Ericsson Sales Grew By 8%, Despite Decline in Mainland China, Middle East and Africa

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Ericsson Sales Grew By 8%, Despite Decline in Mainland China, Middle East and Africa

Ericsson announced its second-quarter results for the period ended June 30, 2021. Ericsson Group organic sales grew by 8% YoY, despite a sales decline in Mainland China of SEK -2.5 b. YoY and an IPR revenue decline of SEK -0.5 b. YoY. Reported sales were SEK 54.9 (55.6) b.

The telecoms giant’s gross margin excl. restructuring charges improved to 43.4% (38.2%) driven mainly by operational leverage in Networks. Q2 2020 was negatively impacted by inventory write-down and initial 5G deployments in Mainland China. The reported gross margin was 43.4% (37.6%).

Middle East and Africa

Currency adjusted sales declined by -10% YoY. Sales declined YoY in Networks and Digital Services primarily due to lower 5G investments in the Middle East and uncertain macroeconomic conditions in Africa, which are likely to prevail for some time. Managed Services sales were stable. Reported sales decreased by -18%.

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Second-quarter key highlights

  • EBIT excluding restructuring charges improved to SEK 5.8 b. (10.6%) from SEK 4.5 b. (8.2%) YoY driven by Networks. Reported EBIT was SEK 5.8 (3.9) b.
  • Organic sales in Networks grew by 11% YoY, driven by market share gains. Sales in Mainland China were SEK -2.0 b. lower YoY. Reported EBIT margin was 21.7% (13.2%).
  • Organic sales in Digital Services were stable YoY, despite a sales decline in Mainland China of SEK -0.5 b. YoY. Reported EBIT (loss) was SEK -1.6 (-0.7) b., impacted by a write-down of SEK -0.3 b. for pre-commercial product investments for the Chinese market.
  • Reported net income was SEK 3.9 (2.6) b.
  • Free cash flow before M&A was SEK 4.1 (3.2) b. supported by higher incoming IPR payments. Net cash per June 30, 2021 was SEK 43.7 (37.5) b.
  • The RAN market outlook for 2021 has been updated to 10% growth YoY, compared with previously 3% growth.

Comments from Börje Ekholm, President and CEO of Ericsson (NASDAQ:ERIC)

Our strong business performance continued, with an organic sales growth of 8% in the quarter. This was despite a sales decline of SEK -2.5 b. YoY in Mainland China. Networks continued to grow market shares in the quarter with some significant wins. Group gross margin increased to 43.4% (38.2%).

We are well-positioned to take advantage of continued market momentum with our competitive 5G product portfolio and cost structure. However, it is prudent to forecast a materially lower market share in Mainland China for Networks and Digital Services as the earlier decision to exclude Chinese vendors from the Swedish 5G networks might influence market share awards.

Networks sales grew organically by 11%, despite lower volumes from delayed 5G deployment in Mainland China. This growth reflects the continued high activity levels in most markets. The North-East Asia market outside Mainland China saw strong growth in 5G volumes. The gross margin improved to 47.9% (40.5%).

Through proactive and continuous measures for supply chain resilience, we have accelerated production to meet customer demand, and we are well prepared for any challenges in the future. Our increased R&D investments have accelerated product development. We strengthened our Cloud RAN portfolio further with 5G mid-band and massive MIMO support for increased network performance.

Cloud RAN will enable service providers to seamlessly evolve their networks towards cloud-native technologies and open network architectures, meeting demand for more deployment flexibility. We continue on the successful path of 5G wins in North America. We have signed another 5-year contract, this one amounting to USD 8.3 b. (SEK 71 b.), with a leading customer. This is the single largest deal in the history of Ericsson.

In Digital Services the strong momentum in 5G Core continued and we are ramping up R&D investments in the cloud-native 5G portfolio. Organic sales were stable in the quarter. However, excluding the reduced sales in Mainland China, sales grew by 5%. Gross margin decreased to 37.9% (43.6%) YoY, mainly due to a write-down of SEK -0.3 b. related to pre-commercial product investments for the Chinese market.

A material loss of market share in Mainland China, which contributed 5.4% of Digital Services sales in 2020, would cause a delay in reaching the EBIT margin target for 2022. A significantly reduced volume would lead to a limited loss in 2022 in Digital Services. Improvements are skewed towards the year-end 2022, as we expect to see a gradual increase in Core revenues.

