6 things you must not do with your money

6 things you must not do with your money

Money can go as fast as it comes, but you might just get to keep it for a long time if you follow these tips.

Coming across this, you probably thought to yourself “what an interesting topic, I wonder what it has to say”. Well, we are right there with you. There are a lot of things you shouldn’t do with your money and even without reading further, you can probably outline about 20 things, (go ahead if you’d like to).

Trust me you’d have fun doing that because it was quite fun coming up with this list and we’d like to present to you the top 6 things we believe you must not do with your money. Have a fun read.

DO NOT BE UNINTENTIONAL WITH YOUR MONEY

Intentional living is important and it is something that has caught on over the years. To be intentional means to be deliberate in your actions and decisions. Basically, what you must understand from this is that you should not be impulsive with your money, whether in your spending, savings, and investment decisions, you must be deliberate. There is a popular saying that goes “failure to plan is planning to fail”.

It is necessary to always have a plan/budget for your money. Never leave your money to chance. Be intentional, be deliberate, and do not be passive with your money plans. To get started, you can focus on three steps; have a vision, create a plan, set limits. You can decide to be intentional with your impulse buying as well. When you create a plan and set limits and you do not go over that limit, even when you decide to splurge, you would still be on track to achieving your goals.

DO NOT MAKE LARGE PURCHASES WITHOUT CONSIDERING THE FULL COST

Part of being intentional with your money is to avoid large purchases if possible. Things like buying a car or land/homeownership should not be taken lightly. Even if you can afford the down-payment at that time, you have to consider the other charges and fees attached. If you can meet up with maintenance and servicing then, by all means, go ahead. Otherwise, it’d be best to review that decision. One way to achieve such purchase though, if your current earnings aren’t sufficient to support an extravagant purchase is to have a savings or budget plan for it.

Even if you cannot afford a financial advisor, there is a good number of mobile apps that would help you make such a savings plan. If you are the type of person that whenever you come upon ‘windfall’ or unexpected income, you’re already thinking of how to spend it extravagantly, you need to have a change of perspective. Before you think of buying that private jet or getting that car, you need to ask yourself if you are fully capable of maintaining it. Making rash purchase decisions can lead to regrets later.

DO NOT CASH YOUR PAYCHECK RIGHT AWAY

With the advancement in technology, most employees have the option to have their earnings paid directly into their bank accounts, rather than collecting cheques or cash. But no matter the form you collect your money; you must make provision for part of that money to be saved. Do not spend it immediately. You can automate payments such that a percentage of your monthly income goes directly into your savings account.

This helps to avoid the temptation of dipping into that fund because, “if you don’t see it, you won’t spend it”. Some companies provide retirement savings plans for their employees, a system whereby a portion of their salaries are deducted and paid directly into their retirement account. One such plan is the 401k, of which the Nigerian alternative is the Nigerian Pension Scheme, governed by the National Pension Committee (PENCOM).

DO NOT PUT ALL YOUR MONEY IN ILLIQUID INVESTMENTS

While investments are fun, and a good way to build wealth, it is important to diversify and have variety. Remember the saying, “do not put all your eggs in one basket?”. The difference between liquid and illiquid investments is simply this; the ability to exchange something for cash. So the rate of liquidity is determined by how easily an investment can be converted to cash. Do not tie up your money by investing in illiquid investments. Your investment portfolio should be diversified.

DO NOT SHOP EMOTIONALLY

The fact that we are biological beings does not mean we should not make logical decisions. Do not fall prey to ‘retail therapy’. Retail therapy is a term that is used to describe the action of shopping to improve one’s mood. It is also referred to as “comfort buys”, often acquainted with individuals who buy during periods of depression and stress. You are allowed to get emotional and you are also allowed to deal with that emotion, but talking to a sales representative or clerk just to make you feel better is not healthy.

Their job is to make sales, not your welfare. This is not intended to paint anyone in any sort of way but rather, to educate you. Instead of making that trip to the store or browsing that online catalogue, it would be better for you to call up a trusted friend or family member and talk with them. You’ll thank me for it.

DO NOT SIGN A CONTRACT YOU DO NOT FULLY UNDERSTAND

A contract is an agreement between two people that is legally binding. Four essential elements that make a document legally binding are; an offer, an acceptance, an intention to form a partnership, and a consideration that usually involves money. It can be oral or written. When it is oral unless recorded, there is no solid proof that an agreement was made, but, once it is written there is enough proof.

So before you go ahead and sign that piece of document, you must be fully aware of the terms and conditions of your agreement. Yes, a contract may, however, be considered invalid for specific reasons, but the bottom line is that you should avoid any situation that would put you in any money problem. It is more rewarding to get professional advice than implicate yourself unknowingly.

With all that’s been said, the crux of the matter is that you must be intentional with your money. Only then, can you plan, only then can you learn from your mistake, only then can you track your money movements, be deliberate, make decisions and take actions with a purpose. Develop a relationship with it (a healthy one of course), get to know your money, go on money dates and your financial health will bless you for it.

 

How to improve your investing habit

Valuable tips to help you improve your investing habit and make more money.

By NM Personal Finance

The best route to financial freedom and wealth is by saving and investing your funds. With the rising inflation rate in the country, money saved in the bank is useless and would depreciate with time. The best thing to do as a smart person is to invest your money and sleep while your money works for you. Investment entails more than just knowing about the stock market and investing, it involves having a healthy investing habit. It takes a lot of study and growth to imbibe these habits. Keep reading for tips on how to improve your investing habit and make more money.

