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African Equity Market Raises $11bn

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An international
accounting firm, PricewaterhouseCoopers (PwC), has said that 11 billion dollars was raised from African equity capital market (ECM) in 2014.
The Tide source reports that the African bourse contribution to the continent’s economy is contained in PwC’s inaugural publication entitled IPO Watch Africa 2014, obtained in Lagos.
According to the report, 2014 had witnessed the highest level of activity in ECM over the previous five years, with a significant increase in both transaction volume and capital raised during the period.
The report also said that the 11 billion dollars raised in 2014 across the continent was almost equal to the combined money raised in the whole of 2012 and 2013, amounting to 11.1 billion dollars.
It said that Initial Public Offers (IPO) activity during the period under review increased to 1.7 billion dollars from 0.8 billion dollars achieved in 2013.
The report also added that 1.2 billion dollars of Further Offers (FO) capital was raised by African companies on international exchanges since 2010.
“FOs in this context include those companies seeking to expand their investor base by way of a secondary listing, as well as those raising further funds from existing international listings,” it said.
A breakdown of market based activities in Africa showed that the Johannesburg Stock Exchange (JSE) retained its position in 2014 as the most active African market in terms of both total ECM transaction volume and proceeds.
The report said that the Tunis and Nigerian Stock Exchanges held the second position on the continent in terms of volume and proceeds raised, respectively.
It noted that 2015 would be a positive year for ECM activity in Africa due to strong performance posted in 2014.
“This is driven largely by a combination of expectations for continued exit by private equity investors, reforms to certain capital markets legislation, and growing investor confidence in and familiarity with African markets,” it said.
PwC Nigeria Capital Markets Partner, Mr Darrell McGraw, said that recent movements in commodity prices and relative depreciation of local currencies against the dollar might affect the Nigerian capital market.

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South-East Traders Petition CBN Over Illegal Bank Deductions 

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The South-East Amalgamated Markets Traders Association has frowned against what it called “multiple and indiscriminate charges and deductions on customers” by commercial banks.
The association, in an open letter to the Governor of Central Bank of Nigeria (CBN), Mr Godwin Emefiele, complained about the bank charges.
The letter was signed by the association’s President-General, Chief Gozie Akudolu, and Secretary-General, Mr Alex Okwudiri.
The letter read in part, “Part of the major responsibilities of the commercial banks, we know, is to accept money deposits from customers and keep safe custody of the same, and perform such other transactions for and as directed by the customer through various bank instruments.
“Most of the transactions, we also know, are the social responsibility of the banks. But today, the banks make deductions and charges for virtually every transaction ranging from deposits to even confirmation of signature”.
The association particularly decried indiscriminate charges and deductions in online transactions, calling on the CBN to put a stop to it.
According to it, ”When a customer makes an online transfer of funds, the transfer is charged a certain amount of money deducted from his/her account and the recipient’s account is also charged and deductions made for receiving the money.
“In addition, charges and deductions are also made for SMS, which most of the time were not received. Finally, at intervals, charges and deductions will be made on the same account as service charge”.
The association said its members had individually approached the banks to complain but without success.
It, therefore, appealed to the CBN governor to prevail on the banks to stop “the indiscriminate charges and deductions and, if possible, refund all the deductions”.
The association, however, noted that the cashless economy policy of the CBN had been of immense benefits to its members, especially as it curtailed to the barest minimum armed robbery attacks on them.

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Rising Food Prices Fuelling Inflation In Nigeria, Others  – IMF 

