Seizing opportunities
Nigerian Central Bank vs First Bank, Seizing opportunities in Malawi, Ethiopia’s telecom woes
Hello there,
Happy New Month 🥳️
Here’s what’s not adding up for us: It costs between $1 - 2 million to sponsor Africa’s biggest reality show Big Brother Nigeria, how did a seven-month fintech company, Abeg, end up being this year’s headline sponsor?
Nigerian Central Bank vs First Bank
This week seemed like it was going to end on a rather quiet note until Nigeria's Apex bank came for the oldest bank in the country - First Bank. Yes, it’s called ‘First bank’ simply because it was the first bank to be established in the country.
What happened?
On Thursday, the Central Bank of Nigeria announced the immediate removal of all the directors of First Bank Nigeria Limited as well as FBN Holdings.
The cause: Blame it on ‘insider abuse and credit’ and ‘breakdown of corporate governance.’
Okay, but what led to this?
It all appears to be tied to the fact that the central bank had ordered First Bank to call in Oba Otudeko’s loan (within the region of ₦75 billion/$18 million) for his company Honeywell Flour Mills within 48 hours. Interestingly, Oba Otudeko is the chairman of FBN Holdings - the holding company that owns First Bank.
And about the breakdown of corporate governance?
On Wednesday, the matters got complicated when First Bank’s board announced the retirement of the MD/CEO Dr. Sola Adedutan and appointed Gbenga Shobo in his place. A move the CBN claimed they hadn’t approved because his tenure wasn’t over and so his removal was improper.
Phew! That’s a lot in one week
Now that you’re up to speed, in compliance with the directive from the CBN, a new board of directors has been appointed. But it looks like there’s more to this story that has happened this week.
Zoom out: The CBN typically gets a bad rep for coming up with unfriendly regulations but this time it looks like it was spot-on in doing its job, which is to ensure the country has a sound financial system.
Dig deeper: In sacking First Bank's board, a bruised Emefiele enforces CBN tradition
Seizing opportunities in Malawi
In 1997, Mike Mlombwa started a car rental business in Blantyre, Malawi, with three second-hand vehicles previously used for deliveries for his stationery business. Ten years later, he incorporated the company as Countrywide Car Hire.
Today, the company is planning to renew its fleet and increase it to around 100 vehicles. Mlombwa has since also diversified the business. He is hoping the three hotels built under subsidiary Countrywide Hotels and Resorts will be open by the end of the year.
How did he get his first major big break? Why is he diversifying into the hotel business?
Dig Deeper: From car rentals to hotels: Businessman seizes opportunities in Malawi
Ethiopia’s telecom woes
On Monday the Ethiopian government announced that it has received bids for telecommunications licences from MTN Group and a consortium led by Vodafone Group.
Sounds like progress but there’s another side to this story
There were other companies that had shown initial interest like Etisalat, Orange, Saudi Telecom Company, Axian and Telkom SA that didn’t bid. Their reasons for not bidding ranged from the restrictive nature of a process that banned new participants from offering mobile-money services or bringing in specialised telecoms tower operators to build new infrastructure.
Why this matters: Ethiopia has only one mobile telecommunication operator, Ethiotel which is managed by the government. It’s been looking to give other players a chance to partake in Ethiopia’s untapped telecom market whilst also generating some much-needed income from the sale of the licenses.
Looking forward: The more the bids, the better it is for the Ethiopian government as it has indicated that, if financial offers fall short of expectations, it might retender the licences. Ethiopia also plans to sell a 40% stake in Ethio Telecom later this year.
Ethiopia is also Africa’s most populated nation after Nigeria and is projected to expand 8.7% next year, according to the International Monetary Fund, making it the fastest-growing economy on the continent. This projection is despite the nation battling multiple crises including a civil conflict in the northern Tigray region.
In other news, Tanzania's first female president has shifted the country's approach to COVID-19 from the controversial stances of her predecessor.
Worth reading 📚
Quote 💭
Courage doesn’t always roar. Sometimes courage is the quiet voice at the end of the day saying, “I will try again tomorrow.”
– Mary Anne Radmacher
how did a seven-month fintech company, Abeg, end up being this year’s headline sponsor?
this is really weird to me too!