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Buhari Reverses the Approval of Seplat-ExxonMobil Deal Following NUPRC’s Objection

By
Samuel Nwite
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0

Shortly after the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) nullified the approval of the Seplat-ExxonMobil deal by President Muhammadu Buhari, the president reversed his authorization.

Nigeria’s upstream petroleum regulator had said the president has no right to approve the transaction as it requires regulatory approval.

Presidential spokesperson, Garba Shehu, told Premium Times on Wednesday that the president has decided to support the position of the NUPRC in the deal.

According to him, previous confusion was because “various agencies involved in (the) decision had not coordinated well among themselves”.

When TheCable asked if there would be proper communication over the issue, he said “I have no statement to issue”.

The deal would have seen Seplat Energy Plc acquiring the entire share capital of Mobil Producing Nigeria Unlimited (MPNU), a local unit of ExxonMobil Corporation, for $1.3 billion.

The deal, which was consummated in February, became a subject of dispute on Monday after Buhari gave his approval.

The Nigerian National Petroleum Corporation (NNPC) had on July 6, obtained a court judgment to halt the deal. The NNPC’s prayer was for the court to declare that a conflict happened between the state-owned oil company and MPNU over the “interpretation of preemption rights under their Joint Operating Agreement (“JOA”) and order NNPC and MPNU to arbitration as required by the JOA.”

But Seplat Energy had argued that neither itself nor Seplat Energy Offshore Limited was a party in the lawsuit, and insisted the share purchase agreement remained valid.

In a corporate filing on Wednesday, Seplat Energy said it secured all the relevant approvals and followed due process in the acquisition of the assets.

“Seplat Energy has become aware of news and social media reports alleging impropriety in the process of securing ministerial consent to the acquisition of Mobil Producing Nigeria Unlimited by Seplat Energy Offshore Limited.

“Such reports are wholly untrue, and the company will pursue legal action against any parties involved in disseminating false information related to its business,” the statement reads.

It is not clear the next direction the deal will take since the presidential spokesperson didn’t provide further details in his statement. However, the NUPRC has maintained that the deal is subject to regulatory approval.

“As it were, the issue at stake is purely a regulatory matter and the Commission had earlier communicated the decline of Ministerial assent to ExxonMobil in this regard. As such the Commission further affirms that the status quo remains,” the regulatory body said.

TeamApt Raises $50m in Investment Round Backed by QED Investors

By
Samuel Nwite
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0

TeamApt, a Nigerian fintech startup that provides business payments and banking platforms, has secured a new investment round believed to be around $50 million.

The investment was led by QED Investors, a U.S. fintech-focused venture capital firm, and backed by existing investors such as Novastar Ventures, Lightrock and Bill.

Founded in 2015, TeamApt has grown to become one of the largest operators of financial services in Nigeria. The startup in a short while processes a $100 billion annualized run-rate transaction value via its products Moniepoint and Monnify.

Per TechCrunch, Moniepoint now serves 400,000 small and medium-sized businesses across Nigeria, allowing them to access various features to manage operations: working capital, business expansion loans and business management tools such as expense management (business payments cards), accounting and bookkeeping solutions and insurance.

TeamApt’s founder and CEO Eniolorunda said this new financing round would help the company to expand its credit offerings.

Presently, TeamApt’s lending portfolio is small. The company is thus seeking to expand its lending that has been operated from the balance sheet of its microfinance bank subsidiary due to its size. The portfolio expansion will see TeamApt sticking to its multiple lending partnerships plan. Per TechCrunch, this will include banks, development finance institutions and securitization structures, to access debt facilities.

QED made TeamApt its first investment in Africa having seen the company’s growth speed and potential. For four years, TeamApt bootstrapped before it raised a venture round in 2019, but the company has recorded 300% annual growth in revenue and market cap. TechCrunch reported, citing sources, that the company generated more than $100 million in annualized revenue last year.

“From our bootstrapping days, we built products where we can see positive unit economics from day one, which has continued to be reflected in our profitability,” Eniolorunda said in an email response to TechCrunch. “This has put us in the realm of the few attractive cash-flow-positive hyper-growth companies — even as we continue growing at triple digits year-on-year, while at the same time expanding our margins.”

