We are grateful for two things today:
Let’s dive into the news 😊
Two days ago, the World Bank released its Ease of Doing Business Index (DBI) global report which ranked Nigeria 131 out of 190 countries, up 15 places from her position in last year’s report. Also, Nigeria was named among the top 10 most improved economies in the world for the second time in three years.
As the Nigerian presidency proudly took to the streets of Twitter to announce these feats, many citizens including stakeholders came out to disagree, saying that the DBI fails to reflect the harsh realities of business in Nigeria.
Here’s the thing with DBI…
First, it’s like building a house without digging for the foundation. The DBI looks at elements like ease of starting a business, enforcing a contract, or getting a loan; considers them in terms of costs and duration; and reduces them to a box-ticking exercise. If you’ve ever heard people talk about starting a business in Nigeria, you’d know that there’s so much not captured here.
Second, considering that the same story can’t be told about Nigeria’s positions on Transparency International’s Global Corruption Ranking, we can infer little from this DBI result.
Third, the DBI technically only applies to a country’s biggest cities (in our case, Lagos and Kano). What then happens to other cities?
Truth be told, the DBI was designed to give an ‘overview’ of a country’s business situation. While many things happen behind the curtains, Nigeria could use this as a confidence boost to further ease business operations in other cities.
We’d be right to expect some political propaganda in the future though, much against the World Bank’s will.
P.S: You might wanna know that the World Bank does not guarantee the accuracy of data used in the Index. 🙂
Earlier this week President Buhari took a trip to Russia for the Sochi Retreat, a gathering of representatives of all 54 African nations – including 43 heads of state or government – with the Russian Government.
Why’s Russia doing this?
Security and Mining: Russia is already Africa’s top arms supplier and is deepening relationships in areas like mining and security. Nigeria’s currently facing Boko Haram’s insurgency and would all the support it can get to topple this negative force. As a result of this meeting, Nigeria’s going to buy 12 attack helicopters from Russia. Also, Nigeria struck a deal with Russia to complete the Ajaokuta Steel Rolling Mill.
Wheat: Russia is one of the world’s top wheat producer, but Nigeria produces less than one hundred thousand metric tons of wheat locally while it imports about five million tons. President Buhari appealed to President Putin to help Nigeria bridge the deficit.
Zoom out: This event by Russia is simply a signal to the western world that Russia is back to Africa, however it’s clear that Russia doesn’t have the economic might to match the investments and trade coming from China, the U.S., and even many lesser powers.
It’s been quite a dramatic week for Nigerian banks, the Nigerian Communications Commission, and MTN Nigeria – all over who should make what money.
Last Sunday, MTN subscribers received text messages stating that from Monday the 21st, every usage of USSD for banking services would attract a charge of ₦4 per 20 seconds. Following bursts of outrage by numerous Nigerians and attacks on both banks and MTN, the Committee of Bank CEOs issued a statement that the decision on what to charge on USSD transactions is entirely by the telecommunications company (telco, for short) and was made without their consent. Subsequently, the NCC ordered immediate suspension of these USSD charges – which forced MTN to admit that banks left it with no option than to charge customers.
Wow. So tell me how this works exactly.
Unstructured Supplementary Service Data (USSD) is a communication technology used to send text between a mobile phone and a network application. In this case, when you enter a bank-designated USSD code (for example, *919# for UBA), you can enjoy numerous banking services without going to the bank and even without internet connectivity.
Usually, banks charge a user per USSD transaction, and then remits an agreed ratio of this charge to the telco. This is called a Corporate Billing System. However, MTN hinted that the Committee of Bank CEOs suggested that they implement the End-user Billing System, by which the would now charge users themselves – much against their will.
So what happens next?
Well, rest assured that you won’t be charged like this for now. And if you have access to the internet, a mobile banking app is always a better option.
The chain of business expansion continues with the Indomie manufacturers, only this time, to an industry your mind may never go to.
Singapore-based Tolaram Group, maker of Indomie noodles, is building the biggest and busiest port in West Africa on the east side of Lagos.
Breathtaking. Tell me more.
Sure. The Lekki Deep Sea Port (yeah, that’s the name) promises to offer enormous support to commercial operations across Nigeria and the entire West African region. Tolaram says the project will allow Lagos reclaim its position as the region’s top port from nearby Togo.
The company has raised $1.1 billion for the project. About $630 million was sourced from the China Development Bank, while the remaining $470 million was gotten in equity from China Harbour Engineering Company who not only is responsible for constructing the port but also owns 52.2% of the project.
So what’s in it for Tolaram?
Profit, surely – a lot of it. It’s worth noting that Tolaram makes more money in Africa than Nestle and Unilever, the world’s largest food companies. Tolaram has gone to great lengths to ensure they seal this opportunity, as part of the money will be used for the surrounding infrastructure without which the port would be dysfunctional (the Apapa port is an excellent example).
P.S: We really hope they’ve made plans for the frequent rain and floods in Lagos.
Guess who’s ready to risk it all?
