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news you can trust I **THURSDAY 01 NOVEMBER 2018 I vol. 15, no 174 I N300

NLC discloses what each state proposed as minimum wage ... Abia to pay N42,000 ... as NECA, MAN, NASME carpet NACCIMA JOSHUA BASSEY & KEHINDE AKINTOLA, Abuja

he leadership of Nigeria Labour Congress (NLC) on Wednesday disclosed how much each state initially proposed as minimum wage while insisting that it would not return to the negotiating table with the employers of labour, since the Tripartite Committee on National Minimum Wage has concluded its assignment. Ayuba Wabba, NLC President who reacted to the N22,5000 announced by Nigerian Governors Forum (NGF) at a press briefing held in Abuja, argued that the N30,000 new minimum wage is irreversible as over 50 percent of the Tripartite Committee on National Minimum Wage signed the agreement at the end of the negotiation which ended on the 5th October, 2018. “More than 50 percent of our members have signed the signature page. What were they signing if there was no agreement?” Continues on page 38

₦2,247,792.70

-0.05 pc

Buy

Sell

$-N 359.50 362.50 £-N 467.00 476.00 €-N 406.50 414.00

Market I&E FX Window CBN Official Rate Currency Futures

($/N)

fgn bonds

Treasury bills

Spot ($/N)

363.32 306.60

-0.16 12.62

-0.40 13.18

0.03

10 Y 0.01

20 Y 0.04

15.33

15.46

15.28

NGUS DEC 26 2018 364.27

NGUS MAR 27 2019 364.72

NGUS SEP 18 2019 365.62

FG shifts TSA transaction cost to businesses, individuals As new pricing regime commences today

ENDURANCE OKAFOR

he Federal Government has approved a new Treasury Single Account (TSA) tariff model which mandates that the service charge on payment to its ministries, de-

partments and agencies (MDAs) from November 1, 2018 would be borne by the payer. This was disclosed at the recently concluded One-Day Stakeholder Sensitisation Exercise on TSA e-Collection Charges held in Abuja on Tuesday October 30, 2018 which was

organised by the Office of the Accountant General of the Federation (OAGF). According to the AGF Ahmed Idris, “all funds collection into the TSA would require payers to bear the transaction cost.” The new model would replace the previous one, wherein the

federal government was responsible for paying the charges on all transactions to the service providers on behalf of payers. In the previous tariff regime, the Federal Government often owed the technology service providers such as Systemspecs Continues on page 38

Inside Presidency, EFCC quiet as more videos of Ganduje receiving dollar bribe emerges P. 2

Oscar Onyema (3rd l), CEO, Nigerian Stock Exchange (NSE). From left: Abisola Bisiriyu, financial controller; Dimeji Sonowo, executive director; Patrick Ilodianya, managing director, all of SFS Capital Limited; Motadeni of Union Capital Trustees, and Oladayo Osawemem, head, finance and mortgage asset, Union Homes REIT, during the closing gong ceremony by the executives of SFS Capital Nigeria Limited at the NSE in Lagos.

Nigeria falls to 146 on ease of doing business ranking ... Analysts see more foreign investors exiting MICHEAL ANI & CYNTHIA IKWUETOGHU

igeria has dropped a spot to 146th among 190 countries in the World Bank’s 2019 Doing Business Index (DBI) despite an improvement in ease of doing business score

from 51.52 to 52.89. A score not enough to move up or maintain Africa’s largest oil producer in its previous ranking. The country moved up 24 places in the 2017 edition of the report from its 2016 spot of 169 to 145. However, the country has

failed to up the scale, falling to 146 despite a 1.37 basis point improvement in its score; a situation analysts say may cause foreign investment to the country to fall more. “The poor ranking goes to show the structural challenges that Nigeria is going through

regarding poor infrastructure, difficulty of doing business around property rights and contract enforcement,” said Omotola Abimbola, a fixed income and currency research specialist at Ecobank. “It also explains why the rallying oil prices that Nigeria has

witnessed have not had major impact on the country because the private and the non-oil sector were not able to grow as it should and attract investment. Hence it is a wakeup call to policy makers that there needs to be a lot more work to be done.” The Doing Business Index is an annual ranking that objecContinues on page 38

2 BUSINESS DAY NEWS

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Thursday 01 November 2018

Buhari sends Yusuf, NHIS Executive Secretary, on administrative leave TONY AILEMEN, Abuja

resident Muhammmadu Buhari on Wednesday approved the establishment of a committee to investigate the embattled Executive Secretary of the National Health Insurance Scheme, NHIS, Usman Yusuf. Buhari also approved that the Execution Secretary should proceed on administrative leave with immediate effect to “create room for an unfettered investigation” according to a statement from the office of Secretary to the Government of the Federation, Boss Mustapha. In his absence, Ben Omogo, a Director of Administration in the Office of the Head of the Civil Service of the Federation has been deployed to oversee the affairs of the Scheme. The statement signed by Olusegun A. Adekunle, Permanent Secretary (General Services Office, the committee has Hassan Bukar, as Chairman. Other members include Emmanuel Meribole, Director, HPRS, FMH, Adewale Owolo, Director, Audit, (AuGF), Shamsuddeen Bello, Deputy Director Expenditure (OAGF), Ishaq Yahaya, Director, Certification & Compliance, BPP, Ekanem John Udoh, Director of Science (FMS&T), ummai Idakwo Director, Administration (OSGF), Member/Secretary. The term of reference include,

to investigate the alleged infractions listed by the NHIS Governing Council in letter, dated 18th October, 2018 and determine the extent of culpability or otherwise of the Executive Secretary with regards to the allegations. The committee is also to make appropriate recommendations based on the finding; identify, investigate and make recommendations with regards to issues that led to the unhealthy relationship between the Board and the CEO; Others include, Investigate and make recommendations on the extent of involvement of staff Unions’ within the institution as to the current impasse between the Governing Board and Executive Secretary; as well as, examine all governance challenges in the NHIS and make appropriate recommendations. The statement noted that it has considered it necessary to restate that the roles of Governing Boards, are as prescribed by the statutes, guidelines and extant circulars and that the position of Chief Executives of Parastatals is to ensure that policies of Government as enunciated by Boards and Councils are implemented in accordance with their mandate. “Government recognizes the importance of the Scheme as a strong mechanism for the delivery of public healthcare and wishes to re-assure all Nigerians of its determination to place high premium on public interest.

Property disposal, finance income increases 11 Plc Q3’s after tax earnings … Analysts expect size of lubricant market at over N405bn in 2022 CYNTHIA IKWUETOGHU

igh finance income together with profit from disposal of property, plant and equipment caused a growth in 11 Plc third quarter’s after tax earnings by 14 percent. The financial result of the Nigeria Mobil fuel and lubricants distributor for the nine months (9M) ended September 2018 showed that the firm grew its revenue from petroleum products marketing by 42 percent to N125 billion from N88.2 billion in 9M’2017. Similarly, Profit after tax rose to N7.9 billion from N4.6 billion, representing 71 percent growth. Highlights of the Q3 results showed that income from the sales of petroleum products grew by 22 percent to N39.2 billion year-on-year (YoY). The company reported more cost of sales by 26 percent from the figure reported in the prior year period. During this period, PAT declined by 14 percent to N2.4 billion from N2.1 billion which was mainly supported by 2,713 percent profit in disposal of property, plant and equipment coupled with a huge growth in finance income by 22,527 percent. The company was also able to manage its cost as finance cost declined by 83 percent. The company showed improved operational efficiency in third quarter as expense -to- sales ratio dropped to 5.4 percent from 7 percent in the previous quarter. This implied that 5 percent of the company’s revenues are used for operating expenses and is viewed as a positive sign. However gross margin for third quarter declined from the previous quarter (Q2) to 8.8 percent. This im-

plied that the company retains 0.088k from each naira of revenue generated. According to analysts at Investment One, “the drop in gross margin was weighed by higher landing costs of premium motor spirit (PMS), otherwise known as fuel. The higher landing costs reflected higher Brent prices witnessed during the quarter.” From the company’s financial position total assets and total liabilities dropped 7 percent and 21 percent as compared with the figure recorded in December 2017 on trade repayment and trade creditors respectively. On the other hand, total equity grew by 18 percent. Analysts at Investment One expect a growth in the cost to income ratio of the company in the next quarter, “given that crude oil prices are expected to climb higher when the US sanctions on Iran take full effect in November.” “Nonetheless, the firm looks set to record a decent performance in full year 2018 as its nine month 2018 profit after tax has already surpassed that made in the full year 2017. Our target price on the counter, based on our last review, is N246.38, which is a buy.” The company recorded an after tax earnings of N7.5 billion in full year 2017. Nevertheless, the lubricants market in Nigeria is expected to grow at a great CAGR to over N405 billion ($1.1bn) in 2022 on account of increasing purchasing power of people and increasing demand for synthetic lubricants in the country, retrofitting of old ships to keep them operational along with the rising marine trade, rising prominence of the middle class in Nigeria and the consequent boost in vehicle sales, Analysts at KenResearch,HeadMarketingstatedin a press statement on Bloomberg.

L-R: Chuka Eseka, president; Sonnie Ayere, immediate past president; Ike Chioke, 2nd vice president, and Samuel Chidoka, director of treasury, all of Association of Issuing Houses of Nigeria, at the 2017 annual general meeting and election of new officers in Lagos. Pic by Pius Okeosisi

CBN dollar reserves slide by $2bn in October ... steepest 1-month drop since February 2015 HOPE MOSES-ASHIKE

igeria’s external reserves fell by $2 billion to $42.06 billion in October 2018 the largest monthly drop since February 2015, in spite of the record increases in the price and production of crude oil. The price of Brent crude stood at $75.70 per barrel as at yesterday checks. Crude oil accounts for more than 90 percent of Nigeria’s foreign exchange earnings. Data from the website of the Central bank of Nigeria (CBN) show that external reserves stood at $44.02 billion at the beginning of the month precisely October 2, 2018. “This is expected in light of the capital outflows in the past months,” said Ayodeji Ebo, managing director, Afrinvest Securities Limited. However, he said the CBN has been able to manage the situa-

tion without causing a panic in the market. The domestic demand has grown significantly due to the speculations that the naira may depreciate after the 2019 general election, hence increasing buying interest. “The external reserves remain at a comfortable level despite the $2.0bn depletion in October. The CBN has continued to raise fixed income rates to reduce the capital outflows,” Ebo said in an emailed response. The country’s foreign buffers grew to $47.86billionasofMay10,2017from$23 billion as of October 2016, when the oil price was below $40 per barrel. It however,starteddecliningfromMay11,2018. “The need to manage the demand pressure in the foreign exchange market in order to keep the exchange rate stable around the current level is the main reason for the drop in the external reserves”,said Ayodele Akinwunmi, head, research,FSDHMerchantBankLimited, in an emailed response to BusinessDay. The CBN had in May this year an-

nounced the execution of a bilateral currency swap agreement with the Peoples Bank of China (PBoC). The transaction, which is valued at Renminbi (RMB) 16 billion, or the equivalent of about $2.5bn, was aimed at providing adequate local currency liquidity to Nigerian and Chinese industrialists and other businesses thereby reducing the difficulties encountered in the search for third currencies. It was expected also assist both countries in their foreign exchange reserves management, enhance financial stability and promote broader economic cooperation between the two countries. The CBN has continued to intervene in the foreign exchange with the most recent one being the injection of $210 million into the inter-bank foreign exchange market on Tuesday.

