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news you can trust I ** wednesDAY 01 january 2020 I vol. 19, no 468

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fter an underwhelming 2019 for the Nigerian economy, focus should rightly turn to expectations for the new year.

The biggest economic risks facing Nigeria in 2020 have been the same since 2015 and they include weak economic growth, increasing poverty levels and foreign direct investor apathy.

There’s a way out for Nigeria and it is implementing economic reforms that can spur investment, boost growth and create jobs.

In 2020, much will depend on six things if the economy is to look nothing like it did in 2019.

First is whether private capital will remain ironically shut out of Nigeria – whether the government will retain full ownership of redundant assets that can be transformed with an influx of private capital and expertise.

This could have the single biggest impact on economic growth in the new year, seeing that the main driver of growth in 2019 and perhaps each year in the last decade – the oil sector – could run into troubles of its own in 2020.

The Organisation of Petroleum Exporting Countries’ oil production cap imposition on Nigeria, alongside the dearth of new investment in the space, could mute

significant growth in the sector.

Threats from the rising adoption of electric vehicles to the waning influence of OPEC are also long-term challenges facing the oil sector.

The non-oil sector has flashed signs of promise but hasn’t been able to wrest the oil sector’s stranglehold on the economy.

The need to open up new sectors to private capital as a way

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of boosting economic growth is hardly new counsel in Nigeria but nothing has changed.

What’s worse from a NigeContinues on page 34

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Stock market closes last trading day of 2019 in green …amid year-end portfolio rebalancing Iheanyi Nwachukwu

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he Nigerian stock market wrapped up the year 2019 in the green amid year-end portfolio rebalancing ahead of new year positioning.

Following that positive on Tuesday, December 31, the record 2019 negative return moderated to -14.6 percent. Increased rally this week pushed the positive returns higher by 1.61 percent.

The Nigerian equity market had started the week in the green territory, sustaining the gain recorded in the last trading days of the prior week.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) appreciated by 87 points to close the year at 26,842.07 points.

Stocks value closed the year at N12.958 trillion, while capitalisation of listed bonds and Exchange Traded Funds (ETFs) on the NSE stood at N12.91 trillion and N6.5 billion, respectively.

The benchmark index benefitted from the upward movements recorded in major large Continues on page 34

Inside

President Muhammadu Buhari (r), receiving Akinwunmi Adesina, president, African Development Bank (AfDB), during his courtesy visit at the Presidential Villa in Abuja. NAN

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Nigerian economy in 2020: Here’s what to expect LOLADE AKINMURELE

fgn bonds

Treasury bills

Poverty and the Nobel Prize laureates: What can Nigeria learn? P. 32

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news Hope rises for Apapa economy in 2020, but concerns remain CHUKA UROKO

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xpectations are high that the economy of Apapa, Nigeria’s premier port city, will turn the corner by the end of 2020. These hopes are hinged on improved roads infrastructure given the ongoing road rehabilitation and reconstruction projects in the city.

Babatunde Fashola, minister of works and housing, sees Apapa’s battered economy returning full scale when the ongoing roads reconstruction and rehabilitation in and around the port city are completed by the end of 2020.

For instance, reconstruction work on Creek Road is nearing 80 percent completion, while the Liverpool Road reconstruction is about 50 percent completed. It is expected that the completion of these two roads before the end of 2020 will return sanity and in turn bring back businesses that have fled the city.

Besides Creek and Liverpool Roads which are nearing completion, Fashola said at the weekend that the reconstruction and expansion of the Apapa-Oshodi Expressway was about Apapa economy, describing it as a strategic economic intervention by the Federal Government.

He hoped that all the businesses and even residents that had left the port city because of infrastructure challenges would come back and that would mean the rejuvenation of Apapa economy.

The economy of Apapa, which accounts for about 75 percent of Nigeria’s export and import activities, is estimated at N25 billion a day. But given the sorry state of the port city at the moment, this argument can hardly be sustained now.

Apapa has over time suffered a degraded environment from which many residents and businesses have relocated, leaving behind homes and business premises that are not only empty but also losing value by the day.

Besides the residents who suffer over N200 million annual rental income loss, businesses still in the city are operating at sub-optimal level while many of the maritime activities such as clearing and forwarding and other agency services are currently on holiday.

Benjamin Bem, a member of the House of Representatives, was quoted recently as saying the House had commenced investigation into the N600 billion monthly revenue loss recorded at the Apapa and Tin Can Island Ports in Lagos.

Whether the story is about Apapa property owners, business owners or sundry stakeholders, the N600 billion monthly loss is caused by gridlock/congestion in the city and the dilapidated infrastructure.

This is why the ongoing projects are engendering hopes of a resurgence of the Apapa economy in 2020.

Concerns, however, re-

Continues on page 34

CBN issues directives on preauthorisation of card transactions … sets July 31, 2020 as deadline for full compliance HOPE MOSES-ASHIKE

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n order to enable preauthorisation and salecompletion of cards transactions, the Central Bank of Nigeria (CBN) on Monday issued a circular on ‘Pre-authorisation of cards in Nigeria’ to merchant acquirers, Deposit Money Banks (DMBs) (issuers), payment service providers and card schemes.

The circular takes immediate effect, but with a deadline of July 31, 2020 for full compliance, after which the CBN will impose appropriatesanctionsforcontraventions and non-compliance.

The move is part of the regulator’s commitment to facilitate the development of the Nigerian payments system and deepen the adoption of various electronic payment options available to users.

In a circular signed by Musa Jimoh, director, payments system management department, the CBN said it had identified the predominant use of single messaging format for PoS as an obstacle to the use of pre-authorisation as a mode of payment.

According to the circular, all merchant acquirers are required to obtain Acquirer Device Validation (ADV) Certification or the applicable testing completion from the CBN-licensed card schemes.

By the directive, all PoS terminals must have the capability for transaction pre-authorisation and sales completion. According to the circular, Payment Terminal Service Aggregator (PTSA) - Nigeria Inter-Bank Settlement System plc (NIBSS) is to ensure that only banks that have conducted and obtained PoS terminal validation certificate for pre-authorisation and sales completion, from the relevant card schemes, have their PoS terminals registered on the Central Terminal Management System.

All card users are required to build the capability and enable the processes for preauthorisation and sales completion of transactions.

Card schemes are also required to provide online simulators for acquirers and issuers to test their systems when necessary. www.businessday.ng

L-R: Innocent Nwoga, elder statesman and former federal minister; Mike Ahamba, lawyer; Olusegun Obasanjo, former president of Nigeria, and Emeka Ihedioha, governor, Imo State, during a courtesy visit by the former president to the governor at his country home, Mbutu, Aboh Mbaise LGA.

Lagos launches series III of N500bn debt issuance programme … bond signals era of more infrastructure upgrade – Finance commissioner JOSHUA BASSEY & SEGUN ADAMS igeria’s commercial capital, Lagos State, has launched the third series of its N500bn debt issuance programme as it seeks to raise up to N100bn for financing physical and social infrastructural development projects in the state.

The Series III is a 10-year bond with an indicative coupon of 11.75 percent-12.25 percent, according to the bond prospectus seen by BusinessDay. Minimum subscription is N10m with multiples of N5m thereafter, and the issue is rated Aa-(GCR) by Agusto & Co, although the issuer which is

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Lagos State government is rated A+(GCR).

Rabiu Olowo, the state commissioner for finance, told BusinessDay that the bond issuance signalled an era of more positive developments in Lagos, in terms of infrastructure upgrade, to cater to the ever-growing needs of the population of Nigeria’s largest sub-national economy.

Olowo said the proceeds of the infrastructure bond would touch major projects captured in the THEMES agenda of the Babajide Sanwo-Olu administration in the state.

“The projects cut across the THEMES agenda of this administration. They include road infrastructure,

water supply, drainage and environment, health, education, among others,” said Olowo.

The THEMES agenda, which Sanwo-Olu unveiled during his swearing-in in May 2019, is the six pillars through which the administration hopes to deliver its “Greater Lagos” vision. It stands for Traffic Management & Transportation (T), Health & Environment (H), Education & Technology (E), Making Lagos a 21st Century Economy (M), Entertainment & Tourism (E), and Security & Governance (S).

Lagos State launched the first tranche of series I of its debt issuance programme in December 2016 when it issued N60bn.

The government raised N97.34bn in the series II which was issued in four tranches. In August 2017, the first two tranches of N46.37bn were issued as a seven-year bond priced at 16.75 percent for Tranche 1 maturing in August 2024, and the Tranche 2 which is a 10-year bond of N38.77bn priced at 17.25 percent will mature in August 2027.

The government raised N6.9bn and N5.3bn in tranche III and tranche IV, respectively, in January 2018.

For the third series, the Book Build commenced Tuesday, December 31, 2019, and will close on MonContinues on page 34

16 revenue-generating agencies fail to remit N19bn to Consolidated Revenue Fund DIPO OLADEHINDE

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recent report from the Auditor General of the Federation’s office has revealed that 16 revenuegenerating agencies did not remit over N19 billion to the Consolidated Revenue Fund in 2017.

The Consolidated Revenue Fund is an account that is owned and managed by the Federal Government, where all its revenues are paid.

The Auditor General’s office has the fundamental function to protect public interest by performing a detailed and objective examination of public accounts and also scrutinising ministries, departments and agencies’ expenses.

According to the report, the Bureau of Public Enterprise (BPE) topped the list of unremitted revenue, with the sum of N7.58 billion.

Some of the other affected agencies and institutions include Federal University Dutsin-ma, Katsina State, with an unremitted sum of N31,461,559.60; University of Abuja, Abuja (N603,446,911.37); Modibbo Adama University of Technology, Yola, Adamawa State (N8,884,010.00); Federal University, Oye-Ekiti, Ekiti State (N24,812,174.73); Federal University of Technology, Owerri, Imo State (N748,178,771.25), and the Teachers Registration Council of Nigeria (N355,059,967.21).

Others are the Na-

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tional Examination Council (NECO) with an unremitted sum of N3,498,463,711.01; News Agency of Nigeria with N32,324,585.60; Securities and Exchange Commission (SEC) with N2,297,199,080.00, and the Federal Medical Centre, Abeokuta, Ogun State, with N155,169,590.25, among others.

The report also noted that several revenue-generating agencies dissipate funds on excessive overhead expenditure and extra-budgetary expenditure on contracts thereby reducing their operating surplus.

“We also found that 26 of the MDAs that were audited did not deduct and/ or remit a total of N1.65 billion,” the report said. @Businessdayng

The Auditor-General’s report also observed that 160 agencies defaulted in submission of audited accounts for 2016; 265 agencies defaulted in submission of audited accounts for 2017, while 11 agencies have never submitted any financial statements since inception.

“Some of the government corporations, companies and commissions have not submitted their audited accounts to me as at 30th June 2019, despite the provision of Financial Regulation 3210(v) which enjoins the Chief Executive Officers of these bodies to submit both the audited accounts and management reports to me not later than 31st May of the following Continues on page 34

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comment End of the American era in the Middle East comment is free

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The US pullback from Syria has emboldened Russia and Iran

Gideon Rachman

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or centuries, the Middle East has been dominated by outside powers. The collapse of Ottoman rule at the end of the first world war was followed by a century in which western nations — first Britain and France, then the US — were the most powerful external actors. But that era of American dominance is now coming to a close.

The decline of US influence in the Middle East was captured by an impotent tweet from President Donald Trump on Boxing Day: “Russia, Syria, and Iran are killing, or on their way to killing, thousands of innocent civilians in Idlib Province. Don’t do it!”

Underlying the president’s handwringing about Syria is a rapid decline in the ability and willingness of the US to shape events in the Middle East — leaving a gap that is being filled by other powers, such as Russia, Iran and Turkey.

Of course, if the Americans are directly challenged they can and will respond forcefully — wit-

ness the bombing raids that the US staged on an Iranian-backed militia on the Iraq-Syria border this weekend. But the appetite for broader strategic plays in the Middle East seems to have largely disappeared from the White House.

As recently as 2011, the US, Britain and France staged a military intervention in Libya which toppled the Gaddafi regime, while Russia fumed impotently on the sidelines. However, the west’s unwillingness to manage the aftermath in Libya — or to get seriously involved in Syria — left an opening for Moscow. Russia’s unexpected military intervention in Syria in 2015 was treated with scepticism in the west. But Russian forces have waged a brutal campaign that has helped the Assad regime regain control of most of the country — with the assault on Idlib potentially opening the way to a conclusive victory.

Two events in recent months have rapidly accelerated the decline in US power in the Middle East. In September, Iranian missiles struck the oil facilities of Saudi Aramco. Since Saudi Arabia is one of America’s closest allies, it was widely assumed that the US would inevitably stage a military response. In the event, the Trump administration did nothing.

The following month, Mr Trump announced a pullout of American troops from Syria.

In a symbolic move, Russian forces moved in swiftly to occupy evacuated US bases, with television reporters sending home incredulous dispatches,

surrounded by discarded American kit. The US had abandoned not just its bases, but its Kurdish allies, leaving them to the mercy of a Turkish military offensive.

The American pullback has further emboldened Russia and Iran, while causing US allies to rethink their dependence on Washington. Russia, Iran and China have just staged their first ever joint naval exercises in the Gulf of Oman, a stretch of ocean traditionally dominated by the US fifth fleet and crucial to the global flow of oil.

Russian “mercenaries”, connected to the Kremlin, have also now intervened in Libya to back the rebel forces led by General Khalifa Haftar, potentially increasing Moscow’s influence over both the country’s oil and the flow of refugees to Europe.

In Libya, as in Syria, it now appears that Turkish forces will intervene on the opposite side to the Russians. However, this proxy conflict has not prevented a certain closeness emerging between Russia and Turkey.

The Turks are not the only regional power that is looking with increasing interest towards Moscow. In the wake of the Trump administration’s inaction over Aramco and Syria, Mr Putin paid a successful visit to Saudi Arabia and the United Arab Emirates, prompting Prince Mohammed bin Zayed, de facto ruler of the UAE, to announce improbably: “I think of Russia as my second home.”

Mr Trump and his supporters shrug their shoulders at this declining influence. After the costly debacles of the Iraq and

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The west’s unwillingness to manage the aftermath in Libya — or to get seriously involved in Syria — left an opening for Moscow.

Russia’s unexpected military intervention in Syria in 2015 was treated with scepticism in the west

FT

How volunteering advances your career

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onke’s day job takes a good percentage of her time. As someone who lives in a fast city with other responsibilities to attend to, her spare time goes into growing her side business. Even though, earlier this year she resolved to donate portions of her spare time to work as a volunteer with an organization working for a cause she is passionate about, her situation did not afford her the chance to do so.

The 5th of December every year marks International Volunteer Day, a day set aside to celebrate volunteers all over the world for the valuable work they do. To recognise their efforts, to promote volunteerism and to galvanize support from all stakeholders.

Volunteers are very vital to our society.

They commit themselves to fighting causes that affect all of us. And because of their

selfless acts of services, our communities are better and stronger.

As a professional like Ronke, you may be overwhelmed with your busy schedule, wondering how or why you too should be a part of these do-gooders making our world a better place. What if I show you how volunteering advances your career?

First, there is a natural sense of pride and satisfaction that comes with helping people who can never repay you. Volunteering makes you self-aware, boosts your confidence while giving you a sense of purpose and a fresh zeal for life. For those of us battling with stress and anxiety, there are studies that show that volunteering helps to combat stress. One can only give as much as they have. Only a healthy and deeply fulfilled person will be productive at work.

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Second, besides helping you grow as an individual, someone who has been out of work for a long time can use volunteering as a way to cover time gaps in their CVs. This speaks volumes of your person. You will come across to prospective employers as someone who is dedicated and committed.

And if you are looking to switch careers, volunteering will give you the experience you need for this new field. You will be exposed to networks that can connect you to your area of interest. On the other hand, as you now work with people you do not know or have to raise funds for charity, volunteering helps to strengthen the skills you already have and use in the workplace.

Considering that some of us have so much on our plates, it makes sense to set realistic expectations while we identify

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Afghanistan wars, Americans are understandably wary of further military involvement in the region. In another recent tweet, the US president said that all outsiders, including “Napoleon Bonaparte”, were welcome to help the Kurds, adding, “we are 7,000 miles away”.

European powers, which are much closer to the Middle East, cannot afford to be so casual.

But their policy towards the region is even more impotent and inward-looking than that of the US. When Mr Trump announced his pullout from Syria, Annegret Kramp-Karrenbauer, Germany’s defence minister, tentatively suggested that Europeans should think about deploying a peacekeeping force. The idea gained no traction whatsoever.

Instead, EU nations are watching the Russian-Syrian offensive with a mixture of horror at the humanitarian consequences and dread that a new flow of refugees will soon be heading towards Europe. Already some 235,000 people have fled from the Idlib area, adding to the millions internally displaced within Syria, and the roughly 4m refugees across the border in Turkey. The Europeans are also alarmed that Islamist fighters may soon be streaming back into western Europe.

In the long run, even the US may pay a price for frittering away its regional influence in such a casual manner. As the past century has demonstrated, turmoil in the Middle East and Europe has a way of eventually crossing the Atlantic Ocean.

OSAYI ALILE

causes we sincerely care about so that there is the right fit. We also need to examine our motives, making sure that our service is devoid of selfish interests, even though helping others profits us in the long term.

It is important to state that technology has made it possible to support these organisations that will need our expertise remotely; hence you can volunteer “without leaving home”. However, if you do not have the time or skill to donate, donating money or supplies is one passive way you can be of help.

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comment Character Matters with Daps

Dapo Akande

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ice sets out to please and is careful not to offend but let’s face it, other than pleasantness; it offers little in terms of real value. Good can also be nice but is ready to be “cruel” to be kind. He will tell you as it is, for your own benefit. It may sound harsh at times but still, it offers you the comfort of knowing it’s the truth. Good is infinitely better, more helpful and more profitable so seek to be good and not just nice.

A good leader seeks to understand his people, not with the aim of manipulating them for his selfish interest but to help them devise and formulate policies that he knows will meet their needs. The indefatigable father of modern Singapore, Lee Kuan Yew, said it all, “We considered it vital that the people feel confident the government would not cheat or harm them. Then, however unpopular government policies might be, the people accepted that they were not the result of immorality, nepotism and corruption.”

Better good than nice. The above position could hardly be at greater variance to that of our society where every move, every policy, every pronouncement and every appointment is viewed with utmost suspicion; all because seldom have there been governments who made any sincere attempt to convince the people either by action or body language that they

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Far better to be good than nice had the people’s supreme interest at heart.

Ishaq Oloyede’s highly commendable leadership at the Joint Admission Matriculation Board (JAMB) secretariat just goes to show what can be achieved when you have a man of character and integrity at the helm of affairs. Leadership is vital. Though I’m not an insider and therefore may not be privy to all the goings on in the organisation, there’s nothing to indicate that he totally overhauled the staff he met on ground. And yet he was, within two years, able to take JAMB from an agency which remitted a paltry sum of N50 million to the federal government coffers over a period of six years to one which now remits N15.6 billion in a single year!

It wasn’t magic. As the saying goes, once the head is good and moves in the right direction, the body will naturally follow. And like the editor of this illustrious newspaper rightly pointed out in one of his articles, Oloyede is a scholar of Islamic and Arabic studies from the University of Ibadan and not a product of a super prestigious foreign School of Management. One thing that can be deduced from this though is that when someone practices what he preaches, he will produce results.

Oloyede has not only passed through the ivory towers of University but he has allowed the core values of his studies to pass through him.

The results speak for themselves; visionary and sincere leadership and a totally transformed agency, essentially with the same staff as before he took over. The taste of the pudding is always in the eating.

This is a “no excuse” for nonperformance leader. Better good than nice and we need more like him –

those whose corporate, religious and ethical values align. Paul Wellstone once admonished, “Never separate the life you live from the words you speak.” It’s really as simple as that but we’ve succeeded in making it look impossible, due to a propensity to put personal interest before that of the collective.

A transformational leader, which I dare say Oloyede is, inspires those around him to be the best they can be. Subordinates will always read the body language of their leaders and it will either lead them down the same road of perfidy as the leader or it will whip them into line.

There’s something unmistakably sinister and corrosive about corruption. It eats away at our sense of humanity and each corrupt action we take dehumanises us the more.

A man who allegedly corners for himself billions of naira meant for pensioners, many of whom have no other means of keeping fragile body and equally precarious soul together but the measly pension they collect every month; or at least are meant to collect, if only they can even be paid as at when due; did not become so inhumane and unfeeling overnight.

It was a process, ever so gradual, as each evil action chipped away at his soul until it became utterly empty, barren, and hollow. It eventually gets to the point where nothing and no-one else matters but himself.

Even at that, there are bound to be a few people he “blessed” with this largesse. Those who will continue to insist he’s a “nice” man albeit at the expense of thousands to whom the funds rightly belong. Better good than nice.

Immanuel Kant once said that, “nothing in the world - indeed noth-

‘

There’s something unmistakably sinister and corrosive about corruption. It eats away at our sense of humanity and each corrupt action we take dehumanises us the more

n every side, we receive and return cheery greetings... Happy New Year!

This is filled with honest wishes for a better and brighter 365 days. It is imperative that if we have any hope for a better future, if we have any good intentions, let us begin today to put them into effect. May we resolve to live in such a way that each day of this New Year will be a fresh beginning for a better and truer life. Let not the temptation to dwell upon past unhappiness or failure which avails us nothing and begets nothing but grief preoccupy our minds. The naked truth is that no human being has got or can ever get through life without failure and mistakes.

Failure itself is one of the most painful sufferings we experience within the human condition. In the everydayness of our lives, we are confronted with the term fear of failure in its multi-faceted nature. There have been, and will still be, fear of various kinds and degrees in our lives. Be that as it may, this must not in any way discourage us, for those who believe they are truly beaten are beaten. Winners, they say, never quit. They keep on trying.

However, the bitter truth is that the fear of failure has ended more dreams than many can imagine. Some people are even afraid to embark on any project and to think big simply because they are frozen in the paralysing grip of fear, especially that of failure. The question

is: should this be the right approach and attitude? Of course not!

On the contrary, when we study the life history of any successful person, we realise to our amazement a string of failures, rejections, disappointments that infiltrated his/her life before there was a celebration of triumph. It should seriously be noted that there is nothing wrong with a bit of failure. As long as one is not overcome, consumed or paralysed by it. Thus, the wise saying that success is failure turned upside down. Life, if it is going to be abundant, must have plenty of hills and valleys. It must have plenty of sunshine and tough weather. It must be packed with days of danger and apprehension. Little wonder some great minds observed that troubles oftentimes are instruments by which God fashions us for greater and better things.

Our successes are conditioned by the amount of risk we are ready to take, because biggest successes, they say, are preceded by the greatest heartburns. The big fish, no doubt, is never caught in shallow waters. You have to go into the open sea for it. You cannot make omelette without breaking eggs; it’s as simple, yet as profound, as that. Any successful person has a legacy of persistence, dedication and a refusal to be stymied by the fear of failure.

It was their resolve to stare down the fear of failure and overcome it. It goes without saying

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Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: “The last flight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com

that determination is of striking importance in any and all human endeavour. The most important thing is to make a start. Added to this, you must have the vision, mission and a sense of purpose.

In this, we note that the most successful in any line of human enterprise – business, science, art, politics – has a vision, a dream, mission, before they could grasp reality. Success entails the ability to see the growth of future years, plan for it, work for it, before it can materialise. Truly, it pays to nurture active imagination. If anyone wishes to accomplish anything this year, they must have purpose and ideas.

A writer once said that the man who does the world best, the man who helps mankind onward and upward, is the man who dreams of helpfulness, progress and improvement, and gets them materialised. Planning is very important in the achievement of success. It ends with execution of the plan. Planlessness and painlessness are the friends of failure.

Throughout history there is no gain without pain.

To be successful, we must be prepared to plan our way to success and be ready to endure pains. Nothing good comes easy. The amount we are ready to put in is the amount we should expect in return. No one gets more than he/ she has put in. Ideas are just ideas unless

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ing even beyond the world - can possibly be conceived, which could be called good without qualification except goodwill”. And this goodwill can only be obtained from performing one’s duty for the sake of duty and for no other reason. This subsequently renders other possible considerations such as the consequences of one’s actions, convenience and expedience non issues. To be good is to do right.

Barbara Jordan once said, “A nation is formed by the willingness of each of us to share in the responsibility for upholding the common good.” This requires us as individuals to perform our duty to the whole and willingness in my book, implies cooperation freely given and not as a result of compulsion.

It’s far better to “will” people into doing something i.e. by selling them a vision as a leader which they catch and which then causes them to desire seeing and enjoying the benefits that could emanate as a result of your proposed course of action. So to inspire is far better than trying to coerce them into it because the first approach stands a good chance of producing favourable results which will endure while the other constantly totters at the edge of coming to an abrupt end once the coercive force expires, loses potency or simply loses steam.

Inspire that change through your actions and not mere words. Be result oriented. It’s always better to be good than nice.

Changing the nation...one mind at a time

Reflections: Freedom from the pain of an unlived life

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SEBASTIAN-LIVINUS OKWARAOHA they are transformed into reality by unshaken determination. Therefore, do not wave aside any good idea that keeps on coming to you to execute for your own good and the good of humanity this New Year. This is a tip of the iceberg in the journey to the fulfilment of your destiny, and betterment of humanity. It may not be significant anyway, but we must not forget that starting small is starting right. God, our creator, makes greatness out of nothing, for a big tree cannot be without the little seed.

In furtherance, we should cultivate a winning attitude. The Holy Bible says: as a man thinketh in his heart, so he is. It is the same as saying you are what you think you are. The real thing is you are not greater than your own dreams. We should never accept that we cannot achieve success this new year and at any time in our life and anywhere.

This new year, let us wish nothing that will make the world poorer, or do nothing that will bring pain or privation to our fellow men.

Let us not be discouraged if the way is uphill, and travelling is slow, so long as we are rising.

This New Year, may our slogan be; no retreat, no surrender!

Okwaraoha writes from Lagos.

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Focus on fresh vistas and opportunities in 2020 “By 2020 Nigeria will be one of the 20 largest economies in the world, able to consolidate its leadership role in Africa and establish itself as a significant player in the global economic and political arena.”- Vision 2020 document. elcome to 2020, d ea r r ea d e r.

We l c o m e t o the year when Nigeria assayed that it would achieve significant progress on all indicators. 2020 was supposed to be the year of health for all, housing for all and all-round progress on various indicators for all citizens of Nigeria. Alas, we enter the year with stakeholders, local and international, lamenting the missed opportunities and fretful about the risks ahead.

All the reports, analyses and prognoses about Nigeria point to a difficult year. It starts with the federal government. A recent report by global ratings agency Fitch thumbs down the economic policies of the government as contributing more to knock than to uplift the economy. The economy is more vulnerable and the Naira a lowvalue currency.

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There is a high risk of a devaluation of the Naira. Devaluation is bad news ordinarily but given the statistics of Nigeria, devaluation would be devastating. Yet the possibility hovers over the economy.

There is no clarity in the economic policies that the government is implementing. Fundamental policy measures are not subjected to any debate before Mr President or other official such as the boss of the Customs announces them and begins rushed implementation. The National Assembly looks on.

The country is steadily going back to the era of massive debts.

The National Assembly is committed to approving the president’s request for Nigeria to take a loan of a huge $29billion ostensibly for funding infrastructure projects.

It will add to the $80b that Nigeria currently owes and the weight of debt servicing and debt repayment.

Inflation would likely spike in 2020 given policy measures such as the 50 percent increase in Value Added Tax, the increased minimum wage, the continued closure of the Western border and restrictions on forex financing for a wide range of imported goods.

GDP growth at 2.4 percent would be below the rate of population growth. In real terms we would have negative growth in the economy. The key ratios look bad. Inflation is high. Interest rates do not support enterprise.

We have already mentioned the low value of the Naira as a tool of global trade.

There are dire warnings from multilateral institutions about the trajectory of our economy.

We enter the new year and new decade tremulous. BusinessDay believes we should take a different stance.

“Sweet are the uses of adversity, Which, like the toad, ugly and venomous, Wears yet a precious jewel in his head”, William Shakespeare got Duke Senior to exclaim in As You Like It. The many aphorisms of the peoples of Nigeria affirm this with expressions such as tough times reveal the content of the man.

Stakeholders of Nigeria must see 2020 as a call to arms. They cannot bow to the headwinds of the economic situation, even as it is clear majority of the challenges are self-imposed.

Fresh ideas, new thinking, new strategies must spring forth from

operators of the economy. Players in other areas of life must weigh in with positivity. The times call for cooperation and collaboration.

Professional bodies that have focused only on member relations must rouse to the challenge of national engagement. Associations focused on the economy should also do more.

Economic history shows that serendipity often comes into play when there is a national resolve.

It is heartening that President Muhammadu Buhari is suddenly mindful of the need to have a united country and worries about his place in history. He could give the nation a New Year gift by changing the character of the administration with new appointments that reflect the diversity of our peoples while enthroning merit.

Enterprises in the country must embrace true research and development to tackle the shortfalls and changing dynamics of the economy and market. The experts such as Morgan Stanley also forecast calmer waters in the global economy, growth in emerging markets and a positive outlook.

Nigeria must be a part of this positive outlook once more.

Happy New Year 2020.

HEAD, HUMAN RESOURCES Adeola Obisesan

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BUSINESS DAY

Wednesday 01 January 2020

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Happy New Year Mr President!

