Items filtered by date: Tuesday, 02 April 2019

Guaranty Trust Bank (GTB) has resisted attempts to take over its branch by Innoson Group of companies.

Innoson and GTB have had a long running case over alleged indiscriminate charges on Innoson’s account with the bank.

Following GTB’s show of resistance, Innoson warned that the bank’s resistance amount to contempt of the court order, and vowed to invoke the full weight of the law against GT bank.

At Ogui road branch of GTB in Enugu, on Monday, officials prevented Innoson and its team of lawyers and security personnel from executing the seal order.

There was a mild drama as customers made panic withdrawals.

Bank manager of the Ogui road branch told Innoson lawyers and security men that they should not seal the bank, and argued that the order the court gave was execution order to pay Innoson its money but not to seal the bank.

 

“The court did not tell you to seal our bank, what they gave was an execution order to pay him his money. If they gave you order to seal it let us see the paper from court which orders you to do so.

“We are not above the law. Everybody knows that Supreme Court is the apex court in the land, once they say it that’s final, but we have not seen the paper from the Supreme Court that gave the order, and until we see that, we will not allow you to seal our bank.” the branch manager said.

Innoson’s head of communications, Cornel Osigwe however said that it’s next line of action would be contempt charge against the bank for obstructing court’s execution order.

Osigwe said “This goes to show the character of the company that we’re dealing with. The character of the company that has failed to obey court judgement, the character of the company that has consistently used kangaroo style and method as their bank relationship management to their best customers.

“We’re a law abiding company, the writ of Fifa execution was carried out by the court bailiff through due process of the law. We shall commence contempt proceedings against the Branch manager and the Managing Director. Nobody is bigger than the court in Nigeria.”

Published in Bank & Finance

Investors in the Nigerian stock market lost N158bn in March while the market slumped by N48bn in the first quarter of the year.

After opening with at 31,721.76 basis points with a market capitalisation of N11.830bn, it hit 32,173 basis points and a market capitalisation of N11.998tn on March 5 and went ahead to close at 31,041.42bps with a market capitalisation of N11.672tn on the last trading day of the month.

A further analysis reveals a N158bn loss between the first and last day of trading for the month under review.

On March 27, the market dropped to its lowest point during the month on March 27 at 30,829.45bps, judging by the All-Share Index while the market capitalisation index showed a drop on March 21 at N11.518tn.

There was total turnover of 2.629 billion shares worth N12.794bn were traded in 15,558 deals by investors on the floor of the Exchange during the last week of the month.

Contrastingly, a total of 1.198 billion shares valued at N12.273bn that exchanged hands in the previous week in 18,293 deals.

Leading the activity chart was the financial services industry (measured by volume) with 2.346 billion shares valued at N8.602bn traded in 9,331 deals, thus contributing 89.23 per cent and 67.23 per cent to the total equity turnover volume and value, respectively.

This is followed by the Information and Communications Technology industry with 140.531 million shares worth N28.117m in 113 deals.

On the third spot is the consumer goods industry with a turnover of 54.152 million shares worth N2.099bn in 2,613 deals.

Trading in the top three equities namely Wema Bank Plc, Chams Plc and Zenith Bank Plc (measured by volume) accounted for 1.948 billion shares worth N3.449bn in 1,642 deals.

This led to the contribution of 74.08 per cent and 26.96 per cent to the total equity turnover volume and value, respectively.

Market capitalisation appreciated by 0.51 per cent while The ASI depreciated by 0.31 per cent to close the week at N11.672tn and 31,041.42bps respectively.

Eterna Plc, Red Star Express Plc, Ikeja Hotel Plc, C & I Leasing Plc and Associated Bus Company Plc were the top five gainers of the week with share prices gaining 10.42 per cent, 10 per cent, 9.94 per cent, 9.90 per cent and 8.16 per cent, respectively.

The top five losers included Fidelity Bank Plc, Dangote Flour Mills Plc, Sovereign Trust Insurance Plc, Mutual Benefits Assurance Plc and Academy Press Plc, which saw their respective share prices shed 13.08 per cent, 12.07 per cent, 9.09 per cent, 8.33 per cent and 8.33 per cent.

Published in Business

Political figures in South African have condemned the latest attacks on foreigners in Durban. At the same time, their anti-migrant rhetoric ahead of elections on May 8 is fueling the country's simmering xenophobia.

