The Central Bank of Nigeria (CBN) has issued guidelines for licensing and regulation of Payment Service Banks (PSBs) as it aims to enhance financial inclusion to small businesses, low-income households, and other financially excluded entities.
In a circular to PSBs on Thursday, the financial regulator said that despite several initiatives introduced, the inclusion rate remained below expectations.
It added that in collaboration with critical stakeholders in the digital financial ecosystem, the need to establish a guideline for the operations of the PSBs is crucial to enhance financial inclusion and stimulate economic activities at the grassroots through the provision of financial services.
“The National Financial Inclusion Strategy (NFIS) seeks to ensure that over 80 percent of the bankable adults in Nigeria have access to financial services by 2020. The CBN in collaboration with stakeholders launched the NFIS on 23rd October 2012 with a view to reducing the exclusion rate to 20 percent by 2020.
“Despite several initiatives including the Introduction of Microfinance banking, Agent Banking, Tiered Know-Your-Customer Requirements, and Mobile Money Operation (MMO) in pursuit of this objective, the inclusion rate remains below expectation.
“In view of the challenges to effective outreach to rural communities as well as the need to complement the services provided by other licensed entities, the CBN issues this regulation to provide for the licensing and operations of Payment Service Banks (PSBs) in Nigeria,” it added.
According to the CBN, the Payment Service Banks structure shall include; “Operate mostly in the rural areas and unbanked locations targeting financially excluded persons, with not less than 25% financial service touchpoints in such rural areas as defined by the CBN from time to time; enter into direct partnership with card scheme operators. Such cards shall not be eligible for foreign currency transactions; deploy ATMs in some of these areas, amongst others.
However, the apex bank revealed that the PSBs shall not grant any form of loans, accept foreign currency deposits, deal in the foreign exchange market or accept any closed scheme in electronic value as a form of deposit or payment.
The CBN stated that banking agents, telecommunications companies, retail chains, postal and courier service providers, mobile money operators, FinTech, and any other entity whose application is approved on merit are eligible to promote the new scheme.
Tesco will create 16,000 permanent UK jobs to meet a coronavirus-fuelled surge in online grocery demand, the supermarket giant said Monday in a boost for the country’s embattled retail sector.
Britain’s biggest retailer added in a statement that it expects “the majority” of jobs to be filled by temporary staff drafted in during the pandemic to cope with soaring home food deliveries amid the country’s lockdown.
“Since the start of the pandemic, our colleagues have helped us to more than double our online capacity, safely serving nearly 1.5 million customers every week and prioritising vulnerable customers to ensure they get the food they need,” said Jason Tarry, chief executive for Tesco UK and Ireland.
“These new roles will help us continue to meet online demand for the long term, and will create permanent employment opportunities for 16,000 people across the UK,” he added in a statement.
The new permanent positions are in addition to around 4,000 full-time jobs created by Tesco during the pandemic.
Some 47,000 temporary staff joined Tesco at the peak of the coronavirus, most of whom have reached the end of their contracts.
Pre-pandemic, online sales at Tesco accounted for about nine percent of total revenue.
That has jumped to more than 16 percent, with Tesco expecting online sales this year to reach more than £5.5 billion ($7.1 billion, 6.0 billion euros).
Monday’s update comes after major UK companies announced thousands of job cuts in recent weeks, notably across the aviation, energy and retail sectors, owing to COVID-19 fallout.
Britain’s economy shrank by one fifth in the second quarter, more than any European neighbour, as the lockdown plunged the country into its deepest recession on record.
In October, the UK government is to end a furlough scheme that has been paying up to 80 percent of wages for around ten million workers during the pandemic.
Analysts said this would result in soaring unemployment across Britain.
– Travel sector warning –
The Association of British Travel Agents (ABTA) warned Monday that more than 90,000 travel jobs have been lost or remain under threat owing to coronavirus fallout.
Far fewer Britons are heading abroad, particularly after the UK government re-imposed quarantine on travellers returning from nations including Austria, Croatia, France, the Netherlands and Spain.
“Travel desperately needs the government in its next review to provide tailored support or tens of thousands more jobs will be lost,” said ABTA chief executive Mark Tanzer.
The gloomy survey came after student specialist holiday firm STA Travel UK collapsed on Friday.
Among British retailers hit hard by virus fallout is Marks and Spencer, which last week said it was axing 7,000 jobs as wary customers steer clear of its stores, which mainly sell clothes and food.
European stock markets surged Monday on hopes of a coronavirus vaccine, while the dollar waned on continued deadlock over a new US stimulus deal, dealers said.
Looking ahead to a key meeting of central bankers this week, traders sent London’s benchmark rallying 2.0 percent and major eurozone indices were almost 2.5-percent higher approaching the half-way stage.
American authorities on Sunday announced that doctors could use blood plasma from recovered coronavirus patients as a treatment against the disease that has killed more than 176,000 in the US.
The move by the Food and Drug Administration comes as President Donald Trump faces intense pressure to curb the contagion that has hobbled the world’s largest economy and clouded his once-promising prospects for re-election in November.
“European markets have kicked off the week in style, with the FDA’s decision to approve the convalescent plasma coronavirus treatment raising hopes that we could see a vaccine fast-tracked before long,” said Joshua Mahony, senior market analyst at IG trading group.
