Thursday, July 19, 2018
Video - Nigeria makes progress towards reaching consensus on CFTA deal
Nigeria is moving closer to signing the pan-African free-trade deal. 44 other countries have already signed on. The agreement scraps barriers to intra-African trade. President Muhammadu Buhari says he's made significant progress in reaching consensus to sign the deal.
Video - At least 44 people dead, thousands stranded after heavy rains in Nigeria
At least 44 people are dead and scores still missing after severe flooding in Nigeria. Torrential rains have swept across northern parts of the country this week, leaving thousands of people homeless.
Video - Nigerian football league suspended after leadership row
Leadership wrangles in Nigeria's football managing body have taken another twist. The League Management Company has suspended all Premier League matches indefinitely.
Nigerians are burying cash in backyards due to stumble in mobile cash
Every few days, Tasiu Abdurrahman takes the money he makes from selling spices in Nigeria’s biggest northern city and buries it in his yard.
The 55-year-old closed his bank account eight years ago after growing disillusioned with standing in long lines for hours to deposit or withdraw cash. Abdurrahman is one of about 50 million of the unbanked in Nigeria, which despite having Africa’s largest mobile-phone market, is only just opening up to the technology to bring banking to its estimated 200 million people.
“My business partners need cash,” said Abdurrahman as he juggled two mobile phones at his ginger and tamarind stand, one of many dotting the streets in Kano. “If they all opened bank accounts, I would be happy to.”
Financial inclusion in Nigeria -- which vies with South Africa as the continent’s biggest economy -- has gone backward as the regulator blocked network operators from applying for mobile-money licenses that would allow cash transfers without the need for a bank account. Between 2014 and 2017, the percentage of banked adults dropped nearly 4 percentage points to 39 percent, while the sub-Saharan African average increased more than 8 percentage points to 43 percent.
The Central Bank of Nigeria this month announced it is not on track to reach its target of increasing financial inclusion to 80 percent by 2020. It is now reviewing the path it took in 2012 with a “refreshed strategy” and has also signed a cooperation agreement with the Nigerian Communications Commission to improve the penetration of financial services using mobile phones.
The 55-year-old closed his bank account eight years ago after growing disillusioned with standing in long lines for hours to deposit or withdraw cash. Abdurrahman is one of about 50 million of the unbanked in Nigeria, which despite having Africa’s largest mobile-phone market, is only just opening up to the technology to bring banking to its estimated 200 million people.
“My business partners need cash,” said Abdurrahman as he juggled two mobile phones at his ginger and tamarind stand, one of many dotting the streets in Kano. “If they all opened bank accounts, I would be happy to.”
Financial inclusion in Nigeria -- which vies with South Africa as the continent’s biggest economy -- has gone backward as the regulator blocked network operators from applying for mobile-money licenses that would allow cash transfers without the need for a bank account. Between 2014 and 2017, the percentage of banked adults dropped nearly 4 percentage points to 39 percent, while the sub-Saharan African average increased more than 8 percentage points to 43 percent.
The Central Bank of Nigeria this month announced it is not on track to reach its target of increasing financial inclusion to 80 percent by 2020. It is now reviewing the path it took in 2012 with a “refreshed strategy” and has also signed a cooperation agreement with the Nigerian Communications Commission to improve the penetration of financial services using mobile phones.
Baby Steps
Less than 6 percent of Nigerians use their handsets to transact using mobile money, compared with 73 percent of Kenyans, where more than two-thirds of adults have a bank account, according to the World Bank. That’s even though there are more than two phones for every bank account in the West African nation.
Mobile First
Nigerians own twice as many mobile-phone lines as they do bank accounts
“We’re taking baby steps when we should be running,” Yomi Ibosiola, an associate director at Deloitte Nigeria’s data analytics practice, said in an interview in Lagos, the commercial hub.
Cellular phone operators would invest more if they were allowed to lead the way, said Emeka Oparah, a spokesman for Bharti Airtel Ltd.’s Nigerian unit, which has 40 million subscribers.
