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Nigeria: H1’17 Corporate Performance – Tier-1 Banks Drive Up Combined Revenue to N5.2 Trn

By Nkiruka Nnorom

Full results of leading companies quoted on the Nigeria Stock Exchange, NSE, in the first half of 2017, H1’17, point to real recovery in corporate performance reflecting positive developments in the economic environment within the period. Financial analysts say second half would be even more impressive, if the positive macroeconomic environment is sustained.

The final reports 94 leading companies show they recorded N5.27 trillion in revenue in H1’17, a 20.3 per cent increase compared to N4.38 trillion posted in the corresponding period of 2016, while their profit before tax, PBT, rose to N960.5 billion from N598.1 billion, representing 60.6 per cent increase.

The banking sector by the virtue of release of the results of the four tier-1 banks and the three others, outpaced other sectors, accounting for N2.59 trillion or 49.2 per cent of the overall turnover and N456.24 billion, representing 48 per cent of the overall profit before tax of the 94 companies.

But a two-part analysis by Financial Vanguard indicated that the tier-1 banks (comprising First Bank, United Bank for Africa, Zenith Bank, Guaranty Trust Bank and Access Bank) with a combined H1’17 earnings of N1.353 trillion, drove up the revenue profile of the 94 companies with the five banks accounting for 25.7 percent of the 94 companies’ combined revenue. Also, while the five tier-1 banks had combined revenue growth rate of 31.1 percent, the rest of the companies numbering 89 had a combined revenue growth rate of 17 percent.

However, though the tier-1 banks dominated the size of the combined profits of the 94 companies, the PBT growth rate of the 89 companies at 85.8 percent was diminished by tier-1 banks’ PBT growth at 28.5 percent.

The combined PBT of the tier-1 banks at N338.46 billion accounted for over 35.2 percent of the combined PBT of the 94 companies which stood at N960.5 billion.

Companies subdue inflation

Nevertheless, the leading companies’ revenue and profit performances subdued inflation rate and outshined the gross domestic product, GDP, within the period.

Inflation trended lower throughout H1’17 recording a six-month average of 17.23 percent while the percent and 60.6 percent respectively.

A recovering GDP figure for quarter two, Q2’17, grew by 0.55 per cent year-on-year in real terms, while it was negative in Q1’17.

The H1’17 corporate results, according to business analysts, revalidate recent macroeconomic performance indicators, which were all in positive territories.

The growth in the companies’ fortune also confirmed the expansion in economic activities as reflected in the Central Bank of Nigeria, CBN, Purchasing Managers Index, PMI, which has been robust for five consecutive months to August, 2017.

The August manufacturing sector PMI expanded to 53.6 per cent, while the non-manufacturing sector composite PMI expanded for the fourth consecutive month to 54.1 per cent.

The report revealed that out of the 34 sectors surveyed, 27 sub-sectors experienced expansion in activities, while seven sectors experienced contraction.

Analysts’ positions

However, investment experts are of the opinion that the worst may not be over yet despite the exit of the country from recession. They said that businesses still have inflationary pressure to deal with and called on the government to work on further bringing down inflation to ease the attendant challenge to business entities.

“That we are out of recession and the economy is doing well is a welcome development for business interest, which means that income to the businesses is going to increase now that the income to the economy has started and more income and make more profit,” said Mr. David Adonri, Managing Director/CEO, Highcap Securities,

He, however, said that Nigerians, including businesses would still be groaning as their income would still be eroded by inflation.

“The country has been experiencing stagflation and stagflation has two legs – recession and inflation. Now the country has come out of recession, but we still have high inflation rate challenging the economy. So, what we have achieved so far is inflationary growth, whereas the objective of any good economy is to achieve non-inflationary growth. So, the challenge that is still there is to bring down inflation to a single digit.

“So, the next challenge is to manage the economy in a such a manner that inflation would start declining and if possible, get to single digit level where the economy will enjoy non-inflationary growth,” he declared.

According to Johnson Chukwu, Managing Director/CEO, Cowry Asset Management, the growth being witnessed in the economy is sublime coming from one sector – the oil and gas sector.

“I think we would have subdued optimism going forward. The economy has rebound from a negative to a positive growth, but growth is very sublime coming from one sector. The agriculture and manufacturing sectors are growing at a slower rate and trade has not turned positive, but given that the sector that lubricates every other sector, which is the oil sector, is now profitable, one is hoping that the trickledown effect of that recovery will be felt in every other sector. So, it is going to be a kind of subdued optimism for businesses in the remaining part of the year,” he added.

Corporate Results

Breakdown of the corporate results showed that pharmaceutical sector, which enjoyed huge investors’ patronage on the stock exchange during the period, came tops in terms of percentage growth in revenue, recording 77 per cent growth to N11.84 billion from N6.69 billion in H1’16.

This was followed by the consumer goods sector, which rose by 64.2 per cent to N364.82 billion from N222.21 billion, while the agriculture sector came third with 58.6 per cent increase to N31.14 billion from N19.64 billion 2016.

However, the banking sector led revenue in absolute terms with the revenue of the 14 banks reviewed rising to N2.59 trillion from N2.04 trillion, a 27 per cent growth. The banking sector also accounted for 49.2 per cent of the total turnover for the period.

