News & Events


May 2014

Nigeria’s retail sector has a bright future, says Bank Chief

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THE Group Managing Director and Chief Executive Officer of United Bank for Africa (UBA) Plc, Phillips Oduoza, has said that Nigeria’s retail sector holds huge potential for growth.

Oduoza said this in a keynote address at the 2014 ‘Retail Leaders Conference held at the Sheraton Hotel, Lagos

The UBA boss, represented by the bank’s Director of Consumer Banking, Ilesanmi Owoeye, listed several factors driving the growth of Nigeria ’s retail industry.

These factors include; the ongoing reforms in key sectors of the Nigerian economy aimed at bridging infrastructural gap, reducing unemployment levels, improving literacy level and improving access to funding by SMEs, which will significantly impact the level of disposable income and effective demand in the near future, affording the sector unprecedented growth opportunity.

Olusegun Olutoyin Aganga, Nigeria's Minister of Industry, Trade and Investment

Olusegun Olutoyin Aganga, Nigeria’s Minister of Industry, Trade and Investment

He also identified increasing technology penetration in Nigeria as another factor driving the growth of the retail sector as this is giving retailers access to valuable market information about purchasing trends as well as segment preferences, making it increasingly easy to adapt sales and marketing approaches and improve consumer experiences. Another factor is the increasing penetration of the informal sector by retailers.

“Without doubt, the continuous rise in mobile technology will be pivotal to the next stage of the retail market development, fuelling its integration with the global retail trade economy and significantly increasing its ease of doing business. This prospect is already becoming evident in the rising trend of online retailers that are increasingly gaining traction and matching the emerging sophistication of Nigerian consumers’ changing demand and payment patterns.” Oduoza said.

He called on banks to adopt on more collaborative financing mechanisms to enable retailers develop their capacities, expand operations and adopt innovative practice production standards to reduce operating cost and optimize value.

He said innovative partnerships among retail financial service providers will increase focus on the funding of retail-based infrastructure development and product distribution projects.

His words: “In an environment of collaborative partnerships, banks will partner retailers in promoting the acceptance and mobility of innovative payment platforms. For example, cheaper mobile-based point-of-sales will replace the expensive terminals currently in use, and we will see mobile-to-mobile funds transfer added to the bouquet of payment platforms,” he stated.

“UBA recognizes the growth potential of the Nigerian economy and the retail sector in particular, so we have and will continue to intensify our support for the sector through provision of innovative payment, cash management solutions and appropriate funding options along the entire value chain.”

He disclosed that the banking sector is collaborating with the Central Bank of Nigeria to deploy an industry-wide biometric system, which will significantly improve consumers’ access to both secured and unsecured financing, thereby increasing the retail market potential.


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May 2014

Nigeria plans gas industrial park

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Nigeria’s Federal Government said that it had concluded necessary arrangements to build Africa’s first multi-billion dollar dedicated gas industrial park in Delta State as part of a comprehensive strategy for gas processing.

The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, stated this at the opening session of a three-day national conference/exhibition on gas resources organised by the Senate Committee on Gas in Abuja.

The minister, who was represented by the Group Managing Director, Nigerian National Petroleum Corporation, Mr. Andrew Yakubu, explained that the proposed park would consist of industries, which would produce fertilizers, petrochemicals, methanol and other related products.


Nigeria's President, Goodluck Ebele Jonathan

Nigeria’s President, Goodluck Ebele Jonathan

She said, “As part of our infrastructure blueprint, we have entrenched the concept of gas processing facilities with a view to extracting the various constituents of natural gas such as the Liquefied Petroleum Gas and ethanol, among others.

“These will help to grow LPG availability for domestic use, whilst the ethane will help to fuel the growth of petrochemical industries and the residue gas will then be used as feedstock for fertilizer, methanol and so on.”

Alison-Madueke lamented that successive administrations in the country had made gas to play a second fiddle to crude oil as it was treated as a nuisance by-product of oil production.

“This mindset governed how the gas sector was handled initially; hence, pricing of gas was deliberately low because it was aimed at disposing an unwanted product,” she added.

The minister also explained that the perceived low value of gas did not encourage the development of infrastructure around it, while the dominant legislative framework for the industry was essentially based on crude oil production and not gas.

