Firing on all cylinders, Transnational Corporation Plc, (Transcorp Group) has reported significant and impressive returns in all its major financial indices for the first quarter ended March 31, 2022.

Its unaudited results filed with the Nigeria Exchange Limited, showed that the conglomerate with interests in the power, hospitality, and energy sectors recorded a profit after tax of N5.0bn rising significantly by 147% up from N2.0bn recorded in March 2021; while Profit before tax which stood at N2.5bn in March last year, gained 129% to N5.7bn in the same period under consideration.

A further look at the results showed that revenue increased by 28% from  N24.4bn at the end of the first quarter of 2021; to N31.4bn as at March 2022, while operating income followed the same pattern as it grew by 45% to N10.0bn up from N6.9bn reported the previous year.

An increase in expenses such as Inventories, prepayments, trade and other receivables, however, did not dampen the Group’s total assets which rose to N417bn in the period under review, up from N416bn recorded at the end of the 2021 financial year; just shareholders’ funds also rose by 3% to N151.0bn, up from N146.3bn.

Transcorp’s President/Group Chief Executive Officer, Owen Omogiafo, who was excited at what she described as a great start to a rewarding year, expressed satisfaction with the performance for the first quarter 2022, and noted that the result is in line with the group’s strategy.

She stated “This laudable performance was achieved as a result of the improved activities across all our businesses. We are excited with the results for the first quarter of 2022; delivering 28% rise in Revenue and 129% rise in Profit Before Tax; and we are confident in the strategic direction for the Group as it underlines the success of our long-term objectives of diversifying revenues and accessing new business opportunities to deliver superior values to all our stakeholders."

Omogiafo re-emphasised the brand's commitment towards producing long-term value and sustainable impact, adding that already, this has been evident from the results churned out by the business in the full year 2021, and Q1 2022, despite the unstable operating environment, adding, “We will continue to work diligently as we remain well-positioned to provide significant value for our stakeholders.”

Transnational Corporation of Nigeria Plc (Transcorp) is a publicly quoted conglomerate, with a diversified shareholder base of over 300,000. Our portfolio comprises strategic investments in the power, hospitality, agribusiness and oil and gas sectors. Our notable businesses include Transcorp Hilton Abuja, Transcorp Hotels Calabar, Transcorp Power, TransAfam Limited and Transcorp Energy.

By

Ayobami Adedeji Business 2022-05-06

Access Bank PLC has announced the promotion of 800 employees following a transparent and robust performance management review in line with global best practices. 

This announcement comes as the financial giant shores up its transition to a Holding Company (Holdco) starting May 1st, 2022. The Bank’s consistent growth over the years has been due to the immeasurable effort and sacrifice of its employees. 

The beneficiaries of this wholescale performance review exercise spanned the Bank’s senior, middle, and junior management levels even as the management strives to continuously put employees in the best position to grow and be successful in today’s highly competitive work environment.

Over the years, Access Bank has demonstrated that employee performance and rewards remain a critical pillar of the Bank’s business operations. The Bank has consistently provided adequate resources to deepen core job skills while entrenching a culture of high performance amongst employees. 

The Bank's penchant for rewarding high performance is particularly highlighted by the annual CEO Awards, one of the programs under it’s ‘We Clap Initiative’ which is designed to support the development of a culture of excellence as well as motivate employees and teams for superior performance.

Recently, Access Bank was named the best institution to work in Nigeria by global professional network company, LinkedIn, having assessed data across seven pillars that serve as identifiers of career progression, namely: the ability to advance, skills growth, company stability, external opportunity, company affinity, gender diversity and spread of educational backgrounds.

By

Ayobami Adedeji Business 2022-05-06

Zenith Bank Plc has emerged as the Best Bank in Nigeria in the Global Finance Magazine’s Best Banks Awards 2022, retaining the award for a third consecutive year. The Bank was among other banks from 36 countries in Africa recognised as the prestigious Global Finance announced its 29th Annual Best Bank Awards Winners.

