Economic & Business Monitor April 2013 - Odu'a Investment
Transcript of Economic & Business Monitor April 2013 - Odu'a Investment
T he Group Managing Director,
Odu’a Investment Company Limited,
Mr Adebayo Jimoh, has said that the
Sketch Newspaper is not ‘dead’ but
only resting and waiting for the mes-
siah to raise it up, just as he prom-
ised to implement the recommenda-
t ions of the Odu’a/Ex -s taf f
of Sketch Reconciliation Committee.
Mr. Jimoh disclosed this dur-
ing a formal presentation of the re-
p o r t o f O d u ’ a / E x - s t a f f
of Sketch Press Limited Reconcilia-
tion Committee to him at the Cocoa
SKETCH I S NOT “DEAD BUT REST ING”
Domestic economic update
AN OUTLOOK ON THE NAT IONAL INFLAT ION
ODU’A INVESTMENT COMPANY LIMITED
Economic & Business Monitor
Volume 1, Issue 15
Apr i l 2013
FIRST QUARTER 2013
EDITION
INSIDE THIS ISSUE
Global
economic 2
update
Domestic
Economy 3-4
update
An Outlook
on the 5
National
Inf lat ion
Business
update on 6-7
Subsidiary /
Associate
Companies
Macro
Economic 8
Indicators
House, Ibadan, on March 19, 2013.
He said that the Management of Odu’a was
only waiting for the right investor, which he
believed would come very soon, to invest in
the defunct Sketch Newspaper
T he nation’s first quarter (Q1) 2013 economic review may have shown a mixture
of strength and weakness, with inflation level at single digit being sustained in the
period.
Available data showed that inflation stayed put in single-digit through the
quarter, starting at a four-year low of 9.0% in January and rising minimally to 9.5 per
cent in February, then down to 8.6 per cent for March.
Nigeria’s fiscal deficits as a percentage of Gross Domestic Product (GDP) also re-
mained below the recommended international benchmark of 3.0%
Provisional growth in GDP is put at 7.1 per cent, a feat in the right direction
to achieve National Bureau of Statistics’ 6.75 per cent growth projection for 2013.
According to the report from PearMutual Consulting Limited, “there was a notewor-
thy increase in the nation’s foreign reserves from the previous quarter; closing at
$48.57 billion (+9.9 per cent) from $44.18 billion in fourth quarter of 2012 and
+24 per cent over Q1 of 2012.”
Continue on page 6
Continue on page 5
GLOBAL ECONOMIC UPDATE Volume 1, I ssue 15 Page 2
Global economic conditions have slight-
ly improved during the past three
months. Advanced economy policymak-
ers successfully defused two of the big-
gest short-term risks to global activity—
the threat of a euro area breakup and a
sharp fiscal contraction in the United
States. Financial markets have rallied in
response, and financial stability has
improved, according to the IMF’s latest
World Economic Outlook (WEO).
The United States of America
U.S. had mounted an impressive re-
bound from last year's slowdown — real
GDP expanded by a 2.5% annualized
rate in the first quarter of 2013 — build-
ing upon a consumer and business re-
vival supported by the recovery in hous-
ing activity and industrial orders. A virtu-
ous cycle of improving employment con-
ditions and rising home prices helped
boost household wealth and under-
pinned consumer spending. However,
even with the rebuilding effort in the
wake of Hurricane Sandy,
the U.S. momentum faded
by the end of the quarter.
Increasing uncertainty
surrounding a myriad of
p o t e n t i a l l y g r o w t h -
dampening international
developments, a deterio-
ration in net trade as imports bested
exports, and rising taxes alongside in-
creasing federal spending restraint
combined to drag on the pace of overall
economic activity.
China
Similarly, China's output growth expand-
ed by a relatively solid 7.7% y/y in
13Q1, but it was unable to sustain the
pick-up in activity recorded in the final
three months of 2012. The contribution
from net exports has been reduced
against the backdrop of much slower
the euro zone intact, has fallen out of
fashion. The conundrum is that there
is no easy or definitive course of reme-
diation. Austerity adjustments, heavier
on tax hikes and lighter on spending
cuts, have depressed growth because
the euro zone nations have had to rely
primarily on internal devaluation, not
currency devaluation, to realign com-
petitiveness and to eventually restore
a current account surplus.
