04 May

Daily Watch – Indomie eats Mimee, ‘Yahoo’ scams snap $5.3 billion in three years

  • The CBN said on Thursday it has signed a $2.5 billion currency swap agreement with the People’s Bank of China to facilitate trade between the two countries and enhance foreign reserve management. Earlier China’s central bank said it has signed a three-year bilateral currency swap agreement with Nigeria worth 15 billion yuan. Nigeria added the yuan as part of its foreign reserve in 2011 and agreed to a swap deal with Industrial and Commercial Bank of China, the world’s biggest lender in 2016. In February, Britain’s export finance agency said it will add the naira to its list of “pre-approved currencies”, allowing it to provide financing for transactions with Nigerian businesses denominated in the local currency. The CBN said it had been in discussions with China on the deal for more than two years. Nigeria is the third African nation to seal a currency swap deal with China.
  • West Africa’s infamous internet scammers have evolved, dropping their impersonations of online love interests, princes and U.S. soldiers in favour of hijacking corporate emails, costing businesses hundreds of millions of dollars a year, a new report says. Gaining access to corporate email login details or passing off almost-identical addresses as the real deal has become a lucrative online venture known as Business Email Compromise, according to a report by cybersecurity firm CrowdStrike issued on Thursday. These Nigerian rackets now dwarf other types of online criminal theft, amounting to at least $5.3 billion of losses between October 2013 and the end of 2016, said CrowdStrike and the U.S. FBI’s Internet Crime Complaint Centre. Behind the fraudsters, popularly called ‘Yahoo boys,’ is an organised crime network with its hands in human trafficking, drugs, prostitution, money laundering and email fraud and cybercrime, the CrowdStrike report said. “The magnitude of this criminal threat has only recently begun to be understood,” it said.
  • De-United Foods Industries, makers of Indomie noodles, have acquired the food unit of May & Baker, makers of Mimee noodles. In November 2017, Dangote Food, makers of Dangote noodles, sold two of its production lines to the company. Sandra Aduba, May & Baker’s communications head, said the deal, which is worth ₦775 million is a 100 percent acquisition of May and Baker’s food division, and less than 10 percent of its total balance sheet size. “The noodles industry is a red ocean and a loss contributing unit for us hence the decision to sell. The board and shareholders approved the sale at an EGM held on November 23, 2017,” Aduba told BusinessDay in an email.
  • Facing falling demand for cereal in its home market, American cereal maker Kellogg Co on Thursday announced a $420 million investment in Nigeria’s Tolaram Africa Foods, its African distributing partner, which makes noodles in addition to cereal. The company did not disclose additional financial terms of the Tolaram investment. Kellogg said it expects net sales to rise between 3 percent and 4 percent in 2018 on a constant currency basis. The forecast includes gains from the Tolaram investment and translates to sales of $13.31 billion to $13.44 billion. The company topped Wall Street forecasts for first-quarter profit and sales, boosted by stronger sales of snacks including Pringles chips and protein bars.
  • Fidelity Bank says it has made provision for 50 percent of its loan to 9mobile. Reuters quotes Gbolahan Joshua, Fidelity’s chief operations and information officer, as saying that the bank placed has placed the telco on a watchlist after it made the decision to increase its provisioning from five percent to 50 percent. The company, which is Nigeria’s fourth-largest telecommunications company, had been in the news for its inability to repay a $1.2 billion loan it took from a consortium of 13 banks and is now up for sale. Joshua said Fidelity Bank expects 9mobile’s sale to new investors to be concluded by the second half of the year, by which time the exact loss on the loan would be known. In 2017, Zenith Bank, another lender made a provision for 30 percent of its loan to 9mobile.