Keep at it 

A good investor doesn’t start today and stop tomorrow. You have to be consistent with your investment plan and learn not to eat all your returns. Reinvest your interest and keep investing till your last breath, that is how you make more money. When Albert Einstein was asked what man’s greatest invention was, he said ‘compound interest’. According to him, “compound interest is the eighth wonder of the world, he who understands it, earns it; he who doesn’t pay it.” Imbibe the art of reinvesting today and keep at it.

Have a plan

‘A goal without a plan is a wish.’ Having defined your financial goals, you should come up with a plan on how to achieve your goals. Gone are the days when you just invest blindly. To improve your investing habits, learn to plan ahead. Decide what to invest in, look out for the risks involved in your investment, calculate your interest rates and see if it would benefit you, and track your investment.

Spend more time on research 

“It has long been the prevalent view that the art of successful investment lies first in the choice of those industries that are most likely to grow in the future and then in identifying the most promising companies in these industries”
An excerpt from the book, “The Intelligent Investor; The Definitive Book on Value Investing” by Benjamin Graham, updated by Jason Zweig.
The importance of research cannot be overemphasized. As a smart investor, you should do thorough research on the industries that have great potential and would give you better results. You should also do in-depth research on the risks involved in investing in specific industries. Arm yourself with enough data before investing.

Learn from your mistakes 

There is no successful investor that has not made a financial mistake or lost money due to some sloppiness. However, what makes you a better investor is the ability to learn from your mistakes and move on. This rule applies to all facet of life so it shouldn’t be new to you. If you make an error in your numbers or make some huge mistakes, pick yourself up and try again.

Wait on it 

You can not be an investor and not know how to be patient, disciplined and eager to learn. One of the habits of successful investors is patience. You have to learn how to let go of your funds and let it come back to you when it is ready. Also, the market won’t always be proposing huge returns or favourable investment plans; your patience will go a long way in helping you survive situations like this.

Be a copycat but also think for yourself 

Do research on successful investors, find the ones that have the philosophy that aligns with you and follow their steps. You cannot know it all. You should also learn from their mistakes along the line; that is the key to becoming better than them. You must also be able to harness your emotions and think for yourself as an investor. Don’t underestimate the power of your intuition.

In addition to the tips listed above, below is the Buffet approach to investment, extracted from “The Warren Buffet Way: Investment Strategies of the World’s Greatest Investors” by Robert G. Hagstrom.

1. Never follow the day to day fluctuations of the stock market.
2. Don’t try and analyze or worry about the general economy.
3. Buy a business, not its stock.
4. Manage a portfolio of businesses: Intelligent investing means having the priorities of a business owner (focused on long-term value) rather than a stock trader (focused on short-term gains and losses).

We wish you well on your investing journey.

 

 

Why your parents are wrong about money

Financial advice given by your parents may today no longer be workable since the world and activities have since evolved.

By NM Personal Finance

The desires, perceptions, and mindsets of people often change as the world evolves. In finance, this also plays out; certain financial concepts that had been successful in the past do not have a place in the financial scope of today. As a millennial, you are faced with technological innovation that has affected every area of life, including finance. Due to this, a few financial resources have opened up, while the economic environment has also shifted.

This means that, in this present financial climate, ideas that worked some time ago may have become outdated and ineffective. Many individuals develop certain values and mindsets that impact their financial lives when it comes to money. Because of the financial experience they have, the exposure or guidance they get about money from their parents, these values are created.

Many parents strive to incorporate skills and abilities into various areas of their children’s lives. Most of them, particularly advise their children in the area of finance, on how to make money and live comfortably, while others rarely address money problems with their children.  The advice or guidance provided by parents on money is focused on what worked for them, which may be incorrect or misleading based on the evolution since their time. Your economic growth cannot be assured by the notions your parents hold about finance. It is therefore important to recognize and replace these convictions with well-informed and timely decisions.

Some of the misguided ideas parents have about money include:

It is not important to discuss money

Many parents rarely have conversations with their children about money or household needs and how they are met. They believe that it is not necessary to relate their income, expenses, and financial goals to their children. This leaves the children with little or no knowledge of how to prepare, handle, and use their money.

Having a degree signifies having a career

Quite a number of parents pressure their children to go to school on the grounds that this alone ensures their prosperity and financial success. Although it is valuable and laudable to obtain a college degree, it does not inherently guarantee financial stability for everyone. A college degree can offer a few financial advantages, but it should be seen as an opportunity to obtain profitable knowledge and experience, not as a key to a job. The chances of securing a comfortable and attractive career are getting slimmer with the growing number of college graduates. Accumulating sound knowledge of economic and financial management is therefore important.

Stick to a job and save up

The idea of making money for most parents is to secure a job that makes ends meet. They typically do not welcome or mention the concept of harnessing a diversified income strategy, as this is a sign of inconsistency for them. This attitude restricts the children from seeking jobs only to gain enough for survival without investigating the financial resources that are made available to achieve their financial goals.

Investment is risky, avoid it.

Most parents, for fear of losing money, will caution their children against investing in financial schemes or institutions. Here is the deal, investment is risky. An assessment of the feasibility of the investment program and the potential of a return is therefore required to be carried out by people before investing.

To gain financial stability you have to learn how to financially analyze your position and handle your money appropriately. This cannot be achieved by adhering to your parent’s loving but misleading financial tips or ideas. It can take a while to unlearn these values, but it is important to make your own decisions about your finances, as this will help you to remain responsible and accountable for your money.

 

Exchange rate falls across Forex markets despite improved dollar supply

The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Wednesday.

