The Gulf Stream Executive jet used by the Akwa Ibom State Governor will soon be put up for lease to earn income and relieve the state of its rising maintenance costs. Contrary to speculations, the government has no plans to sell off the aircraft. It prefers a lease arrangement with the government as the owner. Confirming this, the SSG, Mr. Enobong Uwa told me yesterday, ‘’The jet came back from a routine maintenance check last week. We are negotiating to get the best lease agreement for it from various aviation companies. There is no plan whatsoever to sell the jet’’. The absence of the aircraft from its hangar at the Victor Attah International Airport, Uyo, for some weeks has triggered speculations that the plane might have been sold off - five months after Gov. Eno asked the SSG to determine how best to manage its operating costs.

By opting for a lease instead of an outright sale, the government wants to earn income from the plane and at the same time imposes certain restrictions on its use. For example, the government may not allow the lessee to make any alterations or modifications to the plane, including the interior and seating. Second, the lessee will never become the owner. In finance, we describe this as denying the lessee of the residual value of the aircraft. In simple terms, the government wants to keep ownership of the plane while making money from its commercial use. I imagine that the lease agreement may even contain a clause which permits the governor to use the aircraft without paying for it. A One-hour flight in a private jet in Nigeria costs about $10,000 (over N10 million).

I’m in total support of commercializing the plane. The cost of keeping it has become unbearably too high (one estimate puts it at over N5 billion in a year as at two years ago). For a governor that is inclined towards welfarist programs, keeping a private jet at exorbitant costs would fly in the face of what he stands for. Last year, I wrote an article suggesting that it be sold off. Last January when the governor hinted at putting it into commercial use, I applauded the move.

 Now, I ask the government to be very diligent in choosing the charter company. There are many of them in the country, but a reputable one with impressive track records will bring less headaches. In fact, the anomaly in Nigeria’s aviation is that there are more private jets than commercial planes in the country. I urge the governor to be open, transparent and honest in this transaction and all other dealings with our finances. The reason he enjoys so much goodwill is because our people have seen some sincerity of purpose in his actions.

   Jacob could not become all that God wanted him to be until his name and character were changed. You remember his encounter in the midnight with that angel at the bank of Jabbok River. After that wrestling match with God, his name was change from Jacob (supplanter) to Israel (Prince of God, he will rule as God). Yes, you will begin to rule after now! Until you are changed, until you are transformed physically and spiritually, then the totality, the beauty and the fullness of God will not be manifested in your life. The natural takes from the supernatural and begins to rule after every encounter. Can we just read this great account, “But during the night Jacob got up and sent his two wives, two concubines, and eleven sons across the Jabbok River.  After they were on the other side, he sent over all his possessions.  This left Jacob all alone in the camp and a man came and wrestled with him until dawn.  When the man saw that he couldn’t win the match, he struck Jacob’s hip and knocked it out of joint at the socket.  Then the man said, ‘let me go, for it is dawn.’ But Jacob panted, ‘I will not let you go unless you bless me.’ ‘What is your name?’  The man asked, he replied, ‘Jacob.’ ‘Your name will no longer be Jacob,’ the man told him.  ‘It is now Israel, because you have struggled with both God and man and have won...’  Genesis 32:22-31. Praise God!

  This guy needed a tough all night wrestling match, a strong divine push with his last strength to achieve this total, complete, once-in-a-lifetime transformation and the end result proved that the effort worth it. After the struggle, Jacob won, the Sun rose for him and his worst fear (which was meeting his terribly enraged elder brother) was gone. In fact, his fear was instantly turned into victory and joy because Esau though approaching fiercely with his four hundred strong men was immediately ‘melted’ and rushed to embrace and kiss his brother who fraudulently took away his blessings and birth right. In fact, the record said that both of them broke down in tears. Maybe what you also need today is to wrestle with God in prayer until you see that transformation in your life. Though Jacob had acquired some measure of achievement, yet he needed this particular experience to be able to enter his rest, destiny and also to perfect that divine program for his life. Through him the nation of Israel would be birthed and established, but not with his current dubious name and character. His name and nature must first be change from a fraudster to a prince. From the fearful to a wrestler. From an opportunist to a doer of God’s will. And from a manipulator to a prayer warrior. Like me he learnt midnight prayer by force. The word of God said that he wrestled with the man throughout the night and won! I also love the way Hosea puts it. He said that Jacob struggled with his brother in the womb and as a man he also fought with angel and God and won. Wow! Get my book / audiobook Power of Midnight Prayer by Gabriel Agbo to learn more on this.

