- 2017: The year of Start-ups and Small Business
In a few weeks, the familiar greeting of ‘Happy New Year’ will fill the air as we all begin the journey into yet another year. Most Nigerian’s (including myself) are created with the most optimistic DNA enmeshed in us, as such, we will expect the new year to bring with it tidings of peace, love, warmth and a better economic performance for both our nation and our respective businesses.
I have themed the 2017 financial year, ‘The Year of Start-ups and the Small Business’ and while it may sound like wishful thinking to many, I do believe that for those entrepreneurs who have been working on great business ideas, and have done all that is required to go to the market, 2017 is a great time to venture out. You may be wondering why I am so optimistic given that as a nation, we are enduring our worst recession in decades, inflation rate is over 18 per cent, borrowing rates are above 30 per cent per annum in most Banks, many businesses are failing, most of our friends and loved ones have lost and may soon lose their jobs, the foreign exchange market is in topsy-turvy mode, and the list of negatives goes on and on. I am however of the opinion that we may have seen the worst of the recession and while I cannot categorically state that things will get better, I also do not expect things to get any worse.
Let us examine our macro-economic environment. I like to define the macro-economic environment as “those extraneous factors, which are beyond our control but have a major influence on the outcomes of our businesses”. Let us focus on two elements of the macro-economic environment that you and I are familiar with to support my optimism.
By the end of 2016, the current Government will have spent 19 months or 40 per cent of its tenure. Without doubt, the political landscape with 2019 in view is already beginning to take shape and as such, I envisage that subtle campaigns across all tiers of Government will start taking place at some point in 2017. These campaigns will attempt to reach out to the people and giving the current economic circumstance, any campaign that doesn’t have an economic appeal may fall flat to the ground.
I therefore believe, that we will see a replica of some Government programmes such as the Lagos Employment Trust Fund and the recently launched N-Power scheme across most states of the Federation. Where properly implemented these schemes have the potential to energize existing businesses and birth new businesses thereby combating unemployment and other social maladies. So we have a choice, we can start positioning ourselves to be beneficiaries of these schemes or join the majority and say these schemes don’t work. I will rather position myself to participate than hear of people who benefited from these schemes when the opportunity is gone.
Nigeria is officially in a recession and signs of an immediate turnaround were dealt a further blow when the Q3 report from the National Bureau of Statistics revealed a negative growth of 2.24 per cent. Some analysts suggest there won’t be a rebound until the last quarter of 2017 where an estimated growth of about 0.6 per cent is envisaged.
Economic indicators from GDP growth rate to Inflation rate; from the balance on our foreign reserves account to our balance of payment position; from the barrels of crude oil sold to our foreign exchange market all reflect a weaker economy than in recent years. While I am not wishing away the challenges, I can’t but ask myself this question, in the 15 years of my professional experience, was there ever a time when I thought our economy was great? You may want to ask yourself that question. And if your answer like mine is an emphatic “No”, then it is yet another reason for me to be optimistic….okay “cautiously optimistic”.
I also believe that the Managers of our economy haven tried different things to steady the economy, would have learnt a thing or two. At least what not to do to an ailing economy. So I won’t be surprised if in 2017 we see some positive policy reversals, more stability and less tinkering with policies around the fundamentals of the economy. There is a direct relationship between the political environment and the Economic environment and our economic situation will form the theme for the 2019 elections campaign which like I said earlier will start at some point in 2017. This is another reason to be cautiously optimistic.
Here in Nigeria, many successful enterprises where birthed during seasons of economic malaise same way many closed shop. In my last two articles, “5 reasons why small businesses fail” and “What small businesses can do to survive their early years”, I had attempted to point start-ups and small businesses to a path of both survival and sustainable growth. In 2017, I believe that individuals or start-ups who choose to be optimistic in addition to doing the right things (I have mentioned some in my last posts) stand a chance of weathering the storms.
There is a hymn we sang in my primary school with the wordings “he that is down needs fear no fall, he that is low has no pride…” we are already beaten by the economic challenges we are faced with and are therefore down.
Thankfully, when we fall down or are beaten to the ground, we have only two options. To stay down or to rise up. I believe we have nothing to lose in being cautiously optimistic, making a choice to stand up and not remain down on our backs.
The Small and Medium Enterprises Development Association of Nigeria (SMEDAN) suggests that there are at least 17 million enterprises in Nigeria and these enterprises contribute about 50 per cent of our GDP and 75 per cent of national employment.
Those figures include you and me, it suggests that despite the harsh operating environment we find ourselves in, we have without all the required support from the Government, braved the odds and contributed immensely to our Country’s growth and development. I believe with the required Government support and an enabling environment, we can achieve more. Nevertheless, we can still achieve progress in the face of daunting challenges, an environment filled with pessimism and stories of a failing economy if we are armed with the right mindset and the right business model.
I believe 2017 will be a better year for the economy however marginal; new businesses will be born and entrepreneurship will thrive. I also believe 2017 will be “The Year of Start-Ups and The Small Business”. What do you believe?
Tony Elumelu Acquires Shell, Total, ENI Stakes in OML 17
Tony Elumelu owned Heir Holdings Limited and its related company Transnational Corporation of Nigeria Plc on Friday announced it has completed the purchase of 45 percent stake in Oil Mining Lease (OML 17) through TNOG Oil and Gas Limited.
