Business
Okpala:Debt utilisation must support actual economic growth
OKPALA:Debt utilisation must support actual economic growth
Group Managing Director, VFD Group Plc, Nonso Okpala, presides over an expansive financial conglomerate with expertise across many sectors. Okpala, a well-rounded finance and economic expert, in a recent interview speaks on Nigeria’s macroeconomic outlook, financial markets and business development.
What are the key variables that will shape the economic space in the second half, especially the financial markets?
OKPALA:Following the recession witnessed in third quarter 2020, the economy has recorded two consecutive quarters of economic growth, albeit marginal.
Two major factors have heavily influenced the economic conversation in first half 2021 are inflation and exchange rate. These will remain a key factor for the rest of the year. In second half, we expect a likely increase in headline inflation, followed by the growing trend of higher interest rate across most money market instruments, including treasury bills.
In the capital market, we have seen some progress with the implementation of the demutualisation. However, factors such as naira stability, earnings performances of key players and government policy would be crucial for market growth, especially towards attracting and retaining foreign investors.
We’ve seen a continuing decline in foreign portfolio investments. What is responsible for this and how do we make Nigeria the preferred destination among emerging markets?
The decline in foreign investments could be attributed to the condition of Nigeria’s economic and business space, as well as the security challenges, socioeconomic uncertainties associated with the COVID-19 pandemic, negative macroeconomic indices and mismatch in policies that have failed to give direction.
Huge concerns around foreign exchange (forex) liquidity, capital repatriation, rising inflation and the deterioration in the macro-environment have also dampened the appetite of foreign portfolio investors. In addition, the Nigerian Exchange (NGX) and mutual funds both recorded bearish performances with the NGX All Share Index on negative yield between January and June and only 25 out of 118 listed mutual funds posting growth in the first quarter 2021.
A possible increase in foreign inflow will be supported by the combination of significant improvement in operating environment and the capital market, relative stability in the foreign exchange market, improved security conditions and deliberate government policies that impacts ease of doing business.
Are we likely to see a rebound in the equities market in the second half?
The equities market is not reflecting impressive corporate earnings or a continuous uptick in fixed income enough to weigh on the market. However, a decline in inflation and a convergence of forex rates and forex stability in second half will boost investor confidence and improve foreign portfolio investments in the equities sector. Those are a few of the conditions that will indicate whether a recovery will occur for NGX ASI, although some sectors are already seeing positive year-to-date performance. In addition, the SEC is working on various initiatives which we are hopeful would increase local participation in the market.
What sectors do you think investors should look out for?
Across Africa, we have seen accelerated investments in financial technology. This trend would remain the same given the maturity stage we are in and the vast market that remains to be captured.
Real estate is a viable investment sector. A gradual shift into property-tech and rejig of the housing model to increase investment yield and rental yield is required to accelerate growth.
Other sectors to look at include telcos, food and beverages and travels and tourism especially as the world economy comes to a full reopening and travel restrictions are lifted.
Access to finance is still a major issue for individuals and businesses, especially small and medium enterprises (SMEs), how do we improve access to finance? And what is your Group doing about this?
This remains a challenge, especially in developing and underdeveloped countries.
Along the value chain of our businesses, we have different initiatives and products that helps address this. For individuals, this is purely technology-focused. We have built a virtual banking solution that eliminates barriers and reduces the cost and time of accessing financing. In addition, we will continue to use data to understand our customers and provide them with risk-based credit access.
Within the Group’s portfolio companies, we have three entities with differentiated focus on creating access to credit for individuals and businesses, and emphasis on how important this is to us. We give loans to SMEs through our micro-finance bank while structured financing for larger corporates can be accessed from our bridge financing outfits. Hence, there is something for everyone.
Layered on this is our corporate banking portal which will be launched soon. In designing this, a large emphasis was placed on SMEs. Beyond financing, we are committed to providing end-to-end financial services and growth accelerators to business we work with.
What is your assessment of the first half economic performance, with emphasis on the financial markets?
The first half 2021 was a mix of outcomes. The country officially came out of recession in first quarter 2021, while we have seen strong resistance to the pandemic across some sectors with growth in key indicators, particularly in banking and telecoms. However, these gains remain limited tempered by rising inflation, declining foreign reserves and further naira depreciation across official and parallel windows.
In the financial markets, we witnessed rising interest rate for T-bills, bonds and fixed income instruments. The capital market, however, has witnessed a six per cent decline year to date
Micro-lending is a global tool for poverty alleviation and empowerment. What has been your experience?
