IATA: African Airlines Record 9.9% Traffic Rise in June

06/08/2017

The International Air Transport Association (IATA) announced global passenger traffic data for June showing that demand (measured in total revenue passenger kilometers or RPKs) rose by 7.8% compared to the year-ago period. This was in line with the 7.7% growth recorded in May.

All regions reported growth. June capacity (available seat kilometers or ASKs) increased by 6.5%, and load factor rose 1.0 percentage point to 81.9%.

For the first six months of 2017, the industry experienced a 12-year high in traffic growth (7.9%) and a record first half load factor of 80.7%.

“A brighter economic picture and lower airfares are keeping demand for travel strong. But as costs rise, this stimulus of lower fares is likely to fade. And uncertainties such as Brexit need to be watched carefully. Nonetheless, we still expect 2017 to see above-trend growth,” said Alexandre de Juniac, IATA’s Director General and CEO.

June 2017 (% year-on-year)	World share¹	RPK	ASK	PLF (%-pt)²	PLF (level)³
Total Market	100.0%	7.8%	6.5%	1.0%	81.9%
Africa	2.2%	9.2%	6.6%	1.6%	64.8%
Asia Pacific	32.8%	11.6%	9.4%	1.6%	80.9%
Europe	26.5%	8.8%	6.7%	1.7%	85.4%
Latin America	5.2%	6.7%	5.2%	1.2%	81.6%
Middle East	9.6%	2.1%	3.3%	-0.8%	68.8%
North America	23.7%	4.0%	4.1%	0.0%	86.3%

¹% of industry RPKs in 2016 ²Year-on-year change in load factor ³Load factor level

International Passenger Markets

June international passenger demand rose 7.5% compared to June 2016. All regions recorded growth, led by airlines in Africa. Capacity climbed 6.2%, and load factor climbed 1.0 percentage point to 80.6%.

Asia-Pacific airlines’ June traffic jumped 9.1% compared to the year-ago period. Capacity rose 7.9% and load factor edged up 0.9 percentage points to 79.3%.The overall upward trend in seasonally-adjusted traffic remains strong, although volumes have slipped in recent months. Traffic on Asia-Europe routes continues to trend upwards following terrorism related disruptions in early 2016. However, solid demand growth on international routes within Asia has paused.

European carriers saw traffic rise 8.8% in June compared to June 2016, which was up from a 7.5% year-over-year increase recorded in May. Capacity climbed 6.5% and load factor rose 1.8% percentage points to 85.9%, highest among the regions. The stronger growth reflects both a favorable comparison with the year-ago period, as well as increased momentum in the regional economic backdrop.

Middle Eastern carriers posted a 2.5% traffic increase in June, which was a slowdown from the already subdued 3.7% growth seen in May. Capacity rose 3.1%, and load factor slipped down 0.4 percentage points to 68.9%. While most markets have seen demand slowing, it is most visible on the Middle East-North America market, which has been affected by a combination of factors including the (recently-lifted) ban on personal electronic devices, as well as a wider negative stimulation from the travel ban that has now been implemented for certain countries. However, passenger traffic between the Middle East and North America was already slowing in early 2017, in line with a moderation in the pace of growth of the largest carriers in the region.

North American airlines’ demand rose 4.4% compared to June a year ago. Capacity climbed 4.1%, with load factor inching up 0.3 percentage points to 84.5%. The comparatively robust economic backdrop in North America is expected to continue to support outbound passenger demand. However, anecdotal evidence suggests that inbound tourism is being deterred by the additional security measures in place for travel to the US.

Latin American airlines experienced a 9.7% rise in demand compared to the same month last year supported by strong travel within the region, while travel to North America is flat to down slightly. Capacity increased by 9.1% and load factor rose 0.4 percentage points to 82.1%.

African airlines’ traffic soared 9.9% in June. Capacity rose 7.1%, and load factor jumped 1.7 percentage points to 64.3%, although this still was the lowest among regions. Conditions in the region’s two largest economies have continued to diverge, with business confidence in Nigeria rising sharply in recent months, while South Africa’s economy fell into recession in the first quarter.

‘Africa Poised to Become Digital Insurance Leader’

Business Journal

06/08/2017

Mr. Oliver Bäte, CEO of Allianz SE opened the 44^th annual Insurance Conference in Sun City, South Africa, with a keynote address on that addressed the profound transformation of the insurance industry wrought by digitalisation.

“In today’s fast changing world, it’s critical to innovate quickly and to change course rapidly if necessary. The insurance industry, like other customer service industries, is transforming because of the all-encompassing impact of digitalisation on our lives. Customers have new expectations, a growing number of disruptors are taking the stage and new megatrends, such as artificial intelligence (AI), voice-based smart assistants (i.e. ‘Alexa’), telematics, wearables and drones are fundamentally changing the traditional insurance model.”

“We are completely rethinking the way we serve our customers, not least because of the competition posed by disruptors from the fin-/insuretech space, who have an impressive facility with mobile technology and analytics. Today’s customers will choose a product primarily because it’s easy to use, transparent in terms of price and quality, and personalized – and because it’s available to them via the digital channels they want it from.”

“Digital Comes Naturally to African Customers”

“While traditional markets, such as Europe, are struggling with their digital transformation process, Africa is digital by nature. Mobile is the fastest growing sector and innovation enabler on the continent with an expected 1.2 billion African subscribers by 2018.”

“By leveraging the internet and mobile penetration, African countries can leapfrog innovation. African customers will rightfully demand and drive insurance innovation in Africa as they expect offerings and channels to be fully digitalised. This, and the fact that rules and regulations are favorable for innovation in financial services, puts Africa in a great position to become the digital insurance leader of the future.”

