At the 2024 Access Corporate Forum held in Lagos, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, made a significant declaration regarding the federal government’s fiscal management approach. He announced that the federal government had ceased relying on the controversial “Ways and Means” financing mechanism, a form of borrowing from the Central Bank of Nigeria (CBN) that involves printing money to cover the government’s deficit.

Edun’s statement at the forum, themed “Nigeria’s Economic Rebirth: Hopes and Implications,” disclosed that the federal government is now focused on managing its debt obligations without resorting to Ways and Means.

He explained, “We have exited Ways and Means. What does that mean? It means that the government, when it has to pay domestic debt service or foreign debt service, does not go to the central bank to debit the consolidated revenue fund of the government, which means just printing the money.”

This announcement marks a departure from a practice that had been heavily criticized by economists and financial experts. Under former President Muhammadu Buhari’s administration, the government borrowed over N22 trillion from the CBN through Ways and Means, compounding inflationary pressure and impacting Nigeria’s macroeconomic stability.

Edun’s claim signals that the current administration, under President Bola Tinubu, aims to exercise greater fiscal responsibility by ending this controversial practice. The minister also noted that the government is putting in place a “world-class treasury and liability management system” to ensure better financial management.

This decision is framed as part of a broader effort to revamp Nigeria’s financial management system. However, while this move is being touted as a sign of fiscal discipline, it is notable that the government’s borrowing continues through other channels, raising questions about the sustainability of Nigeria’s debt profile.

The current administration continues to borrow both domestically and externally to finance critical infrastructure and budget deficits. Recent moves underscore the government’s continued dependence on loans, despite its claim to fiscal reform.

Nigeria is in discussions with several international lenders, including the African Development Bank (AfDB) and other financial institutions, to secure more loans for infrastructure projects, which raises concerns about the long-term sustainability of this borrowing spree.

Against this backdrop, Professor of Capital Market, Professor Uche Uwaleke, who was also at the forum, said the right instruments were not being deployed in the country’s debt market. He pointed out that the Sukkuk bond for infrastructure development constituted less than two percent of the federal government’s debt structure.

“If you look at the borrowings that have been done overtime, in my view, the right instruments have not been used in borrowing in the domestic market,” he said.

“When we borrow from the market, it is important that we use more of infrastructure bonds instruments because that is when we can be sure that the proceeds are tied to projects. My recommendation here is that we should choose to use more of infrastructure bonds.”

However, Edun expressed confidence that President Tinubu’s economic reforms were beginning to show positive results, citing evidence of improving macroeconomic stability, such as stable exchange rates, increasing government revenues, and positive trade balances.

The finance minister outlined key elements of the government’s economic stabilization plan, including the mobilization of 360,000 farmers to cultivate 360,000 hectares of land to produce essential crops like maize, wheat, and cassava. This agricultural push, according to Edun, is designed to make Nigeria self-sufficient in food production and reduce dependency on imports. While such initiatives are laudable, they require significant funding, much of which may come from further borrowing.

He also noted the government’s plan to simplify the tax system, reducing the number of taxes businesses must pay to a single digit, and exempting foods, pharmaceuticals, and health products from VAT, are designed to boost investment and ease economic pressure on the private sector.

Corporate Leaders Weigh In

During the forum, prominent business figures like Aliko Dangote and Roosevelt Ogbonna also voiced their views on Nigeria’s economic trajectory. Dangote, the President of Dangote Group, stressed the importance of supporting local manufacturing as a more effective strategy than seeking foreign investments abroad. He argued that creating an enabling environment for domestic businesses is key to attracting foreign capital.

“What attracts foreign investment is domestic investment. No domestic investments, no foreign investments! So, we have to make sure that we support our domestic investors,” Dangote said.

He also pointed out a glaring issue with Nigeria’s import reliance, noting that even simple products like biscuits were being imported from China, thereby creating jobs abroad while contributing to poverty at home.

Mr. Bismarck Rewane, Managing Director of Financial Derivatives Company Limited (FDC), and co-lead speaker at the forum, offered a sobering assessment of Nigeria’s power sector, urging the federal government to write off the existing debts of Distribution Companies (DISCOs) and pursue reforms that could enhance electricity supply. Rewane emphasized that sustained investments in telecoms infrastructure and power are essential to driving economic growth.

