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“SMEs, E-commerce Key to Nigeria’s Economic Development”

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  • “SMEs, E-commerce Key to Nigeria’s Economic Development”

For Africa, particularly Nigeria to develop and take its rightful place on the world stage, concerted efforts must be made to strengthen small and medium-sized enterprises (SMEs) to boost economy.

The Managing Director for DHL Express, Sub Saharan Africa, Hennie Heymans made the remark recently at an interactive session with journalists at the company headquarters in Lagos.

Heymans observed that getting the SMEs going is Africa’s best bet to key into the global E-commerce industry and benefit from it immerse opportunities.

He stated that the beautiful thing DHL has observed in Nigeria is the resilience of the entrepreneurs in the country noting that the nation could have suffered when the oil price dropped down to $29, but for the amazing resilience of Nigerians.

Heymans said: “We have seen the effects of declining commodity prices… We saw SMEs just stepping up their roles. It means lesser reliance on commodities, which is critically important. It also means their diversification has gained traction in the local economy. As we get the entrepreneurs into the market, we are starting to see some real economic benefit from it.”

The DHL boss, however, noted that E-commerce seems to be the biggest conduit for getting the SMEs going forward at the moment.

He, therefore, expressed the company’s readiness to engage with authorities and other stakeholders to leverage DHL global experience to help them prepare for maximizing the opportunities that E-commerce represent in a better and quick manner.

He said: “Looking at the statistics at the moment, Africa makes up less than two percent of the global E-commerce space and we should make up to 19 per cent. That is a fantastic opportunity for Nigeria with 89 per cent Internet penetration”.

Speaking on support for SMEs, Heymans disclosed that one of the initiatives of the company is the training provided to them in the country.

He said: “From time to time we hold free training sessions where we help the SMEs understand what its means to take products across borders, what they need to look out for, and what are some of the mechanisms that they can apply and utilize in order to take themselves across border so that they can benefits.”

He also revealed that DHL has created a vertical channel within the organisation to deal specifically with E-commerce.

He, however, warned that the country needed to get the fundamentals in place first so that she could get it right. He believed that for governments across Africa to get it right, it would be advisable to look at some of the mechanisms needed first.

He said: “Because that is what turns ones from a gatekeeper to an enabler. Those are the basis we need to start off. And from an enabler perspective, it is important for government doing a meeting of the mind and start implementing some of the basis. For instance, Trade Facilitation Agreement (TFA), entry, customs system, transparency, I think those are the things that could open up the economy to really benefit from E-commerce”.

He also observed that infrastructure remains a challenge for Africa noting that without it, Africa governments would have to make alternative plans.

Sending positive signal about the country to others, the DHL boss said what is different about Nigeria is the incredible opportunity its offer to the world, noting that despite the economic hindrances, Nigeria continues to perform well and the company’s commitment has been cemented even deeper than before in the country.

Also speaking at the media chat, the regional Director West and Central Africa, Randy Buday, urged the Federal Government to place greater emphasis on agriculture saying the country has the arable lands, great growing seasons and the people to make Nigeria a great agriculture nation.

He lamented that most of their planes from Nigeria return to Europe either empty or return with pineapples, papaya, and mango from Cameroon, Benin, Togo and Ghana.

Noting that these countries are the one getting foreign exchange for their agriculture produce, Buday observed that Nigeria needs to make its agriculture work by providing aircrafts, trucks, cold storages and other infrastructures to sustain her crops and get them to the markets.

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.

E-commerce

China Fines Alibaba Record $2.8 Billion After Monopoly Probe

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China slapped a record $2.8 billion fine on Alibaba Group Holding Ltd. after an anti-monopoly probe found it abused its market dominance, as Beijing clamps down on its internet giants.

The 18.2 billion yuan penalty is triple the previous high of almost $1 billion that U.S. chipmaker Qualcomm Inc. had to pay in 2015, and was based on 4% of Alibaba’s 2019 domestic revenue, according to China’s antitrust watchdog. The company will also have to initiate “comprehensive rectifications,” from protecting merchants and customers to strengthening internal controls, the agency said in a statement on Saturday.