Based on our strong portfolio, we expect to exceed our original EBIT margin target of 4-7%, as sales in other markets over time will compensate for the reduction in Mainland China. We see strong demand for our OSS, BSS and 5G core offerings, positioning us well for longer-term profitability.

The new IPR agreement with Samsung reaffirms the significant value of our patent portfolio and with this agreement in place, we are well-positioned to conclude pending and future patent license renewals. One additional agreement was signed in July. There is currently high activity in renewal negotiations. As new contracts are concluded, revenues will include retroactive payments for the unlicensed period prior to signing.

Whilst many markets are returning to normal following the COVID-19 pandemic, we continue to see rising numbers of cases in South East Asia, which may result in a slower recovery for impacted countries.

We continue to invest in compliance to fully embed our commitments to ethical business practice, in all areas across the organization. Ensuring all decisions are taken with integrity is a driving force in our culture-change journey.

The opportunity from enterprise for 5G provides an exciting growth path for Ericsson. Building on the strong foundations of our core business we will continue to take a stepwise approach to invest in growth in Dedicated Networks, IoT and the wireless portfolio acquired with Cradlepoint.

We foresee 20-30% annual market growth in the enterprise, with opportunities in automation, remote operations and safety management across whole industry sectors such as smart manufacturing, ports and airports, energy, mining, health and agriculture.

Enterprise use cases in 5G – and the continuing growth in 4G – will drive the digital transformation of business globally combining the high performance, low latency and security benefits of wireless over traditional fixed networks. We are confident that wireless will be the first-choice connection for global business in the 5G era.”

Moneygram Reports Another Strong Month Of Digital Growth

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Moneygram Reports Another Strong Month Of Digital Growth

MoneyGram International, a global leader in the evolution of digital P2P payments has announced that its direct-to-consumer digital business, MoneyGram Online (MGO), delivered 44% year-over-year cross-border transaction growth over last June’s record volume.

MoneyGram Online continued growth has been driven by strong demand for its leading mobile app and high customer retention rates.

“Looking back at our recent accomplishments, it’s clear that 2021 remains a pivotal year for MoneyGram,” said Alex Holmes, MoneyGram Chairman, and CEO. “This rapid growth in our direct-to-consumer digital channel coupled with other exciting developments such as our strengthening financial position has put MoneyGram on a strong trajectory.”

For the quarter, digital receives, including sending directly to accounts, cards, and mobile wallets, hit an all-time high in transactions with 77% YoY growth. In India, digital receives are approaching 50% of total transactions, up from approximately 10% less than two years ago.

As demand for real-time payments and mobile wallets continues to surge, MoneyGram is well-positioned to continue to capture growth through this channel.

Holmes concluded: “We’re excited about our position and growth opportunities in the cross-border P2P market.

“MoneyGram’s large, loyal customer base, unique competitive advantages, and innovation roadmap will ensure MoneyGram continues to capture share and strengthen its position as the leader for progressive innovation in the industry.”

Nneka Onyeali-Ikpe advocates for financial education and Inclusion for children

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Nneka Onyeali-Ikpe advocates for financial education and Inclusion for children

Parents have been urged to invest the necessary time and resources in the development of their wards in order to help them be better positioned for opportunities in the future. This charge was given by the Chief Executive Officer of Fidelity Bank Plc, Mrs. Nneka Onyeali-Ikpe at the graduating ceremony of Sunnybrook International School’s Class of 2021 recently.

Speaking to teachers, pupils, parents and other guests at the event, Onyeali-Ikpe who was the guest speaker, encouraged guardians to continuously make efforts towards engaging children in ways that will embolden and strengthen them as these are virtues that will prove invaluable throughout their lives.

She further stated that, “Children are the future of tomorrow, they say. This also means the tomorrow we will see is largely dependent on the intellectual, financial, and social prowess of the kids we raise today. This is why we at Fidelity Bank have continued to support children, especially with academic and financial education.”