He warned that without such investments, Nigeria would face significant setbacks.

“If Airtel, Glo, and MTN shut down their systems, there will be no e-transactions in the financial and aviation sectors; no INEC’s elections, no BVAS and people will riot immediately,” Rewane remarked.

He also projected that Nigeria’s economy would grow to $400 billion by 2026, up from its current size of $368 billion, but stressed that growth should be the government’s top priority.

“Revenue is necessary but not sufficient. Growth is both necessary and more sufficient,” he said.

Other key business figures at the event raised concerns about policy implementation and its impact on business growth. Dr. Chinyere Almona, Director General of the Lagos Chamber of Commerce and Industry (LCCI), highlighted the plight of small and medium-sized enterprises (SMEs), arguing that government policies often stifle business rather than support it.

“Sometimes the policies are great, but their implementations are zero,” Almona said.

Similarly, Mr. Segun Ajayi-Kadir, Director General of the Manufacturers Association of Nigeria (MAN), criticized the government for its inconsistent support of the manufacturing sector. He noted that the sector was operating at less than 50 percent of its installed capacity due to inadequate government policies and the unresolved issue of foreign exchange (FX) forward contracts with the CBN.

Qualcomm recently made a move toward acquiring struggling chipmaker Intel, sources cited by CNBC confirmed, marking a potential mega-deal in the technology industry.

This news, initially reported by the Wall Street Journal, caused Intel’s shares to jump by 3%, while Qualcomm’s stock fell by a similar margin. If this deal were to materialize, it could become one of the largest technology mergers in history, given Intel’s current market capitalization of over $90 billion.

However, it’s unclear whether Intel has engaged in discussions with Qualcomm or what terms were proposed, as the details remain confidential, according to a source familiar with the situation.

Intel’s Decline and Qualcomm’s Interest

Intel, once the world’s largest chipmaker, has faced a prolonged downturn that worsened in 2024. After reporting disappointing earnings in August, Intel’s stock took its largest one-day drop in over 50 years. For the year, Intel shares are down 53%, with investors questioning the company’s expensive plans to manufacture and design its own chips.

Intel’s ongoing struggles may have prompted Qualcomm’s approach. Although both companies compete in markets like PC and laptop chips, Qualcomm operates differently from Intel. Unlike Intel, Qualcomm doesn’t manufacture its own chips, relying instead on third-party manufacturers like Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung.

Intel’s financial difficulties also come amid its costly foundry business project, which CEO Patrick Gelsinger reiterated in a memo following a board meeting. The project could cost $100 billion over the next five years as Intel aims to build its own chip manufacturing capacity. The company is also exploring outside investment to support this ambitious endeavor, further reflecting its need for external funding.

The Missed AI Opportunity

Another blow to Intel has been its absence from the artificial intelligence (AI) boom that has captured the attention of Wall Street. While AI programs, including OpenAI’s ChatGPT, rely on Nvidia’s graphics processing units (GPUs), Intel’s central processors (CPUs) have struggled to capture a share of this rapidly growing market. Nvidia currently dominates the AI chip market, holding over 80%, a position analysts say Intel has missed out on.

Qualcomm, while not as large as Intel, reported $35.8 billion in sales for fiscal year 2023, compared to Intel’s $54.2 billion. This potential merger could bring synergies between Qualcomm’s efficient, design-focused model and Intel’s manufacturing expertise, though integrating these companies would be no small feat.

However, any potential deal between Qualcomm and Intel would likely face significant regulatory scrutiny, especially given past failures in major semiconductor mergers. Both companies do business in China, and previous acquisition attempts have been blocked by Chinese antitrust authorities. Intel’s attempt to acquire Tower Semiconductor and Qualcomm’s bid to acquire NXP Semiconductor were both thwarted due to regulatory pushback.

On a broader scale, government intervention has derailed other large chip-related mergers. In 2017, Broadcom’s $100 billion bid for Qualcomm was blocked by the Trump administration on national security grounds, as Broadcom was then headquartered in Singapore. Additionally, Nvidia’s attempt to acquire Arm for $40 billion in 2021 faced antitrust lawsuits from the U.S. Federal Trade Commission (FTC) and opposition from European and Asian regulators, ultimately leading to the deal being scrapped in 2022.