The oil and gas sector came second, recording N701.44 billion revenue in H1’17 against N532.87 billion posted in the same period in 2016, thus representing 31.6 per cent growth. The sector, therefore, accounted for 13.3 per cent of the overall turnover.

Industrial goods sector placed third, polling N584.05 billion in revenue, 52.3 per cent increase compared to N383.61 billion and accounted for 11.8 per cent of the total turnover of all the companies.

Profitability Positions

The consumer goods sector, which recorded subdued profitability in 2016 due, mainly, to rising cost of raw material sourcing and high cost of other manufacturing inputs occasioned by forex scarcity during the period, came tops in terms of percentage growth in PBT in H1’17. The sector achieved huge 352.9 per cent growth to N63.875 billion in H1’17 against N14.105 billion in H1’16.

The industrial goods sector ranked second, with 189.7 per cent increase in pre-tax profit to N281.67 billion from N97.22 billion, while conglomerates sector, which ended H1’16 in negative profit position due to the same forex reason above, came third with 168.1 per cent growth. The sector’s PBT went up to N5.29 billion against -N7.77 billion loss before tax in 2016. The three sectors significantly out-performed inflation during the period under review.

Again, the banking sector outpaced others to lead profitability in absolute terms. At the end of the review period, the sector raked in N456.24 billion pre-tax profit compared to N370.64 billion in H1’16. This means that the 15 banks represent controlled 48 per cent (nearly half) of the combined pre-tax profit of the 94 leading companies in the NSE reviewed.

The industrial goods sector followed, posting N281.67 billion PBT against N122.57 billion in 2016, thereby accounting for 29.3 per cent of the overall PBT of all the companies.

The consumer goods sector was the third as the sector achieved N63.88 billion pre-tax profit in H1’17 against N14.11 billion in H1’16 and accounted for 6.7 per cent of the total PBT recorded by the companies in the half year period.

Sectoral analysis

The banking sector, propelled by earning positions of Zenith Bank Plc, Ecobank Transnational Incorporated, Access Bank Plc, Stanbic IBTC Holdings Plc and UBA Plc, led others with N2.59 trillion revenue position.

Zenith Bank led other banks analysed in the sector, posting 77.1 per cent growth in revenue at N380.44 billion up from N214.81 billion in H1’16. This accounted for 14.7 per cent of the sector’s earnings. Access Bank and ETI placed second with 41.5 per cent revenue growth each. Access Bank recorded N246.58 billion against N174.01 billion in 2016, while ETI recorded revenue of N386.89 billion against N273.45 billion.

Access and ETI contributed 9.5 per cent and 15 per cent to the sector’s total earnings respectively.

Stanbic IBTC was the next as it recorded 36.3 per cent revenue growth to N97.2 billion from N71.32 billion, representing 3.7 per cent of the sector’s turnover. UBA ranked fifth, achieving N222.7 billion turnover, which represents 34.5 per cent increase compared to N165.6 billion posted in 2016 and accounted for 8.5 per cent of the sector’s turnover.

Stanbic IBTC emerged the sector leader in percentage growth in profitability, followed by Zenith Bank Plc, Fidelity Bank Plc and UBA Plc in the second, third and fourth positions respectively as the sector posted N456.24 billion PBT during the period.

Stanbic IBTC’s PBT grew by 86 per cent to N29.17 billion from N15.68 billion, thereby contributing just 6.4 per cent to the sector’s profitability. Zenith Bank followed with 74.2 per cent increase, rising to N92.18 billion from N52.91 billion and accounted for 20.2 per cent of the sector’s PBT. Fidelity Bank placed third with 66.7 per cent PBT growth to N10.22 billion from N6.13 billion, but accounted for mere 2.2 per cent of the banking sector’s profitability. UBA was the next with 65.5 per cent PBT growth to N57.53 billion from N34.76 billion, which represents 12.6 per cent of the banking sector’s profitability.

However, GT Bank Plc, which recorded N101.1 billion pre-tax profit, emerged the major contributor to the sector’s pre-tax profit in real term, contributing 22.2 per cent to the PBT.

Oil & Gas sector

The oil and gas sector, driven by improvement in earnings position of counters like Oando Plc, BOC Gases, Total Nigeria Plc and MRS Oil, recorded 31 per cent overall sector revenue growth at N701.44 billion against N532.87 billion in 2016. This shows 13.3 per cent of the total 94 companies’ turnover.

The sector recorded N7.014 billion pre-tax profit against N55.312 billion loss before tax in H1’16, representing 112.68 per cent growth. This represents 0.7 per cent of the total pre-tax profit of the 94 companies for the period.

Oando Plc led other companies analysed in the sector, rising by 129.8 per cent to close the period at N266.98 billion in comparison to N116.24 billion in the corresponding period. The company accounted for 38.1 per cent of the sector’s total turnover.

BOC Gases followed with a 77 per cent growth to N1.21 billion from N926.61 million achieved in H1’16. The company, however, accounted for mere 0.2 per cent of the sector’s turnover. MRS Oil Plc placed third, rising by 16.2 per cent to N62.48 billion from N53.78 billion and accounted for nine per cent of the sector’s turnover volume.