Other Advanced Economies
Underlying weakness in the U.K. per-
sists, while Japan is posting marginal
gains. Subdued economic activity in
the once growth leaders of Canada,
Singapore, and South
Korea has become
more visible. Gains in
India and Brazil remain
lacklustre and well
below recent potential.
Even the twin locomo-
tives of the global
economy, the U.S. and
China, underper-
formed in the first three months of this
year, registering gains that were good
but below expectations.
The critical issue confronting the
global economy is the inability to
generate and sustain a stronger
pace of growth. There are many
reasons — fiscal restraint in the
advanced economies, structural
adjustments in many of the emerg-
ing market economies, ongoing
consolidation and re-regulation in
the financial sectors hardest hit by
recession and capital losses, indus-
trial restructuring to boost competi-
tiveness, weather-related disrup-
tions, or the caution induced by
recurring geopolitical risks.
www.imf.org, www.businesday.com
www.scotiabank.com
global growth and the rising trend in
imports. In addition and more fundamental-
ly, a changing competitive landscape re-
flects rising wage and other domestic pro-
duction costs that are constraining export
earnings. Other restraining factors include
the uncertainty surrounding the political and
economic handover to the new Chinese
leadership, as well as a reluctance to ag-
gressively inject more stimulus. Even so,
China's global growth-leading performance
continues to benefit from the continuing
buoyancy in consumer spending, housing
activity and infrastructure expenditures.
Euro Zone
The flashpoint, however, is the euro zone,
where a growing backlash to
'austerity-heavy' policies is gain-
ing momentum. Even though
there are some incremental
signs of economic progress in
the beleaguered region — the
re-emergence of a primary
budgetary surplus in Italy and
considerable progress in Portu-
gal and Greece, declining unit labour
costs that are helping
to boost competitive-
ness, and a revival in
goods exports in
Greece, Italy and
Spain — persistent
recessionary condi-
tions and the steady
rise in unemployment are increasing the
degree of social distress and unrest. The
recent election in Italy and leadership losses
incurred by the austerity-leaning techno-
crats, and the plummeting opinion poll re-
sults of elected officials in other countries,
highlight the growing public backlash. The
'short-term pain for long-term gain' policy
prescription favoured by the IMF, the EU,
and Germany (the region's benchmark for
fiscal probity), which had been implemented
along with other measures to resolve the
sovereign debt crisis and keep the euro and
GLOBAL ECONOMY: BETTER BUT STILL
BUMPY AND DIVERGENT AS AT Q1
2013
DOMESTIC ECONOMIC UPDATE NIGERIA SIGNS MOU WITH CHINA ON
SKILLS, TECHNOLOGY TRANSFER
T he Federal Ministry of Trade
and Investment and Sanshui
District Bureau of Economy, Science
and Technology Development Pro-
motion in China have signed a
Memorandum of Understanding,
MoU to facilitate the transfer of
skills and technologies.
The MoU includes a trade coopera-
tion agreement between many of
the factories sited at the industrial
park within the Sanshui Economic
Development Zones and Nigeria
with a promise by many of the pro-
cessing industries to open offices in
Nigeria before the end of the year.
The minister of Trade & In-
vestment has further reiterated
that plans to achieve technologi-
cally sound industrialized Nigeria
remained unwavering.
The chief facilitator of the
business meeting, Mr. Williams
Wang said: “This event is just the
beginning of activities which will be
held by “Africa Investment Net” this
year to promote investment in Nige-
ria
DAWN OF A NEW ERA AS NIGERIA
EMBRACES MOBILE NUMBER PORT-
ABILITY
It is official now that telecom sub-
scribers on the four GSM networks
in Nigeria can change their numbers
every 90 days. Following the flag off
of the mobile number portability
scheme by the National Communi-
cations Commission (NCC). At a cer-
emony in Lagos featuring the tele-
com firms. Members of the National
Assembly, NCC officials as
implement the National Building Code, which prescribed standards for professional
practice. The Chairman Cement Manufacturers Of Nigeria (CMAN) Mr. Joe Makoju,
an engineer, who made the charge at a one-day applications and cement standard
seminar, stressed that knowledge about the professional practice among the prac-
titioners would aid high quality building and construction in the country Makoju
noted that inspite of some outstanding concrete works done by leading construc-
tion companies in the country that the neglect to em-
brace the best professional practice which remains a
challenge in the industry .He also noted that all over the
world the regulatory authorities and practitioners in the
building and construction industry develops standard and
codes to guide construction professionals in effective
specification of concrete grades and selection of cement
type thus ensuring some degree of uniformity in the appli-
cation of concretes in their countries.
