DStv is not doing well (see video below) but MultiChoice continues to do well. What is happening here is a pure double play strategy: Multichoice has included many platforms into its distribution platform, making them compete against DStv which is affecting DStv position. But as that happens, MultiChoice is capturing value across many domains.

It is a great business playbook: we have DStv and it does provide us a decent pathway to invest in our distribution, and provided with DStv we can reduce your risks on these distribution investments, we will keep investing. As we do all that, other companies like Amazon Prime and Netflix will see us as the best pathway to reach new markets in Africa. Sure, DStv may struggle but MultiChoice will be great.

MultiChoice knows that DStv is the one oasis and it has used it to create a clear double play in Rest of Africa where it is doing well: Multichoice Group’s operations in the Rest of Africa (RoA), led by Nigeria, achieved its first trading profit in the financial year ending March 31, 2023. The group added 1.7 million 90-day active subscribers, an 8% year-on-year growth, to reach a total of 23.5 million subscribers.  Multichoice Nigeria played a significant role in driving the company’s performance, accounting for 44% of the RoA subscription revenue and achieving a 29% growth in subscription revenue from 2022 to 2023.”

“The strong performance in the Rest of Africa, which added 1.4m subscribers, was underpinned by the decoder subsidy and marketing investments for the FIFA World Cup, which will be fully paid back by the end of 1H FY24. This together with annual price increases resulted in the Rest of Africa delivering positive trading profit for the first time since the group was listed in 2019. This is an exceptional performance from the Rest of Africa team as it was achieved despite absorbing more than ZAR2.9 billion in currency losses in the last four financial years.  

“In contrast, the South African consumer environment weakened sharply, especially in the second half of the financial year. Permanent high stages of load-shedding, interest rate hikes, and elevated inflation levels have left a large portion of the group’s customer base unable to watch or afford video entertainment services. Although SA 90-day subscribers grew by 0.3m YoY, lower levels of activity, represented by active days, were experienced which resulted in a 2% decline in SA revenue.” 

One of the finest Igbo novels ever written remains “Isi Akwu Dara N’ala” by Tony Ubesie. Think of a trilogy of James Hadley Chase (There’s Always a Price Tag), Thomas Hardy (The Mayor of Casterbridge) and peerless Bertha M Clay (Beyond Pardon, A Woman’s Temptation) all lumped into one novel. In Isi Akwu Dara N’ala, Ubesie chronicled romance, pains, wars, etc using Chike and Ada.  Then, the war ended, and heavens opened opportunities for Chike through his “Osisi Na Ami Ego” [literally, a  tree (indeed a factory) which produces money as leaves]. Yes, he built factories and wealth returned through huge profits.

But how can you build factories when governments will not allow you to use your money as you wish? If you check 2,000 years of global GDPs, you would notice that no nation has developed faster and better than its property rights regime. I have written extensively on that in Harvard.

In other words, if the ownership of properties and the capacity to use those properties as desired by owners are not freely allowed by the ordinances in nations, no serious growth will happen. All nations which have developed have always seen first an improvement in property rights.

When you have money in your domiciliary account in Nigeria and the central bank regulates what you can do with that money, that is not a free market system because the velocity of money, and freedom to use at will, under a strong property right is a key tenet of entrepreneurial capitalism.

But there is good news: “The Central Bank of Nigeria (CBN) has announced the removal of cash deposit limitations on domiciliary accounts, days after the deregulation of the Nigerian forex market.” I commend the CBN for killing this mindless policy. Now, we can go and grow “Osisi Na Ami Ego”. Yes, build those factories, warehouses – the old and the modern versions.

Comment on Feed

Comment 1: “If the ownership of properties and the capacity to use those properties as desired by owners are not freely allowed by the ordinance in nations, no serious growth will happen”.

Substituting nations with states in the above quote, I think this statement also explains the reason why Lagos real estate markets developed faster than states in the Niger Delta regions, not discounting the advantages of being a former capital city. Foreigners, or do I say non-indigenes of Lagos were freely allowed to own and develop the real estate markets extensively, turning forests, swarms and wastelands into beautiful cities.

