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Business News of Sunday, 26 December 2021

Source: thenationonlineng.net

Movers and shakers of economy in 2021

Zainab Ahmed, Minister of Finance, Budget and National Planning Zainab Ahmed, Minister of Finance, Budget and National Planning

Despite the trials and challenges that dogged the operating business climate in the outgoing year, some key players who control the levers of the economy made some appreciable progress in different areas of human endeavour. In this report, IBRAHIM APEKHADE YUSUF captures the high and low points of these players in the nation’s business ecosystem in the past 12 months.

Year 2021 saw the economy literally wobbling and tottering on the back of the ravaging COVID-19 pandemic which was on a killing spree across the globe, leaving most governments around the world askance as they longed desperately for lasting vaccines to contain the virus. But in a manner of speaking, luck did smile on some sectors and people as the year panned out, even in Nigeria.

Speaking with a cross-section of experts, including Prof. Chris Onalo, Registrar/CEO, Institute of Credit Administration, Mazi Okechukwu Unegbu, among others, who ventilated their views on the state of the polity, especially within the business climate, they contended that some players did record some modest successes despite the headwinds that characterised the last 12 months.

Some of the names which resonated the most during the interface and discussion session include but not limited to the following personages and institutions: Minister for Finance, Budget and National Planning, Zainab Ahmed; Central Bank Governor, Godwin Emefiele; Minister of Communications and Digital Economy, Prof. Isa Ali Ibrahim Pantami; billionaire businessman, Mr Femi Otedola; Governor Nyesom Wike of Rivers State; MTN Nigeria which made hefty investment in the ICT sector and Funke Opeke, the CEO of MainOne, banking amazons, to mention just a few.

Zainab Ahmed

It is not a coincidence that Mrs. Zainab Ahmed, who is one of the major players that control the levers of the economy, was at the forefront of most economic policies of the President Muhammadu Buhari administration in the last 12 months.

The minister announced some far reaching decisions and policies of the government in the course of the year, most of which have had some rippled negative effects on the polity.

One of such policy frameworks announced was the Finance Act, 2020, billed to change certain laws including some tax law provisions, which are harped on ensuring a balance between broader macroeconomic strategies and specific measures to attract investment, grow the economy and create jobs.

Besides, the minister announced the planned removal of the fuel subsidy by mid-2022 to be replaced with N5000-a-month transport grant to be given to the poorest Nigerians. The population of the poorest Nigerians is put at 40 million.

The cost of the proposed transport grant to be funded from the treasury is N2 trillion. However, the Minister added a caveat that “the final number of beneficiaries will depend on the resources available after the removal of the fuel subsidy.”

The minister also announced that the Federal Executive Council (FEC) had approved the National Development Plan (NDP) for 2021 to 2025 to succeed the Economic Recovery and Growth Plan (ERGP) which expired in December 2020.

She said the NDP was structured along six clusters–economic growth and development, infrastructure, public administration, human capital development, social development and regional development.

The minister said that plan had been estimated at an investment size of N348.7 trillion over the five-year period.

Emefiele’s rising influence

When the Central Bank of Nigeria (CBN) Governor Godwin Emefiele unfolded his policy direction for the second term of five years, support for the domestic economy was one of the pledges that topped the list.

Interestingly, this mandate was literally pursued with all vigour and verve in the last 12 months, judging by the policy matrix of the Bank in key areas of its operations.

As part of this exercise, the apex bank has been able to lend huge support to the domestic economy in line with its mandate to activate better life for all citizens of the country.

The CBN boss also plans to achieve $12 billion non-oil exports by 2023 and raise financial inclusion to 95 per cent by 2024 while retaining the managed-float exchange rate.

The CBN boss’ commitment to the domestic economy has led to more funding going to key segments of the economy to ensure the impact of the Covid-19 pandemic was reduced on the people and their businesses.

In line with its Covid-19 response plan, the CBN under Emefiele created credit facilities for the healthcare, N100 billion, Targeted Credit Facility, N100 billion, and manufacturing sector N1 trillion.

From January 2021 till date, N157.5 billion have been disbursed for 29 real sector projects under the Real Sector Support Facility , while N857.6 billion have been disbursed for 234 real sector projects under the RSS-DCRR (inclusive of (CMIS) from inception November 2018 till May 28, 2021.