A ‘Single Digital Agenda’ to Meet Disruption

To transform Allianz into a truly customer-centric, ‘digital by default’ company, the Group established a Single Digital Agenda. Allianz is spending over €700 million ($800 million) annually on shaping and orchestrating the digitalisation of its 127-year-old business.

The ‘Single Digital Agenda’ is a portfolio of change initiatives built on five pillars, the cornerstone being the Allianz ‘Global Digital Factory’, a place where experts from all parts of the company rethink customer journeys from our various business segments and make them globally scalable. The second is ‘Global Digital Partnerships’ to foster collaboration with tech and sharing economy companies. The third is ‘Digital Pure Play’, the conception of 100% digital insurance and assistance offerings. The fourth is ‘Advanced Business Analytics’ with the aim to increase customer satisfaction and the effectiveness of the business. And the fifth is ‘Allianz X’, a fund and incubator, for which the company has set aside €430 million ($500 million) over the next four years. The fund invests in promising start-ups that are part of ecosystems relevant to the business, such as connected property, connected mobility, health, asset and wealth management.

In Africa, where the Group is already present in 16 countries ^[i], Allianz will focus its digital activities on increasing customer reach in key growing markets, where insurance penetration is still low, and efficiency in markets with higher penetration.

“Insurance companies have much to offer to the African economy. Digitalisation allows us to gain considerably better insights into our individual and institutional customers and thereby to better serve their needs. We believe deeply in Africa’s huge long-term growth potential and we will leverage our global footprint and extensive expertise to strengthen our market position and to attract African talent,” Bäte said in closing.

Leadway Assurance Mobile Office to Deepen Penetration

Business Journal

02/08/2017

Capture — L-R: Head of Commercial, Leadway Assurance Co. Ltd, Mr. Gboyega Lesi; Divisional Director/Head Life Commercial, Leadway Assurance Co. Ltd, Mr. Adebayo Okuwobi; Executive Director, Leadway Assurance Co. Ltd, Mr. Tunde Hassan-Odukale; Executive Director, Leadway Assurance Co. Ltd, Ms. Adetola Adegbayi; Head of Business Development, Leadway Pensure PFA, Mr. Osaghae Osarhieme and Head of Human Resources Department, Mrs. Kunbi Adeoti during the official launch of the Leadway Assurance Mobile Office in Lagos.

Leadway Assurance Company Limited has launched its mobile office designed to create more awareness and deepen penetration of insurance services in the country.

Ms. Adetola Adegbayi, Executive Director, Leadway Assurance, said the mobile office initiative is important in order to get the insuring public to fully understand what insurance is all about. She said insurance is buying of risks from customers while the policy serves as evidence of the risk bought off the customer by an insurance firm.

Adegbayi maintained that the mobile office caravan will move into various neighbourhoods to spread the message of insurance and purchase risks from existing and potential customers.

“The protection gap in Nigeria is still very low because many people do not purchase insurance services for a variety of reasons. We hope to get more people into the protection net through the mobile office because public perception is important to us in the insurance market.”

The Leadway Assurance ED added that the mobile office caravan is to educate, make aware and ensure access to insurance services, as well as a research tool to determine where to open a new branch.

“The Leadway Assurance Mobile Office is about making insurance accessible to the people. It will reach people where they live and educate them on the need to have insurance protection. It is our contribution towards deepening insurance penetration in Nigeria.”

L-R: Head of Commercial, Leadway Assurance Co. Ltd, Mr. Gboyega Lesi; Divisional Director/Head Life Commercial, Leadway Assurance Co. Ltd, Mr. Adebayo Okuwobi; Executive Director, Leadway Assurance Co. Ltd, Mr. Tunde Hassan-Odukale; Executive Director, Leadway Assurance Co. Ltd, Ms. Adetola Adegbayi; Head of Business Development, Leadway Pensure PFA, Mr. Osaghae Osarhieme and Head of Human Resources Department, Mrs. Kunbi Adeoti during the official launch of the Leadway Assurance Mobile Office in Lagos.

Adegbayi said further: “As market leaders in the Nigerian Insurance industry, we have taken it upon ourselves to fulfill the task of reducing the financial protection gap within the country, which in turn increases on the low insurance penetration rate in Nigeria. We have elected to bring risk protection and insurance education closer to the man on the street in Nigeria. The launch of this state-of-the-art Mobile Office is a testament to the execution of this goal. Our objective goes beyond sales; we intend to reverse the negative perception many Nigerians have of the insurance industry.

“With the huge potential of the insurance industry to positively impact our economy by safeguarding the enormous risks within the entire business ecosystem, and by creating wealth through investments, the industry is still way behind other financial and service sectors, contributing about 0.3% to the Nigerian Gross Domestic Product (GDP).

“Notwithstanding a population of over 180million people about a third of which are within the insurable class, Nigeria is said to have about 5 million registered policyholders. This lack of density shows how largely untapped the Nigerian market is and the huge opportunities available to increase insurance uptake and the number of policyholders nationwide.”

Abass Resigns as ntel CEO

Business Journal

02/08/2017

Mr. Kamar Abass has resigned as chief executive of ntel due to unresolved differences with the Board of the company in respect of certain operational issues.

The company has already appointed Mr. Ehiagwina, the Head of Finance as interim ceo.

Abass, who was the pioneer chief executive of ntel was formerly the chief executive of LM Ericsson Nigeria.