Franklin Ngwu

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s today marks the beginning of 2020, I join other millions of Nigerians to wish you a very happy and prosperous New Year! Looking back at 2019, we made some progress from 2018 results, but can we say that it was a good year socio-economically? While we had marginal GDP growth, inflation also declined but has remained in double digit. We also had reforms and policies in different sectors such as oil & gas, agriculture, telecommunications and particularly in the financial sector with Central Bank of Nigeria’s bullish push for increased Loan to Deposit Ratio from 60 percent to 65 percent and possibly to 70 percent. In terms of Ease of Doing Business, we are also told that we have improved in the ranking even though the improvement is difficult to see when you interact with some federal, state and local government agencies.

As we enter 2020 Mr President, I am convinced that you want a better and prosperous Nigeria better than 2019. From different quarters, the economic outlook and the key factors that will shape our national growth and development outcomes in 2020 are being marshalled out and debated. We are told that a GDP growth

of less than 3 percent is possible, inflation will remain at double digit and Naira will likely be devalued or forced to exchange within a band of N360-N375 to a dollar. While crude oil price and capital market may still experience volatile and sluggish growth depending on how the reforms and other global factors play out, unemployment will remain high with the manufacturing sector likely to be weak. Based on what we have heard and analysed, we will probably retain our position as the poverty capital of the world given our rapid population growth that will possibly outgrow GDP as was the case in 2018 & 2019.

Mr President, you will agree with me that if we remain the poverty capital of the world with over 100 million Nigerians described as extremely poor, it will be difficult to say that the reforms and policies are working or that you and your government performed well. With the enormous powers you have as the President of Nigeria and Commander in Chief of the Armed Forces that can be deployed to harness the immense opportunities and assets we have, Nigeria can achieve a GDP growth of over 6 percent in 2020 and beyond. All that we be required is to initiate and implement more bold reforms. I will explain some few macro ones.

As oil and gas remain our main source of revenue, it is the sector that requires most urgent and deep reforms. With the hope that all efforts will be mobilised to sign and start the implementation of the Petroleum Industry Bill (PIB), further reforms geared towards total removal of the subsidy and privatisation of NNPC need to be pursued with presidential vigour and speed. If the oil companies of other oil producing countries such as Saudi Arabia and Norway are de-

‘

To properly jumpstart sustainable economic growth of Nigeria, the items in both the exclusive and concurrent lists must be reviewed with more items move to the latter. This will help relieve the Federal government of unnecessary burden or numerous tasks it is trying to undertake

claring huge profits, there is no reason why NNPC should be declaring losses or questionable results. Further delay in the privatisation of NNPC might result to irreparable regrets and losses when Dangote Refinery starts optimal production. In addition to the privatisation of NNPC, the Bureau of Public Enterprises (BPE) should be properly encouraged to privatise many other underutilised and unused assets of the country. It is a better way of raising even more than $30 million than the present plan to borrow which I have on many occasions argued against.

The present plan to borrow additional $30 million can only be described as lazy and coming from lack of deep thinking and planning. Given our current level of debt, there is no justification for additional borrowing!

Moreover, the documents for the additional loan show that it contains items that the Federal government should not be concerned about if it can initiate and implement the appropriate reforms. A very good example is the need for a loan to develop the mining sector. It is important to remember that Nigeria is a very plural society of about 200 million people and as such, the key question is what governance structure is most suitable for a country like Nigeria. From research and experience from many plural societies, the most suitable governance structure is a devolved system with limited powers at the centre (Federal government).

Denial of this fact will not help the present government or any government.

To properly jumpstart sustainable economic growth of Nigeria, the items in both the exclusive and concurrent lists must be reviewed with more items move to the latter. This will help relieve the federal government of unnecessary burden or numerous tasks it is trying to undertake. Just as the

mining sector should be moved to the concurrent list for the states to manage, so should the power sector. The states or regions should be allowed to generate, transmit and distribute electricity within their states or regions without first sending the generated power to Transmission Company of Nigeria.

Still on the governance reforms, the current situation where our recurrent expenditure is higher than the capital expenditure is not sustainable. A key reform required is on how to reduce the cost of governance especially the federal. Is not possible to initiate reforms for only 18 federal ministers, one senator and three houses of representative members per state? I think it is possible and very feasible.

Expectedly, if it is started at the federal level, the states and local government should be encouraged and pressured to follow. This will reduce the cost of governance by over 50 percent.

Of all the reforms, the most important and interestingly the easiest is the need to form an inclusive government that will give every part of Nigeria a sense of belonging. At the moment Mr. President, there is an increasing belief and discontent that your government is not balanced, inclusive and sensitive to our national peculiarities.

There are so many other reforms, but the above macro ones will help to jumpstart the sustainable economic growth of Nigeria and send the right signals to both private sector and Foreign Development Investors that we are serious for business, growth and development. I pray and wish you and Nigeria a Prosperous 2020!

Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum.

E-mail- fngwu@lbs.edu.ng

Will democracy succeed in Nigeria?

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ust recently, I had a conversation with a colleague on whether democracy has worked in Nigeria over the years and if we could resort to saying that democracy is not fit for the country. This would mean having a leader like “Paul Kagame” of Rwanda, ruling with a defined end in view for the economy.

In my opinion, I do not think the concept of democracy is entirely bad as it recognises the call of the “people” in making decision as to who should represent them. However, in the Nigerian case, the practices seem to be faulty..

In simple terms, is a system of government in which the supreme power is vested in the people and exercised by them directly or indirectly through a system of representation usually involving periodically held “free” elections.

According to The Democracy Index – an index compiled by the Economist Intelligence Unit (EIU), a UK-based company to measure the state of democracy in a country – Nigeria is ranked 108 and classified as “Hybrid Regime” a governing system in which although elections take place, citizens are cut off from knowledge about the activities of those who exercise real power because of the lack of civil liberties; thus it is not an “open society”.

Firstly, the concept of democracy in

Nigeria breaks down when the people are forced to choose between two candidates handpicked by “powerful men” in a political party during primaries to run for presidency, for example, against other political parties with similar handpicking process. Here, the options of the people are streamlined already without their consents.

More importantly, how effectively can democracy have its way in a country like Nigeria where almost 50 percent (94 million people) of its population live in abject poverty (living below $1 a day) according to the World Poverty Clock, and unemployment at an all-time high of 23 percent according to the National Bureau of Statistics.

The election period is largely characterised by huge spending as political parties’ representatives who leverage on the precarious state of its citizens, go about “bribing” hungry Nigerians – since they account for a larger percent of voters – who will almost certainly sell their votes to satisfy their immediate hunger without a thought of whether or not they are sacrificing their future Sometimes I marvel when I see on TV, a multitude cheering and hailing political party representatives who by all standards and facts have failed the people and promising “heaven and earth” on “peanuts” given to them. Can we really blame this group of people? A poor man who practically struggles

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to get just a meal everyday would jump at every opportunity that presents itself. With the economy barely growing at 2 percent and population growth outpacing it yearly, poverty would only continue to threaten democracy given set precedent.

More so, discourse on the importance of education to the success of democracy cannot be overemphasised. Education gives individuals the ability to reason constructively and make informed decision on what would be beneficial.

Also understanding behaviours of key economic variables/indicators in relation to economic policies churned by elected leaders improves our judgement on their performance in office and hence our decision on their continuity. But ironically, only a small percentage of economic agents are educated on the consequences of policies and interpretation of economic indicators and are not sufficient in determining the outcome of elections.

For a country in which killings, riots and snatching of ballot boxes define electoral processes and results, the preaching of democracy is lost. The menace election periods pose to individuals across the years have reduced overtime participation in electoral processes. Upcoming elections may see more uninterested citizens who would rather sit back at home, wait for election

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DAVID IBIDAPO results rather than put see their families mourn and weep upon losing a member.

In summary, amongst other factors that could threaten democracy in any country poverty, illiteracy and dangers during election periods would always undermine the good potentials democracy has in stock.

Over the years, Nigeria major parties have leveraged on these factors to place incapable representatives to rule over the people and the result of their inadequacies are evident in pitiable state of the Nigerian economy.

Can democracy ever work in Nigeria?

Across the world, one could say that the wave of democracy is gradually coming to an end. Two massive nations, Russia and China, are trending toward one-man rule.

The list of countries drifting into autocratic orbits is growing. What’s the hope of the Nigerian democracy?

Ibidapo is an economic and financial analyst with BusinessDay. He is also the Editorial Page Editor.

@Businessdayng

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Wednesday 01 January 2020

BUSINESS DAY

AGRIBUSINESS

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How lack of farm extension service undermines Nigeria’s food security Josephine Okojie

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i g e r i a n smallholder farmers have continued to lag behind its peers owing to their inability to raise productivity due to the collapse of the country’s agr ic extension s er vice delivery.

Despite the potential of Nigeria’s agricultural sector to diversify the economy, it is still fraught with a lot of challenges that have continued to limit the growth of the sector.

One of such challenge is the collapse of agricultural extension services which has been seriously weakened by inadequate funding to support field extension services, poor roads and policy flip flop by various governments.

The inability of farmers to access vital information that is beneficial to them and inadequate dissemination of information by extension agents have reduced agricultural productivity in the country for decades.

Agric extension service is the application of scientific research and new knowledge to agricultural practices through farmers’ education.

The extension agents function as the link between farmers, research institutes and the government.

‘Since I started farming more than 10 years ago, extension agents have only

visited my farmland twice,’ says Samuel Sanondo, a farmer who farms 15 hectare of maize and yam in Donga local government area in Taraba State.

“I am still farming with the farming methods I learned from my father. The extension agent that is supposed to teach me new techniques has only visited my farm once,” Sanondo says.

Sanondo’s case is similar to farmers across the country as the extension service system has been marred with a lot of challenges especially in the area of manpower.

For more than a decade, there has been no recruitment of extension agents in most states of the federation. This has reduced the number of extension agents; with many approaching retirement age.

“The issue of manpower is a very big problem. There has been no recruitment of extension agents by some states since the World Bank grant was exhausted in the 80’s,” says Mohammed Khalid Othman, executive director, National Agricultural Extension Research Liaison Services (NAERLS).

“We have a situation where some states have one agent serving 2,000 farming families.”

According to Othman, the country cannot improve farmers’ productivity when the ratio of extension agents given to farmers is as high as what we have currently in the country especially at a time

where the government wants to diversify the economy through agriculture.

In trying to address the issue of limited extension agents, some states have resulted in picking cooperatives and association heads and educating them on the latest technologies and information necessary for the farmers in their communities who in turn are expected to pass the information to them under their cooperatives and associations.

But it has failed to get to farmers in rural communities as most of the heads of such associations who attend such training on modern techniques can hardly

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and alcohol.

He adde d that such excessive consumption could leave an individual with a bitter experience to deal with for several years.

Hence, he advised individuals to be cautious about what they eat and drink this season, as excessive food and alcohol consumption predisposes an individual to noncommunicable diseases such as high cholesterol, diabetes and heart problems.

While calling for portion control and discipline, he added that pure fruit juice is a healthy option during the yuletide.

“Eating goes beyond mere sustenance as healthy food is known to have curative properties,” he said.

“Recent scientific evidence established the www.businessday.ng

information on good farming practices.

Ritovnen called on the government to revive Nigeria’s agricultural extension service, saying it is the major way information is being disseminated to farmers mostly in the rural areas.

Research institutes in Nigeria have blamed the government for the gap that exists between the farmers, research institutes and extension service. The government needs to address the problem with the delivery of extension services in other to boost farmers’ productivity.

Government has to make provisions for bridging the gap between the lab and the

L-R: Nnamdi Okonkwo; CEO/MD, Fidelity Bank Plc and Kayode Falowo; group managing director, Greenwich Trust Limited at Greenwich’s 25th anniversary dinner held recently in Lagos.

Festive Season: Nutritionist gives tips on healthy eating habits he festive season is here, and it is expected that there would be immense merriment to mark the season. However, Nigerians have been advised to comply with dietary guidelines and practice healthy eating habits this period.

The call was made

by O l u s o l a Ma l o m o, a registered nutritionist and national publicity secretary of the Nutrition Society of Nigeria (NSN), at the end of the year monthly healthy living dialogue- an initiative supported by Chi Limited.

The dialogue is part of the company’s ‘No-Added Sugar’ campaign.

Malomo noted that a potpourri of celebrations, parties, and carnivals this season meant that most people are likely to indulge with excessive foods, drinks,

translate to other farmers.

Abdul Sule, a tomato farmer in Alabata, Odeda, Ogun state says “any time the extension agents come, they pick selected farmers for training so that those farmers can come back and teach us what they have learned but most of the farmers come back and are unable to explain anything to us.”

According to Antti R i t ov n e n , f o r m e r c h i e f executive officer, Dizengoff Nigeria, has noted that lack of farmers’ education i s t h e maj o r c ha l l e n g e confronting Nigerian farmers, saying that farmers are yet to increase their yield per hectare because they lack the

farms, they complain.

“When we come up with new technologies which should improve farmers’ productivity, it never gets to the farmers because the extension agents fail to transfer these technologies to them. And this is the case because the extension workers are not just there,” said Celestine Ikuenobe, director of research, Nigerian Institute for Oil Palm Research (NIFOR) said in a telephone interview with BusinessDay. “The issue is because of the failed system and the gap created by the government,” he said.

Ikuenobe says that the agents are not adequately funded and lack motivation.

He stressed the need for the government to address these issues of extension service deliver y if the economy will be diversified through agriculture.

Given this shortfall, exp er ts unders core the ne e d for pr ivate-s e ctor participation in the funding and delivery of agricultural extension services to meet the needs of the farmers.

They argue that agricultural extension services have been dominated by the Agricultural Development Programme in Nigeria for a long time.

The experts insist that the traditional extension services, linked with production objectives and blanket recommendations, can no longer meet farmers’ expectations.

Invest more in agric to alleviate poverty, Kalejaye advises Buhari REMI FEYISIPO, Ibadan

fact that some food nutrients such as those contained in 100percent fruit juice can cure certain diseases,” he added.

For meals that would be consumed during this festive period and going forward, Malomo stressed the importance of having a glass of 100percent fruit juice alongside.

“This is because the 20152020 Dietary Guidelines include 100percent fruit juice as part of the fruit group, and notes that up to half of the daily fruit intake could come from 100percent fruit juice,” he asserted.

Malomo further advised people to keep themselves hydrated especially because of the rising temperatures, adding that daily consumption of water and 100% fruit juices would help with that.

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r e s i d e n t Mohammadu Buhariled government has been urged to genuinely strive to alleviate poverty and hunger that have been ravaging the lives of Nigerians by investing more in agriculture.

Kunle Kalejaye, a Senior Advocate of Nigeria(SAN), made the call gave on while addressing journalists at the 2019 Christmas Carols of the Nine Lesson he organised at the Florentina Event Center, Basorun in Ibadan, the Oyo State capital.

Kalejaiye who expressed his worry about the rate of hunger in the country lamented that unless the Federal Government quickly arrested the situation through the agricultural revolution, the situation may soon get out of hand, and may further sink the country’s image among the comity of nations.

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Reliving a sad incident he witnessed recently that prompted his call on P re s i d e nt Mo ha m ma d u Buhari to act on time, Kalejaye said, “What I witnessed at a party about two weeks ago made me sad. I had never witnessed such in my life. I saw young people struggling over leftover food that they were not only consuming but that they were packing to give to their parents at home. This is very sad.

“I sincerely believe that the only solution is for the government to invest more in agriculture. With this, more foods will be available to feed our people and more jobs will be provided and thereby reduce the alarming rate of unemployment among our people, particularly among our youth”, he said.

To c o m p l e m e n t h i s suggestion on aggressive agriculture drive, Kalejaye declared his support for the closure of the Nigerian borders by the government. @Businessdayng

He emphasised that it was the right decision by the government as the move will spur investments in the agricultural sector. “ P r e s i d e n t B u h a r i ’s government has done well by closing all the borders because to me there is no need for us as a nation consuming what we cannot produce. With this action, it will also help in the development of our agriculture and agribusiness which will eventually improve our economy,” he said.

While calling on Nigerians to always pray for the country and be closer to God during t h i s X m a s c e l e b ra t i o n , he advised the people to celebrate the season moderately in line with their financial capacity, rather than going a-borrowing, coveting others or engaging in criminal activities to satisfy their lust.

“I implore Nigerian masses to celebrate this year’s Xmas in moderation with contentment according to their financial capacity.”

Wednesday 01 January 2020

BUSINESS DAY

COMPANIES & MARKETS

15

COMPANY NEWS ANALYSIS INSIGHT

CONSUMER GOODS

Nigerian brewers in a race for survival as macroeconomic pressures, competition bite harder OLUFIKAYO OWOEYE

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hese are not the best of times for major beer makers in the country as the effect of sluggish economy and mounting competition further contracted margins The woes of brewers were further compounded by higher energy costs, decrepitating infrastructure, which has sent the cost of goods sales skyrocketing and with brewers still unable to fully transfer the cost burden to already cash-strapped consumers Evidently, amid a broader stock market rout during the year, all brewery stocks are among the worst-performing stocks on the nation’s bourse (YTD) from January to December 30th. In ascending order, International Breweries, Guinness, Champion, Nigerian Breweries have shed 68.85percent, 58.26percent, 53.27percent and 32.22percent respectively.

Guinness and International Breweries recorded losses of N370.15 million and N16.44 billion in the first nine months of the year, while Nigerian Breweries saw a 17.01 percent drop in net income, as margins continue to deteriorate.

Amid an uninspiring performance of beer makers during the year, Nigerian Brewery Plc, the nation’s biggest brewer by market size offers a glimpse of steller performance especially in the premium segment.

Analyst at Cordros Securities believe that going forward, amid higher selling prices and improved volumes, NB can deliver above-target high single-dig-

it (HSD) EPS growth in the medium term and a stronger Free Cash Flow generation.

A company’s FCF is the cash left over after a company pays for its operating expenses and capital expenditures NB, in November 2019, increased crate prices to distributors of its premium brands Heineken and Legend each by NGN50, and on 33 Export, a mainstream

brand by NGN100.

GUINNESS also followed suit, increasing the price of Guinness Foreign Extra (Premium) by NGN50 This is a welcome development, as this is needed in order to compensate for rising excise costs and weaker volumes.

The premium segment refers to a section of a company`s brands or products that carry tangible or imaginary surplus-value in

the upper mid- to high price range.

There has been increased activity in the premium segment; it has also witnessed a double-digit growth. Consumers in the premium segment are not as price-sensitive, relative to the mainstream and value customers.

According to analyst, upward adjustments on electricity tariffs next year, increase in VAT, and the land

border closures, provide scope for renewed inflationary pressures.

For Diageo-owned Guinness, the company kicked off its fiscal year Q1 2020 with its first after-tax loss in eleven quarters.

Guinness has continued to lose market share in the brewery space, however, Spirit business has continued to perform strongly amid a challenging environment.

Spirits sales make up 17percent-18percent of revenue, with a medium-term target of 25percent-30percent by the management.

The spirits growth has not been sufficient to cover the decline in the lager and RTD and significantly cushion the decline in gross margins, especially with higher excise duties impact net revenue.

Nigerian Distilleries and Intercontinental Distilleries Ltd are the biggest spirit makers in the country.

International Breweries has also continued to disrupt the beer market after the introduction of its premium brand into the market. International Breweries may continue to struggle as it has a debt load of ofN243.82 billion as at September 2019, which is 13 times higher than total equity of N18.17 billion, as it a step away from technical insolvency.

MARKETS

African Securities Exchanges Association targets Q1 2021 for linking seven African bourses SEGUN ADAMS

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project by the African Securities Exchanges Association (ASEA) which started in 2016 to facilitate cross-border trading and settlement of securities will link seven exchanges including the Nigerian Stock Exchange (NSE) by the first quarter of 2021.

The project would join the African exchanges to increase capital flows between the bourses and boost liquidity in the capital markets, as well as, improve investment flow into the continent.

“This initiative is supported by the African Development Bank, which has contributed funding of up to $1 million, notably for the system that will help us connect the seven exchanges and also the project management officer

who is already on board,” Karim Hajji, president ASEA, told Bloomberg.

Nigerian Stock Exchange (NSE), Johannesburg Stock Exchange (JSE), the Egyptian Exchange (EGX) Nairobi Securities Exchange (NSE), Casablanca Stock Exchange (CSE), Côte d’Ivoire’s Bourse Régionale des Valeurs Mobilières SA (BRVM), and Stock Exchange of Mauritius (SEM) are the participating bourses.

These seven bourses participating in the first phase of the project represent about 85 percent of Africa’s securities market capitalization (made up of 27 exchanges). The other exchanges would join the project in the long-run.

Hajji said the International Finance Corp. is funding a study that could pave the way for state-owned enterprises to be privatized through partial listings on African stock exchanges.

Such listings would boost capital-market development, raise funds for governments and the companies to carry out investment programs and broaden investor participation, he said.

The project known as African Exchange Linkage Project (AELP) will see the creation of a central trading platform linked to exchange trading systems.

This would facilitate the free flow of trading information between linked exchanges, broker access to the linked trading platform, and aid the creation of products based on securities from the participating exchanges.

The project will also help harmonize rules across jurisdictions to aid capital flow and encourage inflow into African markets.

AELP will result in a collective market capitalization of over US$1.4 trillion, stimulate intra-African flows and provide opportunities for

investors and trading participants in over fourteen African countries, Hajji said earlier in the year.

“With the expected outcome of boosting liquidity in

African capital markets, the AELP will unlock the powerful potential of African markets to access and redistribute domestic capital for economic development,” he said.

The linkage would also provide an opportunity for investors to diversify and tap into opportunities in other markets outside their home country.

L-R: Omolola Ola, head of operations, Richway Microfinance Bank; Ijomah Oputa, director, Studio 24; Vivien Oputa, director, Studio 24; Ulo Oputa, director; Ifeanyi Oputa, and Adenrele Oni, MD/CEO, Richway Microfinance Bank, at the official inauguration of Studio 24 Outlet on Isaac John Ikeja, Lagos.

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Wednesday 01 January 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

MARITIME

SEC approves extension of C&I leasing N3.2bn right issuance MICHAEL ANI

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&I leasing, N i g e r i a’s only listed leasing firm, on Monday, got the approval of the Securities and Exchange Commission (SEC), to extend the closing date of its right issues, which was submitted to the commission earlier.

The right issues which is a N3.2 billion capital raise will now have its offer period extended till Monday, 13th January 2020, SEC said to the investing public in a December 27 circular, signed S K. Abdulsalam, Head-Securities offering for Mary Uduak, Acting DG of the commission.

BusinessDay had earlier this month reported that C&I had on No-

vember 28, 2019, commenced the process of raising as much as N3.2 billion equity capital through right issuance to enable it fund the acquisition of more offshore vessels for marine and oil business expansion.

The exercise was earlier scheduled to end on 27th December, 2019 however, with the approval from SEC, the offer period has been extended to 13th January 2020.

That’s an additional 17 days from the earlier scheduled closing period.

C&I said the extension was to provide shareholders with more time so as to enable them pick up their rights following the yuletide season.

The firm is issuing an allotment of 539,003,333

ordinary shares of 50 kobo at N6 per share on the basis of four new ordinary share for every three ordinary shares held as at 4th September, 2019.

With this, the firm hopes to strengthen further its financial position; provide working capital support and drive revenue growth for the firm which it foresee at an average 18.48 percent increase through the next five years.

Andrew Otike-Odibi, managing director/CEO, C&I leasing noted that most of the proceeds from the N3.2 billion capital raise, will be going into business expansion particularly the marine sector, which will in turn, reflect on the overall performance of the business.

L-R: Samuel Olaniyi, member, board of trustees; Richarch Ogunmola, chairman; Lucy Adenike Adetiwu-Olaniyi, founder, all of LGDI; Raphael Osiomwan, head, media/sponsorship, Vijul Industries, and Onochie Uzogeh, information technology manager, Vijul Industries, at the award presentation at Vijul Office, in Lagos.

Iskilu Akinsanya (l), commandant, Nigerian Security and Civil Defence Corps (NSCDC), Oyo State Command, presenting an award of appreciation to Suleiman Shehu, Defence correspondent, News Agency of Nigeria (NAN), during an Endof-the-Year party and award presentation to media houses by the corps, in Ibadan NAN

FINANCIAL SERVICES

LAPO quips 4,760 micro business owners with financial skills … Empowers 1.2m Nigerians with health, social services HOPE MOSES-ASHIKE

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icro, Small and Medium Enterprises (MSMEs) are agents of economic growth, job generation and poverty reduction all over the world. In Nigeria, they are playing an important role in income distribution, employment and wealth creation.

As a part of her contributions to the development of this vital sector of the economy, LAPO is engaged in the capacity development of microenterprise operators as well as supports the growth and development of their businesses.

Between January and November 2019, 4760 micro-entrepreneurs mostly women received lectures on bookkeeping, business planning and development, customer relationship, financial literacy and record keeping. Features of the programme include lectures, practical training and experience sharing.

Most of the beneficiaries are now able to track their income and expen-

diture and save for the future development of their businesses. They are in turn giving back to society by providing opportunities, mentorship, and resources to others in need.

Furthermore, Lift Above Poverty Organization (LAPO) improved the socio-economic and health conditions of 1,239,690 community members across the country with her innovative services between January and November 2019.

A breakdown of the figures indicates that 266,192 persons were reached with direct services in target communities while 973,498 were empowered t h ro u g h In f o r mat i o n , Communication and Enlightenment Materials.

Similarly, the financial subsidiary of the organization, Lift Agriculture and Rural Development initiative (LARDI) supported 158,446 rural farmers with the sum of N10.1 billion during the period under review.

Sabina Idowu-Osehobo, executive director of LAPO, who stated

this while reviewing the activities of the organisation during the period expressed satisfaction with the performance.

She restated LAPO’s commitment to improving the lives of community members and building the capacity of women to challenge harmful sociocultural structures and processes that limit their progress and enjoyment of good life.

Idowu-Osehobo said social and health empowerment programmes have always been an integral part of LAPO’s poverty reduction efforts, insisting that no meaningful development can be achieved without the inclusion and involvement of women in the development process.

She said the organization delivers innovative health, social empowerment and financial services to target beneficiaries and expressed gratitude to LAPO Microfinance Bank Limited and other organisations that have been part of the history and success story of LAPO over the years.

Patrick Okundia, Edo State commissioner for health/chairman of Edo State Anti-Drug Abuse Committee unveiling the anti-drug abuse billboard at Kings Square in Benin City, the Edo State Capital.

L-R: Caroline Moore, convener of “Why I Am Alive” Initiative; Olusegun Obasanjo, former president of Nigeria and keynote speaker, “Why I Am Alive” Celebration event; Joseph Edgar, Award recipient, investment banker and writer; Olurotimi Badero, guest speaker and award recipient, world’s only combined cardiologist & nephrologist, and Ituah Ighodalo, chairman of “Why I Am Alive” board of advisors, at the “Why I Am Alive” Celebration event tagged “The Nigerian Story”, in Lagos.

Wednesday 01 January 2020

BUSINESS DAY

17

cityfile Gunmen kill one, abduct others in Katsina

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he police in Katsina have confirmed the killing of one person and kidnapping of a woman with her one-year baby in Jibia local government area of the state.

Spokesperson of the state police command, Gambo Isah who confirmed the incident, said that the armed gang also kidnapped one other person.

According to Isah, the kidnappers invaded the town at about 8 p.m on Sunday, wearing masks. They were said to have shot sporadically, as a result of which, one Ibrahim Usman, 20, was killed. They later invaded the house of one Tasiu Waliyi, abducted his wife, her one-year baby and another victim identified as Abu Abu, and took them into forest.

The police spokesman said that Operation Puff Adder, Sharan Daji and Special Anti-Robbery Squad (SARS) teams have been deployed to the forest to rescue the victims.

Dry season: NEMA cautions against fire disaster

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ational Emergency Management Agency (NEMA) has cautioned Nigerians against activities that could result in fire outbreak, as the dry season sets in.

NEMA coordinator in Ekiti State, Olusegun Afolayan, gave the advice at a stakeholders’ forum on fire prevention, mitigation and preparedness, organised by the agency on Monday in Ado-Ekiti.

Afolayan also cautioned against indiscriminate bush burning which, he said, could destroy the eco-system and increase the effect of climate change.

The forum was organised to sensitise Nigerians on the danger associated with the dry harmattan weather.

According to the NEMA official, indiscriminate bush burning, especially for hunting of games, should be avoided as this could extend to neighbouring farmlands and houses, thus destroying the ecosystem and contributing to climate change.

Afolayan said that bushes close to people’s surroundings should be cleared; adding that fire extinguishers should be refilled and made handy in the house.

The general manager, Ekiti State Emergency Management Agency (SEMA), Jide Borode, said dried leaves and papers should be disposed of properly, while electrical appliances should also be switched off and unplugged when not in use.

All these preventive measures, he said, would go a long way in checking fire outbreak as well as mitigating its impacts. NAN

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54-year sales representative, Uthman Hammed, who allegedly swindled his employer of N9. 5 million has been charged before an Igbosere Magistrate, Court, Lagos.

Hammed, a resident of Ajegunle, Lagos, is facing a charge of stealing preferred against by the police.

Fake and substandard drugs destroyed by National Agency for Foods, Drugs Administration and Control (NAFDAC), in Awka, Anambra State on Monday. NAN

Mixed reactions in A’Ibom over planned nuclear plant in Itu ANIEFIOK UDONQUAK, Uyo

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otwithstanding assurances

by Ita Enang, senior special assistant to President Muhammadu Buhari on Niger Delta Affairs, over the proposed nuclear energy plant in Akwa Ibom State, residents are yet to be convinced that the proposed plant would not pose hazards to their health and environment.

Enang recently explained that an Environmental Impact Assessment (EIA) was being carried out to determine the suitability of the project. This, he said, would ascertain the safety and benefits or otherwise of locating the multi-million dollar nuclear plant on the people and the environment.