•Continues online at www.businessdayonline.com

Presidency, EFCC quiet as more videos of Ganduje receiving dollar bribe emerge Iniobong Iwok & Joseph Maurice Ogu

ver two weeks after the videos showing Kano governor, Abdullahi Ganduje, allegedly collecting and stocking wads of dollars into his babariga, neither the president nor the Economic and Financial Crimes Commission (EFCC) has said anything concerning the allegations. This comes as a new alleged bribery video of the Governor emerged yesterdayandisinsharpcontrasttothestance of the administration on opposition politicians accused of corruption. In scenes reminiscent of Nigeria’s Nollywood where videos are released in series, for the past two weeks, series of videos have been trending online allegedly showing the Kano State Governor, Abdullahi Ganduje, purportedly collecting brides from contractors. The videos show picture of a man stocking wraps of US dollars in his ‘babanriga’, a traditional cloth common in the northern part of the country. When

invited by the Kano State House of Assembly to explain the videos, the publisherofDailyNigerian,JafaarJafaar,who publishedthevideosinsistedtheperson on the videos is the governor, Ganduje. According to Jafaar, the said videos were recorded in 2017 after series of complaints from one of the contractors handling projects in the state, that Gnaduje allegedly collects kickbacks from him. According to the contractor, the kickbacks run up from 15 percent to 25 percent of each project carried out in the state. In one video, a man is seen pocketing money, which Jafaar puts at $230,000. The alleged bribe collected is said to have run up to N750m due from N3bn contracts awarded in the state. “Morethantwoyearsago,acontractor friend of mine complained to me that the governor had been receiving kickbacks, ranging from 15 to 25 percent, for every project executed in the state from contractors. We then agreed to plant spy cameras on his Kaftan lapel so that he can capture the brazen act in hard evidence. He captured at least 15

clips, nine of which fully showed the governor’sface,bodyandhandscollecting bundles of dollars,” Jafaar alleged. Ganduje has denied any wrong doing, insisting the videos either do not exist or were doctored. But Jafar maintained the videos are authentic and have been so verified by his technical team before being published. “In the case of the video clips in question, our in-house technical expert, the editor-in-chief and editorial adviser certified that the videos were original and not doctored contents.” He also added that “experts from Amnesty International, the British Broadcasting Corporation (BBC) and Premium Times also watched the clips and certified their authenticity before we went to press.” Although, information has it that President Muhammadu Buhari has ordered investigation into the issue, after watching the video, it is largely been kept under the carpet.

•Continues online at www.businessdayonline.com

Thursday 01 November 2018

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BUSINESS DAY

Thursday 01 November 2018

BUSINESS DAY

Thursday 01 November 2018

BUSINESS DAY

Thursday 01 November 2018

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

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BUSINESS DAY

In association with research@businessdayonline.com

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Analysts predict lull in construction activities for first quarter of 2019 … Retain an overweight rating for Dangote Cement stock KELVIN UMWENI

from N416.1 billion in Q3 2017. Sales at the Pan Africa region of the business remained relatively flattish, rising marginally by a meagre 0.1 per cent to 7 million tonnes. Increased prices boosted revenue in the region by 11.7 per cent to N214 billion in Q3 2018 relative to N191.9 billion in the corresponding quarter of the preceding year as a result of foreign exchange gains when converting the sales from foreign currencies into naira. “The average per-tonne price for Pan-African operations increased from N27,322 to N30,502 mainly as a result of changes in the exchange rate,” Dangote Cement Plc said in its nine months report

released to the Nigerian Stock Exchange (NSE) recently. But RMBNS believes the results were unimpressive relative to expectation. The not-too-impressive performance of the group was due to the Nigerian operation which delivered the weakest country earnings before interest, tax, depreciation and amortization (EBITDA) margin of 62.4 per cent post fourth quarter (Q4) 2016 and lowest volumes of 3 million tonnes post Q4, 2015. “Relative to our estimates, 3Q18 (9M) was lower by 24% (-8%). Also, Nigeria’s 3Q18 realised cement price declined by 3 per cent quarter-on-quarter (q/q), to

N43.2k/t (US$119/t) against our N44k/t, reflecting the increased need to offer rebates in a seasonally weak, rainy quarter,” RMBNS said in the note to investors. Meanwhile, RMBNS expressed satisfaction with the energy strategy of Dangote Cement especially the complete elimination of the use of LPFO and the use of locallysourced coal in its plants at Obajana and Ibese in Kogi and Ogun states respectively which drove gross margin of its Nigeria operation to 73.2 per cent in Q3, 2018. The growth in Pan-Africa COGS/t of N22.4k/t wiped off Nigeria’s stellar COGS/t of N11.6k/t and drove the group production costs up by 3 per cent quarter on

12734BDN

team of analysts at RMB Nigeria Stockbroking (RMBNS), a member of Rand Merchant Bank, have estimated that the earnings per share (EPS) of Dangote Cement Plc will decline by an average of 4 per cent over the estimated period of 2018 to 2020 citing weaker-thanexpected third quarter (Q3) 2018 results and a revised outlook for Nigeria’s cement consumption. As elections draw closer, it is expected that construction projects might not get much attention from policy makers in the first quarter of 2019. “We expect the impact of recent flooding to impact volumes in fourth quarter (Q4) 2018. We estimate Q4, 2018 volumes at 2.8 million tonnes (MT). Broadly, we now expect Nigeria’s 2018e and 2019e volumes at 13.6MT and 14.8MT (+9 per cent year-on-year) respectively. Our 2019e volumes are also c5 percent lower as we expect the electioneering process to cause a lull in construction across Nigeria through first half (H1)2019,” RMBNS said in a note to investors. Dangote Cement’s third quarter result reveals that over 17 MT of cement were sold in Q3’18 representing 7.6 per cent growth when compared with 16.5 MT sold in the corresponding period of 2017. The cement manufacturer’s revenue for the period surged by 13.5 per cent from N603.6 billion in third quarter (Q3) 2017 to N685.3 billion buoyed, as usual, by increased volumes in Nigeria and a price surge in its Pan-Africa operation. The Nigeria operation’s contribution to the top line in Q3 2018, from 10.8MT of cement sold (9.6MT sold in Q3, 2017),was 68.8 per cent (N471.3 billion) even though revenue from the operational region rose by 13.3 per cent

quarter to N16.7k/t sparking call for the energy gains by Nigeria to be replicated in the group’s PanAfrica operations. “While we like the energy gains from the Nigerian operation, we would like to see the Pan African operation deliver similar gains to support earnings. Reducing the Pan-Africa’s COGS/t by 14 percent, from current levels, could drive an EPS upgrade of 25 per cent on our estimates,” the report stated. However, Gbenga Sholotan, equity analyst at RMBNS stated in the report that “a material deterioration in Nigeria’s energy efficiency is a risk to computed estimates even though Nigeria’s cost of goods sold (COGS) per tonnes (COGS/t) is 6 per cent higher than reported in Q3.” Despite the slash in EPS, the stockbroker retained an overweight rating for Dangote Cement stock at a target price of N263 per share with an expected total return of 32 per cent, including a dividend yield of 4.2 per cent. “Our target price (TP) is lower – N263 (from N268) – and we reiterate our overweight rating (OW) for the stock as we see potential expected total return (ETR) of 32 per cent, inclusive of a 4.2 per cent dividend yield, from current levels,” RMBNS said. An overweight rating for a stock means that total return is expected to exceed the average total return of the analyst’s industry coverage universe, on a risk-adjusted basis, over the next 12 months. Dangote Cement is the most capitalised stock on the Nigerian Stock Exchange (NSE). As the close of business on October 30, 2018, its share price closed at N216 per share which amounted to N3.68 trillion in market capitalisation, and thus accounted for 30 percent of the market capitalisation of stocks listed on the NSE. At the end of the 2017 financial year, the cement giant paid N10.5 dividend per share.