NEXIM, Indonesia Eximbank to Enhance Co-operation

Business Journal

01/08/2017

“With the signing of the MoU with Indonesia Eximbank, we hope to strengthen our existing bilateral relationship through increased technical assistance, promotion of non-oil export trade and other economic activities between Nigeria and Indonesia towards supporting our Government’s efforts to diversify the economy.” – Abba Bello

The Indonesia Eximbank has signed an Memorandum of Understanding (MoU) with the Nigerian Export-Import Bank (NEXIM Bank) expressing intention to enhance co-operation and forge stronger relationships in promoting regional and global trade and investment between Indonesia and Nigeria.

The MoU intends to foster trade, technical assistance, experience and information sharing, including other investment relations in a way that would promote financing, guarantees, insurance and counter trade instruments to increase transactions between Indonesia and Nigeria.

In his welcome remarks, Mr. Abba Bello informed the Indonesia Eximbank team that NEXIM Bank was established by Act 38 of 1991 as an Export Credit Agency with the broad mandate of promoting the diversification of the Nigerian economy and deepening the external sector, particularly the non-oil export sector.

The Bank pursues this through the provision of credit facilities in both local and foreign currencies; risk-bearing facilities through export credit guarantee & export credit insurance as well as business development and financial advisory services etc.

L – R: Mr Abba Bello, MD/CEO, NEXIM Bank; and Mr. Dwi Wahyudi, MD, Indonesia Eximbank at the NEXIM Bank Headquarters, Abuja exchanging copies of the signed MoU.

Presently, the Bank’s current strategic initiatives are geared towards boosting job creation and foreign exchange earnings in the Manufacturing, Agro-processing, Solid Minerals and Services (MASS) sectors in alignment with the efforts of the federal government to diversify the economy, create jobs and increase both the value and sources of foreign exchange earnings in the country.

Bello expressed his delight that both Banks were able to quickly come to terms on the Articles of the MoU considering the brevity of time spent in the negotiations, which shows strong commitment on both sides to work towards a more mutually beneficial relationship.

Furthermore, the NEXIM MD indicated that by virtue of both banks’ membership of the Global Network of Eximbanks and Development Finance Institutions (DFIs) G-NEXID, he hopes that the intentions expressed in the MoU would be much easier to pursue. NEXIM Bank has been the honourary president of G-NEXID since May 2015.

In his response, the Managing Director of Indonesia Eximbank, Mr. Dwi Wahyudi expressed his satisfaction that the two institutions have established a viable intention to forge strong collaborative relationship as signalled by the MoU.

He disclosed that the Indonesia Eximbank was incorporated by virtue of Law Number 2/2009, as an export credit institution that provides export financing in the form of security, insurance and consultation services.

Like NEXIM, the Indonesian Eximbank supports its Government’s economic development aspirations by providing financing for (a) businesses that are into production of goods and services for export; (b) viable projects that are not attractive to commercial banks but have the prospects to increase the national export base; and (c) providing assistance to overcome the obstacles facing banks or other financial institutions in providing financing for exporters through various export credit instruments.

Wahyudi is hopeful that the MoU signed with NEXIM Bank would spur meaningful bilateral cooperation between the two countries for the promotion of the intentions expressed in the Articles. This becomes more germane given the readiness of the Government of Indonesia to enhance mutually beneficial economic relations with Nigeria as indicated during the official visit of the Minister for Foreign Affairs of the Republic of Indonesia, Mrs. Retno Marsudi in June this year.

Bello assured his Indonesian counterpart that NEXIM would do all within its mandate in regard to the intentions expressed in the document. Concluding, he expressed his hope that the MoU will strengthen Nigeria’s existing bilateral relations with Indonesia through increased technical assistance, promotion of non-oil export trade and other economic activities and thereby provide more support to the Government’s efforts to diversify the economy.

The Memorandum of Understanding between Indonesia Eximbank and NEXIM Bank is strictly limited to the expressed desires of the parties to enhance cooperation in respect of the matters set out in the document. It is not intended to impose or create any legally binding rights or obligations on the parties.

About NEXIM Bank – The Nigerian Export-Import Bank was established by Act 38 of 1991 as an Export Credit Agency with the broad mandate of promoting the diversification of the Nigerian economy and deepening the external sector, particularly the non-oil export sector through the provision of credit facilities in both local and foreign currencies; risk-bearing facilities through export credit guarantee & export credit insurance as well as business development and financial advisory services etc.

In pursuit of its mandate of promoting export diversification and deepening the non-oil export sector, the Bank’s current strategic initiatives are targeted towards boosting employment creation and foreign exchange earnings in the Manufacturing, Agro-processing, Solid Minerals and Services (Tourism, Transportation and Entertainment) (MASS) sectors. The Bank embraces the exchange of information on best practices in trade and project finance as an important value addition to its operations.

Mobile Broadband to Reach 4.3bn Globally in 2017

Business Journal

01/08/2017

The new 2017 edition of ITU’s ICT Facts and Figures reveals that mobile broadband subscriptions have grown more than 20 per cent annually in the last five years and are expected to reach 4.3 billion globally by the end of 2017.

Between 2012 and 2017, LDCs saw the highest growth-rate of mobile broadband subscriptions. Despite this, the number of mobile subscriptions per 100 inhabitants in LDCs is the lowest globally at 23 per cent.

The number of fixed-broadband subscriptions has increased by 9 per cent annually in the last five years with up to 330 million subscriptions added.

There has been an increase in high-speed fixed broadband subscriptions parallel to the growth in the number of fibre connections. Most of the increase in high-speed fixed broadband subscriptions in developing countries can be attributed to China, which accounts for 80 per cent of all fixed-broadband subscriptions at 10 Mbit/s or above in the developing world.

