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Comercio Partners Projects How Interest Rate Hike will Impact SMEs, Consumers
Comercio Partners, an investment bank firm, has projected that the further increase in the Monetary Policy Rate or MPR, the benchmark interest rate of the Central Bank of Nigeria (CBN), to 17.5 per cent will likely translate to higher funding cost for Small and Medium Enterprises (SMEs) and increased cost of living for consumers.
In a bid to tame the high inflation rate, which stood at 21.34 per cent in December, the Monetary Policy Committee (MPC) of the CBN, at its recent meeting, increased the MPR for the fifth consecutive time by 100 basis points to 17.5 per cent.
Commenting on the rate hike, Co-Managing Partner and Head of Advisory and Investment Banking, Comercio Partners Limited, Steve Osho noted that while it is understandable why the MPC jerked up the MPR by 100 basis points, as against market expectations, banks/lenders will respond by adjusting their interest rates to reflect the hike.
He said as a result, SMEs will pay more to borrow funds needed for their businesses, and this increased cost will translate to higher price of goods and services for consumers.
Osho said: “From the banking and consumer lending point of view, banks/lenders typically would adjust their rates to reflect the hike.
“Although the recent upward trajectory on inflation has anchored majorly on the exchange rate volatility/naira depreciation, the astronomical cost of energy and food insecurity amidst many other factors.
“So, it is yet to be seen how this will impact the real sector but the likely impact will be felt by SME and other consumers on the cost of borrowing to finance business and likely increase in cost of living for an average Nigerian,”
Osho said yields on fixed income securities will continue to trend upwards and thus encourage more investors’ shift from the equity market to fixed income market.
He added, “The common reaction to rate hikes in the market would see bearish sentiments dominate the equities market as investors would be looking to switch to higher yielding fixed income instruments. I expect a similar trend this time.
“The debt management is expected to borrow over 320 billion naira monthly from the auction calendar recently released for the first quarter of 2023.
“As liquidity begins to thin out over the next few months coupled with high borrowing pressures from the government, yields on fixed income securities will continue to trend upwards.”
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Dr. Adesina, AfDB Group President Calls for Media Transformation to Uplift Africa’s Global Narrative
Dr Akinwumi Adesina, the President of the African Development Bank Group, delivered an impassioned plea for more balanced media coverage of Africa and its development, noting it was critical for changing false narratives.
Adesina said this on Thursday in a keynote speech to the All Africa’s Media summit in Nairobi, attended by nearly 300 participants from across the continent. He praised the crucial role the media plays in strengthening democracy and advancing inclusivity.
The Bank Group president said there were many positive developments in Africa yet the continent continues to suffer misrepresentations which undermine its economic progress and investment potential.
“Despite the significant progress within our continent, the prevailing media narrative often focuses on negative stereotypes, overlooking the substantial advancements and resilience Africa demonstrates,” he added.
Adesina said there was plenty of positive news to report about and highlighted the continent’s economic resilience regional and amid global challenges. He said that in 2023, Africa’s growth rate surpassed the global average, with 11 African nations ranked among the world’s fastest-growing economies.
Adesina referenced a 2021 Africa No Filter Report, which revealed significant adherence to outdated and negative clichés in media reports about Africa. “It’s time for change,” he declared. “We must reshape the narrative about Africa to reflect its true spirit and potential.”
He emphasised the critical nature of information and its ability to have a profound negative impact on development and investor perceptions even though an in-depth investigation by Moody’s Analytics had shown the continent was much less of a risk than many other continents.
“We must promote a balanced view that highlights both the challenges and the many successes of Africa. It’s about changing perceptions and showcasing Africa as a continent rich with opportunity and innovation.”
The Bank Group President also spoke about the challenges and transformations within the media sector, highlighting the impact of digital technology.
“The media landscape has dramatically shifted with the rise of the internet and mobile technology, leading to a proliferation of digital platforms,” Adesina declared.
“While this has democratised information, it has also complicated issues, the distinction between fact and fiction can become blurred.”
To counter unfair and unbalanced narratives, Adesina urged the creation of a powerful, globally respected African media and proposed strategic collaborations among regional financial institutions to support this cause, emphasising the need for media to act as a catalyst for development.
“We need to celebrate and promote the continent’s successes, turning the tide against the longstanding stereotypes that have clouded the global view of Africa… What you call yourself, is the name others will subscribe to you.”
“For as long as we continually denigrate ourselves and play into the hands of those who control the narrative about Africa, we will be stuck with a label that does not belong to us,” he concluded.
He highlighted the African Development Bank’s own successes which included maintaining a AAA credit rating and launching groundbreaking financial initiatives that have earned it respect as an innovative and successful multilateral development bank.
“We have proven that Africa can lead with innovation and strength in the global financial landscape,” the President remarked. “Yet, these achievements receive minimal attention compared to the persistent focus on Africa’s challenges.”
Adesina added that just one month ago, the Bank launched a landmark $750 million hybrid capital instrument, again with a Triple A rating, which was oversubscribed eight times. He described this as a huge “testament to the confidence and trust in Africa’s burgeoning financial capabilities.”