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The International Monetary Fund (IMF) says rising food prices is the major factor fuelling inflation in Nigeria and other Sub-Saharan African countries.
IMF made this known in a blogpost on Monday, saying inflation is rising around the world, but because food accounts for about 40 per cent of the SSA’s consumption basket, it plays a major determining role in inflation.
According to the body, “Food inflation increased throughout 2019, on average, across 25 countries in the region where monthly food price data are available.
“After remaining stable around seven to eight per cent (year over year) since the beginning of the pandemic, food inflation started to rise again from April this year to some 10 per cent in October. The chart shows how food inflation is outpacing and contributing to the pick-up in overall consumer price inflation in sub-Saharan Africa, which rose to about eight per cent in October, up from around five per cent in 2019”.
The global body attributed the recent increase in food inflation to rising oil prices (which raise fertilizer prices and transportation costs), droughts and export restrictions imposed by some major food exporters, and stockpiling in some countries.
It said, “In addition, pandemic containment measures disrupted production and imports of seeds and fertilisers and caused labour shortages during planting seasons.
“Importantly, there is diversity across the region—food inflation in Chad is near zero but around 30 per cent in Angola. This suggests that domestic factors such as weather and exchange rates are important contributors to food inflation in sub-Saharan African countries”.
IMF added that food inflation and consumer price index inflation could moderate if commodity prices eased and pandemic-induced global supply chain disruptions were solved.
The international fund body said on the average, inflation would continue to rise in 2021 before dropping in 2022 depending on commodity prices and the resolution of supply-demand mismatches.
It said higher food inflation would worsen the situation for countries already facing food insecurity and shortages, and largely impact poor households.
“The number of undernourished persons in the region is projected to have increased by 20 per cent in 2020, encompassing 264 million people.
“Fighting food insecurity through targeted social assistance and insurance can help populations cope. Avoiding trade barriers and improving access to finance, seed stocks, insecticide, fertilizer, anti-erosion measures, and irrigation are also important”, IMF said.

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Nigeria Records N8.9trn Trade Deficit In Nine Months

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Nigeria recorded a negative trade balance of N8.9 trillion, between January and September, 2021, data from the National Bureau of Statistics (NBS) have shown.
Within this period, total foreign trade stood at N35.09 trillion, comprising N22 trillion imports and N13.1 trillion exports, leading to N8.9 trillion trade deficit.
A breakdown of the trade data by quarters shows that Nigeria’s total merchandise trade stood at N9.76 trillion in the first quarter of the year representing 6.99 per cent increase over the value recorded in Q4 2020.
The export component of this trade stood at N2.91 trillion, representing 29.79 per cent of the total trade in Q1 while import was valued at N6.85 trillion representing 70.21 per cent.
The higher level of imports over exports resulted in a trade deficit (in goods) of N3.94 trillion in Q1 2021.
The value of crude oil export stood at N1.93 trillion representing 66.38 per cent of the total export recorded in Q1, 2021, while non-crude oil export accounted for 33.62 per cent of the total export.
The data also showed that majority of the goods imported during this period originated from China, valued at N2 trillion, followed by the Netherlands (N726.09 billion), the United States (N608.12 billion), India (N589.1 billion) and Belgium (N238.5 billion).
Similarly, Nigeria’s top export trade partners in Q1 were India (N488.1billion), Spain (N287.2 billion), China (N190.1 billion), the Netherlands (N160.billion) and France (N133 billion).
However, in the second quarter of the year, Nigeria’s trade deficit fell to N1.87 trillion as exports jumped to N5.08 tillion against imports of N6.95 tillion.
The value of imports and exports in Q2 brought total merchandise trade to N12.03 trillion, representing a 23.28 per cent increase from the N9.7 trillion recorded in Q1.
The NBS said crude oil, the major component of export trade, stood at N4.08 trillion (80.29 per cent) of total export.
It further said crude oil value had a sharp increase of 111.32 per cent in Q2 compared to the N1.93 trillion recorded in Q1 2021, while the non-crude oil goods recorded N1 trillion (19.71 per cent) of total export trade during Q2 2021.
Further analysis of data from the bureau shows that the majority of imported goods in Q2 2021 originated from China with a value of N2.08 trillion, followed by India with N570.01 billion, Netherlands (N557.15 billion), United States (N526.92 billion), and Russia (N284.36 billion).
Meanwhile, most goods were exported to India (949.05 billion), Spain (N524.49 billion), Canada (N355.60bn), Netherlands (N298.29 billion), and the United States (N256.63 billion).
The NBS on Monday revealed that Nigeria’s trade deficit rose to N3.03 trillion in the third quarter of the year.
According to the Statistician General of the Federation, Simon Harry, who disclosed this in a press briefing held in Abuja, total trade in the review period rose to N13.3 trillion, comprising N8.2 trillion imports and N5.1 trillion exports.
The NBS noted that the rise in imports was driven majorly by increase in the importation of commodities such as motor spirits (N1.1 trillion), Gas Oil (N225.6bn), imported motorcycles and cycles and CKD valued at N116.3 billion from N94.7 billion respectively.

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