Potential Complications

The merger of Qualcomm and Intel would likely face complex challenges. Apart from antitrust issues, both companies’ significant exposure to the Chinese market could attract scrutiny from multiple governments. The broader trend in the semiconductor industry has seen governments around the world tighten their control over chip manufacturing and technology transfers, as evidenced by the U.S. government’s restrictions on chip exports to China and Europe’s focus on maintaining technological independence.

A potential Qualcomm-Intel deal would therefore require approval from regulators across several major markets, including the U.S., China, and Europe. The geopolitical ramifications, given ongoing trade tensions between the U.S. and China, would likely add another layer of difficulty to the deal.

Qualcomm has initiated acquisition talks with chipmaking competitor Intel, but an agreement is “far from certain,” The Wall Street Journal reported, citing anonymous sources. With a market value of $93.2 billion, an Intel takeover would be one of the largest tech pacts ever, and the deal would almost certainly draw antitrust scrutiny. Qualcomm’s overture comes at a turbulent time for Intel, which has embarked on turnaround initiatives, including cutting 15% of its workforce. Earlier this week, Intel announced it would create an AI chip for Amazon and spin off its foundry business.

The presidency has addressed concerns raised about Coca-Cola’s recent announcement to invest $1 billion in Nigeria over the next five years, responding to criticism from Nigerians who viewed the pledge as recycled propaganda.

Following the announcement on Thursday, critics pointed out that the company had previously announced a similar investment plan in 2021.

Responding to the backlash, the presidency explained that the initial pledge was delayed due to challenging economic conditions but has now been renewed under improved circumstances.

Bayo Onanuga, the Special Adviser to the President on Information and Strategy, issued a statement on Thursday addressing the criticism and clarifying the timeline of Coca-Cola’s investment plans. He acknowledged that the $1 billion investment was indeed announced in 2021 but explained that the company was forced to halt the execution of this commitment due to unfavorable business conditions, including the imposition of excise taxes.

“Naysayers and doubters scorned the $1 billion fresh investment pledge in Nigeria made by the company’s global leadership to President Bola Tinubu today in Abuja, saying the company made a similar promise in 2021. Yes, the company made a similar promise three years ago. But it couldn’t fulfil it because of the challenging business environment prevailing in Nigeria then,” Onanuga stated.

He went on to explain that the company’s ability to follow through on its investment pledges depends largely on the economic environment in which it operates.

“As the company’s spokesperson said, while the company made the commitment in 2021, it was also hit by excise taxes,” he said.

The special adviser further explained that the renewed investment commitment is based on the stable and predictable environment fostered by the Tinubu government’s economic stabilization plan. Onanuga reassured Nigerians that the improved conditions have rekindled Coca-Cola’s confidence in Nigeria as a promising market for future investments.

“Our investment pledges are always predicated on a predictable and stable environment. The $1 billion pledge has now been renewed based on the stable environment, which has been promised through the Tinubu government economic stabilization plan,” he explained.

Coca-Cola’s Commitment and Past Investments in Nigeria

While addressing the criticisms, the presidency also highlighted that Coca-Cola and its local partner, the Nigeria Bottling Company, have already invested $1.5 billion in Nigeria over the last decade. This significant capital was channeled toward the expansion of production capacity, supply chain improvements, and logistics.

“The Coca-Cola Company and its local partner, Nigeria Bottling Company, have already invested $1.5 billion in Nigeria over the space of 10 years,” Onanuga noted in his statement.

This figure reflects Coca-Cola’s long-term engagement in the Nigerian market, despite the challenges posed by economic instability and taxation policies. The company’s decision to invest an additional $1 billion over the next five years underscores its confidence in the country’s potential for growth.

Background of The Initial $1 Billion Pledge in 2021

In 2021, Coca-Cola announced its intention to invest $1 billion in Nigeria over a period of five years as part of its strategy to expand its presence in Africa’s most populous nation. However, soon after the announcement, the business environment in Nigeria took a turn for the worse. The country grappled with foreign exchange shortages, rising inflation, and additional excise taxes that negatively affected both local and foreign businesses.

The introduction of new excise duties on beverages added significant cost pressures on companies like Coca-Cola, leading them to reassess their investment plans. Coca-Cola is said to be unable to fully implement its $1 billion investment plan as a result of these new fiscal challenges.