BOC Gases towered above others in terms of profitability. The company’s pre-tax profit rose by 496 to N199.40 million from N33.45 million in H1’16 and accounted for 2.8 per cent of the oil and gas sector’s PBT. It was followed by Caverton Offshore Group Plc with 1400 percent growth to N938.03 million from -N2.40 million loss position, while Forte Oil Plc placed third with 10.3 per cent growth to N4.74 billion from N4.26 billion PBT recorded in H1′ 2016.

Industrial goods sector

The industrial goods sector, driven by Dangote Cement, Lafarge Africa and Cement Company of Northern Nigeria, CCNN, posted N584.05 billion turnover, which represented 11.1 per cent of the 94 companies’ total turnover.

The sector recorded N281.67 billion pre-tax profit, thereby, accounting for 29.3 per cent of the total profit of the companies reviewed. Dangote Cement, which led in the sector, posted N412.68 billion revenue and N115.58 billion pre-tax profit.

The company showed leadership, controlling 70.7 per cent and 41.03 per cent of the sector’s turnover and PBT figures respectively. Lafarge Africa emerged second in the sector with N154.84 billion turnover, which represents 26.5 per cent of the sector’s turnover. Its pre-tax profit, however, stood at N18.16 billion, a mere 6.4 per cent of the sector’s profit, while CCNN was the next with N8.51 billion and N968.57 million turnover and profit before tax respectively. CCNN contributed 1.5 per cent and mere 0.3 per cent to the sector’s turnover and pre-tax profit respectively.

Consumer goods sector

The consumer goods sector posted N364.82 billion revenue and N63.875 billion in profit before tax, representing seven per cent and 6.7 per cent of the 94 companies’ total turnover and profit respectively. Analysts are of the opinion that the sector and some other manufacturing interests are beginning to enjoy the benefit of new CBN forex policy and improvement in macro-economic environment.

Nestle Nigeria Plc stood above others both in terms of revenue and profit position. Nestle during the period under review posted N121.92 billion revenue and N24.46 billion profit before tax, representing 33.4 per cent and 38.5 per cent of the sector’s turnover and pre-tax profit respectively. Dangote Sugar Refinery, DSR, came second with N118.68 billion revenue, representing 32.5 per cent contribution to the sector’s turnover. Its pre-tax profit stood at N25.61 billion, a 40.1 per cent of the sector’s profit. Dangote Flourmills Plc with N64.86 billion revenue emerged third company in the consumer goods sector. This accounted for 17.8 per cent of the sector’s turnover. Its profit before tax at N8.80 billion represents 13.8 per cent of the sector’s profit.

Insurance sector

The sector recorded the highest number of filers as a total of 23 insurers have already filed their H1′ 17 result, a marked departure from the usual practice where majority of the companies were non-compliant. The sector pooled N169.684 billion revenue and N30.684 billion pre-tax profit for the during. This represents 3.2 per cent and 3.2 per cent of the 94 companies’ turnover and profitability respectively. Unity Kapital Plc led with N21.98 billion turnover, representing 13 per cent of the sector’s turnover, while its pre-tax profit stood at N2.61 billion, accounting for 8.5 per cent of the sector’s profit. Axamansard Insurance came second with N17.95 billion revenue and N2.32 billion profit before tax. This accounted for 10.6 per cent and 7.6 per cent of the sector’s revenue and pre-tax profit. Continental Reinsurance with N15.19 billion revenue came third in the sector, contributing nine per cent to the turnover. Its profit before tax for the review period stood at N3.11 billion, representing 10.14 per cent of the sector’s pre-tax position.

Outlook

According to United Capital Plc, “The improvements observed in first quarter 2017, Q1’17 and second quarter 2017, Q2’17, were predicated on the resilience of the agriculture sector, increased crude oil production, amid the relative peace in the Niger Delta region, an aggressive drive to stimulate the economy via an expansive spending and borrowing plan and the adoption of a market friendly foreign exchange, FX rate regime (the I&E window). In our opinion, if the pace of policy pronouncement and implementation is sustained, the worst may be over”.

The investment banking house observed that five consecutive month of improvement in manufacturing PMI supports its position that the pace of output expansion in H2’17 will be stronger than witnessed in H1’17 as the market friendly policy reforms implemented in Q2’17 are expected to take full effect on the economy.

Alhaji Ola Yusuf, Managing Director/CEO, Trust Yield Securities, said that given the improvement already seen in the economy, the remaining part of the year would be good for businesses as they would make profit and declare more dividend for their investors.

“Once the environment is positive, then it means that things will turn out better and it will be reflected in companies results,” he said.

Cowry Assets Management analysts, in their H1’17 review of the economy, stressed that though improvement in the seasonal and structural factors would lead to a year-on-year moderation in both household and business input costs, but the risk to the outlook would be increased public sector spending for the 2017 fiscal year which will tend to drive up general price level.

Zimbabwe: Quality Seeds Key to Food Security – Minister Made

By Faith Zvorufura

Minister of Agriculture, Mechanization and Irrigation Development, Joseph Made has noted the importance of access and provision of quality seeds to ensuring food security, poverty reduction, safer trade and economic development.

Speaking at the launch of the national domestication of Common Market for Eastern and Southern Africa (COMESA) harmonized Seed Regulations, Made said in spite of achievements registered during 2016/2017 summer season, Zimbabwe has not been spared by the negative factors of climate change and outbreaks of new and old crop pests that threaten agricultural production, food security and nutrition.