The editors of Global Finance made the selections after extensive consultations with corporate financial executives, bankers and banking consultants, and analysts worldwide. Global Finance considered factors that ranged from the quantitative objective to the informed subjective in selecting the top banks. Objective criteria considered included: growth in assets, profitability, geographic reach, strategic relationships, new business development and innovation in products. Subjective criteria included the opinions of equity analysts, credit rating analysts, banking consultants and others involved in the industry.

Commenting on the award, the Group Managing Director/Chief Executive of Zenith Bank, Mr Ebenezer Onyeagwu said: “This award is a testament to our tenacity despite a very challenging macroeconomic environment. Indeed, being recognised, for the third consecutive year, is an acknowledgement of the resilience of the Zenith brand as the leading financial institution in Nigeria.” He lauded the contributions and efforts of the Bank's key stakeholders – the Founder and Chairman, Jim Ovia, CON, for his pioneering role in building the structures and laying the foundation for an enduring and successful institution, the Board for the outstanding leadership they provide, the staff for their commitment and dedication as well as the Bank’s customers for their unwavering loyalty and support.

Global Finance’s “Best Banks Awards” are recognised amongst the world’s most influential banking/finance and corporate professionals as the most coveted and credible awards in the banking industry, with winners chosen in 150 countries and territories across Africa, AsiaPacific, the Caribbean, Central America, Central & Eastern Europe, Latin America, the Middle East, North America and Western Europe.

Founded in 1987, Global Finance regularly selects the top performers among banks and other financial services providers, and the awards have become a trusted standard of excellence for the global financial community. Joseph D. Giarraputo, publisher and editorial director of Global Finance, said: "With the financial world in a state of turmoil from Russia's invasion of Ukraine, corporate leaders face a new set of challenges concerning the choice of their banking relationships." According to him, "following on the enormous difficulties wrought by the pandemic, these changes demand increased attention to global commercial relationships. Our awards support decision-makers in selecting the best financial partners.”

By

Ayobami Adedeji Business 2022-04-27

President of Dangote Group, Aliko Dangote, paid a courtesy visit to the President Muhammadu Buhari, at the Presidential Villa in Abuja on Friday.

Dangote, alongside members of the Board of Directors of Dangote Industries, were at the Villa to thank Buhari following his visit to Lagos in March,to inaugurate the three million metric tonnes Dangote Fertilizer at the Lagos Free Trade Zone,Lekki,Lagos.

By

Ayobami Adedeji Business 2022-04-22

Shareholders of Zenith Bank Plc, at the 31st Annual General Meeting (AGM) of the bank held on Wednesday, April 6, 2022, at the Civic Centre, Victoria Island, Lagos, unanimously approved the proposed final dividend, expressing delight at the final dividend payment of NGN2.80 per share which brings the total dividend for the 2021 financial year to NGN3.10 per share with a total value of NGN97.33 billion.

In his statement, the Founder and Chairman of Zenith Bank Plc, Mr Jim Ovia, CON, thanked the shareholders for their unflinching loyalty, which has enabled the bank to rise to the pinnacle of the nation's financial services industry, and assured them of the bank's commitment to consistently deliver superior value to them.

Speaking on the bank's performance, the Group Managing Director/Chief Executive, Mr Ebenezer Onyeagwu, said: "if you look at the bank's history over the years, Zenith Bank has always grown, and even within the pandemic, we have maintained a reasonable positive growth trajectory. Growth is coming from the fact that we are deploying our digital capability to grow more businesses, simplify our service processes, make our processes more efficient, and deal with customers' complaints. Apart from developing new products, we are discovering new business verticals, especially within the retail segment, which have significant revenue.” He added that: “meeting the expectation of shareholders means we have to work harder. The team is dodged, hardworking, resilient, and above all, we have a very supportive board that comes with superior guidance".

Commenting on the dividend payout, the Chairman Emeritus of the Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, expressed the delight of shareholders over the consistent payment of dividends by Zenith Bank, noting that the bank's shares remain the toast of investors because the bank has never failed to pay dividends to shareholders.

