A Lufthansa airplane
German pilots’ kinship Vereinigung Cockpit (VC) pronounced it was expected to call for offer strikes during Lufthansa as a long-running quarrel continued.
The brawl revolves around an early retirement intrigue and Lufthansa’s skeleton to enhance a low-cost operations to win behind marketplace share mislaid to a likes of Ryanair and easyJet, that are expanding in Germany.
Reuters reported that 10 strikes staged by VC final year cost a airline tighten to €200 million in doing distinction and influenced hundreds of thousands of passengers.
In December, a pilots pronounced they were prepared to enter involvement to solve a dispute, nonetheless usually if it enclosed all areas of dispute with management.
Lufthansa deserted that demand, however, observant it was peaceful to enhance talks over usually early retirement benefits, nonetheless that low-cost enlargement was not adult for discussion.
VC pronounced in a matter on Thursday that offer industrial mutation was “possible and likely” as it meets with a members in a entrance weeks.
Lufthansa’s pilots conflict a approach a airline is pulling by low-cost enlargement by regulating a tiny section that is not theme to a same common staff agreements as a Lufthansa and Germanwings units.
VC also wants to say a intrigue that enables pilots to take early retirement from a age of 55 and still accept a apportionment of their compensate until grant payments flog in. Lufthansa wants to boost a retirement age for new starts.
Lufthansa reiterated a position that it indispensable to make constructional changes to assistance a newcomer airlines contest with rivals.
“Necessary constructional changes could so distant not be achieved in a cockpit,” it pronounced in a statement.
CAPTION: An Ethioian Airlines aircraft
Ethiopian Airlines Acquires Dreamliner Simulator
Ethioian Airlines has continued with a aviation record caring on a continent as it recently announced a merger of a initial ever Boeing B787 Dreamliner full moody simulator.
The designation and rave of a full moody Simulator is in swell during Ethiopian categorical Hub in Addis Ababa and a initial commander training in a B-787 moody simulator will start in March, 2015.
Ethiopian was a initial airline in a universe outward Japan to accept and work a B-787 Dreamliner in Aug 2012. Currently, a airline is a largest user of a B-787 in Africa. With a designation of a B-787 moody simulator, Ethiopian will be a initial in Africa to give full moody simulator training for pilots on a B-787 aircraft.
CEO of Ethiopian Airlines Group, Mr. Tewolde Gebremariam, pronounced “We are ceaselessly investing in building a training capability. With designation of a B-787 Flight Simulator, we will be wholly self-sufficient in providing in-house training for a pilots on a B-787 aircraft, that has spin a core swift on a midst and prolonged operation routes. Over a final four years, we have invested $80 million in expanding both a operation and scale of a Academy. In line with a 15 years vital roadmap Vision 2025, we will continue to deposit heavily on a academy with a design of augmenting a annual in-take ability to from now 1,000 trainees to about 4,000 by 2025.”
Ethiopian Aviation Academy already provides full moody simulator training for pilots on a Q-400, a B737, a B757 and a B767.
Ethiopian Aviation Academy is approved by a Ethiopian Civil Aviation Authority, a U.S Federal Aviation Administration, a European Aviation Safety Agency (EASA), and IOSA (IATA Safety Audit). The Academy has been providing training for pilots, upkeep technicians, cabin crew, selling and caring for a airline and other sisterly carriers in Africa for some-more than 6 decades.
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Ethiopian Airlines May Acquire RwandAir
Reports prove that Ethiopian Airlines (ET) has intent in approach talks with a Rwandan government, seeking a seductiveness in a country’s inhabitant conduit RwandAir. Even nonetheless no grave privatisation routine is in place during this impulse in time, a airline has not denied a query for stakes in a new nonetheless earnest airline.
It is suspicion that RwandAir’s authority of a Board of Directors, Girma Wake, himself a long-serving former CEO of Ethiopian Airlines and brought to RwandAir to advantage from his endless believe in successfully and profitably doing Africa’s largest airline, has been instrumental to set adult a talks.
Sources in Kigali, Rwanda have described them as “exploratory” nonetheless also conceded that this has been going on given someday late final year. Confirmation has also been perceived from Addis Ababa where ET’s CEO Tewolde Gebremariam has recently reliable to Reuters that talks were on-going.
Eturbonews.com reported that grapevine speak has it that Ethiopian might find a shareholding anywhere between 26 and 49 per cent and afterwards take on a larger purpose in a supervision of RwandAir, over and above carrying an Ethiopian already offer in a ability as General Manager Commercial, recruited in mid-2014.
