Nigeria is urging multinational companies to remain in the country despite the tough economic conditions that exist there. Some of the companies say inflation and a shortage of foreign exchange have made operating in the country more difficult.
Thursday, December 14, 2023
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ECOWAS Court rejects US prisoner’s request for transfer to Nigeria
The ECOWAS Court of Justice in Abuja has rejected a request to order the transfer of a Nigerian convicted of fraud in the United States to complete his jail time in Nigeria.
The court, in a judgement delivered on Thursday, said it lacked jurisdiction to grant Richard Ugbah’s request.
Mr Ughah had told the court he had already served eight years of the 12 years jail time imposed on him, and that he was due for release in May 2026, according to a statement by the court’s communication unit highlighting the key issues decided in Thursday’s judgement.
He approached West Africa’s regional court to order for his transfer to Nigeria, claiming to have satisfied the requirements for such a transfer.
But delivering judgement, a member of the court’s three-member panel, Sengu Koroma, the Judge Rapporteur of the panel, declared that the court lacked jurisdiction to hear the matter.
The court upheld the preliminary objection raised by the Federal Republic of Nigeria, sued as the first respondent, declaring the applicant’s claims as “unfounded and without legal basis”.
The judge also ruled that Nigeria’s Ministry of Justice sued as the second in the case, was not a proper party before it.
The court consequently dismissed all the prayers of the applicant.
The suit
The applicant, a Nigerian citizen and resident in the US, was convicted by the District Court for the Western District of Wisconsin after he pleaded guilty to one count of wire fraud on 14 February 2017.
He was sentenced to 12 years’ imprisonment.
The ECOWAS Court’s statement said, he additionally, pleaded guilty to another count of conspiracy to commit fraud on 15 November 2017, and judgment was entered on 22 November 2017.
The applicant further told the ECOWAS Court that having served eight years of the sentence, he was due for release on 8 May 2026.
He urged the court to issue the orders for his transfer to Nigeria to complete his jail time, having, according to him, satisfied the necessary conditions in line with the provision of the United Nations Office on Drugs and Crime Handbook on the International Transfer of Sentenced Persons.
He also maintained that the transfer of sentenced persons is considered to be an important means of cooperation to prevent and combat crimes.
He said crimes combatting and preventing crimes are the main purposes of the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotic Substances of 1998, the United Nations Convention against Corruption and the United Nations Convention against Transnational Organised Crime.
The applicant further argued that all three conventions cited refer to the possibility of concluding agreements to facilitate the transfer of persons convicted abroad for the offences covered by the conventions to another state to complete their sentence.
Nigeria opposes suit
The Nigerian government sued as the first respondent in the suit opposed the suit. It filed a preliminary objection contending that the applicant’s initiating application was incompetent by virtue of Articles 9 and 10 of the Supplementary Protocol (A/SP./01/05).
It added that its Ministry of Justice sued as the second respondent, is neither a Community Institution nor a signatory to the Economic Community of the West African States Treaty to be competent to be sued before the court.
The government further claimed that the court lacked the jurisdiction to entertain this suit. It, therefore, urged the court to strike out the notice of registration for want of jurisdiction and lack of cause of action.
Decision
In its decision, the court struck out the second respondent’s name as a party in the suit, based on the agreement reached by both sides in the suit.
The court went on to rule that the applicant failed to show a valid reason for his complaint against the respondent.
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Jumia to shutdown food delivery service in Nigeria
“The more we focus on our physical goods business, the more we realize that there is huge potential for Jumia to grow, with a path to profitability. We must take the right decision and fully focus our management, our teams and our capital resources to go after this opportunity. In the current context, it means leaving a business line, which we believe does not offer the same upside potential - food delivery," said Francis Dufay, Chief Executive Officer of Jumia.
Despite constituting 11% of Jumia's Gross Merchandise Value (GMV) in the first nine months of 2023, Jumia Food has struggled to achieve profitability since its inception. This means the total value of food sold on Jumia Food stood at $64 million (11% of $581 million) between January and September 2023. An indicator of the massive scale Jumia Food was operating at, but it doesn't necessarily amount to revenue or profitability.
Since its inception, Jumia Food experienced fluctuating fortunes, with a significant 82% year-over-year growth in 2021, reflecting the company's strong foothold in the food delivery segment. However, in 2023, the company saw a marked decline in Quarterly Active Consumers and Orders. A consequence of its shift to drive profitability by focusing on viable categories and reducing consumer incentives.
As for employees focused on Jumia Food, the company says a number of them will transition to the core physical goods segment, suggesting that some could be laid off.
