Movers, shakers of economy in 2020

Movers, shakers of economy in 2020



AS it would be expected, in early 2020, economic activities had not gained much traction before Nigeria fell to the ravaging coronavirus pandemic which was already causing major disruption of economy and commerce elsewhere a few months into the new year.

Thus, it could be safely inferred that much of the economic activities of the year was drowned, if you wish, by the disruption brought about by COVID-19.

However, with the benefit of hindsight, a cursory view of the economic activities in the last 12 months show that the roles played by a few individuals stand out in bold reliefs.

From the aviation sector to finance, telecoms, transportation, manufacturing, oil and gas, social service sector, et al, some far reaching decisions which impacted the major commanding heights of the economy were taken by the key players in both the public and organised private sectors.


Finance Minister

In the public sphere for instance, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who is currently one of Nigeria’s most prominent ministers, had a handful of roles to play in the course of the year, chief among which was managing an economy which fell into another round of recession under a global pandemic in the world’s poverty capital!

With the benefit of insight, taking a retrospective look one year into the second tenure of President Muhammadu Buhari-led administration, and over the last four years, the ministry over which she superintends has consistently helped to take the economy through the frightening months of COVID-19, and also looked to set it on the path to steady growth.

The budget process over the years has been anything but hitch-free. However, within the last 12 months, the budget process was completed within a period of two months and successfully reversed the budgetary cycle to January – December. 54.9 percent overall revenue outturn was achieved (66 percent for oil, 31 percent for non-oil) as at Q2’2020.

Besides, the successor mid-term and long-term plans (the Medium-Term National Development Plan (MTNDP) 2021-2025 and the Long -Term Plan Agenda 2050) 2hich succeeded Vision 20-2020 and the Economic and Recovery Growth Plan had commenced respectively just as the development of the macro economic framework for the proposed Medium-Term Plan as well as the Perspective Plan had also commenced.

The 2020-2023 MTEF which has been passed by the NASS was prepared. The monitoring and evaluation (M&E) mechanisms were institutionalised by finalising matrix and targets to each ministerial key performance indicators (KPIs). The key MDAs have established a performance matrix to track and measure the presidential deliverables (2019 – 2023) to ensure improved service delivery.

Under her charge, the Finance Act 2019 was passed in a record time before the 2020 budget.

According to the Minister, “Through the Finance Act, we have achieved the following: Value added tax (VAT) rate increase from 5 per  cent to 7.5 per cent, which was implemented in Feb. 2020; introduction of a N25 million threshold for small and medium enterprises (SMEs) for eligibility for VAT collection; reduced of tax rates for SMEs (0 percent and 20 percent respectively); administering of the Finance Act 2019; automation of import duty exemption certificate (IDEC) and vehicle registration (V-REG); and automation of the collection of stamp duty.”

This was just as the government provided N802.82 billion as new domestic borrowing to part-finance the deficit in the 2019 Appropriation Act. The funds were mainly deployed to capital projects like roads, bridges, etc. As part of the economic development plan of the government, N100 billion sukuk bonds was raised in 2018 and provided N1,319,986 billion, out of the total borrowing of N1,564 billion in the 2020 Appropriation Act, to part-finance the budget deficit.

For COVID-19 response and fiscal stimulus, the federal government provided debt relief to states to relieve them of debt service obligations for 2020; developed a N2.2 trillion economic stimulus plan to help cushion the effects of COVID-19; provided N500 billion for COVID-19 Crisis Intervention Fund, N263.63 billion of which would be drawn from federal government special accounts, N186.37 billion from Federation Special Accounts and the balance of N50 billion is expected as grants and donations; reviewed 2020 Budget based on the current realities (oil price shock and COVID-19 pandemic) as well as funded the Presidential Task Force on COVID-19 response; mobilised funding from domestic and external sources for the implementation of 2020 budget (raised domestic revenue for the budget deficit but as a result of weakness of the foreign market, and converted foreign borrowing to local currency in other to cushion the effect of the oil price shock and COVID-19 pandemic).

