[Nigeria Business Week] Andrea Ayemoba: Telcos break new ground, digital loans gain momentum
Inflation is today an occurrence all over the world. Countries like Nigeria are particularly hit hard, as there were preexisting conditions that made things much worse, such as fuel scarcity and a dysfunctional supply chain system. Airfares keep climbing with no indication of even flattening the curve and road transport fares across the country show an striking increase over the past one year.
As transportation affects virtually every aspect of an economy, food production becomes an immediate concern. The AfDB estimates that the African food sector at a $10b risk and has set aside an emergency food plan to that effect. The World Bank is also involved in this initiative and has earmarked a crisis-response lifeline for Nigeria’s economic recovery, while citing several factors as responsible for Nigeria’s low oil production output in the first quarter of 2022.
Positive notes are heard in the private sector, namely banking and manufacturing. United Bank for Africa posted high profits in the first quarter and manufacturing giants, Nigeria Breweries and Unilever both posted profits in the same time period worth billions of naira. Both these industries are entwined in large investments and capital fundings, as figures have shown a rise in Nigerian manufacturers’ debt to Nigerian banks.
Instant loans, sometimes called digital loans, are also gaining speed in the country. According to recent information, over two million digital loans have been disbursed to private individuals since 2018 by an instant loan solutions platform launched by FCMB Nigeria.
The telecom sector broke some new ground this week. MTN moved to diversify its financing options, issuing a remarkable commercial paper and Airtel received a super agent licence from the Central Bank of Nigeria. MTN is also reported planning an early launch of 5G services.
Trade on an international level and local job creation – these are the longterm strategies being put in place to stabilize the economy and raise GDP. Trade relations negotiations between Nigeria and the UK is currently underway. The Federal government is in process of launching massive investments with the aim of creating over 20 million full time jobs. The overall goal is to uplift so many that are currently living below the poverty line; it is now acknowledged that the solution must come from within. Certain industries must be given the tools they need to flourish, such as agriculturist and farmers, startups and entrepreneurs, technology and innovation. What Nigeria may lack in skill, it has in talent.