- LCCI Cautions Govt Over Forex Ban on Textile Imports
The Lagos Chamber of Commerce and Industry has advised the Federal Government to reconsider the Central Bank of Nigeria’s ban of forex to textile importers.
It argued that given the position of Nigeria in Africa as a leader in fashion, the range of fabrics produced by the Nigerian textile industry could not support the industry in terms of the quantity and quality.
The Director-General, LCCI, Muda Yusuf, said this in a statement made available to our correspondent on Sunday.
Yusuf, who noted that his submission was not to diminish the importance of the local textile industry in any way or the significance of the nation’s industrialisation, however, added that this was to underscore the importance of a strategic approach to industrialisation.
The LCCI DG said before such policy pronouncement, the government ought to have strengthened the capacity of domestic industries, enhanced their competitiveness and reduced their import dependence as espoused in the Nigeria Industrial Revolution Plan.
Yusuf said, more importantly, the power issue must be addressed, as it was almost impossible to achieve rapid industrialisation without resolving the issue of power and the deficit in key infrastructure.
He said, “Today, Nigeria is clearly the leader in Africa as far as the fashion industry is concerned. Currently, the range of fabrics produced by the Nigerian textile industry cannot support the fashion industry in terms of quantity and quality.
“This vibrant industry should not be sacrificed on the altar of textile industry regeneration. This submission is not to diminish the importance of textile industries in any way or the significance of industrialisation. It is to underscore the importance of a strategic approach to industrialisation.
“The starting point is to strengthen the capacity of domestic industries, enhance their competitiveness, and reduce their import dependence as espoused in the Nigeria Industrial Revolution Plan.
“More importantly, the power issue needs to be addressed. It is almost impossible to achieve rapid industrialisation without resolving the issue of power and the deficit in key infrastructure.
“Textile production is energy intensive. This is a high energy cost environment and it is very difficult for any energy intensive sector to survive.”
Listing other implications of the CBN’s ban on forex for textile import, he said the exclusion had grave implications for businesses in the fashion, tailoring, fashion accessories and garment industry in the country.
He said the industry was one of the fastest growing industries and had created amazing opportunities for many young Nigerians to express their creativity and innovation, adding that the sector was estimated at N5tn, with about 500,000 jobs.
He said, “The industry provides significant value addition to fabrics, whether imported or domestically produced. The policy contemplation of the CBN will put all of these at risk.”
Yusuf stated that trading in textiles was also a major economic activity in the country, both in the northern and southern parts of the country, and hundreds of thousands were making their living from there.
He said, “It is a market that responds to changing tastes and fashion trends in the country and beyond.
“Hundreds of thousands of women and men make a living in the marketing of textiles. The policymakers cannot afford to ignore this segment of economic players. The traders are the bridge between the producers and the consumers.
“It is, therefore, very important for policymakers take into account the full ramifications of the consequences of policies and collateral outcomes.”
Yusuf explained that the textile industry had been a beneficiary of several fiscal incentives and protectionist measures over the years, yet it had remained stagnant.
He said, “Some of them have even gone into receivership as they could not repay their loans. The lesson is that we should deal with the fundamental issues of production competitiveness in our economy.
“The textile industry needs to be saved from the excruciating burden of high operating and production cost.”
Yusuf added that in order for the local textile industry to experience a boom as in the line of Executive Order, President Muhammadu Buhari should order that all uniforms of military and paramilitary institutions should be made from Nigeria- produced textiles.
He said, “This is a low hanging fruit that could be explored while the issue of high production cost is being addressed.”
Yusuf, however, commended the FG on its move to create special economic zones in the six geopolitical zones in the country, describing it as a step in the right direction.
He stated, “The Bank of Industry has also done a great deal to provide funding for industries, textiles inclusive. But we need to deal with the fundamentals.
“In the meantime, as we progress to the next level of the Buhari administration, policy coordination and collaboration among the economic ministries and agencies is imperative. There should be collaboration and coordination between the CBN, the Finance Ministry, Budget and Planning and Trade and Investment on trade policy issues.