September 24, 2020

By Chike Olisah

Forex turnover improved by 135% as Nigeria’s exchange rate at the NAFEX window depreciated after yesterday’s trading day gain to close at N386/$1 during intraday trading on Wednesday, September 23.

Also, the naira depreciated closing at N467/$1 at the parallel market on Wednesday, September 23, 2020, despite another round of forex allocation to BDC operators by CBN.

Parallel Market: At the black market where forex is traded unofficially, the Naira depreciated against the dollar to close at N467/$1 on Wednesday, according to information from Abokifx, a prominent FX tracking website. This represents a N2 drop when compared to the N465/$1 that it exchanged on Tuesday, September 22.

Currency Developments

• The local currency has strengthened by about 7.8% within the last one week at the black market, as the Central Bank of Nigeria introduced some measures targeted at exporters and importers in order to try to boost the supply of dollars in the foreign exchange market and reduce the high demand for forex by traders.
• The CBN has sold over $200 million to BDCs since the resumed forex sales on Monday, September 7, 2020. This was expected to inject more liquidity to the retail end of the foreign exchange market and discourage hoarding and speculation.
• However, the exchange rate against the dollar has failed to sustain the initial gains made after the CBN announced plans to provide liquidity.
• BDC operators have urged the apex bank to reconsider the margin allowed for the currency traders as it was inadequate to meet their expenses.
• We also noted that forex traders monitored during the previous week appear to hoard forex as they anticipated further depreciation in the market.
• There has been a drop in speculative buying of foreign exchange, although demand backlog by manufacturers and foreign investors still puts pressure and creates a volatile situation in the foreign exchange market.

NAFEX: The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Wednesday, closing at N386/$1.

• This represents a 20 kobo drop when compared to the N385.80/$1 that it exchanged for on Tuesday, September 22.
• The opening indicative rate was N386.44 to a dollar on Wednesday. This represents a 26 kobo gain when compared to the N386.70 to a dollar that was recorded on Tuesday.
• The N390.84 to a dollar is the highest rate during intraday trading before closing at the rate of N386/$1. It also sold for as low as N383/$1 during intraday trading.

Forex Turnover: Forex turnover at the Investor and Exporters (I&E) window increased by 135.3% on Wednesday, September 23, 2020.

• According to the data tracked by Nairametrics from FMDQ, forex turnover rose from $29.42 million on Tuesday, September 22, 2020, to $69.22 million on Wednesday, September 23, 2020.
• The CBN had in the past few weeks moved to clear the huge backlog of foreign exchange demand, especially by foreign investors wishing to repatriate back their funds.
• The improvement in forex supply after yesterday’s drop reinforces the volatility of the foreign exchange market. The supply of dollars has been on a decline for months due to low oil prices and the absence of foreign capital inflow into the country.
• The average daily forex sale for last week was about $34.5 million which represents a drop from the $58.52 million that was recorded the previous week.
• Total forex trading at the NAFEX window in the month of August was about $857 million compared to $937 million in July.
• The CBN in the latest report on Monetary, credit, foreign trade and exchange policy guidelines for fiscal year 2020/2021, lamented that forex market pressure which is as a result of speculative activities in the BDC and I & E segments of the foreign exchange market is expected to exert more pressure on the naira exchange rate.

 

How to register for FG’s N75 billion MSME survival funds

FG released guidelines to access the N75 billion MSME Survival Fund.

By Chike Olisah

The Federal Government (FG) has released the guidelines to access the N75 billion Micro, Small and Medium Enterprises (MSME) Survival Fund and Support Initiatives, which took effect from September 21, 2020.

The scheme, which is the core of the N2.3 trillion stimulus package of the Nigerian Economic Sustainability Plan includes the N60 billion MSMEs Survival Fund and the N15 billion Guaranteed Offtake Schemes.

This disclosure was made in an official statement by the Federal Government through a series of tweet posts on its official Twitter handle.

The statement from FG read, “As the portal for the registration of prospective beneficiaries of Survival Fund opens, interested Nigerians in the Payroll Support Scheme are to note that the site will be open from 10 pm Monday, September 21, 2020.”

The statement says that the registration for the payroll support will start with the educational institutions at 10 pm Monday, September 21, 2020, and will be followed by businesses in the hospitality industry by 12am Friday, September 25, 2020.

The portal will also open for other categories of small businesses from 12am, Monday, September 28, 2020. It should be noted that the scheduling of the registration for prospective beneficiaries is to ensure that the process is seamless and hitch-free. The registration of every sector is to continue until Thursday, October 15, 2020.

To register for this initiative, the Federal Government has also provided a portal for entry. Potential beneficiaries are advised to log on to https://survivalfund.ng to complete their registration.

As part of the registration process, the beneficiaries are expected to provide personal registration details, activate their account, register their organization after they have successfully activated their account.

Corporate Affairs Commission (CAC) Number, Bank Verification Number (BVN), SMEDAN Number, a Tax ID (optional) and the organization’s bank account details will be needed.

Completing the Payroll Support Registration, beneficiaries’ first name, last name, email, mobile number and Password will be required. Also, their Date of Birth, residential address and residential Local Government Area will also be provided.

These 2 MSMEs initiatives namely MSMEs Survival Fund with payroll support track and the Guaranteed Offtake Scheme were introduced by the FG as part of the efforts to support businesses overcome challenges posed by the Covid-19 pandemic.

The MSMEs Survival Fund scheme is a conditional grant to support vulnerable micro and small enterprises in meeting their payroll obligations and safeguard jobs in the MSMEs sector. The scheme is expected to save at least 1.3 million jobs across the country and specifically impact on over 35,000 individuals per state.

