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Remittances to African Economies Dip at 6.1% to $33b

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  • Remittances to African Economies Dip at 6.1% to $33b

World Bank Statistics have shown that remittance to African countries have declined by an estimated 6.1 per cent to $33 billion.

The figure, which was for last year, was triggered by slow economic growth in remittance-sending countries and a decline in commodity prices.

It said rising sources of income for Africans are being realised through remittances, which have been observed as important aspect that impacts lives as well as brings about economic growth and development on the continent.

The theme of remittances was discussed by researchers and economists at the 12th African Economic Conference in Addis Ababa, Ethiopia, titled: “Financing Arica’s Development–Remittances and Natural Resources”.

A researcher from the University of Lagos, Taiwo Ojapinwa, said although remittances to Africa have recently declined, they still constitute a major component of income to households and investments compared to other external revenue flows.

“There is now need to find ways on how remittances can directly contribute to economic growth, which for decades have not been the case. There is need to have strong institutions and rule of law because the amount of remittances a country receives can be influenced by the quality of governance,” Ojapinwa said.

He added:“Remittances’ contribution to the economy can also depend on the protection of property rights, strong judicial independence, well-organised labour markets, low levels of corruption and a sound macroeconomic environment.”

His fellow researcher, Raphael Babatunde from the University of Ilorin, added that remittances have become a major livelihood strategy among African households – and that this source of income helps to supplement agricultural incomes for many farmers.

“Remittances sent by migrants are important in fighting nutrition, poverty and food insecurity. They are believed to have a huge impact on the socio-economic conditions of families left behind in the countries of the migrants’origin,” he said.

He added:“Although agriculture remains the most important single source of income for many communities in Africa, farming households that receive remittances have a slightly larger share of income than those that do not receive remittances.”

A Professor of Economics at the University of Leeds, Malcolm Sawyer, in his submission on the research papers, said although remittances have been fundamental in changing lives, their impact in Africa is affected by high costs imposed on migrant remittances.

“The remittances to Africa are not being used as efficiently as possible, largely due to high charges. Basically, sending money to Africa is a bit expensive, probably the costs are among the highest in the world,” he said.

He continued:“Policy-makers in individual countries and region should be looking at how these costs can reduce and how these financial flows can be exploited to boost growth and the socio-economic development of their people.”

The Chief Renewal of Planning Section at the United Nations Economic Commission for Africa (ECA), Bartholomew Armah, added that African governments should continue to introduce measures to attract Diaspora investments at home by offering them incentives and reducing remittance charges.

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.

Finance

Investors Oversubscribed for FGN Bonds by N205.87 Billion in October

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bonds

FG October Bonds Oversubscribed by N205.87 Billion

The Debt Management Office (DMO) has said investors oversubscribed for the Federal Government’s October bonds by N205.87 billion.

The DMO stated this after concluding the monthly FGN bonds auction on Wednesday.

Two instruments of 12.5 per cent FGN March 2035 re-opening 15-year bond and 9.8 per cent FGN July 2045 re-opening 25-year bond were auctioned.

The two bonds of N15bn each with a total auction figure of N30bn received a subscription of N235.87bn.

The 15-year tenor and 25-year tenor bonds received 99 and 67 bids but recorded 21 and 26 successful bids respectively.

The amounts allotted for each of the bids were N20bn and N25bn respectively.

According to the DMO, successful bids for the 15-year tenor bond and 25-year tenor bonds were allotted at the marginal rates of 4.97 per cent and six per cent respectively.

However, it added, the original coupon rates of 12.5 per cent for the 12.5 per cent FGN March 2035 bond and the 9.8 per cent for the 9.8 per cent FGN July 2045 bonds would be maintained.

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Lafarge Africa Sustains Growth in Third Quarter, Reports N53.3bn Revenue

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Lafarge Africa

Lafarge Africa Grows Revenue by 31.4 Percent to N53.3bn Revenue in Q3 2020

Lafarge Africa Plc, a cement manufacturer headquartered in Lagos, sustained its strong growth in the third quarter (Q3) ended September 30, 2020.

In the company’s financial results released on the Nigerian Stock Exchange on Friday, the cement manufacturer’s revenue rose by 31.4 percent from N45.172 billion posted in the third quarter of 2019 to N59.337 billion in the third quarter of 2020.

Similarly, operating profit grew by 7.2 percent from N7.746 billion in the corresponding quarter to N8.302 billion in the quarter under review. This strong performance continues across the board as net income expanded by 2.8 percent to N4.867 billion, up from N4.734 billion posted in the third quarter of 2019.

Lafarge earnings per share rose by 2.8 percent to 30 kobo in the third quarter, again up from the 29 kobo posted in the same period of 2019.

On the outlook for the company going forward, the company said:

 Market demand is expected to remain strong in Q4.
 Naira devaluation and inflation remain a concern in Q4.
 The implementation of our “HEALTH, COST & CASH” initiatives would continue to deliver
improvement in our performance.
 We will maintain a healthy balance sheet.

Speaking on the company’s performance, Khaled El Dokani, CEO, Lafarge Africa Plc, said “Our robust results for the first 9 months reflect the strong recovery of the demand in Q3 and the successful implementation of our “HEALTH, COST & CASH” initiatives. Both have delivered considerable improvement in recurring EBIT, net income and free cash flow, despite the impact of the COVID-19 pandemic and Naira devaluation, particularly in Q3.

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Finance

Despite COVID-19 Pension Assets Hit N11.4 Trillion

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pension funds

Total Pension Assets Expand to N11.35 Trillion

The National Pension Commission has revealed that the total pension assets rose to N11.35 trillion as of the end of August 2020 despite the COVID-19 pandemic that disrupted businesses and economic productivity.

According to the latest figures from the National Pension Commission,  the commission assets expanded from N11.08 trillion in June 2020 to N11.3 trillion in July.

The report noted that 66.27 percent or N7.51 trillion of the funds had been invested in the Federal Government’s securities.

While some of the funds were also invested in domestic and foreign ordinary shares, corporate debt securities, local money market securities and mutual funds.

In the commission’s second quarter (Q2 2020) report, it said that following “the issuance of demand notices to some defaulting employers whose outstanding pension contribution liabilities had been established by recovery agents, 16 of the affected employers remitted N261.33 million during the period.

“PenCom said this represents a principal contribution of N152.79 million and penalty of N108.54 million during Q2 2020.”

In the commission’s Q2 2020 report, it said “the pension fund administrators (PFAs) 2,839 contributors under the micro pension plan, remitted a total of N7.4 million to the RSAs as pension contributions.

Also in the same quarter, it said the PFAs recaptured 56,990 RSA holders and uploaded their data to the enhanced contributory registration system (ECRS).

PenCom further said the growth in the industry’s membership was driven by the RSA scheme, which had an increase of 41,147 contributors, representing 0.46 percent.

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