Hong Kong’s main stock index meanwhile led gains across Asia, rallying 1.7 percent with traders cheered by a pledge from China’s banking regulator that it would continue to back the city as a financial hub after concerns were raised following the imposition of a new security law last month.
Investors will this week be keeping an eye also on a virtual gathering of central bankers at Jackson Hole, Wyoming, for monetary policy guidance after they have already provided already a wall of cash to support the global economy during the pandemic.
The main attraction is a speech by Federal Reserve chief Jerome Powell that is slated to take place on Thursday.
“More clarity will no doubt be sought via this week’s Jackson Hole symposium,” said Ben Emons, of Medley Global Advisors.
Traders are additionally keeping tabs on Washington, where US lawmakers are struggling to reach an agreement on a fresh stimulus package for the American economy.
“Democrats and Republicans are still very far (from) reaching a deal, and this means no further immediate aid in terms of fiscal policy,” said Naeem Aslam, chief market analyst at Avatrade.
“Investors will like to know how the Fed will use language to make politicians understand in Washington about the importance of another stimulus package.”
– Key figures around 1045 GMT –
London – FTSE 100: UP 2.0 percent at 6,118.76 points
Frankfurt – DAX 30: UP 2.4 percent at 13,075.07
Paris – CAC 40: UP 2.3 percent at 5,009.88
EURO STOXX 50: UP 2.3 percent at 3,334.80
Tokyo – Nikkei 225: UP 0.3 percent at 22,985.51 (close)
Hong Kong – Hang Seng: UP 1.7 percent at 25,551.58 (close)
Shanghai – Composite: UP 0.2 percent at 3,385.64 (close)
New York – Dow: UP 0.7 percent at 27,930.33 points (close Friday)
Euro/dollar: UP at $1.1829 from $1.1795 at 2115 GMT on Friday
Dollar/yen: DOWN at 105.72 yen from 105.78 yen
Pound/dollar: UP at $1.3120 from $1.3087
Euro/pound: UP at 90.18 pence from 90.09 pence
Brent North Sea crude: UP 0.7 percent at $44.66 per barrel
West Texas Intermediate: UP 0.6 percent at $42.61 per barrel.
Nigeria’s Gross Domestic Product (GDP) decreased by six percent in real terms in the second quarter of 2020, according to the Nigeria Bureau of Statistics.
This was contained in the NBS’s GDP report published on Monday.
The retreat ends a three-year trend of low but positive real growth rates recorded since the national economy emerged from recession in 2017.
According to the NBS, the decline was “largely attributable to significantly lower levels of both domestic and international economic activity during the quarter, which resulted from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.”
Nigeria essentially shut down its economy in March – restricting inter-state travel, closing worship centres, schools and markets – as parts of efforts to keep the spread of the novel coronavirus under control.
“The efforts, led by both the Federal and State governments, evolved over the course of the quarter and persisted throughout,” the NBS said.
The oil sector, which accounts for a large percentage of the country’s revenues, recorded negative growth of 6.63 percent, “indicating a decrease of –13.80% points relative to the rate recorded in the corresponding quarter of 2019.”
The non-oil sector also declined by 6.05% in real terms during the second quarter.
“It was the first decline in real non-oil GDP growth rate since Q3 2017,” the NBS said.
Not a surprise The economy’s decline did not come as a surprise to many as the coronavirus pandemic has gutted economic productivity across the world.
The report will be “negative,” Presidential aide, Tolu Ogunlesi, tweeted on Sunday. “Tomorrow we find out to what degree.”
The third-quarter results have also been projected to be negative, which will officially land the economy in a recession.
A recession is only declared after two consecutive quarterly contractions.
In May, Finance Minister, Zainab Ahmed, predicted that the country was heading towards a recession.
“On the economy, COVID-19 has resulted in the collapse in oil prices,” she said after a National Economic Summit meeting. “This will impact negatively, and the impact has already started showing on the federation’s revenues and on the foreign exchange earnings.”
Video app TikTok said Saturday it will challenge in court a Trump administration crackdown on the popular Chinese-owned platform, which Washington accuses of being a national security threat.
As tensions soar between the world’s two biggest economies, President Donald Trump signed an executive order on August 6 giving Americans 45 days to stop doing business with TikTok’s Chinese parent company ByteDance — effectively setting a deadline for a potential pressured sale of the app to a US company.
“To ensure that the rule of law is not discarded and that our company and users are treated fairly, we have no choice but to challenge the executive order through the judicial system,” TikTok said in a statement.
“Even though we strongly disagree with the administration’s concerns, for nearly a year we have sought to engage in good faith to provide a constructive solution,” it said.
“What we encountered instead was a lack of due process as the administration paid no attention to facts and tried to insert itself into negotiations between private businesses.”
ByteDance said in a separate statement that the suit would be filed on Monday, US time.
TikTok’s kaleidoscopic feeds of short clips feature everything from dance routines and hair-dye tutorials to jokes about daily life and politics. It has been downloaded 175 million times in the US and more than a billion times around the world.
Trump claims TikTok could be used by China to track the locations of federal employees, build dossiers on people for blackmail, and conduct corporate espionage.
The company has said it has never provided any US user data to the Chinese government, and Beijing has blasted Trump’s crackdown as political.