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Thursday 01 November 2018

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Refinancing Eurobonds isn’t a good strategy for Nigeria

UCHE UWALEKE Uwaleke is a Professor of Finance & Capital market and the Chair of Banking and Finance Department at the Nasarawa State University Keffi

ecently, the Senate is reported to have approved President Muhammadu Buhari’s request to issue USD2.786 billion of Eurobonds to help fund part of the 2018 budget including a separate USD82.5 million to refinance the balance of USD500 million matured Eurobond in the international capital market. To be sure, debt refinancing simply means borrowing to retire maturing debt obligations and Nigeria’s experience with foreign loans does not recommend it as a good debt management strategy. Like debt rescheduling, it amounts to postponing the evil day even when it is contracted on a more favourable term. Arguably, Eurobonds can prove a veritable means of diversifying funding sources and plugging financing gaps especially when a country appears hamstrung in accessing low interest loans from multilateral institutions. The challenge however comes when such loans, contracted on commercial terms, are medium-term in nature and, worse still, not invested in self-liquidating projects giving rise to the often costly option of refinancing such debts. It is instructive to note that the decision to issue a 5-year USD500 million Eurobond

in 2013 after the country had successfully issued a 10-year USD500 million sovereign bond in 2011 was ill-advised. The entire USD1 billion Eurobond sales done in 2013 should have carried longer maturing periods to ensure proper matching with long-term funding requirements. The consequence of going for a 5-year medium-term commercial loan is the huge refinancing cost that the country will have to bear now that the principal repayment has kicked-in. Besides, it is doubtful if anyone can point to any infrastructure project that was executed with the proceeds of that USD500 million Eurobond issuance. It must be pointed out that this plan to issue new Eurobonds to retire a maturing one exposes the country to repricing risk which is the likelihood that interest rates will have increased when the maturing debt is due to be refinanced. It is equally important to bear in mind that the Eurobonds issued in 2013, which comprised a 5-year USD500 million bonds and another 10-year USD500 million bonds, were done on the heels of low interest rates in the United States and other developed countries. Today, market conditions are far from favourable. Interest rate hike in the United States and the fog over Brexit are bound to weigh on the proposed new Eurobond issuance. Not surprisingly, as reported by Bloomberg, some of Nigeria’s Eurobonds reversed their gains immediately after the Senate gave the approval. For example, yields on the USD1.25 billion of notes maturing in February 2038 raised five basis points from 8.29 per cent to 8.36 percent by 3:52 p.m in London that same day. It is a no brainer that yields are bound to trend upwards as foreign inves-

‘

Borrowing money from international financial markets is a strategy with enormous downside risks, and only limited upside potential – except for the banks, which take their fees up front

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tors price-in the growing political risk in Nigeria which is triggering capital flow reversals. Therefore, the new Eurobonds issuance will almost likely involve significantly high costs not least because of the weak output growth rates reported this year by the National Bureau of Statistics at 1.95 per cent and 1.50 per cent in the first and second quarters of 2018 respectively. It will be recalled that the IMF recently cut Nigeria’s GDP growth forecast for 2018 from the earlier 2.1 per cent to 1.9 per cent. The refinancing risk is heightened by the growing proportion of commercial debts relative to concessional loans in the country’s public debt profile. Despite accounting for less than 40 per cent of total foreign loans, Eurobonds (including Diaspora bonds) constituted over 56 per cent of actual external debt service payments in Q2 of 2018 according to data obtained from the Debt Management Office. All these are bound to influence the price of the new sovereign bonds. Therefore, given the country’s fiscal position and rising rates in the US, it is doubtful if refinancing the Eurobond would be done at a

lower cost. Much as the current strategy of using cheaper foreign loans to retire maturing short term domestic debts can easily be explained, the idea of issuing new Eurobonds to pay back part of an old one can only lead to suboptimal outcomes. As a matter of fact, once entrenched, the strategy of refinancing Eurobonds will only invoke on Nigeria what has been dubbed the “Eurobond curse’’ in finance literature. This curse arises from the increasing burden on the issuer of servicing a debt procured on unfavourable terms (at a very high cost) in a desperate attempt to overcome economic headwinds. In this regard, the warning of Joseph Stiglitz, a renowned economist, resonates with not a few Sub Saharan African countries already caught in the Eurobond web: ‘borrowing money from international financial markets is a strategy with enormous downside risks, and only limited upside potential – except for the banks, which take their fees up front’. According to reports, the federal government has already appointed Citigroup Inc and Standard Chartered Bank to jointly manage the transaction. In order to ensure that the refinancing risk does not materialize and is rendered irrelevant, there is need to put in place measures that make possible the repayment of any loan contracted over the term of the agreement. To this end, the government should consider not just increasing the size of the sinking fund already provisioned in the annual budgets but also having the discipline to systematically set aside funds to pay down the loan principal along with each interest payment. This will insulate the economy against future adverse macroeconomic conditions by reducing the bullet principal pay-

ments that would have to be paid especially in the case of sovereign bonds. As much as possible and consistent with the provisions of the Fiscal Responsibility Act of 2007, the government must ensure that longer-term funding requirements are financed with long-term concessional loans usually provided by multilateral institutions such as the World Bank and the African Development Bank. The reason is not farfetched. A 2015 World Bank study found that whereas multilateral concessional loans to Sub-Saharan African countries carry an average interest rate of 1.6 per cent and a maturity of 28.7 years, the financing from international sovereign bonds come at an average floating coupon price of 6.2 per cent with 11.2 years maturity period. It bears repeating that external commercial loans should only be used to fund priority infrastructure projects with the potential to pay back the loans. To the extent that funding mismatch could raise the potential for the crystallization of refinancing risk, conscious effort should be made to limit the scope of financing long-term funding requirements with medium term government borrowing obligations. Perhaps more than ever before, the National Assembly should step up oversight role over loan contraction and public debt management in Nigeria. All said, the country can avoid the dangerous practice of borrowing just to service debt through fiscal discipline at all levels of government, broadening the tax base, strengthening revenue collection and containing recurrent expenditure.

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The business of sports: Sustaining Nigeria’s first collegiate football league

OLUFEMI ISAAC OLATUNJI Olatunji is the Media Officer of Higher Institutions Sports League HiSL®. A PR consultant, public speaker and writer. He writes via: olatunjiolufemi45@gmail. com

ill the matches hold as scheduled? Will officiating be top quality as promised? Will the stadiums be ready? If yes, will they be filled? Will spectators and officials be safe? What will become of the league in years to come? These were some of the questions rightly asked by the media and some would-be sponsors, when PACE Sports and Entertainment Marketing in partnership with the Nigeria Universities Games (NUGA) launched, in August this year, what now stands as Nigeria’s first and only collegiate football league, the Higher Institutions Football League (HiFL). If the mantra about proof of concept being an important requirement for building trust is valid, then one may safely say that following the launch of HiFL, the opening game between UNILAG Marines and UNIBEN Royals did more than convince over 6000 spectators that a radically

new sporting initiative is born that will improve collegiate sports and further boost brand marketing in Nigeria. And even if, like me, you breathe an undying passion for football, you would quickly connect when I say the experience was spectacular. The scenes were amazing; players arrayed in beautiful brand crested jerseys, coaches relentlessly screaming instructions from the bench and fans belting out cheers amidst great ovation. Following the opening match, which ended in a 1-1 draw, spectators, football administrators, journalists and scouts already identified one or two amazing talents that they thought would go far in the competition and also excel should they consider a football career. As the league became more competitive, names like Ebuka David of UAM Tillers, Oripelaye Kehinde of OAU Giants, Ogunrombi Hawal of UNILORIN Warriors and JohnBosco Ekwochi of UNICAL Malabites became prominent in sport media reports with many wondering if the new HiFL will provide these bright youngsters the continuous support to achieve national and international accomplishments. However, like every other sport, identifying talent is not enough to develop a sustainable University football league and this is because, to develop sports effectively requires, among other things, a viable

sports policy, committed personnel, standard facilities and adequate sponsorship. Former super eagles coach Adegboye Onigbinde couldn’t have said it better than he did in his most recent October 1st interview in the Punch Newspapers when he opined that Nigeria’s problem with sports is not the absence of talents but the proper nurturing of these talents to achieve international success. Almost always, funding and sponsorship have remained major challenges affecting sports development in Nigeria and this should not be the case, considering the fact that sport is big business in more dynamic societies. As a matter of fact, a recent PwC report estimated that in 2015 global sports sponsorship reached $45billion – out of which Africa contributed less than $2billion – with South Africa shelling out the lion share. A different report by Repucom estimates that global sponsorship reached $62billion by 2017. Unlike Nigeria’s entertainment industry where brands are leveraging celebrities and local contents to connect with their targets, same cannot be said of sports since there are no viable local sports or even football leagues. As a result, these brands are somewhat restricted to entertainment as perhaps the only serious platform to connect consumers. So, instead of investing in building our domestic sports, these brands are giving priority to foreign platforms. Little wonder why about

N50billion is spent annually on TV rights and subscriptions, tourism, merchandising, just for the EPL at the detriment of our own local league. For a certainty, if there is a sport anywhere in the world that can easily get sponsorship and funding outside of government, football ranks high; having grown from being a factor for unity and entertainment alone to becoming a real business and a marketing platform. Because football sponsorship wields transformative power that is capable of driving exponential growth both in brand awareness and affinity, it is no surprise that many brands are fast turning to it, to drive awareness for their products - especially among a teeming youth target. So, when the 2018 Higher Institutions Football League kicked off, amidst investor apathy, few notable Nigerian brands saw the bigger picture. One cannot but salute companies and organizations that are not only encouraged by an enduring, extensive opportunity to connect with the youth segment but more importantly, deliberately seek opportunities to grow and support young talents as they diligently strive for their place in contributing to national development and pride. These organizations are not only about their brands or to turn a profit, they have demonstrated that they genuinely care about the present but also have an eye out for the future.

That leap of faith today, has earned these brands an increased customer base, stronger customer loyalty and top of mind awareness around and beyond the participating campuses, assets that drive revenue and growth. Truth is, there is a strong connection between brand building and sports that has not been fully explored in Nigeria because of a lack of strong sporting platforms and only a deliberate effort by discerning brands to leverage credible homegrown and sustainable platforms like the HiFL will help change the narrative of sports in Nigeria. Beyond sports, the league seeks a tie-in of international recognition of athletic success to the improvement of academic objectives, enhancing the overall reputation of higher institutions in Nigeria on a global scale. With 28 games played, the maiden edition of the HiFL final matches with the widest media coverage and reach are upon us this Saturday at the Agege Stadium in Lagos. As sports lovers nationwide look forward to who emerges winner of the HiFL 2018 between UNICAL Malabites and UAM Tillers there lies again another opportunity for more critical stakeholders, brands and businesses to get on board and be a part of the those changing the game for good.

