MPR: We expect relative stability in financial sector, others in 2022 — VFD CEO

The Group Managing Director/ CEO, VFD Group Plc, Mr. Nonso Okpala, in this interview with Vanguard’s MoneyDigest, speaks on the effect of CBN’s monetary policy on the economy, how COVID-19 pandemic has affected businesses in the country, economic outlook for 2022, and VFD operations and financial performances, among others.

Excerpts:

By Peter Egwuatu

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) recently retained the Monetary Policy Rate, MPR at 1.5%, do you foresee any tightening of monetary policy in 2022 as the country goes into general election in 2023. What do you think would be the effect on the sectors where the company operate and to the economy in general?

In recent years, the market has become increasingly desensitized to the MPR. However, we expect status quo to persist for most of the year.

Considering that 2022 is a year before the general elections, we do not foresee any significant changes in monetary policy.

We expect relative stability within sectors where our investment interest lies. The sector with the most related impact is financial services, and we have faith in the resilience of the entities we are invested in.

For our other investment areas like hospitality, real estate, technology and healthcare to mention a few, the considerations that affects performance in these sector goes far beyond the MPR, hence the impact is relatively mute.

In your own perspective, what policies and programmes would you recommend to the government that can enhance economic growth for the economy in 2022 and beyond?

While a few things come to mind, funding and favourable regulatory support for real sector is crucial to our economy.

We also need policies that will ensure Foreign Direct Investments, FDIs remain sticky and continue to grow despite pre-election uncertainty.

How challenging was 2021 to your businesses considering the global economy with the onset of COVID-19 pandemic that questioned every known business principle. Were you able to weather the storm?

For the year ended 31st December 2021, performance across most of our businesses remained a marked improvement over prior period despite the continued impact of the pandemic on businesses. This was possible for various reasons.

We have built a robust business model with products and services that were easily adaptable despite the changing climes. Also, our agile nature enabled us to make the quick and necessary changes to how we work, thereby keeping a motivated workforce committed to delivering quality service across our businesses.

Can we know how far VFD Group Plc has gone in terms of expanding cross border partnerships to gain significant foothold beyond the Nigerian market?

At VFD Group, we are building Africa’s first truly diverse business ecosystem. Looking ahead, one of our key strategic plans is to be a global proprietary investment firm listed on one of the world’s leading exchanges, and we are already in the process of building this.

We have designed a roadmap to take us there, with industry and cross boarder expansion plans staggered along the way, and I am positive that given our trajectory and the support of our stakeholders, we will achieve this.

Also, we now have business interests and partnerships across Africa ranging from Ghana, Gambia, South Africa to even the United Kingdom.

In the mid-term, we intend to expand this to other African regions, North America and Central Europe.

The VFD Group had reported that its leading digital banking application which was launched a year ago had crossed the 250,000 milestone in unique customer acquired, what is the present situation?

Following the roll out of the Vbank app in August 2019, there has been remarkable growth across key metrics and impressive feedbacks via user ratings and reviews on the app stores. We have recorded over 350,000 in registered customers, over N8.75billion in customer deposits, monthly average transaction count and value has also grown by c.15000% and 2700% respectively as at end of January 2022.

What is the present capital base of VFD Group, and is the Company planning any capital raising given its expansion plan? 

As at 31December 2021, our shareholder funds stood at circa N17.8billion.

As we have done in the past, we will deploy a mix of debt and equity capital to ensure adequate funding levels. However, we intend to raise additional equity capital sometime in 2023 and we will begin engaging the market towards the end of the year.

What is the company’s outlook and what sector of the economy will drive Nigeria’s growth in 2022?

As a company, we are focusing on deepening capacity and share of market on our existing investments. That said, we have specific interest in Fintech, Real Estate & Hospitality, and Power Sector; all of which we will be making significant inroad into this year.

Sectors like Agriculture, Trade, Information and Communication, Real Estates and Financial Services have proved that they could contribute much more to the overall growth of the economy. Overall, the outlook for economy and businesses in 2022 remains positive. In 2021, there were improvements in GDP growth as sectors that were negatively affected by the COVID-19 pandemic are starting to recover fully and nearing pre-pandemic capacity.

How has VFD shares fared on the Nigerian stock market given market volatility? 

Currently, VFD Group is listed on the NASD, the OTC securities exchange. Since our listing in 2019, our shares have performed significantly above market index. This is a testament to what we are building.

We are happy to welcome more participation from the public on investment in our business and even some of our portfolio companies which we will gradually introduce to the market.

How committed is VFD Group in terms of corporate governance as a mechanism to keep it outstanding among its peers in the industry?

We are very much committed to corporate governance in VFD Group and across our subsidiaries. This is further reflected in our recent restructuring where we have created a directorate to focus on this. From Enron to Cadbury, we have witnessed the impact of poor corporate governance and its threat to going concern of any business.

It helps balance the interests of a company’s stakeholders at every point. It is important for the success and sustainability of any business such that the absence or inefficiency of a strong corporate governance framework can have disastrous consequences for the business.

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