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BUA Cement Grow Gross 2020 Full Year Profit to N95bn

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BUA Cement Grow Gross 2020 Full Year Profit to N95bn

BUA Cement, Nigeria’s second largest cement company, has announced full year revenue of N209 billion in its unaudited financial accounts for the full year ended December 31, 2020, showing an increase of 19 per cent 2019.

Gross profit printed at N95.432 billion in 2020, indicating an increase of 16 per cent, compared with N82. 443 billion in 2019. BUA Cement Plc’s excellent cost management led to a decline of 33 per cent in net financing cost to N3.438 billion in 2020, from N5.192 billion in 2019.

Also, the focus on efficiency, a strong management team and newer technologically advanced plants resulted in an improved bottom-line with profit before tax (PBT) growing to N79.066 billion in 2020, up from N66.273 billion, while profit after tax (PAT) rose from N60.61 billion to N70.518 billion in 2020.

The performance consolidated BUA Cement’s position as one of Nigeria’s most profitable companies – a position it is expected to strengthen further with the inauguration of its new three million Metric Tonnes Sokoto Cement Plant in 2021 and the addition of three new lines of 9 million metric tonnes total capacity in Adamawa, Edo and Sokoto States by 2023.

Commenting, the Managing Director, BUA Cement Plc, E Yusuf Binji, said the exceptional performance in the 2020 financial year was a reflection of the continued value and strength of the BUA Cement brand and product offerings as well as a nod to the excellent implementation of the company’s Business Continuity Plan which ensured that the company was able to withstand the impact of the Covid-19 pandemic throughout 2020.

“Despite the prevailing economic conditions in 2020, BUA Cement remains quite optimistic about the future because it affords us not only with the opportunity to further evolve our business model but also provides an opportunity for accelerated development. We will continue to push to new markets aided by a focused distribution strategy,” Binji had said.

BUA Cement in 2020 entered strategic alliances for the supply of Liquefied Natural Gas (LNG) at its Kalambaina Plant, Sokoto State, and for the management of its mining operations.
According to the company, given these deliberate and strategic choices amongst other cost management efforts, it will continue to combine development and innovation into its offerings and activities to drive efficiency, reduce operating costs and maximize profits.

Chairman of BUA Cement, Abdul Samad Rabiu, recently said that that despite the strides made in the Nigerian Cement Industry in the past few years, there was still room for immense growth.

According to Rabiu, Nigeria with its population of about 200million people was still greatly underserved by the Cement Industry with current consumption levels at about 130 kilogrammes per head compared to smaller African countries with consumption levels at about 170 to 180kilograms per head.

Nigeria’s cement consumption is expected to increase to about 200kilograms per head in coming years which is one of the reasons why BUA Cement is ramping up its investments in new plants to be able to meet this potential demand as well as take advantage of regional export opportunities through the African Continental Free Trade Area (AfCFTA) agreement which came into effect in 2021.

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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Finance

Bank of Ghana Holds Key Interest Rate at 13.5%

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Ghana’s central bank on Monday kept its main interest rate unchanged at 13.5% with concerns over rising inflation balanced out by optimistic Covid-19 recovery forecasts, Governor Ernest Addison said in a statement.

The Ghanaian economy grew by just 0.4% last year – its slowest rate since 1983. But it has gained ground in 2021, expanding 3.1% in the first quarter and 3.9% in the second.

The bank’s Monetary Policy Committee sees Ghana’s overall economic outlook continuing on an upward trajectory despite inflation having risen for a fourth month in a row in August.

“Developments continue to point to a sustained recovery in economic activity following the downturn at the peak of the pandemic,” Addison said.

“Given these considerations, and the fairly balanced risks to inflation and growth in the outlook, the committee decided to keep the policy rate unchanged,” he added.

Ghana’s consumer price inflation was at 9.7% year-on-year in August, with food inflation, the largest contributor to the country’s overall inflation rate, rising for a third straight month.

Although the inflation rate remains within the central bank’s targeted band of 8% plus or minus 2 percentage points, Addison cautioned that a close monitoring of the situation would be necessary to swiftly mitigate any impacts to local markets.

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Banking Sector

Stanbic IBTC: Working Towards Net Zero Emissions

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As part of the Stanbic IBTC 2021 Sustainability Week event, Stanbic IBTC Holdings PLC, a member of Standard Bank Group, organised a sustainability webinar tagged “Working Towards Net Zero Emissions”.

The objective of the virtual event which was held on Monday, 20 September 2021 via the Group’s #Bluetalks platform, was to promote public awareness on the impact of climate change and provide practical methods towards reducing carbon footprints and achieving net zero emissions.

Delivering his opening remark at the event, Dr. Demola Sogunle, Chief Executive, Stanbic IBTC Holdings PLC said: “We all cannot continue to ignore our responsibility in the current changes to the climate. Through small adjustments leading to a more conscientious and sustainable lifestyle, each one of us can take part in the global climate protection project. As reflected in one of our strategic value drivers SEE (Social, Environmental and Economic) Impact, Stanbic IBTC is focused on ensuring it does business responsibly whilst positively impacting the society and environment where we operate. As such, the 2021 Stanbic IBTC Sustainability Week is an opportunity for us to advance awareness around practical steps we are taking, and more which we can take, to make our world a better place.”

The webinar featured seasoned experts including Temesoye Jack, Group Head, Sales, Banks, Gas Stations and SMEs, Starsight Energy; Professor Kenneth Amaeshi, Chair in Sustainable Finance and Governance at the European University Institute (EUI) and Oluwasegun Olajuwan, Group Chief Executive Officer, THLD Group.

