Ecobank Nigeria announces the pricing of its Senior Unsecured $300M Bond.

Esan Bolaji
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Ecobank Nigeria announces the pricing of its Senior Unsecured $300M Bond.

February 11, 2021 – Ecobank Nigeria, a wholly-owned subsidiary of Ecobank Transnational Incorporated (ETI), the parent company of the Ecobank Group, announced that it has successfully priced its USD 300 million bond issuance maturing in February 2026, with the settlement of the bond to take place on 16 February 2021.

The fixed-rate, US dollar-denominated bond, with a tenor of 5 years, carries a coupon rate of 7.125% and will be listed on the London Stock Exchange. It is accompanied by an Issuer Rating of B- from Fitch Rating Agency and S & P., The coupon/yield represents the lowest ever coupon/yield achieved by a Nigerian financial institution for a benchmark bond transaction.

Ecobank Bags Best Retail Bank In Nigeria 2020 at Asian Banker Awards Brandspurng

At the peak of marketing the transaction, the issue was over 3 times oversubscribed, with significant interest from international investors. The transaction opened with Initial Price Thoughts (‘IPT’s’) of 7.75% and finally tightened to close at 7.125% on the back of robust demand.

The strength and depth of the book demonstrated global investors’ strong appetite for the Ecobank franchise in Nigeria, a testament to the strength of the Ecobank Group.

This transaction is the first non-sovereign bond from Africa in 2021 and is a milestone capital raise for the banking sector in Nigeria, giving Ecobank access to global debt capital markets, and more favourable credit terms, commensurate with its strong financial position and robust capital structure.

For international investors, it represented an attractive option to gain exposure to Nigeria.

This transaction followed a series of virtual global investor calls, with a number of blue-chip locals, regional and international financial institutions, led by Citi, Mashreq, Renaissance Capital and Standard Chartered Bank as Joint Lead Managers and Bookrunners.

Commenting on the issuance, Mr. Patrick Akinwuntan, Managing Director of Ecobank Nigeria, said:

“Despite the challenging global environment owing to the COVID-19 pandemic, and on the back of a successful NGN 50bn Tier 2 issuance in December 2020, ENG was able to successfully issue and price Nigeria’s first 2021 senior unsecured 5-year bond transaction.

Ecobank Nigeria, through this issuance, is being proactive in optimizing its capital structure as it continues to drive its medium-term growth strategy of establishing itself as a leading facilitator of pan-Africa and international trade and payments.”

Mr. Akinwuntan continued,

“I would like to extend my appreciation to our regulators, the Central Bank of Nigeria, for their timely support and continuous guidance, in granting necessary regulatory approvals.”

He further added:

“We believe that our capital raising activities are key steps forward towards strengthening ENG beyond the regulatory ratios in addition to diversifying ENG’s medium-term financing sources. ENG is poised for continued growth in the Nigerian financial services industry.”

How COVID-19 and school closures are threatening women’s economic future

Brand Spur
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How COVID-19 and school closures are threatening women’s economic future

COVID-19 is threatening the gains being made in girls’ education. Urgent action is needed to ensure that girls and women can realize the returns to their schooling. 

Returns to schooling for women are high – so says Bono and the research. A couple of years ago, in an essay in Time magazine Bono wrote: “Give girls just one additional year of schooling and their wages go up almost 12 percent.”

He said the same thing a year before that at the Munich Security Conference. The source of that quote was a 2014 World Bank paper and a recent update confirms this is still the case. At the same time, girls are staying in school longer and learning more. However, these gains are at risk as COVID-19 is presenting a crisis within a crisis for girls’ education.

How COVID-19 and school closures are threatening women's economic future BRANDSPURNG1
Sierra Leone, Children in a classroom, ready to learn.

On average, one additional year of schooling increases women’s returns to education by 12 percent compared with 10 percent for men. The gap in favour of women has increased by a percentage point over the last decade.

Returns at the primary level are about the same for men and women but then diverge at the secondary level – 9 percent for women versus 7 percent for men – and at the tertiary level – 17 percent for women and 15 percent for men.

These returns are higher for women than for men in all economies and all regions. At the higher education level returns have increased overall, but particularly for women.

How COVID-19 and school closures are threatening women's economic future BRANDSPURNG

The longstanding disadvantage for girls in terms of enrollment has been declining over time, which has led to a reversal of the gender gap in educational attainment. Nevertheless, in terms of the number of expected years of schooling, girls are still disadvantaged in some contexts, including in South Asia and Sub-Saharan Africa, and in fragile and conflict-affected states and low-income countries.

The quality of education received by boys and girls is an important determinant of their access to higher levels of schooling and their future earnings. Girls have caught up to boys in many dimensions in recent decades and, in high- and middle-income countries, now outperform boys in terms of learning achievement.

This has led to a “reverse gap” where girls outperform boys in both enrollment rates and learning outcomes – a female learning premium. Nevertheless, girls’ outcomes remain lower in some contexts, including in low-income countries.

COVID-19 may put a temporary halt to this progress. COVID-19-induced school closures may slow or reverse these gains and may further prevent girls and women from realizing the potential returns – representing a “hidden” future cost.

The World Bank is forecasting lower levels of schooling, learning, and future earnings because of school closures due to COVID-19. Learning poverty is expected to increase significantly. A growing body of studies from high-income countries including Belgium, Netherlands and the United Kingdom have already found losses of learning as well as growing inequality.

For women and girls, who are already being significantly negatively affected by the pandemic, there is a particular risk in the realm of education. The pandemic puts girls at an increased risk of dropping out of school, being vulnerable to domestic violence and other Gender-Based Violence (GBV) threats, facing child marriage and early pregnancy and being exploited as child labour.

UNESCO has projected that 11 million girls may never return to school following the pandemic. As we learned during the Ebola crisis in Sierra Leone, girls are more at risk than boys of missing out on educational opportunities as a result of school disruptions, which can put them at a persistent disadvantage in terms of accumulating human capital.

Predictions vary as to how many girls will drop out of school and the extent to which learning poverty might increase more for girls than for boys, but the risk of long-lasting adverse effects is high.

Before COVID-19, returns to education were expected to increase for many more women in the decades to come as today’s students entered the labour market. Returns of 12 percent as predicted by the WB analysis (and Bono) are huge in terms of lifetime earnings, but if they are significantly reduced by the combined effect of school closures, COVID-19 illnesses and death, and recession, then advances for women will be derailed for decades ahead.

