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Nigeria’s Auto Industry to Import Less than 10,000 Vehicles in 2017, Says Ade-Ojo

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  • Nigeria’s Auto Industry to Import Less than 10,000 Vehicles in 2017, Says Ade-Ojo

Nigeria’s auto industry is expected to import and sell between 8,000 and 10,000 new vehicles this year, a figure that is lower than the 15,000 projected for last year.

The Managing Director, Toyota Nigeria Limited, Mr. Kunle Ade-Ojo, gave this figure at the company’s forecast for the Nigerian automobile industry in 2017 at Toyota’s quarterly briefing in Lagos on Monday.

The forecast, Ade-Ojo said, was based on the industry’s performance in the first quarter of 2017, adding that at the end of the first quarter of 2017, total import figures for the nation’s automobile industry from the nation’s ports came to about 350 units, compared to about 3,500 units that came in at the same time last year.

He said the data showed that “imports dropped by about 90% between 2016 and 2017 Q1. In terms of retail sales, we are estimating, based on the information we have, that the auto market did about 2,000 vehicles compared to about 5,000 vehicles that were sold in Q1 of 2015, bringing it to a drop of over 50% when you look in terms of retail sales”.

In terms of market share, he said: “Toyota had a share of about 22-23% of Q1 sales, generally”.
“But forex continues to be a major challenge and interest rates have gone up,” he added.
He explained that along with the dollar scarcity, “so also the naira is pretty much scarce and banks’ interest rates have gone up.

“Even though the exchange rate has moderated from a high of about N520 to the dollar and is trading at about N400 to the dollar, it is still not available,” he added.

Also providing figures on the performance of the industry in 2016, Ade-Ojo said: “In terms of sales, retail sales went from about 32,000 cars in 2015 to about 18,000 last year. So the market dropped by about 42%.”

He said Toyota Nigeria Limited “went down from about 8,000 cars in 2015 to slightly over 4,000 in 2016. So we had a drop of about 35%”.

Regardless of this, he said: “We grew our share from 24% in 2015 to about 26% in 2016.”

Reviewing imports in the same period, he said car imports dropped by about 60%, from about 18,000 in 2015 to just close to 7,000 in 2016.

“Of course in terms of our share of the imports, we had about 43% in 2015 and that dropped to about 38% in 2016,” he stated.

He said this was basically as a result of different sub-groupings, different manufacturers or auto distributors in the country and “in addition to that, the scarcity of forex affected businesses last year and that caused a major reduction in importation”.

According to him, the devaluation of the naira also affected sales last year, saying: “Whereas in the first half of 2016 the naira was about 200 to the dollar, by the end of the year it had doubled.

“So prices of vehicles also pretty much doubled and a lot of businesses could not afford to pay for the increase. We at TNL are struggling to survive.

“A lot of companies had to retrench their staff last year as a result of the tough economic situation.”

The Toyota boss said companies had to prioritise on what they would spend their limited funds on.
“Vehicles, you know are luxury items, except for the ones that are used for business, which are commercial vehicles and that is why commercial vehicles did way much better last year, at about 70% to 30% in terms of the ratio to passenger vehicles.

“Passenger cars reduced in sales more than commercial cars and of course when you look at the duties on passenger cars also at 70% compared to 35% for commercial, the impact is more on passenger vehicles,” he explained.

Also, he said companies had increased the number of years that their staff use their vehicles. “Normally, it used to be for four years, but now companies have taken it up to between five and six years before they will consider changing or replacing their staff vehicles,” he explained.e explained.

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 long experience in the global financial market.

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Warren Buffet to Give Out Another $2.9bn, Total Donations Now $37bn

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Warren Buffett's Donations

Warren Buffet Gives Away $2.9bn, Total Donations Now $37bn

Oracle of Omaha, Warren Buffet, has announced his yearly charitable donations to the five philanthropies he picked to donate most of his fortune to.

The billionaire plans to give out 15.9 million class B shares of Berkshire Hathaway worth $2.9 billion to the five philanthropies. This will bring his total philanthropic donations to $37 billion since 2006.

Warren Buffett

Buffet, who has promised to give away about 99 percent of his fortune, still hold 248,734 Class A shares of Berkshire valued at around $67.5 billion.

However, before he began given out his shares, Oracle of Omaha held 474,998 Class A shares of Berkshire, which would have worth about $129 billion as of today.

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UBA Appoints Ayoku Liadi, Oliver Alawuba as Deputy Managing Directors

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UBA Appoints New Deputy Managing Directors for its Growing Business

United Bank for Africa Plc (UBA) announced the appointments of Ayoku Liadi and Oliver Alawuba as the Deputy Managing Directors in charge of UBA’s Nigeria and Africa businesses, respectively.

In a statement issued by the bank and released on the Exchange’s website, the bank said the creation of the new positions represents further strategic recognition of the bank’s pan-African business growth.

The lender explained that its pan-African business now accounts for over 40 percent of its Group revenue, while Nigeria remains the bank’s largest market.

According to the bank, the new Deputy Managing Directors will report directly to the Group Chief Executive Officer (CEO), Kennedy Uzoka.

