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Buhari’s second term to prioritise power, transport infrastructure ... review electricity tariff, recapitalise DisCos ...Oil subsidy stays as FG seeks to increase non-oil revenue ISAAC ANYAOGU mproving power distribution and transport infrastructure will be the key focus areas of the second term of President Muhammadu Buhari, BusinessDay has learnt through notes from high-level meetings with senior government officials, the Central Bank and the Debt Management Office. As part of changes required, government will be disposed to upward adjustment of electricity

L-R: Roosevelt Ogbonna, group deputy managing director, Access Bank plc; Pascal Dozie, founder, former Diamond Bank plc; Herbert Wigwe, group managing director, Access Bank plc; Muhammadu Sanusi II, Emir of Kano; Uzoma Dozie, managing director, former Diamond Bank plc; Aigboje Aig-Imoukhuede, former GMD/CEO, Access Bank plc; Aliko Dangote, president, Dangote Group, and Ibrahim Dankwambo, governor, Gombe State, at the formal launch/unveiling of the Access Bank new identity in Lagos. Pic by Olawale Amoo

Downstream woes revealed by negative stock returns in 10yrs L DIPO OLADEHINDE

isted companies in Nigeria’s downstream oil and gas sector have recorded negative returns in the last 10 years compared to their peers in other sectors, pointing to a myriad of challenges bedevilling the sector. While firms operating in the

financial services, agriculture, Fast Moving Consumer Goods (FMCG) and other sectors have seen their share price improve in the last 10 years, six listed firms in the oil and gas downstream sector have recorded less than spectacular performance. Apart from Total whose share price recorded 1 percent increase from January 15, 2009 to January 15, 2019, the share price

of five other listed companies in the sector stayed in the negative territory over the period. Conoil’s share price recorded -70 percent, MRS’ share price recorded -83 percent, while 11 plc (formerly Mobil Oil Nigeria plc), OVH Energy and Forte Oil recorded -44 percent, -94 percent and -90 percent, respectively, according to a report seen by BusinessDay prepared by a

group of researchers from FSDH for Major Oil Marketing Association of Nigeria (MOMAN) titled ‘Making the Downstream Sector Work – An Investor’s Perspective’. Stakeholders blame this negative performance on old perennial environmental, operational and regulatory challenges. These include poor governance and Continues on page 34

Continues on page 34

Inside Oando profits up 46% to N28.8bn in FY 2018 P. 2

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Tuesday 02 April 2019

Saudi Aramco’s $111bn profit dwarfs those of mega-rivals

audi Aramco has for the first time disclosed the financial performance it has kept secret for three-quarters of a century, revealing that the kingdom’s state oil company generated more profits last year than any other company in the world. The disclosure, made in a prospectus aimed at courting investors ahead of its debut international bond sale, showed the group generated $111.1bn in net income last year, almost double that of Apple and five times that of rival oil producer Royal Dutch Shell. Saudi unease about disclosing the company’s corporate make-up and ownership structure was among the reasons Saudi Aramco delayed a much-heralded initial public offering last year. Disagreement over its valuation ultimately forced an indefinite postponement. But the company decided to tap the public debt markets to raise funds for its recent $69bn purchase of local petrochemicals company Sabic. The sale, expected to raise $10bn, will provide a test of fund managers’ willingness to back a company whose influence is tied to its historic connection to the development of the Saudi state. The rare window into the finances of the company, which produces more than 10 per cent of the world’s crude, show the state’s reliance on the oil producer means it generates less in post-tax profits per barrel than privately owned competitors. The government in Riyadh relied on the oil sector for 63 per cent of its

total revenue in 2017, according to the prospectus. The tax take from the kingdom meant the oil company made approximately $26 a barrel last year compared with $38 a barrel for Royal Dutch Shell and $31 a barrel for France’s Total. In 2018 Saudi Aramco generated $224bn of earnings before interest, tax, depreciation and amortisation. Moody’s and Fitch assigned the company ratings of A1 and A+, respectively, but said the government’s reliance on the oil producer to fund its budget acted as a cap on its creditworthiness. US producer ExxonMobil, for example, is rated AAA by Moody’s. Moody’s said Saudi Aramco had many characteristics of a AAA-rated borrower, such as minimal debt relative to cash flows, large-scale production, market leadership and access in Saudi Arabia to one of the world’s largest hydrocarbon reserves. But its final rating was restrained to A1 “because of the close interlinkages between the sovereign and the company”. Fitch similarly noted the company’s “high production, vast reserves, low production costs and very conservative financial profile” would give it a standalone rating of AA+, but said it would cap its rating at A+ due to the influence the state had on the company through regulating the level of production, taxation and dividends.

•Continues online at www.businessday.ng

FMDQ admits pioneer Access Bank N15bn green bond ... supports climate change solutions, sustainable development IHEANYI NWACHUKWU

ccess Bank plc has set the pace for other corporate issuers by listing the first Climate Bond Certified Corporate Green Bond in Africa, the Access Bank plc N15 billion fiveyear 15.50 percent Fixed Rate Senior Unsecured Green Bond due 2024, on FMDQ OTC Securities Exchange. This is a laudable feat for Access Bank, addressing environmental challenges as well as championing development in the Nigerian Debt Capital Markets (DCM). The Green Bond was offered to qualified institutional investors, with participation from Pension Fund Administrators (PFAs) and high net worth individuals. The proceeds from the issuance will be used to finance/re-finance eligible green assets and projects that will support the delivery of a low-carbon economy. This issuance is the first corporate bond to benefit from the Nigerian Green Bond Market Development Programme launched in June 2018 by FMDQ, Climate Bonds Initiative (CBI), and the Financial Sector Deepening Africa (FSD Africa), to provide training/capacity development for regulators, issuers, investors and intermediaries, amongst others, as part of efforts to introduce green bonds as an investible instrument in the Nigerian DCM that can be tapped to close the huge infrastructure gap. To commemorate these remarkable achievements, FMDQ hosted the issuer, Access Bank, represented by Herbert Wigwe, its GMD/CEO, and

other representatives of Access Bank. Also present at the ceremony were the sponsor of the issue and the registration member(listings)ofFMDQ,ChapelHill DenhamAdvisoryLimited,represented by Kemi Awodein, its managing director, and representatives from the joint issuing house, Coronation Merchant Bank Limited, as well as the solicitors to the listing, Aluko & Oyebode, Wigwe & Partners, and other parties to the issue. Globally, the green bond market has shown exponential growth as government and corporate entities are raising funds from the debt capital markets (DCM) to finance climate and environmentally-friendly projects to support the development of their countries. Tumi Sekoni, associate executive director, capital markets, FMDQ, whilst welcoming the guests gathered to commemorate the feat, congratulated the issuer for the successful issue of the pioneer Climate Bond Certified Green Bond in the Nigerian DCM. Sekoni highlighted that this green bond would help address climate and environmental challenges in a sustainable manner to deliver prosperity for Nigerians and further deepen the domestic DCM by increasing the range of investible debt securities in the markets, invariably contributing to Nigeria’s development. She further reiterated FMDQ’s commitment to continue to create awareness and drive education for green financing, thereby facilitating the development of the green bond market in Nigeria.

•Continues online at www.businessday.ng

L-R: Oscar Onyema, CEO, Nigerian Stock Exchange (NSE); Onyenwechukwu Ezeagu, chairman, Association of Stockbroking Houses of Nigeria (ASHON); Abimbola Ogunbanjo, president, NSE; Olutola Mobolurin, vice chairman, Capital Bancorp plc; Shamsuddeen Usman, keynote speaker; Aigboje Aig-Imoukhuede, past president, NSE, and Olusegun Osunkeye, chairman of occasion, at the 2019 ASHON’s capital market summit and award night with the theme ‘Financial Inclusion-The Capital Market Perspective’ in Lagos. Pic by Olawale Amoo

Investors expect lower rates as CBN conducts first Q2 T-Bills auction Thursday HOPE MOSES-ASHIKE

he Central Bank of Nigeria (CBN) will on Thursday auction Treasury Bills worth N95.68 billion in its first Primary Market Auction (PMA) for the second quarter of 2019, with investors anticipating a lower stop rate. Investors expect a stop rate bid range of between 10.00 percent and 10.20 percent compared with the last stop rate of 10.30 percent for a 91-day tenor instrument, according to details of this week’s T-Bills auction made available to BusinessDay. For the 182-day tenor, they expect a stop rate of between 11.70 percent and 12 percent from the last rate of 12.20 percent. In the same vein, the investors are looking at bidding at a range of between 11.90 percent and 12.20 percent compared with 12.34 percent for 364-day tenor. Meanwhile, the CBN plans to sell N10 billion for 90-day tenor, N17.6 billion for 182-day tenor and N68.08

billion for 364-day tenor. Consequently, Afrinvest Securities Limited has advised investors to take advantage of the long-term Primary Market Auction offer (yield around 13.9 percent) as well as selected secondary market bills with attractive yields. “We do not rule out the possibility of a further moderation in the discount rate on T-Bills and Open Market Operation (OMO) bills instruments following the Monetary Policy Rate (MPR) cut and the absence of CBN’s OMO auction,” said Afrinvest analysts. On Tuesday, March 26, the Monetary Policy Committee (MPC) of the CBN surprised analysts, economists and investors with a 50 basis point or 0.5 percent reduction in its benchmark interest rate to 13.5 percent, from 14 percent since July 2016. This triggered more buying interest as investors took positions across the yield curve. The regulator, however, retained asymmetric corridor around the MPR at +2 percent/-5

percent; Cash Reserve Requirement (CRR) at 22.5 percent and Liquidity Ratio at 30 percent. The regulator of banks and other financial institutions sells Treasury Bills twice a month to help government fund its budget deficit. “It is possible that the yields on the Nigerian Treasury Bills (NTBs) remain around the current levels if there is still sustained demand,” says Ayodele Akinwunmi, head of research, FSDH Merchant Bank Limited. A report by Afrinvest revealed that the bearish sentiments in the Treasury Bills secondary market were reversed last week as average yields across all tenors declined 11bps week-on-week to settle at 13.6 percent on Friday. The uptick in investor sentiment was largely supported by the inflow of liquidity from matured OMO bills amidst the surprising absence of the CBN’s OMO auction all through the

Continues on page 34

Oando profits up 46% to N28.8bn in FY 2018 ENDURANCE OKAFOR

ando plc has once again demonstrated its ability to deliver good results and create value for shareholders. The indigenous oil company on Friday, March 29, published its financial results for the full year ended December 31, 2018. Despite a challenging local environment, Oando was able to maintain a trend by posting positive results for the third consecutive year with the announcement of a N28.8 billion Profit-After-Tax (PAT), a 46 percent increase from the N19.8 billion the company posted for full year 2017. “Our 2018 results demonstrate the solid foundation we have built across volatile commodity price cycles, and our ability to deliver profitability despite a challenging local operating environment,” said Wale

Tinubu, Oando’s group chief executive. “Over the last few years, we have developed a reliable platform for future growth through the execution of a corporate strategy designed to streamline our operations, reduce our debt and optimise our asset portfolio,” Tinubu said. A review of Oando’s results shows positive performance across most of its financial indices, reaffirming the company’s concerted efforts at and commitment to reversing the tide following the oil price crash in 2014. As at full year-end 2018, the company’s turnover increased by 37 percent to N679.5 billion compared to N497.4 billion in 2017, driven primarily by higher oil prices resulting in higher oil revenue and higher gas prices, which led to higher gas revenues. In addition, gross profit grew by 9 percent to N96.3 billion, from

N88.1 billion in 2017. The company’s balance sheet remained strong with a 46 percent increase in PAT to N28.8 billion, from N19.8 billion in the comparative period of 2017, driven by higher revenue and income tax credits. Its total group borrowings decreased by 11 percent to N210.9 billion, from N237.4 billion in 2017, while long-term borrowings decreased by 23 percent to N76.8 billion compared to N99.6 billion in the same period of 2017. Since its acquisition of ConocoPhillips Nigeria in 2014, Oando has embarked on a proactive drive to significantly reduce its debt and liabilities. Its corporate facility decreased 55 percent from N473.3 billion in 2014 to N210.9 billion in FYE 2018, and in its upstream business, the company has reduced its debt Continues on page 34

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ECOWAS headlines common currency for 40% inter state trade in West Africa ... as UNIDO mobilises ECOWAS, ABD, NACCIMA, others on target actualisation RAZAQ AYINLA

aving observed the negative economic impacts the absence of common currency creates in the actualisation of thriving commercial activities within West Africa, the Economic Community of West African States (ECOWAS) has intensified efforts on the establishment of single currency, named ‘ECO,’ meant to ease inter-state trade and transaction. The proposed establishment of the common currency, which is headlined under the ECOWAS Protocol 4, seeks to remove economic encumbrances that militate against regional integration and diverse tariff barriers that impede free movement of people, goods and services within the 15 member states, thereby, improving trade and transaction volumes gradually. BusinessDay reports that

series of policy meetings have been held on ECO, which is being designed and developed by the West African Monetary Institute (WAMI) based in Ghana, either by the ECOWAS Presidential Task Force or the ECOWAS Parliament on the actualisation of single currency by 2020 within the West African sub region, with a view to increasing the trade volume by 40 percent in 2030. Consequently, the United Nations Industrial Development Organisation (UNIDO) is mobilising ECOWAS member states’ business associations such as Agriculture Bénin Développement (ABD), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), among others, to drive economic strategies leading to the actualisation of both single currency and 40 percent interstate trade volume by 2030. Speaking in Abeokuta at the weekend, Bruno Gnide-

houe, leader, Trade Mission Delegation from the UNIDO/ Republic of Benin, said the arrangement was to improve on the Gross Domestic Product (GDP) of all ECOWAS members and increase the volume of trade within the economic region, saying the choice of Nigeria as first point of call was borne out of her economic status as the largest economy in West Africa and Africa as a whole. Gnidehoue noted that the West African comparative advantages lay on extractive industry with a bias on agriculture and solid minerals as huge foreign exchange earners, which could fast track series of robust economic policies conceived and formulated by ECOWAS. Gnidehoue explained that the establishment of single currency and 40 percent interstate trade volume in the West African economic bloc would make the region completely favourably with the European Union (EU) in terms of trade as

well as socioeconomic growth and development. Also speaking on behalf of NACCIMA, Wasiu Olaleye, president, Abeokuta Chambers of Commerce, Industry, Mines and Agriculture (ABEOCCIMA), said, “It is a welcome development which we have been clamouring for, when ECOWAS was formed in 1975 to foster relationship and encourage trade within the community of West Africa. “It is disheartening that as at today, the intra trade within the community is just 12% and we are looking forward to grow it to 40% by 2030 and you know without this kind of trade mission, we can achieve that. So, we have to make sure that we relate, we visit each other and each of the states promotes goods or produce where they have comparative advantage and core competence, this will facilitate trade within the community to the fast East or Europe.

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Nigeria needs $40bn to connect states by rail … as Ghana understudy’s Lagos-Ibadan SGR model MIKE OCHONMA & STELLA ENENCHE

he Federal Government says estimated $40 billion will be required to connect the states of the federation by railway. Minister of transportation, Rotimi Amaechi, made the disclosure at the last inspection tour of the Lagos-Ibadan Standard Gauge Rail corridor. Amaechi, who expressed satisfaction with the pace of work on the multi billion naira project, said a total of 102 kilometres had so far been covered. According to Amaechi, who was accompanied by Joe Gharthey, Ghana’s minister of rail management who was in Nigeria to understudy the Lagos-Ibadan SGR model with plans of replicating same in Ghana, the project would have advanced to 109 kilometres, by April, and assured that barring any last minute hitch, the Presidential ride on the LagosIbadan rail will happen in May. “The Presidential ride could take place by the end of May, but it is beyond just having a ride because by the end of May, they should have finished laying tracks, but they have to start building the stations, constructing the communication because we will be dealing with more than one train,” Amaechi said. “We have been able to make progress to kilometre 102 and the Chinese Civil Engineering and Construction

Corporation (CCECC) have assured us that by April 8, they would have gotten to kilometre (DK) 109,” he said. “Kilometre 110 is where we are having soil challenges. We need to replace the soil and they also said replacement of soil is also needed in kilometre 116 to 119. Those challenges are as a result of poor geological survey and the survey revealed to us that the background water in those areas is very high. So that is what we are doing. “I am very impressed with the level of work needed. The challenges we are confronted with presently is a matter of time and that is because we are close to rainy season and we need to deal with them before the rains because if the background water is high now, imagine how it will be when the rains starts. So, they have to find solution to it before the rain,” he said. In the meantime, the minister said the Federal Government might approach Ghana for negotiation, in her determination to complete work on the proposed Lagos - Kano rail line, even as he spoke on plans to link states by rail. That, perhaps, informed the presence of the Ghanaian Minister for Railway Development. “We are trying to go to Ghana for negotiation. Ghana is just starting. They are here because in two to three month’s time, they will start 100 kilometres of railway.

Strengthening bilateral tie in focus as 30-woman delegate set for WEF TEMITAYO AYETOTO

E L-R: Babatunde Osadare, head, legal and regulatory, Ikeja Electric; Oni Timilehin, beneficiary; Ebenezer Okeowo, head, HR/sales, Slot System Limited; Abi Peter, beneficiary, and Felix Ofulue, head, corporate communications, Ikeja Electric, at the commencement of the youth empowerment training by CSR in collaboration between Ikeja Electric and Slot Foundation in Lagos. Pic by Pius Okeosisi

Indigenous IT solution provider becomes Gemalto platinum partner JUMOKE AKIYODE-LAWANSON

PG Technologies & Solutions Limited, Nigeria’s IT company, has become a platinum partner to Gemalto, an international digital security company that provides software applications and is the world’s largest manufacturer of SIM cards. Gemalto focuses on two core technologies - digital identification and data protection. These solutions counter the two major targets of cyber attacks, identity theft and unencrypted data. As daily lifestyles become

more digital and interaction with online services becomes frequent, there has been an exponential amount of personal data online. While this creates countless opportunities for service providers, the growing number of data breaches threatens it. Gemalto solutions are used by over 30,000 organisations to verify the identities of people and things, to allow access to services and to protect the growing amount of data these services generate. With 35 research and software development centres and clients

in 180 countries, Gemalto brings trust to the world’s digital transformation by giving data owners more control by combining digital identity and data protection across the entire digital service lifecycle. As a platinum partner, FPG receives the benefit of receiving the highest level of engagement, commitment and benefits available to Gemalto partners to encourage leadership in the marketplace. “Gemalto recognises FPG Technologies & Solutions for its ongoing partnership and commitment. I believe com-

bining Gemalto’s industryleading solutions with FPG’s industry and technology knowledge will drive value for the customer,’’ Lawrence Elbana, Gemalto’s senior channel manager MEA, enterprise and security, says. Rex Mafiana, CEO of FPG Technologies & Solutions, says, ‘‘Protecting our customer’s digital identities and data is a major priority in considering that these are the two major targets of malicious cyber actors. Prevention of data theft is a challenge that faces all sectors of the economy and individuals.

mphasis has been laid on the need to strengthen bilateral trade ties between Nigeria and India as 30 Nigerian women in business set for this year’s Women Economic Forum (WEF). The women will from April 11 to 16 join other leading women entrepreneurs, leaders, and industrialists from across borders in New Delhi, India, to take on issues hampering economic parity, with a view to ultimately foster global connections and collaborations for difference. In this vein, Godrey Ogbechie, group executive director, Rainoil Limited and one of the participating women hosted the 30-woman group led by Ebun Feludu, the leader of the Nigerian delegation at the company’s head office in Lekki. Thoughts were focused on the cross-fertilisation of ideas and harvesting of fruitful business relationships with other women in their various fields of operations. Ogbechie’s take was that the issue of gender parity and women needed to be considered in the context of ensuring

equal opportunities are available for everyone to compete whether in politics, education or leadership among other spheres of life. She lamented that despite the advancement seem to be made, no woman emerged governor in any state in the recently concluded general elections, while the number of women who made it to the National Assembly has reduced. Further, she raised concern about few women present in boardrooms or occupying chairmanship positions compared to the total number of women graduates who make it into the entry level of organisations. “We cannot pretend that women face difficulties in the workplace that men do not generally face especially in Africa. We cannot also pretend that women are not making it to the top as fast as they should because of some challenges they face- some due to ignorance or man-made factor,” Ogbechie said. “I think anything that is legally okay to make sure that women access the opportunities that will put them at the top just like. The women economic forum is one of the avenues to do so.”

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Nigeria, Iraq fail to comply with OPEC production ceiling for March 2019 OLUSOLA BELLO

… produce 90,000bpd over

he non-compliance of Nigeria and Iraq to OPEC production output ceiling is being more than offset by Venezuela, which was exempted from the pact to deliberately decrease supplies because its unplanned losses have been so extreme. The data for March however indicate Nigeria has not yet mended its ways: the African nation boosted output once again, this time by 90,000 barrels per day (bpd) to a threeyear high of 1.92 million a day. According to Bloomberg, because of Nigerian recalcitrant posture, she along with other errant producers such as Iraq and Kazakhstan were at the last OPEC meeting in Azeri capital of Baku initiated into the committee that oversees implementation of the deal. Saudi Arabia’s commitment is making up for lagging compliance by some members, most notably Nigeria, which is boosting exports as it ramps up operations at a new oilfield, Egina OPEC’s crude production

slid for a fourth month as Saudi Arabia pressed on with output curbs aimed at balancing global markets, and as an economic crisis in Venezuela escalated. Despite pressure from US President Donald Trump to keep oil supplies flowing and put a lid on rising prices, the Saudis and other members of the cartel remain resolved to restrain production to avert a glut. The Kingdom slashed production to a four-year low of 9.82 million bpd in March, according to a Bloomberg survey of officials, analysts and ship-tracking data. Output from the 14 members of the OPEC fell by 295,000bpd to 30.385 million. The Saudis and other Gulf producers continue to curb output even as troubles intensify in fellow OPEC nation Venezuela, where a spiralling financial slump - and the onset of American sanctions - is battering its oil industry. At the start of the year, the cartel and its allies -- which include non-members such as Russia and Kazakhstan started a new wave of output

cuts as a flood of American shale-oil and fragile global fuel demand threatened to tip world markets into surplus. Their restraint has caused supply to tighten, pushing crude prices 32 percent higher in New York in the first quarter, the commodity’s strongest start to a year since 2002. That drew renewed criticism from President Trump late last month. He took to Twitter for the second time this year to urge OPEC to reverse its policy of cutting production. The group has so far ignored his calls. The March data indicates that the 11 OPEC members engaged in the accord collectively cut production by about 30 percent more than required. The extra effort though was almost entirely driven by Saudi Arabia, the group’s biggest member, which decreased output by 280,000 barrels a day to the lowest level since February 2015. The kingdom has cut production by more than double the amount pledged under the December accord.

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How should the military engage citizens in a democracy STRATEGY & POLICY

MA JOHNSON

ontemporary military personnel worldwide, belong to a profession as observed by Samuel Huntington in his book The Soldier and the State: The Theory and Politics of Civil-Military Relations. The noble profession is soldiering. Looking at the roles of the military since the existence of humanity, it is not in doubt that these men and women in uniform are professional managers of violence. Globally, the military is established to fight wars and carry out other peacetime functions. So countries arm, train, and equip military personnel to do horrifying things with force in order to achieve favourable political results. For this reason, many people are appalled when the same military that is mandated to defend citizens of a country is involved in activities that are considered inimical to the wellbeing of those to be protected. Drawing inspiration from Clausewitz in his book On War, all military problems are political. It is absolutely true because the military takes orders from political masters who are mostly civilians in a democracy. These are civilians in positions of authority and responsibility who probably have not served in the military. The issue that has been bothering military scholars recently

is how the military should engage the society in a democracy. Globally, it appears political leaders are taking a healthy, if any, civil-military relations for granted. But military leadership must display courage to withstand pressure from political leaders when ordered to carry out actions that are unethical to their professional calling. Military leadership must always display courage. There are two types of courage: moral and physical. Moral courage is the ability to distinguish right from wrong. As a leader, one must have the courage to stand up and express his or her views politely based on professional competence irrespective of what your superiors, colleagues, and subordinates think on any issue. And the leader must accept full responsibility for his actions. In the military and indeed any profession, a “yes man” is a horrible man. He must be avoided by all. Even though he may rise very high to the peak of his career, he will disgrace his or her followers when it is least expected. A field marshal, or a minister may be a “yes man, but he or she will not be seen as a leader by the followers. A “yes man” would be used by his superiors and dumped. He will be disliked by colleagues, while his subordinates will have no respect for him. What about physical courage? It is bravery in the face of physical pain, death or threat of death. Fear is a natural phenomenon like hunger. Anyone who says he is not frightened is a liar. It is one thing to be frightened and another to show it. Even when you are afraid, you must not show it. Once you show fear in front of subordinates you are leading, it is time to quit.

Sometime in 2017, “France’s military chief resigns after Macron budget argument,” according to Financial Times. The military chief, General Pierre de Villiers, was quoted as saying that “he no longer felt able to command the sort of armed forces that is necessary to guarantee the protection of France and the French people.” In the US, military analysts and observers are of the view that President Donald Trump crossed an important line by asking active-duty military personnel to lobby the Congress in their own self-interest for increase in defence budget. Back home in Nigeria, recent utterances credited to the Nigerian Army (NA) is very disturbing. A deeper analysis of some of these comments gives an impression that the NA has constituted itself into a mini “government” by ordering the suspension of UNICEF and publicly calling for the closure of Amnesty International operations in Nigeria. Sometime ago, the NA was reported as warning Britain against interfering in the just concluded Nigerian elections. The 2019 general elections are over in Nigeria. Most Nigerians and some members ofthe opposition didn’t have anything inspiring to say about the role the military played in some states during the general elections. In a democracy, whenever insecurity is anticipated during elections, the first layer of defence should be the Nigeria Police Force (NPF). But the NPF has its man-made challenges. The most important challenge of the NPF is lack of trust and confidence by most Nigerians coupled with inadequate logistics and firepower to deter sophisticated political thugs from snatching and destroying bal-

‘

...the NA has constituted itself into a mini “government” by ordering the suspension of UNICEF and publicly calling for the closure of Amnesty International operations in Nigeria

lot boxes. But for the challenges of the NPF, the military would not have been in demand to respond jointly with the former to combat various crimes in the country. The military, however, is not to be at any polling unit unless there is a complete breakdown of law and order which may threaten the country’s democracy. If democracy is threatened through misconduct of some political thugs, and the NPF cannot handle the situation, then the military may be ordered through appropriate channel to intervene in line with the provisions of the 1999 Constitution as amended. In defence of the 1999 Constitution and the people of the country, the military must be on standby despite divergent views expressed by members of political parties, civil societies and citizens. The military must be seen at all times to be above politics. In as much as the efforts of the military is appreciated, it does not confer on the institution the status of a special, privileged class of men and women within the Nigerian society. Our political leaders can do their part by denouncing attempts to mobilize the military as a political actor during elections. The military must be preserved as an instrument of national power, and not to be regarded a political party itself. In case political leaders do not know how far they should politicize the military, it is incumbent on military leadership not to dabble into politics. A dip into politics by the military is very dangerous for democracy as this may backfire sooner or later. Thank you! Johnson is an author and a retired naval engineer who has passion for African development and good governance

Incorporating sustainability into business models

Zainab Dere

ack in the years, sustainability was a concept that seemed to only bother on environmental management and protection. On the contrary, it is a broad discipline which has over the years progressed beyond an environmental concern to a serious consideration for a wide variety of fields. The World Commission on Environment and Development proposed the concept of sustainability in 1987. It is defined as “development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs”. Business models in all fields must seriously consider sustainability; an organisation’s sustainability strategy poses significant risks and opportunities to its future existence and profitability. A business model plays a vital role in

the success of any company, it explains how an organization creates, delivers, and captures value. The value the business provides, at what cost it will be delivered and how the business makes money now and on the long term. Hence, sustainability issues can impact most elements of a business strategy, such as the price and availability of capital, competitive relativities, operating costs, risk management, process improvement, innovation, consumer preferences, supply chain management and regulatory compliance. According to a 2016 UN Global Compact, Accenture CEO Study, sustainability initiatives are stirred by compliance pressures or even by moral obligation. These initiatives may not be considered mandatory at the beginning of the business venture. Today, as organisations become more concerned about their societal purpose, sustainability becomes a non-negotiable part of an organisation’s DNA. Sustainability is built on the assumption that developing such strategies fosters company longevity. Scholars have noted that research on sustainable businesses have shown that companies move through the stages of sustainable development, and eventually it becomes a culture of value creation for the not just company but for the world in general. The size and scale of an organization makes no difference in making plans for sustainability. The biggest of the world corporations

such as Toyota, GE, Nike and others are implementing sustainability initiatives which will be the driving force of future businesses. How businesses choose to respond to and integrate sustainability with core business strategy will underpin their success in achieving a longterm competitive advantage. This strategy is expected to identify and respond to both potential limitations to growth and business opportunities, such as access to new products or new markets, and apply across the entire organisation. Incorporating sustainability into core business strategy has been acknowledged as a critical component of good governance, risk management and a source of competitive advantage. A number of ways have been identified to incorporate sustainability into business strategy, this includes, understanding industry externalities and stakeholders’ expectations. Every industry is faced with its unique environmental and social challenges which will affect the business model, technological innovation and business outlook. Understanding these expectations will involve taking steps to capture and assess the unique sustainabilityrelated factors impacting an organisation’s industry and how each of these factors (stakeholder expectations, changing societal tastes and needs, and demographic shifts) may impact the business strategies. Besides understanding the industry challenges, it is

also pertinent to understand challenges in interconnecting industries which could disrupt activities in one’s industry. It is important that the strategy is formulated to capture various risks and opportunities, with particular attention to physical, environmental, technological, social, regulatory and economic factors that will impact the operating environment of the organization. Imperatively, the success of these sustainability initiatives rests critically on the leadership of the organization. This can be achieved by ensuring the value of sustainability is clearly communicated to employees and concerned stakeholders. This requires employees to be aware of the ‘big picture’ of what the organization has set out to achieve, as well as what is expected of them towards its successful implementation. As with most organisational changes, lasting progress on sustainability is unlikely without strong and focused leadership, employees welcome sustainability initiatives and are ready to apply them once they see strong leadership on the initiatives. Zainab Dere is a Research Assistant with the Christopher Kolade Centre for Research in Leadership and Ethics (CKCRLE) at Lagos Business School. CKCRLE’s vision is creating and sharing knowledge that improves the way managers lead and live in Africa and the World. You can contact CKCRLE at crle@lbs. edu.ng

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Educating for the digital economy Rafiq Raji

t the 2018 World Economic Forum in Davos, Chinese e-Commerce billionaire Jack Ma wondered aloud, almost in despair, about the way kids are currently educated around the world. “Education is a big challenge now – if we do not change the way we teach 30 years later we will be in trouble. We cannot teach our kids to compete with the machines who are smarter – we have to teach our kids something unique. In this way, 30 years later, kids will have a chance.” The “unique” education Mr Ma hopes for is open to debate. What is not is the urgency of ensuring learners are better prepared for success in a likely future all-digital global economy. And whereas in the specific African case, basic education using the simplest tools remains a chal-

lenge, there is tremendous hope that positioning African wards for the digitial economy would not be similarly tasking. It is not just a supposition. These days, there is hardly any young African who does not know how to use a smartphone. And the many things that can be done with it on the internet. For good or ill. Increasingly, digital skills, still mostly acquired outside of classrooms, turn out to be more useful in jobs, as do social skills, than the formal instructions received at schools. But that was when all you needed to get ahead in the workplace was the mastery of a word processor, spreadsheet software and the use of search engines on the internet. In the digital economy, with unparalled opportunities for entrepreneurship for the skilled, much stronger tech skills would be required. One would probably be at a tremendous disadvantage at some point if one could not code, build an app or demonstrate a mastery of artificial intelligence. Fortunately, some of these skills can be acquired online for free. In any case, some schools are beginning to incorporate the learning of these skills in their core curriculum; albeit mostly at the secondary and tertiary levels. That is all very well. What is required, however, is for these skills to be imbibed early on. Just like kids are taught a language to be instructed

with, so must they be taught coding as a language for communicating successfully in the digital economy. As there is a huge risk Africa may yet again be left behind, as the global economy evolves rapidly into another technological age, a digital one this time, the urgency of a radical approach cannot be overemphasized. Why the urgency? It is increasingly doubtful the continent would industrialise substantially anytime soon. Wage advantages that many economists supposed would hitherto shift labour-intensive manufacturing from China, where wages are now high, are beginning to seem farfetched. As manufacturing jobs leaving China have been heading to emerging Asian countries like Vietnam, Philippines, and Bangladesh instead, with a simmering trade war between China and America accelerating the process, the expected shift in global manufacturing in favour of Africa would probably not be from China, but from these countries; if it ever happens. That is even as wages are already rising in these emerging Asian countries. But the other advantages they have, like better supply chains, greater integration with a still relevant China, an ample skilled population and so on, mean they are likely to remain competitive. And if eventually these emerg-

