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Revenue of US-owned companies in Nigeria decreased from N1.47 trillion to N1.08 trillion in 2020

The American Business Council disclosed that revenues of American owned companies in 2020 declined from N1.47 trillion in 2019 to N1.08 trillion in 2020.

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Revenue of US-based companies in Nigeria decreased from N1.47 trillion to N1.08 trillion in 2020
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The American Business Council (ABC) has revealed that the revenues of American-owned companies in 2020 declined from N1.47 trillion in 2019 to N1.08 trillion in 2020.

This is according to a recent in-house survey – 2020 Nigeria Economic Impact Survey.

Dipo Faulkner, the President of the American Business Council who made this public, explained that according to the survey report, foreign currency access, implementation of policies by the government, heightened regulation in key industries were some of the key factors responsible for the decline in business activities in 2019 and 2020.

He noted that these factors were further compounded in 2020 by the disruption from the COVID-19 pandemic and the resultant knock-on effect on the economy.

READ: Nigerian Breweries leveraging, but stacking cash through rising input costs

Chijoke Uwaegbute, a Partner at PWC and a key panelist who spoke on the figures, tasked the government to give close attention to the headwinds companies face in their operation in the country.

He explained extensively that in terms of full-time employment, the US companies underperformed as the figures declined from 18,500 in 2018 to about 14,000 in 2019.

Chijoke stated that on average, in a bid to positively impact the local manpower, the company spent about N32 million on a yearly basis on training with a minimum amount of N1.4 billion on training.

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Among the few positives was the growth in indirect employment, which surged significantly as there were over 30,000 indirect jobs created during the period under review, while over 13,000 direct jobs were created.

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READ: This is how much fake products could be costing the government

What they are saying

The Chief Executive Officer of the American Business Council (ABC), Margaret Olele tasked the government to create an enabling business environment to create jobs in the country and facilitate economic growth and sustainable development of the nation’s economy.

She expressed her disappointment over the performance of the companies since 2018, as many companies have invested a lot in different sectors of the economy, in setting up manufacturing facilities and plants in the country. 

While speaking on the interventions of the US Government during the COVID-19 lockdown, she noted that the US government brought in as much as $22 million into Nigeria to support and assist in the fight against the COVID-19 pandemic and with subsequent intervention from the mission putting the total in excess of $34 million.

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The Deputy Political and Economic Chief, US Consulate, Merrica Heaton expressed her worries over the performance of these businesses in 2020.

She said, “When I first saw the data, I was a bit disappointed to see the decreases but hopefully, this will help us to look at where we really need to focus our efforts, and how we can coordinate and advocate with the Nigerian government to improve the investment climate and bring more US businesses and those that are here to encourage further investments.”

She explained that the decline is short-term, as it was driven by the pandemic, hence the challenge according to her is a matter of what can be done and how to work efficiently with the US private sector here in Nigeria, with a view to improving the investment climate.

READ: The opportunities in Africa’s $100 billion infrastructure deficit

In order to resolve the issues of policy inconsistency and key drawdown in regulation which inhibited the performance of US businesses in 2020, she said that this is a time to work more with the government, as there is a positive economic impact from some of this collaboration and engagement.

She added that in terms of the women in the leadership roles, the ABC and the consulate can both be role models to the entire leadership, as they move to encourage more women into the leadership role.

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What you should know

  • The US-based businesses generated over N1 trillion in 2019 and spent N2.57 billion to expand operations in the last five years.
  • The companies also spent an additional N1.5 billion on CSR, from N1.9 billion expended in 2018, with a joint contribution of over N100 million to Covid-19.
  • Going forward the US-based businesses plan to invest about N2.37 billion in the country over the next three years.

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Omokolade Ajayi is a graduate of Economics, and a certificate holder of the CFA Institute’s Investment Foundation Program. He is a business analyst, and equity market researcher, with wealth of experience as a retail investor. He is a business owner and a stern advocate of Financial literacy, who believes in the huge economic prospect of the Nigerian Payment channels and Fintech space.

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Business

Lagos agricultural sector to generate $10 billion in the next 5 years

The agricultural sector in Lagos state is projected to generate as much as $10 billion within the next 5 years.

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Lagos, Sanwo-Olu, Businesses that must remain closed after May 4
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The Lagos State Governor, Mr Babajide Sanwo-Olu, has projected that the agricultural sector in the state could generate as much as $10 billion within the next 5 years.

This is as the governor noted that Lagos could no longer afford to rely exclusively on other states for its food, adding that it was time to unlock its immeasurable agricultural potential through the implementation of the 5-year roadmap.

This disclosure was made by the Governor at the formal launch of the state’s 5-year Agricultural and Food Systems Roadmap, on Thursday, adding that most of the investments would be private sector-driven while the government acts as the catalyst and enabler.

