According to Nairametrics data, these are the largest public companies in Nigeria as at Dec 31 2022. Dangote Cement actually lost momentum there, possibly investors repriced it and went for BUA Cement. The founder of BUA Group is evidently a king in the market now, when you see that BUA Foods and BUA Cement are well represented.
Nairametrics determines the valuations of listed companies using their market value which are publicly available. This is unlike the valuations of many privately-held companies which are often based on venture capital or private equity.
What the data is saying: The Nigerian equities market, represented by its All Share Index, ended December with a total market capitalization of about N27.9 trillion.
The most revealing is that despite using a favourable exchange rate, no Nigerian bank is valued more than $2 billion. We really need to do better in Nigeria. Did you notice that all the three there lost momentum from 2021? (South Africa’s Standard Bank Group is worth about $17 billion).
If these banks do not have strong market cap numbers (leave the balance sheets), how do you expect them to fund the promises of the future? What this means is clear: Nigeria needs to build a banking institution that can fund catalytic projects, instead of rent-seeking institutions, which feed on transaction fees at the downstream of the economic space.
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There are massive opportunities at the upstream in the economy (think of funding roads, bridges, dams, etc) but if investors do not see value therein, the resources required may not come. People, Nigeria needs a really modern banking system.
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Comment: nteresting chart by the way. Without the benefit of further in-depth research, I can see a lot of insights besides your succinct analysis.
- It’s almost as if BUA foods jumped out of obscurity in relative terms. Must be interesting knowing what the 2022 play book was.
- Wonder what kind of promise Airtel Africa made to its staff during the 2022 operating period for the gross dwarfism MTN witnessed in relative terms?
- Kudos to Seplat for salvaging the dwindling image of oil and gas ? in Nigeria.
Like you have posited, our financial institutions need to upgrade their operating models, perhaps a more aggressive similitude of Soludo’s 2004 capitalization drive would force the dial to move.
My Response: I think Nairametrics picked the market caps of these companies on Dec 31 2022 and put in a chart. They made all of us better. To your comments:
- On BUA Foods, it was listed last year as a public company. So, no data existed for prior years
- Airtel Africa includes other countries unlike MTN Nigeria. So, as Nigeria struggled, some other African countries did just well. Largely, MTN Nigeria might have done better than Airtel Nigeria (absolutely did better I am sure) but Airtel Africa is what is listed.
Comment: Interesting. Quick question Ndubuisi Ekekwe do we need more big banks to create more big companies or more big companies to create big banks. Which comes first?
My Response: I am not sure you need BIG companies to create big banks. My understanding is that your need a solid credit base/funding base/liquidity base/etc to fund opportunities of the future. Since “banks” are the vehicles, we need banks with war chests to ramp up economic growth.
Those opportunities of the future should not be driven by one company. The goal is to expand the economy and not necessarily to have big companies. In my part of Nigeria, men divide their assets to support people. What happens is this: you will not have extremely rich people, but you will have a dynamic community where everyone is fine but none is super-rich.
Sure – the banks are companies. At the end, it comes down to government policies. The policies can get those banks to become bigger but asking them to combine to be in positions to do useful and bigger things over collecting rent-transaction-fees.
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With our commercial banks looking like microfinance banks, where do we turn to in order to help us power the economy? Our macro economic numbers still feel like microeconomics, nothing is really happening, just extractive economic practices all round.
The banks can’t fund large projects, they cannot lend to medium sized businesses without drowning them, so we are largely moving funds around, the capacity is not just there.
There is a way out, but right now we have to win the elections first, our numbers don’t inspire.