We have been into micro-lending business since 2009 first with VFD Bridge using our Lagos State lending licence and now joined by our microfinance bank. From then till date, we have deepened our reach of clientele who can access micro-credit significantly. Particularly between 2019 and today, where we have grown from 3,000 customers to about 300,000, who can potentially access micro-credit on request. We have been able to provide credit to individuals and small businesses who, otherwise would not have had access to credit from mainstream financial institutions. This, in return, enables these businesses grow, while also creating more jobs for thousands of others.
That said, this is only one of the several means of poverty alleviation and the government needs to create more social programmes and an economic environment that ensures gains are sustained.
Nigeria’s national economic development programme revolves around diversification and job creation, what are your suggestions?
In addition to diversification of government revenue and job creation, bridging the infrastructure gap is also a front burner subject towards achieving our development goals. While the government continues to make progress in this regard, the pace of infrastructure needs to be sped up to achieve our goal.
Also, we have seen gradual decline in oil contribution to gross domestic product (GDP), with growth, especially in the agricultural sector. However, the future is technology. Even in our agricultural sector, growth accelerator from this sector would need investment in tools to increase mechanised farming and general produce efficiency. Still on technology, we saw the emergence of India in the 90s to 2000s as a major exporter of tech-based solutions, services and personnel. In today’s increasingly global village, we continue to see the ascendance of Nigerians in the tech and software development phase. Government policies need to fully support this budding area of expertise for job creation and economic value realisation.
What’s your view on Nigeria’s debts?
Our debt profile is on the rise, and this is well documented. The bigger challenge is our ability to generate revenue. In 2020, about 97 per cent of government revenue was used to service existing debt stock. Hence the focus in the future should be on how to enhance our revenue, and how future debt utilisation must support actual economic growth.
How much of a risk does the foreign exchange constitute to the markets and economy?
Considering the importance of foreign inflows to our financial markets, foreign exchange stability and availability is an important indicator for the market and our economy.
Investors need assurances that there will not be capital or interest gain erosion at repatriation point or worse case, scarcity of forex as we saw in 2016 when companies could not repatriate funds to home country.
This stability also has the potential to affect the prices of goods and services, especially for products in the manufacturing value chain that relies on imported raw materials. This, alongside the increasing cost of outrightly imported items, can lead to inflation, a scenario we also saw between 2016-2017, when “imported inflation” accounted for the upward trend in headline inflation.
GTCO Launches “Take on Squad” Hackathon 3.0, Opens Call for Applications
Guaranty Trust Holding Company Plc (“GTCO” or the “Group”) has announced the launch of “Take on Squad” Hackathon 3.0, reaffirming its commitment to fostering innovation, empowering talent, and supporting the development of technology-driven solutions that address real-world challenges across Africa.
Now in its third edition, the Hackathon brings together developers, designers and entrepreneurs across Nigeria in a collaborative environment to build practical solutions across key sectors including financial services, healthcare, commerce and digital inclusion. Under the theme “Smart Systems: The Intelligent Economy,” participants are challenged to design and build intelligent, data-driven solutions that transform how communities engage with money.
Applications are now open, and interested teams can find full guidelines and registration details on the official portal at https://squadco.com/hackathon.
Speaking on the initiative, Eduophon Japhet, Managing Director of HabariPay, stated: “Today’s dynamic, digitally driven world demands continuous innovation, which is shaping how economies grow, how businesses scale, and how societies evolve. Through “Take on Squad” Hackathon, we are deliberately investing in the ideas and talent that will define the future. Our objective is not simply to encourage innovation, but to enable its translation into scalable solutions that deliver real and measurable impact. This reflects GTCO’s role as a financial services platform that connects capital, capability, and creativity to drive sustainable progress.”
The social coding event remains a cornerstone of HabariPay’s mission to foster creativity and problem-solving among emerging tech talents. Competing teams will leverage Squad’s advanced APIs to create scalable digital tools that address everyday challenges faced by businesses and individuals.
Through initiatives such as this, GTCO continues to position itself at the intersection of finance, technology and enterprise, actively shaping the future of digital transformation in Africa.
About HabariPay
HabariPay Ltd is the fintech subsidiary of Guaranty Trust Holding Company Plc (GTCO), one of the largest financial services institutions in Africa with direct and indirect investments in a network of operating entities located in 10 countries across Africa and the United Kingdom.
