Business

767 manufacturer’s shutdown in 2023 — MAN

Published

2 months ago

March 7, 2024

The Manufacturers Association of Nigeria (MAN) has said that 767 manufacturers shut down operations while 335 became distressed in 2023.

This came against the backdrop of exchange rate volatility, rising inflation and other economic challenges that have worsened the investment climate.

MAN stated this in a statement in which it condemned the recently introduced Expatriate Employment Levy by the Federal Government.

The association said it was struck with disbelief, seeing that the levy runs contrary to President Bola Tinubu’s Renewed Hope Agenda and the kernel of his Fiscal Policy and Tax Reform initiative.

According to MAN, the unintended negative consequences on the manufacturing sector are humongous and cannot be accommodated at this time of evident downturn in our economy.

The statement read in part, “The imposition of EEL poses a potential impact on the manufacturing sector and the economy at large.

“This will in turn mark an unwarranted and unprecedented addition to the cost of doing business in Nigeria, especially to manufacturers. The manufacturing sector is already beset with multidimensional challenges. In the year 2023, 335 manufacturing companies became distressed and 767 shut down.”

The statement further noted that capacity utilisation in the sector has declined to 56 percent amid rising interest rates and scarcity of forex needed to import raw materials and machinery.

It added, “Inventory of unsold finished products has increased to N350bn and the real growth has dropped to 2.4 per cent.”

MAN also said it was concerned that the EEL contradicts our international trade agreements and the obligations contained therein.

It argued that Nigeria is a signatory to the African Continental Free Trade Area agreement, which seeks to promote the free movement of skilled labour across the continent, which is complemented by non-discriminatory measures against fellow Africans.

The association expressed worry that the introduction of the levy could trigger retaliatory measures against Nigerians working across Africa and other nations of the world and may also frustrate regional integration efforts and portray Nigeria as a spoiler among her peers.

“We are equally worried that the imposition of such a levy could have far-reaching implications for our national economy and potentially exert pressure on our national currency could be introduced through a Handbook, rather than a law enacted by the National Assembly.

“This levy, if not reversed, might expose the Federal Government to a plethora of lawsuits that would distract the Government from the task of salvaging the current dire situation of our economy,” the statement added.

In its recommendation, MAN urged the president to direct that the implementation of the Expatriate Employment Levy be discontinued.

The Expatriate Employment Levy, a new policy introduced by the Federal Government aims to address wage gaps between expatriates and the Nigerian Labor force while encouraging skills transfer and the employment of qualified Nigerians in foreign-owned companies.

The new levy is $10,000 for staff and $15,000 for directors. This represents a significant shift from the $2,000 paid by foreign nationals for the Combined Expatriate Residence Permit and Alien Card.

According to NBS, Nigerian nationals constitute only 59 percent of total jobs in Nigeria, their wages account for less than 45 percent of total wages, and the average basic salary of expatriates stands at more than 45 percent above the basic salary.

However, the introduction of the EEL has been met with strong criticism from members of Nigeria’s Organised Private Sector, who argue that the policy may negatively affect Foreign Direct Investments in the country.

In a statement signed by its Director-General, Chinyere Almona the Lagos Chamber of Commerce and Industry said it is concerned about the likely perception by foreign investors that the Nigerian government is not accommodating to foreign workers.

The chamber expressed concern that this perception would be harmful to our drive for Foreign Direct Investments inflows.

“The Expatriate Employment Levy may cause unintended consequences that may trigger the relocation of foreign companies to neighbouring countries that present a more conducive and less expensive environment for business.

“The imposition of this levy may likely spark retaliatory actions taken by other countries by imposing levies on foreigners and particularly targeting Nigerian workers. This will in turn affect diaspora remittances from Nigerian workers resident in other countries.”

In the same vein, the Centre for the Promotion of Private Enterprise, in a statement signed by its Chief Executive Officer, Muda Yusuf, criticised the new policy directive.

The Centre said that the policy could be a major setback for the continental economic integration vision.

The statement read, “There are serious implications for diaspora Nigerians. The policy may trigger reciprocal actions from other countries and this may affect Nigerians in the diaspora.

“There are currently over 17 million Nigerians in various countries around the world doing extremely well in the fields of education, medicine, health, sports, media & entertainment, leadership & politics, finance, science & ICT, transportation, tourism, industry and agribusiness.”

Business

Odu’a Investment declares N1.961bn profit, up 62%

Published

8 hours ago

May 3, 2024

Walewale

By Atokolo Emmanuel Adejo

Odu’a Investment Company Limited, at its 42nd annual general meeting, has declared N1.961 billion profit before tax.

The 42nd annual general meeting of the erudite Odu’a Investment Company limited was held at the Oranmiyan Hall, Lagos Airport Hotel yesterday. Present at the meeting were stakeholders and SSGs to the six South Western states that make up the Odu’a.

The group chairman, Otunba Ashiru, said the company had gained a modest seven percent growth in Operating Revenue which stood at N3.68 billion in 2022 and glided upwards to N3.95 billion in 2023 despite the volatility in the economy in 2023. In view of this, the company announced a significant N1.961 billion profit before tax. In the cause of the meeting, the stakeholders approved the resolutions brought forward by the board and also the company’s financial statements for the financial year. It was also agreed that a cash dividend be paid to the stakeholders.

The Group chairman was careful to point out the most notable events in the said year under review were the commissioning of the Phase 1 Westlink Iconic Villa in Ibadan that housed 67 residential units of three bedroom apartments, 4 and 5 bedroom state of the art duplexes, launching of the Odu’a Investment Foundation and its flagship, Educational Intervention Project tagged Digital Education For Innovation And Economic Development.