She, however, said that in conformity with global best practices, the Federal Government had ensured that in Nigeria, like other advanced countries, gas would henceforth take the centre stage in the country’s economic activities.

Alison-Madueke said, “Gas is fast evolving as the preferred fuel in view of its relatively more impressive environmental credential and lower cost of supply than alternative liquid fuel.”



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May 2014

Nigeria’s Foreign Direct Investment inflows hit N1trillion in 2013

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NIGERIA received over $6.3 trillion (N1 trillion) Foreign Direct Investment (FDIs) last year, the African Economic Outlook report has revealed.
Besides, Africa’s external financial flows have quadrupled since 2000 and are projected to reach over $200 billion in 2014.
But the report listed the regional risks to this outlook to include lingering unrest and instability in the Sahel region, Northern Nigeria, Central African Republic and South Sudan, which could weigh on investor sentiment in neighbouring countries
According to the report, which was released recently, the largest recipients of investment inflow into Africa as South Africa and Nigeria, with respectively an estimated $6.4 billion and $6.3 billion. 
It noted that West Africa is expected to continue its rapid growth. “After some moderation in 2013, growth is likely to accelerate to above seven per cent in 2014 and 2015.
“Growth in the region is widespread with most countries achieving six per cent or more. In Nigeria, growth is mainly driven by non-oil sectors, such as agriculture, trade, ICT and other services”.


Nigeria's President, Goodluck Ebele Jonathan

Nigeria’s President, Goodluck Ebele Jonathan

The report explained that the oil sector, which accounts for 37 per cent of Gross Domestic Product and about a fifth of government revenues, is currently a drag on growth and suffers from theft, pipeline vandalism and weak investment. “Ghana’s growth will remain robust, boosted by oil and gas production and increased private and public investment. 
“Côte d’Ivoire is also expected to remain on a high growth path. With improved political stability, public and private investment have become important drivers of growth. Growth is supported by favourable developments in agriculture, manufacturing and services. Sierra Leone is currently the fastest growing country in the region with growth mainly driven by iron and ore exports, although other sectors, in particular agriculture and construction, also contribute.
“In Mali, the economy rebounded in 2013 after the backlash in 2012 caused by the political and security crisis, and growth is expected to improve further in 2014 and 2015”, it added.
According to the report, Mozambique received $4.7 billion; Morocco, $4.3 billion; Ghana, $3.3 billion; and Sudan, 2.9 billion close the list. “Those six countries were also the largest recipients in 2012. Egypt, traditionally one of top three recipients, has yet to recover to its pre-Arab Spring level: FDI averaged $9.1 billion per year over 2005-10 but was only $1.9 billion per year over 2011-13. 
AfDB noted that foreign investment – direct and portfolio – has now fully recovered from the 2009 economic crisis and is projected to reach over a record $80 billion in 2014, making it the largest financial flow to Africa. 
It noted that though resource- rich countries remain the prime destination for FDI to Africa, manufacturing and services attract an increasing share of the over 750 new Greenfield FDI projects. 
“Official remittances have been continuing their increasing trend since 2009 and are projected to reach $67.1 billion in 2014. In contrast, Official Development Assistance’s (ODA) share of total external flows keeps diminishing, from 38 per cent in 2000 to 27 per cent in 2014 (estimated at $55.2 billion). Despite this downward trend, ODA still represents the largest external financial flow to low-income African countries. Tax revenues continue to increase in Africa and reached $527.3 billion in 2012. They should not be seen as an alternative to foreign aid but as a component of government revenues that grows as countries develop”, it added.
In the report, Angola, Gabon and Nigeria recorded the highest rates among oil-producing countries with figures ranging from five per cent to seven per cent. Equatorial Guinea saw growth fall below one per cent in 2013 from above five per cent in 2012, following the exhaustion of a major oil field. In the case of Libya, socio-economic disruptions during the year prevented the rolling out of new investment, and led to growth falling below one per cent.
It added: “Investment-driven economies registered growth rates of about four per cent on average, comparable to those of their peers – low middle income economies – elsewhere in the world. Six countries were in this category, posting growth rates of three per cent and above. The tourist sectors in Kenya, Morocco and Seychelles continued to perform well, but manufacturing performance was below expectations. Cape Verde, Egypt, South Africa and Tunisia grew at below three per cent”.


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