Business
IMF Executive Board Concludes 2014 Article IV Consultation with Mauritius
PORT-LOUIS – On April, 21, 2014, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation1 with Mauritius.
A stable macroeconomic environment was maintained in 2013, despite difficult external developments. Real GDP growth was lower than expected at 3.2 percent in 2013, mainly on account of construction, sugar and tourism. With subdued international prices, inflationary pressures declined in 2013, despite the public sector wage increases, and year-on-year inflation fell to 3.5 percent. The unemployment rate was unchanged compared to 2012 at 8.0 percent. Credit to private sector growth remained robust. On the external front, the current account deficit widened to almost 10 percent of GDP in 2013. The reserve cover of imports of goods and services stayed constant at 4½ months with the Bank of Mauritius (BOM) accumulating additional net international reserves.
The fiscal policy stance was more expansionary than planned because of cyclical and one-off factors but also slippages. The structural primary deficit was broadly unchanged relative to 2011. The overall deficit including extra-budgetary funds is estimated at 4½ percent of GDP. While revenues remained broadly unchanged in proportion of GDP, expenditures increased by over 2 percent of GDP. As expected wages increased following the Pay Research Bureau’s (PRB) report, which increases civil servant salaries beyond annual inflation adjustments periodically with the next adjustment expected in 2016. Additional spending was also related to the flash floods in Port Louis as well as unplanned transfers to local governments and public enterprises. Finally, capital spending including by the special funds was 1 percent of GDP higher, though partially due to cost overruns.
Monetary policy was somewhat accommodative. Throughout the year, while a sluggish domestic demand and low international inflationary pressures helped anchor inflation expectations. The public sector wage increase related to the PRB report did not lead to strong private sector wage pressures. In this context, the BOM maintained the policy rate at 4.65 percent in September 2013 and February 2014, following a 25 basis point reduction in June 2013. In October 2013, reserve requirements were raised from 7 to 8 percent to curb excess liquidity in the banking system. The authorities continued building international reserves and used limited interventions to moderate excessive fluctuations of the rupee. The banking system remained well-capitalized and resilient in a strong regulatory context. Regulatory Tier I capital to risk-weighted assets are well above Basel II and the proposed Basel III requirements. Non-performing loans (NPL) increased slightly in 2013, but banks remained profitable with a 20 percent return on equity, despite low leverage ratios. However, liquidity ratios have worsened in recent years and are on the low side in international comparisons. BOM is consulting with banks on implementation of Basel III regulations and continued to publish its bi-annual CAMEL ratings for all domestic banks. It implemented macroprudential measures aimed at addressing emerging NPLs in the construction and real estate sectors as well as rising indebtedness. Threats to financial stability posed by a Ponzi-like scheme in 2013 were contained successfully, and the regulatory framework was subsequently improved.
Mauritius has established a track record as a reformer with strong institutions and a dynamic private sector. The Africa Training Institute (ATI) is set to open in June 2014 in Ebene. The country statistical capacity continues to be strengthened, including ongoing work on Monetary and Financial Statistics (MFS) as well as balance of payments (BOP) and international investment position (IIP) statistics. Mauritius subscribed to the IMF’s Special Data Dissemination Standard (SDDS) in February 2012, being the second Sub-Saharan African country to do so and is working on subscribing to SDDS Plus.
Executive Directors agreed with the thrust of the staff appraisal. They noted that Mauritius’ prudent policies and strong institutions have delivered steady growth, well-anchored inflation expectations, and continued financial stability. The near-term growth outlook is generally favorable, but an uncertain external environment carries risks. Against this background, Directors encouraged the authorities to consolidate recent macroeconomic gains, strengthen policy buffers, and pursue greater economic diversification through structural reforms to enhance the resilience of the economy.
