Inflationary environment, cost structure hurt lenders’ earnings
espite carrying out tough cost cutting measures, including massive lay-offs in recent years, deposit money banks in Nigeria still contended with rising personnel costs in the first half of this year, findings by New Telegraph show.
This newspapers’ analysis of the H1 2019 results of eight lenders- Zenith Bank, UBA, Access Bank, Guaranty Trust Bank, Fidelity Bank, Stanbic IBTC, FCMB and Wema Bank- for instance, shows that they accumulated a total of N178.70billion in personnel costs in the first six months of this year compared with the N165.77 bilion, which they reported for the same period of 2018.
This means that the banks spent a total of N12.94 billion more on staff costs in H1’19 compared with what they expended in the corresponding period of last year.
A breakdown of the results indicates that of the eight banks, Zenith Bank spent the most on personnel expenses in the review period.
The Tier 1 lender reported personnel expenses of N38.73 billion in H1’19 as against the N34.81 billion it declared for the same period of last year.
The United Bank for Africa (UBA) followed with personnel expenses of N37.18 billion in H1 ’19, which was an increase of 5.58 per cent, over the N35.21 billion the Pan-African lender reported for the corresponding period of the previous year.
Also, Access Bank’s personnel and rent expenses increased by 13.27 per cent to N32.07 billion in the first half of last year from the N28.31 billion it reported for the same period in 2018.
The analysis further shows that Guaranty Trust Bank’s personnel costs marginally increased by 0.01 per cent to N18.58 billion in H1 2019 from the N18.58 billion the Tier 1 lender reported for the corresponding period of the previous year.
FCMB’s staff costs went up by 16.15 per cent to N13.96 billion in the first six months of this year from N12.02 billion in the same period of 2018.
Similarly, Fidelity Bank’s personnel costs increased by 11.20 per cent to N11.68 billion in the first half of this year from N10.50 billion in the first six months of last year.
Wema Bank also reported staff costs of N6.63 billion in the first half of this year as against the N5billion the Tier 2 lender reported for the similar period of 2018.
However, of the eight banks’ results reviewed by New Telegraph, only Stanbic IBTC reported a decline in its personnel expenses in H1’19.
According to the Tier 2 lender, staff costs fell by 6.9 per cent to N19.89 billion in the first six months of this year compared with N21.33 billion it declared for the corresponding period of 2018.
Financial analysts attribute the rising staff costs of banks to the country’s inflationary environment as well as the industry’s unsustainable cost structure.
For instance, commenting on bank’s full year 2018 results, the Chief Executive Officer, Financial Derivatives Company (FDC) Limited, Mr. Bismarck Rewane, stated that while most of the lenders reported increase in profit after tax (PAT) and earnings “cost structure (is) a major threat to earnings sustainability.”
The financial expert also noted that “tier 2 banks have higher cost-to-income ratio.”
Industry analysts point out that in the aftermath of the slump in oil prices in 2015 when the Nigerian economy slipped into recession in 2016, the banks had to embark on tough cost cutting measures including laying off redundant staff and shutting unprofitable branches as part of their strategy to cope with the harsh times and remain profitable.
Indeed, data obtained from the National Bureau of Statistics (NBS) indicates that 8,663 workers lost their jobs in the first half of 2017.
Specifically, the data showed that banks sacked an average of 360 workers every week from January to June 2017.
The NBS also stated that in recent years, banks had been employing more contract staff in their bid to cut costs.
Analysts also note that in addition to laying off redundant staff and shutting unprofitable branches, most lenders have also tried to improve cost-effectiveness by optimising their various banking channels and reducing IT expenses.
However, in a recent report entitled, “The Productivity Agenda – Moving beyond Cost Reduction in Financial Services,” PricewaterhouseCoopers (PwC) urged banks to look beyond cost reduction and restructuring measures for profitability and long-term survival.
The multinational professional services network contended in the report that traditional cost cutting strategies come with inherent limitations, which it said, affected the overall impact of the strategies on corporate performance and long-term sustainability.
It stated: “With banks struggling to improve their return on capital, many institutions are being forced to restructure and cut costs. Even in the asset management industry, where return on equity is higher than the financial services industry as a whole, there is downward pressure on margins and profitability.
“Cost cutting will only deliver so much. If financial institutions are to improve profitability in the long-term, they need to fundamentally improve the productivity of the enterprise.”