“Right now, we’re only providing a platform for some people to use, if it becomes our business, we will invest in it,” Oparah said. The government should adjust its policies “if it wants to move very quickly.”
Less than 6 percent of Nigerians use their handsets to transact using mobile money, compared with 73 percent of Kenyans, where more than two-thirds of adults have a bank account, according to the World Bank. That’s even though there are more than two phones for every bank account in the West African nation.
Mobile First
Nigerians own twice as many mobile-phone lines as they do bank accounts
“We’re taking baby steps when we should be running,” Yomi Ibosiola, an associate director at Deloitte Nigeria’s data analytics practice, said in an interview in Lagos, the commercial hub.
Cellular phone operators would invest more if they were allowed to lead the way, said Emeka Oparah, a spokesman for Bharti Airtel Ltd.’s Nigerian unit, which has 40 million subscribers.
“Right now, we’re only providing a platform for some people to use, if it becomes our business, we will invest in it,” Oparah said. The government should adjust its policies “if it wants to move very quickly.”
Verification Details
Fidelity Bank Plc allows people to open an account using a mobile phone, said Chief Operations and Information Officer Gbolahan Joshua. It is also using agents to offer banking services, such as small payments and deposits, through informal branches, he said, adding the lender has 3.9 million customers.
“When you open an account on your mobile, you can receive money but you cannot make payments,” Joshua said. “You need a Bank Verification Number to make transactions on that account you opened on mobile. Since the targets for financial inclusion are people that don’t have BVN already, some infrastructure needs to be deployed, like mobile BVN.”
There are efforts being made to remove those obstacles. One includes issuing identity numbers to 70 million people by the end of next year and pulling together the government’s various identity verification systems into a centralized database, which will make it easier for people to plug into financial services.
Fidelity Bank Plc allows people to open an account using a mobile phone, said Chief Operations and Information Officer Gbolahan Joshua. It is also using agents to offer banking services, such as small payments and deposits, through informal branches, he said, adding the lender has 3.9 million customers.
“When you open an account on your mobile, you can receive money but you cannot make payments,” Joshua said. “You need a Bank Verification Number to make transactions on that account you opened on mobile. Since the targets for financial inclusion are people that don’t have BVN already, some infrastructure needs to be deployed, like mobile BVN.”
There are efforts being made to remove those obstacles. One includes issuing identity numbers to 70 million people by the end of next year and pulling together the government’s various identity verification systems into a centralized database, which will make it easier for people to plug into financial services.
India Inspiration
The central bank has said it’s taking inspiration from India, where a government-biometric database known as Aadhaar helped grow financial inclusion from 53 percent to 80 between 2014 and 2017, by cutting the cost for banks of identifying a customer.
Regulators in Nigeria also announced an initiative in March that will help to increase banking agents to 500,000 within two years, from 100,000, according to estimates by Enhancing Financial Innovation & Access, or EFInA, a research organization.
“One of the major issues for banks has been the cost of going to those unprofitable areas,” said Henry Chukwu, who focuses on broadening agent networks at EFInA.
Most of the biggest lenders are focused on business banking. Zenith Bank Plc, the country’s largest lender with the equivalent of $15.4 billion in assets, makes about 6 percent of its revenue from retail banking and about 58 percent from corporates.
The central bank has said it’s taking inspiration from India, where a government-biometric database known as Aadhaar helped grow financial inclusion from 53 percent to 80 between 2014 and 2017, by cutting the cost for banks of identifying a customer.
Regulators in Nigeria also announced an initiative in March that will help to increase banking agents to 500,000 within two years, from 100,000, according to estimates by Enhancing Financial Innovation & Access, or EFInA, a research organization.
“One of the major issues for banks has been the cost of going to those unprofitable areas,” said Henry Chukwu, who focuses on broadening agent networks at EFInA.
Most of the biggest lenders are focused on business banking. Zenith Bank Plc, the country’s largest lender with the equivalent of $15.4 billion in assets, makes about 6 percent of its revenue from retail banking and about 58 percent from corporates.
