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Business

Non-oil sector is critical to Nigeria’s economic recovery in 2021 – Cordros Capital

The Non-oil sector is expected to drive Nigeria’s economic recovery in 2021.

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Japanese group trains farmers on modern technology 

Nigeria’s GDP growth and eventual recovery in 2021 is expected to be heralded and driven by the Non-oil sector of the economy.

This disclosure was made in the presentations at the e-press conference titled “Positioning in the new normal” by Cordros Capital.

According to the report…

  • In 2020, the Non-oil GDP dipped by 2.5% year-on-year which was attributed to the lingering impact of the pandemic on business activities, with partial easing of lockdown restrictions.
  • The Oil GDP also dipped by 13.9% year-on-year as a result of 18.1% year-on-year decline in crude oil production, as Nigeria fully complied with the OPEC+ agreements.
  • In 2021, the Non-oil sectors are expected to spearhead the economic recovery with the Services sectors growing by 2.69%. The Agriculture sector is expected to remain as resilient as it was in 2020 and grow by 1.89%, but the Manufacturing sector will dip by 0.89% as a result of weakening demand as well as limited FX supply constraints.

Why this matters

Nigeria’s economy has been quite monolithic since the 1980s and this has been persistently threatened by the instability in crude oil prices in the international market.

The need for the diversification of the Nigerian economy from over-dependence on oil cannot be overemphasized, especially going by the unstable and fluctuating global oil prices. This is aimed at minimizing the country’s vulnerability to macro-economic risks, such as production fall, fall in demand and price, and also a run out of reserves.

In the early ’60s, agriculture was a booming sector – Groundnut, Cotton, Cocoa, Palm-kernel, etc, coupled with other mining activities were the major sources of the booming tradable goods before the advent of oil and its predominance in the Nigerian economy.

No doubt, the non-oil sector has what it takes to unlock the economy of Nigeria and position it on the path of resilient and sustained growth, if optimally harnessed.

Johnson is a risk management professional and banker with unbridled passion for research and writing. He graduated top of the class with B.sc Statistics from the University of Nigeria and an MBA degree with specialization in Finance from Ambrose Alli University Ekpoma, with fellowships from the Association of Enterprise Risk management Professionals(FERP) and Institute of Credit and Collections management of Nigeria (FICCM). He is currently pursuing his PhD in Risk management in one of the top-rated universities in the UK.

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Business

Osinbajo reveals what Nigerians in diaspora asked for to make more investments in the country

Osinbajo has disclosed that the Nigerians in diaspora seek an enabling business environment in order to make more investments.

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Solar, FG to slash import duties on tractors, buses, others in 2020 Finance Bill, Nigeria will not issue Eurobonds, says Vice President Yemi Osinbajo, FG guarantees mortgage loan to low income buyers at low interest rate, FG inaugurates gold refinery project in a landmark event

Nigeria’s Vice President, Yemi Osinbajo, has revealed that the Nigerians in diaspora asked for improvement in the enabling business environment in order to make more investments into Nigeria in specific engagements with investment opportunities.

This follows the conduct of a study by the Federal Government with stakeholders, which found out that many Nigerians have a keen interested in investing in the country.

This disclosure was made by Osinbajo while speaking at a webinar organized by Fidelity Bank Plc, entitled, ‘The New FX Policy, Implications and Positive Impact on Diaspora Investments’

Osinbajo, who was represented by the Executive Secretary/Chief Executive Officer of Nigerian Investment Promotion Commission (NIPC), Yewande Sadiku, commended the new CBN FX policy, ‘Naira 4 Dollar Scheme,’ an initiative aimed at incentivising senders and recipients of international money transfers, saying it would aid more investment from Nigerians living abroad.

What Nigeria’s Vice President is saying

Osinbajo pointed out that for several years, the remittances from Nigerians in diaspora exceeded Nigeria’s oil revenue, adding that the country is interested in finding out how to translate this potential to investments.

He said, “Nigerians in diaspora represent an indomitable force, they are flag bearers of Nigeria’s image, Nigeria entrepreneurial energy and Nigeria’s incredible can-do attitude. In business, politics, education, sports, entertainment, science, medicine, and arts, Nigerians have demonstrated across the world what Nigerians represent in Nigeria. We realise the role of the diaspora and the potential that they represent.