Ethiopian Airlines, one of Africa’s 3 members in Star Alliance, is already Africa’s undisputed marketplace personality nonetheless has over a past years sought to enhance change on a continent by vital partnerships. First out of a starting blocks was ASKY in West Africa, followed by Malawian Airlines. Talks with a regime in Kinshasa have also been going on to settle a new inhabitant airline in a Congo, roughly along identical lines like Malawian Airlines, where Ethiopian binds 49 per cent and has seconded supervision to run a company.
Should talks with a Rwandan supervision furnish results, it would roughly dilate ET’s strech in a Eastern African region, mostly during a shortcoming of Kenya Airways, which, according to a source tighten to a airline, has been hold roughly unknowingly of a talks and a maturation schemes by categorical African opposition Ethiopian.
Kenya Airways, saddled with waste in a new past, seems to pursue a single, stand-alone expansion strategy, and with Ethiopian now carrying dual financial partnerships already (ASKY and Malawian Airlines) and potentially a offer 3 descending into place in a nearby destiny (Congo, Rwanda, and South Sudan) a opening between a dual will dilate offer and shorten options for KQ following suit.
RwandAir already enjoys a codeshare with Ethiopian for flights between Kigali and Addis Ababa and has upkeep agreements in place to use their Bombardier Q400NextGen aircraft, a second of that is due to join by early Q2.
RwandAir, portion 15 destinations out of Kigali, operates a swift of 4 B737NGs, dual Bombardier CRJ900NextGens, and now one Q400, nonetheless has another B737-800NG on method for smoothness late this year or early subsequent year. The airline is also eyeing a B787 Dreamliner to embark long-haul flights out of Kigali by 2017/18 to China, India, and Europe.
Only recently has RwandAir perceived fifth leisure rights for flights from Entebbe to Juba and is reportedly watchful for a Kenyan regulators to approve slots for dual daily fifth leisure flights between Entebbe and Nairobi.
Fully owned and corroborated in a growth skeleton by a supervision of Rwanda, a airline has stretched quick in new years. However, a financial seductiveness by Ethiopian might soothe a Rwandan supervision of a poignant volume of income mandate for destiny investments, if a new suitors can be contractually tied down to assistance compensate for bend Rwanda’s prophesy for their inhabitant airline into reality.
MARKET REPORT
CAPTION: Trading building of a Nigerian Stock Exchange (NSE)
Stock Market Depreciates Further as Apathy Persists
Goddy Egene and Eromosele Abiodun
Investors’ hopes that a Nigerian equities marketplace will redeem from a before week’s bad display were dashed final week as a bears postulated reason on a market.
Weak investors’ certainty due to discouraging mercantile and domestic uncertainties remained a scandal of a marketplace notwithstanding slight liberation of wanton oil cost final week to $48 per barrel.
The bad display vexed many marketplace indicators as a Nigerian Stock Exchange (NSE) All-Share Index or ASI and a marketplace unheeded by 3.68 per cent and 3.09 per cent respectively to tighten final Friday during 29,034.89 and N9.671 trillion respectively.
Similarly, all a indices finished revoke during a week with difference of a NSE Oil Gas index that inched adult by 1.59 per cent, while NSE ASeM Index sealed flat.
The marketplace had sealed a initial trade week of a new-year in gloomy a before week as it available 5 true days of losses.This was due to disastrous opening of all a NSE underling sectors (consumer goods, banking sector, word zone and oil and gas sector) due to FX-related doubt that has continued to import on marketplace outlook.
Market pulse remained strongly bearish via a week as wanton oil prices settle subsequent $50 per barrel, worsening fears of mercantile instability.
Meanwhile, traders trust that there might be no wish in steer as tellurian headwinds still persists.
“This week (last week) we design a prevalence of a bears on heightened economics caring and gratifying fever, “said analysts during Cowry Assets.
Summary of daily performance
The marketplace had final Monday started on a certain note as a exchange’s benchmark index went adult by 0.30 per cent from before levels to tighten during 30,234. while marketplace capitalisation staid during N10.01 trillion. Dangote Cement Plc was generally obliged for a certain tighten and sum a accumulative 421.2 points to a index.
Market activity spin was churned as a volume traded declined by 27.5 per cent while marketplace turnover softened by 32.2 per cent. In all 328 million units of shares valued during N3.61 billion were exchanged in 4,530 deals. The Banking zone accounted for 63 per cent of sum volume and value transacted on a bourse.
The Industrial zone modernized by 2.33 per cent, heading zone gains. Gains available by Seplat Plc and Oando Plc carried a Oil Gas sector. Negative sentiments, however, persisted in a banking and consumer products sectors as they both declined 0.93 per cent and 0.91 per cent respectively.