Speaking in Uyo, the Akwa Ibom State capital, the former member of the seventh National Assembly said the report from the EIA of the energy plant would point to which direction the Federal Government would follow whether to site the plant in Akwa Ibom or not.

“It is an ongoing discussion. That’s why they are conducting EIA. So what the public is doing now is reacting to the EIA. This reaction will advise on what the final action of the government will be. We have to find out what the people really want and the effect. There is no other alternative to that.

“People should be calm and make their submissions; there should not be any violence about it. The Federal Government will take a decision based on the EIA. I am also gathering inputs from the people and that of the state government and we will use that to advise the Federal

Government,” he said.

There have been oppositions from many quarters over the location of the project in Itu local government area of the state with environmental rights campaigners saying the dangers would outweigh the benefits of the plant.

The Nigeria Atomic Energy Commission (NAEC) had in 2017 proposed to site a nuclear energy plant in Oku Iboku area of Akwa Ibom state saying that it will serve an alternative energy source in the country.

The NAEC later embarked an enlightenment campaign on the nuclear power project in the state starting from Uyo, the state capital.

The awareness campaign drew audience from traditional rulers, community leaders, women, youth, professionals, and the political class under the theme “sustainable and reliable energy for economic growth.”

The project manager, Nigeria Nuclear Power, Matthew Agu, argued that there were numerous benefits of nuclear power plant in a locality.

According to Agu, nuclear energy was friendly, safe and cheapest than thermal and solar, adding that the industry plays an important role in the social economic growth of the country.

This ranges from job creation, provision of basic amenities to generation of substantial domestic economic value in electricity sales and revenue.

“A recent analysis showed that nuclear power plants create some of the largest economic benefits compared to other electric generating technologies due to their size and number of workers needed

for the operation of the plants. Operation of nuclear plant requires 800 to 1, 200 direct permanent jobs per reactor,” Agu said.

He explained that the challenge confronting the establishment of nuclear plant in spite of the numerous benefits was acceptance by the people.

However, in a paper presented by Okon Ansa, on behalf of Itu Concerned Patriot, he said that the concern of the people was problems of safe storage of waste material.

Ansa argued that Nigeria lacked the capacity to manage emergency crisis that may emanate from the nuclear plant.

He added that the establishment of the nuclear plant would pose a threat to national security because the nuclear plant materials could end up in wrong hands.

According to Ansa, “notwithstanding the numerous advantages of generating power from a nuclear plant as canvassed

by NAEC, we feel very strongly and professionally that it will be counter-productive to site such a plant in the state in view of the aforementioned issues.

Chairman of Itu local government area, Etetim Onuk, equally expressed fears over the proposed location of the nuclear power project, stressing that it was with grave dangers to the residents.

“Let me state that from the conception of this idea to site, stakeholders, including traditional rulers, political class, youth and women have been opposed to it.

Akwa Ibom being an oil/gas bearing community, the Federal Government should be thinking of establishing refineries and gas turbines, instead of introducing antipeople projects,” he said.

Sales rep charged with N9.5 millio fraud The prosecutor, Chinedu Njoku, told the court on Monday that the defendant committed the offence in July 2018, at the premises of Dan Wellington Ltd. on Holloway Street, Lagos Island.

According to the prosecutor said, “the www.businessday.ng

defendant asked customers to pay money into his personal Access Bank account instead of the company’s account.”

He said that the offence contravened Section 287 (7) of the Criminal Law of Lagos State, 2015. The defen-

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dant, however, pleaded not guilty to the charge.

The magistrate, Folashade Botoku granted him bail in the sum of N500,000 and adjourned the case till January 28, 2020.

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Wednesday 01 January 2020

BUSINESS DAY

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Wednesday 01 January 2020

Harvard Business Review

BUSINESS DAY

19

MANAGEMENTDIGEST

Why so many organizations stay white VICTOR RAY

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rganizations are not raceneutral: For example, scholars, managers and journalists routinely acknowledge the existence of “black capitalism” and “black banks.” Still, people think of banks that are run by and serve whites simply as “banks” and white corporations simply as “businesses.” This way of thinking reinforces the fallacy that only people of color have race, and obscures the broad, everyday dynamics of white racial power within organizations.

I argue that the idea of the race-neutral organization has done a great disservice to our understanding of race relations in the workplace, allowing scholars and practitioners to see racial exclusion as unfortunate aberrations or slight deviations from otherwise colorblind ideals. In reality, many mainstream American organizations have profited from and reinforced white dominance. Many still do.

Understanding this context is vital to seeing organizations for what they really are: not meritocracies, but longstanding social structures built and managed to prioritize whiteness.

The simplest way to think about organizational whiteness is through statistics.

For example, black representation at the top of organizational hierarchies, as measured through CEOs in Fortune 500 companies, has decreased from six CEOs in 2012 to three today. University presidents remain mostly white (and male) despite rapidly diversifying student demographics, and academic hierarchies continue to be deeply stratified by race, with black men and women respectively making up just 2% of full-time professors above the rank of assistant.

A recent meta-analysis of field experiments — the gold standard for detecting discrimination, because other potentially explanatory factors are accounted for — shows that high levels of hiring discrimination against

black men have remained relatively constant since the late 1980s, and discrimination against Latinos has decreased little.

Even though discrimination has been officially outlawed and most organizations would never say they’re racist, exclusion is visible in many organizational processes. These range from “race-neutral” grooming codes that coincidentally target black hairstyles to the white normativity built into seemingly nonracial organizational expectations. For example, many elite jobs use nebulous notions of “fit” or collegiality and end up hiring new employees with similar backgrounds to those of the existing white workforce.

Discrimination is also built into the routine ways organizations do business. For example, white banks may siphon resources from black communities through discriminatory mortgage lending that redistributes black wealth to white banks.

How and why did race become embedded in the everyday aspects of doing business? Part of the answer has to do with what sociologists refer to as a “social structure”: a resilient distribution of resources that is bigger than any one individual and has sometimes profound implications for our daily lives.

Inheritance taxes that allow the relatively nonproductive children of the rich to live a life of ease and racially segregated, under-resourced schools are both examples of www.businessday.ng

legally institutionalized social structures.

In business, white organizations are a kind of social structure combining ideas about race with organizational resources. The forming of this structure goes all the way back to the central role slavery played in the formation of the country. By limiting access to property and the material resources necessary to found and run organizations, slavery created an unequal competitive environment whose effects have yet to be fully overcome.

Under slavery, black people were property. Even manumitted and free people of color often had their possessions appropriated through state-sanctioned violence.

Following formal abolition, arrangements such as convict leasing and Black Codes allowed the continued organizational exploitation.

Processes of expropriation were also imposed on Native Americans, Mexican Americans and Asian Americans.

Differential protection and enforcement of law, systematic undereducation and the appropriation of resources have been historical constants for people of color.

White organizational formation was often facilitated by these often-legal exclusions.

Many dominant American organizations were founded in an environment of legally sanctioned and socially accepted exclusion. For instance, the Reconstructionera National Labor Union, according to W.E.B. Du Bois,

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“did not want the Negro in his unions, did not believe in him as a man ... [and] asked him to organize separately.”

Rejecting black workers allowed for some types of paid labor to become a white prerogative and forced nonwhites into the most degraded and dangerous jobs.

Racial divisions also proved financially useful to management, as black workers were paid lower wages for the same work. Although black workers are now overrepresented among union members, incorporation came through hard-fought struggles stretching across the 20th century.

Despite the lasting mythology of American racial progress, these organizationally produced racial inequalities are by no means a thing of the past. Predatory subprime lending — which targeted black and Latino neighborhoods — similarly relied on racial segregation to generate profits. This racially unequal distribution of risk contributed to the massive destruction of wealth for black and Latino families.

During the Great Recession, black families lost half of their wealth and Latinos lost 67% of theirs.

Many attempts to intervene in racial inequality are based on the assumption that discrimination is a rare event, the intentional actions of bad actors. But such an approach doesn’t account for the broad empirical patterns of organizational segregation and the deeply unequal @Businessdayng

distribution of organizational resources. Current legal remedies for discrimination rely on the bad-actor model. Employees can potentially sue for intentional discrimination, for example, if an employer uses a racial epithet. However, these legal remedies would have little to say about discretionary promotion procedures that may favor white employees or a business choosing to locate in a neighborhood that makes them inaccessible to people of color because of residential segregation.

I encourage scholars and managers to think about how organizations create and distribute resources along racial lines in ways that may not necessarily be considered legally illegitimate or discriminatory but may nonetheless shape racial inequality. Hospitals that provide substandard care have contributed to the staggering statistic that black women are 243% more likely to die in childbirth than white women. Schools that provide a substandard education for black students contribute to the so-called achievement gap.

Ignoring how white organizations help perpetuate racial harms virtually guarantees that these harms will continue. It is safer, and likely more realistic, to start with the assumption that organizations are contributing to racial inequality unless the data shows otherwise. At a minimum, leaders should stop thinking about discrimination and inequality as rare events and understand that racial processes often shape behavior in the absence of ill intent. Conversations about organizational inequality need to refocus from a narrow concern with feelings and racial animus to the massive inequalities in material and psychological resources that organizations distribute between racial groups.

Victor Ray is an assistant professor of sociology and African American studies at the University of Iowa.

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Wednesday 01 January 2020

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

WACT, PCHS leads in terminals with highest investment in cargo handling equipment in 2019 amaka Anagor-Ewuzie

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he West Africa Container Terminal (WACT), the most efficient gateway to markets in the Eastern parts of Nigeria, and Ports & Cargo Handling Services Limited (PCHSL), an operator of terminal C in the TinCan Island Port, have been identified as the terminals with the highest investments in the acquisition of cargo handling equipment in 2019.

BusinessDay search reveals that WACT invested over US$14 million in terminal upgrade that involves taking delivery of two new mobile harbor cranes from Liebherr, about 14 new specialised terminal trucks, two new reach stackers and an empty handler.

A breakdown shows that $10 million was invested in acquisition of mobile harbour crane while about $4 million was spent on terminal trucks and other equipment.

Meanwhile, the Ports & Cargo Handling Services Limited (PCHL), a subsidiary of SIFAX Group, invested over US$20 million in the acquisition of series of new equipment to aid the terminal in positioning for the future growth.

The new equipment, which include five new

The newly acquired Reach Stackers and vehicles by PCHS.

harbour cranes, nine reach stackers, 10 terminal tractors, and five units of Nissan Pick-Up, were acquired to not only support SIFAX Group’s business growth plan and vision, but to also enhance discharging of vessels calling at the terminal.

Speaking at the commissioning of the equipment in Lagos recently, Adekunle Oyinloye, Group managing director of SIFAX, said the investment was huge and very significant.

“We are excited because in the last two years, shipping liners have started to bring bigger vessels with longer rows of consignments.

So, most of our older equip-

Customs bans officers from using private vehicles, camp boys on patrol amaka Anagor-Ewuzie

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he Nigeria Customs Service (NCS) has announced that it has prohibited its officers on patrol from making use of private (unbranded Customs) vehicles as well as camp boys to carry out patrol services.

This was stated in circular dated 24th December 2019 with the number EII/2019/CIRCULAR/ NO.39, signed by Augustine Chidi, deputy comptroller general in charge of Enforcement, Inspection and Investigation, stated the CGC has been informed that private vehicles and camp boys were still being used on

patrol by officers and men on patrol.

The circular, titled ‘Prohibition of the Use of Private Vehicles and Camp Boys

by Patrol Team’, which was sighted by BusinessDay, stated it was important to remind all controllers especially those in the border commands and Comptrollers of Federal Operations Unit (FOU) Special Task Force (STF) Commanders and Sector Commanders of Border Drills that any team found to be using private vehicles or camp boys, will be visited with serous sanctions.

Chidi also advised all concerned to ensure compliance to the above given instructions. www.businessday.ng

ment, are finding it difficult to be able to deal with those vessels. But with this additional equipment, we will be able to deal with any size and shape of vessels,” he said.

Increasingly, according to him, ease of doing business, turnaround time of vessels and cargo dwell time would improve. This, he said, was why SIFAX was not only buying cranes, but also cargo handling equipments like reach stackers and terminal tractors.

“For us in Ports and Cargo, we want to be ahead and we are excited that we made the statement today. So far, we have committed over US$20 million and we are

not stopping at that because there are more to come as it was just the first set that we commissioned,” he stated.

According to him, “We are hoping that access into the port would improve because efficiency and turnaround can only improve if government helps by improving the state of the roads in and out of the port.”

Aamir Mirza, managing director of WACT, stated that four trucks arrived first in February, two in April, and another four in June.

“This was in line with our plan of investing in container handling equipment to maintain our strong position in East Nigerian market.

So far, we have 10 terminal trucks and four are still coming on the way. The trucks are required to support the operations of the mobile harbor cranes,” he said.

Recall that it was due to increase vessel traffic experienced at eastern ports after the diversion of cargoes from Lagos Ports as a result of traffic gridlock, that WACT acquired two new Mobile Harbour Cranes (MHCs) worth $10 million (N3.6billion) for discharge of cargoes at the terminal.

The Mobile Harbour Cranes (MHCs), which were expected to increase the turnaround time of vessels at the terminal, brought WACT

at par with its peers in Apapa and Tin-Can Island Ports, in terms of equipment and operational efficiency.

Speaking at the commissioning, in Onne, Rivers State, Mirza, said the massive investment at the terminal attracted 700 direct and 2000 indirect employments in the country.

He said the company has recorded tremendous growth of 17 percent in 2017, 21 percent growth in 2018 and 20 percent growth attained so far within the mid 2019. He described the $10 million investment as a key enabler to customers’ satisfaction.

“Our vision was to make WACT the best performing container terminal in West Africa. We believe this vision can be realised early enough if the government can support us to reduce the challenges of security by ensuring the safety of vessels on our waters, and improve road connectivity, among others,” he said.

Mirza said the cranes would enable volume growth resulting in increased productivity; reduced port stay and provide bunker savings; improve reliability in cargo delivery times; reduce the impact of crane breakdown/ idle time on overall terminal operations; and increase customers satisfaction and speedy delivery.

Maersk announces new executive board to accelerate strategy execution amaka Anagor-Ewuzie

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s part of its effort to achieve a more integrated company, A.P. Moller - Maersk has appointed Vincent Clerc as chief executive officer (CEO) of Ocean and Logistics and Henriette Hallberg Thygesen as CEO of Towage, Manufacturing & Others.

The company, which presently stands as an integrated firm that is delivering end-to-end logistics solutions for customer’s global supply chains, has in the past years transformed from a diversified conglomerate.

It has separated the energy businesses, harvesting synergies between terminals, ocean and from the acquisition of Hamburg Sud, and building competitive

advantage from technology through digital solutions to optimise operations and create more value for customers.

“A year ago, we integrated our customer facing roles across the company. We are now ready to accelerate the execution of our strategy through increased commercial and operational integration,” says Søren Skou, CEO of A.P. Moller – Maersk.

According to him, the new leadership structure will increase the pace. “We have a simple and agile foundation for profitable growth and the new executive board is united in the goal of integrating our value proposition and maximising the value creation across the business.”

Effective immediately, he said, Vincent Clerc has been appointed as CEO of Ocean and Logistics, unit-

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ing the teams in operations focused on ocean delivery with the commercial team to ensure a better offering of integrated services to our more than 70,000 customers and to facilitate end-to-end process thinking.

“Also, Henriette Hallberg Thygesen was appointed as member of the executive board in a new role as CEO of Towage, Manufacturing & Others where she will be responsible for all independent businesses ensuring focus on their performance as well as fleet management and other enabling functions with focus on driving additional synergies,” he stated.

Jim Hagemann Snabe, chairman, Board of Directors of A.P. Moller – Maersk said “We have successfully completed the first phase of our transformation. With the new structure and Henriette @Businessdayng

Hallberg Thygesen joining our executive board, Søren Skou and his team are ready to execute on the next steps in the transformation, ensuring full focus on customer value, strengthening our end-to-end delivery capabilities and creating profitable growth.”

Here’s new composition of the executive board of A.P. Moller - Maersk: Søren Skou, CEO of A.P. Moller - Maersk; Carolina Dybeck Happe, chief finance officer; Henriette Hallberg Thygesen, executive vice president of A.P. Moller – Maersk/ CEO of Towage, Manufacturing & Others; Vincent Clerc, executive vice president, A.P. Moller – Maersk/CEO of Ocean and Logistics; Morten Engelstoft, executive vice president, A.P. Moller – Maersk/ CEO for APM Terminals.

Wednesday 01 January 2020

BUSINESS DAY

21

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

How Nigeria plans to meet IMO’s January 2020 Sulphur Cap Regulation amaka Anagor-Ewuzie

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oday, 1st January 2020, the International Maritime Organisation (IMO), will officially begin the enforcement of its plans to lower the sulphur content in bunker fuel from the current limit of 3.5 percent to 0.5 percent.

By so doing, IMO will reduce the emission of sulphur oxide into the atmosphere from various kinds of ships involved in international voyages, voyage between two or more countries; or domestic voyages.

Precisely, the marine environment is shared among a lot of industries including oil and gas industry, seaborne transportation, and fisheries. However, it is essential to achieve sustainable shipping to ensure that the environment is protected while providing the goods and services for human consumption.

According to IMO, the limit for sulphur in fuel oil used on board ships operating outside designated emission control areas will be reduced to 0.50 percent mass by mass.

This will significantly reduce the amount of sulphur oxides emanating from ships and should have major health and environmental benefits for the world, particularly for populations living close to ports and coasts.

A study on the human health impacts of Sulphur

emissions from ships, submitted to IMO’s Marine Environment Protection Committee (MEPC) in 2016 by Finland, estimated that by not reducing the Sulphur limit for ships from 2020, the air pollution from ships would contribute to more than 570,000 additional premature deaths worldwide between 2020-2025.

Simply put, limiting sulphur oxides emissions from ships reduces air pollution and results in a cleaner environment. It also reduces particulate matter, tiny harmful particles that form when fuel is burnt.

Though, ships transport large quantities of vital goods across the world’s oceans – and seaborne trade, it also does emit pollutants and other harmful emissions.

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According to the United Nations Conference on Trade and Development (UNCTAD), ships carried more than 10 billion tons of trade for the first time in 2016. Meaning that ships have always been the most sustainable way to transport commodities and goods, and increasingly, it becomes even more energy efficient.

Therefore, IMO regulations on energy efficiency support the demand for greener and cleaner shipping.

A ship which is more energy efficient burns less fuel and emits less air pollutant.

Statistics shows that ships are the largest machines on the planet and the world’s largest diesel engines can be found on cargo ships. These engines can be as tall as a four-storey house.

For instance, the largest

marine diesel engines have more than 100,000 horsepower (in comparison, a mid-sized car may have up to 300 horsepower). But the largest container ships can carry more than 20,000 containers and the biggest bulk carriers can carry more than 300,000 tons of commodities, like iron ore.

This was why powerful engines are needed to propel a ship through the sea and it is important to consider how much energy is used to carry each ton of cargo per kilometre.

However, when you look at the relative energy efficiency of different modes of transport, ships are by far the most energy efficient.

Ships can reduce air pollutants by being even more energy efficient, so they burn less fuel and therefore their

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emissions are lower.

Giving insight into Nigeria’s plans to meet the Sulphur Cap Regulation, Dakuku Peterside, director general of the Nigerian Maritime Administration and Safety Agency (NIMASA), in an interview with NestOil News, said the regulatory aspect of protecting the marine environment is the core responsibility of NIMASA. “Part of that responsibility is derived from the international rules and regulations in which Nigeria signed unto. One of such is the IMO target to reduce maximum of 0.5 percent sulphur content in fuel used by vessels that trade on all oceans and international sea route,” he said.

According to him, because Nigeria is a party to that agreement, NIMASA has put a strategic plan in place to achieve compliance by the year 2020 and it will be in five phases.

First, Peterside stated, would be to raise awareness among ship owners, educating them on the existence of this limit of 0.5 percent sulphur content in the fuel use for vessels.

“Secondly, would be to also raise awareness among refineries for them to produce fuel or bunker with maximum 0.5 percent sulphur content by the year 2020,” he said.

Peterside noted that the third step was to notify everybody of the enforcement to the regulation in order to ensure that Nigerian shipping industry measures the

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quality of fuel used and the sulphur content in order to ensure compliance.

“Fourth was to put up a regime of punishment and deterrent for those who do not comply. Finally, was to embark on aggressive education, enforcement to ensure compliance. So, that was the plan but in the interim, we have taken quite a number of steps among which was running a trial test on a number of vessels,” he stated.

He further stated that NIMASA has installed instruments in vessels that can measure the type of fuel and quality of sulphur content and emission on them.

“In addition, we have created awareness about sulphur cap limit by the year 2020. We are rolling out a national campaign to ensure that all our people comply and compliance will be in two phases starting from international vessels to local or Cabotage vessels,” he noted.

Peterside however disclosed that NIMASA has also started engaging with the Department of Petroleum Resources (DPR) as well as those who refine bunker or fuel to ensure they produce fuel that comply with the international regulation.

“On the whole, we are set for the compliance limit by 2020 and we are working tirelessly towards full compliance by Nigerians as the leading maritime administration, and because we know the negative consequences on the environment,” he added.

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Wednesday 01 January 2020

BUSINESS DAY

PENSION today

In Association With

Potential issues that can jeopardize growth in pension industry – Mohammad Ahmad

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Mohammad Ahmad

those funds in a transparent manner. The reforms that culminated in the Act of 2004 had enabled us as a nation, for the first time, to pool funds in a transparent manner, such that we have a little over 9.8 trillion Naira as our total pension funds in Nigeria today.

We cannot afford to fritter the work done over the last fifteen (15) years to go waste by clamour for investment in projects that are not bankable, viable and self-sustaining.

Everyone should be vigilant so that these funds are not used to fund “white elephant’ projects that destroy that value for the industry, the contributors and the nation in general.

However, I urge PenCom and operators to be more creative and collaborative

‘

As many employees are retiring and electing annuity as option to access their retirements benefits, it is important that the commission continuously engage the National Insurance Commission to ensure that retirees and their benefits are protected

‘

t second Annual Retreat organised by Pension Fund Operators Association (PenOp) for the National Assembly Joint Committees for Establishment and Public Service of the Senate and House Of Representatives Committee On Pensions held at Akwa Ibom recently, Mohammad Ahmad, pioneer director-general of PenCom outlined some of the factors that could jeopardise the continuous growth of the pension industry.

Ahmad said the fist is the constant clamour for amendments of the Act, which are often times for frivolous reasons.

“I am a firm believer that if something is not working well, it needs to be changed.

But why change something that is working well? Yes, we must seek to amend portions of the Act for the benefit of the contributors in particular and the Nation as a whole, but these amendments should be well thought out, reasoned and debated as we are doing here today. “ “So, distinguished Senators and Honourable Members, in the light of the comprehensive amendment of the Act in 2014 after 10 years of enactment, I urge you all not to entertain uninformed amendments to the Act not backed by a need to improve portions of thereof or that are not consistent with the spirit of the Act, which is to provide benefits for retirees and ensure formation of long term capital for national development.”

“The second issue he said is also the clamour by certain groups or classes of people to leave the scheme under any guise.

The strength of an effective pension scheme is in numbers and influence. When funds are pooled together, the operating cost is lower, and returns are invariably higher for the fund and contributors. We need to leverage the numbers of the contributors and seek ways to increase the current contributors rather than have groups breaking out.”

“Also, fully funded pension system, is the only sustainable scheme. All over the world, pension funds provide long term capital that is used to fund infrastructure that catalyses national growth and development.”

“In Nigeria’s case, we came from a position where we were not able to pool together

in seeking ways that these funds can be deployed for infrastructure development.

“There is always agitations to increase the lump sum payment received at retirement from the stipulated 25 percent. I understand these agitations still continue. This is driven by a total lack of understanding of what pensions are meant for. The intention of pension contributions is to provide a similar lifestyle to what one was living on whilst they were working. This will be severely jeopardized if a significant lump sum is provided to them upon retirement, with the consequence of these funds being frittered away by the beneficiary if they receive the lump sum at once, as opposed to a structured program withdrawal.”

“The stability and confidence in pension industry will continue to depend on independent and competent Board of Directors for the Commission. It is our hope and prayer that a board for the Commission would be constituted very soon. A well constituted and functioning board gives the regulator the needed legitimacy and enable them take decision that are well thought out in addition to ensure that they are able to respond more quickly to the changing environment.”

“In order to respond to Corporate Governance challenges especially among public limited companies, the Financial Reporting Council of Nigeria issued the Nigeria Code of Corporate Governance 2018. It is expected that PENOP, as one of the key institutional investors, should promote and ensure strong governance culture in the companies they invest in.”

“As many employees are retiring and electing annuity as option to access their retirements benefits, it is important that the commission continuously engage the National Insurance Commission to ensure that retirees and their benefits are protected.

The initial Memorandum of Understanding and joint regulation should be reviewed to address emerging developments. We should always remember that the ultimate responsibility and mandate for the safety and stability of the pension industry squarely rest with the commission regardless of the mode of accessing retirement benefits.”

IS NOW RC634453

Diamond Pension Fund Custodian Limited 1A, Tiamiyu Savage Street, Victoria Island, Lagos State.

Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@accesspfc.com Website: www.accesspfc.com

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This section is created to increase awareness and deepen knowledge about the Contributory Pension Scheme.

If you have enquiries or contributions, send to this e-mail: accesspfcbusday@yahoo.com

Wednesday 01 January 2020

BUSINESS DAY

23

insurance today

E-mail: insurancetoday@businessdayonline.com

Cornerstone Insurance thinking consolidation in the ongoing recapitalisation exercise ...as firm raises fund to meet requirement Modestus Anaesoronye

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ornerstone Insurance Plc is looking at a bigger picture of a consolidated company post recapitalisation, where the brand is going to compete effectively with benefits of stronger capacity, synergy, robust human capital and higher technical capacity.

This is as the company is already financially comfortable to meet the regulatory requirement for firms in its category in the ongoing recapitalisation exercise in the industry.

Ganiyu Musa, group managing director/CEO of the firm said during a press conference in Lagos that the company is in a comfortable financial situation to scale through the exercise, adding that, it has disposed investment property along Lekki axis, and that has increased its liquidity to meet and surpass expectations.

He stated that the company would have loved to keep the property for the long run, but was challenged with the fact that real estate investment is not admissible in the ongoing recapitalisation exercise.

L-R: Yetunde Ilori, director-general, Nigeria Insurers Association (NIA); Akin Ogunbiyi, group managing director, Mutual Benefits Assurance Plc; Muftau O. Oyegunle, deputy president, Chartered Insurance Institute of Nigeria (CIIN) and Yeside Abiodun Oyetayo, rector, College of Insurance and Financial Management during the 2019 Convocation Ceremony of the College and presentation of the College’s first Award of Honour to Akin Ogunbiyi in recognition of his contributions to Insurance Education.

This, according to him, necessitated the sale of the building for a handsome amount that covers the cost of the building project and still left with profit.

“We wanted to hold the building for the long term, but under the ongoing recapitalisation, real estate investment is not admissi-

ble. So, we took the decision of selling the property and we made handsome profit from it. This has put us in a stronger financial position to scale through the exercise, while making our balance sheet stronger and healthier,” he posited.

Aside this, he said, there are preliminary discussion

S

overeign Trust Insurance (STI) Plc has said that an additional 4,170,411,648 of its ordinary shares were on December 23, 2019, listed on the Daily Official List of the Nigerian Stock Exchange (NSE).

According to the underwriting firm, the listing was communicated through a letter, signed by the head, Listings Regulation Department, NSE, Godstime Iwenekhai.

The NSE said the additional shares listed, arose from the Company’s Rights

Issue of 4,170,411,648 ordinary shares of 50 kobo each at N0.50 per share based on one (1) new ordinary share for every 2 ordinary shares held as at 15 January 2019.

It noted that at the close of the offer period, the Rights Issue was 72.50 per cent subscribed and the additional ordinary shares thus listed have been registered by the Securities and Exchange Commission (SEC).

With this listing of the additional 4,170,411,648 ordinary shares, the total issued and fully paid up shares of Sovereign Trust Insurance Plc has now increased from 8,340,823,296 to 12,511,234,944 ordinary shares

expertise, improves technical capacity aside the financial strengthening it brings to the adopting company.

He said cornerstone Insurance came out from its loss position of N1.7billion in 2017 to N1.8billion profit in 2018, even as the 2019 profit outlook is showing sign of higher profit from that of the

African Alliance Shareholders restate support for firm’s recapitalisation drive

Sovereign Trust Insurance lists additional 4.17bn ordinary shares on NSE Modestus Anaesoronye

with two or three underwriting firms on consolidation to make Cornerstone brand a stronger one, post recapitalisation.

Musa believes that consolidation makes better economic sense during recapitalisation rather than throwing in capital, adding that, consolidation nurtures

previous year, judging from its 2019 third quarter report.

The company, he noted, is fulfilling its civic obligation of paying genuine claims as and when due, investing in information technology to give customers the best and seamless services while working towards ensuring that shareholders gets good returns on their investments.

According to him, the fund pooled in the recapitalisation, would enable operators undertake good underwriting; make good investment; deploy robust technology and develop human capital.

The National Insurance Commission in the ongoing recapitalisation mandated underwriting companies with composite licence to upgrade their capital base from N5 billion to N18 billion; Life insurance firms were required to increase their minimum capital requirement from N2 billion to N8 billion, amounting to 400 per cent increase in their capitalisation.

Similarly, General insurance companies are to raise their capital base to N10 billion from N3 billion, even as Reinsurance Firms will now need N20 billion capital base to operate Reinsurance business in the country.