NNEKA ONYEALI-IKPE air peace Fidelity Bank’s MD/CEO purchases 5 million shares
Fidelity Bank Nigeria Plc | Managing Director/CEO Designate, Mrs. Nneka Onyeali-Ikpe | www.brandspurng.com

It would be recalled that in commemoration of the last Children’s Day, Fidelity Bank doled out N150,000 to 62 Sweet Account (SWEETA) holders across the country. Designed for children between the ages of 0 and 17 years, the account boasts of several benefits such as a loyalty cash reward of N150,000 tagged School Fees Support.

Through this scheme, the bank assists parents with paying school fees for their wards. SWEETA, which can be opened with any amount, provides account holders with several perks including free back-to-school packages, education endowment up to 10 times the account balance and to a maximum of N1 Million, participation in monthly quarterly competitions, amongst others.

A renowned advocate for girl-child education, Onyeali-Ikpe also admonished parents to provide undivided attention to their daughters.

According to her, “I am a testimony of the importance of paying attention to the girl child. My parents focused on me and they made sure they gave me the best education as a child. That is what is playing out today. You need to give the girl-child a lot of support and focus so that they don’t get carried away by what is not important.”

Acknowledging the challenges brought about by the Covid-19 pandemic, Onyeali-Ikpe charged the graduating pupils to keep focused emphasizing that, “Some of the children learn under very difficult circumstances but my advice is for them to keep focused. It will get be better and they should obey their teachers and parents and stay away from bad company”.

Since taking over the helms of affairs at Fidelity Bank Plc on 1 January 2021, Mrs. Nneka Onyeali-Ikpe has instituted several initiatives to position the Bank as a leading player in the Nigerian financial services sector.

World PR Day: Four Things You Need To Know About Public Relations

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World PR Day: Four Things You Need To Know About Public Relations

Many people are often confused about the distinction between public relations, marketing and advertising. Even for some people who work with professionals from each of these three spaces, all three seem to serve the same purpose, therefore can be considered the same concept with different names. But in reality, these are distinct concepts that complement each other.

In preparation for the first-ever World Public Relations Day set to hold on July 16, 2021, here are four important things everyone needs to know about PR.

Public Relations Is About Stories

The Public Relations Society of America (PRSA) defines PR as; “a strategic communication process that builds mutually beneficial relationships between organizations and their publics”. What this definition doesn’t say is how.

World PR Day

These relationships are built through the right actions by organizations and stories about them. Public relations focuses on informing the public about a product, an organization or even government, what they stand for, what they are doing and more, thus creating a good perception about it.

Public Relations Is Not Advertising

If a company launches a new beer brand and pays for a billboard or a spot on an online blog to announce the launch of this brand, that is advertising. But if the same blog gets one of their writers to go beer-tasting and write a review of the new beer brand for their audience, that’s free publicity, and that’s what public relations is.

Almost always, PR is a result of a newsworthy action by an organisation, made into a story, which they don’t have to pay to get in front of people. It is more trustworthy and impactful too as PR-driven amplification of concepts, activities, and products tend to be more compelling due to the mode of storytelling.

The Impact of PR Can Be Measured

While many people believe it is hard to measure the exact impact of PR on an organisation’s bottom line, it is not impossible. For years, PR efforts did not have any specific analytic metric to measure their success.

And with modern PR not being a cheap endeavour, brands and clients alike began demanding more in terms of measurement of PR output, to justify spending.

Public relations
Photo by AbsolutVision on Unsplash

This development informed the establishment of the International Association for Measurement and Evaluation of Communication (also known as AMEC), a UK-based global trade association for companies that provide social media measurement and traditional media measurement, evaluation and communication research.

While AMEC was founded 24 years ago, it was only until 2012 that the body was incorporated as part of a new coalition to drive standards for PR research and measurement, along with the Council of Public Relations Firms (CPRF), the Public Relations Society of America (PRSA) and other partners.

The body now provides a wide range of functions, most importantly developing the AMEC Quality Assurance Code to help standardise the media evaluation industry.

Furthermore, MuckRack’s 2021 report on ‘The State of PR’ shows that PR professionals are using traditional media metrics, social media impact and even sales numbers to show the value of the work they do. The numbers they ascertain show the importance of good reputation management on the perception of a product or organisation.

July 16 is World Public Relations Day

This year, the world will start a new tradition of celebrating the public relations practice and its impact annually on July 16, 2021. This day will feature events that help everyone better understand PR and how to utilise it to achieve business and communication objectives. This global event shares the same date as the birth of one of the world’s foremost PR practitioners, Ivy Lee — a fitting tribute.