Oil revenues have been highly affected by the twin shock events i.e. crash in oil prices and dampened economic activities and consumption from the COVID-19 pandemic which have adversely affected non-oil taxes. As at March 2020, oil revenue performance was at 70 per cent while non-oil performance stood at 60 per cent. The erratic oil market makes prediction difficult, heightening the vulnerabilities around oil revenues.

The government re-launched the strategic revenue growth initiative (SRGI) with MDAs (portfolio owners) charged with responsibility of establishing Project Implementation Units (PIUs), and completed the opportunity sizing of incremental revenue with clear identification of potential revenue expected of each source.

However, a deep dive into oil revenue streams show some good results from reforms (VAT and Stamp duty), which include: achieving 54.9 per cent overall revenue outturn (66 per cent oil, 31 per cent non-oil Q2,2020); the stamp duty which increased by 40 per cent from N3,386,648,663.85 in Q1, 2019 to N4,750,893,578.48 in Q1, 2020; and VAT also increased by 27 per cent at the customs level and 13 per cent at the non-import level.

The federal government reviewed tax expenditures and exemptions by reducing sectors eligible for pioneer status incentives under the industrial development income tax relief Act (‘IDITRA’), as well as auto policy incentives and import duty exemptions. It restructured Social Investment Programme (SIP) by: suspending further intakes into the N-Power scheme of the SIP for a period; transitioning youths currently under N-Power into CBN’s Anchor Borrowers’ programme; and conducting a review of the SIP to implement measures to increase efficiency.

The government has worked with the international community of donors, nations, multilateral organisations, etc. to raise concessionary resources for the nation, including COVID-19 response. In the light of this, it signed a total of $2,534,880,717.6 as follows: African Development Bank (AfDB) – $278,093,093; IFAD – $89,100,000; World Bank IDA – $1,573,248,600; AFD – $201,911,909,23; and China-Exim Bank – $392,526,218.37.

The government created the Presidential Infrastructure Development Fund (PIDF) which is being managed by NSIA for the development of four roads and one critical power infrastructure projects namely: Lagos-Ibadan Expressway, Second Niger Bridge Project, Abuja-Kano Road, Mambilla Hydro-Power Project, and East West Road. The projects, worth over N2.5 trillion, will stimulate economic activities across the country especially in the areas the infrastructures are situated.

Perhaps in recognition of her giant strides thus far, she was named the Minister of Finance of the Year during this year’s African Banker Awards. Considered as the Oscars of the African banking community, according to the organisers, Mrs Ahmed managed to push through a set of difficult reforms as well as successfully engaging international partners to help the country navigate an extremely challenging economic environment.

Commenting on this year’s awards, Mr Omar Ben Yedder, Publisher of African Banker said: “It’s been a momentous year in every sense. Banks will have to play a lead role in kick-starting post-COVID growth and sustaining the real economy. “Governments and regulators have done an excellent job with limited means and both our winners Caroline Abel and Zainab Ahmed have demonstrated strong leadership there. Banks will need to work with institutions and partners to ensure liquidity doesn’t dry up.”


Minister of Transportation

For Hon. Rotimi Amaechi, the Minsiter of Transportation also touted as the poster boy of the Buhari-led administration, 2020 has been very eventful.

Despite the modest successes achieved thus far in terms of projects such as the 47 road projects scheduled for completion in 2020/21, including roads leading to ports, the construction of rail line from Kano-Katsina-Libiya-Maradi in the Niger Republic, Lagos-Kano, Calabar-Lagos, Ajaokuta-Itapke-Aladja (Warri) Port Harcourt-Maiduguri, Kaduna-Abuja rail, Ibadan to Kano that may have been drowned by the many controversies surrounding the Chinese loans as well as other unexplained deals.

