ThinkBusiness Today - July 14th

E kaaro o, Ututu Oma, Barka da Safiya - Good morning, and a warm welcome to ThinkBusiness Nigeria, your Monday – Friday dose of commentary, contexts, and insights on business and economic news that matter to you.

TGIF.

Looking for something to do this weekend? You may want to check Eventbrite. The site has a collection of different kinds of events happening this weekend in Nigeria’s major cities.

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Markets

• Yesterday made it two consecutive days the benchmark NGX ASI fell by more than 2% this week, as the market plummet 2.03% to close at 62,748.94, showing a week gain of 1.18%, a 4-week gain of 7.88%, and an overall year-to-date gain of 22.43%. Key share price movement include Stanbic IBTC Holdings (- 10%), Transcorp Hotels (-10%), Fidelity Bank (-10%) and Wema Bank (-10%).

• Global oil benchmark Brent hovered above US $80 a barrel on Thursday after U.S. inflation data implied interest rates in the world's biggest economy are close to their peak. Brent crude futures 1 cent to US $80.74 per barrel while U.S. West Texas Intermediate crude futures crept 8 cents lower to US $75.67.

• Following the N800 breach on the streets two days ago, Naira strengthened against the US dollar at the I & E and largely flat on the streets yesterday. At the I & E, Naira closed N746.28, 7.06% change from Wednesday. On the street, it was a mere 0.3% change from Wednesday, closing at N777.56 against the US dollar. Meanwhile, latest data by FMDQ shows inflows into I & E up by US $300 million in June compared to May, following the aggreagation of all CBN’s exchnage rate windows into the I & E window and laregely removing the previous restrictions in the changes in the value of the Naira.

• US natural gas futures traded around US $2.65/MMBtu, sliught change from Wednesday.

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National Headlines

• N500 billion for palliatives approved – As expected, the House of Representatives granted approval for the amendment to the 2022 appropriation act and approval of the N500 billion requested for palliatives following the removal of fuel subsidies. However, the Nigeria Labour Congress and the Trade Union Congress are dissatisfied, arguing that it is significantly inadequate. They are pressing for 300% increase in salaries.

• Screening / Confirmation of Service Chiefs – The recent appointment, screening, and confirmation of the service chiefs by the President and the Senate has raised the matter of whether the Senate is required by law to do so. July 2013, a Federal High Court ruled unconstitutional and illegal any appointment of service chiefs by the President without the approval of the Senate. This is according to Section 18 (1) and (2) of the Armed Forces Act, Cap A20. This is clear, but they should not take office, nor operate in the roles before the confirmation. Since this ruling, confirmations have become a mere layer of activity on top of the President’s appointment. That is not meant to be the purpose of screening.

• US $800 Million loan again? – No. It’s the same US $800 million for the provision of safety net for those most adversely affected by the removal of fuel subsidy. Under this program, the Federal Government of Nigeria plans to allocate a monthly sum of N8,000 to 12 million individuals from low-income backgrounds. The problem with Nigeria’s safety net programme is that it is not transparent, holistic because some in the category are left out, and no one has been able to vouch for the data.

• Not so necessary – The CBN announced Naira should be a payout for diaspora remittances, using the I & E as the anchor rate. It is not necessary. Following the aggregation of all CBN’s exchange rate windows into the I & E, the market has taken care of that. Physical dollar receipts from the banks and the rise in the number of domiciliary accounts in the country was motivated by the difference in the official and street markets.

Global Headlines

• Tomato prices rise in India – It’s not only in Nigeria that tomato prices are rising. In the last few months, tomato prices have risen dramatically in Nigeria, estimated at about 200% since the start of the year. In India, the prices of tomatoes have risen by over 300% in a year due to flooding in major tomato producing states like Andhra Pradesh, Maharashtra, and Karnataka, according to CNBC reports. India is the second largest producer of tomatoes in the world, after China. In Africa, Egypt is the largest producer of tomatoes, followed by Nigeria.

• Great sporting events this weekend – The English premier league, the staple of most sports lovers in the country, is on break. But outside of football, there are some great sporting events this weekend. I want to particularly draw your attention to the climax of Wimbledon, the third Tennis grand slam event of the year this weekend. The men semifinals hold today – J. Sinner v N. Djokovic and C. Alcaraz Garfia v D. Medvedev. The final will be on Sunday. The final of the women’ single will be between O. Jabeur and M. Vondrousova tomorrow.

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What I read this week

Title – The Innovation Mandate: The Growth Secrets of the Best Organisations in the World

Author – Nicholas J. Webb

While reading this book, I also decided to check the author on the internet. In one of his speeches, he said something remarkable, ‘That, of all those that give thought leadership on innovations, he is the only that has several patents’. It is that extension of confidence and clarity that you will find in the book.

What is your organisation’s mandate? What is the most important thing to the organisation and its employees? For some, growth is their mandate, while for some, it is profit. To Nicholas, “making profit is nonnegotiable”. If profit is the topline nonnegotiable, then innovation is the underlying catalyst. You will find in the book that ‘if your organization doesn’t innovate, its headed for early demise’.

The history of the world is that of innovation. Successive generations have always sought to improve on the ways, products, services of the previous generation. It is what is defined as progress, growth and responsible for the increasing value creations we see today. But in the last 25 years, it has become even more desperate to innovate as a business.

Why?

The first is that we are seeing a rate of change never seen in the history of the world. Rapid technological advances have made value of ‘old’ innovations time value very limited. Imagine how long the world used the landline as the means of civil communication over distances before the mobile phone arrived. While the mobile is still with us, I am sure none of us can remember what the first set of mobile phones looked like, just in the space of a generation.

The second point is the severity of disruption is increasing. This is a major threat to businesses as it increases competition to levels and at speed never seen before now. Due to a variety of disruptions, new innovations can wipe out a company or reduce it to a shell of its old self.

But never mind, Nicholas set out how you can make innovation the ‘rock solid’ mission of your organization, designing a process of innovation that ensures that your business always stays ahead.