Commenting on the report, Financial Services Leader for PwC Nigeria, Sam Abu, said: “The cost cutting agenda adopted by many institutions since the financial crisis has, in essence, de-globalised the industry to make it more local or national, shrunk global footprints, divested businesses and shed clients.
“However, this process has run its course. If profitability is to get anywhere near the highs of 15 years ago, what is needed now is a fundamental focus on building a sustainable productive business model that can compete with both incumbent institutions and digital-only competitors.”
ABP: Association begins N4bn loan recovery from cotton farmers
Prior to the disbursement of a N4 billion loan to farmers under the Anchor Borrowers Programme (ABP) by the Central Bank of Nigeria (CBN) across some cotton-producing states, the Cotton Producers and Merchants Association (COPMA) has said it is setting out to recover the loan from beneficiaries.
The National President of COPMA, Alhaji Lawal Matazu, explained during the inauguration of the recovery committee that the programme was part of government’s policy to revamp the nation’s agricultural sector to enable farmers get economic freedom.
Matazu stated that recovery of the loan from his members was critical at this period because it shows that government has confidence in cotton farmers to pay back the APB loans.
He said: “The programme is aimed at providing an opportunity for the common man, the peasant farmer especially, to have access to an agricultural loan at its doorsteps without any collateral or all those conventional protocols and at cheaper rate charges.”
He said the programme engaged 22,000 farmers across the country, and it covered 24,000 hectares of farms with an expected yield of 36,969 metric tonnes of cotton that will cost N4 billion.
“The minimum guaranteed price for the produce is agreed at N150 per Kg. The price is believed to be a reasonable one for the farmers to make a profit after repaying their loan. In the event that the market price of the produce is above the minimum agreed price, the produce will be collected at the rate of the market prevailing price,” Matazu explained.
The association’s president admonished the recovery committee to use all available and peaceful avenues to recover the loans for the sustainability of the programme as it was designed as a revolving loan.
On his part, National Secretary of the association, Alhaji Kamilu Sheikh Munnir, stated that the programme was initiated by the Federal Government in 2016 for cotton farmers to easily access inputs, as it is designed as a simple loan.
He said: “COPMA came into the programme in 2017 and each farmer/beneficiary was allocated three hectares. All that was distributed to them were in the form of seeds, pesticides and other inputs and the repayment is expected to be with the cotton produced by the farmers, not in cash.”
Outsourcing: Whyte Cleon to promote entrepreneurial training
Whyte Cleon Limited, a leading human resource outsourcing and consulting company, has revealed that it will commence an entrepreneurial development training designed for its former employees to make them become solution providers in outsourcing industry.
The company’s Chief Executive Officer and Managing Director, Mrs. Nireti Adebayo, made this known in Lagos during the company’s pre 10-year anniversary scheduled for the first quarter of 2020.
She stated that entrepreneurial development training was a platform in which the firm wants to give back to the society by equipping its former colleagues with a new mindset that will enable them become more productive in their chosen profession.
Adebayo said: “Over time, we have delivered unrivalled quality service to our clients and provided practical solutions to our clients assisting them in strategy formulation and execution, talent acquisition, organisational performance and human capital investment.
“The entrepreneurial development training is a platform through which we aim to give back to society by equipping our former colleagues with a new mindset that will enable them become more productive, flourish, and ultimately become solutions provider and employers of labour, thereby helping to lift others out of poverty.”
The chief executive officer explained that this initiative, which is the first of its kind by any organisation in the outsourcing space, attested to the status of Whyte Cleon Limited as Nigeria’s fastest growing , “future forward” human resources solution provider.
Failed contracts: Architects seek professionals’ inclusion in procurement
In order to prevent cases of failed contracts, poor contractual performances, escalating corruption and incidence of collapsed buildings arising from loopholes in the Public Procurement Act, the Architects Registration Council of Nigeria (ARCON) is seeking the inclusion of seven professional regulatory bodies in the construction industry.
This is part of a memoranda submitted by ARCON before the Senate Committee on Public Procurement, which conducted a two-day public hearing on three bills (SB 106, SB 109 and SB 158) seeking to amend the Public Procurement Act (PPA) 2007.
According to ARCON’s President and the Registrar, Dipo Ajayi and Umar Murnai, respectively, the bills amongst their propositions should include all seven professional regulatory bodies in the construction industry to strengthen and sustain effectiveness of the procurement process.
They said it was evident that omission on professional regulatory bodies accounted for failure of the Act amongst other factors, given that over 60 per cent of the national budget in the last twenty years had gone into construction-related procurement of goods or services or related expenses.