Loveness James was chased from her home in Burnwood, an informal settlement in Durban, in the middle of the night early last week.

"It was a normal day. I went to work at the salon, came home, cooked for my husband and went to bed," the 22-year old Malawian national, who is nine months pregnant, told South Africa's Independent Online.

Then a violent mob broke down the door of her house.

"They started shouting and telling us to leave, they kept chanting that we must leave their country, they hit and kicked my husband. All I could think of was my unborn baby, my water breaking and me giving birth in front of people who wanted us dead," she said.

Others migrants have similar stories after groups started attacking, looting and burning homes, shops and cars owned by foreigners in Durban a week ago. Three people died in the violence, and dozens were injured, like the man in the picture above.

"It was about 1 a.m. on Monday when we were forced out of our rented rooms," Miriam Mussa, a Malawian immigrant, told GroundUp, a South African public interest news agency.

"I was with my baby and my husband. Even though they did not hurt us after seeing that we had a small baby, they allowed us to leave with only the clothes we were wearing. We watched them as they took out all our furniture," Mussa said.

A hand pulls down the back of a man's T-shirt to reveal a long scar
This man was injured in the xenophobic attacks in Durban

Mussa and her family, along with some 60 other migrants, ended up fleeing to a local police station, camping for several days in the open in its grounds. Dozens of others foreigners took refuge in a nearby mosque.

The xenophobic attacks have created a sense of fear and betrayal among the immigrant community, says Hupenyu Makusha, from Refugee Pastoral Care. The Durban-based organization has been providing blankets, tents and clothing to those forced out of their homes.

"These people [the victims] were actually neighbors to the locals, who turned against them. So they feel very betrayed by their neighbors … very insecure," he told DW in a phone interview from Durban.

Ongoing cycle of xenophobic violence

Attacks against foreigners and foreign-run businesses have erupted regularlyin the past decades in South Africa.

Against a background of chronic unemployment for black South Africans, immigrants are often seen as stealing valuable jobs and taking advantage of housing and health services squeezed by mismanagement and corruption. Migrants are also often accused of being involved in crime.

The facts simply don't support this, says Loren Landau, the director of the Johannesburg-based Africa Center for Migration and Society.

For example, although exact data is difficult to come by, it's estimated some 1.5 to 2 million migrants live in South Africa, a country with a population of 58 million. But a far larger number – around 9 million – of locals are unemployed.

"Even if you you took [the migrants] out, you wouldn't see that many more jobs," said Landau.

"But it's not facts that are driving the violence. It's the way in which it's being framed by national and local leaders," Landau told DW in a telephone interview.

Parties take a hard line on migration ahead of elections

On May 8, the ruling African National Congress (ANC) is facing what is probably the party's most competitive national elections since the end of apartheid in 1994.

The main opposition party, the Democratic Alliance, already said in September 2018 that immigration would be one of its key campaign issues, arguing that borders needed to be more tightly controlled.

Recently, the ANC has also seized on the issue.

Speaking at an ANC rally earlier in March, President Cyril Ramaphosa promised a crackdown on undocumented migrants.

"Everyone just arrives in our townships and rural areas and sets up businesses without licenses and permits. We are going to bring this to an end. And those who are operating illegally, wherever they come from, must now know," Ramaphosa said before a cheering crowd.

ANC secretary-general Ace Magashule also warned in March about foreigners perpetrating crimes.

"If they are undocumented when crime happens, you can't even get these people. You can't get their fingerprints. [This is about] the safety of the country. It is not being opportunistic," Magashule told City Press, a South African news outlet.

Cyril Ramaphosa, dressed casually in a polo shirt and cap, greets young local residents during a door to door campaign visit

Cyril Ramaphosa and his ANC party are facing tough general elections

Migrants 'scapegoats' for government failures

These kinds of statements imply that immigration and lapsed border control are somehow responsible for South Africa's considerable social problems rather than the government's failure to tackle crime, lack of services, poverty and corruption, says Landau.

The ANC has "started to look for scapegoats, look for excuses – and migrants are a convenient excuse," he said.

The strongest words against the xenophobic attacks in Durban came from Julius Malema, the leader of the Economic Freedom Fighters (EFF), while addressing a party rally on Saturday.

"We don't want votes from people who are xenophobic," he said. "We must love one another as Africans because showing love to someone from Mozambique, Guinea, Egypt and Nigeria is self-love."