We know that, during crises, returns to higher education tend to increase, and if women are unable to access higher education because of the pandemic, then they will not be able to realize these higher returns.

Urgent action is needed to prevent further school closures, mitigate or reverse learning losses, and get girls back in school. For many girls, especially the youngest, the learning lost during the pandemic can be limited and even reversed by improving distance education during school closures and by implementing learning recovery programs such as Teach to the Right Level and tutoring, which the evidence has shown to be effective.

However, for older girls, the risk of dropping out is real, and they may leave school before their learning losses can be recovered (a study of the impact of school closures on high school students in Milwaukee found this to be the case).

The risk of dropping out needs to be addressed right away by providing extra support to students and their families to ensure that they stay in school, making sure to target girls as being at a high risk of dropout and learning losses.

The evidence on what interventions are effective at getting girls in school and continuing to learn shows that initiatives that increase access and learning for all students benefit girls.

Research highlights that the most effective interventions to improve access are those that reduce the cost of schooling. For improving learning outcomes, interventions that support improvements in pedagogy have been some of the most effective in improving girls’ learning outcomes.

Targeted support may also be needed to overcome constraints specific to girls, especially adolescent girls. For example, the Keeping Girls in School Program in Zambia provides cash transfers to families of adolescent girls so they can afford to keep their daughters in school and has set up an early warning system to identify girls at risk of dropping out and of other vulnerabilities.

It is critical that we prevent the re-emergence of a learning gap between girls and boys during the COVID-19 pandemic and prevent all students from dropping out. If they do drop out, it is imperative to give them enough support so that they can find ways to continue their education by investing in an educational approach based on lifelong learning.

 

Mixta Real Estate PLC Quotes Series 33 Commercial Paper on FMDQ Exchange

Esan Bolaji
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Mixta Real Estate PLC Quotes Series 33 Commercial Paper on FMDQ Exchange

Despite the underperformance of the Nigerian real estate sector last year, as affected by the negative impact of the COVID-19 pandemic, operators in this sector are optimistic that there could be an early rebound in 2021.

However, affordability continues to be a major limiting factor to homeownership at the bottom of the income pyramid in Nigeria due to the high inflation rate and cost of building materials.

As the leading organiser for the Nigerian debt capital market (DCM) and in its role as a catalyst for infrastructure development, FMDQ Securities Exchange Limited (“FMDQ Exchange” or “the Exchange”) provides a choice platform for the registrations, listings, quotations, and trading of debt securities, towards empowering the Nigerian financial market.

In this regard, the Exchange is pleased to announce the approval of the quotation of the Mixta Real Estate PLC ₦1.66 billion Series 33 Commercial Paper (CP) under its ₦20.00 billion CP Issuance Programme.

FMDQ Hosts webinar on Leveraging the Nigerian Debt Capital Markets for Infrastructure Development
FMDQ | www.brandspurng.com

The quotation of the Mixta Real Estate PLC ₦1.66 billion Series 33 CP on FMDQ Exchange is another testament of FMDQ’s leadership and resilience in providing the required support to governments, corporates and individuals through the delivery of innovative and dependable capital market solutions.

The CP market has continued to prove a viable alternative for corporate entities in diverse business areas looking to secure short-term funding for working capital requirements and other capital expenditures. It avails them with numerous opportunities to carry on with key business activities which contribute to the revitalisation of the Nigerian economy despite the pandemic.

Mixta Real Estate PLC (“Mixta”), a subsidiary of Mixta Africa, is a leading real estate development company in Nigeria. It has a strong track record and diverse real estate portfolio, with operations spanning the residential, commercial, and retail sectors of the Nigerian real estate industry.

Mixta has successfully delivered close to 4,400 real estate assets, comprising homes, plots and retail outlets to end-buyers and continues to seek innovative solutions to activate development finance for affordable housing in Nigeria.

The Mixta CP, like all other securities listed, quoted and traded on the FMDQ Exchange platform, shall be availed global visibility through FMDQ Exchange’s website and systems, transparency through its inclusion in the FMDQ daily Quotations List, governance and continuous information disclosure to protect investor interest, credible price formation amongst other benefits derived from its preferred admission to the FMDQ Exchange platform. 

FMDQ Group is Africa’s first vertically integrated financial market infrastructure (FMI) group which provides a one-stop platform for the seamless and cost-efficient execution, risk management, clearing, settlement, depository and data and information services for the Nigerian financial market, through its subsidiaries – FMDQ Exchange, FMDQ Clear Limited, FMDQ Depository Limited and FMDQ Private Markets Limited.

PepsiCo Reports 4.8% Rise In 2020 Revenue

Esan Bolaji
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PepsiCo Reports 4.8% Rise In 2020 Revenue

February 11, 2021 – PepsiCo, Inc. today reported results for the fourth quarter and full-year 2020.

“We ended the year on a strong note with our global beverage business having accelerated while our global snacks and food business remained resilient in the fourth quarter.

Our results were indicative of the strength and resilience of our highly dedicated employees, diversified portfolio, agile supply chain and go-to-market systems and strong marketplace execution even in the face of difficult COVID-19 challenges,” said Chairman and CEO Ramon Laguarta.

Pepsi-BRANDSPUR NIGERIA

“Moving forward, we remain committed to supporting our employees, customers and communities. In addition, we will continue to focus on winning in the marketplace and investing to build competitive advantages that will enable us to become an even Faster, Stronger and Better organization.”

“For 2021, we are planning for our organic revenue and core constant currency EPS growth to be consistent with our long-term objectives. We have also announced a 5 per cent increase in our annualized dividend, starting with the June 2021 dividend payment.”

Discussion of Fourth Quarter 2020 Reported Division Results:

In addition to the reported net revenue performance as set out in the tables on pages 3 and A-7, reported operating results were driven by the following:

Frito-Lay North America

Operating profit decreased 4%, primarily reflecting certain operating cost increases and a 5-percentage- point impact of higher restructuring and impairment charges, partially offset by productivity savings and net revenue growth.

Additionally, the charges are taken as a result of the novel coronavirus (COVID-19) pandemic negatively impacted operating profit performance by 2 percentage points.

Quaker Foods North America

Operating profit grew 17%, primarily reflecting net revenue growth, productivity savings and lower advertising and marketing expenses, partially offset by certain operating cost increases. Additionally, the charges taken as a result of the COVID-19 pandemic reduced operating profit growth by 2 percentage points.

PepsiCo Beverages North America

Operating profit grew 19%, primarily reflecting net revenue growth, productivity savings, lower advertising and marketing expenses and a 6-percentage-point impact of lower commodity costs.