ARCON’s registrar, in a document signed and made available to New Telegraph in Lagos, said the primary target of the body’s contribution was to improve performance of the construction industry, which, according to him, is second to a agriculture in contribution to National Gross Domestic Product (GDP).
Murnai said: “As pointed out by the sponsors of the three bills, there are evident failures of the Act after twelve years which shows clearly the limitations and constraints that continue to plague the nation in public procurement circles.
“This has adversely affected the construction industry in failed contracts,poor contractual performances, escalating corruption and incidence of collapsed buildings arising from loopholes in the ACT which allow quackery.”
According to him, the window offered by the sponsors of the proposed bills to amend the Act offered construction industry an opportunity to contribute to the consolidation of the gains of the exercise, which will result to increase in the national GDP, thus leaving a lasting legacy.
The three proposed bills include an Act to amend the national council on public procurement and the bureau of public procurement by Senator Shuaibu I. Lau, a Bill for an Act to amend the provisions of the public procurement Act, 2007, to increase the mobilisation fees paid to contractors and suppliers, and other matters related thereto, sponsored by Senator Uche Ekwunife; a Bill for an Act to amend the public procurement Act ,2007 to provide for specific time frame for the procurement process/proceedings and for other matters connected therewith, sponsored by Senator Sankara Danladi Abdullahi.
Fundamental to the second bill, the registrar of ARCON said, was the exceptions sort for ecological funds office and payments terms deemed delayed payments from 60 days to 180 days.
He said: “It is apt to reiterate the importance of the inclusion of the registered professional in respect of all procurement subject matters in the procurement process of the ecological fund and shall be referred accordingly by the procuring entity.
Moreso, he pointed out that a six-month delay to 180 days in payment was financially injurious to any project, its timelines and ultimately the project outcomes.
“Fundamental to the Act and the proposed bill by Senator Shuaibu I. Lau is the omission of all seven professional regulatory bodies in the construction industry as part of the full-time council, he said, pointing out that this was a critical omission.
Apart from this, the ARCON team added that fundamental to the third proposed bill was the time frame for formalising procurement within 60 days; from initiation to completion of the procurement process.
ARCON team pointed out that the 60-day window for project planning of the procurement process by the procurement entity would depend largely on the technical capacity of the procurement entity to handle the size in terms of number of staff input needed and technical inputs of subject matter professionals.
“Where the procurement entity lacks the capacity then,the input of appropriate professional regulatory bodies shall be sought and obtained to facilitate the attainment of the 60 days time frame,” Murnai said.
To forestall a gap in the initiation to completion of the process, ARCON proposed as part of the bill, an inclusion of a precondition evaluation template to be used by all procurement entities to ascertain their professional technical capacity, which would make it mandatory for procurement entities to refer to the appropriate subject matter.
ILO tasks FG over jobs for returnee migrants
To ensure a balanced society for all, the International Labour Organisation (ILO) has called on the Federal Government to make it possible for migrants, who want to return home, get engaged to enable them lead a decent life and be properly integrated.
Giving the advice in Abuja, ILO Workers Specialist, David Dorkenoo, said government should consider multilateral and bilateral agreements, which provide a framework where people can move and earn decent earnings.
According to him, “they should also be able to make provision for people who are migrating from outside back into the country. Talking about healthcare providers, a lot of them want to come back, but when they come back how are they integrated within the system.”
Dorkenoo, while speaking at a workshop to sensitise trade union organisations on labour migration governance, made it clear that potential and returning migrants in Nigeria and Ghana were protected through fair and effective labour migration governance.
He said the project, “Initiative for Labour Migration, Employment and Reintegration in Nigeria and Ghana (LMER), built on existing efforts to strengthen labour migration governance, enhance employment prospects of potential or returnee migrants and support the reintegration of returnees.”
On the status of internally displaced persons, the ILO chieftain said that IDPs were equally as important as migrants because “when you are looking at migration you don’t only look at migration from the perspective of people flying out of Nigeria to another part of the world.
“But even internally, within the country, where there are challenges, insurgencies and people are displaced equally it is important within the frame work of migration to be able to address the challenges of people that are displaced from their traditional place of abode to other parts of the country in terms of providing place for them to be able to stay.”
Explaining further, he noted that when those who are displaced begin to have access to jobs, “they begin to earn income then they will begin to take care of the basic needs because they can take care of their health, their families and education of their children.”
