” “ Monday, March 16, 2015 | Issue 033 FIXED INCOME & FOREX NBS survey shows formal sector new jobs’ slowdown in Q4 2014 Source: FMDQ Verbatim I remember when we were in South Africa on a state visit, MTN paid a courtesy call on me and one of the key things that we raised – myself and Ngozi (Okonjo-Iweala) the Coordinating Minister of the Economy, was the need for them to list. We are working very hard to make sure that companies that are supposed to list, list. That is the only way Nigerians can participate in some of these companies. And in the next four years we will look at it; it is a very delicate area. This government does not want to do something that will injure the private sector. - President Goodluck Jonathan speaking at Nigerian Stock Exchange, Lagos, March 12, 2015 Currency Central Rate SWISS FRANC 194.9985 YEN 1.6179 WAUA 269.7703 RIYAL 52.3916 DANISH KRONE 27.8775 SDR 269.3819 FOREX RATES EMPLOYMENT ! Page VM2 World Bank figures show that as many as 41 million Nigerians, or 24% of the country’s 170 million population, are unemployed. The figures are grimmer for young persons below 24 years. The World Bank estimates that as many as 80% of this group do not have jobs. Government figures place this closer to 38%, which is still alarming. In the run up to elections, political parties are promising to create million of new jobs if elected though how they plan to is vague. Mo Fr 195.9 196.2 196.8 196.5 197.1 196.5 Tu We Th Fr $/N Mo Fr 289.0 292.0 298.0 295.0 301.0 290.7218 Tu We Th Fr £/N Mo Fr 205.0 208.0 214.0 211.0 217.0 207.9167 Tu We Th Fr Euro/N Mo Fr 31.00 31.20 31.60 31.40 31.80 31.3868 Tu We Th Fr CNY/N Mo Fr 0.30 0.31 0.33 0.32 0.34 0.3079 Tu We Th Fr CFA/N Job seekers crowd around an official at last year’s recruitment exercise for the Nigerian Immigration Service. Reports said 500,000 applicants were invited to apply for about 4,500 vacancies.
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Vanguard Markets features unbiased, in-depth coverage of corporate and market developments across a wide range of business sectors. Every week, Vanguard Markets delivers essential business analysis and commentary on Nigerian companies, regional economies, and global markets. Vanguard Markets is published by Vanguard Media Limited in association with Customs Street Advisors Limited, a specialist communications consultancy.
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”“
Mo
nd
ay, M
arch
16
, 20
15 |
Issu
e 0
33
FIXED INCOME & FOREX
NBS survey shows formal sector new jobs’ slowdown in Q4 2014
Source: FMDQ
VerbatimI remember when we were in South Africa on a state visit, MTN paid a courtesy call on me and one of the key things that we raised – myself and Ngozi (Okonjo-Iweala) the Coordinating Minister of the Economy, was the need for them to list. We are working very hard to make sure that companies that are supposed to list, list. That is the only way Nigerians can participate in some of these companies. And in the next four years we will look at it; it is a very delicate area. This government does not want to do something that will injure the private sector.
- President Goodluck Jonathan speaking at Nigerian Stock Exchange, Lagos, March 12, 2015
Currency Central Rate
SWISS FRANC 194.9985
YEN 1.6179
WAUA 269.7703
RIYAL 52.3916
DANISH KRONE 27.8775
SDR 269.3819
FOREX RATES
EMPLOYMENT
! Page VM2
World Bank figures show that as many as 41 million Nigerians, or 24% of the country’s 170 million population, are unemployed. The figures are grimmer for young persons below 24 years. The World Bank estimates that as many as 80% of this group do not have jobs. Government figures place this closer to 38%, which is still alarming. In the run up to elections, political parties are promising to create million of new jobs if elected though how they plan to is vague.
