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Heritage Bank Highlights Potential in Non-oil Exports

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Heritage Bank Limited has identified major commodities that can boost Nigeria’s foreign exchange earnings in the non-oil sector for the country.

Some of the export potential products as listed by the bank in the agriculture sector are: cocoa, cashew, groundnut, fish, horns, sesame seed, ginger, cassava and snails. Others include tobacco, coffee, cotton lint, rubber, among others. Under Vegetables and spices, the lender identified Bitter leaf, plantain flour, Ground melon, Ground Crayfish, Ground Maize among possible foreign exchange earners.

Managing Director/ Chief Executive Officer, Heritage Bank Limited, Mr. Ifie Sekibo said farmers and exporters of agricultural produce should seek more knowledge in order to increase the quality and quantity of their products because export business involves dealings with other world players.

The bank chief who spoke at the 2016 Annual Conference organised by Finance Correspondents Association of Nigeria (FICAN) in Lagos recently said the 10-year tenor export stimulation facility provided by the Central Bank of Nigeria (CBN) at nine per cent interest rate is a laudable incentive for exporters.

According to him, although the lenders would want the economy to grow by lending to farmers and other productive sectors of the economy, farmers/borrowers/exporters on their part should know that banks want their monies back and that “there is need for competence, commitment and confidence in the process.”

Speaking on the topic: “Providing Finance for Exports: Expectation & Experience,” Sekibo said Nigeria can also export such manufactured Goods as: Cocoa cakes, butter, powder & liquor, detergents, Malt drinks Palm kernel cakes & oil, baby clothes, confectioneries, leather. In the category of handicraft, Sekibo noted that Nigeria can export Talking drums, Calabash, Wood carvings, Raffia products among others, not forgetting the ever flourishing Nollywood which is even being watched by Militants (like Gendam) in neighbouring countries.

Represented by the Group Head, Agriculture Finance, Project & Development Finance Department of Heritage Bank, Mr. Olugbenga Awe, Sekibo regretted that exporters from Nigeria are not competitive enough, such that some Nigerian exporters go to Cameroun to bring in products, blend them to Nigerian products so that they can export. For instance, Yams that are consumed in London are from Ghana, not Nigeria.

As a country, Nigeria cannot afford to continue going backward in terms of non-oil export he reiterated.

The banker therefore advised exporters to master the steps to getting funding for export. He said, the first step is to know the difference between funds required for financing the business between the commencement of the manufacturing or procuring process and the dispatch of the goods, known as pre-shipment finance; and that of post-shipment finance, which are funds required for financing the exporter between the dispatch of goods and the receipt of payment.

It should be recalled that in recognition of Heritage Bank’s commitment to promoting non-oil export business, the African Export Import Bank (Afreximbank) recently provided a $150 million funding support for the lender.

Afreximbank, a frontline African financial institution believes in the uniqueness of the business strategy of Heritage Bank especially the Small Growing Business focus of the bank which aligns with the founding mission of Afreximbank.

According to Sekibo, exporters should also know that banks look for certain criteria for financing.

“There must be history of previous performance in terms of volume of export handled in the past; Frequency of Export; Payment methods; Payment Terms; how Products are sourced and how risk are mitigated,” he said.

Banks according to him also look at seasonality of the products; product destination; transaction cycle and buyer’s payment history.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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IBEDC Disconnects UCH Over N500m Debt, Critical Services Affected

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The University College Hospital (UCH) in Ibadan, Oyo State, experienced a disruption in its power supply after the Ibadan Electricity Distribution Company (IBEDC) disconnected the hospital over a debt amounting to N500 million.

Dr. Jesse Otegbayo, the Chief Medical Director of UCH, confirmed the disconnection but refrained from elaborating on the exact cause.

IBEDC’s spokesperson, Busolami Tunwase, acknowledged the outstanding debt owed by UCH but denied that the disconnection was intentional.

Tunwase stated that while UCH owed the substantial amount, the power outage was due to a technical fault in the area, coinciding with the debt situation.

Despite repeated attempts to engage UCH in discussions to settle the debt, IBEDC had resorted to disconnection as a last resort.

The disconnection poses significant challenges to UCH’s critical services, affecting patient care and hospital operations.

While IBEDC emphasized its understanding of the hospital’s importance and commitment to resolving the issue amicably, the situation underscores the financial strains faced by healthcare institutions and the essential need for reliable power supply.

Efforts to negotiate and find a resolution between UCH and IBEDC are ongoing to restore normal operations and ensure uninterrupted healthcare services.

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Oil and Gas Dealers Threaten Withdrawal as 70% of Downstream Businesses Collapse

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The downstream oil sector in Nigeria faces a looming crisis as oil and gas dealers, represented by the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), issue a stern warning of potential service withdrawal.

In a recent resolution following their executive committee meeting in Abuja, NOGASA expressed grave concerns over the collapse of approximately 70% of businesses in the industry due to the harsh operating environment.

President of NOGASA, Benneth Korie, highlighted the dire situation, emphasizing the challenges faced by oil marketers in funding operations amidst soaring bank interest rates.

Korie underscored the overwhelming burden faced by operators who are compelled to acquire funds at exorbitant interest rates upwards of 30%, exacerbating financial strain and hindering business viability.

The primary demand voiced by NOGASA is the pegging of the foreign exchange rate at N750/$ to facilitate refinery operations and stimulate the production of refined products domestically.

Failure to address these pressing issues, Korie warned, could result in the withdrawal of services by NOGASA’s over 200 members starting from the next month.

The downstream oil crisis coincides with heightened anticipation for the release of refined petroleum products from the Dangote and Port Harcourt refineries, seen as critical for alleviating supply shortages nationwide.

However, amidst forex crises and inflationary pressures, operators in the oil and gas sector confront mounting economic challenges, necessitating urgent government intervention.

As Nigeria navigates through turbulent economic waters, stakeholders eagerly await decisive action from authorities to salvage the downstream oil sector from imminent collapse and avert potential disruptions in fuel supply chains.

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Developers Reject Federal Government’s Cement Price Reduction Agreement

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Real estate developers across Nigeria have voiced their strong disapproval of the recent agreement between the Federal Government and cement manufacturers to reduce the price of cement to a range between N7,000 and N8,000 per 50kg bag.

This decision has been met with skepticism and criticism from key players in the built industry.

Dr. Aliyu Wamakko, the President of the Real Estate Developers Association of Nigeria, expressed his concerns, stating that the proposed reduction would not bode well for the economy.

He pointed out that cement is a fundamental component of construction and lowering its price to such levels would not be conducive to addressing the country’s housing deficit, currently estimated at 28 million units.

Wamakko referenced an earlier commitment by the Chief Executive Officer of BUA Cement, who pledged to reduce the price of cement to N3,500 per bag by January 1, 2024.

He questioned why the current negotiation was proposing prices significantly higher than what was promised earlier.

Other stakeholders echoed similar sentiments, emphasizing the need for more affordable building materials to enable the construction of housing units accessible to low-income earners.

They criticized the reliance on imported materials and advocated for the exploration of locally sourced alternatives.

The discontent among developers underscores the challenges posed by rising construction costs and the implications for housing affordability and development in Nigeria.

As discussions continue, stakeholders are urging a reevaluation of the proposed cement prices to better align with the goal of addressing the country’s housing needs.

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