“Access and provision of quality seeds remains a key input to ensuring food security,

“It is a preferred tool for re-establishing the livelihoods of farmers affected by disasters and to return them to life,

“There is need to raise national and regional awareness about seed security and its beneficial effects on food security, poverty reduction, environmental protection, safer trade and economic development,” said Made.

According to Made, ministry of agriculture, mechanization and irrigation development will continue to develop or alter legislation and strategies to appropriately facilitate seed industry development and its performance.

“In order to achieve seed and food security, technical departments of my ministry will continue to provide services that address challenges related to agricultural productivity, production and product quality,

“Issues of plant health which encapsulates seed health issues are gaining prominence and ministry is working on curbing that too,” he said.

Made added that without proper management, seed security in the country and COMESA region may not be realized.

Zimbabwe

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NGOs Coalition Lobby for Increased Budget for Justice Ministry

By Innocent Habonimana

OAG, ACJB and Cordaid team up to advocate the increase of the budget allotted to the Ministry of Justice. Basing their conclusion on the analysis of the 2016 budget, the NGOs say low budget has a negative impact on the access to justice for all.

After an analysis that has shown the insufficiency of the budget of the Justice Ministry with repercussions on the access to justice for all, three NGOs advocate increasing the budget.

Michel Masabo, a consultant who carried out the analysis of the budget of 2016, says “there are some budget lines showing the government’s preoccupation of people’s needs for justice”, but “the effort remains insufficient”.

As a consequence, judges are hindered to carry out their duty as they should. Godefroid Manirambona, the Chairman of Observatory of Government’s Action (OAG) says, with the increase of the budget, “judges will have means that will allow them to adequately satisfy the needs of citizens seeking justice”.

OAG, a local NGO that sees that the government is fulfilling its promises, collaborated with the Association of Burundi Catholic Lawyers (ACJB) and Cordaid on the “Analysis of the Budget of the Ministry of Justice for 2016”.

The activity is within the framework of their programme called “Strategic Partnership in Lobbying and Advocacy for the Access to Justice for All”.

The study highlighted the lack of enough qualified judges and the slow course of justice as consequences of the low budget.

For instance, Bujumbura Court of Appeal, that has the highest average of sentence execution, treated a monthly average of 99.6 cases but executed only 10.7.

The Courts of Appeal of Bururi and Ngozi provinces treated respective monthly averages of 33.5 and 72.66 but executed none.

In some cases, the lack of means of transport hinders the execution of judgments. This may cause judges to make parties involved in legal cases pay for the transport which can result in corruption.

In regard to protecting judges from being influenced, Masabo says, “one way to prevent them from being corrupted is to raise their pay”.

Burundi

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Renewable Energy Developers, Entrepreneurs Stand to Win Big

Rwandan entrepreneurs and developers in renewable energy have just a week to submit their applications for ACF 2017 competition and stand a chance to win $7 million (about Rwf5.9 billion) in funding. The deadline for application is May 12.

According to a statement from the organisers, ACF competition is a financial support mechanism designed to provide local developers and entrepreneurs with the technical expertise and funding required to implement their renewable energy projects.

It is organised and supported by Access Power, a developer, owner and operator of power projects in Africa and Asia, and EREN RE, a renewable energy firm. This is the third edition of the contest.

The winners of ACF 2017 will be announced on June 7 during the Africa Energy Forum in Copenhagen, the statement said, and the top three finalists will subsequently enter into joint development agreement discussions with Access Power.

“Once these are successfully concluded, Access Power will take an equity stake in the projects and commence independently funding their third-party development costs, such as feasibility studies, grid studies, environmental and social impact assessments and due diligence fees,” Reda El Chaar, the Access Power executive chairman, said.

He added that Africa’s renewable energy industry has huge potential, which requires ‘capable’ entrepreneurs to take the sector to another level. He noted that the competition is one of the ways to support renewable energy projects and provide them “with a fast route to the market, no matter the location.”

“Last year’s ACF set the bar high as we received nearly 100 submissions from over 25 countries across the full spectrum of renewable technologies, a 75 per cent increase on the previous edition. We encourage all renewable energy entrepreneurs to submit their projects for a chance to partner with us, and join efforts geared at strengthening Africa’s energy revolution,” Chaar said.

The ACF 2017 application forms and guidelines are available on: www.Access-Power.com.

Rwanda

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Nigeria: Despite Recession, Banking Sector Loans to Customers Rise to N16.372 Trillion

By Obinna Chima and Chineme Okafor

The audited results of 2016 for 14 banks quoted on the Nigerian Stock Exchange (NSE) have shown a 22 per cent increase in total loans and advances to their customers from N13.315 trillion in 2015, to N16.372 trillion in the year under review.

The financial results of the banks reviewed by THISDAY showed deliberate efforts by the banks, mostly to support operators in the real sector of the economy.

Similarly, the total profit after tax (PAT) of the 14 banks rose marginally to N452 billion in 2016, up from the N442.451 billion recorded the previous year; just as their total gross earnings climbed to N4.007 trillion in the reviewed year, as against the N3.441 trillion recorded in 2015.

The banks’ results reviewed were Zenith Bank Plc, Access Bank, FBN Holdings, United Bank for Africa Plc (UBA), Guaranty Trust Bank Plc, First City Monument Bank, Unity Bank, Wema Bank and Union Bank.