MoFr195.9
196.2
196.8
196.5
197.1196.5
Tu We Th Fr
$/N
MoFr289.0
292.0
298.0
295.0
301.0290.7218
Tu We Th Fr
£/N
MoFr205.0
208.0
214.0
211.0
217.0207.9167
Tu We Th Fr
Euro/N
MoFr31.00
31.20
31.60
31.40
31.8031.3868
Tu We Th Fr
CNY/N
MoFr0.30
0.31
0.33
0.32
0.340.3079
Tu We Th Fr
CFA/N
Job seekers crowd around an official at last year’s recruitment exercise for the Nigerian Immigration Service. Reports said 500,000 applicants were invited to apply for about 4,500 vacancies.
ECONOMYVM2
EMPLOYMENT
FORESIGHT
VM | Monday, March 16, 2015 | Issue 033
NBS survey shows formal sector new jobs’ slowdown in Q4 2014
Smartest guys in the room
W Continued from Page VM1
Jobs ReportHE NATIONAL BUREAU of Statistics published its 4th Quarter Job Creation
and Employment Generation Sur-vey last week. It covers from Sep-tember-December, 2014. According to the agency’s statistics 1,121,052 new jobs were added to the national economy last year. The figures on private employment are useful be-cause they serve as a proxy of eco-nomic health. One canary in the coal-mine view is that companies will shed jobs faster than the econ-omy is contracting, and hire slower than the economy is growing.
Analysis Now in its third year, the NBS’
Quarterly Job Creation and Em-ployment Generation Survey survey covers 5,000 establishments spread across all 36 states and the Fed-eral Capital Territory (FCT). The latest survey had a response rate of 82.10%. A sample of 5,000 es-tablishments was taken across the country covering all sectors of the economy.
NBS categorizes employers into 3 groups: formal (these have 10 employees and above or are pro-fessional firms with less than 10 employees), informal (less than 10 employees or operating with only basic structures), and public (gov-ernment ministries, departments, and agencies across the three tiers and arms). The low employee cut-off mark for the formal sector al-lows the survey to capture micro-, small-, and medium scale enterpris-es (MSMEs) far better than many other surveys do.
In the formal sector, 38.10% of new workers during the review peri-od were hired to fill positions left by ex-employees. Business expansion came next at 24.37%, while 18.86% were employed to ease the work bur-den on existing staff members.
RefillingIn considering the number hired
to fill positions left by ex-employees
(52,588) it is important to recall that they were replacements to de-parted personnel, and did not have a net positive effect on employment figures. During the year, employee replacements totalled 145,975 out of 438,263 created in the formal sector.
It is illuminating how replace-ments slowed down in abso-lute numbers in the last quarter (52,588), against 55,422 in the third quarter. This could highlight a watch-and-see attitude on the part of businesses to refill their payrolls when employees leave due to the first signs of economic turmoil that became obvious in the final three months.
Other highlightsThe informal sector was a dif-
ferent story. It added 14.50% more jobs over the third quarter, while the formal sector shrunk by 5.11% in new job additions.
The breakdown of new jobs by business activity showed that edu-cation added the most jobs in the 4th quarter (39.65%), followed by manufacturing (22.75%), trade (7.72%), which was almost tied with accomodation and food services (7.36%).
Agriculture came further down on the list (6.40%) and so did fi-nancial intermediation (3.39%). Construction (0.79%) and real es-tate (0.43%), typically seen as high labour demand industries, threw up surprises that should not be ignored as they struggled to add new jobs.
In terms of job quality, of the 138,026 new jobs added in the fourth quarter, by far the high-est number were for operatives (37.02%) understood as workers with elementary skillsad below apprentices. Managerial, Profes-sional and Technical Workers were the second most in demand group (23.89%). Clerical and related office workers came next (19.68%).
Rhetorics of job creationIn the run-up to national elec-
tions, presidential candidates of the two main contenders, President
Goodluck Jonathan of the ruling Peoples Democratic Party (PDP), and his main rival, Major General Muhammadu Buhari (rtd.) of the All Progressives Congress (APC) have promised to make job creation a priority.
Professor Chukwuma C. Soludo, a former governor of the Central Bank of Nigeria, has questioned whether either candi-date fully grasps the scale of the problem, and has the ability to ad-dress it. In a public letter, Buhari vs Jonathan: Beyond the Election, published in January, he opined that ‘So far, neither the APC nor the PDP has a credible programme for employment and poverty reduc-tion.’ In fact, job creation, in his view ought to be the main focus of the next administration.