‘

If African countries hope to move ahead then, its policymakers must begin to look beyond manufacturing to services

ing Asian manufacturing hubs become prohibitively expensive, it may not matter much. Why? Automation, not cheap African labour, would have probably bridged the gap already. In other words, Asia is likely to keep its current advantages. Put bluntly, the likelihood that Africa would ever garner a competitive edge over Asia in manufacturing is very slim. If African countries hope to move ahead then, its policymakers must begin to look beyond manufacturing to services. With technology, a country or continent can leapfrog in services. For instance, African countries could train a workforce that targets the upstream stages of global value chains, which are more digitally inclined. A good architect could easily send his or her drawings to clients from and to anywhere in the world. And to draw, all that person requires is a computer and the appropriate software. A programmer can code from anywhere on the continent for any client in the world. These are not suppositions. They are already happening on the continent. For impact, they should be scaled up. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Implementing business reforms in Nigeria Ben Okpanachi

fter the country went in a recession as a result of the collapse in oil prices, it became clear to the federal government that Nigeria cannot continue to rely on an unstable commodity like oil to drive its economy. Virtually all governments since the oil boom period had made this pledge but the country continue to hopelessly depend on rent from oil for its sustenance. As at the last count, oil account for over 70 percent of government revenues and 95 percent of foreign exchange into the country. And because of the country’s reliance on oil, other areas were completely neglected, especially the ease of doing business. The country was particularly notorious for its difficult business environment that it was ranked 170th out of 189 countries on the World Bank’s ease of doing business index. Beyond rhetoric then, new ways had to be sought to reform the business environment, attract investment and diversify the economy away from oil. That was exactly what the government

set about doing. In July 2016, the Presidential Enabling Business Environment Council (PEBEC) was inaugurated under the chairmanship of the Vice President, Yemi Osinbajo with Minister for trade, Okey Enalema serving as vice chair. To show its seriousness towards implementation, a secretariat – the Enabling Business Environment Secretariat (EBES) – domiciled in the office of the Vice President, was set up to drive implementation. A departure from the past was the decision of the PEBEC to adopt a global best practice model with performance tracking elements which is measured by the World Bank Ease of Doing Business Index (DBI). The reforms were particularly targeted at micro, small and medium scale enterprises (MSMEs) which account for more than 90 percent of all registered businesses in Nigeria, provide about 84 percent of jobs and contribute just under 50 percent of GDP to the economy. The reforms were basically to remove critical bottlenecks and procedural restrictions to doing business in Nigeria and to improve on Nigeria’s World Bank Ease of Doing Business Index ranking. From starting a business to getting a location to getting finance to dealing with day-to-day operations and ultimately to operating in a secure business environment, the reforms are meant to reduce costs and time and to make the processes of setting up and doing

business in Nigeria simpler and effective. Within a span of three years, PEBEC has succeeded in driving key reforms in key areas such as improving access to credit for individuals and SMEs, improving entry and exit into the country (Visa-on-arrival applications can be done online and is issued within 48 hours), registering properties, particularly in Lagos and Kano, access to electricity (reduced procedures for grid connectivity), reduced time and procedures for registering a business, paying taxes, and dealing with construction permits, enforcing contracts, protecting minority investors, resolving insolvency, facilitating trading across borders and within Nigeria and selling to government. For example, reforms on enforcing contracts, driven by the Lagos state and Kano states judiciaries in collaboration and with the support of the Enabling Business Environment Secretariat, resolved to set up specialised small claims commercial courts in Lagos and Kano, train magistrates and court officials to handle specialised small claims commercial courts in Lagos and Kano, limit number of adjournments allowed in small claims commercial courts in Lagos and Kano, introduction of pre-trial conference for specialised small claims commercial courts and publication of Court of Appeal judgments. Of course, a lot of these reforms could not be effected without a revise to the Com-

pany and Allied Matters Act of 1990. With a great push from the Presidential Enabling Business Environment Council (PEBEC) and the Enabling Business Environment Secretariat (EBES), the Senate, on May 15, passed the revised CAMA and the House of Representatives concurred in January 2019. Interestingly, the National Assembly also had a National Assembly Business Environment Roundtable (NASSBER) which was created as a platform for the legislature, the executive and the private sector to engage, deliberate and take action on frameworks that will improve Nigeria’s business environment through a review of relevant legislations and provisions of the Constitution. Since the launch of the council, PEBEC/ EBES has implemented several reforms with direct and positive impact on business owners. Nigeria moved up 24 places over 3 years to 146th place in the 2018/19 Ease of Doing Business report. The PEBEC’s objective is to move Nigeria’s ranking to sub-100 in the 2019/20 World Bank Doing Business Index. There is no doubt, much needs to be done to improve Nigerian’s business environment generally. But these are beautiful starts and the government must be encouraged to continue to work to improve the ease of doing business in Nigeria Okpanachi writes from Abuja

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Tuesday 02 April 2019

Nigeria: It is institutions or nothing

esearch and lived experiences of nations have long established the centrality of institutions in building a prosperous and sustainable society. In fact, recent research has identified inclusive institutions (including rule of law, enforcement of property rights & respect for valid contracts) as “the fundamental cause of economic growth and development” of nations. This is because inclusive institutions reduce uncertainty by providing a structure to human interaction and everyday life in a stable and often, efficient way. Conversely, extractive institutions (often build around personalities and under which the rule of law and property rights are absent for large majorities of the population) leave the society worse off. One fatal mistake made by most African countries at independence was to jettison, circumvent or even destroy inherited colonial inclusive institutions as un-African and not particularly suited for societies in a hurry to develop and catch up with the West, as the language of the 1960s goes. Egged on by African academics who, unfortunately have no real theoretical or empirical knowledge in nation building, early

independent leaders became impatient with the workings of the institutions bequeathed to them and began to sideline or altogether destroyed these institutions and personalise power. Over fifty years down the line and despite the continent been littered with relics of authoritarian and dictatorial regimes, none of these countries has developed. Rather, they have been turned to virtual wastelands, ravaged, as it were, by tyranny, bad governance, impunity, mindless orgies of crime and death, poverty, hunger and diseases. Yes, these countries now have the worst socio-economic indices in the entire world! What these leaders – and unfortunately, even succeeding ones - specialised in doing is what Ricardo Hausmann terms ‘isomorphic mimicry’ – the creation of institutions that act in ways to make themselves “look like institutions in other places that are perceived as legitimate,” but which in reality are not. So, for instance, countries will have Central Banks that are supposedly independent, but in reality are mere puppets of the regime in power and whenever the regime is facing revenue shortfalls, rather than doing the hard work of undertaking reforms to better manage the economy, it takes the short-cut by directing the Central Bank to

keep printing it more money. The end result will be the case of Zimbabwe, for instance, where inflation rose millions of percentages and rendered the country’s currency absolutely worthless leading to its abolition. Sadly, even Nigeria is on this trajectory. As at the last count, the central bank of Nigeria has printed over N7 trillion for the Nigerian government between 2014 and September 2019. Is it any wonder therefore that confidence in the Naira is at an all-time-low and even politicians and those in government prefer to have their savings in US dollars? This is not even talking about African leaders’ penchant for disobeying disregarding the rule of law, disobeying court orders and even undermining or in worse case, destroying the judiciary, disrespecting the sanctity of contracts etc. The template for most African leaders – regardless of whether they are democracies or not – is that they must exercise absolute authority and their powers cannot be constrained or checked by whatever institution. One lesson these African countries and leaders ought to have learnt by now is that strong inclusive institutions are the best guarantees for sustainable growth and development and not strongmen. Strong institutions are enduring and guarantee societal progress no matter the

people inhabiting them. Having a regime of strong institutions though, has a particular drawback: No one person no matter how important, can exercise absolute powers. It comes with constraints, checks and balances on the powers of all office holders, including that of the president. It is built on the premise that absolute power corrupts absolutely and that personal rule is subject to the whims and caprices of rulers and tends to fizzle out when the ruler departs. Sadly, president Buhari and his minders don’t seem to have learnt any lesson. They prefer to play by the old book. The government’s penchant for subtly or even openly interfering with independent state institutions to produce favourable political outcomes is worrying and is setting the country back by decades. This need not be so. And that is why the plan by the presidency to have a rubber-stamp 9th National Assembly must be resisted by lawmakers who want to see Nigeria progress. Haven already subverted the judiciary, the only check on the powers of the executive remains the legislature. If that arm of government too is taken over by the executive by imposing its leadership, then there will be no checks on the powers of the president – and the result will be disastrous for Nigeria.

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Access Bank unveils new identity following its merger with Diamond Bank Stories by Daniel Obi Media Business Editor

ccess Bank has officially launched its new brand confidently showcasing its new logo following the successful merger between the 30 year-old bank and Diamond Bank. That merger created a Nigerian banking powerhouse and a Pan-African financial services champion. The merger makes Access Bank the largest retail Bank in Africa by customer base. It is one bank with 27,000 staff across 592 branches, spanning three continents, 12 countries and with 29 million customers. The new visual identity fuses the best of Access Bank and Diamond Bank. It builds on the layers of meaning that were built into two iconic brands. Diamond Bank’s was youthful, vibrant and human. Access Banks’s was trusted, global and fast. Victor Etuokwu, Executive Director, Personal Banking at Access Bank said bring them together to capture the strength created through the merger meant drawing from the essence of each logo but refreshing them to create a sense of energy and forward momentum. The diamond shape is fused into the three chevrons, which radiate in all directions to create layers around a core. The retention of the access typeface, colour and font is complemented by the orange logo, which draws from the colour palettes of both banks. The use of the diamond colour palette is further emphasised with the dominance of green in its retail application, ensuring

Herbert Wigwe, group managing director/CEO, Access Bank

continuity for retail customers, whilst the dominant orange in the corporate application provides the same sense of familiarity to Access Bank’s customers. To accompany the new logo, there is a new brand promise: access. more than banking. This is more than a tag line. It is a philosophy. Almost twenty years ago Access Bank set out to change the face of banking in Nigeria. Rob Giles, Adviser, Retail Banking at Access said the goal was to lift the continent of Africa through what the bank called sustainable banking, showing individuals and businesses across the country that ethical business was good business. “ Providing African businesses with access to intra Africa trade and global markets. Giving budding entrepreneurs the tools to build a

business. Offering families the opportunity to realise their dreams. Across the country, another entrepreneur was also building a Bank, with a dream that went beyond banking”. The bank responded to changing lifestyles by using innovation and technology to support societal shifts. With a focus on personalised service that understood people’s desires and ambitions and made them possible. “These two banks, one a corporate titan, the other a digital retail powerhouse, have come together to create Africa’s largest Bank. For both, the philosophy remains unchanged. They want their 29 million customers to be able to access. more than banking. They want them to access their dreams and, in doing so, putting Africa in its rightful place on the world stage”, Giles further said.

ADVAN supports global call for brands to hold social media platforms to account

DVAN echoed very strongly the World Federation of Advertisers, WFA call on all brands globally to hold social media platforms to account in light of recent failures to block dangerous and hateful content. In supporting the position WFA Regional Vice President for Africa, Folake Ani-Mumuney reiterated that while companies must decide their own approaches, WFA is calling on its members and brands worldwide – in their capacity as the funders of the online advertising system – to put pressure on platforms to do more to prevent their services and algorithms from being hijacked by those with malicious intent. The call comes after multiple incidents on some of the world’s biggest digital platforms, including paedophile comments, the glorification of self-harm and suicide content and, most recently, the

live-streaming of the terrorist attack in Christchurch, New Zealand on social media. All these platforms are funded by advertisers and as such those that make them profitable have a moral responsibility to consider more than just the effectiveness and efficiency they provide for brand messages. ADVAN together with the WFA is standing alongside its member association and colleagues at the Association of New Zealand Ad-

vertisers (ANZA), which has issued a call asking for members to think carefully about where they place advertisements and challenging platform owners to do more. “This is not an issue of brand safety, this is a moral question to hold social media platforms to account – in the same way we do for traditional media,” says ANZA Chief Executive, Lindsay Mouat. WFA’s call to action reflects the fact that these are not challenges that can be addressed by one country alone but need global action. Improving the online ecosystem is a top priority for WFA members. 47% of respondents to a WFA member barometer conducted this month of more than 200 senior marketers from over 100 brands representing $125bn in ad spend cited improving the online advertising ecosystem as the single biggest issue the marketing industry needed to address in 2019.

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Employee appreciation key to employee satisfaction - Research

hen it comes to feeling appreciated at work, what matters most to employees? If you answered “pay,” think again. Research reveals that pay is low on the list. Studies have shown that what matters to employees — what truly motivates them — is feeling appreciated and being socially recognized. Across various industries, appreciation & social recognition rank as the most important workplace culture drivers. Given that human beings are naturally incentivized by the promise of a reward, encouraging words and specific prizes for successful job performance will encourage many employees to work harder and be more satisfied with the results of their labour. Study has also shown that approximately eighty percent of organization’s value depends on the human aspect of resources within the organization. This implies that the organization faces a serious chance of falling apart if people are not motivated enough and is likely to progress if motivated. This is why the need to appreciate and recognize employees who work hard in ensuring the growth of the business is paramount and certain organizations are keying into this initiative. An example is iSON BPO, a leading customer experience management firm’s continued cause for employee satisfaction since it started operations. Recently, the company held its Top Talent Apex Awards to acknowledge and reward its top 5% performers from Africa. The ceremony was held in recognition of the efforts of these employees’ achievements and their extraordinary commitment to performance in achieving overall excellent customer experience for its clients in Africa.

The employees whose hard work was unwavering were celebrated with an exclusive trip to Dubai and treated to an exclusive tour of the city and visit to the desert safari. Not only would such bold initiatives, help in encouraging the employees, it will also encourage healthy competition amongst staff. In addition, best performing team was awarded to Ghana OPCO and the runner up was Burkina Faso OPCO. Also, Rhoda Anandam from South Africa Opco was awarded for her significant contribution to business. The Top Talent Awards are organ-

ized annually and are part of iSON BPO’s aim to focus on complete employee satisfaction, ensuring customers and clients a rewarding experience. Commenting on the award, Pravin Kumar - Global CEO - iSON BPO said, “There is no single definition of how employees should feel appreciated and there is no single way for organizations to express it. However, iSON decided to appreciate its top talents by naming them as ‘Celebrities’ and confer them with the top talent award to celebrate all their hard work and encourage them and their peers that hard work is not taken for granted as their continued success of excellence is vital to the success of the company”.

International Breweries relishes business performance in Nigeria, commends trade partners

nternational Breweries PLC, a member of AB InBev, recently hosted its distribution partners across the country in Lagos. The gala night was an opportunity for the company’s distributors, trade partners and other key stakeholders within the distribution value chain to exchange ideas, as well as deepen business relationships. It also provided the company an opportunity to fete and commend the performance of the distributor partners, with those who had excelled in their performance in the recent financial year, winning delectable prizes. “We want to spend this evening celebrating and thanking our special partners in our business, our distributors. The successes we recorded in 2018 would not have been possible without your hard work and commitment”, Managing Director, International Breweries PLC, Annabelle Degroot While commending the stellar performance, however, Degroot reminded the distribution partners that “standing still was not an option,

but going forward,” adding that as a very ambitious organization keen on meeting the needs of consumers across the country, neither the International Breweries PLC organization nor its trade and distribution partners would rest on their oars. “We are looking forward to a 2019 that will be even more impactful than 2018.” Speaking on the role and the relationship that exists between the company and its valued distributors, National Sales Director, Godwin Oche, said: “Our distributor-partners play a very critical role in our supply chain and I am particularly proud of the synergy that exists between them and our team.” Oche added that “From overseeing the movements of products from our factories to the points of sale and managing all attendant risks, our distributors have been able to bring real value to our consumers and in good time too, which has helped to enhance our reach and ensure year-round availability of our leading product brands across the country.”

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African governments, brands challenged to seek creative solutions to continent’s challenges Stories by DANIEL OBI

igeria and some rest of Africa have being facing various socioeconomic challenges ranging from , untapped natural resources, low GDP, poor infrastructure, health, education issues and poverty. These have remained daunting for decades but organisers of ‘Creativity Week’ in Nigeria believed that Africa can change the status quo by embracing the power of creativity to produce positive change. Drawing from examples how scientists have come up with solutions to enhance lives and tackle human challenges, Nnamdi Ndu, managing director of Chini Africa, chief organiser of the Creativity Week, challenged brands, government and non-governmental organisations to unite in the resolve to provide solution for Africa’s many challenges. Focusing on brands, Nnamdi told BusinessDay that the idea of Creativity Week is to encourage the private sector to more in developing the society across Africa. “Though people rely on government for development as they pay

taxes and believe that development is squarely on the shoulders of the government, but we know that if certain activities are left to the government, in the face of dwindling incomes in, government would not be able to make the expected changes. He told the private sector that creativity is not only about producing Adverts to sell products, but the “consumer of today wants the brands to identify with them, with the issues they are dealing with

and speak the same language with them” According to him, this can be achieved by brands getting involved and intervening in issues that communities are interested in. “This way the brand owners are not just selling products but they are connecting with consumers hearts and in return the consumers will be loyal to the products. Consumers don’t just buy products these days because they are told to buy, but they are also

buying and connecting with the hearts of the brand owners” Nnamdi suggested that “if different companies take one issue in the society, using Sustainable Development Goals of UN as template, even if they adopt one and pursue it, we will see that the society will grow”. He noted that though some companies are involved in CSR, but many of the CSR projects are for the camera. The issues should be internalised, to the extent that even the staff should be able to say what the brands represent inside and this should resonate outside, he said. The organisers used the opportunity of Creativity Week in the last week of March, 2019 to launch ‘Creating a Better Africa programme’ which Nmamdi said is an opportunity for African businesses to stand up and take positions to help in solving challenges confronting the continent today. Creativity Week is an annual forum that brings together all those who are involved in marketing communication and marketing and the whole idea is to promote the industry. It is also targeted at establishing the industry so that they can produce materials that are at par with materials produced from other parts of the world.

CSR: Felix King Foundation targets 10, 000 poor widows for upliftment

iqued by the growing poverty rate among the widows in the rural communities, government’s neglect of this very important socio-economic group, and the important role they play in the development of their families and communities, the governing board of Felix King Foundation, has affirmed the operation of Lift Bank initiative , which will help lift 10,000 widows and active poor women in Nigeria’s rural communities within 5 years period . Lift Bank Initiative will help in areas of small business capital access, training, mentorship and network. The Lift Bank, which is scheduled to be officially launched in next month, will focus operations in Edo , Lagos and Ogun states .

Lift Bank is an added component of Felix King Foundation and will operate under the arm of the Felix King Rural Initiative in partnership with Lift Bank accredited community banks.The initiative will support widows and active poor women, who are willing to undertake business enterprise such as artisanship, trade and farming. According to a statement by Felix King Foundation, it is unimaginable what these women had to go through to access as low as N10, 000 from local money lenders and the penalty they had to endure for a day default in repayment due to stringent conditions. These women are harassed and chased around like common criminals; some abandon their homes to

Felix King, founder, Felix King Foundation signing the Lift Bank project seal for the kick off the programme in Lagos, Ogun and Edo States at the media breakfast chart to unveil the project in Lagos recently.

take refuge in the bush just to avoid arrest or confiscation of wares, tools. Most times, what they require to initiate a trade or farming business is what some people spend over a bowl of pepper soup. But the irony of it all is that with as little as N10, 000, these women can train their children up to the University. According to the founder of the Felix King Foundation, Felix King , “We will be partnering with community bank / financial outfits for better output and sustainability. The role of community banks is to disburse the capital, supervise the repayment and manage the re-disbursements as well as progress monitoring of beneficiaries.” He said “the Lift Bank is a free loan access capital for widows and active poor women who are breadwinners of their family. And it is meant to support widows and active rural women in the enterprise such as trading, farming, and artisanship.” Beneficiaries are open to access between N10, 000 to N30, 000 and repayable in 36 months (three years) without interest. The system is planned as a rotational one, where by when beneficiary returns what they borrowed, the money will be given to another woman. King stated that “investing in women is vital for our collective economic prosperity and national stability of any country. When we empower women, communities prosper, the nation thrives and peace prevails,” he said. Therefore, to enhance our community’s security, as well as our national stability and growth, there

is need to encourage the full and free participation of women in the national economy. “This is the foundation of Lift Bank,” he said, adding that “simply put, Lift Bank is prosperity and progress for widows and the forgotten women in rural communities.” In Nigeria today, three out of every four people who live on less than N500 a day are in the rural areas and this class of people is mostly forgotten and with Lift Bank project, this circumstance will gradually change and the economic prosperity and peace in their communities will be restored. According to our arrangement, he said, “the fund will be domiciled at these community financial outfits for effective disbursement and measurement”. Speaking on the repayment arrangement between the foundation and beneficiaries, the founder highlighted that any woman who pays back after a year window, will have the opportunity to reapply with a chance to earn 100 percent above initial fund collected. For instance, “if a woman has collected N30, 000 and repay after a year’s window, she stands a chance of collecting N60, 000 for more economic lift,” he said. According to King, “in 2017/2018, the foundation supported thousands of widows in farming and trading concerns and the progress report from these women , who believe so much in the works of their hand has become a great example of how strong small businesses are the backbone not just of our economy , but of our communities. Today these women feel dignified and their neighbourhoods stronger”

StarTimes enhances youth employability in Nigeria, recruits graduate trainees

esirous of enhancing youth employability in Nigeria, Digital pay TV service provider, StarTimes has disclosed that it is closely working with the SOS Children’s Villages to recruit 10 graduate Trainees at its Lagos and Abuja StarTimes and SOS Children’s Villages Nigeria signed a Memorandum of Understanding (MOU) that will see the two organizations partner towards supporting vulnerable families, with an emphasis on the empowerment of young adults, in line with the United Nations Sustainable Development Goals (SDG). Speaking on this engagement, The Public Relations Manager of

StarTimes, Kunmi Balogun in a statement noted that “The country’s population is fast increasing, with a projection of 411 million by 2050 and so is the pressure of job creation. StarTimes Group has a commitment advanced towards empowering and imparting knowledge and skills to the next generation while creating meaningful jobs.”

Eat’N’Go competes, expands footprint in Nigerian market

at’N’Go Limited, the franchisee Pizza making company in the world is adding new stores across several cities in Nigeria as part of its massive expansion project in 2019. The launch of new stores at new locations nationwide reinforces the brand’s dedication to bringing the best global food brands and concepts to Nigeria and Africa at large. Following a successful year in 2018, Eat’N’Go has expanded its presence in seven states in Nigeria – Lagos, Abuja, Oyo, Ogun, and Rivers – adding Kwara and Akure in only Q1 of 2019, and aims to deliver new outlets in the South-South region in Q2. Eat’N’Go is set to open more branches of its brands in Lagos, Enugu, and Abuja in coming months. The establishment of these new stores will further increase the organization’s staff strength from the already existing 2000 staff across board. Patrick McMichael, CEO Eat’N’Go Limited, expressed his delight on the advancement so far. “We are on a mission to keep providing mouthwatering treats to lovers of Pizza, Ice Cream and Frozen Yoghurt all over Nigeria. It is such a great opportunity for us to be able to deliver our products and services to yet more and more states nationwide.

Tuesday 02 April 2019

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COMPANIES & MARKETS

BUSINESS DAY

Keystone appoints Sule as acting MD as Ohiwerei resigns Pg. 17

C O M PA N Y N E W S A N A LY S I S A N D I N S I G H T

BANKING

FCMB beats estimates after 73% surge in profit BALA AUGIE

irst City Monument Bank (FCMB) Group Plc posted a 73.86 percent increase in 2018 profit, topping analyst estimates, as the lender benefited from non interest income while unpaid loans improved. Net income rose to N14.97 billion in December 2018 from N8.61 billion as at December 2017, according to filings on the Nigerian Stock Exchange (NSE). The mean estimate of three analysts was a profit of N13.56 billion, according to data compiled by BusinessDay. Net interest income was up 4.33 percent to N177.24 billion. The performance means the lender has overcome the headwinds brought on by a sharp drop in crude price in mid 2014 that stoked a severe dollar scarcity and tipped the country in its first recession in 25 years. In this period, businesses were paralyzed, and customers-especially oil and gas firmwere unable to pay back interest on loans borrowed from Banks. Lenders were forced to write off loans as unrecover-

able. That ate deep into operating profit, resulting in low margins. However, the introduction of the foreign exchange regime the central bank and the rebound in crude oil price was a boon for the banking industry as it paved the way for liquidity in the foreign exchange market. Customers began to pay back money owed to financial institutions while the country existed a recession in the third quarter of 2017. Since the improvement in liquidity on the foreign exchange market, First City Mon-

ument Bank has been thriving as evidenced in a reduction in impairment on financial assets by 37.37 percent to N14.11 billion in December 2018 from N22.67 billion as at December 2017. FCMB’s non interest income increased by 10.75 percent to N17.60 billion as at December 2018 from N15.15 billion as at December 2017; the growth in noninterest income was driven by revaluation gains and mobile banking income. A breakdown of non interest income shows fees and commission income was up

33.16 percent to N21.60 billion in December 2018, as the lender recorded an uptick in throughput on its alternate channels, service touch points and mobile platform. Net trading income surged by 158.89 percent to N6.19 billion as at December 2018, thanks to an improvement in foreign exchange trading income and treasury bills trading income. FCMB’s costs control mechanisms have paid off as operating expenses fell by 3.0 percent to N67.47 billion in the period under review while

staff expenses were up by a mere 10.16 percent to N25.92 billion. While a low yield environment has hindered Banks in Nigeria from turning each naira invested sales into higher profit, FCMB’s margins expanded at double digit rate. For instance, net profit margin increased to 8.47 percent in December 2018 from 6.27 percent as at December 2017. FCMB’s loans and advances to customers are down fell by 2.57 percent to N633.03 billion in the period under review

from N649.9 as at December 201 as lenders in Africa’s largest economy have continually refused to turn the tap of lending to the economy. Analysts say the juicy yield on investment securities have allured banks that crave for increased earnings and it will be risky extending credit to businesses that offers no returns. Because government has not de-risk the real sector by providing infrastructure that will minimize costs and maximize profit, lenders will continue to refuse to extend credit to the economy.

sively and creatively pushing the frontiers of its business by creating robust platforms to support emerging digitalization of strategic businesses as well as corporate service units aimed at unlocking inherent potentials that will enable the Bank effectively ride on eco-

nomic headwinds and target opportunities in the markets. A statement from the Bank further adds that the Board of the bank expects that barring unforeseen circumstances, the trend of the results achieved in 2018 would be surpassed in 2019.

BANKING

Unity bank posts first profit in 2 years SEGUN ADAMS

nity Bank released its result for the 2018 financial year which showed the lender returned to profitability for the first time in two years. The lender grew its profit before tax by 109.9 percent to N1.41 billion while after after tax profit settled at N1.27 billion, shaking off losses posted in 2017. The Bank’s MD/CEO, Tomi Somefun said the most gratifying aspect of Unity’s 2018 performance, is that the Bank has made a dramatic turnaround from losses in the previous year. ‘‘This was made possible by growth in the business throughputs and transactionbased banking with its attendant strong non-interest income,’’ Somefun said. Somefun also explained that Unity recorded significant growth in customer acquisition through enhanced customercentric products that was rolled out during the year, riding on the bank’s rebranded channels and platforms which were well

accepted by the youth. ‘‘These are designed to guarantee double digits growth in both earnings and profits for the bank in the near future,” Somefun added. The Bank’s performance was supported by a corporate action to clean up its loan book by eliminating all the legacy non-performing loans (NPLs) which resulted in full de-risking of its balance sheet and creating a new lease of life for the Bank. A cursory review of the Bank’s performance shows growth across key financial metrics, with net operating income for the 2018 full year growing by 112 percent to N21.63 billion as against N10.22 billion in the corresponding period of 2017. Similarly, non-interest income increased to N6.3billion from N1.61bn recorded in 2017 and earnings per share (EPS) for the year 2018 stood at 13.03 kobo, up from negative of 127kobo recorded in 2017 full year. Furthermore, the Bank also optimized its operations and services through process

simplification and automation while promoting cost efficiency across the entire value-chain. The Bank rolled out its Central Processing Centre (CPC) for standardized operations and operational risks mitigation thus improving service delivery to customers in the Bank. In effect, these and several modest initiatives led to a 17.3 percent reduction in total operating expenses and a major improvement in the efficiency ratios. Unity Bank also leveraged on its core competence and strategic advantage in deepening its reach in Agribusiness and attendant value-chain, driving the over 360 percent growth in loan portfolio in this segment of the market. A feat achieved without material increase in loan quality – with NPL ratio closing the year at 0.69 percent. On cost optimization, Unity Bank’s focus yielded positive results as the lender brought down its total operating expenses by 17.3 percent from N24.46billion in 2017 to N20.22billion in 2018 full year.

The reduction is primarily as a result of the Management drive to build strong processes in its operations by leveraging on key business alliances that attract better efficiency in resource allocation and growing scales in the network. The Bank said it is aggres-

L-R: Biola Adebayo, director of operations; Olugbenga Olayeye, director, sales and marketing; Fidelis Ayebae, MD/ CEO, and Imokha Ayebae , head of finance , all of Fidson Healthcare Plc at the media parley on the Fidson right issue in Lagos. Pic by Pius Okeosisi

Edited by LOLADE AKINMURELE (loladeakinmurele@gmail.com) Graphics: David Ogar

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Tuesday 02 April 2019

COMPANIES & MARKETS

‘Technology, vast inventory keep us competitive’ BUKKY AKOMOLAFE is the commercial manager for Travelstart, an online travel booking website. In this interview, she talks about opportunities in Africa’s travel market, how the company has been able to significantly drive down cost of travel and its future plans. JUMOKE LAWANSON brings the excerpts..

h a t mot ivated Travelstart to commence business in Nigeria and what makes it different from other travel companies in Africa? Originally from Sweden, our founder, Stephan Ekbergh, opened the first office twenty years ago in 1999 in Cape Town, South Africa. In 2012, we opened the office in Lagos, Nigeria because we saw that customers had to go through many hurdles before getting the price for a cheap flight. Travelstart is the solution to that problem. We relieve the stress and inconvenience of booking the traditional way. No longer do consumers have to sit through traffic to get a quote, search the market tirelessly or wait for a call to get a price. We believe that if you want to travel, you should just be able to book your flight easily. You know life has enough challenges, and we believe that booking a flight shouldn’t be one of them. Our nimble technology, in conjunction with our vast inventory, which includes access to 500 airlines flying to more than 11,000 destinations worldwide, keep us competitive. How is Travelstart faring in this online travel market space, seeing there are other competitors jostling for market share? I would say very well. We have spent the last two years getting very cheap flight deals from the airlines, improving our service to our customers and we have been very consistent with our marketing message - Travelstart is a simple-to-use website where you can search, book and pay easily and securely online. We have told this story through some cool campaigns such as the Turkish Airlines Big Summer Flight Sale, where flights to New York cost less

Virgin Atlantic to sell direct flights to London for under N299,099 and then we took some travel influencers to Windsor, the day after the wedding to see where the Royal couple got married. We are a small company with a mighty reach. We have a staff strength of close to 50 people, but we are a proof that, sometimes, you don’t need high staff count, plenty offices to be able to execute excellent work. In addition to that, we are part of a team that is creating a recognisable brand. Recognition amongst our peers in the industry has also been a nice touch! We have won a series of awards including Best Travel Agency 2018 at the Pyne Awards.

Bukky Akomolafe

than N300, 000 and the Pepperdem flight sale, where customers got cheap flights to Johannesburg on RwandAir for N129,999. Our overall focus is to run our own race, not someone else’s. The market is big enough for competition, but there will always be one Travelstart. Our mission is to fix travel in Africa, and we are doing that one day at a time by providing cheap flight deals, providing excellent customer service, keeping

our cost structure low and staying relevant with our communication. Branding and marketing play a huge role in the success of any business and require many different resources. What determines the amount of resources you channel towards achieving your marketing goals in Travelstart Nigeria? First and most importantly,

‘‘ I kept my head down,

worked very hard, remained consistent with my work ethic and stayed focused on my personal and professional goals

Travelstart is a sales organisation. We sell cheap flights to numerous destinations around the world. Our resource allocation depends on the message that we are pushing at that moment in time. When we are running a long promo, we are firing at all cylinders versus when we are pushing our daily deals, we only activate a few channels. It is essential to know your objective and allocate resources in the most cost-efficient way. What are some of Travelstart’s landmark achievements in the seven years of operation in Nigeria? For us, it is steady and consistent growth yearon-year since inception; even with the challenges that we faced along the way. We were able to get back up and keep going. We have gotten some incredible airline deals that have really differentiated us from the rest. I remember when the Royal Wedding was happening in England, last summer, we partnered with

Last year, Travelstart celebrated its 6th year anniversary in Nigeria by offering very cheap flight deals and making ordinary people heroes in the ‘6 days, 6 destinations’ campaign. What should we expect for your 7th year anniversary celebration? This year, our campaign is simply tagged, Sale-A-Brate with us. Because we have recorded huge wins over the last seven years, we have decided to take our time to celebrate our most important people, our staff and customers. Through this campaign, we will be providing even cheaper flights to our customers’ favourite destinations in partnership with Emirates Airlines, Air Namibia, AirFrance, KLM and more from 25 - 31 March 2019. We kicked off this campaign with a pre-sale the week before with Etihad Airways. We will also be giving our Day 1 customers lounge access and spa vouchers for use at Murtala Muhammed International airport in Lagos, Nigeria. What Travelstart campaign would you say that you are most proud of and why? I am proud of all our campaigns to date. This is be-

cause of the work and dedication the entire Travelstart team, from marketing to finance to business development to operations put in to ensure success. There are two campaigns that standout for me; first is when we supported the Nigerian Skeleton & Bobsled team in their quest for gold to the Winter Olympics in 2018. We partnered with Air France-KLM to send the 32-passenger squad to South Korea. The second would be the Based-on-Logistics sale. For three days, customers were able to get a 25 percent discount on all local flights because of the postponement of the elections. Tickets bought will be valid until December 2019, so it extended past travel over the election weekends. These campaigns mean a lot to me because we were able to ease the financial burden and stress of our customers, showcase that travel is more than just a luxury - people also travel as a necessity such as to vote, to compete or for education etc. We were also able to show that Travelstart is a responsible company that is more than just about every day sales but gives back in a meaningful and relevant way where and when we can. Recently, you were named as one of Nigeria’s 100 Most Inspiring Women in 2019 by Leading Ladies Africa. How were you able to achieve this feat? Simple! I kept my head down, worked very hard, remained consistent with my work ethic and stayed focused on my personal and professional goals. From a Travelstart perspective, I always had clarity around my KPIs, so I knew what my team and I were working towards every day. Most importantly, in my journey, I wasn’t trying to be anyone else but the best version of me. Selfimprovement is key to me. I am continually trying to be the best version of myself every day.