Directors generally considered it appropriate to start tightening fiscal policy this year to smooth adjustment and increase the likelihood that the 50 percent target for the debt-to-GDP ratio is achieved by 2018, as mandated by law. They encouraged the authorities to articulate an ambitious consolidation strategy centered on better prioritizing public expenditure, strengthening tax administration, and broadening the tax base. Subsidy reforms and an overhaul of public enterprises, as well as an improved framework for fiscal devolution, including a better use of real estate taxes, could also underpin the budgetary adjustment over the medium term.
Directors agreed that the current monetary stance is broadly appropriate, but cautioned that a withdrawal of accommodation might be necessary if inflationary pressures intensify. They also suggested strengthening the institutional and operational arrangements that would support the eventual adoption of a formal inflation targeting framework.
Directors noted that the banking system remains well-capitalized, profitable, and resilient to shocks. They observed, however, that persistent excess liquidity in the banking system has hindered the monetary transmission mechanism, while also encouraging disintermediation and riskier lending. To address this issue, Directors encouraged the authorities to consider an approach to liquidity management involving additional issuance of government paper for monetary policy purposes and—more broadly—closer collaboration between the government and the central bank. Similarly, coordination between the central bank and the nonbank supervisor should continue to be strengthened to ensure the soundness of the overall financial system.
Directors took note of the staff’s assessment that the rupee appears to be modestly overvalued in real effective terms. To bolster Mauritius’s international competitiveness and durably reduce the large structural current account deficit, they recommended greater exchange rate flexibility, well-prioritized infrastructure investment, and stepped-up reforms to address labor and product markets rigidities. Directors also agreed that the external adjustment could benefit from further pension reforms that would boost national savings while strengthening social protection.
Directors welcomed the authorities’ intention to adopt the Fund’s SDDS Plus, and supported ongoing efforts to improve the collection of financial and labor market statistics.
Nigeria’s Gross Domestic Product (GDP) grew by 3.46% year-on-year in the third quarter of 2024, marking a strong performance compared to the 2.54% growth recorded during the same period in 2023 and 3.19% in Q2 2024, according to the latest data from the National Bureau of Statistics (NBS).
The growth was largely fueled by the services sector, which expanded by 5.19% and contributed 53.58% to the overall GDP.
READ MORE: Reps Debate Tinubu’s Loan Request
“The performance of the GDP in the third quarter of 2024 was driven mainly by the services sector,” the NBS stated in its report.
Key areas in this sector, including financial institutions, telecommunications, and trade, played significant roles in the economy’s growth.
The agriculture sector, while still positive, showed a slight slowdown, growing by 1.14%, compared to 1.30% in Q3 2023.
The industrial sector, however, posted a notable recovery, increasing by 2.18%, a marked improvement from the 0.46% recorded in the same quarter of 2023.
In nominal terms, Nigeria’s GDP at basic price for Q3 2024 reached N71.13 trillion, a substantial 17.26% increase from the N60.66 trillion recorded in Q3 2023.
“This performance is higher when compared to the third quarter of 2023, which recorded an aggregate GDP of N60,658,600.37 million, indicating a year-on-year nominal growth of 17.26%,” the NBS added.
The non-oil sector also showed strong performance, growing by 3.37% in real terms during Q3 2024, outperforming the 2.75% growth seen in the same quarter of 2023 and exceeding the 2.80% growth recorded in Q2 2024.
“The sector was driven in the third quarter of 2024 mainly by financial and insurance (financial institutions); information and communication (telecommunications); agriculture (crop production); transportation and storage (road transport); trade; and construction, accounting for positive GDP growth,” the NBS explained.
Despite the growth in the non-oil sector, its share of the total GDP decreased slightly to 94.43%, compared to 94.52% in Q3 2023, though it remained higher than 94.30% in Q2 2024.
The oil sector, in contrast, recorded a 5.17% year-on-year growth in Q3 2024, reversing the -0.85% decline seen in the same period in 2023.
However, growth slowed from the 10.15% recorded in Q2 2024. The NBS reported that Nigeria’s oil production averaged 1.47 million barrels per day (mbpd) during the third quarter, a slight increase from 1.45 mbpd in Q3 2023 and 1.41 mbpd in Q2 2024.