  Yes, you may also need this transformation now to become what God wants you to be.  You may be looking okay physically, but on the inside, privately, you know that all is not well with you. You need a touch on your character, a change of attitudes, a break from the hindrances, curses and shortcomings. There are impediments that need to be uprooted from your life now, so that you can become what God wants you to be. It may even be sickness or a stubborn problem. You won’t believe it, for some, it is their anger, their stubbornness, their talkativeness, unfaithfulness or their laziness that has stopped them from climbing up or having a sustained relationship, marriage, job, career or spiritual growth. This must change today in the name of Jesus! That Jacob must be changed to Israel! You cannot attain completeness until it is done. Jacob could not. And you must wrestle like him until God does it. Another man called Jabez in the bible also understood this principle and became blessed more than everybody around him. His circumstance of birth and name affected him negatively, but he refused to accept that and prayed until God changed it. You know this, “Now Jabez was more honourable than his brothers, and his mother called his name Jabez, saying, ‘Because I bore him in pain.’  And Jabez called on the God of Israel saying, ‘Oh, that you would bless me indeed, and enlarge my territory, that your hand would be with me, and that you would keep me from evil, that I may not cause pain!’ So God granted him what he requested.” 1 Chronicles 4:9-10. Did you read that?

The first recipient of a genetically modified pig kidney transplant has died nearly two months after he underwent the procedure, his family and the hospital that performed the surgery said Saturday.

Richard “Rick” Slayman had the transplant at Massachusetts General Hospital in March at the age of 62. Surgeons said they believed the pig kidney would last for at least two years.

The transplant team at Massachusetts General Hospital said in a statement it was deeply saddened by Slayman’s passing and offered condolences to his family. They said they didn’t have any indication that he died as a result of the transplant.

The Weymouth, Massachusetts, man was the first living person to have the procedure. Previously, pig kidneys had been temporarily transplanted into brain-dead donors. Two men received heart transplants from pigs, although both died within months.

Slayman had a kidney transplant at the hospital in 2018, but he had to go back on dialysis last year when it showed signs of failure. When dialysis complications arose requiring frequent procedures, his doctors suggested a pig kidney transplant.

“Their enormous efforts leading to the xenotransplant gave our family seven more weeks with Rick, and our memories made during that time will remain in our minds and hearts,” the statement said.

They said Slayman underwent the surgery in part to provide hope for the thousands of people who need a transplant to survive.

“Rick accomplished that goal and his hope and optimism will endure forever,” the statement said.

Xenotransplantation refers to healing human patients with cells, tissues or organs from animals. Such efforts long failed because the human immune system immediately destroyed foreign animal tissue. Recent attempts have involved pigs that have been modified so their organs are more humanlike.

More than 100,000 people are on the national waiting list for a transplant, most of them kidney patients, and thousands die every year before their turn comes.

[NationalDaily]

The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) have vowed to embark on the planned picketing of  the office of the Nigerian Electricity Regulatory Commission (NERC) and distribution companies (DisCos)’s premises nationwide today over the hike in electricity tariff.

“We write to inform you of the picketing action scheduled to take place in the offices of the NERC and Electricity Distribution companies (DISCOS) in all states, including the FCT,” the unions said in a joint statement by NLC’s Ag General Secretary Chris Uyot and his TUC counterpart Anka Hassan.

“The action will jointly take place on Monday, 13th of May, 2024 nationwide simultaneously. Therefore, the two Labour centres are directed to work together to carry out this important action. While counting on your usual cooperation, kindly accept the assurances of our goodwill and highest regards.”

Their action followed a hike in the tariff for electricity consumers who enjoy at least 20 hours of daily power supply.

Though the NERC had reviewed the tariff, the labour unions said they were picketing the agency’s office as well as the premises of distribution companies after a Sunday reversal deadline failed.

The recent tariff hike for electricity consumers has continued to draw comments from several quarters.

With inflation rising to new highs and Nigerians grappling with the removal of petroleum subsidy, the increase in tariff was met with stiff opposition.

Human rights lawyer Femi Falana (SAN) had claimed that the Federal Government was raising funds for the “cash-trapped” DisCoS with the tariff hike.

But while defending the move, the Minister of Power Adebayo Adelabu said the Federal Government will pay about N1.8trn in electricity subsidy in 2024.
He argued that the Electricity Act, 2023 made provisions for the review of tariffs twice yearly.

“Review of tariff is actually legal once it is within the exclusive responsibility of the Nigerian Electricity Regulatory Commission (NERC),” he said on an edition of Channels Television’s Politics Today. “The Act actually provides for review twice in a year, every six months.”

Following the clapback generated by the move, the House of Representatives asked NERC to suspend the implementation of the tariff hike.

[ThisNigeria]

A renowned Priest of the Catholic Archdiocese of Abuja, Rev Fr Chinenye Oluoma, has lamented the state of the nation under the incumbent administration led by President Bola Ahmed Tinubu.

In a statement issued over the weekend via his Facebook page, titled ‘RENEWED SHEGE,’ Oluoma said politicians must stop offering people hope and instead offer them jobs, electricity, education, health care, and security, as these are what Nigerians need.

He expressed his belief that Nigerians may not fully comprehend President Tinubu’s new hope agenda. Oluoma compared hope to anaesthetics, stating that anaesthetics are used to numb pain during life-saving surgeries.