Others included Fidelity Bank, Sterling Bank, Stanbic IBTC Holdings, Diamond Bank and Ecobank Transnational Incorporated (ETI).

But one of the listed banks, Skye Bank, had notified the Nigerian Stock Exchange (NSE) that its results would be released next week.

A breakdown of the figures, however, showed that while FBN Holdings’ loans and advances increased to N2.084 trillion in the reviewed year, up from N1.817 trillion the previous year; Zenith Bank Plc’s financial statement also showed the bank gave out N2.289 trillion as loans and advances to its customers, compared with the N1.989 trillion recorded the previous year.

Similarly, while UBA loaned customers N1.505 trillion in 2016, up from N1.037 trillion the previous year; Access Bank recorded N1.809 trillion in 2016, from N1.368 trillion in 2015; GT Bank recorded N1.589 trillion in 2016, up from N1.372 trillion in 2015; ETI also posted N2.824 trillion in 2016, from N2.232 trillion in 2015; Diamond Bank Plc also posted N995.334 billion as customer loans and advances in 2016, up from N763.635 billion the previous year, while Fidelity Bank also posted customer loans and advances of N718 billion in 2016, higher than the N578 billion it gave out in the previous year.

In terms of profit after tax, the breakdown also showed that while GT Bank recorded N132.281 billion in 2016, higher than the N99.437 billion posted the previous year; Zenith Bank earned PAT of N129.652 billion in 2016, from N105.663 billion in the previous year; UBA’s PAT was N72.264 billion in 2016, from N59.654 billion the previous year; Access Bank’s PAT increased to N71.439 billion in 2016, from N65.869 billion; while FBN Holdings’ posted PAT of N17.141 billion, from N15.539 billion.

The International Monetary Fund (IMF) recently affirmed that Nigeria will this year recover from economic recession, projecting that the nation’s economy will grow by 0.8 per cent in 2017.

Citing increased crude oil production due to security improvement, the IMF stated that Nigeria’s Gross Domestic Product (GDP) will grow by 0.8 per cent in 2017 and 2.3 per cent in 2018.

The Group Managing Director/Chief Executive Officer, Access Bank Plc, Mr. Herbert Wigwe, expressed optimism that developments in the macro economy would be positive.

Also, the Managing Director, FBN Holdings, Mr. U.K Eke, described 2016 as a year characterised by significant uncertainty in the operating environment.

“We expect an improved economic environment through 2017 and are confident that the foundations we have put in place will drive improved financial performance and consequently enhance shareholders’ returns,” he said.

Also, the Chief Executive Officer, Diamond Bank, Mr. Uzoma Dozie, said in the months ahead, the bank would continue to deploy new technologies and digital applications to drive financial inclusion and convenient banking amidst a decline in the pace of economic activities and weak economic fundamentals.

The bank will also continue to deepen its retail strategy to mop up low cost fund, expand its credit creation structure and increase market share in all market segments, he added.

Banks Bar Power Discos from Loans

Meanwhile, commercial banks have reportedly barred the 11 electricity distribution companies (Discos) in Nigeria’s power sector from obtaining financial facilities to support their operations, the Association of Nigerian Electricity Distributors (ANED) has disclosed.

ANED said in a statement in Abuja on Monday, that the banks took this decision on the back of a N152.16 billion financial package from the Central Bank of Nigeria (CBN) allegedly written against their accounts, but which they have received only N49 billion.

ANED’s Director of Research and Advocacy, Mr. Sunday Oduntan, who signed the statement, stated that the loan was from the CBN-backed Nigeria Electricity Market Stabilisation Fund (NEMSF) worth N213 billion.

The financial package was designed by the central bank to settle the debts incurred by the electricity market within the interim rule periods, as well as legacy gas supply debts owed gas suppliers by the defunct Power Holding Company of Nigeria (PHCN) but now transferred to the Nigerian Electricity Liabilities Management Company (NELMCO).

According to Oduntan, the breakdown of the fund’s disbursements so far shows that N58.45 billion which is about 27.8 per cent was designated for the Discos, while N152.16 billion (72.3 per cent) was for the power generation companies (Gencos), gas suppliers and other service providers.

He stated that only N49 billion has been received by some Discos from the N120 billion the CBN had disbursed since it commenced in 2015.

Oduntan, also claimed that the N152.16 billion written in the name of the Discos were not for them, but that it was in their financial books.

“The debt encumbrance is a significant impediment to the Discos’ ability to borrow money to finance their capital investment, and their financing of the entire value chain,” said Oduntan.

He also spoke about the recent N701.9 billion approved for the Nigeria Bulk Electricity Trading Plc (NBET) to pay the Gencos for power that would be supplied from January 2017 to 2019, saying that if the retail end of the market would be ignored by the government in its intervention, the N701 billion may not sustain the electricity market.

“It is a good first step towards resolving the market liquidity challenge and ensuring that the upstream operators are not financially distressed, but it is not a complete solution to the problem.

“As long as the retail end of the value chain continues to under-recover its cost, any possibility of the government recovering its intervention or fixing the ailments of the sector is an illusory one,” Oduntan stated.

ANED also claimed that the market still has an outstanding shortfalls of over N800 billion which it added must be addressed urgently to ensure that the N701 billion loan to the NBET would be recovered.