Besides, in the last one year, the sum of N26 billion have been disbursed for 10 projects under the Covid-19 Manufacturing Intervention Scheme (CMIS) while N255.9 billion have been disbursed for 78 projects under the CMIS from January 2020 till May 28, 2021.

Likewise, 98 healthcare projects have been funded to a tune of N97.44 billion under the Healthcare Sector Intervention Facility (HSIF) as at May 28, 2021.

Seven years into his two terms of five years each, Emefiele’s scorecard looks good in the face of the daunting challenges inflicted by the pandemic businesses and economies across the globe.

Likewise, in the five year Policy Trust of the CBN- 2019 to 2024, Emefiele promised to improve access to credit for Micro, Small and Medium Enterprises (MSMEs) as well as spur consumer spending to stimulate growth and enhance employment, among others.

Following the apparent credit squeeze which started in March 2019, the CBN boss modified some long-staring rules that were perceived, rightly or wrongly, as one of the constraints to bank lending.

The Loan to Deposit Ratio (LDR) for commercial banks was adjusted upward from 30 per cent to 60 per cent, and later 65 per cent. The policy shift led to over N2 trillion additional credit to the economy, with MSMEs benefiting more despite fears in many quarters that the LDR policy will increase the level of bad loans in the sector.

So far, expansion in credit has boosted business growth as it helps in changing savings into investment, but it is also a matter of concern for prudential regulation.

However, as the credit expanded the ratio of bad loans to total loans continuously moderated due to policy measures that accompanied the credit cost policy like the Global Standing Instruction (GSI) policy that allows banks to debit accounts of loan defaulters in other banks. The GSI is linked to customers’ Bank Verification Number.

FBN Holdings Plc, United Bank for Africa Plc and Zenith Bank Plc expanded their loan books by the equivalent of about $1 billion in order to dodge heavy penalties from the CBN, S&P Global Market Intelligence calculations showed.

Analysts said many banks expanded their loan base following the CBN’s LDR plan, which also includes sanctions for defaulters through restriction on their deposits.

“The CBN will not allow people to borrow money and refuse to pay again. That era has gone. If you take money, you will pay back the loan. If you borrow money and refuse to pay, we will take your money wherever you are keeping it,” Emefiele said.

President, Chartered Institute of Bankers of Nigeria, Bayo Olugbemi, said that the scourge of bad loans had been a long standing menace to the Nigerian banking sector.

According to him, the issuance of the GSI policy under Emefiele marks a new dawn in credit management and debt recovery processes in the country.

Apart from easing the naira, the CBN governor also unveiled the Central Bank Digital Currency (CBDC) otherwise known as eNaira, the digital equivalent of the physical Naira last October.

The block chain, which is projected to increase Nigeria’s GDP by $29billion over the next 10 years, would enable the government to send direct payments to citizens eligible for specific welfare programmes as well as foster cross border trade.

“As the tagline simply encapsulates, the eNaira is the same Naira with far more possibilities. The eNaira – like the physical Naira – is a legal tender in Nigeria and a liability of the CBN. The eNaira and Naira will have the same value and will always be exchanged at 1 naira to 1 eNaira,” he said.

Emefiele added that the CBN has given careful consideration to the entire payments and financial architecture and has designed the eNaira to complement and strengthen these ecosystems and has implemented secure safeguards and policies to maintain the integrity of the financial system.

Otedola Vs Odukale

One newsmaker that took a lot of industry watchers by storm was Billionaire businessman, Mr Femi Otedola, following his triumphant return to the capital market on a big scale few years after he offloaded his stake in Forte Oil, 75 per cent, which later became Ardova Plc under its new owners.

The business mogul reportedly pounced on the crisis at FBN Holdings Plc, the parent company of First Bank of Nigeria Limited, which also recently had a board crisis, to take over the company.

Otedola, son of a late Governor of Lagos State, Sir Michael Otedola, is now the single majority shareholder of the first generation lender in Nigeria.

He is said to have acquired N30 billion worth of the company’s equities at the Nigerian Exchange (NGX) Limited, where the firm is listed valued at 5.07%.