He shared his concerns on Facebook, highlighting the challenges faced by the nation’s currency, the naira, which is struggling to remain below ₦1500 per dollar. Oluoma also pointed out the significant increase in prices of basic commodities, such as bread, which has risen from ₦500 to ₦1200, and other goods that have doubled, tripled, or even quadrupled in price.

According to him, “Hope doesn’t put food on the table, hope doesn’t pay school fees, hope doesn’t pay hospital bills, hope doesn’t pay house rent (which landlords increase indiscriminately and govt ignores infamously); Hope will not create jobs or make electricity supply constant.”

“The problem here is that successive governments in Nigeria keep administering large doses of anaesthetics to us without carrying out any curative surgery. Maliciously increasing the dosage and frequency once we wake up from the effect of the previous dosage.

“At worst, hope is an opium, a psychic drug that makes you feel okay and patient, maybe even comfortable with all the things going wrong.

“It sedates you but doesn’t change your condition. So, Tinubu offered us hope, not jobs, not improved earnings, not stable electricity or a buoyant economy. He offered us hope, and we bought it.”

Furthermore, Oluoma expressed the viewpoint that politicians should not be the ones providing “hope” to citizens; rather, this responsibility should be entrusted to religious leaders.

He emphasized that it is the duty of the government to create job opportunities rather than merely promising them.

He wrote: “Hope shouldn’t be what politicians offer its citizens, it should be left for clerics like my humble self. A government should offer job opportunities, not hope of jobs.

“A government should offer security, power, housing, affordable health care, education and not hope for these things. Why is Nigeria the place where politicians preach like clergy men and clergy act like politicians?

“While the former offer hope, the latter promise jobs, prosperity and other material well being they are in no position and have no capacity to give. What in God’s blue planet is going on with governance in Nigeria?

“As long as the purchasing power of the poor masses keep nose diving and the prices of basic goods and services keep skyrocketing further beyond their reach, what we have is nothing but ‘Renewed Shege’.

“Each administration will always leave our currency weaker than the previous one, a recurring decimal. One administration shows us Shege, another one comes and renews it and we keep dying gradually in hope. Let the poor citizens of Nigeria breathe, please.”

[NaijaNews]

Telecommunication companies are hitting the brakes on capital expenditure this year as mobile service providers grapple with a cash squeeze arising from record financial losses.

Nigeria’s network quality, which has recorded mixed fortunes lately, is set to worsen as a result of the telcos’ planned reduction in capital expenditure, according to some industry experts.

According to GSMA, the mobile industry’s financial performance has slowed down in recent years due to falling naira revenues and worsening economic conditions.

The situation has led the country’s biggest telcos to announce a reduction in capital expenditure this year.

In 2023, both MTN Nigeria and Airtel declared losses. Airtel recorded a loss of $89 million for its year ended March 2024, and MTN Nigeria’s loss was N137 billion for the year ended 2023. Both telcos blamed the naira devaluation, rising inflation, and worsening macroeconomic conditions in the country.

The naira has fallen from N461/$ in March 2023 to N1,303/$ as of March 2024. MTN and Airtel have hinted that they won’t be spending as much on capital expenditure and will rely more on existing infrastructure.

Airtel Africa, in its financial statement, said: “Having considered all the above-mentioned factors impacting the Group’s businesses, the impact of downside sensitivities, and the mitigating actions available to the group including a reduction and deferral of capital expenditure, the directors are satisfied that the Group has adequate resources to continue its operational existence for the foreseeable future.”

MTN Nigeria, in its Q1 2024 results, noted that its consistent and extensive network investment over the past few years has helped it build the flexibility to optimise our capex deployment.

It said: “In this regard, we plan to reduce capex (excluding leases) for FY 2024 and aim for a capex intensity in the upper single digits. We will optimise latent capacity and implement radio planning strategies in order to minimise any potential impacts and disruptions to our network quality.”

For context, MTN has spent N1.08 trillion on capex in the last two years, and Airtel Nigeria has spent $545 million in the same time period.

“The service providers will continue investing in digital infrastructure to support the digital economy in Nigeria, provided that the economic and regulatory environment improves in a way that supports sustainable investment,” GSMA, said in its report, ‘The Role of Mobile Technology in Driving the Digital Economy in Nigeria: A Partnership between Mobile Service Providers and Government to Support Nigeria’s Future Growth and Prosperity,’ which was unveiled in Abuja on Thursday.

The global association for telcos noted that despite the sector’s N33 trillion GDP and N2.4 trillion tax contributions in 2023, the industry is facing several significant challenges.

“The overall financial performance of the industry in recent years has not been sufficient to support the capital-intensive nature of the business,” it said.

GSMA explained that operating costs have increased significantly in the recent period due to increases in the cost of power for sites due to the rapid increases in fuel price, high and rising costs of tax compliance, and increased demand for forex due to contractual obligations for rollout.