The high point was when an applause filled the air when he announced that they received the first ever rating in the year under review as Augusto and co after a scrutinised audit awarded the company with an ‘A’ Rating with a stable outlook which was credited to its “deft management and also good operating cash flow supported by its diversified income streams and portfolios of subsidiaries and associates.”

The Group Managing Director/CEO, Mr Adewale Raji, was emotional as he announced he will be retiring on the 31st of May, 2024 after being a solid foundation in upholding the interest of the stakeholders for 10 years as a result of serving two successive terms. In his statement, he noted that Mr Abdulrahman Yinusa will be taking over the mantle of overseeing the management of the esteemed company.

He further said that the recorded success they achieved was solely due to the fact that the team and stakeholders he worked with shared a common interest and that was business. One of the stakeholders in his testimony of the retiring Group Managing Director stated that Mr Raji was not interested in political gains while serving and this helped curb issues that may have arisen due to political party crisis in the company.

The outgoing MD noted that it was not all rosy during the 10 years but with good colleagues and words of encouragement from stakeholders helped him pull through, he also not forgot to mention the support and prayers of his wife and family. According to him, a key strategy modeled for 2025 which is SRC (Sweat, Revive, Create). It was aimed at modeling the company to be a lean non operating investment holding company that focuses on Real Estate, Hospitality, Financial Services, Agriculture, Energy/ Power, ICT/Digital, Logistics/e-commerce, Health Care/Pharmaceuticals.

According to him, he noted that, “in real terms, OICL Profit Before Tax for 2023 actually increased by 62 percent to N1.772 billion from N1.092 billion in 2022 if we strip off Revaluation Gains arising from our Investment Properties portfolio in both years. He also recounted that the financial year 2023 will be the 10th consecutive year that the company will be paying dividends to Shareholders with the cumulative amount paid in this past decade amounting to N3.11 billion.”

In his closing remark, he expressed full confidence when stating that the management of the company is in safe hands in the person of Mr Abdulrahman Yinusa, noting that he has the capacity to further take the company to greater heights.

The stakeholders were also full of praise for the outgoing MD and the Emeritus Chairman, Mr Segun Aina for anchoring the company steadily and appealed to them not to shy away from activities that involve Odu’a.

The Chairman, when asked by our reporter how FX negatively impacted business for them and how they were able to stay afloat, responded by saying they FX was a general issue but they ensured that their portfolios had enough funds in it that will keep them going, he also encouraged the stakeholders to strengthen their portfolios financially.

Business

Flour Mills among top gainers as investors make N303bn

Published

8 hours ago

May 3, 2024

Walewale

Investors in the Nigerian equities market went home with N303 billion after the bourse resumed from the Workers Day holiday on Thursday.

The Federal Government declared Wednesday a public holiday to mark the May Day celebration across the country.

The rise in market capitalisation followed the growth in share prices of Presco Plc, Flour Mill, Sterling Bank, and Dangote Sugar, amongst others at the end of trading today.

After five hours of trading at the capital market, the equity capitalisation increased to N55.8 trillion from N55.5 trillion posted by the bourse on Tuesday.

Similarly, the NGX-All-Share Index (ASI) increased to 98,762.78 from 98,225.63 recorded the previous trading day.

The market breadth was positive as 28 stocks advanced, 14 declined, while 78 others remained unchanged in 8,446 deals.

Presco Plc and Flour Mill led other gainers with a 10 percent growth in share price to close at N229.90 and N33.55 from their previous prices of N209.00 and N30.50 per share.

Sterling Bank and Dangote Sugar also raised their share prices by 9.98 percent, and 9.90 percent respectively.

On the flipside, NASCON led other price decliners as it shed 9.99 percent off its share price to close at N47.30 from the previous N52.55 per share.

UPL, OMATEK, and NEIMETH completed the list of losers in today’s trading with -9.29 percent, -9.21 percent, and -9.09 percent dip in their share price respectively.

On the volume index, Abbey Mortgage Bank traded 362.820 million shares valued at N907 million in 16 deals followed by Access Corporation which traded 54.466 million shares worth N954 million in 980 deals.

Veritas traded 38.748 million shares valued at N230.56 million in 103 deals.

Access Corp recorded the highest value for the day, trading stocks worth N954 million in 980 deals followed by Abbey Mortgage Bank which traded equities worth N907 million in 16 deals.

Nigerian Breweries traded stocks worth N802 million in 191 deals.

Business

NGX: ASI, market cap record gains

Published

8 hours ago

May 3, 2024

Walewale

The NGX All-Share Index (ASI) on Thursday advanced by 0.55 percent to close at 98,762.78 basis points.

This is compared to the previous day’s gain of 0.35 percent to close at 98,225.63 basis points. The NGX Market CAP also recorded a gain of N303.79bn Naira terms.

The total volume traded advanced by 20.46 percent to close at N665.20m, valued at N5.54bn and traded in 8,446 deals. ABBEYBDS was the most traded stock by volume, with N362.82m units traded, while ACCESSCORP was the most traded stock by value, with N954.62m units traded.

The Gote Index advanced by 0.27 percent to close at 345.08 basis points, The Toni index advanced by 1.24 percent to close at 1,306.33 basis points, while the Samad index closed flat with 326.45 basis points.

At the close of trading, the market recorded 29 gainers, 14 losers, and 81 unchanged. FLOURMILL topped the gainers’ list, while NASCON topped the losers’ list.

The value chart also revealed that ACCESSCORP contributed the most, with a 17.23 percent share. ABBEYBDS and NB followed closely behind.