Push-Pull
There are not enough incentives for people to open bank accounts, especially among the poor, said Ameya Upadhyay, a principal in the investment team of Omidyar Network Fund Inc., which has invested in Pagatech, one of Nigeria’s first mobile-money providers, and another company that gives loans to small- and medium-sized businesses. About 87 million Nigerians live on less than $1.90 a day, according to Vienna-based World Data Lab’s World Poverty Clock.
“You have to create a ‘pull’ to these accounts and that happens when those accounts are meaningful to people’s every day lives,” he said, such as increasing the number of merchants with pay points or offering more insurance, savings or lending products. “People don’t eat accounts.”
Abdurrahman, the Kano spice merchant, agrees and remains unconvinced about using his phone to transact.
“I may decide to go for mobile money if more of my suppliers have it,” he said. “But for now I am very comfortable keeping cash at the shop to pay for supplies and keeping the rest at home.”
There are not enough incentives for people to open bank accounts, especially among the poor, said Ameya Upadhyay, a principal in the investment team of Omidyar Network Fund Inc., which has invested in Pagatech, one of Nigeria’s first mobile-money providers, and another company that gives loans to small- and medium-sized businesses. About 87 million Nigerians live on less than $1.90 a day, according to Vienna-based World Data Lab’s World Poverty Clock.
“You have to create a ‘pull’ to these accounts and that happens when those accounts are meaningful to people’s every day lives,” he said, such as increasing the number of merchants with pay points or offering more insurance, savings or lending products. “People don’t eat accounts.”
Abdurrahman, the Kano spice merchant, agrees and remains unconvinced about using his phone to transact.
“I may decide to go for mobile money if more of my suppliers have it,” he said. “But for now I am very comfortable keeping cash at the shop to pay for supplies and keeping the rest at home.”
Nigeria to relaunch its national airline by the end of year
Nigeria unveiled a new national carrier Wednesday, nearly 15 years after the previous state-run airline, Nigerian Airways ceased operations.
The new airline will be known as Nigeria Air.
Nigerian Minister of State for Aviation, Hadi Sirika made the announcement and unveiled the new branding and livery for the airline at the Farnborough International Airshow in the UK.
"I'm very pleased to tell you that we are finally on track to launching a new national flag carrier for our country: Nigeria Air," Sirika said at the event.
The name was chosen after Nigeria's Ministry of Aviation invited Nigerian youth and students to contribute "their ideas and creativity in developing the new Nigerian Flag carrier," according to the website nameyourairlinenigeria.com.
Nigerian President Muhammadu Buhari's media aide, Bashir Ahmad announced the name on Twitter.
"And it's Nigeria Air ...Bringing Nigeria closer to the world #NigeriaAtFarnborough," Ahmad wrote, alongside a photo of the branding presented at Farnborough.
According to Sirika, the federal government hopes to launch operations by the end of the year.
Nigerians have greeted the announcement with skepticism as they expressed uncertainty about the federal government's capacity to sustain a national airline, especially considering its track record with previous national carriers.
One man wrote on Twitter that he supported the creation of a national airline, "as long as it's not the government running it."
Their fears may be allayed by reports that the airline will be primarily owned and managed by a group of a yet unidentified private investors.
"The Nigerian Government will not own more than 5% (maximum) of the new National Carrier. The government will not be involved in running it or deciding who runs it," Sirika said at the press conference in Farnborough.
Marketplace Africa covers the macro trends impacting the region and profiles the continent's key industries and corporations.
However, some are also questioning the government's involvement in bargaining with aircraft manufacturers such as Boeing in light of Sirika's statement.
"No private investors named but the govt that will supposedly own a tiny percentage is leading negotiations for aircraft purchase and drawing logo in Calibri font. Carry on," London-based Nigerian commentator, Feyi Fawehinmi wrote on Twitter.
Nigeria's federal government has suffered many setbacks in its many attempts to create a new national carrier since Nigerian Airways ceased operations in 2003.
Described as 'Africa's fastest growing airline' in its heyday in the 1980s, Nigeria Airways was plagued by mismanagement, eventually amassing millions of dollars in debt upon its closure.