C oncerned that buildin and con-
struction industry has not embraced
good professional practice to ensure
sound quality and durable construc-
tion materials, cement producers
have urged stakeholders to
Volume 1 , i s sue 15 Page 3
KONICA MINOLTA TARGETS NIGERIA’S
MARKET WITH LOW-COST DIGITAL
PRINTING SOLUTION
Recognizing the potential of Nigeria’s
enterprise market, Konica Minolta, A
global digital print solutions company,
has introduced new printing products
and solutions in the country. The com-
pany, which recently made enroute into
the country and Ghana, said its prod-
ucts could cut cost of printing by 70
percent. At a two-day media unveiling
of its products in Lagos at the week-
end, the Area Manager, Central Asia,
Middle East & Africa, Konica Minolta,
Mr. Mark Oldfield, emphasized that the
firm’s products would save users up to
70 per cent on printing expenses, while
ensuring quality print production and
colour accuracy, among others. Regard-
less of the evident challenges in the Nige-
rian economy, Konica Minolta has a
promise to deliver cost-effective ma-
chines, overly efficient after sales service
and the cheapest consumables possible.
It is surely going to boost the Nigerian
economy,” he said. The Konica Minolta
range are acclaimed to be the most inno-
vative, cost-effective, safest and easy-to-
operate printing solutions, according to
him. Products include the Bizhub PRESS
c8000, Bizhub PRO c7000, Bizhub PRO
951 and a range of other machines,
which come with the full range of online
finishing options, staple finisher, saddler
stitcher, perfect binder, punch kit and
folding options
CEMENT PRODUCERS URGE EN-
FORCEMENT OF BUILDING STAND-
ARDS
well as the referee – Interconnect
Clearinghouse Nigeria Limited – the
NCC said all was now in place to
make the MNP scheme work
in Nigeria. Two days ahead
of the formal launch, leading
telecoms service provider
Airtel Networks, had extend-
ed its welcome to subscrib-
ers by affirming the exist-
ence of network capacity to take in
additional subscribers.Airtel at a me-
dia briefing at the Lagos Sheraton
was spent mainly on upgrading and opti-
mizing its network as well as preparing
for more subscribers. CEO Airtel Nigeria
Segun Ogunsanya said the
Airtel network
has capacity for double its
current subscription number
of 25 million.Ogunsanya cited
the latest NCC audit of telcos
that showed Airtel outperforming all oth-
er operators on criteria set by NCC.
T he Odua Hall of Fame and muse-
um was commissioned in the month
of March this year. It was declared
opened by a dramatist, poet, novel-
ist, essayist, political activist and
most of all a Nobel prize winner for
literature, Professor Wole Soyinka
The museum captures the totality of
Yoruba way of life in the old days.
Pots and bronze carvings of different
sizes are displayed. The different
kinds of Yoruba drums are also ar-
ranged neatly.
Appurtenances of royalty
such as beads, horse-tail, crowns
and walking sticks are displayed at
the royalty section.the museum is the
war section where old war weapons
such as guns are on display. The
treaty that brought an end to the
Yoruba war of the 19th century ti-
tled Proclamation of Peace at Kiriji-
Mesin Battlefield was boldly dis-
played. Professor Wole Soyinka
commended the management of
O’dua Investment Company Limited
for the initiative. The museum show-
cases the beginning of Yoruba tech-
nology and the ingenuity of our fore-
fathers. According to Professor Wole
Soyinka “I want to say there is still
more to do now that an appeal has
been made to people to donate
material to enrich the arts, crafts and
antiquities contents of the museum.
Let me say that it is with a thought of
nostalgia that I return to the Cocoa
House and I must say I am very happy
with what I have seen here. Cocoa
House is one of those firsts Yoruba
recorded in Nigeria”.