At the same time, Malema regularly makes inflammatory comments about 'Boers' (white Afrikaans-speaking farmers), Jews and southeast Asians and is often accused of inciting racial divisions in South Africa.
President Cyril Ramaphosa said he "condemned violence against foreign nationals in South Africa" in a statement issued by his office on Monday – more than a week after the first attacks broke out.

Ramaphosa also called on police to identify those responsible and bring them to justice.

When it comes to persecuting xenophobic crimes, however, the state has a poor track record.

According to Human Rights Watch, "virtually no one has been convicted for past outbreaks of xenophobic violence, including the Durban violence of April 2015 that displaced thousands of foreign nationals."

A group of people sit and stand as they attend a meeting

Hundreds of foreign nationals attended a meeting organized by the local government after the attacks

'Hesitant' condemnation of attacks

In Durban, more than 70 Malawians caught up in last week's xenophobic attacks are looking to return to their country, according to Hupenyu Makusha, because they are too scared to stay.

As for the political response to the violence, while Makusha praised the local government for working "tirelessly" to calm the situation, he said it's been "too hesitant" at national level.

"To me, this seems to signal a point where, if the leadership, especially the president and members of the ruling party, are not saying anything … then it is maybe interpreted in different ways.

"One may say that it means approval," he said.

 

Credit: DW

Published in Economy

The financial sector crisis was predominately caused by weakness in banking system preceded by high non-performing loans, illiquidity, weak corporate governance, undercapitalization amongst others.

However,the continues insolvency in some banks due to high non-performing loans, misappropriation of funds by some top executives members resulted in their inability to meet their financial obligation to their stakeholder.

The banking crisis has also caused severe economic pain to private sector companies which has led to job losses in excess of ten thousand and slowed economic growth. These happenings in the banking sector may have contributed to the steep depreciation of the local currency.

This was precipitated by a run on the affected banks causing panic withdrawals by their customers and in most cases necessitated the Bank of Ghana (Lender of a last resort) to step in and provide liquidity support to the affected banks. Consequently, the Bank of Ghana revoked licenses of seven (7) universal banks mainly because of negative capital adequacy ratio (CAR), high non-performing loans and bad corporate governance practices.

The Dr.Ernest Addison’s reform of banking sector is expected to make the banks more solvent, free up capital for lending. The bank recapitalization is also expected to contribute significantly to the financial sector's development and make banks more capable to play their intermediation role in the development of the economy due to enhanced capital base. Furthermore, the banking reforms is aimed at addressing issues like risk management weaknesses, operational lapses, governance flaws and to firm up capitalization in the banking system in Ghana for economic growth.

Aftermath of the Banking Reforms

The Ghanaian banking sector has undergone some phase of restructuring though complex and comphrehensive,there are still some edges that needs to be smoothened.The purpose is to make it more sound,resilient and efficient to promote savings, investment and growth for both the public  and private sectors of the economy.

The banking sector is expected to promote economic growth and development through financial intermediation if all policies intended to reform it are in tandem with each other. Banks are expected to enhance their credit delivery processes to make funds available, affordable and accessible for the private sector especially for entrepreneurs, start-ups and improve productivity to foster economic growth in the country. It cannot be over emphasized, that industry watchers expect that financial systems with banks as it major component use available resources to reduce risk, provide linkages for the different sectors of the economy and provide conducive environment to remove all impediment which otherwise could lower or hinder savings and investments.

One major factor that contributed to the collapse of the seven banks is the high non-performing loans on their books which can be attributed to poor credit delivery and lack of constant monitoring and the high interest/lending rate by banks which make it almost impossible for borrowers to pay back borrowed funds. It is recommended that with the consistent downward review of the Central Banks MPC rate, universal banks are also expected to review their lending rates downwards to make repayment of borrowed funds easy for the private sector.

Regulations

The mandate of the Central Bank of Ghana is to regulate and provide supervision to ensure that the whole banking system remains sound and resilient. Banks are regulated by laws which promote policies that allow only financially sound banks to operate, establish appropriate accounting, valuation and reporting rules, limit excessive risk-taking by board and managers and provide for corrective measure on activities of weak institutions. To this end, the need for constant stakeholder discussions on immediate solutions to weather down the impact of the banking crisis and restore confidence and regulatory credibility within the public.