These impacts were partially offset by certain operating cost increases, including incremental information technology costs, a 3-percentage-point impact of a prior-year gain on an asset sale and a 2-percentage-point impact of the charges taken as a result of the COVID-19 pandemic. Acquisitions contributed 10 percentage points to operating profit growth.

In the fourth quarter of 2020, we received notice of termination without cause from Vital Pharmaceuticals, Inc., which would end our distribution rights of Bang Energy drinks, effective October 24, 2023.

Latin America

Operating profit decreased 7%, primarily reflecting certain operating cost increases and a 15-percentage- point impact of higher commodity costs largely due to transaction-related foreign exchange, partially offset by productivity savings, effective net pricing and a 4.5-percentage-point impact of certain tax credits in Brazil.

Additionally, unfavourable foreign exchange and the charges taken as a result of the COVID-19 pandemic each negatively impacted operating profit performance by 10 percentage points.

Europe

Operating profit decreased 10%, primarily reflecting certain operating cost increases, a 10-percentage- point impact of higher commodity costs due to transaction-related foreign exchange and a 4.5- percentage-point impact of certain tax charges.

These impacts were partially offset by organic volume growth and productivity savings. Additionally, the charges are taken as a result of the COVID-19 pandemic and unfavourable foreign exchange negatively impacted operating profit performance by 5 percentage points and 4 percentage points, respectively.

Africa, the Middle East and South Asia

Operating profit grew 80%, primarily reflecting productivity savings, a 27-percentage-point contribution from the Pioneer Food Group Ltd. (Pioneer Foods) acquisition, organic volume growth, a 20-percentage- point impact of lower restructuring and impairment charges, lower advertising and marketing expenses and a 3-percentage-point impact of lower commodity costs.

These impacts were partially offset by certain operating cost increases, unfavourable net pricing and a 7-percentage-point impact of the settlement of a legal claim in the prior year. Additionally, the charges taken as a result of the COVID-19 pandemic reduced operating profit growth by 7 percentage points.

Asia Pacific, Australia and New Zealand and China Region

Operating profit grew 7%, primarily reflecting productivity savings, net revenue growth, an 8-percentage- point impact of favourable settlements of promotional spending accruals compared to the prior year and a 6-percentage-point impact of lower restructuring and impairment charges.

These impacts were partially offset by certain operating cost increases and higher advertising and marketing expenses. An operating loss for Hangzhou Haomusi Food Co., Ltd. (Be & Cheery) and inventory fair value adjustments and merger and integration charges associated with the Be & Cheery acquisition reduced operating profit growth by 5 percentage points and 3 percentage points, respectively.

Dividend Increase

The Company today announced a 5 percent increase in its annualized dividend to $4.30 per share from

$4.09 per share, effective with the dividend expected to be paid in June 2021. This represents the Company’s 49th consecutive annual dividend per share increase.

Guidance and Outlook

The Company provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange translation and commodity mark-to-market net impacts.

For 2021, the Company expects:

  • A mid-single-digit increase in organic revenue;
  • A high-single-digit increase in core constant currency EPS;
  • A core annual effective tax rate of approximately 21 percent; and
  • Total cash returns to shareholders of approximately $5.9 billion, comprised of dividends of approximately $5.8 billion and share repurchases of approximately $100 million. We have recently completed our share repurchase activity and do not expect to repurchase any additional shares for the balance of 2021.

In addition, the Company expects a 1 percentage-point foreign exchange translation tailwind to benefit reported net revenue and core EPS growth based on current market consensus rates.

Heineken 2020 Sales Volume Fell, Nigeria Recorded Double-Digit Growth

Esan Bolaji
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Heineken 2020 Sales Volume Fell, Nigeria Recorded Double-Digit Growth

Heineken N.V. announces its 2020 full-year results

Highlights:

  • Net revenue (beia) organic growth -11.9%; per hectolitre -2.4%
  • Consolidated beer volume -8.1% organically
  • Heineken® volume resilient -0.4%
  • Operating profit (beia) organic growth -35.6%, margin 12.3% (-455 bps)
  • Net profit (beia) €1,154 million, -49.4% organically
  • Diluted EPS (beia) €2.00 (2019: €4.38)

EverGreen strategic review update:

  • Deliver superior and profitable growth in a fast-changing world
  • Placing consumers and customers at the core, enhance our portfolio and strengthen our digital route to consumer
  • Raise the bar on sustainability and on our people agenda
  • Step up in productivity starting with €2 billion gross savings through 2023to fund our journey
  • Restore operating profit margin (beia) to around 17% by 2023 and gear for operating leverage beyond

TOP-LINE PERFORMANCE

COVID-19 continues to have a material impact on our top-line performance, affecting all geographies and markets as governments across the world taking measures to mitigate the contagion including restricted population movement, social distancing, outlet closures and temporary lockdowns of production facilities.

Heineken reports net profit down 76 percent in Q3, premium portfolio grew by more than half in Nigeria Brandspurng2
Photo by Jinen Shah

Net revenue (beia) declined 11.9% organically, with a 9.8% decrease in total consolidated volume and a 2.4% decrease in net revenue (beia) per hectolitre due to country mix effects and non-volume related revenue decline.

The underlying price mix on a constant geographic basis was broadly flat for the full year. Currency translation negatively impacted net revenue (beia) by €1,259 million or 5.3%, mainly driven by the Brazilian Real, the Mexican Peso, the Nigerian Naira, the Russian Rouble and the South African Rand.

The second half of the year benefited from a good summer with some easing of operating constraints including in the European on-trade.

Net revenue (beia) decreased by 7.8%. Total consolidated volume declined 6.4% and net revenue (beia) per hectolitre was down 1.5% (2H19: 3.6% up). Underlying price mix was up 1.0% (2H19: 3.2%) driven by Brazil, Mexico, Ethiopia and Nigeria more than offsetting the negative channel mix in Europe.

Consolidated beer volume decreased 8.1% organically for the full year. Our premium beer volume outperformed the broader portfolio in the majority of our markets with a mid-single-digit decline overall. The fourth quarter reflects the impact of renewed restrictions in all regions, especially in Europe with the closing of the on-trade.

Heineken® volume declined marginally by 0.4%, significantly outperforming the total market and our overall beer portfolio. The brand grew double-digits in 25 markets including Brazil, China, the UK, Poland, Singapore, Nigeria, Germany, Chile, Ivory Coast, Laos, and South Korea.

