GateWayNigeria.tv » Investments

Nigerians abroad to establish N9bn car assembly plants

Naija4ever — Thu, 15 Jul 2010 08:41:00 +0000

A group of Nigerians in the Diaspora have concluded plans to establish N9bn automobile assembly plants in the country under the patent called Zhope Automobiles.

The group is led by a professor of engineering systems and Director, Machining Research Centre, Faculty of Engineering Science and the Built Environment, London South Bank University, Prof. Emmanuel Ezugwu.

Displaying a model of a 15-seater air-conditioned bus at the premises of the National Automotive Council in Abuja, on Wednesday, Ezugwu said that the plants would manufacture and assemble made in Nigeria automobiles in the six geopolitical zones of the country.

He said, “This innovative project incorporates over 25 years, research and development experience in the area of advanced manufacturing technology for sustainable development.

“We are working with local resources on the ground to put forward a technology road map that will serve as a hub for vehicle export to other parts of West Arica.”

Speaking during the event, the Chairman, Zhope Automobiles, Mr. Marcel Ezenwoye, noted that the project would commence by the first quarter of 2011, adding that the plants had been structured to create about 14, 000 jobs in Nigeria.

He said, “There is a projection that not less than 4,000 jobs will be created on the line function and over 10,000 in ancillary related services centres.”

“The training policy of Zhope envisages the training of local engineers like the roadside mechanics, who will in turn train other middle level operators in Zhope automobile technology. For this reason, Zhope’s technical partners from Europe and China will come to Nigeria for the training and technical support.”

He noted that discussions were currently going on with the National Automotive Council for the domestication of Zhope brand in Nigeria.

Ezenwoye said, “We have a forecast of an average monthly sales of 100 number of buses and an annual gross of 1,200 number of buses. Zhope intends to initiate the KDK strategy with a view to reducing overall production cost per unit of the buses. Our target is to get up to 40-50 per cent local content to minimise importation by 2020 if we have the enabling environment for manufacturing.”

How to invest in Industrial Starch for export

Naija4ever — Mon, 12 Jul 2010 09:47:21 +0000

Going by our research, industrial starch (whether from corn, cassava, potato or rice, etc) is one of the fast selling products in the international market.

For this product to attract very high demand and higher prices, it must be well-processed and must maintain very high acceptable international standards, and must be handled with the deserved professionalism. This is a profitable project to invest on this year 2010.

Market position
The demand for industrial starch is world wide. This product is highly demanded in Netherlands, France, United Kingdom, and Federal Republic of Germany. It is also widely demanded in Taiwan, Asia, and USA. The local demand is also encouraging. Starch can be produced in dry or wet forms. Both wet and dry starch is needed in Europe. It has a lot of industrial uses, and can be used as ingredient in the preparation of bread, custard, sauce, snacks, pap. The industrial uses include textile, book binding, glue making, paper board, batteries, cosmetics, paint and soap. Starch is also used in weaving, spinning, and dye works, paper boards, dressing paints, leather adhesive, paste stamps and carpets.

It can also be used in artificial honey, fruit juice sweets, beer, and canned fruit confectionaries and pharmaceutical industries. Because of different uses starch can be subjected to, global demand is over 18 billion metric tons per annum. The supply on the other hand has not been encouraging in the international market. Apart from Zaire and Brazil which supplied a total of 18.2 million metric tons in 1999 and 26.5 metric tons in 2001, the gap has been longing for bridging. There is a gap of about 16.3 billion metric tons of starch for industrial uses; therefore, there is plenty of cassava and other root crops or tubers in Nigeria for the production of world starch requirement.

Plants, machinery and equipment
The major equipment needed include cassava peeler, sifter, slicer, grater, extractor, pulveriser and dryer (if dry starch is required), hammer mill/disintegrator, automatic or semi automatic weighing, and packaging machine and sitches/seakers. Production capacity of the machine under consideration has a full capacity of 10 metric tons of starch per day on two shifts. This implies that about 75, 000 metric tons will be produced in a year.

