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Expert seeks aggressive implementation of economic plan to exit recession

By Tanko Mohammed 

Prof. Uche Uwaleke of Nasarawa State University, has called for early passage of the 2021 Appropriation Bill and aggressive implementation of the Economic Sustainability Plan (ESP), as the country enters recession.

Uwaleke, Professor of Finance and Capital Market, who spoke on the backdrop of third quarter Gross Domestic Product (GDP) figure released by the National Bureau of Statistics (NBS), said the nation’s economy had formally entered into recession as the GDP contracted for the second consecutive quarter by 3.62 per cent in the third quarter of 2020.

NBS, in its GDP report for the third quarter, said that the nation recorded GDP growth of -3.62 per cent, though an improvement from the -6.10 per cent growth recorded in the second quarter.

He said that aggressive implementation of the ESP and early passage of the 2021 appropriation bill would go a long way in supporting economic recovery.

“The economy has officially entered a recession but I see a quick V-shaped recovery as the effect of COVID-19 recedes and the impact of the interventions by the government and the Central Bank of Nigeria begin to manifest.

“The NBS Q3 real GDP number is a confirmation of the fact that in terms of economic contraction occasioned by COVID-19, Q2 2020 represents the worst experience for Nigeria,” he said.

Uwaleke, also the President, Capital Market Academics of Nigeria, said that the third quarter GDP figure was an improvement when compared with -6.10 per cent achieved in the previous quarter.

“It is actually an improvement reflective of the ease in lockdowns and movement restrictions, the reduction in the cases of COVID-19 and the gradual return of investors’ confidence in the economy.

“This improved confidence has also manifested in Purchasing Managers Index readings and stock market performance.

“This explains why, although still in the negative territory, sectors like manufacturing, trade, transportation and education recorded improvements over the Q2 numbers.

“However, the performance of the agriculture sector in real terms which came in at 1.39 per cent was disappointing.

“This corroborates the high food inflation rate now above 17 per cent, caused in large part by insecurity in many parts of the country,” Uwaleke said.

Bank posts N33.9b gross earnings

By Tanko Mohammed

Unity Bank has declared gross earnings of N33.90 billion for the nine months period ended Sept. 30, as against N31.25 billion recorded in the same period in 2019.

Mrs Tomi Somefun, the bank’s Managing Director and Chief Executive Officer disclosed in its unaudited results representing Q3 sent to the Nigerian Stock Exchange in Lagos.

The increase in gross earnings represents an eight per cent growth from the corresponding period last year.

Also, the bank’s total assets rose significantly to N420.87 billion in the nine-month period ended Sept. 30, from N293.05 billion in the corresponding period of 2019.

This represents a 44 per cent asset growth.

The bank also grew its bottom-line by six per cent as profit before tax rose to N1.71 billion from N1.61 billion in 2019.

Profit after tax equally grew by six per cent to N1.57 billion, compared to N1.48 billion recorded in the same period in 2019.

The bank substantially grew its customers deposit portfolio to N332.36 billion, from N257.69 billion for the same period in 2019, creating a 29 per cent increase.

Unity Bank had, earlier, rolled out massive customer-centric products to the public, especially in the retail space, which accelerated the banking patronage during the period.

Somefun welcomed the steady growth of the balance sheet, especially from both assets and liability side of the business and across key performance indices.

She said that this had sustained impact on the bottom-line, even as the bank continued to innovate in its e-business product bouquet to target and support value chain business with robust technology and thus diversify its earnings base.

“One of the areas that will define our strategic direction going forward is investment in alternative channels leveraging further deployment of resources in technology.

“COVID-19 gave us a chance to test the integrity and scalability of our technology, the IT infrastructure, and the electronic banking channels.

“This provided us an opportunity to see where we needed to improve and strengthen, knowing that the future of sustainable banking business is in alternative channels.

“The results can also be attributable to the bank’s growing brand profile and leadership in agribusiness, especially having provided loans and financing to over one million smallholder farmers, especially those in primary production and other value chain businesses in the agricultural sector,” she said.

According to her, during the period under review, the bank enhanced and deepened its collaboration and partnership with major commodity associations.

These include the Rice Farmers Association of Nigeria, Maize Farmers Association of Nigeria and the National Cotton Association of Nigeria.

The partnership is to finance over 400 smallholder farmers’ crop production with the overall strategic intent of fostering food security, employment generation and aggregate economic welfare of citizens across the value chains.

The bank also worked with processors and members of Millers Association of Nigeria to provide working capital through the CBN’s various intervention funds, while providing credit facilities to large number of input suppliers and vendors through the Anchor Borrower’s Programme.

The worse may be possibly over with recession— LCCI

By Moses Uwagbale

The Lagos Chamber of Commerce and Industry (LCCI) says the nation’s economic contraction of 3.62 per cent of the third quarter against the 6.1 per cent of the second quarter of the year may indicate that the worst is over.

Reacting to the National Bureau of Statistics (NBS) quarterly report, its  Director-General, Dr Muda Yusuf, told newsmen that the news of recession was not surprising.