“Underlying these trends in revenue and operating costs has been the deteriorating macroeconomic situation in Nigeria. The high levels of inflation have pushed up the cost of many inputs into the mobile service providers’ businesses,” GSMA highlighted.

The industry body said mobile service providers need to generate sufficient revenue to cover their operating costs and support this level of capex over the medium term. When this is not done, operators are likely to cut back on either capital or operating expenditures or both, it said.

“This results in a shrinking sector which leads to subscribers receiving a poorer quality of service and delays in coverage expansion,” it explained.

GSMA noted that telcos will not be able to pay as much tax in the short term and that digital adoption in the country will slow down in the medium term.

Angela Wamola, head of Sub-Saharan Africa at the GSMA, said: “High-speed connectivity is the bedrock of any digital nation… Future policies should be geared towards reducing the cost and complexity of infrastructure rollout to encourage investment and boost the adoption of mobile broadband.”

The slowdown in capex by the telcos may exacerbate network quality in the country, which has not been at its best. Everyday, Nigerians on X complain about network quality.

To improve connectivity, especially access to fast internet, the Federal Government believes it needs $3 billion to fund an additional 120,000km of fibre optic cables. As of the end of 2023, only 78,676km of fibre optic cables have been deployed in the country, and broadband penetration stood at 43.53 percent.

Nigeria’s plan to achieve 75 percent of fibre optic cable target by 2027 and increase broadband penetration to 90 percent is also now being threatened.

In his remarks at the GSMA event, Karl Toriola, MTN Nigeria’s chief executive officer, noted that the telecom sector was faced with numerous challenges, including insecurity, high operation costs, and taxation.

He said: “The return in the telecommunication sector is poor, and there are no dividends for investors, but on the contrary, other sectors are declaring bumper profit, we are continuously investing massive amounts on infrastructure.”

Gbenga Adebayo, Chairman of the Association of Licensed Telecom Operators of Nigeria, noted, “The industry can only be sustained if we have a continuous flow of investments. As we speak, people are cautious to invest because of the many challenges that we have had from currency devaluation to high cost of business.”

To combat rising prices and other challenges, telcos are currently asking the Nigerian Communication Commissions for permission to raise their tariffs, the first such increase in about a decade.

“The industry is not sustainable, we need a tariff hike, other other sectors are increasing theirs, we are the only ones restricted and it is placing us in a very difficult space,” Toriola, MTN’s CEO declared.

Adebayo, ALTON’s chairman, argued that a price review should be a simple regulatory process and that the government should not use the sector as a palliative to solve people’s problems. “We must price right to sustain the industry; we must price right to have the right investment,” he said.

GSMA also recommended that Nigeria remove retail tariff price control regulations, allow periodic tariff reviews, or set a competitive price band for telcos.

Bosun Tijani, minister of communication, innovation and digital economy, argued that rising tariff prices is not the singular solution to mobile operators’ problems.

“There are tons of other things that we must do to ensure that the business environment is conducive for the investors in this space. And the government is active, including in the tariff conversation,” he said.

[Businessday]

Story highlights

• Nigerian banking stocks have suffered a sharp decline in the second quarter, exacerbated by the Central Bank’s recapitalization directive.
• The FUGAZ stocks, comprising major Nigerian banks like FBNH, UBA, GTCO, Access Corporation, and Zenith Bank, have entered a bearish phase, with share prices significantly declining in anticipation of rights issues.
• Financial analysts have noted that the share price decline typically accompanying rights issues is due to the offer of shares at prices below market rates to entice existing shareholders, thereby increasing the supply of shares and putting downward pressure on prices.

Nigerian banking stocks have experienced a dismal second quarter thus far. This downtrend follows the Central Bank’s announcement on banking recapitalization, which has set expectations for further declines in share prices.

Investors, particularly those with substantial interests in major Nigerian banks, tell Nairametrics they are bracing for these potential drops. Early trends suggest their expectations of lower share prices is panning out as they gear up for non-dilutive rights issues.

These rights issues are typically the first step in the capital-raising process and could lead to further downward pressure on stock prices they opine.

Banking All Share Index

This trend is currently reflected in the performance of banking stocks. The Banking All Share Index, which tracks some of the most capitalized bank stocks on the Nigerian Exchange, is down 18% quarter-to-date, in stark contrast to the All-Share Index, which has seen a 6% increase over the same period.

• Year-to-date, Nigerian banking stocks have decreased by 6.8%, while the NGX All Share Index has risen by 31.37%.
• This is a significant reversal from the first quarter of the year, during which banking stocks posted a 14.6% return.
• At that time, the narrative was that bank stocks were undervalued both in terms of their earnings multiple and when evaluated in dollars.
• The momentum, however, has slowed recently, largely due to newly announced banking recapitalization plans.
• Nigeria’s Central Bank has mandated an increase in the minimum share capital, requiring international banks to hold N500 billion and nationally licensed banks N250 billion. This directive indicates that the banking sector must raise over N4 trillion (about $2.8 billion) within 18 months.