Governor Sanwo-Olu opined that the Roadmap would also lead to wealth generation, value creation, food security, the industrialisation of the agricultural sector and the entrenchment of inclusive socio-economic development of the state.

He said that the roadmap essentially focuses on 3 pillars, which are: growth of the upstream sector, growth of the midstream and downstream sectors as well as improvement of private sector participation.

What the Lagos State Governor is saying

Sanwo-Olu, in his words, said, “Our strategies for sustainable Agricultural Development shall focus on three pillars. First, we will grow the upstream sector through interventions by leveraging technologies that are capable of lowering the cost of production of value chains; Focus on growing the midstream and downstream sectors that are of value and lastly, we will improve on private sector participation by developing and initiating policies that will encourage more private investments in agriculture.”

The projection is that the total investment in the Agricultural Sector from the government, private sector, donor agencies and development partners will run into over $10 billion in the next five years. While we expect most of the investment to be private sector-driven, the government will continue to provide the needed infrastructure while the private sector will be encouraged to lead the key projects.’

The governor pointed out that the state had already started the revamping of its Agricultural Land Holding Authority (ALHA) to support investment in agriculture, giving assurance that the coconut belt would also be strengthened with increased private sector involvement.

Sanwo-Olu listed some State’s landmark investments that will aid smooth delivery of the Roadmap to include the Lagos State Aquatic Centre of Excellence (LACE) that would boost fish production from 20% to 80%, the Imota Rice Mill, the Lagos Food Production Centre Avia, Igborosu-Badagry as well as other statewide agriculture-focused initiatives.

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He said, “I am greatly encouraged by the interest already generated in the Five-Year Agricultural Roadmap and I hope it will be sustained and backed with concrete action on the part of our development partners and the international community. I assure you that the Lagos State Government is putting in place deliberate incentives to make your investment safe, secure and profitable.’

Sanwo-Olu, therefore, urged potential and established stakeholders in the agricultural sector to partner with the state in order to transform the agricultural sector for food security, wealth generation, poverty eradication, economic diversification, rapid industrialisation and accelerated socio-economic growth.

Bottom line

This is a very laudable initiative from the Lagos State Government especially at a time the country is looking at diversifying its economy. The successful implementation of this programme with the expected benefits from the value chain will contribute significantly to the economic development of the state and the country in general.

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The investment in the transformation of agriculture to agribusiness is one way of achieving the dream of attaining self-sufficiency in food production and creating more wealth.

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Business

Bank needs to humanise customers – Aladdin CEO

Every customer needs a unique page where their details go beyond the account numbers.

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Nigerian banks have been tasked to humanise all customers and not only treat them as just an account number. This is to say that banks should treat each customer uniquely and not assume a  one-size-fits-all.

These are the comments of the Chief Executive Officer, Aladdin Digital Bank, Darlington Onyeagoro. According to him, the continent, especially Nigeria needs a marketplace Digital Bank to humanise customers, a vacuum he said Aladdin will occupy.

He said, “By humanizing customers, we are putting a face to the name. You are not just an account number, you are a human being, and as humans, you need to eat, make money and other things.

“Each customer is unique; that is why for the first time, we are breaking barriers so we can reach each one personally. We run a platform structure where every customer has a unique page where their details go beyond the account numbers.”

He added that Aladdin Finance App, which is powered by PurpleMoney Microfinance Bank, will also be offering its customers free banking with no charge rates, where customers can carry out their transfers and transactions to other banks for free.

“Traditional banks charge N25 per transfer, but we are charging Zero Naira for now. We bear the cost for now. So, we offer free banking for at least between one to three months of our operation to encourage them. All transactions are free for now,” Onyeagoro added.

The app also has several features that will cater to each customer, including seamless customer service, rewards on savings, high-interest rates up to 16% (subject to money market reality), and access to different types of loans for emergencies.

To encourage savings for customers to meet their business and personal needs, Aladdin Bank will also be rewarding its customers through a weekly raffle draw on its online platform, where amounts saved from N5,000 and above with the bank will give each customer a virtual ticket for a raffle draw.

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“In that way, we are encouraging our customers to save towards their goals. For example, if you want to travel, pay your rent, children’s school fees, etc., whatever you want to do, you can set targets for yourself and save towards it. So, while you are saving towards your target, we are also paying you a competitive interest rate,” he added.

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What you should know

The co-founders and chief promoters of this project are Onyeagoro, Olayemi Nasiru and Avi Umukoro. Nasiru is a seasoned banker with over a decade of experience. He once held a Senior Management Position in one of the top commercial banks in Nigeria.

Umukoro, another top-flight banker, has over 12 years of consumer banking experience in one of the top-performing banks.

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