Small businesses

Small businesses get N53b to create 1 million jobs

by with No Comment Businessfinance

The Bank of Industry yesterday disclosed that it had  disbursed N53 billion to Micro, Small and Medium Enterprises (MSME), thereby creating jobs for about one million Nigerians.

READ ALSO: Price of petrol could rise as uncertainty looms in the global market

BOI’s Executive Director, Micro-Enterprise Directorate, Mrs. Toyin Adeniji, made this known during the graduation of the first batch of the participants of the Post-COVID-19 Economic Strategy Pilot Training Programme at the   Local Government Service Commission office, in Abere, Osogbo.

Adeniji said: “We have disbursed over N53 Billion to MSMEs in different sectors, thereby facilitating the creation of an estimated one million direct and indirect jobs.

“BOI provides subsidised loans to MSMEs at a single digit all-inclusive interest rate, which has helped to stimulate economic activities in the MSME sector.

Osun State Governor Adegboyega Oyetola said his administration had adopted a proactive strategy to stimulate the economy of the state which hitherto was adversely affected by COVID-19.

He also presented cash seed loans to 2,000 successful trainees of the Skills Upgrade and Entrepreneurship Training Programme.

Oyetola added that his administration had put in place, a workable strategy and   measures by making skill upgrade training, a priority in its 2020 budget as part of efforts to cushion the effects of the  global economic downturn and prepare for the worst circumstances that might arise.

The governor noted that the programme was designed to generate 15,000 direct and indirect sustainable job opportunities for the people annually.

He said his  administration had set aside ¦ 100 million for disbursement to beneficiaries of the scheme as seed loans of ¦ 100,000 only to each participant.

His words: “As an institution charged with providing security and welfare for citizens, our government, on coming to office two years ago during the world economic downturn adopted a proactive strategy to prepare for the situation and the worst circumstances that might arise.

“Under the Skills Upgrade training programme, we were able to re-focus, re-engineer and expand the scope, knowledge and relevance of artisans and people who lost their jobs to make them relevant under the new normal orchestrated by Covid-19.”

The Commissioner for Commerce, Industries, Cooperatives and Empowerment, Bode Olaonipekun, said the programme was put together by the government as part of efforts to address the adverse effects of the COVID-19 pandemic and ameliorate the disruptions to the livelihood of citizens.

He said 2, 000 participants were all trained in 15 different types of skills and empowered with startup loans to support their businesses.

SOURCE LINK

Global Market

Price of petrol could rise as uncertainty looms in the global market

by with No Comment BusinessNews

On Sunday, 28 February 2020, Nigerian oil marketers announced that Premium Motor Spirit (PMS) or petrol may go on sale for as much as N230 per litre in March.

READ ALSO: FUGAZ investors lose N34.68 billion in trading

The announcement was made after the Nigerian National Petroleum Corporation (NNPC), the same day, assured Nigerians in a press release that despite the increase in the price of crude oil, it has no plans to increase the ex-depot price of petrol in the month of March.

The state-controlled oil company had initially made a similar promise, early in February.

However, most filling stations across the country have reported the presence of a large queue of buys as people engage in panic buying.

The announcement has equally prompted some filling stations to engage in petrol hoarding.

The Federal Government in March 2020, announced the removal of fuel subsidy and full deregulation of the downstream sector of the oil industry, which will allow market forces to determine the price of the product.

According to a report, Mike Osatuyi, the National Operations Controller, Independent Petroleum Marketers Association of Nigeria (IPMAN), “Nigeria has crossed the bridge, there is no hiding place and the N1.2 trillion which was hitherto annual spending on subsidy, will be borne by the market.” 

Further commenting, Osatuyi stated that the rise in the prices of crude oil to $67 per barrel as of Sunday, 28 February makes it normal for the price of PMS to be between N220 per litre and N230 per litre

Currently, the world is expecting the Organization of Petroleum Exporting Countries (OPEC) and its allies to increase oil production as the excess crude that piled up during the pandemic as borders were shut down has disappeared.

As the world rally for more supply of crude oil, traders expect the OPEC+ coalition (led by Saudi Arabia and Russia) to agree to an increase in production when it meets on March 4.