NBS in its report said the nation’s Gross Domestic Product recorded a negative growth of 3.62 per cent in the third quarter of 2020.

Yusuf said the EndSARS crisis might perpetuate the recession into the fourth quarter.

He added that the protests and the destruction that followed were major setbacks for the nation’s economic recovery prospects.

Yusuf, however, expressed hope that  the economy would resume to the path of growth in the first or second quarter of 2021, barring any new disruptions to the economy.

“From an economic perspective, 2020 has been a very bad year; the worst in recent history.

“We are faced with the double jeopardy of a stumbling economy and spiraling inflation.

“The October inflation numbers of 14.23 per cent was the highest in 10 months, a condition which in economic parlance is characterized as stagflation.

“The effects of these developments are evident in businesses and in households.

“Regrettably, and as if these were not bad enough, the business community continues to grapple with unfavourable policy, institutional and regulatory challenges impeding investment,” he said.

The DG, however, said to facilitate quick recovery, there was need to restore normalcy to the foreign exchange market by broadening the scope of market expression in the allocation mechanism.

“The ports system, especially the key institutions in the international trade processes need to be more investment friendly.

“We should show greater commitment to the fixing of the structural issues to reduce production and operating costs for investors in the economy,” he said.

Yusuf said that following the EndSARS experience, the state of internal security had begun to impact negatively on investors’ confidence.

He noted that security presence was becoming less visible, especially in the major cities, with psychological effects which, he said, could adversely affect investment and economic recovery.

“We appreciate the setback suffered by the police as a result of the recent protests and we empathize with them.

“But we need to give security confidence to citizens and investors.

“Incidents of kidnapping, banditry,  herders-farmer clashes have not abated and these also have grave implications for investments,” he said.

Commodity Confab targets unlocking economic potential

By Anthony Areh

The Global Commodity Conference (GCC2020) is aimed at creating opportunities for investments and innovation to unlock economic potential in commodity markets, its convener, JODOR Asset Management (J.A.M) Ltd, has said.

Mr Nduka Ofulue, Founder and Chief Executive Officer of J.A.M Ltd, made this known in a statement on Saturday in Abuja.

The expert emphasised the need for the conference as economies around the world grappled with the effect of the COVID-19 pandemic and its impact on commodity prices and jobs policy.

GCC2020 is scheduled to hold in Abuja from Dec. 1 to Dec. 2, 2020 with the theme “Unlocking Value in Africa’s Commodity Markets.”

“The Central Bank of Nigeria, including policy experts rethink of strategy on monetary policy and fiscal stimulus, while government departments faced with dwindling revenue and rising unemployment ponder on sustainable strategies to deal with the pandemic effect.

“The GCC2020 summit aims to bring African policymakers, decision-makers, stakeholders, Analysts, Researchers, Private Equity, Global Investors and Fund Managers to identify with the 2020 drivers and key indicators of the African Commodity Markets.

“It aims at proffering solutions to unlocking its intrinsic and relative time value, thus creating 20-40 million jobs for emerging African market economies,” Ofolue said.

He said that the event would also provide opportunity for networking with industry leaders and professionals in the investment value chain, Policy, Health, Manufacturing, Technology, Commodity, Metals and Mining, Energy and Agricultural sectors.

The conference, which will feature inspirational business speakers with a 21st century perspective to Africa’s challenges, has as its sub-theme “Commodity Trading Revenue (CTR) as a sub-driver for macroeconomic growth”.

Employers call for urgent economic recovery effort

By Tanko Mohammed

Dr Timothy Olawale, the Director-General of Nigeria Employers’ Consultative Association (NECA), has called for urgent economic recovery effort in view of the Gross Domestic Product (GDP) data released by the National Bureau of Statistics (NBS).

Olawale said on Saturday that the data confirmed that the nation had entered recession.

Olawale said: “The report of NBS, showed the country’s GDP growth declined by 3.62 per cent in Q3, 2020 after an earlier contraction of 6.1 per cent in Q2.

“In summary, the GDP for Q1 to Q3 of 2020 stood at -2.48 per cent; the oil GDP fell by -13.89 per cent from -6.63 per cent in Q2 2020 and Non-Oil fell by -2.51 per cent from -6.05 per cent in Q2 2020.

“With negative GDP growth in two consecutive quarters, the economy has invariably entered into recession.”

The Director-General identified the cumulative effects of the COVID-19 pandemic on the Nigerian economy and attendant lockdown as contributory factors to the negative contractions.

He noted that with the high level of inflation and unemployment rate, reducing exchange rate of the Naira and other macro economic indices, there was need for urgent re-evaluation and re-assessment of government’s economic policies.

The NECA boss said there was an urgent need to increase aggregate demand in the economy as a way to spark economic activities.

“Government should give more tax cut to promote business capital investment while encouraging local and foreign investment.

“Government should fast track the implementation of policies to diversify further its export potentials, mostly the huge stock of natural and agro resources in order to reduce pressure on the foreign reserves.

“We call for more robust and comprehensive expansionary fiscal and monetary policy packages to expeditiously reflate the economy out of the current crisis, ” Olawale said.