British Airways Now Offers In-Flight Digital Food Ordering System

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British Airways Now Offers In-Flight Digital Food Ordering System

British Airways has today unveiled its new inflight digital ordering platform, giving customers traveling in Euro Traveller the option to order additional snacks and drinks mid-flight, directly to their seat.

The new inflight ordering system will complement the airline’s current ‘Buy Before You Fly’ offering, where customers are encouraged to order from the airline’s full Speedbird Café menu, including items from its Tom Kerridge range, in advance of travel.

The new digital ordering system means that customers who wish to add to an existing pre-order, or for those who did not place an order before travel, can do so at any point during their flight. The proposition will initially be available from July 19 on selected routes before rolling out across other eligible services.

To place an order, customers simply connect to the on board Wi-Fi service free of charge via shop.ba.com, click on the ‘shop’ option for their flight, and a virtual menu will display the range of drinks and snack options on offer. Orders can be made via all major credit and debit cards or through Avios. The service will be available on most short-haul routes operating from LHR.

British Airways Now Offers In-Flight Digital Food Ordering System-Brand Spur Nigeria
British Airways Now Offers In-Flight Digital Food Ordering System-Brand Spur Nigeria

Tom Stevens, British Airways’ Director of Brand and Customer Experience, said: “The feedback we have had from customers who have been able to travel and have ordered from our new Speedbird Café has been extremely encouraging. The Tom Kerridge range, in particular, has gone down a treat.

We know that customers like being able to purchase their food in advance of travel and guarantee their first choice, however, we also understand the importance of an extra cup of tea or a gin and tonic, in the moment.  We think that this new digital ordering proposition, coupled with our pre-purchase option is a winning combination, catering for everyone’s needs.”

British Airways’ Speedbird Café menu is still available to pre-purchase at highlifeshop.com for short-haul flights in Euro Traveller, and the airline will also continue to offer a complimentary bottle of water and snack to all customers on board.

The introduction of in-seat ordering follows the successful launch of ‘Your Menu’ in British Airways’ Heathrow lounges, the new digital table service which requires only the scan of a QR code to enable orders to be delivered to each individual customer.

Safety is at the heart of British Airways’ customer experience proposition and the airline continues to implement a range of protective measures on the ground and in the sky to keep its customers and crew safe.

British Airways Offers Customers New Fast Bag-Drop Before Check-In

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British Airways Offers Customers New Fast Bag-Drop Before Check-In

British Airways has teamed up with AirPortr to create new convenient fast bag drop areas before heading to the departures concourse at British Airways’ London flagship Terminal 5 at Heathrow airport.

With the first drop-off point planned at the Heathrow Express train platforms, customers will be able to quickly and securely drop-off their luggage at peak times**, before travelling bag-free straight through to security. AirPortr’s team seal, secure, and check in bags for customers’ flights, before being collected from the reclaim at their destination.

Customers can also choose to book luggage collections from their home address, from £19*. This service allows travellers to check in their bags from the comfort of their own doorstep, with a vetted delivery driver. AirPortr ensures that once collected, bags are sealed and monitored throughout the delivery process.

Passengers can track their luggage online from the moment it leaves their doorstep, or at the T5 key access areas, right up to the bag being loaded onto the aircraft. Customers using the services also receive digital bag tag receipts.

Tom Stevens, British Airways’ Director of Customer Experience said: “Ahead of July 19, we have been busy investigating and trialling ways to ensure that we can offer our customers the smoothest journey through the airport possible.

We believe this contactless initiative with AirPortr allows our customers to avoid baggage check-in queues and move through the airport without the hassle of carrying luggage, as well as offering the reassurance that we are doing everything we can to ensure the safe delivery of their bags from doorstep to destination.”

Randel Darby, CEO and Founder of AirPortr Technologies said: “We’re proud to be able to play our part in helping British Airways and its customers with the restart of international travel this summer. Seamless, contact-free journeys through the airport are in everyone’s best interests and removing bags from the equation makes this possible for many more people. As the specialist in this space, we’re excited to be working with British Airways once again to lead development of innovative new baggage solutions, for the benefit of customers travelling in a post-pandemic world.”

