BusinessDay 01 Aug 2019 by BusinessDay

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news you can trust I **THURSDAY 01 AUGUST 2019 I vol. 19, no 362 I N300

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Dangote refinery: 4 local E&P firms set to supply gas, crude M

10 Y 0.04

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NGUS jul 29 2020 363.53

Nigerian seed companies close shop as FG largesse fades

… Active firms down 87% JOSEPHINE OKOJIE

As COOEC, China Harbor begin laying 48-inch underwater pipelines

Dangote seeks partnership with NNPC

any seed companies in Nigeria cannot compete in the local market, leading to a fall in the current number of players from 314 to 40, signifying an 87

Continues on page 39

DIPO OLADEHINDE, Lagos & HARRISON EDEH, Abuja

our indigenous Exploration and Production and one International Oil Company (IOC) are expected to supply gas and crude to the much-awaited $12 billion Dangote Refinery. Industry sources expect that at a stage in the operation of the Dangote refinery, local players like Lekoil, Amni International Petroleum, Sunlink Petroleum and First Exploration and Development Company would play a key

Continues on page 39

Inside Fed cuts rates for first time since financial crisis P. A6

L-R: Maxwell Nzekwe, general manager, EventsTracer; Adewunmi Obakoya, director, EventsTracer; Frank Aigbogun, publisher/CEO, BusinessDay Media; Guy Murray-Bruce, group vice president, Silverbird Group; Maureen Obiabumuo, head, new business, Silverbird Group; Alozie Uzoukwu, group head, entertainment, Silverbird Group, and Chinke Ik, on-air-personality, Rythm FM, at the launch of Small Business Events Circuits in Lagos, Pic by David Apara yesterday.

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Two feared dead as BusinessDay Benue correspondent survives four gunshots James Kwen, Abuja

nidentified gunmen last Sunday shot dead yet to be identified two persons, and BusinessDay correspondent for Benue State, Benjamin Agesan, survived four gunshots while in transit from Katsina-Ala to Makurdi. The incident took place along Ugbema - Abwa road in Buruku Local Government, when an awaiting Toyota Cricket, popularly known as “Duck Nyash,” trail the travellers from neighbouring Katsina-Ala town and opened fire on them. When the driver noticed the danger he refused to stop, even when the car behind him tried to stop them. BusinessDay gathered that one of the victims died on the spot while the other died later, even as Agesan escaped with four bullet wounds in his back. A relative of the BusinessDay correspondent, who visited him where he is receiving treatment in a hospital, quoted him as saying: “I went to Katsina-Ala my home town. When

I was ready to come back, I boarded a public bus (Pleasure Travels), paid for a ticket to Makurdi, only to discover that some of my friends were also coming to Makurdi with their private car. I decided to sale my ticket and joined them.” Agesan is said to have narrated further that the vehicle he later joined also conveyed local task collectors who were carrying huge sums and were being trailed by the gunmen without their knowledge. “Shortly after take-off, the gunmen trailed the vehicle to about 5km and shot sporadically at it and in the process punctured it tyres, which caused it to summersault into the bush.” He said the robbers ransacked the entire vehicle killing two occupants while monies said to be in millions were also carted away by the gunmen leaving him in the pool of his blood. Efforts to get police confirmation on the matter could not yield any result at the time of filling this report.

Group canvasses increase in community pharmacy services nationwide OWEDE AGBAJILEKE, Abuja

pharmaceutical inventory management subscription service, Shelf Life, has called for increase in community pharmacy across the country. This, it said, will checkmate the distribution of fake drugs at the community level. In a statement signed by the head pharmacist, Shelf Life Nigeria, Suleman Sule, the group stressed that community pharmacy remained critical to accessible healthcare in Nigeria. According to Sule, over 100 pharmacies registered in its network have achieved over 96 percent availability on over 500 life-saving medicines and essential products. Recall that at the 91st annual conference of the Pharmaceutical Society of Nigeria (PSN), pharmacists had decried the dearth of community pharmacists in the country, calling for

a deliberate action to grow the number of registered community pharmacists. They said Nigeria needed 50,000 registered community pharmacists in the next five years. Sule pointed out that the presence of community pharmacy would not only increase patient safety but also improve clinical decision-making, service efficiency as well as improved quality of care. The group has presence in other states of the federation, with head office in Abuja, he said. Beyond Nigeria, it also extends its services to other nations in the African continent, including Kenya. He said: “There are over 100,000 community pharmacies and drug shops in Nigeria, compared to approximately 26,000 public health facilities. This makes community pharmac y a critical component of accessible healthcare for Nigerians.”

Wukari Varsity students vacate premises amid tight security Nathaniel Gbaoron, Jalingo

tudents of the Federal University Wukari in Taraba State have on Wednesday, vacated the school premises amid tight security following the closure of the institution by the management. The management of the institution earlier on Wednesday announced the closure of the school following alleged abduction and killing of some Tiv staff and students of the institution. Announcement of the closure was contained in a statement by the Registrar, Magaji Gangumi in Wukari, which was made available to BusinessDay. When BusinessDay correspondent visited the institution located along Wukari Jalingo highway, trailers belonging to Dangote Cement, Benue Links buses and private cars were seen in their numbers conveying students to their states while others were standing

Kwara to partner AfDB on infrastructure development, women empowerment SIKIRAT SHEHU, Ilorin

wara State government says it has opened talks with the African Development Bank (AfDB) on various areas of partnership, including road construction, small and medium scale enterprises with focus on women empowerment, energy and agroprocessing. The proposed partnership is the outcome of a meeting Governor Abdulrahman Abdulrazaq held with the AfDB team in Abuja on Monday during which he spelt out the priorities of his new administration and sought the buy-in of the development body. According to a statement on Wednesday by Abdulrazaq’s spokesman, Rafiu Ajakaye, the meeting was attended by AfDB country director, Ebrimal Faal, and other top officials of the agency. The statement said the governor identified the priority areas to include education, healthcare, infrastructure, agriculture, women and youth empowerment, and entrepreneurship and what steps he had taken on them like recent multimillion naira counterpart

funds he recently released to access various development funds. It quoted AbdulRazaq as saying that the administration planned to develop agribusiness and promote agro-processing with special focus on commodities like sugarcane, rice and cashew, among others. The governor mentioned some investments in these areas to include the $350 million sugar refinery being constructed by the BUA Group and the 16,000 hectares of sugarcane plantation owned by the Dangote Group, according to the statement. “Consequently, Kwara is eyeing a partnership with the AfDB for the construction of Kosubosu-Lafiagi road. There will also be further talks on how Kwara can benefit from AfDB’s initiatives like the $50 million facility to support SMEs and women-owned businesses, $200 million project for National Electrification and transmission lines; and AfDB agro-industrial development through its Special Agro -Industrial Processing Zone being pursued with some Chinese investors, among others,” the statement said.

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stranded. The university authorities ordered the students to vacate the campus by noon Wednesday. Some of the students who spoke with BusinessDay correspondent on condition of anonymity expressed disappointment over the alleged killing of both the Tiv staff and students. They said the evil act had interrupted the academic activities of the institution, and called on the government to bring the situation under control to avert anarchy. Tiv students had earlier on Tuesday protested the alleged killing of their members by the Jukuns, while the Jukun students also staged a counter protest. The situation forced the management of the institution to shut the university. The Jukun/Tiv crisis, which started in April 1, 2019, in Kente village has lingered on till the Tuesday incident.

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The consolidated debts status of the 36 states ADEMOLA ASUNLOYE

state became the second most indebted state after Lagos. However, Lagos had remained the most indebted state within the period under review accumulating N967.73 billion debts. In 2018, the top five most indebted states are: Lagos with N382.18 billion; Rivers with N112.78 billion; Ogun, N84.55 billion; Delta, N58.44 billion; Kano, N44.11 billion; Kaduna N29.45 billion and Edo with a total debt of N28.43 billion. On the other hand, the five least indebted states are: Adamawa, N6.20billion; Ebonyi, N6.14 billion; Taraba N5.97 billion; Kebbi, N4.88billion while Yobe state seats at the base with a total debt of N4.38billion in 2018. From all the states excluding the Federal Capital Territory (FCT), the indebtedness of 13 states are in the region less ten hundred billion, 21 states have less than a hundred billion each while only Lagos and Rivers owed debts the most: thus by far showed a high level of accumulated debts. Most of the states’ debts have exceed-

ed 50 per cent of their annual revenues while salaries of public sector workers are unpaid in some states. The Fiscal Responsibility Commission (FRC) report indicated that states borrowing consistently violated the Debt Management Framework set by the Debt Management Office (DMO), as well as the Investment and Securities Act 2007 which stated that the debt status of each state should not exceed 50 per cent of the statutory revenue (Internally Generated Revenue and Federal Account Allocation Committee (IGR+FAAC)) in the previous 12 months. The states with the highest Debt to Revenue (DTR) ratios exceeding 200 per cent are: Osun (537.32 per cent), Cross River (414.36 per cent), Ekiti (325.85 per cent), Adamawa (214.76 per cent), and Bauchi (209.45 per cent). Twenty states have DTR ratios that exceed 100 per cent where Lagos tops with a DTR of 193.08 per cent. The remaining 11 states have a DTR greater than 50 per cent but less than 100 per cent. The five least states with DTR ratios are: Ondo (82.27 per cent), Katsina (72.74

12734BDN

tates in Nigeria have been on a borrowing binge for decades. While states use the vast majority of debts to finance infrastructures rather than immediate consumption, the federal government issues bonds and finances current operating programs through debt finance. There is a significant and fundamental difference in sub-national debts. Debt in itself is not bad but it must be managed efficiently to address critical sectors that can drive economic expansion at the state level. However, accumulated debts, a consequent of poor management of loans if not serviced will lead to a precarious fiscal health of states—debt crisis. Nigeria’s total states’ debt accumulatedN4.98 trillionby the end of 2018. Prior to this time, the states’ total debts had increased in three consecutive years from N3.03 trillion in 2015 by 32.92 per cent, 11.79 per cent and 10.65 per cent to N4.02 trillion in 2016; N4.50 trillion in 2017 and N4.98 trillion in 2018 respectively. Report released by the National Bureau of Statistics (NBS) shows that a major challenge confronting all the states is the management of domestic and foreign debts. Similarly, Ayodele Teriba, the chief executive officer of the Economic Associates mentioned that the high debt of sub-nationals reflected a major problem with domestic liquidity; what he called a “liquidity glut”: this he said in a seminar on the Nigerian Economic outlook 2019. In no particular order, the five most indebted states in Nigeria since 2015 to 2018 are: Lagos, Delta, Rivers, Akwa Ibom and Cross River. Particular, Lagos and Delta states had been the highest and second highest most indebted states respectively within the period under review except in 2018 where Rivers

per cent), Sokoto (69.15 per cent), Jigawa (64.65 per cent) and Yobe with the least DTR of 63.23 per cent. When the data sourced from the National Bureau of Statistics (NBS) was further analysed, the results revealed that all the states exceeded a healthy DTR of 50 per cent. Hence, there is need for each of these states to work towards bringing their respective consolidated debts within the 50 per cent threshold of their total revenue in order to guarantee general public debt sustainability in the country and also to avoid debt crisis. Regional distribution of debts The regional distribution of debts aggregated by states in the chart showed the South West region as the most indebted region in the country. Generally, the highest amount of debts was recorded in 2018 with N1.6 trillion in the South West region; N1.3 trillion in the South-South, North West and North Central with N0.6 trillion each; while the states in the North East and South East are the least indebted regions with N0.5 trillion each. Year on year from 2015, the debt gaps between the regions are: South West, N0.4 trillion from 2015 to 2016; N0.1 trillion from 2016 to 2017 and N0.1 trillion from 2017 to 2018; South-South, N0.3 trillion, -N0.2 trillion, N0.2 trillion; Northwest, -N0.1 trillion, N0.2 trillion, N0.1 trillion; North Central, N0.1 trillion each within the period and North East remained unchanged within the first period but increased by N0.1 trillion each in the successive periods. On the other hand, the South East region which had remained the least indebted region only increased by N0.1 trillion each from 2016 to 2017, and 2017 to 2018. The debts across the regions have increased because little or no efforts are put in by the states to clear them. Hence, there is need for a radical overhaul of the structure of governance with regards to how debts are utilised in states across the federation.

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The imported potato chips and Nigeria’s local production complex

David Hundeyin

few days ago, I came across a viral social media post in the aftermath of the CBN’s ban on forex issuance for milk importation. The poster uploaded a photo of a bag of frozen potato chips he saw at a supermarket which apparently was imported from the Netherlands. The fact that something as objectively easy to make as potato chips was being imported into Nigeria instead of being produced locally was a source of severe angst to the poster and a large number of commenters on his post. I raised an objection to the use of emotional rhetoric to present the issue in a distorted light. In my view, what the poster should in fact have ascertained was how much it cost to produce frozen fries in the Netherlands and ship them to Nigeria, as against how much it would cost to produce them in Nigeria. It quickly became apparent that not many responders were particularly interested in the cold, hard mathematics of it all. The simple and repeated message was: “Even if it does not make economic sense to produce it in Nigeria, we should do so anyway just so that we do not import it.” I quickly realised that this was not an economic conversation but a political one. At a time when government spokespersons and institutions have made withering references to “seedless grapes” and “Imperial arrogance” when decrying the alleged ills of importing over local production, t is maybe not surprising that many have fallen for the government’s Jedi mind trick. To move forward in the right direc-

tion, we now have to examine this idea at an elemental level. Is Nigeria’s economic malaise actually caused by importing over producing? Is importing actually costing Nigeria what the government claims it is? If not, what is actually the matter with Nigeria’s current business model? Imports Bad, Exports Good: An Economically Illiterate Idea In my column last week, I mentioned that a significant amount of modern African economic thought is still influenced by the Kwame Nkrumah’s Sovietinfluenced ideas. One of these ideas is the outdated notion that a “strong” nation must “produce” everything it consumes and view importation of any kind as somewhere between an irritation and full-on economic sabotage. The Soviets obviously ran a closed, centrallyplanned economy, so it is not hard to see where their vision of complete self sufficiency came from. Nigeria in contrast, does not run a closed economy or anything close to it, and in any case, the cold war has been over for 30 odd years. Capitalism vs. Communism, trade vs. protectionism – these are not serious arguments in the year 2019. They have been comprehensively won and lost for decades. We have no business trying to resurrect a dead argument either out of economic illiteracy or in service to state-backed capitalists flying patriotism kites when all they are really after is competitionfree access to a captive market. For all of our self-flagellation on the subject of imports versus exports, Nigeria is actually still a net exporter. With exports totaling about $44 billion and imports coming to about $23 billion in 2018, Nigeria has a balance of trade surplus. These figures plainly cut through the wall of fact-free, emotional noise that surrounds this topic. This country’s primary economic inefficiency is not import dependency. It is that the cost of production and doing business in Nigeria is insanely high. It has been discovered for example,

that it costs less to transport a shipping container from China to Lagos than to move the same container from Tin Can Island Port to the Trade Fair Complex in Ojo – a journey of barely 19 km within the same city. Nigeria’s well-documented power issues, sloth-paced bureaucracy, regulatory hostility and multiple taxation are much bigger impediments to production than the import-greedy, Nigerian industry-destroying, marketflooding, neo-colonialist/unpatriotic national bogeyman that even the CBN has started to promote of late. There is no bogeyman involved in a vast conspiracy to keep Nigeria poor by “flooding” its impoverished market with imported items that the majority of people cannot even afford. Out here in the real world, countries simply play to their economic strengths by producing and exporting what they are best positioned to do, while importing what they are not best placed to produce for themselves. In other words, as long as Nigeria does not have a prolonged balance of trade deficit, there is absolutely no need to stop importing frozen fries from Holland if making them there is still more economical. Stop Majoring in the Minor – The Singaporean Example The Asian island-State of Singapore offers the perfect case in point to explain how this works. Singapore imports practically everything it consumed in terms of food, fuel, construction materials and anything else you can imagine. It is slightly smaller than the Lekki Peninsula, so space for activities like agriculture is extremely limited. In 2018, Singapore imported a total of over $370 billion worth of goods. According to the economic theory of #BuyNaijatoGrowTheNaira which the CBN now seems to subscribe to, the Singaporean dollar must be in free-fall, because so much of it is dedicated to buying forex for imports worth about 16 times Nigeria’s total annual imports. In reality, Singapore also exported roughly $420 billion worth of goods

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For all of our selfflagellation on the subject of imports versus exports, Nigeria is actually still a net exporter. With exports totaling about $44 billion and imports coming to about $23 billion in 2018, Nigeria has a balance of trade surplus

and services in 2018, giving it a trade surplus of about $50 billion. The city’s biggest exports are electrical machinery and equipment, computers and refined petroleum products with 31 percent, 14 percent and 13 percent export share respectively. Notice that dairy, meat and processed food are not on its list of big exports. In fact it hardly produces any of these things at all, even for local consumption. It just imports them and exports what it is good at producing. This is called Comparative Advantage. Singapore’s economic planners did not get lost in an ‘Nkrumahnomics’ vision of their tiny city state becoming a major global power by being a jack of all trades, doing everything from space exploration to nuclear power as Nigeria pretends to do. Unlike Nigeria which harbors ambitions of someday producing and exporting everything under the sun because “we are a blessed country that has everything,” Lee Kuan Yew and his team set out a realistic and achievable business model for Singapore. The island has a strategic Southeast Asian location which gives it a key advantage in terms of positioning along major Chinese shipping routes. Their strategy was simply to exploit this location. One of the key moves was to construct oil refineries on the Singaporean coast to take advantage of oil tanker traffic in the South China Sea. With refined petroleum accounting for 13 percent of its exports in a country that has no crude oil, it is obvious that this strategy has been successful. What they figured out was that it does not matter where what they consume comes from. What does matter is how productive they are, and the way to become productive is to explore their comparative advantage. Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng/ David Hundeyin is a writer, travel addict and journalist majoring in politics, tech and finance. He tweets @DavidHundeyin.

The triple nexus: Why is Philippines targeted

ecently, the UN Human Rights Council accepted a resolution to initiate a “comprehensive” review of the Philippine drug war. The resolution passed narrowly (18 to 14, with 5 abstentions). Yet, it authorized the UN human rights chief Michelle Bachelet to examine evidence of “thousands of deaths at the hands of the police.” Why has the tiny Iceland in the Atlantic been pushing a resolution in Southeast Asia? Well, that is a net effect of the triple nexus. The human rights nexus (read: Soros) Actually, Iceland joined the Human Rights Council only in mid-2018, filling the seat vacated by the United States, which withdrew from the body. The key role belonged to Iceland’s permanent UN representative Bergdís Ellertsdóttir who is better known for security issues, NATO, EU security, bilateral US relations, international trade and security. She won’t stay in the Council; she will become Iceland’s US ambassador. US is vital to Iceland, which joined NATO already in 1949, although amid great domestic opposition. Two years later, a defense agreement was signed with the US and US troops stayed in Iceland until 2006. From Iceland, the mantle of the Philippine drugs review will move to Michelle Bachelet, a veteran Chilean politician. Her ratings plunged during her second Chilean presidency in the 2010s when she was linked with the land-purchase debacle by her son and daughter-in-law. Like her predecessor, former UN Commissioner Zeid Raad Al Hussein, a vocal critique of the Duterte administration, Bachelet supports many

causes funded by George Soros and has been applauded by the billionaire investor’s Open Society Foundations. But not all of these causes are as progressive. Despite Soros’s stated support of all kind of transparency initiatives, in 2016 Panama Papers revealed his deep money ties to secretive weapons and intel investment firm Carlyle Group, alongside members of Saudi Arabian Bin Laden family, according to Fox News. The most recent Michelet debacle involves her Venezuela report. Despite appeals by an array of victims of right-wing violence, Michelet ignored them, along with the devastating impact of US sanctions and regime-change efforts since 2015. As a result, critics, including Jeffry Sachs and Mark Weisbrot argue that her report may result in thousands of new premature civilian deaths. The democracy-promotion nexus (read: Albright) Reportedly, Amal Clooney will lead a team of international lawyers representing Maria Ressa, Rappler’s CEO who faces numerous court cases and investigations. The Clooneys threw their support behind Ressa during her US visit in May. Since the 2000s, both Clooneys have been active in Democratic causes. In 2010, George Clooney was nominated for life membership in the Council on Foreign Relations, US bipartisan think-tank promoting democracy. After his “philanthropic missions” in Africa, he was linked in the early 2010s with Luis Moreno Ocampo, former chief prosecutor of the International Criminal Court (which enjoys Soros funding and has also targeted the Duterte administration). In a balanced analysis, European Investigative

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Collaborations have concluded that the ICC, Clooney, Omidyar may actually have “interfered in the pursuit of global justice.” In turn, both Clooneys and Ocampo are linked with Madeleine Albright, former US Secretary of State who has often denounced Ressa’s arrests. Albright has a vital role in US democracy promotion. When the National Endowment for Democracy (NED) was insulated from the CIA in the early 1980s, it also led to the establishment of subsidiaries, such as the National Democratic Institute, which Albright chairs. NDI has participated in regime change efforts in Pinochet’s Chile and the Nicaraguan Revolution since the 1980s. It’s also good business. Albright chairs her Albright Stonebridge Group (ASB), a “global business strategy” firm, and the affiliated Albright Capital Management, an “emerging markets investment firm.” Through NDI/NED, one can shape world events in poorer economies; through ASB/ ACM, one can cash on the consequent changes. The data-tracking nexus (read: Omidyar) In addition to Clooneys and Soros, Ocampo has been linked with Pierre Omidyar, eBay’s founder and owner, and Rappler’s billionaire funder. The official version about Omidyar’s riches is that he created eBay for his then-fiancee as an online marketplace for her to improve a collection of Pez candy dispensers, as Time once reported (the magazine Albright has used to defend Ressa). According to Yasha Levine’s Surveillance Valley (2018), the story is a bit different. eBay grew after it created an internal police and intelligence agency of former FBI agents in 1999 to spy on eBay users and track down fraud. They “worked closely with

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Dan Steinbock intelligence and law enforcement agencies in every country where it operated — including the United States, Canada, Brazil, Mexico, Malaysia, India, Russia, Czech Republic and Poland.” In the process, eBay handed over user data to the NSA and FBI, without requiring subpoenas or court orders. It all paid off royally. Today eBay’s annual revenue is close to $11 billion and its total assets are estimated at more than $25 billion. Omidyar made his money through daily real-time information on media consumers, a slate of connections to national security, and a media empire that protects him from critical scrutiny, while profiling him as a “progressive philanthropist.”

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Dr. Dan Steinbock is the founder of Difference Group and has served at the India, China and America Institute (US), Shanghai Institute for International Studies (China) and the EU Center (Singapore). For more, see http://www.differencegroup.net/

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Public service and the implementation of ‘next level’ agenda Tunji Olaopa

t the June 12 inauguration ceremony to mark the commencement of his second term administration, President Muhammadu Buhari made a significant governance promise to the effect that his government would lift 100 million Nigerians out of poverty in the next four years. As far as promises go, this is a significant one. And it is fundamental to the present circumstance of the Nigerian state because it captures one of the major dimensions of the Nigerian predicament, aside unemployment and security. The President’s statement therefore puts into proper perspective the deep relationship between poverty and unemployment to the extent that intervening in the dynamics of unemployment implies a simultaneous alleviationof poverty. The idea of the “Next Level” is also a significant political slogan that implies moving up the governance reflection on how the government can impact the lives of Nigerians more than the first term of this administration. But most significant, this governance promise alludes to the ‘how’ and the implementation challenges ingrained in deliveringon specific goals and objectives based on

measurable targets through a recalibrated system and strategic reflection. The crucial issue then is that of how to move from governance promise to the timely delivery on the governance targets that would bring the “Next Level” agenda alive in the lives of Nigerians. Since the government’s governance agenda is a time-bound one, then it is most logical to ask: What type of changes can be realistically achieved in the next 4 years that will bring the President’s promise to the point of an efficient service delivered effectively to Nigerians? Asking this question immediately sensitizes us to the need, in governance, to explore the junctures at which government policies will articulate and deliver on the citizens’ expectations and aspirations for a good life. Putting the delivery time for the President’s promise within the space of four years helps us to further transform the question into smaller but fundamental queries: How many jobs could be created on an annual basis between now and 2022? How and what institutions will deliver these jobs? What governmental procedures and processes will hamper the delivery of these jobs? How many young people will need to be empowered with skills and resources on an annual basis and at what cost? What does governance cost in real terms in Nigeria? What about corruption especially at the bureaucratic level? These broad questions can equally be made more specific: How can the average of nine and half hours it takes for a patient in public hospitals to see a doctor be reduced while they have better access to affordable drugs? How can the time wasted in clearing goods at the port, or of applying for business

registration, be reduced considerably to facilitate economic growth? How can we deliver more concretely on food security in ways that undermine poverty? What about determining the efficiency of power supply? How can government guaranty safe and secure environment, and the security of life and properties? How can we do more to enable better access to internet and digital connectivity to expand job available to young ones? Achieving governance targets and development objectives are the functions of moving from policy designs (founded on such agenda as the Next Level and the promise of lifting 100 million Nigerians out of poverty) to policy intelligence and implementation. Thus, for the present administration to deliver on its economic and development agenda, there are basically just two issues to be worried about. The first critical issue is the consideration of what needs to urgently change in the way the business of government is managed in a manner that will enable the government to facilitate and consolidate its achievements in the last 4 years as the framework for managing the dynamics of the next level agenda. This thought flows from the fact that we cannot expect any significant transformation if we keep doing things the same way that has refused to yield any worthwhile results in the past. At the core of this government business is the public service whose fundamental objective is to facilitate efficient service delivery of government’s policies to Nigerians. The question is: How does the public service transact its business? What administrative model does it use? The public service operates structurally through the ministries, de-

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The crucial issue then is that of how to move from governance promise to the timely delivery on the governance targets that would bring the “Next Level” agenda alive in the lives of Nigerians

partments and agencies (MDAs). The MDAs mediate between the government and the public service as the engine room for delivering on the targets of governance, like the measurable one of lifting 100 million Nigerians out of poverty in the life time of this administration. And this leads us to the second significant issue this administration needs to worry about. This is: Can an MDA whose performance and productivity capacity is seriously constrained by low capacity and capability readiness, poor incentives, low policy intelligence, etc. deliver on the objective of democratic service delivery of that magnitude within four years? These issues assume a troubling dimension given that an average MDA in Nigeria is crippled by the capacity, performance, policy and process gaps. On the average, an MDA in Nigeria is undermined by the following elements of dysfunction: (a) Input process-oriented business model; (b) Skills and competency gaps; (c) Lack of clarity on actions required to execute national plan; (d) Poor alignment between national plans, sectoral activities and departmental/unit programmes; (e) Unclear accountabilities for execution; (f ) Inadequate performance monitoring and reporting; (g) Organizational silos and culture blocking of execution; and (i) Undefined rewards and sanctions. Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng Prof. Tunji Olaopa, retired Federal Permanent Secretary & Professor of Public Administration. tolaopa2003@gmail.com, tolaopa@isgpp.com. ng

Getting recruitment, selection and placement right

ecruitment and selection costs time and money. It costs a lot of money especially when it is outsourced to recruitment agencies. There are lots of recruitment agencies out there, some are exceptional in the discharge of their duties while others are not. This can also be said of Human Resource Departments of organizations that carry out their recruitment and selection exercises by themselves. I strongly believe that the bar can be raised to effectively justify the amounts of money and time spent on recruitment and selection. Recruitment, selection and placement are strategic activities aimed at staffing any organization with people with the right blend of knowledge, skills and abilities (KSAs) that are instrumental to the achievement of the objectives of the organization. Other than times when organizations have to headhunt, it is important to recruit rightly (internally or externally) by tactically attracting a large pool and probably the best crop of applicants. Recruiting internally (before throwing the recruitment net in the public domain) is very essential because it communicates the importance that organizations place on the career advancement of their staff. If they are eligible and come highly recommended, give them the chance. This will boost their commitment and ultimately strengthen employee retention. If no staff is eligible to fill the vacant role(s), make the job opening public. It is important that recruitment adverts be balanced and detailed enough to enable applicants make informed and wise decisions. Well, I am not oblivious to the fact that some ineligible applicants send in their applications despite clearly spelt out criteria. As regards recruitment adverts that are balanced,

it is crucial I mention an aspect of recruitment that is usually overlooked. This aspect is called realistic job preview (RJP). Michael Aamodt in his book titled ‘Industrial/Organizational Psychology: An Applied Approach’ defines a realistic job preview as ‘… giving an applicant an honest assessment of a job’. He further mentioned a variant of realistic job preview called expectation-lowering procedure (ELP) which ‘…lowers an applicant’s expectation about work and expectations in general’. These approaches might be considered naive because of the common practice of ‘positive positioning and presentation’. But have you ever thought about what disillusionment does to a staff -- its effect on morale and work performance? The idea behind RJPs and ELPs is to ensure that expectations are effectively managed and there are no negative surprises that trigger counterproductive behaviours and perhaps, turnover and/or attrition. However, it is important to mention that discretion is key -- reveal as much as is necessary for applicants to make balanced analyses and informed decisions. When the application window closes, all applications should be screened and the qualified ones should be invited for the selection exercise(s). Those who did not measure up should also be given feedback -- the feedback should be courteous and encouraging. Be humane -- show some empathy because job hunting could be exhausting and demoralizing. Let us shift focus to selection and placement. Central to selection are concepts called predictor and criterion. A good selection exercise takes into consideration the link between selection tests (predictors) and performance on the job (criterion). Also, a good selection test (employment test) should not only discriminate (i.e. dif-

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ferentiate) among test takers, it should predict (with high level of confidence) performance of test takers on the job if employed. It is paramount to move away from the basic practice of mindless lifting and utilization of only test questions from GMAT and/or GRE study guides etc. and have robust test batteries (a combination of two or more selection instruments) that cover a large scope of the job -- we need to assess cognitive abilities, personalities, values, interests etc. A comprehensive job profile should guide the choice of specific tests to be bought or constructed. The use of a solid test battery not only increases the chances of making sound predictions, it also enhances the conduct of a proper placement exercise. Unfortunately, selection tests used by some organizations fail to capture personality attributes, interests etc of applicants which have great implications for performance on the job. Interestingly, these aspects (personality, interests, values etc which are not garments that can be worn or taken off at will) have influence on human activities and sadly, they are somewhat permanent. Lest I forget, there are techniques involved in the selection of applicants that help strengthen the process and these can be adopted while using test batteries. I would be remiss if I fail to specifically address job interviews in this piece. A job interview is one out of many selection instruments and by far the most common. Sometimes, it is the only utilized selection instrument. As regards this selection instrument, it is pertinent to ask some questions: how standardized are those questions? How bias-free are the questions? How practical are they? How do you prevent fatigue and emotions from impairing assessments? It is interesting to note that despite the

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Jude Adigwe use of accompanying rating scales, interviews are still subjective. At best they should be used in combination with other test instruments and interviewers must strive to dispense with sentiments during interview sessions. At the end of the selection exercise, again, all who partook in the exercise (the successful and unsuccessful) should be given feedback. This is basic but it creates positive impressions about organizations in the minds of applicants. Placement is simply about assigning successful candidates to the vacant positions in the organization. To ensure optimal performance, individuals should be assigned to positions that align with their skill mix. Putting square pegs in round holes spells chaos. It is crucial to effectively manage recruitment, selection and placement exercises because they can guarantee meaningful engagement at work, job satisfaction and minimization of training cost owing to poor performance (that is a direct fallout of poor selection and placement). Keep in mind that this article barely scratched the surface because there is more to the topic. Adigwe is a certified Human Resource Management (HRM) professional and an Industrial-Organizational Psychologist.

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Editorial Publisher/CEO

Frank Aigbogun editor Patrick Atuanya DEPUTY EDITORS John Osadolor, Abuja NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua ASSIST. SUBSCRIPTIONS MANAGER Florence Kadiri GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu HEAD, HUMAN RESOURCES Adeola Obisesan

Can PMBs afford another recapitalization round?

hen recently the Central Bank of Nigeria (CBN) governor, Godwin Emefiele, laid out his five-year policy thrust that included recapitalising the banking industry to enable the banks maintain higher level of capital as well as liquid assets, it triggered apprehension that the policy might cascade to the country’s fledgling mortgage industry. The subdued yet persisting anxiety, especially among the primary mortgage banks operators, is not misplaced given their recent history and experience with recapitalization. Again, the mortgage industry in the country has disquieting statistics enough to compel conclusion that the problem of the industry goes beyond recapitalization. At the moment, the capital base of the primary mortgage banks (PMBs) stands at N5 billion for operators with national licence and N2.5billion for those with regional licence. The capital base was raised from N100 million following an earlier recapitalization and consolidation that also reduced the number of PMBs to 34, down from over 80. Ten of the 34 are national while the rest are regional operators Available records also show that the size of the

mortgage market as at 2010 was N284 billion and in 2012, it was N348.1 billion. In 2016, the industry was valued at N518.76 billion. In spite of this, only about 5 percent of the country’s housing stock estimated at 13.7million units is in formal mortgage. Another worrisome statistics on this industry shows that for the whole period spanning 1960 to 2009, the industry generated only 100,000 transactions, and 181,519 transactions from 2010 to 2016. Worse still, the contribution of mortgage finance to Gross Domestic Product (GDP) in the country is less than one percent. Like other close watchers of this industry, we are worried about these statistics. We are all the more worried that despite the recapitalization and the recent N18 billion refinancing of some PMBs by the Nigeria mortgage refinance company (NMRC), the industry’s impact on the housing sector remains to be seen. It is believed that the inability of the industry to impact positively on the housing sector in spite of improved liquidity means there are fundamental problems that need to be tackled before anybody considers another round of recapitalization for the struggling PMBs. Nigeria has a staggering housing deficit that is over 20 million units. The cause of the gap is traceable to identified

problems in the mortgage industry which, in turn, are the causes of the slow growth which the industry has suffered over the years. Mortgage in the country lacks clarity. It is inaccessible and also unaffordable. When Nigerians who actually need mortgage to buy or build houses approach the PMBs for loans, they are always asked to provide things they don’t have, meaning that mortgage is not accessible for those that actually need it. Lack of clarity in the mortgage industry means there is no unified system and this, to us, is a major problem. As it is today, there is nowhere the government has published a mortgage rate which the mortgage banks have to use or a mortgage standard or process which the banks have to fit into. It is not hard to see, therefore, that there is no clarity in the industry and, if there is any such thing, as both regulator and operators are wont to say, it is not yet publicised and so people don’t know and, if people don’t know, it means such a process does not exist. Affordability which has to do with interest rate on mortgage loan stands tall between the borrower and the loan. Many Nigerians hold the view, which we share, that there is no mortgage in Nigeria because it is difficult, most times, to distinguish between commercial from mortgage loans.

Added to this, mortgage loans in Nigeria are usually short term as against long term in other jurisdictions. This, in our view, is a major problem because housing development, for instance, is a long term project and it is not viable nor does it make economic sense to take a short term loan with double digit interest rate for a long-term project. Similarly, it is not viable to take long term loan, where available, with double digit interest rate on low income which most loan seekers have. For these and more, we reason that the problem of the mortgage industry in Nigeria today does not consist in another round of recapitalization or increased liquidity as experience and available statistics have shown, but in creating the needed environment that will enable growth of the industry. The industry has to improve. The operators have to be less opaque while property developers have to be encouraged to build mortgage-viable and ready properties. Interest rate on mortgage loans have to come down to single digit and made available. Indeed, we want a situation where the whole process of securing mortgage has to be made clearer and more transparent, and mortgage has to be available on the retail high street such that every time a loan seeker goes out looking for it, he sees one.