If this is done it would be reversing some of the output cuts made in 2020 by the international body, likely reducing the global crude price and necessitating an increased output that oil-dependent countries like Nigeria could benefit from.

However, Prince Abdulaziz bin Salman, of Saudi Arabia has urged fellow oil-producing states to remain “extremely cautious” as it is not clear what level of impact the COVID-19 (coronavirus) pandemic could have on the global demand for oil if the output is increased.

SOURCE LINK

Lagos State Government

Key To SME Growth In Lagos State

by with No Comment Businesssme tipsstartup tips

Small and Medium-sized Enterprises (SME) are generally regarded as the engine of economic growth in any developing economy. Similarly, a large concentration of SMEs including Micro and Nano businesses are easily noticeable in Lagos State, the economic hub of Nigeria. The State enjoys a high presence of SMEs, Micro and Nano businesses more than any State in Nigeria. Why is that? The simple metric to this is that Lagos State has a population size of about 15 million, according to United Nations (UN) projections and it appears like a country within a country considering the strength of economic activity and populace. 

READ ALSO: P&G Nigeria Partners FG, BoI to Start SME Academy

In fact, without a doubt, Lagos State has a population estimate that is higher than some West African countries namely Guinea (13,132,795), Benin (12,123,200), and Togo (8,278,724), Sierra Leone (7,976,983). Even the population of the State is higher than that of some developed countries such as Finland (5,540,720), Belgium (11,589,623), Sweden (10,099,265), Denmark (5,792,202), and Ireland (4,937,786). Supportably, the population is even higher than the combined population of Liberia (5,057,681), Mauritania (4,649,658), Gambia (2,416,668), Guinea-Bissau (1,968,001) as at 27th February 2021. However, the painful reality is that over 60% of the residents of Lagos State are poor and live in various high density and informal settlements scattered across the State. These residents lack proper sanitation, power, and other basic services, and most of them eke a living from small businesses which includes Nano and Micro businesses most importantly. A visible reference usually includes the operators of kiosks, commercial tricycles, motorcycles and many other informal business operations in the State. 

The estimated figure of micro-businesses in Lagos State is 3,224,324 and to add to this, over 11, 663 SME operates in the State, according to a recent statement from the Lagos Ministry for Commerce, Industry, and Cooperatives. In my opinion, these data are underreported and do not reflect the large informal economy that exists. From reliable data the informal economy employs about 5.5 million people in Lagos State if not more. So, a reliable data base is necessary for adequate planning in the State. 

The small business economic activities in Lagos State can contribute largely to the growth of non-oil sector, employment generation, and the creation of sustainable entrepreneurship. These can largely be driven by businesses in the formal and informal sector in the State. Arguably small business represents over 90 percent of private businesses in the State and contribute to more than 50 percent of employment in the State. Yet the State government has not duly recognised the significance of this sector in the economic development of the State. For instance, the popular computer village in Ikeja, Ladipo spare part market in Oshodi and Balogun market in Lagos Island all consist of clusters of mostly micro-businesses with huge economic engagements but the government of Lagos state is yet to facilitate their formality and capacity building with the required policy and incentive considerations. 

The novel Coronavirus (COVID19) and the harsh economic climate currently with us, has made many of these businesses struggle and some have shut down due to these challenges which includes the perennial issues. That is, from infrastructure deficits (power, road, technology, and so on) to inconsistent government policies, security problems, multiple taxations, regulatory burdens, stiff competition from large companies, entrepreneurial attitude of operators, huge financial and funding problems, lack of meaningful structure, longevity and succession plan among others. SME operators and entrepreneurs strive with different strategies and tactics to absolve many of these challenges and shocks to make any meaningful balance with little or no external support. However, the government needs to realise and recognise that small businesses are crucial to job creation, economic diversification, innovation, poverty reduction, wealth creation, and income redistribution in their policy-making activities. If this sector is well harnessed in Lagos State it can be a huge catalyst in transforming the State economically. 