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Thursday 01 November 2018

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COMMENT POSITIVE GROWTH WITH BABS

BABS OLUGBEMI Olugbemi FCCA, the Chief Responsibility Officer at Mentor as Leadership Limited and Founder, the Positive Growth Africa

igeria celebrated her 58th independence on Monday, October 1, 2018. The low-key celebration is understandable given the positions of the two divides-something to celebrate and nothing to celebrate groups. The yearnings of the majority of the Nigerians to live a life above average cannot be said to have been met given the level of poverty and the drama in our democracy. The fact that previous policies like the housing for all by the year 2000 have been a slogan without measurable impacts and the show of affluence by the few business and political elites has left much to be desired. However, Nigerians are hopeful. We believe the country will get it right and make histories like Singapore, Taiwan and a host of countries without the enormous resources Nigeria is endowed with. We look up to have visionary leadership that will one day write our names in history and create another Singapore story-from survival to fulfilling development among the nations of the world. One thing to celebrate in this year’s independence is the increasing political awareness of Nigeria’s

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Nigeria and the sustainable development goals populace and the call to the accountability of the people saddled with the resources and responsibility for governance. Though this is yet to be fully reflected in the electioneering process, a few examples are the loss or almost loss of power by the incumbents. To most Nigerians, the economic and social welfare of the citizens is important than who holds the political power. To effectively meet the yearnings of Nigerians for a better life, Nigeria must develop a yardstick of key governance indicators (KGIs) that are not disputable and in line with the global aspirations for the citizens around the world. The Sustainable Development Goals (SDGs) is the United Nations General Assembly initiative established in 2015 to drive an inclusive and minimum standard of living for people in the world by the year 2030. The seventeen SDGs are the summary of the one hundred and seventy-nine targeted objectives that are to be achieved to make the world a better place for living for people. The primary themes of the SDGs are: 1. No poverty, 2. Zero hunger, 3. Good health and well-being for people, 4. Quality education, 5. Gender equality, 6. Clean water and sanitation, 7. Affordable and clean energy, 8. Decent work and economic growth, 9. Industry, innovation and infrastructure, 10. Reduced inequality, 11. Sustainable cities and communities, 12. Responsible consumption and production, 13. Climate action, 14. Life below water, 15. Life on land, 16. Peace, justice and strong institutions and, 17. Partnerships for the goals. The assignment of the SDGs projects to a senior special assistant to the President and the creation of

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It takes visionary leadership to buy into and work in the interest of the people of Nigeria. A visionary leadership team will develop or align policies, create an enabling environment and administration of all the components of the country in the interest of the generality of the citizens

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a structure around it are laudable. Howbeit, the mandatory adoption of the SDGs at all levels in Nigeria will eliminate ambiguity in the direction the country is heading to. This uniformity of purpose is a platform for achievement and the yardstick of resolving the conflicts of the divides as to whether there is something to celebrate or not from October, 2019. Having uniform policy objectives from the federal to the local government levels will shape expectations and allow the performance appraisal of the people elected to act for others easier than envisaged. For the SDGs to be successfully pursued and achieved there must be a collective political will to create, align and drive relevant policies irrespective of political affiliations, religious or sectional beliefs. There is a call for a document with constitutional backing to align efforts in the same

directions and with the identified objectives in mind. Aside political will, SDGs 16 and 17 preclude others in the Nigeria situation. No growth and development will be achieved even if pursued with all the resources and effort except, there are strong institutions, peace and justice. That is where Nigeria might likely fail to be counted in 2030 when the review of the SDGs is being done. In the interest of Nigerians, the political elites should ensure justice without which having peace is an illusion. The independence of the judiciary, the legislature, the press and the entrenchment of the rule of law will create institutions that can uphold the aspirations of a society worthy of having for Nigerians. SDG 17 demands the partnerships of all in driving all the other sixteen SDGs. The partnerships are stronger if it starts within the country. For, SDG 8, decent work and economic growth to be achieved, the institutionalization of the private sectors in inevitable. Thus, the private sectors must be deeply involved in the people’s mental well-being and balance as the employers of labour. The private sectors’ supports and involvement cut across most of the SDGs 1 to 12. However, a score of 8 out of 10 in SDGs 3, 8, 9, 11 and 12 will complement the government efforts. It takes visionary leadership to buy into and work in the interest of the people of Nigeria. A visionary leadership team will develop or align policies, create an enabling environment and administration of all the components of the country in the interest of the generality of the citizens. A visionary leadership will live above the religion, ethnicity and sectional bias and upload the tenets of the Nigerian constitution.

One area of alignment is the way our public officers’ achievements are measured and benchmarked. The political office holders under the SDGs’ environment will not attribute the outcome of governance to self. The resources are of the people and not personal. People should have the right perspectives of the achievements of the public officers. Having the right perspective that public officers are custodians of resources, and not the owners will reduce the praise-singing industry and sponsored accolades. At the institutional levels, the budget sessions of the federal, state and local governments, the state competitive index rating, the performance rating of the private sectors, the non-profit organisations and all the key governance indicators (KGIs) should be benchmarked with the 17 SDGS goals. The award of contracts or grants should have a section for the SDGs effect analysis. The rating organisations should hence, measure the impacts of business entities on SDGs outside the size of profits and return on investments to shareholders. The award issuing bodies should align the awards to individuals and organisations to focus on the contributions to the achievement of the SDGs. In conclusion, all the sectors of the economy are important and needed to make Nigeria a country we will all be proud of by 2030, a country to be counted for the SDGs’ achievements. In achieving this, one class of the Nigerian workers who deserves more focus is the teachers. The teachers will drive and sustain the achievement of the SDGs beyond this generation of the citizens.

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Nigeria: Real estate asset pricing (2)

ADENEKAN ADENIRAN Adeniran is Principal at FRISIA Partners (www.frisiapartners.com)

Continue from yesterday …

ith price, value and worth broadly understood, consideration should be given to capital and cost of capital used to acquire real estate. Cost of capital All capital, debt or equity, has a cost, with debt generally considered cheaper than equity. In any (investment) market, debt (and cost of debt) is a vital element, which serves to, inter alia, improve return on (equity) investment. In broad terms, the start point for the cost of debt is to determine the risk-free rate, which is the rate at which sovereign entities i.e. governments borrow, then add a risk premium for borrower risk and investment risk. In Nigeria, the Nigerian naira risk-free rate would

be the yield on Treasury Bills (10% to 12.6%), or for long term borrowing, the yield on 5-year or 10-year bonds (12.8% to 14.69%) whilst the United States dollar risk-free rate would be Nigerian Government Eurobonds (7% to 8%). Borrower risk and investment risk could be upwards of 2% depending on a host of considerations. Assuming a total (borrower and investment) risk premium of c. 2% or 3%, then the cost of long term debt should be no less than c. 15% or 16% in Nigerian naira and c. 9% or 10% in United States dollar. Considering central government securities (treasury bills, bonds) are considered risk-free and other investment asset classes are priced (with a risk premium) relative to the risk-free rate, then no asset class should be priced or yield a (total) return lower than the riskfree rate……..unless the investment is seen and accepted to be more secure or less risky than sovereign / government securities. Real estate investment is certainly not considered to be more secure / less risky than government securities even with a very good quality tenant in occupation on a long lease. In addition, to the extent that debt (priced as explained above) is utilised in the acquisition of real estate investment, then the real estate investment must have total return in excess of the cost of debt i.e. a yield in excess of c. 15% or 16% in Nigerian naira and in excess of c.

9% or 10% in United States dollars to service the debt; and capital growth to compensate for the risk of investment. Otherwise, the investment total return would not suffice to service the interest on the debt never mind amortise the debt and compensate investor. Note: It is possible, and there could be significant value in buying an asset at an initial yield lower than the cost of debt if the purchaser believes that a reversionary yield in excess of the initial yield can be achieved. The reason for this is likely to be that a rent review is imminent or the asset has high vacancy. The value in a transaction of this nature would be the purchaser’s ability to maximise annual rent at rent review, or minimise vacancy within the asset in the shortest possible time or both. In any event, the purchaser’s key initial objective would be to achieve reversionary yield (in excess of cost of debt) as soon as practically possible. Back to value Only when real estate yields (initial and reversionary) are in the range suggested above would real estate as an investment asset class be attractive to retail and institutional investors when compared against other investment asset classes. When considered from this perspective, the logical conclusion is that real estate assets, with initial yields of c. 5% to c. 9% (i.e. multiples of c. 11 to 20) on Nigerian naira net annual income, are significantly overvalued especially in the absence of

real capital growth and reversionary yield to support an attractive total return (which is not based on yield compression). With real estate yields as explained and determined above, multiples on Nigerian naira net annual income from real estate should be in the range of 6.90 (c. 14.5% yield) to 6.25 (16% yield) in the absence of real capital growth to derive a total return in excess of cost of debt. The yield could reduce slightly in a market with a deep tenant pool (therefore low vacancy rates) and stable currency. For completeness, real capital growth is based, largely, on increases in rental income over and above prevailing inflation during the hold period of the investment. An asset bought and sold at the same yield but with the benefit of rental income growth over and above prevailing inflation would have the benefit of capital growth and would be likely to derive a positive total return. The above suggests that real estate asset with a net income of ‘say’ NGN 5 million per annum currently valued and priced at c. NGN 83.33 million based on a yield of 6% is significantly over-valued and should, perhaps, be more appropriately valued and priced at c. NGN 35.5 million based on a yield of 14.5% especially if a rent review is not imminent and real capital growth is not certain. Over-valuation is one of the reasons real estate financiers are

often asked by agnostic investors: ‘why invest in real estate for a yield of x% (without certainty of real capital growth) when an investment in government securities can be made for a yield of 1.5x% or 2x%? Whilst it could be argued that any difference between price and value of an asset is down to demand and supply and market inefficiency, price, we know, would equal value at transaction completion. The issue of worth, and trying to equate worth to value or price, should not occur nor should it be permitted in any market. For prudent and competent real estate pricing, consideration should be given to whether an investor/a purchaser would be willing to acquire an asset that yields a total return that is far less than the cost of capital and if, indeed, the cost of capital has been considered, determined and understood. Should an investor or purchaser be willing to accept a total return less than cost of capital, then, it seems value creation is not the objective of investment and, perhaps, the source of the capital ought to be questioned. In order to create value within the real estate industry in Nigeria, it is incumbent on all participants in the sector to consider international best practices in real estate asset valuation and pricing and ensure that over-valuation/unjustifiable pricing (based on worth) is avoided.