In recent times, there has been an upward movement in the share price of FBN Holdings at the stock market and this has raised many eyebrows as some investors were asking what was driving the hike.

Otedola is not new to the boardroom and it is believed that his entry into the banking space would cause a disruption and make him rub shoulders with renowned bankers like Mr Jim Ovia of Zenith Bank Plc, Tony Elumelu of United Bank for Africa (UBA), amongst others.

Some months ago, many observers were shocked when the Central Bank of Nigeria (CBN) sacked the boards of FBN Holdings and First Bank of Nigeria Limited and it was learnt that the financial institution has been on the life-support of the regulator.

The FBN Holdings board led by businessman, Mr Oba Otudeko was asked to leave and the CBN further ordered the bank to ensure that the debts owed by the directors, including Mr Otudeko, who sits on the board of Honeywell Flour Mills Plc, should be recovered.

A few months after this directive, shares of FBN Holdings and Honeywell have enjoyed a significant rise in value, causing people to ask questions.

If the latest information is correct, it would mean that Mr Otedola was likely the reason for the uptick witnessed in First Bank stocks at the exchange lately.

Like Otedola, Mr. Tunde Odukale, a director at FBNH was also in the race for ownership of the bank with 5.36% holding.

But checks revealed that Odukale’s shareholding in FBNH is 1,061,712,022 units, which is technically 2.95% of the total shares in FBNH (35.8 billion shares) meaning his total direct and indirect shareholding is not up to 5% which had been the case for all shareholders of the bank as of the financial statement for the period ended June 30th, 2021.

A dark horse called Mafab along with MTN win 5G license

In a related development, a fortnight ago, Mafab Communications Ltd along with MTN Nigeria emerged the two successful winners of the 3.5 gigahertz (GHz) spectrum auction for the deployment of Fifth Generation (5G) technology to support the delivery of universal broadband services in Nigeria.

The preferred bidders were led by their chief executive officers including: Karl Toriola Alhaji Musbau Mohammad Bashir respectively.

The bid process was supervised by officials of the DSS), ICPC and observed by officials of the Association of Telecommunications Companies of Nigeria (ATCON) and Association of Licenced Telecommunications Companies of Nigeria (ALTON), NCC and other telecom stakeholders.

Funke Opeke

Following on the heels of MTN Nigeria is Funke Opeke, the CEO of MainOne, whose company pulled off a deal with Equinix, a U.S. multinational specialising in internet connection data centres.

MainOne cable, which services businesses in more than 10 African countries, is now an Equinix subsidiary and the acquisition, subject to regulatory approval, is pegged at $320 million. When completed, it will become the largest acquisition of a tech company in Nigeria and the first landmark deal made by an African woman tech CEO.

Rise of amazons Yemisi Edun, Onyeali-Ikpele, Bukola Smith, others

The year 2021 will go down in the annals of the banking sub-sector as one year which saw the rise of top women CEOs of tier II banks.

On the roll call is Nneka Onyeali-Ikpe who became the MD/CEO of Fidelity Bank on January 1, 2021, also making her the first female MD of the bank in nearly 35 years.

Following closely on Onyeali-Ikpe’s trail was Yemisi Edun, who was announced as Managing Director of the First City Monument Bank (FCMB) Nigeria, just as Mariam Olusanya succeeded Segun Agbaje as MD of Guaranty Trust Bank Plc, while Bukola Smith succeeded Hamda Ambah in April 2021 as the Managing Director of FSDH Merchant Bank, a subsidiary of the FSDH group.

Also in the outgoing year, SunTrust Bank also announced Halima Buba as the new MD/CEO. Buba has over 20 years banking experience across several banks including Allstates Trust Bank, Zenith Bank, Inland Bank Plc, Oceanic Bank Plc and Ecobank Nigeria Limited, and also sits on the board of Directors of the Nigerian Sovereign Investment Authority (NSIA) and Anchoria Asset Management Company Limited.

Kafilat Araoye first appointed in January 2021 to hold forte for Adam Nuru, the former CEO of Lotus Bank, a financial institution which has recently received a non-interest banking licence by the Central Bank of Nigeria (CBN) in June 2021 was formally confirmed as CEO in July 2021.