Enter Adesina, cat with nine lives

One individual who literally fought the battle of his life this year is Nigeria’s born Dr. Akinwunmi Ayodeji Adesina, president of the African Development Bank (AfDB). With a barrage of criticisms and 20-points allegations of corruption leveled against him by US Donald Trump in a desperate attempt to upend his election for a second term in office, his prospects looked dim.

But like a cat with nine lives, Adesina was unanimously re-elected to serve a second five-year term as President of the African Development Bank Group on Thursday, August 27, 2020 by the Board of Governors of the Bank.

As newly re-elected President, Adesina, a former Nigerian Minister of Agriculture, began his new term on September 1, 2020.

The election result, which gave him a hundred per cent of votes of all regional and non-regional members of the bank, was announced by the Chairperson of the Board of Governors of the Bank, Mrs. Niale Kaba, Minister of National Planning of Côte d’Ivoire.

The election took place on the final day of the 2020 Annual Meetings of the African Development Bank Group, which was held virtually for the first time in the bank’s history.

During Adesina’s first term, the bank achieved impactful results on the lives of 335 million Africans, including: 18 million people with access to electricity; 141 million people benefiting from improved agricultural technologies for food security; 15 million people benefiting from access to finance from private investments; 101 million people provided with access to improved transport; and 60 million people gaining access to water and sanitation.

The Bank has maintained its AAA-ratings by all major global credit rating agencies for five years in a row. The Board of Governors of the Bank Group approved a 125% increase in the General Capital of the Bank, raising its capital from $93 billion to $208 billion, the largest in the history of the bank.

Under Adesina’s leadership, the African Development Bank’s Board of Directors approved a $10 billion facility to support African countries to address the COVID-19 pandemic. The Bank also launched a $3 billion COVID-19 social bond on the global capital markets, the highest US dollar denominated social bond ever in world history, which is listed on the London Stock Exchange, Luxembourg Stock Exchange and NASDAQ.

Adesina said, “I am deeply grateful for the collective trust, strong confidence and support of our shareholders for electing me for a second term as President. It is yet another call for selfless service to Africa and the African Development Bank, to which I will passionately devote myself.”

The African Development Bank is Africa’s premier development finance institution, comprising 54 regional and 27 non-regional member countries.



Like Adesina, Dr. Ngozi Okonjo-Iweala will not forget year 2020 in a hurry. The erstwhile Coordinating Minister of the Economy under former President Goodluck Jonathan looked good for the job of the World Trade Organisation (WTO) and “best poised to attain consensus” to become its seventh Director-General. But despite pooling the “largest support” by members, including backing from the EU, China, Japan and Australia, but the US keeps holding down her choice as the first DG of the WTO.

The race to find a new leader of the WTO has been thrown into renewed uncertainty after the cancellation of a key appointment meeting following the US presidential election.

The Geneva-based WTO, which acts as an international arbiter for trading disputes, said it had put off a meeting scheduled that had been called to appoint Nigeria’s Ngozi Okonjo-Iweala as its next director general.

Donald Trump’s administration opposed her selection in one of its final acts before the US election, despite the former Nigerian finance minister securing the overwhelming backing of the WTO’s 164 members.

The special meeting of the trade body’s general council had been convened to take a formal decision on the appointment. Officials had been set to put forward Dr. Okonjo-Iweala as the candidate most likely to attract a majority, after most countries expressed a preference for her over South Korea’s YooMyung-hee.

Okonjo-Iweala had moved a step closer to becoming the first woman and the first African to be director of the global trade watchdog after securing backing from the EU, China, Japan and Australia. Liam Fox, the leading Brexiter and former international trade secretary, had run as the UK government’s preferred candidate but failed to win enough support from other countries to reach the last two in the process.

Trade experts said Joe Biden defeating Trump in the election may have led to countries calling for a delay in the WTO leadership race, with the aim of securing the Biden White House’s backing for Okonjo-Iweala after he takes charge in January.

The delay in selecting a new WTO director general comes at a fragile moment for the world economy amid the second wave of Covid-19, and after years of criticism of the WTO and calls for reform from Trump.