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Frank Aigbogun EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

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

Thursday 01 November 2018

Killing of Shiites in Nigeria

n December 12, 2015, the military took the law into its hands and massacred over 347 members of the Islamic Movement of Nigeria (IMN) who allegedly blocked the convoy of the Chief of Army Staff, Lt.-Gen. Tukur Buratai. Although the military has used several lies to justify the killings, a panel s et up by the Kaduna state government to investigate the killings indicted the Nigerian army for the Zaria massacre. Specifically, the panel indicted Maj. General Adeniyi Oyebade, the General Officer Commanding the Nigerian Army’s 1st Devision in Kaduna for authorising the operation. The Panel only stopped short of indicting the Chief of Army Staff General Burutai who also bears responsibility for, and has defended, the killings on several occasions. Regardless, the army stands accused of grave killings of civilians and crime against humanity. The Panel rightly pointed out that the killings are a crime against hu-

manity and those responsible must be brought to justice. The report also blamed the leader of the Islamic Movement in Nigeria (IMN), Sheikh Ibraheem El-Zakzaky for the clash and recommended that he should be investigated and prosecuted. The government said that the action was taken to preserve peace and stability in the state. Since then, the members of the group – this time not only in Kaduna but also in Abuja, Kano, Katsina and Jos have been protesting the government’s actions and also demanding for the unconditional release of their leader, ElZakzaky, his wife and other members of the IMN who had been in detention unlawfully since their arrest in 2015 following the sect’s clash with the Nigerian Army. Sadly, the sect’s members are being systematically mowed down and killed in several states for protesting the ban on their sect and the continued incarceration of their leader and members or for simply embarking on their religious processions. On Monday again, soldiers opened fire on the group who were on a religious procession which began from the Suleja area

of Niger State. They encountered soldiers around Zuba, a satellite area of Abuja and issues quickly escalated. Videos appeared online showing irate members of the sect throwing stones at soldiers with soldiers shooting live bullets at them as if in a way situation. Hostilities resumed again on Wednesday in Wuse, Abuja with security agencies shooting members of the sect protesting the killing of their members. We note the increasing crackdown on Shia Islam in Nigeria since the ascension to the president of Mohammadu Buhari, a Sunni Muslim. In 2016, President Buhari confirmed Nigeria’s membership in the Islamic Coalition against terrorism formed in 2015 by Islamic countries following the order of Saudi Arabia, the leading Sunni nation. Iran was conspicuously left out of the coalition. On the surface, it appears an innocuous move, but underneath the move is a pandering towards Saudi Arabia and other Sunni countries who have never hidden their hostility towards Shia Islam. To make matters worse, the Nigerian government condemned the Iranian-

backed Shia Houthi militia resistance group fighting the Saudi-backed government of Abid Rabbo Mansur Hadi in Yemen for targeting the Holiest city of Islam, Mecca, in a ballistic missile attack – a claim hotly disputed by both the Houthis and their Iranian backers. The reality is that the Buhari government is dragging Nigeria into a SaudiIran proxy war. Paradoxically, those two countries have somehow managed to keep this conflict out of their lands, and have turned other countries into proxy battlefields for political supremacy. We note and commend the restraint show by Shiites who, despite the shocking scale of persecution and killings, have not resorted to taking up arms against the Nigerian state. Nigeria is still a volatile country trying to overcome the Boko Haram insurgency. It cannot afford another deadly conflict. We urge the federal government to desist from persecuting the Shia’s in Nigeria, release its leader on bail as granted by the courts and also punish all those involved in the killing of IMN members. A stitch in time saves nine.

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Thursday 01 November 2018

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DAY

Seplat eyes expansion, records 103% revenue growth in Q3

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

Respite for SURA Market as CWG provides metering for electricity MICHEAL ANI

WG Plc, one of Nigeria’s pioneer Smart Meter providers, on behalf of the federal government has provided metering for over 1000 shops in SURA market in a bid to eliminate consumer’s complaints on estimated billing. The firm alongside other stakeholders in the country’s power and energy sector, also joined the Nigerian vice president, Yemi Osinbajo in commissioning the 1.5megawatts SURA off-grid independent power project in Lagos, as part of its Energizing Economies Initiative (EEI), targeted at empowering the Small and Medium Scale (SME’s) businesses across the country. “In this particular project, we have provided the metering infrastructures which consist of smart meters to the shops plus a close monitoring system so that the operators can monitor in real time how much power is being consumed by each person, they can see in real time the cash that is coming in, they can also see in real time how much power they are supplying, how much power is being paid for and how

much is being consumed”,James Agaba, managing director/ CEO for the CWG Plc, said. The Energizing Economies Initiative (EEI) is an initiative of the federal government of Nigeria that was launched on September 2017. It targets the Micro, Small, medium Enterprises (MSMEs) with the objective of supporting the rapid deployment of Off-grid decentralized electricity solutions that will provide clean and consistent power to economic clusters in Nigeria through private sector developers. The initiative is being implemented by the Rural Electrification Agency (REA), which is an agency under the Ministry of Power, Works and housing. The aim of the EEI is to increase energy access and economic growth by assisting private sector developers to provide clean, reliable and affordable power to economic clusters such as markets, shopping complexes and agricultural/industrial clusters across Nigeria. Agaba noted that the ‘Smart Metering Solution’ which works in the form of a connected mobile app for electricity consumers – both the Maximum Demand Customers (MDCs) and the Non-maximum Demand

Airtel has the widest 4G network coverage in Nigeria – Ogunsanya JUMOKE AKIYODE-LAWANSON

egun Ogunsanya, chief executive officer/MD of Airtel Nigeria says that the telecommunications operator has the widest fourth generation long term evolution (4G LTE) network coverage in the country. Speaking at the formal launch of Airtel 4G in Lagos, Ogunsanya said that although the telco does not claim to be the first to deploy 4G network in Nigeria, it can proudly say that it has the widest reach, having launched its 4G network across 60 major cities and towns in 16 different states of Nigeria. “Airtel’s 4G network is now in over 60 major cities and towns in Nigeria across different States, making Airtel the network with the widest and largest 4G coverage in the country,” he said. The Airtel CEO also noted that the Airtel 4G launch in Lagos “serves as a glowing testimony of our commitment to partner and empower the good people of Lagos, a truly cosmopolitan state where dreams come true. “We know Lagos has its own spirit – a can-do spirit and it also has its own peculiar energy, which is very fast-paced. “The good news is that Airtel 4G will help everyone in Lagos to do more and achieve more, regardless of status and location. “With fast mobile Internet, a young professional will be able to use

his map to understand the traffic network, plan and connect with the right people. The tailor will be able to take measurement through video calls; the fish seller will be able to share photos and short videos of his current stock. Ditto every other person. “Indeed, 4G comes with tons of benefits and the possibilities are endless: it will accelerate economic and commercial activities; it will boost personal and professional productivity; it will help in creating more entrepreneurs; it will offer the youth a big leverage to express their creativity and talent; it will improve the overall quality of life and connect more people to their dreams,” he said. Early this year, Airtel began an interesting journey of building the largest and most robust 4G – LTE network in Nigeria. On the 13th of February, 2018, the telco recorded a major milestone with the pioneer roll-out of its 4G network in Ibadan, Oyo State, to the delight of many Nigerians who live in the ancient city. Since the pioneer launch, Airtel had not looked back. On Thursday, 4th May, 2018, it unveiled its 4G service in Abuja, the nation’s capital while on the 19th and 25th of September, it announced the launch of its 4G service in major towns and cities in Anambra and Delta states. Ogunsanya and Nyesom Wike, the executive governor of Rivers State, on the 27th of September, formally unveiled the Airtel 4G service in Port Harcourt and other cities in the state.

L-R: Femi Odugbemi, academy director, MultiChoice Talent Factory; Emeka Mba, formal director general, National Broadcasting Commission; John Ugbe, chief executive officer, MultiChoice Nigeria; Caroline Oghuma, executive head of corporate affairs, MultiChoice Nigeria, and Abraham Linus, lecturer, MTF, during the Book presentation to MultiChoice Talent Factory Library by Emeka Mba.

Customers (NDCs), was initiated to address the power challenges in Nigeria, initiated and designed a “This Smart Metering Initiatives has the capacity to eliminate power theft, which has hitherto dwindled the fortune and revenue of the Power Distribution Companies (DISCOs)”, Agaba said. The CWG Smart Metering initiative is keyed to

Government’s smart technology solutions driving smarter cities. The solution has a dashboard which helps the Power Distribution companies detect power theft, monitor and measure usage for improved efficiencies”. He said the company has also developed various types of metres that will be well suited for the youthful population including those metres that has Wifi,

NIDAS, NNPC subsidiary, returns to global oil shipping market FRANK ELEANYA

he Nigerian National Petroleum Corporation (NNPC) has announced the re-entry of its subsidiary, NIDAS Shipping Services, into the international shipment of crude oil and petroleum products, seven years after falling out of reckoning in the global oil freighting trade. NIDAS’s re-entry is in tandem with the ongoing strategic re-engineering of some NNPC subsidiaries to ensure multiple income streams and value addition to the corporation in line with the aspiration of the corporation’s Group Managing Director, Maikanti Baru, a release by NNPC Group General Manager, Group Public Affairs Division, Ndu Ughamadu, has stated. The corporation explained that as a first step to regain its market position, NIDAS has established a robust chartering and operation desk in its UK office to help the company secure sea-going vessels from spot market to herald its market re-entry and foster strong competitive edge. Already, the company’s presence is generating some positive traction in the international freight space as

global tanker fixture’s report last week acknowledged the chartering of LRI tanker, MV Atlantica Bridge by NIDAS to load jet fuel from El Dekheila Port, Egypt for delivery to Nigeria for Duke Oil. The fixture report also captured NIDAS booking of tanker Res Cogitans to load Mercuria’s gasoline cargo for early-November loading from Europe’s ARA (AmsterdamRotterdam-Antwerp) region to Offshore Lagos. NNPC said that as part of strategy to ensure effective participation in the entire supply value chain, NIDAS would optimize right of first refusal offer in the NNPC annual crude oil term and DirectSale-Direct Purchase (DSDP) agreements with off-takers. Under the terms of the deal, the off-takers are obligated to offer the NNPC shipping subsidiary the right of first refusal in freighting of cargoes. The long-term aspiration of the company is to own and operate fleet to secure a significant market share in the global shipping market. Ughamadu said the development was part of the GMD’s 12 Business Focus Areas (12BUFA) which he unfolded when he took over the leadership of the corporation in 2016.

and hot spot that when you put is in your house, the user will start getting internet services. According to him, the solution is designed such that it alerts the power companies with the precise location a theft is occurring at in near–real time, not more than three minutes after it happens, without requiring large equipment deployment. In June this year, The Nigerian

Electricity Regulatory Commission (NERC) approved CWG alongside seven other firms to participate in the distribution and installation of prepaid meters. This approval provided an opportunity for CWG to approach major DISCOs to be positioned as their registered Smart Metering vendor; under the Smart Utilities Sector of CWG’s operations.