West Africa: Continuing the Fight to Save 25 Million Lives Across the Sahel

[Malaria Consortium] ACCESS-SMC brought together a consortium of leading players in malaria prevention to deliver seasonal malaria chemoprevention (SMC) to seven countries across the Sahel: Burkina Faso, Chad, Guinea, Mali, Niger, Nigeria and The Gambia. In the Sahel, malaria remains one of the leading cause of severe illness and mortality in young children, with those under the age of five at most risk. For the 25 million children who live in areas subject to a seasonal surge in malaria incidence, SMC is an effective, lifesav

Nigeria: 78 Bank Directors Get N10.34 Billion Dividend in 2016

By Nkiruka Nnorom

AT the backdrop of the recession the nation’s economy slipped into last year alongside inflationary pressures, corporate results from the banking sector so far released indicate significant increases in fortune for the investors.

While the general shareholders of the first batch of seven banks announcing results so far received a total dividend income of N162 billion, indicating a rise by 13 per cent against N143.3billion in 2015, directors of the banks numbering 78 recorded 20.5 per cent rise in their dividend income at N10.34 billion as against N8.58 billion in 2015.

The banks are Zenith International Bank Plc, Fidelity Bank Plc, Access Bank Plc, United Bank for Africa, UBA Plc, FCMB Group Plc, Stanbic IBTC Holdings Plc and Guaranty Trust Bank Plc.

Financial Vanguard analysis revealed that three of the banks, namely, Zenith Bank, Access Bank and UBA accounted for 64 per cent of the total dividend declared by the seven banks, while their directors smiled home with N9.42 billion.

Further analysis showed that the Chairman of Zenith Bank Plc, Jim Ovia, the Group Managing Director/Chief Executive Officer of Access Bank Plc, Herbert Wigwe, and the Chairman of UBA, Tony Elumelu, benefited the most, receiving N9.25 billion, representing 89.5 per cent of the total dividend received by the 78 directors during the year.

Growth in dividend income

The dividend collected by the trio of Ovia, Wigwe and Elumelu also represents 5.7 per cent of the N162 billion total dividend declared by the seven banks and 8.9 per cent of N103.99 billion total dividend declared by the three banks in 2016. Though the growth in dividend income is considered commendable by some capital market analysts who are looking at the recessionary economic environment, it however, indicated a decline in real returns to the general shareholders whose income lagged behind average inflation rate of over 16 per cent during the year. But this also indicated that the basket returns to directors towered above the inflation rate.

Speaking to select media personalities last weekend in Abuja, the Special Adviser to the President on Economic Matters, Office of the Vice President, Dr. Adeyemi Dipeolu, expressed surprise at the profits and returns being announced by most corporate organizations for the year ended 2016 against the perspective of adverse economic circumstance.

However, Managing Director of Guaranty Trust Bank Plc, Mr. Segun Agbaje, had told journalists earlier this month at the heels of the results rolled out by some banks that the increases in figures of the bottom-line and returns does not reflect a contradictory performance against the economic situation, explaining that when measured against real exchange rate developments where Naira, the reporting currency, had depreciated by almost 60 per cent, the returns were not as impressive. He argued that when the depreciation is discounted the corporate results would be in the negative.

Shareholding by banks

Furthermore, breakdown of the shareholding structure of the seven banks showed that the 78 directors held 10.15 billion shares comprising of 4.4 billion direct and 5.75 billion indirect shares, which represent 5.5 per cent of the banks’ total 184.8 billion shares. The 10 directors of Zenith Bank hold 2.99 billion or 9.5 per cent of the bank’s issued shares of 31.4 billion. This was followed by Access Bank where 13 directors hold 2.87 billion shares or 9.9 per cent of the 28.9 billion issued shares of the bank.

Stanbic IBTC came third with its six directors holding 1.259 billion shares, representing 12.6 per cent of the 10 billion issued shares of the bank. The 17 directors of UBA ranked fourth, holding 2.22 billion shares, representing 6.1 per cent of 36.3 billion of the bank’s issued shares. FCMB was the next with its seven directors accounting for 2.22 billion shares or 11.2 per cent of the bank’s 19.8 billion issued shares.

GTB, which has 12 directors ranked sixth with the directors accounting for 64.02 million shares or 0.2 per cent of 29.4 billion ordinary shares of the bank in 2016, while Fidelity Bank, came last with its 13 directors holding 515.32 million shares, representing 1.8 per cent of 28.96 billion the bank’s shares.

Zenith, Access, UBA account for 64.2% declared dividend

Zenith Bank, Access Bank and UBA accounted for 64 per cent and 60.2 per cent of the total dividend declared by the seven banks in 2016 and 2015 respectively. The total dividend declared by the three banks amounted to N103.99 billion in 2016 and N88.71 billion in 2015.

In 2016, the 40 directors of the three banks, UBA, Zenith and Access Bank, went home with N9.42 billion of the N103.99 billion dividend declared by the three banks. This represents 5.9 per cent of the N162.6 billion dividend declared in 2016 by the seven banks and 9.22 per cent of the N103.99 billion dividend declared by the three banks in 2016.

In 2015, the directors of the three banks received N6.83 billion or 7.96 per cent of the N88.71 billion total dividend declared by the three banks for the year. This also represents 4.64 per cent of the N143.3 billion dividend declared by the seven banks for the year.