As a result, investor relations teams at banks are reportedly working overtime to meet these deadlines. But with billions of shares outstanding and freely floating, bank stocks are likely to face downward pressure in the short term as investors anticipate the rights issues.

FUGAZ stocks under pressure

The performance of tier-one bank stocks, which include FBNH, UBA, GTCO, Access Corporation, and Zenith Bank (FUGAZ), points to a bearish streak even as most adjust their prices ahead of dividend announcements.

In a recent Nairametrics report, nearly all the banks dropped below the one trillion market capitalization mark, with GTCO and Zenith barely hanging on. The valuation of FUGAZ bank shares is significantly declining in response to announcements of impending right issues.

• For example, FBNH, whose share price was quoted as high as N43 per share, is now down to N25 per share.
• One investor, who requested anonymity, suggested the stock could fall further to its year low of around N18, achieved on April 24^th, if it continues to be oversold based on their technical analysis.
• A market maker with ties to the bank suggested the bank’s planned N300 billion rights issue could be priced at N15.50 per share, pointing to the same price that was mooted when the bank first announced a right issue in 2023.
• Access Corporation, Nigeria’s largest bank by total assets, has already seen its share price fall to N17.4, just N1.4 shy of its own year low of N16 per share. Access Bank also announced plans to raise N365 billion via a rights issue.
• UBA, another tier one bank, has seen its share price drop from a year high of N33.95 to just N20.50. The board also approved a rights issue for the bank. The last time UBA raised capital via a rights issue in 2015, it did so at a share price of N3.50.
• The same trend applies to Zenith Bank and GTCO, which have also seen their share prices fall from year highs of N47.35 and N53 to N34 and N40, respectively.
• They are also shy of their year lows of N31.3 and N32.7. Both GTCO and Zenith have also announced plans for the right issue.

Although all the banks have announced plans to raise capital, the dates and share prices for the capital raises have not yet been announced

What they are saying

Speaking on the issue, the president of the Association of Capital Market Academics of Nigeria (ACMAN) highlighted that a decline in share price often coincides with a rights issue.

President of ACMAN, Professor Uche Uwaleke, said the trend is commonly observed as rights issues are usually extended to existing shareholders at prices lower than prevailing market rates, aiming to incentivize shareholders to subscribe for additional shares.

Consequently, the influx of shares into the market intensifies, particularly when shareholders choose to divest a portion of their holdings, exerting downward pressure on share prices.

“A fall in share price normally accompanies a rights issue. This is because rights issues are typically made to existing shareholders at prices below current market values to serve as incentives to the shareholders to take up additional shares. So, the supply of shares to the market is increased especially when those shareholders opt to sell part of their shares which end up depressing share prices,” he said.

The Managing Director of Arthur Steven Asset Management Limited and former President of the Chartered Institute of Stockbrokers (CIS), Olatunde Amolegbe, noted that a discernible reaction has been evident since last month following the release of the recapitalization timeline by the Central Bank of Nigeria (CBN).

He emphasized that investors consistently exhibit caution regarding dilution stemming from capital-raising endeavours, particularly those entailing equity augmentation.

Amolegbe anticipates that volatility in banking stocks is likely to persist until the completion of the Rights issues.

“We’ve started seeing that reaction since last month when the recapitalization timeline was released by the CBN. Investors are always wary of dilution that typically results from capital raising exercises especially those involving equity raise.

My expectations are that volatility in banking stocks will probably continue until the rights issues are completed”.

The Managing Director of Highcap Securities Limited, Mr. David Adonri, highlighted that the post-rights Issue price dynamics are typically influenced by the prevailing market sentiment.

In a bullish market environment, prices may experience an upward trajectory following such issuances. However, he cautioned that irrespective of market sentiment, an oversupply of stocks resulting from a new issue could lead to a decline in prices.

Adonri noted that the movement of banking stocks after an impending rights issue is subject to considerable uncertainty, owing to the volatile nature of stock market fluctuations.

Outlook for banking stocks

Despite potential headwinds for investors interested in banking stocks, these conditions still provide a unique opportunity for medium-term investments.

• Banks are perhaps uniquely positioned to achieve the highest profits in their history, bolstered by central bank policies that have enhanced their earnings from foreign exchange gains and income from risk-free government securities.
• However, risks still exist in the longer term, with capital raises likely to increase the number of outstanding shares. The more shares a bank has, the greater the pressure on it to deliver strong earnings per outstanding share.
• Banks also face potential challenges as the era of super profits, driven by current central bank forex and monetary policies, gives way to a reliance on income from riskier lending activities.

Investors also have one eye on risk-free government securities which attract interest rates as high as 20% compared to the stocks which are riskier despite being cheap.