The equity marketplace sealed on a disastrous note on Tuesday as a NSE ASI unheeded by 1.14 per cent to tighten during 29,889.86, compared with a appreciation of 0.30 per cent available on Monday. The debasement was as a outcome of a waste available in a share prices of some rarely capitalised holds such as: Access Bank Plc, Unilever Nigeria Plc, Guaranty Trust Bank Plc , Nigerian Breweries Plc and Nestle Nigeria Plc, among others. Similarly, a marketplace capitalisation also unheeded by 1.14 per cent to tighten during N9.90 trillion, compared with a appreciation available on Monday to tighten during N10.01trillion. The sum value of a holds traded on a day on a floors of a NSE was N3.11billion, down by 13.91 per cent from N3.61billion traded on Monday.
Bearish sentiments continued on Wednesday as sell-offs opposite all sectors led a benchmark index to a eighth losing event this year. The index declined 3.84 per cent while marketplace capitalisation embellished N381.6 billion from a before tighten to settle during N9.51 trillion. The ASI decrease sent a year-to-date detriment to 17.07 per cent. However, activity spin in terms of volume and value transacted increasing by 58.7 per cent and 22.6 per cent respectively. In all, 488 million units of shares value N3.82 billion were exchanged on a building on a day.
The marketplace was bullish on Thursday as wanton oil prices staid during $48.48 per barrel. The marketplace sealed green, due to certain opening of a consumer products and oil gas sectors compared with a detriment of a word and banking sectors respectively. Trading activities decreased in volume as 278.19 million shares value N3.17 billion in 4,731 deals exchanged hands. As a result, a NSE ASI sealed certain with a 0.25 per cent boost to tighten during 28,811.39 from 28,740.61 a before trade day. Market capitalisation also appreciated in tandem to N9.61 trillion from N9.51 trillion a before trade day.
The marketplace remained certain during a tighten of business for a week final Friday as a NSE ASI appreciated by 0.78 per cent to tighten during 29,034.89, compared with a appreciation of 0.25 per cent available a before day. The appreciation in a index final Friday could be attributed to a gains available in a share prices of Zenith Bank Plc, UACN Plc, FBN Holdings Plc, GuarantyTrust Bank Plc and Access Bank Plc. Similarly, a marketplace capitalisation appreciated by 0.59 per cent to tighten during N9.67 trillion, compared with a appreciation of 1.05 per cent available on Thursday to tighten during N9.61trillion.
Market turnover
Meanwhile, research of activities for final week showed that a sum of 1.663 billion shares value N16.585 billion in 23,591 deals were traded final week by investors on a building of a sell in contrariety to a sum of 2.013 billion shares valued during N23.377 billion that exchanged hands a before week in 20,902 deals.
The financial services attention in volume terms led a activity draft with 1.373 billion shares valued during N9.219 billion traded in 13,354 deals; so contributing 82.53 per cent and 55.59 per cent to a sum equity turnover volume and value respectively. The Conglomerates Industry followed with a turnover of 97.829 million shares value N548.892 million in 1,557 deals. The third place was assigned by a Consumer Goods Industry with 57.872 million shares value N3.979 billion in 3,872 deals.
Access Bank Plc, Zenith Bank Plc, and Mutual Benefits Assurance Plc accounted for 561.416 million shares value N4.147 billion in 3,370 deals, contributing 33.75 per cent and 25.00 per cent per cent to a sum equity turnover volume and value respectively.
Also traded during a week were a sum of 19,856 units of Exchange Traded Products (ETPs) valued during N1.429 million executed in 31 deals compared with a sum of 1,852 units valued during N219,311.75 transacted a before week in 19 deals.
Similarly, a sum of 30,650 units of FGN holds valued during N22.872 million were executed in 5 deals compared with a sum of 300 units of FGN holds valued during N313,385.14 transacted a before week in 3 deals.
Gainers and losers
Meanwhile, a cost mutation draft of a NSE showed that a sum of 15 equities appreciated in cost during a week aloft than 14 equities of a preceding week. Fifty-three equities unheeded in cost revoke than 55 equities of a preceding week, while 127 equities remained unvaried same as available in a preceding week.
Seplat Plc led a cost gainers with N11.13, trailed by Presco Plc with N3.60. Other tip cost gainers included: UACN Plc (N2.90), Beta Glass Plc (N2.22), PZ Industries Plc (N1.46), Oando Plc (93 kobo), UBN Plc (52 kobo), Custodian and Allied (23 kobo), Cutix Plc (11 kobo), and Parma-Deko Plc (10 kobo)
Conversely, Julius Berger Nigeria Plc led a cost losers with N7.53, followed by Guaranty Trust Bank Plc (N2.64), ETI Plc (N1.68), UAC Properties Development Plc (90 kobo), Diamond Bank Plc (65 kobo), Dangote Flour Plc (63 kobo), Caverton Plc (32 kobo), Fidelity Bank Plc (16 kobo) Continental Reinsurance Plc (13 kobo), NEM Insurance Plc ( 7 kobo).