Family-owned businesses (FOBs) can continue to drive economic success, create value for shareholders, and positively impact their communities worldwide by staying true to their core values and adopting strategic practices that prioritise long-term growth, efficiency, and resilience.
This was part of the submission made by the Group Executive Director of Dangote Industries Limited, Halima Aliko-Dangote, during the Forbes Global CEO Conference in Bangkok, Thailand.
Halima, who is also the Executive Director, Family Office, spoke at the panel session on Family Business: Looking at the Next Frontier, opined that family-owned businesses have demonstrated exceptional resilience, navigating challenges and thriving over multiple decades.
Other speakers include the Managing Director and CEO of Worldwide Hotels, Carolyn Choo; the Managing Director of Damen Yachting, Rose Damen, a third-generation family shareholder of Damen Shipyards Group; and Co-Chairman of B.GRIMM Pharma, President of B. Grimm Joint Venture, and Board Member of B. Grimm Power, Caroline Link.
ALSO READ: CSR: Dangote Cement Fuels Education With Support Projects At Lagos Schools
According to her, success in family-owned businesses starts with shared values, goals, governance policies and alignment adding that reputation is part of ‘family capital’.
She maintained that governance structure, adherence to core values, customer satisfaction, optimization of shareholder value, meritocracy, integrity, leadership, brand equity, diversification/growth, philanthropy and preserving generational wealth play key roles to the success of our businesses.
Halima revealed that Dangote Group’s governance policies do not allow board and management to operate in silos as each business unit has at least three independent directors who offer a holistic view.
On other factors of success for Dangote Group, Halima emphasized, “We family-owned businesses have to stick to our tradition of asset rich-cash moderate or as my father will correct me, asset rich-cash poor. We as Dangote perpetuate a profitable business with strong values and strong governance structure. We make money while building our nation by contributing heavily to the global economy, creating massive jobs, thinking of our great grand kids and contributing excessively to humanity.”
Highlighting the significant contribution of FOBs to the global economy, Halima noted that studies by Mckinsey showed that they account for more than 70% of global GDP, generate annual turnovers of between $60 trillion and $70 trillion, and provide around 60% of global employment.
She stressed the crucial role these businesses play in creating jobs, sustaining communities, and driving development in sectors such as manufacturing, education, healthcare, and infrastructure across the world.
“Family-owned businesses (FOBs) have proven to be resilient, weathering challenges and thriving across multiple decades. Despite facing external pressures, many FOBs not only survive but also grow, contributing significantly to the global economy in ways that are often underestimated or overlooked,” she said.
She also pointed out that family-owned businesses often employ two key approaches in preparing the next generation for leadership roles: internal and external capacity building. Regarding internal capacity building, Halima explained that many families create internship programmes for young family members interested in taking over the business or assuming leadership positions.
“In Nigeria, we train the next generation so they can grow organically to leadership roles in family businesses. My dad’s approach is for you to start from ground up knowing you will get to leadership role if you work hard and do your job right. These experiences make it easier for you to learn the ropes and be prepared for leadership role in the future,” she pointed out.
On external capacity building, Halima discussed the practice of sending younger generations to work in non-family businesses. This approach enables them to acquire new skills, learn better processes, and gain diverse perspectives that can benefit the family business in the long run.
Halima revealed that she started her career as an Analyst at KPMG before joining Dangote Industries Limited.
The approach, she explained “removes the familiarity tag as the young generation got employed as other people and supervised to monitor their performance. This has been a common avenue business families have chosen to pursue for many years, having their next generation spend three to five years working outside the family business before eventually joining with a new set of skills and business knowledge.”
Addressing the challenges of succession planning, Halima emphasised the importance of involving the younger generation in the business early on.
She suggested that this creates a space for open communication, where the next generation can share their thoughts, ideas, and aspirations, while the senior generation provides critical information to help the next leaders make informed decisions.
She stressed the need for a balance between tradition and innovation in family-owned businesses. While tradition provides continuity and stability, she noted that innovation is vital to staying relevant and competitive in the modern marketplace.