Mobile broadband is more affordable than fixed broadband

Mobile broadband prices, as a percentage of gross national income per capita, dropped by half between 2013 and 2016.

Mobile broadband is more affordable than fixed broadband in most developing countries.

Digital gender divide

While the Internet user gender gap has narrowed in most regions since 2013, the proportion of men using the Internet remains slightly higher than the proportion of women using the Internet in two-thirds of countries worldwide. In 2017, the global Internet penetration rate for men stands at 50.9 per cent compared to 44.9 percent for women.

In the Americas, the number of women using the Internet is higher than that of men.

International bandwidth and telecommunication revenues

International Internet bandwidth grew by 32 per cent between 2015 and 2016, with Africa registering an increase of 72 per cent during this period, the highest of all regions.

Global telecommunication revenues declined by 4 per cent from $2.0trillion in 2014 to $1.9trillion in 2015. Developing countries, which are home to 83 per cent of the global population, generate 39 per cent of the world’s telecommunication revenues.

ICTs for the SDGs

ITU’s ICT Facts and Figures demonstrates that ICTs continue to play an increasingly critical role in achieving the global Sustainable Development Goals (SDGs).

“ICTs continue to be a key enabler of economic and social development, bridging the digital divide and fostering an inclusive digital economy,” ITU Telecommunication Development Bureau Director Brahima Sanou. “I am confident that the discussions at World Telecommunication Development Conference 2017 will contribute to the fast-forwarding of countries towards attainment of the SDGs.”

NIA Names Tope Smart as Deputy Chairman

Business Journal

01/08/2017

Mr. Tope Smart, Group Managing Director/CEO, NEM Insurance Plc is now Deputy Chairman of the Nigerian Insurers Association (NIA). The NIA also appointed Mrs. Yetunde llori as Director-General.

Mr. Eddie Efekoha, Chairman of NIA said the high-profile appointments will strengthen the capacity of the Association to deliver on its core mandate and move the market forever.

Efekoha said the industry has successfully uploaded 4.4 million vehicles in the motor insurance database, saying that he believes that the 4.4 million vehicles have genuine insurance cover.

World Bank, ITU Launch Global Financial Inclusion Initiative

Business Journal

01/08/2017

A new global programme to advance research in digital finance and accelerate digital financial inclusion in developing countries, the Financial Inclusion Global Initiative, has been launched by the World Bank Group, the International Telecommunication Union (ITU) and the Committee on Payments and Market Infrastructures (CPMI), with support from the Bill & Melinda Gates Foundation.

The three-year programme focuses on three different “model” developing countries – China, Egypt and Mexico – and consists of two complementary operational and knowledge work streams.

The operational work stream supports each country’s national authority – countries in which digital financial inclusion can significantly improve access to financial services for a large number of people without access to financial services.

The knowledge work stream is designed to advance research and develop policy recommendations in three key areas of digital finance: security of information and communication technology (ICT) infrastructure and trust in digital financial services; digital IDs for financial services; and acceptance and use of e-payments by micro and small-scale merchants and their customers.

The inter-agency working groups tackling these issues will share findings at annual symposia. The first of these is scheduled to be the Financial Inclusion Global Initiative Symposium 2017, will be held in Bangalore, India, from 29 November to 1 December 2017, hosted by the Government of India.

“We are excited to work with ITU and CPMI on this new global initiative that will enable our partner countries to better harness the potential of digital technologies for financial inclusion, and to manage associated risks,” said Ceyla Pazarbasioglu, Senior Director for the Finance and Markets Global Practice, World Bank Group.

As part of the initiative, the three model countries are also receiving technical assistance from the World Bank Group with a view to putting into practice the guiding principles set out by the CPMI-WBG report on Payment Aspects of Financial Inclusion (PAFI). In particular, the assistance will contribute to further strengthening public and private-sector commitment and improving legal and regulatory frameworks, financial markets and ICT infrastructure for financial access and inclusion. It will also focus on improving financial product design; financial literacy and awareness; diversified access points; and large-volume, recurring payment streams. The World Bank Group leads the operational work, with ITU handling activities related to telecommunications authorities.

“An estimated two billion adults are still without access to a bank account, and yet some 1.6 billion of them have access to a mobile phone, creating the potential for e-finance access,” said ITU Secretary-General Houlin Zhao. “The ITU community is excited to leverage our unique technical expertise to make e-finance a reality for millions of people through the Financial Inclusion Global Initiative, and in so doing, contribute to poverty eradication and the achievement of the global Sustainable Development Goals.”

“The Bill & Melinda Gates Foundation is pleased to support the Financial Inclusion Global Initiative, which we believe will bring digital financial services to some of the world’s most vulnerable unbanked populations as well as advance knowledge on creating a robust digital payments ecosystem,” said Jason Lamb, Deputy Director, Bill & Melinda Gates Foundation.

The three countries selected were chosen based on potential for country programmes, level of national government and private-sector commitment to financial inclusion, number of people that could be reached through digital financial services, and potential for reforms to encourage innovation and digital technologies use.

According to analyses carried out by the World Bank Group, Egypt has the potential to bring a large number of people into the formal financial sector (more than 44 million adults). These analyses found that Egypt has adequate laws, regulations and financial and ICT infrastructure, but a lack of funding to cover related reforms.

Considered a ‘last-mile’ challenge, China has an increasingly well-developed legal and regulatory environment and financial infrastructure, as well as a supportive ICT infrastructure. The People’s Bank of China has requested support from the World Bank Group for digital financial inclusion measures to reach rural people without access to financial services.