Looting of CACOVID palliatives

On March 27, the private sector Coalition Against COVID-19 (CACOVID)spearheaded by the Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele, the Aliko Dangote Foundation and Access Bank, was established to mobilise private sector resources towards supporting the government’s response to the crisis.

To date, CACOVID has mobilised around NGN 26 billion (USD 72 billion), 22% of its NGN 120 billion target, from private sector organisations including GTBank, UBA, IHS, the African Finance Corporation, Lafarge Africa, Access Bank, the Dangote Group and the Nigerian National Petroleum Corporation.

The private sector has a direct stake in limiting the outbreak of the COVID-19 pandemic in Nigeria. Unlike any other crisis in living memory, the pandemic has taken an unprecedented and direct toll on business activity in all sectors. Drastic but necessary containment measures to curb the spread of the virus have seen lockdowns and travel restrictions imposed across the globe, disrupting supply chains and abruptly halting business and employment for millions of people.

However, amidst the EndSARS protest to end police brutality, mobs of citizens overrun several government-owned warehouses and looted food meant to be distributed during this year’s coronavirus lockdowns across the country.

But many state authorities have halted distribution of the aid since the easing of lockdowns.

The coronavirus pandemic exacerbated hunger for many of the country’s extremely poor, who number some 83 million, about 40 percent of the population, according to the country’s statistics bureau.


Telcos smiled to the banks

At a time many businesses literally suffered an eclipse of some sorts, the telecommunications companies indeed waxed stronger, especially during COVID-19, where data became a lifeblood required by all and sundry. The implication is that they recorded profits upon profits.


Paystack acquisition: Deal of the year

Like telcos, there was increase in fintech activity for the most part of the year and has that already spurred incumbent banks to adopt new strategies to remain competitive and the COVID-19 crisis has only made this imperative more urgent.

Thankfully, Paystack Payment Limited, one of the fintech companies achieved a milestone that literally sent tongues wagging.

The duo of Shola Akinlade and Ezra Olubi, founders of Paystack, in the course of the year, offered what was largely described as cheery news away from the gloom and doom within the intervening period as their company struck one of the juiciest deals by a solely Nigerian-owned firm in recent times.

Paystack was acquired by Stripe through an acquisition deal reportedly worth over $200 million (N76.6 billion), making it the biggest Nigerian startup acquisition.

Stripe is an American technology company building “economic infrastructure for the internet.” It was co-founded by the Collison brothers, Patrick (CEO) and John (President). In January 2010, Stripe launched in private beta, and its public beta was launched in September 2011. “Businesses of every size — from new startups to public companies — use our software to accept payments and manage their businesses online,” Stripe says on its website.

Both Stripe and Paystack are solving the same problem: payment; they also have similar missions. Paystack’s mission is “to help businesses in Africa become profitable, envied, and loved.” Stripe wants to “increase the GDP [Gross Domestic Product] of the internet.”

Paystack is a Nigerian tech company. But it was incorporated in Delaware, United States, in 2015 (same year it joined Y Combinator Accelerator). Paystack is “solving payment problems for ambitious businesses.” (Flutterwave, its archrival, is also incorporated in Delaware.)

Paystack acquisition deal with Stripe has and would have far-reaching impact, for both companies, investors, and the Nigerian tech ecosystem.

Currently, Paystack is only available in three African countries: Nigeria, Ghana (October 2018) and South Africa (July 2020). Compared to Flutterwave, however, Paystack still has a long way to go. Flutterwave, which was launched in 2016, is available in 50 African countries and the UK and US. (But Flutterwave has raised a total of $64.5 million (₦24.6 billion), the last round being a $35 million Series B.)

With this acquisition deal, Stripe will be launching in Africa soon, starting with Nigeria. “In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow about 30% every year”, Patrick told TechCrunch. “Stripe thinks on a longer time horizon than others because we are an infrastructure company. We are thinking of what the world will look like in 2040-2050.”

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