Rallying Cassava stakeholders for improved yield
In continuation of its strategic intervention in select economically viable commodities, CBN rallied cassava stakeholders for a pact aimed at eliminating bottlenecks stifling the commodity’s growth, Abdulwahab Isa reports
Nigeria is yet to reap one tenth of the economic values embedded in cassava. Like other high yield commodities with economic value that Nigeria accords less attention, cassava remains a potential goldmine for the country.
To change the tide, the Central Bank Nigeria (CBN) is leading a cassava revolution to enable the country earn reasonable income and also create jobs for Nigerians.
CBN Governor, Mr. Godwin Emefiele, is thus rallying stakeholders including state governors from cassava producing belt, cassava farmers, and conglomerates using cassava byproducts.
At a meeting between CBN and the stakeholders, including large scale cassava processors, the message at the meeting, which produced Memorandum of Understanding (MoU), was primarily conveyed to resuscitate cassava value chain in Nigeria.
Prior to CBN signing MoU with the stakeholders, CBN had included cassava on the forex restriction list.
Like other commodities of economic potential that are neglected, cassava is one of the economically viable commodities. What is presently derived from it is just one tenth of its untapped full economic value.
At the parley, Emefiele underscored the importance of cassava as an economic commodity.
According to him, “demand for high quality cassava flour in bread, biscuits and snacks is above 500,000tonnes annually while supply is below 15,000tonnes. Demand for cassava starch is above 300,000tonnes annually while supply is below 10,000tonnes. Demand for cassava-based constituents in sugar syrup is above 350,000tonnes annually while supply is almost non-existent.
“Potential demand for ethanol in Nigeria as fuel for cooking, power vehicles (E10), and other industrial uses exceeds one billion litres, while production is near zero. It was on this premise that we included cassava in the FX exclusion list to salvage the industry, encourage farmers to go back to their farms to boost job creation and increase output and improve the capacity utilisation of our processing companies.”
Emefiele noted that the sector had the potential to generate over two million jobs if fully explored.
There are obstacles preventing cassava from attaining its economic height. CBN governor noted that without tackling the obstacles, any investment in cassava would amount to economic waste.
He noted that although huge investments were made into the industry during the cassava bread initiative, the industry continues to suffer as a result of low yield varieties, poor farm practices, lack of good quality farm inputs, non-utilisation of available cultivable lands, manual system of production, inadequate funding for small holder out grower schemes and low processing capacity.
“To curtail these challenges and in line with CBNs developmental initiatives, the bank is intervening in the sector through a complete value chain approach. This will involve support to the Nigeria Cassava Growers Association at the production level under the Anchor Borrowers’ Programme (ABP) and support to large scale cassava processors under the CACS and DCRR programmes,” said CBN governor.
To get every stakeholder on board, Emefiele said CBN was collaborating with the private sector, states in cassava producing areas and other stakeholders to join hands towards resuscitating the sector.
“We place a high premium on cassava because the commodity can generally be used for different things along the value chain. The value chain has enormous potential for employing over two million people in Nigeria if well harnessed, due to the diverse secondary products that it offers.
“Some of the products include high quality cassava flour, starch, sugar syrups & sweeteners, chips for domestic livestock feed and for export to China, ethanol/bio-fuels, high fructose cassava syrup (HFCS), fuel ethanol (E10) as well as animal feed from cassava waste among others,” he told his audience, which included Ekiti State Governor, Dr.Kayode Fayemi, Governor of Ondo State, Rotimi Akeredolu (SAN), and Deputy Governor of Ogun State and representatives of big conglomerates like Nestlé, Flour Mills, Promasidor, Unilever and cassava farmers.
It was to deal with issues retarding progress of the commodity that informed the bank’s decision to bring all stakeholders together to agree on a framework for modern production and processing.
“This is by ensuring that we identify and tackle all major challenges in the value chain from seedlings production, land clearing, planting, harvesting, processing, marketing and provision of extension services among others,” he added.
Transformation envisaged in cassava value chain is not what CBN alone can achieve. All stakeholders, including state governors, cassava farmers and conglomerates using the commodity must come together to achieve it.
As landlords, governors of cassava producing states are required to make land available to unemployed youths to embrace cassava farming and processing.
Reacting, Fayemi, who is also the Chairman, Nigerian Governors’ Forum, thanked Emefiele for spearheading the revolution in strategic key sectors of the economy.