The fine — about 12% of Alibaba’s fiscal 2020 net income — helps remove some of the uncertainty that’s hung over China’s second-largest corporation. But Beijing remains intent on reining in its internet and fintech giants and is said to be scrutinizing other parts of billionaire founder Jack Ma’s empire, including Ant Group Co.’s consumer-lending businesses and Alibaba’s extensive media holdings.

Alibaba used its platform rules and technical methods like data and algorithms “to maintain and strengthen its own market power and obtain improper competitive advantage,” the State Administration for Market Regulation concluded in its investigation. The company will likely have to change a raft of practices, like merchant exclusivity, which critics say helped it become China’s largest e-commerce operation.

“The high fine puts the regulator in the media spotlight and sends a strong signal to the tech sector that such types of exclusionary conduct will no longer be tolerated,” said Angela Zhang, author of “Chinese Antitrust Exceptionalism” and director of Centre for Chinese Law at the University of Hong Kong. “It’s a stone that kills two birds.”

Alibaba’s practice of imposing a “pick one from two” choice on merchants “shuts out and restricts competition“ in the domestic online retail market, according to the statement.

The government action sends a clear warning to the tech sector as the government scrutinizes the influence that companies like Alibaba and social media giant Tencent Holdings Ltd. wield over spheres from consumer data to mergers and acquisitions.

The investigation into Alibaba was one of the opening salvos in a campaign seemingly designed to curb the power of China’s internet leaders and their billionaire founders. The company has come under mounting pressure from authorities since Ma spoke out against China’s regulatory approach to the finance sector in October. Those comments set in motion an unprecedented regulatory offensive, including scuttling Ant Group Co.’s $35 billion initial public offering.

Alibaba said it will hold a conference call Monday morning Hong Kong time to address lingering questions around the antitrust watchdog’s decree.

“China’s record fine on Alibaba may lift the regulatory overhang that has weighed on the company since the start of an anti-monopoly probe in late December,” Bloomberg Intelligence analysts Vey-Sern Ling and Tiffany Tam said, describing the fine as a small price to pay to do away with that uncertainty.”

Further Action

Still, it remains unclear whether the watchdog or other agencies might demand further action. Regulators are said for instance to be concerned about Alibaba’s ability to sway public discourse and want the company to sell some of its media assets, including the South China Morning Post, Hong Kong’s leading English-language newspaper.

The Hangzhou-based firm will be required to implement “comprehensive rectifications,” including strengthening internal controls, upholding fair competition, and protecting businesses on its platform and consumers’ rights, the regulator said. It will need to submit reports on self-regulation to the authority for three consecutive years.

“Alibaba accepts the penalty with sincerity and will ensure its compliance with determination. To serve its responsibility to society, Alibaba will operate in accordance with the law with utmost diligence, continue to strengthen its compliance systems and build on growth through innovation,” the company said in a statement on Saturday.

Faced Challenges

Chief Executive Officer Daniel Zhang said in a memo to employees on Saturday that Alibaba always reflected and adapted when it faced challenges. He called for unity among staff, saying the company should “make self-adjustments and start over again.”

The Communist Party-run People’s Daily newspaper said in a commentary on Saturday that the punishment involves specific anti-monopoly measures regulatory authorities take to “prevent the disorderly expansion of capital.”

“It doesn’t mean denying the significant role of platform economy in overall economic and social development, and doesn’t signal a shift of attitude in terms of the country’s support to the platform economy,” the newspaper said. “Regulations are for better development, and ‘reining in’ is also a kind of love.”

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Telecommunications

MTN Partners Fintechs as Talks With Banks Lingers

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MTN has activated a number of new channel partnerships with fintech companies as the company continues meeting with the commercial banks on a new pricing structure agreement.

MTN’s initial meeting for the reduction of the charges held on Tuesday with the banks ended in a deadlock and is expected to continue until a new long-term agreement can be reached on a sustainable pricing structure going forward.