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The allegory of Rochas Okorocha 2 The Public Sphere

CHIDO NWAKANMA

oes G overnor Emeka Ihedioha have the liver to commit class suicide in his pursuit of the just cause of the people of Imo State? The real challenge in the matter of recovering the assets and resources taken from the state by former Governor Rochas Okorocha and associates is that success would rewrite the story of corruption in the state, the region and the broader country. The price would be steep and involve stepping on many toes. Is Ihedioha ready for a marathon or are current attempts a mere 100-metre or at best a 200-metre dash? It is a tall order, but if it is just for the optics, he will leave the people angrier and more frustrated. Successful pursuit would involve going against the political and economic class that held Imo State hostage over the years and allowed Okorocha room to rape, as other governors have done across the South East and Nigeria. His stood out for its brazenness. Can Governor Emeka Ihedioha withstand the pressure in the form of blackmail, propaganda, threats, vilification and more? Will the people and elite of Imo State, who lost but are now

finding their voice, be there to provide the bulwark of social license a governor needs for such a brave endeavour? The allegory of Rochas Okorocha continues to unfold in Imo State. Okorocha has left behind him effluvium rather than sweet-smelling fragrance. The stink and attempts to either expose and punish or cover it has dominated discourse in the state since his exit. I first wrote on the narratives of Okorocha as he tried to impose monarchy on Imo State in the April 11, 2019 issue and asked Ndi Imo to find the courage to prevent it https:// businessday.ng/columnist/article/ the-allegory-of-rochas-okorocha/. Owerri is abuzz with tales of plunder and outright kleptomania. The captain of the ship led in brazen stealing of state resources. His subordinates followed suit in line with the aphorism that fish rots from the head. The Economic and Financial Crimes Commission has stepped in to seal no fewer than nine assets that it alleged Okorocha acquired through misappropriation of public resources. Citizens want more action and are willing to point to more instances. Eminent citizens are engaged. GoddyUwazuruike pointed to one on July 29 on his Facebook wall on the pillage of the Nsu Ceramics and Tiles Factory that Sam Mbakwe built.The community protected the equipment that Mbakwe’s government had not installed when the military struck. Until in 2011 when Okorocha convinced them he was bringing a new factory and carted away the machinery. Prof Chidi Odinkalu tweeted, “This guy must have been desperately ill. Nothing was spared from plunder- from gift

items to mats and chairs”. Governor Emeka Ihedioha hears an earful regularly since he assumed office. Ndi Imo not only wail at the evil their eyes witnessed but want action to ensure restitution. Some are willing to go the extra negative mile of street justice. The matter of Rochas Okorocha presents a challenge and opportunity. There is the danger of allowing the chase for misappropriated state assets and resources to turn into a witch hunt. Ihedioha and Ndi Imo must rein in their emotions at this point and handle with circumspection. Imo State must deploy the law as well as sociocultural tools. Imo State must gather all the evidence and build a cast-iron case against all those involved. They should pursue the matter diligently, locally and internationally. The real treasure may lie in foreign banks, and they should include all agencies concerned with the investigation of financial crime across the world. Note, however, the pitfall of the legal route in Nigeria. The case against the former governor of Abia State, Orji Uzor Kalu, has taken ten years and counting. EFCC pursues it at its pace. The defendant has now become a senator in the party where membership is absolution from crimes. What happens hereafter is a matter of conjecture. There is no question, however, about the suitability of pursuing justice. It is what our land desires and deserves now. It would assist in cleansing the land. Do it in the best traditions, even as the fellow did not observe such technical niceties when he ruled. What to do with the assets seized by

‘

The narratives of the Okorocha years point to defects in our political system. We elect governors in a democracy who then mount the saddle of emperors and proclaim like the French ruler the people hanged at the Bastille, “l’état, c’estmoi”

the EFCC? It belongs to Ndi Imo. Do not allow waste. Imo State should negotiate with EFCC and ensure that it works the assets until the determination of the case. No asset should be abandoned or allowed to lie idle in this era of mass unemployment. The narratives of the Okorocha years point to defects in our political system. We elect governors in a democracy who then mount the saddle of emperors and proclaim like the French ruler the people hanged at the Bastille, “l’état, c’estmoi” meaning “I am the state”. They do as they wish. The people matter in every democracy. The social license the people provide can be a ticket for good or evil, depending on the moral fabric of society. Ndi Imo provided the social license for the evil the stench of which now makes them puke. The people are enabling similar wrong practices all over the country. Our democracy is failing because of the lack of citizen engagement. The absence of the elite and the middle classes except as collaborators with evil is even more contributory to our desultory experience with democracy. All the evidence points to the fact of the significance of the middle class in upholding democracy as well as the related economic development. Ndi Imo should take the lessons and hold Ihedioha and the LG bosses accountable. Odoemela. Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

Educational alliances & collaboration: The Swansea-OOU model

trategic alliances have become key features of the global business world as organisations continuously strive to achieve sustainable competitive superiority. In this instance, organisations undertake environmental assessment, identify their SWOT( Strengths, Weaknesses, Opportunities and Threats) and align with other organisations so as to optimize their strengths and opportunities while overcoming or warding off their weaknesses and threats. Universities, which are at the apex of the educational and knowledge matrix (and some have gone into direct production), are also involved in the race for competitive superiority. In the first instance, as is the case with other organisations, they have their own objectives and have to design the optimal routes to the attainment of those goals, and that is what strategy is all about. It is also in the character and culture of universities to collaborate with others, both within and without, to exchange, import and export knowledge, sharpen the edges of research and ensure that they continue to be relevant in the UNIVERSE, from which they draw their names( UNIVERSities). As it is, while some institutions go out of their way to seek alliances ( linkages) with the universities, the universities are on their own seeking alliances with other organisations and institutions. Whatever the direction of the alliance-seeking, it is a strategic move both for the ‘seeker’ and the ‘giver’. A new model of university collaboration is however emerging; a model with is both tripartite and competitive and that is where the SwanseaOOU model comes in. Sometimes in 2018, the British Council called for proposals from Nigerian Universities to access grants to support programmes in sustainable funding models for Nigerian tertiary education sector as well as students

employability. Three UK universities were selected as partners for this project. After a rigorous selection process, the Olabisi Onabanjo University and the Swansea University Wales, which is the lead partner, won the £10,000 grant for the project. The 120 year old Swansea is one of the topmost universities in the UK as measured in various dimensions of value-creation, graduate employment prospects, quality of research outputs funding sustainability and symbiotic relationship with industries. The collaborating universities are to utilize the grant to support sustainable finding models and employability through a series of activities including exchange of visits, capacity building workshops, developing new and improved sustainable funding models, enhancing entrepreneurial development of graduates and hands-on interaction and relation with industry . In June this year, a high-powered team from OOU, visited Swansea University to understudy the best practices in sustainable funding models through entrepreneurial and business venture activities, strategic planning and collaboration for continual learning and development, and strategic meetings with CEOs of some enterprise. In July, the Swansea School of management ‘retaliated’ by literally relocating to OOU and indeed, Ogun state and engaging in one whole week of intensive collaborative and creative activities aimed at achieving their joint mandate. On the team were Paul Jones (team leader), Professor of Entrepreneurship and Innovation, Dr Sameul Ebie, a son of the soil, who had come in earlier as a one-man advance team, Dr Price Alan and Thomas Roderick. The visit which lasted from 19th to 26th July started with a symbiotic business roundtable involving the Swansea team, an expanded OOU team and CEOs, captains of industry and entrepreneurs across

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various sectors of the Nigerian economy. This was indeed an unadulterated gown-to-town interaction revolving around the tripartite agenda of the bilateral collaboration. This was followed by a brainstorming session between the Swansea and OOU team to capture the key outcomes of the previous session, and another ‘fellowship’ with team leaders to wrap up the various discussions and outcomes. The 4th day was a special session with ‘agripreneures’ and a final wrap-up session between the leadership of the two teams. The second phase of the activities designed for that strategic alliance has just been concluded. It is just the end of the beginning. The peculiarities of this alliance include the involvement and support of the British Council, the competitive nature of the alliance, making it a relationship between the able and willing and its multiple objectives that go beyond the normal academic alliances to include sustainable funding model for OOU, enhancing the employability of OOU graduates and significantly improve the relationship between the University and the industries, thus making the former more relevant to the needs of the later. It is too early in the day to aggregate the score but from the seriousness with which both parties pursued the programme, I believe that the yield will be enviable. It is expected that the outcome of this strategic alliance, especially as it affects funding sustainability and graduate employability, will gradually permeate the entire educational system in Nigeria. I also hope that other multilateral institutions would emulate this gesture by British Council and thus increase the number of focused collaboration between local and foreign institutions from other parts of the world. Other Matters: The trouble with Nigeria; As rats are granted custody of dry-fish! Our people say that it is an exercise in

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ik MUO futility to contract the safety of dry-fish to a security consultancy outfit manned by rats or to handover the protection of yams to goats. Last year, I commented about the gargantuan challenges faced by AMCON( AMCON, Like Biafran cassava and Nigerian generators; BsinessDay, 18/7/19). The MD of AMCON had enumerated its various challenges and expressed the hope that ‘something’ would be done by the executive and legislators to make and execute the appropriate laws. However and unfortunately, the same CEO of AMCON has just informed the nation, whose citizens have effective shock-absorbers, that ministers and lawmakers are among the chronic debtors owing AMCON N5trn! In effect, those who are supposed to help AMCON to recover the debts, through legislative and executive duties, are the very people who are owing the debts and whom, according to AMCON, borrowed with no intention of repaying. We have surely asked the rats to protect our dry fish and handed our yams to goats for safekeeping! And we are wondering why and how the fish and the yam have vanished from the store! Ik Muo, PhD. Department of Business Administration, OOU, Ago-Iwoye, Ogun State muoigbo@ yahoo.com ;muo.ik@oouagoiwoye.edu.ng ; 08033026625

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BUSINESS DAY

Wema Bank’s halfyear net profit grows most in 5 years

COMPANIES & MARKETS

Pg. 15

COMPANY NEWS ANALYSIS INSIGHT

INDUSTRIAL

Cement giants shed N16.7bn in revenue as weak economy takes toll ….but AFCTA holds opportunities for industry players DAVID IBIDAPO & ISRAEL ODUBOLA

igerian publicly quoted cement manufacturers are f e e l i ng t h e pangs of sluggish economic recovery evidenced by the decline in their sales revenue and thinning profit margin. In the first half of the year 2019, Nigeria biggest cement players Dangote and Lafarge, with combined market share over 90 percent, shed a total of N16.7 billion as their revenue shrank some 3 percent. However, gross receipts of Cement Company of Northern Nigeria’s (CCNN) nearly tripled to N32.1 billion, thanks to a merger that quadrupled its production capacity to 2 million metric tonnes. However, the said companies grew their post-tax profit in the review period. Evaluating those numbers by key financial metrics gave mixed results. While the average operating margin (OPM) of the industry dipped to 26.9 percent half year-2019 from 27.4 percent a year earlier spurred by decline in Dangote Cement’s number, net profit margin (NPM) rose to 17.9 percent from 14.2 percent, thanks to Lafarge’s profit rebound. This implies cement makers roughly retained N179 as profit from each thousand naira of revenue generated after settling direct, indirect, interest and tax expense.

The capacity of cement makers to turn each naira invested in assets to more profit worsens as industry’s return on asset (ROA) slowed to 3.6 percent in the review period from 4.8 percent a year earlier. Dangote Cement gained N70 for every thousand naira committed to assets, with CCNN coming a distant second with N20 and Lafarge N16. Gauging their performance on return on equity (ROE), cement makers delivered less profit on owners’ funds in the review period as industry’s number dipped to 6.9 percent from 9.3 percent last year. The industry leader, Dangote Cement, outpaced others by generating N143 for each thousand naira of shareholders’ equity halfyear 2019, compared to Lafarge N40 and CCNN N21. Cement producers maintained tempo in cost efficiency as cost margin remained almost unchanged at 57 percent. Cost margin indicates the portion of each revenue naira expended on direct cost production of goods and services. Lafarge expends about 75 percent of its sales proceeds on direct material cost, the highest in the industry, underperforming CCNN (55%) and Dangote Cement (41%). Current market rout which has seen stocks listed on the Nigeria equity market tread bearishly as seen investors in stocks of Dangote and CCNN lose in value a total of about N434 billion

since the start of the year. Dangote cement saw its stock price slumped YTD by 10.38 percent as at the end of trading on Tuesday, however outperforming the Nigerian all share index which worsened to a YTD returns of -11.12 percent as at the end of trading same day. Amongst peers in the industry, CCNN grossly underperformed the stock market as stock stood the worst performer eroding 39.43 percent of total investor’s holding in the company’s stock, translating in value, a worth of N97.893 billion. Lafarge on the other hand amid market rout returned to its investors 17.26 percent YTD seeing the second biggest cement company by market capitalization outperform peers within the industry. Cement industry mirrors performance of the broader economy. Prior to the 2016 economic downturn, the sector expanded in double-

digits, but contracted in 2016 and 2017 when the wider economy was struggling with growth. According to a report by Afrinvest, the cement sector has felt the pangs of weak economic performance at the devastating level mainly because the sector closely tracks the performance of the economy, government policies, reforms, and spending on infrastructure. “ The cement sector which accounted for 0.8 percent (N576.6 billion) of real GDP as at FY 2018 has seen growth moderate to an average of -1.0 percent in the past three years compared with 16.9 percent in the preceding decade,” the report stated. While marginal pickup in Nigeria manufacturing and non-manufacturing PMI signals likewise behaviour in Nigeria’s GDP, slowdown in revenues of Nigeria’s biggest cement makers in H1 but-

tresses an expected slower growth in the economy. Although future of the Nigerian cement industry still looks bright on the back of about 17 million housing deficit and infrastructure shortages in Nigeria, slow growth in the economy still pose threat to this reality. Coupled with the above is rising urbanization and steady population growth in which Afrinvest report estimated at 50 percent and 3 percent respectively are positive prospects for the industry, however challenge remain the weak purchasing power which currently impedes housing demand. Analysts at Lagos-based investment house, Afrinvest Securities, in their report titled ‘In search of growth triggers’, cited weaker economic growth, currency devaluation and inadequate expenditure on capital projects as the major woes confronting players in the industry.

Analysts however opined that a bigger prospect is outlook based on recently signed AFCTA deal which is believed should boost trade among African countries by reducing tariff barriers. Cement producers in Nigeria stands a chance to benefit from AfCTA as they are likely to be more cost competitive due to excess capacity, tax breaks and availability of raw materials. “In West Africa region, cement production is not vibrant due to the lack of raw materials in sufficient quantities, hence, imports are unlikely to be a threat,” analysts at Afrinvest stated in a published report. On this note, Dangote cement is believed to gain most from AFCTA due to overcapacity in several regions of Africa.

MANUFACTURING

Honeywell rebounds as Q1 profit rises 6% SEGUN ADAMS

oneywell Flour Mill, a listed miller involved in the processing and packaging of flour and livestock feeds from wheat, has announced a profit of N108 million for its first quarter ended June 30, 2019. The company is bouncing back from a slow-

down in Q1 profit last year. The Lagos-based miller on Tuesday reported that it grew profit by 5.88 percent over N102 million it made in Q1 2018 when profit plunged 84.18 percent. Shares of Honeywell saw an uptick of 1.01 percent N1 per share, some 22 percent lower than it opened for the day, while the equity market dipped 0.46 percent to bring year’s loss to 11.49

percent on Tuesday. The improvement in Honeywell’s profit was on the back of an increase in sales in the 3 months compared to a year ago. After a slowdown in sales last year, the miller said its revenue rose 7 percent to N18.995 billion in Q1 2019. Honeywell noted 7 percent higher cost of sales which resulted in a decline of some 7 percent in gross

profit at N3.41 billion in the quarter. The Company’s gross margin, which shows the amount it retain per N100 revenue earned after deducting direct cost, fell marginally to N17.96 in Q1 2019. It was N18 a year ago. The miller ’s income from other sources declined 31 percent from N45 million while administra-

tive expenses fell 14.47 percent to buoy its operating income by some 52 percent. A h ig h e r b o r row i ng cost translated to 57.96 increase in net finance expense for Honeywell which was nonetheless still able to grow its profit before tax by 6 percent to N135 million. Income tax for the company was higher by 8 percent resulting in a profit of

N108 million for the period. Net margin a measure of the company’s ability to retain profit from its revenue showed little change as the proportion of sales kept back as net profit dipped to 0.57 percent from 0.58 percent in Q1 2018. Earnings per share of Honeywell improved to N1.36 in Q1 2019 compared to N1.29 in the corresponding period of 2018.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: David Ogar

Thursday 01 August 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

Wema Bank’s half-year net profit grows most in 5 years OLUWASEGUN OLAKOYENIKAN

ema Bank Plc, a Nigerian mid-tier lender, this year grew its halfyear profit the most in 5 years to sustain its profit growth momentum which it started in 2016 after a dip in half-year net profit in 2015. The lender grew its profit after tax by 43 percent to N2.25 billion in the first half of 2019, the biggest leap since 2014, as against N1.57 billion achieved in the corresponding period of 2018. This came on the back of increased loyalty from its customers as they continued to trust the lender with higher deposits. Wema Bank’s deposits from customers rose from

N354.9 billion as of June 2018 to N446 billion as of June 2019, indicating an increase of N191 billion within a year. As a result, gross earnings surged 60.8 percent to N40.8 billion in the review period. The bank’s profit growth was also supported by interest income generated from loans and advances to banks and customer, and on its investments in securities. Wema Bank’s interest income on loans and advances to banks and customers grew by almost a quarter to N28.37 billion from N22.82 billion. Similarly, the bank’s investment income on investment securities grew by 66 percent to N3.67 billion in the half-year 2019 compared with N2.21 billion achieved in the same period of last year.

Net impairment loss on financial assets rose more than double to N823 billion from N344 billion, while operating income continued grew 23.6 percent to N19 billion from N15 billion. Wema Bank paid N359 millionasincometaxexpenseforthe review period from N244 million in the same period in 2018, while its earnings per share increased from N8.2 to N11.6. Shares of the tier-two lender fell by 3.23 percent Tuesday on the Nigerian Stock Exchange (NSE) to close at 60 kobo per share, the negative performance further worsened its year-to-date return to 4.76 percent even though it outperformed the NSE broad index which has plunged 11.49 percent since the beginning of the year.

L-R: Panganai Chatapura, head of technical, PZ Cussons Africa; Joyce Folake Coker, group HR director, PZ Cussons Africa; Aderibigbe Peace, winner/student, Babcock University High School, Ogun State; Osibanjo Oladele, chairman, advisory board, PZ Cusoons Chemistry Challenge, and Charles Nnochiri, head of marketing, PZ Cussons Consumer, at the grand finale of 2019 PZ Cussons Chemistry Challenge Nigeria, in Lagos. Pic by David Apara

DEALS

Alitheia opens Boot Camp for SMEs seeking up to $3m funding JOSEPHINE OKOJIE

litheia IDF, a private equity fund that identifies and invests in SMEs led gender-diverse teams, is now accepting applications for the Nzinga Scale-Up Boot Camp for small and medium scale business operators seeking for up to $3million funding and technical capacity to scale. Applications is opened for eligible operators with growth-stage businesses operating in Ghana, Lesotho, Nigeria, South Africa, Zambia or Zimbabwe and significant participation of women as entrepreneurs, processors, distributors and consumers. Also, interested companies must have a sound performance track record of at least two years and must be a consistent revenue generating

business. “We are very excited about this initiative because it provides us with the opportunity to positively impact women by not only providing access to capital, but through the boot camp, we are also enhancing their capacity to properly absorb institutional capital for scale and expansion,” Tokunboh Ishmael, principal partner, Alitheia IDF said in a statement. The boot camp is open to applications from all sectors, but is particularly interested in agribusiness, consumer goods, health, education, and financial services. It involves a six-week series online and in-person collaborative workshops that will address critical success factors including financial structuring, corporate governance, leadership and management,

route-to-market and growth strategy, and fundraising that position businesses to better attract and readily utilize institutional equity investment needed for expansion, the statement states. Submitted applications will be screened and applicants will be invited for interview. Following the interviews, qualified applicants will be invited to join the Nzinga Scale-Up Boot Camp, and candidates who successfully complete the Boot Camp may receive up to $3 million in funding investments. With offices in Johannesburg and Lagos, Alitheia IDF is the only private equity fund manager in Africa with a proactive gender smart strategy to fund female founders and cofounders with innovative and scalable businesses in attractive industries and markets.

L-R: Nick Zaranyika, CEO, Total Health Trust (THT); Chinyeaka Aguboshim, provider manager, THT; Atinuke Uwajeh, MD, Pediatric Partners Hospital; Adekunle Adeyemi, CEO, Crystal Specialist Hospital; Kunle Megbuwawon, group head, commercial and strategy, Mecure Healthcare Limited, and Kunle Sonaike, MD, P&G Medical Centre, Oko-Oba, Lagos at Providers 2019 forum, organised by THT in Lagos.

MANUFACTURING

Xirea Apparels targets oil and gas, construction, banking clients with new factory IFEOMA OKEKE

irea apparels Limited, a full package c l o t h i n g Ma n u facturing Service opened its factory for business on the 23rd of July 2019 with a focus on interesting mix of dignitaries from Oil and Gas, Fashion, Construction, Education, Armed Forces and Banking sectors. Xirea Apparel commissioned two warehouses (Raw materials and Finished Goods) and the garment factory. The event also showcased the Launch of West Africa’s first indigenous brand of Personal

Protective Equipment (PPE) - Buphalo. Buphalo Active Gear is Xirea’s first customer and showcased its products by hosting Africa’s first ever Safety Fashion runway to the delight of the guests. Obinna Eneh, the founder of the Xirea Apparels and Buphalo Active gear, during his speech themed “The Spirit of Nigeria” reiterated his vision of employing more than 50,000 people by the year 2030. He also promised to make the Buphalo Safety Fashion runway event an annual fixture. “Xirea Apparels is a full package Clothing Manufac-

turing Service; we handle everything from thought to finish bringing our customers’ vision to life. “Our end to end solutions include Product Development; which includes Fabric and Trim Sourcing, Tech Pack Development, Pattern Development, Size Chart Grading, Sample Development; Manufacturing; which includes Cut and Sew Manufacturing, Printing/Embroidery, Bulk Production, Custom Fabrics and Other Services, which includes Quality Control Inspection, Custom Notion and Trims, Labels and Tags, Packaging,” Eneh added.

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L-R: Assistant Director, Finance Development, Central Bank of Nigeria, Dr. Paul Oluikpe; Chief Executive Officer, SANEF, Mrs. Ronke Kuye; Assistant Commissioner of Police, Nelson Osazua; Chief Executive Officer, EFInA, Mr. Esaie Diei and Head of Distribution and Engagement, SANEF, Mrs. Uche Uzoebo, during Financial Services Agents Forum, in Lagos.

L-R: Tope Dare, executive director; Femi Muraino, executive director; Femi Adeoti, MD; Ashwin Hegde, executive director, and Koyejo Oladimeji Talabi, director, all of Inlaks, at the official launch/ press conference of thehatch and the maiden Insurtech Hackathon, themed: Shaping the future of Insurance, powered by Inlak, in Lagos.

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Thursday 01 August 2019

BUSINESS DAY

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Thursday 01 August 2019

BUSINESS DAY

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Thursday 01 Augsut 2019

BUSINESS DAY

Investor

In association with

Helping you to build wealth & make wise decisions NSE All Share Index

Market capitalisation

NSE Premium Index

N11.721 trillion

Week open (19– 07–19)

31,924.51 27,919.50

N13.607 trillion

2,278.14

Week close (26– 07–19)

27,918.59

N13.606 trillion

27,918.59

Year Open

Percentage change (WoW) Percentage change (YTD)

2,241.37

The NSE-Main Board

1,456.29 1,137.24 1,134.06

NSE ASeM Index

NSE 30 Index

NSE Banking Index

NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

426.64

778.18

1,155.48 1,158.47

334.56

115.08

574.32

229.59

1,791.72

1,043.90

973.21

971.49

114.00

578.37

229.16

1,794.20

1,062.60

971.49

1.79

-0.18

-14.16

4.04

778.18

0.00

0.24

-0.28

0.00

-11.17

-19.54

-21.24

-1.97

0.26

-0.39 -18.25

-16.46

-0.94 -9.87

0.71

-0.19

-22.76

-24.18

0.14 -19.68

Mixed sentiment trails stocks as H1 earnings season enters full gear Iheanyi Nwachukwu

here are still varied views trailing stocks buying this period despite that many companies are releasing their half-year (H1) scorecards. In the trading week to July 26, the Nigerian equities market extended its bearish run as the benchmark index declined by 0.003 percent. Th e N SE A l l -Sha re In dex and Market Capitalisation both depreciated by 0.003percent to close the review week at 27,918.59 points and and N13.606 trillion respectively. While many analysts at the Nigerian Stock Exchange (NSE) see the market’s recent low as opportunity for bargain hunting on select names, others see no immediate rebound as the market continues its search for positive drivers. “Our outlook for equities in the short to medium term remains conservative, in the absence of any drivers of market returns” said research analysts at Cordros Capital. Summary of price changes l a s t w e e k s h ow 3 1 e q u i t i e s appreciated in price, higher than 15 equities in the preceding trading week. Twenty-nine (29) equities depreciated in price, lower than 52 equities in the preceding week, while 109 equities remained unchanged, higher than 102

equities recorded in the preceding week. Afrinvest analysts had on Monday July 29 expected investors to resume bargain hunting due to sharp losses in some stocks

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recently, “especially those with positive H1:2019 earnings.” While warning that the Nigerian market is currently not for the nervous, they anticipate that the Index will this week

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continue to wander within the negative territory. “But why are we pessimistic? All indicators strongly suggest there are no possible triggers to herald a rebound.”

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Also, amid the positive start to this week’s trading (N15billion gain or 0.11percent rise in ASI), as H1’19 results continue to trickle in at the Lagos Bourse, analysts at Vetiva Securities said they foresaw a mixed and busier session on Tuesday July 30 with a slightly bearish bias. On the contrary, analysts at United Capital Plc in their July 26 note believe the outlook for emerging and frontier market equities will remain positive through second-half (H2) 2019 “on the back of the expectation for a more dovish global monetary policy.” “For SSA, we expect interest in equities to remain fundamentally driven as the heavy-weight market movers – foreign portfolio investors (FPI) continue to look for bold economic reforms as a fundamental reason for buying equities. Thus, in the absence of any new reforms in H2-19, we expect sentiments to remain similar to that of H1-19”, they noted.

Thursday 01 Augsut 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

MTNN: Good for investors seeking capital appreciation, dividend income Iheanyi Nwachukwu

nvestors who are looking for stocks with the potential for capital appreciation and dividend income, that of MTN Nigeria Communications Plc remains one of such stocks. Recall that MTNN on May 16, 2019 listed by introduction its 20.35 billion (20,354,513,050) ordinary shares at N90 per share. Since it listing on the Premium Board of the Nigerian Stock Exchange (NSE), the stock has continued to attract “buy” sentiments. As at Monday July 29, the stock price of MTNN stood at N127, representing an increase of about 41.1percent since its listing on the NSE. This feat comes on the heels of the NSE All Share Index (ASI) recording negative year-to-date (ytd) returns to -11.07percent. The company’s market capitalisation was N2.626trillion as at June 30. As at July 29, it lowered to N2.585trillion. This record decline in the company’s market capitalisation is occasioned by share price decline and signals re-entry opportunity for value hunters at the Nigerian Stock Exchange. MTNN had reached a record high of N159.30 and a low of N99. Last weekend, the company decided to create new wealth for its shareholders as the directors declared interim d i v i d en d a m ount ing t o N60billion for the first-half (H1) period ended June 30, 2019. The company had in the year ended December 31, 2018

paid N73billion dividend. The Telco’s half-year (H1) 2019 result released last Friday July 26 at the Nigerian Stock Exchange (NSE) shows the interim dividend translates to N2.95kobo per share. The register of shareholders will be closed from August 9 to 13, 2019. The qualification date for the interim dividend is August 8. In the review H1’2019, MTNN sustained a solid performance, delivering double- digit growth in service revenue, underpinned by growth in voice and data revenue. MTNN audited result shows service revenue increased by 12.12percent to N566.946billion from N505.667billion in the preceding half-year (H1) period in 2018. MTNN added 3.3million customers to its network, increasing its subscriber base to 61.5million. “We will continue to progress in the second half of the year making improvements to our network experience, subscriber growth, and enhance operational efficiency”, said Ferdi Moolman, CEO, MTN Nigeria Communications Plc. He said: “We expect lower data pricing and our acceleration of the 4G network expansion to bolster the acquisition of customers and data traffic volumes in the second half”. MTN Nigeria in January 2019 adopted IFRS 16 accounting standard in line with global best practices. The Company saw data subscribers increase in the period (H1’19) under review

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by 2.1million to 20.7million. Operating profit of N190.403billion in H1’19 against N136.501billion in H1’18 represents 39.49percent increase. Profit before tax (PBT) of N141.797billion in H1’19 against N108.354billion in H1’18 shows increase of 30.86percent ; while the company’s profit for the review period at N98.930billion implies an increase of 34.79percent, from N73.395billion in H1’18. “We made significant network investments to improve network quality and expand our 4G coverage. Our recent work to revamp our data prices and accelerate our 4G network has put us in a strong competitive position to offer more value to our customers, supporting data and voice revenue growth which will ultimately strengthen our business,” said Moolman. “We are pleased with obtaining a super-agent licence from the Central Bank of Nigeria (CBN), which will enable us to build an agent network and accelerate the growth of our fintech business,” he added. MTN recently made changes to its Board following the retirement of six pioneer non-executive directors on the expiration of their tenure and in compliance with applicable corporate governance code. MTNN Chief Financial Officer (CFO), Adekunle Awobodu has also indicated his intention to resign from the position of the CFO of the company in this second-half (H2) of 2019 for family related reasons, Moolman revealed following the released H1’19 results. MTN N recorded 11.4percent increase in Voice revenue; while Data revenue was up by 31.7percent in H1’19. Fintech revenue increased by 21.2percent; Digital revenue decreased by 64.5percent; capital expenses (capex) increased by 63.8percent to N105.8billion; Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 40 percent to N304.9billion; while EBITDA margin increased by 10.7percentage points to 53.8percent. MTNN increased its Mobile Subscriber base by 3.3million to 61.5million in H1’2019. Amid this impressive result, the company’s overriding priority for the remaining part of the year is to focus on its BRIGHT strategy to build a sustainable business and create value for customers.

Investor’s Square •Have you been shabbily treated by your registrar, stockbroke r or other capital market operators? Let us know and investor will help you investigate and report back. E-mail: iheanyi.nwachukwu@businessdayonline.com

Union Bank: H1 results show PBT up 4% amid earnings decline …share price gains 22.3% year-to-date Iheanyi Nwachukwu

nion Bank of Nigeria Plc has released its unaudited financial statements for the period ended June 30, 2019. The group financial highlights show profit before tax (PBT) grew by 4percent to N12.1billion in the firsthalf (H1) of 2019 as against N11.7billion in H1 2018. The bank’s gross earnings declined 9percent to N76billion (N83.3billion in H1 2018). Union Bank linked the earnings decline to a decrease in average earning assets. Union Bank hosted a conference call for investors, analysts and financial journalists on Tuesday July 30, 2019 were its executive management team discussed the H1 2019 results and responded to questions. At N6.85kobo per share as at July 29, Union Bank Plc share price has risen by 22.3percent year-to-date (ytd). In the H1’19, Union Bank’s interest income was down by 8percent to N57.3billion (N62.2billion in H1 2018). Net interest income after impairment went up 3percent to N30.5billion (N29.7billion in H1 2018); supported by an aggressive drive in collections. Non-interest income was down 12percent to N18.7billion (N21.1billion in H1 2018). It said it was due to muted volatility negatively impacting trading income, despite a 27percent growth in creditrelated fees and 169percent growth in cash recoveries at N5.3billion (N1.9billion in H1 2018). The bank’s net operating income was slightly down

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by 2percent to N49.6billion (N50.9billion in H1 2018). Operating expenses went down by 4percent to N37.5billion (N39.2billion in H1 2018). “It reflects the gains of our cost optimisation programme – Project LEAP”, the bank said. Union Bank gross loans were up 8percent to N563billion (N519.7billion December 2018) driven by increased risk asset creation across priority economic sectors. Customer deposits rose by 4percent to N889.5billion (N857.6billion December 2018); “demonstrating the success of our on-going acquisition of low-cost deposits driven by strengthened brand affinity,” said Emeka Emuwa, CEO, Union Bank of Nigeria Plc. “Notwithstanding the realities of operating in a challenging economic environment, the Group delivered a 4 percent growth in Profit Before Tax (PBT) to N12.1billion from N11.7 billion in H1 2018,” he further noted while commenting on the results. “ To s u s t a i n g r o w t h in earnings, we remained steadfast in our commitment to delivering value and firstclass customer experience to all our customers. We have developed a concerted and clear plan to increase our risk assets with our loan book growing by 8percent to N563.0 billion compared to yearend 2018. The ability to take on more risk is hinged on our robust risk management and debt recovery processes working in sync which led to recoveries of over N5 billion in the period”, Emuwa said. “We successfully closed our Series 3, 10 year N30 billion bond in June, as part of our n100 billion debt capital programme. @Businessdayng

This series, which was once again fully subscribed, is the largest 10-year bond issued by a Nigerian corporate to date. This further reinforces the confidence of the investor community in Union Bank. With this new injection of tier 2 capital, we are well positioned to deliver on our growth strategy and priorities”, according to the CEO. Looking ahead, the bank said it will continue to focus on opportunities to “deliver our simpler, smarter banking promise to our customers while improving internal operational efficiencies which will translate to enhanced shareholder value.” Speaking on the H1 2019 numbers, Joe Mbulu, Chief Financial Officer, Union Bank of Nigeria Plc said: “In the first half of 2019, we continued with our expansion strategy to grow our agency banking footprint which in turn boosted customer confidence in our brand. Customer deposits have followed the same trajectory with a 4percent growth, to N889.5 billion as at June 2019 from N857.6 billion in December 2018. Net Interest Income after Impairments is also up 3percent to N30.5 billion compared to N29.7 billion in the same period in 2018.” “With our aggressive focus on recoveries and improving asset quality, the Bank’s NPL ratio has continued its downward trend, declining to 7.3percent from 8.1percent as at December 2018 ahead of full year 2019 guidance. Improvement in asset quality has enabled us to grow our loan book optimally in the first half of 2019, positioning us with the ability to take on emerging opportunities in key sectors of the economy”, Mbulu said.

Thursday 01 Augsut 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Analysis

Seplat: H1’19 results further emphasises strong cash generation potential …targets both organic, inorganic opportunities to grow shareholder returns ...stocks yield negative return of - 23.4% year-to-date Iheanyi Nwachukwu

eplat Petroleum Development Company Plc, a leading Nigerian indigenous oil and gas company listed on both the Nigerian Stock Exchange (NSE) and London Stock Exchange (LSE) has released its consolidated half-yearly (H1) financial results for the period ended June 30, 2019. Highlights of the half-yearly results show revenue of $355 million, up 4percent yearon-year (YoY) with gas tolling revenue of $67 million recognised for the first time in relation to the processing of Nigerian Petroleum Development Company (NPDC) gas through the Seplat sole risk funded Oben Gas Plant 375MMscfd expansion between June 2015 and end 2018. Earlier this week, Austin Avuru, CEO, Seplat Petroleum Development Company Plc, Effiong Okon, its Operations Director and Roger Brown, the CFO hosted a webcast and conference call and discussed the Company’s results. Gross profit of $207 million represents a 58percent margin (up from 51percent in H1 2018) while operating profit of $139 million is down 12percent year-on-year after adjusting for a $40 million impairment of NDPC receivables. Significantly lower finance costs of $25 million (down 39percent year-on-year) have kept profit before tax (PBT) flat year-on-year at $120.4 million (H1 2018: $121.3 million) with net profit from continuing operations standing at $119 million. The Group recognised non-cash corporate taxes and non-cash deferred tax of $1.3 million in the period to record a net profit of $122.2 million (H1 2018: $48.5 million). Seplat is listed on the Premium Board of the NSE. Basic earnings per share increased to N64.21 from N26.12 in H1’18. At N490 per share as at Monday July 29, the stocks are nearing its 52-week low of N480 per share as against 52-week high of N710. With shares outstanding of 588,444,561 units, the market capitalisation of Seplat stood at N288.337billion. Looking at the NSE ASI with a negative year-to-date (YtD) return of -11.07percent as at July 29, the share price of Seplat has far underperformed the NSEASI with YtD negative return of -23.4percent. Seplat H1 result shows robust balance sheet and cash flow generation. Cash at bank as at June 30, 2019 was $433 million; gross debt $350 million and net cash of $83 million with $225 million un-drawn headroom on the four year revolving credit facility. Net cash flow from operations in H1 2019 stood at $255 million against capital expense (capex) of $28 million; FY 2019 capex guidance revised downwards to $150 million. FY 2019 capex guidance revised downwards to $150 million; three planned exploration / appraisal wells targeting longer term oil and gas production together with the Oben and Sapele LPG projects have been deferred

Austin Avuru, chief executive officer, Seplat Plc into 2020 with the current focus on shorter term oil and gas production gains. The company’s overall working interest production in H1 across all blocks stood at 22,974 barrels of oil per day (bopd) and 145 million standard cubic feet per day (MMscfd), or 48,004 barrels of oil equivalent per day (boepd) with production uptime of 88percent in the period. FY 2019 guidance reiterated at 49,000 to 55,000 boepd on a working interest basis, comprising 24,000 to 27,000 bopd liquids and 146 to 164 MMscfd (25,000 to 28,000 boepd) gas production, as impact of H2 weighted work programme takes effect and drives working interest production to a planned exit rate of 34,000 bopd liquids and 162,000 MMscfd gas (or 62,000 boepd). The company also provided investors and shareholders an update of its operations. Seplat is pursuing a Nigeria focused growth strategy and is well-positioned to participate in future divestment programmes by the international oil companies, farm-in opportunities and future licensing rounds. It said Final Investment Decision (FID) has been taken for the large scale ANOH gas and condensate development in March and followed by capital markets days in London and Lagos; Project to comprise of a first phase 300 MMscfd midstream gas processing development with first gas targeted for Q1 2021. Equity investment of $150 million from government received with $150 million equity funding from Seplat also made into ANOH Gas Processing Company (AGPC). Gas sales

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of $72 million in H1 2019 and tolling fees of $67 million take total gas derived revenue for the period to $139 million. “Today’s results further emphasizes the strong cash generation potential of our lowcost production base and the good progress we are making at the large scale ANOH gas and condensate development project,” said Austin Avuru, Chief Executive Officer, Seplat Plc. He said: “Our H1 work programme has been impacted owing to unforeseen delays from rig contractors as well as the need to undertake higher levels of maintenance and asset integrity work for longer-term benefit of the assets. “Both have affected production during the H1 but we have now secured the necessary rig capacity for the second half to implement the revised work programme which will drive us towards an 2019 exit working interest production rate of 62,000 boepd and bring annualised production within the unchanged guidance range of 49,000 to 55,000 boepd,” Avuru further said. “Meanwhile, we remain on an extremely solid financial footing and concentrated on furthering our growth strategy as we target both organic and inorganic opportunities to grow shareholder returns,” Avuru added. The Company said its policy of creating multiple export routes for all of its assets has resulted in it actively pursuing alternative crude oil evacuation options for production at OMLs 4, 38 and 41 and potential strategies to further grow and diversify production in order to reduce any over-reliance on one particular

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third party operated export system. To add to the Transforcados Pipeline system and the back-up export via the Warri refinery, the Amukpe to Escravos 160,000 bopd capacity pipeline is set to provide a third export option for liquids production at OMLs 4, 38 and 41. The pipeline owners, NAPIMS (a 100percent subsidiary of NNPC), Pan Ocean Corporation Limited (Pan Ocean) and the pipeline contractor FENOG are responsible for completion of the pipeline, which has seen delays to date. Seplat notes that the completion of the project is in sight. The hydro testing of the 20 inch pipeline which involves pigging to remove any debris which has accumulated in the construction, followed by flowing water under pressure from the injection point at Amukpe to the Escravos terminal commenced in early July, and the current flow rates have confirmed the integrity of the pipeline. The company noted that final works within the Escravos terminal are underway, which includes the tie-in of the LACT measurement unit into the Chevron control system and with commissioning expected to be completed during Q3 2019 with export of oil to the permitted capacity of 40,000 boepd in Q4 2019. It is Seplat’s ultimate intention to utilise all three independent export options to ensure there is adequate redundancy in evacuation routes, reducing downtime which has adversely affected the business over a number of years, significantly de-risking the distribution of production to market. Alongside its oil business, the Company has also prioritised the commercialisation and development of the substantial gas reserves and resources identified at its blocks and is today a leading supplier of processed natural gas to the domestic market in Nigeria. With overall operated gas processing capacity standing at 525 MMscfd, the Company is actively engaged with counterparties to increase contracted gas sales with the intention of taking gross production towards the 400 MMscfd level on a consistent basis. Of the 525 MMscfd total processing capacity, 465 MMscfd is located at Oben with the remaining 60 MMscfd located at Sapele. The 375 MMscfd expansion at Oben (Phases I and II) was completed by Seplat as a 100percent investment project. The gas processing capacity expansion is also designed to allow the Company to accept third party gas and receive a processing tariff. During the period, agreement was reached with NPDC in the Operating Committee to back into their right to 55percent of the gas plant expansion of 375MMscfd. A payment of $168 million was agreed between the parties, with $67 million being booked in H1 2019 as gas tolling revenues. The final balance of $101 million will be paid and reflected in the Q3 results once the transfer of NPDC’s 55percent interest has been concluded. Work is on-going at the Sapele Gas Plant upgrade and which is expected to be completed in H2 2020.