He said: “I am happy that this initiative of dealing with farmers who are the out growers. It’s also dealing with the product itself-improving the yield because the CBN governor spoke to us about working with Umudike and working with IITA in Ibadan. If we expand the land available, what will make this more profitable for our growers is yield. The yield per ethanol is very low; we can increase it if we get the right steps for our farmers and if we also ensure that we reclaim the land for them by clearing the land by ensuring we give them support in terms of security.”
Also, Akeredolu said: “Today looks a fulfilling day for us because we have waited for this time to come. We know that CBN has several interventions and on the issue of cassava we have advantage. We have been talking and I want to thank the governor of CBN. He has accepted to look at the issue of cassava and cocoa too.
“Cassava is what we have come here to discuss today. We have so many growers. In Ondo State today, we have an industry that is almost consuming all the cassava that we have and they are still buying from outside. So it is important that if we are able to have so many people to grow cassava as we intend to do with these facilities we are talking of.”
On his part, National President Nigeria Cassava Growers Association, Pastor Segun Adewumi, lauded the initiative. He said Nigeria cassava growers were equal to the task save for threat posed by Fulani headers.
He commended Fayemi for making Certificate of Occupancy (C of O) available for 6,000 hecters of land allocated to cassava growers in Ekiti State.
The quest to revive neglected commodities that are economically viable entails an all-inclusive approach. To redirect cassava to its economic fortune, every single stakeholder connected to it must get on board, charting a new path.
Border closure: Unravelling local investors’ pains
Members of the organised private sector (OPS) are worried over report that the Economic Community of West African States (ECOWAS) sub-region has started rejecting Nigerian goods, apparently as retaliation against Federal Government’s land border closure policy. Taiwo Hassan reports
In many fora, private sector groups comprising Manufacturers Association of Nigeria (MAN), Lagos Chamber of Commerce and Industry (LCCI), Nigeria Employers’ Consultative Association (NECA), National Association of Small Industries (NASI), Nigerian Association of Small and Medium Enterprises (NASME) and others have made their positions known to the Federal Government on the partial closure of the country’s borders.
According to them, no matter the gains assumed from the decision, it remains counter-productive to the country’s economy despite the vision by the Federal Government to promote consumption.
It is on record that trade among ECOWAS countries, including Nigeria, has been in existence since the formation of the regional body in 1973, and it has brought economic fortunes to member-states, with different trade treaties meant to foster liberalisation.
However, following poor implementation of the ECOWAS Trade Liberalisation Scheme (ETLS), not less than 80 per cent of West African countries do not comply with the ECOWAS protocols.
Besides, over 90 per cent of Nigeria’s trade with the West African sub-region is by road. This implies that the border closure has severely affected distribution of goods within the sub-region, culminating in friction among member states.
There is no doubt that the closure of Nigerian land border for a while now has come with benefits and costs; upsides and downsides.
In fact, reports so far show a drastic reduction in smuggling of rice, poultry products and sugar. The smuggling of petroleum products out of the country to neighboring countries has also declined considerably. With this in place, the private sector appreciated these outcomes.
However, it is also important to reckon with the costs to local investors as they have suffered untold losses as a result of the closure.
Corporates, large number of informal sector players and individuals doing legitimate businesses across the borders have become victims of the closure. This poses a dilemma. Government means well, but there are many innocent casualties.
Yes, the country could be celebrating the benefits on one hand, but, there is also need to count the costs, in relation to job losses, skyrocketing prices of goods, halting of legitimate exports to the sub-region, cutting off intermediate products for some manufacturers, as well as delinking of some multinationals companies from their sister companies in the sub-region.
In fact, this has brought about more harm to players involved in the movement of goods via the land border axis.
Notwithstanding the revenue increase the Nigerian Customs Service claimed it has generated for the country with the closure, local exporters are also counting their losses as countries within the ECOWAS sub-region have started rejecting Nigerian cargoes, apparently as a form of retaliation against the land border closure.
Latest developments, according to the exporters, indicate that the border closure is gradually crippling their businesses.
Speaking in a chat with newsmen in Lagos, the Chief Executive Officer, Multi-mix Academy, an export oriented institution, Dr. Obiora Madu, disclosed that Nigerian exports within the ECOWAS region was decreasing due to the border closure.
He said: “It is definitely impacting negatively on the economy as the exports done within the ECOWAS region and our neighboring countries are now in decrease. These countries that benefit from the open border, since we have closed it, even though we used to export to them before, you don’t expect to get the level of cooperation that we are getting before because they are hit hard by these closed borders.”