Details of directors’ dividends

The 10 directors of Zenith Bank received N6.06 billion or 9.5 per cent of N63.42 billion dividend declared by the bank in 2016. Access Bank’s 13 directors followed with N1.70 billion, representing 9.0 per cent of N18.80 billion dividend declared by the bank in 2016. The 17 directors of UBA ranked third, receiving N1.66 billion or 7.6 per cent of N21.77 billion dividend declared by the bank.

For GT Bank, its 12 directors smiled home with N707.03 million dividend, representing 1.4 per cent of N52.09 billion dividend proposed by the bank in 2016, while the 13 directors of Fidelity Bank got N86.22 million or 2.1 per cent of N4.05 billion dividend declared by the bank in 2016. Stanbic IBTC Holdings Plc’s six directors got N62.96 million dividend, representing 12.6 per cent of N500 million dividend declared by the bank. FCMB Group’s seven directors got N22.99 million, representing 1.2 per cent of N1.98 billion dividend declared by the bank within the year.

Top 10 directors by dividend received

Analysis of the top 10 dividend earning directors in 2016 showed that Jim Ovia, the chairman of Zenith Bank earned the highest dividend of N5.95 billion followed by Herbert Wigwe, the Group Managing Director/Chief Executive Officer of Access Bank Plc who earned N1.75 billion.

Tony Elumelu, UBA chairman, was the third highest dividend earning director with N1.55 billion, followed by Olusegun Agbaje, Managing Director/CEO of GTB and Adaora Umeoji, the Deputy Managing Director of Zenith with N662.56 million and N63.87 million dividend respectively.

Others are Rahan Matani, a non-executive director in Stanbic IBTC Holdings Plc, who came sixth with dividend payout of N53.23 million. Dan Okeke, an executive director in UBA came seventh with N22.71 million; Mrs Rose Okwechime, another director in UBA got N22.59 million dividend, while Mr. Christopher Eze, the former chairman of Fidelity Bank Plc, and Ladi Balogun, a non-executive director in FCMB Group were the last on the list with N21.53 million and N20.02 million dividend payout respectively.

Highest dividend earning directors by banks

In GTB, Mr. Olusegun Agbaje, who is the Managing Director/Chief Executive, emerged the highest dividend earner, receiving N662.26 million dividend in 2016, followed by Mr. Ademola Odeyemi, Executive Director in charge of International Banking, who receivedN18.7 million dividend. Mrs Catherine Echeozo, the Deputy Group Managing Director came third with N17.1 million dividend payment.

In Stanbic IBTC, Mr Ratan Mahtani, a non-executive director, with indirect holding in the bank, got the highest dividend, earning N53.23 million. He was followed by Atedo Peterside, erstwhile chairman, who earned N6 million through an indirect holding and Ifeoma Esiri, a non-Executive director, who earned N2.3 million through direct and indirect equity interest.

In FCMB, Mr Ladi Balogun,a non-executive director got the highest dividend as he smiled home with N20.02 million, followed by Dr Jonathan Long, chairman, who got N1.11 million dividend, while Mr Olusegun Odubogun, non-executive independent director, ranked third in the bank, earning N800,000 (Eight hundred thousand naira only).

In UBA, Mr. Tony Elumelu, chairman, topped other directors as he received N1.55 billion dividend. Mr. Dan Okeke, an executive director, followed far behind Elumelu with N22.71 million dividend, while Mrs. Rose Okwechime, non-executive director, with only indirect shareholding in the bank, came third with N22.59 million dividend.

In Access Bank, Herbert Wigwe, Group Managing Director/Chief Executive, emerged the top dividend earner with N1.75 billion dividend through direct and indirect holdings. Next was Obinna Nwosu, the former Group Deputy Managing Director, who received N19.50 million dividend, while Titilayo Osuntoki, executive director in charge of Business Banking, received N18.67 million dividend.

In Zenith Bank, Jim Ovia, the chairman, towered above others, going home with N5.95 billion dividend in 2016. Ms. Adaora Umeoji, the Deputy Managing Director, followed with N63.87 million dividend, while Peter Amangbo, Group Managing Director/CEO ranked third, receiving N10.1 million dividend.

In Fidelity Bank, Chief Christopher Ezeh, former chairman of the bank, emerged the highest dividend earner with N21.53 million dividend. Nnamdi Okonkwo, Managing Director/CEO, came second with N14.14 million dividend, while Mr. Robert Nnana-Kalu, a non-executive director in the bank got N14 million dividend.

Nigeria: Delta Govt Pledges Enabling Environment for Aladja Industrial Energy Park

By Festus Ahon And Egufe Yafugborhi

Delta State Government has pledged to provide an enabling environment for the establishment of the Aladja Industrial Energy Park, AIEPARK, Aladja, Udu Local Government Area of the state.

Secretary to the State Government, Mr Festus Agas, gave the assurance at Government House, Asaba, when Warri-based firm, O-Secul Nigeria Limited, initiator of the industrial park project and one of its partners, Dubai-based Access Power, visited to intimate government of their readiness to kick-start the project with the provision of a 650mw power plant.

Agas said that the current administration was committed to the rapid socio-economic development of the state and stressed the need for mutually beneficial collaboration with relevant private investors as the state government can not do it alone.