His analysis is that the APC does not go far enough, while the PDP strategy is hazy at best.
The professor of econoics pre-dicted that:
‘The fundamental challenge for the next government on the econo-my can be framed around the goal of creating twelve million jobs over the next four years to have a dent on unemployment and poverty. The challenge is to craft a development agenda to deliver this within the context of broken public finance, and an economy in which painful structural adjustments will be inev-itable if current trends in oil prices continue.’
Job quality matters tooIn the debate about numbers, it is
also important to assess the quality of jobs being created and how they fit into a coherent national develop-ment plan. Issues around transfer-able skills acquisition, professional development, salary scales, worker protection, and pensions coverage need attention too. The mismatch between being the largest economy in Africa and having a 24% unem-ployment figure demands urgent answers that the party campaign offices have failed to speak directly to. ;
The fundamental challenge for the next government on the economy can be framed around the goal of creating twelve million jobs over the next four years to have a dent on unemployment and poverty.
- Professor Chukwuma C. Soludo
Hirings to fill positions left by departed employees in formal sectorPeriod Total jobs created Replacements %Q1 2014 76,018 16,481 21.68
Total 431,021 221,054 245,989 265,702 240,871 259,353 349,343 369,485
Source: National Bureau of Statistics
T
Y DARING AND DE-SIGN some companies set themselves up in a class of
their own. In this category, Oando Energy Resources, the Toronto-listed E&P company, fits the bill perfectly. The company announced early this month that it had ‘success-fully realized $234 million by reset-ting its crude oil hedge floor price from an average of $95.35 per barrel to $65.00 per barrel on 10,615 bbls/day for the next 18 months and an-other 1,553 bbls/day for a further 18 months until January 2019.’
Pade Durotoye, CEO, was pleased to tell investors that ‘The de-cline in global crude oil prices led to
a substantial gain for our company.’Without delay, the company ap-
plied the windfall with an additional $4 million to prepay $239 million in outstanding debts. The prepay-ment will result in interest savings of about $65 million over the next 3 years. It has also reduced the com-pany’s total debt to OER currently stands at $615 Million.
CSL Research has increased its target price for OER from C$1.50 per share to C$1.68 per share.
OER’s assets are spread across the Niger Delta region in Nigeria and São Tomé and Príncipe. It has a market capitalization of $890 mil-lion. ;
B
NE WOULD BE HARD pressed to find more con-servative institutions than
Swiss banks. The world’s most trusted bankers pride themselves on tradi-tion. So when Credit Suisse, ad-judged the pinnacle of the race, and a FTSE 100 company, announced on March 10 that it was appointing an Af-rican as chief executive of the 159-year old financial institution it took many by surprise.
The new helmsman is Tidjane Thiam, 52, a towering – 6 feet 4”- Franco-Ivorian. Until then, the Ar-senal football club fan was the chief executive of Prudential, the insur-ance group. Immediately after the news filtered into the market, Credit Suisse shares levitated by no less than 8%. Credit Suisse is the 11th biggest
company in the UK, and has a balance sheet size of over $900 billion. In De-cember 2014, its shareholders’ funds stood at $44.7 68 billion.
In 2009, Thiam’s appointment as CEO of the Pru broke a glass ceiling. It was the first time a black person would be selected to head a FTSE company.
In a statement announcing his ap-pointment Urs Rohner, chairman of the bank described Thiam as ‘a strong and distinguished leader with an im-pressive track record whose extensive international experience, including in wealth and asset management and in the successful development of new markets, provides a firm foundation for leading Credit Suisse.’
At his first press conference, he launched his speech in German,
then switched to French before con-cluding in English. Along the way, he apologised for his ‘rusty German’ but assured the audience that ‘at 18 my German was better than my Eng-lish.’ What easier way could there be to win over the gnomes of Zurich? To round off his cosmopolitan creden-tials, Thiam is married to Annette, an African-American.
Thiam was born in Cote d’Ivoire to a distinguished family. His father served as a diplomat and minister un-der Félix Houphouët-Boigny, the country’s first president. He started his peripatetic life at an early age. His father took Thiam and his six older siblings along with him when he was posted as ambassador to Rabat, Mo-rocco. The future CEO would spend his formative years there.