The vivid truth is that a well-functioning SME sector would add more value to the economic fortunes of the State, sustain livelihoods, reduce poverty by creating more job opportunities in the economy than any other sector. Therefore, proper monitoring and evaluation of this sector are crucial for the economic development of Lagos State. When businesses survive, there will be a reduction in market failures and the more businesses are without survival threats the government can equally benefit from their growth and development. It can increase tax receipts and accelerate the growth of industrialisation in the State. Therefore, the Lagos State government should focus more on policies and programmes to widen the SMEs’ involvement in the formal sector particularly the Micro and Nano businesses. The State government through the appropriate Ministry can implement policies that will enhance ease of doing business in the State to attract operators from the huge unregulated informal sector to the formal sector. The informal sector in Nigeria refers to economic activities in all sectors of the economy that are operated outside the purview of government regulation. Therefore, policies to attract business formality should be considered and formulated, and also the capacity and sustainability of these SMEs, Micro and Nano businesses should be enhanced. Because if all these are set in place it will encourage the development of the formal posture of the SME sector in the State. 

That said, key stakeholders such as the Small and Medium Enterprise Development Agency (SMEDAN), Nigerian Association of Small & Medium Enterprises. (NASME), Association of Small Business Owners of Nigeria (ASBON), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Association of Micro Entrepreneurs of Nigeria (AMEN), The Lagos Chamber of Commerce and Industry (LCCI), Manufacturer Association of Nigeria (MAN), The financial technology (FINTECH) associations, and groups in the Organised Private Sector (OPS) advocate for ways government can create innovative measures to improve business formality, enable secured environment, improve on rule of law, encourage public-private initiatives, invest in infrastructure, and consider policies as the needed. Corruption has also remained a very serious problem that needs to be genuinely addressed because it can threaten any development policies and programmes of the State. 

The support of these teeming Small, Micro, SME and Nano businesses is also imperative and strategies to sustain their business operations should be key in the decision-making process of the government of Lagos State. The national bureau of statistics suggested many of the Nigerian youth are unemployed, majority of them can be meaningfully absorbed into this sector through self-employment, startups, and financial technology (FINTECH), if the SME sector is made viable with adequate enabling environment. 

READ FULL ARTICLE

Capital Investment

Do Startups Need Venture Capital Investment?

by with No Comment Businessfinance

Venture capital investment refers to a type of private equity investment in which investors provide capital and mentorship in a startup that is still in its development phase in exchange for equity in the company.

READ ALSO Nigerian team builds technology for Microsoft

The rise in venture capital investments in Nigerian startups depicts how the investment process in companies has evolved. Before now, companies heavily relied on funds from commercial banks to run their business activities.

Sadly, this comes with a lot of unfavourable conditions such as high-interest rates on loans, banks demand for collateral and the pressure on companies to pay up the loan.

Thus, startups often opt for venture capital firms which often render financial, managerial, and technical assistance needed to build tech products and scale their operations.

In a report published by Techpoint Africa, Nigerian startups received 86.3% of over $1.8 billion venture funds that were contributed to “West African Millionaire Startups” within 2010 and 2019.

According to the 2020 Africa Tech Venture Capital Report, Nigeria remains the number one hub for venture capital investment in Africa as Nigerian startups raised a total of $307 million in 2020.

It suffices to mention that this report only covers Venture capital deals that worth over $200,000. Though some may belittle the amount of these funds and the number of companies targeted by comparing it to the amount being raised by startups in developed nations, Nigeria has come a bit far with fund raising.

These venture capital investments in Nigerian startups are a form of impact investment. Asides from generating financial returns on these deals, research shows that investments from venture capital companies tend to bring about a measurable social impact in the country. Most startups in the country focus on solving trivial problems with innovation. These solutions range from education (Andela, Utiva, ulesson), funding of agricultural production (ThriveAgric, FarmCrowdy), wealth management (Piggy Vest, Cowrywise), online payment solutions (Paystack and Flutterwave), healthcare (54gene, Lifebank, Helium Health) amongst others. More startups emerge every year all in a bid to solve a particular problem Nigerians are embattled with. For these startups to realize their potentials, they will need funds to scale their operations. Thus, funds gotten from venture capital firms contribute a great deal in helping these companies innovate their product and kickstart their operation.