MARKET INDICATOR
MARKET INDICATOR
Naira in Search of Actual Pricing
Obinna Chima
The clever sensitivity celebrated in a unfamiliar sell marketplace in a past few months shows that a naira is now looking for a suitable value to stabilise.
Most analysts had expected that Nigeria could get divided with an 8 per cent devaluation in Nov final year when a oil cost was during $78/bbl, nonetheless fewer trust it can now that Brent wanton has depressed to US$47/bbl.
Nonetheless, usually with poignant involvement from a Central Bank of Nigerian (CBN) has a naira been hold during N183-185 to a dollar during a interbank marketplace and there are doubts about how prolonged such a weaker spin can be maintained.
Forex pot have forsaken to about $34.1 billion, down from $37.1 billion when a final devaluation occurred.
Therefore, analysts during CSL Stockbrokers wondered “where (and when) will a naira find a floor?”
They added: “The oil cost is descending some-more quick than many analysts can adjust their projections, nonetheless there are during slightest dual indicators that can assistance us set some parameters.
“First, there is a rate during that all income and glass deposits in a economy could be converted into dollar, given a existent batch of reserves.
“Working with Nov information this rate was N194/$1; given afterwards we guess that it will have depressed to N209/$1 as FX pot were drawn down.”
Also, some ubiquitous investors have expected that a nation’s banking might thrust to about N234 to a dollar in a subsequent 12 months if oil prices destroy to rebound.
The prediction, according to a news by a Financial Times was indicated in a non-deliverable forwards (NDFs).
Meanwhile, a CBN sole a sum of $499.3 million to dealers during a extrinsic bid of N169 to a dollar during a bi-weekly executive marketplace final week. The executive bank however also conducted several ad-hoc interventions to brace a banking during a interbank shred of a forex marketplace where banking sensitivity is mostly concentrated.
Also, a CBN final week reviewed a position on banks’ daily unfamiliar banking trade position, lifting a extent from 0 per cent shareholders’ comment to 0.1 per cent, while a series of hours dollars bought during a interbank marketplace can be utilized was increasing to 72 hours from 48 hours.
The process directive, that was directed during improving dollar liquidity in a interbank market, did not have an evident certain effect, as week-on-week, a naira unheeded by N2 to a dollar, to tighten during N185.10/$1 during a interbank.
“The dour macroeconomic picture, material influx reversals and politicking forward of a Feb ubiquitous choosing will continue to consecrate headwinds to sell rate stability.
“That said, a loss outmost haven and a revoke intensity for summation in a nearby organisation due to descending oil prices continues to bushel a CBN’s ability to urge a naira,” analysts during Afrinvest Securities Limited argued.
Interbank Market
The interbank income marketplace non-stop a week rarely glass with an opening change of N711.9 billion. But on Friday, a open buy behind and overnight rates strew 54 basement points and 46 basement points week-on-week to tighten during 8.4 per cent and 9.2 per cent.
Bond Market
The FGN bond marketplace started a week broadly on a bearish note generally in brief to middle tenure maturities. The marketplace however available postulated sell-offs during a week. At a primary market, a Debt Management Office (DMO) re-opened a 15.10per cent FGN APR 2017, 14.20per cent FGN MAR 2024 and 12.1493per cent FGN JUL 2034 instruments in a sum offer of N73 billion. At a execution of auction, N72 billion of a instruments on offer were sold.
N24 billion, N20 billion and N28 billion of a APR 2017, MAR 2024 and JUL 2034 instruments were allotted during a extrinsic rates of 15.2 per cent, 15.4 per cent and 15.5 per cent.
“We design furnish will decrease marginally subsequent week as a benefaction spin of prices presents appealing entrance event for domestic institutional investors,” Afrinvest added.
STATUS REPORT:
JP Morgan Threatens to Remove Nigeria from Key Bond Index
Obinna Chima with organisation report
JP Morgan during a weekend pronounced it will consider Nigeria’s bearing to sojourn in a pivotal rising banking bond index it manages since of a miss of liquidity in a African country’s unfamiliar sell and bond markets.
The bank, that runs a many ordinarily used rising debt indexes, pronounced it had placed Nigeria on a disastrous index watch and would consider a place on a Government Bond Index (GBI-EM) over a subsequent 3 to 5 months.
Removal from a index would force supports tracking it to sell Nigerian holds from their portfolios, potentially ensuing in poignant material outflows.
This in spin would lift borrowing costs for Africa’s largest economy, nonetheless analysts pronounced they did not design JP Morgan to take such a step.
