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Why Nigeria Needs To Balance Foreign Investment With Local Growth – KPMG

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KPMG, a professional services company, has said Nigeria needs to strike a balance between attracting foreign capital and promoting domestic development through policies that encourage foreign investment while also fostering a conducive environment for local businesses to thrive.

The firm said in its flashnotes released on January 4, 2024, that capital importation figures show a continuous quarterly decline suggesting persistent challenges to investor confidence in the Nigerian economy.

“While there is an urgent need to restore external investor confidence, Nigeria needs to strike a balance between attracting foreign capital and promoting domestic development (thereby reducing its reliance on foreign capital),” KPMG said.

KPMG attributed the drop in capital importation to Nigeria in the third quarter of 2023, after an initial rise in the second quarter of 2023, to continuing negative market sentiments on the country despite initial reforms being viewed positively.

“Recent persistent dominance of trade credits, loans, and related forms of short-term capital inflows with portfolio and especially foreign direct investment is a major concern,” it said.

It stated that Nigeria’s need for macroeconomic stability, the negative interest rate environment, the wide FX gap with low and declining forex reserves, and the need for greater clarity with respect to monetary and fiscal direction have dampened external sentiments.

KPMG said the exit of multinational companies like GlaxoSmithKline and Procter & Gamithbles (P&G) who have discontinued on-ground operations and adopted import and distributor-led business models have also dampened external sentiments.

“The fact that trade credit, loans, and related forms of capital inflows now overly dominate capital importation is a concern given their short-term nature,” it said.

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“Portfolio investment which includes investments in financial assets such as stocks, bonds, and other securities has also been on a decline since Q1 2023 from $649.28 million to $87.11 million in Q3 2023 exposing the economy to risks of foreign exchange illiquidity and currency depreciation.

Also, pressure on consumer price inflation, reduced purchasing power, slower economic growth (3.75 percent target for 2024), lower job creation (especially from persistent reduction iFDI), and overall macroeconomic instability,” it said.

KPMG stated that it also makes the economy more vulnerable to global economic shocks which is especially concerning given the current global poly-crisis.

“Reduced foreign capital inflows limit access to much-needed external funding for infrastructure projects, technological advancements and other development initiatives without which the cost of doing business, and attractiveness of investment opportunities worsen and further hinder the country’s ability to compete globally.

“Despite the well-recognized potential of the Nigerian environment, investors are nevertheless reluctant to invest or remain in a country where they anticipate challenges related to infrastructure, logistics, connectivity, and operational efficiency,” KPMG stated.

KPMG said investors seek stability and predictability in the business environment, and the lack thereof hampers capital inflows.

It said there is an urgent need to reverse this trend and restore investors’ confidence in the Nigerian economy by intensifying ongoing efforts to create a stable and enabling macroeconomic environment and implementing consistent and investor-friendly policies.

It added that Nigeria can reverse the trend by improving infrastructure, strengthening the competitiveness of macroeconomic fundamentals, and eliminating structural and regulatory bottlenecks impeding the inflow and outflow of capital.

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KPMG stated that restoring investors’ confidence in the Nigerian economy requires concerted efforts from
the Nigerian government and relevant stakeholders.

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Uba Sani: Least Paid Worker In Kaduna Earns N72,000

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Uba Sani, governor of Kaduna, says no worker in the state earns less than N70,000 as salary in compliance with the new minimum wage.

Sani spoke on Thursday at Murtala Square in Kaduna on occasion the Workers’ Day celebration.

The governor said the least paid worker in the state earns N72,000, noting that he believes in the dignity of labour, adding that the issue of incremental adjustment of salaries would be addressed soon.

“I have been involved in the struggle for labour rights, workers’ rights. That is my antecedent. Because of my background, I sat down with the leadership of the Nigerian Labour Congress (NLC),” Sani said.

“I made it clear to them that though we have met the minimum wage requirement but there is something called incremental adjustment which is discretionary.

“Because of my relationship with both NLC and TUC, I asked them that we should sit down and come up with a formular that will make every worker in Kaduna state happy, irrespective of his or her status and they came up with three different options.

“Today, I want to reaffirm to all of you here that by the grace of God, we will look at the incremental adjustment and ensure that even senior civil servants will benefit because we have to make our workers happy.’’

The governor added that his administration also prioritises improving the living conditions of pensioners.

He said the state government has released N3.8 billion to settle outstanding gratuities, death benefits, and accrued rights under the contributory pension scheme in April.