However, supervision and compliance are pivotal to the soundness of the banking system with attention on adequacy of banks risk management practices, constant monitoring and review of all prudential returns is crucial to maintaining soundness of banks and mitigate any unforeseen risk.

Furthermore, the Bank of Ghana going forward must strengthen and enhance the on-site banking inspections and banks’ balance sheet analysis, make sure that the banking supervision department retains professionals with adequate skill to deliver efficiency on the job. Where there is the need to provide additional resources for enhance delivery, it must be done.

In fact to ensure a drastic reduction in the non-performing portfolios of banks in the country, the Bank of Ghana must collaborate effectively with all players in the sector to enhance and enforce the Credit Bureau systems. Indeed, when this is done, it would improve information sharing among banks, deepen credit delivery in the market, better the allocation of credit and reduce default rate by borrowers.

The Bank of Ghana going forward should indispensably tighten the institutional set up of banks and financial institutions. It must require that independent supervisory authorities (external auditors, etc.) improve transparency, disclosure to protect the going concern status of banks.

The Bank of Ghana should collaborate with all the stakeholders to diligently provide supervision to all the banks, so as to scrupulously mitigate the risk of any banking crises in the future.

My five Pillars to Improve Banking Regulations in Ghana

  • Enhance dialogue within the banking system as well as all financial institutions
  • Improve information dissemination in the banking sector
  • Resource well the research department of the Central bank to promptly grasp emerging market trends and development.
  • Human resource development and training should be improved
  • Strengthen local/foreign cooperation for economic growth.

Corporate Governance

Good corporate governance practice is a very important factor in steering competitive banking environment, Of course this promote safety of investments and guarantee good returns. Because banks’ liabilities are largely in the form of deposits, which should be available to creditors/depositors on demand, while their assets often take the form of loans that have longer maturities.

By holding illiquid assets and issuing liquid liabilities, banks create liquidity for the economy for development. The liquidity production function may cause a collective-action problem among depositors because banks keep only a fraction of deposits on reserve at a time.

However, depositors cannot obtain repayment of their deposits simultaneously because the bank will not have sufficient funds on hand to satisfy depositors at once.

This mismatch between deposits and liabilities becomes a problem in the unusual situation of a bank run. To this end, the Bank of Ghana is expected to ensure all banks enhance their corporate governance structure to avoid any future financial crisis that would lead to a run on a bank.

The Bank of Ghana should ensure that the following sound corporate governance practices are enforced in all banks;

  • Strong risk management functions and special monitoring of risk exposures
  • Setting and enforcing clear lines of responsibilities, ensure managerial accountability and transparency
  • Ensure that all banks meet the statutory Capital Adequacy Requirement at all times without exceptions.
  • Ensure an environment supportive of good corporate governance, that the direct lines of supervision of different business areas are different.
  • Ensure dilution of ownership i.e. individual majority stake and government stake.

Conclusion

This article has picked up two key areas of concern to review and has made suggestions as to how they could be strengthened to forestall any future occurrences. The Bank of Ghana should enhance its regulatory supervision of all banks and enforce compliance to sound corporate governance practices within the banking sector.

This article has nevertheless offered some fresh insights concerning regulations and corporate governance that would move the banking sector to a new equilibrium.

 

©Jerry.J.AFOLABI is a Financial & Economic expert Email; This email address is being protected from spambots. You need JavaScript enabled to view it. / +233 054 123 8987

Published in Opinion & Analysis

Unity Bank Plc on Friday released its result for the 2018 financial year which shows the Balance Sheet budding up with a whopping 50.8% growth during the year.

In its audited financial statements for the year ended December 31, 2018, released to The Nigerian Stock Exchange, the Bank’s Balance Sheet Size increased from N156.51 billion in 2017 to N235.98 billion, culminating in Gross earnings of N37.33 billion for the year.

Similarly, in the period under review, the bank grew its bottom-line by 109.9% as Profit Before Tax (PBT) moved in a positive trajectory to close at N1.41 billion, with the Bank recording a Profit after Tax (PAT) of N1.27 billion, shaking off the negative position it posted in 2017FY.