He further admitted that exporting generally is becoming difficult as cargoes are now undergoing careful examinations before leaving the shores of the country. This, he said, had also impacted negatively on the volume and speed of export.
“The fact is that it definitely has impact on volume, it will also impact on speed and it will not be as swift as it used to be because of scrutiny,” he noted.
Speaking with this newspaper, the LCCI Director-General, Muda Yusuf, explained that the country was losing a lot of money as most of the country’s products have these West African nations as export destinations.
To him, the complete shutdown of cross border trade between Nigeria business and their counterparts in the West sub-region is having grave consequences for investments and jobs.
According to him, many industries have invested in products registered under the ECOWAS ETLS, adding that these are investors whose business models were anchored on market opportunities in the ECOWAS.
He noted that these investments had been completely disrupted and dislocated.
“Majority of the victims of the border closure are small businesses, most of them in the informal sector. Their means of livelihood has been put in great jeopardy. This class of traders does not have the capacity to move their products by sea because of the modest scale of their operations. Supply chain of some business has been completely disrupted.
“Maritime sector investors have been denied opportunities offered by transit cargo destined for landlocked countries which normally comes through the Nigerian ports. The closure has triggered an unprecedented hike in prices with a devastating impact on the poor,” he said.
Why close borders
Indeed, Nigeria became the latest African nation to close its borders, following similar actions by Kenya, Rwanda and Sudan in recent months.
The borders have been closed for various reasons including diplomatic disputes, security concerns, health precautions and economic considerations among others.
The closure, especially by Africa’s biggest economy, Nigeria, is a slap in the face of continent’s integration efforts.
The recently signed African Continental Free Trade Area agreement provides for free movement of goods and persons across African countries.
However, findings have shown that economic gains and trade dominance are the reasons behind the closure of borders in Africa.
The private sector insisted that the rejection of goods from Nigeria by ECOWAS states will definitely take a large slice dip off the country’s revenue generation and the GDP in general.
Nigeria’s certified cyber security experts rise to 3,500
…as losses to crime hit N288bn
Nigeria’s capacity to fight the surging cybercrime against businesses and government increased in the last year as the number of skilled and certified cyber security experts rose to 3,500 from the initial 2000.
However, while this is the largest in Africa, the country is said to have the lowest in terms of experts per person based on the estimated 190 million population.
According to Africa Cyber Security Report just released by Demadiur Systems Limited, while countries like Kenya and Uganda have 1800 and 400 cyber security experts respectively, with their population of 46.7 million and 38.3 million in that order, they have more experts per person than Nigeria.
This means that Nigerian businesses are more prone to attacks than other businesses in Africa. Already, the shortage of expertise is said to have contributed largely to the rising cases of cybercrimes in the country, leading to a loss of about N288 billion ($800 million) by businesses in 2018.
The losses in that period were incurred mostly by commercial banks, government, and telecommunications operators in the country, according to the report. Before now, the Federal Government had said that the country loses N127 billion annually to cybercrimes.
Presenting the report in Lagos, the Chief Executive Officer, Demadiur, Mr. Ikechukwu Nnamani, said: “In the course of our study, we found out that the country is ill-equipped in terms of cybersecurity experts to address the challenges facing her. This is in spite of the fact that the number of experts in the country has grown from about 2000 to 3,500.”
According to him, with the cost of cybercrime increasing every year across Nigeria, lack of local cyber security skillset is a big challenge to businesses and governments in the country.
“From our analysis, we identified that this skill gap comes from two major sources, few skillset in the nation and the inability of companies to have a cyber security team and strategy. With the number of SMEs and large organisations in the country facing cyber security threats compared to the 3500 certified security professionals in Nigeria, it is clear that Nigerian businesses are easy targets for both local and international hackers,” he said.
With the low-security expertise, Nnamani said the study conducted in Nigeria also revealed that more Nigerians were going into cybercrimes as attacks from the country have increased.
“We found out that locally engineered malware experts on the rise, which indicates that more Nigerians are going into the crime.
“In 2016, there was one cyber security expert for every 124,587 Nigerians, while this marginally improved to one expert for every 106,048 Nigerians in 2017; in 2018, it abysmally stood at one expert for every 103,093 citizens. There is a need to have people well trained in that space and also to have a certification process to ensure that the right skill needed is acquired,” he said.
Nnamani, however, noted that the country had improved in terms of awareness about cyber security.