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BUSINESS DAY

Business Event

APPOINTMENT

Keystone appoints Sule as acting MD as Ohiwerei resigns SEGUN ADAMS

eystone Bank has announced the resignation of Obeahon Ohiwerei from office as Managing Director/CEO of the Bank, and the appointment of Abubakar Danlami Sule as Acting Managing Director/CEO although it says Sule’s appointment is subject to approval by the Central Bank of Nigeria (CBN). A statement from the Bank disclosed that Ohiwerei is leaving to pursue other personal interests. The statement further added that the Board recognized and appreciated Obeahon’s immense contributions to the growth of Keystone Bank and the visibility the Bank had attained as a brand in the past eighteen months. Sule, who was the Dep-

uty Managing Director of Keystone Bank until recently, is a graduate of Ahmadu Bello University, Zaria with degree in Accounting. He is a Fellow of the Institute of Chartered Accountants of Nigeria; an Honourary Member of the Chartered Institute of Bankers of Nigeria; a Governing Member of the Chartered Institute of Bankers of Nigeria; and an Alumni of both the INSEAD (France) and Wharton Business School in Pennsylvania, USA. Futher more, he has over 29 years of cuttingedge banking experience with competences in Corporate Banking, Operations, Treasury Management, Credit Structuring, Corporate Planning, as well as possession of very strong relationship management skills.

Sule had also served briefly as the Managing Director of Sterling Capital Limited, the Investment Banking Subsidiary of Sterling Bank Plc in 2009. While at Sterling Capital Limited, he was appointed by the CBN as part of the Executive Management team to turnaround the fortunes of erstwhile Intercontinental Bank Plc. He eventually returned to Sterling Bank Plc as Executive Director in charge of the North and Corporate Banking. He also worked briefly in Standard Chartered Bank Limited before he joined Keystone Bank. The Board of Keystone Bank has enjoined Management and Staff of Keystone Bank to join hands with the Acting MD/CEO to build Keystone Bank into a brand that all its stakeholders will be proud of.

TECHNOLOGY

Huawei reiterates commitment to drive digital inclusion in Nigeria

eading global Information and Communications Technology company, Huawei, has reiterated its commitment towards achieving a fully connected and digitally inclusive Nigeria. The Managing Director, Huawei Technologies Company Nigeria Limited, Zhang Lulu, disclosed this at a media parley in Lagos, stating that the company is focused on enhancing availability, assessability and affordability of ICT services by boosting ICT infrastructure with quality and innovative solutions tailored to local needs and equipping the youth with ICT knowledge and skills. Discussing the theme, ‘Connecting the Unconnected’, Mr. Zhang said exploring talents among Nigerians with great potential leads to development in Nigeria, as the ICT industry contributes more than 10 percent to the total Gross Domestic Product of the Africa’s largest economy. “As a leading global ICT solutions provider, Huawei has been witnessing, participating and being a part of what has happened in the

ICT development in Nigeria. Since starting operations in Nigeria in 1999, Huawei has been working with local operators to provide safe, stable and high-quality communication networks in the country; currently covering about half of the population,” Mr. Zhang said. Apart from increased connectivity, Huawei is also committed to building skills at all levels of the society by working with universities and other partners to foster ICT talents and training ICT practitioners. The company has trained more than 20,000 ICT engineers who have become the main work force to guarantee the network running of this country. Huawei is currently working with more than 40 universities in Nigeria in establishing its Huawei Authorized Information and Network Academy (HAINA) and providing industrially recognized ICT certification in subjects including networks, routing and switching. Sharing his experience at the event, Muhammad Maihaja, one of the three students who won the first prize in Huawei ICT competition and will be representing

Nigeria at the global finals in China, described the competition as a life changer which has given him a great opportunity to learn cutting-edge technologies. “The Huawei ICT competition has made me go beyond what I knew. This platform has given Nigerian youths opportunities to showcase their talents in ICT on a continental and global level, which is good for the future of the development of ICT in Nigeria. ”said Maihaja. Reports show that the adoption of communication technology has grown all over Nigeria, with over 80 per cent of the citizens already covered by communication networks, thereby facilitating better lives and giving rise to broader economic activities. Mr. Zhang concluded that upholding its mission and vision “to bring digital to every person, home and organization for a fully connected, intelligent world”, Huawei remains committed to working with carriers and local partners to reach the remaining unconnected areas, especially remote rural areas in the coming years.

L-R: Toyin Ayinde, first national vice president, Nigerian Institute of Town Planners, FNITP; Soromidayo George, corporate affairs and sustainable business director, Unilever Ghana and Nigeria; Adebisi Adedire, 16th chairman, Nigerian Institute of Town Planners – Lagos Chapter, FNITP; Razak Okoya, chairman, Eleganza Group of Companies, and director-general, office of transformation, creativity, and innovation Lagos State Government, and Toba Otusanya, at the Investiture of the 16th Chairman and inauguration of executive committee members of the Nigerian Institute of Town Planners – Lagos State Chapter.

L-R: Founder BookingAfrica.com, Fade Ogunro; Country Manager, VIMN Africa, Bada Akintunde-Johnson; Mavin Records Songstress, Di’Ja and Creative Director, Insight Publicis, Chuka Obi at the Creativity Week 2019 Session hosted by VIMN Africa

L-R: Emmanuel Oyewole, head of administration, Cool Wazobia Info FM; Oyin Williams, chief operating officer, JK Michaels; Bello Omololu, principal consultant, JK Michaels; Ibifuro Olayomi, HR, ICT, and administration manager, Total E&P Nigeria, and Mojisola Komolafe, head, customer service, JK Michaels, at the Breakfast Meeting/Training Session in Lagos. Picture by David Apara

L-R: Tobi Oyewole, CSR Analysts, Nigerian Stock Exchange (NSE); Pai Gamde, chief human resource officer, NSE; Oduniyi Daniella, S-Tee Cambridge School; Wisdom Ojini, Kingdom & Base School; Aina Rotimi, Anthony Village Senior High School; Abimbola Babalola, head, market surveillance, NSE, at the Closing Gong Ceremony in commemoration of the 2019 Global Money Week theme: Learn.Save.Earn at the Exchange today in Lagos.

Tuesday 02 April 2019

BUSINESS DAY

THE SOUL-SEARCHING Why are we even looking? KELVIN BOB-MANUEL FRAME IT BEFORE YOU NAME IT et’s start with some small gist about a guy named Tolu. Tolu decided, at 35, that it was time to get a wife. He auditioned candidates and ended up with Adaora. There was just one problem. Neither Tolu nor Adaora ever bothered to discuss what the word ‘wife’ meant to them. For Tolu, a ‘wife was an intimate partner who ran a home and raised children. You cared for her financially, lavished her with gifts, and the two of you threw a monthly party, where said wife with an impeccable figure and sense of style was a gracious hostess that all your business partners adored. For Adaora, a ‘wife’ was a spiritual partner who served as a source of comfort and counsel to her spouse and helped him grow in his walk with Christ. She cared for her husband’s extended family and put her accounting degree to use by helping him manage his businesses and save for a rainy day. Tolu assumed that Adaora’s good looks and social graces meant that she would be a great ‘wife.’ Adaora assumed that the Bible on Tolu’s bedstand meant that he was looking for an amazing ‘wife.’ The role he was advertising and the role she was accepting had the same title. However, they were not the same thing. Guess what happened to Adaora and Tolu? It starts with a ‘D’, ends with an ‘E’, and sounds like ‘the horse.’

‘

Maybe the duties that will ensure your company’s success can be spread among existing employees, or added to the workload of a competent staff member in return for extra pay

At WAVE, we have a simple rule for recruitment: You have to frame it before you name it. Tolu had not done any soul-searching about what his reason was for looking for a wife in the first place. Without knowing what he needed, he never figured out the job to be done (JTBD). Without the JTBD, he could not create a job description (JD). THE JD IS THE LINGUIST The JD fixes that ambiguity titles have, and ensures that everyone’s interpretations are identical. It gives the prospective hire clarity on exactly what the job entails. It is an invaluable source of insight for you as well. When you examine the

comprehensive list of tasks that make up your JD, you are able to make an honest assessment of which of the tasks require a new employee to complete them. “Framing it before naming it” can sometimes illuminate that you do not need to enter the recruitment process at all. D&D (distress and distrust) does not have to be your portion :-). Maybe the duties that will ensure your company’s success can be spread among existing employees, or added to the workload of a competent staff member in return for extra pay. Maybe the work can be outsourced to an outside company/agency for a one-time cost that ends up being far more cost-effective than having someone on payroll. You might have been looking for ‘The One’ when what you needed was ‘The Already-Present Few.’ THE JD IS THE JUDGE When your objective is not achievable without an extra set of hands, the JD is a tool for making objective hiring decisions. You can assess the list of tasks and then prioritise your goals by dividing the duties into: THINGS THAT YOU ABSOLUTELY NEED TO GET DONE vs THINGS THAT WOULD BE NICE TO GET DONE vs THINGS THAT MIGHT AS WELL GET DONE WHILE YOU’RE AT IT Maybe your company needs someone on site to organise

‘

When your objective is not achievable without an extra set of hands, the JD is a tool for making objective hiring decisions lunch, so the productivity loss caused by people returning to their desks late can be resolved. Maybe your business’s books are a mess. Maybe you hate the fact that visitors to the office have to come directly into the main hall. By according rankings to the duties your company needs fulfilled to ensure success, you can surmise that the reduced productivity caused by lunchtime lateness, and the probable audit by the Internal Revenue Service, are your biggest problems. A pretty, well-spoken receptionist is a cosmetic addition that can wait till the next year when your revenue has increased from the more efficient use of manpower. With a JD, you eliminate the risk of feeling pressured to fill a role just because your competitors appear to have certain employee titles or organisational structures. You have a clear list of your

business’s unique requirements, and their importance to the achievement of your company’s specific goals. THE JD IS THE KOKO The most empowering thing about a JD is that it allows you to join the prospective employee in asking “What’s In It For Me?” (WIIFM). You can ascribe an actual value to each role. You can measure the revenue generation potential of an additional employee, or the potential savings they will net you, against the expense of having them on payroll. Since you know ‘what is essential’ vs ‘what is important’ vs ‘what is merely nice to have’, you can prioritise the recruitment of talent who will enable you to meet your highest-priority goals. This means you can make a savvy decision about which job merits a salary increase in order to attract the right calibre of candidate, which position you can afford to be less picky about, and which role you can sacrifice entirely. A well-thought-out job description pays dividends that cannot be overstated. As we move through the entire process of obtaining and retaining talent, you will see evidence, again and again, that it all comes back to the JD. •Kelvin Bob-Manuel is the Communications Lead at WAVE, an organization focused on rewiring the education-to-employment system to create a level playing field for every African youth to access the skills and opportunity to become what they imagine.

BUSINESS DAY

Tuesday 02 April 2019

The online masters degree is coming of age What an MBA has taught us

Even as digital learning evolves, business schools Students and graduates share the insights and experience they gained during their degrees still value classroom teaching JONATHAN MOULES, FT

ew York University’s Stern School of Business announced a radical new departure in its postgraduate teaching this year: its masters in management (MiM) degree was its first to be totally online. “We are targeting a whole new market,” says Kim Corfman, Stern’s vice dean for MBA programmes and online learning. The aim, she adds, is to attract new student groups from outside the US, where MiM degrees are often more popular than the business school’s core MBA programme. Stern is entering an increasingly

crowded market, however: the online masters degree is coming of age. While NYU Stern was unveiling its first purely digital degree, across the Atlantic in France, the first cohort of students were graduating from an online-only masters in innovation and entrepreneurship at HEC Paris. Among the graduates was Efthymia Lioliou, a 44-yearold Greek-born, Paris-based biochemist. For Ms Lioliou, the 100 per cent online course was a way of fitting learning around raising two young children. “If I was younger I might have done this by studying on campus,” she admits. “As it was, I could log on when my eldest daughter was at school and then work late at night when the children had gone to bed.” The course shows that students are not necessarily coming from further afield, but rather they appreciate the flexibility of online study, says Marc Vanhuele, professor of marketing, who teaches on the course at HEC. “We are targeting active professionals,” he says, noting that the innovation and entrepreneurship course has regular deadlines to keep students on

track, but enough slack to allow them to learn at a pace that suits them. At €20,000, the tuition fees for the online masters degree are considerably less than the €69,500 HEC charges for its full-time MBA programme. The school makes up for this, however, by running much larger classes than the 65 people in the annual intake for the campus-based MBA. “The idea was to create something that is scalable,” says Mr Vanhuele. His hope is to increase the online masters intake to a couple of hundred students a year, split between two cohorts. Despite the decision by top tier business schools like HEC and NYU Stern to offer full degree

30%

Students at ESCP Europe who will learn at least partially online by 2022

programmes online this year, the evolution of digital education is still in its infancy. Valérie Claude-Gaudillat, a professor of strategy and director of the Institute for Innovation, Design and Entrepreneurship at Audencia, a business school in France, has experienced the limitations of technology first-hand. She had a robot in her management class for a joint masters degree course with engineering and architec-

ture. The experiment was “disappointing”, Ms Claude-Gaudillat admits. The example shows that classroom communication using technology is not yet as seamless as human interaction. “It was meant to interact with students, but its responses had to be prerecorded, so it had lots of limitations in what it could do.” When the course finished, the android educator was ditched. “When I asked students afterwards what they most liked about the course, they said the group experience,” Ms Claude-Gaudillat explains. She suggests that online education is passing through the kind of “hype cycle” that technology consultancy Gartner created to explain the evolutions of digital breakthroughs. The cycle starts with an “innovation trigger” and rises quickly to a peak of “inflated expectations”. It then drops into the “trough of disillusionment”, before recovering through a “slope of enlightenment” to the final phase — the “plateau of productivity”. Online education is just beginning to travel up the slope of enlightenment, according to Ms Claude-Gaudillat. Frank Bournois is dean of ESCP Europe business school, which celebrates the 200th anniversary of its founding in Paris this year. Despite claiming to be the world’s oldest business school, ESCP wants to remain a modern education institution. For some courses it blends classroom teaching with online learning using the Coursera platform, Mr Bournois notes. He advises business schools to focus on making the teaching content as good as possible, rather than trying to become a technology supplier in their own right. “The risk for schools is that they become production studios for online courses,” he says. Costs can escalate if schools take this route because they need to maintain their kit. “Of course, our professors need to think a lot about what their students should see [in online courses],” he adds. “But that does not mean that the school needs to employ people to make the videos.” He predicts that about 30 per cent of ESCP’s students will learn at least partly online by 2022. At the moment, 27 per cent of students are taught either wholly or partially online. Over the same timeframe, he expects class sizes on campus to increase so that inperson teaching becomes more efficient. He predicts numbers will rise from the 25 to 40 people at present to about 100. Even as online learning evolves, he says, classroom teaching will always have a place in business education.

Reinaldo Caravellas

Laura Kornhauser

einaldo Caravellas, Brazilian. University of North Carolina: Kenan-Flagler, MBA, graduates May 2019 What’s the best thing about the MBA so far? The network experience. From day one you need to count on your peers to achieve your goals, as their perspectives will always bring new ideas and help you navigate different problems. The most successful MBA students are the ones who connect the most with different people and get more involved, even by doing simple things like organising a party or running a club. When I started applying for jobs, I reached out to alumni at consultancies to understand more about their company culture and how I should train myself, as every company has a different style. When I graduate in May I will join consultants McKinsey in Chicago — we have a lot of alumni there. One of my mentors who works there is going to help me with moving to the city and make sure I feel welcome in the office. I am grateful for the core values of community that are taken very seriously here. Laura Kornhauser American. Columbia, MBA, graduated 2017. Co-founder and chief executive, Stratyfy, New York If you had to improve one thing about the MBA, what would it be? Recruiting often starts when you are only a month into business school, especially for more traditional career paths. That’s a shame. It makes people choose what they want to do way too early. One of the most beneficial things I did during business school was explore — opening my mind up to new ideas, ways of thinking, new approaches. I was able to do that because I was not looking to go into consulting or banking. I spent 12 years at JPMorgan before going to Columbia. I wanted to transition into entrepreneurship, but I didn’t know exactly how. I wanted to be in financial technology, and I had very deep financial experience but not in things like operations or marketing. I used to believe successful career paths looked like a straight line. I learnt through hearing successful business leaders that the most interesting careers don’t look anything like that. Nico Eggert German. HKUST, MBA, graduated 2015. Director of digital engagement innovation, Metlife Korea, Seoul Was the MBA worth the cost? I was in banking and I wanted to move to Asia. Halfway through the MBA, I came across the employer that I’m with now. Since then I have lived in three different countries, I make a decent amount of money and I’m enjoying life. All of that wouldn’t be there without the MBA. You can do the maths and it works; you can look

Nico Eggert

at satisfaction levels and it works. I moved around a lot post-MBA by design. I started thinking about my career a lot more strategically: I look at what I’m going to get out of a job, beyond the obvious “can I do this?”, so what are my options if it goes well, and what if it doesn’t go well? What’s the next step? It worked out really well for me but people looking at doing an MBA should do their homework on the school. Don’t be that disgruntled person that went to the wrong one and doesn’t get out of it what they had hoped. Mridula Chawla, Thai. Melbourne Business School, MBA, graduated 2018. Senior manager, AB InBev, Melbourne What impact has the degree had on your career? Before I did the MBA my background was in science, so I had very little exposure to business terminology or knowledge of how businesses were run. Now, I work at the drinks company AB InBev on technology-related projects. I worked on a project with the finance department recently and without the MBA, I wouldn’t have had any idea. Even just understanding business terms that everyone uses — the MBA exposes you to that. It also gave me clarity on the impact decisions made at a strategic level have on actions taken at the execution level. The MBA taught me how to deal with ambiguity and the unknown, a skill I use every day at work. My background has nothing to do with my current job, but I am able to deal with the pressures that come as a result of it because I was forced to learn how to do so during the MBA. Somrudi (Yee) Mekwilaiphan, Thai. Durham Business School, MBA, graduated 2018. Advisory/consultant, Bangkok What have you learnt from studying abroad? Living far away from my family, I had to take care of myself and manage my life, for the first time — so time management. Also, English is not my first language, so I had to work harder to read the journal papers and do the assignments. I found some of my Chinese friends tried to do research in Chinese, but I never did research in Thai because it was a chance for me to improve my English. I have made international friends and we still keep in contact. After living abroad for the MBA I feel I have more inspiration to make my working life better than before, and I know I will carry the things I have learnt with me and apply them to my career. At Durham they train you in critical thinking to solve problems; my clients have a lot of problems, so I can advise them on how to improve, to identify the root cause of the problem and I can make a recommendation for the future.

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Tuesday 02 April 2019

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Why Science, technology in higher education must drive Nigeria’s development KELECHI EWUZIE

ducationists have reiterated the need for Nigeria to pay adequate attention to science-based education in order to achieve the needed development in the country. They observed that science and technology aspect of education has a repository of potentials capable of transforming economies and has been behind the advancements in developed countries. According to them, “Despite this knowledge, this aspect of education has not received adequate attention needed to push the growth in Nigeria”. Isaac Adeyemi, a professor stated that universities and other higher institutions as innovation hubs have major roles to play in using science and technology to drive development by building capacities in agriculture/ food security, engineering, health and so on. Adeyemi said, “Developing economies, such as ours, can only fast-track and/or leap frog their growth through targeted research and development. A practical way to do this is to do what is generically referred

Academic staff of universities making a case for strategic investment in science and technology education

to as reverse engineering. It is these institutions that must provide the road map to circumvent those road blocks to indigenous technology enhancement necessary for driving innovation and development of the nation. Tolu Odugbemi, former

vice chancellor, University of Lagos insists that managers of economy must be prepared to invest heavily in the higher education cutting across both the public and private “The research facilities must orchestrate the brain power of the staff, take responsibility

Stakeholders seek improved investment in school sports development …As Greensprings school holds Sports day KELECHI EWUZIE

he need for both government and private sectors to encourage investment in the development of sporting activities in schools have again be reiterated in order to breed highly productive next generation leaders. Barney Wilson, deputy director of Education among other stakeholders made this call while speaking at the 2018/19 Sports day which took place at Greensprings School, Lekki campus, Lagos State. Wilson reiterated that the school believes in developing the whole child, adding that the students are strong academically as well as outside the classroom. On the relevance of sports to academics, he

said: “Sports teaches you to come together as a team, it teaches you about collaboration, it teaches you motor skills and so your brain is connected to your physical body; when you are totally in shape it means you are in shape in terms of sports and you are in shape in terms of the classroom.” Speaking at the event, Lai Koiki, executive director, said sports day and the days leading up to it, create opportunities for students to build their gross motor skills which are useful in many ways. “Team spirit is always high as each member of the community is rooting for their team to be victorious while appreciating the skills of all the other competitors.” While stating the importance of sports to youth development, she said sports takes a lot of focus and prac-

tice and it is usually the same set of students that are doing well in class that are leaders within their space and are the sports people because they are focused and they want to lead in every sphere of life. She urged the winning the team to keep practicing and continue to do better and they should know that nobody wins all the time. At the end of the sporting competition which witness spectacular displays of track and field, March past, relay races, I can do race and other events, Abubakar Tafawa Balewa House emerged the overall winner with 47 gold, 20 silver and 23 bronze medals; Moremi House came second with 29 gold, 23 silver and 20 bronze medals; while Nnamdi Azikiwe House came third with 23 gold, 14 silver and 22 bronze medals.

for training new generation of talents and participate in the transformation of the nation’s science and technology base.” Odugbemi noted that the world has moved from commodity-based and military power ranking to knowledge economies/societies, add-

ing that the paradigm shift is propelled by advancements made through science and technology innovations. “The Universities in Nigeria must therefore be the focus for the modernizing of forces of the society, for the promotion of the “values of science and

technology” and for mediating between the political and industrial spheres of national life”. He called for a coherent national Science and Technology strategy with framework developed in consultation with the National Academies of Science to specify the national priorities for research and development with the appropriate funding commitment, while disclosing that countries like China followed this path some 50 years ago to transform their economy. “The challenges of our development, epitomizes largely by corruption, poverty, disease, and poor implementation of good policies can be surmounted if the citizenry is sufficiently educated to make long-term good decisions. It is our higher institutions that are expected to be at the vanguard of the national moral rebirth and exit us from the ‘poverty cycle’ as ‘when poverty increases, honesty decreases,’ Odugbemi said. He further decried the poor standard of education and the lack of proper attention to entrepreneurship development in country which is adversely affecting the economy.

‘Ogun State Govt officials abandon books worth $500,000 at the port’

US based Nigerian, Benjamin Babalola Osibodu have accused officials of Ikenne Local Government Area in Ogun State of abandoning a container load of over 30, 000 books valued at 500,000 United State of America dollars in the open market at the port. Osibodu, an indigene of Ilishan, in the Ikenne Local government, last year made an arrangement with the World Bank headquarters in Washington DC to send the books to Nigeria with the hope that the officials of the Ogun State Government would be excited at the prospects of having the books contributing to the development of the education in the state and lift the burden of buying textbooks from the parents who are already buffeted and grappling with the high cost of living in the country. He accused the local government chairman of Ikenne Local Government of being nonchalant, making little or no efforts to secure the release

of the books. According to him, “I came to Nigeria and met with the commissioner of education and the SSG and neither one seems personally concerned enough to do something.” He appealed to spirited Nigerians and most especially Ogun State indigenes to prevail on the officials of the state government to ensure the release of the books from the port. He said “For the sake of the future of Ogun State, I will like to appeal to the new Ogun State government to ensure that the books get into the hands of the children of Ogun State. The children need to read and access the world of opportunity to learn and grow.” “Ogun State should be a shining light to other states in Nigeria. For a state that produced icons like Nobel laureate, Wole Soyinka and Obafemi Awolowo, it is quite shocking that those presently at the helm of affairs are nonchalant about the importance

of books.” The World Bank Book programme distributes books to educational institutions in rural and disadvantaged areas of developing countries. WB Book Project sends up to four containers (20’ or 40’) of 320 or 576 boxes of books per year to developing countries around the world. Books are donated to all school levels, libraries and community groups concerned with education. According to information on the World Bank website, due to the long waiting list of countries wanting shipments, it usually takes at least two years for WBVS to collect enough requests from one country, find a reliable distributor, pack the shipment and send it overseas. Osibodu said that it would be a shame if the books are left to rot in the nation’s port and Ogun State children are deprived of the rare opportunity to read the books which have the potential to transforming the fortune of the nation.

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EDUCATION Professionals advocate more female students’ involvement in STEM, entrepreneurship education KELECHI EWUZIE

omen professionals under the aegis of Vital Voices have called for more female students to pick interest in becoming entrepreneurs as well as studying Science, Technology, Engineering and Mathematics (STEM) related courses in higher education. This was the message from Nigeria’s version of the Vital Voices Global Mentoring Walks, embarked on by professional women in Lagos to mark 2019 World International Women’s Day. Speaking to BusinessDay after the walk, Ibilola Amao, principal consultant of Lonadek, said the walk, which was held in partnership with Vital Voices, a Hillary Clinton ini-

tiative that promotes women empowerment, was aimed at encouraging women to step up their games in area of leadership, entrepreneurship and professionalism. “We want the girls to understand that STEM education is not for men alone. This is why those of us, who are already there and have achieved something, needs to support others by exposing them to the opportunities in various industries where we work including energy, power, infrastructure, oil and gas and manufacturing,” Amao said. According to her, “The female child can either become a successful entrepreneur or professional in order to become a leader, adding that the mentoring walk to Yabatech was to tell the young girls about future outside the learning institution, about jobs, career and opportunities beyond

Cross Section of Heritage Bank Plc Staff, Teachers and Pupils of Ataoja Government High School, Osogbo, during the CBN 2019 Global Money Week Celebration in Osun State.

studying to pass examines”. “Becoming successful goes beyond passing examines to secure jobs. We believe that if you have a mentor, transition from higher learning to work

place or entrepreneurship will become a lot easier. It is basically connecting women to other women to serve as guide to the younger generation,” she added.

Heritage Bank promotes financial inclusion strategy on Global Money Week KELECHI EWUZIE

eritage Bank Plc has joined the world to mark the Global Money Week (GMW) with series of educational programmes targeted at tutoring children on the importance of financial literacy, whilst promoting savings, drive financial inclusion, invariably gain a higher standard of life and attain secured economy. For the sixth year running, the financial institution has successfully commemorated the Central Bank of Nigeria’s Financial Literacy Day, which is part of the activity to mark the GMW scheduled this year for 25th to 31st March. During this year’s Global Money Week with the theme: “Learn, Save, Earn,” the CBN mandated all banks to adopt a school to commemorate Financial Literacy Day, which is scheduled for 28th March. The central bank direct-

ed Heritage Bank to adopt schools in seven states: Osun, Bauchi, Kebbi, Niger, Enugu, Delta and Ekiti for Financial Literacy workshops. Students and teachers were taught several concepts including; the role and management of money, needs and wants, benefit of budgeting, spending and savings. Whilst, others include savings with a financial institution, the basics of financial education and Heritage Bank savings product for young persons (Bud Account). Ifie Sekibo, CEO/managing director, Heritage Bank while addressing some of the participants, reiterated the importance for young Nigerians to financially and economically equipped for the development of the nation. According to him, “Nigerian youths and those around the world need to be fortified economically via financial literacy knowledge acquisition, which will aid them on learning, saving and earning

money wisely. In line with its mission to create, preserve and transfer wealth across generations, Sekibo said Heritage Bank developed the HB Bud Savings Account to help its customers to create wealth for the children and provide them a future of financial independence. “As a bank committed to creating, preserving and transferring wealth from one generation to the next, we have consistently maintained our position as the leading brand in financial inclusion initiatives by leveraging on CBN’s mandate to impact schools across the geopolitical zones and improve financial inclusion,” the MD reiterated. To him, opening a savings account for a child is one of the best ways to introduce him/ her to that concept of saving at an early age. He explained that one of the ways the bank has continued to promote savings amongst children is the introduction of “My day

as a banker” which is also the Heritage Bank’s unique way of promoting financial literacy among children, which is the core of the HB Bud Savings Account, specially designed to promote savings habit among children and youths. Meanwhile, other senior employees of the bank visited other select schools in the country as directed by the apex bank to promote financial literacy. According to Heritage Bank, today’s children and youth should become empowered economic citizens, capable of understanding the importance of saving, and equipped with the skills to be employed and create their own livelihoods. The bank wants young people to learn to manage and earn money wisely. By empowering children and youth, Heritage Bank can help them create a positive wave that will expand from themselves to their families, to entire communities and the economy at large.

Day Waterman College celebrates 2019 sports day, ready for 10th anniversary STEPHEN ONYEKWELU

ith a comfortable margin, Purple House emerged champion of Day Waterman College’s (DWC) ninth sports day, followed by Yellow and Red Houses and the Blue House came in fifth, as the College marks its tenth anniversary. Of the 1000 total target points, Purple House obtained 922, representing 92 percent of the total scores. Yellow House came in next with 733 points,

that is, 73 percent of the total scores. Red House was next with 714 points, representing 71 percent of the total scores obtainable. Then Green House garnered 645 points, while the Blue House secured 635 points. “Today is about celebrating health and fitness, which are keys to sustaining one’s life. Stewart Cowden, principal at Day Waterman College said in an interview with BusinessDay, on the side lines of the sports event. “We want to raise the bar by putting in place programmes that will identify and train elite athletes

from among our students, who will compete at international sports events.” Experts say sports can be a positive, character-building experience. It provides one of the best opportunities for children to come in contact with rules and social values. It defines the need to get along well with others and be accepted as part of a team. It plays a prime role in promoting values such as tolerance, fairness, and responsibility. With proper leadership, sport provides the opportunity for children to acquire an appreciation for an active

lifestyle, develop a positive self-image by mastering sport skills, learn to work as part of a team, develop social skills with other children and adults, learn about managing success and disappointment and learn respect for others. The idea that sport builds character comes from 19thcentury Britain where many believed the playing fields were the training ground for the discipline necessary to produce leaders in adult life. Physical activity, they thought, was a social experience that powerfully influenced attitudes and values.

Amao, who advised the girl child not to be limited by her environment or the people around her, said there is need to encourage young people to see beyond classroom teach-

ing to thinking on how to run business and become professionals. “We post free IBM technology courses here for those who want to go into Data Analysis, Coding, Web Development and Mobile App. We give free coaching to enable female students to develop further. Before graduation, you can start doing something to earn extra support. We help in the area of career counselling, industry awareness and empowerment,” Amao added. On her part, Oluseyi Afolabi, a trained engineer with 35 years’ experience in oil and gas sector, who noted that a lot of young girls run away from Mathematics, Technical courses because they feel Engineering and Technology are for men, said there is need for girls to give themselves the opportunity inherent in studying STEM courses.

Experts speak on how to achieve productivity at work place IFEOMA OKEKE

xperts from various works of life have suggested several means entrepreneurs, staff and young people can achieve productivity at work place and business endeavours. Speaking during the maiden edition of Productivity Plus Summit (PPS) in Lagos, Theresa Onwuka, creative director, Needle Point, a lifestyle brand that does ready to wear African print for women; who was also a speaker at the event said to achieve productivity, young people must have passion, be disciplined, believe in themselves and not be distracted. “To achieve productivity in work place, there is a need to go the extra mile and always seek to learn. Do not say this is my job and I will only do my job. Learn the next thing. Whatever is in you that you have learnt, no one can take it from you, use it somewhere else and teach other person. It is a ripple effect. “Learning increases productivity. If you are disciplined in your work place, want to create and add value genuinely, your productivity will increase. Whatever industry you find yourself, take one step at a time. Once you have identified what you want to do as a young entrepreneur, set clear realistic goals that you can achieve,” Onwuka added. Abisola Longe, CEO of Human Capacity Development Consultant (HCDC) said Productivity Plus is an answer to the quest to achieve produc-

tivity, success and financial freedom. Longe who is also the founder and convener of Productivity Plus explained that she started productivity Plus in 2012 and it has grown inch by inch and has continued to address issues around unemployment, productivity and achieving success. “People weren’t productive and didn’t understand what it took to achieve success. People didn’t have the work ethics and didn’t understand the process to success and productivity. So, this is to help people understand what it takes to achieve success and give them the tools to help them design their dream lives. “Many people make excuses and they give their power away. Productivity Plus is to help you design your dream life yourself and make it happen the way you design it as long as you are prepared to put in the work and the learning,” she said. She said over 2500 people registered for the summit which focus is to help people cross the difficulty between where they are today and where they want to be. “We hear a lot about unemployment, people can’t find work or do businesses, the environment is so harsh but what we see is people who don’t have the knowledge and the tools. They don’t see the opportunities they have. With this summit, young people can meet mentors who will show them the process. I call it connecting the dots. People can see the steps they need to take to achieve a productivity plus life.