The scheme will be implemented over an initial period of 3 months and is targeted at employees of MSMEs and self-employed individuals with 45% for female business participation and 5% for special needs participation

The Guaranteed Off Take Stimulus Scheme is expected to perfect and sustain the income of vulnerable micro and small enterprises from the economic disruptions of the Covid-19 pandemic through the implementation of various initiatives aimed at boosting the production capacities of small businesses as well as the provision of grants.

The duration is also for an initial period of 3 months and is targeted at micro and small businesses registered in Nigeria.

Naira gains at black market as CBN move against prominent businessmen for forex abuse

September 18, 2020

By Chike Olisah

Nigeria’s exchange rate at the NAFEX window remained stable for the fourth consecutive trading day to still close at N386/$1 during intraday trading on Thursday, September 17.

Also, the naira appreciated closing at N462/$1 at the parallel market as the Central Bank of Nigeria (CBN) intensifies its move against forex abuse by asking banks to send domiciliary accounts details of some prominent businessmen

Parallel Market: At the black market where forex is traded unofficially, the Naira appreciated against the dollar to close at N462/$1 on Thursday, according to information from Abokifx, a prominent FX tracking website. This represents a N3 gain when compared with the N465/$1 that it exchanged on Wednesday, September 16.

Currency Developments

• The local currency has strengthened by about 7.8% within the last one week at the black market, as the Central Bank of Nigeria introduced some measures targeted at exporters and importers in order to try to boost the supply of dollars in the foreign exchange market and reduce the high demand for forex by traders.
• The CBN has sold over $150 million to BDCs since the resumed forex sales on Monday, September 7, 2020. This was expected to inject more liquidity to the retail end of the foreign exchange market and discourage hoarding and speculation.
• However, the exchange rate against the dollar has failed to sustain the initial gains made after the CBN announced plans to provide liquidity.
• BDC operators have urged the apex bank to reconsider the margin allowed for the currency traders as it was inadequate to meet their expenses.
• We also noted that forex traders monitored during the previous week appear to hoard forex as they anticipated further depreciation in the market.
• There has been a sharp drop in speculative buying of foreign exchange, although demand backlog by manufacturers and foreign investors still puts pressure and creates a volatile situation in the foreign exchange market.

NAFEX: The Naira still remained stable against the dollar at the Investors and Exporters (I&E) window on Thursday, closing at N386/$1.

• This was exactly the same rate that it exchanged for on Wednesday, September 16.
• The opening indicative rate was N386.05 to a dollar on Thursday. This represents a 5 kobo drop when compared to the N386 to a dollar that was recorded on Wednesday.
• The N391.99 to a dollar is the highest rate during intraday trading before closing at the rate of N386/$1. It also sold for as low as N380/$1 during intraday trading.

Forex Turnover: Forex turnover at the Investor and Exporters (I&E) window declined by 68.9% on Thursday, September 17, 2020.

• According to the data tracked by Nairametrics from FMDQ, forex turnover dropped sharply from $282.23 million on Wednesday, September 16, 2020, to $87.78 million on Thursday, September 17, 2020.
• The unusual huge forex supplies at the NAFEX window CBN’s move to clear the huge backlog of foreign exchange demand, especially by foreign investors wishing to repatriate back their funds.
• The drop in forex supply reinforces the volatility of the foreign exchange market. The supply of dollars has been on a decline for months due to low oil prices and the absence of foreign capital inflow into the country.
• The average daily forex sale for last week was about $34.5 million which represents a drop from the $58.52 million that was recorded the previous week.
• Total forex trading at the NAFEX window in the month of August was about $857 million compared to $937 million in July.
• According to a monitored media report and as part of the move against forex abuse and follow up to its earlier order, the apex bank directed deposit money banks to provide details of domiciliary accounts of some 12 top Nigerian businessmen, foreigners, and others.

 

Electricity customers will only pay for meters through tariff costs –NERC

September 17, 2020

By Ripples Nigeria

Electricity customers will henceforth cease to make one-off payment for meters but rather will pay for them via periodic tariff costs, the Nigerian Electricity Regulatory Commission (NERC) said.

A reward system that will compensate those who have acquired meters from their own purse is also in the pipeline.

Nathan Rogers Shatti, the NERC Commissioner, told stakeholders and industry think tank at a virtual session on Wednesday of the imperative of adopting a tariff and billing that will be determined by quality assurance and delivery.

“There would be a new mechanism for people who used their money to buy their own meters. There have been delays in the implementation; all those who paid for their own meters will be compensated,” Shatti said.

President Muhammadu Buhari, in August, approved a fresh electricity tariff hike effective from 1st September, stirring up outrage and backlash among end-users.

Under the new billing regime, only customers enjoying at least 12 hours of daily power supply will pay the newly increased rates.

“Government does not have the resources to continue along this path. To borrow just to subsidize generation and distribution, which are both privatized, will be grossly irresponsible,” Minister of Information, Lai Mohammed said at a press conference last week.

 

Landlords cannot transfer existing electricity bills to new tenants –NERC

September 17, 2020

By Ripples Nigeria

Landlords with outstanding bills cannot transfer the payment obligation to tenants just renting their properties, the Nigerian Electricity Regulatory Commission (NERC) said Tuesday.

The NERC made the revelation through its Commissioner for Finance and Management Services, Nathan Shatti, at a virtual session titled ‘Metres and Metring,’ noting that there was already a judicial precedence in place that forbids landlord placing the burden of settling backlogs of unsettled bills on new tenants.