Temesoye Jack stated that renewable energy sources like solar energy can help countries attain net zero emissions. She said, “Solar energy can help us move towards reducing greenhouse emissions. We need to have more energy efficient offices nationwide. However, this shift will not happen overnight as it is a gradual process.”

She explained that Nigeria has barely scratched the surface when it comes to renewable energy and emphasised that sustainable practices do not have to end in the office but must be observed in all areas of the country

Prof. Kenneth Amaeshi highlighted the importance of harmonising technology upgrades and sustainable growth to reduce carbon emissions. He explained that sustainability at the global level is targeted at mitigating the adverse effects of climate change.

According to Prof. Kenneth, “From recent surveys, it is clear individuals are ready to go green. The affordability of clean energy will determine if we will be able to reduce carbon emissions.”

Speaking on practical steps that can be adopted to help in achieving net zero emissions, Oluwasegun Olajuwan, Group Chief Executive Officer, THLD Group, said “Autogas has been around for 40 years, and Nigeria is not fully embracing it. It is safer, cleaner and more cost effective than fossil fuel and diesel. Vehicle conversion from fuel to Autogas is affordable. CNG (Compressed Natural Gas) is more efficient than fuel. The use of CNG in vehicles mitigates the emission of nitrous oxide and hydrocarbons by 40% and 90% respectively, compared to petrol.”

Omolola Fashesin, Head of Sustainability at Stanbic IBTC, thanked the panellists for the informative session, which helped create awareness of alternative sources that can help reduce carbon emissions. She urged the participants to apply learnings from the webinar to take practical steps to reduce their carbon footprint.

Finally, in his closing remarks, Kunle Adedeji, Executive Director Finance and Value Management stated that “at Stanbic IBTC, we are committed to facilitating a better and more sustainable future for all. We have already commenced various workstreams that will help us on the journey towards Net Zero emissions. Some of these include understanding our energy sources, consumption patterns and possible areas for efficiency; adoption of cleaner energy sources in our office locations (leveraging Autogas and Solar energy solutions); and adoption of Tree Planting programs which will help us with carbon sequestration.”

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Loans

Credit to Private Sector Rises to N33.26 Trillion in August 2021

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The Central Bank of Nigeria (CBN) has disclosed that credit to private sector went up by N498.6billion in August to N33.26trillion from N32.8trillion reported in July 2021.

The N33.36trillion figure announced by the CBN is a new record that was fuelled by banks, among others increased lending to real sector.

CBN in its Money and Credit Statistics for the period revealed that credit to private sector in January was N30.65trillion and dropped by 0.47 per cent to N30.5 trillion in February.

However, in March, it closed at N31.44trillion and crossed the N32.1trillion mark in April to N32.12 trillion.

In addition, the CBN reported N32.63trillion and N33.36trillion credit to private sector May and June respectively.
Analysts believe banks lending to real sector played a critical role in the recent increase in Nigeria’s Gross Domestic Product (GDP).

An economist and Chief Executive Officer, BIC Consultancy Services, Dr Boniface Chizea said he is optimistic that banks credit to real sector, amid severe challenges are yielding positive results. According to him, “The volume of credit which seems humongous will deliver expected dividends despite perceived inhospitable investment environment. We should therefore remain confident and hopeful that desired impact must be felt if not immediately then in due course.

“We must also accept the fact that we would be challenged if we want to isolate the direct impact of the credit on the economy. So, we must remain assured that the credit is not money down the drain.”

On his part, Economist & Private Sector Advocate, Dr Muda Yusuf said the growth in credit to private sector is laudable.

He noted that the impact would depend on the sectoral spread, quality of credit, tenure of the funds and interest rate.

Yusuf said: “My guess is that a significant percentage of this have been given to large corporates, multinationals and high end medium enterprises. The CBN has done a lot in lending to agriculture, but the quality of the lending is an issue. Reports indicate high default rates in agricultural credit, especially the anchor borrowers’ scheme.

“Monetary intervention is imperative for real sector development. But it is not sufficient to guarantee the desired outcomes of growth and productivity. The context in which businesses are operating is as important as the funding, if not even more important. The totality of the investment environment must be right for sustainable real sector development to be achieved.”

He added, “Therefore, to complement the credit to the private sector, the other factors that should reckoned with include infrastructure quality, especially power, roads and railways. There are also issues around the quality of the regulatory environment, the foreign exchange policy regime, the ports situation, volatility of the naira exchange rate, the tax environment and the security situation.

“These are not things monetary intervention can solve. It takes an impactful fiscal policy intervention to fix these problems. Some of the issues border on economic reforms that need to happen. Engagements between the private sector stakeholders and policymakers is critical to achieving sustainable development of the economy.”

The Governor, CBN, Mr. Godwin Emefiele had in his communiqué at the end of August Monetary Policy Committee (MPC) meeting said the committee noted the improvement in lending to the real sector following the introduction of the Loans-to-Deposit Ratio (LDR) in 2019.

According to him, “Industry gross credit increased by N6.63 trillion from N15.57 trillion at end-May, 2019 to N22.20 trillion at end-July, 2021. The credit growth was largely recorded in manufacturing, oil and gas and agriculture sectors.”

He expressed further that the MPC members noted the unequivocal importance of credit growth to the sustained recovery of output and the moderation in price development as supply improves.

“It thus, called on the Bank to maintain adequate surveillance on banks to ensure compliance with its extant credit policy, while ensuring that they are not unduly exposed to credit risks.

“The Committee also noted the relevance of the Bank’s suite of interventions to the overall system credit, urging its continued use to fund sectors with high employment-generating capacity,” he said.

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