As well as the AirPortr’s luggage service, British Airways also offers a special twilight baggage drop service the night before travel from Heathrow Terminal 5, when customers are able to deliver their bags to the airport terminal between 4 and 9pm the day before they travel.

The airline is continuing to explore how it integrates other technologies to further streamline the customer experience, including trialling digital travel apps to ensure customers meet the entry requirements for their destination before arriving at the airport. Customers can currently use VeriFLY on all flights to the US, Canada and France as well as on all inbound flights. The airline has also recently announced its involvement in IATA’s Travel Pass. The digital travel solution will begin on British Airways’ flights from Heathrow to Geneva and Zurich.

British Airways’ customers travelling to Cyprus, Germany, Greece, Italy, Spain and Portugal, can now also upload their negative Covid-19 test result and other documentation directly into ba.com for verification before travel.

Elsewhere the airline is trialling new intelligent queuing technology from Qmatic, that enables customers to virtually queue at check-in by pre-booking their slot time in advance of arriving at the airport.

United Capital Grows Profit by 64% to N3.14 Billion in HY 2021 Results

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United Capital Grows Profit by 64% to N3.14 Billion in HY 2021 Results

United Capital Plc, (NSE: UCAP, Bloomberg: UCAP:NL, Financial Times: UCAP: LAG) announced its Unaudited Financial Statements for the period ended June 30, 2021. During the period under review, the Group showed significant growth in key indicators despite the challenging global economic climate.

Brand Spur reports that the company’s total revenue in HY 2021 soared to N6.85bn from N4.45bn in HY 2020, an increase of 65% was recorded in PBT while PAT grew by 64% year-on-year. Total Assets grew by 44% year-to-date driven by a 49.60% increase in Total Liabilities.

HIGHLIGHTS OF THE RESULT – Statement of Profit or Loss:

Year-on-Year Analysis (HY 2021 to HY 2020) reveals the following:

  • Revenue: N6.85 billion in HY 2021, compared to N4.45 billion in HY 2020 (54% growth year-on-year)
  • Operating Income: N6.81 billion in HY 2021, compared to N4.35 billion in HY 2020 (57% growth year-on-year)
  • Operating expenses: N3.11 billion in HY 2021, compared to N2.18 billion in HY 2020 (43% growth year-on-year)
  • Profit Before Tax: N3.74 billion in HY 2021, compared to N2.27 billion in HY 2020 (65% growth year-on-year)
  • Profit After Tax: N3.14 billion in HY 2021, compared to N1.91 billion in HY 2020 (64% growth year-on-year)
  • Annualized Earnings Per Share: 105 Kobo. (2020: 64kobo). This represents 64% growth year on year.

United Capital Plc Raises N15Bn in Series 3 Commercial Paper Issuance

Statement of Financial Position:

  • Total Assets: N320.23 billion, compared to N222.75 billion as at FY 2020 (44% year-to-date growth)
  • Total Liabilities: N296.68 billion, compared to N198.32billion as at FY 2020 (50% year-to-date growth)
  • Shareholders Fund: N23.55 billion, an 3.57% year-to-date decrease relative to FY 2020’s value at N24.43 billion.

Comparing HY 2021 with HY 2020, the following are worthy of note:

  • Total Revenue: United Capital’s total revenue recorded an impressive 54% growth year-on-year driven by strong growth in fee and commission income (+128% year-on-year) and Investment Income (+27% year-on-year) despite a 60% year-on-year decline in net trading income.
  • cost-to-income ratio: The cost-to-income ratio for the period declined by 3.58 percentage points largely attributable to the faster growth in revenue (+54% year-on-year) relative to operating expenses (+43%year-on-year). This indicates a continued improvement in operational efficiency during the period.
  • PBT Margin: United Capital’s Profitability margin also improved with PBT margin gaining 3.58 percentage points to 54.57% for H1 2021 relative to 50.99% for H1 2020 as PBT increased by 65% year-on-year during the period.
  • PAT Margin: PAT margin also improved, gaining 2.81 percentage points despite a higher tax charge of 16.0% for H1 2021, relative to a charge of 15.62% during the same period in 2020.
  • Total Assets: Total Assets grew by 44% year-to-date driven majorly by a significant 366% increase in cash and cash equivalents and 9% growth in trade and other receivables.
  • Total Liabilities: United Capital’s Total Liabilities grew by 49.60% year-to-date driven majorly by 82.92% year-to-date increase in manage funds.
  • Shareholders’ Fund: United Capital’s Shareholders’ funds declined 3.57% year-to-date, with retained earnings down 4.90% due to dividend payout during the period under review.