It’s a shame that today, pronouncements are being made by politicians without understanding impacts and repercussions of trying to restrict free market systems.

The former Governor of the CBN caused so much damage to the economy with his policies, never really understood why he thought restrictions on domiciliary accounts would encourage flow of FDI or FPI into our economy. He drove legal funds flow into invisible flows.

I think we need to all learn from the damaging effects market restrictions have on national economies.

Comment 2: I am really happy about this news Prof. I remember going to bank sometime last month and I was informed that I can’t withdraw more than#50,000 from my personal account, it was really a terrible experience. The next they should do for us is to lift the ban on using our local ATM cards for international transactions, this is killing a lot of business on daily basis and some end up in the hands of scammers in their search for alternative routes.

Comment 3: Some of the policies implemented by the immediate past CBN governor were clearly antithetical, or so they seem to me.

Can’t imagine wanting to boost forex inflow/remittances and at the same taking actions that’ll impede the same. Some of his actions have a colortion of economic sabotage, albeit, maybe not intentional.
In order not to crucify or persecute ‘Big Meffy’, I’ll end by saying “incompetence is not a crime”

The Central Bank of Nigeria (CBN) has announced the removal of cash deposit limitations on domiciliary accounts, days after the deregulation of the Nigerian forex market.

The move comes barely a week after the apex announced new guidelines guiding the nation’s new forex regime.

A statement issued by the CBN following an extraordinary Bankers’ Committee meeting held on Friday, June 16, where a discussion about implementation and implications of floating the naira was held, said domiciliary account holders can withdraw up to $10,000 per day.

“Domiciliary account holders are permitted to utilize cash deposits not exceeding USD$ 10,000 per day or its equivalent via telegraphic transfer. DMBs shall provide returns to the CBN, including the “purpose” for such transactions,” the circular said.

“Cash deposits into domiciliary accounts will not be restricted, subject to DMBs conducting proper KYC, due diligence and adhering to the spirit and letter of extant AML/CFT laws and other relevant rules and regulations.”

The central bank said it will give priority to the timely and orderly settlement of any committed Foreign Exchange (FX) forward transactions to enhance market confidence.

The apex bank added that it will work towards standardizing its Cash Reserve Ratio (CRR) maintenance processes and ensure fair implementation across the banking industry.

See the full statement below:

CBN Issues Further Guidance on Operational Changes to Foreign Exchange Market

Following the Central Bank of Nigeria (CBN) press statement of June 14, 2023, on new guidelines in the foreign exchange market, an extraordinary Bankers’ Committee meeting was held on Friday, June 16, 2023, to discuss its implementation and implications for the banking public.

These policy changes aim to promote transparency, liquidity and price discovery in the FX market in order to improve FX supply, discourage speculation, enhance customer confidence and ensure overall stability in the FX market.

According to the Director, Corporate Communications, Dr. Isa Abdulmumin, the CBN, in line with deliberations at the meeting, provided further guidance to Deposit Money Banks (DMBs) as follows:

All visible and invisible transactions (medicals, school fees, BTA/PTA, airline and other remittances) are eligible for the Investors’ and Exporters’ (I & E) window.

DMBs shall ensure expeditious processing of all eligible invisible transactions on behalf of their customers using the applicable rate at the I & E window.

Ordinary domiciliary account holders shall have unfettered and unrestricted access to funds in their accounts. Domiciliary account holders are permitted to utilize cash deposits not exceeding USD$ 10,000 per day or its equivalent via telegraphic transfer. DMBs shall provide returns to the CBN, including the “purpose” for such transactions.

Cash deposits into domiciliary accounts will not be restricted, subject to DMBs conducting proper KYC, due diligence and adhering to the spirit and letter of extant AML/CFT laws and other relevant rules and regulations.

The CBN will prioritize orderly settlement of any committed FX forward transactions as they fall due in order to boost market confidence further.
The Bank will normalize its CRR maintenance processes and ensure equity in its implementation across the banking industry.

The CBN will continue to engage stakeholders and issue further guidance as it implements the ongoing reforms.