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IFC, African and European Partners Launch Alliance to Support Private Sector Growth in Africa

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To support a stronger private sector, entrepreneurship and the growth of small and medium-sized businesses across Africa, African, European, multilateral and bilateral partners today launched the Alliance for Entrepreneurship in Africa (AforE).

The Alliance will combine and focus the technical and financial strengths of its members to improve Africa’s business environment and support the growth and success of small and medium-sized enterprises (SMEs), women in business and young entrepreneurs. In addition to its core members, the Alliance aims to bring together multilateral and bilateral development banks, bilateral donors and African national development banks.

The Alliance was first announced at the Summit on Financing of African Economies in Paris in May 2021.

Alliance core members include the African Development Bank (AfDB); the European Bank for Reconstruction and Development (EBRD); the European Investment Bank (EIB); the European Development Finance Institutions (EDFI); the French Treasury; the International Finance Corporation (IFC) and Proparco, the private sector financing arm of Agence Française de Développement Group (AFD Group).

The launch of the Alliance comes as African economies recover and rebuild from the effects of the COVID-19 pandemic, with small businesses seen as important drivers of job creation, innovation and the delivery of essential goods and services.

The creation of the Alliance reflects the strong commitment of African, European, multilateral and bilateral institutions, in coordination with the African Union, European Commission and others, to bolster Africa’s private sector amid ongoing African and global economic challenges.

Alliance members today signed the working arrangement for the Alliance. IFC will serve as the Alliance Secretariat helping to coordinate the activities and operationalize the initiative in partnership with the French Treasury.

“Small businesses and entrepreneurs in Africa are drivers of inclusive growth, economic stability and resilience. Supporting their growth will be critical to creating jobs and helping Africa recover from the COVID-19 crisis. And the Alliance for Entrepreneurship in Africa stands ready to do that. IFC is proud to be part of this initiative, which deepens the partnership between international partners to give small businesses the support they need and deserve,” said Makhtar Diop, IFC’s Managing Director.

Solomon Quaynor, the African Development Bank’s Vice President for the Private Sector, Infrastructure and Industrialization, said: “Micro, small, and medium-sized enterprises are vital to Africa’s prosperity. They represent 90% of all businesses and generate more than half of all jobs. Supporting existing businesses and the ecosystem for entrepreneurs to create innovative new ones lies at the heart of our private sector development strategy. The African Development Bank is committed to the Alliance for Entrepreneurship in Africa. We want to ensure that African entrepreneurs have the means to thrive and can play an important part in solving Africa’s development challenges.”

Odile Renaud Basso, EBRD President, said: “The EBRD is committed to supporting financially and technically small businesses in the North African countries where it invests, Egypt, Morocco, Tunisia and soon Algeria. We offer an extensive suite of financial tools and advisory programme that we put at the service of small and medium enterprises and by joining forces with partners in Alliance we can archive a better impact on the economic growth of these countries.”

“Ensuring that African entrepreneurs and companies can access finance is crucial to accelerate growth and create jobs. Over the last two years EIB has been very active to support financial institutions that help SMEs particularly hit by the COVID-19 pandemic. We are pleased to be a core member of the Alliance for Entrepreneurship in Africa. This initiative combines the financial and technical strengths and local insight of African and international partners and together we can ensure a better future for African business,” said Ambroise Fayolle, European Investment Bank Vice President.

“The European DFIs welcome the opportunity to join hands with international and African partners to boost entrepreneurial growth in Africa. EDFI member institutions have been able to increase financing for SMEs across Africa, demonstrating our commitment to this important priority. The deeper collaboration through this new alliance can help mobilise even more investment in the inclusive development of Africa’s private sector,” said Søren Peter Andreasen, CEO at EDFI.

“Proparco is proud to count among the founding members of the Alliance for Entrepreneurship in Africa. Proparco has long been committed to supporting African entrepreneurs and will build on the expertise acquired through the French initiative Choose Africa to contribute to this new global Alliance,” said Gregory Clemente, CEO of Proparco.