The Central Bank of Nigeria (CBN) however denied there was any necessity of liquidity in a banking market, Reuters stated.
JP Morgan sum Nigeria to a widely followed index in 2012, when liquidity was improving, origination it usually a second African nation after South Africa to be included. It sum Nigeria’s 2014, 2019, 2022 and 2024 bonds, that make adult 1.8 percent of a GBI-EM Global Diversified index.
Investors have $216 billion benchmarked to a GBI-EM, a many renouned rising internal debt index. But a bank pronounced a stream liquidity issues finished it tough for unfamiliar investors to replicate it.
“If we are incompetent to determine sufficient liquidity in Nigeria’s mark FX and internal book bond marketplace … it will trigger a examination … for removal,” Reuters quoted JP Morgan to have said.
“Conversely, if liquidity improves and investors are means to covenant with minimal hurdles, Nigeria will be private from index watch negative.”
The forex and bond markets have come underneath vigour after a cost of oil, Nigeria’s categorical export, plunged.
In response, a executive bank had devalued a naira by 8 per cent final year and tightened trade manners to quell speculation.
A Nigerian banking play pronounced daily forex trade had depressed to underneath $100 million daily from around $500 million 4 weeks ago, that he blamed on a executive bank rules.
Head of Emerging Debt during BNP Paribas, David Spegel said: “I would be really astounded if Nigeria was ejected from a index wholly given a distance of a economy and intensity for destiny material lifting in a debt and equity markets there.
“Eventually a whole oil risk emanate will be labelled into a marketplace and flows of material and investment will lapse to Nigeria.”
INSIDE BANKING HALL:
UBA, Ikosi Road, Ketu, Lagos
Nume Ekeghe
This bend of a United Bank for Africa Plc (UBA) is located in a vital area, that attracts a lot of clientele from customers. Firstly, it has dual ATM machines, nonetheless during a time of this observation, nothing of them was dispensing cash.
On entering a banking hall, there was a prolonged reserve of business watchful to be attended to by a 3 tellers on avocation and there was one teller stationed to lift out income transfers.
Three officials of a bank were doing customers’ services, while dual attended to customers’ complaints, with a other enrolling business on a Bank Verification Number.
Notwithstanding a queue, a staff members were rarely veteran in carrying out their duties.
This bend was also purify with an superb banking atmosphere. Therefore, there is a need for a bank to inspire some-more business to welcome a electronic remuneration channels such as quick marks inside a banking gymnasium and ATM machines that accept deposits so as to revoke queues in a bank.
APPOINTMENT STORIES
CAPTION: Chairman of a house of Honeywell, Dr. Oba Otudeko
Honeywell Flour Mills Strengthens Board with New Members
Honeywell Flour Mills Plc (HFMP) has announced a appointment of 5 new members to a board. The new house members are: Dr. Zate Raymond Zoukpo (Ivorian), Mrs Wonuola Adetayo, Mr Alan Palmer (British), Dr. Teddy Ngu (Cameroonian) and Mr Andrew Smith-Maxwell (British).
The association settled in a recover that a appointments were in avail of a prophesy to spin one of Africa’s heading food companies, with a opposite portfolio of heading products and brands, elite by a consumers.
The association stated: “These people move a lane record of particular feat and universe category believe in a dishes attention and other sectors.”
This extended believe will offer strengthen a house of a association in a purpose of heading a association and running a supervision organisation in a feat of a company’s vision.”
“The appointment of these rarely competent and opposite people also underlines a company’s fasten to ensuring a top spin of corporate governance.
Speaking on a appointments of a new house members, a authority of a board, Dr. Oba Otudeko CFR, said: “We are transparent about a prophesy to spin a many dignified African dishes company, doing opposite a food value method from plantation to fork. We trust that a healthy resources in Nigeria as good as a race bottom of a country, gives us a healthy advantage for a feat of a vision”.
Speaking further, Otudeko stressed: “We recognize a significance of carrying a right peculiarity of people opposite all levels of a organisation, including on a house and therefore a new house members were allocated since of their common resources of opposite believe from some of Africa’s and a world’s heading organisations. We trust that a singular mix of their knowledge, discernment and eccentric viewpoint will be of measureless advantage to a company.”
Honeywell Flour Mills Plc is one of Nigeria’s heading dishes companies. The company’s operation of domicile products include: Honeywell Superfine Flour, Honeywell Brown Flour, Honeywell Semolina, Honeywell Whole Wheat Meal, Honeywell Macaroni, Honeywell Spaghetti and a renouned varieties of Honeywell Noodles.