The acquisition includes all assets of Shell Petroleum Development Company of Nigeria Limited (30 Percent), Total E&P Nigeria Ltd (10 percent) and ENI (five percent) — in the lease.
It was further stated that TNOG Oil and Gas Limited will also have the sole right to operate OML 17.
The field presently has a production capacity of 27,000 barrels per day. Also, there are estimated 2P reserves (proven and probable) of 1.2 billion barrels and an additional one billion barrels in possible reserves — all of oil equivalent.
A consortium of global and regional banks and investors provided a financing component of $1.1 billion for the largest oil and gas financing in Africa in over a decade.
In a statement released on Friday, Shell said the completion was after all the necessary approvals have were received from authorities.
“A total of $453m was paid at completion with the balance to be paid over an agreed period. SPDC will retain its interest in the Port Harcourt Industrial and Residential Areas, which fall within the lease area,” the SPDC said.
Speaking after the completion of the deal, Elumelu said “We have a very clear vision: creating Africa’s first integrated energy multinational, a global quality business, uniquely focused on Africa and Africa’s energy needs. The acquisition of such a high-quality asset, with significant potential for further growth, is a strong statement of our confidence in Nigeria, the Nigerian oil and gas sector and a tribute to the extremely high-quality management team that we have assembled.
“As a Nigerian, and more particularly an indigene of the Niger Delta region, I understand well our responsibilities that come with stewardship of the asset, our engagement with communities and the strategic importance of the oil and gas sector in Nigeria. We see significant benefits from integrating our production, with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.
“I would like to thank Shell, Total and ENI, for the professionalism of the process, the Federal Government of Nigeria, the Ministry of Petroleum Resources, and the NNPC for the confidence they have placed in us.”
Tony Elumelu is the Chairman of Heirs Holdings Limited, Transcorp and United Bank for Africa Plc.
Exporters Say CBN Pre-export Requirements is Frustrating Export of Goods
Exporters have said the recently introduced pre-export requirements by the Central Bank of Nigeria is creating unnecessary bottlenecks for exporters and the movement of goods out of the country.
Exporters, who spoke under the aegis of the Network of Practicing Non-oil Exporters of Nigeria (NPNEN), said the electronic Nigeria Export Proceed Form now required by financial institutions from exporters had come with so many challenges.
Ahmed Rabiu, the President, NPNEN, explained that the new policy had several requirements that often led to delays and loss of income on the part of exporters.
He said, “We acknowledge the CBN’s desire to ensure that all exports out of Nigeria are documented in order to ensure that the proceeds of such exports are repatriated.
“However, the reality on the field shows that the process is causing undue delays and consequently, encouraging corruption.”
According to them, in the new pre-export requirements, the Central Bank of Nigeria wants an export transaction to be initiated through eNXP processing on the trade monitoring system.
After which exporters are expected to have a pre-shipment inspection agent, the Nigeria Customs Service and other designated government agencies carry out their pre-export inspections.
The exporters said the pre-shipment inspection agent was expected to issue a clean Certificate of Inspection while Customs would issue the Single Good Declaration. All these they said takes time and delay goods from leaving the country on time.
Pointing to a recent report, they said about N868 billion worth of goods bound for export were stuck at the ports due to the new policy.
Speaking further Rabiu said, “For example, for the PIA to issue the CCI, the exporter is required to upload a certificate of origin as one of the supporting documents for the eNXP.
“The PIA is also required to upload the CCI to the TRMS(M) and until this is done, the Customs service will not issue the Single Good Declaration.”
He added, “After issuing the SGD, the customs is further required to upload it into the TRMS before the goods are allowed to be gated into the port and loaded on the vessel by the shipping line.”
Ardova Plc in Talks to Acquire Enyo Retail and Supply Limited
Ardova Plc, Nigeria’s leading integrated energy company, has commenced discussions to acquire Enyo Retail and Supply Limited.
According to the statement issued and signed by Oladehinde Nelson-Cole, Ag. Company Secretary/General Counsel, Ardova Plc, Enyo is one of the newest and fastest-growing retail and supply companies in the downstream sector.
It stated, “This announcement is pursuant to the acceptance in principle of AP’s offer and acquisition framework by the shareholders of Enyo, it is subject to the successful completion of a due diligence exercise and the receipt of all required regulatory approvals.”
“This announcement is pursuant to the acceptance in principle of AP’s offer and acquisition framework by the shareholders of Enyo, it is subject to the successful completion of a due diligence exercise and the receipt of all required regulatory approvals.”
Speaking on the yet to be completed deal, Mr. Olumide Adeosun, CEO, Ardova Plc, said upon completion, Ardova will retain the Enyo branded stations which will operate side by side with the Ardova brand while simultaneously leveraging on the strengths of Ardova and its group companies.
He added that the two companies are determined to conclude the deal by the end of Q1 2021.
Enyo presently operates over 90 stations across the nation and attends to over 100,000 retail customers on a daily basis.
Ardova Plc and Enyo Retail & Supply Limited promised to furnish stakeholders with more information on the progress of the deal.
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