Venture capital firms also provide funds for startups to invest in branding and marketing of their products. In the words of Tara Nicholle Nelson, “you cannot buy engagement, you have to build engagement.” Thus, building a product is not enough. Startups do engage in implementing a lot of marketing strategies for user acquisition, engagement, and retention. This requires a lot of funds which most tech entrepreneurs do not have. This is more difficult to do in a market like Nigeria which is reported to have a population of over 200 million people. Thus, making the product a well-known brand and preserving the same, costs a fortune and also requires establishing partnerships with stakeholders in key areas. These are issues venture capital firms can help with as they have the right resources and network.

Additionally, companies that have received funding in the past through venture capital investment are equipped with the means to expand their operations and create new market opportunities for their product. Subsequent funding received by startups also confers a form of goodwill in terms of financial capabilities and human capital which is often needed to expand operations and improve their technological innovation.

Thus, it is no doubt that Nigerian startups stand a lot to benefit from the investment opportunities, mentorship and the network, venture capital firms do offer. Sadly, most of these investments are foreign venture capital funds. However, the recent efforts of companies like Future Africa through the Future Africa Collective and Co-Creation Hub through the CcHub Syndicate programme must be commended as these are innovative funding models through which more tech startups can be backed. Though there is the need for more venture capital investments in Nigerian tech startups as techpreneurs in Nigeria never stop to serve their fatherland with all their talents and hard work in a bid to fix the deep-lying issues that are affecting the various sectors of the Nigerian economy.

Would it not then be a smart decision for more high-net-worth individuals and enterprises within the country to invest in these innovative ideas? Would it not then be right for the Nigerian Government to create more strategic policies and enable the environment to attract more funding in the tech ecosystem? These are the multimillion-dollar questions that demand attention.

SOURCE LINK

SMEs

Millions of MSMEs pushed to the brink amid lockdown

by with No Comment Business

A large chunk of Nigeria’s 41.5 million MSMEs could go under due to the coronavirus-induced lockdown aimed at halting the spread of the deadly virus.

Joshua Adekunle happily survived on packets of sweets before the coronavirus-induced lockdown. His entire life was anchored on the daily sales he made under Obalende Bridge in Lagos. All his wares were worth N5,500 and he made daily sales of N500 to N1,000. As little as these were, they took care of him.

READ ALSO: NBS, SMEDAN, to Confirm Number of MSMEs in Nigeria

But since the announcement of total lockdown in Lagos two weeks ago by President Muhammadu Buhari, Adekunle’s life has seemed hopeless. He has sold all his wares at an auction and spent the money on food.
“My biggest concern now is to eat some food,” Adekunle, who sleeps in a dingily-lit one room at Ajah with four other micro business owners, said.

READ ALSO: Business owners recount tales one year after COVID

“I don’t know what to do after the lockdown because there will be no money to start life again,” he said.
A large chunk of Nigeria’s 41.5 million Micro, Small and Medium Enterprises (MSMEs) could go under due to the coronavirus-induced lockdown aimed at halting the spread of the deadly virus.

The measure to control the virus is in line with global best practices, but it will lead to shocks, shutdowns and unprecedented job losses in Nigeria as the Federal Government continues to drag on plans to provide palliatives to help the businesses, analysts say.

Millions of workers will not return to their jobs after the pandemic, with unemployment peaking at 23 percent before the pandemic. The World Bank said in a 2015 report that 40-50 million additional jobs were needed between then and 2030 to reduce poverty and boost inclusive growth. MSMEs contribute 50 percent to Nigeria’s GDP and account for 86.3 percent of jobs (59.6 million jobs in 2017), according to a report by the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN).

Ike Ibeabuchi, chief executive of a small-scale manufacturing outfit in Enugu and Abuja, said he has no money to pay his workers because there is no production, distribution and, consequently, revenue.

“The year is lost for some of us who are in small and medium businesses,” Ibeabuchi, who produces chemicals, said. “Even after the pandemic and lockdowns, the consumers will be so poor that they can’t buy, and firms won’t be able to raise prices, even though the situation warrants that.”