Speaking on the new appointments, Tony O. Elumelu, Group Chairman, said “In 2005, we set out our pan-African vision. Fifteen years later, we are present in 20 African countries, serving over 20 million clients, leveraging our service culture and technology platform, to provide an integrated and seamless customer offering across the continent.

“In Africa, we lead in innovation and service, whilst our International Business, operating from New York, Paris and London, provides global and African clients access to treasury, trade finance and corporate banking products, uniquely tailored to the African opportunity. These senior appointments represent our commitment to optimise our management structure to best serve our clients and drive our business success.”

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West African Consumer Sentiment Reflects Global Uncertainty

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Ghanaian Consumer Confidence Declines by 15 Points

Lagos, 7 July 2020 – Against the backdrop of the unprecedented COVID-19 pandemic, West African consumer sentiment has experienced a sharp drop in the Nielsen Consumer Confidence Index (CCI) for Quarter 2, 2020. Ghana’s figures show a substantial decrease of 15 points to 104, while Nigeria’s CCI has decreased by 14 points to 108.

Looking at Ghana’s performance, Yannick Nkembe, Market Lead for Nielsen West Africa Expanded Market, comments; “The latest consumer sentiments reflect the market reality. With the global pandemic affecting the economy and causing general uncertainty all around, consumers have readjusted their confidence levels and are also more cautious with their spend.”

Ghanaians have significantly dropped their outlook around  their job prospects, with less than half (45%) saying they will be good or excellent in the next 12 months – a 16 point decrease from the previous quarter. In terms of the state of their personal finances over the next 12 months, 60% say they are excellent or good, again a substantial 16 point drop from the previous quarter.

Ghanaians propensity to purchase has also seen a considerable decrease quarter on quarter, with the number of those who think now is a good or excellent time to purchase what they want or need drop from 52% to 33% in the second quarter.

Only 43% of Ghanaians say they have spare cash, down 13 points from the previous quarter. Once they meet their essential living expenses, the highest number of consumers (74%) put their spare cash into savings, followed by 73% on home improvements/decorating and 56% who would invest in stocks and mutual funds. One of the most significant drops in discretionary spending is on holidays down from 58% to 27% – a clear indicator of consumers’ mindset shift away from non-essential services and their desire to avoid unnecessary travel.

Reality bites

When asked whether they had changed their spending to save on household expenses compared to this time last year, 75% said yes, up seven points from the previous quarter. To reduce expenses, 53% said they spent less on new clothes, 52% on out of home entertainment, with the same figure deferring on the replacement of major household items.

When looking at the real-life factors that are affecting their outlook, the top consumer concerns over the next twelve months were increasing food prices (29%), followed by work/life balance (23%) and their children’s education (22%). Nkembe comments; “Ghana has previously experienced strong business prospects and with the relatively earlier easing of restrictions to stimulate its economy, recovery in Ghana is likely to rebound sooner. We expect consumers to revert to previous consumption behaviours, although some of their attitudes will have fundamentally or permanently changed post the pandemic.”

Subdued sentiment in Nigeria

In tandem with the rest of the world, Nigeria’s CCI figure dropped by 14 points. Commenting on the reasons for this, Nielsen Nigeria MD Ged Nooy says; “As Africa’s largest economy and the largest exporter of oil, Nigeria’s economy was already under immense pressure before the COVID-19 lockdown due to the collapse in international oil prices. Based on the additional economic pressure as a result of the COVID-19 pandemic, Nigeria, therefore, instituted a fairly early easing of its 5-week lockdown in early May due to the adverse financial effects on its economy and population.”

Looking at the consumer picture during this time (Quarter 2, 2020) Nigerian job prospects declined with less than half viewing them as excellent or good, a 14 point drop from the previous quarter. Nigerians’ sentiment around the state of their personal finances also showed a decline with 59% who think they will be excellent or good over the next year, having decreased 19 points from the previous quarter. Immediate-spending intentions also declined, with only a third of the respondents saying “now is a good or excellent time to purchase” what they want or need, a 14 point drop from the previous quarter.

In terms of whether Nigerians have spare cash to spend, 32% said yes, versus 50% in the previous quarter. When we look at Nigerians spending priorities, once they have met their essential living expenses, 81% said they would put their spare cash into savings, 73% said home improvements and decorating and 66% would invest in shares/mutual funds.

Seventy-six per cent of Nigerians said they had changed their spending to save on household expenses compared to this time last year. To reduce expenses, 67% said they had delayed the replacement of major household items (a 10 point increase on the previous quarter). Sixty-four per cent said they would spend less on new clothes and 56% said less out of home entertainment – both of which are understandable given ongoing restricted living patterns.

In the next 12 months, Nigerians said their top concern would be attaining a work/life balance (31%), which has seen the biggest increase of eight points compared to the previous quarter. This is followed by increasing food prices (23%) and concerns over the economy (19%).

Elaborating on these results, Nooy says; “Economic recovery has been sluggish and will remain severely constricted due to the oil price crash amidst and beyond the pandemic. For Nigeria’s manufacturing and retail sectors to rebound will require a sharp focus, as trade opportunities and execution remains severely constrained, having further deteriorated during the partially restricted living period.”

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