Good morning, Thank you to all those who took out time to remind us that last week was the first Saturday in M̶o̶n̶d̶a̶y̶ May. That’s what happens when you spend too much time deliberating on whether to write May or Month

Economy


One n̶o̶t̶ ̶s̶o̶ good turn deserves another

What is happening?

President Buhari is retaining Godwin Emefiele as the Governor of the Central Bank of Nigeria (CBN), hopefully for the next 5 years which is the typical tenure of a CBN Governor.


Hmm, okay isn’t that normal?

Nope, Emefiele is the first CBN Governor to get a second term since (Late) Alhaji Abdulkadir Ahmed who served from 1982 to 1993 under Shehu Shagari (civilian government), Buhari and Ibrahim Babaginda (both military).


He must have done a great Job right?
Well maybe, you be the Judge.According to Stears Business, here’s a comparison of the Nigerian economy pre-Emefiele (Q2’14) and the economy today (as of March 2019).

Errm, this doesn’t look good, why is he coming back?

While his performance is questionable, the drop in Nigeria’s performance can be largely attributed to the collapse of Global Oil prices from $115 per barrel to $57 within a few short 2014 months, eventually leading to a significant decline in dollar supply in the country. 
However, many weren’t too pleased with how the CBN Governor and Minister of Finance handled the collapse.


But he must have done something right right?

On the bright side, as at the last quarter 2018, the Nigerian economy grew at 2.38%, with inflation dropping for the third consecutive month to 11.25%. 
Also, Emefiele did a decent job addressing three main banking issues the CBN faced:
The 9Mobile default: Etisalat Nigeria, now called 9mobile, took out a syndicated loan from 13 Nigerian banks but failed to make repayments in 2017. CBN helped ensure this was settled amicably. 

Skye bank: CBN probably made the right choice in acquiring Skye Bank when it saw it was going under via a bridge bank – Polaris bank.

Access-Diamond merger: Following uncertainty around Diamond Bank’s financial position and performance, CBN gave a nod for it to merge with Access Bank to protect customers and investors from any serious loss.

What should we expect in his second term?
Now that the economy seems stable, hopefully, more progress.

How much did your state generate in 2018?

Brainteaser: Who earns his salary without working a single day?

The answer is at the end of this story

What’s going?

How much you earn or make often determines how much cloout you have, so it’s a thing of pride or shame when the National Bureau of Statistic releases the IGR of Nigerian states for 2018.
 

Please remind me what IGR is again?

Internally generated revenues (IGR) are revenues generated by States within the Nigerian federation, independent of their share of the revenue from the federation account. This is mostly made up of taxes.

Okay, what do I need to know?

The total IGR grew by 22.79% from the 3rd Quarter of 2018 and increased by 24.82% when compared to that of 2017.
 

Go on…

Top 5 best performing states are…

And the Top 5 worst performing states are…


In all, the value of foreign debt stands at $4.23b while domestic debt was N3.85 trillion at the end of the year 2018.

Why should I Care?

Revenue generation in Nigeria is principally derived from tax, A state needs funds to drive economic growth, much revenue is needed to plan, execute and maintain infrastructures and facilities at the state government level. The more revenue is generated internally, the less there’d be a need to borrow.

Answer: A night watchman/Nightguard

 

International Trade


60 days till we go Nuclear

It was supposed to be a simple deal: Don’t build nuclear weapons or keep plenty materials (Uranium) that can be used to create weapons and we’d buy stuff from you, we would buy from you on good terms.

What’s going on here?

One year ago President Donald Trump announced America’s withdrawal from the Nuclear deal which has Iran, after accusing Iran of not complying with the terms of the deal.

Trump saying true to his words said, “We will be instituting the highest level of economic sanction…Any nation that helps Iran in its quest for nuclear weapons could also be strongly sanctioned by the United States.”
 

What did Iran do?

Iran kept its cool, tried to negotiate and get the support of other countries but things got bad, like really bad.

Ouch! That seems…extreme.

It’s supposed to be. Iran earns about $50 billion from Oil sales which account for 40% of government revenue. The sanction even includes stopping five of Iran’s biggest customers from buying its oil.

And what is Iran doing now?

Iran is now reaching out to other European countries, Russia and China to meet their financial and oil commitments within 60 days or else it would revert to building weapons.

“If Europe does not step up to save the deal and protect Iran’s oil and banking sectors from U.S. sanctions, it will restart construction of its Arak nuclear reactor, which was capable of producing weapons-grade plutonium and had been shut down as part of the 2015 deal.”
 

What are the other countries saying?

Uk, Germany and France opposed last year’s decision by President Donald Trump to abandon the deal. Russia and China are clearly not in support too.

US & China are still doing Tit-for-Tat



What happened?

President Donald Trump raised the stakes in his trade conflict with China as the U.S. increased tariffs on $200 billion in Chinese goods on Friday.
 

I’m gonna need a quick history lesson.

Since last year, the US and China have been going tit-for-tat on tariffs. Slapping each other with import tariffs, To trump, it’s a fulfilment of part of Trump’s campaign promise which is to fix the longtime abuse of China’s broken international system and unfair practices. To China, it isn’t going to let anyone bully her.
 

Would this ever stop?

We doubt.

Trump has prepared to put even more pressure on China as he pushes for an agreement. He has threatened to slap 25% tariffs on $325 billion in Chinese goods that remain untaxed.
 

Elections

South Africa’s Election: The Disinterested and the Loyalist

Getty



What happened?