Quality, packaging standards
It should be noted that this product is demanded in metric tons by end users. It is therefore advisable that the end product be packed as such and to maintain the international market water content standard of about 8 percent. The product is packaged in 100kg jute bags for export. How the products should be preserved to avoid producing irritating odours will be discussed when we are contacted for further clarifications by prospective investors.

International prices/foreign markets
The price fluctuates between $650 and $800 per metric ton. Locally, it is sold between N42, 000 and N45, 000 per metric ton. Prospective investors would be assisted in the area of getting foreign buyers at reasonable prices.

Financial implication
The project can be started on a medium scale of N10.6 million as shown below. Since the machine produces 75,000 metric tons per annum, working for 300 days, the total sales revenue at full capacity will be $18.6 million within the first year of operation. Realising however that our industrial capacity cannot be realised, the capacity is placed at 50 percent, resulting in total annual income of $9.4 million (N1.3 billion).

Having considered the availability of raw materials, convincing technological position, government encouragement to non-oil export-oriented investors and availability of human resources, as well as huge profit margin from exporting this product; we recommend this project to Nigerians to invest in. Uba Godwin’s contact: Tel: 01-4721550, 01-7349363; 08023664368, 08034494437, Email: “mailto: ubagodwin@yahoo.com

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Nigerian Remittance Market worth over $10bn annually

Naija4ever — Sat, 03 Jul 2010 12:20:59 +0000

Pam Patsley, Chairman &Chief Executive Officer of Moneygram International, visited Nigeria recently as part of efforts to gain a better understanding of the market, customers and different cultural practices.
In a chat with Princewill Ekwujuru and Moses Nosike, she posits that money transaction volume has increased six times in the first quarter. Read on.

How long has MoneyGram been operating in Nigeria?

MoneyGram started operating in Nigeria in 1998 and has steadily expanded its network of well established and respectable banks.

Pam Patsley

What is your assessment of the Nigeria Remittance Market?

Information we have indicates that the Nigeria Remittance Market is worth over $10bn annually. We believe the market shrank a little in 2009, as a result of the global economic crisis and its effects on employment statistics for migrant workers in key corridors. With the easing of the financial crisis, especially in the US, we expect remittances to Nigeria will experience positive growth.

Our business has experienced good growth both in terms of number of transactions, value and our network. We have been able to achieve this modest growth thanks to the support of our agent banks. With new agents and additional network, we expect our business in Nigeria to grow tremendously in the coming years.

How significant is the First Bank launch of MoneyGram service? Will MoneyGram be signing any more agents in Nigeria?

We are happy to have signed on First Bank and to have the MoneyGram service delivered through an additional 500 First Bank locations nationwide. This will make the MoneyGram service more accessible and convenient to many more customers.

In many markets where we operate, any new agent brings in its wake increased transaction growth and we expect this to be the case with First Bank.

MoneyGram will continue to forge alliances with credible financial institutions as the laws of Nigeria allow to bring our services even closer to our customers. They are a few more agreements in the pipeline which should be concluded over the next couple of months.

What is MoneyGram doing in the area of fraud prevention in Nigeria?

MoneyGram has initiated key actions to combat fraud in Nigeria; Key amongst them are;
Successfully implemented the locking down of a transaction to the location that first viewed

Have added as compulsory a receiver questions for all our transactions in Nigeria to provide additional security
We continue to provide periodic compliance training for the compliance officers and product managers of all our agents.

MoneyGram’s Director of fraud from the U.S. visited Nigeria in April this year,, organizing workshops for all our agents in Nigeria and also meeting with enforcement agencies to presents MoneyGram’s anti-money laundering and compliance efforts

The Regional Compliance Manager for Africa also visited Nigeria to meet with the EFCC (law enforcement agency) and the agents and present MoneyGram’s efforts on anti-money laundering and compliance generally. The feedback from both events has been very positive.