The curator of the museum,
Mr. Babajide Famuyiwa, explained the
reason behind the establishment of
the museum: “It is created to show-
case the essence of the Yoruba peo-
ple, what the Yoruba call Omoluabi.
The Yoruba people have played a ma-
jor part in the economic development
of the country. They have helped in
the development of every sphere of
endeavour in the country. So in that
wise, it was decided that we should
look at these and bring them in focus.
That informed the creation of the
O’dua Museum and Hall of Fame”
Volume 1, Issue 15 Page 4
NCC SETS NEW SMS TARIFF
FOR TELECOMS
I n line with its mandate, the
Nigerian Communications Com-
mission (NCC) has set a tariff cap
of N4 per Short Messaging Ser-
vice (SMS) for all domestic off-net
SMS with effect from February 5,
2013.
NCC, which said it will not place a
price cap on international SMS
for now, disclosed that the di-
rective to this effect had been
communicated to all the opera-
tors including MTN Nigeria, Glo-
bacom, Airtel and emerging mar-
ket telecommunications service,
operating as Etisalat in Nigeria
since January 3, 2013
C oordinating Minister for the Econo-
my and Finance Minister, Dr. Ngozi Okon-
jo-Iweala, has announced a partnership
between the Federal Government and
the World Bank to develop a $300 mil-
lion mortgage financing structure for af-
fordable housing. This attempt at revolu-
tionizing Nigeria’s housing sector is seen
by experts as another bold step forward
towards making cheap funds available in
the sector. Under the arrangement, the
World Bank is to provide financial access
and liquidity to the tune of $300 million
to kick start the project, while banks in
the country will partner government to
develop mortgage vehicle that will
zmanage housing development in Ni-
geria. Government will, however, have
a small share.
Minister of Finance and Coordinating
Minster of the Economy, Dr. Ngozi
Okonjo Iweala, who briefed the Nigeri-
an media at the end of the World
Bank/International Finance Corpora-
tion (IMF) meetings in Washington DC,
said the facility will attract zero per
cent interest, 0.7 per cent commit-
ment charge, 10-years grace, and 40-
year repayment period. She said Ni-
geria’s current housing deficit of 17
million is growing at two million units
per annum.
D O M E S T I C E C O N O M I C U P D A T E C O N T I N U E D
ODUA COMMISSIONS HALL OF FAME & MUSEUM
INTERIOR PASSAGEInterior Passage - the look and feel will alsocapture the ancient indigenous concept
EXPERTS APPLAUD N4.68b FG,
WORLD BANK MORTGAGE DEAL
C o nt inu e d f r o m pa ge 1 It noted that the new posi-
tion translated to 13 months of im-
ports and is a by-product of reduced
funding requirements for WDAS.
“The capital market also continued
to witness position recovery,
buoyed by substantial foreign direct
investments from international port-
folio managers,” the report said.
However, the report further
explained that “our major concern
for the economy is the continued
menace and revenue leakage
caused by the ‘oil-theft syndrome’
in the Niger-Delta. “Besides, crude
oil prices are on the decline, due to
weaker demand and global general
austerity.
Therefore, we stress the need for
diversification of the nation’s in-
come streams on the heels of new
oil discoveries and sustained eco-
nomic turmoil in Europe.”
The International Monetary Fund
recently scaled back its global
growth forecast for 2013 from 3.5
per cent to 3.3 per cent, but Ni-
geria’s economy, the report said, is
expected to be buoyed by increased
foreign investment flow. In March of
2013, Nigeria annual inflation rate
slowed to 8.6 percent, the lowest rate
since April of 2008. On the year-on-year
basis, the inflation rate decreased to
8.6 percent in March of 2013 from 9.5
percent recorded last month.
Relative to February, the relatively slow-
er rise in the headline index could be
primarily attributable to base effects
from March of 2012. As a result of sub-
stantially higher price levels in March of
2012, the implications are that the year-
on-year changes exhibited for March
2013 year are muted. The composite
Food Index increased year-on-year by
9.5 per cent to 144.6 points. This was
1.5 percentage points lower than the
11.0 per cent recorded in February.
The composite Food Index increased
year-on-year by 9.5 per cent to 144.6
points. This was 1.5 percentage points
lower than the 11.0 per cent recorded in
February.