Modestus Anaesoronye

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hareholders of foremost life insurer, African Alliance, have lent their support to the board and management of the company in their ongoing quest to reposition the firm and be fully recapitalized by the cut-off date as specified by the National Insurance Commission (NAICOM).

This was the take away from the 50th Annual General Meeting of the firm held recently in Uyo, Akwa Ibom State.

Presenting the state of the company to the shareholders, the Board Chairman, Anthony Okocha, thanked the shareholders for their

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continuous faith in the business over the years. He pointed out that despite all odds, the firm is rapidly on the path to prosperity as evidenced by the improvements in the financial statement. “There is no doubt we are on the rise again, considering where we were before now. In the period under review, our profit after tax decreased from a loss of N6.72b in 2017 to a loss of N2.4bn in 2018. It is important to note that the bulk of these year-on-year losses were technical arising from the drop in interest rates which significantly affected the returns on annuity assets that accounted for 96 percent of the company’s business portfolio.

By the time the???

2019 re-

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sults are released, you would see how your company has turned the bend,” Okocha said. He further disclosed that the company’s recapitalization drive involves a combination of strategies including new equity injection by existing and new investors, assets conversion as well as possible merger.

Funmi Omo, managing director/CEO, highlighted the major changes the business has undergone as part of its repositioning for growth. “Lately, there has been an aggressive effort towards improving our brand visibility and we have opted to explore the power of technology through digital marketing. Our recent rebranding is a major part of this process and we are @Businessdayng

already reaping the gains of that exercise in folds,” Omo said.

“We have also introduced new products to balance our portfolio and cushion the effect of the accumulated losses the decision on annuity brought on the business while a comprehensive training and retraining plan is being executed in line with the corporate goal to prioritise capacity building and reposition the business to attract the best talents. Within the last two years, skilled and experiencedpersonnel have been employed to bolster our online presence, optimise our website and build a more interactive call centre.

I dare say we have the most engaging online presence in the industry,” she concluded.

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Wednesday 01 January 2020

BUSINESS DAY

BANKING Making $25bn Diaspora remittances go through BDC channels HOPE MOSES-ASHIKE

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iaspora remittances to Nigeria, now at $25 billion annually as at 2018, remain a reliable source of foreign exchange to the domestic economy and that is why over 4,500 operators of Bureaux De Change (BDCs) licenced by the Central Bank of Nigeria (CBN) come to mind in terms of receiving same.

However, concerned with the stagnant state of the nation’s economy marred with inconsistent forex earnings through oil export, the Association of Bureaux De Change Operators of Nigeria (ABCON) has called for BDCs to be one of the channels for receiving Diaspora remittances into the economy.

Aminu Gwadabe, ABCON president, said the CBN forex policy has brought stability to the BDC industry and helped operators to embrace automation which is the standard best practice globally. Adding the BDCs as one of the channels through which the Diaspora remittance funds come into the country will be a good way to reduce the reliance of rate differentials to sustain operators’ businesses.

The BDCs remain at the centre of economic development and have the capacity to attract needed capital for the development of the Nigerian economy, he said.

Findings have also shown that forex remittances from Nigerians in the Diaspora far exceeded the country’s earnings from crude oil export last year.

Since a number of transactions are unrecorded or take place through informal channels, the actual amount of remittance flows into the country is arguably higher.

The estimation is that migrant remittances to Nigeria could grow to $25.5 billion, $29.8 billion and $34.8 billion in 2019, 2021 and 2023 respectively.

For instance, the total oil earnings of the nation stood at $15 billion in 2018, while the total remittance from Nigerians in Diaspora amounted to $25 billion in 2018. Nigeria earned a total of N5.54 trillion ($15.4 billion) from oil revenue last year, according to figures released by the Central Bank.

“Diaspora remittances contribute to this economy more than what the oil sector is yielding. The Nigeria National Petroleum Corporation (NNPC) inflow in 2018 is about $15 billion while migrant remittances, Diaspora remittances is nothing less than $25 billion annually into this country’s economy, and this inflow is steady and adds to the country’s Gross Domestic Product (GDP)”, Gwadabe said .

According to him, Diaspora remittances remain cheap source of fund, because it is not to be paid back with interest but goes directly into the construction of houses, payment of school fees, medicals and a lot of things that are adding value to the weak economy.

The ABCON boss explained that Diaspora remittances represent household income from foreign economies arising mainly from the temporary or permanent movement of people to those economies. The remittances cash and non-cash items that flow through formal channels such as electronic wire, or through informal channels, such as money or goods carried across borders. He said Nigeria can cover a large part of capital flow

Godwin Emefiele, CBN governor

Aminu Gwadabe, ABCON president

gaps through remittances from its citizens in diaspora using the BDCs. “Nigerian BDCs operators have also identified with the immense opportunities presented by Diaspora remittances and want to play greater role in attracting more foreign capital into the economy. Reason being that remittances are known to help poorer recipients meet basic needs, fund cash and non-cash investments, finance education, foster new businesses, service debt and essentially, drive economic growth,” Gwadabe said.

He said that Nigerian BDCs, like their counterparts in other emerging or developing economies, have what it takes to deepen the forex market through remittances and collections.

“When that happens, it will not be the first time that BDCs were given the opportunity to turn the remittances market around for good. In India, the BDCs generate over $30 billion from the Diaspora remittances.

In United Arab Emirates, the entire banking needs of banks are met by the BDCs. The working of the Lebanon economy is highly dependent on the activities of BDCs in that country. Therefore, Nigeria can also achieve higher revenue through BDCs given the opportunities we have seen in the remittances market,” he said.

Gwadabe regretted that the cost of sending money from the Diaspora to Africa is rising. In the first quarter of 2018, the average cost of sending $200 was 7.1 per cent, and remittance services in Sub-Saharan Africa were the costliest in the world at an average cost of 9.4 per cent. He insisted that renegotiating exclusive partnerships and letting new players operate through national post offices, banks, BDCs, and telecommunications companies will increase competition and lower remittance prices.

BDCs’ position on N305/$ exchange rate The ABCON has also defended CBN policy on foreign exchange allocation to BDCs, which it believes has stabilised the naira against the dollar.

Gwadabe faulted the ongoing petition

against the CBN Godwin Emefiele, governor of the CBN and its management team over the deployment of dual exchange rate regime in forex allocation. He faulted the N305/$ rate to BDC as proposed by the petitioner saying it is not transactional rate but used for settling government obligations.

Senate Committee on Finance had invited CBN Governor Emefiele to appear before it on February 7, 2020 following a petition by Human Rights Lawyer, Bar. J.U Ayogu, accusing the CBN governor and his management team of compromise in the allocation of foreign exchange.

“There is a case against the CBN Governor and his management team written by Bar. J.U Ayogu. A petition before the Senate laid on the Senate on the December 12, 2019 where Bar. J. U Ayogu, on behalf of the BDC operators of Nigeria wrote against the CBN over its dual exchange rate forex policy that enriches few Nigerians and its top management staff to the detriment of many lawful Nigerians. It is frustrating the present administration’s to eradicate poverty and unemployment from all the nooks and crannies of Nigeria,” Member, Senate Committee on Finance, Senator Ayo Akinyelure (PDP, Ondo Central) said.

The petitioner had pleaded with the Senate to compel Emefiele to review the policy of dual exchange rate without delay to keep BDC operators in business.

But ABCON management said the CBN forex policy has brought stability to the BDC industry and helped operators to embrace automation which is the standard best practice globally.

“This is the hand work of unknown faces not ABCON. It is confrontational and lack credible evidence. The N305/$ is not a transactional rate but for settling government obligations. ABCON submission to the National Assembly is on Value Added Tax (VAT) exemption and downward review of licence fee renewal submitted to the CBN. The petitioner was never at any time appointed to speak on behalf of BDCs,” Gwadabe said.

He disclosed that no BDC or service provider gets forex at N305 to dollar and that the

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petitioner’s claim is completely false.

Gwadabe said that ABCON has appointed Mike Akinfolarin & Associates as ABCON Consultant/ Tax Attorneys on VAT, which is a bigger problem confronting operators as a large part of their income go into paying taxes adding that in other economies, foreign exchange rate control by government is VAT exempt. “That the law firm Of Mike Akinfolarin &Associates ( Tax Attorneys) made a representation on behalf of ABCON before the National Assembly public hearing, House Committee on Finance Bill on November 25, 2019 in Abuja and that remains the position of ABCON,” he said.

He commended the CBN management for its progressive policies and achieving stable exchange rate that aligns with its price stability mandate and reducing unemployment in the country.

Also speaking on Diaspora remittances, West African Institute for Financial and Economic Management (WAIFEM), Baba Musa, director general, explained that in economics, Diaspora remittances are called non-debt creating flow which comes in like Foreign Direct Investment (FDI).

He said that Diaspora remittances remain crucial in economic development, but there was need to look at how they are coming in. He said that the sources of many of the funds are never known, hence the need to broaden the remittance channels.

Connecting BDCs’ to Remittance Business Financial analysts have continued to give reasons why BDCs should be brought into the Diaspora remittance business. For instance, financial institutions’ long procedures, complicated forms, and history of poor service quality means BDCs are needed to deepen the market. The BDCs segment of the market operates in a simple manner while remaining closer to the people needing the remittance funds.

“BDCs buy foreign currency from remittance recipients and sell it to Nigerians who want to travel abroad. The reason for establishing these institutions in 1989 was to broaden the forex market and improve accessibility to hard currency. The CBN supervises and issues operational guidelines for BDCs. In March 2006, Nigeria had 293 licensed BDCs which have risen to over 4,500 operators today. This development means that BDCs are willing and ready to do the remittance business,” Gwadabe said.

He explained that money senders want their beneficiaries to get a favorable exchange rate and more value in the local currency and such can only be achieved in a competitive market where recipients have several options including BDCs. Gwadabe said a coherent policy framework to harness remittances into generating capital for productive investments for the growth and development of small and micro-enterprises, which will in turn, create employment was required. In addition, remittances can be deployed toward philanthropic activities which can serve as solutions for specific deficiencies in the local infrastructure such as schools, hospitals and roads.

He believes that remittances are on track to become the largest source of external financing in developing countries and Nigeria cannot be left behind.

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Wednesday 01 January 2020

BUSINESS DAY

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Wednesday 01 January 2020

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Award justifies auto-freak ‘lust’ for RR Autobiography ...Dealership image maker makes list MIKE OCHONMA Transport Editor

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oscharis Motors representing some respected iconic auto brands in Nigeria ended the year with recognition awards on some of its brands and personnel.

At the 2019 Nigerian Auto Journalists Association (NAJA) Awards held at the Eko Hotels and Towers, Lagos, it was a glorious day for the leading auto dealer giant as Coscharis Motors carted home two awards with the Range Rover Autobiography winning the Luxury SUV of the year award while the general manager, marketing and corporate communications, Abiona Babarinde was also recognized with the Media / PR Manager of the Year award respectively.

The award for the luxury SUV category was keenly contested with other tested luxury brands but the Range Rover Autobiography came tops according to the organizers after strong consideration of the market acceptance of the Range Rover Autobiography in all ramifications.

The Range Rover Autobiography variant has its special appeal and style that resonates with its priority audience when it comes to class, comfort and performance.

Presenting the award to Abiona Babarinde who represented Coscharis group at the event, Samuel Obayemi, the assistant corp marshal and zonal com-

manding officer (ZCO) RS-2, Lagos & Ogun states, Federal Road Safety Corps, representing Boboye Oyeyemi, the corp marshal of the FRSC, equally applauded the choice of the Range Rover Autobiography as the winning brand in this category as he confirmed that it is revolutionary, reliable and a class on its own when it comes to luxury in the Sport Utility Vehicle segment.

He equally commended Coscharis Motors for maintaining the global standard of positioning the brand overtime to the ever dy-

namic Nigerian market as the sole franchisee of the Jaguar LandRover brand in Nigeria.

Commenting on these awards, Cosmas Maduka, President of Coscharis group dedicated the awards to the organization’s ever loyal customers for their consistence patronage and acceptance of the brands over the years with a promise to continually create more value in the automobile industry in Nigeria across board.

In his words, ‘’there can’t be another best way to end a very challenging business year in 2019 than

with these set of prestigious awards as a recognition to some hard work made possible by our hard working team members across board who despite all odds has consciously strive to deliver value for money at all times for the benefit of our numerous stakeholders. We do cherish all these awards that came our way especially coming from the ever conscious and professional media partners that has been part of the success story of the Coscharis brand from the beginning in Nigeria and beyond’’.

The ever exciting annual NAJA

award ceremony that usually brings stakeholders in the automobile industry together under one roof expectedly lived up to its billings with industry players from both the private and public sectors fully represented.

Over the years, Coscharis Motors group has remained one of the leaders in Nigeria’s automotive market with more than six different brands from different continents of the world. Company sources say the multi-brand dealership boasts of after sales service outlets across Nigeria.

Toyota prioritizes advance self-driving tech on CVs …As passenger cars need more time – report MIKE OCHONMA

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oyota plans to first deploy its advanced autonomous driving features in commercial vehicles before rolling them out in passenger cars meant for personal use. This is because it is easier to implement the technology in vehicles which do not require constant human monitoring, such as taxis and non-passenger vehicles.

Against this new strategic thinking, the Japanese automaker is developing autonomous driving technology for segments such as on-demand ride services, mobile shops and ambulatory hospitals, the report said.

Operators of these vehicles will be able to control when and where the vehicles are be-

ing deployed and for overseeing their maintenance, said James Kuffner, chief of Toyota Research Institute-Advanced www.businessday.ng

Development (TRI-AD).

“It will take more time to achieve Level 4 (autonomous capabilities) for a personally owned vehicle. Level 4 is really what

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we are striving for to first appear in mobility as a service,” Kuffner said.

Level 4 self-driving is a high level of automation where the vehicle takes over longer stretches of a given journey; for a detailed explanation on what the various autonomous driving levels mean, read our feature article here.

Toy o t a a n d i t s suppliers are adopting a ‘long view’ t o w a rd s v e h i c l e s with autonomous technology and artificial intelligence (AI) than many of its competitors are doing with their @Businessdayng

vehicles that are already on the market with autonomous highway driving, the report said; Denso is among Toyota’s suppliers, and also invests in TRI-AD. The Toyota Research Institute revealed the Lexus LS500hbased P4 autonomous driving prototype at the beginning of this year ahead of the Consumer Electronics Show (CES), which was set to be used for developing the company’s Guardian and Chauffeur systems.

For sometime now, the development of autonomous driving technology has been fraught with incidents. A fatal crash involving a Tesla Model X in April 2018, while another fatality involving a pedestrian and a self-driving Uber development vehicle occurred when it was in autonomous mode.

Wednesday 01 January 2020

BUSINESS DAY

27

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Mercedes to eliminate most AMG Models in 2020 MIKE OCHONMA Transport Editor

issan Motor Co. has told its manag e rs to slash non-essential spending as the automaker grapples with slumping car sales and tumbling profits, three company sources with knowledge of the matter told Reuters.

The penny-pinching drive is in place for the rest of financial year until end-March and will most likely continue into the coming business year, they said.

Managers have been told to put on hold on unnecessar y travels, sales incentives and promotional events to “conserve every yen,” as one source put it.

Meetings that three or four people would once have traveled to

In April 2019, it embarked on a wide-ranging turnaround plan to revive sales and boost profits but the business outlook has worsened more than anticipated, the sources said. In November 2019, it reported 70 percent slide in second-quarter operating profit and cut its full-year forecast to an 11-year low.

The de facto freeze on non-essential spending is “increasingly a modus operandi at Nissan globally,” a second source said, adding: “The house is not on fire, but there’s something smoldering.”

The three sources declined to be identified as Nissan has not publicly disclosed the extent of the cuts.

A Yokohama-based Nissan spokesman said: “Given the business and

attend in person, might now only have one Nissan representative, the sources said, while other gatherings and dinners have been canceled altogether or replaced by video-conferencing.

The extensive spending cuts come in tandem with Nissan’s decision last year December to order a two-day lay off for U.S. employees January 2-3. There is also an effective travel ban for staff in the U.S., where sales have been particularly hard hit, one source said.

While the automaker is not facing any cash crunch, the actions underscore a deepening sense of crisis at Nissan, which has been rocked by the ouster of scandal-hit leader Carlos Ghosn, the departure of other top executives and strained relations with alliance partner Renault SA.

operational situation we face, we’re carrying out moves to cut expenses’’.

The sources stressed that the automaker had sufficient cash resources.

According to a fourth Nissan source, the automaker has good credit lines and plenty of cash, including money in China, which he said is years of accumulated profit from Nissan’s China joint-venture operations.

Last week in December 2019, Nissan’s stock hit lows not seen since September 2011 after Jun Seki, its vice COO and a former contender for CEO, said he was leaving the firm to become the president of supplier Nidec Corp.

Only sast week Friday, the automaker named executive officer Hideyuki Sakamoto as a candidate for the board of directors following Seki’s resignation.

MIKE OCHONMA

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hile just about everyt h i ng M e r cedes Benz makes gets a hotter AMG version, that might be coming to a close as Mercedes Benz looks to eliminate up to 75 percent of their AMG line up in order to meet rising fleet emission standards according to reports.

European standards and some states require an average CO2 emission across the range of their vehicles while the AMG models with their focus on large high output engines drag down Mercedes Benz average.

The AMG lines are some of the highest margin cars that Mercedes Benz makes, which has driven the German make to offer an AMG version of models across the line.

In order to bring the line down to an average 100g/km carbon emis-

Nissan on drastic spending cuts to stem profit slide

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sions from its 138g/km that is currently the average most of their big output engines will have to go away.

One of the ways that Mercedes Benz and other manufacturers have addressed their emissions standards is through electric cars. Currently electric vehicle sales account for only 2% of the new car market but every major manufacturer has a set of electric cars on

their slate, largely to help meet mandatory CO2 requirements.

One of the signs that the German automaker is making an adjustment to meet stringent emissions standards is the scheduling shift of their EQC electric model.

Originally it was meant for an introduction in the United States for 2020 but it’s been pushed back to 2021 in order to introduce it earlier in the

European market where the standards are high.

With the writing not on the wall yet for the venerable AMG badge, industry followers believe that, the big power associated with AMG might come from different sources. There are future AMG models like the 2022 C63 AMG that will get its power from a combination of a four cylinder 2.0 liter with a hybrid assist.

Connected Vehicles: When the leaders does not always win

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global race is underway to digitize cars, and the perception is that the newcomers with a disruptive mentality have taken pole position. Silicon Valley and China are investing heavily in computercontrolled smart vehicles, closing the gap on Germany, traditionally an important and large market for the automotive and wider transportation sector.

Indeed, Volkswagen has held the top spot for selling the most cars globally since overtaking Japan’s Toyota in 2016, according to Bloomberg.

And it’s hardly a surprise, given the company’s track record of consistently being at the forefront of innovation. But with the almost limitless opportunities brought by emerging technologies, there will be many companies jostling for a podium finish.

In the West at least, Tesla is perhaps the best-known trailblazer in innovative automotive technology – making electric fashionable. But terrific energy and investment is also being

poured into the digitization of vehicles in Silicon Valley and China.

The start-ups do not have the ‘disadvantage’ of a large customer base built up over many years, and so are free to experiment and quickly deploy new data-led services developed from information collected via connected sensors.

This innovation-critiwww.businessday.ng

cal data once stored, processed and analyzed – requiring a robust and cloudbased digital infrastructure – allows connected car providers to improve the operations, and therefore salability, of their vehicles.

Across geographies, great strides are being made towards self-driving or autonomous vehicles, which is perhaps what many of us think of as the

ultimate ‘digitized’ car.

The newcomers might be hogging the headlines, but established vehicle makers are investing heavily to accelerate progress and round out their capabilities too. For instance, BMW announced it would collaborate with Intel and Mobileye to put “highly and fully automated driving into series production by 2021”.

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Wednesday 01 January 2020

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

2020: Digital banking, Insuretech are areas of growth in Fintech industry - report Stories by Endurance Okafor

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idespread financial inclusion is vital in unlocking the economic potential of a nation’s citizens and for a country like Nigeria where 36 million people are without access, analysts recommend the use of financial technology.

To stimulate innovation and promote financial inclusion, banks and governments are poised to significantly boost uptake of Fintech solutions during 2020, according to a new report from Ecosystm, the global disruptive technology research and advisory platform.

According to the report titled- Ecosystm Predicts: The Top 5 Fintech Trends for 2020, digital banking, digital payments and Insuretech as the domains where exponential growth will take place in the next 12 months of 2020.

Paul Gestro, Ecosystm principal advisor believes that Fintech is poised to have a greater impact in 2020 than many people realise.

“As well as improving the experience for existing customers, it will also drive the induction of many currently unbanked people into the mainstream economy,” Gestro said.

According to Lilian Olubi, the chief executive officer of EFG Hermes Nigeria, disruptive technology and Fintech are compelling growth areas

that Nigeria must pay attention to.

“These areas drive financial inclusion and as such, they are receiving unprecedented global support and funding which will further enhance the country’s productivity and contribute immensely to our global visibility,” Olubi said.

Before October 2018 when the Central Bank of Nigeria (CBN) released an exposure draft that requested an application from Telcos, retailers and other industry players to apply for Payment Service Bank (PSB) aimed at giving financial access to Nigeria’s excluded population, Africa’s largest economy only depended on its bank-led financial inclusion model.

While its Africa peers leveraged financial technol-

ogy to give access to a large number of its population, Nigeria has been a laggard owning to its decades-old bank led-inclusion model According to a recent report by the World Bank, mobile money drove financial inclusion in Sub-Saharan Africa. Countries in Africa which included Burkina Faso, Côte d’Ivoire, Gabon, Kenya, Senegal, Tanzania, Uganda, and Zimbabwe recorded 20 percent or more adult using only a mobile money account.

Between 2014 and 2017, the World Bank noted that there was a significant increase in the use of mobile phones and the internet to conduct financial transactions which contributed to a rise in the share of account owners sending or receiving payments digitally from 67

percent to 76 percent globally while developing countries recorded 57 percent to 70 percent.

Recent data by EFInA put Nigeria’s financial inclusion rate at 63.2 percent, meaning that as much 36.8 percent adults still lack access to financial services.

“For a large number of the country’s population to be financially included we would have to leverage technology, for millions of Nigerians to have access,” Uzoma Dozie, the last Group Managing Director of defunct Diamond Bank, and Founder/CEO of Sparkle said.

According to the 2019 Consumer Digital Banking Satisfaction report by Agusto & Co., a foremost Pan-African credit rating agency, Mobile & App Banking is the

most preferred online digital platform for making financial transactions among Nigerians.

The advent of smartphones, which are typically internet-enabled and allows customers to easily execute banking transactions, explains why a larger percentage of respondents from the report use Mobile & App banking as the primary platform.

A breakdown of the report revealed that internet banking platform requires more security details of customers when carrying out transactions, and as a result, the Mobile & App banking is mostly “preferred by customers executing out larger value transactions.”

Further analysis of the Fintech industry report by Ecosystm, revealed that five key trends will shape the Fintech market going into 2020.

From the Fintech report by the Singapore-based advisory firm, investment in the industry is top on the list of trends that will shape the digital financial industry in 2020. “Increasing investments in Fintech platforms and services will play a significant role in achieving greater inclusion, especially in emerging economies, as well as reducing the gender gap when it comes to the adoption of financial services,” the report stated.

The significant growth and an increasing ability for banks and other businesses to address previously untapped markets will drive huge capital inflow from Impact Investors who are keen

to achieve a beneficial social result as well as a profitable return, the Fintech report explained.

The rise of Artificial Intelligence (AI) is one of such trends projected by Ecosystm to impact the Fintech industry. The Fintech report believed that AI lies at the heart of most Fintech platforms and will continue to drive innovation in the sector.

“Being better able to make decisions about data and the automation of workflows will be top-of-mind objectives for finance firms during 2020,” the report read.

According to Ecosystm, Regtech is another initiative that will take centre stage in the Fintech industry come 2020.

Regtech is the automated management of regulatory processes, and the report believes it will gain strong traction during 2020 as organisations come to understand how it can assist them with compliance.

Ecosystm said Regtech has the potential to combat financial crime and reduce costly mistakes because the previous strategy of simply employing more people to undertake compliance is no longer sustainable and firms are keen to find better ways of tackling the challenge.

“The return on investment (ROI) on Regtech platforms is easy to identify and very compelling. Our report clearly shows that 2020 will be a huge year for Fintech firms and the organisations that take advantage of their offerings,” Gestro said.

Bamboo Capital exits stake in Nigeria’s Accion Microfinance Bank

B

amboo Capital Partners, the impact investing platform, has announced that it successfully exited its indirect stake in one of the leading microfinance banks in Nigeria, Accion Microfinance Bank.

Bamboo’s stake in Accion Microfinance Bank will now be held by global non-profit and financial inclusion pioneer Accion.

Accion MfB strives to economically empower micro-entrepreneurs and low-income earners by providing financial services in a sustainable, ethical and profitable manner.

Since 2007, Accion MfB has reached a total of 244,950 borrowers, with an average loan size of N158,000 ($435), the notice published by Bamboo Capital said.

The company has expanded to 50 branches and 20 cash centres across Nigeria. Since Bamboo’s investment via its Financial Inclusion Fund (FIF) in 2012, Accion MfB has grown its portfolio of active borrowers by 3.5 times from 14,000 to 50,000 active loans in 2019, with women representing over half (58%) of current loan clients.

According to Jean-Philippe de Schrevel, Founder and

Managing Partner at Bamboo Capital Partners Commented, Accion MfB has made excellent progress in the last seven years, tripling its portfolio of active borrowers to 50,000 active loan clients.

“Our exit from Accion MfB is a real success story for impact investing and microfinance in Nigeria. For the previous decade, we have been committed to financial inclusion and ensuring that consumers underserved by traditional financial institutions in frontier markets have access to financial services. We are proud of the impact and success that our investment in Accion MfB

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has generated,” Schrevel commented.

The founder stated also that Bamboo Capital’s investments have helped more Nigerians, including women, access loans and drive financial inclusion, and also create jobs within the local economy.

“We are excited for the next stage of Accion MfB’s journey and do not doubt that the business will continue to grow and economically empower micro-entrepreneurs and low-income earners,” The lender has grown its staff strength from 288 employees to a team of 1,125 people with 517 female employees.

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Bamboo was an investor in Accion Microfinance Bank indirectly alongside global non-profit Accion through an entity called Accion Investments in Microfinance Nigeria. Bamboo has transferred its portion of ownership to Accion. “Accion remains active as a shareholder, through its board members, and as an advisor to Accion Microfinance Bank,” Bamboo Capita said.

The impact investing platform, Bamboo Capital Partners was founded in 2007 and it provides innovative financing solutions to catalyse lasting impact.

The company bridg@Businessdayng

es the gap between seed and growth-stage funding through a full suite of finance options – from debt to equity – which it activates unilaterally or through strategic partnerships.

Bamboo aims to generate lasting impact and improve the lives of the world’s most marginalised communities while delivering strong financial returns. Since its inception, Bamboo has raised over $400m for developing countries, positively impacting over 152 million lives and creating over 40,000 jobs, including 14,000 jobs for women, through its investments in over 30 countries.

Wednesday 01 January 2020

BUSINESS DAY

29

tax issues The African Continental Free Trade Area: Unfolding changes Chijioke Odo

T

he agreement establishing the African Continental Free Trade Area (AfCFTA) is arguably the most discussed economic subject out of Africa. Now the largest free trade agreement (FTA) since creation of the World Trade Organisation (WTO), it is easy to understand the attention.

Considering how long Africa has unsuccessfully attempted to set-up a pan-African economic community, recent steps towards developing a working FTA have surprisingly advanced very quickly.

This progression has moved many businesses to quick thinking, as they look to align their business models with trade patterns that could evolve as a result of the Agreement.

However, several businesses have indicated a significant challenge with putting together a robust response to the AfCFTA. They explain that so much has been said about the Agreement but very little clarity is being disseminated about its workings and its impact on businesses. Whilst some countries have done impact assessments, these assessments have failed to provide the visibility that these businesses need to plan around the Agreement.

This write-up provides some background to the AfCFTA, reviews its current state and attempts to predict what businesses should expect in the short to long term.

Background The AfCFTA, which came into force on May 30, 2019 is the culmination of several years of deliberations and negotiations around the economic integration of Africa. It is the outcome of a process that started as a long term African vision.

The founding fathers of the Organization of African Unity (which has now metamorphosed into the African Union (AU)) strongly believed that Africa would only be truly independent with greater economic integration among the member states. That belief still holds true today, with the AU predicting that Africa would be wealthier and less vulnerable to external vicissitudes, if member states traded more with each other.

Against this backdrop, AfCFTA is designed to be a legal instrument which would foster economic integration by creating a single market for goods and services, vide progressive elimination of tariff barriers (TBs) and non-tariff barriers (NTBs) (Eg. permits, national protectionist policies) to trade and investment.

Is removal of TBs and NTBs the single bullet that automatically integrates the African region? Absolutely not! The current regional infrastructure is not built for intraAfrica trade, visa restrictions still create problems, and Africans still need to move beyond historical biases. So there are still other challenges to overcome and they need

time.

However, a platform that removes TBs and NTBs in international trade is always a sweetener, which without doubt has the ability to get businesses in Africa looking inwards for solutions.

Current state of the AfCFTA: Based on its structure, AfCFTA addresses six (6) broad areas, divided in two phases: Phase 1: What goods are covered and how will they be liberalized? What services are covered and how will they be liberalized? How would disputes be resolved?