Story highlights

• Amidst macroeconomic headwinds of heightened inflation rate, interest rates and volatile exchange rates due to Naira devaluation, cement companies have managed to sustain profitability.
• Despite sustaining profitability, unlike other sectors, particularly, the consumer goods, cement companies experienced a decline in profitability attributed to elevated foreign exchange costs and high-interest experiences.
• Consequently, this decline is reflected in the profit margin, return on equity, indicating the impact of the macroeconomic challenge.

Since 2023, the business landscape has been turbulent, characterized by macroeconomic challenges of heightened inflation, fluctuating interest rates, and volatile exchange rates.

As a result, many companies have suffered significant losses, some resulting in retained losses and the erosion of shareholders’ funds.

Nevertheless, amidst these challenges, Dangote Cement, BUA Cement, and WAPCO (Lafarge) have sustained profitability, although not without encountering some impacts.

An examination of the companies’ results reveals the varying degrees of impact caused by these headwinds.

Revenue Analysis

The combined revenue of the three companies in 2023 amounted to N3.074 trillion, reflecting a notable 31% year-on-year growth.

This positive trajectory continued into Q1 2024, witnessing an impressive surge of 85% in aggregate revenue, reaching N1.116 trillion. Notably, this Q1 figure represents 36% of the total aggregate revenue recorded in 2023.

Dangote Cement led in revenue for 2023, reporting N2.208 trillion out of the total N3.074 trillion revenue, marking a 36.4% YoY growth.

It continued its strong performance in Q1, with revenue surging by 101% YoY to N817.350 billion, representing about 73% of the three companies’ revenue in Q1. This highlights its continued market dominance.

The growth in Dangote Cement’s revenue appears to be primarily driven by pricing strategies, as the company’s sales volume experienced a decline of 1.8% to 27 million tons in 2023.

BUA Cement secured the second position in both revenue value and growth. Its revenue grew by 27% YoY in 2023, reaching N459.999 billion. The company further improved its performance in Q1 with a growth of 52%, outpacing its long-term growth trajectory.

On the other hand, WAPCO (Lafarge) experienced marginal revenue growth of 8% YoY in 2023, amounting to N405.5 billion. This trailed its 5-year compound annual growth rate of 17%, indicating a slowdown in revenue expansion momentum. However, there was a notable improvement in Q1 as revenue surged by 50% to N137.77 billion

Profitability and Margins

Despite revenue growth, there’s a noticeable decline in profitability and margins.

In 2023, aggregate pre-tax profit decreased by 2% to N699.114 billion, with a further 4% decline to N196.300 billion in Q1 2024.

This decline can be attributed to increased power costs, foreign exchange losses, and interest expenses.

Collectively, the companies reported a surge in foreign exchange losses, reaching N255.362 billion in 2023, a 246% YoY increase, and escalating to N95.624 billion in Q1 2024, marking a significant 1,133% rise.

Additionally, they incurred significant expenses on fuel and power, totaling N598.137 billion in 2023, representing a substantial 42.45% increase from the previous year.

These trends suggest that the companies are grappling with operational inefficiencies and external economic pressures. Effective cost management strategies are crucial to sustain and improve profitability in the long run.

Dangote Cement stands out as the only company that achieved profitability growth in both 2023 and Q1 2024.

Despite grappling with a substantial 204% surge in foreign exchange losses, amounting to N164.077 billion in 2023, and a subsequent 551% year-on-year increase to N63.765 billion in Q1, Dangote Cement managed to maintain profitability.

In 2023, the company saw a 6% year-on-year increase in pre-tax profit, followed by an even more impressive 13.34% growth in Q1 2024.

However, this increase in profitability was accompanied by a decline in pre-tax margin. This suggests that although the company’s earnings grew, it also faced escalating costs at a faster pace, squeezing its profit margins.

Notably, Dangote Cement’s cost of sales grew by 143%, outpacing its revenue growth of 101% in Q1. This indicates that the company is indeed experiencing rising costs at a faster rate.

BUA Cement faced a notable decline in profitability, with a 44% YoY decrease to N67.220 billion in 2023, followed by a further 39.97% decline in Q1 2024.

This decline can largely be attributed to the accelerated growth in the cost of sales, driven by escalating material input costs that outpaced revenue growth.

Additionally, the company recorded significant foreign exchange losses. In 2023, BUA Cement incurred a significant N69.956 billion in FX losses, marking a substantial 1,172% YoY increase. This trend continued into Q1 2024, with FX losses growing by 688% YoY to N10.1 billion.

These factors collectively contributed to a significant decline by 2,013 basis points in the pre-tax margin, which dropped to 13% in Q1 2024.

With a pre-tax profit margin of 13% in Q1 2024, lower than Dangote Cement’s 20%, means that BUA Cement retains a smaller portion of its revenue as profit. This also could indicate higher expenses or lower revenue relative to costs.