On a month-on-month basis, the compo-
site CPI increased by 0.71 per cent in
March, from index levels recorded in
February.
AN OUTLOOK ON THE
NATIONAL INFLATION
Volume 1, Issue 15 Page 5
The Food index increased by 1.0 per cent
between February and March. While food
prices were higher across classes in the
food sub-index, the largest contributors of
the increase in the food sub-index, the
largest contributors of the increase in the
food index were bread and cereals, pota-
toes, yams and other tubers, and vegeta-
bles..In March, the “All the items less
Farm produce” or Core index, which ex-
cludes the prices of volatile agricultural
products, increased by 7.2 per cent year-
on-year. This was lower than 11.2 per cent
recorded in February by 4 percentage
points
On month-on-month basis, the Core index
increased by 0.7 per cent from February
to March 2013. Year-on-year all COICOP
classes that contribute to the core exhibit-
ed muted rises except the “Alcoholic Bev-
erages, Tobacco and Cola” division.
Source: www.tradingeconomics.com
www.theguardianmobile.com
WEMABOD LAUNCHES SOUTH
AFRICA’S BUILDING SYSTEM
IN ITS OGUN PROJECT
W EMABOD Estate Limited has un-
folded a cost effective building technolo-
gy that reduces cost of construction by
40 per cent. The new formwork construc-
tion system, act as an alternative to the
conventional “bricks and mortar” method
of constructing houses.
Called Moladi construction
system, a test—run for the
building system has already
commenced at the compa-
ny’s housing estate located
at Ibafo in Ogun State.
The system is light—weight
and easy to move about and
assemble, the entire super structure
walls of a basic house can be completed
in a matter of days. “with this system, the
likelihood of Mould, adopted from
South Africa. It has the approval of South
Africa Bureau of Standards and South
Africa National Home Builders Registra-
tion Council.
The estate located on a 10 hectare
Page 6 Volume 1, Issue 15 BUSINESS UPDATE ON
SUBSIDIARY/ASSOCIATE
COMPANIES
Continued from page one
Mr Jimoh said the management would
carefully look into the report and imple-
ment the recommendations to the let-
ter. He said Odu’a had been respon-
sive to the demands of the ex-staff,
which he said motivated the manage-
ment to set up the reconciliation com-
mittee. Earlier in his address, Chair-
man of the Reconciliation Committee,
Oloye Lekan Alabi, who led other
members of the committee, said
the committee painstakingly car-
ried out its assignment and came
out with a report that would be
acceptable to all stakehold-
ers.“Our job was made easy by the
conducive atmosphere and tech-
nical assistance given by Odu’a
Investment, positive responses
from corporate and individuals
committee in the course of this as-
signment” he said. He urged the
management of Odu’a Investment to
“kindly re-open the matter
of Sketch Press Limited” with a view
to resuscitating it for the good of the
Nigerian reading public. It will be re-
called that the Management of
Odu’a Investment Company Limited,
in September 2012, set up a recon-
ciliation committee to look into the
complaints of the former workers of
the defunct Sketch Press Limited
SK E T C H I S N O T
“D E A D B U T R E S T I N G”
The estate located on a 10 hectare par-
cel of land, is situated opposite moun-
tain of fire and miracle ministries, La-
gos—Ibadan expressway and is 10
minutes drive from Berger bus stop and
two minutes drive from the same ex-
press where entry is made via existing
access road and exit through the same
route which links directly to the express
without making a U-turn “Ibafo”.
The 150 housing unit estate also
comes with spacious three bedroom
detached and semi-detached bunga-
lows built with moladi construction
system on a deeply rooted foundation
of 36 metres and incorporating the
modern finishes to give a very superb
structure befitting for convenient ac-
commodation of masses.
Facilities provided include; perim-
eter fence, borehole, electricity,
12meters width road, drainage
system, refuse disposals system,
recreational facilities, securi-
ty/gate house amongst other.
The title to the land is a lease-
hold interest in excess of 90-
years via a Deed of Sublease
from the Gateway City Develop-
ment Company Limited.