“Landlord’s outstanding electricity bills cannot be enforced on a tenant. A judge recently ruled that the bills of a previous tenant cannot be enforced on a new customer. Send us details if you are in such a situation.”

Mr Shatti went further to say that tenants who purchased metres with their own money would be reimbursed through an arrangement the NERC was about to make.

There is a court order in force that has made violation of the Nigerian capping policy a punishable offence.

The capping policy stipulates that power Distribution Companies (Discos) disallowed from charging electricity consumers under the estimated billing system more than they do consumers with prepaid metres in the same vicinity.

“An order was issued on capping in February. The capping order is still in force.
DisCos should take note. The Commission is doing everything to enforce compliance. We will do even more,” the commissioner said.

Shatti told Discos to refrain from the illegitimate practice of taking money from customers without providing them with metres.

“The intention of the regulation is that payment should not be made if meters are not available. Where you have, write to the Commission with your details.”

 

CBN orders banks to provide domiciliary account details of Baba Ijebu, Bet9ja owners, 9 others

September 17, 2020

By Ripples Nigeria

The Central Bank of Nigeria (CBN) has requested banks to hand in key transaction information including domiciliary account statements and Bank Verification Numbers of 12 high-ranking Nigerians.

The apex bank gave the directive in a memo to all deposit money banks with the title ‘Request for Statement of Accounts,’ dated Tuesday 15th September 2020 and endorsed by Z. Marcus, its director of banking supervision.

According to the letter, the banks are to send the customer information of the 12 Nigerians and four foreign nationals, majority of whom are involved in the betting trade, to five email addresses.

Recently, the CBN froze the accounts of a number of the businessmen on the ground of breaching the procedures guiding foreign exchange transactions.

“You are hereby required to place the under listed accounts on post-no-debit with immediate effect and revert with the account names, numbers, currencies and balances of all accounts placed on PND,” the CBN said in the document.

Those listed in the new CBN memo comprise Kesington A. Adebutu (chairman of Premier Lotto Limited popularly called Baba Ijebu), Ajibola Bankole Adebutu, Olasegun Oladiran Adebutu, Adebisi A. Adebutu and Adebisi A. Adebutu.

Other Nigerians are Adekunle O Soname and Ayodeji Ojuroye (joint owners of Bet9ja), Oluwafemi Babalola, Akinola Adekunle Alabi (founder of NairaBet), Oluwadamilare Olubukola Alabi and Adetayo Cosmas Adesanwo.

The foreign nationals are Domenico Giovando, Charbel Jabbour Chidiac, David Patrick Grogan and Mauro Ripamonti.

 

Prices of flour, rice, beans, tomatoes, pepper, others jump, as low patronage hits major markets

The report contains information on items that witnessed price increase, price decrease, as well as insights.  

September 17, 2020

By Bamidele Samuel Adesoji

Despite the ease of lockdown in the country, the prices of household items continue to trend upwards, as traders across Lagos markets have once again lamented the sustained decline in patronage. This is according to the latest Household Market Survey conducted by Nairalytics, the research arm of Nairametrics.  

The persistent increase in the price of food items across major markets in Lagos State continues to hit harder on consumers, as local and foreign rice, tomatoes, pepper, flour amongst others, recorded significant surges in their prices.  

According to the latest report, a 50kg bag of Mama Gold flour that was initially sold for an average of N11,575, now sells for an average of N16,500 – a 42.6% increase. Also, a 50kg bag of Mama Gold rice now sells for an average of N28,875, as against N24,375 recorded two weeks ago. 

The survey further shows that a big bag of pepper increased by 23.1%, to sell for an average of N16,000, compared to an initial average of N13,000. A big basket of round-shaped tomatoes, now sells for an average of N12,000. 

The report contains information on items that witnessed price increase, price decrease, as well as information on special markets, and insights.  

Items that witnessed price increase  

Listed below are the items that recorded significant price increase: 

• A 50kg bag of Honeywell flour increased by 24.7%, from an initial average of N11,525 to sell for N14,375, while Mama Gold brand sells for an average of N16,500. 
• A 50kg bag of Dangote flour now sells for an average of N14,333, compared to N11,067 recorded a fortnight ago. 
• A big bag of pepper that was initially sold for an average of N13,000, now sells for an average of N16,000 – a 23.1% increase.
• A big basket of round shaped tomatoes increased by 9.1% to sell for an average of N12,000, compared to an initial average of N11,000. 
• The cost of a big basket of oval shaped tomatoes spiked by 14.3%, from an initial average of N7,000 to sell for an average of N8,000. 
• A 50kg bag of Mama Gold rice now sells for an average of N28,875, from an initial average of N24,375 – a 18.5% increase. 
• A big bag of brown beans increased by 8.6%, from an initial average of N30,375, to sell for an average of N33,000. 
• A 5-litre gallon of vegetable oil that was sold for an average of N2,525 two weeks ago, now sells for N2,750 – 8.91% increase. 
• A bag of bush mango seeds (Ogbono) increased by 5% to sell for an average of N105,000. It was initially sold for an average of N100,000. 

Items that witnessed price decrease 

Some of the items that recorded slight decrease in prices include: 

• A 50kg bag of garri (Ijebu) that reduced by 5.31%, to sell for an average of N13,375, compared to an initial average of N14,125. 
• A big basket of sweet potatoes that was initially sold for an average of N18,000, now sells for N14,000 – a 22.2% decrease. 
• A 5-litre gallon of Kings oil now sells for an average of N3,000, as against N3,050 recorded last month. 
• A big bag of dry onions reduced marginally by 2.11%, to sell for an average of N34,750, compared to N35,500 recorded two weeks ago. 
• A big bag of new onions now sells for an average of N25,500, a 1.92% reduction, compared to an initial average of N26,000. 