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Tuesday 02 April 2019

Office space

Here’s why Heritage Place is haven Make fact-finding reports on for corporate, multinational tenants building collapse public – FIABCI

CHUKA UROKO & TEMITAYO AYETOTO

mid the glut in the prime office space market in Nigeria today, there are still some products out there that stand out and command demand because of their peculiar attributes and, more importantly, their strong value propositions which tenants or buyers find too compelling to resist. Heritage Place, a Grade A office building located strategically on the intersection of Luggard Avenue and Kingsway Road in Ikoyi, Lagos, is one of such products. The building is the first, if not the only, green building that is Leadership in Energy and Environmental Design (LEED)-certified in Lagos at the moment. The LEED-certification, which is an accreditation that started in the United States, looks at things that reduce a building’s carbon footprint and energy use. It takes into consideration the architectural design of the building, the material, the cost of construction which embodies the life-cycle cost of being in that building that has to be much lower, the air-flow within the building, the health, safety and environment (HSE) issues, the glaze and the orientation of the building. It also considers all the things that promote wellness for the inhabitants of the building; it is a lot cheaper to service and maintain the building over its life-cycle and the return on investment is high. In any green building such as Heritage Place, everything has to be efficient. This is why

energy efficiency here is high to the advantage of occupants. The energy mix in the building, according to its promoters, is much lower than what obtains in other buildings such that energy cost is about 30-40 percent lower. For these reasons and more, Heritage Place, which stands on 14 floors with 16,000 square metres gross lettable area (GLA), enjoys significant occupancy rate estimated at 90 percent in a market where commercial office vacancy rate is deep, hovering between 20 and 30 percent as at Q4 2018. Multinational companies including American computer technology corporation, Oracle, has found this ultramodern, eco-friendly building a preferred haven to carry out operations in Nigeria for

reasons other than its iconic architectural layout similar to the towers of New York. Other corporate and multinational tenants in this iconic building which features large, flexible and efficient floor plates suitable for builtto-suite international requirement of an open, healthy and safe work environment are Actis, Andersen Tax, Visa, Verod Capita, etc. Heritage Place was developed by Actis, in collaboration with its development partners—Primrose Development Company (PDC) and Laurus Development Partners. With raised floors and suspended ceilings it is designed for high space efficiency, with segments including reception area, meeting rooms, café, coffee shop and Plaza. Security-wise, digital-

ised registration is made for every visiting individual, including a face-capture system that helps the smart building to be fully aware of people’s presence in it. Actis, a leading investor in growth markets across Africa, Asia and Latin America, concerns itself with details as little as the indoor air quality within the building and designed to be more energy efficient than comparable buildings and. According to officials of the company, Heritage Place development is in line with “Actis Strategy” which is to be in the Grade A market with a location and product that they can put their name behind. Funke Okubadejo, a Director at Actis, told BusinessDay in an interview that when

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orried about the continued building collapse incidents across Nigerian cities despite efforts by both public and private sector operators in the built environment to prevent them, the International Real Estate Federation (FIABCI), Nigeria Chapter has stressed the need for fact-finding reports on past incidents to be made public to forestall future occurrences. The federation, which lamented avoidable loss of lives and destruction of properties, noted in a statement in Lagos at the weekend, that there have been several standing committees that have been constituted at the federal and state levels on building collapse incidents, but “there are still some missing links to the building collapse puzzle”. “Building collapse is not a new phenomenon all over the world. The concern here is the continuous and unending occurrence, as well as the fact that our city administrators seem to be unwilling to take necessary corrective measures”, Adeniji Adele, the president of the federation said. “We believe that fact-finding missions are carried out on every building collapse that has ever occurred. However, the final reports emanating from these missions are either locked up in secluded shelves where they may never see the light of the day or for some political reasons not made available to the general public and research organisations for their consumption and use. “The need to make such documents public cannot be overemphasised, as the findings could guide future building policies, as well as aid research into building construction, development

and management. This will help prevent the recurrence of a building collapse as lessons are drawn from past findings, while panaceas would have been proffered”,Adele posited. The federation noted further that the efforts of the physical planning offices in several states, which, it said, could not go unmentioned. It cited instance of Lagos State where, between 2000 and 2001, marked 300 buildings for demolition through its Building Control Agency (LASBCA), pointing out that many of the marked buildings were still standing with occupants carrying out their daily activities. According to them, these buildings are obvious dangers waiting to happen at any time. “Whereas the planning officers are armed with building codes and regulations, citizens and most especially politicians use the judicial system as a cog in the wheel of any enforcement of a demolition notice. It is, therefore, posited that the judicial system should come up with either a tribunal or a special court that sits specifically on housing matters in all their ramifications. “Till date, we are yet to read about anyone having been sanctioned over a building collapse. It is believed that when people are held responsible and made accountable for their negligence, building collapse will be minimized”, he assured. He noted further that the enforcement of building codes and regulations has not lived up to expectations, hence there is need to pay attention to how buildings are being massively developed in Nigeria. There is no effective measure of building construction standards thereby permitting anyone called a mason (bricklayer) to build a house.

Land titling

Basic things an average investor should know about titling ISRAEL ODUBOLA

ndividual and institutional investors wishing to invest in real estate but lack knowledge of the market should worry no more as K.Parkwood Property’s Real Estate Investor Series (REIS) has offered and will continue to offer insights on the basic things such investors should know. REIS is an initiative of K.Parkwood Property, a Lagos-based asset & portfolio management firm, aimed to help investors make informed decisions when acquiring real estate, and protect them from possible exploitation. The maiden edition of REIS, which held last week

in Lagos, focused on the significance of title document to investors. It highlighted a few basic things including knowing a good title; According to Tosin Ajose, Partner at DealHQ Partners, any document irrespective of the name it bears, satisfies the legal requirement of the instrument or alienation is good title. A title must be in writing, describes the parties involved, describes the subject property in details, indicates a valid tenure, have governor’s consent, and issued for consideration. Governor’s consent and, more importantly, registration with land registry makes a title authentic. Documents like receipt,

will, letter of administration, lease and tenancy agreement, license, power of attorney, contract for sale, survey plan, deed of mortgage and excision (except if it is gazetted) are not titles. Ownership interest Ownership interest in property can be legal or equitable. Legal interest is recognized by law or statute, and grants true ownership as well as rights that comes with land ownership. Owner has exclusive possession of the property, as well as easement, conveyance and partition rights. Equitable interest is recognized by law and enforceable only to the extent that there is no superior interest. The only condition that can

make owner of equitable interest lose his/her property is when another person tenders a more powerful document of ownership. On excision Excision, as explained by Olumide Osundolire, Partner at Banwo & Ighodalo, is a process whereby state releases a portion of land to the family or community from which the land was acquired. Excision will be granted only if the land is not committed to a specific project. Also, proposed use must tally with the master plan of the state for the said area. Grant of excision is not totally guaranteed, and investors are advised not to undertake any transactions

on the land till excision is granted. Lawyer’s role in document preparation A lawyer first has to confirm title to ensure no defect or encumbrances. He/she searches at the Land Registry and also checks other governmental offices such as Land Use Office to confirm the validity of the title. The lawyer drafts and perfects title documents before it is taken to the governor for approval. Addressing title issues Titling is still at primitive stage in Nigeria and other emerging markets compared. The process of titling needs to be simplified and the 30-day government consent regime

should be enforced to lessen stress. urthermore, perfection costs needs to be moderated and the use of information technology is pertinent to better titling process. Process of getting Governor’s consent According to the Land Use Act, 1978, all land in a state is vested in the governor of that state, implying that any transfer of interest in a land requires the consent of the governor. The Directorate of Land Services of the Lagos State Government Land Bureau is empowered to handle Governor’s consent to subsequent transactions on land among others.

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Housing

Developers everywhere, yet housing gap persists ENDURANCE OKAFOR

ranslating the large number of real estate developers in Nigeria to a more affordable housing for the citizens is almost the same as pouring water from a big tanker into an empty basket. Checks by BusinessDay has, therefore, revealed that there are a lot of challenges that cut short the large number of developers from bridging the housing gap which has remained above 17 million units in the last 10 years. Lack of infrastructure, regulatory framework on the part of the government, low income on the part of the end users, and unavailability of affordable capital for developers were some of the issues noted by stakeholders. Rotimi Akindipe, an Architect and MD/CEO of Groveworld Realties Limited, a real estate development company in Lagos, said the housing solutions Nigerian developers have areunaffordabletomostbuyers. “There is a glut in the kind of houses that are delivered to Nigerians, especially first time homes buyers, who, naturally, are the people that need these houses. First and foremost,

the houses are not cheap, but they have to be affordable; the places they are located do not help commuting to their place of work,” Akindipe told BusinessDay. Checks by BusinessDay revealed that the increasing young adult population who are just starting their career in urban cities coupled with those whose income level were affected by the 5-quarter recession are now settling for one-room self-contained as a result of dampened purchasing power. They are the ones driving the demand for such properties. Therefore, the average rate per month at which single room self-contained apartments are rented increased by 24.16 percentage points from 42 percent in 2017 to 66.16 percent in 2018, BusinessDay survey shows. To that effect, Godwin Asuelimen, Head, Core Product at Propertypro.ng, said the demand for housing is mostly for the low priced properties. “For leasing, the studio room properties are the hot cake in the market, but developers want to get back their investment on time and, as such, they mostly focus on building 2 or 3-bedroom apartments,” he said. He added that what is on

offer is too expensive for the large segment of the middle and low income earners, noting that even single rooms, sometimes, are beyond their budget, especially when the property is located in a highbrow area like Lekki. Checks by BusinessDay reveals that it is more expensive to construct a building in Nigeria than it is in most of Africa. Bankole Folorunsho, Deputy Managing Director, Stable Shelters Development Co. Limited, a real estate firm, says there is supposed to be a regulatory body for prices of land in Lagos, for example, as many people see lack of regulation as an opportunity to sell at high price. “This is one of the factors that is driving cost of houses and translates to why real estate developers have not been able to bridge the housing gap,” Folorunsho told BusinessDay. His submission was affirmed by Asuelimen who emphasized, “it is very important that government plays a regulatory role in the real estate sector.” Akindipe noted that “government’s influence is not really felt in the real estate sector; you can’t have large size of land where you can

setup divisions like they do abroad, where you can build 100 houses.” Meanwhile, credit sales reports that the average rent of Nigerians between 20-35 years of age is around $230 monthly and the average price of onebedroom in mega cities like Lagos, Abuja and Port Harcourt is around $300 per month. Folorunsho explained that even getting land documentation and building approval also contribute to the high cost of real estate properties, saying, “the guy that is going to

Project

Architects Council wants states to embrace APRN initiative to prevent building failures CHUKA UROKO

he lack of political will by various state governments to implement the National Building Code and enforce other building regulations, coupled with the mutual suspicions and denials among building industry professionals whenever there is a building collapse incident have given birth to Architects Registration Council of Nigeria’s (ARCON) new APRN

initiative to prevent building failures. APRN is an acronym for ARCON Projects’ Registration Number which the council which regulates the architecture profession introduced into the building industry to, among other things, reduce building collapse incidents in Nigeria that have become a feature of the country’s built environment. With this initiative, all architectural projects/drawings are prepared only by fully registered architects, submit-

ted to ARCON and assigned APRN before submission for planning, implementation and approvals. ARCON is, therefore, wooing all states in the country to adopt its initiative in order to reduce the menace of building collapse in Nigeria. “We want to collaborate with state governments to ensure that APRN becomes operational all over the country. And we have been creating awareness on this,” Dipo Ajayi, ARCON President, disclosed to newsmen in Lagos recently. Ajayi spoke in his reaction to building collapse incidents in Lagos and other parts of the country. A couple of weeks ago, a four-floor building at Ita-Faji area of Lagos Island used as residential and school premises collapsed. This incident led to the death of some, while several others were injured. Few days after that, another building collapsed in Ibadan, Oyo State capital. Ajayi, who led Kayode Anibaba, former Commissioner for Physical Planning and Environment in Lagos, Adebayo Dipe, Permanent Secretary, Lagos State Ministry of Housing, Ohioma Andy, Director, Federal Ministry of Power, Works and Housing, Ladi

Lewis, former chairman, Nigerian Institute of Architects (NIA), Lagos and Tiwalola Fadeyibi to the Ita-Faaji collapsed building site, noted that it was high time states of the federation embraced its APRN initiative. It is the hope of the regulatory body that the APRN system, which entails numbering all architectural projects in Nigeria, will further tighten loose ends in monitoring building projects in Nigeria. The ARCON boss hoped that those directly involved in this despicable act would be brought to book, explaining further that APRN, in addition to reducing the scourge of building failures by eliminating quackery, will also ensure that only fully registered and financially current architects/architectural firms prepare, produce and submit designs for planning/implementation approval and receive such approvals when they are given. According to him, architects and architectural firms that are registered with the council are to submit architectural building plans for approval/implementation and will be responsible for the supervision of their designs.

push your documentation file is not going to do that except you give him something.” On the solution that can help translate the large number of developers into affordable accommodation for Nigerians, Akindipe said Nigeria has to, first and foremost, upgrade its infrastructure because “housing is a subset of infrastructure.” Folorunsho explained that a developer in Nigeria, gets his own light, supplies water treatment facility and builds good road network. This, ac-

cording to him, is supposed to be done by the government. “For instance, in some parts of Lagos Island, you need to drill an industrial borehole before you get good water and upon that you would still have to treat it; those things don’t come cheap.” “As far as government is not providing those social amenities, the end users are going to be bearing the cost of those things when they are buying real estate properties; this means construction cost will remain high”, he added.

Here’s why Heritage Place is haven for corporate tenants... Continued from page 22 Actis, which holds interests in energy, financial services, healthcare, consumer and real estate sectors in Nigeria, began investing in this flagship office project in Nigeria, it considered the sharp undersupply of good quality office buildings as an opportunity. “The undersupply stemmed from dearth of long term capital and skills to develop an international Grade A office space”, Okubadejo explained, adding, “when we conceived the investment, it was with the mind of raising the bar with a world class development with offering quality office space suitable for the modern work environment which is more open and collaborative than secular arrangements prevalent in the past,” she added. With the realisation that a high-end quality office environment had shifted from having occupants tend to their needs of environment maintenance, consumption or leisure, the development incorporates quality service delivery to ease that burden. “Occupiers can rely fully on the managed services provided that focuses on health and safety, and security that have been factored in the development and conception of the office building,” Okubadejo said further. Heritage Place develop-

ers have a track record of investments in some of the well appreciated destination retail malls such as the Ikeja City Mall and currently in its portfolio is the Jabi Lake Mall, Abuja. In response to the demand for top class standard office space, there has been influx of investment in the office segment in the last five years and Okubadejo sees more of such investment coming. In Ikoyi and Victoria Island alone, about 50,000 square meters of additional space, some of which are currently under construction will be delivered in the next few years. With the help of a general improvement in the business confidence in the country, though supply is believed to have gone ahead of demand, demand is firming up, according to Actis. “Our sense is that uptick in demand for existing space will continue to get stronger and that would ultimately result in additional supply,” the Actis Director said. According to Actis, real estate sector is directly impacted by the level of economic growth; what happens in the overall economy impacts on how people behave, their level of confidence in making new decisions to move into new space, buying new homes or expanding their businesses and thus directly impacts demand for real estate.

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Interior Decor

Why changing trends, taste matter to furniture demand TEMITAYO AYETOTO

abricating wardrobes, shelves or cabinets have shifted from using polished woods to dryformed fiber panels like highdensity fiberboard (HDF), medium-density fiberboard (MDF) and low-density fiberboard (LDF). The patterns of choices have been such that reflect not wanting to be caught behind time, according to Hanson, a furniture maker with services across the country. This has given rise to the few playing in the furniture market, which is already overwhelmed with demand. “Aesthetics is one of the factors driving demand right now. There is a change in the type of furniture we have right now. People were used to furniture made out of wood but right now we have other varieties of furniture materials that makes an average person want to change or acquire furniture,” Joshua Hanson, Hanson & Associates chief executive officer, explained. “We recently had a client who spent N2 million to change from beautifully polished wooden furniture to the last fiber panels; because he sees something different when he visits friends and does not want to be left behind,” Hanson said. On the heels of this and other factors, experts note that population, rural-urban migration and a growing consumption culture are

rising, adding that Nigeria’s furniture market has been expanding. It has ridden on importation restriction to drive a market that thrives well above N50 billion. Consumers have increasingly had less need to cling to their penchant for foreign-made in their considerations for custom furniture. Tapping into taste-driven trends, manufacturers are evolving their creative strategy to match the speed of change in trends. They are upping their game to create international appeal for their products, by using top quality materials. Allan Pung Fu, sales director at expanding furniture firm, Lifemate Nigeria Limited, admits change is trend and taste has great influence on how the company responds to demands. She said the company has invested more in its capacity to change its products to align with client’s taste. Taste and trend apart, the furniture has also been backed by a population variable, which is creating more jobs than the players available. Estimates of Nigeria’s population are now nearing 200 million and is projected to hit 400 million by 2030, according to World Bank forecast. It is believed that as new families are created and empowered by income growth, spending on furniture pieces will grow bigger. One in five of the world’s consumers will live in Africa by the end of the next decade,

and more of these people will fall into the category of affluent or middle class, according to Brookings Institution. In the next few years, more than half of all African households are expected to have flexible income - that is, approximately, 130 million families by 2020. In the five largest consumer markets alone led by Nigeria, the African Development Bank estimates that there will be 56 million middle-class households with disposable incomes of nearly $680 billion. 30 Consumers who are

considered ‘better off than middle class’ according to OECD standards, are expected to spend an additional $174 billion per year over the same period, accounting for another 27 percent of the region’s total consumption growth. Industry observers see this middle class contributing to the expansion of the furniture market. Although, Nigerians are getting poorer with 87 million people below $1.90 baseline, experts remain optimistic taste will come to the rescue

of demand. Ayoola Ojo, chief executive officer at Pencot Limited, started his furniture business in April, 2018 with most of his activities domesticated online. So far, his venture’s transactions has hit a tune of N40 million in less than a year and he says while substantial income is key to purchasing ability, there were buyers who simply prioritised their taste for certain trends. “Most people prefer the fabric covered sofas. Rich people demand the good leather work which could be very

expensive. But average people still demand, even though it might be fabric; something that children cannot tear and can be easily cleaned. There are several sales online from different platforms,” Ojo explained. Experts also see market sustainability prospects in growing housing projects around the country. Nigeria still has a long way to go to fix the housing needs for its population. A number of projects, especially in luxury and regular locations, are springing up.

Housing finance

Reasons for drop in bank lending to real estate in Q4 2018 ENDURANCE OKAFOR

he decline in the rate at which Nigerian banks allocated credits to the real estate in Q4 2018 may have resulted from their quest to invest in risk-free assets coupled with the political uncertainty during the review period, industry analysts have said. Figures from the National Bureau of Statistics (NBS) for the last quarter of 2018 reveals

that the N622 billion credits to the sector represents a 12.3 percent decline from the N 710 billion it got in Q3 2018. The credit share the sector got from the country’s commercial banks in the review quarter represents 4.12 percent of the total N15.13 trillion credits to the entire private sector. Jide Ogunleye, CEO of Denaro Properties Limited, who is also a business and investment strategies expert

with emphasis on real estate, explained that the only reason a bank would lend money at any point in time was not for charity purposes. “It is to make good returns and, on that note, a couple of reasons can be linked to why the banks reduced their lending to the real estate sector”, he said. The CEO said “it could be that they are finding returns in fixed income market. You can put your money there and go to sleep, as there is no risk involved.” This was affirmed by Godwin Asuelimen, Head, Core Product at Propertypro.ng as he said: “I don’t think the decline in the bank lending to the sector was about the fact that the sector was less attractive; it was mostly because of the election uncertainty. BusinessDay analysis of the banks’ credit to the property industry in the review quarter shows it represents the lowest decline since Q3 2015. Meanwhile, figures from NBS reveal that the all-time

highest and lowest credit allocation to the sector were in Q3 2017 and Q2 2015 with credit of N798.39 billion and N548.21 billion respectively. Yemi Stephen, a partner at Estate Links, a firm of estate surveyors and valuers in Lagos, said despite the decline in bank lending to the sector, it is still one of the most attractive sectors for investment. “The year was coming to an end and people were uncertain about the recently concluded elections; it was also as a result of the economic performance, as the more the economy grows the more activities that will be reported for the real estate sector, Stephens said. Real estate is about real investment. Huge capital outlay is needed and the stake is very high. Femi Akintunde, GMD, Alpha Mead Group, explained in an interview, noting that banks slowed down lending to real estate just as even people taking corporate bonds were being careful in Q4 2018 because of the uncertainties

that surrounded the just concluded general elections. This is quite evident, looking at bank lending to the sector earlier in the year as reported by NBS. According to the Bureau, N784 billion and N744 billion were lent to the sector in first and second quarters of the 2018 respectively. Another factor that may be daunting banks’ lending to the property industry, according to Ogunleye may be risk assessment. “Every bank has a risk assessment unit; if they carry out risk assessment and they see that the real estate sector is not going to do well in a particular year, definitely, they will withhold their funds.” He said the banks now carry out their due diligence owing to their past experiences with non-performing loans. “You know there are some banks that have not recovered from the loans they gave to oil and gas industry which may have been as a result of the fact that they failed to carry

out due diligence.” Ogunleye noted that the banks have information about the property market, citing instance of when people take loans from the banks and they give them property as collateral, upon their default, the banks put those properties in the market and as such they know the sale velocity of the real estate market. Unlike other sectors of the economy, real estate in Nigeria plunged further into recession in Q4 2018 fuelled by the political uncertainty from the February general elections. After showing signs of rebound for two consecutive quarters through to Q3 2018, the property market turned southwards, falling deeper into contraction mode. The figures released by NBS show that, in real terms, the sector contracted by 3.85 percent in Q4 (year-on-year), which is 2.07 percent points better than the -5.92 percent recorded for the fourth quarter of 2017.

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Using technology to boost Nigeria’s real estate industry Similoluwa Olunloyo, guest writer

he world is getting smarter; people are getting more connected than ever before, the universe has become so central that with the snap of a finger or as they say with ”one-click” you are connected to another person who is more than 5000 kilometres away from where you are. It is safe to say that without technology, most of the innovations that have made life easier would not have been possible. Whether we like it or we don’t, technology has come to stay, and with time, it is going to form the basis of everyday living. When channelled in the right path, technology has proven to improve the quality of life, and when it falls into the wrong hands, the consequences are devastating. Technology has improved the way we work and live; it will change the future of work as more technologies are going to be deployed at the workplace increasing productivity in the process. Most industries have started incorporating technology into their operations, and you cannot blame them because let’s face it, technology is the future. When thinking about real estate, technology and productivity in one breath, it is very easy for your mind to go to the cutting edge technologies adopted in developing a site right from when the first block is laid to when the building is finally completed. You are not wrong to think that. Over the years, the real estate industry has undergone a technological transformation of its own. It used to be drawing out plans on broadsheets, but now with the help of 3D imaging, developers have now been able to express their creativity better and more precise.

This improves productivity as less time is spent on drawing out the plan, printing it out and then having to sell the idea to the client is entirely a different ball game but with 3D, it’s faster to get the designs out, and it is self-explanatory. Almost all if not every part of real estate is touched by technology, from the beginning of the home search to closing deals, every transaction can be done with the click of a button. The internet has proved to be a blessing to the real estate industry, and that is set to continue for a long time. Technology has also improved productivity when the way houses are designed is factored in, how you may ask. With the new trend of “Smart Houses”, productivity is further enhanced as the automation affords the occupant/owner of the apartment the luxury of focusing on other things instead of having to run the apartment manually. While the shift to smarter homes is still relatively new to the Nigerian real estate industry, some developers have taken commendable steps into ensuring that they meet up with the global technological standards

in the industry. One of these forward-thinking developers is Hall 7, a real estate development company based in Nigeria’s capital city of Abuja. Established in 2013, Hall 7 Real Estate symbolises hallmark of excellence and perfection in the Real Estate sector. The company’s constant delivery of innovative, top notch and specialised customer experiences has enabled it to set the pace in the Real Estate sector. Despite being relatively young in the business of real estate, Hall 7 is setting the pace for others to follow. From design to execution, their clients get exactly what was designed and even more by the time the project is completed. The brand says it “doesn’t promise but delivers”, this is particularly encouraging considering how a lot of developers promise you the world and then deliver structures below the expected standard. Hall 7 is technologically inclined; it is evident that they are when one checks out the projects they have delivered in their six years existence, The Brookshore Residence and The Bridge Peridot are two examples of

the company’s technological prowess. The Bridge, for example, is an automated set of apartments and townhouses, where all you need is just the press of a button away. You control lighting, temperature, entertainment systems, and appliances electronically with literally a snap of your fingers. When it comes to security, the bridge peridot is fully secured using some of the best security technologies in the world. CEO of Hall 7, Olayinka Braimoh, a young and tech-savvy developer had this to say earlier in the year at the commissioning of the bridge peridot. “ We want to do things differently, that is why we decided on developing The Bridge Peridot which took more than two years to complete because we wanted it to be of world standard and we are pleased that we achieved that using some cutting edge technologies. We are excited about commissioning this, and we look to doing more for the Nigerian real estate sector in the near future”. Living in an automated home like the two mentioned above for apparent reasons improves productivity, as you spend less time on managing your apartment because the houses are automated, you have more time to relax and also focus your energy on other things. When you look at the success of Hall 7’s Bridge Peridot, you’d see that Nigerians are particular about value. If you’re not offering value to the typical Nigerian then whatever you are providing them is meaningless, and you can never fault them for that, because, who doesn’t want value anyways. Real estate companies in Nigeria, Africa’s most populous country have a huge mandate to provide value to their customers because of the capital involved. One just cannot invest a considerable amount

of money in a real estate project and not expect value in return. However, most real estate firms in Nigeria have fallen short of that in recent times. This sometimes stems from their being in a hurry to finish up the project because the client can no longer wait. At other times, it’s down to some of the companies in the industry being outrightly incapable of delivering value. But for Hall 7, the company has been able to excellently tap into technology in its operations and build processes such that each project has something technologically unique about it. In its six years of existence, the firm has been responsible for the development of arguably some of the best and tech-driven neighbourhood in the federal capital territory. Aside the Bridge Peridot, there’s also the Brook Shore. Like the Bridge Peridot, the Brook Shore is fully automated. In their execution, Hall 7 employed some of the best technologies available to make sure its buildings are safe, stands the test of time and at the same time gives the customer what they want. In a country where getting value for money is becoming very difficult to find, Hall 7 has made sure that the client gets what they asked for but with some extra features that makes the customer’s experience a whole lot better than it would have been. It is that extra attention to details and those additional features that makes the client know they have gotten value for money and Hall 7 real estate is constantly working to make sure they deliver that value to their customers. Olunloyo, a tech and real estate enthusiast wrote from the FCT, Abuja

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IXPN expands to become regional exchange point for West Africa Stories by JUMOKE AKIYODE-LAWANSON

ith the support of the African U n i o n Commission, the Internet Exchange Point of Nigeria (IXPN) has expanded to become a regional internet exchange point for West Africa. With many IXPs in Africa exchanging intracountry traffic locally and intra-regional traffic being exchanged regionally, this will reduce the latency and save costs by eliminating the international transit through overseas carriers. In 2016, following a response to a call for proposals issued by the AU Commission, the IXPN was awarded a grant to be supported to grow and exchange internet traffic not only for Nigeria but for the wider West African region. Through the African Internet Exchange System (AXIS) project of the African Union Commission, Countries in Africa with internet exchange points have increased from 18 to 35. The AU Commission further provided grants to

L-R: Mohammed Fouani; managing director, Fouani Nigeria Limited, Kehinde Borisade; managing director, Zenith Insurance Plc, and Hari Elluru; head of corporate marketing, LG Electronics, at the official announcement of the partnership between LG Electronics and Zenith Insurance, held on Tuesday 26 March 2019, at the LG Brandshop Lekki, Lagos.

support selected internet exchange points in the five geographical regions of the African Union to become regional internet exchange points including the Internet Exchange Point of Nigeria. Moses Bayingana, project manager, African Internet Exchange System Project of the AU Commission said: “Africa has been paying overseas carriers to exchange intra-continental traffic on our behalf. This is both costly as well as inef-

ficient. With regional IXPs in Africa exchanging intraregional traffic locally, this will reduce the latency and save costs by eliminating the international transit through overseas carriers.” “There is growing importance in exchanging traffic among the internet service providers in Africa. This is due to the fact that by connecting to the regional internet exchange point, access to local content in the region improves, since the local traffic re-

mains in the region. This in turn enhances internet use because the end users realize fast and efficient services,” Bayingana added. On his part, Muhammed Rudman, chief executive officer of IXPN, said that with the new status as the Regional Internet Exchange Point for West Africa, IXPN would seek strategic alliances with other IXPs, regional carriers and service providers towards connected West Africa. He also said that the AXIS ini-

LG partners Zenith Insurance for 80% cover on customer products

tiative has now positioned IXPN to champion a more regional connectivity drive that will ultimately lead to a One-Connected Africa. Rudman noted that localising the Internet within the African continent will improve quality of service as traffic will no longer travel abroad as was the case, and enjoined African countries, especially in the West Africa region to embrace this concept of AXIS for a better and improved connectivity for the continent. “We are excited with the current status of IXPN as a regional IXP for the entire West Africa. This has made us an information hub for the region and will help not only to localise internet traffic within the region, but reduce cost and latency, at the same time unlocking the potentials for digital economy allowing internet related businesses to thrive.” Rudman said. He added that, in consonance with its new status, it has upgraded its infrastructure to ensure a more resilient operation in the function of connecting other foreign IXPs and ISPs and to accentuate its capacity to handle the requisite traffic.

Why it is important to deepen cloud adoption in Nigeria

ith digital transformation becoming the driving force behind organisational strategies across the continent – Nigeria is no different. With the country recently emerging from its first recession – businesses have been forced to review IT strategies and spend – leading to an increased awareness for improved cloud adoption. With this wave has come the need for organisations to consider cloud computing as a way of storing and managing servers, databases, networking analytics and software through the internet (cloud). With this, experiencing faster innovation, flexible resources, and economies of scale.

According to the IDC, worldwide spending on public cloud services and infrastructure is forecast to reach $210 billion in 2019 – an increase of more than 23 percent over 2018. In Nigeria, a further 78 percent of companies increased their cloud computing budgets last year. Akin Banuso, country manager at Microsoft says; “we created our Azure cloud offering recognising that organisations that migrate to the cloud would require an ever-expanding set of cloud services to help them meet business challenges. The solution also allows organisations the freedom to build, manage, and deploy applications on a massive, global network using preferred tools and frameworks.”

For business transformation in the digital age – this allows organisations in Nigeria to pay only for cloud services used, helping to lower operating costs, run infrastructure more efficiently, and streamlining scaling as business needs change. Speaking recently at an event orrganised by Microsoft in Lagos, to create awareness around its Azure offering and drive cloud migration, Wale Olokodana intelligent cloud (Azure) business group lead at Microsoft said, “for organisations in the country not wanting to move to the public cloud completely, leveraging a hybrid model may be better suited. This combines private and public cloud capabilities, allowing data and applications to be shared be-

tween them.” Furthermore, when computing and processing demand fluctuates, hybrid cloud computing provides businesses with the ability to seamlessly scale their on-premises infrastructure up to the public cloud to handle any overflow— without giving third-party data centres access to the entirety of their data. Organisations are afforded the flexibility and computing power of the public cloud for basic and nonsensitive computing tasks, while keeping businesscritical applications and data on-premises, safely behind a company firewall. “And this is where a monumental factor comes into play – with Microsoft recently launching its first cloud data centres in South Africa. Going forward the

latter will allow for faster, more agile business operations and provide access to next-generation technologies for the rest of the continent, including Nigeria”, Banuso said. “Our aim with this event, is that CTO’s, CIO’s and the like will recognise not only the value that the public cloud has to potentially revolutionise their businesses – but also that it doesn’t stop there. Products like Azure stack as well as the just released Azure Stack HCI (Hyper Converged Infrastructure) solutions allow customers adopt models like the hybrid cloud to accelerate their digital transformation journeys – For businesses in Nigeria this will only help to keep them abreast in a dynamic and fasted paced environment”, Olokodana said.

G Electronics has announced its partnership with Zenith Insurance to offer its customers cover against fire and accidental damage on all electronics purchased from any of their authorised outlets. The pact was signed with the insurance firm with the aim of providing premium service to customers- especially as the electronics giant deepens penetration in the Nigerian market. According to Hari Elluru, head of corporate marketing, LG Electronics, West Africa operations, “With the everchanging tech world we live in, customers are buying and gifting new gadgets and electronics more often than ever. Plus, many of these items are a big investment. “As a customer-centric brand, we pay attention to the needs and aspirations of our customers. We are enriching lives through our products and want to ensure that our customers don’t have to worry about anything while enjoying their products. When we promise, we deliver. And this is a demonstration of our commitment to enhance our consumer lifestyle in Nigeria”, he said. Commenting on the partnership, Mohammed Fouani, managing director Fouani Nigeria Limited, major distributor of LG products in Nigeria, said the cover is applicable for the first year of product purchase. To avail this cover, the customer has to pay only 3 percent of the product cost as Insurance premium, which is charged at the point of purchasing the product. At the time of repair or replacement of damaged item, 20 percent cost will be borne by the customer while Zenith Insurance will cover the remaining 80 percent. Fouani said “Free Insurance package will be provided for a period of one week on the purchase of LG OLED TVs, Instaview and TWINWash at any Fouani Nigeria Ltd stores. “In the event of accidental damage to the insured item, the insured must immediately notify Fouani. Notification by the insured must be made within a maximum of three days from the date of accidental damage. “After due notification, Fouani can proceed with replacement or repair, following the presentation of original purchase receipt, estimate or repairs/repairs cost and duly completed form”, Fouani explained.

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Oil majors rush to Permian basin starves Nigeria of investment dollars ISAAC ANYAOGU

he giddy rush by International Oil Majors to buy stakes in the Permian basin, the world’s second biggest oil field located in the United States, is resonating in Nigeria in the form of dwindling investment dollars. Nigeria has been responding in a cavalier manner, seizing their assets as in the case of Shell’s OML 11 oil field whose operatorship was taken over by the NNPC, and demanding US$20bn in back taxes and royalties - actions akin to receiving your suitor swinging a baseball bat. Hence the Permian fields first developed in the 1920s have become an attractive proposition with production reaching 3.8million barrels per day in 2018 on the back of advanced hydraulic fracturing technology - a way to drill oil from rock formations. Analysts at Wood Mackenzie, a global oil sector consultancy found that oil majors’ scramble for a piece of the Permian pie drove the value of M&A deals to an all-time high of US$60 billion, twice as much as each of the two prior years, accounting for 53% of global M&A activity. The Permian itself set a new record of US$29 billion. BP, Chevron, ExxonMobil and Shell have staked their claims on tight oil platforms even though they are late arrivals. “These four are among the

biggest investors shaping the way the basin is being exploited,” said Simon Flowers, chairman and chief analysts at Wood Mackinzie, a global energy sector consultancy. Chevron and ExxonMobil have announced big upward revisions to Permian targets that envisage oil production of at least 0.6 million b/d in five or six years’ time. Chevron also increased tight oil resource by 5 billion boe – the increase in production isn’t just about getting the oil out quicker,

Flowers said. The Permian basin demonstrates the power of technology to take a field struggling to produce 1 million bpd in 2010 to over 4million bpd currently even after it has been producing for 100 years. “We expect an average of nearly 4 million b/d this year, 2 million b/d more over the next five years, and an eventual peak at 6.4 million b/d in 2034,” Flowers said. At current production rate, it could

well surpass Saudi Arabia’s Ghawar oil field producing 5 million bpd. This is because wells that had been dug and abandoned, perhaps due to unfavourable economics or absence of requisite manpower or technology are being restarted. Over the past five years, oil producers have dug on average 5,316 wells per in the Permian but have only completed an average of 4,620 wells per year, Robert Rapier, an oil sector chemical engineer told Forbes.