The US measures come ahead of November 3 elections in which Trump, behind his rival Joe Biden in the polls, is campaigning hard on an increasingly strident anti-Beijing message.
– Trump and China – Trump has increasingly taken a confrontational stance on China, challenging it on trade, military and economic fronts.
Shortly after Trump announced his moves against TikTok this month, the United States slapped sanctions on Hong Kong’s leader over the Chinese security clampdown after last year’s pro-democracy demonstrations.
Microsoft and Oracle are possible suitors for TikTok’s US operations.
Reports have said Oracle — whose chairman Larry Ellison has raised millions in campaign funds for Trump — was weighing a bid for TikTok’s operations in the US, Canada, Australia and New Zealand.
The Trump administration has also given ByteDance a 90-day deadline to divest in TikTok before the app is banned in the United States.
The measures move away from the long-promoted American ideal of a global, open internet and could invite other countries to follow suit, analysts told AFP previously.
“It’s really an attempt to fragment the internet and the global information society along US and Chinese lines, and shut China out of the information economy,” Milton Mueller, a Georgia Tech professor and founder of the Internet Governance Project said previously.
Nigeria’s unemployment rate has gone up by 27 per cent in the second quarter of 2020, from 23.1 per cent it reported in Q3 2018.
The National Bureau of Statistics (NBS) disclosed this in its ‘Labor Force Statistics: Unemployment and Underemployment Report’ released on Friday.
“For the period under review, Q2 2020, the unemployment rate among young people (15-34 years) was 34.9 per cent, up from 29.7 per cent, while the rate of underemployment for the same age group rose to 28.2 per cent from 25.7 per cent in Q3 2018,” the NBS report said. “These rates were the highest when compared to other age groupings.”
According to the NBS, the number of persons in the economically active age (15 – 64 years), jumped from 115,492,969 in Q3 2018 to 116,871,186 in Q2 2020.
“The number of persons in the labour force (i.e. people within ages 15 -64, who are able and willing to work) was estimated to be 80,291,894,” it said.
This was 11.3 per cent less than the number of persons in Q3 2018.
“Of this number, those within the age bracket of 25-34 were highest, with 23,328,460 or 29.1 per cent of the labour force,” it added.
A further peep into the latest NBS unemployment data indicated that the number of employed people in Q2 2020 slumped by 15.8 per cent to 58,527,276 when placed side by side with that of Q3 2018.
“Of this number, 35,585,274 were full-time employed (i.e. worked 40+ hours per week), while 22,942,003 were underemployed (i.e. working between 20-29 hours per week),” the report revealed.
At 48.7 per cent, Imo State has the highest unemployment rate in the country and is trailed by Akwa-Ibom State (45.2 per cent) and Rivers State (43.7 per cent).
Anambra State, however, has the lowest unemployment rate in the nation – 17 per cent.
“For underemployment, the state which recorded the highest rate was Zamfara with 43.7 per cent, while Anambra State recorded the lowest underemployment rate, with 17 per cent in Q2 2020,” the agency said.
Due to the COVID-19 pandemic, the NBS said: “2,736,076 did not do any work in the last seven days preceding the survey due to the lockdown but had secure jobs to return to after the lockdown.”
Being forced to classify drivers as employees could temporarily idle Uber operations in its home state of California, the ride-sharing firm’s chief said Wednesday.
The comments from Uber’s chief executive Dara Khosrowshahi to MSNBC come after a court gave Uber and rival Lyft until the middle of next week to reclassify drivers as employees instead of contract workers in compliance with a new state law.
“If the court doesn’t reconsider, then in California, it’s hard to believe we’ll be able to switch our model to full-time employment quickly,” Khosrowshahi said in the MSNBC interview.
“We’ll have to essentially shut down Uber until November when the voters decide.”
Uber and Lyft are backing a referendum in the state to overturn the law, while pledging to provide benefits for a social safety net that would keep gig workers independent
The order came Monday when a judge granted a restraining order in a lawsuit filed by California attorney general Xavier Becerra and three cities including San Francisco, where Lyft and Uber are based.
The suit calls on Lyft and Uber to comply with a state law that went into effect at the start of this year that requires “gig workers” such as smartphone-summoned ride service drivers to be classified as employees, eligible for unemployment, medical and other benefits.
Uber and Lyft expect to appeal the decision, which could buy them more time.
A backup plan for Uber would be to pause operations in California, eventually restarting with “a much smaller service, much higher prices” and probably focused in the center of cities or in suburbs,” according to Khosrowshahi.
The rideshare rivals have maintained that most of their drivers want to remain independent even if they also are looking for benefits.
Hong Kong carrier Cathay Pacific said Wednesday it lost HK$9.9 billion (US$1.27 billion) in the first half of this year as the coronavirus pandemic sent passenger numbers tumbling, eviscerating its business.
Before the pandemic, Cathay Pacific was one of Asia’s largest international airlines and the world’s fifth-largest air cargo carrier. But it has been battered by the evaporation of global travel.
“The first six months of 2020 were the most challenging that the Cathay Pacific Group has faced in its more than 70-year history,” chairman Patrick Healy said in a stark statement announcing the results.
“The global health crisis has decimated the travel industry and the future remains highly uncertain, with most analysts suggesting that it will take years to recover to pre-crisis levels.”