Zoukpo
Zoukpo recently late as Chief Operating Officer during a African Development Bank (AfDB). He performed his Ph.D in Economics from a University of Tsukuba, Japan in 1985. As a scholar, Dr. Zoukpo began his career as a Research Fellow with a Ivorian Centre for Economic and Social Research. He after went into banking, where he spent 25 commendable years opposite opposite executive roles and functions during African Development Bank (AfDB), from where he late as First Vice President and Chief Operating Officer.
Adetayo
Adetayo has over 25 years of sum Consulting and Marketing experience. She is now a partner, co-founder and Chief Executive of Kainos Edge Consulting Limited. Adetayo’s abounding career has seen her work, during several times, in comparison selling and caring roles opposite opposite geographies with Unilever/UACN. These roles included: Divisional Marketing Director, UAC Foods; Marketing Director, CAP Plc; Managing Director, UACN Pharmaceutical Personal Products Limited; and, Group Marketing Manager, Unilever Caribbean in Trinidad Tobago. She left UACN/Unilever to work in consulting, fasten Phillips Consulting as Associate Director. She after founded and was Managing Director of SoftSkills Management Consultants. She was a member of a Nigeria 2020 Vision Drafting Committee and Chairman of a Governance Institutions sub-committee. She now serves on a house of a Nigerian Economic Summit Group (NESG).
Palmer
Palmer is a evident past Managing Director and CEO of Kraft West Africa and Cadbury Nigeria Plc. He was also formerly a Managing Director, South-East Asia for Cadbury Schweppes Plc. Mr. Palmer has tighten to 40 years of believe in a quick relocating consumer products (FMCG) space operative with tellurian organisations such as Kraft Foods Incorporated, Cadbury Plc and Trebor Bassett Limited. Alan Palmer is now CEO Foods, Honeywell Group where he has primary shortcoming for doing a mutation of a Honeywell Foods Business into a leading, world-class, pan-African dishes FMCG company.
Smith-Maxwell
Smith-Maxwell has over 25 years of tellurian investment banking believe from some of a world’s heading Investment banks. He has been a partner in Fieldstone Private Capital Group, a boutique investment bank specialising in energy and infrastructure projects opposite Africa. Prior to that, he led and built adult a Energy and Utilities Group during Dresdner Kleinwort Wasserstein, an earlier British-based investment bank that is now a member of a tellurian banking group, Commerzbank, where he was obliged for overseeing a teams in a UK, Germany, Asia, Latin America and a United States. He has formerly served on a Board of Wessex Water following a merger by YTL Power International. He will supplement his substantial believe and discernment into corporate financial to a house of a company.
Teddy Ngu
Ngu is now Head, Corporate Development and Investments during Honeywell Group. He has over 17 years of believe in plan consulting, corporate strategy, corporate financial and auditing, carrying led and served on plan teams with some of a world’s heading consulting firms in over 15 countries in 4 continents. Before fasten Honeywell Group he was a Director and Head of Strategy and Operations Consulting during a Lagos bureau of PricewaterhouseCoopers (PwC). Prior to PWC, Dr. Ngu was partial of a Corporate Strategy and Development Group during Pepsico, New York and formerly a consultant with a New York Office of a Boston Consulting Group (BCG). He competent as a franchised accountant (ICAEW), with a UK use of a tellurian veteran services company, Ernst and Young. He attended The Wharton Business School, from where he performed his MBA. He also has a PHD in Mechanical Engineering.
MONDAY INTERVIEW
CAPTION: Director-General of a Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf
Yusuf: Nigeria’s Auto Policy Not Sustainable
Director-General of a Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, believes that Nigeria can come out of her benefaction mercantile hurdles by focusing on areas where she has a analogous advantage. He spoke to Obinna Chima. Excerpts:
Although a allowance check has upheld a second reading during a National Assembly, a oil benchmark is still during $65 per tub since oil prices are trade around $46 per barrel. Don’t we consider it should be practiced to simulate a genuine conditions in a oil market?
First of all, we know a allowance check was sent to a National Assembly for consideration. The energy of allowance indeed go to a National Assembly, so what they have is still a proposal. we am certain that a lawmakers judging from a deliberations they have had so far, will have to examination some of a simple assumptions in a budget, quite a arrogance that has to do with a oil benchmark. So clearly, what we have now can't stand. It is expected to be reviewed around $50 per barrel. Even a Coordinating Minister for a Economy had also pronounced that what they have is like unfolding budgeting. We have a check for opposite scenarios – for $40 per barrel, for $45 per barrel, for $50 per barrel, and so on. So, we consider what we have on palm from a approach we see it, is a check if upheld into law, that we it is going to be implemented in a really flexibly approach given a form of sensitivity that we have currently. It is softened to start from a really regressive indicate as regards to a arrogance so that we have a check that is tighten to reality.
If we are to suggest, what oil benchmark cost will we suggest to a lawmakers?