The dizzying pace at which investment dollars move in search of opportunities has eluded Nigeria’s oil sector because those who manage it treat reality like an abstract concept. While Nigeria’s African peers are creating opportunities for investment dollars, Nigeria is building a barricade. Last month, Shell said that Nigeria’s claims that it was owed billions in taxes could delay the development of 180,000 bpd Bonga South West oil field. Shell’s head of upstream Andy Brown told Reuters on the side lines of the International Petroleum Week conference that the claims dealing with PSCs terms lack merit. Though it would be difficult to find worse royalty terms than Nigeria’s PSCs which gifted oil companies zero royalty in water depths below 1,000 meters where the bulk of Nigeria’s deep water finds have been located, but banking on successfully plugging a 14 year revenue gap in one fell swoop and unilaterally, is comforting delusion. Yet there is a yawning need to review Nigeria’s obsolete fiscal terms. It is rather pragmatic to negotiate fresh terms and embark on reforms. This is an economic imperative as investments in big oil and gas projects have stalled over poor regulatory and fiscal framework, lack of reforms in the operation of the NNPC and operational risks associated with militancy in the Niger Delta.

EXPLAINER

Nigeria’s tight spot on OPEC cuts - crude or condensate? oil, and the IEA declined to give a reason for the change. Under IEA figures counting Agbami and Akpo as condensate, Nigeria’s crude production has not hit 1.8 million bpd since November 2015. Wood Mackenzie estimates that export grades aside, roughly 12 percent of Nigeria’s production could be classified as condensate but that it could be higher. This cloudy, but sizeable, chunk of output could keep Nigeria from capping.

DIPO OLADEHINDE

he concern over what can be classified as crude or condensate has become intense after Nigeria began to pump above OPEC’s supply cap. S&P Platts said Nigeria pumped 1.88 million bpd in February, 190,000 bpd above its cap. Now Nigeria has started production from Egina, a new deepwater field, which Ibe Kachikwu, minister of State for Petroleum Resources, said he might seek OPEC classification condensate, which is not subject to quotas. What is condensate? According to an online platform drillinginfo.com, condensate is a very light hydrocarbon with an American Petroleum Institute (API) specific gravity of greater than 50 degrees and less than 80 degrees which can exist separately from crude oil or dissolved into crude oil. Schlumberger oil field defined condensate as a low density, highAPI gravity liquid hydrocarbon phase that generally occurs in as-

sociation with natural gas. Condensates are liquefied once extracted from high-pressure reservoirs, where they exist as a gas. Nearly all oilfields produce some condensates, usually in small amounts. Once it becomes a liquid, there is no widely agreed way to differentiate condensate from crude. How much condensate does Nigeria produce? Akpo is the only substantial Nige-

rian grade marketed as condensate, which is typically exported at a rate of 100,000-133,000 bpd. Also, production of another condensate grade, Oso, has declined so substantially that it is blended into Qua Iboe crude exports. In 2017, the Paris-based International Energy Agency (IEA) began counting another Nigerian grade, Agbami, with 220,000-250,000 bpd of exports, as condensate. Oil traders say the grade is marketed as crude

What does condensate mean for OPEC? OPEC’s crude oil production in February modestly declined to 30.80 million bpd in February, the survey showed. The figure is a 60,000 bpd drop from January and is the group’s lowest output level since March 2015, when Gabon, Equatorial Guinea and Congo had yet to join the organization. Analysts said that despite the fall, OPEC still has more cutting to do to fully comply with its supply accord that went into force in January.

What does this condensate for Nigeria’s economy? Dili Nwabueze, Engineer with oil and gas firm TMD Limited said condensate is more profitable than crude oil on equal volume basis as its price is comparable to the price of naphtham, an intermediate hydrocarbon liquid stream derived from the refining of crude oil. “Nigeria deserves the greatest benefit of hydrocarbon condensates, which occur in substantial quantities in our oil and gas fields. However this can only be realized if the government identifies with this objective and provides appropriate legislation that is consistent with well-known technological approach to the exploitation of this special hydrocarbon resource,” Nwabueze said. The 2019 budget proposal, presented to the National Assembly on December 19, by President Buhari, was based on oil production of 2.3 million bpd (including condensates), with an oil benchmark price of $60 per barrel.

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ENERGY INTELLIGENCE Investment

Investors won’t lose money in Nigeria’s gas commercialisation programme – Derefaka ISAAC ANYAOGU

idders in Nigeria’s gas flare commercialisation programme, will have the flexibility of choosing which flare site to bid for, how much they wish to buy the flared gas from a floor price of $0.25c/1000scf, the end market or gas product, as well as the technology to be used, Justice Derefaka, program manager of Nigeria Gas Flare Commercialisation Programme has said. There have been concerns over how to evacuate gas from flare sites in remote Niger Delta locations to industries outside the region and the practicality of building gas gathering infrastructure in a volatile, often dangerous Niger Delta terrain, which could derail expectations of bidders to recoup their investments. In response to these concerns, Derefaka, told BusinessDay that prior to the launch of the programme, his team has conducted a research on ways bidders can transport and use the gas captured from flare sites for economic activity. “And we found out that although pipelines present the most viable option for transporting gas, there are scalable, containerized, skid mounted/barge type ‘plug & play’

Justice Derefaka

technologies, virtual pipeline & compressed natural gas (CNG) trucks would be preferred for security and other reasons. “So these take care of the issue of remoteness of gas flare site and locations. Additionally, under the NGFCP, any preferred bidder and/ or a would-be gas flare site “Permit Holder” is free to latch onto existing

NNPC pipeline infrastructure.” Derefaka also said that the Federal Government is offering flexible terms including a floor price of gas at $0.25c/1000scf. Natural gas currently sells for $2.78/1000scf in the international market allowing for higher returns. He also said the programme is strictly market driven and the World

Bank and the International Finance Corporation are funding a market study to assist investors. “The primary focus of the Market Study is on the Off-Takers (Market) inputs and the total value chain economics and each of its corresponding links. Study will also determine whether and under what conditions Flare Gas can be taken to Market based on sound economic/market criteria. Focus on current Market conditions and potential (adverse) change in Market conditions within the next 5 – 10 year period,” Derefaka said. The study will determine the feasibility, attractiveness and sustainability of Flare Gas to Market projects which includes the transformation of Flare Gas to “end products” and the delivery and sale of these “end products” to the Off-Taker and provide market intelligence on LPG, CNG/LNG, Power, Methanol, Pipeline gas, GTL. Analysts are also concerned about the ability of government to realise its desired objectives given the claim by some producers that a significant amount of gas currently being flared is due to safety reasons which the law allow. “There is also the claim that some of the flare out projects is already part of a Field Development

Program that the National Petroleum Investment Management Services (NAPIMS) has approved,” says Wole Obayomi, partner and head, tax, regulatory and people services at KPMG Nigeria in an article for the company’s blog. Obayomi further said, “It is, therefore, important that both NAPIMS and NNPC are fully committed to the NGFCP. Most importantly, the success of the NGFCP will highly depend on its bankability and ability to attract quality investors. For investors to be able to successfully raise finance for the project, they would need the assurance of protection from political risks. Otherwise, investment in NGFCP will be less attractive.” Derefaka assured that the programme is market driven, a core principle of the NGFCP. “The gas flare commercialisation programme is strictly a market driven programme,” he said and assured that it supports government’s plan to achieve zero gas flares and reduce Nigeria’s carbon emission. Since the Federal Government announced the Nigerian Gas Flare Commercialization Programme, an ambitious plan to sell over 700 million standard cubic feet of gas a day flared at 178 different sites across the Niger Delta, over 700 bidders have expressed interest.

Market

Future of OPEC supply cap deal looks uncertain as Russia mulls quitting ISAAC ANYAOGU

lexander Novak, Russian energy minister told his Saudi counterpart Khalid al-Falih when the two met in Baku last week that he cannot guarantee an extension of their agreement to cut production in order to boost oil prices, to the end of 2019, a move that spells danger for the deal. Novak told Falih that he will extend in June but can only do it until the end of September as he is under too much pressure internally to end the cuts according to report by international media organisations. OPEC and non-OPEC producers - an alliance known as OPEC+ -implemented its first cuts in 2017 and since then oil prices has doubled to more than $60 per barrel with current US sanctions on Iran and Venezuela providing extra boost. The latest agreement in December was to reduce oil supply by 1.2 million barrels per day from Jan. 1 for six months. Higher oil prices now provide a

Russia’s Energy Minister Alexander Novak (L) and Saudi Arabia’s Energy Minister Khalid al-Falih

temptation to quit but could also precipitate a bust. Oil prices rose about 1 percent on Friday, posting their biggest quarterly rise in a decade, helped by the cuts and U.S. sanctions against Iran and Venezuela. May Brent crude oil futures

contract, which expired Friday, gained 57 cents, or 0.8 percent, to settle at $68.39 a barrel, marking a first-quarter gain of 27 percent. The more-active June contract settled up 48 cents at $67.58 a barrel. U.S. West Texas Intermediate (WTI) futures rose 84 cents, or 1.42

percent, to $60.14 a barrel, and posted a rise of 32 percent in the January-March period, a Reuters report said. The concern for OPEC is that should Russia pull out of the deal oil prices would drop. Saudi Arabia and other members including

Nigeria will be forced to go ahead with the cuts but it will lack the same influence it did when Russia was onboard. Analysts say it is possible that Russia’s tough stance was a negotiation tactic or a real threat to quit the agreement in order to dilute US influence over oil production. Spurred by a giddy rush to produce in the Permian basin, the United States has become the world’s biggest oil producer and increasingly exerts its influence to the consternation of Russia. Igor Sechin, head of Russian oil giant Rosneft and an ally of Vladimir Putin, is said to have told the Russian president that the deal with OPEC is a strategic threat and plays into the hands of the United States. For Saudi Arabia, oil prices have to settle around $70 a barrel to help it balance its budgets but for Moscow around $55 a barrel will not hurt its economy. Nigeria needs oil prices above $60 and would want the cuts to remain.

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Insight

Norway’s state owned Equnior is investing in battery technology Fund, why shouldn’t NNPC? DIPO OLADEHINDE

he rise of cheap renewable energy is starting to upend the bottom lines of fossil-fuel companies world over; while Nigeria National Petroleum Corporation (NNPC) has being relatively quiet with renewable energy, its counterpart Norway’s state-owned Equinor is planning to invest in a $180 million fund for battery and related technologies. The investment is a major sign of how the world’s biggest oil companies are diversifying into low-carbon vehicle and grid tech, while also hustling to profitably harness the wind and the sun even though it remains a small part of their portfolios. Meanwhile Nigeria state-owned corporation is still struggling to shoulder the cost of old perennial problems such as subsidy, pipeline repairs and underperforming refineries. Luqman Agboola head of energy infrastructure at Sofidam Capital said with better regulations Nigeria National Petroleum

Corporation (NNPC) should be operating like Saudi Aramco or Equinor by not only meeting local demands but also expanding to other frontiers such as renewables. “Due to weak laws and regulations the corporation still seems to be struck in past glory,” Agboola said to BusinessDay. The advantages of renewable energy utilization cannot be overemphasized, especially to a developing country like Nigeria, where population growth is high with an increase in industrial activities which results into environmental pollution and economic difficul-

ties from more consumption. Nigeria, for instance, is one of the countries that largely supply crude oil in the world, but still suffers setbacks in terms of access to electricity for their daily usage in homes and industries, a problem which can be easily solve with adequate investment in renewables. Unlike Nigeria, Norway’s development of innovative battery storage technology will aid in the spread of renewable so as energy can be stored more effectively and economically which Volta Energy Technologies, a consortium that provides venture financing to

startups seeking breakthroughs in battery technology will receive the investment from Equinor. “Volta will invest in battery technologies and in related areas such as artificial intelligence and methods to quickly charge electric vehicles,” Jeff Chamberlain, Volta Energy Technologies chief executive told fortunes. While Norway’s Equinor boasts of similar oil production capacity Nigeria’s NNPC with an average of two million bpd same cannot be said in futuristic plans beyond oil as research by Bloomberg New Energy Finance ignored Nigeria in the list of leading countries in Africa’s renewable energy revolution. The only renewable energy source Nigeria utilizes is hydropower and biomass; where solar energy is minimally utilized for street lightening, mostly in the cities. The country relies also on fossil fuels, natural gas and oil, which are non-renewable – they dwindle, are expensive, and pollute the environment. Just three weeks ago, Nor-

wegians sovereign wealth fund which is the largest such in the world, announced that it will be divesting the oil and gas assets of the fund. The Government Pension Fund Global manages around $1 trillion in total assets. Norway’ finance minister Siv Jensen said that the step is necessary to shield the fund from the risk of declining oil prices. The divestment decision will have no effect on the fund’s investment in Shell and BP mainly because they are in oil refining along with oil production and they also have significant renewable energy operations. The government also has not expressed any intention to divest from Equinor as it is already ramping up renewable investment. Also, Saudi Arabia has embraced solar and other sources of renewable energy to reduce its dependence on oil and diversify its economy in recent years,, under the general reform plan being pushed by the Crown Prince of the Kingdom, Mohammad Bin Salman Al Saud.

Thailand’s planned 2.7 GW floating solar farm highlights Nigeria’s lag STEPHEN ONYEKWELU

hailand is boosting its share of clean energy and has planned to build the world’s largest floating solar farms to power Southeast Asia’s second-biggest economy as Nigeria struggles to keep its dams functional. Thailand’s state-run Electricity Generating Authority of Thailand (EGAT) will float 16 solar farms with a combined capacity of more than 2.7 gigawatts in nine of its hydroelectric dam reservoirs by 2037. Several of the proposed projects are more than double the size of the world’s floating system now and the venture dwarfs the 1.3 gigawatts of generation installed globally as of October, 2018. Eight of EGAT’s 16 planned floating plants would be larger than what is now the world’s biggest, a 150-megawatt system floating above a collapsed coal mine in China. Thailand’s biggest will be the 325-MW farm at Sirikit Dam in northern Thailand, scheduled to be completed in 2035. The hydro and

solar power will work in synergy in this project and use existing assets and resources. But Nigeria, Africa’s most populous nation has been unable to build and operate simple dams. The Okere George Dam in Iseyin, Oyo State is a textbook example of how successive governments in Nigeria have managed dams. Turbines for the dam were bought in 1982 but 35 years later the equipment procured with public funds for such a critical economic lies waste.

Work on the dam began in 1977, with a plan to generate 3,750 megawatts of hydro-power and irrigate about 2.8 million hectares of farmland. Only the Federal Government can give an account of how much money has been sunk into this corruption cesspool. Oyo State alone has a total of 22 dams, second to Kano State, where 23 dams are domiciled. While Nigeria struggles to build and maintain dams, Thailand is making an ambitious bet on floating

ANALYSTS: Isaac Anyaogu (Team Lead), Stephen Onyekwelu, Dipo Oladehinde

solar, which tends to be more expensive than the ground-mounted units that dominate the sector. When EGAT builds all its proposed projects, the company says floating solar will account for one tenth of the country’s clean energy sources, compared to just 1 percent of global solar capacity by 2050, according to BloombergNEF. “As the cost of solar equipment comes down, many developers are looking at water with grid connection,” said Jenny Chase, head of solar analysis for BloombergNEF in London. “This seems to be a great combination of long-term and well-structured planning, with individual projects identified already.” Locating the plants at existing hydropower reservoirs means the utility won’t need to spend as much on infrastructure tying it into the grid and the system will improve the overall output of the hydropower plants, according to Thepparat Theppitak, deputy governor of the utility. In the future, the company will also use lithium-

ion batteries to store electricity produced by the floating plants. Thailand has been moving towards generating more electricity from renewable sources in recent years. It has set the goal that renewable energy will make up 27 percent of overall capacity by 2037, according to its latest power development plan. The bidding for the first floating solar project will begin in two months and will be open to international companies, Thepparat said, with the budget set at 2 billion baht ($63 million) for a 45 megawatt farm at Sirindhorn Dam in northeast Thailand. That plant is expected to come online next year. Floating systems are considered about 18 percent more expensive than land-based ones because of the need for floats, moorings, and more resilient electrical components, according to the World Bank. However, the projects bypass land use in forests and farmlands and water can also help to cool the solar panels, increasing the efficiency by 10 percent.

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email: isaac.anyaogu@businessdayonline.com, stephen.onyekwelu@businessdayonline.com, oladehinde.oladipo@businessdayonline.com

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Live @ The Exchanges Market Statistics as at Monday 01 April 2019

Top Gainers/Losers as at Monday 25 March 2019 LOSERS

GAINERS Company

Opening

Closing

Change

BERGER

N8.25

N9.05

0.8

CAVERTON

N2.49

N2.71

0.22

IKEJAHOTEL

N1.88

N2.06

0.18

ZENITHBANK

N21.8

N21.9

0.1

UNITYBNK

N0.8

N0.87

0.07

Company

ASI (Points)

Opening

Closing

Change

N1580

N1450

-130

DEALS (Numbers)

BETAGLAS

N71.95

N64.8

-7.15

N66.75

N63

-3.75

VOLUME (Numbers)

N19.9

N17.95

-1.95

VALUE (N billion)

N10.2

N9.2

-1

NESTLE

CCNN DANGFLOUR

MARKET CAP (N Trn

30,527.50 3,251.00 1,724,092,115.00 3.678 11.465

Global market indicators FTSE 100 Index 7,317.38GBP +38.19+0.52%

Nikkei 225 21,509.03JPY +303.22+1.43%

Generic 1st ‘DM’ Future 26,181.00USD +248.00+0.96%

Deutsche Boerse AG German Stock Index DAX 11,681.99EUR +155.95+1.35%

S&P 500 Index 2,857.60USD +23.20+0.82%

Shanghai Stock Exchange Composite Index 3,170.36CNY +79.60+2.58%

Experts mull survival strategies for capital market Stories by Iheanyi Nwachukwu

inancial experts at the weekend in Lagos identified the challenges militating against the growth and development of Nigeria’s Capital Market and proffered workable solutions to re-position the market for the benefits of all stakeholders. Besides, the forum, tagged 2019 Capital Market Summit, hosted by the Association of Securities Dealing Houses of Nigeria (ASHON) was deployed to unveil the Association’s new identity aimed at brand positioning. The keynote Speaker, Chairman and CEO, Susman and Associates (S and A), Shamsusdden Usman, in his paper titled “Driving Financial Inclusion

through the Capital Market “ explained that unlike other markets that had fully recovered from the global financial crises of 2007-

2008, Nigeria’s capital market had continued to suffer from investor apathy and other sundry issues. Usman, a two- term

minister of Finance and National Planning respectively advocated a complete review of the market in line with the current

L – R: Seyi Kumapayi, chief financial officer, Access Bank Plc; Ajoritsedere Awosika, non- executive director, Access Bank Plc; Oscar N. Onyema OON, chief executive officer, The Nigerian Stock Exchange (NSE); Herbert Wigwe, group managing director/CEO, Access Bank Plc; Roosevelt Ogbonna, group deputy managing director, executive director, Access Bank Plc; Victor Etuokwu, executive director, Personal Banking Division, during the Closing Gong Ceremony in commemoration of the successful merger of Access Bank Plc and Diamond Bank Plc and Listing of the N15bn Corporate Green Bond.

Fidson sustains revenue growth despite challenging year for Pharma Industry

idson Healthcare Plc recently released its 2018 audited financial report to the Nigerian Stock Exchange, reporting a 15percent growth in turnover from N14.06billion in 2017 to N16.23billion in 2018. The increase in revenue was as a result of volume growth from expanded production at its new WHO compliant factory. The plant, which was commissioned in 2016, is a key driver of the company’s growth strategy and local sourcing initiatives. The new factory is one of the most sophisticated manufacturing facilities in Africa and is well

positioned to meet the rising demand for medicines in Nigeria and the broader West-African region. The growth in revenue was achieved in spite of a challenging year for the pharmaceutical industry, which saw some therapeutic substances banned by the government and costs increasing on key production inputs. As a result of these challenges, the Company’s Cost of Sales went up by over 40percent from N6.90billion in 2017 to N9.91billion in 2018. Other factors that affected its Cost of Sales include increased logistics cost for imported materials due to

congestion at the seaports which drove up the cost of transporting goods from the ports by 1000percent. These factors, together with price depressions that affected some generic products, led to a drop in Gross Margin by 11 percentage points. Despite the sharp increase in Cost of Sales, operational efficiencies and various cost optimization strategies implemented by management reduced the impact on Operating Profit which declined by about 20percent, less than half the level of increase in production costs. However, the Operat-

ing Profit of N2.05billion was eroded by the sharp increase in net Finance Costs of N1.89billion arising from increased borrowings and high cost of funds. Fidson has begun the process of correcting this trend through its fundraising initiatives, including a Rights Issue. The Rights Issue transaction is currently open and closes on April 9th. About 60percent of the Rights Issue proceeds will be applied towards taking out expensive short-term debts, thereby reducing finance cost by about 50percent on an annualized basis going forward.

realities in the global financial market in order to re-address the issue of investor confidence and leverage the market for financial inclusion. He advocated a one-stop financial centre in line with some foreign markets. “In China, Interbank bond markets offer special financial bonds for the purpose of increasing size of loans to the SMEs. Capital Market Business Hubs (CMBH) are established in small cities to expand outreach of capital market institutions. In Mexico, the farmer mutual insurance funds provide insurance to their members by pooling together resources to pay for future indemnities and reinsures itself from major systemic risks that could hurt simultaneously all their members”, Usman said.

Corroborating him, ASHON’s Chairman, Patrick Ezeagu stated that the Association had aligned with the policy thrust of the government that every citizen should participate in the financial industry and enjoy its benefits. The panel members included The Nigerian Stock Exchange’s Chief Executive Officer, Oscar Onyema; NASD Plc Chief Executive Officer, Bola Ajomale; Director General, Debt Management Office, Patience Oniha; Central Securities Clearing System (CSCS) Plc Managing Director and Chief Executive Officer, Haruna Jalo-Waziri; and former Chairman, Nigerian Economic Summit Group (NESG), Bukar Kyari while the Vice Chairman, Capital Bancorp Plc, Tola Mobolurin was the Moderator.

Access Bank lists N15bn Green Bond on NSE

he Nigerian Stock Exchange (NSE) on Monday April 1, 2019, listed N15 billion Access Bank’s green bond on the floor of the Exchange. The 5-Years, 15.5% Fixed Rate Senior Unsecured Green Bonds maturing March 18, 2024, is the first ever climate bonds standard certified corporate green bond to be issued in Africa. It has been awarded a B2 rating by Moody’s and verified by PwC (UK). Commenting on the Bond, the Group Managing Director, Access Bank Plc, Herbert Wigwe noted that “With our

pace-setting experience in mainstreaming of sustainability in our business operations, we are confident that this green bond will further help in supporting environmentally friendly investors to meet their investment objectives whilst simultaneously supporting the Bank’s customer towards realizing growth opportunities in the fast-developing low carbon economy”. The Nigerian Stock Exchange provides a unique platform to support both the Federal Government and businesses to access capital for sustainable initiatives.

pared to N497.4billion in 2017, driven primarily by higher oil prices resulting in higher oil revenue and higher gas prices which led to higher gas revenues. In addition, gross profit grew by 9percent to N96.3 billion from N88.1 billion in 2017. The company’s balance sheet remained strong with a 46percent increase in PAT to N28.8

billion from N19.8 billion in the comparative period of 2017 driven by higher revenue and income tax credits. Its total Group borrowings decreased by 11percent to N210.9 billion from N237.4 billion in 2017, while long term borrowings decreased by 23percent to N76.8 billion compared to N99.6 billion in the same period of 2017.

Oando grows profit after tax by 46% to N28.8bn

ando Plc has once again demonstrated its ability to deliver good results and create value for shareholders. The indigenous oil company on Friday, March 29, published its financial results for the full year ended, December 31, 2018. Despite a challenging local environment, Oando was able to maintain a

trend by posting positive results for the third consecutive year with the announcement of a N28.8 billion Profit-After-Tax (PAT); a 46percent increase from the N19.8 billion the company posted at full year end 2017. A review of Oando’s results shows positive performance across most of its financial indices; reaffirming the

company’s concerted efforts and commitment to reversing the tide following the oil price crash in 2014. Following the negative fallout from the plunge in oil prices in 2014, the company has successfully executed strategic initiatives that have enabled continued growth across all financial performance

indices three years in a row; in a challenging local terrain this is indeed a feat worth applauding. The company’s positive performance has ensured it maintains its position as Nigeria’s leading indigenous oil company. As at full year ended December 31, 2018 turnover increased by 37percent to N679.5 billion com-

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NAAPE tasks FG on implementation of Abuja second runway project, national carrier Stories by IFEOMA OKEKE

he National Association of Aircraft Pilots and Engineers (NAAPE) has called on the Federal Government to actualise the realisation of the second Abuja Runway project and the national carrier, Nigeria Air. Speaking in Lagos on Thursday, on the occasion of the aviation stakeholders safety workshop which it organised with the theme: “Promoting Aviation Safety In Nigeria”, at the Lagos Airport Hotel, Ikeja, Abednego Galadima, president of NAAPE urged the president to actualise the suspended Nigeria Air and other laudable projects contained in the Aviation Roadmap document. Galadima said the workshop is aimed at interacting with the stakeholders on the evaluation index it intended to use in their ranking and

awards. He further observed that the workshop is also intended to serve as a platform for sensitisation and discussion on other pressing safety concerns in the industry. He said he was optimistic that their engagement will bring about solutions to identify safety concerns and greater promotion of safety in the industry. “Our assessments will focus more on the organisational factors. It is also instructive to note that our Selection and Ranking process will be coordinated by a board of eminent and impartial professionals from the aviation industry. The awards are not aimed at de-marketing any organisation but to motivate organisations to imbibe and entrench safety culture. Remember, safety is everyone’s business,” Galadima said. In his remarks, Akin Olateru, the commissioner, of Accident Investigation (AIB)

observed that NAAPE’s focus on the welfare of aircraft pilots and engineers promotes total safety in the aviation industry in Nigeria and the world. Olateru noted that the safety levels that global air transport enjoys today represents an achievement built on the determination and efforts of the entire aviation community. He maintained that considering the level of commit-

Air France, KLM strengthen agreements with Virgin Atlantic, enhance fleet

ir France, KLM and Virgin Atlantic have announced their first code-share agreement, offering their respective customers new travel options to and from North America and more opportunities to earn miles with their frequent flyer programmes. With this partnership, customers of the three airlines can create their own tailor-made transatlantic trips by choosing from the many flight options operated by Air France, KLM, Virgin Atlantic and Delta. According to a statement sent by the airline, as a result of this partnership, Air France

and KLM customers will have access to a wide choice of additional flights with 24 new routes available between the United Kingdom and North America via London-Heathrow and Manchester. “They will have access to more frequent flights on certain routes such as Amsterdam - Miami via LondonHeathrow, as well as additional options between Paris and New York via Manchester,” the statements added. This is also as Air France is enhancing and modernising its fleet. The airline welcomed its first Airbus A350 (324 seats) in September 2019. Another

six aircraft will be added to the fleet by the end of 2020. In addition, Air France will receive two Dreamliner 787-9 aircraft for the summer season, to operate a total fleet of 9 Dreamliner 787-9. On July 1, KLM will launch the latest version of the Dreamliner: the Boeing 787-10 (344 seats). This latest generation aircraft is in addition to the company’s 13 Boeing 787-9 aircraft. Another 7 Boeing 78710 aircraft will be added to the fleet by the end of 2020. Transavia will fly its customers on board its 79 Boeing 737s throughout the 2019 summer season.

ments made by the current administration to ensure a safe airspace for air transport users, the theme of this workshop; ‘Promoting Aviation Safety in Nigeria’ is relevant and appropriate. The AIB Commissioner explained that for every flight, several possible hazards may be encountered during takeoff, cruising or landing which include, but not limited to

wind shear, Fire, Bird Strike, Human Factors, Controlled Flight into Terrain, runway safety Incidents , Runway excursion, runway overrun among others. He implored all pilots, engineers and stakeholders to note that safety is not a one man’s business, stressing that: “We all need to play our part to ensure a safer air space for Nigeria that will be worthy of emulation by other countries across the globe.” In his paper presentation at the event on Safety Evaluation Index, Uhuegho Kole, the guest speaker noted that promotion of aviation safety goes beyound compliance in achieving safety excellence. Kole stated that the aim of promoting Aviation safety includes: Building confidence in the Safety Management System (SMS) program as well as safety in general, setting the tone to build robust safety culture and to help foster improve safety performance by com-

municating lesson learned. Kole while explaining the concept of safety promotion noted that we are no longer in the era of safety believing that rule compliance is enough for safety. He stressed the need for team player emphasis with no tolerance for whistle blowers (Culture of silence) and focus on continuous improvement. Kole outlined the challenges of safety to include attitudes, communication, competing priorities, employee buyin, creating safety awareness among others. He also listed the benefits of building confidence in the SMS program to include: Employees who receive proper training feel confident in performing duties safely, strong lines of communication between all employee and different levels of management, on-going awareness of pertinent safety issues and a demonstration policy of nonpunitive reporting.

Air Peace strengthens Asaba operations with B737 aircraft

est Africa’s biggest carrier, Air Peace on Thursday deployed a Boeing 737 aircraft to service its Asaba operations, saying the development was in response to the yearnings of members of the flying public for bigger-capacity equipment on the route. The Boeing 737 aircraft will support the airline’s 50-seater Embraer 145 jets, which had been servicing the carrier’s Lagos-Asaba-Lagos and Abuja-Asaba-Abuja routes. The airline, which relaunched its Asaba operations about five months ago on October 8, 2018 after the Asaba Airport was fixed, said demand for air travel on the

Lagos-Asaba and Abuja-Asaba routes was already outstripping the capacity of its Embraer 145 jets. It said its acceptance on the Asaba route was an endorsement of the quality of its flight operations. A statement issued by Chris Iwarah, Air Peace corporate communications manager, said the deployment of a Boeing 737 aircraft on the route would afford air travellers the advantage of a bigger space. Iwarah said: “We relaunched our Lagos-Asaba operations and added Abuja to the route on October 8, 2018. We promised then that we would deliver nothing but the best of flight services. Barely five months since we returned to the Asaba route, we have

demonstrated beyond doubt that we are in the airline business to make a difference. “In five months, our flights have brought relief to leisure and business travellers on the Lagos-Asaba-Lagos and Abuja-Asaba-Abuja routes and we have been inundated with requests to increase the capacity of our aircraft on the Asaba route. As a customercentric airline, we have yielded to the demand of the flying public and have strengthened our operations on the route with the addition of a Boeing 737 aircraft to our 50-seater Embraer 145 jets currently servicing the route. Our valued customers can now take more luggage with them and enjoy the comfort of a bigger space.”

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INTERVIEW ‘One of the major issues Nigerians have with insurance is mistrust’ Ada Ufomadu is a Senior Financial Institutions Analyst at Agusto & Co Limited, a credit rating agency. In this interview with Endurance Okafor, she gives growth projections for Nigeria’s insurance industry in 2019 while also sharing insight on the issues dragging the almost a century old industry. She also explains how Nigeria’s less than one percent penetration ratio can be increased to enable it catch up with its African peers. Excerpts: Tell us about Agusto & Co. and how the agency provides insight into the various industries in Nigeria through its reports. gusto & Co Limited is the foremost pan-African credit rating agency registered in Nigeria as well as a leading provider of industry research. Agusto & Co started as a business information company with a long-term view of gathering and providing information on economies and select industries as well as assigning risk ratings to obligors. Agusto & Co created the credit rating industry in Nigeria in 1992, and that was when we commenced assigning ratings to 120 banks in Nigeria on an unsolicited basis. This took place for a period of 5 years after which we commenced solicited ratings for banks and other financial institutions. Today, the scope of our ratings has expanded to include insurance, corporates, municipals, primary mortgage institutions, microfinance banks, asset managers, securities firms, etc. Agusto & Co was licensed in 2001 by the Securities & Exchange Commission (SEC) as Nigeria’s first rating agency. In 2013, the Company was approved and duly registered in the Capital Markets Authorities in Kenya and Rwanda as a credit rating agency. In producing our industry reports, we meet with key stakeholders of specific industries which include regulators, operators, associations and even end-users of the industry’s products. The information we gather from these stakeholders deepen our understanding of the industry. We then marry this with our knowledge of the macroeconomic environment and are able to assess the impact of the macroeconomic environment on the industry and provide recommendations as thought leaders

tributor to GPI growth given that the country had just exited a recession and growth was fragile at 1.9percent in 2018. However, macroeconomic indices favoured the Industry’s investment portfolio. There has been a significant growth in the Industry’s investment income due to higher yields on government securities. Though yields moderated in 2018 due to a change in the government’s borrowing strategy, we expect a pickup in 2019 as the government will borrow more to fund its budget deficit.