Phase 2: How would intellectual property rights be protected? How will intra-Africa investment be increased and/or facilitated? How would competition be promoted?

Whilst work on Phase 2 is still at its infancy, work on Phase 1 is well advanced, with the expectation that final details would be completed ahead of the trading start date of July 2020. For now, the focus of this write-up would be on Phase 1: i.)

What goods are covered and how will they be liberalised?

The most important thing to understand when attempting to use an FTA is the ‘Qualification Criteria’. What qualifies any good for preferential treatment within the trading bloc?

Step 1: Are your goods among those being liberalised?

As currently conceptualised, each Regional Economic Community (REC) within the AU is expected to participate in a ‘request and offer’ negotiation process to designate goods that are subject to liberalisation.

The outcome of this negotiation process is a listing of tariff lines that would be liberalised and those that would not. This listing will be contained in what the AfCFTA calls the Schedule of Tariff Concessions.

Based on current negotiations, 90percent of all tariff lines will be subject to linear liberalisation over a period of time. At the moment, it is envisaged that liberalisation will occur over five years for developing countries (DCs) and ten years for least developing countries (LDCs).

The remaining 10percent will be divided into two: 7percent will www.businessday.ng

be designated as sensitive and be subject to a longer liberalisation cycle –that is ten years for DCs and thirteen years for LDCs, while 3percent will be designated as excluded from liberalisation unless reviewed during the five-year review cycle.

Negotiations are still ongoing on categorization, with RECs expected to finalise and submit the schedule as follows: 90percent of non-sensitive tariff lines by September 2019, 7percent of sensitive tariff lines by November 2019 and a final schedule of offerings by January 2020.

Step 2: Do your goods originate from the trading bloc?

The AfCFTA has been set up to make this determination based on the Rules of Origin (RoO), which has been divided into the general product RoO and specific product RoO. As the name goes, the general RoO will apply to all goods classifiable under liberalised tariff lines that do not have specific RoO. The general rules are binary, and consist of the ‘wholly obtained criteria’ and ‘substantial/ sufficient transformation criteria’.

Article 6 of the Agreement outlines the products that may be considered as wholly obtained, whilst Article 7 outlines the rules for substantial/sufficient transformation. At the moment, the substantial/sufficient transformation criteria are incomplete as negotiations on the specific RoO and value addition are still ongoing, with the expectation that final details will be completed before trading starts in July 2020. ii.) Which services are covered and how will they be liberalised?

Whilst traditional tariffs do not apply to services, NTBs do and are the primary focus of the AfCFTA. The AfCFTA therefore has at its bedrock, the liberalisation of restrictions on market access and national regulations that protect local service industries.

Step 1: What services are covered?

AfCFTA attempts to liberalize five of the twelve service sectors categorized by the WTO. These five sectors are business services, communication services, financial services, tourism and travel, as well as

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transport services. It is understood that liberalisation may only happen in specific subsectors.

Step 2: How would the services be liberalised?

At the moment, this aspect is vague. However, in line with WTO’s General Agreement on Trade in Services, it is understood that member states would inter-alia, be required to: make commitments to grant market access to other member states in these five sectors. Examples of these commitments could be a member state committing to remove quota restrictions on the employment of non-nationals by a service provider. Another could be the removal of restrictions on the ownership structure of service providers.

• make commitments to accord a ‘formal identical’ or ‘formal different’ treatment to services and service providers of another member state. In this regard, a formal different treatment would only be acceptable if it does not skew competition in favour of a service provider from the home member state.

• work together to design a framework for regulatory cooperation. This could potentially cover the alignment of qualification, standard or licensing matters across the trading bloc.

The scope of specific commitments would be determined during negotiation rounds, which are expected to continue through to 2020. iii.) How would disputes be resolved?

Absence of a robust dispute resolution mechanism has made many African RECs less functional, as aggrieved parties have no medium to ensure participating member states hold-up their end of an FTA. It is for this reason, the AfCFTA puts in place a dispute resolution mechanism that seeks to ensure the rights and obligations provided in the Agreement are enforced.

AfCFTA creates a dispute settlement body (DSB) that will administer all issues relating to disputes.

According to AfCFTA, the DSB will have the powers to: establish dispute settlement panels and an appellate body; adopt panel and appellate body reports; maintain @Businessdayng

surveillance of implementation of rulings and recommendations of the panels and appellate body; and authorise the suspension of concessions and other obligations under the Agreement.

It is important for businesses to note that if they are of the view that a member state has breached an obligation, they should simply appeal to their countries to take up the dispute with the DSB. The DSB would be meeting as often as possible to ensure disputes are quickly settled.

It is understood that the DSB would be up and running as soon as trading starts in July 2020.

Impact on businesses On the basis that not all goods and services will be liberalized, it goes without saying that the impact of the AfCFTA on any business would depend on the outcome of ongoing negotiations.

For instance, liberalising certain products could immediately break existing local monopolies or create continental ones. The driver of this outcome may not necessarily be tariff elimination (which would be linear anyways and should not have an immediate impact on trade patterns) but the removal of NTBs. It is expected that whilst some businesses would not be directly impacted once negotiations are complete and trading starts, all businesses would be impacted in the medium to long term - whether or not their business activities are the subject of liberalisation.

For instance, the industry of a specific business may not be liberalized, but the industry of its suppliers may be liberalised. If the competitive landscape of a supplier is fiercer, the business could benefit from lower costs.

Whilst all these structural adjustments are going on, there could be potential job displacements i.e. losses in one market and gains in another, but an overall continental job gain due to the potential movement of capital and accompanying jobs to Africa.

That being said, it is expected that these adjustments would be slow. This is in part due to the gradual liberalisation process being negotiated by member states, but importantly due to the absence of critical regional infrastructure needed to build the regional value chains.

For instance, it may still be quicker and/or cheaper to import from Asia than from a contiguous member state – even after factoring the removal of tariffs. Many C-Suite executives have asked what the impact of the AfCFTA would be on their business. The response would be – follow the conversation, evaluate the impact of ongoing negotiations, petition your country’s negotiators if necessary, and importantly plan to conquer the new market.

Odo is Global Trade Advisory Lead Deloitte & Touche

30

Wednesday 01 January 2020

BUSINESS DAY

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Wednesday 01 January 2020

BUSINESS DAY

31

Live @ The STOCK Exchanges

Prices for Securities Traded as of Tuesday 31 December 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. 355,452.26 10.00 2.56 140 47,313,001 244,525.86 7.15 0.70 149 37,398,900 UNITED BANK FOR AFRICA PLC ZENITH BANK PLC 583,974.78 18.60 0.54 262 29,786,039 551 114,497,940 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 220,756.05 6.15 -3.15 95 12,945,955 95 12,945,955 646 127,443,895 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,137,223.87 105.00 1.90 96 1,036,866 96 1,036,866 96 1,036,866 BUILDING MATERIALS DANGOTE CEMENT PLC 2,419,752.05 142.00 0.35 183 16,782,410 LAFARGE AFRICA PLC. 246,449.27 15.30 9.29 61 13,002,864 244 29,785,274 244 29,785,274 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 387,078.83 657.80 10.00 29 311,014 29 311,014 29 311,014 1,015 158,577,049 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 11,340.15 4.25 -9.57 1 87,374 1 87,374 1 87,374 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 1 87,374 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 53,037.40 55.60 1.09 12 122,040 OKOMU OIL PALM PLC. PRESCO PLC 47,500.00 47.50 - 4 3,945 16 125,985 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,500.00 0.50 - 8 261,850 8 261,850 24 387,835 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 1,456.01 0.55 - 0 0 JOHN HOLT PLC. 217.92 0.56 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 40,241.51 0.99 -1.01 41 2,582,985 24,779.15 8.60 0.58 83 7,953,950 U A C N PLC. 124 10,536,935 124 10,536,935 BUILDING CONSTRUCTION ARBICO PLC. 521.24 3.51 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 26,268.00 19.90 - 15 86,530 ROADS NIG PLC. 165.00 6.60 - 0 0 15 86,530 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,598.40 1.00 -0.99 5 200,000 5 200,000 20 286,530 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,438.02 0.95 - 1 5,000 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 65,821.00 30.05 - 35 107,942 INTERNATIONAL BREWERIES PLC. 81,660.69 9.50 - 3 2,000 NIGERIAN BREW. PLC. 471,817.22 59.00 -1.26 57 2,075,360 96 2,190,302 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 163,200.00 13.60 -1.45 71 1,105,563 FLOUR MILLS NIG. PLC. 80,777.48 19.70 - 24 292,117 HONEYWELL FLOUR MILL PLC 7,850.90 0.99 - 4 69,000 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 46,285 NASCON ALLIED INDUSTRIES PLC 34,310.23 12.95 - 41 298,109 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 141 1,811,074 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 19,815.03 10.55 2.93 14 498,400 NESTLE NIGERIA PLC. 1,165,125.42 1,469.90 - 14 4,875 28 503,275 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 9 2,866 VITAFOAM NIG PLC. 5,503.71 4.40 10.00 64 2,767,933 73 2,770,799 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 22,433.20 5.65 4.63 57 663,926 UNILEVER NIGERIA PLC. 126,390.12 22.00 -0.23 45 2,185,736 102 2,849,662 440 10,125,112 BANKING ECOBANK TRANSNATIONAL INCORPORATED 119,272.08 6.50 2.36 51 5,488,446 FIDELITY BANK PLC 59,398.33 2.05 -0.49 29 8,816,384 GUARANTY TRUST BANK PLC. 874,106.02 29.70 2.41 109 6,962,819 JAIZ BANK PLC 18,267.83 0.62 - 24 11,065,469 STERLING BANK PLC. 57,292.93 1.99 - 10 27,348 UNION BANK NIG.PLC. 174,724.52 6.00 -2.44 25 322,119 UNITY BANK PLC 7,481.18 0.64 -3.03 5 216,591 28,545.10 0.74 5.71 26 3,656,220 WEMA BANK PLC. 279 36,555,396 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 4,998 AIICO INSURANCE PLC. 4,989.75 0.72 1.39 22 14,237,981 AXAMANSARD INSURANCE PLC 20,790.00 1.98 10.00 7 594,917 CONSOLIDATED HALLMARK INSURANCE PLC 3,170.70 0.39 - 0 0 CONTINENTAL REINSURANCE PLC 22,820.04 2.20 - 0 0 CORNERSTONE INSURANCE PLC 6,628.28 0.45 9.76 7 321,000 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. 1,830.86 0.25 -7.41 4 260,000 LAW UNION AND ROCK INS. PLC. 2,148.17 0.50 - 0 0 LINKAGE ASSURANCE PLC 4,240.00 0.53 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 3 322,159 NEM INSURANCE PLC 12,778.82 2.42 - 2 863 NIGER INSURANCE PLC 1,547.90 0.20 - 4 746,160 PRESTIGE ASSURANCE PLC 2,960.40 0.55 7.84 1 100,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 2,502.25 0.20 - 0 0 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 5,000 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 - 1 2,700 WAPIC INSURANCE PLC 4,550.13 0.34 - 19 2,318,671 72 18,914,449 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,629.63 1.15 - 0 0 0 0

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,000.00 4.00 -4.31 29 958,250 CUSTODIAN INVESTMENT PLC 35,291.19 6.00 - 14 469,526 DEAP CAPITAL MANAGEMENT & TRUST PLC 600.00 0.40 - 0 0 FCMB GROUP PLC. 36,635.01 1.85 0.54 49 6,020,623 ROYAL EXCHANGE PLC. 1,543.61 0.30 - 3 150,000 STANBIC IBTC HOLDINGS PLC 430,703.66 41.00 5.13 42 3,875,721 UNITED CAPITAL PLC 14,400.00 2.40 - 20 183,291 157 11,657,411 508 67,127,256 HEALTHCARE PROVIDERS EKOCORP PLC. 2,119.05 4.25 2.41 6 590,840 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 781.69 0.22 - 0 0 6 590,840 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 6,467.72 3.10 - 2 19,500 GLAXO SMITHKLINE CONSUMER NIG. PLC. 7,294.85 6.10 9.91 35 572,516 MAY & BAKER NIGERIA PLC. 3,329.70 1.93 - 4 139,986 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,177.48 0.62 - 3 7,015 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 44 739,017 50 1,329,857

COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 816.96 0.23 -4.17 8 2,193,577 8 2,193,577 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. 486.00 4.50 - 0 0 316.77 0.64 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS CHAMS PLC 1,549.70 0.33 -5.71 9 1,467,357 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 2 6,966 11 1,474,323 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 7 35,483 7 35,483 26 3,703,383 BUILDING MATERIALS BERGER PAINTS PLC 1,956.31 6.75 - 7 38,886 CAP PLC 16,800.00 24.00 - 14 93,800 CEMENT CO. OF NORTH.NIG. PLC 237,897.37 18.10 - 0 0 MEYER PLC. 286.87 0.54 - 0 0 1,769.32 2.23 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 21 132,686 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,342.56 1.33 -8.28 18 510,890 18 510,890 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 5 18,522 GREIF NIGERIA PLC 388.02 9.10 - 0 0 5 18,522 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 44 662,098

CHEMICALS B.O.C. GASES PLC. 2,289.35 5.50 - 1 64,512 1 64,512 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. 83.60 0.38 - 0 0 0 0 1 64,512 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 7 859,000 7 859,000 INTEGRATED OIL AND GAS SERVICES OANDO PLC 49,601.34 3.99 8.42 70 1,426,495 70 1,426,495 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 9 8,213 CONOIL PLC 12,838.11 18.50 - 3 222 ETERNA PLC. 4,694.92 3.60 9.09 11 133,158 FORTE OIL PLC. 23,574.91 18.10 - 16 76,781 MRS OIL NIGERIA PLC. 4,663.23 15.30 - 4 27,276 TOTAL NIGERIA PLC. 37,652.97 110.90 - 19 17,268 62 262,918 139 2,548,413 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 247.03 0.21 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,623.26 4.45 - 0 0 TRANS-NATIONWIDE EXPRESS PLC. 431.34 0.92 - 3 50,266 3 50,266 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 2,328.25 1.12 - 0 0 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 37,241.98 4.90 - 0 0 TRANSCORP HOTELS PLC 0 0 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,320.00 0.36 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 223.78 0.37 - 0 0 LEARN AFRICA PLC 871.74 1.13 - 0 0 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 552.20 1.28 - 2 37,500 2 37,500 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 745.97 0.45 - 1 5,500 1 5,500

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32

Wednesday 01 January 2020

BUSINESS DAY

FEATURE Poverty and the Nobel Prize laureates: What can Nigeria learn?

Bismarck Rewane

P

tricacies of their world.

The unconventional methods adopted offer two key takeaways for developing countries like Nigeria in the fight against poverty: #1: Impactful intervention is crucial The first point of call for the economists was to question the typical top-down intervention, which many governments adopt to fight poverty.

They challenged the ‘give more money to the poor population’ principle, which several governments adopt in the fight against poverty.

Esther Duflo countered this principle by suggesting that the solution of poverty does not depend solely on the free flow of foreign aid to developing countries but the impact of these funds on their lives.

In the Primary School Deworming Project (PSDP), carried out by Michael Kremer and Edward Miguel, the researchers sought to solve the low school attendance in Kenya by simply carrying out a deworming exercise in 75 primary schools.

This inexpensive intervention resulted in a reduction in infection rate among schoolchildren, which led to increased school attendance. #2: Nudges are a key part of poverty alleviation According to the economists, the poor population is often not in the best position to ‘do the right things’ despite being aware of what to do. The tendency to postpone costs and lack of information questions their judgment.

The Nobel Prize laureates believe that this is the role ‘nudges’ play in that they compel the poor to do the right thing at the www.businessday.ng

right time. Invisible nudges are a common feature in advanced economies.

For instance, parents are forced to immunize their children as public schools will not admit them otherwise and health insurers often reward citizens for joining the gym and adopting a healthy lifestyle.

Michael Kremer displayed an understanding of the impact of nudges in developing countries when he provided a free supply of chlorine at local water sources in Kenya.

The rising epidemic of diarrhea diseases in rural Kenya was resulting in child malnutrition and fed the poverty cycle. The installation of chlorine dispensers increased usage by 53% as

‘

Nigeria’s success in fighting poverty will depend on the willingness and ability of policy makers to do things differently and block the loopholes in its existing poverty alleviation policies

‘

overty has served as a conundrum for policy makers and governments across the world for decades. According to the World Bank, extreme poverty is defined as a state of consuming less than $1.90 per day.

It is estimated that 8.6% of the world’s population live on less than $1.90per day.1 The Sub-Saharan Africa region is also severely affected by the poverty problem, as 40% of the region’s population consume below the international poverty line.

This year, three worthy economists – Esther Duflo, Abhijit Banerjee and Michael Kremer - were awarded the prestigious Nobel Prize award for their extensive work on poverty alleviation.

The unique choice of winners for this category extends beyond the fact that Esther Duflo is the youngest recipient of the award.

It is also because the three economists have redefined the field of development economics.

They have successfully tackled the issue of poverty, which many economists hitherto believed to be an insurmountable challenge, by breaking it down into smaller and more precise sub-components touching on areas such as education and healthcare amongst others.

This led to the adoption of an experimental approach to poverty alleviation, which is commonly termed the randomized trial in the medical sciences.

The idea was to understand which policies work in the real world fight against poverty. By so doing, the economists expanded the scope of economics from merely a world of theoretical modelling to real world examples.

What the Nobel Prize winners teach us about poverty alleviation In their book, ‘Poor Economics: a radical rethinking of the way to fight global poverty’, the husband and wife duo – Abhijit Banerjee and Esther Duflo – highlight the importance of poor economics, which is simply an understanding of the economic existence of the poor.

Over the years, the economics of poverty has often revolved around social intervention programs. The Nobel Prize laureates instead chose to actually reach out to the poor not through issuing fancy policies from oval offices but by interacting with them and learning about the economic in-

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people were reminded to use the chlorine treatment when fetching water.

Poverty in the Nigerian context Poverty in the Nigerian context Poverty in Nigeria has been on the rise over the last decade and in 2018, Nigeria overtook India to become the country with the highest poor population.

According to the World Bank, the poor population in Nigeria could increase by more than 30 million by 2030 and the country is at risk of housing 25% of the world’s extremely poor population.

Past governments have attempted to solve the poverty problem using social intervention programs such as the National Home-Grown School Feeding Program, the Conditional Cash Transfer Program, N-Power, and Trader Moni initiatives, amongst others.

However, these programs have failed to translate into equal distribution of economic prosperity to all Nigerians. Looking forward, the specifics of how President Buhari will lift 100 million Nigerians out of poverty in the next 10 years remains sketchy. Incorporating the lessons learnt into Nigeria’s poverty alleviation schemes Lessons for Nigeria The models adopted to solve the rising poverty rate in Nigeria vary significantly from the example set out by the Nobel Prize winners. Replicating the lessons learned from the Nobel Prize laureates will take some deliberate re-learning by policy makers on the efficient and effective ways of @Businessdayng

poverty alleviation.

The first lesson point for Nigeria lies in who handles lending to the poor and vulnerable within the society.

According to Duflo and Banerjee, microcredit schemes in developing countries are often driven by political reasons rather than economic need.

Instead, they propose that governments should not be in the business of subsidized lending as the loans have the potential to end up in the wrong hands.

Their solution was for Microfinance institutions to step up and fill the lending gap. They suggested a joint liability system for microfinance banks to help them reduce the risk of default.

The system, which has already been adopted by Bangladesh, involves the coming together of a group of borrowers to receive credit on a rotational basis and share the risks and responsibilities.

The second lesson point is the need to design nudges to fit the specific contexts of individual developing countries. Nigerian policy makers have partially incorporated the nudges model adopted by the laureates through the Home-Grown School Feeding Program.

The program, which was launched in 2016 and targeted especially towards the vulnerable, initially set out to feed over 24 million schoolchildren. Poor parents are indirectly nudged to send their children to school where they can enjoy a free meal.

However, with approximately 11 million children aged five to 14 years still out of school, there is a need for policy makers to do more.2 In November 2018, the FGN introduced the deworming exercise as a component of the school feeding programme.

This is proof that poor parents in Nigeria need more incentives to send their children to school. Going forward, other potential nudges that can be explored include free textbooks, free immunization amongst others. 2UNICEF. 2013.

Way Forward If left unaddressed, the increasing rate of poverty will keep both growth and development at a sub-optimal level in the medium to long term.

Nigeria’s success in fighting poverty will depend on the willingness and ability of policy makers to do things differently and block the loopholes in its existing poverty alleviation policies. The models adopted by the laureates provide a good starting point.

Wednesday 01 January 2020

BUSINESS DAY

news

ANALYSIS

The imperative of establishing national commission on persons with disabilities Diana Omueza, NAN

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ne of the conspicuous events for Persons Living with Disabilities in 2019 was the International Day of Persons with Disabilities being annually observed on December 3 around the world.

The theme for the 2019 edition of the day: “Promoting the participation of persons with disabilities andtheirleadership:Takingaction onthe2030DevelopmentAgenda’,’ has been a fundamental reference pointofviewtonumerouspersons living with disabilities in Nigeria.

The observance of the day is to ensure the empowerment of persons with disabilities for inclusive, equitable and sustainable development as envisaged in the 2030 Agenda for Sustainable Developmentthatpledgesto‘leave no one behind’.

Concerned citizens, therefore, hold a view that sensitisation to the plights of the vulnerable group in that regard ought to be aggressive more than ever after the observance of the day.

Theysuggestorganisedconferences on disability and developmenttostepuptheongoingefforts byglobal,national,regionalandlocalactorstokeepthepromiseofthe 2030 development agenda for all.

In his view, David Anyaele, executive director, Centre for CitizenswithDisabilities,observesthat establishing a national commission on persons with disabilities will bring justice to persons with disabilities.

He recalls that the need for a commission to take care of the physicallychallengedunderscores thedecisionoftheFederalGovernment to establish a national commission for Persons Living with Disabilities (PLWDs) to enhance their inclusiveness in the scheme of things.

Accordingtohim,thecommission will drive the Discrimination against Persons with Disabilities Prohibition Act 2019, foster better enforcement and strengthen the implementation of the law.

He observes further that the commission has the potential to integrate PLWDs, including the albinoandothervulnerablegroups into the society.

“The commission is the most integral part of the 2019 national disability law that will boost and give these vulnerable in the society asenseofbelonginginthecountry,’ he says.

He appeals to the Federal Government to establish the commission with no further delays, while the media should help in sensitising the public to the importance of the establishment of the commission.

He advises the media further to use appropriate expressions to depict the plight of the PLWDs in their reportage and news analyses.

Anyaele enjoins Nigerians to develop a healthy attitude towards the marginalised group by learning to accommodate and cohabit with them.

Sharing Anyaele view, some analystscallonNigerianstohelpin reducing theburdenandplightsof peoplewithdisabilitiesinthecountrybycreatingabarrier-freesociety.

They note that the role of the public is to accommodate, support, encourage and integrate the vulnerablegroupsinthesocietyby curbing isolation, discrimination and stigmatisation.

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He observes that the burden of disabilities will not be felt if the society is accommodating well people with disabilities.

In his opinion, Obinna Ekujureonye, the FCT chairman, National Association of the Blind, says the importance of an accommodative society cannot be over emphasised in addressing the plight of the physically challenged persons.

“The government at all levels and policy makers should strive to create an inclusive economic plan that will factor these vulnerable groups into government plans, strategies and policies,” he explains.

Similarly, Theophilus Odaudu, programme officer for Nigeria for the Disability Rights Fund and Disability Rights Advocacy, says it is important for state government to make inclusive plans, strategies and policies to accommodate everycitizentoboostparticipation in governance.

According to him, only few states in the country have legal framework that protects citizens with disabilities and other vulnerable groups from exclusion and discrimination on the grounds of differences.

“We are worried that both the federal and states government budgets for 2020 reflects very little or in some, no provision is made for the rehabilitation and integration of vulnerable groups,’’ he explains.

Odaudu observes that anticorruption agencies have continuously made no efforts to include organisations of PLWDs in the fight against corruption, while the PLWDssuffergreatlyfromcorrupt practices in any country.

He, however, appeals to states and non-state actors to help in curbing and halting the act of marginalising PLWDs, including the albino and others, during preparations and establishment of both short and long term plans, strategies and policies.

HecallsonPresidentMuhammadu Buhari to establish the disability commission to ensure that the purpose of the national disability act is achieved.

“Marginalisation of the vulnerable groups such as the physically disabled, the blind and deaf, the albino and others, is an issue that has long received far too little attention in the country.

“The social inclusion of vulnerable groups by enabling their participation in cultural and artistic activities cannot be over emphasised.

“No democracy can thrive without the inclusion of these groups, so there ought to be a commission to drive an all-inclusive government,” he advises.

Sharing similar sentiments, Minister of Humanitarian Affairs Sadiya Farouq, thanks Buhari for assenting to the Discrimination Against Persons with Disabilities (Prohibition) Act after 18 years.

Irrespective of action programme to ameliorate the plight of PLWDs, Minister of Women AffairsPaulineTallen,wantsNigerians to change attitudes towards the physically challenged.

“Our attitude towards them — PLWDs — should be the type that will help them realise their potential; my ministry is willing to support PLWDs and all agencies handling activities targeted at giving them a better life,” she says. www.businessday.ng

Adoke: Judge returns case file to CJ over alleged $1.2bn Malabu oil scam Felix Omohomhion, Abuja

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he bail application filed by a former Attorney General of the Federation (AGF) and Minister of Justice, Mohammed Bello Adoke, Tuesday suffered a setback.

This is as the vacation judge, Justice Othman Musa, returned the case file to the Chief Judge of the Federal Capital Territory for reassignment.

Justice Musa said the inability to conclude the hearing of the bail application before expiration of vacation necessitated the return of the case file.

Earlier, counsel representing the former AGF applied for an adjournment to enable him responds to the counter affidavit filed by the Economic and Financial Crimes Commission (EFCC)

challenging the application.

In a short ruling on the propriety of granting the adjournment, Justice Musa explained that the vacation period of the court ends on January 3, 2020, and in view of that, he is returning the case file to the Chief Judge of the FCT for reassignment to another judge.

The EFCC had filed criminal charges against Adoke over his alleged indictment in the Oil Prospective License OPL 245.

Adoke was in self-exile for four years when the criminal charges were slammed on him by the federal government.

Upon his return to the country two weeks ago, the EFCC had secured a court order from Justice Musa to detain him for 14 days to enable the anti-graft agency complete its investigation in

the level of his involvement in the alleged Malabu oil scandal.

Musa said this at the resumed sitting, scheduled for hearing of Adoke’s bail application, over the $1.2 billion Malabu Oil scam.

The EFCC had in 2017, filed charges against Shell Nigeria Exploration Production Company Limited, Nigeria Agip Exploration Limited, Adoke and 10 others over the matter.

EFCC in the suit marked FCT/HC/CR/124/17, accused the defendants of fraudulently allocating the Oil Prospecting Licence 245, otherwise known as Malabu Oil. They were also accused of other forms of offences to the tune of about $1.2 billion, forgery of bank documents, bribery and corruption.

The alleged money scam

involved the transfer of the OPL 245, purportedly from Malabu Oil and Gas Limited, to Shell Nigeria Exploration Production Company Limited and Nigeria Agip Exploration Limited.

Benson Igbanoi, counsel who represented Adoke, informed the court that he would not be able to move the bail application because the prosecution just served him with its preliminary objection.

“This morning, we were served with a counter affidavit to our motion filed on December 23,” he said.

“By reason of the facts raised in the counter affidavit, which call for further affidavits and also a need for reply on point of law, we are therefore constrained to ask for a short adjournment to enable us to respond accordingly,” Igbanoi prayed.

L-R: Victoria Oouwanyi, financial secretary, China Europe International Business School (CEIBS) Alumni, Nigeria chapter; Sunday Agboola, president, CEIBS Alumni, Nigeria chapter; Omoyemi Chukwurah, council member, CEIBS Alumni, Nigeria chapter; Idowu Taiwo, matron, Nigeria Red Cross Society Motherless/Abandoned Babies Home, and Emeka Okoye, assistantgeneral secretary, CEIBS Alumni, Nigeria chapter, during the association’s donation to the charity organisation in Lagos.

Separate regulatory functions from NCAA, aviation expert urges FG

A

n Aviation expert has advised the Federal Government to initiate a bill that would separate the safety and economic regulatory functions of air business to ensure robust industry.

John Ojikutu, secretarygeneral, Aviation Safety Round Table Initiative (ASRTI), gave the advice in an interview with the News Agency of Nigeria on Tuesday in Lagos.

Ojikutu said the economic regulatory functions should be kept away from the Nigerian Civil Aviation Authority (NCAA).

He said that the NCAA should not be further entrusted with overseeing economic regulations, because the body had not performed well in regulating air business.

Ojikutu said a Civil Aviation Commerce Board (CACB) should be established to regulate air trade, while NCAA retained its regulatory functions for air safety.

“The CACB should be tasked to promote and regulate civil aviation commerce within and between Nigeria and foreign countries in the interest of the air business.

“As such, the approval of scheduled commercial air routes BASA and Commercial Agreements should be consid-

ered air commerce function and accordingly the responsibilities of the CACB. “The bills to amend the CAA Part 12 (1), (2), (3) a-e and the establishment of a NCACB with

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anenablingpowerandprovisions tomakeregulations,prescribethe manners of exercise and carry out duties and functions.

“These are under the Civil Aviation Act, 2006 and the stan-

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dards that the board needs to achieve compliance to BASAs, commercial agreements and the necessary amendments on Nig. CARs Part 18 on Economic Regulation,’’ he said.

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Wednesday 01 January 2020

BUSINESS DAY

news Stock market closes last trading...