The African food delivery landscape is complex
Parallel to Jumia Food's shutdown, Bolt Food, another significant player in the African food delivery market, announced its exit from Nigeria and South Africa in December 2023. Bolt Food's departure, despite its expansion efforts in major Nigerian cities like Lagos, is attributed to economic downturns, high inflation, and stiff competition from well-entrenched rivals such as Jumia Food, Gokada, and Uber Eats.
In contrast, Barcelona-based startup, Glovo has been deepening its presence in Sub-Saharan Africa with key partnerships with restaurant chains like Chicken Republic and Shoprite.
Chowdeck, another key player in Nigeria's food delivery market, has shown impressive growth, recently celebrating a significant milestone of delivering food worth over ₦1 billion ($1.2 million) in a single month. Chowdeck's recent partnership with Shoprite for grocery delivery marks a landmark moment in its expansion strategy.
However, there's a note of caution in interpreting Chowdeck's reported success with food delivery. When placed in context, Jumia's 9-month figure of $64 million amounted to ₦5.7 billion monthly, yet profitability was still an issue. This is not unique to Jumia.
Profitability remains a challenge for many players in the global food delivery landscape.
In the US, Doordash and Uber have burned millions in venture capital to control 96% of the on-demand food delivery business while barely making any profit.
With $1 billion in funding to date, Glovo seems to be part of that mould but has differentiated itself with early diversification of revenue and already operates in 25 markets.
A key point in Chowdeck's favour seems to be a capital-efficient model, as the CEO maintained in an interview that its growth to $1.2 million monthly GMV was purely organic.
The African food delivery market, expected to grow at a CAGR of 12.2% from 2023 to 2028, reaching $1.7 billion, presents a landscape of both opportunities and challenges. While partnerships and technological integration offer growth avenues, the path to profitability remains complex. The experiences of Jumia Food and Bolt Food, contrast with the expansion of Glovo and Chowdeck. Both are relatively early in Africa's food delivery landscape and there's still time to chart a different course.
By Emmanuel Paul, Techpoint Africa
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World Bank says Nigeria needs to curb inflation, stabilize forex to boost growth
Nigeria still needs to control inflation and stabilise its foreign exchange market to boost growth in Africa's largest economy following currency reforms and the removal of a petrol subsidy, the World Bank said on Wednesday.
Nigerian President Bola Tinubu has embarked on the country's biggest reforms in decades, unifying the country's multiple exchange rates and scrapping a popular but expensive petrol subsidy, which the World Bank and International Monetary Fund had for years called on Nigeria to do.
The impact has been record inflation, which has risen for 10 straight months, reaching 27.33% in October, the highest in almost two decades.
World Bank lead economist for Nigeria Alex Sienaert said during a presentation in the capital Abuja that "several complementary reforms are needed to support Nigeria's structural agenda and overall gain in competitiveness and economic diversification".
He said that, with the reforms, Nigeria's economy was expected to grow at an average annual rate of 3.5% in 2023-2026, or 0.5% points higher than without the reforms.
The government still needed to remove remaining import restrictions, despite lifting a forex ban on 43 items, improve infrastructure and pursue clear, consistent trade policies, Siernaert said.
Nigeria's central bank should tighten monetary policy, build market confidence around free foreign exchange pricing, phase out "ways and means" advances to the government and discontinue its development finance initiatives, part of a series of unorthodox policies used by former central bank Governor Godwin Emefiele.
New central bank Governor Olawale Cardoso has already begun rolling back Emefiele's policies.
He adopted an inflation-targeting policy, ended all direct interventionist programmes, which he said blurred the lines with monetary policy, and begun clearing foreign exchange backlogs, estimated at $7 billion, that were owed to banks.
"We will be using inflation-targeting and we will ensure that the use of monetary policy actually cascades down and has an impact," Cardoso said in response to Siernaet's call.
The central bank, under Cardoso, has also restarted its Open Market Operations (OMO) to rein in money supply.
Despite unifying its multiple exchange rates, Nigeria has struggled with low oil revenue and foreign exchange shortages, which has dampened investor sentiment and hindered growth.
Finance Minister Wale Edun said the government would scrutinize revenue from oil, its main export and source of foreign currency earnings, and aim to boost output of the commodity ahead of plans "to spend even more".
"What is spent as a proportion of GDP is much lower than in some African countries where government spending as a portion of GDP goes as far as 50% to 60%," Edun said. "If you are willing to do that, you need revenues and the first source of revenue is oil revenue."
By Camillus Eboh, Reuters
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