Also speaking on behalf of shareholders, the President of the Association of the Rights of Nigerian Shareholders (AARNS), Dr Faruk Umar, said: "The bank is doing very well. All the ratios and indices have gone up. And more importantly, while we were in the meeting, I got my alert of the credit of my dividend. This is very commendable. The leadership of the bank has been very effective; we thank Jim Ovia for the leadership he has been giving, he has increased the dividend in spite of the economic hardship in the country, and I believe the GMD is doing very well. I commend the management and staff of the bank, including the board, and I am very confident that this year would also be very good for the bank." Dr Faruk Umar also commended the Group Managing Director for the numerous awards the bank received in 2021, especially the sustainability awards.

In spite of a challenging macroeconomic environment aggravated by the COVID-19 pandemic, the Zenith Bank Group achieved year-on-year (YoY) growth in gross earnings of 10% from NGN696.5 billion reported in the previous year to N765.6billion. This was on the back of a 23% YoY growth in non-interest income from N251.7billion to N309billion and a 2% YoY growth in interest income from N420.8billion to NGN427.6billion.

Profit before tax also grew by 10%, from NGN255.9 billion to NGN280.4 billion in the current year. The increase was due to growth in the top-line and very strong management of the treasury portfolio that increased efficiency, resulting in a drop in interest expense by 12% from NGN121.1 billion in 2020 to NGN106.8 billion in the current year. This further led to a 7% increase in net interest income of NGN320.8 billion in 2021 from NGN299.7 billion in 2020.

Customer deposits increased by 21%, growing from NGN5.34 trillion in the previous year to NGN6.47 trillion in the current year. The growth in customer deposits came from both corporate and retail customers. Retail deposits grew by NGN146 billion from NGN1.72 trillion in 2020 to NGN1.87 trillion in 2021. The Group's continuous drive for retail deposits combined with the strategic rebalancing of its funding base helped to reduce the cost of funding from 2.1% to 1.5% in the current year. Although operating expenses grew by 13% YoY, growth remains below the inflation rate, and the Group improved its Earnings per Share (EPS) which grew by 6% from NGN7.34 to NGN7.78.

Total assets increased by 11%, growing from NGN8.48 trillion in 2020 to NGN9.45 trillion in 2021, mainly driven by growth in customer deposits. With the steady recovery in economic activities, the Group prudently grew its gross loans by 20%, from NGN2.9 trillion in 2020 to NGN3.5 trillion in 2021, with moderated NPL ratio from 4.29% to 4.19% YoY. The Group recorded impressive liquidity and capital adequacy ratios of 71.6% and 21.0%, which remained above regulatory thresholds of 30% and 15%, respectively.

By

Ayobami Adedeji Business 2022-04-08

Towards enhancing agriculture and creation of jobs, Dangote Fertiliser Limited is to train over one million farmers in the next three years. The training, which is part of the Fertiliser company’s agriculture extension services will involve Spot Demonstrations, Result Demonstrations, Field Demonstrations and Soil Samples Collections.

According to Mr. Uchenna Nwankwo of Dangote Fertiliser, the exercise is designed to instruct farmers on the best practices in fertiliser application. Speaking during his presentation at the Dangote Group Special Day at the ongoing Enugu International trade fair, he added that free samples of Dangote Fertiliser will be used in field demonstrations while the results will be collated at the end of the farming season.

Earlier, the President, Enugu Chamber of Commerce, Industry, Mines and Agriculture (ECCIMA), Mr. Jasper Nduagwuike, praised Dangote Industries Limited for the sponsorship of the Enugu International Trade fair adding that the indigenous conglomerate activities are making great impact to the economic development of Nigeria.

Nduagwuike noted that the Dangote Group is turning Nigeria’s economy from consuming to producing, by manufacturing household items, fertiliser, and other products. He charged other companies to emulate Dangote Group.

He said “ECCIMA expects other companies to emulate Dangote industries because that is the only way you can change the cause of this economy. I challenge Small and Medium Enterprises (SMEs) to understand that Dangote industries was once an SMEs but with hard work, resilience, and determination, it is today a conglomerate.

“The profound gratitude of ECCIMA to Dangote industries for being a part of the sponsorship of the Fair. This relationship will continue and for us it is morning yet on creation day”.

The Regional Sales Director of Dangote Cement in Southeast, Mr. Abayomi Shittu, welcoming guests to the special day, said the interest of the Dangote Group is aimed at supporting government in job creation and reducing poverty in Nigeria.