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Thursday 01 August 2019

BUSINESS DAY

Thursday 01 August 2019

BUSINESS DAY

FEATURE

60-days-in-office: Sanwo-Olu’s expeditious moves to resolve historic challenges Sixty days into his four-year term, the new governor of Lagos, Babajide Sanwo-Olu, is showing through his actions that historic challenges can be tackled, write SEGUN ADAMS and GBEMI FAMINU.

wo days after taking the oath of office, the new governor of Lagos State, Babajide Sanwo-Olu went on a trip. The trip was to a part of Lagos where Lagosians fear to tread. His trip was to Apapa, Nigeria’s premier port city which had become nightmarish because of bad roads, poor traffic management and a port complex that has been thoroughly overstretched. His mission was simple: To assess the situation and bring much needed executive attention to bear in order to solve the Apapa conundrum. “Visiting Apapa was a great

step and a sign of seriousness,” says Dr. Bongo Adi, an economist with the Pan Atlantic University. “The case of Lagos state demands strategic interventions,” which Mr. Sanwo-Olu made allusion to by his visit to the port town.” In the days that followed his first visit, drainages were immediately cleared, not just in Apapa but also across many parts of Lagos in preparation for the rainy season. Days later, the governor repeated his visit, this time, he was accompanied by Vice President Yemi Osinbajo. The immediate outcome of the two visits was clear as the traffic situation improved mar-

ginally in the area and trucks which previously lined the roads leading reduced drastically. Also, previously abandoned infrastructure projects which were designed to solve the Apapa problem stated receiving government attention. Targets were set for delivery of the projects. The Sanwo-Olu led administration has also touched several other aspects of governance and infrastructure development. So far, his strategic interventions have centered on the promises he made on the campaign trail. While campaigning, SanwoOlu hinged his plan for Lagos on six pillars. A broad framework captured by the acronym ‘T.H.E.M.E.S’ (Traffic Management & Transportation, Health & Environment, Education & Technology, Making Lagos a 21st Century Economy, Entertainment & Tourism, and Security & Governance). In the last 60-days, SanwoOlu has been quietly focused on assiduously paying attention to strategic areas in line with promises made during the period of campaign, the governor has started addressing these issues that are critical to Lagosians in clever and creative ways. Traffic management and transportation Apart from the focus on Apapa which an obvious emergency was, the governor has taken some steps to ease the traffic and transportation problems in throughout Lagos. Residents attest to the fact that commuting time has been significantly reduced and these comments cuts across the entire state, except from a few areas where evidently the rains have made it impossible for palliative

Gov. Sanwo-Olu on his first visit to Apapa

measures to be implemented. In addition to all the roads that are being fixed, drainages are being cleared and traffic officers now spend longer hours on duty so as ease traffic congestion. “There used to be this long stretch of potholes under the independent tunnel at Maryland. I used to struggle each night on my way from work. However, last week, I realised that it had been fixed,” says Aderonke Niyi, a banker who works at Magodo but lives in Surulere. The result is an improvement in traffic in the area. A few kilometers away, in the Lekki axis of Lagos efforts have been made to unravel the causes of grid locks which characterize the area, especially during peak

Vice President Yemi Osinbajo and Gov. Sanwo-Olu inspecting facilities at Apapa www.businessday.ng

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hours. The tollgates at both the Admiralty Way and the Lekki toll gates at Shoprite have been opened periodically just to allow traffic studies in order to simulate and unravel the true cause of traffic jams in the area. In addition, a key stakeholder engagement of residents, churches, events centers, banks and other businesses along Oniru Estate axis all through to those residents along the alternative route was convened with the governor in attendance. Commenting on the steps taken by the governor so far, elder statesman and first Civilian Governor of Lagos State, Alhaji Lateef Jakande said the government of Sanwo-Olu has started on a good note and that he believes Sanwo-Olu will further sustain the tempo of economic development of Lagos. Alhaji Jakande noted that the decision of the governor to focus on infrastructure development would boost the economic prosperity of the state. He urged the governor to take Lagos to the desired destination and hope of all Lagosians during his tenure. According to Abiodun Adewole who manages a law office in Lagos, “Sanwo-Olu’s first directives on traffic and waste management as well as fixing of potholes and rehabilitation of 100 roads in the Lagos metropolis helped to ease the traffic snarl in the state.” In his comments, Stanley Mudgere, another lawyer, “the visit of the governor to LASTMA at Oshodi, where he increased the operatives hazard

allowances and also reeled out the riot act directing LASTMA to enforce the traffic laws to the letter and not to spare any offenders, even if they were members of his own family, is indeed very commendable of the governor. This alone has brought a significant amount of sanity back to our driving culture. It is evident that incidences of driving against traffic (popularly known as one-way) has significantly reduced since the governors’ pronouncement. Health and environment The first 60 days of Sanwo-Olu’s administration have seen Lagos become cleaner. A few weeks Lagos was neck deep in filth and on the brink of an epidemic. Refuse collection centers at mar-

kets and street corners were overflowing with dirt, and public sanitation contractors were in disarray, no one could understand how a city which is referred to as the center of excellence became the center of filth. The past 60 days have seen a reversal of that ugly and unpleasant state of affairs. After inauguration, the governor signed his first Executive Order on indiscriminate refuse dumping, traffic management, and Public works. Education and technology The governor has commenced the implementation of plans to improve quality of education in all state-owned schools beginning with primary and secondary schools. Already, Maryland Primary School, Saint Francis Primary and some schools in the Papa Ajao and Agege areas of the state have been visited by state government officials on physical assessment with a view of improving educational facilities statewide. The overall plan is to immediately repair and rehabilitate dilapidated school facilities and strengthen the public-school system with both physical infrastructure and modern learning and teaching tools. The 21st Century economy Beyond physical infrastructure, the Lagos state government is working behind the scene to make Lagos a 21 Century economy driven by innovation, technology and smart jobs in partnership with the private sector and indigenous telecoms giants to deploy the Lagos Metro broadband ring and the smart city solutions across the entire state will provide internet access to all nooks and crannies of Lagos especially densely populated parts of the state. With this sort

When Gov Sanwo-Olu met a 64-year-old traffic warden

of broadband available everywhere, there is hope that a 21st Century economy is possible. In the long run, all of this effort will drive job creation, improve security, and improve quality of Life in Lagos. According to the Director General of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, though the state government machinery is not yet fully active there are positive indications already. Naming of the cabinet members Within the first 60 days as promised by the governor, the list of cabinet members have also been released and forwarded to the state legislature for screening. The team balanced comprising young technocrats, mature public servants and politicians, a testament to the determination of the governor to move things forward quickly while balancing political interests across the state. This is the view of Mr. Yususf. He said the governor has already submitted the list of Commis-

Gov Sanwo-Olu on inspection tour at Apapa www.businessday.ng

sioners who will make up his cabinet to the State House of Assembly, he has already visited Ikorodu, Badagry and Apapa all in an effort to restore the failed roads in those areas, these are all good steps. “To me, the Badagry road is very strategic because it links Nigeria with other West Africa nations. Imagine a road that holds 80 percent of trade between Nigeria and other West African nations being in good condition.” Speaking further, Mr. Yusuf said “… his vision is commendable. Road infrastructure is critical to boosting the economy and you know with that road [Badagry road] in good condition other states apart from Lagos will

gain and the entire country and even the sub-region will benefit. The Director General applauded the governor who has mobilised contractors to commence work on the road. This has been done despite the challenges of the rainy season and the difficulty in demolition of shanty structures along the road. Even though, the administration is just settling down, there are indications that this will not be business as usual, however, the governor still has a lot to do as the rainy season continuously unleashes torrents of flash floods exposing the true state of road infrastructure in Lagos. This will enable the administration sustain the good will it has garnered in the past few months.

Gov Sanwo-Olu inspecting road construction project at Ikorodu https://www.facebook.com/businessdayng

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Thursday 01 August 2019

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

NNPC clears air on alleged underpayment of lease renewal by ExxonMobil Stories by Olusola Bello

igerian National Petroleum Corperation (NNPC) has cleared the air on the alleged under payment of lease renewal on Oil Mining Lease (OML) 67, 68, and 70 by ExxonMobil, saying that the company paid $600m which was its equity contribution of 40% of the Joint venture agreement after which NNPC was to pay the remaining 60% but it became unnecessary as it represented the government. The corporation said ordinarily, NNPC would have contributed the balance of 60 percent of the amount which literally meant government paying monies to itself. There was no need for that, the management said. Mele Kyari, group managing director of the NNPC cleared the air while receiving the chairman and members of the Panel at the NNPC Towers, stating that the Corporation had nothing to hide as it stood to gain a lot by being transparent in all areas of operation.

According to him the management member of the corporation shares the vision of Mr. President that government’s institutions must be accountable to all Nigerians. This is because they know the corporation will gain more by being more transparent. “We have nothing to hide,” Mele Kyari, group managing director of the NNPC cleared the air while receiving the Chairman and members of the Panel at the NNPC Towers, stating that the Corporation had nothing to hide as it stood to gain a lot by be-

ing transparent in all areas of operation. On the alleged breach of government’s Treasury Single Account (TSA) policy, the Mele Kyari said the NNPC has no secret account, emphasizing that “there is no single account NNPC is operating that is unknown to the Federal Government. Any account(s) outside the TSA platform are partner accounts which we have obtained due approvals from the government.’,’ he noted. He stated that all monies belonging to the corporation was domiciled with the Cen-

tral Bank of Nigeria (CBN), added that the Corporation’s account managers remain the CBN and the Accountant General of the Federation. Shedding more light on the alleged non-remittances of taxes and royalties by the Nigerian Petroleum Development Company (NPDC), NNPC’s upstream arm, he stated there were outstanding payments which arose as a result of the pillage that occurred before 2015. He, however, assured the Panel that this administration has made concerted efforts to

Nigeria/Benin power deal on shaky grounds as French oil giant, Total signs LNG agreement with Benin

igeria/ Benin power deal on shaky grounds as Total, the French oil giant has entered the picture with the aim of supplying Liquefied Natural Gas to Benin to meet its power demand. If the agreement scales through it means that Benin would soon cease to depend on Nigeria for power supply. Energy resources are limited and Benin depends on Nigeria and Ghana for energy. GDP growth averaged close to 6 percent in 2012–2015 but declined to 4.6 percent in 2016 due to a slowdown of exports to Nigeria and a drop in agriculture production. Nigeria, Niger, and Benin have a long tradition of intergovernmental agreements for exchange of electricity that build on the cooperation between the countries that share the waters of the Niger River. Nigeria has exported electricity for decades, in exchange for Niger and Benin refraining from damming the waters upOlusola Bello, Team lead,

stream. The current amounts traded are small in relation to its overall capacity, 180 MW to Niger and 200 MW to Benin. Electricity exported from Nigeria to Benin is transported through 70 km of 330 kV line between Ikeja and Sakété in Benin, with a, contracted the amount under intergovernmental agreements of 260 MW. In December 2017,a separate contract for 60 MW was signed between the Société Béninoise d’Energie Electrique (SBEE) and Parras, a Nigerian independent power producer (IPP), using a oneyear renewable PPA. Given the capacity constraints of the transmission line between Nigeria and Benin, the total amount traded is 200 MW, with priority given to the electricity sold by Parras despite the higher price for this power. Total, the Republic of Benin and the Société Béninoise d’Energie Electrique (SBEE) signed the Gas Supply Agreement and the Host Government Agreement for Total,

Graphics: Joel Samson.

while the Republic of Benin and the Société Béninoise d’Energie Electrique (SBEE) signed the development of a Liquefied Natural Gas (LNG) import floating terminal and the supply of up to 0,5 million tonnes per annum (Mtpa) of regasified LNG from Total’s global portfolio to Benin for 15 years, starting in 2021. Total will develop and operate the regasification infrastructure that will comprise a floating storage and re-gasification unit (FSRU) located offshore Benin and an offshore pipeline connexion to the existing and planned power plants in Maria Gléta. This project is in line with Total’s strategy to develop new gas markets by unlocking access to LNG for fastgrowing economies. We are very pleased to have been entrusted by the Benin authorities to develop LNG imports and support a broad adoption of natural gas in the country, said Laurent Vivier, Senior Vice President Gas at Total.

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“Access to LNG will help Benin to meet growing domestic energy demand and add more natural gas to the country’s current energy mix, hence reducing its carbon intensity”. The interconnection between Nigeria and Benin was inaugurated in 2007 with the line to Sakété in Benin. The initial agreement with for Benin the agreements were between CEB and defunct Nigerian Electricity Power Authority. The Federal government had just renegotiated new terms for the supply of electricity to both Benin and Niger Republics a few days ago. The renegotiation, which was consummated by the Nigerian Bulk Electricity Trading Plc (NBET), was to ensure that the international sale of electricity by Nigeria to the Société Nigérienne d’Electricité (NIGELEC) and Communauté Électrique du Bénin (Togo/Benin Bi-national Electricity Company) (CEB), reflected appropriate commercial terms.

reconcile every payment due to the Federation on taxes and royalties. “The only outstanding payment is the $600m and we have a pre-payment plan with the Department of Petroleum Resources (DPR) such that by mid-2020, we will have money left to be paid”, he noted. On alleged non-remittances by some oil companies operating in the country, the NNPC boss said it was the responsibility of the Federal Inland Revenue Service (FIRS) and the Department of Petroleum Resources (DPR) to collect taxes and royalties from oil companies, including those on Joint Venture (JV) and Production Sharing Contract (PSC) arrangement. The NNPC boss further noted that the NNPC would provide the necessary support to the agencies concerned in that regard though it has no legal obligation to do so. “As an enabler organization, we will support them because we see our roles beyond our immediate responsibility,” he said. While affirming the Corporation’s commitment to transparency and accountability, the NNPC boss said

Oil market outlook for 2020

il market outlook for 2020 Global economic growth is expected to remain at 3.2% in 2020 (Graph 1). While the US and China are forecast to slow slightly, some severely hit economies – mainly in Latin America and Turkey – are forecast to recover, keeping the GDP growth momentum unchanged from the 2019 level according to July 2019 OPEC report. In the OECD, growth is forecast to slow to 1.6% in 2020, down from 1.7% in 2019, due to ongoing challenges in several key OECD e c o n o m i e s a n d d e sp i te counter-balancing developments within the region. In the emerging economies, China is forecast to experience slower growth, while momentum in India and Brazil is expected to pick up. Meanwhile, Russia’s growth is forecast to remain at the 2019 level. The 2020 forecast assumes that no further down-side risks materialize, particularly that trade-

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the Corporation is one of the most accountable public institutions in the country, saying ‘’this is the only company that publishes its operations and financial reports monthly. I’m not aware of any company that does that in the world.” Earlier in his remarks, the Chairman of the Presidential Panel, Okoi Obono- Obla said their visit was to seek synergy with the NNPC towards reforming the country and particularly to clear the air on issues relating to the operations of the Corporation. He expressed the Panel’s satisfaction with NNPC’s “frank and honest responses on the issues raised, describing the Corporation “as a very important and transparent national institution with a head who has a track record of accountability and transparency in his public career.” “The NNPC boss has a reputation for being an apostle of accountability and transparency. I feel very happy that somebody like him is coming out to clarify the key issues. Nigerians have been misled, it behoves on every organization to tell Nigerians the truth to engender transparency in the entire polity”.

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related issues do not escalate further. Growth risks also include ongoing challenges in several emerging and developing economies. High debt levels could pose serious challenges to the countries affected, not only due to limitations in fiscal space, but also if their credit ratings worsen. Brexit poses an additional risk, as does a continuation in the current slowdown in manufacturing activity. While further increases in US-China trade tariffs have been postponed, other trade-related uncertainties remain. GDP growth forecast in selected countries/ regions, y-o-y changes, % World oil demand in 2020 is forecast to grow by 1.14 mb/d y-o-y, in line with the current year estimates. The OECD is forecast to grow by 0.09 mb/d next year, with only OECD Americas showing positive growth, while OECD Europe and Asia Pacific are anticipated to continue to decline. In the non-OECD, oil demand is expected to increase by around 1.05 mb/d.

Thursday 01 August 2019

BUSINESS DAY

ENERGYREPORT

Why NCDMB is involved in promotion of modular refineries The Nigerian Content Development Monitoring Board, NCDMB, is the body that monitors Local content development in the oil and gas industry. Simbi Wabote who is the executive secretary of the agency in a recent interview with Olusola Bello on the sideline of the just concluded Nigeria Oil and Gas Conference spoke on sundry issues in the oil and gas industry. Excerpts: What is the whole idea behind project 100? he whole idea behind project 100 is to identify a couple of Nigerian companies that we can work with overtime to build their capacity. We want to build the capacity of people who can deliver highly technical service. This is not just in a day or six months; it takes a lot of time. What have we done so far, we have been able to transparently select about 60 or more that applied based on the criteria we have set. Yes, the target is a 100 by January next year we will then look at the remaining 40 and definitely we shall get to 100 and we have been able to get them. Currently, about a month ago we organize extensive training for most of the companies. Their managers and staff were trained for six weeks in various aspects of project management, understanding the industry and how to access opportunities, what’s the process to go through. We have extensive six weeks training and we also train them on underwater activities because the industry is going upward, we needed them to understand that. Just two weeks ago, we have to select about 10 of them because to build capacity in the oil and gas sector, you need partnership, you can’t do it alone. How do you create partnership between local and international businesses that have technology and expertise, so we took about 10 of them to Oil & Gas Fair for them to meet other international companies that want to come and do business with Nigeria, see how they work, synergize to close that partnership. Of course, we couldn’t take

training; we are not training people so that they will seek employment. How can they become self-sustaining such that they will become an entrepreneur themselves and employ people rather training them to look for jobs.

the 60 because we don’t have the fund to begin to take 60 people on that journey. Out of the 10, about 8 of them got international recognition. This is where we are and we are building programmes right now to develop a strategy to complete them. First of all, know where they are and where we want to take them to. This is currently ongoing. It has to be a structured pattern that is why it is not a fast track arrangement; it is a long-time developmental arrangement that will be well structured. What is the update of NOGAS? The NOGAS, like I, said two of them are under construction currently in Bayelsa and Calabar. For the Bayelsa one of the contractors has been mobilised to site, the Calabar one in the next couple of weeks, once we get the necessary approval we will go ahead. The infrastructure on it, we are also moving ahead, we believe that in the next few weeks, we will get the necessary approval. Our target is to see how we get those two projects completed. As for the power plant that will support the Bayelsa NOGAS, hopefully, it will be commissioned sometime early August. Can you tell us more about the $200 million intervention fund? The message is to attract counterpart founding to that level not necessarily to release the fund. I think that was the challenge with the Bank of Industry, BoI. BoI is the bank managing that intervention fund for us. They are working very hard. A few weeks ago we had a meeting with the leadership of BoI and they are about concluding some

Simbi Wabote

form of counterpart founding in the pact of the $200 million they are managing for us. So, it is not to raise but look for counterpart funding to support so that we don’t stop that process. It has to continue. They are making good progress. Sourcing for the fund is not a day’s job and hopeful that will be concluded very soon. What is NCDMB doing to in respect of those trained and are not able to get placement in the industry? That is why since I came on board, in terms of training, NCDMB has adopted a different approach. We don’t get into training for training sake. A lot of people have been trained either through NCDMB, Amnesty Programme or Niger Delta Development Commission, NDDC, yet these fellows don’t see where to work. There is no provision strategy to say we will adopt what we call the 60-20-20 approach for training. 60 percent of our training is

to focus on people that will be trained with ease of addressing job opportunities while 20 percent focus on those who already have jobs, how do we upscale their capacity to be able to serve the industry proper. Then the other 20 percent can have general training where people will be trained in terms of work ethics and interpersonal relationship. Also, to enhance their ability to perform. Today, there is a company called AOS Orwell that is training electrician for us and part of the agreement with them is that 60 percent of those who are trained will be absolved. That is the contract and if they don’t absolve those 60 percent, they don’t get paid for the services they provide. That is the way you force people to provide training that will enhance employment rather than training people. You are right of course that we design a model to ensure that they are employed. We are also focusing on entrepreneurial ship

NCDMB, Waltersmith have a joint pact on a refinery coming on stream s oon and another initiative in Calabar. What does the Board intends to achieve? The push and the drive for it are government policy trying to bring up modular refineries in order to support local refining petroleum products in-country. The government launched a yearly programme to localised refinery. The mistake people make is that they think modular refinery is a different kind of refinery. It is still the same refinery but on a smaller scale. How can you get it going so that you begin to refine products in-country? That is the drive, it is part of government’s policy to do this and we are at tandem with that. If you recall when the president launched the 7 BIG WINS, it was part of the BIG WINS agenda for the refinery industry to get Nigerians involved in the value chain. It is the same way we are addressing the flare down opportunity, gas commercialization and the rest of them. So, it is all tailored towards that. We are involved in the Waltersmith bid, the other day we signed an agreement for equity participants with Azikel refinery. It is important that journalists visit the site as work is ongoing. Presently, the tanks are being erected and the detail design is about to be commissioned. There is a timeline for this and the

Board will catalyze those activities. We are a regulatory agency with a developmental agenda as part of it. We catalyzed those processes as they get on, we pull out and focuses on other things we will do. We are also looking seriously at the gas value chain. How can we support the federal government policy on LPG penetration? That is the way government works to enunciate the policy and agencies of government, see how they fit in to support government agenda. That’s all we are doing. Doing what the government wants us to focus on. How long will it take before you pull out? It depends, once it comes onstream, they might ask us they want to buy us out which is okay even if it is a year, two years or three years, it depends on when they want us to get out of that kind of investment. We have a target date at some point we just move out. Is there any way you follow up activity or regulate local refinery operators? Obviously, we followed them up and we try to see what they do. Right now, we are trying to encourage more of it to get on. Like you know part of what we have in Niger Delta, the good number of people trying to refine crude in the process the environment is degraded but we have to organize them in modular form. Small refineries everywhere at some point you cave out those who are producing crude oil and degrade the environment which has to stop. We know what they are doing even though they don’t make too much noise about it. Some of them are private entities. We only step in to put things in order.

SPE to focus on artificial intelligence, data analysis, and mobile technology during NAICE 2019

he Society of Petroleum Engineers (SPE) Nigeria Council has said it will focus the petroleum industry on the advancement of artificial intelligence, big data as well as mobile technology during the forthcoming 2019 Nigeria Annual International Conference and Exhibition (NAICE). Addressing a press con-

ference recently in Lagos, Debo Fagbami, SPE Nigeria Council Chairman said the conference promises to be bigger and innovative, adding that the programmes for the 3-day event were carefully planned to encourage broader participation of key stakeholders in the mid and downstream sectors of the petroleum industry. “O t h e r s e c t o r s l i k e www.businessday.ng

Banking and other financial services have been fully integrated into our NAICE program of activities. This year, we would be having quite a number of powerpacked panel discussants trashing out issues in the area of AI and big data and quite a few of these discussants would be coming from the financial services sector,” Fagbami said.

According to him, NAICE over the years has grown to become the largest upstream oil and gas event in Africa attracting industry regulators, highlevel government officials, petroleum technology professionals and other key oil and gas industry stakeholders. “NAICE has held annually since inception in 1976

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with a focus on collecting and encouraging the dissemination of technical knowledge and technologies related to the oil and gas industry as well as to provide an exploration and production market place for Sub-Sahara Africa, Fagbami said the 43rd edition will hold from August 5 – 7, 2019 at the Expo Centre, Eko Hotel and Suites, Vic@Businessdayng

toria Island, Lagos. “SPE and NAICE continue to break new ground and explore blue ocean ter r itor y and our team of volunteers will always come up with innovative programs and activities designed to share technical knowledge and provide avenues for professionals to develop their technical expertise.

Thursday 01 August 2019

BUSINESS DAY

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Thursday 01 August 2019

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

MALL

Nigeria misses out as retailers lure African shoppers from markets into malls BALA AUGIE

etail chains are bypassing Nigeria, a country where the vast majority of people live in abject poverty, to open new outlets in other Sub-Saharan countries with booming coastal centre and rising disposable income. France’s Carrefour SA, one of the largest grocers in the world, has opened a new store one of the sprawling shopping malls in Ivory Coast, siting rising consumer confidence and stable macroeconomic environment. The French grocer, with three supermarkets across Abidjan city, said it plans to open 10 more across Ivory Coast, Kenya, and Senegal as it continues to expand its footprint across Africa. Because of a preponderance of stores across the country, the demand for new malls are on the rise, as developers are smiling to the bank, while tenants are buoyant since consumers are willing to open their purse string. The Ivorian economy, estimated at about $40 billion,

is the biggest in Francophone West Africa and is expected to expand by 7.5 percent this year, according to the International Monetary Fund. In 2018, Shoprite Holdings Plc, a South African retail giant, opened its first store in Kenyan, as it is seeking a foothold in East Africa’s largest economy. A g row i n g e c o n o my spurred by copious investment in infrastructure, lower crude price and job creation has underpinned consumer wallets. Kenya has GDP size of $89 billion while the IMF expects the economy 5.70 percent in 2019. While some African countries are attracting retailers into their malls on the back of a stable macroeconomic environment, Nigeria, with a GDP size of $492 million, and population of 200 million, has been experiencing an exodus of foreign investors as the economy is increasingly becoming unpredictable. Nigerians are getting poorer as over 50 percent of a population of 200 million live on less than $1.98 a day; little wonder the country has overtaken India as the world’s

poverty capital. Unemployment rate is at an all-time high of 23 percent, and to further exacerbate the already anaemic situation of consumers is the incessant fuel hike and devaluation of the currency. While inflation rate has fallen to a 12 month of 11.22 percent in May, the figure is below the central bank’s target range of 6 perent and 9 percent. Gross domestic product in Africa’s largest oil producer

expanded by 2.01 percent in the three months through March from a year earlier. That compares with 2.4 percent expansion in the fourth quarter. The median estimate of five economists surveyed by Bloomberg was for growth Because consumers have refused to open their purse spring, tenants are finding it practically difficult to meet their obligations to landlords. Most malls charge dollar rents—around $55 per square meter monthly—tenants were

soon paying more than before given the sharp fall of Nigeria’s naira currency. A tenant, who is a wife to a publisher of the one of the top Nigeria Newspapers, and who doesn’t want her name mentioned, said that the economic uncertainty served to limit budget of consumers and that most shoppers focus on buying basic goods and have reined on spending on non-essential goods. ”If I build a $100 million mall and people are show-

ing up just to take pictures, then it’s a big problem” said Omidire, in a recent interview with Quartz. Embattled retailers at the Apapa shopping mall have refused to open their stores while tenants are shrinking their foot sprints more quietly by choosing not to renew expiring lease. Analysts at Euro Monitor are of the view that the country is expected to record solid value growth, but growth is expected to pick up following the inauguration of a new government, supported by anticipated economic growth and a rise in disposable incomes. A young technology savvy people that prefer the comfort of a mall to the brink and mortals shops will be a major driver of retail activities. However, the lack of policy direction and delay in implementing strategic policies by the President Muhammadu led administration have been a prang to economic growth. For instance, it took the president six months to appoint his cabinet, a habit that has prevented foreign investors from investing their money in Naira assets.

CONSUMER SPENDING

Beer War: Premium lager segment nears rebound despite pressure on consumers-Analyst OLUFIKAYO OWOEYE

he race for market leadership and profitability among the three ‘musketeers’ players in the Nigerian beer industry has become highly intense, with each player churning out different strategies to boost volume sales. With the operating terrain still challenging, the three musketeers have to wait and see limited opportunities for growth in sales of lager, they are pushing premium brands shielded from higher costs, as well as their non-alcoholic drinks exempted from excise charges

Early this year, International Breweries Plc makers of Premium brand, Budweiser announced a price change in its premium brand dubbed ‘King of Beer’. It, however, announced a reversal of prices in March after the other two players namely Guinness and Nigerian Breweries refused to follow suit. The interval of price change saw significant sales dropped in Budweiser, with Nigerian Breweries’ Heineken and Diageo’s Guinness Gold being the biggest winner in the price change. Brewers in Nigeria are confronted by a combination of slow volume growth, a flat beer-pricing environment, intense competition, highwww.businessday.ng

er raw material costs, and higher excise, culminating in declining cash margins. The Nigerian economy has experienced sharp upand downswings in recent years, reflecting large fluctuations in oil prices. Con-

sumer price inflation spiked in 2016 and 2017, in large part reflecting a depreciating naira, whose value fell by a cumulative 45% against the US dollar between 2015 and 2017, the weaker naira led to rising import prices and higher overall inflation Dayo Ayeni, vice president and Sub-Saharan Africa consumer analyst at Renaissance Capital said the lull performance in the premium lager segment may soon be over. According to Ayeni, the premium lager segment has witnessed an improved activity unlike years back when Nigerian Breweries’ Heineken dominated that market. Between Q2 2019

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and Q2 2019, AB InBev has moved in with Budweiser which was launched on the eve of the soccer world cup held in Russia. “The reason for that is the absence of strong price increases in their core brands mainly the mainstream brands and players are trying to drive net positive growth in gross revenue per hector meter for their brands which could help them extend margins,“ he said. Ayeni further noted that management of IB will be stuck with Trophy and Hero drinks contributing to their bottom line. He however advised management to invest behind the brand as investors are looking for @Businessdayng

margin expansion and good returns. “Management is now faced with the dilemma to support the brand with investment or do you step out slightly to get expansion in margins and hold back on branding and advertising,” he said. He, however, lamented that the beer industry still looking for the catalyst as the consumers are still under pressure. “The consumer purchasing power will improve with the much-expected minimum wage increase, the volume that these companies are reporting is still not driven materially as investors would like to see,” he said.

Thursday 01 August 2019

BUSINESS DAY

Retail &

consumer business

CONSUMER GOODS

Consumer goods firms capitulate to slowing economy as revenue dwindles BALA AUGIE

onsumer goods firms’ woes are mounting as the clock ticks, as half year sales dwindles, raising concerns about the inability of federal government to formulate policy that will help boost consumer spending. Analysts say investors may perceive the unimpressive result to mean that second quarter GDP figure might turn out poor and that valuations will continue to be affected since profits are continually pressured. The combined revenue of 10 largest firms quoted on the floor of the bourse dipped by 2.63 percent to N752.014 billion in June 2019 from N772.14 billion the previous year. Of the firms on the Nigerian Stock Exchange 30- the list of the most liquid companies- consumer goods firms are more vulnerable to the

macroeconomic headwinds. Over the past few quarters, consumer staple companies have had to combat a combination of factors including: unrelenting smuggling activities, together with, and continued traffic gridlock in the road.

Consumer spending in Nigeria remains extremely subdued, with shoppers yet to recover from the effects of the naira devaluation, fuel price hike, and the strong price increases that were subsequently implemented. Nigeria economy has

been growing sluggishly as GDP expanded by 2.01 percent in the three months through March from a year earlier; that compares with 2.4 percent expansion in the fourth quarter. While inflation figure for the month of June fell to

a 12 months low of 11.22 percent, the figure, however, falls below the central bank’s target range of 6 percent and 9 percent. Analysts blame the woes of these companies on the lack of policy direction of the President Muhammadu Buhari’s led administration and that federal government has to formulate policy that will help create jobs and propel economic growth. A booming economic, where infrastructure bottlenecks are removed, allows consumers open their purse strings. Nigerians unemployment rate is 23.10 percent, one of the highest in the world. Drilling down the figures shows unilever Nigeria Plc’s revenue fell by 2.15 percent to N23.42 billion in June 2019 from N23.82 billion the previous year; It suffered an 18.40 percent in the Homem and Personal business. Dangote Sugar’s revenue fell by 4.15 percent to N80.36 billion in the period under re-

view as smuggling and influx of cheap products continues to undermine earnings. Dangote Flour Mills’ revenue’s sales reduced by 13.95 pecent to N48.74 billion in the under review as against N56.35 billion the previous year. Nacon Allied Industries’ suffered the steepest drop at the top lines as sales fell by 49.54 percent to N12.82 billion in the period under review from N25.76 billion the previous year. However, some firms bucked the trend as they recorded growth in sales. Nestle Nigeria’s sales increased by 5.05 percent to N141.91 billion in June 2019. The growth in Revenue has been largely driven by solid growth in Beverage business as the Milo RTD pack continues to gain widespread acceptance in the marketplace. Cadbury Nigeria revenue increased by 10.96 percent to N19.45 billion in the period under review from N17.55 billion the previous year.

CONSUMER SPENDING

Consumers spend more on jollof as it cost N5,974 per a pot … vegetable oil drove cost to 3yr-high … as Abuja became most costliest place to prepare jollof Endurance Okafor

igerians are now spending more to prepare a pot of Jollof than they did in 2016, thanks to the price of vegetable oil which drove the cost to N5,974, data by SBM Intelligence , a research arm of SB Morgen that tracks prices of key household items across major markets in Nigeria revealed. Three years ago when SBM commenced tracking the prices of commodities required to prepare a pot of jollof rice across the country, the national average cost stood at N5,072, 17 percent

or N902 less than the current cost. According to the June 2019 data by SBM Intelligence, of the ingredients involved in cooking a pot of jollof rice, that is, salt, seasoning, curry, thyme, pepper, tomatoes, vegetable oil, tinned tomatoes, beef, turkey, onions and rice, the prices of salt and other items remained remarkably stable over the three year period, experiencing only slight variations except for Vegetable oil which surged by 100 percent in the review period. “The key drivers of the increase in the jollof Index were rice, beef, turkey and vegetable oil. Vegetable oil particularly proved to be

most volatile, with price increasing by almost 100 percent in some markets across the country,” SBM Jollof index report said. Interestingly, the price of rice has been on a steady decline in all but the Abuja markets since July 2016 when SBM commenced tracking the prices of commodities required to prepare a pot of jollof rice, as compiled from the june index. As a staple consumed all over Nigeria, the cost of jollof is a good indicator to measure inflation rate in a country that has about 92.1 percent of its citizens living on less than N2000 a day. According data by the National Bureau of Statistics

(NBS) as analysed by BusinessDay, Nigeria’s inflation rate rose at a slower pace in June 2019 to the lowest level in eleven month, fuelled by decline in core inflation and moderation in food prices. The Composite Price Index (CPI), which is a measure of the general change in the prices of consumer goods and services purchased by households over a period, rose by 11.22 percent on a year-on-year basis in June 2019. This represents 0.18 percentage points lower than the rate recorded in May 2019 (11.40) percent and the lowest inflation rate recorded by the country since June 2018 when inflation rose by 11.23

percent. However, at the current level, the nation’s headline inflation remains higher than the threshold of 6 percent to 9 percent set by the Central Bank of Nigeria (CBN). The index has remained in the double-digit trajectory since February 2016 when it rose 11.38 percent. A dive into the data by SBM Intelligence revealed that, over the last three years, the North West and North Central markets were consistently the most expensive places to cook a pot of jollof in Nigeria, trending above the national average. Although, until December 2018, Sabongeri Market in Kano had the costliest

Team Lead: Bala Augie, Olufikayo Owoeye; Analyst: Bunmi Bailey; Graphics: Fifen Eyemisanre Famous www.businessday.ng

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jollof index. However, from the first half of 2019, Wuse 2 in Abuja took over as the costliest place to cook jollof nationwide. The South East, South South, and Lagos, consistently trend below the average. Furthermore, the data from the jollof index was not far from what NBS reported for state with highest and lowest inflation rate. According to the state funded bureau, all items inflation on year on year to June 2019 was highest in Bauchi (15.40%), Kebbi (14.73%) and Kaduna (13.91%), while Delta (9.46%), Kwara (9.01%) and Bayelsa (8.56%) recorded the slowest rise in headline Year on Year inflation.

