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Lufthansa urges pilots union to return to pay talks

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German pilots union VC should resume talks with Lufthansa to find a compromise over a long-running pay dispute rather than repeatedly going on strike, a board member at the airline told a German weekly.

Lufthansa canceled nearly 2,800 flights during a four-day strike from Wednesday that affected more than 350,000 passengers, the 14th walkout in a dispute running since early 2014 that has cost the airline hundreds of millions of euros.

“We have to talk,” Bettina Volkens, Lufthansa’s board member in charge of human resources told Bild am Sonntag. “I hope very much that (VC) finally changes its uncompromising stance.”

“This cannot be forced via strikes.”

Lufthansa said via Twitter that all flights would start on schedule on Monday, Nov. 28, as there was no strike call from VC so far.

VC rejected the latest pay offer from Germany’s biggest airline late on Friday but lifted the threat of extending its strike beyond Saturday.

It said on Saturday that more strikes were possible, and would be announced at least 24 hours in advance.

Lufthansa has offered to increase wages by 4.4 percent in two installments, plus a one-off payment worth 1.8 months’ pay. The union wants an average annual pay rise of 3.7 percent for 5,400 pilots over a five-year period backdated to 2012.

Pilot strikes cost Lufthansa 222 million euros ($235 million) in 2014, according to the IW Cologne Institute for Economic Research while in 2015, walkouts by pilots and cabin crew cost the airline 231 million euros.

Lufthansa said it had taken another 20 million euro hit over the first two days of the latest strike.

Source: Reuters

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Business

Comparison Of Nigeria’s Naira To Other African currencies And Be Shocked At The Result

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I wanted to do an online transaction with an online fashion brand abroad. Of course, I always make sure I check the exchange rate before I place an order, to know how much I would be spending in naira.

As usual, after calculating the exchange rate, what I wanted to get was on the high side. I just became humble and cancelled the transaction.

I started thinking if the disparity between dollar and naira is so insane, what will be the exchange rate of the naira to the currencies of other African countries. I picked 25 random African countries and compared their currencies with the naira.

Before I started my findings, I felt only a few African countries could have stronger currencies than the naira but boy I was shocked and ashamed with what I came up with.

Check out the latest exchange rate of the Nigerian naira compared to some random African countries’ currencies.

1. South Africa – 1 Rand = 26.28 Naira

2. Ethiopia – 1 Birr = 13.30 Naira

3. Ghana – 1 Cedi = 81.96 Naira

4. Gambia – 1 Dalasi = 7.60 Naira

5. Kenya – 1 Shilling = 3.48 Naira

6. Liberia – 1 Dinar = 3.05 Naira

7. Swaziland – 1 Lilangeni = 26.55 Naira

8. Tunisia – 1 Dinar = 145.90 Naira

9. Zambia – 1 kwacha = 36.7 Naira

10. Angola – 1 kwanza = 2.17 Naira

11. Lesotho – 1 Loti = 26.55 Naira

12. Libya – 1 Dinar = 262.77 Naira

13. Morrocco – 1 Dirham = 38.32 Naira

14. Madagascar – 1 Ariary = 0.12 Naira

15. Mauritius – 1 Rupee = 10.5 Naira

16. Malawi – 1 kwacha = 0.50 Naira

17. Mozambique – 1 Metical = 5.8Naira

18. Namibia – 1 Dollar = 26.55 Naira

19. Seychelles – 1 Rupee = 26.38 Naira

20. Sudan – 1 pound = 53.89 Naira

21. Botswana – 1 Pula = 34.60 Naira

22. Cape Verde – 1 Escudo = 3.82 Naira

23. Algeria – 1 Dinar = 3.18 Naira

24. Egypt – 1 Pound = 20.45 Naira

25. Eritrea – 1 Nakata = 23.52 Naira

The currencies of some worse economies in Africa have better value than the naira.

© 2017, Sunday Emmanuel. All rights reserved.

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We source 75% of raw materials locally – Guinness MD

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The Managing Director/Chief Executive Officer, Guinness Nigeria Plc, Peter Ndegwa, spoke to STANLEY OPARA on the growth of the company amid the current economic realities in Nigeria

Guinness Nigeria recorded 131 per cent increase in operating profit year-on-year for 2017 financial year. How was the company able to achieve this despite the state of the economy?

Guinness Nigeria’s financial results were driven by a relentless focus on executing our strategy and keeping costs down. Despite the challenging economic conditions, we have remained focused on executing our company’s total beverage strategy, which gained further traction with strong growth in our international premium spirits portfolio following our first full-year of distribution.