He noted that the company, through its job creation mechanism, has become the second biggest employer of labour in the country outside the government, which adding to him is a big plus to the company.

Shittu started that the President/Chief Executive of Dangote Industries Limited, Aliko Dangote, is passionate about promoting the activities of Chambers of Commerce & Industries across the nation. He said, “He is interested in activities of all the major Chambers of Commerce & Industries in Nigeria, hence our participation in trade fairs organized by Enugu, Abuja, Ogun, Kaduna, and Kano Chambers of Commerce & Industries.”

Explaining the importance of Chambers of Commerce, he stated “Our participation at all major trade fairs across the country is a means of demonstrating our belief that Chambers of Commerce & Industry occupy a unique position in driving economic development through their activities. Our expectation is that through this Trade Fair will further expand awareness for our innovative products, generate sales, get prospective buyers, improve the image of our brands, and open up new markets that will further translate in job creation.”

By

Ayobami Adedeji Business 2022-04-07

Africa’s Global Bank, United Bank for Africa (UBA) Plc, has assured shareholders and investors of its unwavering commitment to sustain its current growth trajectory even as its efforts at business diversification across Africa and beyond continues to yield increasing returns.

The Group Chairman, Tony Elumelu, who made this declaration at UBA’s 60th Annual General Meeting, which was held at the Transcorp Hilton Hotel, Abuja on Thursday April 7, 2022, noted that the bank’s strategic investment decisions over the past few years have indeed translated to huge returns for its investors, despite the challenging business environment witnessed in the last two years.

“I am proud of how as a Group, we have been able to further consolidate on the new capabilities we have built, novel customer solutions we have deployed, efficiency gains recorded and the growth prospects we have leveraged from a recovering world,” Elumelu stated, adding “These were the building blocks for the very strong financial performance and the growth delivered by your Group in 2021, further confirming the wisdom of the investments we made and the strategy we have pursued, to ensure the diversification and sustainability of our business model.”

Whilst expressing his delight to shareholders and customers who have stood with UBA for almost eight decades, Elumelu remained confident of the bank’s capacity to sustain this momentum especially as economic activities recover from the impact of the Covid -19 pandemic.

“Our goal is to continue to build strong brand loyalty with our customers and create additional value for our shareholders, whose underlying support has positioned UBA for continued growth,” the Chairman noted.

UBA’s Group Managing Director/Chief Executive Officer, Kennedy Uzoka, who went into details about the improved performance of the bank’s subsidiaries in the financial year under consideration, said, “We are happy that the global community recognises the role our Group is playing in the transformation of the African economic landscape through innovative and customer focused banking services.”

He pointed out that the bank’s business in the United Kingdom had specifically witnessed remarkable expansion, adding “As from July 2021, UBA UK started making profit, and even to date, they are still doing well, and the same can be said for many of our African subsidiaries. The truth is that we are driven by the opportunities and potential in each of the geographies that we invested in, and we are happy with what we have achieved so far’.

Shareholders who spoke at the meeting including Sir Sunny Nwosu, Alhaji Farouk Umar, Mr. Nonah Awoh, Mr. Patrick Ajuda, Mrs. Bisi Bakare and Chief Timothy Adesiyan, were unanimous in their commendation of the board and management of UBA, for the impressive financials which have translated to higher dividends for shareholders.

“Despite the economic situation UBA has been able to grow profitability and increase its customer base. If you compare the dividend with the share price of UBA, you will see that our dividend yield is very high. No bank in Nigeria has been able to achieve this, and I therefore commend the UBA board,” Umar noted in his remarks.

At the end of the 2021 financial year, UBA’s Profit Before Tax was impressive with a 20.3 percent growth to N153.1 billion, compared to N127.3 billion at the end of the 2020 financial year; while Profit After Tax rose grew by 8.7 percent to N118.7 billion in 2021, compared to N109.2 billion recorded the previous year. As a result, the Bank proposed a final dividend of 80 kobo for every ordinary share of 50 kobo for the financial year ended December 31, 2021, bringing the total dividend for the year to N1.00 as the Bank had earlier paid an interim dividend of 20kobo.

