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NEWS UPDATE (Wed. 02.10.19)

michael okonma

DANGOTE EYES $30 BILLION REVENUE

Aliko Dangote, the richest man in Africa, is looking to Dangote, who is building one of the world’s biggest refineries in Lagos, in addition to investments in gas and petrochemical plants, said he expects total group revenue to grow to about $30 billion from $4 billion when the plants start operations in the next two years.
Thereafter, he plans to include investing about 60per cent of profit outside Africa, including the U.S. and the U.K. “Sometimes in Africa you have issues of devaluation. We want to really preserve some of the family’s wealth,” he said.
He plans to expand cement capacity on the continent by 29per cent to 62 million tons, entrenching his flagship company’s position as the the continent’s biggest producer of the construction material.
He plans to add six million tons in Nigeria next year, taking volume in Dangote Cement Plc’s home market to 35 million tons, The rest of the expansion is planned mainly in West Africa, including Niger and Cote d’Ivoire.
The 62-year-old told shareholders in June the company plans to open plants in Nigeria that will allow it export clinker to grinding plants in Cameroon and West Africa.
Dangote Cement reported six per cent increase in profit for the six months through June to N119.5 billion ($331 million), even as revenue fell three per cent to N467.7 billion.

CUTIX TO ACQUIRE ADSWITCH

Cutix Plc has announced plan to acquire Adswitch Plc, a related electrical switchgears company that was delisted on the Nigerian Stock Exchange (NSE) in 2016.
Adswitch, a Nigerian company, was incorporated in 1982 and it has a close relationship with Cutix Plc.
The board of Cutix stated that it the acquisition is intended to enhance business expansion and boost the profitability of the company.
The board has put a special resolution on the acquisition as one of the items for approval of shareholders at the forthcoming annual general meeting on October 25, 2019.
The directors of Cutix, a wire and cable company, are seeking the mandate of shareholders to enable them enter into any agreements and execute any other documents necessary for and incidental to effecting the resolution on acquisition of Adswitch.
Cutix is an indigenous company wholly owned by Nigerians. Incorporated in 1982, the company gradually transformed from a private limited liability company formed and owned by friends and family members to become a publicly quoted company.
Cutix recently invested about N300 million on a new extension of its factory as part of efforts to increase the installed production capacity of the cables-manufacturing company. The new factory extension was expected to impact positively on the production capacity and efficiency of the company and to enable it to further improve its performance notwithstanding the increasing competition in the cables industry.
Adswitch had delisted from the NSE due to what the directors of the company then broadly described as harsh operating environment. The company, which was listed as a second-tier stock in 1991, filed for voluntary delisting at the NSE.
Market analysts then described the harsh business climate as operational challenges due to influx of fake and substandard products and uncompetitive manufacturing costs in Nigeria as well as the costs and requirements of maintaining the listing.
Prior to its delisting, Adswitch had struggled with dwindling margins and sales. Audited report and accounts of Adswitch for the year ended April 30, 2012 showed that turnover dropped from N32.72 million in 2011 to N30.7 million in 2012. It posted a loss before tax of N10.34 million in 2012, albeit a better position that loss of N19.04 million recorded in 2011. Loss after tax also stood at N10.73 million in 2012 as against N19.69 million in 2011.

TRANSCORP RETAINS POSITIVE RATING

Transcorp Hotels Plc, the hospitality subsidiary of Transnational Corporation of Nigeria Plc (Transcorp) and owner of the Transcorp Hilton, Abuja and Transcorp Hotels, Calabar, has retained its national scale ratings at A-(NG) and A2(NG) in the long-term and short-term, with the outlook accorded as stable.
Concurrently, the national scale ratings accorded to the following Issuances affirmed Series 1 N10 billion Fixed Rate Bond: A-(NG), Stable Outlook; Series 2 N9.8 billion Fixed Rate Bond: A-(NG), Stable Outlook.
According to GCR, the rating reflects Transcorp Hotels ability to maintain its market position as a leading brand in Nigeria’s hospitality industry, supported by the major renovation and facilities upgrade at Transcorp Hilton Abuja (‘THA’) and the subsequent improvement in pricing and occupancy rate. The available support to Transcorp Hotels as a member of Transnational Corporation of Nigeria Plc (“Transcorp”), and the partnership with Hilton Worldwide Limited (“Hilton”) is considered positive rating.
In the report released in August, this year, it stated: “Following the upgrade at THA and the accompanying repricing of the hotel facilities in fiscal year 2018, revenue improved across all service lines, with rooms and food and beverages rising 26 per cent and 28 per cent. Per management, the company is exploring other opportunities and add-on services that could be offered to boost earnings going forward.’’

