How’s the weather where you are?
It’s been raining back to back in Nigeria, especially in the southwestern part.
Anyways in case, it gets to the stage where you need an ark; we Noah guy.
President Buhari finally signed the Africa Continental Free Trade Area (AfCFTA) agreement and said: “Nigeria shall sustain its strong leadership role in Africa in the implementation of the AfCFTA.”
What’s the gist?
Few hours after we told ‘you’ C’ mon you can do better, President Muhammadu Buhari signed the AfCFTA agreement at the 12th Extraordinary Summit of the African Union on the AfCFTA in Niger. Fellow latecomer, President Patrice Talon of Benin, also signed the trade deal. As a result, their friend President Isais Afwerki of Eritrea is the only one that hasn’t signed.We can authoritatively say President Buhari’s decision to sign the AfCFTA agreement was informed by the report he received on June 27. In October 2018, the President inaugurated a committee to carry out an assessment of the AfCFTA and its potential risk for Nigeria. Why did the committee use eight months to assess an agreement that was signed by 44 out of 55 countries in March 2018?
As Africa’s largest economy, Nigeria could lose more than it will gain from the AfCFTA if the necessary infrastructures that will enable the country to benefit from the trade are not put in place.
The AU Summit also marked the launch of the operational phase of the AfCFTA. This means traders across Africa can now leverage the preferential arrangement offered by the AfCFTA, but with a caveat that the trade transactions are among member-states that have ratified the agreement and conform to the provisions of the rules of origin governing trade in the AfCFTA. The United Nations Economic Commission for Africa (ECA) said “competition, investment and intellectual property rights” are critical to the next phase of the AfCFTA.
Don’t put all the eggs in one basket
Airtel has joined MTN as the second telecom company to be listed on the Nigerian Stock Exchange (NSE). With 3,758,151,504 ordinary shares listed at a market value of $4.2 billion (N1.5 trillion), Airtel is the third-largest company listed on the Nigerian bourse behind Dangote and MTN, and the second company to list in London and Lagos after Seplat.
Why Should I Care?
Airtel’s listing continues to diversify the stocks on the NSE, which has been dominated by the manufacturing and banking sector. As an investor (or wannabe), you can now share in the telco largesse. Who knows the next big coy that will go public? Globacom?
#ThisIsNigeria there’s always a but. This brings that déjá vu feeling of MTN listing by introduction in May because Airtel also did a secondary listing. It had issued an IPO in London last month, which performed poorly. While MTN was ‘forced’ to list on the NSE, the aim of Airtel’s London and Lagos IPO is to raise money to reduce debt, which stood $4 billion in March. So, the dividends might only come in trickles.
P.S: Airtel has come a long way in Nigeria. While Bharti Airtel acquired the company in 2010, the entity referred to as Airtel today has been existing since 2001. It has evolved from Econet, Vodacom, Vmobile, Celtel and Zain.
Nigeria has gone 2.3% deeper into the ocean of debt, per the Debt Management Office report.
What does this mean?
This means the total public debt increased from N24.387 trillion as of 31 December 2018 to N24.947 trillion by March 31, 2019. The DMO also reported that $357.26 million (N128.87 billion) have been spent on servicing external debt in Q1 2019.
Zoom Out: As debt keeps on increasing we can only hope that it’s being used for good.
The National Bureau of Statistics released a report of how much investment funds came into Nigeria in the first quarter of 2019.
What did it say?
Total Value of Capital inflow: ~$8.5 trillion. That’s 216.03% more than what came in the 4th quarter of 2018 and 34.61% more than the first quarter of 2018.
Type of Investment: Portfolio Investment (84.5%), Other investments (12.9%) Foreign Direct Investment (2.86%)
FYI: Portfolio investment refers to investments in a group (portfolio) of assets – financial instruments such as shares, debt, bonds. Portfolio investment is a passive form of investment and different from direct investment, which involves taking a sizable stake in a target company and possibly being involved with its day-to-day management.
Sector: Out of the ~$8.5 trillion that came into Nigeria, a few sectors such as Banking ($2.8 trillion), Shares ($2.4 trillion) Financing ($2.1 trillion) gulped most of it while a few other sectors such as Drilling, Brewing, Hotels didn’t receive any foreign investment.
Destination of Investment: 97% of the total investment came to only two states – Lagos (56%) and Abuja (41%).
Top 3 Countries of Origin: Almost 80% of the total investment came from three countries – the UK (53%), USA (17%) and South Africa (8%).
Why should I care?
A good understanding of how capital flows into Nigeria would help anyone seeking capital to be better positioned.
Dig Deeper: Nigerian Capital Importation(Q1 2019)
Nigeria is a happier nation because the Super Eagles are in the semi-finals of AFCON. This current AFCON tournament in Egypt is the 32nd edition. We’d take a look back at the origin of AFCON and how it has evolved over the years from its original aim.