MoneyGram is also working with agents to restrict locations that pay out fraud induced transactions.
We continue to collaborate with key regulatory authorities i.e. Central Bank of Nigeria, Economic and Financial crimes commission (EFCC) and Special Fraud Unit (SFU).

Nigerian Banks now using Credit Reference Agencies

Naija4ever — Fri, 11 Jun 2010 09:40:05 +0000

IN the recent past, it was easy for the well-heeled in the country to walk into many banks and obtain loans without collaterals or even the intention to repay.
But with the empowerment of credit bureaux by the Central Bank of Nigeria (CBN), chronicle loan defaulters are in for it.
Credit is the oil in which business runs. There is basically nothing wrong in granting or accessing credit to run a business. Such an act becomes wrong and almost criminal when one borrows without the intention of repaying.
It becomes even worse when such borrowed funds belong to a bank that holds same in trust for the public.
Basically, that was one of the things that went wrong with the nation’s banking industry last year leading to the removal of some banks’ managing directors.
To avoid the same pitfall, the Central Bank of Nigeria (CBN) recently gave life to its earlier directive that banks must comply with certain regulations as it concerns credit bureaux before granting loans to customers.
In order to effect the directive by the Central Bank of Nigeria (CBN) to engage the services of at least two credit bureaux before granting loans, banks have started writing to their customers seeking their consent to disclose information concerning their (Customers) banking relationship to any of the credit bureaux.
It would be noted that recently, the CBN had made it compulsory for banks and other financial institutions to partner with licensed credit bureau order to enhance the performance of their operations.
According to the circular signed by the apex bank’s Director, Banking Supervision, Samuel Oni, “following the release of the guidelines on licensing, operations and regulations of Credit Bureau, issued by CBN in October 2008, it has become imperative to issue this circulate directing banks and other financial institutions to partner with the licensed credit bureau in order to enhance the performance of their operations.
“Consequently, it is mandatory for banks and other financial institution under the purview of the CBN to comply with Section 5.4.3 and 5.4.5 of the guidelines on licensing, operations and regulations of the credit bureau in Nigeria.”
The sectors stipulated, “banks must have data exchange agreement with at least two credit bureaux, obtain credit report from at least two credit bureaux before granting any facility to their customers, and obtain quarterly credit bureaux for all previous loans/facilities granted to enable the determination of borrowers current exposure to the financial system.”
Based on the foregoing, the apex bank had stressed, “banks and their financial institutions are advised to comply with this circular with immediate effect as failure to do so will attract appropriate sanctions.”
As a fallout of this, part of banks’ consent to disclosure of information obtained by The Guardian over the weekend, explained to their customers that the information shall be used for business purposes approved by the CBN and any relevant statute, adding that as members of a credit bureau, the banks are under obligation to disclose to the bureau, credit information and any other personal information disclosed to them (banks) in the course of banker-customer relationship with them.
The banks explained to their customers also, the various implications of submitting such information to them.
Some of the implications, include that,
• Such a bank may collect, use and disclose to a credit bureau and that the credit bureau may use the information for any approved business purpose as may, from time to time be prescribed by the CBN and/or any relevant statute.
• The customer should understand that information held about him/her by the credit bureau might already be linked to records relating to one or more of his/her partners.
Such a customer may be treated as financially linked and his/her application will be assessed with reference to any associated records.
In addition, for any joint application made by the customer with any other person(s), new financial association may be created at the credit bureau, which will link the bank’s financial records.
• The customer warranty that he/she is entitled to disclosure information about any co-application or guarantor and/or any one else referred to by him/her, and to authorise the bank to search and/or record such information of a credit bureau about him/her and such co-applicant or guarantor or other person.
• You understand that an association will be created at the credit bureau, which will link your financial records. You agree to indemnify and hold the bank harmless against all claims, fees, expenses, damages and liabilities against the bank relating to or arising as a result of disclosure of information about such a co-applicant or guarantor or other persons or any use of such information by the credit bureau in compliance with the provisions of any CBN guideline and/or relevant statute.