He pledged that the African Development Bank remained committed to supporting initiatives that would help the media present a more balanced and progressive portrayal of Africa and support its economic development.
In a discussion with Julie Gichuru of the Mastercard Foundation after his address, Adesina said Africa was blessed with energy sources, but millions remained without electricity. “This must change,” he said.
“We cannot industrialise in the dark, we cannot develop in the dark. Our children cannot be competitive in a world of darkness,” he concluded.
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Brands Jostle for CVA 2024 as Consumers Vote
Ongoing voting for brands on the Consumers Value Awards portals, consumers expressed brand satisfaction with their votes.
Over 40 categories of brands are listed based on consumers’ nominations on the Consumers Value Awards portal for voting as Value-for-Money brands in the 2024 edition of the award.
Consumers cast votes for brands to express satisfaction among various brands.
Presenting the one-month result, Akonte Ekine, CEO of BrandXchange, said the initiative is transparent and objective. It’s the consumer position on brands as nomination and voting drive the platform.
According to him, in the Telecommunications category (MNOs), MTN leads with 51.1% of the votes recorded in the first month, Spectranet has 47.6% of the votes in the Internet Service Provider segment, and MTN has 69.2% votes for ISP under the MNOs.
In the ongoing 3rd edition voting, two new categories of sanitary pad and Ice Cream are experiencing consumers’ attention as Always Sanitary Pad leads the segment with 63.6%, Just Delight Ice Cream at 36.2% and Viva Detergent at 41.7%.
Other leaders on the voting platform of Consumers Value Awards based on consumer preferences in the first month under home appliances (Television, Refrigerator, Air conditioner and washing machine) are Samsung 40%, Haiier Termocool 40%, Lontor 40% and Haier Termocool 42.9% respectively.
Trophy leads Alcohol Beverage with 50% of the votes, and Pepsi takes 62.5% of Carbonated Drinks. It is a tie among consumers on the cooking oil and regular Toot paste as Kings Oil and Power Oil achieved the same vote of 50%, Colgate Toothpaste and Close Up Toothpaste also tied with 26.7% votes each in the categories while Dabur Toothpaste leads in the herbal toothpaste category with 55.6%.
Lafarge Cement leads with 62.5% in the Cement, Dangote Sugar has 55% of the votes in Sugar, Leadway Insurance has 57.1%, Eva leads the Table water category with 38.5%
Other leaders in various segments based on consumer votes on the Consumers Value awards platforms are Maltina 40%, Dettol 37.5%, Peak Milk 80%, Golden Penny Spaghetti 80%, Indomie Noodle 85.7%, Checkers 90%, GTB 66.7%, OPay 62.5%, Morning Fresh 62.5%, and Gala Sausage Roll 94.4%.
Also, knorr Cube 57.1%, Lipton Tea Bag 83.3%, Vaseline 71.4% and Golden Morn lead their sectors, Milo and Bournvita tied with 50% of the vote each as leaders alongside MTN and Cadbury tying with 40% votes under Consumer-Friendly brands.
Vitafoam 44.4%, Guinness Stout 83.3%, Mobil Engine oil 100% (International Engine Oil Brand), Oleum Oil 100% (Made in Nigeria Brand), Hypo and Harpic 50%, Fearless 33.3%, Abidec 80%, Reload Kids 60% Reload Adult 66.6%, and Bet 9ja 50%
The voting will close on 30th June 2024.
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Sterling One Foundation Partners UNIDO, Others to Launch ESG Series
The Sterling One Foundation, a non-profit organization dedicated to sustainable development and empowering professionals to drive social impact across Africa, has partnered with Price Waterhouse Coopers Nigeria, UNIDO-Investment Technology Promotion Office, Nigeria, Lagos Business School Sustainability Center, Sterling Bank, NGX Group, the Nigeria Employers Consultative Association and the Lagos Chamber of Commerce & Industry to unveil the first edition of its Environmental, Social, and Governance (ESG) Series.
The partnership aims to support professionals in understanding, implementing, and reporting sustainability progress, in alignment with global standards.
According to a signed statement by the Foundation, the ESG Series was birthed following a workshop held at the 2023 edition of the Africa Social Impact Summit (ASIS) where it was discovered that there was a significant knowledge gap on the subject within the African development ecosystem as well as the private sector.
They commended all the excellent partners who have made the series possible noting that their commitment will strengthen professionals’ competencies in integrating ESG principles into organizational frameworks, and drive positive change while advancing the adoption of ESG principles and increased investment into the economy from local and global investors.
Over the years, Environmental, Social, and Governance (ESG) considerations have evolved from optional to essential for organizations, making the significance of incorporating ESG principles into business plans to enhance sustainability and corporate responsibility, for organizations an increased priority. Statistics indicate that ESG-focused institutional investments are projected to reach $33.9 trillion by 2026.
Through this series, the Foundation said it aims to demystify ESG concepts among the private, public, and development sectors in Nigeria and Africa while highlighting their tangible business benefits, to equip professionals with the knowledge and tools necessary for successful ESG integration in their organizations.
The one-day virtual event gives insight through in-depth sessions featuring thought leaders from private sector impact makers, development partners, international non-governmental organizations, and government agencies.
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