Mexico has shown a strong commitment to financial inclusion with its new National Financial Inclusion Strategy launched in June 2016, as well as a draft fintech law. Mexico has the potential to become a regional and global model for digital financial inclusion, despite relatively low levels of financial inclusion.

China, Egypt and Mexico are already part of the Universal Financial Access 2020 (UFA2020) initiative. Led by the World Bank Group, this seeks to bring two billion unbanked adults in 25 countries into formal financial systems.

The design of country programmes under the Financial Inclusion Global Initiative will be informed by the same guiding principles of UFA2020 – the PAFI guiding principles – as well as the Level One guidelines for enabling payments infrastructure, and the recommendations of the ITU-T Focus Group Digital Financial Services.

The Financial Inclusion Global Initiative is supported by the Bill & Melinda Gates Foundation through a US$ 12,238,635 grant. This will be used to fund country-level implementation led by the World Bank Group, the organisation of the initiative’s annual symposia by ITU, and the activities of the initiative’s established working groups.

Niger Insurance Reports N22bn Asset Base

Business Journal

01/08/2017

Mr. Kolapo Adedeji, Managing Director/CEO, Niger Insurance Plc says the company’s asset base has increased to N22 billion from N20. 4 billion, thereby giving the insurer stronger operating opportunity in the insurance market.

Adedeji said the company has taken wide-ranging strategic measures to strengthen its position in the industry such as integrated marketing approach based on segmentation, business development cum research in terms of product portfolio and deployment of Information & Communications Technology (ICT) tools to create value for policyholders.

Kola Adedeji, MD/CEO, Niger Insurance Plc

“Despite the uncertainties surrounding the socio and macro-economic environment, my strong confidence and reliability on our diversified product portfolio and robust asset base remain undeterred. I also have confidence on the quality of our management team and the support of our stakeholders that gives us strength and resilience to navigate the storms of uncertainty in our operations.”

‘9Mobile Has Bleak Future’

Business Journal

31/07/2017

A telecom analyst has predicted bleak future for 9Mobile, formerly Etisalat Nigeria, due to its $1.2 billion indebtedness to a consortium of banks.

The analyst, who insisted on anonymity, told Business Journal in Lagos that the huge debt burden will make it practically impossible for the telecom firm to operate optimally, let alone generate sustainable profit going forward.

“The prospect of 9Mobile surviving in the cut-throat Nigerian telecom market is very slim. With a debt burden of such magnitude, the future of the company is doomed. The idea of the company looking for fresh investors is unrealistic because no rational investor will dare dive into the current mess called 9Mobile. Its future is simply bleak.”

He argued that with 13 creditor banks involved in the current ownership structure of the company, the decision-making process has become extremely unwieldy and chaotic.

“Despite the optimism of name change from Etisalat to 9Mobile, the reality is that the company does not have the financial and market capacity to pay back the $1.2 billion loan hanging on its neck in the near term. As a small operator in the market, the possibility of generating sizeable revenue in the short and medium term to offset the facility is doubtful.”

He insisted that the story making the rounds of certain firms lining up to snap up the company is more of public relations than realistic investment commitment.

“Of course, certain corporate names have been bandied about in the media but the truth remains that 9Mobile is not a worthy investment for now.”

Leadway Assurance, Leadway Pensure Partner Nollywood on Insurance/Pension

Business Journal

31/07/2017

Leadway Assurance Company Limited; Leadway Pensure PFA and Pinewood Medicare have signed a partnership agreement with 13 recognised affiliates of the Nollywood Creative Sector Industry for the provision of an insurance scheme, tagged NollyHealth Insured, for their members.

The Memorandum of Understanding (MoU) was signed on Thursday, July 13, 2017, at the NAN Media Centre, National Theatre Complex in Iganmu, Lagos, Nigeria.

Under the partnership, registered members of the following bodies in the Nigerian creative industry – Association of Motion Picture Entertainment Editors of Nigeria (AMPEEN); Creative Designers’ Guild of Nigeria (CDGN); Cinematographers’ Society of Nigeria (CSN); Directors Guild of Nigeria (DGN); Film & Video Producers’ and Marketers’ Association of Nigeria (FVPMAN); Independent Television Producers Association (ITPAN); Motion Picture Practitioners Association of Nigeria (MOPPAN); National Association of Nigerian Theatre Arts Practitioners (NANTAP); Screenwriters’ Guild of Nigeria (SWGN); Theatre Arts and Motion Pictures Producers Association of Nigeria (TAMPAN) and United Movie Practitioners’ Association of Nigeria (UMPAN) will enjoy a unified general insurance, healthcare, pension coverage and other listed benefits.

On its part, Leadway Assurance Company Limited will provide a life/general insurance policy for practitioners covering the following: Group Personal Accident Insurance which provides compensation to members/affiliates of the group in the event of accidental bodily injury to the insured person(s) that may result to death or disablement; Group Life Cover for the beneficiary of a member who passes away while in Service and Business Protection Insurance (Creative Art Production Insurance) under which is Cast & Crew Insurance, Fire & Burglary on Directors & Crew’s Personal Property, Miscellaneous Equipment (All Risks), Public liability insurance and Theft or Loss of money on a filming location.

L-R: Executive Director, Leadway Pensure PFA, Mr. Olusakin Ladeodan; Director, Administration and Human Resources, Lagos State Ministry Of Tourism, Art and Culture, Mrs Olubisola Olunloyo; Managing Director, Nigerian Film Corporation, Dr. Chidia Maduekwe; Executive Director, Leadway Assurance Company Limited, Miss Adetola Adegbayi and MD/CEO Pinewood Medicare, Dr. Olasimbo Davidson at the formal launch of Nolly Health Insured and MoU signing in Lagos.