Heineken® 0.0 grew strong double-digits with growth in all regions and outstanding performance in Brazil, Mexico, and the USA. Heineken® 0.0 is now rolled-out in 84 markets.

The international brand portfolio had a mixed performance across brands and markets. Desperados grew double-digits driven by France, Poland, the Netherlands and Ivory Coast. Birra Moretti grew slightly as strong growth in the UK and Romania more than offset the decrease in Italy.

Tiger volume was soft in Vietnam, outperforming the total market, and the brand grew strongly in Nigeria and South Korea. Amstel declined driven by Europe and South Africa despite double-digit growth in Brazil and Mexico. Sol declined driven by Mexico but grew double-digits in the UK, Chile and Argentina. Edelweiss declined in Europe but showed strong growth in South Korea.

Cider volume declined in the high-teens to 4.6 million hectolitres (2019: 5.6 million), due to pub closures in the UK and alcohol sales restrictions in South Africa. Strongbow grew double-digits in Mexico and Russia.

Low & No-Alcohol (LONO) volume decreased slightly, delivering 14.0 million hectolitres (2019: 14.1 million) and outperforming the overall portfolio in most of our markets. The no-alcohol portfolio grew mid-single-digit, driven by Heineken® 0.0 globally and Maltina in Nigeria.

We entered the Hard Seltzer category with Pure Piraña in Mexico and New Zealand in September and more launches will come in 2021. In Mexico, Pure Piraña is the first nationwide seltzer brand available across all channels, complemented by Amstel Ultra Seltzer, launched in January 2021. In the USA, together with Arizona we announced the launch of AriZona SunRise Hard Seltzer in 2021.

Our e-commerce platforms showed strong growth as digitalisation trends accelerated, consumers changed shopping patterns and customers adapted to new realities.

  • Beerwulf, our direct-to-consumer platform in Europe, nearly doubled its revenues. All markets grew strongly, most notably the UK where revenues tripled. Online sales of our home-draught systems the Sub and Blade grew in the mid-double-digits.
  • All together our direct-to-consumer platforms Beerwulf, Six2Go and Drinkies tripled the number of orders from consumers in the year.
  • We continued to deploy our business-to-business digital platforms at speed. We are operational in 25 markets covering more than €1 billion of our net revenue as we connect more than 100,000 customers in traditional channels.
  • Our platforms also include digital connections to cashier systems and on-trade equipment, including fridges and draught beer columns. By the end of 2020, we connected to more than 130,000 customers globally.

OPERATING PROFIT PERFORMANCE

Operating profit was materially impacted by the negative consequences of COVID-19, partially offset by significant mitigation actions.

Operating profit (beia) declined 35.6% organically, with all regions in decline. Operating profit declined 78.6%. More than 90% of the organic operating profit (beia) decline was driven by Europe, Mexico, South Africa and Indonesia. Currency translation negatively impacted operating profit (beia) by €129 million or 3.2%, mainly driven by the Brazilian Real and the Mexican Peso.

The operating profit decline in Europe was amplified by an over 40% volume decline in the on-trade. HEINEKEN has a strong position in the on-trade channel across Europe, including wholesale in several markets and pubs in the UK.

In Mexico, beer volume declined in the mid-teens. Operations were suspended throughout most of the second quarter and faced operating restrictions throughout the year.

In South Africa, total volume declined in the thirties as our strong momentum was disrupted by a COVID-related suspension of all alcohol companies in the second quarter, a ban on the sale of alcohol during July and August, and impacts to various supply chain expansion projects that constrained our capacity in the second part of the year.

In Indonesia, total volume declined in the forties given the impact of lockdowns throughout most of the year and the absence of international tourism in the key Bali region.

Input costs per hectolitre increased by around 10% essentially driven by the negative impact of channel and product mix and to a lesser extent by transactional currency effects. Commodity prices had a slight positive impact.

Other incremental expenses included higher depreciation from previous year investments, provisions for credit losses, safety & protection equipment, donations and other forms of support to our customers and communities.

We implemented cost mitigating actions throughout the year, reducing all discretionary expenses, pausing projects, and cancelling senior managers’ bonuses. These actions resulted in a net organic reduction of circa €800 million of other expenses (beia). This excludes the effects on input costs, goods for resale, transport and depreciation. Most of these cost mitigation actions are by nature non-repeating benefits.

TOTAL DIVIDEND FOR 2020

The Heineken N.V. dividend policy is to pay a ratio of 30% to 40% of full-year net profit (beia). For 2020, a total cash dividend of €0.70 per share, representing a decrease of 58.3% (2019: €1.68), and a payout ratio of 34.9%, in the middle of the range of our policy, will be proposed to the Annual General Meeting on 22 April 2021 (“2021 AGM”).

If approved, the full dividend will be paid on 6 May 2021, as no interim dividend was paid during 2020. The payment will be subject to a 15% Dutch withholding tax. Due to the reported net loss in 2020, the proposed dividend will be paid out of the equity reserves. The ex-dividend date for Heineken N.V. shares will be 26 April 2021.

Insider Dealing: Heineken Brouwerijen B.V buys more stakes in Nigerian Breweries Plc
heineken lagos fashion week | www.brandspurng.com

2021 OUTLOOK STATEMENTS

Overall the COVID-19 pandemic and governments’ measures continue to have a material impact on our markets and business. 2021 started with many restrictions across our markets, including on-trade closures and restrictions to travel.

In Europe in particular, we estimate that at the end of January 2021, less than 30% of on-trade outlets were operating. Product and channel mix is expected to continue to adversely impact results, especially in Europe.

According to the World Health Organisation, the effect of vaccines on the pandemic will depend on several factors including their effectiveness, speed of their approval, manufacturing and delivery and the number of people getting vaccinated. As such, we expect the pandemic to continue to impact our business in the first half of 2021 and market conditions to gradually improve in the second part of the year.

Input costs per hectolitre are expected to be volatile due to channel and product mix effects. Based on our hedged positions for 2021, we expect a significantly higher negative transactional currency impact on input costs.

Home consumption drives growth in Arla’s brands during pandemic

Esan Bolaji
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Home consumption drives growth in Arla’s brands during pandemic

In a year of volatility and global disruption due to COVID-19, the farmer-owned European dairy cooperative Arla quickly reshaped the business to meet the spike in-home consumption and high demand for trusted household dairy products while offsetting negative impacts in other sectors.

In 2020 Arla grew global branded sales volumes with 7.7 percent due to the cooperative’s global portfolio of popular brands such as Arla® and Lurpak® and strong market positions. Despite revenue losses in Food Service and Global Industry Sales, total group revenue was EUR 10.6 billion (compared to EUR 10.5 billion in 2019.)