WAPCO (Lafarge) reported the lowest revenue among the three companies in 2023 of N405.502 billion. However, despite this, it achieved the highest growth rate of 13% YoY in pre-tax profit. Additionally, it was the only company that recorded growth in pre-tax profit margin of 4%.

Nevertheless, in Q1 2024, WAPCO encountered challenges as it faced a substantial foreign exchange loss of N21.804 billion. Consequently, this led to a significant decline of 61.26% in pre-tax profit, decreasing to N8.709 billion, and contracting the profit margin to 6.32%.

The profit and profit margin decline of these companies likely contributed to the decrease in return on equity.

In 2023, the average return on equity for the three companies fell by 23% to 19%. Dangote Cement maintained the highest return at 26.40%, albeit with a 27% year-on-year decrease, followed by BUA Cement at 18%, marking a 27% year-on-year decline, and WAPCO at 12%, down 9% from the previous year.

This decline signals challenges in operational efficiency, financial health, and investor confidence, necessitating strategic adjustments.

Despite this, the companies’ share prices have surged, indicating ongoing investor optimism. Dangote Cement leads with a year-to-date gain of 105.28%, surpassing its 2023 gain of 31.25%, followed by BUA Cement at 48% and WAPCO at 39%.

India and China lead the chart with 1.43 and 1.42 billion people, respectively, followed by the United States with 0.339 billion. Indonesia, Pakistan, and Nigeria complete the list, with populations ranging from 0.223 to 0.277 billion, showcasing global demographic diversity and distribution. 

In developmental economics, there has been a concern with population growth, which evokes much controversy and concern, as does the concept of overpopulation. Conventional wisdom often portrays overpopulation as a harbinger of underdevelopment, invoking images of strained resources, environmental degradation, and economic stagnation.

However, upon closer examination, this narrative reveals itself to be a simplistic myth rather than an accurate reflection of reality.

Q: “One of the primary flaws in the overpopulation-underdevelopment narrative lies in its failure to account for the complexities of economic dynamics and human ingenuity.”

The notion that overpopulation inevitably leads to underdevelopment is deeply ingrained in popular consciousness. It stems from the Malthusian theory proposed by Thomas Malthus in the late 18th century, which posited that population growth outstrips the capacity of resources to sustain it, resulting in poverty, famine, and societal collapse.

While Malthus’s theory gained traction during his time and continues to influence public discourse today, empirical evidence and modern economic theory challenge its validity.

One of the primary flaws in the overpopulation-underdevelopment narrative lies in its failure to account for the complexities of economic dynamics and human ingenuity. Contrary to Malthusian predictions, history has shown that increases in population can coincide with periods of economic growth and prosperity.

In the latest update on global population in 2023, World Bank data uncovered an extraordinary trend: India and China, collectively hosting over 2.8 billion individuals, account for a staggering 35.60 percent of the world’s population, which stood at over 7.95 billion. What’s even more remarkable is that these two populous nations were at the forefront of significant economic development.

This revelation challenges the conventional wisdom that population size alone dictates a nation’s level of development.

India, having surpassed China to become the world’s most populous nation with over 1.43 billion people, stands as a testament to this paradigm shift. Leveraging its vast workforce as a demographic dividend, India has propelled itself forward as an economic powerhouse in recent decades.

This data highlights a critical insight: population size is not a limiting factor in a nation’s development trajectory. Instead, it is how countries harness their human capital and resources that determines their economic prosperity.

India’s ascent to the top spot in population size serves as a compelling example of the potential for growth and innovation inherent in populous nations.

The country has become a global hub for information technology (IT) and business process outsourcing (BPO) services, employing millions of skilled workers.

India’s vast labour pool has also fueled growth in manufacturing, agriculture, healthcare, and other sectors. Moreover, the country’s growing middle class presents a significant consumer market, attracting both domestic and foreign investment.

According to World Bank data, India boasts $3.41 trillion as its gross domestic product (GDP), demonstrating how the country has been able to use its population to its advantage.

China, now the second-most populated country in the world with a population exceeding 1.4 billion, has utilised its workforce to become the world’s manufacturing powerhouse.

The biggest economy out of Asia not only has a large population, it doubles as the second strongest economy after the US with $17.9 trillion as its GDP.

The country’s labour-intensive industries have propelled its economic growth, with sectors like electronics, textiles, and machinery driving exports and foreign investment. Additionally, China’s large domestic market has fueled consumer spending, contributing to its economic expansion.

Moreover, China’s emphasis on education and skill development has resulted in a highly skilled workforce, further boosting its competitiveness on the global stage.

The United States has proven itself to be the dominant economy in the world, having a GDP over five times bigger than India’s.

The US boasts a whopping $25.4 trillion as the country’s economic output, according to the World Bank.

With a population of over 330 million people, the US has harnessed its diverse and skilled workforce to drive innovation and economic growth.

The country’s emphasis on research and development (R&D) has led to breakthroughs in technology, healthcare, and other sectors, driving productivity and competitiveness.