“For several years, the remittances from Nigerians in diaspora exceeded Nigeria’s oil revenues, which translated sometimes as high as six per cent of GDP. We are interested in understanding exactly how to translate this potential to investments.

“So, the office of the VP working with stakeholders, including NIPC, worked on a study and we found that many Nigerians, particularly first-generation males, have a keen interest in investing in their country.”

Going further, Osinbajo added, “We noticed that 70 per cent of remittances go into family support and only 30 per cent of the inflows go into investments and in that 30 per cent, a bulk of it goes into real-estate.

“But what Nigerians in the diaspora indicated would be useful for them is to undertake more investments into Nigeria in specific engagements that promote investment opportunities led by the private sector. From government, what they asked for was improvement in the enabling business environment.

“The effort of government in recent years has been on improving the business environment and initiatives, such as this, driven by the private sector, to attract investment from the diaspora is one of the key things they asked for,’’ he said.

The Vice President expressed delight with the new CBN policy that makes it easier for Nigerians in diaspora not just to transfer funds to Nigeria but to have greater control over the funds they transfer to Nigeria.

He said that he is confident that when statistics would be released, there would be a material impact on the diaspora remittances from Nigerians to Nigeria.

What you should know

  • It can be recalled that the CBN in an earlier circular dated March 5, 2021, stated its new forex policy initiative that all recipients of diaspora remittances through the apex bank’s licensed IMTOs shall henceforth be paid N5 for every $1 received as remittance inflow as an incentive.
  • This means for instance if an individual sends you $10,000, you will get an additional special credit alert of N50,000.
  • The new policy initiative which is with effect from Monday, March 8 and end on Saturday, May 8, 2021, states that this incentive is to be paid to recipients whether they choose to collect the US dollar as cash across the counter in a bank or transfer same into their domiciliary account. In effect, a typical recipient of diaspora remittances will at the point of collection, receive not only the USD sent from abroad but also the additional N5 per USD received.”

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Business

BUA commences legal action over allegations of involvement in $20 million bribe scandal

BUA has urged stakeholders and the public to disregard malicious, baseless allegations circulating in some news media concerning its OML 110.

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Kabiru Rabiu, BUA Group

The management of BUA Group has commenced legal actions against parties involved in spreading spurious allegations of corruption and involvement in a $20 million bribe scandal.

The leading conglomerate revealed that the corruption allegations which were published by some Nigerian news channels allegedly attributed to a purported statement by Alhaji Ibrahim Mai Deribe and Cavendish Petroleum with respect to BUA’s OML 110 as false, defamatory, malicious and libellous.

According to the statement published by the management of BUA, the Group had been duly contacted by Cavendish Petroleum as well as the alleged writer of the statement, Alhaji Ibrahim Mai Deribe and both parties have told BUA on the record that neither Cavendish, the Mai Deribe Family nor any of its Executives put out such a malicious statement.

The Group noted that the statement was made with the clear intent to impugn the integrity and reputation of BUA Group and its Chairman, Alhaji Abdul Samad Rabiu.

BUA fingers Kainos MD as instigator of false allegations, commences legal action

An inhouse investigation conducted by the Group revealed that the source of the fraudulent news is Mr James Onyejekwe, the MD of Kainos Exploration and Production.

In reaction to this, BUA has therefore instructed its legal team to immediately commence criminal defamation proceedings against the MD of Kainos, the said originator of the malicious letter fraudulently attributed to Alhaji Ibrahim Mai Deribe, with damages.

The legal action will also extend to the online blog, blazenews.com.ng – which first published the unsubstantiated malicious news without a careful fact check in their duty of journalistic care, to confirm and clarify the source of such a weighty allegation.

The Group believes these actions are necessary, in order to protect the name and reputation of the manufacturing conglomerate, noting that there is no reason why Mr. James Onyejekwe of Kainos Exploration and Processing would single out BUA in a supposed business dispute which had no link to the BUA Group in its entirety.

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