The airline said it carried 4.4 million passengers in the first six months of 2020 — a 76 percent plunge on-year — as the coronavirus burst out of central China and spread around the world.
At the height of the global lockdowns in April and May, Cathay Pacific’s entire fleet was averaging just 500 passengers a day.
Cargo remained the lone bright spot, rising nine percent on-year to HK$11.2 billion. Demand was driven up by a squeeze on space for cargo, which is often carried in the holds of passenger planes.
Despite the grim results, Cathay’s share price rose 12 percent on Wednesday, its biggest one-day jump since 2008.
Bloomberg News said the rally was caused by a tweet by China’s state-run tabloid Global Times saying Hong Kong’s airport may soon restart transfer flights to the mainland.
The paper gave no source for its tweet but investors were buoyed because transfer flights could give Cathay some much-needed extra passengers.
Unlike other big international carriers, Cathay has no domestic market to fall back on, and it was already under pressure after months of huge protests in Hong Kong last year caused passenger numbers to plunge.
It was also punished by Beijing last year when some of its 33,000 employees expressed support for Hong Kong’s pro-democracy movement.
– Rescue package –
Healy said 2020 had started promisingly, with signs that demand was beginning to return after the sometimes-violent protests had put travellers off visiting the financial hub.
But then the pandemic struck.
In response to the health crisis, Cathay Pacific has tried to save cash by reducing capacity, cutting executive pay, introducing voluntary leave schemes and slashing other non-essential costs.
It has so far refrained from any large-scale job cuts.
Hong Kong’s government also came to its rescue earlier this year with a HK$39 billion recapitalisation plan.
The deal allowed Cathay Pacific to raise some HK$11.7 billion in a rights issue on the basis of seven rights shares for every 11 existing shares held.
Preference shares were sold to the government via Aviation 2020, a new company it owns, for HK$19.5 billion and warrants for HK$1.95 billion, subject to adjustment.
In return, Aviation 2020 received two “observers” to attend board meetings.
Healy predicted little optimism for business picking up any time soon, quoting the International Air Transport Association as saying global travel is unlikely to reach pre-pandemic levels until at least 2024.
And he said Asia-Pacific airlines were likely to suffer for longer given spiralling tensions between the United States and China.
“With a global recession looming, and geopolitical tensions intensifying, trade will likely come under significant pressure,” he said.
“And this is expected to have a negative impact on both air travel and cargo demand.”
Asian markets were mixed Wednesday with worries that US lawmakers might not agree to a fresh stimulus deal any time soon playing up against optimism about upcoming US-China trade talks.
Both nations are due this weekend to meet to review their much-vaunted trade pact, which had been a cause for concern among investors owing to ongoing tensions between the superpowers.
But Donald Trump’s top economic adviser eased concerns Tuesday by saying the pact was “fine right now”.
Larry Kudlow told reporters that despite the tensions, “one area we are engaging is trade”. He added that Beijing had promised to stick to its promises on the January trade deal and there was evidence it was increasing purchases.
However, optimism that US lawmakers will thrash out a new stimulus package to accompany Federal Reserve’s ultra-loose monetary policy is waning.
Senate Majority Leader Mitch McConnell gave traders a jolt when he told Fox News there had been no progress, fanning concerns the talks could take a lot longer than envisaged.
“Another day has gone by with an impasse,” McConnell said, sparking a sell-off on Wall Street, which had been well in positive territory until then.
“The hope was that US politicians will look to restart negotiations on a new fiscal stimulus this week. Now with no talks scheduled, the deadlock between Republicans and Democrats is at risk of dragging on for weeks,” National Australia Bank’s Rodrigo Catril said.
Hong Kong rose 1.4 percent, with airlines boosted by a report that the city’s airport might restart transfer flights to China soon.
Tokyo gained 0.4 percent, while Seoul added 0.6 percent and Singapore put on 0.5 percent. Manila and Jakarta each rose 0.7 percent.
But Shanghai fell 0.6 percent while Sydney, Taipei and Mumbai were also lower.
Wellington dropped more than one percent after a three-day lockdown was announced for Auckland, New Zealand’s biggest city with a population of 1.5 million, after four people tested positive, ending a 102-day run that had fanned hopes the disease had been contained.
London started slightly higher as data showed the economy suffered a historic contraction in the second quarter but officials said it was showing signs of bouncing back.
The UK economy shrank a record 20.4 percent in the second quarter but deputy national statistician Jonathan Athow said things “began to bounce back in June, with shops reopening, factories beginning to ramp up production and house-building continuing to recover.”
Michael Hewson at Markets.com said the reading largely was in line with expectations and “economic activity is bouncing back” but warned that “getting back to 2019 levels of activity is going to take a very long time”.
“Britain’s economy is on the ropes, but we knew this already,” he added.
Frankfurt fell and Paris edged up in morning trade.
– Deflated optimism –
“When you walk back the market’s expectations of an imminent fiscal deal, it is like poking the balloon with a straight pin as all semblance of near-term optimism gets immediately deflated,” said AxiCorp’s Stephen Innes.
“Let us face it, the only relevant information that might aid investors’ comprehension of the path of the real economy has come from fiscal stimulus chatter,” he added.
“Take that out of this week’s equation, and you are left hoping on a wing and a prayer for a vaccine.”