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“Since the inception of our administration, we have cumulatively paid the sum of N10.4 billion in gratuity, death benefits, and accrued rights in the Contributory Pension Scheme,” Sani said.

The governor said the payment of such a huge sum to pensioners is “unprecedented.”

Commenting on the ongoing industrial action by the Kaduna State University branch of the Academic Staff Union of Universities (ASUU), Sani said his administration has done everything to reposition the school.

According to him, more than 60 percent of the courses were not accredited when he assumed office, but his administration spent over N300 million to secure National Universities Commission (NUC) accreditation.

The governor said the striking lecturers’ demands had accumulated over 17 years, with about three of his predecessors unable to settle the liabilities, which now total between N5 billion and N6 billion.

“In spite of this, the lecturers want us to settle these liabilities now, and I said no. I said that we have to sit down and have a dialogue. I then asked them, where were their voices in the last 17 years?” he said.

He promised that the problem would be addressed owing to the importance of education, which he described as the “greatest leveller”.

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PETROAN Asks FG To Prioritise Welfare Of Oil, Gas Workers

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The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has asked the government to prioritise the welfare of oil workers, given the hazardous nature of their work.

In a statement on Thursday, Billy Gillis-Harry, PETROAN’s president, hailed oil and gas workers across the country on Workers’ Day.

According to Joseph Obele, PETROAN’s spokesperson, Gillis-Harry, while addressing journalists in Abuja, appealed to the government and stakeholders in the industry to improve welfare packages and expand health insurance for oil workers.

“Studies have shown that workers in areas where gas flaring is prevalent are at high risk of several health challenges, which can affect them physically, mentally and even increase cancer risks,” Gillis-Harry was quoted as saying.

The association said gas flaring remains a serious problem in Nigeria’s energy industry, exposing workers and nearby communities to harmful health and environmental effects.

The group said the impact of gas flaring highlights the urgent need for better health protection and general welfare for those working in the sector.

According to the statement, Gillis-Harry urged regulatory bodies to strictly enforce existing laws aimed at stopping gas flaring in the country.

“It’s imperative that we prioritise the health and well-being of our workers and protect the environment from the harmful effects of gas flaring,” the president said.

The spokesperson said PETROAN believes ending gas flaring would reduce its harmful impact on workers and host communities and help build a more responsible oil and gas industry.

Obele said PETROAN commended governors who have started paying the new minimum wage, especially those paying above the set rate.

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“Billy Gillis-Harry called on governors who are yet to comply to do so in the shortest possible time, emphasising the need for workers to receive fair compensation for their labour,” he said.

He said the association also reaffirmed its commitment to collaborating with stakeholders to support oil and gas workers and ensure safe and healthy working environments.

Obele said PETROAN is of the view that better welfare and an end to gas flaring would boost productivity, reduce accidents, and raise performance across the industry.

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MTN Nigeria posts N1trn revenue surge

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MTN Nigeria Communications Plc generated N1.0 trillion in service revenue in the first quarter of 2025.

This marks a 40.5 per cent increase from the N752.99 billion earned in Q1 2024.

The company confirmed this in a corporate filing with the Nigerian Exchange Ltd. on Tuesday.

Profit after tax dropped by 134 per cent, falling to N133.7 billion from N392.7 billion in the same period of 2024.

Its total subscriber base grew by 8.2 per cent to 84.1 million, with 3.2 million new additions in Q1 2025.

Active data users rose by 13 per cent to 50.3 million, following the addition of 2.6 million users.

EBITDA climbed 65.9 per cent to N492.7 billion, while EBITDA margin improved by 7.2 percentage points to 46.6 per cent.

The company recorded free cash flow of N209.9 billion and earnings per share stood at N6.38.

MTN Nigeria CEO, Karl Toriola, expressed satisfaction with the Q1 2025 results, citing strong strategic execution and resilient service demand.

He said momentum from Q4 2024 had helped put the firm on track to restore profitability and achieve a positive net asset position.

He added that regulatory approval for price adjustments was essential to sustain investment and maintain service quality.

This approval enabled N202.4 billion in capital expenditure, up 159 per cent, aimed at expanding capacity and enhancing user experience.

Toriola said the 40.5 per cent growth in service revenue underscored strong demand and commercial discipline.

He noted that Q1 results do not yet reflect the full impact of price changes made late in the quarter. (NAN)

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