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E-Financial

Coronavirus – Is the Worst over for Nigeria or Just the Tip of the Iceberg?

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By Lukman Otunuga, Senior Research Analyst at FXTM

Africa’s largest economy expanded by 1.87 percent in the first quarter of 2020, bucking the global trend of recessions triggered by the coronavirus pandemic. For comparison’s sake, the performance represented a contraction by 0.68 percent compared to the 2.55 percent growth rate recorded in the Q4 2019 and 0.23 percent, when compared to 2.10 percent growth witnessed in Q1 2019.
What does this performance mean?
Nigeria rolled with a succession of devastating punches in the first quarter. The country’s resilience against tumbling Oil prices and the negative impacts of COVID-19 not only beats expectations, it wins a round during which other larger and developed economies lost growth and confidence on a massive scale. 
The US economy contracted by minus 5.0 percent while GDP in the UK shrank by two percent. In the Eurozone, the economy declined by minus 3.8 percent. Tragically, all those regions had high infection and mortality rates along with forced and extensive lockdowns.

While Nigeria has not escaped the spread of coronavirus, at 8,915 infected and 259 deaths at the time of writing, the virus’ economic impacts were constrained relative to other regions.  

Could the worst be over for Nigeria as global Oil prices recover and economies relax lockdown measures amid gigantic stimulus from central banks? As the worldwide economy slowly gets back on its feet, Nigeria could be strongly positioned for a quicker-than-expected recovery, at least on the basis of Q1 data.  

On the downside, uncertainty abounds. The negative impacts of the coronavirus pandemic, low Oil prices and slowing global growth may be felt across the economy for the rest of the year. 

The Naira remains exposed to negative shocks, foreign exchange reserves have fallen to $33.4 billion and inflation has jumped to 12.34 percent in April 2020, the highest since April 2018, meaning the Central Bank of Nigeria may have little room for maneuver.

Concerns over a coronavirus driven economic recession has prompted the CBN to reduce the Monetary Policy Rate (MPR) to 12.5 per cent, from 13.5 per cent in May. Although lower rates may promote economic growth, this may come at the expense of rising inflationary pressures. Given the current uncertainty around Oil prices, the priority may be to boost consumption and continue diversifying the economy.

Oil prices going sub-zero earlier this year should be another major wakeup call about the importance of diversifying away from Oil dependence to other sustainable sources of growth. 

Economic data over the coming weeks will be critical in assessing whether Nigeria was able to weather the tornado of domestic and external risks in Q1. I’m watching for data from the banking sector on credit reports in June. Inflation and labour force numbers are also set for release and are significant benchmarks of economic health. Any serious deterioration or unexpected strengths in these numbers could set the tone for the second half of the year. 

The country’s outlook will also be affected by developments around the 2020 state budget which was already revised down to 10.52 trillion Naira. 

It’s important for investors to avoid either irrational euphoria or unreasonable negativity under the circumstances. While the Q1 GDP data may offer some semblance of hope, especially in comparison to other major economies, Nigeria is certainly not out of the woods yet. 

Fears around a second wave of coronavirus rattling the global economy may put Oil prices underwater again, rekindling recession fears. Then again, as the virus curves flatten in key economies, growth and recovery are just around the corner. 

In conclusion, one thing is for sure; any recovery scenario would be supported by Nigeria’s resilience and growing economic diversification.
 

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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

E-Financial

UBA Expands to More African Cities, Stamps Footprint  in Saudi Arabia

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United Bank for Africa (UBA) has announced strategic expansion into more African countries even as it plans to open a new office in Saudi Arabia, marking a significant milestone in its mission to connect Africa with key global markets.

UBA Expands to More African Cities, Stamps Footprint  in Saudi Arabia

Oliver Alawuba, GMD/CEO, UBA group,

This emerged during the Group’s Half Year Business Review held at its global headquarters in Lagos, where Oliver Alawuba, group managing director/CEO, UBA group, met with senior executives overseeing UBA’s 24-country footprint.

The meeting reaffirmed the bank’s pan-African strategy while outlining bold new steps into global markets.

Alawuba highlighted UBA’s continued growth outside Nigeria, with more than 51.7% of Group revenues now generated from its ex-Nigerian operations.