World Quality Alliance holds global quality excellence awards

orld Quality Alliance, a global quality organization has concluded the plans to hold the Global Quality ExcellenceAwardsfor2018.Theaward is meant to celebrate excellence in quality conformance to customer needandpromoteawarenessofthe importantcontributionsthatquality makestowardanation,ororganization’s growth and prosperity. The event is scheduled to hold in Lagos on the 8th November 2018 which is also the World Quality Day. In a global economy where successdependsonquality,innovation and sustainability, the award is your chance to reinforce these, as the foundation of your organizations and brand for their achievements in improving brand/business performance. The award is organized by the world quality alliance with the support of chartered quality institute. The two organizations made an alliance to improve relationship in order to intensify the global commitment to quality principles and their application in all segments of the society. The theme of this year World Quality Day is “Quality: A Question of trust” Reputations are built on trust. Trust is a hard-earned commodity, yet one which can be squandered in a moment. Therefore, in 2018, we are celebrating the role that everyone in an organization

plays in building and sustaining trust for stakeholders: customers, suppliers, staffs, regulators, shareholders, and society. Hardly a day goes by without reading about quality failure and its impact on the customers and stakeholders or organizations: Grenfell, Facebook, Kobe Steel and BMW to name a few. These stories beg two questions Firstly, about organizational competence and secondly, about organizational integrity. The quality management profession is about helping organizations put in place competent system to ensure that the activity of an organization consistently delivers on its promises to customers and stakeholders, an assurance framework to help the organizations understand operational risk, and an improvement framework to mitigate and improve it. These systems of governance, assurance and improvement combined with your culture of quality are your investment in trust and reputation.Thequalityprofessionis your business partners in enhancing trust in your organization. Quality professionals are the people who support and develop qualitycompetenceandcultureusing their unique view across the organizationanditsstakeholders,and their unique skills in establishing systemsofoperationalgovernances, assurance and improvement.

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Friday 26 October 2018

Business Event

Seplat eyes expansion, records 103% revenue growth in Q3 DIPO OLADEHINDE & DAVID IBIDAPO

eplat Petroleum Company Plc has announced a 103 percentincreaseinrevenue to N173 billion in the first nine months of 2018. The company also announced plans for an ‘organic and inorganic’ expansion of its operations. “We plan to build on this performance in the coming quarters aswestep-uporganicdevelopment activities across our existing portfoliowith headroom to also capitalize on inorganic growth opportunities as and when they may arise, in line with our price disciplined approach,”AustinAvuru,Seplat’sChief Executive Officer (CEO) said. Seplat’s Boss noted that the company has continued to deliveronitsproductiontargetswhich combinedwithanoilpricetailwind, hasresultedinyetanotherconsecutive quarter of very strong financial performance and profitability as the current business generated significant free cash flow. The strong performance in revenue boosted gross profit for the period by 145 percent from N38.08

billion in 2017 to N93.5 billion in 2018. Components of Seplat’s Revenueincludedproceedsfromcrude oilsalesofN134.8billionwhichwas up97percentfromthecomparable periodin2017asproceedsfromgas sales increased by 48 percent from N26.3 billion N38.8 billion within the same period. Operating profit surged by 396 percent from N16.3 billion to N80.7 billionwhichwasdrivenmajorlyby other income. Despite the significant rise in operating profit, the company also sawasurgeof324percentinfinance income to N2.05 billion from N483 million in 2017, which also further drove Profit Before Tax (PBT) and Profit After Tax (PAT) to N65 billion and N27.9 billion from a loss of N760 million and N1.62 billion in 2017 respectively. Investment managing firm CardinalStone Research, in an investment note to clients, said the company’s income was quite impressive. It noted that the firm’s major profitability drivers were crudeproductionandcrudeprices. “We anticipate similar stellar performance in the next quarter as theTransForcadosPipeline(TFP)is

expectedtoremainfunctionalwhile Brent continues to trade within the bandof$70-$80/bblintheinterim,” analysts at CardinalStone Research said. Gas sales performance moderated to 119 MMscfd in 2018 from the second quarter quantity of 152 MMscfd the lowest in the last four quarters, as some off-takers resorted to fuller hydroelectric dams for power generation during the quarter. CardinalStone Research said it expect sales of natural gas to inch up in 2018 when the dry season kicks in and major off-takers fall backtogasthermalplantsforpower generation. “The firm remains committed to diversifying the risk of over-reliance on the TFP as the AmukpeEscravosPipeline(AEP)isexpected to come online in 2018,” CardinalStone Research said. The company recorded other incomeofN6.25billionfromUnder lift and Reversal of N521 million of financial assets compared to 2017 with no record of this transaction. Also, the report revealed Seplat recorded no Over lift or Under Lift compared to an Over lift of N9.5 billion recorded in 2017.

Asharami Synergy highlights growth enablers for downstream oil sector OLUSOLA BELLO

heemerging‘downstream of the future’ will require a change in operating business model to accommodateamoreintegrateddownstream value chain, service differentiation through technology and shift to importingcleanerfuel,MorotiAdedoyin-Adeyinka,managingdirector, Asharami Synergy Plc has said. She said the sector’s future would require increased Investments in Downstream Infrastructure, Regional and Pan-African Expansion Opportunities and Increased Integration along the Downstream Value Chain. Adedoyin-Adeyinka who was speaking ahead of the OTL Africa Downstream Conference holding in Lagos said: “There is a strong prospect for growth in Africa’s downstream sector that will be

driven by the emergence of ‘New Majors’ like Asharami Synergy. We are passionate about transforming the sector and believe the OTL platform will throw up key issues all stakeholders need to address as we align with regional and global trends in the sector,” According to the Synergy boss, who delivered a key note address on ‘Takeovers and Markets: The changing roles of Independents and Majors in downstream petroleum’ , explained that Asharami SynergyPlcwasformedasaresultof theconsolidationofSaharaGroup’s downstream entities and this has enhanced its position as a leading vertically integrated downstream business with vast experience in delivering fueling solutions across Sub-Saharan Africa. “It’s a new dawn for the downstream sector and Asharami Synergy remains committed to spearheading and supporting

thoughtleadershipplatformsonthe continent to enhance stakeholder capacityforleveragingdownstream growthopportunitiesandnegotiating industry challenges.” Asharami will also engage various stakeholders at the OTL exhibition to discuss its suite of specialized services, including Product Importation, Vessel Chartering and Product Sourcing on behalf of Third-Party Clients. Other services include construction and bulk storageofPremiumMotorSpirit(PMS), Aviation Turbine Kerosene (ATK) and Automotive Gas Oil (AGO) as well as marketing and distribution of bulk, retail, industrial, commercialanddoor-to-doorwhiteproduct sales and lubricant sales. Asharami currently supplies 27 percent of Nigeria’s aviation fuel demand and supplies significant share of Nigeria’s Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO) requirements.

R-L: President Muhammadu Buhari receiving an advocacy document on Maritime Reforms and Petroleum Industry from Babatunde Ruwase, President of The Lagos Chamber of Commerce and Industry (LCCI), during a courtesy visit by the Chamber to the State House in Abuja, recently.

L-R: Laoye Jaiyeoba, chief executive officer, Nigerian Economic Summit Group (NESG); Tarik Bouquoquo; Oby Ezekwewili, senior Economic Advisory, African Economic Development Policy Initiative (AEDP); Karim El-Ayanoui, managing director, OCP Policy Centre, and Mohammed Hariri, managing director, OCP Africa Fertilizer Ltd, Nigeria, at the recent Morocco-Nigeria Relations Strategic Dialogue held in Abuja.

L-R: Clem Ugorji, director, public affairs and communications, Coca-Cola West Africa Business Unit; Bala Yusuf, technical director, office of the senior special assistant to the president on SDGs; Chinyere Ezeaka, professor of paediatrics, Lagos University Teaching Hospital, Idi-Araba, and Dr Adedamola Dada, chief medical director, Federal Medical Centre, Ebute-Metta, during the Coca-Cola stakeholders parley on ‘Enabling Safe Births in Nigeria’ in Lagos.

Increased premium boosts AIICO’s underwriting profit BALA AUGIE

double digit growth in premium income amid a volatile and tough macroeconomic environment has spurred AIICO Insurance Plc to growth as the insurer returned to underwriting profit. Experts say it takes ingenuity on the part of management and board of directors to record strong growth at top line (revenue) in an environment fraught with rising inflation, low purchasing power among consumer, and volatile currency. They also added that the board of the Nigerian company are poised to delivering high return on investment to shareholders.

For the first nine months through September 2018, AIICO recorded underwriting profit of N2.29 billion from a loss position of N837.64 million as at September 2017. An increase in revenue, which helped absorbed rising claims and underwriting expenses, added impetus to underwriting profit as the company’s diversified product base and solid marketing strategy continues to underpin revenue. Gross premium written (GPW) rose by 17.72 percent to N27.67 billion in the period under review from N23.50 billion as at September 2017; the growth was largely driven by a 27.23 percent uptick in Life business to N17.24 billion in the period

under review. Gross premium income (GPI) and Net premium income (NPI) rose by 15.97 percent and 12.93 percent to N25.92 billion and N22.16 percent in September 2018 from N22.35 billion and N19.62 billion the previous year. The company plans to expand its product base as it got a nod from National Insurance Commission (NAICOM) to underwrite Agriculture. Agriculture sector is largest contributor to the country’s GDP. While Aiico recorded stellar performance, the industry is grappling with lingering apathy for Insurance by the Nigerian populace-driven largely by cultural & religious belief- and a sluggish economic growth.

L-R: Uche Ebemere, manager, corporate communications, MTN Nigeria; Gbenga Yusuf, creative director of ‘Legends the Musical’; Pamela Emodi, manager, education portfolio, MTN Foundation; Nonny Ugboma, executive secretary, MTN Foundation, and Ayo Ajayi, music director and composer/arranger of ‘Legends the Musical’, at the premiere of MTNF sponsored ‘Legends the Musical: Kings and Kingdoms’ at the MUSON Centre in Onikan, Lagos.

