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Nigeria Out of Recession Very Soon, CBN Assures

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The Central Bank of Nigeria (CBN) on Saturday in Enugu assured Nigerians that the country would be out of the current economic recession soon, while also urging Nigerians to take advantage of the numerous policies, initiatives and programmes packaged by the bank to cushion the effects of the biting economic recession in the country.

Speaking at the bank’s fair organised for small and medium scale enterprises, artisan, farmers, banks, hairdressers, barbers, shoemakers and other business groups in Enugu, the Acting Director, Corporate Communications of CBN, Isaac Okoroafor said the bank was aware of the prevailing economic condition in the country and added that the situation would not last long.

“Though we are in trouble, it is just for a while. As fast as we can, let us re-adjust ourselves so we can get out of the present situation. First of all, what is recession? Recession simply put, is a period of dwindling economic realities. Incomes are falling and government’s revenue is dwindling. Unemployment is increasing because businesses are not the way they should be. They sack workers because income is shrinking.

“People are not spending especially in our case, because oil prices have collapsed and foreign exchange receipts have dried up; falling from $3.2 billion to less than $500 million a month. With this kind of situation, Nigerians should try to adjust themselves. This is the real change. We need to change our ways to the realisation of a new troubling situation which is that it is no longer business as usual. Nigerians should learn how to save the little they have, so they can use it over time.

“Nigerians should begin to eat what we produce and not to look for expensive dollars to import food. We should go back to corn, yam and made in Nigeria Rice. Let us produce toothpick and not import it from China. We should not import 20 million eggs from South Africa. We should stop importing chicken when we have them here. Nigeria should brace up. This is not 100 metre marathon. Let us brace up and change our ways. The most hit now are people who have refused to realise that we ought to eat what we produce,” he said.

On the policies packaged by the bank with capacity to cushion the effects of the economic challenge, Okoroafor said 60% of MSME development fund was meant for women and women owned enterprises noting that some have collected as much as N1 billion and N2 billion and they retail to registered co-operative members in those states in bits. Some states elected to pay the interest which is not more than 9% on behalf of the beneficiaries. That is a lot of guarantee and some are recording huge successes. We also have the commercial Agric Credit Scheme (CACS) for larger commercial farmers. We are for everybody.

“One of the greatest highlights this time is the youth entrepreneurship programme and that programme is for corps members who are either in service or have finished service in the last 5 years.

“This is how it works. If you are a serving corps member and you want to get into business, you can get as much as N3 million to start as an entrepreneur. What happens is that you are not required to provide any collateral because we discovered that collateral is the problem. Your degree or HND certificate will serve as your collateral because we know it is an asset in which you have made investment. So just surrender it and that is all.

“If you have finished up to 5 years ago, you can submit your NYSC and Degree or HND certificate and then you can take a loan. But before you do that, you have to make us a proposal. Let us know the kind of business you are doing. If we feel it is feasible, we invite and train you for 3 days and make you understand the intricacies of the business and to put your plan very well. After which we link you up with a bank. That is what we do,” he said.

The bank cited its N220 billion fund made available for Micro, Small and Medium Enterprises (MSME), which it said could be easily accessed.

On other policies already introduced by the bank to help stabilise the nation’s economy, Okoroafor said the decision of the bank to release a list of 41 items that Nigeria out to stop importing to the country was borne out of a genuine desire to take the nation’s economy to the next level.

“Look at rice for instance, 28 out of 36 states in Nigeria can produce rice and so, we have launched a programme on rice called Anchor Borrowers Programme. It is not just on rice but also on tomatoes palm produce etc.

“What we are saying is this: Come to us with your proposal. If you cannot stand alone with your collateral, form yourselves into cooperative and we are ready to work with you and state governments like we are working with Kebbi which is giving Nigeria 1 million tons of rice this year and remember this year, the Nation needs 6.1 million tons.

“If Kebbi State at its pilot stage can give us 1 million tons, Ebonyi is involved, Anambra, Cross-river, Benue, Zamfara and so on. They are all showing interest. If our farmers can be given finance like we have done to Kebbi State, Nigeria should be expecting rice in two years’ time,” he said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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AB InBev Opens Applications For Beer Garage Africa Innovation Challenge

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The world’s largest beer company, AB InBev, has partnered with Hindsight Ventures to launch the Beer Garage Africa Innovation Challenge, which will offer startups access to venture development and grant funding.

AB InBev, which has over 500 brands and over six million B2B customers in over 100 countries, launched Beer Garage a few years ago with the objective of driving innovation by building a strong community of ecosystem stakeholders.

As part of this initiative, AB InBev is now launching the Beer Garage Africa Innovation Challenge, a pan-African challenge to identify hi-tech, high potential startups and founders building innovative solutions across Africa.

To do so, it has partnered with Startup Réseau, an India-headquartered global startup accelerator, which will operate the programme through its Africa-focused vertical Hindsight Ventures.

Ten startups will be selected to take part in a Global Venture Bootcamp, a three-week venture mentorship and leadership development programme that will be delivered by successful founders, industry leaders, domain experts and investors. The Beer Garage Africa Innovation Challenge will culminate with a demo day, which will be attended by AB InBev’s global leadership as well as Hindsight Ventures’ global investor pool. On the demo day, one African startup will stand to win US$5,000 in grant capital. All selected startups get access to US$150,000 in technology credits from partners.

