Nigeria Content Online

Some
industrialists say the credit crunch challenge, a fallout of the
banking reforms and the persistent decline in infrastructure and
security in Nigeria, is telling on the business climate of the nation.

The
year 2009, they say, was a year of contrasting fortunes between the
first and second half of the year for businesses in the country as
while the first half was a period of growth, the second half was one of
slow-down.

Kola
Jamodu, an industrialist and chairman of Nigerian Breweries Plc, said
that in the second half of last year, the Central Bank of Nigeria (CBN)
carried out sweeping reforms in the banking sector, culminating in its
intervention in the management of eight out of the twenty four banks in
the country.

“One
of the consequences of that intervention was the near total absence of
access to credit facilities by customers of those banks especially
companies and entrepreneurs,” he said during the pre-annual general
meeting press briefing in Lagos yesterday.

The
former industry minister added that, “This had a profound effect on our
supplies, customers, other key partners and consumers. The
expectations, however, is that the long- term benefits will outweigh
the short-term pains being suffered.”

He
added that while the efforts of some state governors to improve on
physical infrastructure were commendable, the general infrastructure
state remains a huge challenge for business operators.

“Businesses
still generate their own power, invest heavily in private security and
expend huge time and cost in the haulage of both raw materials and
finished products from one part of the country to another because of
the deplorable state of our roads,” he said. “Multiplicity of taxes and
constant harassment by agents of local governments of businesses are on
the increase.”

Economic slow-down

For
the brewed product market and the general fast moving consumer goods
industry, the year under review witnessed a slow down in growth.
According to Mr. Jamodu, “This was due to the economic slowdown, the
banking reforms, general lack of enough liquidity and other social
factors which affected business.”

He
also stated that despite the challenges in 2009, benefits from the
firm’s continuing investments and improved operating efficiencies
accounted for its success.

The company’s turnover grew by 13 per cent from the N145.46 billion in 2008 to N164.21 billion.

Operating
profit also grew by 13 per cent from N36.78 billion to N41.66 billion.
Profit before taxation increased by 10 per cent from N37.52 billion in
2008 to N41.40 billion, while profit after tax increased by N25.70
billion in 2008 to N27.91 billion.

The firm announced the payment of a total dividend of N27.9 billion;
that is, N3.69 per ordinary share of fifty kobo each, an increase of 9
per cent over the N3. 40 paid during the corresponding year.

The
company had earlier paid two interim dividends in May, 2009 and January
2010 of N21.17 billion of N2.80 per ordinary share of 50 kobo each. The
final dividend, according to the firm’s management, will now be N6.73
billion, totalling 89 kobo.

If approved, the firm says the final dividend is payable to all
shareholders recorded in the register of members as at 12 March. The
payment date is 20 May.