“Last May, the international community gathered in Paris at the Summit on the Financing of African Economies to devise jointly actions that will help boost a strong and inclusive recovery in Africa, grounded in a dynamic private sector. Today, we are proud to deliver with the official launch of the Alliance for entrepreneurship in Africa, gathering prominent development partners to support private sector development in Africa, as the main driver for growth and job creation. We will remain committed in the implementation phase to deliver on the ground, mobilize additional financing, promote tangible and high value added projects developed by the Alliance core members, with the objective to effectively make a difference for African SMEs through innovative financial products,” said Mr. Emmanuel Moulin, Director General of the Treasury.

Through a private-sector focused cooperation platform, the Alliance will support the roll-out of new initiatives to expand financing options for Africa’s SMEs, which cite a lack of access to finance as a major constraint to growth. According to the World Bank, SMEs account for up to 90 percent of all businesses in sub-Saharan Africa and represent 38 percent of the region’s GDP. Prior to COVID-19, IFC estimated the funding gap faced by SMEs in the region at $331 billion.

In addition to financing projects, the Alliance will support reforms aimed at strengthening the business and investment climate across Africa and facilitate the growth of private sector initiatives in more sustainable green and digital sectors.

Banking and non-banking financial institutions, other public and private sector organizations (such as foundations, philanthropic organizations, venture capital firms), and business and innovation training providers (including incubators, accelerators, universities), may also join the Alliance.

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N1.3bn Fraud Allegation: Court Orders Arrest of Dana Air MD For Not Showing Up For Arraignment

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Mr. Hathiramani Ranesh

A Federal High Court in Abuja has ordered the arrest of the Managing Director of Dana Air, Mr. Hathiramani Ranesh for failing to appear in court for his arraignment in the alleged N1.3 billion fraud preferred against him by the Office of the Attorney-General of Federation (AGF).

The Federal Government had on October 10, 2024, asked the court to issue a bench warrant for the arrest of Dana Air after failing to honour invitation for his arraignment.

The AGF had filed a six-count charge against Ranesh and two others and marked Dana Group PLC and Dana Steel Ltd as the 2nd and 3rd defendants, respectively.

The prosecution argued that Ranesh and the two companies, along with others still at large, committed a felony between September and December 2018 at the DANA Steel Rolling Factory in Katsina.

They were accused of conspiring to remove, convert, and sell four units of industrial generators—three units Ht of 9,000 KVA and one unit of 1,000 KVA—valued at over N450 million. These assets were reportedly part of the Deed of Asset Debenture used as collateral for a bond, which remains valid.

The defendants and others at large were said to have conspired to fraudulently divert N864 million between April 7th and 8th, 2014, at House No. 116, Oshodi-Apapa Expressway, Isolo-Lagos.

This sum, reportedly part of the bond proceeds from Ecobank intended for revitalizing production at Dana Steel Rolling Factory in Katsina, was allegedly diverted for unauthorized purposes.

They were also accused of conspiring to transfer N60,300,000 to an Atlantic Shrimpers account (No: 0001633175) at Access Bank, fraudulently diverting funds earmarked as part of the Ecobank bond proceeds for resuming production at the Katsina factory.

The cumulative amount involved in the charge totals N1,374,300,000. Each offense is said to be contrary to and punishable under Section 516 of the Criminal Code Act, Laws of the Federation of Nigeria, 2004.

After Mojisola-Okeya Esho, counsel to the Federal Government, had requested for bench warrant to be issued against Ranesh, the defence lawyer, B. Ademola-Bello, disagreed with Esho, saying that they had filed a preliminary objection challenging the jurisdiction of the court to hear the matter and that the prosecution had already been served.

Delivering ruling on the application, Justice Obiora Egwuatu, agreed with Esho that Ranesh’s arrest was necessary due to his failure to appear in court despite being served with the charge and several proceedings having taken place.

Justice Egwuatu held that, according to Section 184 of the Administration of Criminal Justice Act (ACJA), 2015, the court has the authority to issue an arrest warrant against any defendant who fails to attend court sessions.