Meanwhile Chairman, O-secul, Michael Orugbo, told Vanguard in Warri after the Asaba visit that in terms of funding, land acquisition and other investors’ requirements, Access Power and O-Secul were ready to start construction of the power plant to pave way for the investors in other sectors.

He said: “About 150 acres of land have been duly acquired from the host community. A sales agreement with the Nigerian Gas Company for gas to feed the power plant had been signed earlier and needs review.”

Nigeria

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Liberia: Access Bank Associates With Clients

Access Bank Liberia, one of the Leading Commercial Banks in the country has identified with their customers through a direct marketing activity at the waterside market and its environs.

Speaking with this paper at the colorful ceremony, the Head of Marketing and Deposit Mr. Reindorf Cletus Haligah used the opportunity to thank their valued customers and the General public for their support in doing business with them and encourage those who are not with them to take advantage of their various wonderful products and services.

He also emphasized during his interaction with their customers and marketers that Access Bank is a full-fledged commercial bank that provides Banking and financial services to small, medium and Large scale businesses in the country.

Some marketers where so excited to have their bank visit them and want to be identified with them. One of them said her business will not have become what it is today without Access Bank. Due to the Banks quest to make sure every sector of the financial market is taking care of, most people take them to be a micro finance institution.

The Marketing head said they have retail banking products and also credit products and that he said is a function of a commercial bank and not a micro finance institution. He said they are backed by very powerful owners that put them in a very good position to serve the market right.

Madam Cecilia Dolo a trader at the market told our reporter that some of their friends take Loans from the Bank refuse to pay back resulting to the bank loosing great sum of money. She encouraged the public to live to their word and pay the bank if they borrow from them.

Due to the Banks quest to make sure every sector of the financial market is taking care of, most people take them to be a micro finance institution.

He assured medium and large scale companies in the country to take advantage of their Banking products and services by joining the Access Bank’s family.

Liberia

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Africa: New Tuberculosis Drugs May Become Ineffective – Study

By Lyndal Rowlands

United Nations — New antibiotics that could treat tuberculosis may rapidly become ineffective, according to new research published by the Lancet ahead of World Tuberculosis Day.

The rise in multi-drug resistant tuberculosis, which affected 480,000 people in 2015, could mean that even newly discovered drugs will soon be useless, the study found.

In total both drug resistant and non-drug resistant Tuberculosis (TB) killed an estimated 1.8 million people in 2015, making it the world’s deadliest infectious disease. The five countries where TB is most predominant are India, Indonesia, China, Nigeria, Pakistan and South Africa.

Multi-drug resistant tuberculosis reflects the meeting of an ancient and under-addressed disease – tuberculosis – with an emerging modern threat – antimicrobial resistance. The inappropriate use of antibiotics, including taking them without prescription or not following doctor’s orders closely is slowly rendering many antibiotics useless.

“Resistance to anti-tuberculosis drugs is a global problem that threatens to derail efforts to eradicate the disease,” said lead author of the Lancet report Professor Keertan Dheda from the University of Cape Town, South Africa.

“Even when the drugs work, TB is difficult to cure and requires months of treatment with a cocktail of drugs. When resistance occurs the treatment can take years and the drugs used have unpleasant and sometimes serious side effects,” said Dheda.

Dheda added that it is important for improved diagnostic tests, which are currently being developed, to be made available in low-income countries “so as to inform treatment decisions and preserve the efficacy of any new antibiotic drugs for TB.”

The report was published in the Lancet Respiratory Medicine on World TB Day – 24 March.

Meanwhile, according to Medecins Sans Frontieres (MSF) Access Campaign fewer than five percent of people with multi-drug resistant Tuberculosis have access to new medicines, four years after these medications were released.

“It’s downright disheartening that, with hundreds of thousands of people living with deadly drug-resistant tuberculosis, only 4,800 people last year received the two new drugs that could dramatically increase the number of lives saved,” said Dr. Isaac Chikwanha, TB advisor for MSF’s Access Campaign.

“Our first major problem is that pharmaceutical corporations are not even registering important new drugs in some of the countries hardest hit by TB; The next major problem is their high price,” said Dr. Chikwanha.

“People with drug resistant TB who don’t have access to the two new drugs continue to be treated with older, more toxic regimens that cure only 50 percent of people treated and cause severe side effects ranging from severe nausea to deafness to psychosis,” said MSF Access.

Dr Margaret Chan, Director General of the World Health Organization recently told IPS at a press conference on antimicrobial resistance that “there is no denying the fact that TB is a top priority for the world.”

She says that there are two high level meetings planned in 2017 and 2018 to “shine a light on TB” and give it “the political attention and the investment in research and development that it deserves.”

However according to both MSF Access and the new Lancet study, research and development alone, though needed, is not enough to address the shortcomings in the global response to TB and Antimicrobial Resistance without a matching political response.

In a comment article published alongside the new Lancet study David W Dowdy from Johns Hopkins Bloomberg School of Public Health said that the difference between “a drug-resistant tuberculosis epidemic of unprecedented global scale” or “an unprecedented reversal of the global drug-resistant tuberculosis burden,” falls largely to whether there is “political will to prioritise a specific response to the disease.”

Follow @https://twitter.com/LyndalRowlands

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