In December 2015, Guinness Nigeria became the first total beverage alcohol company in Nigeria when it acquired the rights to distribute International Premium Spirits including Johnnie Walker Scotch whisky and Bailey’s liqueur in Nigeria. This was quickly followed in January 2016 by the acquisition of the rights to distribute McDowell’s, a United Spirits Limited whisky brand.

Our gross profit of N48.3bn is as a result of volume growth, pricing benefit and a favourable sales mix as we continued to invest in our expanded brand portfolio during the year.

Was there a major investment locally with respect to this growth?

Part of our investment includes the N4.7bn spirits line for locally manufactured spirits which we inaugurated in Benin. These strategic acquisitions and expansions have filled the gaps in the spirits brand base, allowing us to compete across all categories of the alcoholic beverage market in Nigeria. We remain committed to executing our productivity agenda with a strong focus on cost reduction, distribution and operational efficiencies.

What is your export strategy, considering the huge market outside Nigeria?

We are investing behind our capacity and if we weren’t thinking long term, we would not be doing that.  Our exports have also been expanded, and this is not because of the desire for profits. Really, we intend to access foreign exchange. We exported some of our products to countries such as Ghana, Cameroun, and so on. From these exports, we were able to use the money we earned to fund the purchase of the import. We were also able to reduce costs in the last two years through sourcing of raw materials locally. However, this is not always about lowering cost, especially during economic recession, though it is more sustainable long term. We source cassava and sorghum, among others, locally and have significantly moved our local sourcing from 40 to 75 per cent in the last three years. Although there have been challenges but we still believe this is sustainable. We have also started to work with Edo State and some other Northern states in developing the value chain of the agriculture sector. For quality, we have effective processes in place, and we can get better pricing and guarantee farmers on specific prices of their farm produce.

Will these successes translate to better dividend for your shareholders going forward?

Guinness Nigeria has a history of paying good dividend to its shareholders. It has always been around 50 per cent of our profit after tax. This year, our shareholders got 50 per cent of the company’s profit after tax as dividend, and this is not unusual. Long-term shareholders of our company know our culture. Guinness, this will not be unusual. We are very confident that we have implemented the right strategy, and we have gone through our rights issue, which will help us take out a lot of debts that we have had on our balance sheet. This has been a drag on our results. Last year, our interest cost was quite significant, and if you are able to significantly reduce that interest cost, then it means the profile of your profit will be more stable. More so, because we have reduced the debts, including the foreign exchange debt, now that liquidity is more available, then you expect less volatility on the foreign exchange which had previously impacted negatively on our profitability. So, we are growing better and starting to have more predictable growth. We are more confident in managing costs and interest on costs that we have been carrying and also the foreign exchange volatility. That is the reason why the board of directors recommended that dividend level to the shareholders.

Now, the country is out of its 18-month recession. Do you see this impacting on your future performance?

For us, the Gross Domestic Product of our operating environment is germane, and in the case of Nigeria, it has started to grow in the second quarter of this year. That this is happening now remains good news to us and also is a key pointer to the fact that the country is exiting recession.

To consolidate on this, the country needs more quarters of positive GDP growth until consumers regain their purchasing power. At the moment, the costs of buying commodities are still going up so we can see consumers holding back on spend, reducing frequency of purchases, or spending less anytime they purchase, or going for lower-priced brands. If you look at the other Key Performance Indices of the economy, one of which is inflation; it is in double digits; food inflation is about 20 per cent.

So, consumers are not in great shape yet. From the manufacturing perspective, foreign currency still remains an issue as the Nigerian economy has big import content. Although we are sourcing 75 per cent of our raw materials locally, there is still 25 per cent which is a lot of money for our business. When you are importing and accessing foreign currency, the foreign exchange market is very important. The past 20 months when liquidity was a problem, it was a big issue for us, even though we were able to get $95m support from Diageo. The intervention of the Central Bank of Nigeria is quite laudable as it improved liquidity. This is one of the biggest positives that we have seen in the GDP. This has brought stability in terms of the company’s ability to access liquidity, and our concern is how sustainable is this.  Also, the shocks in the economy, oil price, security, and policies are factors that need to be considered. The CBN has had different policies at different times but we hope that this one will continue to be stable because it provides the cover for companies to plan, and predict their expenses to suppliers.

However, Guinness Nigeria is committed to driving productivity. We are significantly reducing waste, driving simplification and improving our business processes.