However, according to the presidency, with the recent economic reforms introduced by President Tinubu’s administration, including efforts to stabilize the naira, ease foreign exchange constraints, and attract foreign direct investments (FDI), Coca-Cola has regained confidence in the Nigerian market. This has led to the reaffirmation of its investment plan during the recent visit of Zoran Bogdanovic, the Chief Executive Officer of Coca-Cola Hellenic Bottling Company, to President Tinubu.

During the meeting with President Tinubu, Bogdanovic expressed Coca-Cola’s optimism about Nigeria’s economic future and its long-term commitment to the country. He assured the president of the company’s determination to execute the investment plan over the next five years, provided the business environment remains stable and predictable. According to Bogdanovic, Coca-Cola believes that Nigeria has tremendous potential for growth, and the company is willing to work closely with the government to unlock this potential.

“I am very pleased to announce that, with a predictable and enabling environment in place, we plan to invest an additional $1 billion over the next five years. We believe Nigeria’s potential is tremendous, and we are committed to working with the government to realize this potential,” Bogdanovic stated during his visit to the President.

However, this pledge is coming weeks after Coca-Cola came at odds with the Nigerian regulatory watchdog, the Federal Competition and Consumer Protection Commission (FCCPC), over allegations of misleading trade descriptions and unfair marketing tactics. The FCCPC accused Coca-Cola Nigeria Ltd and its bottling subsidiary, NBC, of misleading consumers by promoting the “Original Taste, Less Sugar” variant as having the same formulation as the original Coca-Cola.

The FCCPC further warned that the company’s alleged abuse of market dominance would be subject to penalties under the Federal Competition and Consumer Protection Act (FCCPA) and the Administrative Penalties Regulation 2020 (APR), with regulatory action expected in the future.

Against this backdrop, many believe that Coca-Cola’s attempt to reintroduce the $1 billion pledge is a clever attempt to curry favor from the government and quell the ongoing probe of its operations in the country.

More fintech startups in Nigeria fail due to “cyberattack & KYC/identity theft” related issues than any other problem. Our data shows that when those attacks happen, most times, the companies die over time, unable to recover from the paralysis. If you google and check recent closures, and ask questions, someone will tell you how some criminals have broken into a startup’s system, took money or distorted the company’s state of equilibrium.

Why this problem? Many people see embedded finance or finance-related APIs as marginal solutions without knowing that once you offer such solutions, you have provided vectors through which people could be hacked, if not protected. In other words, if you offer banking as a service where customers can get bank accounts via your portal, you have provided a path for them to be hacked, if you do not harden the access points. 

Indeed, in your fintech portal, your bank account is linked. A bad actor can initiate withdrawal from that account, and using the same fintech platform move the funds to another account.  Of course, many customers do not know that once they link a  bank account to the platforms, especially ones with “withdrawing” rights, they have extended withdrawing access to their bank accounts. But unfortunately, the portal where that is happening has no decent security protocol.

(Let me use PayPal to explain. Your PayPal account is linked to your bank account. From your PayPal account, you can initiate a deposit from your bank account into your Paypal wallet. If someone has access to your PayPal, that person also has access to your bank account!)

If you check some banks in Nigeria (one issue was reported today), their main bank websites and apps rarely have security failures, but their “fintech” subsidiaries do fail due to hacks. Why? While the Central Bank of Nigeria (CBN)’s security guidelines and regulations are adhered to on the core websites and apps, the fintech subsidiaries are not fully handled in the same way. So, some banks keep losing money due to such failures.

What can you do? One of Tekedia Capital startups wanted to build a fintech component as a marginal feature in its core business. We told the team to freeze the idea, encouraging them to continue to work with their banks’ partners, making it clear that a fintech-focused team should be in place before any voyage into that space.

Yes, that fintech marginal feature should be seen as a core product with every element of security thought-through before customers are allowed to use them.  Do not just get access, embed APIs and expose customers to be burnt without a team with responsibility to ensure that you (not in the finance space) have provided basic security features.

Indeed, embedding a protected and secure product in a porous portal creates vulnerabilities for your business and your customers. And that means you must ensure you are also protected, and secure, before you ask customers to use the solution.