The country’s retail sector will continue to face significant challenges over the next 12 months as a result of its dependence on higher foreign exchange rates offered in the parallel market, analysts have said.
In a recent report by a real estate services firm, Broll Nigeria, on the Nigeria’s retail market update in the second quarter, the analysts stated that while the change in the Central Bank of Nigeria’s policy was expected to increase liquidity and access to forex, the retail sector would depend on the parallel market to fund imports due to the ban on over 40 items to use the window.
The CBN had, over a year ago, banned the issuance of foreign exchange for the importation of some commodities, which could be produced within the country, in a bid to boost the economy.
The report stated that the prevalent economic conditions had continued to adversely affect the retail sector in the second quarter.
“The inadmissibility of items currently banned from the interbank forex market under the CBN’s new policy will see many retailers continue to depend on the higher forex rates offered on the parallel market to fund Imports. The reality of a shallow tenant pool in the retail market continued to bear down on the sector with respect to leasing activity and take-up rates.” the report added.
It further found that as the market practice in the sector continued to allow leases with dollar-denominated rents payable in naira at the interbank exchange rate, there would be an upward rental pressure in the future, given the depreciation of the naira against the dollar.
“We, however, expect that push back from tenants given these realities will intensify and we anticipate that landlords may be willing to consider extending substantial concessions to tenants who are likely to see effective rents increase by 35 per cent to 45 per cent.
An indigenous mall developer and Chief Executive Officer, Top Services Limited, Chief TokunboOmisore, said the recent downturn in the economy, caused by the collapse in oil prices and devaluation of the naira had adversely impacted many local operating retailers.
According to him, the retailers that have felt the brunt of the impact are those who sell a plurality of imported items and have their rental expense either directly paid or indexed to the dollar.
“However, the Nigerian middle-class consumer is 0 prize that both local and international retailer will continue to fight for. With an estimated 35 million people in the Nigerian ‘consumer’ class, it is not a market where entrants will be willing to leave and outside players not considered because of the recent economic downturn,” he said.
Omisore stated that a major structural change that would occur in the sector was that retailer would no longer pay high prices for marginal space and market share.
Tony Elumelu Receives Licence to Kick Start Heirs Insurance Limited, Heirs Life Assurance Ltd
The Chairman of Heirs Holdings, Tony O. Elumelu, on Friday said the company has received operating licences from the National Insurance Commission (NAICOM) for its two new insurance companies, Heirs Insurance Limited (HIL) and Heirs Life Assurance Limited (HLA).
The Chairman disclosed this on his social media page.
In his words, he said “I am proud to announce that the Nigerian Federal Government, through the insurance regulator, the National Insurance Commission (NAICOM), has officially issued the operating licences for our new Group insurance companies – Heirs Insurance Limited (HIL) and Heirs Life Assurance Limited (HLA).
“This represents an important milestone of a long-term strategic journey in providing much needed, quality, & valuable financial services, to a broad demographic in Nigeria. Insurance should not be a luxury, and just as we have democratised other sectors, we will democratise insurance – applying our tried & tested business philosophies.
“Fueled by the determination to improve lives & leave a legacy in the African private sector, we have embarked on this journey to revolutionise the insurance space – deploying technology, customer understanding & operational excellence.
“It has been a five-year journey, but with the optimism & the resilience that have brought us this far, it has been worth the wait.
“I would like to warmly thank our new CEOs—Dr. Adaobi Nwakuche, MD/CEO of Heirs Insurance and Niyi Onifade, MD/CEO of Heirs Life Assurance, our Board members, regulatory partners, those who have believed in this dream, despite the obstacles, & those who have cheered us on.”
This is coming barely two weeks after Mr. Elumelu announced Transcorp has acquired Afam Power for N105 billion.
Ndubuisi Ekekwe Moves to Deepen Capabilities Through Free Weekly Business Lessons
In a bid to deepen business and individual capabilities across the African continent, Prof. Ndubuisi Ekekwe, Founder of Fasmicro and the Lead faculty, Tekedia Institute, on Sunday said he will commence free business lessons to enhance accumulation of capabilities.
In a message forwarded to all members of the platform, Tekedia.com, Prof. Ekekwe, explained that when businesses accumulate capabilities, they move upstream and create new competitive tentacles which eventually form the foundation of their growth.
“More so, because of the capabilities, they protect their market shares through strategic moats against competitors and new entrants,” he stated.
Prof. Ekekwe plans to send out two business lessons per week to engage Tekedia’s growing community on the mechanics of business systems. “Each piece would be prepared to pass across a business lesson.”
Prof. Ndubuisi Ekekwe writes regularly in the Harvard Business Review and has spoken at global events — explaining and teaching the mechanics of business systems and nation-building.
To start receiving his free business lessons sign up here.
FG Introduces NEXIT Portal for Npower Batch A and B Beneficiaries
The Federal Government has introduced a new online portal for exited Npower beneficiaries of batch A and B.
According to the Minister for Humanitarian Affairs, Sadiya Farouq, the portal was launched in collaboration with the Central Bank of Nigeria (CBN) to enable exited Npower beneficiaries apply for available federal government empowerment options.
This was disclosed in a statement issued by Nneka Anibeze, the media aide to the minister, on Friday.
The ministry said the NEXIT portal will be used to determine the suitability of exited beneficiaries for various CBN-affiliated programmes.
She explained that selection will be based on the conditions and criteria set by the apex bank.
Ms Farouq, therefore, urged interested exited Npower beneficiaries to log on to the NEXIT portal and provide the required additional information for possible placements into central bank’s intervention options.
“The Minister expressed her deep appreciation to the CBN Governor Mr Godwin Emefiele CON for his support adding that the Ministry of Humanitarian Affairs remained committed to the vision of Mr President to lift 100 million Nigerians out of poverty in the next 10 years.
“Minister Umar Farouq pledged the Ministry’s willingness to collaborate with relevant agencies of government and other stakeholders towards the realization of that vision and congratulated the exited beneficiaries while wishing them well in their future endeavours.
“The Federal Government of Nigeria is very proud of the milestones you have achieved during your period of service to the nation. As we prepare to exit into prospective endeavours.”
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