Nope, not Davido. It’s Guineans.
They are angry about a perceived constitutional change which they think might lead them into dictatorship, so they are ready to risk it all to bring their president to do the right thing.
What is this story about?
At least nine people were recently killed in Guinea when government security forces opened fire on protesters who took to the streets to speak against an alleged constitutional review by President Alpha Conde, which they believe could be an attempt to fulfilling his agenda for running for the third time in the country.
A few months to the end of his tenure, Conde ordered for the constitution to be reviewed and concerned citizens took to the streets to protest their fear for his alleged plans to extend his tenure come 2020, after ruling for 10 years.
This sounds familiar
Yes, it does. Not just because it is against the constitution of Guinea, but because it is fast becoming a regular practice in Africa, where some leaders, have in the past, selfishly chosen to die at the helm of power against the will of citizens.
In many places around the world, it was election season.
In brief, Israel’s PM could not afford a coalition. Trudeau retained his seat as PM in Canada…tension rocked in Bolivia as electorate rejected final result, meanwhile, Argentina goes to poll this Sunday.
Let’s dig deeper
After losing the ruling majority seats in two general elections this year, Israel’s Prime Minister, Benjamin Netanyahu has failed in his attempt for a coalition government, which could have been a chance to build a new unitary government in Israel with him as the leader.
Netanyahu was required to sweep 61 seats at the Parliament to form a ruling majority but got just 54, hence could not form a new government. He risks forfeiting this opportunity to his rival, Benny Gantz, who has 28 days to form his own coalition government.
However, In Canada, the results were the opposite. For the second time, Justin Trudeau has retained his seat as Canada’s Prime Minister. Although he has been accused of being involved in some scandalous cases of corruption and racism in the past, he legalized marijuana and signed strong trade deals with the world’s great economies. His efforts were never in vain after all.
While in Bolivia, electorates expressed their discontent to the election results when Evo Morales who allegedly got more votes, proclaiming himself the outright winner of the election. He had earlier lost a 2016 referendum to determine whether he could run for a fourth term. Do we smell autocracy? Bolivians are not having any of it anyways.
Meanwhile, Argentina will decide it’s new leader tomorrow, Sunday as sitting President, Mauricio Macri running against Alberto Fermández.
During this week, many companies released the report on how they performed from July – September 2019. We look at four companies.
Caterpillar: The heavy machinery manufacturer reported a disappointing revenue of $12.758 billion reported as against an expected $13.572 billion. It blames this on ‘global economic uncertainty’, that’s just a fancy term for the US vs China trade war that has led customers to pause purchases.
Microsoft: The sky’s the limit for Microsoft as it beat investors expectation with a higher than expected profit and revenue. The company’s revenue for the first quarter of the fiscal year rose 14% year-over-year, to $33.1 billion. Net income increased 21% to $10.7 billion.
Although It’s cloud service is leading the way in terms of growth, the growth rate is also gradually taking a nosedive due to stiff competition from Amazon. Microsoft recently announced a 3-year partnership with SAP (Europe’s largest tech company), however, it’s contending with Amazon for a $10 billion cloud-computing contract with the US Govt.
Amazon: Amazon’s results fell short of the market’s expectations as although it’s revenue grew 24% to $70 billion for the quarter, Its net income dropped to $2.1 billion, down 26% from the year-ago period’s $2.9 billion.
The increase in revenue shows that the heavy investment in free one-day shipping – so you never shop anywhere else again – is leading to more purchases, however, also the return to a heavy investment cycle is cutting into Amazon’s profitability.
P & G: P & G revenue rose by 7% to $17.80 billion, topping expectations of $17.42 billion. This growth is driven majorly by beauty, health care and fabric and home care lines. P &G claims to be focused on innovation, such as launching digital diapers that track babies’ sleep. But on the flip side, its Gillette shaving business has been a drag, it’s struggling to grow as it contends with the likes of Unilever’s Dollar Shave Club and Harry’s.
China revealed its economy grew by 6% in the third quarter of this year – lower than the 6.1% economists had predicted and its weakest growth rate since 1992.
Reasons: China has been fighting a trade war with the US for the past year, which has created uncertainty for businesses and consumers. Also, it faces domestic challenges including a swine fever outbreak that has fuelled inflation and hit consumer spending.
Why it matters
Since economic growth measures the increase in the amount of goods and services produced per head of the population of the country over a period of time. The rate at which China’s economy grows will affect its demand for products and services from companies around the world, many of the world’s largest companies such as Apple and Coca Cola rely on the China market for significant sales revenue.
On the flip side, despite the decline in economic growth, a report from Credit Suisse shows that wealth in China is rising up, as there are now more wealthy Chinese than Americans for the first time.
A recently released research paper analyzed more than 40m Uber trips during a 4-week span in 2017, it looked at how much riders tipped, and how these tips varied based on a multitude of factors.
Turns out drivers would need to come up with better ways to motivate riders to tip them.
The Break-Up: Illustrations on what’s happening in Europe
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