RADICAL CHANGES NIGERIA NEEDS TO DRIVE GROWTH – SOLUDO

The “Next Nigeria economy” is possible without oil, but a new political, legal, institutional and governance foundation is required to create wealth for the citizens, a former Central Bank of Nigeria (CBN) governor, Chukwuma Soludo, has said.
Mr Soludo, a member of the recently constituted National Economic Advisory Council (EAC), was one of the key speakers at the Platform, a biennial economic summit organised by the Covenant Christian Centre, Lagos to commemorate Nigeria’s 59th Independence anniversary celebrations.
The former CBN governor who spoke on the topic, “Economic restructuring: Strategies of the future” said the future of the Nigerian economy without oil would be powered by the country’s greatest assets – human capital and technology, to guarantee security, prosperity and happiness.
He said the country’s major problem was not bad economic ideas, as successive governments since 1962 have implemented various National Economic Development plans on economic restructuring or diversification and structural adjustment programmes designed to move the economy away from oil.
Despite these programmes, Mr Soludo said not much has been achieved in terms of the economic structure due to the absence of the enabling institutions to drive the process.
He said a private sector-led economy will not be possible without the requisite financial institution with the capacity to drive the process.
It will be difficult to have a competitive and prosperous post-oil economy of the future with the same legal institutional foundation for the consumption of oil rents.
The link between law, constitution, institution, judiciary and the economic transformation is the weakest in the country’s design of new national economic agenda,” he said.
The restructuring of the future economy, he said will entail transformational changes to generate and sustain a broad-based growth rate of at least of 7 per cent, from the current one to two per cent rate, required for poverty reduction and employment generation.
If we want to be a middle-income country by the end of this century in 80 years’ time, what we need is an economy that will be growing at double digits every year from over $400 billion today to about $5.5 trillion.
Our economy is stuck currently at a very low-speed lane in the context of the debt cliff with little fiscal space, while monetary policy is at near its limits, low savings investments trap, rising unemployment and poverty,” he said.

E-PAYMENT TRANSACTIONS HIT N203.35 TRILLION IN SIX MONTHS

Electronic payment (e-pay-ment) transactions worth N203.35 trillion were carried out by banks between January and June, this year, Central Bank of Nigeria (CBN) half-year e-payment figures have shown.
The data, released at the weekend, showed that the deals occurred through cheques, Automated Teller Machines (ATMs), Point of Sale (PoS), m-Cash, CentralPay, Remita, Nigeria Interbank Instant Payment (NIBSS) Instant Payment (NIP), mobile money, among other channels.
The report showed that 3.4 million transactions worth N2.2 trillion occurred through cheques; 504 million transactions worth N49.35 trillion through NIP; 424.5 million transactions worth N3.23 trillion through ATMs. PoS attracted 187.6 million transactions worth N1.39 trillion, while web transfers attracted 47.9 million deals worth N223.9 billion.
Others are mobile money, 104.7 million transactions worth N1.9 trillion and Remita’s 21.6 million transactions worth N9.8 trillion.
On annualised, the data showed that nine million cheques were issued last year compared with 10 million in the preceding year; 875 million ATMs and 295 million PoS transactions, among other data.
The e-payment powers were conferred on the CBN by Sections 2 (d) and 47 (2) of the CBN Act, 2007, to promote the development of efficient and effective systems for the settlement of transactions, including the development of electronic payment systems; the CBN hereby issue the following Guidelines on Operations of Electronic Payment Channels in Nigeria.
While pushing for the full use of e-payment, CBN Governor Godwin Emefiele said for Nigeria to actively play at the world stage, “our payment system must be successfully benchmarked against the global best practices, as in most developed nations of the world.”
He said e-payment provides safe and efficient mechanisms for making and receiving payments with minimum risks to the CBN, payment service providers and end-users.
To make the e-payment vision a success, the CBN, in collaboration with key stakeholders in the payments community, developed the National Payments Systems Vision 2020 (NPSV 2020). The NPSV 2020 is a sub-set of the Financial Systems Strategy 2020 (FSS 2020).

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