Moreover, the entrepreneurial spirit in the US has resulted in the creation of numerous startups and large corporations, further stimulating economic activity.

Additionally, immigration has played a crucial role in supplying talent and labour, contributing to the country’s economic dynamism.

However, of the top ten most populous nations, Nigeria, Pakistan, and Bangladesh have a relatively lower national income, affirming the need for these countries to focus on wealth creation through improved productivity and value creation.

Nigeria, now the fourth-largest economy in Africa, according to the International Monetary Fund, has about 218 million people as its population. But the country’s economic output pales, with a staggering $472.6 billion.

The country has recently witnessed an upheaval in its economy, from low foreign direct investment to a decrease in oil remittances and various reforms by the government in power that have seen the former largest economy contend with skyrocketing prices, exchange rate fluctuations, and spiralling inflation.

Analysts who spoke to BusinessDay hold that Nigeria has failed to invest in human capital, which serves as the major drive for development and economic stability.

“No country develops with a perpetually low human capital. If you don’t invest in your citizens through quality education and access to technology, there won’t be productivity,” a leading economist and university lecturer said.

“China and the US have constantly been at the top because they understand the importance of strengthening their workforce by investing in them. If they had left their people with no skills to spur growth, they would have remained like us (Nigeria),” Michael Anagun, a lecturer of economics, said.

Pakistan is the fifth-most populous country in the world, followed by Nigeria. It has about 235 million people living in its territory. But the country has equally been faced with a series of challenges, thereby hurting the growth of the country’s economy.

The country is plagued with deep-rooted structural challenges, including weak institutions, political instability, and inadequate infrastructure. These issues have hindered the country’s ability to attract investment and foster sustainable growth. No wonder it’s a staggering $374.7 billion in GDP.

Beyond weak institutions, the country is faced with persistent macroeconomic imbalances, such as high fiscal deficits, inflation, and external debt, which have put strain on the economy. Weak fiscal management and a reliance on borrowing to finance expenditures have exacerbated these imbalances.

There have also been issues of security concern, including terrorism and regional instability, which have adversely affected investor confidence and economic activity. These challenges have deterred both domestic and foreign investment, particularly in sectors like tourism and manufacturing.

“Pakistan’s economy has been growing slowly over the past two decades. Annual per capita growth has averaged only 2 percent,” the World Bank said.

Moreover, the belief that overpopulation strains resources overlooks the role of technological innovation and resource management in addressing scarcity. Throughout history, humanity has continually found ways to increase agricultural productivity, harness renewable energy sources, and develop more efficient technologies to meet growing demand.

The Green Revolution of the mid-20th century, for example, saw the adoption of high-yield crop varieties and modern agricultural techniques that dramatically increased food production, debunking predictions of widespread famine due to overpopulation.

Furthermore, the relationship between population growth and economic development is not linear but rather shaped by a multitude of factors, including governance, education, healthcare, and institutional quality.

Countries with effective governance structures, robust education systems, and accessible healthcare tend to experience demographic transitions where declining fertility rates accompany improvements in living standards, as seen in the likes of India, China, the United States, and even Indonesia. This phenomenon, observed in many developed nations, illustrates that sustainable population growth is achievable within the framework of socioeconomic development.

Critics of the overpopulation narrative also point out its tendency to scapegoat vulnerable populations, particularly in the Global South, while ignoring underlying structural issues such as the unequal distribution of resources and economic exploitation.

Blaming overpopulation for underdevelopment absolves governments and institutions of responsibility for addressing systemic inequalities and promoting inclusive growth strategies.

In light of these insights, it becomes clear that overpopulation alone is not a determining factor in economic development or underdevelopment. Instead, it is the interaction of population dynamics with social, economic, and environmental factors that shapes the trajectory of nations.

By dispelling the myth of overpopulation as a driver of underdevelopment, we can foster more nuanced discussions and policies that address the root causes of poverty and inequality while promoting sustainable development for all.

Thus, the belief that overpopulation inevitably leads to underdevelopment is a simplistic myth that fails to account for the complexities of economic and social dynamics. While population growth presents challenges, it also offers opportunities for innovation, entrepreneurship, and human progress.

By reframing the discourse on overpopulation and development, we can move towards more inclusive and effective approaches to addressing global challenges and building a prosperous future for generations to come.

President Bola Tinubu has congratulated the President-Elect of the Republic of Chad, Mahamat Déby, on his election victory.

Ajuri Ngelale, Special Adviser to the President on Media and Publicity, in a statement, said the successful conduct of elections in Chad underlined the commitment of the government and the people to democracy and orderly transitions in the region.

He said, “The president assures President-elect Déby that Nigeria will continue to work closely with the Republic of Chad, as both countries seek to enhance peace, security, and shared prosperity for the mutual benefit of their peoples.

“The president also calls for sustained, friendly cooperation between both nations, while wishing the President-Elect success as he undertakes this noble service to the people of Chad.”

[DailyTrust]