Given what is happening, we will suggest $45 per barrel. Whatever we do now, we have to describe it to a actual. Already, oil cost is about $46 per tub and routinely when we are sourroundings a benchmark, we set it about 10 per cent subsequent a tangible so that we have a tiny room for probable savings. That is a whole thought of a benchmark. So, if we a tangible that is already $46 per tub and we are anticipating that some of these variables might change that could pull it to around $50 per tub or $55 per barrel, afterwards for me, $45 is a protected figure to work with.
There are projections that oil cost might even tumble offer to as low as $40 per tub this year, how will that impact a country’s mercantile opinion this year?
Well, it will impact a economy and we are already feeling a impact as regards to a ability to comment a budget. We see what is function already to a sell rate in a official, interbank and together markets. So, if we have a projection of $40 per tub or something lower, afterwards a conditions will get worst, quite for sell rate and it will also get misfortune for income and governments during levels since a economy is contingent on oil income for about 80 per cent a sum revenue. So, if we have this pointy reduction, afterwards it is going to be a vital startle on a income form of all a governments. So, a conditions will get misfortune if oil prices goes down further. Of course, it will impact a cost of prolongation since a lot of a firms in a nation count on sell rate for their business and as prolonged as sell rate is vicious or a banking is being devalued, cost of prolongation will continue to go up. This will also impact distinction domain since if cost is going up, distinction domain will really drop. It will impact a ability to even keep jobs and emanate new jobs. Some employers might be forced to cut down on a series of employees. Most state governments might not be means to means their workforce, so it is going to be a vital highlight on a use conditions in a country.
Do we consider that a supervision has finished adequate to residence hurdles being faced by manufacturers in a country?
They have not finished adequate during all. Look during a energy situation, it has not softened during all and has even gotten worst. Many operators in a nation are still swamp down by energy issue, some of them count on diesel, some count on LPFO, and some count on gas, to be means to beget power. Power is a vital emanate and it is inspiring a lot of businesses. Cost of comment is still really high during around 25 and 30 per cent, even as a Central Bank of Nigeria keeps mopping adult and tightening financial policy, cost of comment has been going up. We still have issues during a ports, a highway is a nightmare. In annoy of all a reforms during a ports, clearing of cargos, capricious gratefulness of a cargoes, all sorts of charges and there are no entrance roads to a ports. All these irritate a cost of doing business and it could make doing business really frustrating. Then we have a emanate of transfer of all sorts of products from all over a world, that is origination it formidable for a lot of manufacturers to be means to compete. Look during a weave attention for instance, in annoy of all a involvement funds, many of a firms have died since they are not competitive. So, it is not adequate to yield involvement fund, we need to emanate a sourroundings for businesses to be sustained. So, a businesses are still carrying a lot of issues. There are issues of mixed taxation, logistics in relocating products from one indicate to another, cost of travel and so many other issues.
Talking about high cost of fund, one of a reasons since a N220 billion comment for micro, tiny and middle scale enterprises was introduced, was to revoke a weight of high cost of comment in a system, are your members not accessing that fund?
Not most is function nonetheless around that fund, even a executive bank had certified that many of a banks are not so penetrating about disbursing a comment since of a low domain since a extent of a seductiveness rate has been set by a CBN. Beyond that, many SMEs have hurdles assembly a mandate of a lot of a banks, quite with regards to collateral. For instance, some of a growth banks need bank pledge and these things are not easy to get by SMEs. So over a emanate of cost of fund, entrance to a comment is another vicious thing. But we contingency acknowledge that we have a lot banks that are apropos some-more innovative and assertive in giving credit to SMEs and some of them are apropos some-more SME friendly. But infancy of them still have issues with SME funding.
What is your take on a sovereign government’s automobile policy?
The automobile process is not sustainable. At what cost are we going to arrange a automobile here? We should learn to demeanour during a sourroundings before we start to put in place a policy. We don’t have a steel industry, we don’t have infrastructure, we don’t even have a economies of scale that would make it cost effective to start to furnish vehicles here. Even nonetheless we need to start from somewhere, we should be means to grow in method in process administration and process choices. That is really important! The infrastructure for us to furnish vehicles in Nigeria are not there, a cost of comment is so high, so it is softened to do things gradually. For instance, we can start by production gangling parts. There are so many vehicles on Nigerian roads that need gangling parts, let us start from there by production gangling tools locally. Let’s stop a importation of gangling tools and start producing them here in Nigeria. People need startle absorbers, stop pads, bumpers, windscreen and a lot of other things. We can start from there gradually and emanate jobs, to start to use a existent vehicles. In any case, in any case, for we to start to do a kind of oppressive tariff that a process is bringing about, we contingency have good open travel system, so that we don’t have to during all cost wish to possess a car. This is since a tariff would make it really restricted to possess a car. Do we have ability to make a policy? They know they don’t have a ability to exercise it that is since they keep changing a date. So, we have to put in place policies that are in line with stream realities.