“We noticed that there is now more awareness, compared to previous years; management and boards are beginning to take cyber security more seriously. We also noticed that the number of successful prosecution has gone up,” he said.
The Demadiur CEO added that banks had also increased their investments in cybersecurity in recent years, but noted that there was still a high level of ignorance about cyber security among SMEs in the country.
Speaking on the report, the Chief Executive Officer, Cyber Security Experts Association of Nigeria, Mr. Remi Afon, said Nigeria had a Cyber Security Strategy and National Cyber Security Policy, which were published in 2014 to drive the fight against cybercrimes. He, however, lamented that the policies have remained mere documents.
“The documents cover vast areas of cyber security domain, which if implemented would have strategically positioned Nigeria in a good place in terms of managing and mitigating cyber security threats we face as a nation. Unfortunately, the strategy and policy documents have remained electronic documents, which not only need to be reviewed five years on but also deserve proper implementation,” he said.
Afon added that while private businesses were trying their best to employ cyber security experts, the Nigerian government had remained non-committal to cyber security.
“Except for a few government agencies that have a functioning cyber security department, most government agencies do not have any department set aside for cyber security function. So, clearly, they lack information security professionals and rely on the IT department to carry out all their information security-related duties,” he said.
Telcos connect 4.7m broadband users in one month
Nigeria’s broadband penetration recorded a huge leap in October as telecommunications operators added 4.7 million new customers.
This brought the total number of broadband users in the country to 72.2 million from 67.5 million recorded in September.
According to the latest industry statistics released by the Nigerian Communications Commission (NCC), the country’s broadband penetration stood at 37.8 per cent as of October 2019.
The growth may not be unconnected with the telecoms operators’ aggressive push for deployment of 4G service across the country.
Broadband, in Nigeria context and as defined by the country’s National Broadband Plan (NBP 2013-2018), refers to internet access with a minimum speed of 1.5 megabits per second (Mbps).
While the number of Nigerians with 2G and 3G internet access has been on the increase, broadband growth has been limited as it requires the operators to deploy more infrastructures across the country.
According to a World Bank study, a 10 percentage point increase in fixed broadband penetration will increase GDP growth by 1.21 percent in developed economies and 1.38 percent in developing ones.
While the country exceeded the target of 30 per cent penetration by December 2018 as set in the NBP 2013-2018, stakeholders have been clamouring for a new plan to give the next direction for the industry.
However, in the absence of a new policy from the government, the operators said they were targeting 70 per cent broadband penetration by 2023 through the rapid deployment of 4G infrastructure.
To increase the penetration level, NCC said it was focusing on ensuring that all new base stations to be built by the mobile network operators (MNOs) were 4G-compatible.
According to the commission, 56.4 per cent of the country’s population is on 3G, while some are still on 2G.
However, while highlighting efforts to deepen broadband penetration at a forum in Lagos, the Executive Vice Chairman of the Commission, Prof Umar Danbatta, said the commission had been encouraging the operators to upgrade their 2G base transceiver stations (BTSs) to 3G while ensuring that their new sites are 4G.
“Through effective regulatory oversight, which the Commission is known for, we are ensuring that all new sites to be built by the mobile network operators (MNOs) are Long Term Evolution (LTE)-compatible. We also strive to ensure the implementation of harmonised Right of Way (RoW) charges on state and Federal Government highways at the cost of N145 per linear meter to encourage faster rollout of telecoms infrastructure.
“We are also working with relevant stakeholders to ensure the elimination of multiple taxation and regulations; encourage the spread of 3G coverage to, at least 80 percent of the Nigerian population over the current 56.4 percent of the population covered with 3G networks,” the EVC said.
He added that the commission was also ensuring that there is efficient allocation of spectrum resources through re-planning and opening up of some spectrum bands as well as development of framework for the utilisation of unused broadcast spectrum known as television white space (TVWS) for the provision of affordable broadband services in the rural, underserved and unserved areas of the country.
SMEs: FG urged to float N1trn investment fund
A former Deputy Governor of Central Bank of Nigeria (CBN) and a presidential candidate of the Young Progressives Party (YPP) in the last election, Professor Kingsley Moghalu, has urged the Federal Government to float a N1 trillion venture capital fund under a Public Private Partnership (PPP) arrangement for Small and Medium scale Enterprises (SMEs).
This, he said, would urgently address the spiraling rise in unemployment in the country.