The year’s performance is supported by noticeable fundamentals derived from the Bank’s corporate action to clean up its book by eliminating all the legacy non-performing loans (NPLs) which resulted in full de-risking of its balance sheet and creating a new lease of life for the Bank

A cursory review of the Bank’s performance shows significant growth across key financial metrics, with Net Operating Income for the year ended December 31, 2018 growing by 112% to N21.63 billion from N10.22 billion in the corresponding period of 2017, Non-Interest Income also increased to N6.3billion from N1.61bn recorded in 2017 and earnings per share (EPS) for the year 2018 stood at 13.03 kobo, up from negative of 127kobo recorded in 2017 FY.

The Bank’s improved performance is attributable to the reinvigorated business transformation initiatives implemented during the year, in addition to strategic corporate actions taken by the Management of the Bank to prioritize customer service, product delivery as well as optimize its operations for operational efficiency, thus setting a stage for its sustainable business growth model.

The Bank’s strong performance feat was achieved through composite strategic focus involving the complete revamp of its service delivery channels, products revamp and profiling as well as building structured and secured operating environment to protect customers’ businesses. In this regard, the Bank, not only aggressively pushed out its USSD platform (the newly introduced customer-centric platform for easy banking), but also launched its youth-focused UniFi app – a robust omni-channel app that goes beyond banking services but also offers lifestyle services including gamification for increased customer satisfaction. These, along with aggressive transaction push led to a 290% increase in non-interest income (income from transactions, cards, mobile, ATMs, commissions & fees, FX etc.).

Furthermore, the Bank also optimized its operations and services through process simplification and automation while promoting cost efficiency across the entire value-chain. The Bank rolled out its Central Processing Centre (CPC) for standardized operations and operational risks mitigation thus improving service delivery to customers in the Bank. In effect, these and several modest initiatives led to the huge 17.3% reduction in total operating expenses and a major improvement in the efficiency ratios.

Unity Bank also leveraged on its core competence and strategic advantage in deepening its reach in Agribusiness and attendant value-chain, driving the over 360% growth in loan portfolio in this segment of the market. A major feat achieved without material increase in loan quality – with NPL ratio closing the year at 0.69% (the best in the industry).

On cost optimization, Unity Bank’s focus yielded positive results as the lender brought down its total operating expenses by 17.3% from N24.46billion in 2017 to N20.22billion in 2018FY. This reduction is primarily as a result of the Management drive to build strong processes in its operations by leveraging on key business alliances that attract better efficiency in resource allocation and growing scales in the network.

Commenting on the result, the MD/CEO, Mrs. Tomi Somefun said: “The most gratifying aspect of our 2018 performance, is that the Bank has made a dramatic turnaround from losses in the previous year to a promising profit position in 2018FY. This was made possible by growth in the business throughputs and transaction-based banking with its attendant strong non-interest income.

“We equally recorded significant growth in our customer acquisition through enhanced customer-centric products that we rolled out during the year riding on our rebranded channels and platforms which were well accepted by the youth. We leveraged on our exceptional competencies in agribusiness and rural economy niche market which contributed to substantial growth in loans through on-lending schemes to farmers in the last quarter of 2018, all of which buoyed our performance for the year under review.

“Also, the two-prong customer-centric banking approach being deployed to deliver quality banking services to emerging sectors in Retail/Small and Medium Enterprises and the Agricultural value chain are impacting positively on the bank’s bottom-line. In furtherance of our vision to be the “Retail Bank of Choice,” the bank revamped its digital strategy to provide convenient, simple and efficient platforms that are already attracting the next generation of Nigerians and expand the volume of loyal customers that have kept faith with us through the years. These are designed to guarantee double digits growth in both earnings and profits for the bank in the near future.”

The Bank is aggressively and creatively pushing the frontiers of its business by creating robust platforms to support emerging digitalization of strategic businesses as well as corporate service units aimed at unlocking inherent potentials that will enable the Bank effectively ride on economic headwinds and target opportunities in the markets.

Analysts are of the view that the full impact of the initiative on the account and shareholder’s value began to manifest at the fourth quarter of 2018 and early 2019, thereby gradually regaining investors’ confidence in the mid-tier lender after a period of uncertainty prevailed in the preceding year.

A statement from the Bank further adds that the Board of the bank expects that barring unforeseen circumstances, the trend of the results achieved in 2018 would be surpassed in 2019. With the margins steadily looking up, the outlook for the future holds even brighter prospects for the Bank even at this period that the Bank closes its recapitalization programme and sets a new phase of its strategic pursuit.