In 2016, oil price fell to below $40 per barrel, leading to low foreign exchange inflows into the Nigerian economy that relies on oil proceeds for 75 percent of its revenue and over 90 percent of FX.

Between 2016 and 2017, about 272 MSMEs were forced to shut down, with 180,000 jobs lost, according to a 2017 survey jointly done by NOI Polls, the Manufacturers Association of Nigeria (MAN) and Centre for the Studies of Economies of Africa.

The current situation will be worse, say analysts, with everything from production to supply on lockdown, and recession knocking.

Chukwubuike Nnoli, chief executive of Zubnol Limited, producer of pillows and mattresses in Anambra, has asked his workers to go home. Raw materials he ordered have not arrived and his customers are in their rooms.

Temiloluwa Smyth, CEO of Smyth Couture, a fashion designer, said since the pandemic, people have stopped making outfits as there are no events or occasions to wear them to.

The national survey of MSMEs conducted by NBS and SMEDAN in 2017 said the number of MSMEs has risen from 37 million to 41.5 million MSMEs. The growth is due to the rising number of survivalists who opened micro businesses in the face of economic slump in order to survive. Small businesses face multiple taxation, high energy cost, poor access to credit and infrastructure, but the current situation has combined with these age-old problems to worsen their plight.

“The number of medium-sized enterprises decreased significantly from 4,670 in 2013 to 1,793 in 2017, indicating a 61 percent drop,” the NBS and SMEDAN report, which covered between 2013 and 2017, said. This means that 2,877 firms shut down within four years.

Degun Agboade, president, Nigerian Association of Small and Medium Enterprises (NASME), said the COVID-19 pandemic and lockdown have been devastating for MSMEs in the country, especially for micro businesses who survive on daily incomes.

“The impact has been colossal on us. Everything is totally paralysed and many of us will not be able to recover when all this is over. The impact will be longer than we expect and the government is not doing enough to support us at this time,” he said.

READ MORE

MSMEs

NBS, SMEDAN, to Confirm Number of MSMEs in Nigeria

by with No Comment BusinessNews

The process of authenticating claims by the Small and Medium Enterprises Development Agency (SMEDAN) that Nigeria has 37 million Micro, Small and Medium Enterprises (MSMEs) has commenced.

The nation’s stats office, National Bureau of Statistics (NBS), is assisting in confirming this figure.

READ ALSO: $1.4bn deal, sealed to produce ammonia

Last month, Director-General of SMEDAN, Mr Dikko Radda, disclosed at a conference in Abuja that there were about 37.1 million MSMEs operating in the country.

Mr Radda made this disclosure at the India-Nigeria Cultural Conference organised by the All India Universities Alumni Association, Abuja Chapter, themed ‘Micro, Small and Medium Enterprises in combating unemployment in Nigeria: India experience.’

“There are presently about 37.1 million MSMEs in Nigeria. That is huge.

“Their contribution to the Gross Domestic Product is about 48.7 percent, while their contribution to export is about 7.2 percent.

“That is to tell you how significant they are to our economy,” Mr Radda had stated at the conference.

He based his figure on the last national survey conducted in January 2014, where it was revealed that 37.1 million enterprises operating in the economy were employing 59.7 million persons.

Speaking at a one-day workshop on MSMEs Survey yesterday, Mr Radda said in the survey that will commence nationwide soon, two micro enterprises sub-class would be categorized instead of the former undifferentiated micro-enterprises class.

According to the SMEDAN chief, who was represented at the event by Mr Wale Fasanya, a senior employee of the agency, “This will help distinguish an establishment-leaning microenterprise sub-class (or salaried paid employment) from the other microenterprise sub-class of unpaid or part-time household members.”

SOURCE

Business

Business legislation will give govt “dramatic authority”

by with No Comment BusinessNews

Analysts have expressed concern about the National SME Amendment Bill and the potentially harmful consequences it could have on South African businesses.

The bill was released for public comment on December 11 and aims to change the way governments deal with the impact of the law on SMEs.