Analysts said easing concerns about the future of the US-China trade pact and healthy China data provided some cheer to investors, giving them the confidence to shift out of safe havens such as gold and the yen.
Gold prices fell three percent, extending the previous day’s sell-off on profit-taking and owing to a pick-up in the dollar, which had been hammered through July to push the yellow metal to multiple records.
– Key figures around 0810 GMT –
Tokyo: Nikkei 225: UP 0.4 percent at 22,43.96 (close)
Hong Kong: Hang Seng: UP 1.4 percent at 25,244.02 (close)
Shanghai: Composite: DOWN 0.6 percent at 3,319.27 (close)
London – FTSE 100: UP 0.6 percent at 6,187.94
Euro/dollar: UP at $1.1739 from $1.1734 at 2045 GMT
Dollar/yen: UP at 106.79 yen from 106.50 yen
Pound/dollar: DOWN at $1.3045 from $1.3047
Euro/pound: UP at 89.99 pence from 89.94 pence
West Texas Intermediate: UP 0.9 percent at $42.00 per barrel
Brent North Sea crude: UP 0.9 percent at $44.91 per barrel
New York – Dow: DOWN 0.4 percent at 27,686.91 (close).
The Private Telecommunications and Communications Senior Staff Association of Nigeria (PTECSSAN) has threatened to embark on a two-week industrial action over the alleged anti-labour practices by the management of MTN Nigeria.
The union, which is an affiliate of the Nigeria Labour Congress (NLC), issued the warning in a statement on Tuesday.
It also vowed to disrupt the services of the telecommunications company nationwide after several attempts to resolve the issues failed.
According to PTECSSAN, the issues bother on the remuneration of workers, exit packages for long-term staff, employee relations practices, and alleged abuse of expatriate quota, amongst others.
It accused MTN of disregarding its employees in the country, saying such an action was contrary to the core values preached by the organisation.
“MTN practices an unwholesome, insensitive, and discriminatory structure in the emoluments of some categories of workers.
“Workers on the same job level earn disproportionately. In many cases, members of a team earn more than their team leads and even more than their direct managers,” the union alleged.
It added, “Non-payment of severance benefits at the point of departure of employees after long years of dedicated and uninterrupted services to the company has become a deep frustrating practice to the live long guarantees for workers in MTN.
“The company claims it has not been paying exiting employees severance benefits, hence, it cannot be a matter for negotiation with the union despite the fact that social dialogue demands that all matters without exception concerning workers in the workplace are subject to negotiation.
“The rate at which companies in the telecommunications sector import excessive manpower to the country to do jobs Nigerians are not lacking in competence is alarming. It is becoming pervasive in MTN Nigeria as well.
“We have several expatriates in the company who do exactly what Nigerians do. Most of these expatriates are trained by Nigerians and we still wonder how the permits for these individuals were approved.”
The union warned that if the company fails to yield to its demands or source for another alternative to satisfy their business interests, its proposed strike would be wide and compelling with deep implications for the company’s businesses.
“Once again, we reinstate that if our demands are not fully and appropriately complied with by MTN Nigeria Telecommunications Limited on or before the next 14 days from today, we shall withdraw every guarantee of industrial peace within MTN Nigeria. Services may be disrupted across the nation throughout the network from the midnight of the 24th day of August 2020,” it said.
A Great Place To Work In his reaction, MTN’s Chief Corporate Services Officer, Tobechukwu Okigbo, stated that the allegations made by the labour union were totally untrue and without any merit.
Bayelsa NSCDC Uncovers Plot To Attack MTN A file photo of the MTN logo.
Okigbo, in a statement sent to Channels Television, insisted that MTN has built a ‘people first’ culture that empowers its employees, values inclusivity and hard work, and instills a responsibility for its customers and communities.
“This is what defines and unites us. MTN cares greatly about all its workers, deploying global best practice people solutions and policies that make MTN Nigeria a great place to work.
“We intentionally invest in our people. Indeed, MTN’s success in Nigeria is as a result of the hard work, commitment, and dedication of all staff, guided by a strong culture of people management,” the statement said.
It added, “Our people/workforce are our most critical competitive advantage and a key differentiator in the marketplace so we take staff welfare, remuneration, and career development seriously.
“We have stringent policies in place that promote meritocracy and protect our employees from all forms of harassment and discrimination and creates a workplace where employees feel valued and safe.”
Recently, the MTN group announced plans to exit the Middle East and focus on the African continent, stating that the Middle East environment was becoming increasingly complex and has contributed less to its earnings.
It explained that the move was part of its medium-term strategy, starting with the sales of its 75 percent stake in MTN Syria.
After the planned exit, the firm’s entire portfolio would amount to 17 subsidiaries in Africa.
Meanwhile, half-year earnings report sent to the Nigerian Stock Exchange showed that MTN Nigeria reported a half-year revenue of N638 billion in 2020, compared to N566.9 billion it reported in the same period last year, driven by growth in data revenues in the first and second quarters of the year.
In the second quarter of 2020, total revenue rose by 8.5 per cent to N308.9 billion, driven largely by higher data revenues.
The company explained that the growth in data revenue was driven by growth in data usage and traffic while adding two million new data subscribers in the quarter compared to 1.8 million in the first quarter.