Thursday 01 August 2019

BUSINESS DAY

TECHTALK Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

Bank IT Security

Onu’s target to reach China’s 2019 tech development level in 30yrs shows poverty of ambition FRANK ELEANYA

uring his ministerial screening on Wednesday, Ogbonnaya Onu, former minister of Science and Technology who was nominated a second time by President Muhammadu Buhari, said in the next 30 to 50 years the level of technology development in Nigeria will be at par with what China is today. While addressing senators during the screening, Onu said that during his term, the Science and Technology ministry in collaboration with other ministries in the federal executive council initiated the executive order number 5. The executive order is expected to promote the application of science and technology and innovation towards achieving the nation’s development goals across all sectors of the economy. “By that executive order, once fully implemented, Nigeria will have an economy that is innovation-driven, and in the next 30 to 50 years, nobody will imagine the level of development in our country. We would just be like China is today in terms of

Ogbonnaya Onu

advancement. Those who travel to China 30 years ago know the implications of what I am saying. Definitely, it will take a lot of time,” Onu told the senators. China’s more than 30 years of reform is a welldocumented history in which the country mad startling transformation from an economically and technologically backward nation to becoming the second most advanced economy in the world and the leader in many

technological innovations. According to the story, in December 1978, following a decade of the Cultural Revolution led by Mao Zedong that left the communist country in ruins, a series of transformative economic reforms opened China up to the international community and foreign investment. The reforms also paved the way for things like China’s trillion-dollar Belt and Road Initiative (BRI) – an ambitious infrastructural push

TECNO phone maker targets $4 billion valuation as China green lights listing FRANK ELEANYA

ranssion, the manufacturer of dominant smartphone brands Tecno, Infinix and iTel is on the verge of becoming the second most valuable technology company in Africa after MTN Group as it receives the preliminary green light to list shares on the Chinese Stock Exchange, on Friday. When it is eventually approved, the listing and a planned initial public offering (IPO) could push Transsion market value to above a $4 billion and put it miles ahead of technology companies like Jumia which listed its shares on the New York Stock exchange recently. Although the Shenzhen-based company has never sold a single phone in China but dominates the smartphone market in Africa, the planned listing

is seen as a response to a directive from Chinese President Xi to create a new equity bourse specifically to allow Chinese tech companies to raise capital locally, providing an alternative to stock exchanges in the global West. The new equity bourse known as the Star Market is expected to help tech companies from different stages raise funding from a less stringent process. Since it was announced in November, the President Xi directive has led to the launch of a Science a n d Te ch n o l o g y b oa rd earlier in 2019 and has received applications from 122 companies, according to data from Shanghai Stock Exchange. Transsion’s successful has largely been driven by exclusive focus on making ver y cheap mobile devices for African and South Asian markets. Transsion expansion mission has led to it controlling over 45

per cent of the mobile industry in Africa’s six major countries with cumulative sa l e s vo l u m e rea ch i ng over 246 million Dual-SIM handsets. The smartphone components of TECNO, Infinix, and itel are assembled, tested and completed in a big factory located in Addis Ababa. The factory currently houses 1,600 employees and has a production capacity of a million phones per month. The company’s diversified portfolio includes Carlcare for after-sales services, Oraimo for mobile accessories and Syinix for home appliance. Transsion also owns Afmobi, a mobile internet company which houses a quick search website www. af1234.com, a news portal s i t e w w w . h e l l o A f. c o m, an app store PalmPlay and an instant messaging platform Palmchat with over 140 million registered users.

aimed at expanding China’s political and economic influence internationally – and set the stage for the emergence of e-commerce and technology giants like Alibaba and Huawei. The economy of the country during the last three decades has also grown at an average annual rate of 9.8 per cent. While it should be applauded that Onu even has ambitions of transforming Nigeria’s science and technology space – the jury has

not returned on his previous term in office - what is perplexing is why he wants Nigeria to grow at a 2019 level in 30 to 50 years when the rest of the world would probably be run by robots, flying taxis and internet-of-everything becoming common place plus other yet-to-be-seen technological innovations. In other words, in 30 years times Nigeria will just be achieving technological advancements that China had achieved in 2019. To be fair, China in 2019 is leading the world in many technology innovations. For instance, China’s growing domestic technology market, now second only to that of the United States, is likely to surpass the latter in buying power by around 2020. China is also believed to be leading the world in artificial intelligence. The country’s AI researchers are poised to be in the top 50 per cent of most cited papers in 2019, according to study from Allen Institute and not to mention China’s superiority contest in 5G technology with the US. Thus, for 67 years old Ogbonnaya Onu aspiring to be at the height where China is in 2019 could be a start-

Bolo, an app to help children read features among Google’s new updates CALEB OJEWALE

he ‘okada’ mode in Google maps, which refers to the new tab for motorcycle travels, and even the provision for navigating and finding directions for commercial buses known as ‘Danfo’ may have taken the shine following announcements at the Google for Nigeria event last week, but there were other equally important updates and announcements. Noteworthy is Bolo, an app that helps children learn how to read. It is a speechbased reading app that helps kids learn how to read in English. It encourages them to read out loud and then provides individual, customised feedback to help improve their reading capabilities. Bolo was launched in India earlier this year and is now available in Nigeria and Ghana. It is available for download from the Google Play store, and so far, is completely free. Navigating through the app, there

are seven books pre-loaded with the app, and at the time of writing this article, as many as 68 others are available for download to the app’s library. Other new updates include Gallery Go, Google Lens, and a Nigerian culinary experience from Google Arts and Culture. Google also says it has partnered with the Nigerian Government to make an online safety curriculum available to all primary and secondary school students in the country, reaching an estimated 56 million Nigerian students every year. To help make it easier to visually explore places in Nigeria, Google is publishing more panoramic imagery on Street View. Starting with imagery of Lagos two years ago, Google has added Street View imagery of Abuja, Benin City, Enugu and Ibadan - with almost 12 thousand kilometers of roads added. Google also launched Gallery Go, a fast and smart photo gallery designed for users who do not have a reliable internet connection. Gallery

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com www.businessday.ng

ing point but it is not good enough for Nigeria’s 30 years future. Predictions from top scientists for the next 30 years in terms of technological advances are beyond what China has currently attained and any minister of science and technology that is unable to see as far ahead is unlikely to push any meaningful agenda for tech in the next four years. “We are not too far away from having an AI and brain interface,” Kai Wulff, executive vice president, Balton CP, the parent company of Dizengoff Nigeria, told BusinessDay in a recent interview. One of the projections for the next 30 years, according to the Defense Advanced Research Projects Agency, a think tank that is behind some of the biggest innovations of the US military, is human beings getting to the point where they can control things with their minds. Scientists are already working on neurotechnologies that can enable this to happen. This is likely the future where China and the rest of the world with public servants that are ready for the future will be playing.

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Go brings many of the best features of Google Photos on device, to help them find, edit and manage their photos even when they are offline. The app is only 10MB to keep the phone light and fast. From this week, Google says users will also be able to access the Assistant directly from Google Go in a new Nigerian voice. Using only their voice, they will be able to ask Google to perform tasks, from making calls to surfing the internet for specific queries. Google has also launched Lens inside Google Go, to help people read, translate, and search the words they see simply by using their camera. Users can open Lens, point it at a sign, and listen to the words read out loud. If they don’t speak the language, they can translate it into their own. Google has now launched support for Hausa, Yoruba, and Igbo. Google Arts & Culture also unveiled a new project, ‘Come Chop Bellefull: A Taste of Nigeria’, which pays tribute to Nigeria’s vibrant and diverse food culture.

Thursday 01 August 2019

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

JEE SECTORINSIGHT

Liability & Risks During Emergency Care – Issues & Options TOYOSI ODUNMBAKU

fter another challenging day at work, Anna nally shuts down her computer, grabs her bag and makes her way to the car park, determined to make it home before her kids turn in for the night. As she drives out of the oce complex and approaches the third mainland bridge, she notices an unuusual bottle neck of trac at the mouth of the bridge. Unknown to Anna, a band of armed robbers had just nished carrying out an exercise on the bridge and were attempting to escape… Anna watched in trepidation, as drivers hurriedly exited their cars and made for the bushes… As she attempts to follow suite, an array of bullets are suddenly released by the robbers and Anna is hit in the abdomen, by a stray bullet. Bleeding profusely, she is hurriedly rushed to a nearby private hospital, by some compassionate by-standers\helpers in the neighborhood and by the time they arrive at the hospital, around 12.00 mid-night, Anna is unconscious. e attending Doctor and nurse on duty, advise the helpers that in order for Anna to receive any emergency treatment, they would require a Police Report, as well as some deposit on account. e helpers who were unprepared

Toyosi Odunmbaku

for this request, take a decision to rush Anna to a nearby government hospital, where they imagine they will not have to expend any money. By this time, Anna Anna has lost a lot of blood and has received no emergency care since sustaining her injuries many hours ago. Consequently, before they can make their way to the government

hospital, Anna passes away. is unfortunately, is an example of the situation that usually occurs with gun-shot wound victims in Nigeria. is is no doubt in itself, quite disheartening, as deaths arising from gunshot wounds may be avoidable, if proper emergency care is given at the appropriate time. It is sad however, to note that due to questionable internal

controls in health-care establishments, gunshot wound victims are not given proper care, thereby opening the responsible healthcare provider or worker to avoidable criminal and civil liabilities. Concerns about potential liability for medical negligence, healthcare malpractice and medication errors during emergencies have never been more acute for the health care industry. Not only are the substantive laws increasingly complex, but the risk of detection of violations and imposition of penalties have never been greater. Thus, it has become increasingly important that healthcare providers, healthcare workers and healthcare establishments understand and formulate, preventive and detective internal controls to avoid, mitigate or reduce these attendant liability and risks. Indeed, the necessity to chart a system of internal controls during emergency care becomes glaring in the face of criminal and civil liabilities imposed on Healthcare providers and Healthcare workers under the National Health Act and the recent Treatment and Care of Victims of Gunshot Act. A painstaking look at Sections 20 to 30 of the National Health Act 2014, and Sections 1 to 16 of the Treatment and Care of Victims of Gunshot Act (2018) imposes obli-

gations and sanctions of far reaching consequences on Healthcare professionals and Establishments. For instance, Section 20(1) of the National Health Act provides that “a health care provider, health worker, or health establishment shall not refuse a person emergency treatment for any reason whatsoever”. Section 20(2) of the said Act further provides that any person who contravenes the above section is liable on conviction to a ne of NGN100,000 or to imprisonment for a period not exceeding six months or to both. It would appear that the Act does not place any limitation on the kind of emergency, as it gave a broad indication that all emergencies are to be treated with urgency. A consideration of the Treatment and Care of Victims of Gunshot Act (2018) reinforces the duty of Healthcare professionals and Healthcare Establishments in emergency situations. Section 1 of the said Act provides that “every hospital in Nigeria whether public or private shall accept or receive for immediate and adequate treatment with or without police clearance, any person with a gunshot wound”. e Act further provides in Section 6 that the Police may not receive any person with gunshot wounds from the hospital Continues on page 30

A publication by the law firm, Jackson Etti & Edu.

Transparent disclosure will give listed companies access to long-term sustainable capital – Oscar Onyema

hief Executive Officer (CEO) of the Nigerian Stock Exchange (NSE), Oscar Onyema has said that promoting transparent disclosure would help listed companies gain access to long-term sustainable capital. Speaking at a Capital Market Roundtable organised by one of Nigeria’s leading commercial law firms, Aluko & Oyebode in Lagos, where he led discussions around the theme: “Engendering an Effective Regulatory Landscape for Competition Law in Nigeria - Promoting a Fairer Market,” the NSE chief, expressed confidence that promoting transparent disclosure is a great way for listed companies to get long term sustainable capital. “This would enable them and the private sector at large, effectively play a key role towards actualizing sustainable development goals,” he said. The event, which was attended by over 50 stakeholders in the Nigerian capital market, touched on frontline issues in the economy, such as chal-

lenges relating to the administration of competition law in Nigeria and more specifically, the implementation of the recently enacted Federal Competition and Consumer Protection Act, 2019. Speaking about the event, Olubunmi Fayokun noted that, deliberations from the roundtable discussions would shape the policy and practice of competition law in Nigeria. In her words, “The new competition law will promote international best practice in the implementation of mergers and acquisitions in Nigeria, and ultimately lead to increased investor confidence.” In his remarks, Daryl Dingley, Partner and head of Competition Practice at foremost South African law firm, Webber Wentzel said, “You need to be upfront and also understand the public interest consequences of your transaction; is it going to affect suppliers, employers or a particular sector of the economy?” www.businessday.ng

Discussions followed a panel session, where Babatunde Irukera, chief executive/director general of the Federal Competition and Consumer Protection Commis-

sion), Mfon Bassey, Deputy director, Securities and Exchange Commission, Olusola Carrena, Head of Corporate Finance, Stanbic IBTC Capital, Daryl Dingley; Eric Idiahi,

Co-Founder/Partner, Verod Capital Management Limited and Ayodeji Oyetunde, Partner, Aluko & Oyebode addressed the issue of fairness in the capital market.

L:R - Unekuojo Idachaba, Senior Associate, Aluko & Oyebode; Babatunde Irukera, Chief Executive/Director General, Federal Competition and Consumer Protection Commission; Ayodeji Oyetunde, Partner, Aluko & Oyebode; Sola Carrena, CFA, Head, Corporate Finance, Stanbic IBTC Capital Limited; Eric Idiahi, Partner & Co-Founder, Verod Capital Management; Olubunmi Fayokun, Partner, Aluko & Oyebode; Daryl Dingley, Partner, Webber Wentzel; Mfon Bassey, Deputy Director, Mergers & Acquisitions, Securities and Exchange Commission (SEC) and ennifer Martins-Okundia, Moderator & Senior Associate, Aluko & Oyebode.

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Thursday 01 August 2019

BUSINESS DAY

INDUSTRYFILE

LegalBusiness

Strachan Partners, LASU, Emerge Winners of 2019 LCA-YAN Moot Competition …As LCA-YAN commits to capacity building for young lawyers, university students

trachan Partners, a leading commercial law firm in Nigeria, and Lagos State University (LASU), have emerged the winners of 2019 edition of Lagos Court of Arbitration - Young Arbitrators Network (LCA-YAN) International Commercial Arbitration Moot Competition, held last week. After the fiercely contested hearings, Strachan Partners’ team of young lawyers emerged winners by beating their counterparts from Olisa Agbakoba Legal (OAL) to the second place in the Law Firm category, while Lagos State University (LASU) team beat their University of Lagos (UNILAG) counterparts to win the University category prize. Four Law firms, Strachan Partners, Olisa Agbakoba Legal, Babalakin & Co and Banwo & Ighodalo had [qualified for the semi-final while Lagos State University, University of Ibadan, Obafemi Awolowo University, Ile-Ife and University of Lagos participated in the semi-final for the universities category. With this competition, the Lagos Court of Arbitration-Young Arbitrators Network (LCA-YAN) continues to show its commitment to deepening knowledge and interest of arbitration into young lawyers and university students across Nigeria through its annual moot competition. The 2019 edition of the competition which is the third, held at the Lagos Court of Arbitration, and saw Efemefuna Iluezi-Ogbaudu emerge Best Advocate in the Law Firm category; Babajide Michael Olusegun, claimed the corresponding prize in the University category; Strachan Partners as best participating team in the Law Firm category and Lagos State University as best participating team in the University category. Also, Olisa Agbakoba Legal won the prize for the best-written Memorial in the Law Firm category, while Obafemi Awolowo University clinched the award for best-written Memorial in the University category. Speaking during the event, Mazeedah Hassan, event director with LCA-YAN, the organisers of this competition, said the reason for

the competition is to get interest of arbitration into young lawyers and students in the university. “We realised that there are few opportunities for students and young lawyers to see the intricacies of an actual arbitration because arbitration is a private hearing between parties. So, this competition is an opportunity for young lawyers to see how arbitration is and get them interested in it,” Hassan said. She said the gift for those who emerge winners is price money, adding that the best memorial will get N250,000, best advocate, N250,000 and the winning team will get 1,000 dollars. LCA-YAN executives, Oluwaseun Philip-Idiok and Ridwan Bello added that the competition, which is an initiative of young arbitration practitioners in conjunction with the Lagos Court of Arbitration, aims to expose young professionals to International Arbitration Practice, and provide them with a platform to exchange views on issues in international arbitration. “The LCA-YAN aims to achieve this objective through: Mentorship for young practitioners under the supervision and guidance of expert Arbitrators; Fostering an international network of young Arbitrators for educational and practical collaboration; Providing access to continuous professional development and career opportunities, and Teaching and encouraging compliance with global best practices in Arbitration, amongst young practitioners”, Oluwaseun noted. Attempting a critical assessment of the competition, Oluwaseun adds that the process and journey has been remarkable “because the competition is getting richer and has resulted to the University of Lagos representing the country at the Willem C. Vis International Commercial Arbitration competition (Vis moot) in Vienna, Austria this year,” she said. On his part, Ridwan added that, the “LCA YAN International Commercial Arbitration Moot Competition has also inspired previous participants to do further research in the area of Arbitration, leading to several thesis in Novel issues in

L-R: Mr Ibifubara Berenibara (Senior Associate, AELEX Law Firm- Sponsor of the Trophy Prize), Ifeoma Solanke, Efemena Iluezi- Ogbaudu and Oluyinka Ogboye, All of Strachan Partners, Winners of the Law firm category of the 2019 Moot.

Arbitration in Nigeria. “LCA-YAN is grateful to its sponsors for their continuous support towards the success of the Competition and is open to receiving sponsorships for future editions of the Competition”, Bello added. “We have participation within Nigeria, Ghana, South Africa, Kenya and Egypt. For the first stage of the competition, which was written, we had about 20 universities and 26 law firms. He said panel of expert Arbitrators at the Lagos Court of Arbitration, carried out the assessment. Benjamin Wehmann a lawyer practicing in Frankfort and one of the judges at the competition said the competition is to teach practical skills to young lawyers and students in the field of international commercial arbitration and international commercial law. Wehmann said the Moot competition is essentially part of a larger initiative of the two world-wide

competitions going on in Vienna and Hon Kong. “In Vienna we have more than 300 teams from about 80 countries participating and in Hon Kong, there are more than 100 teams and probably 20 to 30 countries represented. The idea was to promote that format in Africa. “One of the lawyers here saw the international competition and therefore mirrored what we were doing. I saw his initiative in LinkedIn and I reached out to him three years ago and that is how we connected because we were always looking to support people in promoting that format in their respective countries. “This is an annual event. This is the third year in Nigeria. The international competition also happens every year and I think it is in its 22nd edition,” he explained. Speaking on Nigeria’s young lawyers and students’ performances when compared with global standards, he said it is quite remarkable

on how fast Nigerian lawyers adapt to different styles that they are confronted with. “What you see in the international competition is every country in every region has different approaches to the law. So part of this international experience is that you get confronted with different styles of approaching dispute settlement and it was very interesting to see how students here who had less international exposure adapted so quickly. “Last year, University of Lagos sent a team to Vienna and people in Vienna were very impressed with the level of competition they delivered,” he added. On the panel of Arbitrators for the 2019 competition, were leading arbitration practitioners, including Prof. Konyinsola Ajayi, SAN, Funke Agbor, SAN, Godwin Omoaka, SAN, Babatunde Ogungbamila, Laura Alakija. Others were Tola Osobi, SAN, Folasade Alli and Mark Modi. Speaking at the event, Funke Agbor, SAN, who said she was involved in the competition for the first time said she was proud of the performances from the participants. The Senior Advocate said it was impressive listening to young people dissecting cases and trying to persuade the Arbitral Tribunal on the decision they should take. She however encouraged the young arbitrators to always dwell more on the facts and then law to be able to put forward a good case. This year, the competition which had two separate tracks for Law Firms and Universities, had kickedoff with the assessment of memorials submitted by 20 Universities and 26 Law Firms. The event, which is gradually becoming an annual ritual in the legal community, is proudly supported by the Lagos Court of Arbitration as well as top Nigerian and International Law Firms, including AELEX, Olisa Agbakoba Legal, Stephenson Harwood Legal, M. A. Banire & Associates, White & Case, Solola & Akpana, Africa Legal Practice, Strachan Partners, Ibifubara Berenibara, and Adeniyi Akintola SAN & Co.

Liability & Risks During Emergency Care – Issues... Continued from page 29

for the purposes of investigation, unless and until the Chief Medical Director of the Hospital certifies him fit and no longer in dire need of Medicare. Section 13 of the Act subsequently provides that “any person or authority including any police ocer or other security agents or hospital who stands by or omits to do his bit, which results in the unnecessary death of any person with bullet wounds, commits an oence and shall on conviction be liable to 5 years imprisonment or a fine of N50,000 or both”. It would therefore appear that the healthcare provider may be liable, even where its worker is not found liable. Section 22 of the National Health Act 2014 lays the burden on

the healthcare provider to indemnify a healthcare worker that is eventually not found liable for negligence with the costs of litigation. is is quite awkward in our opinion, as the Claimant in the court action should be the one to indemnify the health worker in a situation where the health worker has not been found liable. It only goes to show that where a claim of negligence arises, the healthcare establishment may be unable to escape liability, whether or not it was complicit in the breach of duty of care, to such patient or claimant. With the above analysis in mind, it is my humble opinion, that for proper risk control and for the avoidance of liability risk (which includes civil and criminal liabilities) and exposure, it is necessary and crucial for healthcare establishments to conwww.businessday.ng

sider internal control measures that should be taken, to prevent liabilities attached to emergency care. I therefore recommend that the measures to consider for internal control of risks, as they pertain to emergency care under the National Health Act (2014) and the Treatment and Care of Victims of Gunshot Act (2018) are as follows: (1) Develop an Emergency Care Checklist To avoid criminal and civil liability, it is important that a checklist of all actions that must be taken during emergency care is issued to and understood by healthcare professionals (including support sta) in healthcare establishments. e suggested checklist should reflect the execution of obligations under the National Health Act (2014) and Treatment and Care

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of Victims of Gunshot Act (2018). Such obligations include the duty to disclose relevant information pertaining to a patient’s health and treatment to such patient; the duty of con- dentiality; the duty to report a gunshot wound to the Police within 2 hours of treatment; the duty not to certify a gunshot wound (GSW) patient as t, unless he is not in dire need of medicare; and the duty to notify family members or relations of the GSW patient as far as they may may ascertain within 24 hours of becoming aware of the victim or patient’s identity. (2) Maintain clinical competency One of the easiest ways to reduce liability risk is to ensure that the healthcare professionals have the necessary expertise to work under @Businessdayng

emergencies, so they can perform their duties as accurately and competently as possible. us, the best hires should be made, and continuous on the job training should be encouraged. Additionally, it is necessary that the responsible health care professional knows how to use all of the equipment they may need to use on a patient. Some malpractice cases can stem from mistakes using this equipment, so knowing how it works is essential. Understanding the strengths and weakness of each health care professional during emergencies within the establishment is another way of avoiding liability. is would allow the establishment avoid assignments its employees feel they are unable Continues on page 32

Thursday 01 August 2019

BUSINESS DAY

BD LegalBusiness YOUNG BUSINESSLAWYER “Little doses of intention, focus and agility keep the professional “together” OYEYEMI ADERIBIGBE

he year 2019 has run wild and it seems we are in December already and if you are like many of the lawyers in the buzzing professional world of practice, you will be taking a bare-faced look at the mirror or your goal checklist or maybe swiping past several posts on professional networks and rating yourself on your performance or non-performance. If you have more checks on your list, then you should back-pat yourself because you have done well. If it goes the other way around, then you may want to share some of your time reading the rest of this article. One thing I have learnt is that life happens in instalments and it is easier to get lost within the dreary length of work or even life and we do not realise how quickly the clock runs. This means that consciousness of the value of the instalment is probably more important than making bogus plans for a future that is happening already. More instructive is this, time is the most expensive currency that we as humans spend but if we rate how much of it is not put to productive use at work, we realise that for most professionals, it is rated and traded very cheaply. So as the clock turns and we begin to count down to the end of another year of work, it is important that you check your time diet against your goal checklist (if you have one) to see if they are in sync. Where they are not, I will advise some correc-

tive medicine, intention-ality, focus, agility. Intention suggests mindfulness. This means that the lay-out for your day is not just the schedule set by employers or the demands of work.

It is more. It means that you are reviewing the relativity of every action taken at work and even with respect to your personal life to confirm that they take you closer to your desired aims. This means that you are con-

scious of the balance required and you work towards this in instalments per time to correct the gaps that may present themselves. In plain terms, it is not too late to rejig the system and intentionally drive yourself towards the fulfilment of your goals. Focus is synonymous with directed intention. As the saying goes, even the road to hell is paved with good intentions, so intention, is not enough if there is no active direction of this towards your aims. It is a very tall order and usually the point at which many of us fall off the wagon. This means you drive your intention to ensure that you do not spend one second longer doing anything which derails you from the progress that you hope to see. Focus is the finisher’s strength and the propeller for almost any successful person. It means zeroing in on your goal without distraction. This goal may be a singular task at work or as simplistic as waking up at bed or even reducing your screen time. It is the leash on your self to ensure that you behave in line with the dictations of your head and not run off on emotional rollercoasters at the time you should show up to achieve. Lastly, agility is not only the current buzz word in project management, it is the ingredient that distils success and mediocrity. It is easy to fall into boring rhythms and not realise that you are losing your ability to create or more importantly that you are getting stuck. Indeed, it is easy for focused people to be railroaded into stagnancy without knowing it. Agility harnesses intention and focus for application in situations which are not

the norm or planned for. It manages change well without losing steam, attention or results. It is important that as we go on with life and work that we begin to be nimble enough to adjust as and when they are required. Those who advance are those who are able to make quick and smart adjustments as the demands arise. If there is a knowledge gap in the office, the agile worker will fill it. If there is a need for someone to step into the shoes of another in the event of an emergency. it is usually the agile worker who would be drafted in. The first indication of agility in my opinion, will be if you are able to turn around the non-performance from the beginning of the year and make the rest of the year worthwhile. As you begin to work out your personal or even corporate missions and visions, it is important that you review your work and life strategy for these ingredients and where they are missing, I can assure you that little doses of not less than one and where you really mean business all three of these will change the outcomes that you see. I wish you all the best. OYEYEMI OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Vice-Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ Committee Liaison Officer of the African Regional Forum of the International Bar Association. Feedback – Oyeyemi.aderibigbe@templars-law.com; yemiimmanuel@yahoo.com.

GREYMATTER

National identity management in Nigeria: Matters arising

ecently, the applicability of the provisions of the law and regulations governing national identity management in Nigeria was tested in two separate and interesting law suits. This article reviews the extant legal and regulatory framework for national identity management in Nigeria vis-à-vis the decisions of the various courts and analyses their implications on the activities and business transactions carried out by individuals and corporate entities in Nigeria. An effective national identity management system is critical to the development of any economy. It provides a universal identification infrastructure for a country that enables access and means to confirming the identity of individuals residing in a country. Thus, proper economic planning, adequate intelligence gathering and a functioning internal and external security architecture will be difficult to achieve in the absence of a robust national identity system (which is usually comprised in a central identity repository or database). In recognition of the foregoing, the National Identity Management Commission (“NIMC”) was established in 2007 pursuant to the NIMC Act to create, manage, maintain and operate a unified National Identity Database for Nigeria. To this end, the NIMC, which replaced the defunct Department of National Civic Registration, is required to carry out

the registration of all registrable persons in Nigeria and thereafter issue a General Multipurpose Identity Card (“National Identity Card”) to each registered person. In terms of the NIMC Act, registrable persons comprise the following: Any person who is a citizen of Nigeria; Any person who is lawfully and permanently resident in Nigeria, whether or not he is a citizen of Nigeria; Any non-citizen of Nigeria who is lawfully resident in Nigeria for a period of two (2) years or more. The information that may be obtained and stored in the National Identity Database about a registrable person (see Second Schedule to the NIMC Act) include: full names; other names by which the person is or has been known; date of birth; place of birth; gender; address of the person’s principal place of residence in Nigeria; address of every other place in Nigeria where the person has a place of residence; passport photograph; signature; fingerprints and other biometric information of the person. www.businessday.ng

In addition to the foregoing, information in respect of a registrable person relating to nationality; entitlement to remain in Nigeria together with the attached terms and conditions (if any) may also be recorded in a registered person’s entry in the Database. The National Identity Card issued upon completion of the registration process bears a unique National Identification Number (“NIN”), which is assigned by the NIMC to each registered person in the National Identity Database. The unique NIN is required to be incorporated into or made compatible with other existing identity-related databases/ registers containing information/ data relating to the registered person. In order to ensure efficiency in the task of covering the whole country, the NIMC operates administrative and monitoring offices in all the States, Local Government Areas and Area Councils of the Federation. Legal Significance of the National Identity Card As provided in the NIMC Act, registration and procurement of a National Identity Card is compulsory for all registrable persons in

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Nigeria. In this regard, there are no age restrictions for registration and possession of the National Identity Card. Hence, any person born in Nigeria since the introduction of the NIN is required to be registered within sixty (60) days of his/her birth, or at any time after this period not exceeding one hundred and eighty (180) days, or any other period as the NIMC may specify from time to time by regulation. For Nigerian citizens born outside the country, the NIMC Act does not specify a time frame within which they are to register and obtain the NIN but it should be noted that registration is also compulsory for this class. Hence, the NIMC has initiated the Diaspora Enrolment Programme and licenced some InfoTech companies who, working with foreign partners, are to carry out the enrolment of Nigerian adults and children in the Diaspora into the National Identity Database (see NIMC Press Release, 25 March, 2019). The NIN is required to be presented by registrable persons, before several basic transactions can be undertaken in Nigeria. Specifically, all registrable persons are required to state their NIN while engaging in transactions including the following: Application for, and issuance of a passport; Opening of individual and/or personal bank accounts; Purchase of insurance policies; Purchase, transfer, and registration of interest in land (subject to the @Businessdayng

Land Use Act); Transactions relating to pensions and Health Insurance Schemes; Consumer credit transactions, Payment of taxes; Registration of voters; and Transactions having social security implications. Registration for, and provision and use of hospitality services; Registration and licensing for, and use of health or medical services; Application for the adoption of an infant, child or person under applicable laws; Purchase and registration of aircrafts, ships, boats, motor vehicles and motorcycles; Registration and use of aviation services by airline operators and customers; Boarding of aircrafts, trains, commercial vehicles, ships and boats; Purchase of travel tickets or tokens for air, rail, road and water transportation; Acquisition, sale or transfer or transmission of shares or equities and other financial instruments; Enrolment into primary, secondary and tertiary schools and continuous professional studies in Nigeria. Registration of companies, sole proprietorships, partnerships and non-profit organisations and other post-incorporation documentation with the Corporate Affairs Commission; and Filing and registration of criminal Continues on page 32

Thursday 01 August 2019

BUSINESS DAY

BD LegalBusiness GLOBALREPORT UK M&A market softens as corporates National identity management in Nigeria... pause to assess opportunities Continued from page 31

he latest edition of Deal Dynamics – a publication by global law firm, Hogan Lovells has revealed that the UK’s dealmaking environment softened in the first half of 2019, much like many of its global peers. Unsurprisingly, a protracted Brexit process continues to fuel uncertainty. According to the report, many would-be buyers and sellers of assets are positioning themselves to take advantage of the possibility of greater certainty at the end of

2019, when the post-Brexit picture may become clearer. Supported by strong corporate fundamentals, company boards are weighing up the likelihood of changes to the post-Brexit tax regime and a possible liberaliza-

tion of regulations, while also considering political risks, such as the prospect of a Labour-led nationalization programme. It is also said that the current UK dealmaking environment is being impacted by global trends such as high volatility, concerns about trade and protectionism, and geopolitical instability. Significant movements in the value of Sterling are also prompting a clear ‘wait and see’ approach. • Culled from Hogan Lovells DEAL DYNAMICS

Saudi Arabia flouts international law with surge in beheadings

ublic executions in Saudi Arabia - a key Western ally which is due to host the G20 summit next year - represent multiple breaches of international law, according to a hard-hitting study published on Monday July 29, 2019 by a global legal body. Among the issues raised by the International Bar Association is the ‘arbitrary effect’ of Saudi Arabia’s imposition of the sharia code. So far this year, the Saudi authorities have carried out at least 134 executions, the International Bar Association’s Human Right Institute states. Of these, 55 were of nonviolent drug offenders and 37 were political activists killed en masse on 23 April 2019 following lengthy periods of detention, torture, and ‘grossly unfair’ trials. Should executions continue at this rate, the 2019 death toll will far exceed all previous recorded totals, the report’s author, Baroness Kennedy of the Shaws (Helena Kennedy QC), notes. The report catalogues numerous ways in which the Saudi penal code contravenes international law. For example, at least six of the 37 individuals executed in April were under 18 at the time of their alleged offences.

International conventions Saudi Arabia has pledged to respect include the Convention on the Rights of the Child, the Convention Against Torture and the Universal Declaration on Human Rights. The declaration outlaws the ‘arbitrary’ definition of life, which, the report states, is not to simply be equated with ‘against the law’, but ‘must be interpreted more broadly to include elements of inappropriateness, injustice, lack of predictability and due process of law, as well as elements of unreasonableness, lack of necessity and disproportionality’. All these are features of the Saudi justice system, the report states. The country prescribes the death penalty for a wide range of crimes, including ‘terrorism’ which can encompass any opposition to the government. Meanwhile the circumstances in which the death penalty must or may be imposed are often unclear, as

‘much depends on the interpretation of imprecise passages of the Quran, the hadith or fatwas, and jurists’ approach to such interpretation appears to vary considerably’. ‘This in itself is problematic, since it renders the rules and principles governing the imposition of the death penalty volatile and uncertain,’ the report states. The IBA Human Rights Insittute calls on Saudi Arabia to impose a moratorium on executions ‘with a view to ultimately abolishing the death penalty’. Meanwhile the kingdom should publish accurate information about persons on death row and allow an international factfinding mission by an independent and politically neutral organisation to investigate further. ‘The mission must be given immediate and unfettered access, as an absolute minimum, to all those who are on death row awaiting execution.’ In the event of failure to comply, members of the G20 should refuse to participate in the summit due to be held in Riyadh in November next year. ‘Otherwise, these countries and the EU will risk normalising and even tacitly legitimising the human rights abuses being perpetrated by the Saudi regime,’ the report states. ---Law society Gazette

and civil actions in courts or other arbitration processes. Specifically, Section 27(2) of the NIMC Act provides that any authority or organization to which a person applies to carry out any of the above listed transactions (or any other transaction as may be prescribed by the NIMC in a Federal Government Gazette), shall request such person to produce his National Identity Card or NIN. Thus, a person (individual or corporate) who violates any of the provisions of the NIMC Act or permits the carrying out of any transaction covered by the NIMC Act without a NIN, commits an offence punishable with various fines and terms of imprisonment (as appropriate) in line with the provisions of Sections 28, 29 and 30 of the NIMC Act. Regulatory & Compliance Framework The framework for the enforcement of compliance with the requirement of the NIN was first developed in 2015. The framework was reviewed by the NIMC in 2017, culminating in the release of the Mandatory Use of the National Identity Number Regulations, 2017 (the “NIN Mandatory Use Regulations”), published in the official gazette of the Federal Republic of Nigeria (Government Notice No. 123, Vol. 104, No. 121, Lagos, 13th November, 2017). As provided in Section 4(1) of the NIN Mandatory Use Regulations, the NIMC is required to ensure strict compliance with the NIN requirement under the NIMC Act, NIN Mandatory Use Regulations and other regulations made pursuant to the NIMC Act, as well as Nigeria Biometrics Standards Regulations, 2017. In furtherance of its resolve to emplace a formidable identity management system, the Federal Government of Nigeria (“FGN”), at the Federal Executive Council meeting of September 12, 2018, approved the immediate commencement of the implementation of a strategic roadmap for Digital Identity Ecosystem in Nigeria; necessitating full compliance with the NIN Mandatory Use Regulations. In this regard, the NIMC issued a public notice specifying Janu-

ary 1, 2019, as the FGN-approved commencement date for the enforcement of the NIN Mandatory Use Regulations and the consequent application of appropriate sanctions and penalties for noncompliance. Consequently, all registrable persons are required to provide their NIN to be able to carry out the above-listed transactions (and any other transactions that the NIMC may determine by regulation) as from the stated date. In accordance with the provisions of Sections 6 and 7 of the NIN Mandatory Use Regulations, the NIMC in exercise of its regulatory and enforcement powers, may: Upon giving written notice of not less than 24 hours, have the right to conduct an audit on the state of affairs and operations of transactions or services carried out by applicable persons and entities; Obtain an order of the Federal High Court to seal-off the premises or business place or shut down the identity database or stop further services by the defaulting person or entity; Demand payment of a penalty as provided in the NIMC Act; and Request the assistance of any law enforcement agency to enforce compliance with any directives issued under the NIN Mandatory Use Regulations. Furthermore, the NIMC is empowered to impose administrative fines and sanctions, in addition to the penalties provided in the NIMC Act, on any person or entity who fails to comply with the provisions of the NIN Mandatory Use Regulations and other relevant regulations made pursuant to the NIMC Act. Testing the Law Pursuant to the objectives of the NIMC Act and the NIN Mandatory Use Regulations, the NIMC has commenced collection of the data and biometric information of registrable persons into the National Identity Database. Upon completion of registration, a transaction slip known as the National Identification Number Slip (“NIN Slip”) is first issued to a registered person pending release of the National Identity Card. The NIN Slip serves as evidence of registration and bears the unique NIN of the registered person. To be continued

Liability & Risks During Emergency Care – Issues... Continued from page 30

to complete successfully without any error. (3) Document everything accurately Another essential statutory step to take, towards reducing and avoiding liability risk is to ensure that every step of emergency treatment is documented, from admission to treatment, and to discharge. For instance, if there is a complaint of any pain or ongoing issues, this information needs to be kept on record. Other things that should be documented include: • Interviews and discussions with patients • Results of diagnostic procedures • Changes in the condition of patients • Patient assessments during rounds

is documentation can be critical if a healthcare establishment or healthcare professional is ever faced with a malpractice lawsuit or criminal prosecution for negligence in emergency care. By having a record of all the important information of each patient, healthcare professionals can have proof of everything that has happened with them, which can be used in court to help them defend themselves. Record management is pivotal for many healthcare operations. Having records of everything from patient lists, medical les and even petty cash, enables healthcare organizations to prevent and avoid unnecessary liability. (4) Physical and Electronic safeguards The use of security personnel and cameras can assist the medical oce in reducing risk and protecting the establishment from liability, especially against unscrupulous claims. www.businessday.ng

erefore, it is important to have security personnel in place (at least two), and cameras can be placed at each entrance and exit, including the front desk. (5) Maintain presence Internal controls are effective tools for preventing losses and liabilities during emergency care. However, managers of Healthcare Establishments cannot understand the eectiveness of controls if they are out-of-touch with operations. Managers and executives need to be walking around their workspaces and letting people know you are observing operations. (6) Follow documented standards Generally, there will be a list of standards that healthcare professionals will have to follow on the job. Making sure they abide by this list is one of the easiest ways to prevent

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malpractice lawsuits. Healthcare professionals who follow procedure will be able to avoid any issues that could stem from them doing something out of the ordinary. Proposal for the amendment to the National Health Act It is my position that that apart from laying civil and criminal liability burden on healthcare providers and workers, the laws should extend to protecting healthcare providers that have done everything to put internal controls in place. We are of the view that liability should be limited in such situations. Indeed, a critical amendment that should be made is the provision requiring the healthcare provider to indemnify the healthcare worker for his costs for defending a litigation connected to breach of obligations, which may be tied to emergency care. I am of the view that the Plaintiff or Claimant should be the one to @Businessdayng

bear such burden, as such party was the one who took such healthcare worker to court in the first place. The healthcare provider should not be made to bear a burden it was not responsible for. Apart from the above recommendations, the National Health Act should be amended to include provisions mandating healthcare establishments to have internal risk control mechanisms in place, to prevent avoidable errors, which oen, have wide implications that may lead to death or in- capacitation of the victim(s) of such failure of process. Conclusion My position is that decisions made during emergency care are crucial and may attract avoidable liabilities if a proper strategy is not in place to ensure compliance and avoidance of any unwarranted abuse or malpractice.