Due to the strong financial position, Arla’s Board of Directors has proposed to the Board of Representatives to pay out 1.75 eurocent per kg milk for the supplementary payment which is 0.75 eurocent higher than the standard 1.00 eurocent per kg milk.

Arla Dano World Milk Day 2019 milk consumption brandspur nigeria5

Arla’s pre-paid milk price to farmer-owners was kept relatively stable compared to the volatility seen across the dairy industry. However, 2020 was a challenging year for many Arla farmers due to tough cost environments and added complexities on farms.

Arla’s performance price – which measures the value Arla creates per kilogram of owner milk – was 36.9 Eurocent in 2020 compared to 36.6 Eurocent in 2019.

“The Arla pre-paid milk price to our farmer-owners has been kept at a competitive and relatively stable level throughout 2020 compared to our peers, and the Board of Directors is very pleased to be able to also propose a higher supplementary payment to the Board of Representatives due to our cooperative’s 2020 results.

That said, we fully recognise that farmers are facing increasing production costs and additional requirements. This is a challenge across Europe that needs to be met by actions across the dairy industry and its wider stakeholder group,” says Arla Foods Chairman Jan Toft Nørgaard.

In-home consumption drove demand

As consumers were forced to stay home for much of the year, the number of family meal occasions increased significantly, and many consumers turned to cooking and baking. This boosted sales of Arla’s global brands Lurpak®, Arla® and Puck® that delivered strategic branded volume growth of 14.6 per cent, 3.0 per cent and 11.7 per cent respectively.

“This is, without doubt, the most challenging crisis Arla has ever operated within. Due to the cooperatives agility, we were able to reshape our business and redirect large milk volumes almost overnight to meet the increased demand for our quality household dairy products, while minimizing the negative impact from other market sectors such as food service.

“Thanks to our farmer-owners and our employees we have been able to play our part in maintaining food supply and I am extremely proud that we have been able to provide safe working conditions for our people, of the service levels we have provided to our customers and of the results we have delivered,” says Arla Foods CEO Peder Tuborgh.

The significant increase in retail offset the overall declines in Arla’s foodservice and global industry sales business. Foodservice sales saw an initial drop of 45 per cent in the Spring of 2020, then quickly regained momentum over the summertime, weathering the second and third waves of COVID-19 with further shutdowns of workplaces and across the hospitality sector. Arla’s branded foodservice business in Europe was overall 12 per cent down from 2019.

Growth in commercial segments

Arla focuses its activities on four commercial segments. Despite global logistics and supply chain challenges due to COVID-19, both the Europe and International segments strengthened the quality of business, gained market positions and grew core brands due to retail demand and e-commerce sales in 2020.

Arla Europe represents 60 per cent of the business and delivered overall branded volume-driven growth of 5.9 per cent driven mainly by Lurpak®, Arla® and Starbucks® and with highest branded growth in the UK, Germany and the Netherlands. Overall Europe revenue increased to EUR 6,413 million compared to EUR 6,353 million in 2019.

Arla International represents 19 per cent of the business and delivered branded volume-driven growth of 11.6 per cent driven mainly by Lurpak®, Puck® and Starbucks®. Particularly the MENA region delivered branded volume-driven growth of 20.1 per cent. Overall revenue increased to EUR 1,975 million compared to EUR1,802 million last year.

Arla Foods Ingredients (AFI) a 100 per cent owned subsidiary of Arla, increased the value-add ingredient business driven by growth in the Pediatrics and Medical Nutrition segments. The food segment and Child Nutrition Manufacturing business delivered slightly below 2019 levels due to COVID-19 impact and delays. Overall AFI revenue increased to EUR 716 million compared to EUR 710 million in 2019.

As a result of increased sales in retail, Global Industry Sales, (formerly Trading), which is business-to-business commodity sales, experienced weakened prices along with a decrease in the overall share of milk sold by 2.3 percentage points compared to 2019. Revenue, therefore, decreased to EUR 1,541 million from EUR 1,662 million.

Transforming the business despite the crisis

Arla’s transformation and efficiencies programme Calcium secured savings of EUR 130 million, primarily from supply chain efficiencies and optimized marketing spend, but also due to reduced expenses as many office employees worked from home. The accumulated Calcium savings are now EUR 354 million since the launch in 2018 with the end goal of EUR +400 million in sustainable savings by the end of 2021.

“Over the last three years, we have transformed the way we work, spend and invest across Arla. This transformation was put to the test when the COVID-19 crisis impacted the world, but today it is very clear that the work the business has done through Calcium helped us to successfully handle the sudden and very challenging disruptions such as COVID-19.

It has shown how far we have come and how the transformation has become a natural part of our DNA and our ways of working,” says CFO Torben Dahl Nyholm.

Arla continues the sustainability journey

In 2020 Arla took further sustainability action across its value chain, including packaging, moving from fossil to renewable energies in its supply chain and piloting new technologies in its logistics fleet. The most prominent step forward was the implementation of Climate Checks on 93 per cent of all Arla farms across seven European countries.

The climate data delivered by farmer-owners creates one of the world’s biggest externally verified climate datasets on milk production and will help farmers benchmark and inspire each other in their work to lower their emissions even more.

“Arla’s farmer-owners are already among the most climate efficient in the world and we are committed to creating a sustainable future for dairy farming. The Climate Checks programme creates a solid foundation for us to accelerate our transition and I am very proud that so many of my colleagues are participating in this very important work and together are creating such strong results,” says Chairman Jan Toft Nørgaard.

Expectations for 2021

2021 is expected to be another challenging year as COVID-19 continues to impact the global dairy industry, the global economy and people’s livelihoods around the world. Arla expects core brands to continue to deliver branded volume growth, but at a more modest rate than in 2020.

2021 will also be the first year with the new Free Trade Agreement between the EU and the UK, which removed significant risk to Arla. The business has a range of plans in place and is well prepared to handle the non-tariff barriers in the new agreement.

Arla plans to invest EUR 700 million in 2021 driven by structural investments, Calcium initiatives and Arla’s sustainability agenda. Major projects include the completion of the powder tower in Pronsfeld, Germany, continuing the mozzarella capacity increase project in Branderup, Denmark, and upgrades to the production site in Bahrain, as well a continuation of strategic investments in AFI.

“2021 will be another year of uncertainty and global disruption as the COVID-19 crisis stretches into the year and the first signs of a recession are starting to show. We need to be vigilant in ensuring the health and safety of our people and farmer-owners while securing business continuity and growth.