On the other hand, its subsidiary company Leadway Pensure PFA would cater for the pension funds of members, while Pinewood Medicare HMO would serve as a healthcare service provider for the members of the aforementioned interest groups operating within the Nollywood ecosystem.

Speaking at the event, Executive Director, Leadway Assurance Company Limited, Ms. Adetola Adegbayi, stated that: “Nollywood as at 2014 contributed to the tune of $6.6bn for the Nigerian GDP, and sadly there are situations where practitioners are forced out of how they make their living due to accidents and medical emergencies. We felt it was important that we provided reliable solutions to the problem and ensure we do our best to bridge the gaps that exist.

“This is why we have come together to create a platform that covers the basic needs of practitioners. The NollyInsured Scheme will cover group personal accidents, pension’s savings and group life insurance which is like leaving a legacy behind for families. This three-pronged approach will cover practitioners from a basic level.”

Speaking on the need to save for retirement, the Executive Director, Sales & Marketing Olusakin Labeodan stressed the need for the creative industry to key into the contributory pension scheme. He said there cannot be a better time to take on the scheme, especially considering how well the industry has done. He noted that the Nollyinsured initiative and MOU signing are a clear indication of good things to come

In his remarks, the President, Directors’ Guild of Nigeria (DGN), Mr. Fred Amata, who spoke on behalf of the creative industry said: “This is the first collective effort of the creative sector to seize the opportunity of the persuasive power of unified numbers in negotiating an advantage for the benefit of the larger sector. NollyInsured is a progressively inclusive initiative.”

Also commenting, MD/CEO Pinewood Medicare, Dr. Olasimbo Davidson stated: “The Nolly-care program is designed firstly to end healthcare inequalities that pertain to income differences, and secondly to end preventable deaths which often stem from high healthcare costs. Lastly the Nolly-care Program aims to significantly reduce poor health outcomes which are typically linked to low access to high end specialists and sub- specialist”.

The Minister of Information and Culture, Lai Mohammed, who was represented by the Managing Director, Nigerian Film Corporation, Dr. Chidia Maduekwe, assured Nollywood stakeholders of the Federal Government’s continual support towards the development of Nollywood insurance scheme which provides favourable healthcare conditions for practitioners.

Furthermore, Dr. Madueke said that the insurance scheme could not have come at a better time, especially in the face of the urgent medical challenges that has faced members of the film industry and that there was the urgent need for both stakeholders to discuss health insurance and health issues pertaining to Nollywood members.

Commending the scheme, Hon. Adebimpe Akinsola, Special Adviser and Acting Commisioner, Ministry of Tourism, Arts & Culture represented by Director Admin & Human Resources, Ministry of Tourism & Culture, Mrs Olubisola Olunloyo, said she is convinced that the accomplishment is worthy of emulation and that the numerous medical and economic advantages streaming from the initiative will further heighten the excellence of Lagos State.

Worldwide IT Spending to Rebound in Half Year 2017

Business Journal

31/07/2017

Worldwide IT spending is expected to increase by 4.5% in 2017 in constant currency terms, a significant improvement on last year’s growth of 2.5%, with stronger upgrade cycles for infrastructure and mobile devices leading the improvement in the second half of the year.

According to the latest edition of the International Data Corporation (IDC) Worldwide Black Book, total IT spending this year will reach $2.1 trillion and is forecast to increase by another 4% in 2018 as positive momentum continues into next year. Including telecom services, which will increase by just over 2% in constant currency terms this year, the overall ICT market will reach $3.5 trillion in 2017.

Cloud Is Still Leading the Way

The strongest growth this year will come from infrastructure hardware, enterprise software, and mobile devices. With cloud service providers expected to accelerate their datacenter investments in order to keep pace with growing demand for cloud services, total server spending will increase by 4% this year and 5% in 2018. Enterprise spending on server and storage infrastructure will also pick up in the second half of 2017, driven by product refresh cycles. Meanwhile, demand for Infrastructure as a Service (IaaS) will remain robust, with spending set to exceed $25 billion this year and more than $50 billion by 2020.

Smartphone Sales Will Improve Compared to 2016

Last year saw a significant slowdown in the smartphone market, as increasing maturity and price competition affected many markets. Stronger growth is expected in the second half of 2017, as premium vendors launch significant new products while smartphone penetration and value continues to grow steadily in key emerging markets including China. Overall smartphone spending will increase by 7% this year to $439 billion, a big improvement on last year’s 1% growth.

“Cloud and mobile are still the big drivers for IT spending, despite the attention devoted to new technologies like augmented reality, artificial intelligence, and robotics,” said Stephen Minton, vice president, Customer Insights & Analysis. “New technologies will drive a larger share of market growth in the next 5-10 years, but the short term will also see a resurgence of growth in markets tied to 3rd Platform opportunities, including cloud services, mobility, and big data.”

Software Spending is Strong, Services Market is Stable

Software spending will increase by 7% this year to more than $471 billion in constant currency, driven by continued enterprise investment in big data and analytics alongside ongoing adoption of Software-as-a-Service (SaaS) and other key growth segments.

Meanwhile, IT services spending will post growth of 3% this year, led by project-oriented services. In telecom services, growth will still be driven by fixed and mobile data services while voice revenues continue to decline.

“While overall market momentum is set to improve, some technologies will continue to drag on industry growth in the near term,” said Minton. “High-end servers are expected to post another year of double-digit decline this year, while hardcopy peripheral spending will fall for the second year in a row. Overall tablet spending will also decline again, despite improving sales of hybrid and detachable models, while sales of traditional PCs and external storage systems will be broadly flat. This year will also see slowing growth for enterprise network equipment and traditional outsourcing services. For vendors still relying on 2nd Platform technologies for their revenue and growth, the market will remain challenging.”