The telco said this in a statement on Thursday titled ‘Update on banking channel partners’ dispute and expansion of channel network’.

MTN customers were reconnected to banking channels after the banks blocked them on April 2.

This was agreed on the basis that MTN would revert to its previous cost of sales structures with banking partners, until a new long-term agreement could be reached on a sustainable pricing structure going forward.

The telecom company noted that it had been participating in a series of meetings with the banks since Tuesday, after the intervention of the Minister of Communications and Digital Economy, the Nigerian Communication Commission and the Central Bank of Nigeria.

According to the telco, the reduction in the banks’ commission on USSD airtime is ‘international standard and best practice as scale is built along distribution channels’.

“We will provide a further market update once these discussions have been concluded.

We are confident that partners in the banking sector will work with us to ensure this process concludes as quickly as possible to the benefit of the entire industry,” MTN said.

It said it had partnered with new fintechs to expand the range of channels available to customers, adding that the partnerships would remain in place.

“The new channel partners include Sparkle, Konga Pay, Barter By Flutter Wave, Jumia Pay, OPay, Kuda, Carbon, BillsnPay, MTN On Demand, MTN Xtratime airtime loans (*606#), myMTN Web http://mymtn.com.ng and Momo agent *223#,” the statement said.

The telco expressed optimism for a mutually acceptable solution that empowered all ecosystem participants.

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Fintech

Trove, Bamboo Assure Nigerian Investors Assets Are Safe Following SEC Warning

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Trove and Bamboo, the two of the numerous fintech companies, facilitating investments in foreign assets for Nigerians in Nigeria have released statements to assured Nigerians that have invested through their platforms that their investments are safe.

The assurance came few hours after the Nigerian Securities and Exchange Commission (SEC) released a circular to warn the public against unregistered online investment and trading platforms facilitating access to foreign markets.

The SEC, in a circular titled, ‘Proliferation of Unregistered Online Investment and Trading Platforms Facilitating Access to Trading in Securities Listed in Foreign Markets’ stated that its attention has been “drawn to the existence of several providers of online investment and trading platforms which purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign Companies listed on Securities Exchanges registered in other jurisdictions. These platforms also claim to be operating in partnership with Capital Market operators (CMOs) registered with the Commission.”

“The Commission categorically states that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any Exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public. Accordingly, CMOs who work in concert with the referenced online platforms are hereby notified of the Commission’s position and advised to desist henceforth.

“The Commission enjoins the investing public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums.”

However, Trove immediately released a statement, saying “Our attention has been drawn to the SEC circular that was recently issued.

“Please be aware that we are and will remain committed to being in compliance with all local laws and regulations. We have always maintained good standing with all existing compliance requirements and regulatory frameworks.

“Be rest assured that your funds and equities are safe and secure with Trove.

“Since the memorandum, we have been liaising with the SEC to get more clarity on the circular. We are also engaging with top level executives at our local partner brokers. Additionally, we have involved legal professionals to manage the on-going mediation.

“From all indications, we anticipate everything would be resolved.

“Kindly note that your US funds and equities are held in custody by Drivewealth LLC, a regulated broker dealer in the US and protected by the SIPC, for up to $500,000.

“You can continue your trading activities as normal as we are still fully capable of carrying out our responsibilities as usual.

“Be rest assured that we are on top of all the happenings and would actively communicate with you all as things progress. Thanks for all your support and confidence”

Bamboo also responded in a similar version to calm thousands of investors on its platform.

Richmond Bassey, CEO, Bamboo, in a statement sent to all registered investors said “We are aware of the recently released SEC circular about trading in foreign markets.

“First off, we want to assure you that your assets on Bamboo remain safe and easily accessible to you.

“We are already in discussions with the SEC and our broker partner and are fully committed to working with them to ensure your interests as our users are fully protected.

“We want to reassure you that there’s nothing to be concerned about. We are still able to carry out all our operations and will continue to do so. Should the situation change, we will inform and advise you on the best course of action.

“Thank you for your continued faith and trust in us. We will continue to put in all the hard work to serve you. Thank you.”

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