Egwuatu ordered that Ranesh must appear before the court on January 13, 2025, before any objections can be raised.

Consequently, he adjourned the matter till January 13, 2025, for hearing.

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Persistent Service Disruptions In Banks Paralyze Activities At Ports, Many Cargoes Trapped 

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Lekki Deep Seaport

Activities at the Apapa and Tin-Can Ports in Lagos State have been paralyzed as cargoes have remained uncleared following persistent disruption to some online services of some commercial banks in Nigeria.

It was gathered that the banks suffer network problems due to the upgrade of their electronic banking portals.

To this end, business moguls have been unable to pay the Customs duty necessary for the clearance of their cargoes at the ports.

A visit to the ports showed that many import units of containers have not been cleared because their clearance documents are still trapped in some banks due to ongoing network migration issues.

If the banking disruptions persist and cargoes continue to lie fallow at the ports, experts have said that prices of goods at Nigerian markets may soar.

Many persons who have been working at the ports have also been rendered jobless as activities at the ports remain in limbo.

Confirming the situation at the ports, the National President of the Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON), Mr. Frank Ogunojemite said many jobs are stuck because agents have been battling to settle payment part of their clearance schedules.

Ogunojemite revealed that the clearance of cargoes at the ports usually goes through Form M and the Pre Arrival Assessment Report (PAAR), said agents have to go through a commercial bank to pay their Customs duty before any clearance process can be done.

He said if the banking system or network is down, it will be impossible for Customs duty to be paid and that container will remain in the port accumulating rent which comes with storage and demurrage payments.

According to him, prices of goods may soar if the situation persists as cargo owners spend more for clearance if their containers spend longer time in the ports.

Preferring solutions, he called on government to introduce ‘compensatory law’ where importers are given waivers when delays to their cargoes inside the ports is not from them.

Also, haulage operators bemoaned the effect of the various banking migrations on picking of containers inside the ports.Persistent Service Disruptions In Banks Paralyze Activities At Ports, Many Cargoes Trapped

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Nigerian Businesses Face Tougher Times as PMI Drops to 19 Months Low of 46.9

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Nigerian businesses continued to face headwinds as the Purchasing Managers Index published by Stanbic IBTC shows a 19-month low. 

According to the report released on Friday, business conditions took a hit and PMI dipped from 49.8 points in September to 46.9 points, the steepest decline since March 2023.

For context, a PMI reading above 50 points indicates growth in business activity. Conversely, a reading below 50 points indicates contraction, suggesting deterioration consequent to an economic downturn.

According to the report, businesses faced pressures from the local currency weakening, higher fuel prices and increasing cost of transportation.

This has also forced the hands of businesses to increase prices to sustain operations, which the report stated has led to a reduction in new orders and business activity.

Most importantly, confidence in the business sector plummeted to the worst ever since the organisation started documenting PMI in 2014.

“Overall input costs rose at one of the sharpest rates on record, with selling prices increased accordingly. This resulted in marked reductions in new orders and business activity, while business sentiment was the lowest in the survey’s history,” the report read in part.

A positive light in the report was that some companies managed to add a few new hires, extending a six-month trend of job creation. The downside to this was that the companies employed these staff on a short-term basis.

The report also stated that companies are making efforts, now more than ever, to help their staff stay afloat in the current economic situation.

“Meanwhile, efforts to help workers with rising living costs meant that staff pay was increased to the greatest extent in seven months,” the report added.

Metrics like the private sector output, volume of orders, and quantities of purchases made by customers all recorded steeper values than they did in September.

Trends showed that prices, cost of staff maintenance and input prices, on the other hand, recorded very sharp increases, with some metrics posting record hikes since March 2023.

Inflation in the general Nigerian macro environment is telling in every quarter and businesses are not exempt.

Analysts told Investors King that special interventions will help ease the pressure on companies, but warned that risky conditions attached to these measures may scare off firms from accepting them.

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