Unlocking Investment in West Africa

Business Journal

31/07/2017

Despite West Africa’s enormous investment potential, its integration into the global economy is low. One sign of this is that the region captures only 5% of Africa’s total Foreign Direct Investment (FDI). The main hurdles for national, regional, and foreign investors are cross-border constraints. Small businesses and service providers are especially affected.

“In Nigeria, burdensome and non-transparent administrative procedures, land, the clearance of goods and services at ports and airports, and access to finance are some of the obstacles hampering investors,” said Bala Bello, Deputy Director for Policy and Advocacy at the Nigerian Investment Promotion Commission.

With its Improved Business and Investment Climate in West Africa Project, the Trade and Competitiveness Global Practice of the World Bank Group is looking at ways of addressing these problems by supporting both regional organizations and individual West African countries. It wants to help them address a range of investment policy issues that constitute barriers to private sector investment across the region.

“This project seeks to take pragmatic steps to facilitate the emergence of a conducive and predictable investment climate in advancement of the ECOWAS Common Investment Market vision,” said Kalilou Traore, Commissioner of the Industry Private Sector Directorate at the Economic Community of West African States (ECOWAS).

At the heart of its work is the establishment of a strong, regional public–private dialogue mechanism. “The participation of the private sector in contributing their opinions and practical experiences is essential,” said Iyalode Alaba Lawson, Vice-President of the Federation of the West African Chambers of Commerce and Industry.

“Since 1979, the private sector has held observer status at the ECOWAS Heads of State Summit, contributing the view of business to the Trade Liberalisation Scheme,” she said. “Regional-level private sector involvement, from investment policy initiation to formulation through to execution, allows for easier implementation when introduced into the business environment.”

The first forum for this was at an inaugural technical workshop in the Senegalese capital of Dakar in June 2015, and has since been moved up to national level. National reform action plans have been made by six, pilot countries—Cote d’Ivoire, Mali, Senegal, Ghana, Nigeria, and Sierra Leone—for a formal commitment to a regional monitoring scorecard.

Non-pilot countries have been invited as observers to help them prepare for future reform. A regional workshop with national governments and private sector associations deepened their familiarity and understanding of investment policy and promotion. Countries explored how they can promote and retain new and existing investment, and how they can leverage FDI for domestic business environment reforms.

Another avenue for convergence is the launch of the ECOWAS Investment Climate Scorecard. Over 70 public and private sector representatives from 15 member states, as well as representatives from the ECOWAS Commission, the West African Economic and Monetary Union (WAEMU), the European Union, and the World Bank Group, have formally endorsed the scorecard as a tool for deepening regional investment integration.

The scorecard is an innovative instrument that enables both the ECOWAS Commission and national policymakers to identify investment barriers and track the progress of national and regional reforms.

A digital dashboard will aggregate its data to facilitate analysis and decision making.

“At the national level, we must make our countries more attractive to investors, each focusing on its own unique potential,” said Zeinabou Keita, Head of the Technical Unit of Business Climate Reform at Mali’s Ministry of Investment Promotion in Private Sector, who added that removing constraints would make individual economies and the region more competitive. “The scorecard is an indispensable tool to help countries refocus efforts on issues that result in too much red tape for investors,” she said.

“West African countries have enormous potential to strengthen competitiveness and increase investment, which can drive growth, reduce poverty, and deliver jobs to the region,” said Eme Essien, International Finance Corporation Country Manager, Nigeria. She said the project was using a unique, hybrid approach to support the ECOWAS Commission to further regional integration by working simultaneously at regional and national levels to identify, address, and monitor the elimination of specific barriers to the expansion of cross-border investment.

The Improved Business and Investment Climate in West Africa Project is a four-year initiative that was launched in November 2014. The project is funded by the European Union and implemented by the World Bank Group.

Arne Hoel

‘Nigeria’s Rising Public Debt Worrisome’

Business Journal

12/07/2017

Yemi Osinbajo Acting President Federal Republic of Nigeria

Euler Hermes, the global leader in trade credit insurance recently presented its latest analysis on Africa’s economic performance at a ‘Risk Frontiers 2017’ conference in London. Highlights of the speech by Stéphane Colliac, Chief Economist for France and Africa with Euler Hermes, follow:
While Africa’s external debt has increased slightly, at 32% of GDP it remains far below its past peak (55% in 2002). While there is no general solvency issue, liquidity requirements are pushing some countries to request IMF support.

The increasing public debt on the continent is also a concern, driven by countries with fiscal vulnerability, particularly some oil exporting economies such as Algeria, Angola, Libya and Nigeria. After a three-year commodity shock, the moment of truth is approaching: many countries will have to accept IMF money and adjust their fiscal balance accordingly.
“Despite its challenges and recent severe financial pressure’s on commodity exporters, the African continent has significant economic potential,” said Stéphane Colliac.

“Further corporate expansion and development is possible – we predict Africa’s growth to be +2.6% in 2017. However, liquidity is under pressure as many countries have recently experienced currency depreciation pressures.”

Main Continental Risks

#1: Political risk and uncertainty

#2: Commodity price/exchange rate issue

#3: A growing debt pile due to vulnerable fiscal policies

Africa: The Problem is Not Growth, But How to Finance It
Political uncertainty, be it in major economies in the world or within the region, is the biggest concern. It compounds weak economic performance in commodity exporting countries such as Gabon, Ghana, Nigeria and South Africa.