• You hereby release and discharge the bank from its obligations under the banker’s duty of secrecy and forswear your right to any claim, damages, loss etc or account of such disclosure to credit bureau or the use by credit bureau in accordance with the provisions of any CBN guideline and/or relevant statute.
The CBN had licensed three credit bureaux to help checkmate the activities of loan defaulters in the banking industry.
The three credit bureaux are, CRC Credit Bureau, Credit Registry and XDS Credit Bureau.
Late last month, the Central Bank of Nigeria’s (CBN) policy on accessing information on borrowers before lending by financial institutions in Nigeria started yielding dividends with 21 out of the 24 banks in the country engaging the services of credit bureaus to that effect.
The CBN had in its guidelines for the licensing, operations and regulations of credit bureau in Nigeria in October 2008, issued directives to financial institutions to this effect.
A credit bureau is an institution that collates data on borrowers from various sources and makes it available to aid informed lending by financial institutions.
On the strength of this, a credit bureau can also assist financial institutions to reduce loan-processing time and cost, enhance informed lending decisions and most importantly, reduce the level of non-performing loans.
Revealing the compliance level of banks and other financial institutions to The Guardian over the weekend, the Managing Director and Chief Executive Officer of CRC Credit Bureau, one of the three CBN-licensed credit bureaus, Tunde Popola stated that from January this year till now, the compliance level by financial institutions has been high.
Citing his firm, he said that, 21 out of the 24 banks have signed on the services of CRC Credit Bureau, adding that, those 21 banks represent about 97 per cent of the banking system credit market and also have access to about 95 per cent of the borrowers in the nation’s banking system.
The implication of this development, The Guardian gathered, is that these 21 banks must have also signed on the services of another credit bureau in line with the apex bank’s directive in order to have an elaborate and informed data on current and prospective borrowers.
Apart from that, Popoola also disclosed that, Bank of Industry (BOI), over 25 Primary Mortgage Institutions, about 50 micro finance banks have signed on, stressing that, all these happened between January this year and now.
In August last year, the CBN had announced that five banks in Nigeria had high level of non-performing loans.
The five banks are Afribank Plc, Finbank Plc, Intercontinental Bank Plc, Oceanic Bank Plc, and Union Bank Plc.
According to the apex bank, the major findings included excessively high level of non-performing loans attributable to poor corporate governance practices, lax credit administration processes and the absence or non-adherence to the bank’s credit risk management practices.
Thus, the CBN said, the percentage of non-performing loans to total loans of these banks, ranged from 19 per cent to 48 per cent, adding that, the five banks will need to make additional provision of N539.09 billion.
Based on that, the apex bank had revealed that, the total loan portfolio of these five banks was N2.9 billion.
It added that margin loans amounted to N456.28 billion, while exposure to oil and gas was N487.02 billion, stressing that, aggregate non-performing loans stood at N1, 143 billion representing 40.81 per cent.
Meanwhile, the three CBN-licensed credit bureau’s had earlier written to the CBN on the implication of non-compliance of banks to the content of the guidelines on credit bureaus.
Instructively, the heavy loan portfolios of Nigerian banks are mainly due to non-performing loans, as stated by the apex bank.
These bad loans are usually from chronic loan defaulters.
To check this trend, the apex bank had licensed credit bureaus to enable financial institutions access information on borrowers that will enable them (banks), make informed decisions before lending.
Managing Director/Chief Executive of Credit Registry Services, Taiwo Ayedun said the most effective way for the CBN to address the problem of bad loans is to enforce its guidelines that bank should use credit bureaus.
He noted that the method of publishing bank debtors names by the apex bank has its own limitations, as a much more effective way is to ensure that those information make their way into a credit bureau’s information system, and banks as a matter of choice should check everyday because it is automated.
He stressed, “information-sharing is so fundamental in clearing up the financial system, as nobody will see evidence that somebody is owing elsewhere and is defaulting and you still go ahead and grant him loan.
“It is not possible. All you do is to tell the individual to go and pay up the loan he owes. But in the absence of information-sharing, banks will just be making ignorant decisions,” he submitted.

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