“The boundaries of monetary policy need to be properly defined. Exclusion of sectors from the forex market is not a monetary policy issue. It is a trade policy matter.”
Bill Gates Sexual Harassment Allegations Bring Microsoft Under Spotlight
Shareholders of Microsoft have started pressuring the company to increase transparency over its sexual harassment history after recent allegations against Microsoft co-founder Bill Gates.
More than 75% of investors at the company’s annual meeting voted in favour of the tech giant publishing a report on the efficacy of the company’s sexual harassment policies, going against the company’s recommendations to reject the proposal.
Bill Gates, who is 66, resigned from the Microsoft board last year after an investigation was opened into a relationship that Gates had with a colleague, which started in 2000. This affair was only brought into the light in May this year, a few weeks after Bill Gates and Melinda Gates announced to the world their plans to get a divorce.
Since then, multiple reports have come out that Bill Gates, who co-founded the company had made repetitive unwanted advances to Microsoft employees after he and Melinda got married in 1994. Reports further stated that Bill Gates was warned about his inappropriate conduct back in 2008.
The shareholder proposal was submitted by investor Arjuna Capital, and made a call for Microsoft to put out a report on transparency which would contain details of investigations into the conduct of individual employees.
Arjuna Capital had mentioned that reports of Bill Gates’ inappropriate affairs and unwanted sexual advances made towards Microsoft employees have only magnified concerns, putting under question the culture which had been set by the very leadership of the company, as well as the role of the board in holding those responsible accountable for their actions.
The company board had encouraged shareholders to reject the proposal, with the argument that it was throwing more resources into fighting sexual harassment. It is rare to see shareholder proposals that are strongly opposed by the company pass by such a large margin.
Natasha Lamb said that while the accusations against Bill Gates are only the most recent revelations in what has been a long-standing problem, it is significant and encouraging that Microsoft is now listening to shareholders while committing to transparent and unbiased reporting.
HFMP And FMN Combination: The Making of A National Champion
The contribution of key players in the Nigerian food industry has grown in value and relevance over the years. According to a report by the World Trade Organization (WTO), Nigeria is ranked as the largest food market in Africa, with significant investment in the local industry and a high level of imports. As of now, the food and beverage sector is estimated to contribute 22.5% of the manufacturing industry value, and 4.6% of Nigeria’s GDP. In another report compiled by PricewaterhouseCoopers (PwC), it was confirmed that the food sector brought in an average of 57% of Gross domestic product (GDP) and generated 64.5% of export earnings.
Founded in 1972, Honeywell Group began as a food trading company servicing the West African region before pivoting to importing a variety of goods for the domestic Nigerian market. Now operating an investment holding company based in Nigeria, Honeywell Group Limited has diversified its business l into different sectors which are referred to as portfolio companies. The Group has evolved to become an investment company participating in major sectors of the Nigerian economy including foods, real estate, leisure and hospitality, energy, infrastructure, and financial services.
Honeywell Flour Mills Plc (HFMP), one of the portfolio companies of Honeywell Group Limited and a market leader in milling, processing & packaging of flour and other wheat-based products in Nigeria has continued to contribute immensely to the growth and performance of the Nigerian economy. With over 20 years of experience, HFMP has gathered extensive knowledge and skill in the production of flour and a range of flour-based products. The company has superior operational efficiency and remains a dominant player in the food industry in Nigeria.
Operating on a total installed capacity of 2,610 metric tonnes per day, HFMP manufactures a variety of products from wheat meals, semolina, noodles, superfine flours to spaghetti, macaroni, brown flour, amongst others.
During the company’s recent Annual General Meeting (AGM) which was held on October 14, 2021, the company recorded an all-time high revenue of N109.5 billion, an increase of 36% over N80.4 billion for the financial year ending March 2021. The company’s Operating Profit also grew faster than revenue at 39%, from N5.4 billion in FY 2019 to N7.6 billion in FY 2020.