PTECSSAN, however, insisted that the increase in revenue was enough reason why the company should not engage in unfair treatment of its staff in a country that contributes about 60 per cent in its entire Africa operations.
Stock markets surged Tuesday on optimism that lawmakers in Washington will hammer out a new stimulus package for the crippled American economy, while concerns about the US-China trade pact eased.
Approaching the half-way stage, London’s benchmark FTSE 100 index was up 2.5 percent.
In the eurozone, Frankfurt and Paris rallied 2.6 percent.
European indices took “their cues from a positive Asia session, as investors focus on the prospect of a fiscal stimulus deal from US political leaders…. while setting aside concerns about an escalation in US-China trade tensions”, noted Michael Hewson, chief market analyst at CMC Markets UK.
Hong Kong rose more than two percent, with Macau casinos rallying on news that China would resume issuing tourist visas to Macau, reopening a crucial revenue stream for resorts that have been battered by a crash in tourist numbers.
Shanghai dropped more than one percent.
There was some relief that China did not include any members of US President Donald Trump’s administration in a group of 11 Americans hit with sanctions, in retaliation to a similar US move last week linked to the Hong Kong row.
As the pandemic hustles economies around the world, the US-China stand-off has been a major headache, with the two sides butting heads on several issues that have fanned worries they could renew their damaging trade war.
However, there is some confidence they will stick to their commitments after talks at the weekend to review their January tariffs pact.
Observers have pointed out that Beijing has failed to buy certain products owing to restrictions caused by the coronavirus, but the head of the central People’s Bank of China told state media the country would abide by the agreement despite tensions.
“No matter how the international situation changes, the most important thing is to get our own things done and to firmly deepen financial reform and opening-up,” Yi Gang told the Xinhua news agency.
Meanwhile, Bloomberg News reported that China would increase buying of soybeans from the US and ditch expensive Brazilian purchases.
“The strong sense is that the Trump administration won’t want to jeopardise the deal this side of the election for fear of alienating the important midwest farming constituency,” said Ray Attrill at National Australia Bank.
– Next Digital rockets again –
Shares in Next Digital, the media company owned by Hong Kong tycoon Jimmy Lai who was arrested under a Chinese security law, surged 668 percent at one point thanks to pro-democracy activists buying it.
The stock, which ended Friday at HK$0.09, had soared more than 2,0000 percent to HK$1.96 at its Tuesday peak, before easing back to end at HK$1.10.
US lawmakers meanwhile remain deadlocked in their pursuit of a new stimulus, though observers say that with an election around the corner, Democrats and Republicans will likely reach a deal.
Trump’s executive orders at the weekend deferring payroll taxes, providing $400 in weekly unemployment benefits and making it harder to evict people eased immediate concerns, though markets say a full deal is key.
“The pressure is on the Democrats to offer a meaningful concession and likely a deal will emerge in the $1.5-2.0 trillion area,” said OANDA’s Edward Moya.
– Key figures around 1100 GMT –
London – FTSE 100: UP 2.5 percent at 6,201.60 points
Frankfurt – DAX 30: UP 2.6 percent at 13,012.16
Paris – CAC 40: UP 2.6 percent at 5,039.10
EURO STOXX 50: UP 2.5 percent at 3,342.55
Tokyo – Nikkei 225: UP 1.9 percent at 22,750.24 (close)
Hong Kong – Hang Seng: UP 2.1 percent at 24,890.68 (close)
Shanghai – Composite: DOWN 1.2 percent at 3,340.29 (close)
New York – Dow: UP 1.3 percent at 27,791.44 (close)
Euro/dollar: UP at $1.1801 from $1.1737 at 2115 GMT
Dollar/yen: UP at 106.11 yen from 105.95 yen
Pound/dollar: UP at $1.3101 from $1.3065
Euro/pound: DOWN at 90.02 pence from 89.79 pence
West Texas Intermediate: UP 1.5 percent at $42.58 per barrel
Facebook on Monday said it has created a new unit devoted to financial services to harmonize payment systems on its platform.
The new group, called Facebook Financial, will be headed by e-commerce veteran David Marcus, who was a president at PayPal before joining the leading social network six years ago.
Marcus is one of the creators of Facebook’s digital money network Libra, and heads the team building a Novi digital wallet tailored for the currency.
The Novi wallet — set to launch when Libra coins debut — promises to give Facebook opportunities to build financial services into its offerings, offer to expand its own commerce and let more small businesses buy ads on the social network.
Facebook Financial will handle management and strategy for all payments and money services across the Silicon Valley company’s platform.
“Today various payments features exist across our apps, and we want to make sure decision making, execution and compliance are not fragmented,” Facebook said in an email reply to an AFP inquiry.
“We want to be able to give people the ability to make a payment however they choose — debit, credit or Libra digital currencies.”
Noting security concerns posed by Facebook’s yet-to-be-launched digital currency Libra, the Federal Reserve last week revealed plans for its own instant payments system.
FedNow will provide households and businesses with instant access to payments, for wages, government benefits or sales, without waiting days for checks to clear, the Fed said.
The system, which is not due to launch for two to three years, “will be designed to maintain uninterrupted 24x7x365 processing with security features to support payment integrity and data security,” the central bank said.