While commenting on the group’s performance the Group CEO, Mr. Peter Ashade, had this to say:

“I am excited to inform our stakeholders that United Capital Plc recorded a very impressive half-year 2021 result following a record year performance in 2020. We ended the first half of the year on a very high note as reflected in our earnings growth and strong financial performance.

United Capital Plc is in a growth phase, and I must say that our strong financial performance is a testament to our unwavering commitment to increasing value creation for all our clients amid the harsh socio-economic environment and lingering effects of the devastating pandemic.

In the remaining half of the year, we will be focused on our transformation agenda by deepening our value propositions to underserved market segments especially mass affluent and mass market clients, while driving phased automation of our business processes.

Our bespoke affluent segment propositions including private trusts, and wealth management solutions are curated to increase, preserve, and transfer wealth for our fast-growing affluent customer base. Furthermore, our best-in-class digital platforms remain central to our purpose of transforming lives and promoting financial inclusion across Africa by providing easy access to collective investment schemes and microloans while promoting socio-economic development.

Our stakeholders can be assured of our commitment to delivering superior returns. More importantly, we will continue to work with our regulators and other capital market operators on structural reforms to deepen the capital market as the domestic economy continues the path to recovery.

Following the release of our HY 2021 result, we shall be hosting an Investors and Analysts conference call in due course to discuss our performance and the overall outlook for the next quarter of 2021. The date and further details with respect to the conference call would be circulated in due course.”

6 reasons why remittances soared in South Asia during COVID-19 | Learn Why

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6 reasons why remittances soared in South Asia during COVID-19 | Learn Why

Remittance flows are a major source of income for all countries in South Asia, larger than all other capital inflows combined.  In 2019, India received more remittances than any other country in dollar terms, and Nepal ranked third in the world in terms of remittances to GDP at 27 percent.  

Remittances seem to have been even more essential during the COVID-19 pandemic, increasing by 5.2 percent in 2020 in South Asia. But this was somewhat surprising because household surveys globally showed remittances falling, especially in the second quarter of 2020.

So, what happened in South Asia? Many studies indicate that remittances tend to increase when receiving households experience disasters or recessions. However, since the COVID-19 shock was global in nature, both home (recipient) and foreign (sender) countries were impacted.

remittances
Photo: A M Syed / Shutterstock.com

Migrant workers, many of whom- in North America, the EU, and the Middle East- are employed mostly in contact-intensive services sectors were particularly hard hit by COVID-19. 

Remittances seem to have been even more essential during the COVID-19 pandemic, increasing by 5.2 percent in 2020 in South Asia

Our analysis in the World Bank’s latest South Asia Economic Focus shows that several factors help explain the large increase in remittances in 2020. Some also suggest there are great opportunities for policy interventions.

  1. Savings repatriation. A portion of the recorded rise in remittances could represent repatriated savings of emigrants returning home after losing their jobs or not finding new opportunities.  One example: Saudi Arabia granted less than 10,000 work visas per quarter in the first and third quarters of 2020, compared to an average approval rate of over 40,000.
  2. Better capturing of remittance statistics. Remittances could have shifted from informal (unrecorded) to formal (recorded) channels. Part of the increase was just a recording of flows unnoticed in the past in official statistics, not an actual increase. Before COVID-related travel restrictions, a significant share of remittances may have arrived through trips home by migrants or their trusted friends with cash in hand, gifts, etc. This was no longer an option during the pandemic.
  3. Generosity. Dire economic conditions in South Asia could have encouraged greater giving by migrants’ close-knit family and community ties. South Asian countries rank high compared to other middle-income countries on a measure of altruism based on FINDEX. Current giving campaigns by diaspora amid the health crisis in India suggest this altruism is alive and well in 2021!
  4. Financial innovation. The shift to more formal channels was facilitated by the accelerated development of Fintech and digital transfer apps such as G-pay and Alipay, which have made the digital transfer of funds more accessible and cheaper per transaction, leading to an overall increase in remittances.
  5. Tax incentives. Increasingly, policymakers want to encourage greater formal remittances. Pakistan and Bangladesh, which (along with Mexico) saw the highest surge in remittances in a sample of 45 developing countries, had recently introduced new remittance tax incentives.  This one-off change may explain the high growth rate in 2020.
  6. Host country transfers. Some migrants were able to access cash transfers offered by host country governments, which would allow them to send home higher amounts than normal (e.g., stimulus payments in the United States).