He won a highly coveted place at the prestigious École Polytechnique. From there he proceeded to the elite École Nationale Supérieure des Mines de Paris, before earning an MBA at INSEAD. He joined McKinsey straight from Fontainebleau. His career has seen him land spots on the World Bank’s Young Professionals Program, as head of Cote d’Ivoire’s National Bureau for Technical Studies and Development, and minister of planning and development. Before resuming at the Pru, he was the chief financial officer at Aviva, the British multinational insurance company.
In 2012, he turned down the CEO position of the International Fi-nance Corporation, the World Bank’s private sector arm.
Equally at home in Davos, New York, and Abidjan, Thiam’s ascend-ance brings once more to the fore questions about the racism in the City. Many are watching to see how soon other talented Nigerians, Ghanaians, Senegalais, and Camerounais will join him at the top echelon. Being first in his class is meaningless if he is the only one in his class. ;
SPOTLIGHT
HIGH TABLE
Has the Champagne Bubble Burst? (1)
EDITOR: MIDENO BAYAGBON
GROUP BUSINESS EDITOR: OMOH GABRIEL
CONTENT DIRECTION: OBIORA TABANSI ONYEASO
DESIGN & ILLUSTRATION: PUBLICAN MEDIA
Vanguard Markets features unbiased, in-depth coverage of corporate and market developments across a wide range of business sectors.Every week, Vanguard Markets delivers essential business analysis and commentary on Nigerian companies, regional economies, and global markets. Vanguard Markets is published by Vanguard Media Limited in associa-tion with Customs Street Advisors Limited, a specialist communications consultancy.
Vanguard Media Limited, Vanguard Avenue, Kirikiri Canal, P.M.B.1007, Apapa.
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FEW YEARS AGO Spiros Malandrakis, senior analyst at Euro-
monitor, a global market research company, predicted that the yearly consumption of champagne in Ni-geria will rise to 1.1 million litres by 2017. Only France, homeland of the sparkling drink, would experience higher volume growth, he said.
In 2012, Nigerians spent $59 mil-lion on champagne, confirming its spot as the biggest market in Africa and the Middle East for Moët Hen-nessy, makers of the eponymous champagne. The previous year, Ni-gerians drank 752,879 bottles of bub-bly, more than Russia and Mexico. Charles Armand de Belenet, global marketing and communi-cations director at Pernod’s GH Mumm and Perrier-Jouët cham-pagne brands went on record that ‘Nigerian champagne consumption is quite big and we are building our net-work here and it is one of the most at-tractive places for us at the moment.’
These figures will make the so-
cially conscious Global Development lecturer look away uncomfortably in contempt.
The sub text of the above statistics begs for analysis. It delves into the mind of the average Nigerian and in some ways is a better social commen-tary on our economic position.
Nigerians identify with the aspira-tions tied into champagne consump-tion. With our high table mentality, everyone wants to feel like the guest of honour whenever they eat or drink.
This answers the question raised by the huge disparity in price points of champagne bought in restaurants and bars and champagne bought in the retail market. It is not uncom-mon for the price mark up to soar to 500%. Many club and bar owners view champagne sales during week-end club hours as ‘harvest season’ from a long drought with lunchtime crowds and weekday diners.
A recent example of this boom oc-curred when a patron in a high brow night club in Victoria Island called Escape famously spent N10 million on Dom Pérignon champagne in one sitting. This sent the Lagos Twit-terverse in feverish activity among a usually unimpressed social media group. Perceived success and exclu-sivity is paramount especially when there are observers.
Ultra-luxe champagne brands add to the exclusivity. One club in Vic-toria Island serves Angel Cham-pagne (the singularly most expensive champagne brand) at a retail value of $2200 per bottle. The club says that its patrons quaff at least a carton of this coveted brand every weekend. Quilox also manages to sell vol-umes of Ace of Spades and Cristal Champagne to wealthy club goers.