He described the Saudi expansion as a move that positions UBA to support cross-border trade, attract investment flows, and better serve the African diaspora.

“UBA’s vision is clear—we are building a truly global institution anchored in Africa, but serving customers across continents. Our entry into Saudi Arabia signals confidence in new opportunities and commitment to supporting economic connectivity between Africa and the Middle East,” he said.

The Saudi expansion adds to UBA’s international presence, which currently includes the United Kingdom, United States, France, and the United Arab Emirates. Alawuba also disclosed that the bank is upgrading its operating licence in France to further strengthen its European operations.

“In Europe, UBA has operations in the United Kingdom and is upgrading its licence in France, expanding its capacity to serve cross-border trade, investment flows, and the African diaspora, complementing our over 40-year presence in New York,” Alawuba noted.

Since launching its pan-African journey with an entry into Ghana in 2004, UBA has expanded rapidly across 20 African countries, establishing itself as a leading driver of financial inclusion, innovation, and regional integration.

 

 

 

 

 

 


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E-Financial

Ecobank Plans to Raise $250m Capital Through Private Placement

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Ecobank Transnational Incorporated announced its plan to raise up to $250m in Additional Tier 1 capital through a private placement of contingent convertible notes.

In a statement filed on the Nigerian Exchange Limited recently, the capital raise was approved by shareholders at the company’s Extraordinary General Meeting held in Lomé, Togo. The private placement offer was launched on July 9 and will run for ten days.

“Following the approval of the shareholders at its Extraordinary General Meeting held on May 28, 2025, in Lomé, Togo, to raise up to $250m in additional Tier 1 capital qualifying instruments via a private placement of contingent convertible notes, Ecobank Transnational Incorporated announces the launch of the AT1 effective July 9, 2025, for ten days. Renaissance Capital Africa has been appointed as the transaction adviser to ETI.”

The move is an initiative aimed at strengthening Ecobank’s capital adequacy, enhancing financial resilience, and supporting its long-term growth ambitions across its diversified pan-African banking platform.

Additionally, Madibinet Cisse, Ecobank’s Company Secretary, said, “This proposed capital raise represents a critical step in our efforts to fortify the bank’s financial foundation and support sustainable growth across Africa.”

It would be recalled that Ecobank Transnational Incorporated, the parent company of the Ecobank Group, has raised an additional $125m through a Eurobond tap, bringing the total size of its 2029 notes to $525m.

 


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E-Financial

EFCC Recovers Funds Lost to CBEX Fraud

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Ola Olukoyede, chairman, Economic and Financial Crimes Commission (EFCC), has announced that the body has recovered lost funds from the CBEX fraud scheme.

EFCC Recovers Funds Lost to CBEX Fraud

Olukoyede did not announce the amount recovered, but he assured Nigerians that the EFCC is taking action against the promoters of the scheme.

The EFCC Chairman emphasised that the suspects found are facing prosecution.

“We have found a lot of people culpable. Those who promoted that scheme are within our jurisdiction and have been arrested. So, at this moment, they are being prosecuted. And we can also say that money has been recovered, even though the process is still ongoing for us to finally forfeit it,” he said.

Olukoyede also urged Nigerians to exercise caution when investing their resources into online platforms.

“Ponzi schemes remain one of the most pervasive threats facing unsuspecting investors. The CBEX case is a clear example. We all remember the outcry that followed the collapse of the scheme, but these unfortunate situations are preventable. Nigerians must begin to conduct due diligence before committing their resources to such platforms,” Olukoyede said.

He also stressed that the body remains committed to fishing out the culprits and recovering the lost funds.

“It was only when the bubble burst that people wanted EFCC to perform magic and recover their money. In the case we investigated in Lagos, which we dubbed Operation Flush, we arrested a large number of foreigners involved in various cybercrimes, including CBEX. I want Nigerians to know that as of today, we have secured close to 150 convictions. Some of them are already serving their jail terms. And when they are through with that, we are going to send them back to where they came from. So we are monitoring them,” he added.

He urged the public to stay vigilant, assuring them that the body will see the case to the end.

“We are no longer the EFCC that drops cases halfway. Whatever we start, we will finish. Nigerians should trust us and believe in our capacity to do justice. Some of these cases are complex and may require cross-border investigations, but we are up to the task,” he said.


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