But it is also a year where we hopefully will see the world open up again as vaccines are rolled out so I am cautiously optimistic for 2021,” says CEO Peder Tuborgh.

Group revenue outlook for 2021 is expected to be EUR 10.3-10.6 billion, net profit share will be in the range of 2.8 to 3.2 per cent, and leverage is expected to be in the lower end of the target range of 2.8-3.4.

Arla will publish its Annual report and CSR report on February 25th.

ANNUAL RESULTS 2020 KEY FIGURES:

Group revenue: EUR 10.6 billion

Performance price: 36.9 eurocent/kg

Milk volume: 13.7 billion kg

Net profit share: 3.2 per cent

Calcium savings: EUR 130 million

Leverage: 2.7

STRATEGIC BRANDS

Overall strategic branded volume-driven revenue growth

7.7 per cent

Lurpak®

The main driver of the volume-driven branded growth, delivering 14.6 per cent growth. Lurpak® increased revenue to EUR 638 million compared to 588 million in 2019.

Arla ®

Strengthened its sustainability trait by introducing carbon compensated milk in Denmark, launching carbon reduced and recyclable packaging solutions across markets and continued to build on its premium organic position in China and the Middle East. Arla® delivered 3.0 per cent volume-driven brand growth and increased revenue to EUR 3,116 million compared to EUR 3,033 million in 2019.

Puck®

Arla’s strong Middle East brand. During lockdown Puck® quickly adjusted its marketing and communications to successfully focus more on the inspiration for in-home cooking. Puck® grew brand share and delivered 11.7 per cent volume-driven brand growth and a revenue increase to EUR 427 million compared to EUR 363 million in 2019.

Castello®

Ramped up its digital content focusing on millennials. The brand more than tripled the number of consumer engagements and delivered a branded growth of 2.2 per cent. Due to lower prices revenue de-creased slightly to EUR 177 million compared to EUR 179 million in 2019.

Milk Based Beverages (MBB)

Includes strong brands such as Cocio®, Matilde® and the licensed brand Starbucks®. Despite de-cline in on-the-go products due to lockdowns, Starbucks® delivered volume-driven brand growth of 27.9 per cent. Overall revenue for MBB increased to EUR 232 million compared to EUR 207 million in 2019.

Are cryptocurrencies the top-performing asset class of the decade or the world’s greatest bubble?

Esan Bolaji
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0
Are cryptocurrencies the top-performing asset class of the decade or the world’s greatest bubble?

In the early 1990s, when the internet was still in its infancy, there was some hesitation in adopting this new and unfamiliar technology with limited use in our personal and work lives.

Today, the internet is the backbone of global industries and fuels the $11.5trn digital economy. The internet is now so native to us that it’s impossible to disentangle it from our everyday lives.

Top 3 Cryptocurrencies Hit $273.5bn in Market Cap, an 83% Jump in 9 Months
Photo by Bermix Studio

In my view, the potential of blockchain and cryptocurrencies are the same: some view them with scepticism, others with ignorance, but no one can question their growth. Cryptocurrencies have been the top-performing asset class over the last decade with their total market value increasing from $193bn in January 2020 to over $1.3trn today.

Bitcoin is the world’s seventh-most valuable asset after its 267% return in 2020 and 55% return to date in 2021. The number of wallets containing at least 1,000 Bitcoin (~R720m) increased by 17% to reach a global high of 2,052 last year.

And Bitcoin began 2021 with an all-time high of $47,066 (around R720,000) per coin when it was announced in early February that Tesla bought $1.5bnworth of Bitcoin. Ironically, making Bitcoin more valuable than Tesla’s market value.

Bitcoin’s astronomical 46,000% return on investment in the last decade has made it larger than Warren Buffet’s Berkshire Hathaway and tech giants Samsung and Visa.

This upward price trajectory was seen within alternative cryptocurrencies in 2020 too, with Ethereum (up 890%), Chainlink (up 660%), Cardano (up 1,015%) and Polkadot (up 700%) all posting triple-digit gains over the last 12 months.

Cryptocurrencies, as an asset class, experienced a 3,800% value increase over the same time period, which far outperforms the returns of the S&P 500 Stock Index, JSE Top 40 Stock Index and gold – all of which saw gains of no more than 25% year-on-year.

Building a diversified investment portfolio

This exponential growth in market value has poised cryptocurrencies as the digital gold of the fourth industrial revolution (4IR).

Recent months have witnessed global institutional investors – pension, hedge and endowment funds, which historically invest in diverse asset classes including stocks, commodities and real estate – invest in cryptocurrencies to diversify their investment portfolios and spread their risk.

To be clear, these aren’t the niche investments of niche firms. We’re talking along with the likes of Facebook, Paypal, Square, JP Morgan, now Tesla, as well as Harvard, Yale and Brown’s endowments.

This investment decision has legitimised cryptocurrency as an asset class beyond individual investors and has carved its place among mainstream investment strategies while acting as a stabilising force against inflation within a volatile global economic market.

In this way, these institutional investors will most likely accelerate cryptocurrencies’ adoption as a mainstream payment platform or alternative store of value to traditional assets.

The holy grail of building a diversified portfolio is choosing investments across different asset classes that respond differently during economic crises. We’ve seen what happened with GameStop in recent weeks.

Being a responsible investor means diversifying investments and not putting all one’s life savings into a single investment. The responsible investor manages their risk and possible returns across a number of different asset classes, from traditional commodities to cryptocurrencies.

Be prudent when adding cryptocurrencies to your investment portfolio for the first time. Allocate between 1-10% of your wealth to this asset class. This ensures that you have the potential to see your wealth grow as the market expands, without the risk of being overly exposed if the market pulls back.

Holding fiat currency – whether in rands, pounds or dollars – is a big risk with looming pandemic-induced inflation, which guarantees a loss on your money each year. Similarly, when it comes to risk in the cryptocurrency space, price volatility, which is characterised by daily price shifts, is greater when compared to the majority of other investment categories.

While the price of the largest cryptocurrencies is unlikely to reach zero, their asymmetric return potential – where investors could lose 100% of their funds in the worst-case scenario or make upwards of 250-1,000% if the asset class grows – makes this investment category so appealing.

Cryptocurrency bundles

Investing in a single asset class exposes you to the ups and downs of that particular investment category. Just as you wouldn’t only invest in Woolworths, Shoprite or Naspers on the JSE but would rather consider the Satrix Top 40, so you should do the same within the cryptocurrency space.