In the beginning: The inaugural AFCON tournament was held in 1957 to celebrate the formation of the confederation of African Football (CAF). One of the major goals of AFCON, when it was founded, was to assert Africans’ equality with Europeans, who still colonised most of the continent at the time.
How AFCON has fared over the years:
Equality: In 1976, South Africa a founding member of CAF was expelled from CAF and banned from AFCON for 18 years for insisting it’d select only White Players.
Time of event: Since it’s inception AFCON was always held between January and February when weather conditions are most suitable in most African countries but this year, it was moved to summer – a period of very high heat or heavy rain – in order to fit the summer break period for European clubs. This move reflects the difficulty of resisting the commercial dominance of European football as there will no longer be a direct competition with European club matches for television viewers. The new schedule also protects the commercial value of African players in Europe who will no longer have to miss two months of club matches.
Foreign-based players: Before 1982, there was a limit of each team having only 2 foreign-based players but when it was clear that the best players were increasingly playing abroad CAF realised that keeping those players out of AFCON would diminish the quality of the competition. So the limit was lifted causing an influx of foreign-based players into National teams.
To give home-based players more action 2007 CAF introduced a new competition, the African Nations Championship (CHAN) solely for domestic players but CHAN hasn’t attained the global appeal status of AFCON.
Access to watch the games has also been a problem: Ticket prices are higher than most people’s wages and regular TV stations don’t show these matches again as the broadcasting rights have been sold to the highest bidder – expensive subscription services.
Bottom line: AFCON was founded to uphold African Solidarity and Autonomy but over the years it has still bent to pressures from Europe. (Tweet this)
If you wanted to raise money to run a project, a good way to go about that would be to reach out to your ‘rich’ friend or relative who lives abroad, after all, the exchange rate is always in their favour.
We think it’s a good strategy and the government also thinks so.
One way the government raises money is via diaspora bonds. A bond is a tool for borrowing money in financial markets.
This is how diaspora bonds work, developing countries in need of financing often look to their citizens in wealthy countries for support. The migrants provide this support by receiving discounts on government debt from their home countries.
Contributions from the diaspora are often significant with countries like Nigeria, India and Israel have had successful issuances of diaspora bonds, with expatriates from each country investing billions of dollars. (tweet this)
Nigeria’s first diaspora bond, issued in 2017, was a resounding success. It raised $300 million for investment in infrastructure from Nigerians overseas and was oversubscribed by 130%. The government is looking into a second similar offering.
In all, not all diaspora bonds are successful, Ethiopia’s own failed with only 6% subscribing for it.
Why should I care?
When you leave your home country, that’s if you haven’t left already, don’t forget to invest in diaspora bonds.
If planned and structured appropriately, diaspora bonds have great potential to tap into significant sources of capital that are currently underutilised.
Dig Deeper: Investing from Abroad Report
Godzilla, John Wick, The secret life of Pets, Men in Black, Avengers…what do these movies have in common?
They are sequels released this year.
Sequel: A published, broadcast, or recorded work that continues the story or develops the theme of an earlier one.
It appears Hollywood is hopping on this trend as this year alone we’ve seen more sequel movies released.
But aren’t people tired of seeing the same movies with a different storyline?
The CEO of Imax doesn’t believe so citing that the recently released Spider-Man: Far from Home raked in $580 million globally within its first 10 days despite being the second Spider-Man movie released this year.
Should we expect more original content?
Errm…with many movies having huge budgets of $150 – $250 million many people are reluctant to make big bets on new content. So Nope! Sequels are here to stay.
One more thing…
After less than 80 days in the theatres, Avengers: Endgame is $15million shy of meeting up and most likely surpassing the record $2.787 billion that Avatar the highest-grossing movie of all time has earned since its release in 2009.
It took Avatar 234 days during its first run (the film got a rerelease in 2010) to displace Titanic as the highest-grossing movie of all time. We would be counting down to when Avenger overtakes Avatar.
Microsoft’s Teams which was launched just 2 years ago has surpassed Slack’s daily usage. Teams has over 13 million daily active users while Slack has 10 million.
Abit about Teams
In Teams, people can make calls and exchange messages with teammates, and work on Word and Excel files without switching to different applications. Microsoft just replicated slack in a better way.
Why so fast?
Since March 2017, Microsoft has included Teams in companies’ subscriptions to the Office 365 bundle of productivity software at no additional charge. Microsoft has 180 million active users of Office 365 bundle. Per CNBC, The success of Teams, at least in relation to Slack, is an example of how Microsoft can make hits out of young products just by distributing it to its large collection of existing customers.
Bottom line: This is a tight one for Slack because whatever Slack does to differentiate itself, Microsoft can easily copy. (tweet this)
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