Why did a LCCI reject a private companies’ acclimatisation and inventory check that has a aim of enlivening unfamiliar companies in a nation to list on a Nigerian Stock Exchange?
Well, a position of a Lagos Chamber is that we don’t have to enforce any association to list compulsorily. Companies that come to a nation should have a choice of either they wish to sojourn private or they wish to go public. What is vicious is that we should have policies in place that would make such companies impact on a economy definitely by pursuit origination and a remuneration of their taxes. We should inspire them to be listed on a batch sell voluntarily. We might maybe embody incentives to inspire them to list. So, if a association has been in your nation for prolonged and as during a time it was being set up, it wasn’t a condition that it contingency list compulsorily, now after several years, we are perplexing to force a association to list on a batch exchange, we don’t do policies like that! That is not unchanging with tellurian best practice. That means that a process will spin retroactive. In any case, it is always softened to use incentives to inspire companies to list. The beauty of a private craving is that we have a choice within a law on how we wish to run your business. So, we are not gentle with a fact that they wish to force companies to list on a batch exchange. There are other ways to get them listed. We can get them to compensate their taxes, get them to emanate many jobs as probable for a inland people, and get them to use as many internal products as probable that can beget some multiplier effects. These are ways in that we can get them to impact on a multitude and also inspire them to do corporate amicable shortcoming (CSR).
But how can a nation come out of a long-lived hurdles it faces whenever wanton oil prices falls?
One of a ways for us in Nigeria to get out of this disaster firstly is to cut a wastages that we indulge in. How can we be an oil producing nation and we are spending billions of dollars annually to import fuel? These are a low unresolved fruits that we need to harness. Do we know how most we would save in terms of unfamiliar sell if we start enlightening petroleum products in this country? We are maybe a usually oil producing nation that imports as most petroleum products even as we trade wanton oil. It is a vital disaster of governance and it is one of a biggest indicate of vigour in a unfamiliar sell market. Look during a billions that we spend in importing petroleum products, that should be a starting point. In ubiquitous trade, we start from your area of rival advantage. We have analogous advantage in oil and gas and we should be enlightening some-more of polished petroleum products, we should be exporting a lot of petro-chemical products, we should be exporting fertilisers since we also have rival advantage in that area. We also have rival advantage in agriculture, nonetheless we need a right kind of policies to expostulate it. So, we should brand sectors where we have these advantages and continue to inspire exports. Another vicious thing that we need to do is to make certain that revenues that are ostensible to be remitted to a association accounts are remitted. The association comment should be some-more strong than what it is, nonetheless there is so most parole and people are violating a Fiscal Responsibility Act. Some of these parastatals are richer than their primogenitor ministries. They acquire these monies and infrequently they spend it wastefully. So, we have to move fortify into governance. If we do that, a stream conditions will not be as bad as it is presently. We need to start doing things right. If we demeanour during a check for instance, usually 16 per cent of it is going to material expenditure. How do we wish to variegate a economy with that? Of course, mercantile diversification is about investment in your infrastructure, investment in tellurian material and institutions. So, if we have a conditions where usually 16 per cent is on material expenditure, how can we build infrastructure and be competitive? How can we variegate a economy? So, these are elemental issues that need to be looked into since if we don’t suitable your resources properly, there is no approach that we can get an economy that is rival and sustainable. Now, in a allowance check that was submitted to a National Assembly, there is a sustenance of N91 billion for kerosene subsidy. For integrity sake, that kerosene funding is unnecessary. That is one easy approach to make assets if we are critical about origination savings, since there is nobody in this economy, detached from those importing a kerosene or those that have approach allocation from a NNPC that is removing a advantage of a funding on kerosene. All a demonstration we had in this nation was not about kerosene, it was about petrol. So, if we are articulate about purgation and we are still putting N91 billion in a 2015 check for kerosene subsidy, we consider that doesn’t uncover earnest and fasten to austerity, it doesn’t uncover fasten to cost reduction. The assemblage of output on infrastructure in a check is usually about N93 billion and we are imprinting N91 billion for kerosene subsidy. Then we also have N200 billion for PMS. With a stream spin of oil prices, nobody should be articulate of funding again. The cost has so crashed that we should not be articulate about spending a resources of supervision on funding again. We also need to worry about a debt. In this budget, N943 billion is being used to use debts! What is a sum budget? All these debts we incurred, what did we use them for? So, we need to counsel supervision on a rate during that it incurs domestic debts quite since we don’t have anything to uncover for it.
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