By

Ayobami Adedeji Business 2022-04-07

Transnational Corporation of Nigeria (Transcorp) Plc, Nigeria’s largest, leading listed conglomerate with investments in Hospitality, Power, and Oil and Gas sectors, has reported significant performance, across all its major investment lines, for the financial year ended December 31, 2021.

 Notwithstanding the tough operating and business environment, the conglomerate saw its revenue leap appreciably by 48% to close the year at N111.2bn; compared to 75.3bn recorded at the end of 2020; while operating income grew by 114% from N18bn in 2020 to N38.5bn in the year under consideration.

Its audited results released to the Nigerian Exchange also showed that profit before tax grew significantly by 1,600%, rising from N1.6bn at the end of the 2020 financial year to N27.9bn, while profit after tax which had stood at N3.8bn the previous year, shot up by over 530% to close the year at N23.9bn. Shareholders’ funds also grew by 53% from N95,4bn to N146bn in the year under consideration.

 Commenting on the remarkable performance, Transcorp’s President/Group Chief Executive Officer, Owen Omogiafo, noted that the performance was achieved as a result of the improved performance across all its businesses, adding that the conglomerates’ various investments in key segments of energy and hospitality had been turning in huge returns.

 She said, “We are very pleased with the progress of our transformation agenda for Transcorp. We remain committed to building an institution that will delight all our stakeholders and will be here for many generations to come,” adding that the Conglomerate also recorded growth in both its Power and Hospitality investments, with the hospitality arm showing a strong recovery from the Covid-19 pandemic, with results comparable with pre-covid era.”

 Speaking specifically about the consistent progress recorded in its various concerns especially its hotel business, Omogiafo, said, “The 143 % growth reported in the hospitality arm of the business this year, is a testament to the strong spirit of resilience, innovation, and execution within the Group.

 Continuing, she said, “The additional investments we made in our Power businesses, led to the increased revenue witnessed in that sector, notwithstanding some of the challenges in the sector, which are now being addressed. We stayed on course with our OPL281 investment and are well on the way towards the attainment of our integrated energy strategy,” the Transcorp boss noted.

 According to her, the hotel business as well as its other concerns are fully geared up to continue to churn out outstanding performance in the current year especially as the world continues to recover from the effect of the COVID-19 pandemic.

 “Transcorp Group remains committed to its strategy of sustainable growth and continuous drive to deliver value, We do not plan to rest on our laurels, and we will continue to work diligently and remain well-positioned to provide significant value for our stakeholders,” Omogiafo assured its stakeholders.

By

Ayobami Adedeji Business 2022-03-30

President Muhammadu Buhari yesterday commissioned the new 3 million Metric Tonnes capacity per annum state-of-the-art Dangote Fertiliser Urea Plant, with an emphatic assurance that the project would give a huge fillip to Nigeria’s agricultural sector, which revitalisation has been a focal point of his administration’s economic policy. 

The new plant, which he commissioned in the presence of some 18 governors, ministers, captains of industries as well as prominent traditional rulers, is located at Ibeju Lekki, Lagos Free Trade Zone within the periphery of the Dangote refinery.

A visibly excited President Buhari said the coming on stream of the plant would create huge opportunities in the areas of employment, trade, warehousing, transport and logistics. The Plant, according to the President “will greatly create wealth, drastically reduce poverty and secure the future of our nation”.

He said, “In the agricultural sector, another focal point of our economic policy, we expect a boom as fertiliser is now readily available. Many Nigerians who hitherto practiced subsistence farming because of non-availability of necessary inputs can now take up agriculture as a business. We expect a rise of new breed of agropreneurs who will add value to farming and make the nation self-sufficient in food production.”

According to him, the federal government is now determined more than ever before to provide enabling environment for private sector investors to thrive, adding that his government would continue to improve on infrastructure, power, security and enact relevant laws and regulations that would drive investments in the economy.

President Buhari reiterated that part of the government’s effort in this regard was the partnership with the private sector government via a tax credit scheme, in the rehabilitation of roads across Nigeria under the Presidential Order No. 7.