How would you define the present state of the Nigerian Insurance industry? The Nigerian insurance industry is a growing industry. There are about 59 insurance firms underwriting nonlife and life businesses in Nigeria. The Industry’s asset base stood at N1.3 trillion as at 31 December 2018, reflecting a compounded annual growth rate of 17 percent in the last three years. However, total assets, Gross Premium Income (GPI) and profits are controlled by a few. Top 5 players account for 45 percent of GPI, 42percent of total assets

Ada Ufomadu

and 61percent of after tax profits. In 2018, the Industry generated premiums of about N448.6 billion, which reflected a 12 percent growth year on year. With this volume of GPI, the industry’s penetration ratio stands at 0.5percent, one of the lowest in Africa when we compare with countries like South Africa (17%), Kenya (2.8%) and Ghana (1.1%). This presents huge opportunities for growth and is the reason why we have classified the industry as one in a growth phase. With the gross premium income of the Nigerian Insurance Industry sustaining its growth trajectory with the GPI rising by over 12perecnt in 2018 according to the Agusto & Co. report, where do you see the insurance industry by the end of 2019? In 2019, Agusto & Co projects a 10 percent growth in the Industry’s GPI to about N493.4 billion. Growth will be driven by an improved operating climate as well as opportunities in oil and gas (particularly refinery) and engineering considering the Dangote projects that are on-goingthe refinery and fertilizer manufacturing plant. Agusto & Co growth projection of 10% for the sector in 2019 is less than the 12% is reported in 2018, why is that? Like we all know, 2019 is a political year. Although it is a re-elected administration, it will take a while for them to settle in and we think it may slow down a bit on economic activities. However, growth will come from

a slightly better operating environment driven by an improved operating climate as well as opportunities in oil and gas (particularly refinery) and engineering, considering the Dangote projects that are on-goingthe refinery and fertilizer manufacturing plant. Do you see those favourable macroeconomic indices that drove the GPI maintaining the same trend in 2019? Much of the growth seen in 2018 was driven by major projects that had previously been stalled due to the recession as well as efforts by stakeholders to increase insurance awareness. The macroeconomic environment was not a major con-

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To build trust, insurers need to educate the populace on the benefits of insurance and take them through the fine prints written on policies so that they have a clear understanding of what they are going into

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Despite the growth the sector recorded last year, industry experts say there are enormous opportunities that abound. Can you highlight some of these opportunities? Agusto & Co believes that there are opportunities in the over 100 million Nigerians without any form of insurance policy. In addition, there is the potential to deepen market share of the pockets of already insured populace. There are over 12 million registered vehicles in Nigeria for motor insurance; fire insurance for households and manufacturing companies; annuities as more people retire; life insurance policies for individuals. There are also opportunities in the agriculture value chain as the government continues to diversify its earnings away from oil. What are your recommendations on how to harvest these untapped opportunities in the Nigerian Insurance Industry? We recommend that operators listen to the market more and develop products that are consumer centric as well as create innovative ways to get these products to end users through digitalisation (distribution channels). According to Nigerian Insurers Association (NIA), insurance companies in the country paid a total of N217.8 million as terrorism claims and paid N1.2 billion to settle claims arising from flooding in 2018. What kind of insurance do you think will be most viable for them in 2019? I believe viable insurance policies would be those relevant to the Nigerian market and addressed to specifically meet the needs of Nigerians. Historically, motor and general accidents insurance have been the most profitable business lines with underwriting profit margins of 34.2 percent and 31.8 percent respectively in 2017.

We believe that these business lines will continue to drive underwriting profits. However, insurers are expected to underwrite risks across various sectors and not ignore any. This will diversify risks in the insurance pool. How can the country’s insurance companies shore up their capital base, irrespective of the cancellation of the recapitalisation exercise by the National Insurance Commission (NAICOM), in order to enable them take on bigger risks which at the moment are being taken abroad? Typically, capital can be shored up by injection of equity or debt and by retaining more profits. To retain profits, operators need to grow revenue. To grow revenue, operators require innovation, digitalisation and aggressively marketing strategies. The issue of trust in the Industry also has to be addressed because insurance is a business of trust. To be attractive to providers of capital, there has to be good profitability as well as high corporate governance standards which include transparency, strong risk management framework, experienced board and management and so on. Independent credit ratings provided by companies such as Agusto & Co provide an independent assessment of a Company which gives an extra layer of comfort to investors. Despite the fact that Nigeria has larger capital base than some of its African peers, its insurance penetration rate remains low, standing at 0.6 per cent, compared with South Africa’s 15.4 per cent. How can it broaden its penetration? Penetration can be deepened by getting more Nigerians into the insurance pool. How can this be achieved? We believe there has to be a strong collaboration of all stakeholders- regulators and operators to drive awareness. One of the major issues Nigerians have with insurance is mistrust. To build trust, insurers need to educate the populace on the benefits of insurance and take them through the fine prints written on policies so that they have a clear understanding of what they are going into. Trust also requires that when there is a claim request, it is attended to and paid promptly. In addition, products targeted at the middle and lower class, especially middle class, need to be developed.

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Downstream woes revealed by negative... Continued from page 1

management of refining assets, low operating margin for operators leading to low Return On Equity (ROE), huge debts/ receivables on account of unpaid accumulated subsidy and unpaid interest, and foreign exchange differentials on product importation. To overcome these challenges, the umbrella body for the major oil marketers suggested some important strategic steps which include introduction of corporate governance, full deregulation of the sector, and introduction of guilds which will increase availability of skilled workmen and artisans in the industry. In the 16-page report, MOMAN also suggested “improved regulations of fuel standards, improved customer service, improvement in port reception logistics, development of transport infrastructure, and improved security”. On quick wins needed to address

challenges facing the sector, it recommended that operators adhere to strict governance standards which will attract financing for working capital and investments for expansion, while also emphasising the need for implementation of fuel monitoring systems such as self-dispensing fuel pumps. “There is a need to upgrade the jetties and pipelines in use at the ports. Operators need to reduce the wait times of vessels at the ports,” MOMAN said in the report released March 2019. Nigeria as the largest market in Africa offers unique opportunities for investment in the petroleum downstream sub-sector, according to leading global consulting firm PricewaterhouseCoopers (PwC). “However, the government needs to create the necessary business environment through price liberalisation and strong independent regulation,” PwC said in a report titled ‘Nigeria: looking beyond oil’. “In addition, challenges around pipeline infrastructure, technology,

supply consistency and capital need to be addressed,” it said. MOMAN in the report said petroleum products demands/consumption in Nigeria grew at a Compound Average Growth Rate (CAGR) of 4.35 percent between 2015 and 2018 despite a drop in 2016. It expects demand for petroleum products to continue to grow in line with the Nigerian economy with average daily consumption of PMS expected to increase to 84 million litres in 2023, from 54 million litres in 2018. “PMS will continue to account for the highest consumption in forecast period; this will be followed by AGO while the demand for DPK (kerosene) may reduce,” it said. Analysis of activity for the 12 month period ending December 31, 2018 showed the oil and gas industry under-performed in the NSE All Share Index (ASI) by 27.2 percent while year to date also decreased by -1.38 as at April 1, 2019. The Nigerian downstream sector, broadly categorised into the refining and marketing segments of petroleum

products, has continued to underperform despite opportunities for growth. Nigeria’s inability to refine adequate petroleum products domestically in order to meet local demand has continued to render the downstream sector vulnerable to foreign exchange volatility, particularly for independent petroleum marketers. Recent efforts to revive the local refineries have failed as they have struggled to refine up to 30 percent of their installed capacities despite the huge amount ($1.6 billion) reportedly spent on repairs and maintenance over the past 19 years. The tough business operating landscape in the marketing segment, however, slightly improved in 2016 as petroleum importers enjoyed relative higher margins due to the special exchange rate of N285/$1 (parallel market rate stood at c.N305/$1) provided by the government. Lower oil prices (average of $49.00) meant lower associated cost of importation and higher pump for petrol (from

Tuesday 02 April 2019

N87 to N185). This was, however, short-lived as oil prices began to rally in Q4 2016 implying higher landing costs for petroleum marketers. In addition, the unending delay in subsidy payments which limited access to credit facilities from banks while interests accrued on loans that were obtained worsened the financial capability of petroleum marketers to import. Given these arrears, at different times, marketers cut short the supply of fuel to retail stations, particularly during periods of expected high demand of petroleum products as their operations became unsustainable. The advent of Dangote Refinery, which is set to produce 0.65mbpd of refined products, and other modular refineries will significantly impact the current landscape in the downstream sector. Upon completion, Dangote Refinery will refine in excess of domestic consumption levels and subsequently export excess refined products to neighbouring African countries.

Investors expect lower rates as CBN... Continued from page 2

week. As a result, most investors took positions in the secondary market, particularly along the medium and long ends of the curve with the 18-Jun19 (-120 bps), 20-Jun-19 (-106 bps) and 23-Jan-20 (-48bps) maturities enjoying significant buying interests. The overnight inter-bank rate, which is the rate at which banks borrow and lend to each other, has been on a steady decline since Tuesday last week, dropping to 5.57 percent on Monday, April 1, from 17.29 on March 26, 2019.

Also, the Open-Buy-Back (OBB), a money market instrument used to raise short-term capital, declined to 5.00 percent on Monday, April 1, compared to 16.43 on Tuesday, March 26, 2019. Nigeria’s external reserves have increased to $44.34 billion as at March 28, 2019, compared to $42 29 billion it stood on February 28, 2019. Naira appreciated marginally by 0.02 percent to close at N360.60k per dollar on Monday, as against N360.80k/$ at the investors and exporters foreign exchange window.

Oando profits up 46% to N28.8bn in FY... Continued from page 2

L-R: Oluwatoyin Ogundipe, vice chancellor, University of Lagos (UNILAG); Vice President Yemi Osinbajo; Arthur Mbanefo, chairman of the occasion, and Wale Babalakin, pro-chancellor of UNILAG, at the UNILAG 50th Convocation Lecture in Lagos. NAN

Buhari’s second term to prioritise power... Continued from page 1

tariff to a level that makes it cost reflective. It hopes this will attract more

investments and make the sector efficient. Apart from tariffs, the Federal Government wants to tackle challenges power distribution companies (DisCos) face monetising their services and recapitalise them by selling down its stakes to private investors. According to analysts at Renaissance Capital who had meetings with some Nigerian government officials including Vice President Yemi Osinbajo, policymakers and regulators including the CBN governor and the Debt Management Office, the Federal Government wants a new power sector reform programme that will make it easier for private companies to thrive. The current Power Sector Recovery Programme (PSRP) ran aground due to non-review of tariffs. The tariff methodology, called the Multi Year Tariff Order (MYTO), should have been reviewed five times in the past 15 years, but was only done in 2012. With elections over, the Federal Government will remove the brakes on tariff review and allow NERC to assert a modicum of independence at regulating electricity pricing. The Federal Government will also continue to resuscitate rail tracks and ports around the country, BusinessDay learnt. Osinbajo had previously said

the government was investing over N2 trillion on private sector-led agriculture and transport infrastructure projects. To fund these projects, the FG will raise excise duties, tariffs and taxes. The government plans to cut its stake in joint venture agreements with offshore oil companies to boost revenues in the near term. “However, there seems to be some unwillingness on the part of the government to completely remove the de facto subsidies at this time,” analysts at RenCap said. Rather, they added, “the intention will be to progressively deal with the subsidies by ensuring a better subsidy regime in a bid to ultimately reduce them over time”. Buhari’s government has spent N7.9 trillion in the past four years importing petrol to augment supply from the country’s rickety refineries, according to data from the National Bureau of Statistics (NBS). This is more than Nigeria’s entire 2017 budget of N7.2 trillion and 5 percent of the country’s current gross domestic product. This could persist for the next four years. “It is a big shame that we are one of the world’s biggest producers of crude oil and still the world’s biggest importer of petrol. This has to change,” said Adeola Adenikinju, director, Centre for Petroleum and Energy Economics and Law and member, CBN Monetary Policy Committee.

But RenCap said it “seems unlikely that market-based reforms in the downstream petroleum sector and power sector will materialise this year”. “Hence, the upside risks to our current inflation forecasts that we have highlighted may not crystallize,” RenCap analysts said. The analysts added that in keeping with its core mandate of price and monetary stability, the CBN will continue to tighten monetary policy. “The recent cut in the MPR was merely to signal to the government to enter a pro-growth phase. The apex bank will only consider substantive monetary policy easing when the headline inflation moderates to single digits,” they said. The analysts said the CBN will continue its ‘managed float’ foreign exchange policy and support the currency around the $1/N360 levels particularly with foreign reserves in the region of $45 billion, adding that the Federal Government could review its foreign exchange policy if oil prices fell below $50 per barrel and foreign reserves below $30 billion. Apparently, the DMO did not get the memo on Nigeria’s debt crisis. It does not think that Nigeria is close to debt distress because debt-to-GDP ratio remains very low at 19 percent. Current debt service-to-FGN revenue ratio stood at 63 percent in the nine months ending September 2018, according to RenCap calculations.

•Continues online at www.businessday.ng

by 70 percent from $801.6 million in 2014 to $260 million as at FYE 2018. “Our asset base is delivering strong free cash flows as evidenced by a 70 percent reduction in our upstream borrowings since the closure of our landmark acquisition of ConocoPhillips’s Nigerian assets in 2014,” Tinubu said. “We remain confident in our ability to deliver significant value to shareholders in the years ahead as well as resuming our dividend payments,” he said. The company’s FYE 2018 results are further evidence that its management team is focused on maintaining a strong balance sheet, profitability, value creation and a business that is indeed here for good. The company’s third year of strong financial performance is evidence that the company is back to business as usual, thus rebuilding stakeholder confidence in the brand as a viable business to invest in. “We can see light at the end of the tunnel. My faith in the management of the company grows from strength to strength with each financial result. I’m hopeful that soon, in the very near future, we the shareholders can finally reap the fruits of our labour,” said Kabiru Tambari, an Oando shareholder from Sokoto Zone Shareholders Association. In addition to an impressive financial statement, Oando recorded operational high-

lights. In the upstream, Oando recorded a 2 percent increase in proven oil reserves to 479.8 mmboe, from 470.7mmboe, while net revenues in 2018 increased to $407.0 million, from $333.7 million in 2017. “Our upstream business will continue to pursue production growth initiatives through strategic alliances, whilst ensuring operational efficiency and fiscal prudence,” according to a press statement issued on Oando’s website. In the downstream, Oando traded over 14 million barrels of crude oil under various contracts with the Nigerian National Petroleum Corporation (NNPC) as well as delivering 739,876 MT of refined products, acting as a key source of liquidity to the Group. The company continues to solidify its relationships with leading international and local banks, maintaining a sizeable and well diversified structured trade finance facilities required to support future growth. Oando streamlined its portfolio in 2016, by focusing on its dollar-denominated businesses in the upstream and downstream trading sector to drive profitability and ensure value accretion to shareholders as a mechanism to navigate the crash in oil prices which negatively impacted all players in the oil and gas sector. Since the successful implementation of its corporate strategic initiatives, the company has recorded its third consecutive year of profits.

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Solid Minerals BUSINESS Inconsistency in government policies stalled Nigeria’s mining industry growth – Okunlola …as illegal miners constitute threat to the industry JOSEPH MAURICE OGU

he underdevelopment of the Nigeria mining sector has been attributed to the inconsistencies in government policies in the past because policy makers did not consult professionals before taking decisions, a university don has said. “The problem with mineral industry in Nigeria is not policy. It is the inconsistency in the policy that is the problem,” said Gbenga Okunlola, a professor of geology at the University of Ibadan, and a fellow of Nigerian Mining and Geosciences Society (NMGS). To move the mining sector forward, all the policy makers should always consult professionals because mining is a knowledgebased industry. “Without professionalism, quackery and inconsistency of policies from government and other stakeholders in the sector cannot move the sector forward,” Okunlola said. According to the University of Ibadan don, some of the actions and reforms Nigeria undertook led the nation to where mining industry finds itself today. For example, the indigenisation policy of government in 1972 where foreign investors in the country woke up to a new decree that they must forfeit their investment by 30% to government, caused the decline of mining industry till today. Foreign investors brought in their investment, competence, technicalities, equipment since 1920s, but had to leave because of the indigenization policy. “The indigenisation policy of 1972 by the Federal Government was a mistake,” he said. Okunlola argued that because the investors could not cope with the new policy, they left the country. Since then, the mining industry in Nigeria has been struggling to survive, he stressed, adding: “There must be consistency in policy implementation.” According to him, there should also be inclusion of good leaders who have the capability of thinking and planning ahead of time. This, according to him, goes

beyond short-time political consideration, and requires involving professionals in policy making. “Mining industry is not a short time investment. It is a marathon,” he said. Explaining further, he pointed out that the nature of the industry may require investors to stay-put in the business for a minimum of 25 years. So, if government is not consistent with its policies, changing them at will after people have invested huge sums, no investor would want to risk such thing, Okunlola said. “If I know government will change its policies after 5 years of investing my money in your country, which will make me to lose my money, as an investor, I will not come,” he said. This explains why investors are not keen to invest in mining industry in Nigeria. Another problem is that 80 percent of the total budget for mining exploration comes from outside Nigeria. Because of this, donors and creditors are always watchful to see what is happening with the fiscal policy. Any inconsistency in the fiscal policy results in donor countries to stay back for a minimum of 10 years. “For this reason, we must get our policies and fiscal policies right,” he said. Joseph Ayalogu, a retired diplomat and group executive director, Eta-Zuma Group, which mines coal in Enugu, said government needs to do more in curbing the activities of illegal miners which adversely affects mining business. According to him, licensed miners who invest in the industry and comply

with all the required processes are burdened seeing illegal miners having a field day in the industry, “and government has not done much about it,” he lamented. “This is a big concern to a real investor.” According to him, acquiring mining and exploration licenses and fulfilling all the requirements for legal mining cost a lot of money; yet illegal miners who do not contribute to the government revenue cause problems for the legitimate miners. “We want to see more government actions in that area,” Ayalogu pleaded. He pointed out that if nothing was done, illegal miners “will scare real investors away because nobody wants to spend money and have rogue miners coming to destabilise the area.” Illegal miners have become powerful such that they go into people’s licensed concessions to mine illegally and constitute threats the real owners of the sites. “Illegal mining undermines the integrity and potentials of the sector, both on the loss of revenue to the government, management of the area and responsibility to the community,” Ayalogu added. Dele Ayanleke, Secretary, Miners Association of Nigeria, described illegal miners as touts, saying that they constitute menace to everyone and to the industry. Collaborating Ayalogu, Ayanleke said illegal miners excavate and destroy the land. In some cases, they could constitute a danger to the lives of others, if the are many.

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BUSINESS DAY

FG remains committed to creating environment for productive investment - Osinbajo KELECHI EWUZIE

ice President of Nigeria, Yemi Osinbajo, says the Federal Government remains committed to creating an environment for productive investment in hard and soft infrastructure. Osinbajo says the economic recovery plan of the Federal Government will in the coming years, among other critical interventions, improve soft infrastructure that covers the whole gamut of the regulatory environment for business while hard infrastructure focuses on economically strategic roads, rail, power and ports across the country. The Vice President speaking at the 50th Convocation lecture of the University of Lagos, Monday, said industrial infrastructure was a major component of the government economic transformation plan, adding that Project MINE Made in Nigeria for

Export was the major plank of Buhari’s government industrial policy. In his lecture titled ‘Nigeria rising: The path to prosperity,’ he said in planning the path to prosperity, the Federal Government took into account the age-old weaknesses of the Nigerian economy, and the illusion of prosperity that frequently distorted our understanding of the actual fragility of our economy. He observed that a combination of theft of public revenues and the consequent failure to invest in infrastructure as well as a largely rent seeking business class were what accounted for Nigeria’s economic quagmire. He however pointed out that the future for job creation and efficient and profitable businesses rested on innovation and technology, adding that the Federal Government had partnered local and international tech companies and innovators, in the building of

tech hubs, and promoting innovation. “Our aim is to completely democratise access to innovation and cyber commerce and create jobs”, he said. On the technology agenda of government, he said plans were on to focus on a new educational curriculum, which emphasised Science, Technology, Engineering, Arts and Mathematics (STEAM). According to Osinbajo, “Through the implementation of the Green Imperative, 5 million people will be impacted, 100,000 technical personnel will be trained, and 4,848 tractors will be assembled each year, resulting in the ultimate injection of $12 billion into the local economy over 10 years. “We are currently developing that curriculum with the support of global players like MIT, Cisco, IBM and Oracle, a nationwide curriculum that incorporates 21st Century STEAM thinking: coding, design skills, digital arts, robotics, machine learning, and so on.

L - R: Titilayo Ukabam, deputy rector administration, Yaba College of Technology (YABATECH); Matt Kelly, EMEA market intelligence manager, Canon; Obafemi Omokungbe, rector, YABATECH; Nizar Abdoui, product manager, Canon, and Kunle Adeyemi, dean, school of art, design and printing, YABATECH, during the commissioning of Yaba College of Technology-Canon Printing Academy in Lagos.

State House Medical Centre to gulp N14.3bn TONY AILEMEN, Abuja

… as Centre reverts to Clinic

ederal Government has budgeted a total of N14.3 billion for State House Medical Centre, which serves the first family and staff of the State House. This is as President Muhammadu Buhari has directed that the Medical Centre be reverted to Clinic to serve the original purpose of its establishment. This position was made known on Monday when the permanent secretary, State House, Jalal Arabi, appeared before the Senate Committee on Federal Character and Inter-Governmental Affairs for the 2019 budget defence. The State House 2019 budget proposal of N14.3 billion is slightly lower than the 2018 Appropriation of N15.47 billion by 7.1 percent.

The permanent secretary disclosed, “Without prejudice to what is currently obtainable at SHMC, the intention to revert to a clinic is a Presidential directive. This is to make sure that the facility is functional and serves the purpose for which it was established, ab initio.’’ Later, Arabi explained to journalists after the budget defence that the reversion of the Centre to a Clinic was a case of ‘‘cutting one’s coat according to your cloth. ‘‘It was initially meant to serve the first and second families and those working within and around the Villa. ‘‘The overstretching of facilities at the Medical Centre by patients is some of the challenges the Centre have been going through. It wasn’t meant for that purpose.

‘‘Nobody was charging anyone for any services and relying on appropriation means, we will depend on subvention when it comes to run the Centre. ‘‘Whatever comes is what you utilise and if the last patient comes in to take the last drugs based on the last budgetary release, that is it and we have to wait till another release is done. ‘‘But this new development means that services will be streamlined to a clinic that will serve those that it was meant to serve when it was conceived,’’ the permanent secretary said. The Centre was a focal point during the two-hour presentation and budget defence by the permanent secretary before the Senate Committee.

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How Polaris Bank is deepening financial inclusion through literacy awareness among adults BALA AUGIE AND ISRAEL ODUBOLA

Tokunbo Abiru, MD/CEO, Polaris Bank

organizing financial literacy sessions as a platform to empower students and young adults with money management skills. As part of activities to celebrate the 2019 Global Money Week, an initiative of Child & Youth Finance International Finance (CYFI) where young people are taught financial planning, Polaris Bank organized interactive financial literacy classes for secondary school students in Lagos, Ebonyi, Cross-River, Akwa-Ibom and four other states. The session covered discussion on saving, budgeting, money management and available financial products available to young adults among others, and facilitated by 155 employees of the bank led by the Managing Director/Chief Executive Officer, Tokunbo Abiru. Giving insight into the rationale behind the initiative, Abiru explained that the strategy is one of the bank’s tactical approaches to instil saving cultures in the young ones, and ensure an empowered life and a sustainable economy in accordance with the financial inclusion mandate of the Apex Bank. “As a responsible corporate citi-

zen, it behooves on us to do what is appropriate for the betterment of individuals and the society at large”, Abiru said. In Cross-River, sessions held with students of Offot Ukwa Secondary School and their peers in Uyo High School, Bright Future International School, Nigerian Christian Institute and Redemption Academy, all in Akwa Ibom, were engaged. The students were charged to develop the habit of keeping a

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Some adults are not financially literate, and they have been living with the consequences of this. We should not make the mistakes some of our parents made by failing to inculcate the habit of saving in our young ones from an early age

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inancial inclusion, a tool for economic development, is increasingly gaining recognition among policy makers, analysts, researchers and stakeholders in the global financial system, given its role in poverty reduction, employment generation and value addition. Findings from surveys conducted by Enhancing Financial Innovation and Access (EfinA), revealed that 53 percent of adults were excluded from financial services in 2008. Afterwards, financial inclusion started gaining momentum in Nigeria as exclusion rate further fell to 46.3 percent and 36.8 percent in 2010 and 2018 respectively. To facilitate progress towards achieving the 20 percent exclusion rate target by 2020, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, unveiled four policy documents – Revised National Financial Inclusion Strategy (NFIS 2.0), the Financial Literacy Framework, the Consumer Protection Framework and the Consumer Education Framework to stakeholders in Abuja three months back. These documents serves as policy direction for the banking sector and other sub-sectors in the country’s financial system. Understanding their role in financial inclusion campaign, Nigerian banks together with the Apex bank are leaving no stone unturned to bring unbanked population which are mostly in the informal sector to the mainstream financial system. On this note, Polaris Bank Plc is unrelenting to educate the general banking public especially young adults on the fundamentals of finance. This stems from the fact that when the young ones are exposed to financial matters involving saving, investing and managing money very early in life, it helps make appropriate financial choices in the future. The bank is preaching the good news of finance to secondary school students across Nigeria,

tangible fraction of monetary gift in the bank, and watch it grow. While speaking with students of Uyo High School, the bank’s helmsman stressed on the importance of saving. “You are not too young to start saving. The time to start is now so it can become a habit that will make you stand in future”, said Abiru, adding that they are not too young to make wise financial decisions. In Ebonyi State, sessions with students held at Fountain of Knowledge International School, Jesus is Lord International School, Great Minds International School, Success Impact Academy and Our Lady Schools. In Oyo State, students of Rosebird College, Valencia College, Seed of Life College, Ogunsanya Girls Science Academy and Frontliners Primary and Secondary Schools. Furthermore, students from Alhaq Academy, SMBC Model School, Iman Global International School and College of Education Staff were engaged. The bank hosted junior secondary students of Rainbow College at its headquarters in Lagos on Friday, March 29. Innocent Ike, Executive Director of Technology & Services explained that the banking industry is increasingly driven by technology and everyone including young ones must be carried along. He encouraged the students to be more financially prudent. “Savings must be an integral part of your life. You must save to plan your future”

BD MARKETS + FINANCE Analysts: BALA AUGIE

“It is important to let our kids know they can actually shape their future from very early days in life. It is clear to us as a financial institution that we must invest in the youths, and the future of our society” In her presentation titled “Financial Literacy for Youths 101”, Bola Adesanoye, Head Sustainability and Consumer Protection, had an interactive session with the students. She explained how they can make money with their talents, and save to generate returns. Adesanoye talked about the golden rule of financial planning – saving before spending. “This rule must be your guide. You must save to meet financial goals, deal with unexpected emergencies and take advantage of opportunities”, she said, while speaking on the importance of saving. Talking about the bank’s outreach to the schools, Adesanoye stated that the initiative is part of the efforts of the bank to deepen financial literacy and inclusion among students, thereby extending the frontiers of sustainability. “Some adults are not financially literate, and they have been living with the consequences of this. We should not make the mistakes some of our parents made by failing to inculcate the habit of saving in our young ones from an early age”, said Adesanoye, adding that the bank is keen to groom the young ones to fully rounded adults with minimal financial issues. The sessions did not center on financial literacy discussions alone. Students who provided correct answers to quiz won educational gifts and cash prizes. A tangible number of students joined the ranks of financial literate persons in Nigeria at the end of the sessions. Overall, more than 5000 students benefited from the sessions. With the sessions over, children and young adults can now save and spend appropriately. As the CBN demands active participation from banks and other financial institutions as regard celebrating Financial Literacy Day annually, the goal of ensuring 80 percent of general banking public have access to affordable financial services next year, looks bright.

Tuesday 02 April 2019

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Economic reform: IFC Senate committee urges assesses Edo’s private FG to enhance BPE sector, mulls support budget for efficiency structures enate Committee

ollowing the farreaching economic reforms by the Governor Godwin Obaseki-led administration in Edo State, the International Finance Corporation (IFC), an arm of the World Bank, has expressed interest to collaborate with the state in boosting the capacity of small and medium enterprises (SMEs) to scale their operations and increase productivity in the state. This was disclosed by the Senior Economist, IFC, Denny Lewis-Bynoe, who led a delegation of the IFC on a courtesy visit to the Government House, Benin City, the Edo State capital. Lewis-Bynoe said the delegation was on a twoday visit to the state to assess the private sector scene, especially the operating environment for SMEs, so as to fashion out support instruments for their growth. According to LewisBynoe, “We want to help businesses and also improve the ease of doing business in Edo State and Nigeria. So, the IFC is in Edo to have a detailed assessment of the private sector and come up with strategies to improve their businesses.”

on Privatisation has called on the Federal Government to enhance the budget of the Bureau of Public Enterprises (BPE), for efficient privatisation processes. Yahaya Abdullahi, the vice chairman of the Committee, made this call during the BPE’s 2019 budget defence at the National Assembly, on Monday in Abuja. According to a statement by Amina Othman, head, Public Communications, BPE, budgeting structure should be reviewed to reflect cost of transactions of the bureau. Abdullahi said since the funds generated by the bureau are annually remitted wholly into the Federal Government’s coffers, the government should adequately fund activities of the bureau. He also said President Muhammadu Buhari was determined to leave a lasting legacy in the economic development of the country through the power sector. “Reviewing BPE’s budgeting structure to ensure that provisions for transaction costs are made in the bureau’s budget will ensure a more efficient privatisation process to reflect the president’s economic plans.”

I was not arrested - Mike Adamu OBINNA EMELIKE

he CEO of Reform Sports West Africa Limited and son of Amos Adamu, former director-general, National Sport Commission, Mike Adamu, has denied being arrested or detained by the Nigerian Police over a purported court order. He said this in a press statement he sent to the media on Sunday. The statement became necessary after a number of media platforms reported that Adamu had been detained based on the order of a Magistrate Court in Mpape, Abuja. In the statement, Adamu pledged to pursue the matter to a logical legal conclusion. “My attention has been drawn to false online and print media reports suggesting to the public that I was arrested, arraigned and ordered to be remanded in custody by a magistrate court in Mpape Abuja till April 1, 2019, sequel to a petition by NSIL Limited pertaining an alleged fraud or scam against me. “It is sad that newspapers and news platforms that are supposed to be mediums of truth have allowed them-

selves to be avenues of peddling falsehood. “I was never arraigned nor remanded in the custody of the Police Intelligence Response Team, prison custody or any other custody whatsoever till April 1, 2019 or any other date. “The said publication is false, smirks of cheap blackmail and desperate attempt by the purveyors of this false report. I have had series of meetings with friends, associates and business partners at various times and places within this week and even till this moment. “It is unfortunate that a simple business misunderstanding with NSIL Limited will lead to falsehood and an attempt to tarnish my name, that of my companies and my extended family by willing newspapers and platforms,” he said. Speaking further, he said, “In view of the damage done to my hard earned reputation by this, I am consulting with my lawyers and will do everything within the ambit of the law to ensure that everyone involved in peddling and publishing this falsehood face the consequences of their unlawful actions.”

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High unemployment pushes Nigeria among top miserable countries BUNMI BAILEY

ith over 21 million Nigerians without jobs, the country’s misery level has significantly risen and unemployment shares a huge part in the blame, according to the 2018 Misery Index report by Steve Hanke, an economist from John Hopkins University in Baltimore, United States. The 2018 misery index showed that Nigeria ranked sixth position out of 95 miserable countries, scoring 43.0 among companies that were analysed. The country’s position has remained unchanged in 2017. In the sphere of economics, misery tends to flow from high inflation, steep borrowing costs and unemployment. Analysts say the surest way to mitigate that misery is economic growth. The unemployment rate in Nigeria has been on an increase since 2015. According to the National Bureau of Statistics (NBS), unemployment rose to 23.1 percent in the third

quarter of 2018 from 7.5 percent in Q1 2015. Gbolahan Ologunro, an equity research analyst at Lagos-based CSL Stockbrokers, says he is not surprised on this ranking due to the elevated unemployment rate in the country. “The reason is not farfetched, it stills boils down to the fact that the pace of recovery since we entered recession in 2016 has been very much low and that is why we have not seen the impact in the real sectors of the economy,” Ologunro says. “And these are the sectors that have the capacity to absorb people from the unemployed bracket. So, growth in the real sector is weak so that is why you see that unemployment remains elevated at double digit level,” he states. The country’s miserable position has not showed improvement since 2016. From the index, Nigeria ranked fourth in 2016 and moved to the sixth position in 2017 and 2018. Nigeria entered recession in 2016 and exited in the second quarter of 2017, but

since then growth has been sluggish. According to the NBS, the economy grew by 1.98 percent in 2018. In 2018, poverty in Nigeria was pervasive, as the country is now the poverty capital of the world with over 87 million Nigerians living in extreme poverty, according to the world poverty clock. But inflation commonly known as consumer price index moderated to 11.44 percent in December 2018 from 15.1 percent in January. The country’s lending rate, which is officially known as the Monetary Policy Rate (MPR), remained unchanged at 14 percent since July 2016 and this is considered high. But last month, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) cut the rate by 50 basis points to 13.5 percent. “It is clear, based on the numbers published by the NBS. Misery index is unemployment plus inflation. This is a call to action by the Buhariled administration to focus on ‘drastic implementation’ in the next four years,” Ayodeji Ebo, MD, Afrinvest Securities

Limited, says. On improving the lives of Nigerians by making them less miserable, Ebo suggests that the Petroleum Industry Governance Bill be passed and more efforts towards attracting private investments through the review of the Public Private Partnership Act that guarantees enforcement of contract should be enforced. Hanke‘s modified Misery Index is the sum of unemployment, inflation and bank lending rates, minus the percentage change in real GDP per capita. Higher readings on the first three elements are “bad” and make people more miserable. “Higher Misery Index score reflects a higher level of “misery,” and it’s a simple enough metric that a busy president, without time for extensive economic briefings, can understand at a glance,” Steve Hanke said. The top five countries above Nigeria in the list of world’s miserable countries are: Venezuela, Argentina, Iran, Brazil, and Turkey, while the least are Thailand, Hungary, Japan, Austria, and China.

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Nigeria, Cape Verde conclude talk on Air Transport partnership … to commence flight operation to Nigeria, establish embassy in Abuja IFEOMA OKEKE

he Federal Government of Nigeria has concluded discussions with Cape Verde on the plan to begin air transport relationship in line with existing Bilateral Air Service Agreement between the two countries. Hadi Sirika, Nigeria’s minister of state for aviation, made the disclosure after a meeting with Cape Verde representatives during a sideline meeting at the just concluded First ICAO/UNWTO Ministerial Conference on Tourism and Air Transport in Africa, held in Sal, Cape Verde. According to Sirika: “We have just concluded a meeting with Cape Verde authority and they have signified interest to start flight operations into Nigeria. Cape Verde is willing to exercise their right in the Bilateral Air Service Agreement and hopefully to seek a Nigeria airline that will reciprocate through flight operation into Cape Verde. “They will start operations into Nigeria very soon and we hope that Nigeria airlines

will take the opportunity too, as they have already said they are looking forward to a Nigerian airline to partner with.” Apart from the flight operations, the country is also planning to establish its embassy in the Federal Capital Territory, Abuja. On his twitter handle ‘@hadisirika’, the minister said: “Cape Verde to open an embassy in Abuja this year and also to commence direct flight”. Another source, who was privy to the meeting, said Cape Verde had agreed to fulfil all necessary commitment and go through the process in line with international best practices. He also said, “Cape Verde is ready to begin the operation with its national carrier, Cabo Verde Airlines, and they are looking at this year.” According to the source, “The Nigerian Civil Aviation Authority will embark on inspection trip to Cape Verde to look at their facilities and their airlines in form of an audit before a final approval is given for them to commence operations into Nigeria.”