Thursday 01 November 2018

BUSINESS DAY

Thursday 01 November 2018

BUSINESS DAY

C002D5556

Investor

In association with

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

Year Open

38,243.19

Market capitalisation

N13.609 trillion

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,564.13

1,713.69

1,087.32

Week open (19 – 10–18)

32,841.69

N11.990 trillion

2,403.05

1,442.39

792.33

Week close (26– 10–18)

32,907.33

N12.014 trillion

2,414.24

1,441.81

786.19

Percentage change (WoW) Percentage change (YTD)

0.20 -13.95

0.47 -5.85

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

330.69

2,560.39

1,975.59

1,379.74

745.76

285.87

2,264.56

1,520.01

1,219.48

738.56

297.65

2,272.47

1,458.35

1,218.91

NSE Banking Index

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

1,746.68

475.44

139.37

1,474.26 1,476.17

416.20

124.29

420.89

124.88

NSE 30 Index

-0.04

-0.77

0.13

-15.87

-27.69

-15.49

1.13 -11.47

0.47 -10.40

976.10

-0.97 -24.34

4.12

0.35

-4.06

-0.05

-9.99

-11.25

-26.18

-11.66

Mixed sentiments trial stocks outlook despite recent gains F

FDI into Africa rises, Morocco joins South Africa as leading investment destinations

IHEANYI NWACHUKWU

he feelings of many research and economic analysts seem varied particularly on the future performance of the Nigerian stock market. Their views come on the heels of more value hunters at the local bourse seen leveraging the previous dip in prices to buy Nigerian stocks. This is even pronounced now that more companies’ third-quarter (Q3) scorecards are stimulating investment appetite in equities. For instance, as more corporates rushed to the Nigerian Stock Exchange (NSE) to meet deadline for the submission of their scorecards, increased buy momentum pushed prices higher leading to the NSE All-Share Index and market capitalisation appreciating by 0.20percent to close last week at 32,907.33 points and N12.014 trillion respectively. In the review trading week to Friday October 26, twenty six (26) equities appreciated in price during the review week, higher than twenty (20) recorded in the preceding week. Forty (42) equities depreciated in price, the same as forty (42) in the preceding week, while 101 equities remained unchanged lower than 107 equities recorded in the preceding week. Similarly, all other indices finished higher with the exception of the NSE-Main Board Index, NSE ASeM index, NSE Consumer Goods index, NSE Industrial Goods Index and NSE Pension Index that closed lower by 0.04percent, 0.77percent, 0.97percent, 4.06percent and 0.05percent respectively. In their 2019 emerging and frontier markets outlook piece, Charles Robertson-led team of economists at

Moscow-based Rencap noted risks to Nigeria’s markets. “In Frontier Markets, we focus on the ratio of debt to government revenues, with concerning implications for Nigeria and a fair few others in Africa and FMs. Nigeria’s GDP disappointed us in 2018, but we see upside risk if oil stays high in 2019 and if fiscal/monetary policy is more probusiness after the elections”. “Despite recent gains, we remain conservative in our outlook for equities in the short to medium term, amidst brewing political concerns, and the absence of a positive trigger. However, stable macroeconomic fundamentals remain supportive of recovery in the long term,” said Cordros Capital research said in their October 26 note. “With investors continuing to monitor earnings releases,

sentiment was varied through the review week though supported by strong gains at week close. We expect further releases to sustain current activity levels in the market, however with sentiment still mixed across board”, according to Vetiva Capital Research. United Capital Research analysts expect investors to continue crunching numbers from the nine months 2018 earnings publications to make decisions this week “even as events in the broader economy and political space unfolds.” Stock market in review A total turnover of 1.454 billion shares worth N15.263billion in 16,682 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 1.380 billion shares valued at N15.149 billion that exchanged hands last week in 14,033 deals.

The Financial Services Industry (measured by volume) led the activity chart with 1.220 billion shares valued at N9.480 billion traded in 10,520 deals ; thus contributing 83.94percent and 62.11percent to the total equity turnover volume and value respectively. The Conglomorates Industry followed with 92.190 million shares worth N452.948 million in 719 deals. The third place was Consumer Goods Industry with a turnover of 76.567 million shares worth N3.712 billion in 2,471 deals. Trading in the Top Three Equities namely – First City Monument Bank Plc, Access Bank Plc and Sterling Bank Plc, (measured by volume) accounted for 695.396 million shares worth N2 billion in 3,494 deals contributing 47.83percent and 13.10percent to the total equity turnover volume and value respectively.

oreign Direct Investment (FDI) was up across the continent last year, although South Africa experienced a fall in project numbers, on the back of continued weak domestic growth, according to EY’s latest Africa Attractiveness report. FDI projects in Africa were 718 last year from 676 in 2016. It had reached 771 in 2015; 722 in 2014; and 882 in 2013. The higher project numbers were driven by interest in ‘next generation’ sectors, namely manufacturing, infrastructure and power generation. Despite the rise in FDI, project numbers remain below the 10-year average of 784 projects (per annum), the report shows. The EY 2018 report, ‘Turning tides’ provides an analysis of FDI investment into Africa over the past ten years. The 2017 data shows that Africa attracted718 FDI projects which is up 6percent from the previous year. This was in line with a recovery in the continent’s economic growth, following a difficult preceding year. The report also highlights the countries with the strongest FDI gains, with Ethiopia, Kenya and Zimbabwe experiencing a major uptick in FDI during the 2017 year. By contrast, South Africa, Egypt, Mozambique and Cote d’Ivoire experienced declines in FDI projects in the same year. Henry Egbiki, EY Nigeria Country leader and Regional Managing Partner for Africa, says: “The last three years have been significant for the continent as the continent has witnessed various changes in leadership, including Nigeria, South Africa, Zimbabwe and Angola, even in Kenya. The changes, no doubt, brought about a renewed urgency to introduce and implement fresh socio-economic policies that would spur economic growth”. Continuing, Egbiki has this to say “As Nigeria prepares for another general elections come February 2019, I believe what is needed as a matter of expedience is to entrench risk-mitigating policies that will assure both local and foreign investors that the business environment is safe for investment. This is the first step, and if this is done, I can assure of more foreign direct investment flows into the country”.

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Thursday 01 November 2018

WEEKLY REPORT

Helping you to build wealth & make wise decisions

STOCK MARKET REPORT FOR OCTOBER 26TH 2018

United Capital investment views

A total turnover of 1.454 billion shares worth N15.263billion in 16,682 deals were traded this week Bulls hold the baton amid by investors on the floor of the Exchangeearnings in contrast to a total of 1.380deluge billion shares valued at

n the week that ended 26th October, Nigerian stocks closed mostly higher for the third week in a row, with the All Share Index gaining 0.2percent week-on-week (w/w), as sentiments were braced for the deluge of earnings. The index ended the week at 32,907.3 points, bringing month-to-date (MtD) return to +0.4percent and year-to-date ( YtD) return to -14percent. Attributing performance daily, the market declined on only one of the five trading days of the week. Market capitalization crossed the N12trillion mark after gaining N23.9billion to close at N12.01trillion, while activity level on the exchange was upbeat as volume traded rose 5.3percent w/w to 290.9million units while value traded gained 0.8percent to N3.05billion. Performance across sector indices was mixed but with a bullish tilt as three sector indices tracked northwards w/w; the Oil & Gas (+4.1percent w/w), Banking (+1.1percent) and Insurance (+0.5percent) sector indices, due to buying interests in SEPLAT (+4.9percent), FO (+4.2percent), DIAMOND (+20percent), FIDELIT Y (+10.6percent), ZENITH (+4.8percent), AIICO ( + 5 . 3 p e r c e n t ) a n d WA P I C (+5percent). On the flip side, the Industrial Goods (-4.1percent) and Consumer Goods (-1percent) were the week’s laggards due to declines in WAPCO (-13.1percent), CCNN (-0.2percent), GUINNESS (-3.1percent) and NB (-0.5percent) which outpaced the gains recorded in DANGCEM ( + 0 . 5 p e rc e nt ) a n d N E ST L E (+0.7percent). Broadly, performance reflects 9months earnings releases across sectors including; DANGCEM (PBT up 12.3percent y/y to N158.3billion), OKOMU (PBT down 4.9percent year-on-year (y/y) to N8.7billion), ACCESS (PBT down 3.6percent y/y to N70.3billion), FBNH (PBT down 7.4percent N51.3billion) and TOTAL (PBT up 18.2percent y/y to N11.4billion) among others. I nv e s t o r s ‘s e n t i m e n t remained underwhelming as market breadth closed at 0.6x (previously 0.5x); 25 stocks advanced w/w while 39 declined. We expect investors to continue crunching numbers from the 9M18 earnings publications to make decisions in the week ahead even as events in the broader economy and political space unfold. Money Market: CBN yields to another OMO rate hike In line with the CBN’s tacit tightening stance, the apex bank hiked clearing rates (again) in its OMO auction that was carried out during the week; from 14percent to 14.5percent in its 1-year bill and from 12.75percent to 13percent in its 6-month bill. The Bank appears to be counterbalancing the effects of its continued netliquidity injections into money markets, which saw another net-repayment of N98.1billion during the week - as the CBN took out just N186.0billion, relative to N284.1billion maturities. Consequently, system liquidity was modestly buoyant as money market rates (the Open Buy Back and Overnight rates) averaged 15.2percent, compared to 23.6percent in the preceding week. In the secondary market, benchmark Nigerian Treasury Bill (NTB) papers repriced higher, up 20basis points (bps) on average to close at 13.7percent: 91-day (up 11bps to 13percent), 182-day (up 121bps to 14.8percent) and 364day (up 72bps to 16.4percent). In this coming week, system maturities rise to N527.2billion,

N15.149 billion that exchanged hands last week in 14,033 deals. split between OMO maturities rates at the Interbank and parallel of N381.9billion (which implies

market depreciated 2bps and

a l i k e l y O M O a u c t i o n o n 14bps to finish at N306.55/$1 and The Financial Services Industrymaturities (measured byofvolume)N361.0/$1 led the activityrespectively. chart with 1.220 billion shares Thursday) and NTB Looking N145.3billion (which implies we83.94% expect sustained valued at N9.480 billion tradedalso in 10,520 deals; thusahead, contributing and the 62.11% to the total an NTB auction). We expect the weekly FX intervention by the equity turnover volume and value to respectively. Conglomorates Industry to followed with 92.190 tempo of these events guide TheCBN to continue support the trading thedeals.The local pressures million sharessentiments worth N452.948through million in 719 thirdunit place as wasdemand Consumer Goods Industry week. Meanwhile, we highlight with aBond turnover ofMarket: 76.567 million sharesbears worth N3.712persist. billion inthe 2,471 deals. level of underBond that rising