Bundled investments can instantly diversify your investment portfolio with some of the best-performing cryptocurrencies. A Top 10 Bundle, for example, allows investors to invest in a bundle of the 10 largest cryptocurrencies as measured by market value and spread across 85% of the market.

Unlike investment funds, cryptocurrency investment bundles do not require an intermediary, such as a fund manager. Instead, they allow investors to invest directly into the underlying cryptocurrencies within that bundle and closely track their overall performance.

Crypto bundles use algorithms to automatically reweight and rebalance the investment portfolio each month to ensure that investors always hold the largest and most reputable cryptocurrencies. It’s never a case of only betting on one horse.

Alternative and tokenised investment classes

A library of theme-based investment opportunities is opening up across various sectors and industries thanks to the blockchain.

In the near future, we’ll see a rise in theme-based investment classes, such as Artificial Intelligence, 5G technologies, biotech, renewable energy, e-commerce, sharing economy services, medical cannabis, gaming, collectors’ watches and digital artworks.

There will be also an opportunity to trade social media accounts and website URLs. Ordinary individuals will also be able to invest in successful business people, researchers or academics in terms of their future earning potential, findings and registered patents.

There will also be an increase in fractionalised investments, which will allow investors to own a share of a certain commodity, for example, 1/1,000th of a Picasso artwork.

Increasingly, traditional stocks, such as gold, will be tokenised and placed on the blockchain, where one token represents one ounce of an insured physical gold bar stored in a vault.

It’s a new way for investors to get exposure to a commodity that they might have not had access to before. Furthermore, when it comes to tokens and tokenised investments, the settlement and execution happens in real-time and can be withdrawn immediately, making it even more attractive.

In closing, the continuous growth of cryptocurrencies and blockchain investments has shown that this asset class is here to stay, and soon enough will become the gold standard investment strategy of the future.

About the author

Sean Sanders is a cryptocurrency and blockchain entrepreneur and co-founder of the investment platform Revix. He is a CFA Charterholder with a passion for fintech, blockchain and automated finance.

Visa and GIG Logistics partner to enable eCommerce delivery

Esan Bolaji
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0
Visa and GIG Logistics partner to enable eCommerce delivery

11 February 2021 – Visa today announced a partnership with a logistics provider, GIG Logistics (GIGL), to introduce special eCommerce Tariff for Small Businesses in Nigeria. The collaboration allows merchants who have signed up on the Visa Small Business Hub access to a discounted tariff plan for their logistics needs with the foremost logistics provider.

Visa and GIG Logistics partner to enable eCommerce delivery Brandspurng1

SMEs who wish to enjoy these benefits will be redirected to the GIGL Merchant Portal Page when they visit the Small Business Hub on the Visa Nigeria website. 

Additionally, business owners can also access up to 25% discounts on all GIGL tariffs when they fund their wallets with a Visa business or corporate card via the GIGGo App or the GIGL website.

Visa and GIG Logistics partner to enable eCommerce delivery Brandspurng1

Speaking about the partnership, Kemi Okusanya, Vice President, Visa West Africa, affirmed Visa’s role as a payment enabler and its continued efforts in supporting the recovery and sustainable growth of SMEs. She said,

“Visa has continuously shown its support in the recovery of African economies, through strategic partnerships to help reposition small businesses for improved growth and recovery. Our partnership with GIGL seeks to further provide a platform for business owners to enjoy discounted offers to better serve the everyday consumer”.

GIGL continues to validate unflinching support for digital commerce merchants and SMEs by solving the most critical factor with online and offline sales, which is delivered to the end-user. Mosun Suleiman, Merchant Support and Growth Manager, GIG Logistics on her part said,

“powering decentralized commerce and providing adequate support for SMEs through initiatives and strategic partnerships are integral parts of our business culture and we are committed to building practical solutions that simplify logistics by providing timely, cost-efficient and effective deliveries while returning best value to all stakeholders.” 

Visa has continued to deploy online resources to empower SMEs across the country with the right tools and knowledge to help them transition to the digital economy and grow their businesses. SMEs who wish to join thousands of other merchants already signed up on the hub can register on the Visa Nigeria website.

10 Tips to turn up your Valentine’s Day charm

Esan Bolaji
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0
10 Tips to turn up your Valentine’s Day charm

This year, Valentine’s Day falls on a Sunday. Hopefully, this gives you ample time to prepare for it. It is all about romance and expressing your love to the one you cherish the most. It comes with high expectations and preparing for it can create a lot of anxiety and stress.

To make your Valentine’s Day easy, here are ten tips that will ensure you create a day that is charming and memorable.

10 Tips to turn up your Valentine’s Day charm brandspurng
Photo by Kevar Whilby

  1. Set reminders and create calendar events

To start preparing for Valentine’s Day, remind yourself that the little things matter when expressing your love. Using your Google Assistant, set reminders and create calendar events to ensure that little details do not fall through the cracks. Schedule time to clean the house, get a babysitter (if you have a baby), buy ingredients for V-day’s food recipes and make reservations.

You can simply create new calendar events by telling Assistant, “add to my calendar” or “make an appointment” followed by the event’s name, and optionally even location. For instance, you could say: “Add to my calendar, buy red roses on February 12th at 10a.m,” Google Assistant is available on most current Android devices. You can access it by setting up “Hey, Google” voice activation.

  1. Create a playlist of romantic songs

Love songs are perfect for stirring up a romantic mood. The songs you pick are a major part of showing how you feel. On YouTube, there are a variety of love songs fit for Valentine’s Day. You can create a playlist of romantic love songs, from timeless classics to brand-new tracks to share with your loved one before Val’s day.

On Valentine’s Day, you can stream the songs from your created playlist while you sing along with your loved one. The right love songs plus a candlelight dinner; candles and flowers, not forgetting slow dancing. will go a long way to spark up Valentine’s Day charm.

  1. Purchase a special gift

Google Maps’ nearby function can help you find gift stores close to you to purchase that special gift for Valentine’s Day. Simply open Google Maps, search for a place, press enter, then click “Nearby.” Enter the kind of place you want to search like, “Gift shops”, then press enter again to see the top results in red mini-pins and red dots. The results show you an array of gift shops you can purchase gifts from.

Share gifts that show your appreciation and not necessarily those that break the bank. For instance, you can choose between a favourite perfume or cologne, a bottle of wine, jewellery or a trip to the spa. Remember, with gifts, it is really the thought that matters, so make it count.