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WITIN founder to drive socio-economic empowerment in Nigeria, bags award JUMOKE AKIYODE-LAWANSON

ounder of Women in Technology in Nigeria (WITIN), Martha Omoekpen Alade, who is using technology to drive socio-economic empowerment in Nigeria by helping 20,000 women and girls out of poverty by 2022, has won the Community Impact award at the 2019 Technology Playmaker Awards. Technology Playmaker Awards celebrates the achievements of women in the tech industry and winners of the second edition of the awards came from Nigeria, Ethiopia, Finland, France, Mexico, and the United States. This year, the awards were open to global nominations, building on a European focus last year, and drew hundreds of entries from over 60 countries. Announcing the recipients of the 2019 Technology Playmaker Awards, in London, Gillian Tans, CEO, Booking.com, one of the world’s largest e-commerce companies, said: “We received an exceptionally high calibre of nominations from every corner of the world and, it is my pleasure to congratulate all of our inspiring

finalists and winners. “Their stories highlight the breadth and scale of achievements that women at all stages of their tech careers are making every day. “We recognise the need to shine a light on role models in the tech industry, and set out to create a forum that brings together leading female technologists from different backgrounds to exchange ideas and perspectives and build connections with the aim to inspire future generations and achieve equal gender representation for women in tech.” Congratulating Alade, the British High Commissioner, Catriona Laing, said: “I am so delighted that Martha has been recognised with this prestigious award for her contribution in driving socio-economic empowerment in Nigeria, especially for women and girls. We hope that Martha’s achievement can act as a trailblazer inspiring more women and girls from all walks of life from education to politics to business, to aspire to the top.” Omobola Johnson, Nigeria’s pioneer minister of communications and technology, also congratulated Alade.

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‘Good governance indispensable to strengthen national economy’ SEYI JOHN SALAU

s a result of various high profile corporate scandals and failures, especially the 2008 financial institution meltdown, the notion of good corporate governance now dominates much of the world’s professional and academic literature. As a result, stakeholders in the Nigerian business ecosystem recently converged on Lagos to chart a path for good corporate governance. In charting a path for good corporate governance in Nigeria, the Institute of Directors (IoD) Nigeria convened a stakeholders’ forum on Nigerian Code of Corporate Governance 2018 with the theme, “Trends in Global Corporate Governance, the big picture and lessons for Nigeria.” Ahmed Rufai Mohammed, president/chairman of governing council, IoD Nigeria, said good governance was indispensable in the quest to strengthen national economy, which can only be achieved through transparent and efficient management of all resources. According to Mohammed, IoD Nigeria believes in the principle that organisations are set up as enduring

entities or going-concerns. “IoD believes that effective governance makes every organisation more focused and competitive. It is therefore important that a company’s governance processes must meet global standards of best practice in order for it to secure and retain capital investment, which will lead to its financial sustainability. “Financial sustainability and prosperity ride on the back of good corporate governance which passes effective risk management and efficient utilisation of critical resources such as finance, human capital and technology,” he said. The Financial Reporting Council of Nigeria (FRCN) in 2018 produced the code of corporate governance for Nigeria’s private sector. The code was however approved by the Federal Government after various stakeholder engagements, with resultant support and buy-in of all relevant stakeholders in the country. Daniel Asapokhai, executive secretary/CEO of the FRCN, in his keynote address at the stakeholders’ forum on Nigerian code of corporate governance 2018, said the code for good corporate governance was not an end in itself.

Tuesday 02 April 2019

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Oil rally set to sustain gain on tightening market STEPHEN ONYEKWELU

O Akinwunmi Ambode (2nd l), governor, Lagos State, with Mohammed Salami (l), late Pa Fasinro’s brother; Mustapha Fasinro (2nd r), and Moronfolu Fasinro (r), sons of the deceased, at the Governor’s condolence visit to the family in Lagos.

FG offers 2, 3-year savings bonds at 11.27%, 12.27% for April – DMO … as NSE re-opens on downward trend, market cap dips 0.29%

ederal Government has offered for subscription two-year savings bond at 11.27 percent and three-year savings bond at 12.27 percent per annum, the Debt Management Office (DMO) has said. According to the offer circular posted on the DMO’s website on Monday, the two-year bond will be due in April 2021, while the three-year bond will be due in April 2022. It however did not state how much was offered, but added that the maximum subscription was N50 million at N1,000 per unit, subject to minimum subscription of N5,000 and in multiples of N1,000. The website said the bond was fully backed by the full faith and credit of the Federal Government, with quarterly coupon payments to bondholders. The savings bond issuance is expected to help finance the nation’s budget deficit. It is also part of the Federal Government’s programme targeted at the

lower income earners to encourage savings and also earn more income (interest), compared to their savings accounts with banks. The circular also said that the offer would close on Friday. Meanwhile, the equities activities of the Nigerian Stock Exchange (NSE) reopened for the week on Monday on a downward trend as market capitalisation depreciated by 0.29 percent. The News Agency of Nigeria reports that market capitalisation, which opened at N11.672 trillion, lost N34 billion or 0.29 percent to close at N11.638 trillion due to price losses by some blue chip equities. The All-Share Index declined by 509.73 points or 01.64 percent to close at 30,531.69 against 31,041.42 posted on Friday. An analysis of the price movement chart indicated that Nestle led the losers’ chart with a loss of N130 to close at N1, 450 per share. Betaglass came second with N7.15 to close at N64.8, while Nigeria Breweries lost N3.75 to close at N63 per share.

CCNN dipped N1.95 to close at N17.95 and Dangote Flour dropped N1 to close at N9.2 per share. Conversely, Berger topped the gainers’ chart, gaining 0.8k to close at N9.05 per share. Caverton gained 0.22k to close at N2.71, while Ikeja Hotel rose by 0.18k to close at N2.06 per share. Zenith Bank increased by 0.1k to close at N21.9, while Unity Bank improved by 0.07k to close at 0.89k per share. In all, a total of 1.72 billion shares worth N3.67 billion were traded by investors in 3,251 deals against the 266.86 million shares valued at N3.15 billion traded in 3,455 deals on Friday. Wema Bank emerged as investors delight with 1.46 billion shares worth N1.05 billion. UBA followed, accounting for 62.95 million shares worth N485.03 million, while Chams sold 47.71 million shares valued N9.67 million. Fidelity Bank traded 17.49 million shares worth N33.25 and ETI transacted 17.45 million shares valued N226.75 million.

EdoGIS to deploy GIS data in resolving land, boundary disputes

he Edo Geographic Information Service (EdoGIS) Agency has disclosed plans to kick-start the deployment of its Geographic Information Systems (GIS) data in resolving inter-community boundary disputes. Managing director, EdoGIS, Francis Evbuomwan, disclosed this during a tour of the agency’s office by a delegation of the World Bank led by Senior Social Development specialist, West Africa Social Development, World Bank Group, Edda IvanSmith. He said the agency’s databank would be de-

ployed for a pilot scheme in addressing community percolation, to put an end to reoccurring intercommunity conflicts over land sale and boundary disputes. According to Evbuomwan, “EdoGIS plans to engage in systematic titling to help the agency register every piece of property in the state, as it would enable agriculturists, industrialists and residents know their respective land sizes.” Ivan-Smith, on her part, said the team was on a mission to collect relevant geographic information data on the state, adding that they were

impressed with the organisation and seamless operations of EdoGIS, as it relates to documentation of lands, management of geo-mapping as well as surveys. “We are impressed by EDOGIS and think the agency is a very well organised and managed. The World Bank is very keen to support the state government to ensure local communities, small and medium businesses, including farmers are able to benefit from private sector development in terms of shared benefits, and perhaps in preferential treatment in terms of employment opportunities,” she said.

il has sustained a three-month long rally, rising further on Monday thanks to a tight supply and positive signs for the global economy that has supported prices. Brent crude for June delivery was up 96 cents or 1.42 percent at $68.54 a barrel by 0900 GMT, having risen 27 percent in the JanuaryMarch period. US West Texas Intermediate futures rose 56 cents or 0.93 percent to $60.70 a barrel after gaining 32 percent in the first quarter. “For both futures contracts, the first quarter 2019 is the best performing quarter since the second quarter of 2009 when both gained about 40 percent,” CNBC said. OPEC oil supplies sank to a four-year low in March, a Reuters survey found as top exporter Saudi Arabia overdelivered on the group’s supply cut pact while Venezuelan output posted a further drop due to sanctions and power outages. The 14-member OPEC nations pumped 30.40 million barrels per day (bpd) last month, the survey

showed on Monday, down 280,000bpd from February and the lowest OPEC total since 2015, according to a Reuters’ survey. The strong gains this quarter may have prompted President Trump to call on OPEC to boost production to lower prices on Thursday. “Very important that OPEC increase the flow of oil. World Markets are fragile, price of Oil getting too high. Thank you!” Trump wrote in a post on Twitter. OPEC, Russia and other non-members, an alliance known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from January 1. OPEC’s share of the cut is 800,000bpd, to be delivered by 11 members, all except Iran, Libya and Venezuela. In March, the 11 OPEC members bound by the new agreement achieved 135 percent of pledged cuts, the survey found, up from 101 percent in February. “Oil continues to move higher with risk appetite on the rise in global markets,” BNP Paribas strategist Harry Tchilinguirian told the Reuters Global Oil Forum. The United States and China said they made pro-

gress in trade talks that concluded on Friday in Beijing, with Washington saying the negotiations were “candid and constructive” as the world’s two largest economies try to resolve their trade war. Experts say without putting pressure on demand for OPEC crude, market fundamentals will be positive. Especially when the majority of the market starts to understand that US oil storage figures are being influenced by a global lack of demand for US shale oil. If the latter is being taken out of all calculations, prices would already have spiked. Slowly but surely, Saudi’s energy strategists can start to relax. The US shale patch is proving to the market that it can’t influence oil prices to the extent that OPEC can. There will be no flooding of the oil market, only unconventionals are stacking up. And this is likely to happen for a shorter period of time than agencies such as the Energy Information Agency (EIA) of the US Department of Energy, are reporting. The year 2019 will go into history as a year of ‘undersupplied markets, while US storages will be full.

BUSINESS DAY

Tuesday 02 April 2019

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Ukraine election turns ugly as president and comic reach run-off Poroshenko expected to launch onslaught on Zelensky in bid to make up ground ROMAN OLEARCHYK AND BEN HALL

olodymyr Zelensky appeared cocksure as he played table tennis with journalists at his packed campaign headquarters on Sunday night, a typical act of showmanship by the television comedian. Minutes later, exit polls indicated he had convincingly won the first round of Ukraine’s presidential election with a much wider than expected margin. The 41-year-old actor and comic, whose political experience is limited to playing an honest teacher elected president in a popular TV series, is on course to stage the biggest act of his career. But despite the euphoria, there was already anxiety in Mr Zelensky’s camp that the campaign would soon enter a more brutal phase. “We know it is coming,” said one adviser of the expected onslaught from Petro Poroshenko, the incumbent, who will face Mr Zelensky in the run-off vote on April 21. Sure enough, Mr Poroshenko went on the attack on Monday morning so as “not to waste time”. In a post on Facebook he took aim at Mr Zelensky, suggesting he was supported by Moscow while also being a “puppet” of Igor Kolomoisky, one of Ukraine’s oligarchs whose TV channel has given vast airtime to the comedian in recent weeks. “Why is the Kremlin, its agents and the fugitive oligarchs so scandalously rampant in this year’s elections?” Mr Poroshenko wrote.

Many observers predict the second-round campaign will take an ugly turn. “I expect a fiercely fought campaign over the next three weeks with character assassination and ungentleman-like accusations made on both sides,” said Andy Hunder, president of the American Chamber of Commerce in Kiev. Mr Poroshenko has a mountain to climb. He won 16 per cent of the vote, according to an interim official tally with 80 per cent of votes counted on Monday, well behind Mr Zelensky’s 30 per cent. Mr Poroshenko may face the immediate distraction of a legal challenge by Yulia Tymoshenko, the former prime minister, who came third with 13 per cent but has complained of electoral fraud. One view among analysts is that anger over Mr Poroshenko’s failure to do more to raise living standards and combat corruption is so deep that he will struggle to win over enough supporters of candidates eliminated from the race, including Ms Tymoshenko, the pro-Russian candidate Yuri Boiko and the reformist Anatoliy Hrytsenko. “Any criticism of Zelensky just bounces back,” said Volodymyr Yermolenko, editor in chief at Ukraine World. He noted how the actor hit back at claims that he was an oligarch’s puppet by pointing to a recent corruption scandal involving the son of one of the president’s top advisers. Mr Poroshenko’s camp is expected to home in on Mr Zelensky’s

China government bonds make global benchmark debut Bloomberg flagship index to boost weighting to 6% over next 20 months HUDSON LOCKETT

loomberg has begun including Chinese government bonds and policy bank securities in its Bloomberg Barclays Global Aggregate index, a move expected to attract trillions in foreign inflows and reshape global capital markets. The phased inclusion of 363 Chinese securities over the next 20 months could ultimately spur some $2tn of fund inflows into China’s onshore debt market, according to Moody’s. Foreign holdings of onshore domestic bonds stood at $250bn at the end of January, or about 2 per cent of the total outstanding. “Purely from the weight of money and the shift in global capital markets, this is the biggest change in global capital markets that we have seen for some time, and we believe it is something that all investors should be paying attention to,” said Hayden Briscoe, Asia-Pacific head of fixed income at UBS Asset Management. China’s debt market is the third largest globally, at $12.42tn as of end-September, just shy of Japan’s $12.62tn although still well below the US’s $40.72tn, according to figures from the Bank of International Settlements.

Bryan Collins, head of Asia fixed income and portfolio manager at Fidelity International, said: “The developments in the China onshore bond market will also create a positive spillover effect to boost the wider Asian fixed income market.” Bloomberg says Chinese securities ultimately will account for 6 per cent of its $54tn index, and that on completion of the inclusion China’s renminbi will become the fourth-largest currency component. That will provide a boost to use internationally of the Chinese currency, which in February accounted for less than 2 per cent of international payments, compared with a peak of almost 3 per cent in mid-2015. China is tipped to become a net debtor this year for the first time since 1993, and to finance its expected current account deficit Beijing will need greater net foreign capital inflows — Morgan Stanley predicts $210bn every year for a decade, or six times the average annual foreign purchases of government bonds in recent years. International investors now largely hold central government and policy bank bonds, which are relatively liquid and low-risk compared with local government and corporate debt.

readiness for high office, questioning how he would stand up to negotiations with western backers as well as Russian president Vladimir Putin. This strategy was rolled out late last week, with Mr Poroshenko giving a TV interview from a high-tech situation room within the presidential office, constructed during his tenure. In the background were live video feeds from the front lines in eastern Ukraine, where the military is locked in conflict with Russianbacked separatists and Russian forces. As if inviting viewers to imagine Mr Zelensky in his seat, Mr Poro-

shenko laid out all the important decisions he made in recent years under extreme pressure, his relentless attempts to preserve western unity over sanctions against Russia, rebuilding of the army from scratch and securing US Javelin anti-tank missiles. People close to Mr Poroshenko’s team suggested they would also challenge Mr Zelensky’s allegiance to Ukraine, pointing to past comments the Russian-speaking Jewish actor made questioning his own Ukrainian identity. Even qualifying for the second round has been a mammoth

achievement for Mr Poroshenko, whose chances of re-election were written off nine months ago. Campaigning as a patriot, a defender of the nation against Russian aggression and a champion of the Ukrainian language and national identity, he clawed his way back into the race. Pre-election analysis published last week by US pollsters Greenberg Quinlan Rosner showed in the scenario of a Zelensky-Poroshenko run-off the electorate split into two blocks of 40 per cent: one seeking a new face above all, the second a tested pair of hands.

Saudi Aramco revealed as world’s biggest profit producer First glimpse of oil group’s finances as agencies assign ratings ahead of bond launch DAVID SHEPPARD AND MYLES MCCORMICK

audi Aramco has been revealed as the world’s biggest profit producer in the first official glimpse of its finances, as the state oil company courts investors ahead of its debut international bond sale. The company generated $111.1bn in net income last year, according to a prospectus accompanying the sale, almost double that of iPhone maker Apple and five times that of the biggest-earning rival oil producer, Royal Dutch Shell. Having delayed a much-heralded initial public offering, Saudi Aramco has turned to debt investors to help pay for its $69bn purchase of local petrochemicals company Sabic. The sale will also provide a test of fund managers’ willingness to back a company whose influence in the global oil market is tied to its historic backing from the Saudi Arabian government. Moody’s and Fitch assigned the company ratings of A1 and A+ respectively, but said that the oil producer’s close links to the kingdom acted as a cap on its creditworthiness. US producer ExxonMobil, for example, is rated

Aaa by Moody’s. The rating agency said that Saudi Aramco had many characteristics of a Aaa-rated borrower — such as minimal debt relative to cash flows, large scale production, market leadership and access in Saudi Arabia to one of the world’s largest hydrocarbon reserves — but its final rating was restrained to A1 “because of the close interlinkages between the sovereign and the company”. JPMorgan Chase and Goldman Sachs are among the advisers Saudi Aramco has hired to sell the bonds, which could include 30-year debt, and comes as the oil price has partly recovered from a plunge in the fourth quarter. However, the rare window into the finances of Saudi Aramco, which produces more than 10 per cent of the world’s crude, also show that the state’s reliance on the company means it generates less per barrel than privately owned competitors. The government in Riyadh relied on the oil sector for 63 per cent of its total revenue in 2017, according to the prospectus. The tax take from the kingdom meant the oil company made approximately $26 a barrel last

year compared with $38 a barrel for Royal Dutch Shell and $31 a barrel for France’s Total. In 2018 Saudi Aramco generated $224bn of earnings before interest, tax, depreciation and amortisation. The Sabic transaction will see money transferred into Saudi Arabia’s Public Investment Fund (PIF), which is the vehicle that Crown Prince Mohammed bin Salman has chosen for carrying out his ambitious plans to overhaul the Saudi economy and diversify it away from oil. Officials had hoped a stock market listing of Saudi Aramco would have seen $100bn funnelled into the PIF. Saudi Aramco, which dates back to the 1930s, has issued bonds in local currency, but the expected $10bn international deal is expected to be well-received. In its assessment, Fitch noted that the company’s “high production, vast reserves, low production costs and very conservative financial profile” would give it a standalone rating of AA+, but said it would cap its rating at A+ due to the links between the company and the sovereign and the influence the state had on the company through regulating the level of production, taxation and dividend.

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NATIONAL NEWS

FT Google blocks China adverts for sites that help bypass censorship

Erdogan’s polls defeat adds to Turkey’s challenges President forced to regroup after his party hit by local election results LAURA PITEL

Visitors and locals rely on virtual private networks to access global internet

YUAN YANG

oogle has stopped distributing advertisements in China for two websites that review anti-censorship software, in a move that critics consider signals the US tech giant’s efforts to curry favour with Beijing. Last week, VPNMentor, a company that reviews virtual private network services that allow users to bypass China’s internet controls and avoid surveillance, said that Google had refused to sell its adverts to Chinese users, after doing so for more than two years. On Wednesday, Top10VPN, another review site, said it had received the same notice after advertising with Google for several months. VPNMentor posted a screenshot of an email to Twitter, appearing to be from Google, saying “it is currently Google policy to disallowed [sic] promoting VPN services in China, due to the local legal restrictions”. Foreign businesses and visitors to China, as well as local citizens, rely on VPNs to access the global internet, including platforms such as Google and Facebook, which are blocked by China’s “Great Firewall” of internet controls. Google runs adverts on third-party websites in China. Google said it had “longstanding policies prohibiting ads in our network for private servers, in countries where such servers are illegal”, adding that bans on VPN adverts in China had been in place for several years. On Friday, China’s market regulator demanded that internet platforms step up their censorship of adverts. However, there is no blanket ban on selling VPNs in China. Chinese regulators issued a notice in 2017 stating that VPN providers would need to be licensed in order to operate in China. Regulators told the Financial Times last year that the situation was “complex” and that they were still “researching” how to apply the measures. Charlie Smith of GreatFire, a censorship monitoring organisation, criticised Google’s blunt action in relation to VPNMentor and Top10VPN as being too broad. He said: “There are legally registered VPNs operating in China, so either Google has not kept up to date with local regulations or they are overstepping their boundaries.” David Kaye, the UN special rapporteur on the promotion and protection of the right to freedom of opinion and expression, said that Google’s move “deprived [Chinese users] of the choice to find uncensored material”. “If Google is in the business of expanding access to information, why do they not conceive of their business in those terms in China?” he asked. Mr Kaye also questioned whether Google had researched the legal status of the review sites, or “sought ways to ameliorate the impact on expression” before deciding to enforce a ban against them as regards all VPN-related adverts. Mark Natkin of Marbridge Consulting, a tech research group in Beijing, said that Google “may be trying to comply with the spirit of the regulation”.

Tuesday 02 April 2019

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Bain boss warns over private equity debt levels Bullish projections mask scale of leverage as some fear risk of dealmaking crash JAVIER ESPINOZA AND PATRICK JENKINS

rivate equity groups are taking on too much debt in the competition to win deals, heightening the risk of a crash in the sector, according to one of the most senior buyout executives. Jonathan Lavine, co-managing partner at global giant Bain Capital, made the warning as fears rise that slowing growth across corporate America could end the dealmaking boom. He said that “increasingly aggressive” projected benefits from mergers and acquisitions were masking the real scale of leveraged borrowing. The warning comes as private equity groups are paying record high prices, with investors, flush with cash, pouring in large amounts of money to their funds. This may have created a bubble, which Mr Lavine and others say may burst in the event of an economic downturn. Speaking to the Financial Times, Mr Lavine said that some

rivals’ practice of adjusting future revenue growth of companies when calculating synergies between deal partners was akin to adjusting one’s height to fit a narrative. He said: “I’m 5ft 8in, but I change the scale and make myself 6ft 2in on a pro forma basis. I’m not actually 6ft 2in on a pro forma basis, but I can make adjustments like standing on a box, maybe trying to stretch.” The executive said that people were increasingly using complex jargon to exaggerate assumptions of cost savings for companies, leading to soaring debt levels based on overinflated projections. He said: “It is ordinary to give a company credit when you’re lending for some piece of those financial projections. It used to be about 10 per cent of any transaction. “The really ugly ones have been as high as 30 and some have been even higher than that.” I f a s s u m p t i o n s a re n o t fulfilled, he said, suddenly a company is many more times

levered. “If you start seeing people not generating cash flow and not deleveraging, particularly in their first two years, I’d start worrying,” he added. Others have separately expressed their concerns over the levels of riskier debt in companies. Investment bank Cantor Fitzgerald has warned that a third of US investment grade market leverage ratios are deemed high risk as concerns grow over deteriorating credit quality. The buyout executive also said that a “self-fulfilling” recession could easily follow a slowdown in revenues. “Even in the absence of a recession, if growth slows down a lot, people will treat it like a recession and it could have some of the self-fulfilling negative effects that an actual recession does have,” he said. “My concern is that there will be a flattening that people will treat as a recession and then we have to understand the reality of it and it becomes self-fulfilling?”

Star Radler sign up Tiwa as brand ambassador

tar Radler, a brand of the Nigerian Brewery recently unveiled Tiwa Savage as brand ambassador, at a special announcement held at Muri Okunola Park, Lagos. Tiwa Savage becomes the first ever female to be officially signed on as an advocate for the beer brand, as she joins an elite bracket of Nigerian musical artists to be associated with the brand. “Star is a great brand and I’m thrilled to have joined the Star family. I’ve always loved the Radler brand and it’s an amazing opportunity to be the official face of the brand. The taste is quite exquisite! The Star brand is all about inspiring

people to dream for bigger, greater things. “Every Nigerian is somewhat aspirational, and this is a theme I try to imbibe in my music. I can’t wait for what the future holds with Star as I urge everyone to be on the lookout for us,” said Tiwa Savage, expressing her delight at becoming the first ever woman to be a brand ambassador for Star. Tiwa Savage is no stranger to “firsts”, last year she became the first ever Africa female to win a BET Award, etching her name in the history books in the process. Since her emergence in the Nigerian music scene, Tiwa has released 3 studio albums which have earned critical

and commercial success. Star also unveiled its brand new football kit, accompanied with a sporting emblem. This kit will be worn by the Star football team, which will be made up of professional players like former Super Eagles player, Austin Jay Jay Okocha and fans, in a novelty match on 16 April. Back in January, Burna Boy was announced as the first ever brand ambassador for Star Lager, while the popstar’s unveiling was followed by a Television commercial (TVC). However, with Tiwa’s unveil; fans of the Afro-pop sensation will be eagerly anticipating the creative ways the brand intends to exploit

ecep Tayyip Erdogan strived for a reassuring tone when he addressed supporters from the balcony of his ruling party headquarters in the early hours of Monday morning. But behind the upbeat veneer, the Turkish president was well aware that he had suffered one of the most difficult election results of his 16 years in charge. “If we have deficiencies it is our duty to fix them,” Mr Erdogan told the crowd in a tacit acknowledgment of the losses. Having lost Ankara, the nation’s capital, and facing a bitter dispute over the result in Istanbul, Mr Erdogan must now add the need to fix his dented support to the array of domestic and international challenges he was already facing. “It’s a terrible result for Erdogan,” said Berk Esen, an assistant professor of international relations at Ankara’s Bilkent University. “There’s an economic crisis, there’s an international crisis due to an ongoing stand-off with the US. At the same time, there is an electoral defeat that shows his international partners and domestic opponents that’s he’s quite vulnerable.” Although Mr Erdogan was not a candidate in Sunday’s vote, he fought the campaign for control of Turkey’s 81 provinces as if it were a general election. He sought to distract from complaints about sky-high food prices and rising unemployment by casting the vote as a battle for national survival in the face of external threats. His face was on posters throughout Turkish towns and cities, and he zigzagged his way across the country on a gruelling schedule of campaign rallies. The Turkish leader fought so hard because he knows from personal experience how victory on a local level can trigger a domino effect. He was elected mayor of Istanbul in 1994 on the back of a wave of support for Islamist politics. Eight years later, the Justice and Development party (AKP) that he founded swept to national power. No one is predicting Mr Erdogan’s imminent demise. The 65-year-old remains by far and away the country’s most popular politician and has found his way out of tight spots many times. But the loss of Ankara and a string of economic powerhouses along the country’s south coast — including the industrial city of Adana and the tourism hub of Antalya — sent a clear message to the political alliance led by the AKP. “They survive,” said Asli Aydintasbas, a senior fellow at the European Council on Foreign Relations, a think-tank. “But they don’t have the confidence of voters in big cities, including the best and brightest, the industrial elite and the middle class.” Winning back those people will be a central focus for Mr Erdogan as he looks ahead to his dream of presiding over celebrations for the centenary of the Turkish republic in 2023.

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Renault probe discovers four private jets in Ghosn investigation DAVID KEOHANE AND PETER CAMPBELL

he holding company at the heart of the Renault-Nissan alliance owned four private jets, rather than the one previously assumed, an investigation by Renault has discovered. The three extra jets not previously known about were discovered as part of an internal investigation by Renault into the company following the arrest of Carlos Ghosn last November in Japan. Two of the planes were long range jets, while two were used for shorter journeys, investigators found. One of the planes, bearing the tail number NI55AN, was the one in which Mr Ghosn arrived in Tokyo last November immediately before his arrest. Questions about the use of company jets have focused on the blurred lines between Mr Ghosn’s globe-spanning business remit and his personal life, with children and personal properties on several continents. The jets were owned by RNBV, the Netherland-registered joint venture that housed some of the alliance-level functions of the two carmakers. The discovery comes as investigators probe Mr Ghosn’s pay at

Renault and at the RNBV. Renault has separately alerted French prosecutors to millions in suspicious payments made to an alliance business partner in Oman for marketing purposes. The news of the payments was first reported by Reuters and confirmed by people familiar with the matter. Alliance partner Nissan has previously suggested it was also looking into $30m in questionable payments to a subsidiary in Oman. The probe in February also found that a Renault sponsorship of the Palace of Versailles allowed Mr Ghosn’s use of the venue for a wedding party, at an estimated cost of €50,000. He has since offered to pay back the money. Mr Ghosn has been charged with two counts of misconduct, one for misreporting his pay at Nissan, and another of using his position for personal benefit after passing trading losses on to Nissan’s books. Mr Ghosn continues to protest his innocence over the charges, saying that his arrest is a result of “plot and treason” at Nissan in order to prevent his attempts to merge the company with Renault. Renault is expected to report on both investigations during a board meeting scheduled for this Wednesday. Renault declined to comment.

Ageing and global trade imbalances are G20 priorities With the crisis behind us, we must tackle the structural issues weighing on economic growth TARO ASO

en years since the global financial crisis, trade tensions are rising and confidence in multilateralism, the backbone of prosperity and stability since the second world war, is being challenged. At the same time, widening inequality is sapping the foundations of democratic institutions. At such a time, the G20 nations, representing 85 per cent of global gross domestic product between them, have a duty to uphold their long-held mission: to ensure “strong, sustainable, balanced and inclusive growth”. The Japanese presidency of the G20 is now in full swing, preparing for the Osaka summit and Fukuoka finance ministers and central bank governors meeting in June. I took part in the first G20 summit meeting in 2008, and I am convinced of the group’s power to marshal co-operation in tackling challenges faced by the international community. Now that the financial crisis is behind us (although risks to financial stability remain) it is high time the G20 set out to tackle longer-term structural issues that weigh on economic growth — namely, ageing and global imbalances.

Living longer is a blessing, but ageing populations have an impact on growth in many countries. A shrinking labour force puts pressure on output and reduces investment opportunities amid poorer growth prospects. Meanwhile, rising age-related spending, such as for pensions and public health systems, tends to erode the fiscal balance. Countries with rapidly ageing populations need to make savings now to prepare for the future, exporting capital to capital-scarce young countries that are rich in investment opportunities. One caveat : today’s elderly people (including myself, at 78 years old) are much healthier than previous generations. Harnessing the potential of a healthy elderly population could be an important way to counter the negative impact on growth. Ageing is not a problem confined to advanced nations. It affects emerging economies, too. Some of them are growing older more rapidly than advanced economies have done. For these countries, broadening social security coverage while safeguarding growth and fiscal sustainability will be a big challenge. Sharing best practices across the G20 will help both ageing and younger emerging economies alike.

Airbnb invests $100m in Indian hotel start-up Oyo SoftBank-backed franchise valued at $5bn at its last funding round SIMON MUNDY AND SHANNON

yo Rooms, the fast-growing Indian hotel franchise, has raised more than $100m from US room-booking site Airbnb, giving fresh firepower for its international expansion drive. Founded in 2013 by then 19-year-old university dropout Ritesh Agarwal, Oyo has become the world’s most rapidly expanding hotel chain, adding more than 700 properties each month. On Monday, it confirmed an equity investment from Airbnb, without revealing financial details. A person with direct knowledge of the terms said Airbnb had invested between $100m and $200m, at a valuation “significantly higher” than the $5bn reached when Japan’s SoftBank led a $1bn investment in September. The person added that Oyo and Airbnb were exploring deeper collaboration, including making Oyo properties available through the Airbnb platform, but that this would not entail dropping partnerships with other booking platforms, such as Expedia.

For San Francisco-based Airbnb, the investment is part of a push to broaden its business as it eyes an initial public offering later this year or in 2020. “Emerging markets like India and China are some of Airbnb’s fastest-growing, with our growth increasingly powered by tourism to and from these markets,” said Greg Greeley, Airbnb president of homes. The company, best known as a place to rent an apartment, house, or room in a private home, has been seeking new sources of revenue and customer growth by offering a wider array of travel services. In March, it bought hotel booking site HotelTonight, which will add more hotel rooms to Airbnb’s listings, and has hired an airline industry veteran to oversee transportation offerings. Already by far India’s largest hotel chain by room numbers, Oyo now claims to be the sixth-biggest in the world, having expanded into several markets in Asia and the west. It has grown with a primary focus on low-priced hotels with basic but reliable quality standards.

Of more than 10,000 branded hotels in its network, most are existing hotels whose managers agree to renovate them to Oyo’s specifications. In return, the hoteliers are allowed to use the Oyo brand under a franchise agreement, and gain access to Oyo’s proprietary hotel management technology and swelling user base. After the SoftBank investment, Oyo also received equity infusions of about $100m each from ride-hailing companies Grab and Didi Chuxing, based in Singapore and China respectively, both of which are also backed by SoftBank. Most of the new capital has been earmarked for expansion in China, by far Oyo’s largest foreign market. In recent months it announced moves into several new markets, including the UK, the US and Japan. Airbnb was valued at $31bn in its last fundraising in 2017. The company does not disclose financials but has said it was profitable on an adjusted basis for the past two years. Last month, it said 500m guests had checked in at Airbnb listings since its founding in 2008.

Louis-Dreyfus/Glencore: the master is Margarita Owner has shown her determination but needs to come with a plan

n executive with a cunning plan must judge the right moment to share it fully with the boss. Misjudge this, and the wheeze may look either half-baked or presumptuous. You may then be forced out. That was apparently the fate last year of Gonzalo Ramírez Martiarena, chief executive of agricultural commodities group Louis Dreyfus. Owner Margarita Louis-Dreyfus was uneasy about Mr Ramirez discussing possible tie-ins with Glencore and two partner pension funds. Ms Louis-Dreyfus needs to come up with her own plan. The reason? Malthus was wrong. One pundit calculates the world population has risen from 3bn 60 years ago to 7.5bn now with-

out food prices jumping in real terms. Technology has lifted the carrying capacity of planet earth. Tragically for agricultural commodities traders, even weird weather linked to global warming has not induced much price volatility. Steady production and stable demand leaves them with skinny margins. Louis-Dreyfus made net income of just $357m on sales of $36.4bn last year. The classic response is to bulk up, move downstream (into food production), or both. Fine in theory. Not so much in practice, in the eyes of Ms Louis Dreyfus. She may have twigged that negotiations with Glencore’s Ivan Glasenberg often culminate in deals that are a win-win — for Ivan Glasenberg

and Glencore. Ms Louis-Dreyfus is pretty determined herself. She just bought out a big stake held by members of the dynasty she married into. That left her with an estimated $900m of debt. Louis-Dreyfus claimed to have net debt of $3bn at the end of 2018. But that figure deducted easily-sold inventories. Discount the deduction by a prudent 50 per cent, and the ratio of net debt to ebitda is a hefty 4.5 times. The company still needs a deal. Joint ventures with Cofco of China or Bunge of the US could be worth exploring. New chief executive Ian McIntosh should give Ms Louis-Dreyfus daily updates. Always wise to keep the boss in the loop.