For many low-income households in the receiving country, remittances are a key stable tool of poverty alleviation

It’s not clear which effect mattered more, let alone whether the increase in remittances is temporary or permanent. Much will depend on post-COVID migration policies in host countries.

But as in other areas of policy, the pandemic has provided an opportunity to better reap the economic benefits of migrant work. For the host countries, migrants are willing to work hard and consistently if provided with reasonable opportunities, raising growth potential in host countries–many of which are facing long-term national labour supply shortfalls amid lower birth rates and aging populations. For many low-income households in the receiving country, remittances are a key stable tool of poverty alleviation. 

The pandemic has also accelerated innovation and competition in digital platforms. South Asian governments can work with host countries to expand job-matching sites, establish registries, and sponsor ‘fintech’ platforms that will further bring down the cost of digital payments. 

Single-corridor Fintech solutions are giving way to multiple-corridor platforms, which could enable local institutions to access both sender and receiver through digital wallets. Low-hanging fruit for policymakers!

The global recovery is bypassing the poorest countries

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The global recovery is bypassing the poorest countries

The global economy is booming – or so it might seem.

Global growth is surging again, only a year after COVID-19 triggered the deepest recession since World War II.  This year is likely to mark the strongest post-recession rebound in 80 years: global GDP is expected to expand 5.6 percent. 

Growth in advanced economies is expected to reach 5.4 percent—the highest rate in nearly 50 years—powered by rapid vaccination and unprecedented fiscal- and monetary-policy support since the beginning of the pandemic.  Almost all advanced economies will go back to their pre-pandemic per-capita income levels in 2022. In some parts of the world, clearly, the pandemic’s damage is being repaired quickly.

poorest countries
Rwandan women selling eggs to people visiting the Kimironko market in Rwanda’s capital city. Photo: © Sarine Arslanian/shutterstock

Not so in the 74 countries eligible to borrow from the World Bank’s International Development Association (IDA). These are the world’s poorest: they account for roughly half of all people living on less than $1.90 a day.

For them, the global “recovery” is simply nowhere to be seen. In 2021, their growth will be the slowest in more than two decades (except for 2020), reversing years of progress in poverty reduction. For them, the harm will not be repaired quickly. By 2030, one out of every four people here will still be living below the international poverty line.

COVID-19, in short, is doing the greatest harm to precisely the people—in precisely the places—that can least afford it. Even as the wealthiest nations begin to enjoy a return to prosperity and a semblance of normality, the pandemic continues to ravage the poorest countries.  Maternal and child mortality is on the upswing in IDA countries because of reduced access to health services and food. Conflict and instability are also compounding the challenges for some countries.

History shows that misery on this scale inevitably transcends national borders. Tomorrow, heads of state from Africa—which constitutes more than half of all IDA countries—will gather in Abidjan, Côte d’Ivoire, to support a strong and early replenishment of funding for IDA. They will identify key priorities for financing a resilient recovery from the COVID-19 crisis. It’s in the interest of all countries to act swiftly to mobilize the resources needed to support this effort.

“Even as the wealthiest nations begin to enjoy a return to prosperity and a semblance of normality, the pandemic continues to ravage the poorest countries.”

These countries will need significant help to dig out of the COVID-19 recession. In 2020, the pandemic all but halted economic growth in IDA countries and caused per capita income to shrink by 2.3 percent.  Our analysis indicates their growth will lag that of advanced economies by about 2 percentage points a year on average from 2021 through 2023, widening an already large gap between the richest and poorest countries.

A significant gap has also opened up in the health response to COVID-19: because of supply shortages, procurement struggles, and limited financing, the pace of vaccinations has been alarmingly slow. As of July, only three doses of COVID-19 vaccine per every 100 people had been distributed. That amounts to less than one-tenth the rate in advanced economies.