Items that maintained initial prices 

Items whose prices remained the same, compared to two weeks ago include: 

• A crate of egg which continues to sell for an average of N1,200, same as recorded in the previous report. 
• A medium-sized basket of round shaped tomatoes continues to sell for an average of N7,000. 
• A 50kg bag of beans (Oloyin) sells for an average of N20,375. 
• A 400g tin of Peak Powdered Milk sells for an average of N1,200, while 900g still sells for an average of N2,363. 
• The various sizes of cartons of noodles maintained their initial prices – 305g Indomie (N3,150), 210g Indomie (N3,200), and 100g Chikki (N2,150).  
• 500g and 900g Milo tins still sell for N1,038 and N2,125 on average respectively across the four markets.
• A carton of Golden Penny Pasta sells for an average of N4,325. 

Special markets/items 

Nairalytics had reported two weeks earlier, that prices of major food items such as rice, beans, pepper, and other items recorded significant increase. This was partly attributed to seasonal fluctuations and supply chain bottlenecks caused by the COVID-19 induced lockdown.

In the latest increase, traders decried the sudden jump in price of flour. Flour, which is a necessity for the production of items like bread, cakes, and confectioneries, recorded a significant spike, as a 50kg bag of flour witnessed a 29.5% increase in price.

An interview with a trader at Oyingbo market revealed that customers have become disgruntled with the persistent increase in prices of most food items, as it has become a cause for worry to the traders, “We are worried about this continued increase in price of food, as some of our customers now decide to buy less due to the price increment, while others just take a walk,” She said. 

She further revealed, “Bakeries have now increased the price of bread, as the increase in price of flour has affected their already declining profits.”  

Below are the prices of various brands of rice sighted at Daleko market:

Mama Gold (10kg) – N4,500; Royal Stallion (50kg) – N29,000; Rice Master (10kg) – N5,000; Mama Gold (50kg) – N29,000; Caprice (50kg) – N29,000; Mama’s Pride(50kg) – N24,500; Umza (50kg) – N24,500; Labana (50kg) – N25,000; Alamzat (50kg) – N23,500; Big Bull (50kg) – N25,000; Mama’s Choice (50kg) – N24,000. 

Market insights 

Major tomato traders at Mushin market, during the week, blamed the increase of tomatoes on the fact that, the season for the oval shaped tomatoes is coming to an end. According to Mrs. Jamiu, “Very soon, oval shaped tomatoes will no more be available in the market, as its season is almost over.”  

Nairametrics, earlier reported that a small basket of oval shaped tomatoes was sold for an average of N800 at Mushin market last month. However, it has doubled in price, and now sells for an average of N1,700. 

Mrs. Olaoluwa, who also sells at Mushin market, shared a contrary opinion. She attributed the increase in price of major food items including tomatoes to the approaching festivity.

“As the year is coming to an end, it is normal for prices of items in Nigeria to jack up, it is just hitting harder this year because of the effect of the COVID-19 pandemic.” She said 

When Nairalytics Research visited Daleko market, Mrs. Oladayo, reiterated that the Federal Government’s decision to restrict importation of rice, is the major cause of the increase in price of rice. According to her, Nigeria is not able to produce enough rice that can circulate across the country, hence the unavoidable scarcity. 

She reiterated that the stony rice being sold in the markets also affects the prices of the commodity, as most consumers who do not wish to buy the inferior quality, will have to pay more for neater brands of rice. 

 

Banking and Finance Sector Have Key Roles to Play in Achieving Sustainable Development

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Wednesday, September 16, 2020 / 3:22 PM / Ottoabasi Abasiekong for WebTV / Header Image Credit: @cibnigeria

The Banking and Finance sector in Nigeria will play a prominent role in supporting sustainable development in Nigeria. The President of the Chartered Institute of Bankers of Nigeria (CIBN), Mr. Bayo Olugbemi, FCIB made this comment at the opening session of the 13^th Annual Banking and Finance conference, which held virtually in Abuja and Lagos.

Speaking at the conference Mr. Olugbemi said  "So, when we talk about a sustainable future, what do we mean? Literature has a generous and wide array of interpretations. Luckily, the United Nations offers a comprehensive but concise picture of what a truly sustainable future would look like. This picture is brilliantly captured within the 17 United Nation's Sustainable Development Goals (SDGs) which include Decent Work & Economic Growth; Industry, Innovation, and Infrastructure; Gender Equality and Reduced Inequality".

On the opportunities and implications of the UN SDGs which has 2030 as the target year for achievement, the CIBN President said "Given the 17 goals and implicit 169 targets, we cannot only have a better understanding of the sustainable future to strive for but the blueprint to achieve this".

He added "In the quest to achieve such goals, the banking sector no doubt has a pivotal role to play. Indeed, banks often called the lifeblood of the economy are generally responsible for the efficient allocation of resources which is a forerunner to wealth creation and economic growth and development. Given the recent disruptions caused by COVID-19, the roles of banks have become more important now than ever before".

The two-day conference covered 5 sub-themes and two breakout sessions over two days. It discussed the following topics: 

• An Assessment of Inclusive Banking and the way forward
• An articulation of the risks of facilitating a sustainable future and positioning of banks in tackling such risks
• A discussion on how Fintech is shaping the future through innovation and disruption
• A discussion on Leadership and Competence in the Banking Industry
• A discussion on Green Banking and Economic Growth
• The Impact of Finance on Emerging Sectors: Spotlight on MSMEs, Manufacturing, Creativity and Agriculture Industry
• The Impact of Finance on Emerging Sectors: Leveraging Digital by the Banking Industry

 

CBN approves N200 billion housing loan for 300,000 households at 5% per annum

The facility is to enable FHF finance construction of social housing units for low-income earners.