Continued from page 1

cap stocks.

Market watchers expect mixed trading sessions post New Year day’s break, with bargain hunting in some counters trading at the ir current low and

profit taking in some of the stocks that gained re-

cently.

“We expect the market to close 2019 on a bullish note amid year-end portfolio rebalancing. However, this may be erased on Thursday and Friday as the market opens for the year,” said research analysts at Lagos-based United Capital.

16 revenue-generating agencies fail to...

Continued from page 2

year of accounts,” Anthony Ayine, Auditor-General of the Federation, said in the report.

“As in previous years, the annual budgeting process of the Federal Government remains flawed and unable to support genuine development. Delays in the passage of the budget had a direct impact on the ability of MDAs to perform their functions and rendered the annual budget execution process ineffective to a large extent (especially regarding capital expenditures),” Ayine said.

The Auditor-General said there is the need for the executive and the legislature to work better together on the passage and implementation of budgets if Nigeria is to achieve meaningful development.

“Overall, audit found that the sum of N20.6 billion in various taxes such as Pay As You Earn(PAYE), Withholding Tax (WHT) and Value Added Tax (VAT) in the year under review was not remitted to the Consolidated Revenue Fund of the Federal Government by MDAs,” the report said.

The office of the Auditor-General also noted that non-remittance of revenue surpluses by revenue-generating agencies affects financial liquidity of the government and reduces government’s efforts to adequately fund its annual budget which may increase government’s internal and external borrowing, thereby increasing the debt burden.

The Auditor-General recommended that a proper strategy to improve the oversight of revenue-generating agencies should be devised and implemented.

“A timely reconciliation of all revenues accruing to the Consolidated Revenue Fund should be done immediately, to ensure that funds meant for the government are remitted immediately. Adequate sanctions should be implemented against the heads of agencies failing to remit appropriately and in a timely manner,” the report said.

On tax refunds, it said that in the course of ascertaining the appropriateness and accuracy of outflows from tax refund account maintained by both Federal Inland Revenue Service (FIRS) and Office of the Auditor-General of the Federation (OAGF) in 2017, it was observed that FIRS’ internal processes were not compliant with Section 23(3) of FIRS ACT 2007.

The Act states explicitly that “any tax refund shall be made within 90 days of the decision of the service made to subsection (2) of this section, with the option of setting off against future tax by the taxpayer”.

Details of the report showed that applications for tax refund as of December 31, 2017, stood at N47.4 billion while the amount due for payments on that date stood at N23.1 billion. Similarly, the budgetary provision for tax refund in 2017 was N25 billion but there were delays in approval from management after tax audit. There were also delays in the refund to taxpayers after tax audit and approval stages had been carried out, the report added.

The Auditor-General noted that the development created inconvenience to taxpayers and impacted the finances of households and businesses in the country.

“The chairman of FIRS is required to ensure that the yearly budgetary provision for tax refund is adequate and that the 90-day timeframe for tax refund is met,” the report said.

L-R: Sam Egube, commissioner for economic planning and budget; Obafemi Hamzat, deputy governor, Lagos State; Babajide Sanwo-Olu, governor, and Mudashiru Obasa, speaker, Lagos State House of Assembly, at the signing of the Y2020 Budget into Law at the Lagos House, Alausa, Ikeja, yesterday.

Nigerian economy in 2020: Here’s what...

Continued from page 1

rian perspective is that other African countries are recognising the role of private capital in growing the economy and are providing good competition for Nigeria in attracting capital.

Take Ethiopia, Africa’s second most populous nation, for instance. Ethiopia plans to sell a minority stake in state-owned monopoly Ethiopian Telecommunication Corp to foreign investors in 2020, as well as two new licences to drive competition in the space, as Prime Minister Abiy Ahmed opens up the economy to foreign ownership for the first time in decades.

Ahmed’s ambitious privatisation plans don’t end there.

Six sugar plants will also

Lagos launches series III of N500bn debt ...

Continued from page 2

day, January 13, 2020, according to the prospectus.

The bonds are tax-exempt.

Chapel Hill Denham will act as Lead Issuing House and Bookrunner while Commercio Partners Capital Limited will be joint issuing House.

Experts say that the state’s

Hope rises for Apapa economy in 2020, but...

Continued from page 2

main. Some stakeholders are of the view that until there is efficiency in port operation and management of traffic in the port city, its economy would continue to suffer.

“The Nigeria Ports Authority (NPA) must automate its operations for there to be sanity in Apapa,” a major stakeholder in traffic management in Apapa told BusinessDay at the weekend.

The stakeholder, who did not want to be named, www.businessday.ng

be sold to foreign investors while sectors including international aviation, where state-owned Ethiopian Airlines dominates, as well as power and postal services will be open for private sector partnership with the government.

Ethiopia is not alone.

Ghana and Egypt are also putting incentives in place to attract capital while Nigeria slumbers.

The second factor to consider for 2020 is whether the country’s three-yearold multiple exchange rates practice will remain, even though estimates set in the 2020 budget that show an exchange rate peg of N305 per dollar suggests the practice – said to be deterring investment – will indeed stay.

The N305 rate is said to be used for government transactions while a much

noted that even if all the access roads in Apapa were paved, it would not solve the gridlock problem.

“NPA has to tell itself the honest truth by admitting that its failure to come up with a working call-up system for the trucks is a major drawback,” he said.

Ayo Vaughan, chairman of Apapa GRA Residents Association, agrees. He recalls that out of frustration, the Presidential Task Team (PTT) on the restoration of order in Apapa had expressed lack of cooperation

focus on infrastructure bond is laudable and shows the government’s commitment towards making the necessary investments for growth and development.

As opposed to generalpurpose bonds which can be easily misappropriated, infrastructure bond helps from NPA, wondering why that should be so given that PTT was established by the presidency .

Kayode Opeifa, executive vice chairman of the team, said though infrastructure was very critical to restoring order in Apapa, port efficiency must be in place.

“For so long as port operations are not efficient, there must be trucks on the road because they cannot gain entry into the ports and these are the real issues that must be addressed,” Opeifa said.

He is also worried that corruption has refused to give way in Apapa.

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weaker rate of N360 is the market rate for investors and exporters.

Third is whether initial steps to gradually phase out a costly petrol subsidy will be taken and if electricity will be priced on market terms.

That President Muhammadu Buhari has fought off pressure to implement these reforms for the most part of his five-year administration gives little optimism for change.

Fourth is for how long the current financial repression in the market, w h e reby l o ca l i nve s tors have been handed big headaches by CBN policies that have forced government bond yields below inflation, will continue.

There are two positive implications of the CBN’s determination to force yields down. First is it reduces the government’s

borrowing costs and second is it has improved credit to the private sector.

Whether it is sustainable and is without long-term damage to lenders’ asset quality remains to be seen.

What happens to government finances in 2020 is the fifth factor to consider in making predictions about how the economy will fare.

There will be more focus on driving taxes in 2020. The increase in Value Added Tax (VAT) to 7.5 percent kick-starts this year and a mulled communications tax could boost tax revenues.

Finally, much will also depend on whether Nigeria continues with a raft of protectionist policies that contradict signing the African Continental Free Trade Area agreement. It is unclear if the controversial land border closure will make way in 2020.

maintain focus on priorities, the experts said.

Lagos is Nigeria’s smallest state by landmass but easily the most populous.

Faced with increasing immigration and population explosion, investing in the maintenance, upgrade and creation of new infrastructure is necessary for continuous development.

Consequently, Governor Sanwo-Olu in his 2020 budget presentation in November said his administration would aggressively invest in and develop education, health and other physical infrastructure sectors in the state.

In the 2020 budget which has been approved, the state planned N711bn for capital expenditure and allocated N128bn for Works and Infrastructure.

The state’s plan for other priority sectors this year include N47bn for education, N38bn for environment and N33bn for health, underscoring Lagos’ commitment to physical and social infra-

structural development.

On plans for physical infrastructure in 2020, the state government will be building a broadband metro fibre around Lagos which is about 3,000km long and has six ducts, Sanwo-Olu said.

Other projects in view for Lagos include Public School Infrastructure Rehabilitation Programme to transform 300 public schools across the state; construction and completion of Maternal and Child Care Centres (MCCs) in Badagry, Epe and Ojo; desilting of major drain systems across the state and construction of new ones, and provision of security and emergency equipment.

In the mix also are road infrastructure projects: Lagos-Badagry Expressway; Agege-Pen Cinema Overhead Bridge; AgricIsawo Road; Ikoyi-Victoria Island CBD reconstruction projects; zero tolerance for potholes programme; rail/ civil infrastructure works, among others, the government said.

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Wednesday 01 January 2020

BUSINESS DAY

35

news

World Chamber Federation appoints Mabogunje as council member Odinaka Anudu

T

he World Chamber Federation (WCF) has appointed Toki Mabogunje, president of the Lagos Chamber of Commerce and Industry (LCCI), to its governing council.

The WCF is a global network of 12,000 chambers of commerce drawn from over 100 countries with headquarters in Paris, France. WCF works to enhance chamber capacity globally to foster private sector development and has developed strong ties with a range of multilateral organisations, including the World Bank, the United Nations Development Programme and regional development banks.

Muda Yusuf, director-general of the LCCI, said Mabogunje’s appointment was in recognition of her contributions to the development of the chamber of commerce movement in Nigeria and the African continent.

“It is also in appreciation

of her pedigree and immense contributions in business development services, value chain development, project financing, strategic organisation and management and the provision of legal and business advisory services to small and medium enterprises,” Yusuf said.

“She has served the Chamber previously in various capacities over the past two decades as Sectoral Group Chairman, Vice President and Deputy President and was recently inaugurated as the 23rd President of LCCI,” he further said.

Muda Yusuf added that it was an appointment well deserved as the chamber was excited at that.

“Her election will enhance the LCCI’s role and profile in the global business arena and deepen our global networks.

This is valuable for the global perception of Nigerian private sector and our dear country Nigeria.”

2020: No guarantee of industrial peace in states not paying minimum wage, NLC warns JOSHUA BASSEY

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igeria Labour Congress (NLC) says it will not guarantee industrial peace in any state of the federation where the N30,000 minimum wage is not being implemented in 2020.

Ayuba Wabba, president of the NLC, stated this on Tuesday, December 31, in a new message, tagged “Workers’ welfare and good governance are our priority.”

According to the NLC, “We use this medium to implore states that are yet to implement the new national minimum wage including the states that are yet to begin negotiation with labour on the consequential wage adjustment to speedily do the needful.

“In tandem with our position as adopted and communicated after a stakeholders’ meeting on December 11, 2019, organised labour in Nigeria will not guarantee industrial harmony in states that fail to implement the new national minimum wage by

December 31, 2019.”

Wabba said the national leadership of the NLC had directed all state councils to be on the standby to robustly engage state governments that failed to obey the minimum wage laws.

“We wish to remind state governors that no excuse would be good enough for failure to pay. The ongoing revelations on the monumental looting perpetrated by former governors prove that only an intent to loot, and deadened conscience not availability of resources would be the reason any governor would hesitate to pay workers the N30,000 new national minimum wage and the consequential adjustment in salaries,” he said.

The NLC insisted that the new national minimum wage was now a law and state governors do not have the luxury to choose whether to pay or not.

The NLC also signalled its intent to undertake aggressive campaign for massive employment generation and decent jobs in the year.

Rail project: Lagos announces road closure in Agege

L

agos State government on Tuesday said it would be closing the Adejobi axis of the Agege Motor Road to facilitate the quick completion of the ongoing construction of the Lagos-Ibadan standard guage rail line.

The public affairs unit of the Ministry of Transportation said in a statement that the axis would be closed to traffic from 6pm, on January 4, to 12pm, on January 5, 2020.

The statement said the closure was necessary to subgrade the level cross construction of the rail tracks. “The state government is hereby appealing to the residents, especially, motorists that ply the corridor to bear the pains.

“The project is aimed at

achieving a seamless multi modal transport system in the state.”

The statement said that the state government had provided alternative routes for road users to utilise during the course of the construction.

It said they would include: Ashade Underpass and Fagba Crossing to ensure motorists reach their various destinations with ease.

“The closure has been slated for this time to ensure smooth and uninterrupted flow of work on the rail tracks.

The government appeals to road users to endure as it takes steps to create proper road infrastructure that will ultimately improve traffic situation in the state,” it said. www.businessday.ng

L-R: Kema Chikwe, former aviation minister; Betty Anyanwu-Akeredolu, first lady, Ondo State; Elizabeth Ebi, representing Ernest Ebi, former deputy governor, Central Bank of Nigeria, and Peter Obi, former governor, Anambra State, at the 2019 edition of Winifred Hubbard Lecture to mark Maiden Global Reunion of Egbu Girls Old Girls Association (EGOGA), held at Egbu Girls Secondary School Chapel auditorium, Egbu, Owerri North, Imo State.

Lagos targets 90% performance as Sanwo-Olu signs 2020 budget JOSHUA BASSEY

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agos State government is targeting to achieve over 90 percent performance with its 2020 budget size of N1.168 trillion.

The 2020 budget, signed on Tuesday, December 31, by Governor Babajide SanwoOlu, is about 34 percent higher than 2019 election-year budget, which stood at N874 billion.

The budget, which has about N723.75 billion capital expenditure component, represents 62 percent, and recurrent expenditure of N444.81 billion, representing 38 percent of the total budget size, was passed by the House of Assembly on Monday, December 30, 2019.

This is going be Sanwo-Olu’s

first full budget, as the 2019 budget, though signed into effect by him, was prepared and presented to the state House of Assembly by his predecessor, Akinwunmi Ambode, who exited government in May 2019.

Sanwo-Olu, while signing the appropriation bill into law, expressed the hope that his administration would achieve 90 percent in terms of implementation, just as he was optimistic that 2020 would be a prosperous year for the state’s economy and the over 22 million residents.

“Now is the time for members of the state’s executive council who will be implementing this budget to demonstrate their tenacity to the vision of achieving Lagos of our dreams.

We must display the conviction

AfDB backs spending of pension/ sovereign funds on infrastructure TONY AILEMEN, Abuja

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resident of the African Development Bank (AfDB), Akinwunmi Adesina, on Tuesday advised African governments to invest pension and sovereign funds in their countries in infrastructure development.

This is coming against the backdrop of heavy infrastructure deficit in the country.

Adesina, who spoke with State House correspondents after meeting with President Muhammadu Buhari at the Presidential Villa, Abuja, said African countries with over $1.8 trillion pension and sovereign wealth assets could leverage such huge resources to develop infrastructure in the continent.

“African countries have an infrastructure gap of between $68 billion to $108 billion, which could be adequately addressed by utilising the $1.8 trillion accrued pension and sovereign wealth funds,” he said.

Adesina, who formerly served as Nigeria’s minister of agriculture, urged African leaders to explore the possibility of spending the funds by investing in infrastructure

development.

While noting that “charity begins at home”, he said with such huge resources, African governments have no need looking elsewhere to seek funds for development or investing the funds.

He explained that with good infrastructure, Africa would be better positioned to compete favourably in trading with others.

He commended the continent’s leaders for increasing the bank shareholders’ funds to $115bn, and assured that the bank would was now better placed to continue to support the development of infrastructure on the continent.

“Today, Africa has an infrastructure gap of about roughly $68bn to $108bn infrastructure financing gap. At the AfDB, we have been working so hard to close that particular gap.

“When it comes to the issue of attracting capital to do that, there are three things that I will say; first, we have to also look at home. Today, in Africa, the size of the sovereign wealth fund and pension fund and insurance pull of fund (mutual funds) is about $1.8 trillion.

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that we can do the job given to us by all residents of Lagos.

“With the speedy passage of the budget, the responsibilities cut out for us have gained additional momentum and the effort to achieve our development agenda has just started, because this is first budget this administration will be implementing in full cycle. We are hopeful that we would have improved the quality of life of residents at the end of the budget year,” said Sanwo-Olu. Sanwo-Olu, who praised members of the state House of Assembly for accelerated passage of the budget, said the legislators, by their action, aligned themselves with the overall interest of residents.

He added: “The happiness of

the speedy passage of the budget is not for all of us in government, but for all the 22 million Lagosians on whose behalf we act and take the decision to make the state habitable and developed.

When we fix the road, when we make the drainage flow better, when we turn around the services of our hospitals for good, when we ensure Lagos becomes a choice destination for investments and tourism, when we fully implement the budget, we would have given the people the voice to express their happiness.”

Speaker of the state House of Assembly, Mudasiru Obasa, stated that with the budget now signed, the executive would be fired up to provide the greatest good for the greatest number of residents.

Lagos to shut, convert Igando dumpsite to energy generating plant Joshua Bassey he Lagos State governmentisdecommissioning the landfills and refuse dumpsites located along LASU-Isheri Road in Igando, with plans to convert them to a wasteto-wealthenergy-generatingplant.

The decommissioning of the dumpsiteisalsotopreventapotentialexposuretoepidemicoutbreak among the residents of the area.

Commissionerforhealth,Akin Abayomi, and his counterpart in the Ministry of Environment and Water Resources, Tunji Bello, in a joint statement on Tuesday, said both ministries were aware of the dumpsites and the resultant menace they were causing to the environment.

Abayomi said the proximity of the dumpsites to the Alimosho General Hospital where medical care was being provided left much to be desired.

“Situating a waste yard right beside a general hospital or in the proximity of residential community,istotallyunacceptable,andwe acknowledge the health and environmental dangers this dumpsite constitutes to the neighbourhood and particularly the Alimosho General hospital,” said Abayomi.

He further explained that the dumpsites which were on the out-

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skirts of the metropolis until population expansion, commercial and residential buildings caught up with them had earlier been shut down about five years ago before they were reopened by those engaged to manage the waste in the last four years before the present administration.

“We are aware that these dumpsites have caused residents of the area so much discomfort and agony over the years. These, coupled with the attendant exposure to environmental hazards which is inimical to attainment of good health, are the reasons why we are taking the bull by the horn to provide lasting solution to this uglymenacebydecommissioning thesesitesandrestoringserenityin the environment,” Abayomi said.

Bello, while highlighting plans aimed at finding a lasting solution to the dumpsites and landfills in the axis, disclosed that the ministry of the environment and water resourceshadmandatedtheLagos Waste Management Authority (LAWMA) to begin the process of decommissioning of Solous 3 dumpsite. This is the dumpsite close to the Alimosho General Hospital, starting with rehabilitationandimprovedmanagementof thedumpsiteasacriticalfirststepto eventual decommissioning in two to three years.

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Stakeholders upbeat on NAICOM extension of recapitalisation deadline ... as NAICOM opens escrow account for new funds Modestus Anaesoronye, with agency report

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hareholdersandoperators in the Insurance Sector on Tuesday lauded the NationalInsuranceCommission (NAICOM) for extending the deadline for the recapitalisation of the Insurance and Reinsurance Companies, earlier fixed for June 30, 2020, to December 31, 2020.

The Commission also has opened an escrow account with theCentralBankofNigeria(CBN), where insures will put all the money raised in the course of the recapitalisation exercise pending approval by the regulator.

A circular signed on Monday

by Pius Agbola, director in NAICOM, addressed to all insurance companies, read: Minimum Paid Up share capital for insurance and reinsurance in Nigeria: “The Commission has reviewed the recapitalisation plans submitted by operators and various levels of compliance. Similarly, it has noted the inputs from the various engagements with relevant stakeholders; the Commission therefore hereby extends the

recapitalisation deadline to December 31. 2020.”

On the Escrow account, NAICOM noted that the CBN had obliged the Commission with the recapitalisation on Escrow Account (T24) for the deposit of fresh funds raised for recapitalisation. “T24 Account Name: 0230164061014” The stakeholders spoke in separate interviews with News Agency of Nigeria in Lagos on Tuesday.

Agboola said the decision for the extension followed a review of the recapitalisation plans submitted by the operators and various levels of the compliance observed. It also followed input from various engagements with relevant stakeholders.

In his reaction, Boniface Okezie, national coordinator, ProgressiveShareholdersAssociation of Nigeria, commended Sunday Thomas, acting commissioner for Insurance, for the extension.

“There was no way the commission could stampede the insurance firms with the recapi-

talisation, considering the warbling and unstable economy and the not clear policy by the government.

“If the Acting Commissioner continues with this trend, then it will be better for the market; as there is no need to be too rigid because you are regulating, but rather consider the plight of the stakeholders,” Okezie said.

He urged NAICOM to improve on its policy for the sector, for the insurance companies to take their rightful position in the capital market which would in turn make the re-capitalisation seamless.

According to Okezie, the effort, if made by NAICOM, will build the confidence of the public in the insurance sector.

“As a matter of concern, there is no will and confidence on the insurance sector. As at today, how many people patronise them?

The share is lavishly below the power value.

“With the present reality, if there is going to be re-capitalisation, at how much price would they offer their Right issue or Public offer to the public or existing investors who will buy?

New Year: Okowa reiterates administration’s commitment to stronger Delta Francis Sadhere, Warri

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elta State Governor Ifeanyi Okowa has expressed optimism that the New Year, 2020, will be characterised by sustainable development as the state government remains irrevocably committed to the Stronger Delta vision.

The governor stated this in his NewYearmessagetothepeopleof thestate,andurgedthemtoremain united and focused on the course of developing the state, irrespective of ethnic, religious or political differences.

In the message contained in a statement by his Chief Press Secretary, Olisa Ifeajika, in Asaba on Tuesday, Okowa felicitated with Deltans and all Nigerians as they stepped into 2020, and expressed gratitude to God for the grace granted Delta and its citizens in 2019.

While praying for unity, peace and development in the state, which he noted was the plank of his Stronger Delta vision, he urged the people to remain supportive of government, saying that peace remainedthebedrockofmeaningful development in any society.

The governor expressed hope that 2020 would be a year of fulfilment as the state remained on the right trajectory to sustainable development.

AccordingtoOkowa,givenour modeststridesinthepastfiveyears, I have no doubt that with the same level of cooperation from the good people of Delta, we will achieve more in all facets of governance.

“I am optimistic of a Stronger Delta in 2020, because of the support I enjoy from the legislature, the judiciary, the civil service, traditional and religious leaders and my team of political appointees.

“Othersourcesofstrengthtous

are agencies of government, both at the federal and the state levels, multilateral donor agencies and most importantly, our trust and believe in God. “As one of the first states to sign our 2020 Budget into law, we are prepared for the onerous task of governanceaswearealreadysetto hit the ground running as the New Year commences.

“This has given me and the state the advantage of early starters, both in the appreciation of what Deltans expect from their government and in the development of solutions to meet such expectations.

“Furthermore, our administration recorded successes in the last five years because God was in control and it is my hope that 2020 will be a year of fulfilment for all Deltans as the state remains on the right trajectory to sustainable development.

Manufacturing PMI ends year with 60.8 index points HOPE MOSES-ASHIKE

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he manufacturing sector closed the year 2019 on a faster growth with its Purchasing Managers Index (PMI) expanding at 60.8 points in December from 59.3 points in November 2019.

The PMI report released on Monday by the Central Bank of Nigeria (CBN) shows that production level, new orders, supplier delivery time, employment level and raw materials inventories grew at a faster rate in December 2019.

The manufacturing sector expanded for the 33rd consecutive month. All the 14 surveyed by the CBN subsectors reported growth in the review month.

These include petroleum and coal products; transportation equipment; plastics and rubber products; food, beverage and tobacco products; fabricat-

ed metal products; furniture and related products; primary metal; chemical and pharmaceutical products; printing and related support activities; textile, apparel, leather and footwear; cement; paper products; electrical equipment, and non-metallic mineral products.

Robert Asogwa, member of the Monetary Policy Committee (MPC), noted in his personal statement that expansion in both manufacturing and nonmanufacturing PMI showed a brighter outlook for investment and consumption expenditure expected to support future growth.

The composite PMI for the non-manufacturing sector stood at 62.1 points in December 2019, indicating expansion in non-manufacturing PMI for the 32nd consecutive month. The index grew at a faster rate when www.businessday.ng

compared to its level 60.1 points in November 2019.

The production level index for manufacturing sector grew for the 34th consecutive month in to 61.8 index point in December 2019 compared to 60.1 points in the preceding month.

The December 2019 PMI survey was conducted by the Statistics Department of the Central Bank of Nigeria during the period December 10-14, 2019. The respondents were purchasing and supply executives of manufacturing and nonmanufacturing organisations in all 36 states in Nigeria and the Federal Capital Territory (FCT).

At 61.5 points, the new orders index grew for the thirty-third consecutive month, indicating increase in new orders in December 2019 compared to its level of 59.4 points in November 2019. https://www.facebook.com/businessdayng

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BEDC connects Edo community to national grid IDRIS UMAR MOMOH, Benin t was a new dawn for the people of Oke-Irhue community as the Benin Electricity Distribution Company (BEDC) plc connected the community to the national grid.

The community, located in Uhunmwonde Local Government Area, was connected to the national grid for the first time.

In a statement made available to newsmen in Benin City

by Adekunle Tayo, general manager, public affairs of the company, said the light up of the community was in furtherance of its mandate of ensuring power availability in communities spread across its franchise states, which were without power supply for a long period or yet to be connected to the national grid.

“The management of BEDC plc has connected Oke-Irhue, an agrarian community in Uhunmwode Local Government Area of Edo State to the national grid for the first time in its existence last Sunday amid fanfare by her inhabitants.

“The connection of OkeIrhue to the national grid was to demonstrate BEDC’s resolve to partner with communities without electricity supply in addressing their power outage challenge having fulfilled all necessary preconditions for energisation.

“It will be recalled that the Federal Government through the Rural Electrification Agency embarked on the electrification of the community long before the privatisation of the power sector with the provision of two 300KVA distribution transformers,” Tayo said.

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He said the BEDC however took over the project and carried out enumeration, line rehabilitation/maintenance and also the subsequent metering of customers through its Meter Asset Providers (MAP) scheme.

Tayo, who explained that the community had several customers who were only connected to two 300KVA transformers, said after the Sunday energisation only 100 of the customers were currently connected in the first phase.

He assured that others were to be connected in the next phase of energisation after meeting up with wiring standards to ensure safety of customers.

In his remarks, Douglas Agbonleni, president general, Oke-Irhue Community General Assembly (OCGA), commended members of the community for their patience, commitment and cooperation in ensuring that the energisation project became a reality.

Agbonleni, however, urged the community members to guide the project jealously against the activities of vandals, noting that lacked of electricity in the community had slowed down the pace of development in the area despite being blessed with abundant resources.

He opined that the energisation would no doubt spur the socio-economic development of the area.

“There would be reawakened socio-economic advantage engendered by the new status of the community, and thanked BEDC management for its guide, support and understanding in spite of inadequacies.

Lafarge Africa inaugurates projects to strengthen ties with Ogun communities RAZAQ AYINLA, Abeokuta

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s part of efforts to give back to Sagamu, the host community where Lafarge Africa plc operates, the cement and building solutions company has inaugurated various life-improving projects in several towns and communities that make up the Sagamu Local Government Area of Ogun State.

Lafarge Africa, a member of LafargeHolcim, in partnership with the Royal Initiative for the Development of Sagamu Community (RIDSCo), a socio-cultural organisation established by Akarigbo-in-Council,donatedN5 million cheques to 100 students of tertiary institutions of Sagamu extraction, who are in various tertiary institutions across Nigeria.

The cement company also renovated and built four blocks of 14 classrooms with toilets and boreholes in three primary schools and donated computers, printers, UPS and generators to seven secondary schools in Sagamu Local Council in addition to 800 dual lockers distributed to both secondary and primary schools within the local council.

For interventions in health, Lafarge Africa renovated and equipped three Primary Health Centres owned and controlled

by Sagamu Local Government, which spread across Sagamu Local Government Area, namely, Owode-Epota, Latawa and Emuren which were undertaken for the host communities in ad-

dition to eye treatment support.

On Skills Acquisition, Vocational Training and Women Empowerment, Lafarge Africa trained 27 youths on various artisanal skills such as Welding and Fabrication, Furniture and Joinery, Hairdressing and Tailoring, among others with the provision of take-off tools to the graduating trainees.

Speaking at the Community Day 2019 event held at the Akarigbo’s Palace in Sagamu, MichelPuchercos,countryCEOof Lafarge Africa, said the event was celebrated annually in all its host communities across the country “to show appreciation and give back to the communities where the company operates.”

The country CEO, who was represented by Folake Odegbami, head of Safety, Health and Environment, noted that Lafarge Africa will continue to give back to the communities that host its manufacturing plants across the country within the four critical intervention areas which include Education, Health, Provision of minor Infrastructure Development and Human Capital Development.

He explained that Lafarge Africa has a robust sustainability strategy that has not only improved the lives of its host communities but also contributed to the entire country’s economy in terms of gross domestic product, direct and indirect employment opportunities, wealth creation, among others. www.businessday.ng

Last minute shopping for New Year, at Idumota Market, Lagos Island, yesterday.

Pic by David Apara

UBEC counterpart funding, other expenses reasons NSHA jerks up 2020 Appropriation Bill to N108bn Anthony Adgidzi, Lafia

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he N5.6 billion counterpart funding earlier obtained from the Universal Basic Education Commission (UBEC) to fix the decay in education sector in Nasarawa State is one of the reasons the Nasarawa State House of Assembly jerked up the 2020 appropriation bill to N108 billion signed into law recently.

Another reason for the increase was to cover the cost for the rebuilding of Nasarawa-Eggon burnt market as well as other sundry expenses as oversight.

Governor Abdullahi Sule gave the explanation while signing the bill into law at a ceremony held at the Government House in Lafia, the state capital.

It would be recalled that Governor Sule had in early December presented the 2020 appropriation bill of N100.5 billion to State House of Assembly, where he

pleaded for speedy consideration and approval.