It also affects Foreign Direct Investment (FDI) as foreign investors are skeptical about putting money into a country / region experiencing political upheaval and extremism.
Exchange rate policy is another major challenge, as floating exchange rates have in past acted as shock absorbers for Egypt and South Africa.

However, for countries with fixed rates such as Nigeria and Angola, the fear of floating worsened the liquidity shock. Furthermore, increasing public debt and vulnerable fiscal policy affects government spending on critical matters, as fiscal spending is key for social cohesion and further development. Unfortunately, public debt has increased in many sub-Saharan economies, and countries such as Ghana and Tunisia are facing liquidity issues, while Mozambique and Angola faced solvency risks.
“Although Africa is lagging behind the rest of the world, this is paradoxically an advantage for the region as it approaches development differently. It has already taken concrete steps to address the backlog, especially in some of its key economies,” adds Colliac.

Nigeria: Recession Should End Soon
Nigeria is a dominant economy in West Africa in terms of population and GDP, and is now the continent’s largest economy.

Its hydrocarbon resource base includes 2.2% of global oil reserves (11th in global rankings with 43 years of additional extraction at current rates) and 2.7% of natural gas reserves (9th and over 100 years).
The hard currency peg was not credible and the gap with the black market exchange rate widened significantly. Capital controls implemented to maintain the peg hit growth hard (-2% in 2016). With stagflation, the consumer suffered from major purchasing power losses and low Day Sales Outstanding (DSOs) hit corporates.

Finally, the unwinding of capital controls in March 2017 reduced the exchange rate issue and helped to stabilise economic activity. GDP growth of +1% is expected in 2017.
The World Bank’s Doing Business 2016 survey ranks Nigeria 169th out of 189 countries assessed, above Cameroon and Bangladesh but below Algeria and Guinea.

Nigeria ranks 143rd in terms of both the enforcement of contracts and the ease of resolving insolvencies.

South Africa: Recession to be short-lived

The country experienced a technical recession with two consecutive quarters of negative growth, at -0.2% in 2017 Q1, following -0.1% in 2016 Q4. The 2016 laggard — commodities — performed well during the first quarter (agriculture +5.1% and mining +3% q/q), when the resilient domestic economy of 2016 no longer held on.

Retail sales weakened markedly in January and February 2017. This was just after inflation peaked as a result of increasing oil and food prices — fuel prices increased by +16% y/y at the beginning of the year. The recession should prove short-lived, since inflation decreased markedly at +5.3% y/y in April.

Unfortunately, the negative carry-over effect is driving growth expectations lower (from +1% to +0.6% in 2017 and from +1.5% to +1.2% in 2018). South Africa will probably remain at near stagnation for some time.

But all is not doom and gloom as there is good news in the form of inflation. Euler Hermes now expects a decrease in inflation of +5% in both 2017 and 2018, comfortably within the Central Bank’s target band (3%-6%)], providing a bit of breathing room.

Recent political evolutions have not shown any sign of resolution that would break this stagnant growth; instead public debt is growing, to 53% of GDP in 2017.

Nigerian Equities Market Extends Gains to 5th Consecutive Session… NSE ASI up 0.5%

Business Journal

12/07/2017

The Nigerian bourse, at the close of trade today, extended gains to the 5th consecutive session as the All Share Index (ASI) rose 0.5% to settle at 32,981.63 points, thus nudging YTD gain to 22.7%. Quite similar to yesterday, performance was buoyed by sustained buy interest in market heavyweights – GUARANTY (+1.9%), NIGERIAN BREWERIES (+0.6%) and DANGCEM (+0.1%).

Consequently, investors gained N52.9m as market capitalization increased to N11.4bn. However, activity level was mixed as volume traded declined 17.6% to 180.3m units while value traded rose 22.7% to N2.6bn.

Positive Performance Across Sectors
Performance across sectors was positive as all indices closed in the green. The Banking index advanced the most, up 1.3% due to sustained buy interest in GUARANTY (+1.9%) and ETI (+5.0%) while upticks in NIGERIAN BREWERIES (+0.6%) and 7UP (+8.8%) drove the Consumer Goods index 0.5% northwards.

Similarly, the Insurance and Industrial Goods indices rose 0.3% and 0.2% on the back of gains in NEM (+4.9%) and DANGCEM(+0.1%) respectively while appreciation in SEPLAT (+1.1%) and FORTE (+2.7%) pushed the Oil & Gas index 4bps higher.

Investor Sentiment Strengthens
Investor sentiment as reflected by market breadth improved to 1.9x (from 1.2x recorded yesterday) – 29 stocks advanced while 15 declined. The best performing stocks were 7UP (+8.8%), NEIMETH (+7.1%) and CAP (+5.0%) while UPL (-9.6%), CHAMPION (-7.6%) and UCAP (-7.3%) were the worst performers. Whilst we expect market performance in the near term to remain largely driven by expectation of positive H1:2017 corporate reports, we do not rule of the possibility of some “end of the week” profit taking in subsequent sessions.

NASD OTC Exchange Market Activities
In the NASD OTC exchange, three counters traded – NDEP, SOURCE, CSCS AND IGI – with total volume and value of transactions closing at 16,300 units and N47,375 respectively. IGI accounted for 61.3% of total volume traded, followed by CSCS (30.7%).

Market Statistics: Wednesday, 12th July 2017

Market Cap (N’bn)	11,367.1
Market Cap (US$’bn)	37.2
NSE All-Share Index	32,981.63
Daily Performance %	0.5
Week Performance %	2.1
YTD Performance %	22.7
Daily Volume (Million)	180.3
Daily Value (N’bn)	2.6
Daily Value (US$’m)	8.4

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