Published in Bank & Finance

One can easily assume that international investors are deterred from investing in Africa given the growing need to weather a global financial crisis, which has been distorted by Brexit, rising geopolitical tensions, tightened global liquidity conditions, leveraged loans and sketchy debts that continue to riddle bank systems, idiosyncratic governments and the bond yield curve that is trending toward inversion.

However, this is not the case. Conversely, the global financial crisis and the desperate search for growth, yield and solvency has led investors to pay more attention to emerging markets in Africa, and in particular frontier markets with favourable growth paths, moderate debt levels and high returns on investment.

The stock markets across Africa have reportedly exceeded a market capitalization of USD 100 billion and are substantially larger than those in Central Europe and Russia in the mid-1990s, when they first opened up to foreign investors. According to the International Monetary Fund, the African markets have been a strong bull run and shown a compound annual growth of 3.5% in 2018 and are projected to pick up to 3.9% in 2019.

There are many factors that make the African continent an attractive destination for institutional investors, such as the economic prospects, a favourable demographic profile, high urbanisation and the rise of the African consumer. The acceleration in growth has also been driven by cyclical improvements and supported by favourable regional conditions.

These favourable conditions include the restoration of oil production in Algeria, Angola and Nigeria, the improved external financing conditions, the moderate increase in commodity prices, surging foreign direct investments and the narrowing current account deficit in certain jurisdictions. In Ethiopia and Nigeria, this growth has been spurred by partial privatisation of state-owned companies and high commodity prices, respectively.

Contrary to the images that would previously conjure up at the mere mention of Ethiopia, the country has made commendable economic progress in reducing poverty and improving living standards. While the market outlook continues to be somewhat subdued for Ethiopia, due to dynamics that were historically hampered by poor government policies and state-owned monopolies, foreign exchange shortages, and weak prices for traditional exports, Ethiopia has displayed economic growth potential. In the last quarter of 2018, the International Monetary Fund's World Economic Outlook Report predicted Ethiopia to be the fastest growing frontier economy in Africa with 8.5% growth, thereby far outstripping the growth of advanced economies.

Ethiopia's economic growth has been driven by an increase in industrial activity and the availability of domestic and foreign investments in certain industries such as infrastructure, manufacturing and telecommunications. The reduction in its current account deficit to 6.4% of the real gross domestic product in 2017/2018, the flexible exchange rate regimes and the various attempts to bring inflation back on target have all supported Ethiopia's economic growth. In addition, the current Prime Minister's reform agenda is driven by a strategy to shift the engine of economic activity to private sector development while allowing the public sector to be consolidated into such development.

For instance, the Ethiopian Government has accelerated its efforts to bolster network expansion and improve the hardware capabilities and infrastructure of its state-owned telecommunications company, Ethio Telecom, which boasts over 60 million mobile subscribers and 18 million internet users. To this end, the Ethiopian Government has reportedly opened-up Ethio Telecom's assets and shares, for acquisition by local and foreign investors as part of a multi-billion dollar investment. This investment is aimed at accelerating fixed broadband and internet penetration and ultimately, fast-tracking the development of Ethio Telecom's infrastructure. Although the telecommunications monopoly seems to be the main prize, because of its protected market and the absence of competitive broadband services, other major state-owned companies facing partial privatisation in 2019 include Ethiopian Airlines, Ethiopian Shipping and Logistics Services Enterprises and Ethiopian Electric Power.

Turning to Nigeria, the upgraded forecast reflects improved prospects for Africa's most populous nation and the growth of its real gross domestic product is projected to increase to 2.3% in 2019. Although the sharp recovery of oil prices and various portfolio outflows have provided some relief to Nigeria's 1.5% annual contraction and technical recession recorded in 2016, the country's improved economic growth still falls short of the levels seen during the commodity boom of the 2000s.

Although crude oil and gas products accounted for over 94.4% of Nigeria's foreign exchange earnings in 2018, Nigeria is under immense pressure to introduce reform policies in order to adjust to the global pursuit of sustainable energy alternatives, which include solar energy, wind power and geothermal energy. The Nigerian economy's vast dependence on its crude oil and natural gas resources also makes it vulnerable to oil discoveries in other African countries, the global push towards technologies that promote energy sustainability and fluctuating commodity prices. The extent to which the Nigerian economy moves towards its near-term development aspirations will depend on the success of its import substitution policies, the fast-paced implementation of structural reforms and economic diversification of non-oil economic indicators.