In 2004, a team of Nigerian investors and Virgin Atlantic Airways, owned by British entrepreneur, Sir Richard Branson signed a joint venture agreement creating a new national carrier, Virgin Nigeria.
In September 2009, Virgin Nigeria announced a name change to Nigerian Eagle Airlines on its website.
In 2010, Nigerian business magnate, Jimoh Ibrahim acquired a majority stake in the carrier and announced a rebranding to Air Nigeria.
The airline eventually ceased operations in September 2012, weeks after laying off the majority of its staff.
Minister Hadi Sirika assured the audience at Farnborough and Nigerians that the new national carrier would be a much sturdier and efficient enterprise.
"I am confident that we will have a well-run national flag carrier, a global player, compliant to international safety standards, one which has the customer at its heart.
"An airline that communicates the essence of our beautiful country, an airline we can all be proud of," Sirika said at the unveiling.
The new airline will be known as Nigeria Air.
Nigerian Minister of State for Aviation, Hadi Sirika made the announcement and unveiled the new branding and livery for the airline at the Farnborough International Airshow in the UK.
"I'm very pleased to tell you that we are finally on track to launching a new national flag carrier for our country: Nigeria Air," Sirika said at the event.
The name was chosen after Nigeria's Ministry of Aviation invited Nigerian youth and students to contribute "their ideas and creativity in developing the new Nigerian Flag carrier," according to the website nameyourairlinenigeria.com.
Nigerian President Muhammadu Buhari's media aide, Bashir Ahmad announced the name on Twitter.
"And it's Nigeria Air ...Bringing Nigeria closer to the world #NigeriaAtFarnborough," Ahmad wrote, alongside a photo of the branding presented at Farnborough.
According to Sirika, the federal government hopes to launch operations by the end of the year.
Nigerians have greeted the announcement with skepticism as they expressed uncertainty about the federal government's capacity to sustain a national airline, especially considering its track record with previous national carriers.
One man wrote on Twitter that he supported the creation of a national airline, "as long as it's not the government running it."
Their fears may be allayed by reports that the airline will be primarily owned and managed by a group of a yet unidentified private investors.
"The Nigerian Government will not own more than 5% (maximum) of the new National Carrier. The government will not be involved in running it or deciding who runs it," Sirika said at the press conference in Farnborough.
Marketplace Africa covers the macro trends impacting the region and profiles the continent's key industries and corporations.
However, some are also questioning the government's involvement in bargaining with aircraft manufacturers such as Boeing in light of Sirika's statement.
"No private investors named but the govt that will supposedly own a tiny percentage is leading negotiations for aircraft purchase and drawing logo in Calibri font. Carry on," London-based Nigerian commentator, Feyi Fawehinmi wrote on Twitter.
Nigeria's federal government has suffered many setbacks in its many attempts to create a new national carrier since Nigerian Airways ceased operations in 2003.
Described as 'Africa's fastest growing airline' in its heyday in the 1980s, Nigeria Airways was plagued by mismanagement, eventually amassing millions of dollars in debt upon its closure.
In 2004, a team of Nigerian investors and Virgin Atlantic Airways, owned by British entrepreneur, Sir Richard Branson signed a joint venture agreement creating a new national carrier, Virgin Nigeria.
Despite reaching record numbers and carrying its 1,000,000th passenger within two years of operations, Virgin Atlantic announced plans to sell its 49% stake in Virgin Nigeria in August 2008, along with a review of whether "the Virgin brand should remain linked to Virgin Nigeria."
In September 2009, Virgin Nigeria announced a name change to Nigerian Eagle Airlines on its website.
In 2010, Nigerian business magnate, Jimoh Ibrahim acquired a majority stake in the carrier and announced a rebranding to Air Nigeria.
The airline eventually ceased operations in September 2012, weeks after laying off the majority of its staff.
Minister Hadi Sirika assured the audience at Farnborough and Nigerians that the new national carrier would be a much sturdier and efficient enterprise.
"I am confident that we will have a well-run national flag carrier, a global player, compliant to international safety standards, one which has the customer at its heart.
"An airline that communicates the essence of our beautiful country, an airline we can all be proud of," Sirika said at the unveiling.
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