September 16, 2020

By Chike Olisah

The Central Bank of Nigeria (CBN) has approved the sum of N200 billion as mortgage finance facility to the Family Homes Fund Limited (FHFL) and targeted at low income earners.

According to a circular, which was issued by the CBN and seen by Nairametrics, this financing initiative is to be implemented in collaboration with the Family Homes Fund Limited as the lead developer, as it is introduced to support the Federal Government’s Economic Sustainability programme.

This fund is to fast track the construction of 300,000 homes in the 36 states of the federation and the Federal Capital Territory and to create up to 1.5 million jobs in 5 years.

In addition to the 1.5 million direct construction sector jobs particularly young people on a low income, the programme also has the potential to create further 1 million jobs through its supply chain.

The CBN in the circular stated, ‘’The programme will house up to 900,000 children and adults (at an average of 3 persons/home) on a low income with direct impact on health, education and economic outcomes. Most of these would currently live in informal settlements with shared facilities in unsanitary environments. Towards targeting people on low-income level across the country.’’

(READ MORE:has approved the sum of N200 billion as mortgage finance facility to the Family Homes Fund Limited (FHFL) and targeted at low income earners.

On boosting local manufacturing, the apex bank stated, ‘’The programme is designed to utilize at least 90% locally manufacturing inputs and as a result conserve foreign exchange.

“In that regard the programme will deliberately aim to revitalize local manufacture of construction materials including doors and windows, ironmongery, sanitary fittings, concrete products, tiles, glass, electrical fittings/fixtures and bricks etc. for example, it is estimated that the programme will require up to 1.7 m doors, 7m door hinges and locks etc.’’

The funds, which would be released to the Family Home Funds (FHF) by CBN on a project basis is subject to the cumulative maximum limit of N200 billion. The facility type which would be a term loan is to enable FHF finance the construction of social housing units for low-income earners and is for a 3-year tenor from the date of disbursement.

The facility, which is expected to be repaid in not more than 3 instalments within the tenor of the facility, has an interest rate of not more than 5% per annum.

Accountants proffer solutions for business recovery

By Gloria Nwafor

 

15 September 2020

  Accounting professionals have charted paths on how to assist companies increase their chances of survival. 

Amid the COVID-19 pandemic, accounting professionals have charted paths on how to assist companies to increase their chances of survival and return on the path of steady growth.

They highlighted some areas businesses could dwell on to help them respond, recover, and thrive, especially as the COVID-19 caught many companies and industries unprepared, leaving the majority of them as the worst hit. 

The professionals spoke during a webinar organised by the global accounting body, Association of Chartered Certified Accountants (ACCA), during the launch of a report themed, “COVID-19: The Road to Recovery.”

Head, Business Process Solutions, Deloitte Ghana, Kwabena Situ, who spoke on what companies could do when planning the path to recovery, said organisations needed to look at areas of liquidity forecasting.

He said it was important to review clients’ cash flow for the next three months since companies were identifying what mitigation action could be taken to preserve cash in short and medium-term.  

He said the pandemic made clients consider the need to review their lending documents as the majority have now understood the terms.  

Situ, who shared how his organisation had survived and kept their clients during the pandemic, said they were constantly communicating more with key stakeholders including lenders and investors to retain their confidence and support. 

He said it was also important for companies to seek out additional sources of capital, keep their plans and various options constantly under review, work with a flexible plan and advised on how companies could encourage clients to find alternative supplies to meet up the demands.

He said: “The outlook of the impact of COVID-19 is uncertain, therefore, they must work with a short to medium-term plan.

“Most businesses did not have their business continuity plan and even if they had, it had never been tested. We did a quick review of the business continuity plan to see if it could stand the test of time while looking at the likely impact of the COVID-19. Our clients were excited about this. The government rolled out interventions and tax relief and Deloitte organised free webinars and published articles on them.  We helped our clients to take advantage of the tax incentives and reliefs.”

On the impact in Nigeria, Tax Leader, West Africa at PwC, Taiwo Oyedele, shared how innovation around transportation companies who were most hit, tried to adapt by switching to logistics

  Oyedele, who is also ACCA Global Council member, noted that as much as the world is physically distancing, it was getting more technologically connected.  

  Noting that the role of professional accountants is to guide their organisations, he said: “They must properly identify their needs and get the right investment in technology at the right time and must be agile. They must adapt to stay on top of their game. Accountants must find a way to help their organisations to preserve their competitive advantage.”  

 On what the government can do, Chief Executive Officer, Nigeria Economic Summit Group (NESG), ‘Laoye Jaiyeola, said this is dependent on how much resources are available.  

  He maintained that a lot of the workforce is in the informal economy and depends on day-to-day work, adding that data was a challenge.  

He said the approach in Nigeria was beyond government, as “it is a collaborative approach. There is a huge gap between our expected revenue and expenditure and so there’s a limit to what the government can do. The government can give waivers.”

Earlier in his remark, ACCA Director, Africa, Jamil Ampomah, said the Road to Recovery Report outlined three stages in a framework, which provided a recovery roadmap; to explore the priority for recovery with the focus on the hard-hit industries, the role of digital, the technological aspect of doing business, how accounting firms will play a key role, government interventions and the future of work and employability.