“We are really excited by this partnership, which allows us to drive a pan-African program. With a billion people in the continent, over 300 million new internet users expected to come online over the next three years, a fast-growing mobile internet penetration – and now, with global venture capital money making its way to African entrepreneurs, this is a great opportunity for startups to engage with AB InBev as a partner of choice,” said Ajay Ramasubramaniam, founder and chief executive officer (CEO) of Startup Réseau.

Pritam Dutta, global director for fintech ventures and innovation at AB InBev, said the Beer Garage Africa Challenge was an opportunity to leverage the emerging tech startup ecosystem and funnel novel ideas into AB InBev.

“We set out to build out a stronger connect into the Africa ecosystem, find disruptive startups which could be a great pipeline for our future disruptive innovations and further accelerate our innovation agenda, delivering strong business impact,” he said.

Applications for the challenge are now open here.

Beer Garage is one of the global innovation hubs at AB InBev with the objective of driving innovation by building a strong community of ecosystem stakeholders.

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Merger and Acquisition

Sub Saharan Africa Mergers and Acquisition Transactions Totalled US$ 78.3 Billion During First Nine Months of 2021

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Refinitiv today released the Sub-Saharan African investment banking analysis for the first nine months of 2021. According to the report, an estimated US$387.5 million worth of investment banking fees were generated in Sub-Saharan Africa during the first nine months of 2021, a 15% increase from the same period in 2020. 

While debt capital markets underwriting fees increased 148% to US$117.8 million, the highest year-to-date period since our records began in 2000, fees from equity capital markets underwriting, M&A advisory and syndicated lending all declined from the first nine months of 2020.  Equity fees declined 17% to US$50.7 million, while syndicated lending fees declined 4% to US$148.2 million. Advisory fees earned in the region from completed M&A transactions reached US$70.8 million, down 3% from last year to the lowest first nine-month total since 2013.  Fifty-eight percent of all Sub-Saharan African fees were generated in South Africa during the first nine months of 2021, and 23% were earned from deals in the financial sector. Standard Chartered earned the most investment banking fees in the region during the first nine months of 2021, a total of US$33.1 million or an 8.5% share of the total fee pool.

MERGERS & ACQUISITIONS

Boosted by the US$44.1 billion Naspers/Prosus share swap in May, the value of announced M&A transactions with any Sub-Saharan African involvement reached US$78.3 billion during the first nine months of 2021, more than four-times the value recorded during the same period last year and the highest first nine-month total since our records began in 1980.  The number of deals increased 4% from last year to a three-year high of 584.

M&A involving a Sub-Saharan African target reached US$61.8 billion, again lifted by the share swap to an all-time record first nine-month total, while the number of deals increased 8% over last year.  Inbound deals, involving an acquiror outside of Sub-Saharan Africa, increased 86% to US$9.6 billion, while Sub-Saharan African outbound M&A more than doubled to US$11.5 billion. With advisory work on deals worth a combined U$52.1 billion, Morgan Stanley held the top spot in the financial advisor ranking for deals with any Sub-Saharan African involvement during the first nine months of 2021.

EQUITY CAPITAL MARKETS

Sub-Saharan African equity and equity-related issuance reached US$971.2 million during the third quarter of 2021, the highest quarterly total in more than two years.  Despite the strong third quarter, total proceeds raised during the first nine months of 2021 was down 42% from last year at US$1.2 billion, the lowest first nine-month total since 2005.   Pepkor Holdings, Lighthouse Capital and retail pharmacy chain Dis-Chem Pharmacies were among those in the region raising new equity funds from follow-on offerings during the third quarter.  There have been no initial public offerings in the region so far during 2021. Investec and Goldman Sachs share first place in the Sub-Saharan African ECM underwriting league table during the first nine months of 2021. 

DEBT CAPITAL MARKETS

Sub-Saharan African debt issuance totalled US$37.2 billion during the first nine months of 2021, up 149% from the value recorded during the same period in 2020 and the highest first nine-month total since our records began in 1980.  The number of issues increased 33% over the same period.  US$15.2 billion worth of the bond proceeds were raised during the third quarter alone, with both Prosus and the Federal Government of Nigeria raising US$4.0 billion.  Government & Agency issuance accounted for 55% of proceeds raised during the first nine months of 2021, while the financial sector accounted for 24%. Citi took the top spot in the Sub-Saharan African bond book runner ranking during the first nine months of 2021, with US$6.0 billion of related proceeds, or a 16% market share.

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Merger and Acquisition

Access Bank Completes Acquisition of African Banking Corporation of Botswana Limited

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Africa’s leading bank, Access Bank Plc has now completed the acquisition of a 78.15 percent shareholding in African Banking Corporation of Botswana Limited (BancABC Botswana).

Access Bank announced in a statement signed by Sunday Ekwochi, Company Secretary, Access Bank Plc.

According to the lender, the new acquisition will form part of the Bank’s nexus for trade and payments in Southern Africa and the broader COMESA trade region.

BancABC Bostwana is the fifth-largest bank in Botswana and is a well-capitalized franchise poised for growth in its local market. The lender’s achievements in the retail banking space will provide an opportunity for the Bank to deploy its best-in-class digital platforms and product suites to the benefit of BancABC Botswana’s customers and enable it to complete strongly across its core business segments.

Commenting on the transaction, Dr. Herbert Wigwe, GMD/CEO of the Bank, “We are pleased with the successful conclusion of this transaction which will provide significant synergies by combining BancABC Botswana’s strong retail banking operation with Access Bank’s wholesale banking capabilities. It will also strengthen the quality of earnings through revenue diversification and growth in the corporate and SME banking segments for BanABC Botswana. The combination is another step towards our broader vision of becoming the world’s Most Respected African Bank.”

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