  1. Find inspiration for the lounge

You can choose to break away from the norm of spending time in a fancy restaurant and hotel. Bring the love back home and spend quality time with your sweetheart. This will require some deliberate effort to create comfortable surroundings with romantic ambience.

The lounge is the perfect spot to get you and your partner in the mood for love. You can watch YouTube videos to get Valentine’s Day decor ideas to create a romantic mood in your lounge. Whether you decide to set up Valentine’s Day tree or adorn the lounge with blush pink decor instead of red, you will definitely be inspired by the videos you watch on YouTube.

  1. Opt for top-rated restaurants

Making plans for that Valentine’s Day romantic evening. Use the “Explore” feature on Google Maps to find the top-rated restaurants around you.

See listings of the names and addresses of the restaurants, opening hours, directions, a price scale and even user reviews so you can see if it’s worth making a reservation. It is important to make sure that the menu can accommodate your dietary preferences and to check if it is within your budget.

It is imperative that you adhere to Covid-19 preventive measures if you must spend Valentine’s Day outdoors at a restaurant, so be sure to ensure that the restaurant is operating with Covid-19 guidelines for businesses in Nigeria.

  1. Connect with your sweetheart over a distance

If you are in a long-distance relationship or you have been separated due to the Covid-19 travel ban, never mind, lover’s day can still be memorable. Make use of Google Meet to connect with your sweetheart. Set up a video call to share the day together. You can have a romantic meal via the call, stream a movie together, listen to your favourite playlist online or just sincerely confess your love to each other among other planned activities.

  1. Relieve your love by creating and sharing photo memories 

With Google Photos, you can relieve your love memories and share with your sweetheart on Valentine’s Day. You probably have photos with your partner saved up over the years. If you have Google Photos, those photos will have been saved up automatically. Simply select the photos that share intimate memories via a created folder with your loved one – this will definitely be nostalgic.

Also, you can make plans to have a romantic Valentine’s Day photoshoot using your device and save up the photos in a folder in Google photos and share later with your sweetheart.

  1. Binge-watch your favourite romantic movies on YouTube.

Valentine’s Day is a nice time to make plans to cuddle up and watch romantic movies. YouTube provides a list of romantic movies that can be streamed for free. Grab some wine and chocolate, with scented candles, while laying on the rug and binge-watch love movies into the night.

  1. Serenade your honey with a love song

A great way to show how much love you feel for that special person in your life on Valentine’s Day is to sing to him/her. Music connects with love emotions. If you are not sure of the lyrics of that favourite love song, you can simply search for it. By typing, ‘song name’ plus “lyrics” in the search bar on Google Search, you get the lyrics displayed at the top of the search results page.

  1. Get inspiration for love words

There is no doubt that Valentine’s Day can make us anxious and not sure of the right ways to say, “I love you.” Take a peek into Google Arts and Culture portal to get inspiration from Beethoven. In his numerous letters, compositions and notes there are some declarations of love; beautiful passages, that have been compiled that you can draw inspiration from to get the right words to profess your undying love to the one you love.

With a little effort and some planning, you will not only create a very special day, but you will create a Valentine’s Day that will be memorable. Remember, little romantic touches make a big difference. You really do not have to overdo it. Pay attention to little romantic details to ensure your Valentine’s Day is an enjoyable, special day to remember.

FEC Approves a New Debt Management Strategy for Nigeria

Esan Bolaji
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2
FEC Approves a New Debt Management Strategy for Nigeria

The Federal Executive Council (FEC) at its meeting today, February 10, 2021, approved a new Medium-Term Debt Management Strategy for Nigeria, for the period 2020-2023.

The Medium-Term Debt Management Strategy (MTDS) is a policy document that provides a guide to the borrowing activities of a Government in the medium-term, usually four (4) years.

FEC Approves a New Debt Management Strategy for Nigeria brandspurng2

It is recognized as one of the best practices in public debt management and is recommended by the World Bank (WB) and International Monetary Fund (IMF) to ensure that public debt management is driven by a well-articulated strategy that is structured to meet a country’s broader macroeconomic and public debt management objectives.

  1. The MTDS, 2020-2023 has been prepared by the Debt Management Office (DMO), in collaboration with relevant stakeholders (Federal Ministry of Finance, Budget and National Planning, Central Bank of Nigeria, Budget Office of the Federation, National Bureau of Statistics and the Office of the Accountant-General of the Federation).
  2. Nigeria has had two (2) Medium Term Debt Management Strategies (2012-2015 and 2016-2019), prior to the current Strategy. The new Strategy had to be re-worked to reflect the global and local economic impact of the COVID-19 Pandemic and incorporates data from the revised 2020 Appropriation Act and the Medium-Term Expenditure Framework 2021-2023. Thus, the new MTDS adequately reflects the current economic realities and the projected trends.
  1. The preparation of the MTDS usually involves the consideration of alternative funding strategies available to Government, as it seeks to meet its financing needs, taking into consideration the cost of borrowing and the associated risks, while ensuring debt sustainability in the medium to long-term.
  1. The 2016-2019 MTDS included some Debt Management Targets. The Targets and the Actuals at the end of the Strategy period, (that is, as at December 31, 2019) are shown in Table 1. As can be seen from the Actual Outcome, the MTDS, 2016-2019 was 2 applied in the borrowing activities of the Government during the period which led to the high success rates achieved.

TABLE 1: MTDS, 2016-2019: TARGETS AND ACHIEVEMENTS

FEC Approves a New Debt Management Strategy for Nigeria

The New MTDS, 2020-2023 and the Debt Management Targets

  1. Based on the current Public Debt Stock, Government’s borrowing needs in the medium-term (as stated in the 2021 Appropriation Act, MTEF, 2021- 2023), as well as future global trends, Nigeria’s 2020-2023 MTDS can be summarized as follows: “Borrowing will be from domestic and external sources but a larger proportion of new borrowing will be from domestic sources using long-term instruments while for External Borrowing, concessional funding from multilateral and bilateral sources will be prioritised”. The new Targets for the MTDS 2020-2023 are shown in Table 2.

TABLE 2: MTDS, 2020-2023 TARGETS

FEC Approves a New Debt Management Strategy for Nigeria

Conclusion

    1. The implementation of the Medium-Term Debt Management Strategies over the years has helped in managing the structure of the growing public debt and ensured debt sustainability, as well as effectiveness in public debt management. With the approval of the Federal Executive Council of the MTDS, 2020-2023, the Strategy will be implemented to support economic development while ensuring that the Public Debt is sustainable.
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