In order to address Nigeria's economic diversification and growth, the federal government launched the Economic Recovery and Growth Plan (ERGP) in April 2017. The ERGP is a medium term all-round developmental initiative for the period 2017-2020, focused on restoring economic resurgence and building a globally competitive economy. Some of the objectives of the ERGP include stabilising the macro environment, increasing non-oil revenue generated from the agricultural sector, improving transportation infrastructure, driving the industrialisation of small and medium-sized enterprises and ensuring sufficiency in energy and petroleum products.

Although there have been challenges in achieving the ERGP objectives, positive results are already manifesting in key economic indicators. For instance, the Nigerian economy has witnessed an increase in non-oil revenue generated from the agricultural sector, which has reportedly shown a steady growth of 18.58% in the last quarter of 2018 and contributed 14.27% to the nominal gross domestic product. In addition, the ERGP task team has launched a number of agricultural projects such as the commissioning of the West African Cotton Company Limited rice mills in Argungu, Kebbi State, with a production capacity of 120,000 metric tonnes, geared towards enhancing productivity in the agricultural sector. According to the most recent data published by Nigeria's National Bureau of Statistics, other non-oil sectors that are contributing to Nigeria's economic growth include trade, telecommunications, mining and quarrying, real estate services, finance and insurance and construction.

Evidently, there is great investment potential across the African continent and the outlook on African countries remains positive despite the reported downgrades for the global economy.

 

Itumeleng Mukhovha, an associate in the Corporate/M&A practice at Baker McKenzie in Johannesburg

Published in Opinion & Analysis

Pope Francis has urged Christians across the world to build friendship, particularly with adherents of other religions rather than trying to increase membership of the church.

The Pope, Head of the Catholic Church and Sovereign of the Vatican City State said this in his message at the Saint Peter’s Catholic Church in Rabat, Morocco on Sunday.

Pope Francis is on a two-day visit to Morocco.

He said that at creation of the church, God called it to enter into dialogue with the world in which we live.

“The Church must enter into dialogue with the world in which we live. She has something to say, a message, a communication to make.

“To say that the church has to enter into dialogue is not to follow a fashion or strategy for increasing membership of churches.

“The church has to enter into dialogue just like our Lord and Master Jesus Christ who from the beginning moved by love centered into dialogue with us as a friend.

“As disciples of Jesus Christ and from the very day of our baptism, we have been called to be a part of the dialogue of salvation and friendship from which we are the first to benefit. ”

According to the Pope, Christians should have respect for the freedom of others to practice their religions.

Pope Francis cited how Saint Francis of Assisi encountered Sultan al-Malik al-Kamil during the early crusades and Blessed Charles de Foucault who were deeply impressed by the humble and meek life of Jesus of Nazareth.

“Dialogue then becomes prayer. We can carry it out daily in the name of human fraternity that embraces all human beings, unites them and makes them equal.

“A prayer that does not distinguish, separate or marginalise, but embraces the life of our neighbour.

“A prayer of intercession that says to the father, thy Kingdom Come. Not by violence, not by hatred, not by ethnic, religious or economic supremacy, but by love and compassion, ” Pope Francis said.

The Holy Father commended the church in Morocco for using dialogue, cooperation and friendship to sow a future of hope for upcoming generations.

This, according to the Pope, will prevent attempt to exploit differences and ignorance in order to sow fear, hatred and conflict.

According to him, fear and hatred, nurtured and manipulated destabilise our communities and leave them spirituality defenceless. ”

The visit is the Pope’s second to the country, after Pope St. John Paul II went in 1985, as the first pope to visit a Muslim country, at the invitation of the state.

Pope Francis praised Morocco as a model of religious moderation and migrant welcome as he kicked off a trip to the kingdom Saturday, warning that walls and fear-mongering won’t stop people from exercising their legitimate right to seek a better life elsewhere.

King Mohammed VI welcomed Francis as he arrived during an unusual rainstorm and began a 27-hour visit aimed at boosting Christian-Muslim ties and showing solidarity with Morocco’s ever-growing migrant community.

Morocco last year became the main destination for sub-Saharan African migrants seeking to reach Europe via Spain.

The influx has strained the kingdom’s resources and fueled anti-migrant sentiment in Spain ahead of its April 28 general election.

Published in World
  1. Opinions and Analysis

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