“Successful family businesses recognise the need to adapt to changing consumer preferences, technological advancements, and market trends. Family businesses often have a wealth of experience and deep-rooted traditions. They can also benefit from external expertise and fresh perspectives,” she concluded.
A total of 9,000 youths in the Niger Delta have acquired entrepreneurial skills under the LiveWIRE programme of The Shell Petroleum Development Company of Nigeria Limited (SPDC) since it was introduced in 2003 as part of efforts to boost employment opportunities among people aged 18 – 35 years.
It was gathered that the recipients were trained and supported with start-up grants and business mentorship enabling them to launch their own businesses and become employers of labour.
The latest training, sponsored by the SPDC Joint Venture which includes the Nigerian National Petroleum Company Limited, TotalEnergies and Nigerian Agip Oil Company, involved more than 1,000 young entrepreneurs from host communities in Rivers, Bayelsa and Delta states. They graduated last week in Port Harcourt having developed business plans and pitched them to experts as part of the training. 654 trainees were selected as best-performers.
ALSO READ: CSR: Dangote Cement Fuels Education With Support Projects At Lagos Schools
“We’re delighted at the success of the LiveWIRE programme,” SPDC Director and Head Corporate Relations, Igo Weli, said at the graduation ceremony. “This training is set aside for young people from our host communities which means they can also enjoy the benefits of the programme and join the teeming number of entrepreneurs, several of whom now have the chance to participate in SPDC’s business as vendors. LIveWIRE is one of many ways through which Shell and her partners are powering progress in Nigeria.”
The graduation ceremony featured a technical conference with the theme, “Unlocking Growth: Leveraging Policies to Build an Inclusive Tech Eco System in the Niger Delta.” The keynote speaker, Iyke Kemabonta, and panelists, Soala Jumbo, Davies Awongo, Kalada Briggs, Vivien Ene and Ezieke Amaefula, challenged the beneficiaries to grow their businesses, overcome environmental challenges and enable the Niger Delta to reap the rewards of the programme.
Trainees from the 2023 Regional LiveWIRE programme from Rivers, Delta, Bayelsa, Imo, Abia, Akwa Ibom, Cross River and Edo states also joined the graduation ceremony. Beneficiaries were inducted into the LiveWIRE Alumni Group by three previous participants who now run their own businesses — Precious Adeho, Queen Esther Bolou-Ebi and Kalada Briggs. The trio encouraged the recipients to use the opportunity as launching pads into international recognition and success.
In a notable achievement, five previous beneficiaries won the LiveWIRE International “Go and Trade Enterprise Linkage Award” which enabled them to embark on trade visits to London, Dubai, Malaysia, and neighboring Ghana. Livewire Nigeria also offers beneficiaries the chance to compete for the Global Shell LiveWIRE Top Ten Innovators Award which comes with huge rewards.
LiveWIRE is Shell’s global enterprise development initiative for small businesses and is active in 18 countries. As at 2023, the programme had trained about 3,400 people and helped create more than 1,200 jobs around the world.
Tyla Scores 8 Nominations At Billboard Music Awards
Ayra Starr’s “19 & Dangerous (Deluxe)” Achieves 600 Million Spotify Streams
Tinubu Applauds 3.46% GDP Growth, Vows To Deliver $1trn Economy By 2030
G7 Foreign Ministers To Meet On Netanyahu’s ICC Arrest Warrant
Loans Necessary For Budget Despite High Revenue Collections – Wale Edun
FG To Mandate Acceptance of Corps Members In All Gov’t Agencies
OSSG Raises Alarm Over Murder Plot By APC Chieftain
NCC, SMEDAN, NAICOM, SEC, Others Set for SUPERNEWS SMEs Conf June 13
Sahara’s Tonye Cole resigns from GPHCDA
Oando opens ultra-modern petrol station in Lagos
Niger Delta Avengers: President Buhari Reads riot Act …considers the carrot and stick option