“As we all know, good roads contribute to easy movement of goods and services across the nation, thus reducing cost of doing business and improving productivity. We are also rehabilitating our railway lines and building new ones to lessen the burden on our roads and create more effective multi-model transportation networks,” he added.

In an earlier welcome address, President of Dangote Group, Aliko Dangote described the new plant as a game changer, as it has the capacity to make Nigeria become self-sufficient in fertiliser production, with spare capacity to export to other markets in Africa and the rest of the world. He added that already, Dangote fertiliser has reached the markets in the USA, Brazil and Mexico.

According to him, the Fertiliser plant, which is the largest granulated  Urea fertiliser complex in Africa, occupies 500 hectares of land, was built at a cost of $2.5 Billion, and is expected to reduce drastically level of unemployment and youth restiveness in the country through employment opportunities. To him, the plant is expected to generate new jobs with top quality fertiliser being available and in sufficient quantities for the farmers.

He stated that agriculture accounts for 20 per cent of the nation’s GDP and that the new plant was an ambitious project that would provide both direct and indirect employment, thereby reducing youth restiveness

Dangote Fertiliser, according to him, would ensure emergence of farmers in the country, providing hundreds of jobs and ushering in a new era of agricultural entrepreneurs, (agroprenuers). “This breed of agroprenuers will take to farming on large scales, providing food and raw materials for our industries,” he added.

Dangote stated that the fertiliser plant is rolling out with innovations that would transform the agricultural sector in the form of extension services for small and medium scale farmers. It has set up a well-equipped fertiliser soil testing laboratory to enable it analyse and identify soil deficiency and the appropriate fertiliser blend.

“Studies have shown that applying the right fertiliser to the soil will boost productivity. This service is to cover all the geopolitical zones, and will surely change agricultural landscape in the country by transforming farming into a lucrative profession.

“Dangote Fertiliser is working with Farmer Associations, Corporate Farmers, NPK Blenders, NGO/development partners and State Governments all over Nigeria, and governments across Africa and beyond who are looking for sustainable approach to improving soil quality and farm yields," he explained.

Speaking at the occasion, Governor of Central Bank of Nigeria, Godwin Emefiele said Nigeria is indeed indebted to Aliko Dangote for his giant stride to add value to Nigeria’s economy. According to him, “It is great that a Nigerian has taken not just this great initiative of helping to solve our perennial problem of importing petrochemical products including fertiliser but has taken advantage of the emerging huge market opportunity presented by recent global developments.”

Emefiele commended President Buhari for providing all the support needed to put in place economic policies that would reverse the trend of the doldrums, pointing out that the completion of the fertiliser plant is a stellar example of the realisation of the vision.

The CBN governor described the fertiliser plant as timely considering the recent developments in the global market, where prices of wheat, fertiliser and crude oil spiked by over 20 per cent, following the start of the Russia - Ukraine war.

“In addition to the lessons we learnt from the protectionist actions of countries during the early days of COVID-19, this investment is again a glaring testament to the foresight and tireless efforts of Mr. President in encouraging domestic production of items that can be produced in Nigeria, especially agriculture. This would not only help to enable greater productivity of our agricultural sector but also help in insulating Nigeria farmers from depending on imported fertiliser,” Emefiele stated.

He recalled that prior to 2015 when President Buhari resumed office, Nigeria had a fertiliser shortfall of about 3.5 million tonnes per annum compared to the over 6 million tonnes per annum required in the country.

“Then President Buhari inaugurated the Presidential Fertiliser Initiative and charged them with resolving this problem. With sustained efforts, other indigenous companies like Indorama and Notore with a combined capacity of over 2.5 million tonnes per annum have tried to match the market demand, yet the country still faced a huge shortfall of fertiliser supply. Today, Nigeria is self-sufficient in the production of urea, and we are also the leading producer of urea in the African continent,” he added.

The Minister of Agriculture, Dr. Mahmood Abubakar called on other investors to rise up to the occasion, noting that the Dangote Fertiliser would help to solve the problem of fertiliser shortages in Nigeria. He also assured that the government would enforce standard in the industry to maintain quality.