South Africa’s ruling ANC party won the election with around 58% of the vote. That’s down from 62% in 2014 but nonetheless, it was good enough for Cyril Ramaphosa.

Who were the candidates?

The Democratic Alliance: Musi Maimane, a 39-year-old pastor running under the Democratic Alliance.

The Economic Freedom Fighters: This party was created by Julius Malema, a 38-year-old controversial political activist. 

The African National Congress:  ACN is the oldest political movement in Africa, established in 1912. Thabo Mbeki and Jacob Zuma had run under the party.  68-year-old Cyril Ramaphosa is the current president and contender under the party 
 

Anything else I should know about the elections?

  • 26.76 million registered voters
  • 55% of them are female
  • 48 parties on the ballot
  • 28,757 voting stations
  • 220,000 members of electoral staff
     

How are people feeling about this?

Disinterested.

The most striking statistic in this election is that more than six million didn’t register to take part. In an interview with BBC, a citizen aired her grievances saying,  “I am upset! If Nelson Mandela was a presidential candidate I would run to the polling station no doubt. But right now we would vote and they would still be riding fancy cars.  Look at the road, We drink dirty water but they drink clean bottled water. They live in fancy places, we live in dirty places. They expect us to vote but they won’t do anything for us.”
 

Excited.

Esau Zwane who is 90 years old, having lived under the white-minority rule was excited to vote simply because South Africa is now ruled by black people.

Big Picture: Clearly, a portion of the population has lost faith in the country’s leaders. Hopefully, the returning president can restore some.
 

Governance

Your CV is getting a leadership revamp


To the rest of the world, CV mean Curriculum vitae, a written overview of a person’s experience and other qualifications for a job opportunity but to Nigerians especially if you have been to Lagos, most likely it also means Computer Village.
 

What and Where is Computer Village?

Computer Village (CV) is an Information and Communications Technology (ICT) accessories market located in a community called Otigba, located at Ikeja, the capital of Lagos State.
 

K, Continue

CV used to be under the leadership of the Computer and Allied Product Dealers Association of Nigeria (CAPDAN) but now it’s leadership being replaced by Iyaloja and Balaloja (traditional market leaders).

What are people saying?

Hundreds of traders from CV are protesting against this move, members of the CAPDAN are furious that the planned installation will alter the periodic elections that had existed over the years in the market.

They are arguing that Computer Village is an international market and does not need the imposition of Iyaoloja or Babaloja.

So why do it?

That’s a question that doesn’t seem to have a clear answer right now.

Hmm, do you think these new guys can do a better Job?

In the words of the Iyaloja who has been in Ikeja for over 25 years and was an early member of CAPDAN,  “I was one of the people who wrote to the government to stop banks from selling laptops as they aren’t specifically in the business of buying and selling.”

“I have always been a leader. I’ve been called ‘Iyaloja’ by everyone in the market for over ten years, as a nickname and as a result of my contribution in the market. But in my humble opinion, I think it’s just the right time for God to crown the name with a position,”


Big Picture: We would be looking out for what this new leadership has to offer.
 

Entertainment

Disney is Thriving 🎉


What happened?

Disney released its Q1 report on Wednesday, It reported a revenue of $14.9 billion and net income of $5.4 billion. By the way, these figures don’t even include the figures for Avengers: End Game (the second highest grossing movie of all time) which would be included in next quarter’s report.
Looking into its Q1 report, It made the most revenue from Parks, Experiences and Products ($6.169 billion) while it’s most profitable unit is Media Networks ($2.185 billion).

Please tell me about the Avengers: End Game?

Sure! Its Total lifetime gross as at today is $2,328,245,739, well on its way to surpassing Avatar which is in number one.


How much did Nigerians spend on the movie?
As per Cinema Exhibitors Association of Nigeria (CEAN)

Debut Day: N22.5 million
First weekend: N188 million
First Week: Over N304 million

But what about Ze Black Panther?
It made N135.4 million in its first weekend

Okay back to Disney, anything else?
Disney’s $1 billion Star Wars-themed Disneyland expansion opens May 31 and it recently announced its streaming service, Disney+, which would go live in November. 

E-Commerce


Not all IPOs are created Equal

What do you do when you’re on the verge of bankruptcy, your largest shareholders won’t fund you anymore, and your closest competitor just got sold at a fire sale valuation? You fudge the numbers and hope that you can dump stock onto US investors.
 These words are not ours but those of Citron a US Based online investment Newsletter that claims Jumia inflated its active user and merchant pool, also failing to disclose its rate of order returns and cancellations in its IPO filing despite doing so in the earlier investor presentation.


What’s going on here?

Jumia share price has gone on a downhill with the stock recording six straight days of decline since this report came out.


What’s in the report?

  • Jumia’s largest shareholders MTN and Rocket Internet wanted to exit the company after it reported in 2018 that it had a year’s cash left.
  • Jumia’s revenue declined from $145 million to $131 million while its adjusted loss went from just $161 million to $150 million.
  • The most disturbing disclosure that Jumia removed from its IPO filing was that 41% of orders were returned, not delivered, or cancelled. This was previously disclosed in the Company’s October 2018 confidential investor presentation.

What’s ‘left’ in it for Citron?
The newsletter is run by well-known short-seller Andrew Left. Short-sellers profit from stocks when their share price drops. Andrew might gain big from this report if he had shorted Jumia stock.

What’s Jumia saying?
No word from them yet so it’s all allegations, for now.

Why should I care?This critical report if true does not help local startup community as it reinforces the narrative that Nigeria is a corrupt country with people who are relatively poor and not suitable for e-commerce to thrive 💔