QED is a notable investor in the payment industry, but has stayed away from Africa for reasons believed to involve the perceived minimal growth potential of the continent. However, in the past few years, Africa has risen to the top in payment services. Nigeria leads the pack with over $800 billion in digital transactions annualized in the first four months of this year.

The West African country is breeding fintech startups that are attracting millions of dollars in investment monthly, and some of them have already attained unicorn status. Seeing the wave of fortune blowing across the payment industry, QED is expected to bet more funds in the African market henceforth.

“I am proud to bring Africa to QED and QED to Africa. I could not think of a better way to enter the continent than with our investment in TeamApt,” said Gbenga Ajayi, QED Investors partner and head of Africa, in a statement. “Tosin and his team have steadily built an impressive payment and distribution network across Nigeria over the past five years. Their strong and positive unit economics, coupled with a deep customer focus, will enable them to continue to build out an even more expansive network.”

Ndubuisi Ekekwe To Keynote African Freelancers’ Summit 2022

By
Ndubuisi Ekekwe
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0

In 1776, Adam Smith wrote his masterpiece – the Wealth of Nations. He followed up with other works, explaining productivity and the power of the “invisible hand”. Free market systems advance economies, by making products better, through healthy competitions. Indeed, the freedom of production and consumption, under market forces, accelerates innovation which improves societies.

Factors of production are the pillars upon which the market system operates. And in those factors, Labour remains extremely catalytic. The nature and the form of labour are evolving as a result of technology systems which continue to redesign the interdependent relationships that connect people, firms and nations.

In the industrial age economy, Labour was mainly in the meatspace (physical and atoms). Today, a new paradigm has emerged. Yes, Labour has added remote (digital and byte). Join me on Sept 10 2022 as I keynote African Freelancers’ Summit 2022.

You will understand the changes. Many young men and women are living in Lagos but they work in Estonia, America, Canada, etc daily.  As companies follow Adam Smith’s division of labour thesis, they are going remote, and Africa is positioned for that future. The LABOUR of the future would be unbounded and unconstrained by geography; plan for it. Two Saturdays ago, I keynoted 4 events on the same day, covering 3 continents. Is that not efficient? Adam Smith would have said “it is”.

H1 2022: Nigeria’s Banking Sector Leads, Attracts $1.47 Billion Foreign Inflows

By
Ojukwu Emmanuel
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1

Even though the banking sector in Nigeria continues to be grappled with macroeconomic pressures, such as rising inflation, fluctuating naira-to-dollar exchanges rates, and the likes, the Central Bank Of Nigeria, (CBN) disclosed that the sector recorded the highest amount of foreign inflow compared to other sectors of the Nigerian economy.

The banking sector attracted $1.47 billion as capital inflows in the H1 of 2022, an increase of 109.8%, compared to $698.2 million received in the second half of 2021 and 46.5% higher than the $1 billion inflows recorded in the corresponding period of 2021.

The banking sector accounted for 47.1% of the inflows in the Nigerian economy, followed by the manufacturing and financing sectors accounting for $457.7 million and $396.7 million respectively.

The banking sector in Nigeria is said to have settled for some major shifts in its operations this year, as last year, the Central bank of Nigeria (CBN), disclosed that the total assets of the banking industry grew by 20.97% from N53.17 trillion in April 2021 to N64.32 trillion in April 2022, which indicates that there is an N11.115 trillion increase within one year.

The banking industry in Nigeria despite some constraints has continued to grow significantly in recent years, owing to the exceptional performances of traditional banks in the country.

Some top-tier banks on the Nigerian exchange, generated a sum of N77.01 billion from electronic business in the first quarter of 2022, growing the top line by 11.7% compared to N68.92 billion recorded in the corresponding period of the previous year.

Also, the Fintech sector has also been attributed to have helped improve the growth in the banking sector, with a large percentage of inflows coming through Fintech startups either from international venture capitalist firms or Angel investors.

A report disclosed that Fintech firms raised a sum of $658.4 million in funding in H1 2022 across 23 deals. Other financial services firms recorded total deals worth $345.3 million.

Meanwhile, a total sum of $3.11 billion in capital was imported into the Nigerian economy as foreign inflows, between January and June this year, most of which were in form of foreign portfolio investments.Comparing the total inflows from the first half of last year, it grew by 11.8% when compared to the second half of 2021, where it declined by 20.7%.