Each set of moladi formwork pan-
els can be re-used 50 times mak-
ing the technology cost effective
due to its repetitive application
scheme, reducing the cost of
construction and transportation
significantly. The moladi system
produces durable and permanent
structures, which have been sub-
ject to numerous tests and inde-
pendent reports.
Volume 1, Issue 15 Page 7
LAFARGE DECLARES N1.20 DIVIDEND
L afarge Cement WAPCO Nigeria Plc
has declared a dividend payout of N1.20
per share to investors. A note by Lafarge
to the Nigerian Stock Exchange stated
that investors that registered with the
company as at May 3, 2013 would enjoy
the dividend. The statement said the full
set of accounts would be provided by the
company to investors in due course
LAFARGE WAPCO NOT SHUTTING-
DOWN -HUDSON
L afarge Cement WAPCO Nigeria
Plc, has said it is not shutting
down production despite the report-
ed glut in the cement market. Some
local cement manufacturers have
raised alarm of glut in the cement
market, citing importation of the
products into the country as the
cause.
Rather, Lafarge Wapco said it re-
mains focused on its vision of deliv-
ering value to its customers and
stakeholders through innovative
products and services. The manag-
ing director and chief executive of-
ficer, Joe Hudson, in a statement
said although the company tempo-
rarily reduced its production recent-
ly, to manage inventory levels, it has
no intention of closing its plants but
expects to be fully operational soon.
He expressed delight at the devel-
opment of local capacities that
the country has witnessed, including
the birth of its ultra-modern Ewekoro
II plant which has led to bridging the
gap in the supply-demand curve of
cement in the country.' Local capacity
has improved rapidly. Today, cement
manufacturers are even calling for the
use of concrete for building more du-
rable roads which will serve Nigerians
better. We could not have done this a
few years back.”He commented on
the company’s development initia-
tives, and noted that as a premium
cement company in Nigeria and part
of the Lafarge Group - the world’s
leading cement company, Lafarge
WAPCO will continue to lead the re-
quired differentiation in the cement
industry being the only cement manu-
facturing firm that has developed
unique products to meet the different
applications and needs of customers.
BUSINESS UPDATE ON
SUBSIDIARY/ASSOCIATE
COMPANIES
ODU’A GROUP SET TO CHANGE SHOPPING
CULTURE IN IBADAN WITH N2BILLION HER-
ITAGE MALL.
O du’a Heritage Mall which consists of
18,640 square metres of lettable space is
set to change the shopping culture of Iba-
dan the capital of the South West Region of
Nigeria. The mall when completed will have
as its anchor tenants the likes of Mr Price,
Cash n’ Carry, Life Mate, etc. the develop-
ment of the mall was a response to per-
ceived demand by high net worth individuals
in Ibadan who spend time and money travel-
ling to Lagos at weekends to
shop.
Ibadan has a large expatriate
Community, these people travel all
the way to Lagos from Ibadan with
Police escort for their weekend shop-
ping. This untapped opportunity
was what prompted the man-
agement of to venture into the
construction of a world stand-
ard mall. The mall has among
other facilities a 200 under-
ground parking space where
shoppers will park and pay , fire
service unit to respond to and
unexpected fire incidence as well as a
close circuit Television for adequate sur-
veillance of the mall premises.
MACROECONOMIC INDICATORS Nigeria Inflation Rate
Monthly Average Exchange Rates
$USD 155..92 158.42
€EUR
205.78 202.93
POUNDS
253.28
240.78
DEC MARCH
A Monthly bulletin Publication Compiled by Research & Planning Department of
Odu’a Investment Company Limited
Cocoa House Building,
Floors 20, 21, 22 & 23 e-mail: [email protected]
Oba Adebimpe Road,Dugbe, P.M.B. 5435, Ibadan www.oduainvest.com.ng
Source: www.cenbank.org
Source:: Office for National Statistics
GDP Contributions to the quarter on quarter % change (Q1 2013)
0
2
4
6
8
10
12
14
Q1 -12Q2 -12 Q3-12 Q4-12 Q1-13
12 - month Moving Average
Year- on - Year
Q1 -12 Q2 -12 Q3-12 Q4-12 Q1-13
12 - month Moving Aver-age 10.9 11.3 11 12.2 11.4
Year- on - Year 12.1 12.9 11.3 12 8.6