Thursday 01 August 2019

BUSINESS DAY

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Thursday 01 August 2019

BUSINESS DAY

cityfile Accident claims two lives in Yenagoa Samuel Ese, Yenagoa

A Ola Oresanya, out-going MD/CEO. Lagos Waste Management Authority (LAWMA) (2nd r); Muyiwa Gbadegesin, in-coming MD/CEO (l); Moshood Oshun, chairman, Lagos State House of Assembly ad-hoc committee on Environmental Degradation (2nd l), and other members of the committee: Adedamola Kasumu (m), and Olawale Sulaimon (r), during a facility tour of the Simpson Transfer Loading Station (TLS), Sura, Lagos Island, recently.

Navy arrests 2 bunkering suspects, destroys boats in Ondo

wo illegal oil bunkering suspects have been arrested by the operatives of the Nigerian Navy, with two boats belonging to the suspects, also destroyed in Ondo State. Danjuma Ndanusa, a navy captain and commanding officer, Nigerian Navy Forward Operation Base (FOB), told journalists in Igbokoda that the destruction of the seizures was to forestall heinous crimes. A c c o rd i n g t o Nd a nusa, 338 jerry cans and some quantities of adulterated Auto-

motive Gas Oil (AGO) also known as diesel, wa s a l s o s e i z e d f ro m the suspects during patrol on the Igbokoda coastal-line, Ilaje local government area of the state. The commanding officer further explained that some of the bunkering suspects on sighting the navy patrol gun boats, fled into the creeks, making it impossible to nab all of them. He said two of the suspects were apprehended and handed-over to the Ni g e r i a S e c u r i t y a n d Civil Defence Corps for onward prosecution. Ndanusa warned criminals in the area to

desist from criminal activities and illegal businesses on the coastal area of the state, as there would be no hiding place for them. According to him, the navy will continue to resist every attempt by criminals and their illegal businesses to thrive on the Nigerian coastal lines especially in Ondo State. “Our personnel are on the alert and combat ready to forestall bunkering, illegal refining of crude oil and all criminal activities inimical to the development and sovereignty of the country, said Ndanusa on Tuesday.

The officer lauded the naval high command in Abuja and Lagos for their intelligence support for the personnel to flush out criminals from the coastal areas. He, however, urged government at all levels to create job opportunities for teeming youths in the Niger-Delta to reduce various criminal activities in the area. It would be recalled that the navy recently paraded nine bunkering suspects, 92 drums of adulterated Premium Motor Spirit (PMS) also known as petrol, and handed them over to the Okitipupa command of the NSCDC.

ghastly motor accident at about 8.00pm at Banga Camp on the outskirts of Yenagoa involving an a Infinity SUV and motorcycle has claimed the lives of the motorcyclist and one of the passengers while another is in critical condition, Cityfile gathered. The motorcyclist was said to be carrying two passengers from Yenagoa inwards Anyama in Southern Ijaw local government area on Monday night when the SUV with Lagos registration number SMK 801 C W driving in the opposite direction, hit him at top speed. Eyewitnesses said the SUV, which was driving without any headlamps a n d h ea d i ng towa rd s Yenagoa from Anyama in Southern Ijaw local government area, had four persons, the driver and three ladies. The driver of the car was said to have swerved from his lane to the op-

posite lane and the motorcyclist instinctively moved to the next lane to avert the collision, but the jeep swerved again to his lane before the impact. According to eyewitnesses, the occupants of the car did not suffer any serious injuries. How ever, the force of the impact threw one of the passengers on the motorcycle into the nearby bush over a distance of about 20 m e t re s a n d w a s o n l y d i s c ov e re d f o l l o w i n g keen observation from those who saw the motorcycle before the accident. When Cityfile visited the accident scene about 30 minutes later, concerned residents had pushed the car and motorcycle off the road while parts of both the car and motorcycle were scattered all over the road. Police officers from the State Traffic Command visited the accident Tuesday morning and towed both the vehicle away.

Sylva’s community butchers giant whale Samuel Ese, Yenagoa

he people of Okpoama community in Brass local government area of Bayelsa State have butchered a giant whale that was grounded on their beach, a reliable community source told Cityfile. The whale described as humpbacked and measuring about 50 feet was found dead on the beach on Sunday night and com-

munity folks believed that it swam into the area at high tide, but was left stranded when the tide receded. A community source told Cityfile on phone that a similar incident had occurred in the community 40 years ago in 1979 when a whale was found dead and stranded at the beach. Pictures of villagers butchering the dead whale with hack and cutlasses had gone viral on social media platforms.

EFCC foils suspect’s attempt to flush away phone, arrests 15 ‘yahoo boys’ in Ibadan REMI FEYISIPO, Ibadan

he Ibadan zonal office of the Economic and Financial Crimes Commission, (EFCC) has quashed a n at t e m p t by a s u spected internet fraud-

ster to flush his phone through a water closet in order to deny access to potentially incriminating data about him. The 20-year susp e c t , F i s a y o Fa l a d e , was among the 15 young men arrested in Ibadan on Tuesday for internet-related www.businessday.ng

crimes when EFCC ope rat i v e s c o n d u c t e d a raid on two locations in the ancient city. Ten of the suspects were arrested at Akatanpa Powerline, while the other five were na b b e d at Ku s h e n la area, Ibadan, Oyo State capital.

The suspects, whose ages range between 20 and 28 years, allegedly hid behind fake name s and ide ntitie s to perpetrate fraud, dispossessing their unsusp e cting victims o f t h e i r h a rd - e a r n e d money. Their involvement

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in internet-related fraud was reported to the commission by members of their neighborhoods who noticed their expensive lifestyle as undergraduates, and without any known sources of income. Items recovered @Businessdayng

from them include t w o e x o t i c c a r s, l a p tops, mobile phones and several documents c o nt a i n i ng f a l s e p re tences. The suspects will be charged to court as soon as investigations are concluded.

Thursday 01 August 2019

BUSINESS DAY

BUSINESS TRAVEL Nigerians access visas through recently launched EB-5 Immigrant Investor programme Stories by IFEOMA OKEKE

aving successfully launched the EB-5 Immigrant Investor programme in Nigeria few months back, the Atlantic American Partners (AAP) has so far enrolled some applicants into the programme and several others are in a bid to access visas through the programme. Recalled that in April 2019, AAP launched its United States EB-5 Immigrant Investor Program in Nigeria; as a convenient means to help potential investors in Nigeria to secure a hassle-free immi-

gration process to live, work, and attend school in the U.S., while also getting a reasonable return on their initial investment.

The EB-5 visa creates opportunity for foreign investors to invest in the United States and become legal permanent residents in America

with a green card, along with several other benefits including the ability to travel to one’s homeland from the United States without a visa, ability to sponsor family members for a green card after becoming a citizen, access to low or no cost- highquality primary and secondary public education; and thereafter public or private colleges and universities for participants and their children (21 years old and under, unmarried) at the same cost as US citizens. Speaking at the EB- 5 private business meeting organised by Atlantic American Partners (AAP) in Lagos, Daniel Ryan, the Managing Director, Emerging Markets

Africa, said “we are dedicated to helping clients and their families achieve their immigration goals, while providing one of the safest investment solutions in the EB-5 industry” Ryan further stated that the EB-5 visa was introduced in 1990 by the United States Congress and has since enabled a large number of families to live the American dream by granting them permanent residency through investments made in ‘trophy’ new commercial real estate investments. Ryan remarked that the trophy new commercial real estate investments include luxury hotels, luxury rental apartments/flats, and most recently; high-quality student

rental housing at American Universities. According to him, “The EB-5 programme requires each EB-5 investor to invest $500, 000 in the United States with projects that Atlantic American Partners oversees as ‘trustee’ that will yield at least 10 permanent jobs, per applicant, for United States citizens.” “Also, if the applicant desires, they can apply for US Citizenship and sponsor other family members to move to and live in America. It is important to note that ‘dual citizenship’ between USA and Nigeria is available, which is another tangible benefit to invest in this programme,” he noted.

AFRAA’s Director of Government and Industry Affairs to speak at Akwaaba Aviation Day

kwaaba African Travel Market has confirmed the participation of the newly appointed African Airlines Association (AFRAA), Director of Government, Legal and Industry Affairs, Aaron Munetis for this year’s Aviation day. Aaron Munetsi who has vast experience in Aviation Industry will be the lead speaker for the 2019 Akwaaba, African

Travel Market Aviation Day. The former Regional General Manager-Africa and Middle East, South Africa Airways, SAA, was responsible for business development and stakeholder management at all levels. The 15th Edition of Akwaaba African Travel Market will be holding in Lagos from the 22nd of September to the 24th. The Aviation day will be on the 24th Tuesday by 10am

at Eko Hotels and Suite. The Aviation day paper will be on ‘Impact of Airport Development and Airlines on Tourism Growth in Africa. The 2019 aviation day event is expected to take a critical look at the contribution of airports and airlines to drive tourism in countries across the global and Africa in particular. Governments all over the world are becoming aware of the importance

of tourism and the role it plays in contributing to its Gross Domestic Product (GDP), to the development of the economy. The event will feature presentations by notable aviation and travel professionals in the industry on issues concerning the sector. It aims to stimulate discuss from renowned industry players in the Travel, Tourism and Aviation industry.

NGO launches insight initiative to help tackle human trafficking in Nigeria ... as airlines record incidents of attempted human trafficking

he Nigerian Women Association, Verona (NWA), a voluntary organization based in Verona has launched an insight initiative to help tackle human trafficking in Nigeria. This move is coming at a time when airlines have continued to report cases of attempted human trafficking in

Nigeria and are working with the Federal Airports Authority of Nigeria (FAAN) to address the issue. NWA, Verona, Italy which works in the field of intercultural relations through empowerment, cultural enrichment, education of women, children and youth in order to project a positive image of Ni-

geria and her cultural values commemorated the World Day against Trafficking in Persons in Lagos on Tuesday, 30th July at the Kosofe Local government secretariat to raise awareness of the scourge of human trafficking in the country. The Insight action is said to be a collaboration which

L-R : Blessing Uwadineke, Chairperson NWAV, Lagos chapter; Ndidi Bowei, Human rights lawyer; Bose Otukpe, program coordinator; Raliat Ajani at the Nigeria Women Association Verona event. www.businessday.ng

aims at increasing capacity of key local stakeholders in the Veneto region Italy, Edo and Lagos state to address the theme of human trafficking from Nigeria to Italy as well as Sweden. Targeted to deal with evolving trends, forms and modus operandi with specific attention to female children, the program also promotes knowledge based policy making in the respective countries. The program also involves the launch of a pilot help desk in Lagos for victim returnees, training sessions for teachers as well as reintegration of victims of human trafficking. Speaking at the event, Awofesan Rasheed, chairperson of the Child Protection Network, Lagos said the issue of human trafficking was no doubt a scourge in the society and efforts had to made to change the state of things.

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NCAT introduces more courses to improve knowledge in aviation

igerian College of Aviation Technology (NCAT), Zaria has commenced admission into Ordinary National Diploma (OND), Higher National Diploma (HND) and Post Graduate Diploma into various fields of academy in a bid to improve knowledge in the sector. Abdulsalami Mohammed, the Rector of the college told journalists in Lagos on Monday that the essence of the programmes was to improve the academic knowledge of professionals in the sector. According to Mohammed, NCAT had sought and received accreditation from the National Board for Technical Education (NBTE) for the legitimate awards of the programmes, before the commencement of forms for the programme. He declared that the programmes are also aimed at transforming the college in line with the vision of the current administration for the institution, stressing that with this; the college would be able to compete favour@Businessdayng

ably with its counterparts across the world. He told journalists that the programme, which commenced five years, had contributed immensely to the knowledge base of the Nigerian aviation industry. For OND, he explained that the college is running courses on Electrical/Electronic Engineering Technology, Aircraft Maintenance Engineering Technology, while for HND, admissions are available for Aviation Management, Aircraft Maintenance Engineering Technology (Avionics option), Aircraft Maintenance Engineering Technology (Airframe/Power Plant Option). Besides, he stated that the college is also offering PGD in Aviation Management (full time), which would be held in Zaria, Kaduna State, while the part-time of the programme would hold in Lagos. He explained that admission into the programme would close after six weeks period, commencing from Monday last week.

Thursday 01 August 2019

BUSINESS DAY

POLITICS & POLICY

Okowa urges politicians to mind their utterances, swears-in 17 commissioners Francis Sadhere, Warri

feanyi Okowa, Delta State governor, has urged political office holders to apply decorum in their utterances to avoid heating up the polity. Governor Okowa gave the advice in Asaba during the swearing-in ceremony of 17 new commissioners. Those sworn into the Delta State Executive Council are Fidelis Tilije, Lawrence Ejiofor, Barry Pere Gbe, Julius Egbedi, Churchill Amagada, Arthur Akpowowo, Martin Okonta, Charles Aniagwu, Ifeanyi Egwunyanga and Mordi Ononye. Others are, Ovie Oghoore, Emmanuel Amgbabuba, Gbubemi Ikolo, Matthew Tsekiri, Christian Onogba, Omamofe Pirah, and Henry Sakpra. The governor was reacting to a statement credited to a prominent politician who used the media to castigate his administration for not granting his (the politician’s) request to nominate a com-

Ifeanyi Okowa, Delta State governor (left), congratulating Charles Aniagwu, shortly after being sworn-in as commissioner, in Asaba.

missioner. He said that political leaders were expected to “show some level of decorum in whatever they say or do because, I am not the kind of man that wants to be dragged into arguments with our leaders because I have a lot of respect for them. But when some leaders go off

course sometimes, it is important to put things in the right perspective.” According to him, “It is truly unfortunate that one of our leaders has been insulting the office of the governor on the pages of newspapers and on social media; it is very unfortunate that this type of situation took place

Senate resolution: Nobody will control us from Abuja, Edo government insists Innocent Odoh, Abuja

he Edo State House of Assembly saga took another twist on Wednesday as the state government reacted to the resolution of the Senate directing Governor Godwin Obaseki to issue a fresh proclamation for the inauguration of the state Assembly, which the governor has described as “misconceived.” The Senate had on Tuesday passed a resolution asking the governor to issue a fresh proclamation for the inauguration of the state parliament, which the governor insisted has already been done on June 17. Obaseki had on Monday said that he would not issue a fresh proclamation letter for the inauguration of the 7th Edo State House of Assembly. The governor in a statement signed by Osarodion Ogie, secretary to the Edo State Government, on Wednesday said the Senate was acting under political pressure from highly placed individuals whose intentions are to control the state even as he hinted that nobody would be allowed to control the state from Abuja. This was a veiled reference to the national Chairman of the All Progressives Congress (APC), Adams

Oshiomhole and his cohorts who are alleged to be the brain behind the crisis in the state. Obaseki said: “The Edo State government watched with alarm today as the distinguished Senate of the Federal Republic of Nigeria in a step that was not totally unexpected, purported to pass a resolution in the following terms: – Directing the Governor of Edo State to issue a fresh proclamation for the inauguration of the Edo state house of assembly, and ordering a fresh inauguration of the Edo state house of assembly within one (1) week from the date of the said resolution. “As earlier mentioned, this move was not unexpected in the light of the enormous political pressure which had been brought to bear on the officers and members of the distinguished Senate by the highly-placed and powerful persons who are intent on foisting their will and choices on the good people of Edo state. “This is borne out by the recorded statements made by one Seid Oshiomhole (a member-elect and younger brother of the national chairman of the All Progressives Congress, Comrade Adams Oshiomhole) wherein he boasted that both the Senate President, Senator Ahmed Lawan and the speaker www.businessday.ng

of the House of Representatives, Rt. Hon. Femi Gbajabiamila have been instructed on what to do in this matter.” Obaseki stated that the Senate was aware of at least three suits pending before various courts wherein the factual and legal dispute regarding the Edo State House of Assembly’s inauguration were submitted. He added that the pronouncements of the Distinguished Senate on the subject (with respect) is clearly misconceived and would amount to interference in the role of the courts which may, in fact, constitute contempt with which the governor would not wish to be associated. “The government of Edo State firmly believes that our state is not a colony or a vassal of any person or persons exercising power in Abuja and we shall take all necessary steps within the ambit of the law to defend and validate our position and actions on this matter. “We call on all persons of goodwill to call the powerful wielders of ‘power and authority” in Abuja and elsewhere to refrain from acts which are clearly unconstitutional, undemocratic and a flagrant disrespect for the principle of due process and separation of powers.

and I wish that the criticism was based on real facts, but, I do not think that the criticism was on a mistake on my part, because, the fact that a leader makes a request to appoint a commissioner and it is turned down is not enough for such a leader to go to the newspaper or social media to criticise the

government of Delta State. “More so, when such a leader by all standards and from all available information in the state cannot be said to have contributed enough to say the kind of things that he has said on the newspapers.” “Only yesterday, my attention was drawn to the fact that he has asked the government to account for the monies we have received in the last four years and I think that Deltans appreciate the much we have done within the limits of the resources we have and I am aware that in Burutu Local Government alone, a lot has been done and will still be done. Just a few weeks ago, the Vice President of this nation was in Burutu to commission the Obotobo 1 and Obotobo 2 to Sekebolo to Yokri road which is a 20.76km road for which our people were happy. “Only last year, we commissioned the Burutu township roads and I know that the people in Burutu town and the local government area are very happy with the

jobs; and I am aware that the road moving from Tuomo to Torugbene is on-going as I speak,” Okowa said. He said he was aware that they were continuing the bridge in Ayakromo and so many other projects that they are undertaking, adding, “Such a person from that local government is asking us to give account. I will say that I will want to start to give the account from his local government area and I urge him to tell us what he used his position to do for the people of Burutu.” Okowa, who congratulated the 17 commissioners, urged them “not to succumb to such negative emotions as complaining, grumbling and murmuring, as this administration will strive to ensure that all who have laboured in the past and especially during our electioneering campaigns will be rewarded one way or the other, if not by appointment but through some other means and I plead with Deltans to be patient with us as we navigate our way through this process.”

2003: Ogunlewe seeks constitutional amendment in tackling nation’s woes Iniobong Iwok

deseye Ogunlewe, a former minister of works has said that only an amendment of the 1999 constitution could help in tackling the current challenges bedeviling the country. He noted that the 1999 Constitution was defective and largely contributed to failure of past governments in the country, while advocating for concerted effort by stakeholders in amending it. In recent times, Nigeria’s

ethnic and political leaders have been agitating for a restructuring of the country and amendment of the 1999 constitution, which according to them was the solution to the myriad of challenges facing the country. However, the demand has been rejected by the APC and incumbent President, Muhammadu Buhari, who says the problem of the country, was about ‘the system of doing things’ rather than its structure. But speaking on the state of the nation in a telephone interview with BusinessDay,

Wednesday, Ogunlewe, said the country must make radical restructuring to make progress. According to him, “It is not about the President appointing ministers, what can they do when the system is defective and cannot allow you to work, I was there before as a minister; I know the issues. “I have said it before that we must amend the present constitution, or no progress, look at the numbers of abandoned projects, we have the highest in the world at 17,000 and every year we keep appropriate money for projects.”

PDP rejects tribunal sack of Ondo federal lawmaker, heads to Appeal Court YOMI AYELESO, Akure

he People’s Democratic Party (PDP) in Ondo State has rejected Wednesday’s ruling of the election petition tribunal nullifying the victory of Ikengboju Gboluga as the lawmaker representing Okitipupa/Irele constituency in the House of Representatives. The Justice Nuhu Adi led tribunal had sacked the PDP lawmaker over issue of dual citizenship, directing the Independent National Elec-

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toral Commission(INEC ) to withdraw certificate of return from him and issue Albert Akintoye, the first runners up and candidate of the All Progressives Congress (APC). Zadok Akintoye, the Director of Media and Publicity of the party in a statement said the basis of which the tribunal gave the ruling was against the constitution of the country under section 25 of the 1999 constitution as amended. The party maintained that the citizenship by birth of Hon. Gboluga cannot be @Businessdayng

forfeited by virtue of his secondary citizenship of the United Kingdom The statement read: “The constitution, by virtue of section 28(1) which deals with dual citizenship and forfeiture of Nigerian citizenship, states expressly that: Subject to the other provisions of this section, a person shall forfeit his Nigerian Citizenship if, NOT being a citizen Nigeria by birth, he acquires or retains the citizenship or nationality of a country, other than Nigeria, of which he is not a citizen by birth.

Thursday 01 August 2019

BUSINESS DAY

SUMMARY OF UNAUDITED HALF YEAR RESULTS FOR THE PERIOD ENDED 30 JUNE 2019

The Board of Directors of Berger Paints Nigeria Plc hereby announce the company’s unaudited half year results for the period ended 30 June, 2019. 30 June 2019 ‘000

1,565,840

1,583,893

Profit before taxation

214,188

179,350

Tax expense

(68,540)

(57,392)

Profit for the year

145,648

121,958

Other comprehensive income

Total comprehensive income for the year

145,648

121,958

Revenue

Earnings per share: Basic (kobo)

By Order of the Board

Ayokunle Ayoko

Company Secretary/Legal Adviser FRC/2015/NBA/00000013900

www.businessday.ng

30 June 2018 ‘000

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@Businessdayng

Thursday 01 August 2019

BUSINESS DAY

news WAEC official says Cambridge assessment report to Buhari not equal to certificate

Ryan Mclnerney, global president, Visa (l), and Herbert Wigwe, group managing director/CEO, Access Bank plc, during an interactive session on the digitisation of economies and expansion of financial inclusion across West Africa, in Lagos

FELIX OMOHOMHION, Abuja

Investment commitments in Nigeria falls 67% to $15.15bn in six months …Ondo overtakes Rivers with largest investment pledges OLUWASEGUN OLAKOYENIKAN

nvestment commitment to various sectors of the Nigerian economy fell by 67 percent in the first half of 2019 to $15.15 billion compared $45.74 billion pledged in the comparative period of the previous year, according to figures of investment announcements obtained Wednesday from the Nigerian Investment Promotion Commission (NIPC). The figures were contained in the “Report of Investment Announcements in Nigeria” released by the commission and categorised by sector, investors’ country of origin, and destination. The “report is based only on

investment announcements cited in the NIPC Intelligence Newsletters published from January to June 2019,” NIPC stated. “It may not contain exhaustive information on all investment announcements in Nigeria during the period.” Despite the decline in value, domestic and foreign investors were willing to invest in 43 projects in the first half of this year across 12 states of the federation including the Federal Capital Territory (FCT), Abuja, higher than 42 projects investors pledged to fund across 9 states and the FCT in the same period in 2018. Among the 12 states that attracted investment interest for the period, investors pledged the largest amount

of $1.1 billion to Ondo state, making the state displace Rivers state with the largest value of proposed investment, while Lagos and Ogun followed with $0.6 billion and $0.2 billion, respectively. A sectoral analysis of the announcements shows Mining & Quarrying sector got the biggest chunk of $12.3 billion, making it account for 81 percent of the total value; Manufacturing, 14 percent ($2.2 billion); while Finance and Insurance, Information & Communication, and other sectors each accounted for 2 percent ($0.2 billion) of the value. Royal Dutch Shell Plc of Netherlands proposed investment worth $10 billion. As a result, the Netherlands accounted for 66 percent of

the investment pledges; Morocco, 14 percent owing to $1.5 billion; while Nigeria took 9 percent of the investment value. Malaysia accounted for 6 percent, while other countries took the remaining 5 percent. Other top investors who announced their interests in the review period include Morocco’s OCP Group which planned to invest $1.5 billion in Ogun, Kaduna and Enugu, and Neo Themis/Kingline and Crown Refinery & Petrochemical Limited which declared investments worth $0.6 billion and $0.5 billion to Ondo, according to NIPC’s report of investment announcements in Nigeria.

Continues on page 45

Insecurity: FG to deploy CCTV, drones in South-West …as Ooni says bad Fulani must leave region …Shiites announce temporary suspension of street protests TONY AILEMEN & INNOCENT ODOH

resident Muhammadu Buhari on Wednesday said the Federal Government was working with the state governments to beef up the equipping of the security agencies with advanced technology and equipment that can facilitate their work. Buhari said he would be issuing directives to the appropriate federal authorities to speedily approve licensing for states requesting the use of drones to monitor forests and other criminal hideouts. “We also intend to install CCTVs on highways and other strategic locations so that ac-

tivities in some of those hidden places can be exposed, more effectively monitored and open to actionable review,” he said. President Buhari, who disclosed this when he received South-West traditional rulers led by the Ooni of Ife, Adeyeye Ogunwusi, who were on a courtesy visit to the State House, assured that his administration would continue to do everything necessary to protect the lives of all Nigerians and ensure that every Nigerian in every state is safe, and that people live in peace and harmony regardless of ethnicity, religion or region. “As a government, we rewww.businessday.ng

main committed to the ideals of our democracy, particularly entrenching the rule of law and the sanctity of life,” he said. Buhari assured that his government would enforce the law, prosecute lawbreakers and secure an atmosphere of tranquility for all Nigerians wherever they choose to live and also protect communities from all forms of crimes. “This is both in our interests as an administration and the interests of the people who voted us into office. We need security to deliver on our many programmes to the people. There can be no prosperity if there is no security,” he said. Corroborating Buhari’s

position, Ooni of Ife said any identified bad Fulani must leave the South-West, adding that the initial call for the Fulani to leave was as a result of “tension”. “Well, it’s because of the tension but this time around the traditional rulers have arrived at a resolution to ensure that will not happen. It is the bad ones that should be focused on. We all live in Nigeria; it is the bad ones that have come in from different borders that are porous, those are the ones we will focus on to separate the corn from wheat,” the Ooni said.

•Continues online at www.businessday.ng

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senior official of the West Africa Examination Counc i l ( WA E C ) o n Wednesday told the Presidential Election Petition Tribunal sitting in Abuja that the assessment result issued to President Muhammadu Buhari by Cambridge University Assessment International Education was not equal to a certificate. A deputy registrar in charge of school registration, Henry Adewunmi, ma d e t h e c l a r i f i cat i o n on Wednesday at the resumed hearing at the tribunal where the People’s Democratic Party (PDP) and its candidate, Atiku Abubakar, is challenging the declaration of Buhari as winner of the February 23 presidential poll. According to the senior WAEC official, the assessment which led to the issuance of result to Buhari wa s m o derate d by th e Cambridge Assessment International Education in conjunction with WAEC. Adewunmi, who was led in evidence by Buhari’s lawyer, Wole Olanipekun (SAN), told the tribunal that 18 candidates sat for the

1961 WAEC examination, including President Buhari who was indeed number two on the candidates’ list. Testifying further, he claimed that Buhari sat for eight subjects and had credits in five subjects as follows: Oral English C5, History A3, Geography C6, Hausa Language C5, and Health Sciences C6. However, under crossexamination by Atiku and PDP’s counsel, Levy Uzoukwu, the witness who claimed to have worked with WAEC for 30 years said the assessment report on President Buhari is not a document from WAEC because it bears Cambridge University Assessment International Education. Further cross-examined by the petitioners, Adewunmi admitted that he never worked with the University of Cambridge and that his own signature is not on the assessment report. He added that the attestation letter issued to Buhari on November 2, 2018 was not a certificate and it can be issued under various conditions.

•Continues online at www.businessday.ng

Nigeria misses FPSO boom on lack of clarity in fiscal terms

…Shell, Petrobras among companies with highest orders

STEPHEN ONYEKWELU

ncreasing numbers of orders for floating production, storage and offloading vessels (FPSO) appear already to be straining the global supply chain, including shipyards in Asia, but Nigeria may not benefit due to lack of clarity in the country’s fiscal terms for offshore petroleum exploration and production. According to World Energy Reports’ July edition, approximately 24 FPSO contracts are nearing critical decision stages and final investment decisions (FID) on these are forecast to generate more contracts than the supply chain can deal with. The report suggests these two dozen or so tenders are poised to reach contract awards over the next 18 to 24 months. “Whether the supplier base is capable of taking on all of these projects within this time frame is an issue,” the report says. It adds that the growing backlog is already forcing major FPSO contractors to be increas@Businessdayng

ingly selective in bidding on new contracts. However, the lack of clarity in fiscal terms that would eventually apply to offshore petroleum exploration and production licences has stalled some Nigerian projects that require FPSO to operate. These include Total’s I k i ke, O w ow o, B o nga South-West, and Preowei projects. The FIDs of these projects are expected to be made by 2020, with the first oil from Preowei scheduled for 2022. Others are the Zabazaba and the Etan fields which Eni/Agip is working on. Recently, a bill at the National Assembly on adjustment of the Production Sharing Contract (PSC) in terms of royalty brought together stakeholders and lawmakers to deliberate on how to allocate costs and proceeds from offshore oil exploration and production activities among stakeholders with claims to ownership.

•Continues online at www.businessday.ng

Thursday 01 August 2019

BUSINESS DAY

news Nigerian seed companies’ close shop as ... Continued from page 1

percent drop. Also, most of the seed companies ventured into the industry during the Growth Enhancement Scheme (GES) of the exPresident Goodluck Jonathan administration when key inputs such as seeds and fertilisers were distributed to farmers. Under the scheme, contracts were awarded to lots of seed companies to provide farmers with input. But the scheme was suspended by the current administration as states could no longer afford to pay their counterpart fund for the scheme. Th e c o mp a n i e s t hat closed shop struggled to offer competitive prices to buyers in the face of stiff competition with local and international players, experts say. Industr y players argue that some of the firms lacked the capacity to understand the chemistry of the industry, but jumped into it basically to make money. They were, however, gobsmacked by the reality on ground. Michael Oyegbaja, director of marketing, Premier Seeds, in a telephone response to BusinessDay questions attributed the tremendous decrease in the number of seed companies that are functional to quick-money syndrome in the country and the lack of technical capacity to operate in the industry. “A lot of companies registered as seed companies because they thought they could make quick money due to the huge potential. Also, the industry requires lots of technical capacity to operate which majority of them lack,” he said. Nigeria has a total of 314 registered seed companies, according to data from the National Seed Council, but BusinessDay investigation found that only 40 of the registered companies are in operation. BusinessDay visited the premises of some seed companies located across five different states and found out that many of the firms registered by the National Agricultural Seed Council (NASC) were not functional. The situation has slowed the growth of Nigeria’s seed industry which has a potential put at N777.38 billion in 2015, thus leaving farmers with low quality and adulterated seeds and seedlings that portend danger to crop production and food-sufficiency target. Experts suggest that currently the value of the industry may have risen by five to 15 percent since 2015. “Lots of businesses ran into the seed industry because of the enormous po-

tential without undergoing due diligence of the industry. They lack the capacity needed to successfully operate in the industry and the infrastructure to grow the industry is also lacking,” AfricanFarmer Mogaji, chief operating officer, X-Ray Farms Consulting Limited, said. “Also, many of them went into it with the intention of importing seeds into the country and not to produce,” Mogaji added. He advised NASC to carry out de-registration exercises after two to three years if the companies are unable to carry out any activity. Since 2012, the number of registered private seed companies grew from 11 to 315. Some of the seed companies that are functional, according to BusinessDay’s i nve stigati on , are P re mier Seeds Nigeria Limited, Maslaha Seeds Nigeria Limited, West African Cotton Company Limited (WACOT), Notore Seeds Limited, Candel Seeds Limited, Alheri Seeds Nigeria Limited, Value Seed Limited, Techni Seed Limited, among others. Nigeria’s total national seed requirements for major crops, including maize and rice, stood at 413,417.64 metric tonnes (MT) in 2017, while the quantity available was 93,306 MT, leaving a yawning gap of 320,111 MT, data from NASC show. To help reduce cost of production for operators willing to invest in the industry, some experts suggest the issue of inadequate funding can be addressed if seed companies enter into contractual agreement with breeders in research institutes to fund their breeding activities. “The cost of breeding can be enormous and since Nigeria cannot adequately fund agric research institutes to produce enough breeder seeds, seed companies should enter into contractual agreement to fund breeders,” Sam Ajala, breeder, International Institute of Tropical Agriculture (IITA), said in a response to questions. “With adequate planning and funding of the breeders by seed companies, research institutes will be able to produce the volume that they require,” Ajala said. In June, Nigeria signed the seed bill into law to provide legal backing to NASC to deal with issues of seed adulteration in the country but the Plant Variety Protection Bill – which provides legal intellectual property rights to plant breeders who develop new and improved seeds for increased crop production – is still waiting for assent. www.businessday.ng

Godwin Obaseki (m), governor, Edo State; Itohan Bazuaye (2nd r), permanent secretary, Ministry of Youth and Special Duties; Daniel Uwadia (2nd l), Edo South representative of the Nigerian Youth Parliament (NYP); Irene Ijie (r), Edo Central representative, NYP, and Abigail Aderemi, Edo North representative, NYP, during a courtesy visit by members of the parliament to the governor at Government House, in Benin City.

Dangote refinery: 4 local E&P firms set to supply ... Continued from page 1

role in the supply of gas to the refinery. The $12 billion Dangote refinery, an hour east of Lagos, will begin to stream and is due to hit full capacity by mid-2020. It will be the world’s largest single-train oil refinery. Still, many stakeholders are curious on update on the pipelines installation and how the refinery plans to get gas to power its plants and factories. According to insider sources in the Dangote refinery, the refinery is expected to source crude from anywhere globally which will depend on some technical and other commercial factors. “The gas will be sourced from Nigeria through Nigerian Gas Company Limited (NGC) and other upstream partners,” the source said, but declined to give further comments concerning the matter. Renaissance Capital, an emerging and frontier markets-focused investment bank, expects Lekoil’s Ogo field to be among the main suppliers to Dangote’s refinery. “Lekoil’s Ogo field is strategically located close to the refinery, implying it could be a supplier of gas and crude to the refinery,” RenCap’s Temilade Aduroja said in a recent publication. China Harbor Engineering Co and China’s Offshore Oil Engineering Company (COOEC) recently began laying 48-inch underwater pipelines to convey crude to the refinery, sources told BusinessDay. The pipeline project is part of Dangote’s gas pipeline, fertiliser, petrochemicals and refinery projects.

The work-scope includes transportation and installation of nine sub-sea pipelines with a total length of 100 kilometres in water depths of up to 40 metres. Of the pipelines, six are 24-inch diameter and three are 48-inch. The Chinese contractors will also install five singlepoint mooring systems, a catenary anchor leg mooring buoy weighing 240 tonnes, and pipeline end manifold carrying a total weight of 220 tonnes for a shuttle tanker that imports crude for the refinery. The refinery will have the capacity to refine 650,000 barrels of crude oil per day, the petrochemical plant will produce 780 KTPA Polypropylene and 500 KTPA of Polyethylene, while the fertiliser project will produce 3.0 million metric tonnes per annum of Urea. In addition, Dangote Industries Limited is promoting an East West Offshore Gas Gathering System (EWOGGS) project which consists of a 1,100km length sub-sea gas pipeline with capacity to handle 3 Bscf/d of gas. The current gas consumption by factories, power plants and gas-based industries in Nigeria is slightly less than 2 billion cubic feet per day (Bcf/d). The main constraint to growth is inadequacy in the supply of natural gas. According to sources, the list of acreages from which the EWOGGS is expected to extract natural gas includes America’s ExxonMobil-operated OMLs 70 and 138, Amni International Petroleum-operated OML 52, Shell operated OML 77, Sunlink Petroleum-held OML 144 and First E&P-held OMLs 71 and 72, in which

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West African E&P, a Dangote subsidiary, has significant stake. “The starting point for the pipelines is a new-build platform in OML 72, gathering gas from the hub with OML 52. The pipeline system consists of 7 gas receiving and 2 gas off-take subsea tie-in points along the route,” sources said. Other sources said a Dangote document actually lists OML 138 as scheduled to provide 10 percent of the 3Bcf/d EWOGGS capacity, but ExxonMobil does not have any agreement yet with Dangote Industries Limited, nor does Shell. Industry sources said Sunlink has been desperate to monetise its gas in OML 144. As such, it is keen to get on board while First E&P will deliver on OMLs 71 and 72, but it’s not clear what arrangement Amni International Petroleum has with Dangote. When contacted, an insider source in Dangote Refinery said he can’t confirm or deny these contracts arrangements because the discussions surrounding the sources of gas are treated with confidential agreements. Dangote Industries’ expectation is that Africa’s most populous countr y should be able to utilise 10 billion cubic feet of gas per day in its power plants and factories by 2020. In the last 12 years, the state has built over 10 thermal power plants with nameplate capacity in excess of 5,000MW, expected to be fuelled by natural gas. But the volume available has been held down by “insufficient Investment focus to grow the required supply capacity”, according @Businessdayng

to a concept note by the Dangote Group, which it shared with Nigeria’s Vice President Yemi Osinbajo in 2016. The bulk of the gas produced for the Nigerian market is for electricity, an industry considered rather unstable at the moment. Speaking at the Oxford Business Forum Africa 2019, Sahara Power Group’s Managing Director Kola Adesina said the available gas in Nigeria can power the whole of West Africa if the right infrastructure and facilities are put in place. Other gas and power analysts have lamented the obstructions imposed by off-take assurances vis-àvis pipeline tariffs, funding mix and failure of payment guarantee structures. And yet there are projects under construction and in feasibility studies. Shell and Seplat are collaborating on the Assa North Ohaji South (ANOH) project, which will deliver 600MMscf/d at peak to the Nigerian market. Meanwhile, Aliko Dangote, president/CEO, Dangote Group, said the Dangote Refinery seeks partnership with the NNPC as a collaborator rather than a competitor, noting that the refinery would rely heavily on the Corporation’s invaluable knowledge of the refining business in Nigeria to achieve its central objective. Dangote stated that upon completion, the refinery would dedicate 53 percent of its projected 650,000 barrels per day refining capacity to the production of petrol. “The most important thing for us is to see how we can partner with NNPC. We would like NNPC to be part of us and we also want to be part of NNPC. I think that is the only way we can achieve a win-win situation,” he said.