© 2017, Sunday Emmanuel. All rights reserved.

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ARTICLE: The job of Nigerian stock exchange

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WRITTEN BY :Sifon Arthur

SAVING AND INVESTING

Every day of an individual’s life he thinks of how to make ends meet. That is to say that he undertakes a particular career in life to satisfy or possibly curtail or reduce the insatiable needs and demands of his existence. This explains why sixty to seventy percent of people in a country leave their various place of comfort everyday by 7 O’clock in the morning, coming back by the dusk with the sole purpose of not running penury. Poverty especially in developing countries cannot be put aside as it has accounted for one of the major causes of terrorism in such countries, thus leading to underdevelopment. Poverty cripples every sector of a nation ranging from the political, to the social and most especially the economic sector which sustains the nation. This poverty can also be viewed on a smaller scale in the life of an individual which sucks the life blood of every aspect of the individual’s life. One possible way to curtail and reduce the rising of poverty is through saving and proper investment. The individual might be able to satisfy his present needs but in a long run how he saves and invest the income he gets. This explains why saving and investing can be considered pivotal in the life of an individual.

No doubt, saving and investing is easier said than done, as it is tasking and sometimes beclouded by different obstacles which might end up making the individual poorer in the nearest future.

However, obstacles in saving and investing are relatively internal and external to the individual.

Internal obstacles are triggered by the individual. For instance, one major obstacles to saving and investing is lack of discipline. Without discipline it is practically difficult if not impossible to build wealth. Discipline in this aspect calls for prudency. It has to do with balancing the level of spending and accumulation. That is, one is not expected to spend more than he or she earns. Spending on irrelevances is actually reducing the saving strength of an individual. A disciplined approach helps one to remain focussed on his financial goals. Another obstacle to saving and investing money is debt. Debt bores a hole in the savings and investments of an individual.

Although all debts are not bad, for instance, a reasonable mortgage or loan is commendable to boast a business, but a consumer debt or bad mortgage on a big house is actually irrelevant and hinders saving. Another internal obstacle to saving and investing is lack of budget. A proper budgeting plan is vital to any savings strategy. it helps one to identify where his money is going, thus, wasteful spending could be curtailed.

 As mentioned earlier, obstacles to savings and investments could be external as well. These external obstacles are not caused by the individual. For instance, the mismanagement of an economy by the government has a negative consequence on the life of an individual. Such macroeconomic instability could lead to inflation, necessitating regressive and arbitrary tax, which affects the lower income earners. In such a situation, individuals find it extremely difficult to save and invest. Faced with economic recession, the individual finds it difficult to earn a living due to the level of unemployment and high percentage of people losing their jobs. In such a situation, an individual finds it difficult to save and invest and those that lose their jobs have to fall back to their savings process which will in turn destroy any hope of investing.

        Considering such obstacles, the individual could actually be relieved a little by the Nigerian stock exchange. The exchange could be very useful both to the savings and investment of the money of an individual. It is an avenue where the individual can actually solve his discipline issues. All the individual needs to do is to key into the stock exchanges. Stocks are assets of a particular company which are partitioned into shares. Shares represents a fraction of ownership in a business. That is to say that the individual actually owns part of a company by investing or buying its shares. The stock exchange helps the individual to save his money because the individual does not have to spend extravagantly. Also in the stock exchange the individual needs no budget on how he or she spends the money so he is relieved of the stress of getting an expenditure budget. Stock exchange is actually an investment because the money does not remain the way it was. The purpose of an investment is to maximise profit. The stock exchange yields to series of dividends and interest, which could be regarded as profits. This shows the importance of the Nigerian stock exchange because the individual needs no business plan to actually make a profit and it could be regarded as a reliable savings process. The purpose of savings and investment is to have future ends meet. The Nigerian stock exchange is vital to that aspect, as it could be regarded as a proper saving for retirement.

     The Nigerian stock exchange can also be helpful to the external obstacles not caused by the individual. For instance, one of the roles played by the stock exchange is creating investment opportunities for small investors. By so doing, the individual has access to be part of a particular company that will in turn help eradicate or reduce the level of poverty that would possibly arise. Also government at various levels may decide to borrow money to finance infrastructural projects by selling certain category of securities known as bonds. These bonds cab be raised through the stock exchange whereby members of the public buy them thus loaning money to the government. This goes a long way to boast the economy of Nigeria, thus reducing level of poverty.

 

 

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© 2017, Sunday Emmanuel. All rights reserved.

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