Major business decisions that’ll shape Nigerian economy in 2022

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In 2022, all eyes will be on many Nigerian businessmen and corporate organizations whose decisions in the preceding year will greatly impact the country.

One of such decisions was the decision of the Central Bank of Nigeria to license two telecom giants, MTN and Airtel as Payment Service Banks (PSBs).

PSBs accept deposits from individuals and small businesses, carry out payment and remittance services within Nigeria, issue debit and prepaid cards, operate electronic purses and other activities prescribed by the CBN.

While the telcos would not offer a full suite of financial services, they would be able to provide users with entry into the financial system.

With the infrastructural cost of setting up branches and security, banks are not opening branches in new locations, and in some cases, are shutting down operations.

A significant reason for the optimism shown is the potential of telcos to fast-track the CBN’s financial inclusion goal. This is mainly due to their comprehensive coverage of the country, especially in rural areas that house most of the unbanked population.

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It is not clear what will happen to thousands of Point of Sale (POS) operators working closely with other banks when the new entrants fully deploy their resources.

The acquisition of the 104 –year old Union Bank by a relatively new Titan Trust Bank is another major decision that may have a major impact in the Nigerian banking industry.

The agreement, which is subject to regulatory approvals and other financial conditions, will, upon completion, transfer 89.39 percent of Union Bank’s issued share capital to Titan.

This followed an agreement by Union Global Partners Limited, Atlas Mara Limited and majority shareholders to divest 88.39 per cent shareholding in Union Bank to Titan Trust Bank.

Speaking on the divestment, Mudassir Amray, chief executive Officer, Titan Trust Bank, said: “After completing over two years of operations with aggressive organic growth, we are excited to have an opportunity for a significant leap forward in market share.”

“UBN’s widespread presence, state-of-the-art technology platform, quality staff, and strong brand loyalty fits well with our synchronized modular strategy. We look forward to delivering superior results for the benefit of our staff, customers, shareholders, and stakeholders.”

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The Dangote Refinery no doubt would have a much bigger impact as it is expected to commence operation this year, producing 650,000 b/d.

Dangote Refinery will fill a large vacuum in Nigeria’s products market that authorities hope will help stabilize the local supply of refined oil products.

In doing this, it will help reduce Nigeria’s perennial foreign exchange (forex) crisis which is due in part to the huge amounts spent on the importation of refined petroleum products.

The award of 5G license to both MTN Nigeria and Mafab Communication in 2021 would also have a serious impact on businesses because it is going to pave the way for faster internet to consumers and businesses when fully developed.

 5G is expected to facilitate several emerging technologies, generate innovative use cases, spur significant socio-economic growth and create jobs.

It will be critical because it will enable unprecedented levels of connectivity, upgrading 4G networks with five key functional drivers: superfast broadband, ultra-reliable low latency communication, massive machine-type communications, high reliability/availability and efficient energy usage.

Mangal Industries, owned by the Katsina-born industrialist, Alhaji Dahiru Mangal, in 2021 signed a contract with China-based Sinoma International Engineering for the delivery of a 3Mt/yr new integrated cement plant in the northern state of Kogi.

The plant will cost US$600m and generate thousands of jobs during construction and when inaugurated in early 2024. Sinoma International Engineering will also build a dedicated 50MW power plant for the plant.

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The factory will rely on the best available technology for cement production in line with the highest environmental standards.”

Air Peace is a star to watch. In 2021, the airline received the third of its brand new Embraer 195-E5 aircraft at the Nnamdi Azikiwe International Airport, Abuja, and disclosed that it would receive all the 13 aircraft it ordered from the Brazilian planemaker before the end of 2022, adding that it would create about 17,000 jobs.

The Chairman and Chief Executive Officer (CEO) of Air Peace, Allen Onyema, made this known in a speech just before the aircraft touched down at the Abuja airport from the Embraer facility in Sao Jose Dos Campos, Brazil.

He said the airline would deploy the aircraft to international, regional and domestic destinations as it had started opening new routes in Nigeria.

Jim Ovia, the man behind Zenith Bank, will be in the news again in 2022. Ovia is currently building a $1.5bn Quantum Petrochemical Complex in Ibeno, Akwa Ibom State.

The petrochemical plant will support the local economy by supplying products to sectors such as construction, packaging, pharmaceuticals, agriculture and textile. This is in addition to creating jobs.