READ ALSO: Stock Market Reverses Gain as Index drops by 0.59%

It also regulates the relationship between SMEs and other companies and introduces a new dispute resolution process that includes the concept of “unfairness” in contractual transactions.

This is done through the introduction of a new SME ombudsman service that acts as a support function for the minister.

In analyzing the bill, the Free Market Foundation raised concerns about this ombudsman service and the power it could have.

The bill states that the minister, based on the ombudsman’s recommendations, may ban certain practices related to SMEs as unfair, including the transfer of commercial risk to weaker parties. ..

The FMF said abstract values ​​such as “fairness” cannot constitute the substantive rules that courts use to intervene in contracts.

“If the contract is unfair, the idea that the contract does not have to be enforced creates legal and commercial uncertainty and undermines the rule of law.

“If the parties agree to the terms of the contract, the law should not be used to provide relief for unfair terms,” ​​he said.

Gary Moore, senior researcher at the Free Market Foundation, said the change was particularly problematic, as virtually any contract could be challenged in the future.

“All contracts, no matter how carefully negotiated, are subsequently unfair in some of their terms and cause immense damage to business conduct, personal trust and respect for the law. It will be opened in response to the objection.

“Imposing these notions of fairness will have the unintended consequence of discouraging large companies from dealing with small businesses, as opposed to government policy,” he said.

Moore already applies common law rules, such as interpreting ambiguous contracts as lightly as possible, coercion, excessive influence, and rules on public policy when bargaining power is found to be unequal. He added that it would be done.

Sweeping power

The Small Business Institute (SBI) raises similar concerns, with planned changes providing radical authority to both the minister and the proposed Ombud, violating the civil and contract laws already established in South Africa. , Said it could be disabled.

“Ombud’s arbitrary definition of what constitutes” unfair trading practices “and intervenes in” contractual arrangements or other legal relationships “between” SMEs “and” other parties. ” Empowering can lead to indiscriminate intervention and its potential. SBI CEO John Doldre said, “Ombedprener is unstoppable under the amendment for disgust and frivolous claims.”

He said the amended bill is unlikely to over-contribute to the “already stunning amount of bureaucratic formalism” faced by micro, small and medium-sized enterprises (SMMEs) and promote prompt payment of invoices. Added.

This is another example of a policy on hoofs, Dludlu said, without the minister’s authority to exercise and the regulatory impact assessment actually required of her fellow ministers.

Other potential issues identified in the bill include the fact that there are already a large number of ombuds already available to small business owners, and the lack of specificity regarding what constitutes “deferred payment.” Said.

Business legislation planned in South Africa will give the government “dramatic authority” over contracts: analysts

SOURCE LINK

Stock Exchange

Stock market reverses gains as index drops by 0.59%

by with No Comment Businessfinance

The Nigerian Stock Exchange (NSE) has reversed positive sentiment to close on a downturn yesterday as the shares of Nestle Nigeria and 25 others decline, leading to a fall of the All-Share Index (ASI) by 0.59 per cent.

READ ALSO: COVID-19 vaccines arrive in Nigeria

At the close of trading, ASI contracted by 234.01 absolute points, representing a decrease of 0.59 per cent to close at 39,697.62 points while the overall market capitalisation value lost N122 billion to close at N20.77 trillion.

The downturn was driven by price depreciation in large and medium capitalised stocks including Nestle Nigeria, Flour Mills of Nigeria, Ardova Plc, Lafarge Africa and Unilever Nigeria.

Analysts at Vetiva Dealing & Brokerage


As measured by market breadth, market sentiment was negative, as 26 stocks declined relative to 18 gainers. Academy Press recorded the highest price gain of 9.76 per cent to close at 45 kobo, while PZ Cussons Nigeria followed with a gain 9.38 per cent to close at N5.25 kobo.

Royal Exchange and Beta Glass Company went up by eight per cent each, to close at 27 kobo and N54, while Regency Alliance Insurance rose by 7.69 per cent to 28 kobo.

READ ALSO: Business owners recount tales one year after COVID

On the other hand, Mutual Benefits Assurance led the losers’ chart by 10 per cent to close at 36 kobo, per share. Ardova followed with a decline of 9.97 per cent to close at N16.25 while Champion Breweries shed by 9.69 per cent to close at N2.05 kobo.