The focus on the bottle label dis-guises the fact that there is more
to champagne quality than names. John Obayuwana, owner of Polo Luxury Group, the country’s pre-mier luxury store, was quoted in the Economist magazine’s December 2014 Special Report on Luxury that as far as fashion and luxury go, ‘for
Nigerians the bigger the logo the better.’ Unscrupulous importers of champagne have been exploiting this perception complex for a long time.
On the side lines of this alarming trend in conspicuous consumption, wine drinkers are becoming more
aware. The sheer volume they consume has given these amateur oenophiles the palates to tell good champagne from plonk. Playing the role of informal watchdogs, they detect that a lot of the champagne sold in Nigeria is of inferior quality to that sold in Europe.
This argument gains potency when similar brand champagne bought in markets such as Apongbon in Lagos Island is compared to its duty-free counterpart from Europe. It would appear clarity and bubbles are com-promised - to the point that some argue that we are given ‘first press’, a less desired batch of champagne. Champagne sellers blame poor stor-age for any difference in quality stat-ing that it is impossible for cham-pagne houses to know which country their champagnes are exported to.
For all its promise during the heady years, closer analysis shows a slowdown in the purchase of cham-pagne. Champagne by the glass, once a rarity in Lagos, is becoming more common. The cocktail list at Man-silla and Casa d’Lydia offer the bubbly in flutes. This could be due to the current economic downturn. Another sign that all is not well is that newer champagne brands in the market have not been able to in-crease their market share among the staple brands sold in Nigeria. ;
Excess! The 18-carat white gold logo on this limited edition bottle of Goût de Diamants champagne, which translates to ‘taste of diamonds’, is encrusted with 19-carat diamonds. It sells for $1.8 million, and was designed by Alexander Amosun, the British-born Nigerian lifestyle designer.
Ify Ojiis a lawyer, writer and food lover. She is the creator of the GidiTang.com (syno-nym: Lagos Flavour) blog on food and drink in [email protected]
A
O
ECONOMY VM3VM | Monday, March 16, 2015 | Issue 033
Casa d’Lydia19, Glover Road, Ikoyi
Escape234B, Adeola Odeku Street,
Victoria Island
Mansilla6, Musa Yar’Adua Street, VI
Quilox873, Ozumba Mbadiwe Street,
Victoria Island
First in his class: Tidjane Thiam
LEGEND
15-week trading bar:This bar shows the volume of the company’s shares traded during the 5 most recent weeks. Each alternate colour bar represents a consecutive week. The bar is to be read from left to right. The first bar on the left (light blue) represents the traded volume five weeks ago. The next bar (grey) represents the volume 4 weeks ago. The 5th and last bar (light blue) signifies the volume of shares exchanged last week. The purpose of the Weekly Trading bar is to give readers an instant view of trading volumes as they compare on a week-by-week basis.
2Liquidity Rating: This indicates the level of demand for a company’s shares based on the number of deals rather than volume done over the past week. Stocks are graded accord-ing 5 categories. Blue spheres are used to represent liquidity. • Category 5: This is the highest liquidity rating shown by 5 blue spheres.
Stocks that have traded more than 20 deals per day on at least 4 days in the past week are awarded this score
• Category 4: This is shown by 4 blue spheres. It indicates that the stock has
traded between 12 to 19 deals per day on at least 4 days in the past week• Category 3: Shown with 3 spheres, this liquidity classification represents
those stocks that have traded 8 to 11 deals per day on at least 4 days in the past week
• Category 2: Shown with 2 spheres it identifies those stocks that traded 4 to 7 deals per day on at least 4 days in the past week
• Category 1: This is shown by one blue sphere to represent stocks on which 3 deals and/or below were traded per day on at least 4 days in the week.
SECTOR PRICE CHANGES – MAR 09 – 16, 2015MARKET REVIEW – MARCH 09 – MARCH 16, 2015
1. 52-week low price2. Year low price3. Current price4. Year high price5. 52-week high price6. Current price7. 5-day price change8. 1-year price change9. 3-months price change10. 1-week price change11. Daily price movement over 3 months.12. 30-day moving average13. Daily price movement over last week
MARKET DATA VM5VM | Monday, March 16, 2015 | Issue 033