Licensed by the Central Bank of Nigeria (CBN), our goal is to support SMEs, micro merchants, large corporations and other fintechs (Tech Stars) with the tools they need to thrive in an evolving digital economy and expand beyond their current market reach. HabariPay’s solutions include Squad, a full-scale digital payments toolkit to make in-person and online payments simpler, HabariPay Storefront, an e-commerce website to facilitate online purchases, Value-Added Services to help merchants access cost-effective and flexible airtime and data bundles to run their businesses, as well as a switching infrastructure that enables tech-focused businesses to optimise cost and make transactions more efficient.
HabariPay’s contributions to Accelerating Digital Acceptance in Africa have not gone unnoticed–it received Mastercard’s Innovative Mobile Payment Solution Award at TIA 2022 for its innovative payment solution, SquadPOS.
About Squad
Squad is a complete digital payments solution that is reliable, secure, and affordable, making receiving in-person and online payments simpler and convenient.
Thousands of merchants currently leverage Squad’s payment solutions for their daily business operations. Squad’s current products and service offerings include SquadPOS, Squad Payment Links, Squad Virtual Accounts, USSD, and E-Commerce Storefront.
Find out more at www.squadco.com.
Electric 8-Seater Tula Moto Keke Enters Nigerian Market, Targets Higher Operator Earnings
LAGOS — A new electric-powered tricycle with an expanded passenger capacity has been introduced into Nigeria’s urban transport sector, offering operators a potentially more profitable and eco-friendly alternative to conventional petrol-driven “keke.”
The newly launched 8-seater electric tricycle, now available in Lagos with plans for nationwide distribution, features a dual-row seating arrangement capable of accommodating up to eight passengers per trip—significantly higher than the standard three-passenger configuration common across the country.
Promoters of the innovation say the increased capacity is designed to boost daily earnings for operators, particularly amid persistent fluctuations in fuel prices. By running entirely on electric power, the vehicle eliminates dependence on petrol, reducing operating costs and shielding drivers from fuel price volatility.
According to the distributors, the tricycle is equipped with a durable battery system capable of covering extended distances on a single charge, making it suitable for commercial operations across high-traffic routes, residential estates, campuses, and marketplaces.
“The concept is straightforward—enable drivers to earn more while spending less,” a company representative stated. “With higher passenger capacity and zero fuel requirements, operators can maximise each trip without the burden of daily fuel expenses.”
Beyond its cost-saving potential, the electric keke is also said to require less maintenance than traditional models, offering additional long-term savings. Its quieter and smoother operation is expected to enhance passenger comfort and overall commuting experience.
Industry analysts note that the introduction of electric mobility solutions reflects a growing shift toward cleaner and more sustainable transportation alternatives in Nigeria, particularly in densely populated urban centres such as Lagos.
The distributors added that the product is currently available under a limited promotional offer, with delivery options across the country.
For inquiries and purchase: 📞 08153432071
📞 08035889103
Office Address:
📍 Plot 9, Block 113, Beulah Plaza,
Lekki–Epe Expressway,
Lekki Phase 1, Lagos
As transportation costs continue to rise and environmental concerns gain prominence, innovations like the electric 8-seater keke may signal an emerging transition toward more efficient and sustainable mobility solutions nationwide.
Business
A Pipeline, a Licence, and a Storm Brewing: Corruption allegations Draw global oil giant, Shell, Into Nigeria’s Reform Test
*A Pipeline, a Licence, and a Storm Brewing: Corruption allegations Draw global oil giant, Shell, Into Nigeria’s Reform Test*
By Deji Johnson and Mustapha Bello
t begins with a pipeline that should have been completed by June 2026. It widens into a regulatory dispute. And it now risks becoming a defining test of Nigeria’s gas reforms under President Bola Ahmed Tinubu.
At the center is a stalled 80 kilometre gas pipeline from Sagamu to Ibadan, a project backed by over 100 million dollars in investment and built on a protected Gas Distribution Licence issued under the Petroleum Industry Act 2021. The licence granted NGML–NIPCO exclusive rights to distribute gas within Ibadan for 25years based on Nigeria’s Petroleum Industry Act.
On paper, the law is clear. On the ground, the situation is anything but.
For more than three months, construction has been halted following a stop work order issued by the Oyo State Government led by former Shell Contractor and engineer, Governor Seyi Makinde. No detailed public justification has been provided that aligns with existing federal approvals already secured for the project.
What might have remained a quiet regulatory disagreement has now escalated into something far more politically charged. How?
In recent remarks, Nigeria’s Minister of the Federal Capital Territory, Nyesom Wike, who is of the same political party as Governor Seyi Makinde, made a pointed allegation that has since rippled across political and industry circles. He suggested that the Governor of Oyo State and Shell were in what could be described as an “unholy alliance.”