Thursday 01 August 2019

BUSINESS DAY

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Thursday 01 August 2019

BUSINESS DAY

news Manufacturing PMI records growth for 28 months - CBN HOPE MOSES-ASHIKE

entral Bank of Nigeria (CBN) on Wednesday released the Purchasing Managers Index (PMI) report, which shows that the manufacturing and nonmanufacturing sectors of the economy expanded consecutively for 28 and 27 months, respectively. The Manufacturing PMI in the month of July stood at 57.6 index points, indicating 0.2 points over 57.4 index points recorded in June 2019. New orders and raw materials grew at a faster rate, while production level, supplier delivery time and employment level grew at a slower rate in July 2019. The report shows that 13 out of the 14 subsectors surveyed reported growth in the review month. These include petroleum and coal products; transportation equipment; cement; printing and related support activities; paper products; food, beverage and tobacco products; furniture and related products; fabricated metal products; non-metallic mineral products; plastics and rubber products; primary metal; chemical and pharmaceutical products; and

electrical equipment. The textile, apparel, leather footwear subsector recorded decline in the review period. Analysts at FBNQuest say in a July note that manufacturing has not performed well as a whole since 2014. It endured the recession running from Q1 2016 through to Q1 2017, and is still struggling with demand pressures. This is indicated by the sub-neutral reading in June for employment (49%), driven by a sharp turn for the worse in the responses of medium-sized companies. The production level index for the manufacturing sector grew for the 29th consecutive month in July 2019 to 58.9 points compared to 59.3 index points. The index indicated a slower growth in the current month, when compared to its level in the month of June 2019. Twelve of the 14 manufacturing subsectors recorded increased production level, while two recorded decline. Also, the new orders index grew for the 28th consecutive month to 57.2 points, indicating increase in new orders in July 2019 from 55.9 points in June. Eleven subsectors reported growth, one remained unchanged, while two contracted in the review month.

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Raise standard of emergency response, Sanwo-Olu tells LASEMA JOSHUA BASSEY

agos State governor, Babajide Sanwo-Olu, has pointed to the need to rejig the operations of the state’s emergency response team for better performance and service delivery in disaster management. The governor, during a visit to the Lagos State Emergency Management Agency (LASEMA) operational headquarters at Cappa, Oshodi, also tasked the response personneloftheagencyonquality of service, saying they must raise the standards of their operations in line with international best practice. He pledged his administration’s support to the agency in the delivery of its mandate. “I like to commend LASEMA and its emergency workers’ performance in disaster management. But, we know there is still a lot that we can do to raise the standard and there is still a lot that is expected of us,” he said. The governor explained the decision to visit the operational base of the agency to assess the level of response mechanism and take stock of the challenges the agency might be facing. “We do not want to give excuses to the taxpayers. We pledge our continued support to encourage the agency to live up to expectations, because its efficiency in service delivery

would be the parameter citizens would use to assess and write the agency scorecards,” said the governor. He equally emphasised the need to embrace professionalism and empathy in the discharge of the agency’s duty, noting that disaster management required promptness and competency to minimise losses. He tasked the emergency workers to work towards reducing their response time by half, saying the government would address the resource gap hindering the agency from taking its service to optimal level. “LASEMA needs to escalate its level in managing emergencies. If it gets to the level where we need additional support from other agencies, such police, fire fighters, or any arm of government, we must be able to quickly analyse the situation and escalate it to another level, so that we can reduce losses to lives and property. Lagos is a centre of excellence and we must live up to billing by putting forward the best rescue operation.” Sanwo-Olu was accompanied on the inspection by his deputy, Obafemi Hamzat, and other top functionaries of the state, including the secretary to the state government, Folashade Jaji; the head of service, Hakeem Muri-Okunola; the chief of staff, Tayo Ayinde, among others.

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‘Nigerian organisations require work-life synergy to boost productivity, talent retention’ KELECHI EWUZIE

ny plan organisations have of boosting productivity and talent retention must be hinged on a robust synergy of work-life balance to be successful, industry professionals say. According to International Work Group survey, today’s dynamic and diverse workforce is in clear demand for flexible working on a yearly basis; workers demand is up to 75 percent from 70 percent in 2017. Analysts observe that forward thinking organisations are allowing staff to work where they want, in remote locations as well as in co-working spaces, and are even relying on more flexible workforce arrangements. They say employers and employees can benefit from flexible working environment in their quest to reduce expenses and increase productivity, and on the other hand achieve a better work-life balance. Ayo Akinmade, country manager, Regus Nigeria, says people are recognising that they are far more productive and successful in a dynamic working environment, while businesses are waking up to the financial and strategic benefits. Akinmade says demand for flexible office space is growing

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rapidly with 53 percent of professionals globally now working remotely for at least half their working week. According to Akinmade, “In this multi-faceted environment, the regular 9-5 is gradually becoming a thing of the past and many types of workers are using various combinations of workplace solutions that include home working, business lounges and remote offices, as well as traditional office locations, rather than espousing a single solution.” He further opines that one sure advantage to work life balance is that commuting stress is largely reduced by flexible working. “Flexible workspace gives access to technology, data security and a professional environment that make a workspace productive. Workers that struggle with a noisy environment or are unable to access a secure and strong internet connection cannot be productive even if they are able to reduce their commute time. “Not every workspace is created equal or indeed suited to every worker, but if businesses wish to reap the bumper benefits that flexible working is already bringing some of their competitors, they will need to carefully address worker needs and how they respond to them,” he states.

Wednesday 31 July 2019

BUSINESS DAY

NEWS

NECA wants CBN to consult widely on forex restriction on milk

AIHN urges FG to inaugurate PENCOM board HOPE MOSES-ASHIKE & GBEMI FAMINU

JOSHUA BASSEY

… holds dinner, award night Thursday

ssociation of Issuing Houses of Nigeria (AIHN) has called on the Federal Government to inaugurate the board of PENCOM, as it recently inaugurated the Securities and Exchange Commission’s (SEC) board. This, the Association said, will strengthen the governance structure of the pension industry and empower the regulator to make pending and long-overdue investment policy decisions for the benefit of the market and the economy. Meanwhile, AIHN will Thursday evening bring together members of the association, chief executive of investment banks, captains of industry, investors and political leaders at its 2nd Annual Dinner and Awards Night in Lagos. The Association also urged the FG to sustain its policies that create enabling environments

for businesses to thrive and for industry regulators to play contributory roles in achieving sustainable economic growth. According to Chuka Eseka, group managing director, Vevita Capital Management Limited, who doubles as the president of the AIHN, while addressing financial correspondents at a conference that while the private sector plays key roles in fostering economic development, the government also needed to provide a sustainable enabling environment for businesses to thrive. “Government must be decisive and close out on the key policy issues affecting the functioning of the economy to create the right framework for the acre to thrive. “It is time for the capital market to invest intellectual capital and develop solutions for funding key national priorities such as power transporta-

s reactions continue to trail the planned restriction of foreign exchange (forex) for milk importation by the Central Bank of Nigeria (CBN), the Nigerian Employers’ Consultative Association (NECA) has urged the apex bank to consult widely with industry stakeholders to gauge the suitability or otherwise of the policy at this time. NECA believes that creating an environment for further engagement of stakeholders will enable the CBN weigh the merits and demerits of the policy in the long term. Timothy Olawale, directorgeneral of NECA, who stated this, further posited that while the employers understood and acknowledged the imperative for backward integration on the long term, the proposed restriction of forex, in the consideration of NECA, was too sudden and “have the potential of crippling businesses, which are already struggling.” Without prejudice to the long-term benefits of backward integration, the short-term consequences, without a deliberate and acceptable plan by critical stakeholders could be catastrophic for local businesses in the value-chain.” On the need for a long-term backward integration plan, the director-general stated that cow husbandry in Nigeria had been proven not to be ideal for milk

production but for consumption only. “Contrary to the postulation that local cows are good enough for milk production, massive investment would have to be made for the importation of dairy cows for milk production,” Olawale said, adding that due to gap that would be created between local supply and demand, unscrupulous elements would have a field day importing milk with attendant loss of revenue to government, massive loss of jobs with attendant social consequences. He listed other consequences to include capacity under-utilisation as the entire food and beverage sector will be adversely affected as many are dependent, in varying degrees, on the use of milk as intermediate product. Proffering a way out of the situation, the NECA urged the CBN to “soften its hard-line stance and listen to the concerns of stakeholders.” He further advised the apex bank to, in the interim, suspend the planned restriction and engage in extensive consultation with all stakeholders. He also pointed out the need for the CBN to revisit the timeline of the implementation of the policy to enable companies’ plan for alternatives. “Local production of the product at the scale required to meet domestic needs would take between four to five years. Government should support key players in the sector to enable them invest massively in backward integration.”

tion and telecommunications to achieve the transformational and catalytic economic benefits,” he said. Speaking on the proposed recapitalisation of banks by the CBN in five years, Eseka said the CBN had a broader view and better understanding of the economy; therefore, there were proposition and justifications for their actions. He said the association was prepared towards such policies as they are ready to ensure that the policy is well understood by investors, adding that the AIHN will engage in activities to convince investors to pool resources and encourage investments. “We will work with the banks to properly define their investments story and create a unique go-to-market strategy that will aid them,” Eseka said. Speaking on economic issues regarding the interest rate, Ike Chioke, group managing

director, Afrinvest, proposed that a single-digit interest loan was the most suitable for the economy to encourage growth and development. He added that although some single-digit loans have been made available by the CBN through its intervention policies in its aim to improve those sectors like agriculture, which can be assessed through the window of commercial banks, he advised that such action should be replicated on the other sectors, as it would foster a thriving economy. “Using sterilised funds from commercial lenders through the cash reserve ratio, the CBN provides funding risk while the banks provide credit risk, applying a single-digit interest rate to the general economy will be more beneficial to industry players as well as business owners.”

MSMEs’ operators in Kano commend government’s financial inclusion town hall meetings KELECHI EWUZIE

icro Small and Medium Enterprises’ (MSMEs) operators in Taurani Market, Kano State, have lauded the Federal Government financial inclusion and the introduction of town hall meeting aimed at boosting profitability at the grassroots. Sulaiman Musa Jido, chairman, Taruani Market Traders, while speaking at the inaugural TraderMoni town hall meeting in Kano, said it was a welcome development and pledged his support in cooperating with the officials to ensure the process was transparent. Jido commended the Office of the Vice President for bringing the TraderMoni officials to ensure that the real Taruani Market traders collected the money. “I will encourage my people at Taruani Market to quickly pay back the TraderMoni loan so they can receive additional money to keep growing their business. We really appreciate this effort by the government,” he said. Uzoma Nwagba, chief operating officer, Government Enterprise and Empowerment Programme (GEEP), while speaking at the town hall meeting said these meetings would provide an avenue for the beneficiaries to engage directly with the different stakeholders such as officials

from the implementation partner, Bank of Industry; financial institutions and partner organisations from the private sector. Beneficiaries will also benefit from business advisory services to guide them in the utilisation of the funds for their businesses. Nwagba said the process of receiving cash out of the TraderMoni loans had been simplified and become more transparent through the printing of lists of approved applicants, which is vetted by the market leaders. Ahmed Isma’eel, senior special assistant to the President on Social Investment Programmes on his part, said the market leaders had been empowered to take ownership of the programme and ensure that the process ran smoothly. “The names of TraderMoni beneficiaries approved for cash out are displayed openly in the market. So, no longer will hardworking traders fall prey to unscrupulous and fake agents,” Isma’eel said. Fatima Aliyu, a tailor based at Yankabba Market who attended the second TraderMoni town hall meeting, which was held at Yankabba Junior Secondary School, confirmed that she received the alert on her phone about the TraderMoni loan and promised to use the funds to buy more materials to produce more handmade bags. www.businessday.ng

Paul Usoro (2nd l), national president, Nigeria Bar Association (NBA), cutting the tape at the groundbreaking ceremony of the Lagos Bar Centre in Lekki. He is flanked by Wale Babalakin (2nd r), principal partner, Babalakin and Co; Chuka Ikwuazon (l), outgoing chairman, Lagos NBA, and Gbenga Oyebode, chairman, Aluko and Oyebode.

Depression among youth: Edo urges collaboration among stakeholders … as EdoJobs, ITF to commence free training on welding, furniture making, others SEGUN ADAMS

do State Governor Godwin Obaseki has called on government at all levels, nongovernmental organisations (NGOs) and other stakeholders in the health sector to work together on strategies that will help young people deal with depression. Obaseki made the call when he received members of the Nigerian Youth Parliament (NYP) representing Edo State, at Government House in Benin City. He stressed that it was time governments gave serious thought to the issues and aspirations of youths as they form about 70 percent of the nation’s population. “Depression among young people is an issue we have not really focused on as we should. It is something we should highlight and get the various agencies of government; ministry of health and NGOs and other actors in the health sector, to look at how we can help young people who are

depressed in the society, more so, now that it is becoming a problem among youths.” He listed other problems that require similar attention as; unemployment, irregular migration and access to quality education, urging the Youth Parliament to articulate their issues and present them as bills that could be passed into laws. He noted that his administration was working to create an enabling environmentwhereyouthscanrealise theirfullpotentialthroughskillsacquisition and job creation programmes. “We are creating jobs in Edo State, but we need to expand these job opportunities especially in Information Communication Technology (ICT) and entrepreneurship. “We are also creating access to good education especially technical and vocational education.” He noted that his administration was ready to support and work with youths to mitigate their challenges, and advised them to redefine the way

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youths are perceived in the society. Earlier, the leader of the team, representing Edo in NYP, Daniel Uwadiae, said they were collaborating with the state and NGOs to curb illegal migration. “We are collaborating with the existing structures we have in the state such as EdoJobs, to promote acquisition of skills and entrepreneurship among Edo youths,” he said. Uwadiae added that the delegation would help mobilise youths across the local government councils in the state to help alleviate the challenges posed by flooding in some parts of the state. Similarly, the Edo State Skills Development Agency (EdoJobs) in partnership with the Industrial Training Fund (ITF) has concluded plans to commence free capacity building programmes in welding and fabrication, furniture-making, auto-gele and beauty care, interlocking blocks production, among others, across various locations in the state. @Businessdayng

Senior special assistant to the Governor on Job Creation and Skills Development, Ukinebo Dare, said the training would hold in Benin City, Auchi, Ekpoma and Agbede, noting that the skills development programmes promoted by the state government are aimed at building a skilled workforce in the state. According to Dare, “We have entered into a partnership with ITF to train Edo residents in various technical skills that are in high demand. The people are going to be picked from the various localities where the trainings are being held. “The training is also geared at building the right mix of experts that would work in the Production Center inBeninandtheonestobeestablished in Edo North and Edo Central. The trainingentailsweldingandfabrication forsixmonths;furniture-makingforsix months; auto-gele and beauty care for a month, interlocking tiles production for six months and Catering and Event Management for three months.”

Thursday 01 August 2019

BUSINESS DAY

news Spotlight Africa partners LAWMA, rewards 150 street sweepers for community service ENDURANCE OKOAFOR & ISRAEL ODUBOLA

t was an exciting moment for some street sweepers at the weekend as Spotlight Africa, a Lagos-based non-profit organisation, in partnership with Lagos State Waste Management Authority (LAWMA), rewarded 150 of those sweepers in recognition of their efforts to make Lagos clean. The event with the theme, ‘LAWMA Women Making a Difference Community Awards Ceremony’ and described as the first of its kind, was held in Ikeja, the Lagos State capital. In her remarks, Nonye MikeNnaji, president of the NGO and managing partner at HSPG Realtors, extolled the virtues of the street sweepers for their exceptional delivery, saying that despite the risk associated with the job and low remuneration, they still remained dedicated to duty. According to Nnaji, the objective of the event was to celebrate the women who were making a difference by keeping the highways and communities clean. “What these women are doing is incredible. Some of them wake up as early as 4am to sweep the streets of Lagos. What they did during the Ebola outbreak in Nigeria was magnifi-

cent,’ Nnaji said. She posited that their good work prompted her team to be the first to celebrate them. “The day I saw one of them working tirelessly, I began to think what it meant to clean the dirt in Lagos. I met some corporates to come and support us to celebrate them, and the turnout is overwhelming,” she said. She said plans were underway to organise a Yuletide party for them, and called on coporates to partner with them to make it successful. In his address, Oladimeji Oresanya, CEO of LAWMA, urged the street sweepers to maintain the tempo, saying it gladdened his heart to see them making impact in the community. “The last four years was tough for them. But we are happy that the glow in their eyes and faces has been restored,” he said. “You can recall, 10 years back, we did celebrate them annually. They had a handshake with the state governor to boost their morale, but all of a sudden, that stopped. But now, these ones are back on the streets, interestingly, Lagos is getting cleaner,” Oresanya enthused. The LAWMA boss maintained that the event went

beyond celebration of refuse collection, to devising ways to enable them have access to cheap loans, so they can do other things for themselves considering the job is part time. Amaka Onyemelukwe, head of public affairs and communication, Coca-Cola, said her company was glad to partner Spotlight Africa to champion the course of women in the society. “For us as a company, we are deeply passionate about women. If you look around, there is always a woman on the street selling Coca Cola and as such any initiative that impacts women, we are proud to always be part of it,” she disclosed. One of the awardees, Stella Oluku, urged Lagos State government authorities to look into reckless driving in the state, which is a big challenge to her work. “You know in Lagos, there are many reckless drivers, even when they sight you with safety pole, they will still want to climb on it. We want the government to checkmate this, and build more mechanisms to protect our lives,” she said. Spotlight Africa has said it is poised to enhance the continent where every individual can live out to his or her fullest potential through a power network of varied human investment.

Nigeria’s lagging oil, gas reforms continue to shut out potential investors STEPHEN ONYEKWELU

oreign investors recognise the potential in Nigeria, Africa’s biggest oil producer, butarestayingawaybecause clarity still eludes them as to how to recoup investments into the country’s oil and gas sector. Last week, a United States of America’s official said the country could attract more investments from US firms if the oil and gas sector becomes less opaque and a petrol price peg is removed. A reduction in opacity means clearer and more competitive fiscal terms. Unpegging retail pump price frees up the downstream oil and gas sector, making it more attractive for investors and takingoutasubsidyregimethatcosts the Nigerian National Petroleum Corporation close to $1 billion annually, since 2017. “Nigeria needs to think strategically about what is going to make it a more attractive destination,” Brent Omdahl,thecommercialcounsellor attheUSDepartmentofCommerce, said in an interview in Lagos. “Our investors are willing to compete on fairtermsfornewinvestmentsifthere is a transparent process to try to win new oil opportunities.” Industry watchers have said the existing fiscal terms in Nigeria’s oil and gas sector are not strong enough to attract investors into the country. The petroleum fiscal regime of a

country is a set of laws, regulations and agreements, which governs the economic benefits derived from petroleumexplorationandproduction. The regime regulates transactions between the political entity and the legal entities involved. “Onfiscalterms,theregimeisnot strong enough to attract investors, as compared with other African countriesespeciallyintheareaofdeep-sea exploration. The fiscal regime in the sector is not flexible enough to respondtodynamiclevelsofproduction and profitability,” Tengi GeorgeIkoli, the programme coordinator, Nigerian Natural Resource Charter (NNRC) had said in 2017. In a report of July 8, BusinessDay showed how failure to review the fiscal policies governing the exploration of oil in deep, offshore waters is costingthecountryenormouslosses in oil revenue amounting to trillions of naira. Nigeria’sroyaltyratesaretypically set as a percentage of the value of oil producedandthesizeofthelicensed area of production. Royalty rates rangefromzeropercentto20percent inonshoreareasunderJointVenture (JV) arrangements while under Production Sharing Arrangements (PSCs) ranges from zero to 12 percent.Royaltyratesforgasproduction range from 5 percent for operations in offshore areas to seven percent for operations in onshore areas. The situation is not the same for

other big oil-producing countries such as Saudi Arabia that collects 85 percent royalty on commercial oil production and 30 percent on natural gas. The United Arab Emirates have no fixed royalty rate as taxes are currently imposed at the Emirate level on companies based on actual oil production in accordance with specific (but confidential) concession agreements while Kuwait collects 50 percent royalty on commercial oil production. In Russia, Mineral extraction tax also known as royalty is charged on a fixed amount of $11 per ton, multiplied by coefficients that vary by depletion of reserves and other factors. Adeola Adenikinju, director, Centre for Petroleum Energy Economics and member of Nigeria Monetary Policy Committee believes the current oil contractual agreement most especially the offshoreproductionarrangementisnot in favour of Nigeria. “In the past when the oil price was very low a memorandum of understanding (MOU) was signed toencourageInternationalOilCompanies (IOCs). But this is supposed to have been revised over 20 years ago to encourage investment into offshore production since oil prices are now higher. Otherwise, Nigeria is being short-changed,” Adenikinju told BusinessDay.

HDI urged FG to prioritise funding for basic education SEYI JOHN SALAU

he Human Development Initiatives (HDI) has urged the Federal Government to increase funding to the educational sector as a means of cutting down the current 13.5 million out-ofschools children in the country. “It is therefore not out of place to state that poor funding is one of thegreatestproblemsconfronting the education sector in Nigeria. We sincerely believe that Nigeria will get there by prioritising education, especially by committing moreresourcestofundingeducation,” said Olufunso Owasanoye, the executive director of HDI. She stated this at the recent publicpresentationofthereportof monitoring the implementation of year 2016 and 2017 Lagos State Universal Basic Education Board (LSUBEB)ActionPlansinselected local government areas in Lagos. According to Owasanoye, the meagre resources being devoted to financing education, especiallybasiceducation,usually gets frittered away as proceeds of corruption through retail corruption, project cost inflation, use of substandard materials and kickbacks, hence the need for independent monitoring exercise. “HDI believes that Education is the only legacy that safeguards the future of children across board, cutting across socio-economic, ethnic and religious lines. Education is the way to go in a globalized world where technology and Artificial Intelligence (AI) is taking over the fight against graft, national and trans-national impunity. “While several civil society organisations (CSOs) beam their

searchlights on national level occurrences of graft, corruption has dwarfed most of the efforts put into improving the standard of basic education in Nigeria, often resulting in decaying infrastructure, low educational outcomes, dearth of qualified and well trained personnel among others,” Owasanoye said. Ganiyu Remi Sopeyin, chairman of LSUBEB, said the report would help Lagos SUBEB to understand how far it has performed with the fund made available to it and the quality of the job carried out by contractors, saying, “It will enable us to know where we still have to put in more efforts.” Omololu Soyombo, member of board, HDI, said private spirited organisations should be engaged to monitor the implementation of awarded contracts for better outcomes. According to Soyombo, the monitoring exercise will ensure projects are implemented according to plan. “The supervising agency or commission may not be able to visit or monitor all projects; hence it is better for an independent body to carry out the monitoring process,” Soyombo stated. HDI with the support of MacArthur Foundation has been tracking the utilisation of basic education funds in selected states for quite sometimes. However, experiencehasshownthatproject contractors may likely compromise standard when there is no third party monitoring or awareness of prying eyes of committed community members and Civil SocietyOrganisations(CSOs)who religiouslyandpassionatelyfollow up on projects. www.businessday.ng

L-R: Kehinde Olugbenle, Olu of Ilaro/paramount ruler of Yewaland; Babatunde Ajayi, paramount ruler of Remoland/president, Remo Traditional Council, Ogun State; Adeyeye Ogunwusi, O’oni of Ife; Vice President Yemi Osinbajo, and President Muhammadu Buhari, during the visit of South West Traditional Rulers to the Presidential Villa in Abuja, yesterday. NAN

Tenants, homebuyers advised to avoid pseudo practitioners in real estate sector CHUKA UROKO

rospective tenants and homebuyers in Lagos State have been advised to avoid people the state has described as pseudo or practitioners who parade themselves as estate agents and developers in the state’s real estate mark. With a very active rental market and over three million housing market, real estate business in Lagos is very lucrative and that has led to the development of quackery and unwholesome activities by fraudulent elements that take advantage of the high demand to defraud home seekers.

The state government has therefore enjoined residents seeking for accommodation to engage the services of only registered developers and agents across the state. Wasiu Adedamola Akewusola, permanent secretary, Ministry of Housing, gave this advice during a site visit in Ketu area of the state where a fraudulent property developer collected money from over 262 prospective home buyers for only 15 units of studio apartments. “Residents of should desist from patronising quacks and criminals when scouting for accommodation and homes to buy,” Akewusola counselled,

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decrying rate of fraudulent activities by illegal estate agents and developers who, through their nefarious activities, are swindling innocent people of their hard earned money. “We are greatly concerned about the rise in the criminal and callous activities of some dubious estate agents who lure unwary individuals to purchase non-existent parcels of land or rent one flat out to hundreds of prospective tenants,” he said. He disclosed that it was the responsibility of Lagos State Real Estate Transaction Department (LASRETRAD), a directorate under the Ministry of Housing, to register, monitor and regulate @Businessdayng

activities of genuine estate agents and developers. The permanent secretary advised intending tenants to ensure that they transacted business with only registered agents who could be recognized by the state government’s estate agents registration banner. He seized the opportunity to enjoin the people to continue to have confidence in government’s ability to fulfil the mandate of providing accessible, affordable and qualitative housing. “Lagos State is a responsible government and will not relent in its efforts at ensuring that the well-being of the people is upheld,” he said

Thursday 01 August 2019

BUSINESS DAY

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Thursday 01 August 2019

BUSINESS DAY

news SANEF rolls out 156,000 money agents as CBN pledges support HOPE MOSES-ASHIKE

he Shared Agent Network Expansion Facility (SANEF) has so far rolled out 156,000 agents with 2.2 million beneficiaries, while demonstrating optimism of achieving the 500,000 agents’ enrolment target by 2020. SANEF was a project powered by the Central Bank of Nigeria (CBN), Deposit Money Banks (DMBs), Nigeria Inter-Bank Settlement Systems (NIBSS), licensed Mobile Money Operators (MMOs) and Shared Agents with the primary objective of accelerating financial inclusion in Nigeria. But today, SANEF has converted to a company, incorporated in January. “Initially, it was a project set up by the banks. In January, we decided that for this project to be more effective we will have a proper company run by the people as supposed to having it on the side as a project,” Ronke Kuye, CEO, SANEF said. SANEF is meant to achieve 250,000 agents by the end of 2019 and 500,000 agents in the six geo-political zones by the end of 2020.

Kuye, who spoke with journalists on the sideline of financial services agents’ forum on Tuesday in Lagos, said the company was collaborating with relevant stakeholders including the super agents, banks, agents the police and others towards achieving the financial inclusion target. “What we intend to do is to have a forum like this every quarter where we meet with our agents to discuss the progress we have made so far, the products that we are pushing out there. We also discuss the way forward into achieving the financial inclusion target for 2020,” she said. Meanwhile, the CBN has reiterated its support, not just through implementation activities, but also through policy and operationalisation of research outcomes into financial inclusion. Speaking at the forum, Joseph Attah, head, financial inclusion secretariat, said the commitment of the CBN and the government is immediately evident, unequivocal, and irrevocable. Repres ente d by Paul Oluikpe, assistant director, finance development; he said the CBN continues to demonstrate its commitment to

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SANEF and its activities and objectives through providing complementary support, using its multi-stakeholder platforms, activities, coordination and engagements. Such key activities include financial literacy programmes, financial inclusion state steering committee activities, outreaches and sensitisation, account opening weeks planned across 36 states of the federation, the peer educator programme which would see youth corps members posted to financial institutions and local governments to drive inclusion. All of these he said will ride and utilise the agent networks and platforms to fulfil their activities. “As a policy institution, the CBN would ensure that it advances policy positions that enable and smoothen the spread of agent networks across the country, as this is mutually beneficial for all and sundry,” Attah said. SANEF Bank Verification Number (BVN) enrolment is currently at 40 million. Gbekeleoluwa Nubi, of NIBSS said the SANEF (BVN Enrolment) Project commenced in February 2018 and went live on August 1 2018. The financial inclusion rate currently stands at 63.6 percent.

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Thursday 01 August 2019

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

Why more corporates must think community and sustainability Stories by ONUWA LUCKY JOSEPH

igerian corporates routinely engage in the CSR that draws plaudits from government and the general public. And it’s a good thing, whatever is done to improve the lives of others that may not necessarily register on the bottom-line, at least not immediately. But there are lots of areas where corporate organisations in Nigeria need to apply themselves on behalf of the long term interest of the business as well as the community within which the business is undertaken. The oil companies readily come to mind. Shell and its never ending battle with its host communities is well documented. The company is currently in court on many fronts with aggrieved community leaders and wives of those who were slain with Ken Saro Wiwa. The much talked about cleanup is not going to plan and the strain between the company and the Ogoni as well as other communities is quite evident. This need not be so. Despite the millions spent on education and other matters, the community feels hard done by for the way the company treats its environment and the people’s sources of livelihood. The stark reality the communities face is that one day, there may be no more oil in their ground, but by then the ground would be so despoiled that it becomes literally good for nothing. But Shell is not the only company with such a withering reputation. There are many others polluting the environment where they do business. There are those others, (whose names are not Shell), whose products, as well, do not

Aliko Dangote

augur well for the long term health of their environment. Examples of these are companies involved in production of plastics or whose products require massive usage of polythene for packaging. One

volved in the production or massive usage of chemicals for their production processes. How safely are the chemicals disposed? What are the consequences for those whose source of water or food

changes. However, because the world is so used to doing things a certain way, the disruption of such ingrained patterns can only come from new inventions and discoveries; which is where we believe our big corporates should today be channeling their energies, aside other commitments. Sub Saharan Africa has its storied peculiarities that we need transform into modern realities. How we achieve that as a people is up, to a large extent, to our big organisations which must consciously strive for more collective wealth because only when the community is healthy and wealthy, only then can we really begin to play bigger on the international stage. Otherwise, we will remain easy pickings for outsiders who with enough capital can buy us out and have us working for their interests rather than ours. This has been the unfortunate situation in many an African country. But it must change. The need for community enhancement must be at the forethought of corporate honchos especially the communications

ness, for instance to, in concert with others, donate cement on a regular basis, to schools, hospitals, those places that are falling apart, and to put its people to work to ensure that derelict buildings are rehabilitated. Where they can’t be salvaged, they can be pulled down and others stand in their place. It won’t be easy work, and it may not get the mileage a hefty donation to some ‘national emergency’ gets. However, real lives would be impacted and grateful. That is the foundation for brand loyalty and a do-good culture that carries on from one generation to another. The call is to companies with the resources to engage the brains at their disposal to bring solutions about. Fortunately, Africa has no shortage of brilliant minds. What we have a glut of, is governments and organisation that do not have what it takes to galvanise the brains at their disposal towards solving Africa’s many problems. Let it be that we begin to look beyond the contrived fineries of today to build something for posterity. Business, as indeed life, should be about posterity

Abdul Samad Rabiu

would expect that in this era of sustainability where progressive businesses are known to align their products with their CSR strategy, that there would be more companies working hard towards alternatives. We do not always have to wait for the research to be done abroad and for us to adapt. There are big corporates in-

Mike Adenuga

happen to be along its disposal path? What of batteries? Be it for cars, telephones, computers, etc. Is enough effort going in to ensure adequate disposal that does not have a long term consequences for the environment? If good research is carried out that produces alternatives e.g. paper-based or other biodegradables for packaging, etc. all the credit would go to the company for innovativeness and resourcefulness. There is big room for those who are bold in their sustainability thinking. Paperless is good, sure, but what else. Usage of domestic gas as against firewood is good, sure, but what else. It’s a universe of possibilities that is not always hamstrung by lack of finances, only imagination and right thinking. Research & Development is the big kahuna ultimately in any sustained talk about sustainability. The low hanging fruits should be harvested by all, of course. And by this, I mean behavior and lifestyle

Cosmas Maduka

and CSR strategists who more than others can relate with the reputation deficit that we have and which we need reversed. It is for reasons of sustainability that corporates should engage more, for example, in school rehabilitation and infrastructure overhaul. We expect a Dangote, BUA and others in the cement busi-

and nothing else. It is what we bequeath that makes our names indelible. I am hoping that more organisations will take up the challenge of R&D to solve our long term sustainability issues. Air pollution, noise pollution, water pollution, the answers are not abroad. They are here. Let’s get to work.

The GTB annual autism programme

rom all available statistics, there seems to be an increase in the prevalence of autism worldwide, and Nigeria is no exception. The good thing, though, according to the World Health Organisation, WHO, is that, it is not caused by vaccination, and it is also not communicable. Unfortunately, there’s a lot of old wives tales around the condition which is actually a spectrum of conditions ranging

from near indistinguishable to near paralyzing. According to the WHO, “People with ASD are often subject to stigma and discrimination, including unjust deprivation of health, education and opportunities to engage and participate in their communities. “People with ASD have the same health problems that affect the general population. Furthermore, they may have specific health-care needs related to ASD www.businessday.ng

or other co-occurring conditions. They may be more vulnerable to developing chronic noncommunicable conditions

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because of behavioural risk factors such as physical inactivity and poor dietary preferences, and are at greater risk of vio@Businessdayng

lence, injury and abuse”. The GTBank Autism Programme is now in its 9th edition and it’s aimed at helping people understand the challenges of autistic patients and how their caregivers can better manage them. It’s also to help erase societal stigma that the ASD patients face on a daily basis. This being a condition that more kids (the most quoted statistic is 1/160 kids) face, the GTBank intervention is laudable and highly commendable.

Thursday 01 August 2019

BUSINESS DAY

Corporate Social Impact

How to drive profits with Corporate Social Responsibility MAUREEN KLINE

esearch shows that companies integrating sustainability into core operations reap multiple financial benefits. Companies that fully integrate social responsibility into their business operations are well placed for healthy financial returns on their investments, a new study shows. Research and consulting firm IO Sustainability has been studying the business case for sustainability, or CSR (corporate social responsibility), and has been able to map specific advantages obtained by companies that are serious about it. The firm’s latest deep dive looked at companies with CSR programs being managed separately from the rest of the company’s operations, and compared them with companies fully integrating CSR into their operations. The study found that integration brings enormous advantages. The winning strategy looks like this: a company identifies areas of social impact that fit with its core strategy, products or services, and operations. It makes a commitment, dedicating resources to these social impact projects that are material to the company. It manages and measures social impact performance with clear key performance indicators. And it connects and engages with stakeholders for full effect. According to the research, companies sticking to the IO Sustainability roadmap of integrating social impact into their business were able to: • enhance sales by as much as 20% • increase productivity by 13%

• reduce employee turnover by half • protect against litigation risk at a value equivalent to the cost of insurance worth up to 4% of the company’s value • increase the company’s share price by up to 6% • create a “reputation dividend’ worth up to 11% of market capitalization • reduce financial risk, the cost of equity, and the cost of borrowing. The study showed that companies not integrating their CSR programs into the business could still earn a reputation advantage, but not much else. A CSR program on the sidelines that does not involve employees, for example, would not affect employee turnover rates. Sales Companies fully integrating CSR were able to increase sales and prices. Other research confirms this idea, particularly as millennials seek ways to make their purchasing reflect their values. Customers pay attention to the

way brands react to social and political issues and are ready to boycott when a company’s values appear to conflict with their own, or instead to line up to buy to applaud a company’s activism. Never before has it been so important for companies to make their values clear and take stands. In a polarized world, taking a middle ground doesn’t work well anymore. According to IO Sustainability’s research, customers of companies integrating CSR fall increasingly into two categories: “aspirationals,” who think of a brand as part of the cultural fabric they identify with (a company today can hope to attract 39% of customers into this category), and “advocates,” who proactively promote a brand and support its values (a successful company can count on up to 20% of its customers as advocates, helping the brand on social media and with peer referrals). Understanding this truth, Aspiration Bank, an online bank targeting socially conscious savers,

has a new app ranking brands on social and environmental performance. When an account holder of the bank uses her debit card to purchase an Apple product, for example, she gets an alert on the app that Apple has a “People” score of 86 and a “Planet” score of 92 (reflecting the company’s commitment to renewable energy). She might be interested to know how a local business near her scores, and send its name into the app for a full review and ranking. Reputation A company can cultivate a reputation for great products, for being innovative, for offering a great place to work, for good governance, for good corporate citizenship, and for showing leadership on important issues. The IO research shows estimated percentage increases to things like market capitalization that a good reputation can bring. In fact, over the last half century, the stock market value of companies has shifted from being mostly

equal to the value of its brick and mortar assets and inventories, to being based on mostly intangible assets such as patents or reputation. Well-known brands today are worth vastly more than the sum of the value of the footwear or cloud servers or soft drinks they peddle. In order to fully integrate sustainability into a company’s purpose, culture, and operations, it’s important to fully engage with stakeholders. The general idea is to shift the focus of corporate strategy from short-term results and quick profitability for investors, to longer-term thinking and value creation for all stakeholders, including for example employees, the community, and the planet. The longer-term approach works better for longer-term investors, too, such as individuals saving for retirement. More and more prominent voices are calling for a shift to a longer-term horizon in management, and to value creation for all stakeholders. JP Morgan Chase CEO Jamie Dimon teamed up with Warren Buffett recently to call for an end to quarterly earnings forecasting, in order to push the focus of corporate managers towards the longer term, joining Blackrock’s Larry Fink who has repeatedly called for long-term thinking and attention to environmental, social and governance factors in his annual letter to CEOs. Integration of sustainability into operations is a winning strategy that will set the stage for a much-needed cultural shift for corporate America. • Maureen Kline is VP Public Affairs & Sustainability, Pirelli USA

(Culled from Inc. Magazine)

All Federal Universities Now to Enjoy PTDF Local Scholarship Scheme

he Petroleum Technology Development Fund (PTDF) just expanded its Local Scholarship Scheme (LSS) which covered only 23 universities to all the 40 federal universities in Nigeria. It is from this wider base that the Fund will select 555 masters and doctorate candidates across the country for the 2019/2020 session. Briefing journalists recently at the commencement of the selection interview for the LSS postgraduate programme across the six geo-political zones, the manager, Education and Training, PTDF, Mrs. Rabi’ah WaziriAdamu, said, “we have over 3,000 PhD and MSc candidates sitting for the interviews. “As you know, we have decentralised the interview venue. This is just for the convenience of our applicants and over 370 candidates would be selected for the undergraduate section of the local scholarship scheme, while it would continue to fine-tune the scheme ahead

of the gradual phase-out of the Overseas Scholarship Scheme (OSS).” She disclosed that the LSS is a policy initiative and there is a deliberate attempt to expand the scheme. “This year, unlike previous years where we had just 23 universities participating in the programme, we have all the 40 federal universities participating in the programme and we are picking 370 MSC candidates from across the nation; that is 10 from each state including the Federal Capital Territory; we are also picking five PhD students www.businessday.ng

from each of the states, including the FCT. “The local scholarship has an undergraduate aspect to it; we are picking 10 undergraduates from each of the states and they are going to all the federal universities. However, we had just about 23 universities, but because we want to expand the number of the LSS, we now partnered with all the 40 federal universities to implement the scheme.” Waziri-Adamu stated that the PTDF also has an upgrade programme where it picks departments in some federal universities as well as state universities that have oil and gas-related programmes, or upgrade in human capacity and infrastructure, adding that the LSS is instituted in each of these upgraded departments. She explained that the Overseas Scholarship Scheme, OSS, which it planned to phase out gradually, is a short-term measure to address the capacity gap in the Nigerian petroleum

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industry, adding that following the implementation of the OSS over the years, the PTDF had trained a significant number of lecturers and imbued them with critical skills. “We have so many Nigerians now that are participating in the oil and gas industry that the PTDF has trained. So we feel that the time has come for us to domesticate the programmes and then cut down on the numbers that we sponsor for the overseas scholarships.” According to her, in the past two years, the PTDF had reviewed all the benefits for the LSS and made it more attractive. “We have included an aspect that caters for bench work for the PhD scholars; they go abroad and spend six months in a university that offers a programme that is related to their research area. So they get a supervisor that would work with them abroad. For some of them, it is due to lack of equipment, for some it is because of the expertise that they find in the universities abroad. @Businessdayng

“We also give provision for conferences. This is to encourage our local scholars to have an international aspect to their research. So once they have a paper that has been published or that they wish to present, we allow them to go anywhere in the world, as long as we know that the conference is oil and gasrelated and it is of high standard; it is recognized in the industry. PTDF foots all the bills, including air tickets and then allowances that would pay for their accommodation while attending the conference.” This is all good and commendable. Our hope is that the PTDF would also help with ensuring that the schools are well equipped and well-staffed so that its scholars when they come out are adequately equipped to take the Nigerian Oil & Gas business much further than where it currently is.