The Initiates lost 9.62 per cent to close at 47 kobo while Sterling Bank shed 8.75 per cent to close at N1.46 kobo. Meanwhile, the total volume of trades decreased by 59.1 per cent to 222.574 million units, valued at N5.390 billion, and exchanged in 4,470 deals.

Transactions in the shares of Zenith Bank topped the activity chart with 48.102 million shares valued at N1.236 billion. United Capital followed with 20.238 million shares worth N121.971 million, while Mutual Benefits Assurance traded 19.443 million shares valued at N7.224 million.

Japaul Gold and Ventures traded 17.057 million shares valued at N10.483 million, while AXA Mansard Insurance transacted 8.972 million shares worth N9.379 million.

SOURCE: NEWSCENTRIC

PMI

PMI: SMEs report rises as PMI swings to positive

by with No Comment Business

Nigeria’s manufacturing Purchasing Managers’ Index (PMI), a gauge for manufacturing sentiments, moved back into positive territory in February 2021 after recovering from 44.5 in January to 53.0 points, according to data by FBN Quest and NOI.

READ ALSO: Business owners recount tales one year after COVID

The index had declined sharply from 55.0 in December 2020 to 44.5 in January.

“The good recovery was driven by medium-sized and small firms,” analysts at FBN Quest said. PMI

READ ALSO: Risks facing Africa requires urgent IMF special fund

“Among their positive responses, we note an improvement in demand; a full month’s production (whereas many firms resumed late in January after the holidays); and an easing of COVID-related restrictions.”

Manufacturers in Nigeria are beginning to see increased demand for their goods as the economy gradually turns the corner on a brutal pandemic last year.

The economy exited recession in the fourth quarter of 2020 after two-quarters of successive declines even though there was a contraction of 1.92 percent for the full year.

PMI, unlike the national accounts, are forward-looking indicators. They can move financial markets, at least in advanced economies and the large emerging markets.

Nigeria’s manufacturing Purchasing Managers’ Index (PMI), a gauge for manufacturing sentiments, moved back into positive territory in February 2021

READ MORE: BUSINESS DAY

IMF

Risks facing Africa requires urgent IMF special fund

by with No Comment Businessfinance

The risks facing Africa and the rest of the world make the issuance of additional International Monetary Fund (IMF)’s Special Drawing Rights (SDRs) more urgent, according to a report released on Tuesday by Afreximbank.

Special drawing rights are supplementary foreign exchange reserve assets defined and maintained by the Washington based IMF.

READ ALSO: Concerns grow over stoppage of food supply to southern Nigeria

SDRs are the IMF’s reserve asset, and are exchangeable for dollars, euros, sterling, yen and Chinese yuan or renminbi. The IMF has so far allocated SDR 204.2 billion, equivalent to roughly $285 billion.

Deploying additional SDRs will bolster investor confidence and strengthen Africa’s economic recovery, besides preventing liquidity crises from morphing into solvency crises, the report says.

The risks facing Africa’s growth outlook include weaker-than-expected recovery among the continent’s key trading partners; abrupt tightening of financing conditions; a premature return to fiscal consolidation; climate change and extreme weather events that could cause food prices to spike; and longer-lasting COVID-19 infection rates.

Most of these are contingent on the pandemic’s evolution, which could undermine the recovery process and weaken governments’ capacity to respond effectively to prolonged hardship.

Another risk facing Africa’s growth is if vaccine deployment is hindered by supply bottlenecks or some citizens’ reluctance to be vaccinated – as has been the case in parts of Europe – new waves of infection could rage. Slow growth in Africa’s main trading partners could inhibit the region’s resurgence through lower export demand and reduced investment.

According to the report, the development impact of such a move will also be broad-based and longer-lasting. It will benefit low-income Debt Service Suspension Initiative (DSSI) eligible African countries as well as those larger nations, like Nigeria and Kenya, that opted out of the G20 initiative to preserve access to international capital markets and will play a key role in the region’s recovery as major drivers of intra-African trade.

READ MORE: BUSINESS DAY