It is a serious claim. One that, if substantiated, would raise profound questions about the intersection of corporate influence, state level action, and federal law.
Neither Shell nor the Oyo State Government has publicly responded in detail to the allegation.
But the silence is now part of the story.
*THE SHELL QUESTION*
For Shell, this moment carries particular weight.
The company has operated in Nigeria for decades, building one of its most significant global portfolios in the Niger Delta. But that history is not without controversy. From corruption claims to environmental damage claims and community disputes amongst others, Shell has faced years of litigation and, in several high profile cases, adverse rulings tied to its operations in the region.
Those cases, many adjudicated in foreign courts, have shaped a negative reputation that continues to follow the company.
Now, a new question emerges.
Is Shell once again operating at the edge of Nigeria’s regulatory framework seeking to exert undue influence in circumventing Nigeria’s petroleum laws, or firmly within it?
Industry sources including a widely reported meeting between their representatives, Oyo State Government representatives and the newly appointed midstream and downstream chief executive, indicate that engagements involving Shell and the Nigerian Midstream and Downstream Petroleum Regulatory Authority could enable the company to enter a gas distribution zone already licensed to another operator in breach of the PIA.
If true, the implications are immediate and far reaching.
A licence meant to protect investors and investments in Nigeria’s gas space ceases to be exclusive against the dictates of the guiding laws. A framework begins to look flexible, and a reform risks appearing reversible.
To many, it seems more than just a commercial dispute and is not just about one company versus another.
Nigeria is in the middle of an energy transition where gas is expected to play a central role in powering industries, stabilising electricity supply, and reducing reliance on expensive diesel. President Bola Tinubu has emerged as a global champion of using gas as a transition fuel in Nigeria and Africa whilst rolling out elaborate but clearly defined plans to achieve it. Yet gas availability remains inconsistent, constraining power generation and limiting industrial output.
Projects like the Sagamu to Ibadan pipeline are designed to close that gap. To halt such a project is to delay not just infrastructure, but impact. To undermine its legal basis is to question the system that enabled it and to introduce competing claims within the same licensed zone is to risk regulatory confusion at a time when clarity is most needed.
This is where the issue moves from commercial to national because at stake is not only an investment, but the credibility of the reform architecture itself.
*OYO STATE AND THE FEDERAL QUESTION*
The role of the Oyo State Government adds another layer of complexity.
Energy regulation in Nigeria, particularly in the gas sector, is governed by federal law. Yet implementation often intersects with state authority, creating spaces where jurisdiction can blur.
The stop work order issued on the pipeline has become the clearest manifestation of that tension. Was it a regulatory necessity?
A precautionary measure? Or, as alleged by Minister Wike, part of a broader alignment with external interests? Without transparency, speculation fills the vacuum and the regulator must avoid finding itself mired in such allegations.
*QUESTIONS THAT WILL NOT GO AWAY*
For Shell, the questions are now direct and unavoidable:
Is Shell, a global energy giant, seeking to operate within the Ibadan gas distribution zone already licensed to NGML–NIPCO?
What assurances, if any, has it received from regulators or state actors?
How does it reconcile such actions with the exclusivity provisions of the PIA?
For the regulator, NMDPRA:
Can a Gas Distribution Licence be effectively shared, diluted, or overridden after issuance? According to Nigerian laws, the answer is No.
What precedent does this set for Nigeria’s gas infrastructure market?
For the Oyo State Government:
On what legal grounds does the stop work order stand, given federal approvals already in place?
And how does this action align with national energy priorities or the state’s gas needs?
Nigeria has spent the last two years telling a new story to the world. A story of reform, of discipline, of a country ready to compete for global capital. And it has worked so far with stability returning to Nigeria’s economy and over $20bn of energy investments looking to enter the country in the short to midterm.
But reforms are not tested in policy papers. They are tested in moments like this.
Moments where law meets influence, investment meets interference and promise meets pressure.
For Shell, long mired in issues surrounding ethical operations in Nigeria, this is more than a business decision. It is a reputational crossroads.
For Nigeria, it is something even larger. Whether the country’s laws will hold when they are most challenged or Whether its reforms will stand when they are most inconvenient or even whether Nigeria’s energy investments future will be shaped by the rules of law, adherence to regulatory protections and provisions or by unethical and corrupt relationships.
Until those questions are answered clearly, publicly, and decisively, the pipeline in Ibadan will remain more than steel in the ground.
It will remain a symbol of a country still deciding which path it truly intends to follow. Nigeria must act quickly and decisively because the world is watching.
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