• (For feedback, contact us at csrmomentum@gmail.com/ 08023314782)

Thursday 01 August 2019

BUSINESS DAY

Garden City Business Digest Stop breaking pipes:

Ogoni soil may never be fully restored again – NOSDRA boss - Quest for cheap kero is no excuse to continue degrading the environment

been able to catch culprits and that the youth are taking laws into their hands. Government and oil companies are all liable and wondered what level of development government delivered to oil communities. On this score, the NOSDRA zonal boss condemned the situation whereby oil communities buy kerosene at very high prices, saying it causes frustration in oil communities. “Some

monarchs and leaders in communities rather see the youths causing vandalism as heroes. One monarch said at a function that he would never ask the youths in his domain to stop illegal refining because they do not see government kerosene. So why would they not appreciate the one the youths produce. For this reason, the chiefs see the youths as saving grace. It is thus difficult to stop the boys.” Nkangwung said his office preferred to treat matters with utmost sincerity, a policy that showed fully throughout the interaction. “We say the truth about cause of spill, gravity and size, etc. This agency created in 2006 is the lead agency in environmental management of spill; we clean, remediate and restore. No matter what you do, you can’t restore any environment 100 per cent. Collaboration with the Energy and Maritime Reporters (EMR) is thus a good development because it will give us opportunity to give out useful information.” He mentioned the concerns of NOSDRA in Port Harcourt; “We need information on spill from all sources. Members of the public should report spills to NOSDRA. There is need for public enlightenment and we also mediate between communities and oil companies. So, wee too need to get information about oil companies. We have solved many cases. Courts are the last resort after mediation has failed.” The regional director welcomed the partnership offer and promised a free flow of information to the EMR now that it is clear that they would handle it with responsibility. One thing however stood out; NOSDRA is one of the federal agencies that suffer acute under-funding despite overwhelming responsibilities. If it is left to the polluters (oil firms) to transport them to site and do support with logistics, it would not be ideal. Observers say in the battle to save the Niger Delta environment, an agency like NOSDRA need to be financially capable of mediating between the oil companies and the communities.

common people ordering his master about were his seniors in school who commanded about in the past. They were merely re-enacting old times and exercising their seniority status over the man now; though he is now very much their senior in life. So it was that when I met the loud-talking and ever-jovial Chinemerem Oshionya, Amaliri, Goodluck Jackson (the singer), Denis Nwosu (now a professor), our senior prefect then, Alex Chigbu, and Mathew, at the burial of McPherson Chigbu’s mother at Umuchukwu (?) in Eziama, Ngor-Okpala, fun exploded. It was difficult to know whether we came to mourn or to scatter fun. We did both. It was Oshionya that alerted us about the death/burial and made sure we turned up. Many others he tried to catch such as Beatrice Nwachukwu and Joy Ihenaka (now Dr Okpara, wife of one of our most beloved tutors) escaped his efforts. I went to Choba (near the Uniport) to pick Oshionya up and we picked up Amaliri on the way from Port Harcourt to Okpala through Okehi. The journey turned into a safari. If kidnappers were to see us, they would be bewildered because of the intensity of our shouting called conversation and the fierceness of our feeling of bravery on that forest road. That is what old boyness can do to aging men. One thing was clear; each person showed eagerness for the success story of the other. Boys exclaimed and cheered every bit of success story they learnt about any old boy. If any old boy was mentioned, they would ask in chorus, “Is he doing well?” Next, they would claim that our set was the best. Soon, we all left to my village in Ubahi in

Mbutu-Nworie for me to drop some load I brought home and also see my sick mum. My mates poured money on her. We ran off, chattering noisily like chatter-birds. The road knew no peace. My mates that used to condemn Mbaise people became cheerleaders, praising my community, finding everything good and admirable. If I stood for governor that moment, they would all vote for me. I, too, for them. Soon, Amaliri re-assumed his role of my senior brother and boss. I was glad to be his boy again. He was very protective of me those days and he took back the position, now. Oshionya the former bully wanted to protect me more, but there was no vacancy. Amaliri reminded me of my prophetic inscriptions of declaring that ‘I will make it; I will make it”. To be sincere, I did not know what I was going to make. All I knew from childhood was to be a lawyer; not for the money because I never knew what money lawyers made. Life later pitched me into Journalism. I am a senior journalist, people say a versatile one for that matter. I am a chartered editor and writer, but have I made it? I am not a lawyer, but my wife is happier for it, saying my kind of person with huge public sympathy should never be a lawyer, that her children would starve where I would be pursuing public-interest cases probono. I don’t agree with her, but what would I do. Okay, I agree, but I put in everything I have into writing my stories; whatever that is called. That is how we fared when the Old Boys or Class of ’77 met at the burial of McPherson’s mum. We have plans to do stuff soon but that’s how we always plan. Age and distance stand greatly between us.

Ignatius Chukwu

he United Nations since 2011 recommended $1Bn to be released by polluters for the remediation of the environment in Ogoni areas but a man helping to protect and restore the environment has warned that Ogoni soil does not stand the chance to achieve 100 per cent restoration. On this score, he has appealed to the youths breaking pipes and refining crude oil to know that oil is now found 10 meters deep in Ogoni soil and that remediation may not ever get to that point. The chilling revelation came when journalists covering Energy and Maritime (known as EMR) in the Port Harcourt zone paid a visit to the regional director of the National Oil Spill Detection and Response Agency (NOSDRA), Cyrus Titus Nkangwung, at the regional headquarters of the agency located on Peter Odili Road in Trans-Amadi, Port Harcourt, last week. EMR team was led by the interim chairman, Martins Giadom of Radio Rivers, to fashion collaboration mechanism between both bodies to fight deteriorating environmental disasters and oil pollution in the Niger Delta. He said information in the fight against pollution is difficult to come by and pleaded with NOSDRA to open its doors more to reporters. He offered partnership that would also help the EMR members get specialized training. He commended Nkangwung for numerous achievements including collaboration with other agencies and sustaining the activities of his predecessors. Responding, the zonal director said: “We cannot stop oil production but we will work to stop oil spill and to clean up the environment. Ogoni cannot be fully clean again. That is why pollution is bad. Contamination in Ogoni is up to 10 meters deep because of many years the oil

Cyrus Titus Nkangwung, zonal director NOSRA, presenting a copy of the 2006 Act to the Martins Giadom, chairman Energy and Maritime Reporters (EMR ), in PH

has remained in the soil. Thus, it is advisable to do early cleaning.” The EMR team had revealed their findings to their hosts on the economics of illegal refining, thus; One drum of illegally refined kerosene is sold for N8000, making it possible to sell a litre for N50 instead of N400 for officially refined product. The zonal director seemed to agree. Observers in the oil region said Nigeria has not

OSSO ‘77: Old students and old times Port Harcourt by Boat

IGNATIUS CHUKWU

nside the car, Christopher Amaliri took me by surprise. He said; IG, do you know who was called Professor Caesar Knack? As I tried to manage the uppercut, he followed up; Do you know who wrote ‘I will make it, I will make it?’ I submitted and admitted. Amaliri, as we call him, was a young man who had worked in the creeks in the early 70s after his primary six and did some jobs often in vessels or tugboats. He one day watched a vessel sink and many died. He saw only one survivor. Thereafter, he gave up and gathered his savings to come back home to his Umuohie village in Okpala (Imo State) to start secondary school in Class Two. That was where he met me. He was to discover that the only survivor he saw was my kinsman, Timothy Onunka, who never regained sanity till his death many years after. Amaliri immediately assumed the position of the elder brother that I did not have, and replaced a cousin, Bro Nick, that had nurtured me for one year in school and moved on to reside in another part of Okpala. So, it was while we shared dreams that I must have uttered those inanities.

He said he still had a diary where I had inscribed those graffiti. Why is it that secondary school (college) classmates are something else? Educated people have primary school mates, secondary and university school mates; but the ones from secondary school seem to be most exhilarating to recall. This may be because in primary school most persons are yet to develop a personality. They hardly would have reason to form a strong bond. In the university, most persons have already formed a personality and have built the inner core of their minds. They would hardly form deep affinity with any person at that point anymore. But, the six years of secondary school seems to be the time someone is opening up, growing up, transforming from infancy to teenaged life and undergoing puberty. Those who passed through same experience seem to form very tight affinity and bond with each other forever; male of female. This could be the reason. They may have many secrets to share and keep for each other. They usually never meet with each other often but when they do, they pour everything out. Their wives and kids watch helplessly but with great admiration and mirth how old men return to kiddies’ times. They call each other unprintable names, reveal many unmentionable things, and fall on each other. A story was told how a senior army officer was shouted down at an event and commanded about; his orderly drew a pistol. The officer smiled and asked him to calm down. Later, the orderly told Oga’s driver that he never knew anybody could talk to Oga like that. He said old boys must be something else; for them to play with Oga like that. Yes, the

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Thursday 01 August 2019

BUSINESS DAY

Investing in Rivers State How Rivers may have cracked the informal sector tax drive formula •Months of planning by RIRS •Stakeholder session series •Joint committee of groups and RIRS to fashion agreeable steps •Final roll out delayed till August 1, 2019, to capture all views Ignatius Chukwu

fter several months (if not years) of patient planning, the Rivers State Internal Revenue Service (RIRS) led in the past couple of years by Adoage Norteh seems to have found the formula for a possible success in informal sector tax scheme. Many chief executives of the board before him may have avoided it due to predictable chaos and volatility it could create, and concentrated on easy tax subheads, especially the Pay As You Earn (PAYEE) from corporate workers and public sector. Many feared it could cause political backlash for the administration that appointed them. Now, Norteh, a tax expert, went to town, to the same informal sector groups, burrowed into their core and found the way to their hearts and how to mine from their vaults. He now set up a committee mostly by the same people that would want to make trouble, and is now set to announce a resolution. This was reached after several months of consultations and stakeholderengagement sessions covering each trade group and professional group in the state; from the informal of the informal to those he descried as structured informal sector. At the end of the strategic sessions and engagements, it was the heads of the informal and formal sectors that announced the resolutions to the world, with the RIRS executive merely coming in at last to concur. This is expected to send positive signals to the entire taxpaying community in Rivers State that an acceptable and peaceful tax collection system is born. Announcing the resolutions, the

Adoage Norteh, RIRS, chairman

Obasi, Committee chairman

chairman of the Rivers State Joint Committee on Implementation of Informal Sector Tax Collection, Uba Obasi, who represented the Manufacturers Association of Nigeria (MAN), backed by the secretary of the committee, Clement Akamgbo (from the organized private sector and member of the Port Harcourt Chamber of Commerce) said key associations that decide how informal sector groups such as Pillar of Association, SME leadership group, Rivers Drivers Cooperative, MAN, PHCCIMA, etc, were members of the committee. Obasi, CEO of ALCON, manufacturers of specialized low voltage products, said the objective was to look into how the RIRS could capture the revenue of the informal sector in the state. He told newsmen that it was also to reduce multiple taxes and usher in peace in the tax collection process. He stated: “We have just fashioned a resolution and it would be forwarded to the Executive Chairman of the RIRS. If accepted, it would bring to an end the problems

bedeviling tax collection dives in the informal sector in the state. Implementation would now be easier. We need the information to spread to all taxpayers in Rivers State that the stakeholders and the Revenue Board have agreed on how to collect taxes from the informal sector. This will take off on August 1, 2019.” When pressed, he told newsmen that all groups were represented in this exercise. He said: “Pillar of Associations captures a huge chunk of informal sector businesses. We have the group coordinating SMEs, we have the drivers cooperative society, the drivers welfare association, the MAN that also interacts with informal sector people, etc. “We did a thorough job of taking papers from groups and going through all of them, engaging key stakeholders, especially determining tariffs of transporters.” Sources said the committee may have tackled the biggest headache confronting tax payers in the state and the issue that dominated discuss at the sessions, which is numerous tax subheads. It was gathered that the

taxes to be collected in the state may have been pruned from 24 to seven. Obasi however asked newsmen to wait till the details were published by the RIRS. The secretary added thus: “We obtained the feeling of the business people and this is reflected in the final report. Now, we have one payment point. The report is easy to interpret, too. The important part of the job has been done, such that the people now know what to pay, how to pay, and where to pay. All they have to do is register with RIVTAMIS (launched in March 2018). It has been simplified such that a business can choose to pay monthly or yearly. “We were very happy for the setting up of a committee to help the Revenue Board fashion out a way of collecting taxes from the informal sector without rancour. Tax harmonization has been a lingering issue in Rivers State from administration to administration. Now, it has been done by the RIRS under Adoage Norteh. “It has been a tireless work. All groups were represented and our position cuts across all shades of opinion. This will surely bring about a lot of succor. Ease of Doing Business (EODB) in Rivers State will definitely be boosted starting from a healthy and peaceful tax environment. Everything every category will pay has been carefully itemized and it is now clear what to pay, how to pay, when to pay, and where to pay. The well-known group, Pillar of Associations, led by a comrade, Emeka Onyekwuru, supported the outcome. He said: “We are grateful to the Rivers State government for this exercise because this is what will bring peace in the state as far as tax collection is concerned.” The executive chairman of the RIRS (Adoage Norteh), who later breezed in to commend the exercise,

said the committee truly did huge work and that it was a big sacrifice by representatives of the private sector operators to help in the tax collection task of Rivers State. “We wanted the true view of the taxpayers in the state. We will look at it first before deciding on adoption of the report, but we can’t throw away the entire report. That would mean we should not have even set up the committee in the first place.” Many described the present RIRS as a listening agency. North said: “I regard this report as an olive branch from the Government and I expect taxpayers to embrace it. Let us join hands to eliminate touting. Now, the tax atmosphere is expected to be clear. We could have fixed the taxes and rolled out the drive but we chose to consult and engage. Kick-off will start with serving demand notices in line with this resolution. We will release the taxes. We will serve what we call ‘presumptive amounts’ because there have been no individual assessments. We plan to release leaflets and handbills. People should also visit our website. “We insist, do not pay cash. Any person demanding cash is fake. We will not push many people into the tax space to demand for tax. Else, touts capitalize on it. The activities would be streamlined and calm. We may work with the unions where necessary. There would be no handwritten receipts. The IT payment platforms would generate receipts as you pay.” Norteh took time off to explain further what he meant in the issue of churches and tax. He made it clear thus: “Churches as registered nonprofits will not pay tax but when they engage in profit-making activities, they will have to pay. If church members go to work and earn income, they will pay tax.”

Academy will make youths to be more committed to life as they now have an avenue to become super stars and millionaires. He said: “It is a good gesture from Governor Wike. We want him

to maintain it. The very best of footballers can emerge from the Academy. Even after his time in government, we will remember him”. A football administrator, Frank Baridakara described the completion of the Real Madrid Football Academy as a dream come true for Rivers State. He said the Academy will boost sports development in Rivers State. “Graduates from the Academy will make the state proud. They will excel in international football. This Academy will produce the likes of Ronaldo that we have been hearing about “, he said. Chinonso Uka said that the Rivers State Governor’s initiative has developed a platform for more youths to be groomed as successful professional footballers. A player, Musa Kundi said that by building the Real Madrid Football Academy, Governor Wike has encouraged upcoming footballers to aspire to the highest level. He said that the Academy will create the avenue for Rivers youths to become International Stars.

Real Madrid Academy ready in Port Harcourt Ignatius Chukwu

he Rivers State government said the Real Madrid Football Academy which it initiated more than one year ago, is now set to start the grooming of international football stars, following the completion of the facility in Port Harcourt. The President of Confederation of African Football (CAF) Ahmad Ahmad laid the foundation stone on May 28, 2018 after the Rivers State Governor, Nyesom Ezenwo Wike reached agreement with officials of Real Madrid Football Club. Governor Wike and officials of Real Madrid Football Club addressed the sporting media at the Government House Port Harcourt to kick-start the development of the step to develop football. Governor Wike had earlier cemented the construction of Real Madrid Football Academy in Port Harcourt after meeting with officials in Spain. Today, the Real Madrid Football Academy is set for operation. All the

facilities have been completed by the contractors. The coaching and other technical staff have been trained in Madrid. Governor Wike directed the admission of all the players of Banham Model Primary School Port Harcourt into the Real Madrid Football Academy when the Academy opens later in the year. Banham Model Primary School won this year’s Channels Television Kids Cup. Further admissions are ongoing. Representative of Ministry of Sports at the Real Madrid Football Academy Project Site, Allwell Braide said that the contractor has done well. He said that the football academy is ready, awaiting commissioning by the Rivers State Governor. He said that the Administrative Building, Classrooms, football training field and the basketball court have been completed. Sunday Odungweru said that the Real Madrid Football Academy will give Rivers youths the opportunity to excel. He said the institution will create the platform for football lovers in the South-South and South-East www.businessday.ng

to interact for the development of the game , which will lead to the emergence of new international stars. Head Coach of S. K E. Football Club, Port Harcourt, Tunde Sanni, said that the Real Madrid Football

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Thursday 01 August 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Wednesday 31 July 2019

Top Gainers/Losers as at Wednesday 31 July 2019 LOSERS

GAINERS

Company

Opening

Closing

Change

1.85

NESTLE

N1299.5

N1270

-29.5

N19.65

1.65

N55

N50

-5

N11.95

N12.3

0.35

DANGSUGAR

N10.8

N9.8

-1

ACCESS

N6.3

N6.55

0.25

BERGER

N6.3

N5.7

-0.6

UBA

N5.8

0.2

CONOIL

N20.25

N19.7

-0.55

Company JBERGER FO CCNN

Opening

Closing

Change

N18.75

N20.6

N18

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

27,718.26

FTSE 100 Index 7,586.78GBP -59.99-0.78%

Nikkei 225 21,521.53JPY -187.78-0.87%

3,937.00

S&P 500 Index 3,015.31USD +2.13+0.07%

Deutsche Boerse AG German Stock Index DAX 12,189.04EUR +41.80+0.34%

Generic 1st ‘DM’ Future 27,187.00USD +23.00+0.08%

Shanghai Stock Exchange Composite Index 2,932.51CNY -19.83-0.67%

251,930,298.00 4.128 13.507

Nestle, Nigerian Breweries lead laggards as stock market dips further by 0.37% Stories by Iheanyi Nwachukwu

he Nigerian stock market wrapped up the month of July on a negative note, following a record decline by 0.37percent on Wednesday July 31. Investors offered for sale stocks like Nestle Nigeria Plc, Nigerian Breweries Plc, among others. As earnings season comes to an end, market watchers saw stronger reactions to earnings on Wednesday’s trading session at the Lagos Bourse. The Nigerian Stock Exchange (NSE) All Share Index (ASI) closed lower by 0.37 percent from preceding day high of 27,820.57 points to 27,718.26 points; while the value of listed equities on the Nigerian Bourse decreased from N13.558trillion to N13.507trillion, losing N51billion. Twenty (20) stocks gained against 20 losers, pushing the record year-to-date (YtD) nega-

L – R: Folusho Phillips, chairman, Phillips Consulting Limited; Chioma Dennis, Trainee of the Year 2019 and Oscar N. Onyema, chief executive officer, The Nigerian Stock Exchange (NSE) during the NSE GTP Class of 2019 Graduation Ceremony and Dinner on Tuesday July 30, 2019 at the Civic Center, Victoria Island Lagos.

tive returns further to -11.81percent. Week-todate (WtD), the market has lost 0.72percent of its value. Nestle led the losers table after its share price decreased from N1,299.5 to N,1270, losing N29.5 or 2.27percent; followed by Nigerian Breweries Plc which declined from

N55 to N50, losing N5 or 9.09percent. On the gainers table, Julius Berger Nigeria Plc led the pack, after its share price rose from N18.75 to N20.6, adding N1.85 or 9.87percent; followed by Forte Oil Plc which moved up from N18 to N19.65, adding N1.65

Honeywell Flour Mills grows Q1 earnings, profit

oneywell Flour Mills Plc has announced its financial figures for the first quarter (Q1) ended June 30, 2019. Summary of the financial results show revenue of N19 billion, up 7percent compared with N17.7 billion recorded in the corresponding quarter of 2018; gross profit margin, up by 7percent from N3.193billion to N3.411billion. Operating profit went up by 52percent from N1.02 billion to N1.54 billion; while profit for the period was up by 6percent from N102million to N108million. Speaking on the results, ‘Lanre Jaiyeola, Managing Director, Honeywell Flour Mills Plc

said, “Despite the tough operating environment, revenue for the quarter was up by 7percent to N19 billion, when compared to revenue of N17.7 billion recorded in the corresponding quarter of the last financial year.” He said, “This was driven by sales of our various Pasta products, which led to the continued strong performance of our B2C business line. With the commencement of full commercial production at our ultra-modern Foods and Agro-allied complex in Sagamu, Ogun State, we were able to grow our capacity to meet the increasing demand for our Pasta products which is evidenced by the impressive 157percent volume inwww.businessday.ng

crease. The performance in Pasta gives credence to the company’s commitment to continue to expand its footprint into growth areas that will positively impact the long-term sustainability of the business.” The Managing Director further explained details of the result saying that the “Execution of well-embedded savings and efficiency initiatives aimed at improving the company’s margins led to a 14percent drop in selling and administration expenses from N2.2 billion to N1.9 billion. “This translated to the operating profit accelerating at a faster rate than revenue by 52percent, from N1.02 billion to N1.54 billion.

Global market indicators

or 9.17percent. “Amidst the mixed company performances and bearish response across the board, market activity picked up towards market close due to end of month trading as investors worked to rebalance index funds,” said analysts at Lagosbased Vetiva Capital.

Chams assures shareholders of steady returns, pays N140mn dividend

hams Plc has assured its shareholders of enhanced returns on their investments as it rose from a loss to profit after tax of N385million and declared gross dividend of N140million which translates into 3 kobo per share. Besides, the company is leveraging on restructuring of its balanced sheet to expand income stream, boost performance indicators and sustain competitive edge. Speaking at the 35th Annual General Meeting (AGM) of the company in Lagos on Tuesday, the chairman, Dere Awosika stated that the company had been well positioned to enhance shareholders’ value as a result of the successful restructuring of its books which laid a solid foundation for its performance and competitiveness. “We plan to consolidate on the progress made from the successful restructuring of our balance sheet which has helped to lay the foundation for better performance for the company, improve its competitiveness in the ICT sector and improve the potential of the company to pay dividends.

According to her, on the strength of the new outlook, there are more opportunities for effective and efficient implementation of the company’s growth strategy. “We plan to consolidate on the progress made in the previous years to deliver a strong and sustainable performance that enhances returns to our shareholders. We are marching forward in the year with confidence and optimism, knowing fully well that our businesses have been strategically positioned to take advantage of key opportunities as we stay on course in the execution of our growth strategy” she said. Corroborating Awosika, the Group Managing Director and Chief Executive Officer, Femi Williams stated that the company’s restructuring paid off as reflected in its impressive financial performance for 2018 despite the setback of the previous year. “It will please you to know that your company recorded a plausible financial success in 2018, despite the losses made in 2017.

NSE unveils 2019 Factbook

he Nigerian Stock Exchange (NSE) on Tuesday July 31 launched its 2019 NSE Factbook. The Factbook is a compendium of capital market information, aimed at ensuring availability and easy access to current and historical market information for both local and foreign investors. This special edition of The Factbook incorporates various features aimed at ensuring readers have access to diverse and comprehensive market information such as 5-year financial performance data covering the dividend history of all listed companies

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listed, ranking of rated companies in line with the Corporate Governance Rating System (CGRS), international codes of listed securities, profiles of dealing members and quoted companies as well as frequently asked questions (FAQs) pertaining to the capital market.

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Commenting on the Factbook, Jude Chiemeka, Divisional Head, Trading Business of the Exchange, said, “timely and adequate information is critical to the workings of the capital market and is imperative for making desirable investment decisions. Over the years, the NSE Factbook has continued to be an invaluable resource for the investing community, providing insight into the operations of the stock market including activities of listed companies, dealing members and other stock market stakeholders. The Factbook is therefore a veritable tool for investor education”.

Thursday 01 August 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper JAMES POLITI IN WASHINGTON

he Federal Reser ve has cut its main interest rate by 25 basis points, the first reduction since the financial crisis, and signalled that it was prepared to ease monetary policy further if necessary. In its policy statement, the US central bank suggested the monetary easing was justified by “uncertainties” stemming from weakness in the global economy and simmering trade tensions. “In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the committee decided to lower the target range for the federal funds rate to 2-2.25 per cent,” the Federal Open Market Committee said. The one-notch cut in interest rates was widely expected by investors and economists, and was accompanied by a dovish decision to halt the reduction in the Fed’s balance sheet on August 1, two months earlier than planned. But two members of the FOMC dissented — Esther George, the president of the Kansas City Fed, and Eric Rosengren of the Boston Fed, said they preferred to keep rates steady — and comments from chairman Jay Powell in his afternoon press conference upset markets that had been looking for a more clearly dovish tone. Midway through his remarks, the S&P 500 of US stocks was down 1.1 per cent and the dollar spiked 0.5 per cent against its peers, after Mr Powell described

Fed cuts rates for first time since financial crisis Stocks fall after Powell calls move a ‘mid-cycle adjustment’ rather than turning point

Jay Powell, the Fed chairman, steered the bulk of the FOMC towards the view that an interest-rate cut was needed, but two members dissented © AFP

the Wednesday cut only as “a mid-cycle adjustment to policy”. The next move by the US central bank would depend on the “evolving data and the evolving risk picture”.

The FOMC statement had hinted that more monetary easing could be forthcoming later in the year. “As the committee contemplates the future path of the target range for the federal funds rate, it

will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion,” it said. Peter Boockvar, chief invest-

ment officer at Bleakley Advisory Group, called it a “play-it-by-ear statement”. He said: “It gave markets what they were expecting, but they are not pre-committing to what they are going to do from here.” Since early June, Fed officials have been pointing to the likelihood of an impending interest rate reduction to buy the US economy some “insurance” against the menacing tide of global economic tremors. Even though unemployment remains near record lows, and consumption has been remarkably resilient, they have worried about other incoming data including a second-quarter slowdown in US growth, weakness in investment, and persistently low inflation, which is running below the Fed’s 2 per cent target. The 25 basis point cut in interest rates will disappoint US president Donald Trump, who vociferously pressed the Fed to slash rates more aggressively in the run-up to this week’s meeting, in his latest challenge to the US central bank’s independence.

Mexico narrowly avoids recession Siberian wildfires prompt Russia in second quarter to declare state of emergency President Andrés Manuel López Obrador receives setback in quest for growth spurt JUDE WEBBER IN MEXICO CITY

e x i c o’s s e c o n d quarter growth registered just above zero, narrowly escaping market expectations of a technical recession but dealing a blow to President Andrés Manuel López Obrador’s promises to kick-start decades of disappointing growth. Gross domestic product expanded 0.1 per cent from April to June, according to the state statistics institute Inegi, after a shock 0.2 per cent contraction in the first quarter. Industrial activity was the surprise, coming in at zero after a poor performance in May. Services picked up, helping beat the market forecast of a 0.2 per cent contraction for GDP overall in the quarter. “We’ve woken up to good news,” the president told his daily early-morning news conference, at which he reiterated his forecast for 2 per cent growth in 2019. “Contrary to what some were forecasting, that we would fall

and enter recession, fortunately the economy grew. The experts’ forecast didn’t work . . . Not everything is fixed but we’re doing very well economically,” he said. But Alonso Cervera at Credit Suisse wrote on Twitter that there was “little to celebrate. The economy has been stagnant for nearly a year. Accumulated growth in the first half was just 0.2 per cent.” The anaemic growth increases pressure on the Bank of Mexico to start reducing interest rates when its board meets on August 15, especially if the Fed goes ahead with its expected interest rate cut later on Wednesday. One board member, Gerardo Esquivel, who was appointed by Mr López Obrador, called for a cut at the last meeting in June. Mr López Obrador says GDP data alone do not properly capture the development and wellbeing that his leftist nationalist government is delivering as he roots out institutionalised graft and boosts purchasing power in Latin America’s second-biggest economy through higher salaries and social programmes. www.businessday.ng

Military dispatched to help in firefighting efforts as blaze spreads across forest in 4 regions HENRY FOY AND NASTASSIA ASTRASHEUSKAYA IN MOSCOW

ussia has declared a state of emergency in four Siberian regions and dispatched the military to help in firefighting efforts after wildfires engulfed an area of forest the size of Belgium amid record high temperatures. Officials said 3m hectares of forest were ablaze on Wednesday as soaring temperatures, lightning storms and strong winds combined, sending smoke hundreds of miles to reach some of Russia’s biggest regional cities. The Russian government’s lacklustre response to tackling the fires, which began weeks ago, has raised concerns over Moscow’s commitment to addressing climate change. The country relies heavily on the oil and gas industry and has a poor record of enforcing green initiatives. The decision to declare the state of emergency came after two petitions attracted more than 1m signatures demanding the government take action. President Vladimir Putin on Wednesday ordered Russia’s

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armed forces to join the firefighting effort. Local authorities have previously dismissed the wildfire as a natural occurrence, saying putting them out was not economically viable. “This is a common natural phenomenon, to fight with it is meaningless, and indeed sometimes, perhaps even harmful,” Alexander Uss, governor of the Krasnoyarsk region, said on Monday. “Now, if a snowstorm occurs in winter . . . it does not occur to anyone to drown icebergs so that we have a warmer weather.” Environmental groups worry that in addition to the destruction of carbon-absorbing forest, the carbon dioxide, smoke and soot released will accelerate temperature increases that are already melting permafrost in northern Russia. An estimated 12m hectares of Russian forest have been destroyed by fire this year. “The role of fires [in climate change] is underestimated. Most of the fires are man-made,” Grigory Kuksin, head of the fire protection department at Greenpeace Russia, told the Financial Times. “Given the changing climate, this has led to the @Businessdayng

fire acreage expanding quickly, and the smoke spreading wider.” Mr Putin has backed the global Paris Agreement to tackle climate change but has also warned against “absolutism” and “blind faith” in green energy. Last month he said wind turbines “make worms come out of the ground”, a claim with no scientific proof. Russia is the world’s third-largest oil producer and has sought to exploit shrinking ice caps in the Arctic to drill for more hydrocarbons, expand its military footprint and develop shipping lanes from Europe to China. Temperatures in Siberia last month were as much as 8C above long-term averages and hit all-time records in some areas, according to data from Russia’s state meteorological agency. Russian prime minister Dmitry Medvedev sent his natural resources minister Dmitry Kobylkin to the affected regions on Tuesday amid reports that smoke from the fires has spread as far north as the Arctic Circle and south to Novosibirsk, Russia’s third-largest city.

Thursday 01 August 2019

BUSINESS DAY

NATIONAL NEWS

Elizabeth Warren and Bernie Sanders attacked at Democratic debate Progressives’ ‘bad policies’ won’t defeat Donald Trump, say centrist rivals LAUREN FEDOR AND DEMETRI SEVASTOPULO IN WASHINGTON

S senators Bernie Sanders and Elizabeth Warren came under attack in Tuesday’s Democratic debate from fellow presidential hopefuls who said the progressives would fail to defeat Donald Trump in next year’s presidential election with their “bad policies”. The nearly three-hour debate, covering issues ranging from healthcare to immigration to trade, underscored an ideological divide among Democrats heading into 2020, with progressives saying the party needs to energise its “base” and centrists insisting only more moderate proposals will win over voters in crucial swing US states such as Michigan, Ohio and Pennsylvania. Ms Warren, 70, said: “I remember when people said Barack Obama couldn’t get elected. I remember when people said Donald Trump couldn’t get elected. “There is a lot at stake, and people are scared, but we can’t choose a candidate we don’t believe in just because we’re too scared to do anything else.” Mr Sanders, 77, and Ms Warren were the candidates on the stage with the highest opinion poll ratings going into Tuesday’s debate in Detroit, Michigan. But they were repeatedly criticised by their lesser known, more centrist opponents, who took issue with Ms Warren’s proposed wealth tax on families with a net worth of more than $50m and Mr Sanders’ plans to abolish private health insurance under “Medicare for All”, as well as their shared position to decriminalise unauthorised border crossings. John Delaney, 56, a former congressman from Maryland, said: “Folks, we have a choice. We can go down the road that Senator Sanders and Senator Warren want to take us with bad policies like Medicare for all, free everything and impossible promises that will turn off independent voters and get Trump re-elected.” His sentiments were echoed by John Hickenlooper, 67, a former governor of Colorado, who said, in reference to the Democrats’ success in the 2018 midterm elections: “Last year, Democrats flipped 40 Republican seats in the House, and not one of those 40 Democrats supported the policies of our frontrunners at centre stage.” Steve Bullock, the 53-year-old governor of Montana who made his debate debut on Tuesday after failing to meet the polling and fundraising requirements to qualify for the first round of debates last month, dubbed Mr Sanders and Ms Warren’s proposals as “wishlist economics”. But Ms Warren repeatedly dis-

missed the attacks, at one point saying to Mr Delaney: “I don’t understand why anybody goes to all the trouble of running for president of the United States just to talk about what we really can’t do and shouldn’t fight for.” Mr Sanders simply told Mr Delaney: “You’re wrong.” Later, when challenged by Tim Ryan, 46, a congressman from Ohio, on the details of his Medicare for All plan, he snapped: “I do know, I wrote the damn bill.” The candidates were also deeply divided over trade. Mr Delaney, who supports the Trans-Pacific Partnership deal that Mr Trump abandoned in 2017, slammed Ms Warren over her new trade policy, which he said would “isolate” the US from its allies, including the UK and the EU. “Trump wants to build physical walls and beats up on immigrants. Most of the folks running for president want to build economic walls for free trade and beat up on President Obama,” he said. Ms Warren said the US had to stop allowing “giant multinational corporations” to write trade policy. “They have no loyalty to America, they have no patriotism. If they can save a nickel by moving jobs to Mexico they will do in a heartbeat,” she said. Mr Sanders came to her defence, saying: “Elizabeth is absolutely right. Anybody here who thinks that corporate America gives one damn about the average American worker, they’re mistaken.” Ten candidates participated in Tuesday’s debate. Other hopefuls on the stage included Pete Buttigieg, the 37-year-old mayor of South Bend, Indiana, former Texas congressman Beto O’Rourke, 46, Minnesota senator Amy Klobuchar, 59, and Marianne Williamson, the 67-year-old selfhelp author. In a surprise breakthrough moment on Tuesday, Ms Williamson garnered huge applause for both her assessment of the water crisis in Flint, Michigan and her defence of reparations for black Americans. “We have communities, particularly communities of colour and disadvantaged communities all over this country, who are suffering from environmental injustice,” Ms Williamson said. “I assure you, I lived in Grosse Pointe. What happened in Flint would not happen in Grosse Pointe. This is part of the dark underbelly of American society.” A second debate, with another 10 candidates, including the overall frontrunner, former US vice-president Joe Biden, 76, will be held on Wednesday. News channel CNN, which is hosting the debates, selected the line-up for each night in a televised random draw. www.businessday.ng

Carlyle will pay corporate tax on all its performance fee income, reducing the distributions available to shareholders including co-founder David Rubenstein © Bloomberg

Private equity group Carlyle to abandon partnership status Staff to be stripped of special voting rights in bid to improve share price MARK VANDEVELDE IN SAN FRANCISCO

he Carlyle Group is abandoning its tax-advantaged partnership status and stripping its staff of their special voting rights in a bid to improve the private equity group’s share price by qualifying for inclusion in index tracker funds. When the transition is completed in January, Carlyle will pay corporate tax on all its performance fee income, reducing the distributions available to shareholders including David Rubenstein, the private equity group’s billionaire co-founder. The partnership structure resulted in lower tax bills, but also forced investors to fill in lengthy tax forms in multiple states if they owned even a single share, limiting possible owners. Republican tax cuts have persuaded all the major listed private equity groups that corporate taxes were no longer high enough to be worth trying to avoid. KKR ditched its partnership structure last year, months after a smaller firm, Ares, kicked off the trend.

Index funds bought $1bn of KKR’s stock within six months, a development that analysts said vindicated the bet that public markets valued simplicity over lower taxes. Blackstone and Apollo followed suit earlier this year. But Carlyle is the first firm to abandon its dual-class structure and seek entry into indices such as the S&P 500, which is not generally open to companies with more than one share class. Blackstone’s billionaire cofounder Stephen Schwarzman, for example, still holds much of his Blackstone stake via a special partnership called Blackstone Holdings, which is not open to the public. Mr Schwarzman has the right to convert the units into ordinary Blackstone Group shares. Unlike its peers, which have retained preferential tax arrangements for insiders, Carlyle is ditching the partnership group even for its own staff. The firm is also eliminating special voting rights for Carlyle partners. “There will be no such thing as inside shareholders and outside shareholders,” said

Kewsong Lee, co-chief executive. “There will be one class of shareholders.” Carlyle staff own about 60 per cent of the buyout group’s equity, and are expected to command a majority of the votes for the foreseeable future. Offering every shareholder an equal vote could make Carlyle eligible for inclusion in some equity indices that remain offlimits to peers. Separately, Carlyle announced it would abandon its variable dividend policy, instead paying a fixed distribution initially set at $1 a year. That amounts to a dividend yield of about 4 per cent based on Tuesday’s share price, and is a significant reduction from the annual distributions of between $1.34 and $3.39 Carlyle made between 2014 and 2018, according to data from Sentieo. But Carlyle concluded that shareholders placed limited value on a fluctuating dividend, and that the growth of private capital afforded better opportunities to redeploy the capital itself, according to people familiar with the firm’s thinking.