Moghalu, in an interview with this newspaper in Lagos, explained that the current administration under President Muhammadu Buhari must find a lasting solution to the stifling credit to local SMEs in the country, which is severely taking a toll on their bottom line and profits.
According to him, it is time the Federal Government created a N1 trillion venture capital funding to enable SMEs get access to capital to boost their businesses, adding that paucity of fund was killing SMEs businesses in Nigeria.
Also, he noted that high interest rate from Nigerian banks was preventing SMEs from approaching banks to borrow money to improve their businesses.
The former CBN chieftain admitted that availability of fund and access to credit to SMEs would help tackle the spiraling rise in unemployment in the country.
He emphasised that the N1trillion venture capital fund was the catalyst to fully enable the SMEs realise their objectives as the bedrock of Nigerian economy.
To him, the scheme is obtainable in many advanced countries of the world, including the United States, South Africa, United Kingdom and Asia giants; and Nigeria cannot be an exception to this since this scheme has been a success story in other business climes around the globe.
He said: “We need to create a N1 trillion venture capital fund. It will be a Public Private Partnership. It is going to be more useful than the Social Intervention Programme (SIP) of the present administration. The reason for the intention of the SIP is to empower traders with money, it is not sustainable and we all know that. They are recycling poverty.
“What will need is to create wealth for SMEs in this country. And how you create wealth, you create access to finance for SMEs, for young people who are jobless; you have to create access to capital for them.
“The problem I have about Nigeria is that a lot of our approach about capital is about credit, and credit is expensive in this country. So we need to move to equity. That is equity investment.”
“So this fund, how will it operate, very briefly, this fund will invest in technology innovation, product innovation, and it will help take them to the market, it will give start up to scientists and young people who have good ideas, which they can pitch like the International Breweries kick-start initiative.
“We need to have this fund and to invest in equity and the PPP will be co-owner of the business and we will set up modalities on how to manage the part of the corporate governance of the business, whether it is access to funds or it is going to be a direct funding, that is a matter of government to decide. But we need a venture capital funding in Nigeria.
“Why? Because in South Africa and many other countries of the world, including Asia, most of the jobs are created by the private sector that created the venture capital. When you start a new business with a support from this fund, you may start on your own but after a while, you have six or 10 employees, also after a while, you have 12 or 20 employees, if you replicate this in hundreds of thousands, millions of jobs will be created through the scheme, this is the truth. So you must have a policy that targets that youth segment of our population and address their problems.”
Firm to train SMEs on internet businesses
Web hosting giant, Whogohost, has said it will sponsor the ‘Make Money Online’ SME Clinic at the Computer Village Expo 2019, where there will be discussions on ways their products could help businesses make money online.
Computer Village Expo 2019 themed, “A New Partnership Agenda for Growth,” is the annual flagship integrated events platform connecting 10,000+ Technology SMEs from Nigeria’s largest technology market, Ikeja Computer Village, and consumer technology buyers across Nigeria, Africa and beyond.
Whogohost, in a statement, said it had always been keen on helping SMEs and tech enthusiasts grow in Nigeria and it saw the SME Clinic at the Computer Village Expo 2019 as an opportunity to establish a new relationship with SME owners and entrepreneurs.
“During Make Money Online SME Clinic, Whogohost will be sharing insights on how SMEs in Ikeja Computer Village and other participants can expand their reach online which will help them grow their customer base and eventually revenue. We will also offer our diverse range of value offerings to prospective partners, showing off ways that they can make money as resellers,” the statement read.
As a sponsor of the SME Clinic, Whogohost said it hoped to help small and medium enterprises get their businesses online.
“We operate with the goal of enabling Nigerian SMEs grow online effectively with very minimal financial investment through the deployment of beautiful, functional and mobile-friendly websites which are hosted on their web hosting infrastructure providing small businesses in Nigeria with a cost-effective way of expanding their brand awareness and sales revenue through their native online platforms,” the company said.
Having launched an online campaign tagged ‘#TakeItOnline’ in 2018 & 2019, Whogohost said it had achieved several engagements with so many business owners signing up to have their websites designed, built and hosted.
Commenting on the success of the campaign, WhoGoHost’s CEO, Toba Obaniyi, said that: “#TakeItOnline is a labour of love that we created out of a desire to help businesses grow in Nigeria. Having experienced the benefits of running an online business, we realised that most businesses in Nigeria are still in the dark regarding benefits that owning a website guarantees their business.
With #TakeItOnline, there is no longer any reason for SMEs to be left behind in this rapidly changing world of commerce.”
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