Recall that the COVID-19 pandemic shook the economies of nations, which affected the capital inflows in Nigeria in the second half of 2020, as investors became wary about investing their money in Nigeria’s economy.

Despite this setback, there was a notably strong resilience in the second half of 2021, as inflows began to pick up, although weren’t compared to the success of inflows during the pre-pandemic era. In the first half of 2022, most of the inflows that came into the country came as foreign portfolio investment (FPI) at $1.71 billion in H1 2022, accounting for 55.2% of the total inflows recorded in the review period.

A major factor that has been attributed to the decline in Nigeria’s foreign inflows is the inability of foreign investors to repatriate their earnings from the economy as a result of FX scarcity.

Nigeria top-tier banks, UBA redeemed its $500 million 5-year Eurobond in June 2022, while Zenith Bank completed the redemption of its $500 million Eurobond in the previous month. This indication of the creditworthiness from the Nigerian banking industry, brought about the confidence of foreign investors to be willing to invest in the sector.

Cryptocurrencies Transforming Corporate Payments

By
Ojukwu Emmanuel
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0

As the world is gradually drifting towards an increasingly cashless world, the corporate payments space is also transforming. More innovative ways to carry out transactions as well as payment for goods and services are beginning to emerge, and one of them is cryptocurrencies.

An increasing number of businesses and companies worldwide are beginning to accept digital assets as a means of payment, also for operational and investment purposes. More than 2,300 businesses in the U.S now accept Bitcoin as a means of payment.

Cryptocurrencies as with any frontier, there are unknown dangers, but also very strong incentives. Experts disclose that these changes in the corporate payments space were triggered by the covid-19 pandemic, as it accelerated payment trends that were already starting to develop.

Despite the volatility that is synonymous with the crypto space, this has not in any way deterred businesses and companies from accepting it as a means of payment. Co-Founder of Revenue for BVNK, London-based crypto-powered payments and banking platform for businesses, Chris Harmse, disclosed that cryptocurrencies are now becoming the basis for international payments.

He further revealed that using crypto rails and stablecoins for international payments, allows businesses to send funds instantly to anyone in the world, without needing chains of intermediaries to facilitate the transaction.

There have been predictions that an integrated and seamless transactional environment will be the future of industries. Most of these companies believe that an integrated and seamless mode of transactions, such as payments through cryptocurrencies will simplify payments and FX treasury management in one place.

Also, with the current high-inflation rate ravaging global economies, businesses are already considering various factors to protect their commercial gains, as the inflation has resulted in high volatility in currency exchange rates, which is taking a toll on the revenue of businesses.

Businesses that overlooked investing in cryptocurrencies as a hedge are predicted to be the most hit this period. While researching how cryptocurrencies are transforming corporate payments, I came across a Deloitte report that disclosed some rationales behind the adoption of cryptocurrencies by some companies.

Here Are Some Of The Rationales Behind Why Some Companies Are Currently Adopting Crypto As A Means Of Payment

  • •These companies disclosed that Crypto provides access to new demographic groups. Users represent a more cutting-edge clientele that values transparency in their transactions. A study reveals that up to 40% of customers who pay with Crypto are new customers of the company, and their purchase amounts are usually twice that of credit card users.
  • •More companies are finding that important clients and vendors want to engage by using crypto. Consequently, they disclosed that a business needs to be positioned to receive and disburse crypto to assure smooth exchanges with key stakeholders.
  • •Crypto furnishes certain options that are simply not available with Fiat currency. For example, programmable money can enable real-time and accurate revenue-shaping while enhancing transparency to facilitate back-office reconciliation.
  • •Introducing crypto may help spur internal awareness in the company about this new technology. It also may help position the company in this important emerging space for a future that could include central bank digital currencies.

It might interest you to know that Cryptocurrencies are gaining widespread adoption, as two of the biggest platforms for making payments worldwide, Visa and Mastercard have both publicly endorsed the use of Bitcoin.

With two big payment giants hopping on the train, there is no disputing the fact that the doors are now open for broader mainstream adoption of cryptocurrencies and practical use among business owners in the upcoming years.

Final Thoughts

Despite the volatility synonymous with the crypto space, experts reveal that it has a strong possibility of impacting the future of a business.

With the ability to instantly transfer coins anywhere globally, the change in demand and overall value of cryptocurrency could make it a popular means of payment in the business world and peer-to-peer.

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