According to the Governor, “The 2020 appropriation bill was jerked up to accommodate other expenses which include, the N5.6bn counterpart funding obtained earlier from the Universal Basic Education Commission (UBEC), which will be deployed towards the construction of new schools and renovation of existing schools in the coming year.

“The cost of the burnt market in Nasarawa-Eggon, since the state government is determined to give the town a facelift in 2020, as well as other sundry expenses as oversight, were captured.”

The governor disclosed that when he first saw the adjustment, “I wanted to refuse signing the bill until the details were later sorted out.

“One of the areas that got a major chunk is actually the

NSUBEB amount of N5.6bn, which even though we have the money in our account and we already have the tenders done this year, we thought we are going to capture it in this year’s budget, so we did not include it in next year’s budget.

“But because we are just releasing the tenders and not a penny has been spent in the money, we are going to do what in accounting they consider balance brought forward, so in January, we are going to open our accounts with that money credited into our account.

“So, for that reason we cannot say we have spent the money this year when in reality we are spending the money next year,” he stated.

He added that the executive arm of government worked together with the legislature in order to arrive at the difference.

“I would have signed this

budget last week. When I first saw the budget, I would have done exactly what President Buhari would have done, just push the budget aside and said they have changed the figures and I am not going to sign.

“But then we went through and negotiated and was able to explain details of what happened in every aspect of it,” he said.

While pointing out that with the signing of the bill into law, actual work has begun, the Governor called on officials to consider the budget as a balance sheet which must be balanced.

“The bottom line is we have to try as much as possible to ensure that we generate what we can spend.

“Because if we are not able to generate that, which means we cannot spend that. And the work is for every one of us. We shall work together as a team,” he stated.

Tambuwal applauds Nigerians’ resilience, tolerance amid obstacles

FCT minister urges residents to support government programmes, policies in 2020

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James Kwen, Abuja

overnor Aminu Waziri Tambuwal has applauded the resilience and tolerance of Nigerians in the face of many obstacles, especially socioeconomic challenges, they face daily.

Gov. Tambuwal stated this in a brief New Year message, emphasising that the travails tugging precariously at the fabric holding Nigerian compatriots together shall never be torn into pieces by the myriads of problems they cope with frequently.

“I have said it times without number that Nigeria and Nigerians are one indivisible entity ordained by Allah. Any contrived or accidental attempt to foist disunity among them can only last but some moments.

“Christianity, Islam, animism and other shades of religious beliefs are disparate expressions of our collective strive to be close to our creator. None of the beliefs diminish our togetherness as human beings subsisting

under one nation with common destiny.

“I am confident that as we move into the New Year, we shall surmount, as we have done countless times, all the challenges staring us in the face and putting us at daggers drawn with tolerance and understanding,” the governor explained.

While wishing Christian brethrens a merry and prosperous New Year, Gov. Tambuwal admonished them to reflect on the blessings of the outgoing year and pray for good tidings in the coming year.

“As I am confident that you a n d I w i l l w eat h e r through whatever storm is gathering, I enjoin you to be steadfast in your resolve to ensure that the rule of law and good governance are not truncated.

“I pray to Allah to make us more united to confront the menace of insurgency, cultism, banditry and all manners of crimes and criminalities,” the governor said.

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inister of the Federal Capital Territory (FCT), Muhammad Bello, has asked residents of the Territory to support all government programmes and policies, he says are designed primarily for the benefit and wellbeing of the people in year 2020.

Bello, who gave this charge in his new year message to the residents of the Territory, said no government policy was ever designed to inflict hardship on the populace but were formulated and implemented for the benefit of the greater populace.

He said support for government policies would ensure the success of such policies, which ultimately would be enjoyed by majority of the citizenry.

Describing the outgoing year as very important and significant in the socio-political development of Nigeria, primarily because of the general elections and its accompanying events, Bello thanked residents for their cooperation and peaceful conduct during the elections and those @Businessdayng

accompanying events.

“2019 was a very important year in the socio-political development of Nigeria because of the 2019 general elections which culminated into an unforgettable Democracy Day celebrations. I wish to thank residents for their peaceful conduct and for being exemplary hosts to the foreign dignitaries who were in the FCT for this event,” he noted.

He reminded the residents that this form of benevolence should be maintained if the FCT is to consolidate on its rising profile as the conference tourism hub of the continent.

The FCT minister told the residents that the FCT was poised to play host to several international events in the year 2020 and FCT residents and businesses stand to gain a lot if they maintain the warm and friendly attitude for which they have become known, adding that an accommodating attitude is essential to build and nurture the budding tourism industry.

He also reiterated the need for residents to obey all extant rules and regulations guiding living and doing business in the FCT.

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DOB Equity invests in Tanzanian-based vanilla producing firm MICHAEL ANI

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OB Equity, a leading Dutch family-backed i m p a c t investor in East Africa, has invested in Natural Extracts Industries Ltd, the leading integrated natural vanilla flavour manufacturer, based in Moshi, Tanzania (“NEI”).

Since its inception in 2011, NEI has partnered with small-holder farmers by encouraging them to grow vanilla next to their existing crops, thereby providing extra income.

NEI provides training in good agricultural practices for over 5,000 farmers across five regions in Tanzania in vanilla husbandr y (following organic principles) and traceability. As a result, farmers have earned up to 50 percent additional income from vanilla farming.

NEI sources green vanilla pods from these far mers and skilfully manufactures them into

unique premium quality vanilla products. The pods are mainly sold to speciality food companies and flavour houses in the global market.

This has been instrumental in putting Tanzania on the global vanilla

map as seen in November 2019, when the Biennial Vanilla Symposium was held in NEI’s home town, Moshi, Tanzania.

Th e i nve st m e nt by DOB Equity will facilitate the growth of NEI’s smallholder farmer network. It

will also help diversify the company’s sourcing capacity, as well as expanding processing capability. The investment will also aim to increase the overall participation of Tanzania and the broader East African region in the

$72m raised to fund women-led businesses in Nigeria, four others DAVID IBEMERE

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okunboh Ishmael, Nigerian businesswoman has raised $72 million to invest in female led businesses in Africa.

Tokunboh with South Afr ican Polo L etekaRadebe created Alitheia IDF - the first female led Private Equity fund - to change the nar rative around the empowerment of women in the investment space on the continent.

Speaking on the plans,

Tokunboh Ishmael said: “2020 is the year. Women control over $20 trillion in worldwide spending, Alitheia IDF’s fund will facilitate our collective abilities to better meet women’s needs, wants, tastes and preferences to boost Africa’s GDP. We are proactively seeking to finance and support women-led business.”

Anchor investor for the fund is the African Development Bank, the President Akinwumi Adesina has taken a personal interest in the fund, he said: “We are very proud of

Alitheia, they are the only private equity fund we have in Africa investing in women. Closing this fund is a better day for women of Africa, women run Africa and when they get Capital they’ll do much better than you see today.”

The fund signals the b e g i n n i ng o f a m ove that wants to see women equal men in the investment space. Management consultancy guru’s Mckinsey estimates there is the potential to add $28 trillion (or 26 percent) to global annual GDP by

the end of 2025 if parity is achieved with women participating in the economy identically to men.

The fund supported by, Industrial Development Cooperation, Bank of Industry Nigeria, FinDev Canada, and Dutch Good Growth Fund plans to leverage the power of women as producers and consumers in the economy from boardroom to factory floor.

The outcome will lead to diverse perspectives that enhance decision making and corporate governance to boost innovation and business performance.

premium quality natural flavour space.

Brigit van Dijk – van de Reijt, CEO of DOB Equity, says: “NEI is one of the most advanced regional processors and extractors of locally grown high-end crops such as vanilla.

Through its diversified sourcing platform, it can create substantial socio-economic impact for thousands of farmers in Tanzania and positively contribute to influence environmental sustainability.”

Nigeria’s IHS Towers buys Brazilian telecoms infrastructure company CCS for undisclosed amount MICHAEL ANI

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igerian telecoms group IHS Towers said on Monday it has agreed to buy Brazilian telecoms infrastructure company Cell Site Solutions (CSS) from Goldman Sachs and Centaurus Capital LP for an undisclosed amount, to expand in Latin America.

The acquisition is part of IHS’s strategy to become a leading owner, operator and developer of shared telecommunications infrastructure in

emerging markets.

“Brazil’s topography and compact urban areas, coupled with the recent economic upturn, provide favorable macroeconomic factors for 4G and 5G deployment,” Reuters quoted Sam Darwish, IHS’s chairman and chief executive.

The transaction, is subject to regulatory approval, IHS added.

According to the company, CSS has approximately 2,290 towers and other telecoms infrastructure sites across Brazil, Peru and Colombia.

BusinessDay PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: SAMUEL IDUH ) Businessday’s Private Equity and Fundraising section is a weekly publication that provides in-depth analysis on private equity trends and tracks deal activity in Nigeria.

Email the PE & F team loladeakinmurele@gmail.com

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FINANCIAL TIMES

World Business Newspaper

LEO LEWIS, KANA INAGAKI AND CHLOE CORNISH

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arlos Ghosn has fled what he called “injustice and political persecution” in Japan and made it to his home country of Lebanon, in an unprecedented breach of both strict bail conditions and the close surveillance of police, prosecutors and private detectives.

In a short written statement, the former Nissan-Renault boss confirmed on Tuesday that he was in Lebanon, which does not have an extradition treaty with Japan.

He declared that “he will no longer be held hostage by a rigged Japanese justice system where guilt is presumed, discrimination is rampant, and basic human rights are denied”.

“I have not fled justice,” Mr Ghosn said. He added that he could “now finally communicate freely with the media, and look[s] forward to starting next week”.

People close to Mr Ghosn said that he landed at Beirut’s Rafic al-Hariri international airport late on Sunday. Local media in Lebanon reported that he arrived in a private jet.

Amid speculation that Mr Ghosn may have used a false passport or even a diplomatic passport issued by the Lebanese government, the mystery of how he fled the country deepened on Tuesday morning when state broadcaster NHK reported that a source at Japan’s immigration office said authorities had no record of Mr Ghosn leaving the country.

Prosecutors had earlier told Japanese media they were not

Carlos Ghosn flees Japanese justice system to Lebanon Former Nissan-Renault chairman declares he will no longer be held ‘hostage to political persecution’

Carlos Ghosn was arrested in Japan in November 2018 under four charges of financial misconduct, which he denies © Reuters

aware of any change to his bail conditions — a set of strict controls that included the door to his apartment being under 24-hour camera surveillance and his not being able to see his Lebanese wife without special permission. Mr Ghosn paid a total of ¥1.5bn ($13.8m) in bail, which he now risks forfeiting.

Junichiro Hironaka, who heads Mr Ghosn’s legal team in Japan,

Indicator that once warned of recession now at its steepest in more than a year

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US bond market indicator which signalled earlier this year that a recession could be imminent is closing 2019 at its most optimistic in more than a year, suggesting that the Federal Reserve has successfully steered the economy through a global growth scare.

The US yield curve, which shows the difference between short-term and long-term interest rates and is one of the most closely watched barometers of market confidence, on Monday reached its steepest level since October 2018.

The new 2019 record was set by bond traders even as equity market investors took profits from a rally that has propelled global stocks to their best year in a decade. Government bonds in Germany and the US, refuges for investors in more risk-averse times, both sold off on Monday.

Peter Boockvar, chief investment officer at Bleakley Advisory Group, said equity markets are already expecting a benign 2020 for the global economy, after the US Federal Reserve cut rates three times this year and Washington and Beijing appeared close to signing the truce they have agreed in their trade war.

“If the stock market is right that everything is amazing, I don’t see

how long rates can stay as low as they are,” he said. “The stock market is rallying on hope. Hope that things will inflect higher with this trade deal and Fed accommodation.”

For two weeks in August, the US yield curve inverted, meaning short-term yields were higher than longer-term ones. Investors paid close attention to the move because an inversion has occurred before every US recession of the past 50 years.

Line chart of Difference between two-year and 10-year Treasury yields (basis points) showing Bond market indicator no longer flashing recession signal At its worst, the difference between the yields on two-year and 10-year Treasuries was minus-5 basis points. On Monday, the gap was back to 33bp, as the yield on the 10-year Treasury rose 4bp to 1.91 per cent while the two-year yield was flat.

Earlier in the day, the yield on Germany’s benchmark 10-year bond was up 7 basis points to minus-0.19 per cent, the least negative level since May. In Japan, the 10-year government bond yield hovered near its highest level in roughly eight months. Central banks have been reconsidering the effectiveness of negative rates to stimulate growth, contributing to the increase in yields. www.businessday.ng

sume that this is a breach of bail conditions,” Mr Hironaka said. “His act is unforgivable and a betrayal of Japan’s justice system.”

The former Nissan-Renault boss, who was arrested in November 2018, spent more than 100 days in Japanese custody and has been in Tokyo ever since, awaiting a trial on charges of financial misconduct that had been expected to begin

US companies power a surge in megadeals in 2019

US yield curve signals optimism for 2020 COLBY SMITH

told reporters on Tuesday that he was “surprised and baffled” by news of his flight to Lebanon and said he had been unable to reach his client. He said his team still held all of Mr Ghosn’s passports, and last saw the former chairman on Christmas day. They had agreed to meet again on January 7 to discuss trial strategy.

“If this is true, we have to as-

next year.

Mr Ghosn faces four charges that he falsified financial statements by understating his pay by more than $80m and misused company assets for his own gains.

He has denied all charges against him and accused senior Nissan executives, prosecutors and government officials of “plotting” his downfall over fears that he would force the Japanese carmaker into a full merger with Renault.

The 13 months since Mr Ghosn’s arrest have caused ructions within Nissan and shone an unflattering light on Japan’s justice system. Its extremely high conviction rate depends heavily on confessions by suspects during long periods in police custody.

The Tokyo District Public Prosecutors Office and the Immigration Services Agency of Japan, which are closed ahead of the New Year holiday, could not be reached for comment on Tuesday. Lebanese authorities were also not immediately available for comment.

If the former chairman does not return to Japan, it would throw the judicial process into disarray, leaving only Nissan and Greg Kelly, Mr Ghosn’s former aide who was arrested for financial misconduct charges, to face trial.

American M&A rose as European and Asian transactions declined sharply ARASH MASSOUDI, JAMES FONTANELLA-KHAN AND ERIC PLATT

D

ealmakers outside the US cast an envious eye towards their American counterparts in 2019. As cross-border mergers and acquisitions plummeted to their lowest level since 2013, US companies struck big transactions at home, accounting for 15 out of the year’s biggest 20 deals.

Nearly half of the $3.9tn in global M&A recorded this year involved US targets — a 6 per cent rise from a year ago, according to data provider Refinitiv. The boom in the US contrasted with lacklustre dealmaking in European and Asian markets, which recorded $742bn and $757bn respectively in total acquisition value, a 25 per cent decline for Europe and a 16 per cent drop for Asia.

The US activity was enough to power global M&A to its fourthhighest level on record. The deals were broad-based, spanning transformative pharmaceutical acquisitions like Bristol-Myers Squibb’s $93bn purchase of rival drugmaker Celgene and AbbVie’s buyout of Allergan for $84bn, and industrial tie-ups such as United Technologies’ $90bn deal to buy Raytheon.

Other marquee mergers agreed

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in 2019 included the largest oil takeover in a decade, when Occidental Petroleum clinched its $54bn purchase of rival Anadarko, and the biggest bank deal since the financial crisis, as regional banks BB&T and SunTrust agreed to combine in a $66bn deal.

By the end of the year, some of Europe’s largest companies found opportunities to muscle into the US market. France’s LVMH agreed to buy US jeweller group Tiffany & Co for nearly $17bn and Swiss drugmaker Novartis acquired the Medicines Company for $9.7bn.

A graphic with no description © Chart showing M&A activity in both value ($billion) and the number of deals in thousands Anu Aiyengar, head of M&A in North America for JPMorgan Chase, said the concentration of activity in the US highlighted the risks faced by European companies, which have not captured the benefits of M&A-driven growth and scale. “Of the top 50 companies by market capitalisation a decade ago, 16 were European. Now, only seven are. This is a stark statistic. Is Europe getting left behind in this consolidation game?”

She added: “Some European companies have the opportunity and the licence to go and do deals.

Those that were able to did so from @Businessdayng

a position of strength. I feel there is impetus for European companies to do more, as we are going into a period of higher uncertainty and in those periods scale matters more.”

Europe struggles The difficulties of dealmaking in Europe were underscored by Fiat Chrysler Automobiles, which failed to complete a June deal with its French rival Renault after interference by the French government.

FCA returned months later with plans to merge with Peugeot, its other French rival.

Ireland’s Kerry Foods was also thwarted, but not by political interference. The group managed “to snatch defeat from the jaws of victory”, according to one banker, in the battle for DuPont’s nutrition and biosciences business. Instead, US group International Flavors & Fragrances grabbed the DuPont unit in a $26.2bn deal.

Deal activity in Europe remained subdued partly due to geopolitical uncertainty linked to the UK’s pending departure from the EU. The UK remained the strongest European market for deals, but activity slipped 4 per cent to $221bn. Volumes were boosted by a series of take-privates by buyout firms, as well as the London Stock Exchange Group’s $27bn deal to buy Refinitiv.

Wednesday 01 January 2020

FT

BUSINESS DAY

44

NATIONAL NEWS

Four decades of growth, but Equatorial Guinea’s people still mired in poverty GDP per capita is among Africa’s highest but one family has held on to power and wealth for 40 years NEIL MUNSHI

I

n the roadside bars of New Billy, a sprawling slum in Malabo, people drink Castel beer and steer clear of politics.

“They try to make Malabo like Dubai but that’s not reality — this is the real Malabo,” said one resident of Equatorial Guinea’s capital, pointing to the stream of sewage running down the rutted street. Just a few miles away, in the manicured Sipopo district, the country’s leaders courted international executives in glittering five-star hotels.

“There’s a lot of money, but it all goes to the president and his family,” the man said, before stopping himself. “But I shouldn’t talk — you talk too much and . . . ” he slid his finger across his neck.

President Teodoro Obiang Nguema seized power 40 years ago, ousting his uncle in a bloody coup in 1979. Since then his family has ruled with absolute power over one of Africa’s richest countries.

US oil companies discovered giant crude deposits in the country’s maritime waters in the mid-1990s, generating billions of dollars in annual revenues for the regime. Gross domestic product per capita in the country of 1m people is now among the highest in Africa — higher than that of Brazil and China — but

detention, extrajudicial killings and torture are all common.

In 2016, Mr Obiang, 77, won his fifth seven-year term with his smallest share of the vote yet: 94 per cent. His coalition holds every seat in parliament.

The international community has largely been silent on the state’s alleged abuses. US oil companies such as ExxonMobil, Kosmos and Marathon form the backbone of the economy. Equatorial Guinea at present sits on the UN Security Council, and the IMF has approved a $280m loan facility for the country.

This year the government has held two international energy conferences in Malabo’s gated Sipopo district as it has sought to attract investment.

A surreal stretch of private beaches and luxury hotels that looks like it was airdropped from another continent, Sipopo includes 52 identical presidential villas built for a week-long African Union summit in 2011.

It is one of many impractical government infrastructure projects, including international airports on sparsely populated islands and a city in the middle of the rainforest with a new university and no students. In contrast, Mr Obiang has spent very little on education — 2.3 per cent of GDP in 2015, according

Children in a street in Malabo, capital of Equatorial Guinea. Very little of the country’s oil wealth trickles down to the country’s 1m population © Luc Gnago/Reuters

very little has trickled down to the population.

Equatorial Guinea ranks 141 out of 189 countries in the UN Human Development Index. According to Human Rights Watch, it has the world’s largest gap between per capita wealth and its human development score.

“We have many, many hotels.

But no schools. No good hospitals.

No water, nothing,” said Andres Esono Ondo, secretary-general of Convergence for Social Democracy, one of only two genuine opposition parties.

In an example that human rights activists say is typical of the regime’s treatment of its opponents, Mr Ondo was arrested in neighbouring Chad earlier this year and held by authorities for 13 days, accused

by Equatorial Guinea of planning a coup.

“They persecute us because they’re scared,” he told the Financial Times. “This is a government that likes violence, so when you apply the law . . . they are very nervous.”

Freedom House, a US-based think-tank, lists Equatorial Guinea as the sixth least free country in the world — between North Korea and Saudi Arabia — describing the nation as an “oil kleptocracy”. Arbitrary

to the World Bank — or healthcare.

The 2014 oil price crash halted the infrastructure spending spree.

Crude production has fallen by roughly two-thirds to about 120,000 barrels per day, according to the International Energy Agency, while GDP per capita has almost halved, to just over $10,000, though still among the highest in Africa. The Frank Gehry-esque new airport in Malabo is one of many projects left uncompleted.

Few trucks ply the world-class highway that loops around Bioko — the lush, volcanic island that is home to Malabo, 40km off the coast of Cameroon. The road network is similarly pristine on the mainland, a 10,000 sq km rectangle sandwiched between Cameroon and Gabon.

Gabriel Obiang Lima — minister of mines and hydrocarbons, and one of the president’s sons — acknowledged the economic stress the country faces and the need to create jobs for young people. “ You don’t want them to be . . . frustrated,” he told the FT. “You know the example of Tunisia — we don’t want that,” he said, and dismissed the criticisms of rights groups, insisting the country had “changed”.

Isabel dos Santos owns a 25% stake in Unitel, which controls most of Angola’s mobile phone market, among other shareholdings © Reuters

Angola freezes Isabel dos Santos’s assets over graft allegations Court order signals further fall from grace of former president’s daughter JOSEPH COTTERILL AND DAVID PILLING

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ngola has frozen the assets of Isabel dos Santos, daughter of the oil-rich nation’s former president and Africa’s richest woman, in the latest escalation in President Joao Lourenço’s drive against corruption.

An Angolan court ordered the freeze on Tuesday in a bid to recover more than $1bn of state funds that Ms dos Santos and associates allegedly failed to repay.

The freeze affects Ms dos Santos’s large shareholdings in Unitel, Angola’s dominant mobile-phone company, and Banco de Fomento Angola, a big bank, Angolan state media reported.

The move adds to a dramatic fall from grace for the family of José Eduardo dos Santos, whose children dominated the economy of Africa’s second-biggest oil producer when he was president.

They rapidly lost influence after Mr Lourenço came to power in 2017.

Ms dos Santos and her husband, Sindika Dokolo, allegedly failed to return the state funds and sought to send money abroad, according to government lawyers.

Ms dos Santos, whose downfall began when she was sacked as chair of Angola’s state oil company by Mr Lourenço in 2017, did not immediately respond to a request for comment.

Both she and her husband have always denied wrongdoing and have suggested there is a political vendetta against them.

On Tuesday Ms dos Santos sent a message on Twitter wishing “tranquility and confidence” to staff in her companies.

“We will continue, every day, in every business, doing our best and fighting for what I believe in for Angola. The road is long, the truth will prevail. United we stand stronger,” she said.

Ms dos Santos owns a 25 per cent stake in Unitel, which controls most of the country’s mobile market, among other shareholdings.

During the near four-decade rule of Ms dos Santos’s father, Angola gained a reputation as one of the world’s most corrupt countries. His children had positions at the top of Angola’s business world.

Although Mr Lourenço was Mr dos Santos’s handpicked successor in the ruling People’s Movement for the Liberation of Angola party (MPLA), he swiftly turned against the former president’s family after he became president.

Ms dos Santos was removed from the helm of Sonangol, the stateowned oil company, and her brother José Filomeno dos Santos lost control of the sovereign wealth fund.

Earlier this month José Filomeno dos Santos went on trial over alleged corruption at the fund, including the alleged embezzlement of money abroad. He denies the claims.

Mr dos Santos relinquished the MPLA’s chairmanship last year. New banknotes in 2020 will no longer bear his visage, Angola’s central bank recently announced.

Uber and Postmates sue California over labour law Tech groups challenge move to change employment status of gig economy workers PATRICK MCGEE

U

ber and Postmates sued California in federal court on Monday, alleging that legislation set to take effect in the US state ostensibly meant to improve worker conditions unfairly targeted them and should be considered unconstitutional.

Assembly Bill 5 is set to come into force on January 1 and could prove a risk for ride-hailing groups and ondemand couriers. The law threatens to change the employment status of on-demand workers from independent contractors to employees, which advocates say would bring added benefits but critics say would kill the very flexibility these workers crave.

The lawsuit, filed in the US District Court for the Central District of California, in Los Angeles, alleges the legislation infringes on the constitutional right of workers to “pursue their chosen occupations as their own bosses, not to be forced into a rigid employee-employer relationship”.

The companies also said that AB5 drew “irrational distinctions” between industries and thus violated equal

protection.

“The drafters exempted dozens of other professions that have similar degrees of worker independence, based only on the industry they operate in,” the companies said. “For example, direct salespersons, manicurists and hair stylists are exempted — but not rideshare or delivery providers. This distinction is irrational.”

Assemblywomen Lorena Gonzalez, a co-author of AB5, tweeted just before the lawsuit was filed that she expected lots of “false accusations by gig companies”.

She later posted in response to the “irrational distinctions” claim, explaining how on-demand workers lacked the power to set their own rates and were restricted in exercising their own judgments.

The stakes are high for the tech companies, whose fast growth has been bankrolled by venture capital but whose business models already struggle to turn a profit. If Uber and Postmates were to treat all workers who rely on their apps as employees, it would likely increase their expenditures and disrupt their business model in California — and potentially serve as a model for other states and

countries.

When the law was signed by California governor Gavin Newsom in September it was hailed by a variety of labour groups such as Gig Workers Rising. The share prices of Uber and Lyft fell, while politicians predicted ramifications across the country.

In Monday’s lawsuit, Uber and Postmates were joined by two named gig economy plaintiffs who wrote blog posts describing how the jobs fit their lifestyle and how AB5 would threaten rather than improve their situation.

Lydia Olsen, a driver for Uber, called AB5 misguided and unjust.

She added: “Being a rideshare driver is not perfect, and there are many areas where the relationship between the drivers and companies could be improved. However, forcing us into a legal framework that we never signed up for and did not want is not the way to solve this.”

Miguel Perez, who does courier work for Postmates, wrote that the law would eliminate the freedom he enjoys from working when he wants.

“The constitution does not allow lawmakers to trample on the rights of so many California workers and businesses,” he said.

Wednesday 01 January 2020

BUSINESS DAY

45

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Russia and Ukraine sign deal to secure European gas flows

Germany welcomes new five-year agreement between state groups Gazprom and Naftogaz

NASTASSIA ASTRASHEUSKAYA, GUY CHAZAN AND ROMAN OLEARCHYK

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ussia and Ukraine have struck a deal that guarantees the flow of gas to Europe for a further five years, a day before the expiry of the previous 10-year contract between their national gas companies.

The new deal closes off a potential schism between Russia and Europe while benefiting Ukraine financially.

Alexei Miller, Gazprom chief executive, said in a statement released late on Monday that the agreement between the Russian state-owned gas company and Ukraine’s Naftogaz had been reached after five days of talks in Vienna.

It is made up of a series of contracts encompassing a “large package deal restoring the interests of both sides”, Mr Miller said.

The agreement follows an initial protocol signed earlier this month assuring the market of uninterrupted supplies, which had pushed gas prices down.

Gas prices have been on the decline, losing nearly 20 per cent since December 19, according to market data, and fell again after the deal was announced.

Russian president Vladimir Putin and his Ukrainian counterpart Volodymyr Zelensky welcomed the agreements in a phone conversation on Tuesday, according to the Kremlin’s website.

Both sides did not, however, reach agreement on direct gas supplies to Ukraine.

Following Russia’s 2014 annexation of Ukraine’s Crimean Peninsula, Kyiv halted direct purchases from Gazprom in 2015, opting instead to purchase gas largely of Russian origin from European suppliers through so-called reverse

flow schemes.

However, the two leaders spoke about developing Russian-Ukrainian relations in 2020. On Sunday, Ukrainian forces and Russianbacked separatists in eastern Ukraine completed an exchange of prisoners as the two countries negotiate to end their five-year conflict.

Germany, the largest European market for Russian gas, which had insisted on continued gas transit via Ukraine despite a planned direct route via the Baltic Sea, welcomed the agreement.

“I am glad that the talks on the transit of Russian gas through Ukraine, which have gone on for a year and a half now, could now be successfully concluded,” German chancellor Angela Merkel said.

“The continuation of gas transit through Ukraine . . . is a good and important signal for ensuring the security of our gas supply in Europe.”

A decade ago, disagreement between Moscow and Kyiv resulted in disrupted gas supplies to Europe.

The new deal foresees Gazprom pumping 65bn cubic metres of gas through Ukraine’s gas transportation system next year, and 40bn cubic metres over the following four years. The agreement, which will bring in revenues to Ukraine of more than $7bn, can be further extended by 10 years. Ukraine is willing to pump even larger volumes, Mr Zelensky said on his Facebook page.

Naftogaz chief executive Andriy Kobolyev thanked the European Commission “for its consistent position” in supporting Ukraine through trilateral negotiations this year as well as the US for its “firm support of energy security in Europe” by imposing sanctions upon Nord Stream 2, the underwater gas pipeline under construction from Russia to Germany.

Hong Kong stocks cap off gloomy 2019 with December rally Hang Seng Index among world’s best performers as US-China trade truce cheers mood

DANIEL SHANE

H

ong Kong’s stock market turned in a world-beating performance in December as the Asia finance hub capped off a year marred by its worst political crisis in decades and an economy mired in recession.

The city’s benchmark Hang Seng Index rose more than 7 per cent for the month, the largest gain for any of the world’s big indices.