Just recently, the Honeywell Group Limited announced the signing of an agreement with Flour Mills of Nigeria Plc (FMN) on the proposed combination of Honeywell Flour Mills Plc and Flour Mills of Nigeria, another leading Nigerian food manufacturer to further enhance food security in the country and create a more resilient national champion in the Nigerian foods industry. This agreement will have Honeywell Group Limited dispose of a 71.69% stake it has in HFMP to FMN.
Building on the achievements and improved performances of HFMP and FMN year-on-year, it can be seen that this is a combination of two giants in the food manufacturing industry in Nigeria. With more than the 85-year combined track record of both companies and their shared goal of making affordable food available to Nigeria’s population, stakeholders will benefit from this combination in numerous ways.
Based on the scale of the transaction that will be carried out by the consolidated company, this will provide employees with more career development opportunities in a larger organisation, with the potential to create more jobs in the economy. Customers will also benefit from access to a wider product range and an even stronger stream of innovation that can only be delivered by a combined entity with stronger teams and financial muscle. In addition, Nigeria and its food security agenda will benefit from both companies’ focus on developing Nigeria’s industrial capability, its agricultural value chain and specifically backward integration of the food industry.
The proposed combination will bring together two trusted and entrenched brands, creating a single entity of becoming a national champion in the food manufacturing space that is better positioned to benefit the growing Nigerian population and leverage opportunities stemming from the African Continent Free Trade Area (AfCFTA).
As this deal comes to a close, Honeywell Group, a leading investment company is setting its sights on the journey of refining and growing its investment portfolio. This will see it consolidate in sectors where it currently operates, such as real estate, energy, financial services, infrastructure. The company also intends to announce more strategic initiatives in the coming months.
MTN Nigeria Begins Sale of 575 Million Shares to Retail Investors
Telecommunication giant, MTN, will today begins the sale of up to 575 million shares held in MTN Nigeria by MTN Group to Nigerian retail and institutional investors.
The announcement of the sale is coming a week after the company disclosed that the Security and Exchange Commission (SEC) had approved its offer for sale of up to 575 million ordinary shares by way of a bookbuild to qualified investors (Institutional Offer) and a fixed price to retail investors (Retail Offer).
The company’s Chief Executive Officer, Karl Toriola, talking about the sale of the shares yesterday in a press conference clarified that the sale of the shares was never an initiative of funds raising but an attempt to deepen the company’s shareholding and in order to enable more Nigerians to partake in the prosperity of the company.
“The offer opens at 8:00am today and is scheduled to close at 5:00 pm on December14, 2021. It is priced at N169.00 per share and the minimum subscription is for 20 shares and lots of 20 shares thereafter. The offer includes an incentive in the form of one free share for every 20 shares purchased, subject to a maximum of 250 free shares per investor. The incentive is open to retail investors who buy and hold the shares allotted to them for at least 12 months, post the allotment date,” the CEO said.
The retail offer is the first in Nigeria to be delivered via a digital platform. It aims to facilitate the maximum possible participation by Nigerian investors leveraging on technology. Similarly, It is the first time the company will invite subscription from the public nearly two years after it listed on the Nigerian Exchange Limited (NGX).
Speaking about the offer, MTN Group President and Chief Executive Officer, Ralph Mupita, said the offer was MTN’s strategic priority to create shared value. “In the last 20 years, we have worked diligently to connect 68 million subscribers onto voice and data networks and ensure that we deliver the benefits of a modern connected life. With this offer, we will contribute to the further deepening of Nigeria’s equity capital markets. It is the first in a series of transactions as MTN Group implements its plans to ensure broad-based ownership by reducing its shareholding in MTN Nigeria to 65 per cent over time. We thank the Nigerian authorities for the support we as MTN Group have received in the various approvals related to this Offer, and remain committed to playing our humble role in driving digital and financial inclusion across the country over the medium-term, ” he added.
Investors will be able to submit applications through the issuing houses, receiving agents (authorised stockbrokers and Nigerian banks) and online via a unique digital application platform, Primary Offer, administered by the Nigerian Exchange Limited.
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