Facebook’s announcement last year of plans to design the Libra cryptocurrency and payments system raised immediate red flags for global finance officials who expressed a barrage of withering criticism about the security and reliability of a private network.
President Muhammadu Buhari has signed the instrument to establish the African Insurance Agency.
The Special Adviser to the President on Media and Publicity, Femi Adesina, disclosed this in a statement on Monday.
According to him, the Agreement and the Agency are registered with the Secretariat of the United Nations in accordance with Charter of the United Nations, and is in cognizant of the fact that lack of adequate political, non-commercial and commercial risk insurance is a significant impediment to the availability of finance for investments in Africa and the expansion of African foreign trade and intra-Africa trade.
Adesina said the Agency, when executed, would acknowledge previous multilateral efforts made by African States towards regional economic integration through co-operation in trade liberalisation and development.
He explained that this was aimed at attaining sustainable growth, promoting economic activity, and creating an enabling environment for foreign trade, as well as cross-border and domestic investments.
“Recalling the economic objectives and aims of the African Union, there are several African Treaties on regional economic integration, including the Treaty Establishing the Common Market for Eastern and Southern Africa, the Treaty Establishing the Southern African Development Community and the Treaty Establishing the Economic Community of West African States.
“A memorandum from the Attorney General and Minister of Justice, Abubakar Malami, stated that the request for the President’s signature on the agreement was sequel to the directive of the Federal Executive Council, that the instrument is prepared and forwarded for execution,” the statement said.
Mr. Adesina further stated that the ratification was adopted at Grand Bay in the Republic of Mauritius on May 18, 2020.
He noted that the object and purpose of the Agency were to provide, facilitate, encourage and otherwise develop the provision of, or the support for, insurance, including coinsurance and reinsurance, guarantees, and other financial instruments and services, for purposes of trade, investment and other productive activities in African States in a supplement to those that may be offered by the public or private sector, or in cooperation with the public or private sector.
…Manufacturers lose credit lines as costs escalate
… Parallel market faces pressure on CBN interventions
With the Central Bank of Nigeria (CBN) adjusting foreign exchange rates in search of uniform framework, local demand has hit $1.16 billion on the back of outstanding obligations.
Local manufacturers have also warned that many factories may shut down if obligations of over one year to foreign suppliers are not met. Some of the producers lamented that locally sourced materials were being indexed and priced at the same rates for which they would have been imported, thus stalling backward integration agenda.
Data from manufacturers’ union showed steady decline in backward integration activities since 2017 until H2 2019 due to local pricing and availability of raw materials.
Already, the CBN, few days ago, altered the official exchange rate at which it sells the naira to the dollar on its website to N379/$1 from the N361 per dollar that the website had reflected since March 20, this year.
The CBN had, on July 3, adjusted the naira rate from N360/$1 to N380/$1 at the Secondary Market Intervention Sales (SMIS). Similarly, on July 7, the regulator adjusted the exchange rate at the Investors and Exporters’ (I&E) window, also known as NAFEX, according to data on FMDQ website, by 5.54 percent to N381 per dollar from N361/$, sparking speculations that it was set to officially unify the exchange rates.
However, it left the exchange rate unchanged at N361/$1 on its website. In the wake of acute forex scarcity, occasioned by low oil prices, the naira has come under pressure on the parallel market and the I&E window where it trades for about N475 per dollar and N386 per dollar respectively.
The CBN initially sought to stem the decline of foreign exchange by suspending dollar auctions in March and has continued to severely ration supply, while Bureaux De Change (BDCs) have also not accessed official dollar sales from the apex bank since March.
According to the Manufacturers Association of Nigeria (MAN), while the move is gratifying, the apex bank should urgently put measure in place to minimize intensity of the pain by considering outstanding obligations of manufacturers from the second quarter 2019 till date.
Noble Reporters Media gathered that forex demand across 14 sub-sectors/groups of MAN may have risen beyond the initial $1.16 billion request made during the first half of 2020.
Local manufacturers believe that the outstanding obligations given at N345 to a dollar prior to unification should be given the privilege to be settled at between N330 and N360 per dollar to enable banks to redeem these obligations to foreign suppliers of manufacturers.
If not done, MAN said many factories might close and CBN stimulus packages to the manufacturing sector would suffer setback, just as cash flow crunch would become worse.
MAN, in its position on the matter, noted that it was important to recognise existence of unavoidable pains that naturally come with transition from multiple exchange regime to the domain of single exchange rate, particularly the burden of dollar denominated loans and offsetting existing credit commitments to foreign suppliers of raw materials.
To address the concerns, the local producers urged the CBN to develop appropriate implementation strategy that would engender successful transition from the current multiple windows to a single efficient one; and to ensure that the strategy pursues two fundamental objectives.
The first objective, according to MAN, is to limit the short-term pains until efficiency gains materialise by responding swiftly with an inward-oriented rescue guideline while the second should seek to boost the pace at which such efficiency gains materialise.
MAN also urged the apex bank to submit all instruments of exchange rate determination gradually to the unseen forces of demand and supply as a matter of necessity and completely avoid the temptation of interference, so as to fully harvest all benefits that foreign exchange unification offers.
The LCCI had raised concerns that the liquidity crisis in the foreign exchange market was becoming increasingly unbearable as many businesses faced challenges with importation of raw materials, equipment, spare parts and other inputs.
Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf said the development had created new dimensions to supply chain problems, which many manufacturers had suffered in the peak of the lockdown.
Yusuf said the forex crisis had put enormous pressure on the parallel market, resulting in sharp exchange rate depreciation in that segment of the market.
“Across all sectors, we are experiencing cost escalation, loss of credit lines enjoyed from foreign creditors, forex remittance challenges and many more. We need an urgent response from the CBN to calm the situation and restore confidence in our foreign exchange management framework,” he said.
According to the LCCI D-G, the dollar shortage is hitting most of its 2,000 members hard.
The CBN Governor Godwin Emefiele had, at the onset of the COVID-19 pandemic in March, asked correspondent banks and creditors to local lenders not to panic over Letters of Credit and other obligations extended to businesses during the economic crisis.
The bank also identified a few key local pharmaceutical companies to be granted naira and forex funding facilities to support procurement of raw materials and equipment required to increase local drug production in the country.
As the Federal Government consolidates efforts designed to ward off a deep recession and effect significant changes in the economy, opportunities abound across different sectors in the Economic Sustainability Plan (ESP) for the private sector to lead the charge for Nigeria’s economic growth and development, according to Vice President Yemi Osinbajo, SAN.
Prof. Osinbajo made the call on Friday at the virtual edition of the Presidential Policy Dialogue of the Lagos Chamber of Commerce and Industry (LCCI).
The Vice President said the ESP which is now being implemented by the Buhari administration is driven by the desire “to adapt to the challenges and make required changes in order to come out stronger than before”.
According to him, “I take this opportunity to encourage the private sector to be proactive in leading the charge against recession and poverty in our country. The Federal Government is not under any illusion that it can do this on its own. The opportunities that now exist in the short term in agriculture, infrastructural development, housing construction, in renewable energy, digital technology development, mining, financial inclusion, healthcare and pharmaceutical manufacturing, call for the private sector to take the bull by the horns and make them a reality.
“The priority of the Federal Government in response to the economic challenges caused by COVID-19 is to ward off a deep recession by an admixture of stimulus measures to support local businesses, retain and create jobs and ameliorate the circumstances of the most vulnerable.”
Continuing, the Vice President said though the stimulus package is just about 1.5% of GDP, it is the best the government could do given existing realities in the economy.
He said “government developed the Economic Sustainability Plan with a stimulus package of N2.3trillion to give fillip to the economy across various sectors. The size of this stimulus which is just about 1.5% of national income is not as large as we would have liked it to be but it was the best we could do given existing fiscal and monetary constraints. Based on the assumption of the price of crude averaging out at $30 per barrel throughout the year, we anticipate an economic growth of about -0.59% in 2020.
“You would already be familiar with details of the Economic Sustainability Plan. In essence, it is intended to boost production, prevent business collapse, and provide liquidity. It will also promote the use of labour-intensive methods and direct labour interventions in key areas like agriculture, light manufacturing, housing construction and facility maintenance while increasing infrastructural investment in roads, bridges, solar power, and communications technologies. It is intended to do all this while extending protection to the poor and other vulnerable groups in our society.”
Speaking further on the plan of government to address the disruptions on the economy by the COVID-19 pandemic and the role that the private sector can play, the Vice President said, “these opportunities are the building blocks that will enable our medium-term goals to be achieved and make our long-term goals achievable.”
According to Prof. Osinbajo, “this is a drive we hope to continue into the medium term as we build up the economy over the next few years. We do need foreign direct investment to complement our domestic efforts but it is the success of our own investments that will attract such inflows. Investors are already aware of Nigeria’s huge market and its great potential, but they will only ‘want in’ when government by its own positive interventions and the private sector by its success stories show them what is possible to do here.
“No doubt, the task ahead is challenging. Nevertheless, government is focused on doing its bit so I call on the private sector to play its part and join us in this noble venture. We know that this will be a difficult year but expect that with our combined effort growth will resume to the order of about 3 percent by the end of next year. We can do this working together.”
On the Ease of Doing Business reforms of the Federal Government, the Vice President maintained that the commitment of the Federal Government to providing an enabling environment for business to thrive remains strong.
“In this regard, we have made some strides in improving the ease of doing business in Nigeria. Through the Presidential Enabling Business Environment Council (PEBEC), a lot has been achieved to fast-track processes, reduce bottlenecks and improve transparency across Government MDAs.
“As a result, we have moved 35 places upward in the World Bank’s Ease of Doing Business rankings. We have continued to scale up our business reform initiatives across regulatory agencies.
“Of course, there is still a lot more to be done. Our aim is to continue to improve our national ranking in the World Bank Doing Business Index Ranking to below 100 in the coming years. It is also very important to reduce the harassment and extortion of businesses by various government agencies,” the Vice President added.
In his remarks, the Minister of Industry, Trade and Investment, Otunba Niyi Adebayo, said the current focus of the Federal Government in the manufacturing sector “is on prioritizing local production especially in the importation of machinery that utilize local materials.”
Earlier, the LCCI President, Mrs Toki Mabogunje commended the Federal Government’s “spirited effort” regarding its managing of the Nigerian economy, adding that members of the chamber and private sector players are willing to collaborate with the Buhari administration.