The S&P 500 is up 2.5 per cent and the UK’s FTSE 100 up 3.3 per cent over the same period, while Japan’s Topix added 1.3 per cent.

The eleventh-hour rally came despite little sign of a resolution to the months of at-times violent political unrest that have rocked Hong Kong and prompted millions of anti-government protesters to occupy streets and disrupt transport networks.

Retail sales and tourist arrivals have collapsed and the economy is in its deepest recession since the 2008 financial crisis, and some analysts project that the situation could worsen in 2020.

Another big protest march is scheduled for New Year’s Day on Wednesday.

Some analysts said that investors in recent weeks had shrugged off the effect of the protests and instead focused on the benefits of the so-called phase one trade deal between Washington and Beijing, which has eased trade tensions.

Line chart of Performance of Hang Seng index in Q4 showing Hong Kong stocks end 2019 on a high “A lot of it is down to trade.

Anything that can set the scene for a rapidly improving trade environment is going to be positive” for Hong Kong, said Hannah Anderson, a global markets strategist at JPMorgan Asset Management.

The Hang Seng Index closed the year at its highest point since the end of July, up about 10 per cent for the full year. But it remains below its 2019 peak hit in April, against the backdrop of mass demonstrations and spillover from the US-China trade war. The S&P 500 has climbed more than 28 per cent this year. www.businessday.ng

Nicolas Moreau: ‘Combining our responsible investment and ETF expertise is a natural next step for us’ © Bloomberg, AFP/Getty

HSBC pins asset management growth on ETFs

New investment head Nicolas Moreau attempts to revive flagging fund arm CHRIS FLOOD

H

SBC is planning an ambitious expansion of its exchange traded fund range in 2020 in a move to revitalise its underperforming $512bn asset management business.

Nicolas Moreau, who was appointed chief executive of HSBC’s asset management division in August, has devised a series of initiatives aimed at reinvigorating growth at a time when the London-listed bank is aggressively cutting costs.

In the first half of 2020, HSBC will launch eight ETFs employing environmental, social and gover-

nance metrics to tap into rising investor demand for ESG focused strategies.

“Combining our responsible investment and ETF expertise is a natural next step for us,” said Mr Moreau.

Assets in ESG-themed ETFs more than doubled in 2019 to a record $52.4bn at the end of November, according to ETFGI, a London-based consultancy.

HSBC also plans to develop a fixed income ETF platform in 2020 and to launch a range of precious metals tracker funds later in the year.

About 15 new roles will be created in the asset management division to support these initiatives at a time when the wider group

plans to axe about 10,000 jobs globally in an effort to save costs.

Three senior roles have been created to bolster the team working under Mr Moreau. Brian Heyworth moved to global head of institutional business from his role as global head of client strategy.

Christophe de Backer, a director on the boards of the asset management and private banking divisions, has been named global head of wholesale business and partnerships.

Edmund Stokes assumed the responsibility of global chief operating officer after moving from his position as global head of product.

“These newly created roles will prove invaluable in delivering our growth plans,” said Mr Moreau.

Fed curbs repo volatility on final day of 2019 Markets arm of central bank injects $255bn to ease possible cash crunch JOE RENNISON AND COLBY SMITH

T

he US Federal Reserve succeeded in keeping a lid on short-term borrowing costs on the final day of the year after injecting billions of dollars into the market to ease a possible cash crunch.

The cost of borrowing cash overnight in the repo market, where investors exchange highquality collateral such as Treasuries for funding, rose to 1.88 per cent on Tuesday before falling over the first couple of hours of trading to 1.55 per cent.

That is in line with levels seen throughout December and far below the peak level of 6 per cent reached on December 31 2018, according to data from Curvature Securities.

“The market is very calm,” said Mark Cabana, an interest rate strategist at Bank of America Merrill Lynch. “There really hasn’t been any pressure early in the day. I think the Fed has crushed any kind of year-end volatility with all of the operations they have done.”

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Investors and analysts had feared a repeat of the spike in September when a scramble for cash pushed repo rates up as high as 10 per cent, alarming some market participants and prompting a series of actions from the Fed. The markets arm of the central bank went all out to ensure the year-end period went smoothly, injecting $255.6bn to keep money flowing through the financial system. It had said it would offer up to $490bn, depending on demand.

The New York branch of the US central bank, responsible for market operations, provided $25.6bn in overnight funding on December 31, adding to $230bn of longer-term repo operations — in effect short-term loans — that will mature throughout January.

Elevated repo rates are more common at the end of the year, as banks often pull back from lending into the market ahead of important regulatory calculations taken before the start of the new year, leaving less cash available to investors.

Mr Cabana added that the Fed @Businessdayng

was helped by banks finding new ways to trade with clients outside of traditional repo lending, while still lowering year-end regulatory burdens. For example, Goldman Sachs mimicked repo trades with hedge funds through the derivatives market, in a bid to lower its capital charges.

With the year-end hurdle cleared, investors’ focus has shifted to what comes next for the Fed and how it will go about weaning the market off the money it has provided.

In addition to the overnight and short-term loans the central bank has offered up, it has also expanded its balance sheet by purchasing Treasury bills, which have a maturity of one year or less, in an attempt to further bolster cash in the system.

“The Fed has delivered on its promise to flood the market with liquidity,” said Gennadiy Goldberg, a US rates strategist at TD Securities. “But I highly doubt the Fed will be breaking out the ‘mission accomplished’ banner just yet, as they now have to worry about what they do from here.”

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Wednesday 01 January 2020

BUSINESS DAY

FT

ANALYSIS

Celebrity doctor pay exposes China’s healthcare gap

Wage disparities highlight unequal access to good quality medical treatment TOM HANCOCK

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s a top neurosurgeon in Shanghai’s best state-run cancer hospital, Song Donglei’s skills were in such demand that he spent weekends flying to remote regions of China to conduct surgeries — helping him to earn an annual salary of more than Rmb4m ($570,000).

“Just like table tennis, it’s important to be on the top national team,” he said. “I was in the top five at the hospital — that’s like being on the Olympic team.”

Most Chinese doctors are not so well-rewarded. More than 60 per cent are paid less than Rmb100,000 per year, according to consultancy McKinsey. Low salaries have led to a shortage of doctors and a wave of resignations in rural areas.

The salary gaps highlight the unequal distribution of resources in China’s medical system — with staterun hospitals in the largest cities hosting world-class professionals, while doctors in smaller provincial hospitals are generally less skilled.

Wage disparities within professions are common in China, where there are marked differences between regions in terms of prosperity and development. But they are especially stark in healthcare, in part due to the “superstar effect” which sees patients flock to see “celebrity doctors”. That process can further erode incomes for less well-known doctors in local hospitals.

increased due to rising demand from affluent patients.

A graphic with no description Dozens of Chinese doctors earn more than Rmb5m a year, but an elite group of about a dozen earn Rmb10m, according to industry insiders — more than twice the average for a New York neurosurgeon of $616,000, according to the ERI Economic Research Institute.

However, they are an exception.

“The average doctor’s wage in China is 1.6 times the average wage, compared to more than three times in developed countries,” said John Lin, a partner at EY in China.

Beijing has increased state spending on healthcare from about 2 per cent of gross domestic product to nearly 3 per cent over the past decade as it rolled-out a basic system of statebacked medical insurance covering 95 per cent of the population.

China has achieved “some of the most pronounced gains” in healthcare access and quality improvement worldwide from 2000 to 2016, according to research published in The Lancet last year. But it added that the country’s regional disparities were among the widest.

Just 10 per cent of doctors in township healthcare centres, the lowest level of urban provision, have received formal medical training, according to a study in the BMJ this year. “China’s relative efficiency in using health resources is decreasing,” it added.

A doctor treats a patient in Zhejiang province. More than 60 per cent of doctors in China are paid less than Rmb100,000 ($14,000) a year © Damir Sagolj/Reuters

Chinese patients pore over rankings of top hospitals produced by institutions such as Fudan University in Shanghai, while online forums and increasingly popular medical apps allow them to pinpoint the doctors with the best reputations.

Chance treatments can also help catapult a doctor into celebrity status.

Mr Song’s fame was boosted when he treated famed comic actor Zhao Benshan for an aneurysm in 2009.

A graphic with no description Wu Shouguo, a 55-year-old Beijing resident, hosts 40 to 50 people a year, mostly from his home province of Sichuan, who visit the country’s capital hoping to see top doctors. “They come because they didn’t get treated well by local doctors,” he said.

At Mr Song’s Shanghai hospital about 95 per cent of patients travelled from outside the city, he said.

Wealthier people in China’s regions are able to pay out of their own pockets to have top doctors come to them. “Much of a Chinese doctor’s income isn’t earned inside their hospital. Instead, once you are famous, others will request you to perform surgery,” said Mr Song.

Mr Song left his state-run hospital five years ago to seek more freedom in private practice. Since then, salaries for top doctors have continually

State insurance only covers some costs, and coverage varies regionally.

Patients in wealthier areas have more generous insurance, intensifying the concentration of medical skills in larger cities because their better insurance means they can afford more expensive treatment. Some patients have no option but to try to fund treatment out of their own pockets.

Problems are starkest in the countryside. In the north-eastern province of Heilongjiang, more than 100 rural doctors resigned in June, announcing in a letter that they were each owed tens of thousands of renminbi by a state insurance fund.

“There is a lack of high-quality medical resources in China, so some excellent doctors have much more work than average doctors,” said Zhao Bing, a healthcare analyst at Huajing Securities, a brokerage. “To change this situation, we must strengthen the training of grassroots doctors.”

In the meantime, patients continue to search for the best medical care.

When Chen Zhe’s mother-inlaw was diagnosed with late-stage colorectal cancer, he sought out Li Jin, a Shanghai doctor recommended by another medical professional.

“This is how people get to know and judge a celebrity doctor, by word of mouth,” he said. www.businessday.ng

End of the party: why Lebanon’s debt crisis has left it vulnerable Once known for its resilience, the country’s fragile financial system has triggered angry protests CHLOE CORNISH

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n 2008, as mountains of bad debt collapsed and economies around the world crumbled, carefree gamblers at the central bank-owned Casino du Liban rolled dice and spun roulette wheels. Unscathed by the global financial crisis, Beirut glittered as the Middle East’s party capital and purveyor of discrete financial services.

Lebanon offered wealthy investors something they could not get elsewhere — high interest rates for low risk investments. While the rest of the world’s central banks tried to boost post-crisis recovery by holding borrowing costs at 1 per cent or less, the Banque du Liban pushed rates up so high that returns of more than 10 per cent became common for depositors.

The central bank paid so much because it badly needed a constant supply of dollars to maintain a currency peg against the US dollar, pay for imports and fund the government. “Lebanon relies on remittances,” Riad Salame, central bank governor, told the FT in 2018.

That reliance on money from overseas left the government vulnerable and sliding ever further into debt, especially as economic growth has been sluggish since the start of the Arab spring in 2011.

A bungled October effort at raising funds via a tax on WhatsApp calls triggered Lebanon’s biggest protests in over a decade, adding to the political paralysis and deepening the economic crisis.

Now the debt-fuelled crash Beirut avoided in 2008 could have finally arrived. Rating agency Fitch is predicting default on $88bn of Lebanese public borrowing. The country’s apparent powers of resilience, even as it was surrounded by instability, suddenly look more like luck — and Lebanon is in its most precarious position since its civil war ended in 1990.

A harsh economic collapse at the heart of the tumultuous Middle East would hurt Lebanon’s poorest most, at a time when public opinion is already enraged by perceived corruption and cronyism. “It will be very very hard,” says Sibylle Rizk, public policy director at Kulluna Irada, a lobby group,

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“and the possibility of violence and social unrest is high.”

With its nearly 7m population of Christians and Sunni and Shia Muslims, including over 1m refugees, Lebanon is surrounded by trouble — civil war has raged in next door Syria since 2011 and tensions with neighbouring Israel are continuous. Iran-backed Shia Islamist paramilitary and political party Hizbollah, seen by many Lebanese as a defender against Israel but viewed by Washington as a terrorist group, now forms an integral part of Lebanon’s government, souring relations with Gulf countries that were once Lebanon’s sponsors.

Yet even amid these tensions, Beirut’s high life, yacht-friendly marina and banking secrecy made it a playground for the Middle East’s wealthy.

The central bank borrowed from Lebanese commercial banks, who borrowed from their clients.

Lenders “could generate profits at very low risk”, says Nasser Saidi, a former central bank vice-governor.

“For each bank it looked like this was paradise.” The banks’ deposits with the central bank grew by over 70 per cent from 2017 to August 2019 to 229trn Lebanese lira.

In this handout picture provided by the Lebanese photo agency Dalati and Nohra, Lebanon’s Prime Minister Saad Hariri announces the resignation of his governmentt in the capital Beirut on October 29, 2019, bowing to nearly two weeks of unprecedented nationwide protests. - Hariri’s express and sombre televised address was met by cheers from crowds of protesters who have remained mobilised since October 17, crippling the country to press their demands. (Photo by - / DALATI AND NOHRA / AFP) / === RESTRICTED TO EDITORIAL USE - MANDATORY CREDIT “AFP PHOTO / HO / DALATI AND NOHRA” - NO MARKETING - NO ADVERTISING CAMPAIGNS DISTRIBUTED AS A SERVICE TO CLIENTS === (Photo by -/DALATI AND NOHRA/AFP via Getty Images) Saad al-Hariri resigns as prime minister of Lebanon © AFP/Getty For some observers, the numbers did not add up. “What could @Businessdayng

the central bank be investing in to pay those rates?” says Mr Saidi.

But as banks paid out dividends to shareholders, many of whom were politicians, Lebanon’s political elites were happy to go along with it. “Everybody got greedy,” shrugs one bank board member.

Meanwhile politicians were spending the country deep into the red, buying votes by expanding public hiring and wasting cash on unsustainable solutions for Lebanon’s chronically malfunctioning electricity sector, while its trade deficit ballooned.

Lebanon’s biggest protests in a decade forced the resignation of prime minister Saad al-Hariri’s government at the end of October.

Hassan Diab, a computer sciences professor, appointed prime minister designate, must now corral Lebanon’s multi-confessional political parties — shifting alliances between Christian, Sunni and Shia Muslim factions — into forming a cabinet to steer the country out of crisis.

Amid the growing warnings about a looming default, Mr Hariri had begun to beseech international allies for help and started talks with the IMF. The west has little interest in seeing this crucible of regional tensions explode. The rise of Iran-backed Hizbollah means it can no longer depends on Gulf bailouts.

But while many capitals from Paris to Tehran want influence in the strategic Mediterranean nation, no state has so far offered to foot the bill. Asked whether an aid packaged was on the table, David Schenker, the State Department’s assistant secretary of state for near eastern affairs, told the Associated Press: “Lebanon is not being saved from its financial mess.”

Lebanon’s drastic downturn came slowly then suddenly. After months of economic slowdown and a dollar liquidity squeeze, rampant wildfires erupted across the mountains in central Lebanon, unchecked in part because the state had failed to maintain expensive helicopters. Days later, in an austerity measure to curb its deepening fiscal deficit, politicians proposed taxing WhatsApp calls. Lebanon snapped.

Wednesday 01 January 2020

BUSINESS DAY

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POLITICS & POLICY Nigerians must unite to overcome nation’s challenges in 2020 - Atiku Iniobong Iwok

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tiku Abubakar, Nigeria’s former vice- president, has charged Nigerians to unite and exhibit the spirit of oneness to enable the nation overcome the challenges that have plagued it in recent times, in the new year.

Atiku stated this in his new year message to Nigerians on Tuesday, he personally signed.

Atiku said 2019 was not a pleasant year for the country, stressing that the Nigeria retrogressed in several human indices, while calling for a renewed awaking among the citizenry and leaders to change the trend.

Atiku, who was the candidate of the PDP in last February presidential election, said Nigeria must make deliberate effort to fight poverty if it must be successful in the war against terrorism.

Atiku further charged the Muhammadu Buhari administration to put the masses first in any policy, advising that anti-people’s policies must be avoided.

He, h ow e ve r, s e e k s a change in attitude among Nigerians and across board, while warning that the present administration must

respect the rule of law and the sanctity of the judiciary.

According to the statement, “The coming of the New Year 2020 is symbolic in many ways. First, it heralds a brand new decade.

Secondly, and probably more important, is that this New Year will require us all to stay together more than ever before to take on, head front, the common enemy of insecurity that challenge our everyday lives as Nigerians.

“I do not share the sentiment when some people claim that the outgone 2019 was a successful year for Nigerians. Such sentiment is reductionist and does the harm of making us have a false sense of victory.

“The bitter truth is that Nigeria is still in the throes of economic instability, with more people losing jobs and the attendant outcome of more children being out of school and more families having hard time in accessing basic needs of life.

“In this New Year, however, I will rather ask that Nigerians stand together with renewed vigour and determination to battle the hydra-headed demon of insecurity that has plagued us in the past decade.

“We must challenge the inadequacies that made us

Atiku Abubakar

become the global headquarters of extreme poverty; much as we must work hard and fast enough to eliminate the scourge of out-of-school children in the countr y.

These are the challenges that this new decade has thrown at us and we cannot afford to slumber and submit to defeat.”

According to him, “The problems of extreme poverty and scant investments in education play huge roles in fueling the problems of violent extremism that we spent the past decade contending with. We cannot win the fight against terrorism if we do nothing to reduce or eliminate poverty and

Bode George calls for selflessness, unity among Nigerians in New Year Iniobong Iwok

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labode George, a former deputy national chairman of the People’s Democratic Party (PDP) has charged Nigerians to exhibit the spirit of selflesness, while shuning acts that could affect the unity of the country in 2020.

George stated this in his new year message to Nigerians,Tuesday, a copy of which was made available to BusinessDay and personally signed by him.

He urged Nigerians to forget the bitter experience of last year and look forward to a better 2020, while warning that acts that could further polarise the country must be advoided.

George, who is the PDP leader in Lagos State, urged Nigerians to advoid acts that could lead to ethnic crisis and killings in 2020, while advising incumbent administartion to avoid ethnic sentiment in its policies

and decisions.

He further called for the restructuring of the country by the incumbent Muhammadu Buhari administration so that it would fufill its pontential and reduce the suffering of Nigerians.

According to him, “Let us begin this new year with a renewal of hope and with a belief in a bright new beginning without discord, without malice, without selfishness.

“Let us look forward to a new beginning with an absolute resolve on mutual harmony and friendship across the national divide. We must heal old wounds. We must bind new ties. We must solidify the foundational bonds of our founding fathers.

“The year 2020 is so unique, so significant in both numerical and spiritual ordering.

The last time there was such numerical balance and symmetry was one thousand and ten years ago in the year 1010.

“It will take about 34 generations yet unborn to witwww.businessday.ng

ness again such astronomical symmetry in the year 3030. This will happen in another one thousand and ten years . Of course, no one alive today will be around at that time.

“This very truth about the transient nature of all of us on Mother Earth and this rare balance in date and spiritual realm ought to tame and sober everyone privileged enough to bear witness to the year 2020.

“Thus, with this sobering awareness, we must and we should predicate our collective national destiny on the path of sacrifice, on the course of selflessness, on the goodness of the heart, on tribal cordiality, on truth and on a sweeping investment in a genuine and enduring leadership that really cares.”

George also urged, “Enough of blodshedding.

Enough of the grim recourse to ethnic and sectarian malady. This national journey must now be renewed totally and overhauled upon a

illiteracy.

“The reality of this new decade requires of us to recalibrate our approaches and to pursue some tough choices. If failure is not an option, then we must let go of our egos and conveniences.

“In this new decade, we must start to do things differently if we are honest about our desire for a better and prosperous future.

There must be a deliberate effort to improve the material wellbeing of the people, by lifting millions of Nigerians out of the extreme poverty belt at a start, and to prosperity. Government must rethink many of its policies that are sinking more people into the abyss of extreme poverty.”

The statement further noted that, “It is incumbent on government at all levels to pursue policies that will provide decent housing to the mass majority; put food on the table; provide healthcare and education.

We cannot continue to do things the same way and expect a different outcome.

It is therefore high time we caused a rejig of economic policies that will promote an expansion of the economy and create jobs opportunities aplenty.

“At the individual level,

this moment calls for more empathy and sacrifice. The New Year and a new decade come with the opportunity to make better impressions in our lives and in the lives of people around us.

“I wish to restate that our collective call for rule of law and our history about the struggle for democratic rule did not envisage a situation where judicial pronouncements would be worth less than the paper upon which they are rendered.

“It is a bad advertisement for the country and its democracy if declarations made by the court are not respected without the executive arm of government agreeing to same. Any democracy is not worth the appellation if the principle of separation of power is not ingrained in it. In the new year, government should not pretend to be democratic, but rather act according to the fundamentals of a democracy.”

“Above all, I expect that in the New Year there will be a better observance of rule of law and greater respect for citizens’ democratic rights.

“While we anticipate a change of attitude across board in the new year and new decade, I wish every Nigerian a happy and prosperous 2020,” Atiku further said.

Adoke: Judge returns case file to CJ foundation of trust, upon the firm ground of genuine commitment to service, upon the pivot of enlightened patriotism, ond upon the sincere platform of brotherhood without boundaries.

“We must seize the moment with a leadership that is undetained by myopic self interest; a leadership that is unhindered by the untidy short-cuts of commercial gains or temporary advantages or a leadership that is not mounted on the crude nudging of nepotism or ethnic triumphalism.

“Now, we have a chance at national rebirth, discarding the odious ingredients of instabilities, embracing new visions of ethical commitment to reposition our nation on a strengthened, firm and decisive course.

“The choice is ours. The reality is stark and obvious.

We dare not fail nor falter on this righteous course. May the redeeming grace of God continue to abide with our Nation,” he said.

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Felix Omohomhion, Abuja

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he bail application filed by a former Attorney General of the Federation ( AGF) and Minister of Justice, Mohammed Bello Adoke (SAN) Tuesday suffered a setback.

This is as the vacation judge, Justice Othman Musa returned the case file to the Chief Judge of the Federal Capital Territory for reassignment.

Justice Musa said the inability to conclude the hearing of the bail application before expiration of vacation necessitated the return of the case file.

Earlier, counsel representing the former AGF applied for an adjournment to enable him respond to the counter affidavit filed by the Economic and Financial Commission Crimes ( EFCC) @Businessdayng

challenging the application.

In a short ruling on the propriety of granting the adjournment, Justice Musa explained that the vacation period of the court ends on January 3, 2020 and in view of that, he is returning the case file to the Chief Judge of the FCT for reassignment to another judge.

The EFCC had filed criminal charges against Adoke over his alleged indictment in the Oil Prospective License OPL 245.

Adoke was in self exile for four years when the criminal charges were slammed on him by the federal government. Upon his return to the country two weeks ago, the EFCC had secured a court order from Justice Musa to detain him for 14 days to enable the anti-graft agency complete its investigation in the level of his involvement in the alleged Malabu oil scandal.

Thebigread

BUSINESS DAY Wednesday 01 January 2020 www.businessday.ng

Ten charts that tell the story of 2019 The FT’s pick of the year’s best visual journalism, from extreme weather patterns to signs of a growing surveillance society Alan Smith

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he power of a good chart or map lies in its ability to inform the debates and decisions that lie ahead. Here are 10 graphics published by the Financial Times in 2019 where the real story is often about what happens next — in the years, decades and centuries to follow.

Map showing the estimated annual per capita income loss under a hard Brexit scenario (€) Europe to share the pain of departure but UK and Ireland will be most affected Boris Johnson’s victory in the UK’s December general election, driven by his promise to “get Brexit done”, means that the premise of this graphic from earlier in the year — a “hard Brexit” — remains a strong possibility as we enter 2020. The estimated per capita income losses shown on the map illustrate cartographer Waldo Tobler’s first law of geography: “Everything is related to everything else, but near things are more related than distant things.”

Most economists predict a hard Brexit will hit the UK hardest, with neighbour Ireland a close second — but the ripple is predicted to extend across Europe.

Chart showing the Measles immunisation coverage (%) for the first dose (MCV1) among 1 year olds, between 2008 and 2018. Estimates, as of Jul 15 2019. The measles ‘first dose’ immunisationoffers an individual 90% protection from the disease. Twenty-three countries have yet to introduce the second dose, which would increase this cover to 99%.

Not all countries have made progress in their efforts to reach vaccination targets. Countries affected by war or civil unrest, such as Syria and South Sudan, have seen a big decline in measles vaccination rates in the past decade. In the US, where there is a prominent “anti-vax” movement, levels remain stubbornly below the 95 per cent threshold needed to prevent wider outbreaks. Meanwhile, new research suggests that the disease has a much more serious effect on children’s immune systems than previously thought.

Chart showing which jobs are risk from automation.

Workers are set to experience major changes to their jobs and careers as a result of automation.

And according to the OECD, their governments are not preparing them for the disruption.

Separate analysis by McKinsey suggests that those in low-skilled and low-paying jobs are exposed to the greatest risk of automation. But virtually every worker faces the threat of elements of

their job being automated.

Map showing locations where once-a-century extreme sea level events are projected to occur at least annually by 2050, even if the world drastically cuts emissions. One metreSea level rise by 2100 if global warming exceeds 3C. 20%–90% projected loss of coastal wetlands by 2100. 90% projected loss of warm water coral reefs, even if global warming is limited to 1.5C. Sea levels are rising quicker than previously thought — and pose a significant risk to coastal cities and low-lying islands, according to a September report from the UN’s Intergovernmental Panel on Climate Change. The UN’s researchers warned that extreme floods — typically experienced once a century — are likely to happen at least once a year by 2050 in many regions, even if global warming is limited to 1.5C above pre-industrial levels.

Two maps showing Top 10 counties according to total vineyard hectares, 2015 and Top 10 counties based on area of viticulturally suitable land. Areas such as Essex and Suffolk have highly suitable land and climate as well as greater seasonal stability than areas currently populated with vineyards.

Climate change presents an unusual economic opportunity to English winegrowers according to academics at the Univer-

sity of East Anglia. A combined terrestrial and climatic model identifies over 33,000 hectares of prime viticulture land — an area larger than France’s Champagne region. The research suggests that Essex and Suffolk are particularly ripe for cultivation, while many current English vineyards are “sub-optimally” located.

Useful intelligence, if you think you could run a vineyard.

Chart showing a visual history of lunar missions. Almost all missions have been unmanned; some completing a lunar orbit, others using the moon for a ‘gravity assist’ as part of a longer journey, some sending a probe to impact the lunar surface, and others landing rovers on the moon. Most early lunar missions failed to escape Earth’s orbit. The first two manned lunar missions were orbital only, and never landed. In July 1969, the crew of Apollo 11 becamethe first people to set foot on the moon.

The crew of Apollo 13 never made it to the lunar surface. Every lunar mission since 1972 has been unmanned. After the frenetic activity of the space race, lunar missions were seen as too expensive. More recently, a wider set of countries has launched lunar missions.

2019 saw the 50th anniversary of the first manned Apollo landing — and renewed questions asking why it has been so long since the last crewed mission to the moon in 1972. With

Nasa’s publicly declared goal of returning humans to Earth’s closest neighbour by 2024 and billionaire entrepreneurs joining aspiring space nations in launching ambitious missions of their own, one thing seems certain: space is set to become extremely busy.

Chart showing the number of patents published worldwide that mention facial recognition or surveillance cameras in the title or abstract, by country of patent author(s). China dominates both facial recognition and surveillance cameras patents China is leading a global boom in surveillance technology that is fuelling increasingly polarised views on privacy and security. San Francisco police may have banned its police from using facial recognition software but, according to the FT’s Henry

year. This animated map paints a stark picture of the inroads into global trade China has made since joining the World Trade Organization in 2000. One analyst described 2019 as “peak China”.

US election: voters feel the economic pinch. Chart showing results of the survey question…

Which of the following is the most important reason for the change in how you are faring financially? Of those who said their financial situation had improvedsince Trump became president, 39% said the most important factor in the change was wages or income level. Amount of personal savings and investments was the second-most cited factor for improved finances.

19% of thosesaying their financial position was worse named the burden of debt as the most important factor.

Mance, there are a growing number of companies justifying their technological advances on the premise that “anonymity was just a phase in human existence”.

Animated world map showing whether US or China is the larger supplier of goods in a country from 2000 to 2019.

In 2000, Cuba, a rare Chinese stronghold in the Americas. Few countries in China’s orbit prior to WTO entry. In 2005, US top supplier to the Americas and key western allies. China major exporter to most of Europe, Asia and much of Africa. In 2010, China dominant in Europe and Africa, and has a foothold in Latin America. In 2018, China mops up holdouts in Africa and the Gulf. Red tide rises in South America. In 2019, Venezuela switches to China’s camp.

France, Austria, Greenland, CAR and Zimbabwe rejoin US sphere of dominance.

The simmering trade war between the US and China threatened to spiral out of retaliatory control before signs of de-escalation finally appeared at the end of the

The US election will dominate news coverage in 2020. Rather than predicting a winner, a new FT/Peterson Foundation poll on US voter economic sentiment hints at some of the debates that will feature in the campaign, as two-thirds of Americans say the Trump presidency has not made them better off.

Finally, geologists revealed in December that magnetic north — the point on Earth’s surface that points directly downwards — is moving at an unprecedented rate of 50 kilometres a year.

The latest update to the World Magnetic Model also confirmed that the planet’s magnetic field is weakening, which could eventually lead to a complete reversal in the field. Under such a scenario, Earth would be exposed to harmful solar and cosmic radiation, wreaking havoc on terrestrial life. As we enter the new decade looking for signs of optimism in an uncertain world, it is of some comfort that experts consider the chances of this particular catastrophe remote — at least for the next few centuries.

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