To return to the path to convergence with wealthier economies, IDA countries will need up to $376 billion in additional financing through 2025—above and beyond the $429 billion in regular external financing needs. Many of these countries are already heavily indebted, so the option to borrow is limited.

Given the fiscal constraints of most countries in the pandemic’s wake, overseas development assistance is likely to remain flat or even decline. Under the circumstances, IDA countries increasingly will need support in the form of grants or zero-interest loans.

IDA has proved to be a uniquely effective platform in that respect. For more than 60 years, it has mobilized resources from donors as well as capital markets to deliver tightly focused support in the form of concessional financing to the poorest countries.

Exactly a year ago, backed by $23.5 billion in donor contributions, IDA began a three-year cycle aimed at delivering $82 billion in financing to the poorest countries. Today, more than half that amount has already been committed, necessitating an early replenishment to support these countries from July 2022 through 2025.

This will be a critical period—for extinguishing COVID-19 for good and also for putting the poorest economies on the right track to overcome deep challenges of development confronting them in the long term.

A first step will be to speed up the delivery of vaccines: nations with surplus doses should release them to the poorest countries, and vaccine manufacturers should prioritize available doses for countries that need them most. 

The next step is to put in place an ambitious package of policy reforms—to facilitate the transition of labour and capital to high-growth sectors, lower trade costs, and encourage environmentally sustainable investments—that can deliver a green, resilient, and inclusive recovery.

IDA countries are eager to do both. But they need—and deserve—all the help they can get. As leaders of the Summit on the Financing of African Economies noted recently: “We…share the responsibility to act together and fight the great divergence that is happening between countries and within countries. This requires collective action to build a very substantial financial package, to provide a much-needed economic stimulus as well as the means to invest for a better future.”

Special Flight Deals On Offer As Konga Travel Turns 3

Brand Spur
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Special Flight Deals On Offer As Konga Travel Turns 3

Konga Travel and Tours, Nigeria’s frontline travel booking agency, is three. To celebrate its three years of disruptive entry and outstanding service delivery in the Nigerian travel booking industry, Konga Travel is offering Nigerians a week-long treat of exciting flight deals to exotic destinations around the world.

The Konga Travel 3rd Anniversary Sale, a week-long mega fiesta, runs from Thursday, July 15 until Friday, July 23, 2021.

The specially-discounted and mouth-watering flight deals are available to interested customers on specific days and within specific time periods described by the management of Konga Travel as the ‘win hours’ of 12 pm to 3 pm. Monday and Friday will witness sweet flight deals to the United Kingdom go on sale while Tuesday and Wednesday will see tickets to Dubai up for grabs. On Saturday and Sunday, Konga Travel will be offering deals to the United States.

Konga Travel

The tickets are available for purchase online at www.travel.konga.com with interested shoppers are also advised to book and pay with their cards for immediate confirmation.

Eric Nana, Vice President, Konga Travel, says the offers are unmatched anywhere else, even as he described the initiative as a gesture aimed at appreciating Nigerians for their support, patronage and loyalty to the brand.

‘‘It has been three years of unbelievable growth and we are grateful to Nigerians for believing in us and supporting us. We have recorded so many outstanding strides within the short period since our entry into the market and these would have been impossible without our loyal customers.

‘‘So, we have decided to say a big thank you to them.

‘‘The flight deals on offer have been carefully selected. The prices can be described as a giveaway and I wish to reiterate that the offers are limited, so bookings will be treated on a first-come, first-served basis. The deals go live from 12 pm – 3 pm for this week-long fiesta and card payment is advised once you book on our website to aid swift confirmation,’’ he disclosed.

The management of Konga Travel will also be hosted by four airlines which the team is expected to pay courtesy visits to as part of its third-anniversary celebration.

Having emerged on the scene barely three years ago, Konga Travel –  which was recently named the Most Innovative Agency by the global airline, Virgin Atlantic, as well as Travel Agency of the Year at the 2020 Beacon of ICT (BoICT) Awards – has distinguished itself.

Within a short space of its existence, the company has grown more than 25% on a month-on-month basis, acquired all the requisite and major travel certifications and rolled out multiple physical store locations nationwide.

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