China accounting scandal threatens corporate fundraising Fundraising disrupted as listings halted in situation evoking Arthur Andersen collapse DON WEINLAND IN HONG KONG

n accounting scandal rocking corporate China is drawing comparisons with the collapse of US firm Arthur Andersen as dozens of Chinese companies are forced to halt public listing work. Ruihua Certified Public Accountants, one of China’s largest accounting firms, was investigated by the country’s securities regulator early this month after a listed company it audited was found to have inflated profits by

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about Rmb12bn ($1.74bn) over four years. The probe has caused an unprecedented disruption in fundraising activities for Chinese companies, with more than 50 Ruihua clients halting initial public offerings and private capital raising, according to state media. The China Securities Regulatory Commission has suspended IPO approvals for at least 20 Ruihua clients. Several listings on China’s new Star Market board have also been delayed. Ruihua did not respond to emailed queries. @Businessdayng

The situation, which Chinese media have dubbed the “Ruihua incident”, is evoking the collapse of US accounting firm Arthur Andersen, one of the largest in the world until the 2001 bankruptcy of energy group Enron led to its dissolution. “This reminds me of when Arthur Andersen went out of business because it’s the same kind of crisis of confidence with everyone bailing out,” said Paul Gillis, an accounting specialist and a professor of practice at Peking University’s Guanghua School of Management.

Thursday 01 August 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Apple finds silver lining in iPhone sales drop

Tech group points to other businesses and says it ‘is becoming broader’

PATRICK MCGEE IN SAN FRANCISCO

ales of the iPhone now accounted for less than half of Apple’s revenues in the third quarter, but the company is taking a glass half-full approach. Luca Maestri, Apple’s finance chief, said: “The 48 per cent [revenue share of the iPhone] is, in a way, a positive for us. It shows the company is becoming broader.” The Silicon Valley company played up the variety and depth of its business lines on Tuesday, saying that a 12 per cent year-onyear fall in iPhone sales in the third quarter was offset by a rosier picture than expected in China and booming growth in its wearables, such as AirPods earphones and Apple Watches. As a result, overall revenues in the quarter to June were up 1 per cent year on year to $53.8bn, ahead of analysts’ expectations. Thomas Cooke, a business professor at Georgetown University, said: “They have diversified themselves in such a way that the iPhone is not so critical. It used to be, ‘tell me how many iPhone units were sold’, and that was it. Now it’s, ‘tell me about the iPhone — but tell me about all the rest’.” As recently as early 2018, iPhones made up 70 per cent of Apple’s top line. The fiscal third quarter tends to be a seasonal low point for iPhone sales, but it was

the first time since 2012 that the device made up less than half of the company’s revenues. “It’s worth taking a step back and digesting the bigger picture here,” Tim Cook, chief executive, told analysts as he explained why Apple is pushing into gaming, Netflix-style video streaming and credit card services. “Apple is alone in offering this kind of value and ecosystem to its customers.” The group’s resilience in China played a big role in sending shares up 4.5 per cent in after-hours trading on Tuesday. In January, Apple was forced to issue a rare revenue warning owing to a slowing Chinese economy, fuelling investor fears that the trade dispute tit-fortat with the US was hurting profits and tarnishing its brand image against the likes of Huawei and Samsung. But revenue across greater China declined only 4 per cent to $9.2bn in the third quarter — compared with a 22 per cent decline three months earlier — and in constant currencies revenue actually grew. “Each of our categories [in China]— iPhone, iPad, Mac, wearables, services — everything improved sequentially,” said Mr Cook. “So we couldn’t be happier with the progress.” Mr Cook said Beijing’s stimulus programme, including a “bold” cut in the value added tax, had helped.

US healthcare provider loans tumble as politicians target patient billing Moves to shield patients from unexpected treatment costs leave debt investors nervous JOE RENNISON AND HANNAH KUCHLER IN NEW YORK

push on Capitol Hill to stop US patients from being caught unaware by medical bills is weighing on the debt of KKR-backed Envision Healthcare, the target of one of the biggest leveraged buyouts last year. The proposed law, seen as having broad bipartisan support in both houses of Congress, would prohibit providers from hitting patients with large, unexpected costs for treatment. Investors are concerned that a new so-called “surprise billing” law could crimp revenues at companies such as Envision, which employs emergency-room doctors and anaesthetists through its subsidiary EmCare. Envision’s $5.4bn loan due in 2025, sold in September when investor demand for leveraged loans was very strong, slid from almost 97 cents on the dollar at the start of May to just 87.8 cents on the dollar on Thursday, as more detail sur-

rounding possible legislation has been released. “A lot of sellers nervous about this legislation have emerged,” said Ron Launsbach, a loan fund manager at Columbia Threadneedle. “It has put pressure on Envision’s debt.” Surprise billing is a peculiar feature of the US healthcare system. Patients with private insurance pay less for “in-network” treatment — medical facilities and practitioners that accept a specific insurance provider’s coverage. However, patients may go to an in-network hospital but, unbeknown to them, end up being seen by an outof-network doctor, such as those employed by Envision or TeamHealth. The doctor then attempts to recoup costs from the patient’s insurer and charges the patient extra. “It is like a ransom negotiation: ‘I’ll hit your enrollees with giant bills unless you pay me enough money not to do that’,” said Loren Adler, associate director at USCBrookings Schaeffer Initiative for Health Policy. www.businessday.ng

Apple said a fall in iPhone sales was offset by a rosier picture than expected in China and surging growth in wearables such as AirPods earphones and Apple Watches © Reuters

UBS plans negative interest rate for rich clients Latest European bank to pass cost of central banks’ ‘lower for longer’ stance to depositors DAVID CROW, STEPHEN MORRIS AND ALICE ROSS IN LONDON

BS plans to levy a negative interest rate on wealthy clients who deposit more than SFr2m with its Swiss bank, as lenders hunker down for a period of ultraloose monetary policy. Several banks in Switzerland and the eurozone already pass on the cost of negative official rates to corporate depositors, although most large players have refrained from doing so with individual clients. But with policymakers expected to adopt a “lower for longer” stance for the foreseeable future, UBS Switzerland will from November charge 0.75 per cent a year on individual cash balances above SFr2m, according to three people briefed on the plans. The move underscores how banks in Europe and the US are scrambling to prepare for a protracted spell of lower rates that threatens their profitability, hav-

ing previously wagered that central bankers would tighten monetary policy. Last month the Swiss National Bank said it would hold the negative rate it charges on commercial banks’ deposits at -0.75 per cent, while the European Central Bank deposit rate is -0.4 per cent. The US Federal Reserve is expected to cut interest rates later on Wednesday. “A year ago everyone thought interest rates would go up. Now it doesn’t look like that,” said one senior wealth manager at UBS. In a note to clients last month, the lender forecast that the SNB would in September lower its rate on deposits to -1 per cent. UBS relationship managers have started discussing the forthcoming charges with some wealthy clients and are preparing to issue a letter outlining the changes, the people added. Some of the bank’s smaller rivals, such as Julius Baer and Pictet, already charge some clients with large cash deposits. “We assume that this period of low interest rates will last even lon-

ger and that banks will continue to have to pay negative interest rates on customer deposits at central banks,” UBS said. “Following similar moves by a number of other banks here in Switzerland, we confirm that we’ve decided to adjust cash deposit fees for Swiss francs held in Switzerland.” The move comes as Credit Suisse, UBS’s main rival, said on Wednesday it was also thinking about imposing a levy on some wealthy clients. “In Switzerland, we are considering measures on deposits to mitigate pressure of negative interest rates,” Tidjane Thiam, Credit Suisse chief executive, told reporters during a discussion of the bank’s half-year results. He said any levy would be “targeted on people . . . that measure their cash balances in millions”. UBS clients who want to avoid the levy can move their balances into non-cash assets or into “fiduciary call deposits” that can be transferred back to the customer’s main account within 48 hours, two of the people said.

Google parent Alphabet overtakes Apple to become new king of cash Leadership switch follows concerted effort by iPhone maker to reduce its liquid reserves RICHARD WATERS IN SAN FRANCISCO

he corporate world has a new king of cash. The title for the company with the biggest financial reserves, held by Apple for a decade, has passed to Google’s parent, Alphabet, according to figures released in recent days. The switch in leadership follows a concerted effort by the iPhone maker to reduce its liquid reserves, six years after it first came under pressure from activist investor Carl Icahn to pay out more of its cash hoard. Apple’s holdings of cash and marketable securities, net of debt, has fallen to $102bn, down from a peak of $163bn at the end of 2017.

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Alphabet’s financial reserves have been moving in the opposite direction. At $117bn, its cash pile has risen by almost $20bn over the same period. The rise of Google’s parent to the top of the corporate liquidity rankings puts its corporate wealth and power on conspicuous display at a politically sensitive moment. After being hit with €8.2bn in antitrust fines to the EU in the past two years, it now faces intense scrutiny in Washington. The company’s preference for hoarding its money and spending it on trying to break into new markets, rather than using it to reward shareholders with buybacks or dividends, @Businessdayng

as Apple has done, also antagonises some investors. “In general, their attempts to reinvent themselves with their new initiatives aren’t working out,” said Walter Price, a portfolio manager at Allianz Global Investors. “I wish they’d return more cash to shareholders and waste less.” Too much liquidity? The cash build-up has come despite a surge in capital spending. At $25bn last year — up from around $13bn in 2017 — much of the money has been pouring into real estate, as Google has added to its office holdings in cities such as New York and built data centres to support its growing cloud computing business.

Thursday 01 August 2019

BUSINESS DAY

ANALYSIS

FT Donald Trump is not a shoo-in for 2020

It is hard to think of a president who has done less to recruit voters outside his base JANAN GANESH

n the distant, half-forgotten yesteryear of January 2019, Donald Trump was bound to lose the next election. There was no money forthcoming for his wall against Mexico. There was, come to think of it, no federal government at all, bar the workers who toiled without pay during a shutdown of his own choosing. He had lost a defence secretary and a chief of staff within weeks of each other. Pressed to name Washington’s most commanding septuagenarian, most would have cited speaker of the House of Representatives Nancy Pelosi. Even at the time, the Trump slump struck some of us as rather routine for midterm. Once he had presidential rivals to define himself against, ones with names and faces, not just the “generic Democrat” of polling fame, his genius for invective was always going to tell. It has. The reluctance of special counsel Robert Mueller to indict him was another boost. The economy’s impertinent refusal to slow down as much as some had forecast also helped. Mr Trump is now stronger than at any point in his presidency. There is a faint line, however,

between correction and overcorrection. As Washington depopulates for the summer, that line is being crossed. There is exuberance on the right, the beginnings of despondency on the left and, among foreign observers in business and diplomacy, a sighing resignation to a second term of president Trump. Some of this is “recency bias”: he is on a roll of little victories. Some of it is post-2016 trauma: having failed to see that result coming, no one wants to be caught out again. Either way, it is hopelessly premature. After the longest economic expansion in US history, Mr Trump remains unpopular. It does not follow that a recession in 2020 would finish him off. If the relationship between economics and politics were as clockwork as that, the incumbent Democrats would not have lost amid a boom in 2016. All the same, a president supervising 4 per cent unemployment should expect to go into an election year with a cushion of goodwill. Instead, according to FiveThirtyEight, Jimmy Carter is the only postwar president with a worse net approval rating at this stage. Mr Trump either trails or barely leads the main Democratic candidates in head-to-head polls. He has no buffer against adverse events.

GE sees ‘early signs’ of progress in bid to turn round power unit US industrial conglomerate raises 2019 earnings per share forecast ADAM SAMSON IN LONDON

eneral Electric said it has seen “early signs” of success in turning round its troubled power generation unit as the US industrial conglomerate boosted its 2019 outlook even as it slumped to a loss in the second quarter. The blue-chip company, which makes everything from MRI machines to jet engines, said on Wednesday that while there was still a “long way to go” in stabilising the power business, the situation was improving. Orders rose 2 per cent in the second quarter on an organic basis that excludes currency fluctuations, acquisitions and divestments from the same three months in 2018 to $4.9bn. However, the division only eked out a profit of $117m, down 69 per cent from the previous year on an organic basis. GE’s business making large gas turbines for power generation has been hit hard by the rise of renewable energy and the company has been working to turn it round. Larry Culp, who took over as chief executive last October, said the power division had made “meaningful improvements on fixed cost reduction and project execution” during the April to June quarter. Progress in the power division, expectations for lower costs in a broad restructuring programme, as well as strength in GE’s healthcare division and lower interest costs left

the company confident enough to raise its 2019 outlook. GE, which was founded in the early 1890s, now expects adjusted earnings per share, which exclude certain items, to be 55 cents to 65 cents, up 5 cents from an update in March. Wall Street analysts had been forecasting 2019 EPS of 59 cents, according to a FactSet survey. Organic revenue growth in the industrial segment, which includes GE’s non-financial businesses, is now expected to rise in the “midsingle digits”, from “low to mid single digits” previously. Second-quarter revenues for GE as a whole were $28.8bn, down 1 per cent from the previous year. Net loss attributable to common shareholders was $61m, down from a profit of $615m during the same quarter in 2018. The group’s loss per diluted share was 1 cent, from a profit of 7 cents in the previous period. GE’s shares rallied 5 per cent in pre-market trading in New York to $11.05. They have bounced back significantly since tumbling below $7 late last year, but were still down 18 per cent for the past 12 months as of Tuesday’s close. “We made steady progress on our strategic priorities in the second quarter. Our top-line growth was solid, and power made meaningful improvements on fixed cost reduction and project execution,” said Mr Culp, who added that he was “encouraged” by the progress so far in 2019. www.businessday.ng

No-deal Brexit: how prepared are the EU and UK? As Boris Johnson takes the reins as PM, the FT considers 5 areas most exposed to a crash exit MEHREEN KHAN IN BRUSSELS, JIM PICKARD AND JANINA CONBOYE IN LONDON

K prime minister Boris Johnson has ordered ministers and officials in his new government to “turbo-charge” preparations for a no-deal Brexit, unnerving currency markets and businesses — and leaving EU leaders wondering if he is bluffing. The new prime minister’s pledge to leave the EU with or without a deal on October 31 means both sides stand perilously close to a cliff edge, peering down at the prospect of medicine shortages, flight disruptions and endless border queues. To underline the UK’s shift in tone, chancellor Sajid Javid will this week announce a further £1bn for no-deal planning — on top of the £4.2bn set aside for all Brexit funding by the government so far. The European Commission insists it will not be doing any more contingency planning to deal with the fallout before October 31, a move designed to avoid giving Brexiters a “soft” hard landing. Should the UK crash out in three months’ time, EU officials calculate a chaotic exit would bring UK negotiators back to Brussels from November 1 to try to secure some continuity for businesses. Here the Financial Times considers where the biggest impact from a no-deal Brexit could be felt. Data flows Vast volumes of personal digital data from EU and UK citizens are transferred by businesses and public sector bodies across the English Channel every day. Under a no-deal exit, the legality of these data flows will be under question, having an impact on businesses including tech groups, healthcare companies or any services that deal with EU customers. The disruption to data flows would be a significant barrier to trade and, in the worst cases, could force British companies to

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halt their European operations. A system of contractual clauses offered by Brussels, allowing nonEU companies to carry out data transfers in compliance with European law, could offer a fallback. Large businesses with big legal departments that have anticipated a crash exit may well have already signed up to such alternative measures. But the CBI, the UK employers’ group, has warned that small and medium-sized enterprises have little awareness of what a hard Brexit means for them and the contingencies available. In the longer term, the UK says it wants to sign an agreement on data flows with the EU that would effectively treat Britain as if it were still a member state. There are a handful of these “adequacy” arrangements between the EU and third countries, but Brussels officials have warned it could take “years” for it to be concluded. VERDICT: Both the UK and the EU face equal damage Financial services After a no-deal Brexit, the UK’s lucrative financial services sector would lose “passporting” rights that allow British-based companies to operate in the EU’s single market. The prospect of mass disruption of the market after a hard Brexit means financial services is one of the few areas where regulators such as the European Central Bank and Bank of England have been co-operating on risk before Britain’s expected exit. While companies have been left with most of the burden of preparing for no deal, Brussels has taken important contingency steps. These include temporary access to clearing houses operating in the UK that will end in March 2020, 18 months for central securities depositories that settle trades and a six-month window to allow contractual changes to over-thecounter derivatives. Financial services groups also face thornier logistical issues on exit day itself. October 31 falls on a Thursday, which means UK companies would face the difficult @Businessdayng

logistical exercise of switching the systems they use to report transactions midweek — although many EU countries enjoy a public holiday on November 1. In the longer term, with or without a divorce deal, the City of London will be striving to gain limited market access rights under an EU system known as “equivalence” after Brexit. This is granted to non-EU companies if the European Commission decides that the country’s financial regulations are just as tough as those of Brussels. But even if agreed, the financial sector will not enjoy the depth of market access it enjoyed while the UK was a member state — and equivalence can be withdrawn by the commission at short notice. VERDICT: A key part of the UK economy faces significant disruption Customs Britain would fall out of the EU’s customs union under a nodeal Brexit, meaning UK companies would have to fill in customs declarations, change labels on food products and get health checks for exports containing animal products. A UK communications campaign has been launched to inform companies about what they need to do to prepare. But British businesses have criticised the government over a lack of information on how to prepare for the cliff edge, for example on issues such as dealing with new tariff changes or how customs checks would function on the Irish border. There is currently an invisible frontier between north and south, but a no-deal exit would be likely to mean border infrastructure returning to the island. Sam Lowe, senior research fellow at the Centre for European Reform, said companies had failed to prepare because they did not believe a crash exit was realistic. “So far the whole strategy required companies to sign up to things and engage, but they haven’t been doing it enough,” he added.

Thursday 01 August 2019

BUSINESS DAY

ECONOMIC MONITOR A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)

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What first quarter 2019 export figures mean for domestic firms, SMEs TELIAT SULE

here is no doubt that Nigerian firms are raising their game now in order to enhance their top and bottom lines. A number of them, particularly notable SMEs, have invested in innovative strategies, quality control and customer service delivery with a view to remaining competitive locally and internationally. For the international markets, quite a number of them need information as to where outside the shores of this country that there are readily available markets or customers for Nigerian goods. This analysis provides insight into this interesting aspect of their operations. In the first quarter of 2019, Nigeria’s foreign trade fetched N4.54 trillion for all the Nigerian firms and individuals involved in foreign trade transactions. You may not know to what extent the nation’s external sector faired until the first quarter of this year is compared with N4.69 trillion exporters realised in the first quarter of 2018. Year-on-year, foreign trade momentum declined by 3.37 percent in the first quarter of 2019. In the two comparable quarters, that is, first quarters of 2018 and 2019, Europe remained Ni-

geria’s largest destination of our export. In Q1 2018, 48.7 percent of Nigeria’s exports ended up in Europe; 27.9 percent in Asia; 12.6 percent in America while African countries received 10.5 percent of Nigeria’s Q1 2018 exports. In other words, from every 100 items that left the shores of this country, only 11 ended up among African countries.

At the fringe of the Nigeria’s foreign trade is Oceania, which received a paltry 0.3 percent of our exports. At the end of the first quarter of 2019, things were a little bit different. While Europe remained largest buyer of Nigeria’s exports, only 40.4 percent of the goods sold overseas ended up in the European Union. Trade also picked up with Asian countries as 29.2 percent of goods that left

rican countries. Put differently, 21 goods out of every 100 goods sold by Nigerian firms and individuals were bought by African consumers compared with 11 the corresponding quarters. Also, trade with the Oceania was more than doubled from 0.3 percent in Q1 2018 to 0.8 percent in Q1 2019. For investors in agric value chain, Europe and Asia are your best bet for exports

the shores of this country were bought by Asian consumers. Trade with America declined to 8.9 percent at the end of Q1 2019. The good news is that Africa is beginning to see the need to enhance trade among its members. At the end of the first quarter of 2019, 20.7 percent of goods sold outside the shores of this country ended up in Af-

In both quarters, agricultural exports accounted for just 1.8 percent of the total export proceeds. Export of agricultural goods rose by 17.53 percent from N73.24 billion at the end of the first quarter of 2018 to N86.09 billion as at the end of Q1 2019. Just like in 2018, the majority of the agric exports were realised from Asia and Europe. In Q1

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2018, Nigerian exporters in the agric value chain realised 51.6 percent of the foreign receipts from Asia and 44.6 percent from Europe. That added up to 96.2 percent. Only 3.8 percent was realised from Africa, America and the Oceania. In Q1 2019, Asia accounted for 56.2 percent of agric exports while Europe received 36.8 percent of our exports. In all, 93.1 percent of Nigeria’s export ended up in the two continents. America received 4.4 percent of Nigeria’s export in that quarter, while in Africa and the Oceania, 1.4 percent and 1.2 percent of the nation’s agric exports were consumed by consumers in those continents. Most African countries have similar socio-economic characteristics including export of farm produce in primary state and with a low level of industrialisation. For solid minerals, the export markets are in Africa and Asia Solid minerals exports accounted for 0.6 percent Nigeria’s export proceeds in the first quarter of 2018 and 0.2 percent in Q1 2019. Notably, there was a sharp drop in the export of solid minerals. In Q1 2018, Nigerian exporters sold N26.9 billion worth of solid minerals overseas but it was just N8.99 billion in the first quarter of 2019. What’s more? Export of solid minerals was distributed among four markets in Q1 2018 but sales of these products were prominent in two markets in Q1 2019. In Q1 2018, Africa accounted for 19.7 percent of Nigeria’s solid minerals export proceeds. American consumers bought 49.7 percent of solid minerals exported by Nigerian traders; Asia firms and @Businessdayng

individuals consumed 13.5 percent while Europe bought 17.1 percent of the nation’s solid mineral sales. In Q1 2019, only Africa and Asia were on the radar of Nigerian solid minerals exporters. African firms and individual consumers acquired 64.1 percent while Asian consumers used 35.4 percent. In Africa, Niger, Togo and Chad Republic are where the markets are for now. Niger Republic consumers bought emery, natural corundum and natural garnet from Nigerian exporters. In Asia, the markets for Nigerian solid minerals are in China, Hong Kong and Malaysia. Nigerian solid minerals such as lead ores and concentrates, niobium, tantalum, vanadium ores and concentrates are the preferred goods by Asian firms and individual users. Markets for Nigerian manufactured goods moved from Europe to Africa Year on year, export of Nigeria’s manufactured goods rose by 6.4 percent from N434.38 billion in Q1 2018 to N462.33 billion in Q1 2019. That was expected from a country that has put in so much to diversify its economy. However, what is interesting is the sudden change in the direction of trade. In Q1 2018, European customers-both industrial and households, bought N373.84 billion worth of manufactured products from Nigeria, which means, 86.1 percent of exported manufactured goods in that quarter were sold to the clients in the European Union. In that same quarter, only 7 percent was sold to African clients; 5.9 percent to Asia while 1 percent went to America. Things were not the same in the first quarter of 2019, as African countries bought 85 percent of manufactured goods from Nigeria. That translated to N392.20 billion. America bought 5 percent; Europe, 7 percent while Asia bought just 3 percent. There are rumours that due to credibility problems, Nigerian exporters now take their goods to other African countries for re-export to other continents on one hand and the fact that export documentations, trade protectionism in Africa might not as cumbersome as they are in America, Europe and Asia. In addition, in December 2018, Afreximbank launched a $1 billion programme to promote Nigeria-Africa trade. This sudden change may be attributed to the aforementioned factors. Otherwise, how do we explain the sudden change in the direction of trade of this magnitude in just twelve months?

Thursday 01 August 2019

BUSINESS DAY

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Thursday 01 August 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 31 July 2019

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 229,266.71 6.65 1.53 106 3,221,646 UNITED BANK FOR AFRICA PLC 191,516.76 5.65 -0.88 290 30,731,500 ZENITH BANK PLC 583,974.78 18.60 0.54 325 22,885,807 721 56,838,953 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 202,808.40 5.65 -0.88 206 5,632,949 206 5,632,949 927 62,471,902 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,585,023.16 127.00 -0.04 125 2,610,404 125 2,610,404 125 2,610,404 BUILDING MATERIALS DANGOTE CEMENT PLC 2,913,926.77 173.00 -1.72 62 142,521 LAFARGE AFRICA PLC. 227,925.31 14.15 -1.74 98 1,118,844 160 1,261,365 160 1,261,365 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 308,933.39 525.00 9.38 15 23,642 15 23,642 15 23,642 1,227 66,367,313 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 0 0 0 0 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 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 53,228.18 55.80 - 2 2,309 PRESCO PLC 44,800.00 44.80 - 6 13,140 8 15,449 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,440.00 0.48 - 7 48,202 7 48,202 15 63,651 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 847.13 0.32 - 1 1,400 JOHN HOLT PLC. 179.01 0.46 - 1 690 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 41,460.95 1.02 4.08 131 9,340,506 U A C N PLC. 16,279.33 5.65 -4.24 50 1,503,160 183 10,845,756 183 10,845,756 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 1 10 1 10 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 23,760.00 18.00 - 24 98,920 ROADS NIG PLC. 165.00 6.60 - 0 0 24 98,920 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 3,092.09 1.19 - 6 34,001 6 34,001 31 132,931 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 13,231.85 1.69 - 1 100 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 100,757.61 46.00 - 28 43,667 INTERNATIONAL BREWERIES PLC. 118,622.89 13.80 - 27 30,120 NIGERIAN BREW. PLC. 479,814.12 60.00 6.95 46 316,320 102 390,207 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 89,250.00 17.85 - 177 1,106,902 DANGOTE SUGAR REFINERY PLC 127,200.00 10.60 -1.85 71 1,403,594 FLOUR MILLS NIG. PLC. 57,405.31 14.00 - 150 2,880,049 HONEYWELL FLOUR MILL PLC 7,692.29 0.97 - 43 282,975 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 30 NASCON ALLIED INDUSTRIES PLC 35,767.42 13.50 -3.70 16 562,045 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 458 6,235,595 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 21,411.50 11.40 0.44 25 213,096 NESTLE NIGERIA PLC. 1,030,453.13 1,300.00 -2.03 73 142,062 98 355,158 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 5 152 VITAFOAM NIG PLC. 4,653.14 3.72 0.54 7 264,230 12 264,382 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 23,822.86 6.00 - 29 270,550 UNILEVER NIGERIA PLC. 183,840.17 32.00 - 29 79,249 58 349,799 728 7,595,141 BANKING ECOBANK TRANSNATIONAL INCORPORATED 165,145.96 9.00 - 34 289,179 FIDELITY BANK PLC 46,649.42 1.61 2.55 31 2,405,413 GUARANTY TRUST BANK PLC. 846,146.40 28.75 -0.86 230 33,593,780 JAIZ BANK PLC 12,374.98 0.42 -4.55 10 579,000 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 67,369.58 2.34 -3.70 20 11,435,447 UNION BANK NIG.PLC. 199,477.16 6.85 - 50 1,481,890 UNITY BANK PLC 6,779.82 0.58 -9.37 13 420,347 WEMA BANK PLC. 23,530.42 0.61 -1.61 12 565,944 400 50,771,000 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,366.03 0.63 - 11 145,113 AXAMANSARD INSURANCE PLC 17,325.00 1.65 - 1 20 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 7.14 1 100,000 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 7 51,400 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,563.20 0.35 2.94 6 358,297 LAW UNION AND ROCK INS. PLC. 2,019.28 0.47 - 1 17,071 LINKAGE ASSURANCE PLC 4,080.00 0.51 -3.77 11 646,416 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 3 48,950 NEM INSURANCE PLC 10,983.45 2.08 - 2 1,030 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,422.15 0.45 -6.25 2 141,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 1,000 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 -4.76 2 228,443 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 100 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 5,353.10 0.40 5.26 23 580,270 72 2,319,110

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MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 2,583.90 1.13 - 5 755,000 NPF MICROFINANCE BANK PLC 5 755,000 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,158.00 0.99 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,200.00 3.60 2.86 33 664,909 CUSTODIAN INVESTMENT PLC 35,879.37 6.10 - 5 51,602 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 31,486.31 1.59 0.63 30 2,119,347 ROYAL EXCHANGE PLC. 1,131.98 0.22 - 0 0 390,165.07 38.10 - 16 39,838 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 12,300.00 2.05 0.49 78 6,421,975 162 9,297,671 639 63,142,781 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 781.69 0.22 - 2 5,300 2 5,300 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 8,554.08 4.10 - 2 9,900 GLAXO SMITHKLINE CONSUMER NIG. PLC. 9,567.01 8.00 - 7 81,000 4,140.56 2.40 - 11 192,970 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,044.54 0.55 - 6 16,783 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 0 0 26 300,653 28 305,953 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 3 371,618 3 371,618 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 648.00 6.00 - 0 0 346.47 0.70 - 4 4,332 TRIPPLE GEE AND COMPANY PLC. 4 4,332 PROCESSING SYSTEMS CHAMS PLC 1,174.02 0.25 - 6 64,284 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 2 2,188 8 66,472 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,215,762.01 323.50 - 4 136,433 4 136,433 19 578,855 BUILDING MATERIALS BERGER PAINTS PLC 1,825.89 6.30 - 4 13,500 CAP PLC 17,325.00 24.75 - 19 32,089 CEMENT CO. OF NORTH.NIG. PLC 164,950.94 12.55 - 22 93,055 FIRST ALUMINIUM NIGERIA PLC 844.14 0.40 - 0 0 313.43 0.59 - 0 0 MEYER PLC. PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 1 20,000 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 46 158,644 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,624.37 1.49 - 6 103,275 6 103,275 PACKAGING/CONTAINERS BETA GLASS PLC. 33,173.14 66.35 - 5 790 GREIF NIGERIA PLC 388.02 9.10 - 2 790 7 1,580 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 59 263,499 CHEMICALS B.O.C. GASES PLC. 2,110.36 5.07 9.98 5 104,105 5 104,105 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 92.40 0.42 - 0 0 0 0 5 104,105 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,377.79 0.22 10.00 20 3,647,645 20 3,647,645 INTEGRATED OIL AND GAS SERVICES OANDO PLC 49,725.65 4.00 - 36 613,431 36 613,431 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 56,974.05 158.00 - 20 37,505 CONOIL PLC 14,052.53 20.25 - 47 72,509 ETERNA PLC. 4,368.88 3.35 - 14 67,005 FORTE OIL PLC. 23,640.03 18.15 -0.28 77 3,469,722 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 4 404 TOTAL NIGERIA PLC. 43,289.03 127.50 -1.85 20 58,935 182 3,706,080 238 7,967,156 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 341.14 0.29 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,112.54 5.28 - 3 11,285 TRANS-NATIONWIDE EXPRESS PLC. 328.19 0.70 - 5 55,943 8 67,228 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 2,785.59 1.34 - 3 22,220 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 2 70 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 5 22,290 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 241.92 0.40 - 4 3,933 LEARN AFRICA PLC 1,080.03 1.40 - 13 12,503 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 776.54 1.80 - 23 3,825

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industry Insight

BUSINESS DAY Thursday 01 August 2019 www.businessday.ng

Making energy available for increased productivity Michael Ani

ixing epileptic power supply in Nigeria could reduce ballooning costs borne by manufacturers, which have hindered their competitiveness and downed capacity utilisation. Many manufacturers cannot produce on a larger scale and export to other countries because they struggle to get cheap alternative energy sources in the face of poor power supply from energy distribution companies. In 2017, manufacturing companies in Nigeria spent as much as N117.38 billion in fuelling their plants to run daily operations, according to data from the Manufacturers Association of Nigeria (MAN). This affected their ability to expand operations, acquire new machinery to produce more in order to give juicy returns to shareholders. More worrisome is the fact that the money was spent basically on alternative energy sources. “The biggest challenge facing manufacturing companies as well as small- and medium-scale enterprises is power. This has led the deaths of many businesses in the country,” Muda Yusuf, director general, Lagos Chamber of Commerce and Industry, told BusinessDay. The nexus between increased power supply and productivity is clear. When there is steady energy supply, operating costs of manufacturers fall, leading to the production of cheap products that can compete locally. This is not the case today as locally made products are much more expensive that imported ones owing to high production costs. When manufacturers produce competitively, they export and earn foreign exchange. Rather than seek foreign exchange to import inputs, they earn enough to buy inputs and also free it for the economy. Today, Nigerian manufacturers are in a dilemma as they face cash-strapped and poverty-ravaged consumers, half of who earn N21, 000 or less. All the poverty indices show that Nigerian consumers are getting poorer. Brookings Institute said in 2018 that 87 million Nigerians, or around half of the country’s population, were extremely poor or lived on less than $1.90 a day. Just recently, the United Nations Development Programme (UNDP) said slightly over 98 million Nigerians are living in multidimensional poverty. Data from the National Bureau of Statistics on Gross Domestic Product (GDP) by Income and Expenditure approach at 2010 purchaser’s values show that consumption expenditure of households has been declining at varying pace since it rose by 1.5 per cent in 2015. This has a far reaching implication for these companies with regard to sales. Final consumption of households has declined by 8 percent from N43.1 trillion in 2014 to N39.66 trillion in 2018. Although the figures provided for 2018 by the statefunded data agency was limited to Q2 2018, BusinessDay arrived at a full-year estimated on an annualised basis. Year on Year, the decline in household spending rose 1.45 percent to N43.7 trillion in 2015 but as Nigeria entered its first recession in more than two decades, household spending fell 5.74 percent to N41 trillion in 2016. While the rate of decline slowed in 2017 as households spent N40.78 trillion, the estimates for 2018 suggest a plunge to 2.75 percent. Regular power supply could, perhaps,

have cut manufacturers’ production costs to enable them meet the needs of a majorly poor population. Availability of energy would traditionally enable these firms to employ more of this population. The National Bureau of Statistics says 23.1 percent of Nigerians are jobless, but the manufacturing companies cannot engage the unemployed population as they struggle in the face of high production costs. According to USAID’s energy sector review, Nigeria has the ability to generate 12,522 megawatts (MW) of electric power from existing plants, but it is able to distribute around 4,000 MW. Currently, manufacturers are beginning to seek energy themselves. They in self-generate a little over 13,000MW through alternative sources of energy in order to stay afloat. In 2016, the Manufacturers Association of Nigeria, through its recently formed MAN Power Development Company, signed an agreement with Tower Energy Solution & Systems Limited for the supply of six to 10 megawatts (MW) of electricity to Henry Carr Industrial Cluster in Ikeja, Lagos. The impact of these agreements is yet to be known. In major advanced economies of the world, the manufacturing sector takes the front burner in driving investment, raking in higher taxes, creating jobs and reducing poverty. The reverse has been the case for Africa’s largest economy as many firms have either been squeezed out of business, or

produce below capacity. In the first quarter of 2019, growth in the manufacturing sector slowed to 0.18 percent from the 2.35 percent growth in the previous quarter, based on NBS data. Even though the percentage share of foreign exchange earnings got from the sector grew, it still accounts for a meagre 10.9 percent of total foreign receipt in the period under review. Analysts argue that the sector has a great potential to grow if the challenge of power is fixed “If this problem is solved, it would help in driving the needed investment that will boost liquidity in the economy,” Yusuf explained. Manufacturing companies in Africa’s biggest oil producer suffered greatly from a recession that occurred in 2016 owing to a global collapse in oil prices. The fall in the oil prices caused a huge dollar shortage for the oil dependent nation which gets 90 percent of its foreign earnings from oil. The dollar shortage caused the Central bank to devalue the naira, which dealt a bigger blow on most manufacturing companies since many of their raw materials are sourced abroad. In August 2016, MAN and NOI Polls reported that 222 small-scale businesses closed shops, including 54 manufacturers, leading to 180,000 job losses. The situation was bad for most companies especially given the high inflation—which

rose to as high as 18.7 percent in January 2017—and slow economic growth that cut consumers demand. A recent report by the NBS and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) shows that the number of medium scale enterprises dropped by 61 percent, from 4,670 in 2013 to 1,793 in 2017. Analysts say the decline was as a result of the increasing operating cost affecting the growth of businesses as well as a reflection of the Nigerian economy in the last six years—particularly in periods of negative or sluggish growth in 2016/2017. Power supply serves as an indispensable input in the MSME activities. Apart from its necessity for running many industrial machines, its role from productivity to human capital is enormous. All business activity, especially industrial units, requires constant and effective flow of electricity. Electricity contributes greatly to product marketing. Constant electricity plays a vital role in storing finished goods ahead for demands thereby enhancing consumer satisfaction. Many developed countries in the world became competitive on the basis of regular energy access. Many have also long embraced energy mix. Today, a number of firms ranging from those in China to Indonesia are employing energy mix to increase output and cut costs. In September 2017, a report by David Gardiner and Associates, a strategic advisor to organisations seeking a sustainable future, reviewed 160 of the largest global manufacturing firms in the United States. According to the report, entitled, ‘The Growing Demand for Renewable Energy Among Major US and Global Manufacturers’, 25 percent of manufacturers, including General Motors, Anheuser-Busch InBev, and Mars, have renewable energy targets while 83 percent have greenhouse gas reduction goals. The report says that renewable energy, particularly wind and solar, is now among the cheapest and cleanest generation resources. It stated that manufacturers were pursuing that type of energy to help reduce costs. As reported by Alyssa Danigelis of energymanagertoday.com, of the 160 companies surveyed, 18 have 100 percent renewable energy targets. Even though some may dismiss this as an American example, the fact remains that this is happening across the world and manufacturing concerns world over are working towards being energy efficient. The International Energy Agency predicts that renewable energy will comprise 40 percent of global power generation by 2040. Nigeria has an advantage over the US, China and many countries in Europe, in that it is located in the sub-Saharan Africa where sunshine and wind are not in short supply. More so, solar panels are becoming increasingly cheaper, though reduction in cost will be determined by how much number Nigerian businesses and homes can buy. Experts say Nigerian manufacturers must begin to take energy mix more seriously to bring down costs in the long-term. Renewable energy may have shortcomings, but it is the future. More so, analysts believe that Nigerian economy needs radical policies that will cut poverty and enhance earnings. Such polices will empower the consumers and make manufacturers ready for the upcoming African Continental Free Trade Area.

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