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Tuesday 02 April 2019

ANALYSIS Why the new nationalists love Israel A trip to Jerusalem has become almost compulsory for today’s ‘strongman’ leaders GIDEON RACHMAN

Dubai fears the end of its ‘build it and they will come’ model But can an economy fuelled by the vagaries of the property market reform itself? SIMEON KERR

he shimmering Palace Residences apartment blocks will look out through palm trees, across calm creek waters lapping in from the Gulf towards what developers boast will be the world’s tallest structure. The futuristic, rocket-shaped Dubai Creek Tower will be a “notch” higher than the Burj Khalifa, the current holder of that title, just down the road. Off-plan sales of the Palace Residences were launched in January, with one-bedroom flats on the market for Dh1m ($272,000), generating “significant demand”. The plan is for the 6 sq km Dubai Creek Harbour to eventually house 200,000 residents. The project is a classic example of the “build it and they will come” development model that has served the rulers of Dubai well for the past four decades: carve out a space in the desert or on land reclaimed from the sea; build bigger and better luxury residences; offer top-class amenities; and sit back as wealthy expatriates snap them up. Yet even as construction sites inch ever deeper into dusty desert districts, there are signs that this model may have run its course. The skyline remains dotted with dozens of cranes, but amid a second downturn in a decade many stand idle. Construction on Dubai Creek Tower began more than two years ago, but only its foundations have been laid and no completion date has been set. Property prices are down by at least 25 per cent since 2014; real estate developers are trimming their headcounts and delaying payments to suppliers; parents speak of falling numbers at their children’s schools. Growth in gross domestic product decelerated to 1.9 per cent last year, the emirate’s slowest rate of expansion since 2010. “The entire business model needs a radical reset,” says one company executive, who believes distress among the city state’s corporates will deepen this year. “Costs are too high to sustain these levels of activity.” Dubai’s rulers, who brook little criticism of the economic model that transformed the emirate into the region’s trade, finance and tourism hub, appear to agree. Sheikh Mohammed bin Rashid al-Maktoum, its dynamic leader, last year turned to consultants to pull Dubai out of its funk, convening a series of meetings with business bosses to discuss ways of boosting the economy, such as

cutting fees and privatising state entities to revive moribund capital markets. Dubai’s executive council has hired the PwC consulting arm Strategy& to turn some of those ideas into policy. “The brainstorming sessions were meant to [help] understand the challenges and come up with ideas for the private sector,” says one consultant. “The executive council knows there is now a pressure to implement.” At a time when job cuts are hitting white-collar workers, a priority appears to be boosting population growth among wealthy foreigners by providing expatriates — who make up 92 per cent of the 3.2m population and yet have no right to stay in the emirate if they lose their jobs — with a greater sense of belonging to encourage long-term investment. While official statistics show healthy growth in the foreign population, the exit of better paid, senior expatriates has chiselled away at discretionary spending in the consumer-driven economy. Attendees urged the government to grant longer-term residency programmes to give expatriate investors more security. Traditionally, there has been a high turnover of expatriates living in Dubai but in recent years many have begun staying longer. Now — to counter rising living costs — Dubai has frozen school fees and government service charges indefinitely. Abdulla al-Saleh, the United Arab Emirates undersecretary for foreign trade and industry, said last week that long-term visas would “go a long way to reinforce business confidence”. A new law to allow 100 per cent foreign ownership of companies outside existing business parks, which currently exempt the need for a local partner, is another measure designed to improve the commercial climate and cut costs. But Dubai officials warn that “it will take time” for these measures to kick in. Some business people question how much the government is listening. “It’s like we are talking a different language,” says one person who attended. “We talk about long-term investment and growth, they can’t see beyond the security risks.” Giving foreigners more rights in what was historically a conservative, local society is unpopular among the 250,000 Emiratis in Dubai. Many fear losing even more control, while the security apparatus remains concerned about the risks of importing the region’s geopolitical woes into a traditional safe haven.

“ T h e s e c h a n g e s a re n o t enough,” says a senior banker based in the emirate. “We need a new story.” It is not the first time Dubai has been urged to change or that its brash business model has been questioned. Founded on open trade, international connectivity and a go-getting attitude, the citystate was swept up in the global financial crisis a decade ago, and at one stage was at risk of becoming the first sovereign default of the crisis. It weathered the storm, thanks largely to a $20bn bailout from its big brother Abu Dhabi, the UAE’s oil-rich capital and by far the wealthiest member of the sevenstrong federation. The lifeline exposed both Dubai’s oversized dependence on credit — in 2009 it was saddled with $109bn of debt, equivalent to 130 per cent of GDP — and the opaque nature of a system where the lines between the government and state-related entities are poorly defined. Some of Dubai’s flagship stateaffiliated companies were forced to restructure. And the crisis prompted earnest talks on the need to wean the emirate off its reliance on the cyclical real estate sector, alongside discussion of better governance and improved transparency. The rulers implemented property and financial reforms, while a sympathetic financial sector worked with Dubai to restructure debts. The regional turmoil, triggered by the 2011 Arab spring, offered Dubai an opportunity to leverage its reputation as one of the Middle East’s most liberal and open societies to become a haven for those fleeing civil wars or their local taxman. Although Dubai has negligible energy resources, its role as a petrodollar recycling hub means its fortunes have long swung in tandem with its larger oil-exporting neighbours. So rising oil prices after the Arab spring helped the city-state. At the same time, winning the right to host the World Expo 2020 in 2013 fed the renewed construction frenzy. The master plan for the expo, which organisers say could attract 25m visitors, envisages a 1,082-acre site, including a gated 370-acre area and surrounding residential, hospitality and logistics zones. But within 12 months the collapse in oil prices had sparked a debilitating downturn across the Gulf. Governments, including the UAE, slashed spending and introduced taxes. The private sector, already struggling under government fees, has been battered.

ith a week to go before the Israeli election, Benjamin Netanyahu has rarely been in a weaker situation at home or a stronger situation overseas. The Israeli prime minister is fighting the elections weighed down by a preliminary indictment for fraud, bribery and breach of trust. He is currently neck-and-neck in the polls, with the centre-left opposition led by Benny Gantz, a former head of the Israeli military. The campaign is also taking place against the backdrop of continuing unrest in the Gaza Strip. But while the clouds are gathering at home for Mr Netanyahu, they are lifting overseas. Israel is benefiting from the rise of a new generation of nationalist-populist political leaders — from Washington to Delhi, and from Budapest to Brasília — who ardently admire the Jewish state. This change in the international political atmosphere has created new breathing space for a country that has long

feared international isolation and trade boycotts. The single most important change for the Israelis was the election of Donald Trump. The US president has delivered on a long list of Israeli objectives which once seemed like distant fantasies. Mr Trump has moved the US embassy from Tel Aviv to Jerusalem and pulled out of the Iran nuclear accord. And this month, America recognised Israeli sovereignty over the Golan Heights, which Israel seized during the Six-Day War of 1967. Mr Netanyahu sounded almost incredulous as he received this gift in the White House. Another leader who loves to stress his friendship with Mr Netanyahu is Jair Bolsonaro, the new president of Brazil, who is currently visiting Israel. Having the largest country in Latin America as an ally is a breakthrough for Israel because the “global south” of developing nations has traditionally been solid in its support for the Palestinians. For Mr Bolsonaro, embracing Israel is a way of simultaneously appealing to the large evangelical community in Brazil and to the Trump White House, while sticking a finger in the eye of his enemies on the liberal left. Indeed, a trip to Israel has become almost a compulsory stop for a new generation of “strongman” leaders, who revel in defying liberal opinion. Last September, Rodrigo Duterte, the leader of the Philippines, came to Jerusalem and told Mr Netanyahu: “We have the same passion for human beings” — a double-edged compliment, given that Mr Duterte is under investigation by the International Criminal Court for encouraging extrajudicial killings. Another strongman cultivated by Mr Netanyahu is Viktor Orban,

the prime minister of Hungary and champion of “illiberal democracy”, who visited Jerusalem last year. This relationship is controversial in Israel because Mr Orban launched a poster campaign in 2017 that used antiSemitic imagery portraying George Soros, a Jewish philanthropist, as a puppet master intent on flooding Hungary with refugees. Nonetheless, there are ideological affinities between the Israeli and Hungarian leaders. They are both ethnic nationalists — “Israel for the Jews” and “Hungary for the Hungarians” are similar ideas. The fact that Mr Orban’s nationalism has more than a whiff of anti-Semitism about it is not especially shocking to Mr Netanyahu, whose brand of Zionism has always assumed that the outside world is inherently anti-Semitic. For the Israeli leader, making a tactical alliance with a dubious figure like Mr Orban is justified if it helps Israel. And central European nationalists are currently doing just that. Last year, the Czechs, Hungarians and Romanians vetoed EU condemnation

of America’s embassy move to Jerusalem. Since then, the Romanian prime minister has suggested that his own government might move its embassy to Jerusalem. These days, Europe’s far-right is far more hostile to Muslims than Jews, and that Islamophobia often translates into support for Israel. Something similar may be going on with Narendra Modi, who in 2017 became the first Indian prime minister to visit Israel since the state’s foundation. Mr Modi leads the Hindu nationalist BJP, whose supporters are often antagonistic towards Muslims. Some BJP loyalists see Israel’s ferocious response to Palestinian violence as a model for India in its struggle with terrorists based in Pakistan. Technology is Israel’s calling card with China. Wang Qishan, China’s vice-president, visited an Israeli tech fair last October. At a time when American tech companies are getting warier of working with China, Israel is an attractive alternative. A Chinese firm now operates the port of Haifa, which is the main base for the Israeli navy. Mr Netanyahu regards these new relationships as great achievements and dismisses liberal scruples about palling up with the likes of Messrs Duterte, Bolsonaro and Orban. But, even in terms of pure realpolitik, Mr Netanyahu’s diplomacy carries substantial risks for Israel. The most damaging charge made against Israel by its critics is that the Jewish state’s claim to be a beacon of democracy is undermined by its treatment of the Palestinians. By allying with a new generation of populist-nationalists — many of whom have dubious democratic credentials — Israel will further weaken its claim to be a champion of democracy.

Tuesday 02 April 2019

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Live @ the Stock exchange Prices for Securities Traded as of Monday 01 April 2019 Company

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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 231,043.97 6.50 0.78 142 8,904,878 UNITED BANK FOR AFRICA PLC 263,335.54 7.70 0.65 296 62,951,571 687,583.21 21.90 0.46 220 7,718,967 ZENITH BANK PLC 658 79,575,416 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 287,162.34 8.00 -2.44 142 2,673,457 142 2,673,457 800 82,248,873 BUILDING MATERIALS DANGOTE CEMENT PLC 3,254,736.91 191.00 - 84 1,607,438 196,515.11 12.20 - 40 72,547 LAFARGE AFRICA PLC. 124 1,679,985 124 1,679,985 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 347,182.29 590.00 - 1 1 1 1 1 1 925 83,928,859 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 11,300.89 45.20 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 3 9,190 3 9,190 3 9,190 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 3 9,190 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 76,312.80 80.00 - 8 1,027 OKOMU OIL PALM PLC. PRESCO PLC 62,750.00 62.75 - 8 3,198 16 4,225 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,890.00 0.63 - 16 525,670 16 525,670 32 529,895 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 820.66 0.31 - 5 169,845 JOHN HOLT PLC. 202.36 0.52 - 0 0 1,903.99 2.93 - 0 0 S C O A NIG. PLC. TRANSNATIONAL CORPORATION OF NIGERIA PLC 49,184.07 1.21 0.83 67 6,397,510 22,185.98 7.70 -3.75 94 3,064,486 U A C N PLC. 166 9,631,841 166 9,631,841 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 36,300.00 27.50 - 10 28,808 ROADS NIG PLC. 165.00 6.60 - 0 0 10 28,808 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,313.34 1.66 - 5 67,000 5 67,000 15 95,808 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 11,352.77 1.45 - 0 0 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 136,789.41 62.45 - 19 22,920 INTERNATIONAL BREWERIES PLC. 223,492.41 26.00 - 10 108,881 NIGERIAN BREW. PLC. 503,804.83 63.00 -5.62 93 1,712,643 122 1,844,444 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 46,000.00 9.20 -9.80 157 5,192,858 DANGOTE SUGAR REFINERY PLC 170,400.00 14.20 - 29 124,171 FLOUR MILLS NIG. PLC. 73,806.83 18.00 - 24 55,885 HONEYWELL FLOUR MILL PLC 9,516.24 1.20 - 12 157,448 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 3 1,162 NASCON ALLIED INDUSTRIES PLC 52,988.77 20.00 - 27 604,249 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 252 6,135,773 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,782.02 10.00 - 17 21,821 NESTLE NIGERIA PLC. 1,149,351.57 1,450.00 -8.23 32 138,056 49 159,877 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,940.83 3.95 - 19 118,826 19 118,826 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 38,910.68 9.80 - 26 182,894 UNILEVER NIGERIA PLC. 224,055.21 39.00 - 20 57,799 46 240,693 488 8,499,613 BANKING ECOBANK TRANSNATIONAL INCORPORATED 233,956.78 12.75 -3.41 38 17,449,313 FIDELITY BANK PLC 55,052.11 1.90 -7.77 180 17,498,342 GUARANTY TRUST BANK PLC. 1,059,522.45 36.00 -0.14 206 17,323,737 JAIZ BANK PLC 15,321.41 0.52 - 14 921,118 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 69,097.00 2.40 -1.25 51 5,355,215 UNION BANK NIG.PLC. 193,653.01 6.65 - 55 846,134 UNITY BANK PLC 10,169.72 0.87 8.75 16 355,200 WEMA BANK PLC. 27,002.13 0.70 -9.09 97 1,456,628,534 657 1,516,377,593 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,920.45 0.71 - 12 111,597 AXAMANSARD INSURANCE PLC 23,100.00 2.20 - 2 20,010 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 4 25,655 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 -4.76 3 1,574,383 GOLDLINK INSURANCE PLC 2,001.98 0.44 - 3 7,010 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,050.56 0.28 -6.67 15 2,354,160 LAW UNION AND ROCK INS. PLC. 2,191.13 0.51 - 1 10 LINKAGE ASSURANCE PLC 4,400.00 0.55 - 4 43,506 MUTUAL BENEFITS ASSURANCE PLC. 1,600.00 0.20 -9.09 17 4,865,300 NEM INSURANCE PLC 11,722.72 2.22 - 12 219,420 NIGER INSURANCE PLC 1,625.29 0.21 - 7 2,342,939 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 0 0 REGENCY ASSURANCE PLC 1,667.19 0.25 4.17 12 2,295,300 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 5.00 16 3,387,662 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 3 349,552 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 3 5,750 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 10 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 3 200,200 WAPIC INSURANCE PLC 5,353.10 0.40 - 30 384,180 148 18,186,644 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,407.09 1.49 - 1 5,000 1 5,000

MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 0 0 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 2,265.95 0.20 - 1 1,500 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 1 1,500 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,600.00 3.80 - 53 343,453 35,879.37 6.10 - 12 122,094 CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 37,229.10 1.88 1.08 116 9,287,101 1,492.16 0.29 - 6 122,443 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 471,577.46 46.05 0.11 18 2,866,889 17,100.00 2.85 -1.75 47 806,840 UNITED CAPITAL PLC 252 13,548,820 1,059 1,548,119,557 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 959.35 0.27 -10.00 2 126,250 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 2 126,250 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,425.00 4.95 - 2 1,105 12,138.15 10.15 -6.02 41 306,198 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 3,968.04 2.30 - 8 43,661 1,177.48 0.62 - 7 38,150 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 3 120 61 389,234 63 515,484 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 1 10 648.00 6.00 - 0 0 NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC. 381.11 0.77 - 0 0 1 10 PROCESSING SYSTEMS CHAMS PLC 986.17 0.21 5.00 85 47,712,000 11,088.00 2.64 - 2 2,900 E-TRANZACT INTERNATIONAL PLC 87 47,714,900 88 47,714,910 BUILDING MATERIALS BERGER PAINTS PLC 2,622.90 9.05 9.70 27 236,970 26,180.00 37.40 - 7 14,443 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 235,925.84 17.95 -9.80 15 87,620 633.11 0.30 - 3 145,000 FIRST ALUMINIUM NIGERIA PLC MEYER PLC. 313.43 0.59 - 2 21,426 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 1 100 1,279.20 10.40 - 0 0 PREMIER PAINTS PLC. 55 505,559 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,346.51 1.90 2.70 17 804,461 17 804,461 PACKAGING/CONTAINERS BETA GLASS PLC. 32,398.19 64.80 -9.94 5 263,138 GREIF NIGERIA PLC 388.02 9.10 - 0 0 5 263,138 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 77 1,573,158 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 10 1 10 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 50.60 0.23 - 0 0 0 0 1 10 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 5 165,100 5 165,100 INTEGRATED OIL AND GAS SERVICES OANDO PLC 63,400.20 5.10 -9.73 125 4,134,829 125 4,134,829 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 64,185.96 178.00 - 17 4,661 CONOIL PLC 15,960.90 23.00 - 17 22,013 ETERNA PLC. 6,259.89 4.80 - 14 81,946 FORTE OIL PLC. 36,078.73 27.70 - 16 121,600 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 8 39,078 TOTAL NIGERIA PLC. 66,546.28 196.00 - 20 11,877 92 281,175 222 4,581,104 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 1 10 1 10 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 376.43 0.32 -8.57 1 242,124 1 242,124 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 1 100 TRANS-NATIONWIDE EXPRESS PLC. 323.50 0.69 - 0 0 1 100 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 1 10 IKEJA HOTEL PLC 4,282.32 2.06 9.57 16 823,925 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 1 250 TRANSCORP HOTELS PLC 41,042.18 5.40 - 1 192 19 824,377 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 199.58 0.33 - 0 0 LEARN AFRICA PLC 1,026.03 1.33 - 3 53,900 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 785.17 1.82 - 8 160,000 11 213,900 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 878.58 0.53 - 3 73,740 3 73,740 SPECIALTY INTERLINKED TECHNOLOGIES PLC 766.91 3.24 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0

Tuesday 02 April 2019

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LegalPerspectives

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Odunayo Oyasiji

Onnoghen : More constitutional crisis looming if not averted • Suggestion for NJC • Suggestion for NBA • What the Federal Government Should do

ccording to section 231(5) of the 1999 Constitution of Nigeria, the President can only appoint an acting CJN to occupy the position for three months. The only situation where an extension can occur is if the NJC recommends it. The section states “(5) Except on the recommendation of the National Judicial Council, an appointment pursuant to the provisions of subsection (4) of this section shall cease to have effect after the expiration of three months from the date of such appointment, and the President shall not re-appointment a person whose appointment has lapsed.” Within the three months, the president based on the recommendation of the NJC can present the name of the acting CJN for the approval of the senate in order to make him the substantive CJN. The law is clear and there is no lacuna (gap) in this regard. An acting CJN is expected to be in office not more than three months. No provision for extension beyond the three months at the discretion of the President. Will the president be humble enough to approach NJC for the approval of an extension or for Tanko to be recommended by NJC as the substantive CJN? The essence of the above is to lay a foundation for what might happen in the next few months with regards to the present controversy on the Illegality of the suspension of the CJN. Therefore, something needs to be done by all parties concerned (NJC, Federal government and the courts) to avert the looming constitutional crises. The leadership of the senate seems not to be happy with the way Onnoghen was treated as it once instituted an action before the Supreme Court before same was withdrawn. Also, without the way the present upper chamber of the legislative arm of government is constituted, it is not likely that the house will approve the appointment of the Honourable Justice Tanko as the substantive CJN. This is because there are uncertainties as to the party that is the majority in the house. However, the popular believe is that the opposition party (PDP) is the majority. What then happens at this point?-the acting CJN should constitutionally not act beyond three months and the present senate will likely not approve the current acting CJN as the substantive. Please note that the leadership of the senate is in the hands of the opposition that has condemned the action of the President. It must be noted that the posi-

tion of the CJN differs totally from appointments into positions like the Chairman of EFCC. The CJN is not an appointee of the President and cannot stay in such position as acting CJN for as long as the president wishes. He is not Magu who keeps acting as EFCC chairman in the face of the failure or refusal of the National Assembly to confirm his appointment. Looking at the present issue from a moral angle, the acting CJN has no moral reason whatsoever to make himself available as an instrument in the hands of the President to ridicule the judiciary. He definitely knows what is right but fails to abide by it. The reason for the foregoing assertion is the fact that he was part of the 85th meeting of the NJC that was held on March 14, 2018 when decision was taken against Justice Orji of the Abia State Judiciary for allowing himself to be sworn in as the Acting Chief Judge of Abia State without the recommendation of the NJC. This was after the Abia State House of Assembly illegally removed the incumbent Chief Judge- Justice Theresa Uzokwe. While earlier placing Justice Orji on suspension in January 2018, the NJC stated that “the suspension of the Chief Judge of Abia State (Justice Theresa Uzokwe) by the State House of Assembly without a prior recommendation by the National Judicial Council

violates the provisions of the Constitution of the Federal Republic of Nigeria. Consequently, the subsequent act of appointing and swearing-in of Hon. Mr. Justice Obisike Orji as the Acting Chief Judge is invalid for being unconstitutional. Furthermore, the conduct of Hon. Mr. Justice Obisike Orji in presenting himself to be sworn in raises potential questions of misconduct that Council is now looking into. Council therefore resolved to query and suspend the Hon. Mr. Justice Obisike Orji pending the outcome of its investigation.” Also, after investigation was concluded by NJC, the body stated that “Hon. Mr. Justice Obisike Oji was earlier queried by the council for allowing himself to be sworn in as acting Chief Judge, and thereby colluding in, and aiding an unconstitutional process”. Justice Orji was asked to proceed on compulsory retirement while the third most senior judge was asked to take over as the Chief Judge of the state. The Acting CJN is caught in the same web now. I believe the Abia case is a good precedent for NJC to follow in this instant case. Apart from the position above, I am sure he is aware of the various constitutional provisions that deal with the position of the CJN. I am also certain that as someone who has been in the business of interpreting the law of the land

for a long time he understands the position of the constitution on the right way/procedure to remove and also ascend to the position of the CJN. The law is settled on the procedure for removal of judges and that of the CJN and Chief Judges of the various states of the federation. In the Court of Appeal decision in Hon. Justice Hyeladzira Ajita Nganjiwan V Federal Republic of Nigeria (2017) LPELR-43391(CA), the court held that the NJC is the first place to report a judge to. The judge is to be investigated by NJC and necessary recommendation is to be made by NJC. Also, the Supreme Court decided in the case brought by the sacked Chief Judge of Kwara State, Justice Raliat EleluHabeeb that the then Governor of Kwara State (Bukola Saraki) does not have the right or power to singlehandedly remove the CJN of Kwara State without the recommendation of NJC. The court ordered the reinstatement of the CJ. This matter needs to be handled with utmost care. Failure to do so can lead the entire nation into a state of lawlessness as the constitution might end up being rendered a worthless piece of paper by the gladiators. Another issue that definitely needs to be looked into is the basis for the issuance of an order suspending the CJN when the jurisdiction of the CCT to entertain

the matter is being challenged. It is trite law that when the jurisdiction of a court is being challenged, the court ought to determine the issue of jurisdiction first before delving into other things. The foregoing position was affirmed by the Supreme Court in the case of the Supreme Court of Nigeria affirmed this in the case of NDIC V CBN (2002) 7 NWLR (PT.766) 272 AT 292,300 where the court stated that “but first it has to be plain to everyone , not least the court, that the court has jurisdiction to entertain the suit. The court must not give an order in the suit affecting the defendants until the issue of jurisdiction is settled when it has been raised”. The court further stated in the same case that “the matter of jurisdiction is very crucial in any matter before the court that it must be addressed first by the court before proceeding further in the matter”. There is serious need for the proper legal body to mete out the right punishment as we won’t be in the present mess we are as a nation if the CCT had done the right thing. It must be noted that Olisah Agbakoba SAN had called on NBA to disbar the Chairman of CCT. This in my view is a more worthy route to take in correcting the anomaly on ground than asking the lawyers to boycott courts for two days. It will even send a very strong message to all members of the noble profession. The CJN is not untouchable as he doesn’t enjoy immunity. However, his position is well protected by the constitution for the purpose of independence of the judiciary and separation of power. He doesn’t occupy the position at the discretion of Mr President. Therefore, the right procedure must be followed even when he is considered to have erred or violated the law in any way. Finally, the CCT order granting the suspension of the CJN has been challenged at the Court of Appeal while the NJC has given the acting CJN and the suspended CJN 7 working days to react to the petitions against them. It is very important for the Court of Appeal to rescue the judiciary and decide the matter in a way that supports the constitution and the law. It is imperative that NJC too should take a bold decision and put the judiciary on the right path again. Ultimately, it is highly important that the executive arm of government should abide by the dictates of the courts and decisions of NJC so as to avert the looming crises. Note that all the parties concerned must act very fast!

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INSIGHT/INNOVATION

Zainab Ahmed as the reincarnation of Kemi Adeosun

OGHO OKITI

n a series of articles in April 2016, at the start of Nigeria’s economic recession of 2016 / 17, the former finance minister Kemi Adeosun wrote in the papers, “the first thing to note is that there are no quick fixes, but our strategy is clear and the expected outcomes are pretty compelling. Our immediate economic imperative is to provide a Keynesian stimulus to reflate the economy. The 2016 focus is underpinned by a desire to radically reposition Nigeria’s economy.” She went further, “The 2016 budget is being debt funded and the borrowings are targeted at the financing of capital projects to address the infrastructure deficit, create jobs and build the platforms for optimisation of the non-oil economy that will see Nigeria prosper. Our borrowing policy will remain conservative and will see us access the lowest available funds, hence our decision to approach multilateral agencies in the first instance, for budget support at concessional rates as low as 1.5% per annum.” Just last week, following the Federal Executive Council (FEC) meeting, the current minister of Finance, Zainab

Ahmed was quoted as saying, “We intend to fund the 2019 budget through borrowing locally and internationally with a spread of 50: 50. Our focus is on concessionary long term loans”. Swap “multilateral agencies” in Adeosun’s statement for “concessionary” in that of Ahmed and you have the same meaning and intent in relation to Nigeria’s fiscal policy by the government. But pursuing this policy again in 2019 will be tantamount to the repeat of the failure of 2016. Please recall that the Federal budget of 2016 was actually passed into law by the national assembly on March 24 of the year. In that year, and subsequent ones, the pattern that emerged was that the budget was never ready in the first quarter of the year. Indeed, in the last four years, no one, including those in government, is sure what our fiscal year is anymore. This is a story for another day. But the implication I want to draw your attention to is that Adesoun made those statements after the 2016 budgethave been prepared and passed. In other words, she had no clue where it will be funded, except for the intention, until the budget was passed. Meanwhile, as expected by every rational economist, the World Bank and the International Monetary Fund did not provide the concessionary loans because Nigeria did not provide a credible economic policy and programme. Consequently, the budget was not implemented as envisaged and planned, and the following year and since, the government has borrowed from the international debt

markets at varying yields in excess of 7%. Second, just as the 2016 budget was the first by Adeosun as finance minister, the 2019 budget is the first for Ahmed, appointed Minister in charge of that ministry, following Adeosun’s resignation in September 2018. I brought this up to provide context that Ahmad is about to repeat the same mistake made by Adeosun. Except Nigeria provides what the multilateral agencies consider credible economic policy programmes, it would not get a dime from them. The motivation for the government to seek cheap credit is simple. Oil prices are low, the economy is weak, and debt servicing is huge, but without a credible economic programme, they will not listen. The statement also exposes the fiscal rigmarole that the government has provided in the last few years. The government continues to provide large budgetary envelopes without credible revenue plans and basis. In 2016, 2017 and 2018, the government budgeted 6 trillion, 7.3 trillion, and 9.1 trillion, respectively. In all these years, the revenues were always grossly overambitious and unattainable. The motivation is to theoretically maintain that it had not borrowed beyond the 3% deficit as allowed in the Medium Term Expenditure Framework (MTEF). For instance, in the three years, its planned deficits were 2.2, 2.36, and 2 trillion respectively, but actual deficits and addition to debts were higher. Second reason the government provides over ambitious and unattainable revenue

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At this rate, by the end of 2023, this government will leave Nigeria with unsustainable debt, job crisis, and set us back another three decades

expectations is so that it can claim it is spending over 30% on infrastructure. But consecutively, it has not because the revenues have always been over simplistic and short. From the foregoing, two things are clear. One is that the government saw the economic crisis of 2016 as an aggregate demand problem. This suggests that the government needed to spend and expand demand, and for the government to make capital expenditure on infrastructure, which it expects will drive growth and jobs. The other point is that the government continues to limit its fiscal policy to “revenue and spend”. It continues to limit its policies to how to raise revenue and how to spend the revenue. Shikena. But the most potent aspect of fiscal policy available to the government are the policies it can embark on that will drive private sector investments and attract foreign ones across many sectors of the economy. But that is not happening. At this rate, by the end of 2023, this government will leave Nigeria with unsustainable debt, job crisis, and set us back another three decades. Contrary to what Adeosun thought, their strategy was not clear and the expected outcomes certainly not compelling. For the sake of all Nigerians, I do hope that it retraces its steps very quickly and do things differently, as the President suggested recently. I thank you. Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

Restructuring Nigeria: In search of visionary leaders PROPHYLAXIS

AYULI JEMIDE

or as long as I have been old enough to understand what goes on in Nigeria, it has always been clear to me that citizens have often been unhappy with the quality of those who govern us. Nigerians generally feel that majority of candidates our political process throws up for legislative and executive positions are not representative of the respectable Nigerian intelligentsia and 80-90% of professional politicians have no iota of altruism that triggers true service to the people. Admittedly, we have seen some few bright and hardworking elected officers who sometimes seem exceptional. I say “seem” advisedly because we are never sure if they look exceptional because their peers are so dismal. In many cases these “exceptions” cannot handle accolades and end up being pompous tyrants strutting their meagre achievements like one-eyed men in the land of the blind. Putting this tirade succinctly I think the Nigerian electorate simply feel that we live in a country where the least qualified and most inexperienced govern the more qualified and more experienced. As we continue with conversations

about restructuring Nigeria, I think the restructuring should not be limited to resource control but should be extended to include redefining the processes that select candidates and redefining our governance standards. We should try to cure certain mischiefs like the low barriers to entry for elective offices and the general feeling that politics is an avenue for wealth acquisition. These are my token contributions to these conversations: Firstly, I think the constitutional barriers to entry for legislative and executive elective offices are low. Nigeria is too complicated to be ruled by school certificate holders. We must amend the Constitution to insist that people should have a valid qualification from a tertiary institution to qualify for all executive offices and federal legislative offices. I also think that people who want to run for office as governor or president should have a minimum amount of cognate experience and must have been active in some productive endeavor in the 10 years preceding the elections. We don’t want candidates who have exhausted their options in life and see politics as their willynilly escape route. We now know that this is a bad experiment because people get so desperate if they don’t have a mainstay to fall back to should they lose elections. Secondly, the idea of people being professional politicians should be discouraged. Politicking should not be a fulltime job and a pathway to sustenance. Legislators should be re-elected for a maximum of 2 terms like the executive arm. Some senators have been in the senate for as long as we can remember, and their productivity has dwindled with each re-election, but they keep going back be-

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If say 30% of accredited voters indicate that there is a candidate failure, the political parties will have to all go back and offer new candidates

cause being in the senate has become a veritable source of income. On this note, I think the legislators should function on a part time basis. They should be paid basic allowances and a seating fee for every session they attend. They should be recalled by their constituents if they do not attend a minimum number of sessions in a year. If we saved some of the money budgeted for paying full time legislators in the National Assembly,we can apply it to fix our universities. To put this in context, the 2019 budget for the National Assembly is 125 billion naira whilst the budget for education in the 2019 budget is 462 Billion naira. Note that the 125 billion naira for National Assembly has a zero budget for capital expenditure. If we reduced the 125 billion by 50% it can go a long way to improve university education. The third thing I suggest is to have a system that gives the electorate the power to reject candidates presented by political parties if they think the candidates are not worthy of office. We have seen over the years several elections where citizens are not enamoured by all the candidates on the ballot box – either for president, governor or legislators. In such situations, some voters abstain while others rationalize and assume that they have a civic duty to pick the best of the bad candidates. I think political parties would be rigorous in their choice of candidates if the ballot paper has a vote for “candidate failure”.This vote allows a citizen to cast a vote that basically indicates that all the candidates on the ballot party are unacceptable. If say 30% of accredited voters indicate that there is a candidate failure, the political parties will have to all go back and offer new candidates. Maybe

with this system, god fathers,their thugs, relatives and political parties will subject candidates to greater scrutiny and citizens will feel they have an option when the dregs are thrown at us. The fourth suggestion is that our electoral system should allow independent candidacy, even if we start with allowing only independent candidates for legislative offices. Why does anyone necessarily need to belong to a party to offer to serve his constituency in the house of assembly or house of representatives or even the senate? This party structure and its paraphernalia is what discourages many independents from vying for elective offices. Fifthly, must we wait for 4 years to remove an elected officer? Must we depend on the legislators to impeach a governor or the President? Why should we not have a process whereby a certain percentage of the accredited voters from the last elections can signify that they have lost confidence in the governor or president? If 30 million people voted in an election and 2 years later, over 50% of that number decide that the person they elected is a disaster, they should have some independent recourse. These ideas may sound utopian to many, but the point is that we have serious problems which need drastic domesticated solutions and we should all put on our thinking caps and start now to make our voices heard on restructurings that put us in better stead by 2023. Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer. Email: AJ@ayulijemide.org Twitter: @JemideAyuli

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