Author of the report and Global Head of Business, ACCA, Jamie Lyon, who presented the publication, explained how organisations globally are responding to the COVID-19 crisis, and what ACCA’s recommendations are for charting a path to recovery.

The report maintained that the long term financial impact of COVID-19 seemed to be growing increasingly clear, as leading indicators suggest that the global economy was entering into a deep recession, yet remained impossible to understand the true long term consequences.

The roadmap suggested a number of practical steps in three phases that organisations could take as they chart a path to recovery and build resilience for the future.

The roadmap emphasized on 3As – Act, Analyse, and Anticipate.

It explained that the Act focused on the short term horizon, and the initial few weeks of response to the crisis. It said this stage was critical to ensure the current situation was managed properly, continuity plans are brought into place and the wellbeing of employees is protected.

On Analyse, it explained that the shift to the medium-term horizon reflected the focus on starting to build the path to recovery. 

At this stage, the report maintained that the organisation starts to resume its business operations, planned in manageable phases.

In the Anticipate phase, the report said the longer-term horizon is focused on innovation and understanding how organisations must evolve in the face of the pandemic. Here, the business model and strategies may evolve.

The webinar saw over 1,000 participants across markets, including African nationals outside of the continent like Nigeria, Ghana, Canada, the UK, and the US among others

 

Naira falls on black market after Forex ban for food imports

September 15, 2020

By Ripples Nigeria

Naira depreciated by 1.09% to N460 on the parallel market on Monday, days after President Muhammadu Buhari ordered the Central Bank of Nigeria (CBN) to halt dollar sales for importation of foods and fertilizer.

The Naira had firmed dramatically a fortnight ago on the black market following the regulator’s resumption of foreign exchange supply to individuals and investors in a bid to clear a heap of dollar demand.

Yet, sales have been pretty inadequate according to traders, with pressure mounting on the local currency.

Between last year and now, 16.6% of Nigeria’s foreign reserves has shrunken to around $35.77 billion.

Forex liquidity faded out on the spot market after international investors quit the economy in the aftermath of the recent oil crash. But dollar sales by the CBN have been inadequate also.

Turnover on the over-the-counter spot market also called the Investors and Exporters (I&E) Forex window plunged from a high of $1.3 billion in February to a low of $3.9 million in August.

On Monday, Naira traded at N381 to a dollar on the official market supported by the CBN while it was quoted at N385.83 on the I&E Forex window.

“It doesn’t help that some … pronouncement … will likely send more demand to (black) market. These developments put more pressure on the parallel market rates, particularly in the midst of very little supply,” trader told Reuters.

 

Nigeria’s revenue has dropped by 65% —Finance Minister

 

By Ripples Nigeria

The Minister of Finance, Budget and National Planning, Zainab Ahmed, said on Monday Nigeria’s revenue had dropped by about 65 percent.

The minister, who disclosed this at the Nigeria Television Authority (NTA) programme, “Good Morning Nigeria,” said the drop in government revenue was responsible for President Muhammadu Buhari’s decision to discontinue the payment of subsidy on petrol.

She stressed that the retention of subsidy on petrol would lead to fuel scarcity in the country.

Ahmed said: “What we have been doing is not sustainable. If we bring back fuel subsidy, we will fail because we will not be able to pay it and the problem of disputes with marketers will come back, then we will have queues again. We just cannot afford it and therefore this deregulation must be made to work.

“We appeal to Nigerians to understand that in the past when subsidy was done, we could afford to do it but right now, we cannot pay. Remember that right now our revenue has gone down by about 65 percent. So, it is not business as usual. We cannot do what we used to do anymore.”

The minister added that Nigeria is currently facing difficult times like several other countries across the world.

External Debt Almost Two-thirds Concessionary

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Tuesday, September 15, 2020 / 10:20 AM / by FBNQuest Research / Header Image Credit: Ecographics

 The FGN's external debt obligations increased by US$3.8bn in Q2 2020 to US$31.5bn. We see from the DMO's data release that the driver was the disbursement of US$3.4bn by the IMF within its rapid financing instrument (RFI) to tackle external shocks such as Covid-19. (The RFI is free of policy conditionality, which explains why it is available to all members other than those in arrears to the Fund such as Zimbabwe.) There were also increases of US$360m and US$120m in net obligations over the quarter to the World Bank group and Exim Bank of China.                                                                                   

In the absence of new commercial borrowing, the share of the external debt stock that is due to multilateral and bilateral creditors, principally the World Bank Group, on concessionary terms has again risen. The ratio rose from 59.6% in Q1 2020 to 64.5%.

The budget projects external borrowing of US$5.5bn. Beyond the RFI and US$290m approved by the African Development Bank (AfDB) group out of US$500m requested, it hopes to navigate its way around conditionality, led by fx policy, and secure multilateral loans from the World Bank and others.            

The FGN has pledged not to tap the Eurobond market this year. We hope that it will refinance a Eurobond maturity in January with a new issue. It did not accept the G20 offer of bilateral debt relief and did not ask private creditors for comparable treatment. That way, it protected its market standing.

FGN external debt by lender group, Jun 2020 (% shares)

Sources: Debt Management Office (DMO); FBNQuest Capital Research

The DMO has started to share data covering external loans approved but not yet disbursed. The total from Exim Bank of China is US$1.26bn and JPY2.3bn including one for rice processing plants signed as long ago as April 2016.

A note put out by S&P in June informs us that Nigeria had the fifth highest stock of public external debt in Africa at end-2019. Egypt topped the table with over US$60bn, with Angola, Kenya and Ethiopia all ahead of Nigeria.