Lagos state governor, Mr. Babajide Sanwo-Olu commended Alhaji Aliko Dangote for always blazing the trail, noting that Lagos state government was happy to be hosting many of his businesses. He added that, “with the largest fertiliser plant in Africa in Lagos and the largest refinery in the world coming soon, there is nobody that would not be proud of Alhaji Dangote.”

The governor stated that Nigeria would quickly forget its many economic problems if another entrepreneur like Dangote could be replicated in other regions of Nigeria.

Sanwo-Olu also said that private investors could always count on Lagos State government when it comes to provision of an enabling environment to make businesses thrive.

By

Ayobami Adedeji Business 2022-03-23

Heritage Bank Plc, Lagos Commodities and Futures Exchange (LCFE) and other participating financial institutions explored opportunities on export revenue from the Commodities Ecosystem as part of its supports to the Central Bank of Nigeria’s (CBN) to raise $200billion in foreign exchange repatriation from the non-oil exports over the next three to five years.

At a breakfast meeting organised by LCFE with bankers, tagged, “The CBN RT200 FX Programme: And Potential of Export Revenue from the Commodities Ecosystem,” had in attendance representatives from Heritage Bank, FSDH, Agvest Limited, Novo Merchant Bank amongst others.

Speaking on the opportunities for financial institutions in the CBN RT200 FX Programme, Olugbenga Awe, Divisional Head, Agribusiness, Natural Resources & Project Development, Heritage Bank stated that the promotion of investment in commodities ecosystem by financial institutions in partnership with LCFE in its various assets traded in Agric commodities, energy and solid minerals would increase liquidity support from local commodity exportation to boost the race for the $200billion in FX repatriation and reduce the pressure on exchange rate.

Meanwhile, he identified challenges expediently needed to be addressed which may likely hinder financial institution’s efforts on supporting the commodities ecosystem to drive the CBN’s RT200 FX target, such as inadequate export finance resources, lack of dependable source of local product prices, risk of haulage to bad roads amongst others.

Awe explained that to significantly boost local production of exportable commodities and drastically reduce the country’s dependence of oil revenue, financial institutions must play the role of market markers to the Commodity Exchange (COMEX), thereby bringing liquidity to the Exchange.

According to him, with COMEX as a risk mitigation platform, there is need for the Warehouse (WR) finance structure to be registered with LCFE and the collateral management in place, which is within the parameters set by banks.

He further explained that banks must actively participate in crop receipts, liaise with its brokers to develop the value chain around a well market structure warehouse receipts systems (WRS). This, he said would help stimulate demand amongst players from the aggregators, off takers for standardized contracts that help deepen the value chain while providing financing that increased volumes traded.

Awe, however, reiterated that promoting investment in commodities ecosystem via structured WR finance would bring about value addition to commodities with the help to moderate  the prices, as the expected increase in demand would increase revenue export and make deposit money banks self-sufficient in meeting the FX needs of their customers.

Awe, who enumerated how financial institutions can partner with commodity exchange especially LCFE to deepen their foot prints in various asset classes traded by LCFE, also referenced what Heritage Bank is doing in the Wheat Value Chain together with CBN investing N40billion, which will scale up wheat production during harvest season.

According to him, whatever can be achieved in wheat can be replicated across various value chain in rice, maize, others and ensuring that there is link to the commodity exchange.

MD of LCFE, Akin Akeredolu-Ale, who commended Heritage Bank for its sterling efforts in deepening its footprints in agrobusiness, called on banks and other organisations to take advantage of the catalytic and transformational approach to support CBN RT200 FX initiative.

He stressed that to achieve the target, there was need for creation and registration of Bank Commodity Desks with LCFE and Central Securities Clearing System (CSCS).

He noted that the stakeholders’ structure in financing the commodities ecosystem include Commodity Exchange, Commercial Banks, Non-Interest Banking, Merchant Bank.

Akeredolu-Ale, who decried that Nigerian economy was still import driven and depended largely on export of petroleum to meet FX earnings, revealed that LCFE has lined up products such as commodity instrument, commodity backed notes, Exchange traded funds, Commodity Spot Contracts amongst others as a bumper for driving huge export revenue from commodities ecosystem to fast track the actualisation of $200billion in FX repatriation.

By

Ayobami Adedeji Business 2022-03-22