used vehicles.”
CBN retains MPR at 11.5%, holds other parameters constant
The Central Bank of Nigeria (CBN), voted unanimously to keep the Monetary Policy Rate (MPR), at 11.5%.
The Monetary Policy Committee (MPC), of the Central Bank of Nigeria (CBN), has voted unanimously to keep the Monetary Policy Rate (MPR), at 11.5%.
This was disclosed by Governor, CBN, Godwin Emefiele while reading the communique at the end of the MPC meeting on Tuesday. Other parameters such as Cash Reserve Ratio (CRR), Liquidity ratio, and asymmetric corridor remain unchanged.
Highlights of the Committee’s decision
- MPR was kept at 11.50%
- The asymmetric corridor of +100/-700 basis points around the MPR
- CRR was retained at 27.5%
- While Liquid Ratio was also kept at 30%
The Committee noted that inflation continued to be driven by supply-side disruptions arising from the COVID-19 pandemic and other legacy factors. Key amongst these are the security challenges in parts of the country; the increase in food prices; and the recent hike in the pump price of PMS and electricity tariff.
The MPC emphasized the need to address structural supply-side issues putting upward pressure on costs of production and unemployment.
Meanwhile, to address the public health crisis associated with the COVID-19 pandemic, the Committee urged the Federal Government to make relentless effort to procure a substantial quantity of the COVID-19 vaccines to surmount the public health crisis and pave the way for a broader macroeconomic recovery.
The Governor highlighted that the current economic recession had been anticipated by the monetary and fiscal authorities, which prompted them to put measures in place to quicken the reversion. The Committee, however, noted that the economic contraction had bottomed out in Q3 2020 since it moderated significantly from -6.1% recorded in Q2 2020 to -3.62%.
What this means
The decision of the Central Bank to retain the monetary policy, despite a rise in inflationary pressure, indicates that the apex bank aims to expand credit to the real sector at low-interest rates.
This action will hope to boost production, increase business activities in the country, and also increase consumer spending.