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Onyema: NGX Group Repositioned for Growth Post Demutualisation

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The Group Managing Director and Chief Executive Officer, Nigerian Exchange Group Plc (NGX Group), Mr. Oscar N. Onyema, OON yesterday said the Group is repositioned for growth amid the completion of the demutualization of the Nigerian Stock Exchange.

Speaking virtually during the Group’s 2021 financial year investor and analyst presentation, he said the Group is focused on revenue diversification, optimization of profitability, and building a platform business to drive the increase in recurring income.

He added that the Group is also positioned to invest in new strategic opportunities, support achievement of strategic goals of its subsidiaries, and increase resilience across the Group. He explained that the focus on executing deals and transactions to scale business, raising capital, and optimal corporate governance structures are part of the plans of the non-operating Holdco to optimize growth.

According to Onyema, the revenue of NGX Group is made up of dividends and treasury investment income. “Dividend income is generated from dividends paid by the subsidiaries, and associates companies of the group, while the treasury investment income includes income from bonds, treasury bills, and fixed deposits.”

Speaking further, the Group’s Chief Financial Officer, Cyril Eigbobo, said, the NGX Group’s gross earnings grew to N6.78 billion from N6.02 billion, resulting in a 13 percent increase. He added that the group’s profit before tax (PBT) increased by 25.4 percent to N2.39 billion while its profit after tax (PAT) rose by 22.2 percent to N2.25 billion from N1.84 billion recorded in the corresponding period of 2020.

According to him, the jump in the Group’s revenue which rose by 14.9 percent from N5 billion recorded in 2020 to N5.8 billion in 2021, was driven by a 24.8 percent growth in listing fees which grew to N757.4 million as against N606.9 million in 2020, 4.9 percent growth in its treasury investment income and a 2.1 percent growth in the transaction fees which rose to N2.9 billion from N2.8 billion recorded in 2020.

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Rising inflation and low economic growth in Nigeria will push a further 2.8 million people into poverty by 2023’s end, the World Bank has disclosed. This is based on a report titled, ‘Macro Poverty Outlook: Country-by-country Analysis and Projections for the Developing World,’ released recently. The Washington-based bank said, “By the end of 2023, the rise in inflation and low economic growth will have contributed to an increase of 2.8 million people in poverty (y-o-y), a 0.4 percentage points bump to 37.5 per cent of the population.” It noted that Nigeria’s high inflation reached a17 17-year high of 24.1 percent (y-o-y) in July 2023, partly reflecting surging food prices and the temporary impact of the removal of the fuel subsidy. It stated that a cumulative 725 basis points hike in the monetary policy rate since May 2022 has had little effect on reining in inflation due to clogged transmission channels, also weakened by direct credit allocation by the central bank, and the continued monetization of the fiscal deficit. The global bank further declared that federal fiscal deficit has risen to 63 per cent higher between January and May 2023 than in the same period in 2022, due to increasing interest payments, higher capital spending ahead of the elections, and the continuous large cost of the fuel subsidy. The impact of this is set to spike public debt to 45 per cent of GDP and keep debt service above total revenue in 2023. It said. “The fiscal financing need and the devaluation of the naira are expected to push the public debt to 45 per cent of GDP and keep the debt service above total revenues in 2023. “The current account balance (CAB) recorded a surplus of 2.2 per cent of GDP in Q1 2023, driven by lower imports and income outflows. However, the small CAB surpluses and capital flows since 2022 have been insufficient to increase foreign reserves, as oil export FX flows to CBN contracted, likely as a result of the direct crude sale-direct fuel purchase arrangements.” The Bretton Woods Institution further predicted that future economic growth in the country will depend on the continued implementation of macro-fiscal and inclusive structural reforms. It stated the current reforms of the government will boost economic growth to an average of 3.4 per cent in 2023-2025. It also expects inflation to begin to moderate by 2024. The World Bank added, “The share of Nigerians living below the international poverty line is expected to peak in 2024 at 38.8 per cent before beginning a gradual decline, as inflation cools down and economic growth picks up. Targeted measures, including cash transfers, could mitigate short-term adjustment costs to the poor and vulnerable and mitigate their risk of falling into intergenerational poverty traps.” Earlier in June, the bank disclosed that inflation pushed an estimated four million people into poverty between January and May 2023. Inflation has since risen to 27.33 per cent as of October 2023.

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