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

Sterling Bank grows Q3 net profit by 39%

remain in the driving seat as recovery in the books of the DMO stands pat on stop rates Nigerian National Petroleum TradingIninthe the Top Three Equities namelythe First City Monument Bank(NNPC) Plc, Access Bankhigher Plc and primary market, Corporation amid Debt Management (DMO) oil prices remains Sterling Bank Plc, (measuredOffice by volume) accounted global for 695.396crude million shares worth N2.000 billion IHEANYI NWACHUKWU conducted its monthly auction a downside for Nigeria’s dollar inof3,494 deals, contributing 47.83% and The 13.10% toearnings the total equity volume and value FGN bonds for October. and turnover reserves. terling Bank Plc recently DMO was initially looking to Global markets end bearish announced its thirdrespectively. raise N115billion but ended up amid concerns over economic quarter (Q3) 2018 results selling only N88.1bn – as the growth sustainability revealing strong top-line range of bids were beyond the The week to 26th October monetary Equity Turnoverauthority’s - Last 5 days target for s aw b e a r i s h t h e m e o n t h e growth and increasingly efficient credit risks and cost management the auction. Notably, the 2028 backdrop of persistent concerns bond was mostly demanded about slowing global economic practices to deliver a healthy 39 (bid-to-cover: 2.3x versus 0.5x e x p a n s i o n , d i s a p p o i n t i n g percent growth in net profit during Turnover Turnover Traded Advanced Declined Unchanged and 0.7x at the 2023 and 2025 corporate earnings, rising interest period. bond The auction and Italy. In theStocks US market, Daterespectively). Deals Volume Value (N) rates, Stocks Stocks Stocks the Unaudited report and was carried out at the following the earnings season brought 22-‐Oct-‐rates: 18 3,178 257,919,119 4,950,039,582.67 17 17 market62 accounts of the bank for the ninestop 5-year (15percent about96 its respective versus at the2,350,455,849.06 last volatility 23-‐Oct-‐18 15percent 3,180 185,192,724 98 as companies 14 19 that fell65 month period ended September auction), 7-year (15.15percent vs. short of expectations were badly 30, 2018 released at the Nigerian 15.15percent at the last auction) beaten. down 3.463 Stock Exchange (NSE) showed 24-‐Oct-‐18 3,278 380,965,724 2,332,732,122.87 96 The S&P 17 was 16 and 10-year (15.32percent vs. %, DJIA fell 2.7percent lower 25-‐Oct-‐18 3,128 349,455,219 3,668,406,254.22 99 tech-laden 19 19 61 that the commercial bank bucked 15.25percent at the last auction) and the NASDAQ the pervasive low growth in the In the secondary market, off 3.4percent after suffering its 13 2011. 23 Notably,62 banking sector with 21 percent t r26-‐ a dOct-‐ i n18 g s3,918 e n t i280,325,870 m e n t s 1,961,861,503.31 w e r e worst98 day since relatively muted at the beginning the US Department of Commerce and 39 percent growths in gross of the week, as players traded reported that the US economy earnings and profit after tax

expanded 3.5percent in Q3-18 cautiously ahead of the October faster than Bloomberg’s estimate bond auction, which saw a lot of 3.3percent. of unmet bids and closed with In Europe, Italy’s budget lower than expected stop rates. controversy remained in focus as Overall, FGN bond yields edged the European Commission asked higher marginally by 4bps on the nation to revise its budget, average to close at 15.2percent, stating that it was non-compliant driven by increases in maturities For Further Inquiries Contact: Market Operations Department Page -1 with its recommendations 2020 (+36bps) and 2026 (+22bps). this is the first time since the Also, the average yield for FGN creation of the euro that the Eurobond inched higher by union will outrightly reject a 16bps to settle at 7.4percent budget of any of its member while average yield in corporate states. Furthermore, ongoing Eurobonds edged higher to BREXIT negotiations, fears of 9.3percent from 8.9percent, with rising interest rates and wariness the highest increases recorded in ahead of the forthcoming Hessian GTB (+300bps) and DIAMOND State election in Germany led to (+80bps) Eurobonds. Looking a spooky week for the European ahead, we expect an uptick in equity market as Italy’s MIB yields, albeit marginally. (-5percent), Germany’s DAX Foreign Exchange: Naira (-3.2percent), France’s CAC appreciate w/w at the Investors (-2.7percent), Pan European & Exporters Window STOXX (-2.6percent) and UK’s In the Foreign exchange FTSE (-1.9percent) all declined market, the performance of the w/w. local currency against the U.S In emerging markets, a mixed dollar was mixed across market theme guided sentiment across segments. The CBN sustained markets. Brazil remained in its weekly FX intervention in focus, in light of the second the wholesale and retail FX round of its presidential elections market, as FX demand pressures coming up on October 28, while continued to mount amid rising news of tax credits to support rates in developed markets. middle-class spending in China Accordingly, FX reserves eased also guided sentiments. Overall, 0.9percent w/w to $42.3bn as Brazil’s IBOV (+0.2percent) and at Wednesday, implying $2.0bn China’s SCHOMP (+1.9percent) reduction in October alone! rose w/w, while Russia’s RTSI Relatedly, Brent price traded (-3.2percent), India’s SENSEX below the $80/b mark during (-2.8percent) and South Africa’s the week. However, FX rate at the JALSH (-2.1percent) declined Investors and Exporters segment w/w. appreciated marginally by 5bps w/w to close at N363.84/$1, while

respectively. All major performance indices recorded double-digit growth, indicating growing market share in retail banking. Gross earnings rose by 21.1 percent to N114.6 billion in the third quarter of 2018 compared with N94.6 billion recorded in comparable period of 2017. The top-line performance was driven by growths in both interest and non-interest incomes as noninterest income rose by 31.2 percent from N16 billion to N21 billion while net interest income increased by 7.8 percent from N36.9 billion to N39.8 billion. Net operating income thus improved by 26.3 percent to N57.2 billion in the third quarter of 2018 as against N45.3 billion in the third quarter of 2017. The bank sustained a steady growth in profitability as profit before tax grew by N8.5 billion or 29.5 percent as against N6.5 billion in corresponding period

of 2017. After taxes, net profit rose by 39 percent from N5.9 billion to N8.2 billion. Earnings per share thus improved from 21 kobo to 28 kobo. Underlying ratios showed improvement in the intrinsic value of the bank. Pre-tax return on average equity improved from 9.6 percent in third quarter 2017 to 10.8 percent in third quarter 2018. Post-tax return on average equity also increased from 8.6 percent to 10.4 percent. Return on average assets was steady at 1.0 percent while cost of risk improved from 1.8 percent to 0.8 percent. The balance sheet spread also showed increasing acceptance of the bank’s brand and continuing supports of the bank to the growth ofthenationaleconomy.Customer depositsincreasedtoN723.2billion by September 2018 from N685.0 billion in December 2017. The bank’s net loans and advances increased by 10.7 percent to N662.0 billion from N598.0 billion in December 2017. Total assets improved to N1.08 trillion as against N1.07 trillion recorded at the beginning of the year while shareholders’ funds increased from N102.9 billion in December 2017 to N106.2 billion in September 2018. The bank’s Liquidity Ratio (LR) improved from 30.5 percent in December 2017 to 34.4 percent in September 2018 while Capital Adequacy Ratio (CAR) stood at 11.4 percent. Non-Performing Loan Ratio (NPLR) improved considerably from 6.2 percent to 5.4 percent. Abubakar Suleiman, Chief Executive Officer, Sterling Bank Plc said the bank has been able to sustain its steady growth due

to focused implementation of its strategic intent of exceeding customers’ expectations. He noted that the robust growth of 31.2 percent in noninterest income was driven by a growth in trading and transaction banking revenues, as the bank continues to prioritize efficiency of its digital banking platforms to support its retail drive. “Our strategic intent to be more customer-focused has continued to yield results. One of such recorded in the last quarter is the increase in the volume of transactions processed through our various electronic platforms since the start of the year. We achieved over one million monthly NIBBS Instant Payment transactions as at July 2018, a 73 percent increase from the start of the year and expect to see continuing traction in this regard,” Suleiman said. He disclosed that the bank’s Series 2 Notes issuance of N19.7 billion under its N39 billion debt issuance programme was oversubscribed. He added that the net proceeds from the issuance would be recognized as Tier II capitalaftertheregulatoryapproval. He said the buffer provided by the additional capital would give room for business expansion across the bank’s focus growth areas including health, education, agriculture, renewable energy and transportation sectors. “Going into the final quarter of the year, we aim to complete the ongoing implementation of a number of digital-led initiatives in line with our digitisation drive. This is expected to further intensify the bank’s retail drive,” Suleiman said.

TCS’ Quartz Blockchain solution powers landmark cross-border data exchange in Africa

ata Consultancy Services ( TC S) a leading IT services, consulting and business solutions organization, announced that two of its TCS BaNCS customers in Africa: Central Securities Clearing System (CSCS) Plc, the Central Securities Depository (CSD) of Nigeria, and South Africa based Standard Bank, a leading custodian, have successfully completed a pilot using the Quartz Blockchain technology for cross-border corporate action information exchange using the BaNCS Network, potentially seeding an innovative pan-African financial ecosystem for crossborder information exchange and transaction settlement. TCS Financial Solutions is a strategic business unit of Tata Consultancy Services. In an innovative pilot, a Blockchain ecosystem consisting of the TCS BaNCS Network,

with Blockchain nodes for CSCS Nigeria and Standard Bank South Africa, was set up using TCS’ Quartz Blockchain solution in a coexistent architecture. Leveraging the power of Blockchain, corporate action information was exchanged on a real-time basis for a wide range of equities and fixed income instruments over the BaNCS Network. To demonstrate the ability to extend the ecosystem to other stakeholders, additional Bl o ckc ha i n n o d e s w e re configured for Registrars on the BaNCS Network. This successful pilot for information exchange using the BaNCS Network, Quartz and TCS BaNCS solutions has the potential to extend its usage for transfers and settlement. “Blockchain represents a unique opportunity for early adopters interested in transforming their businesses

and industries. CSCS is excited to have worked together with TCS BaNCS and Quartz Solutions on this innovative pilot that has the potential of generating efficiencies in the financial markets. This is a significant step towards our vision of being the globally respected and leading central securities depository in the region. Our next steps are to continue exploring waysinwhichCSCScouldharness the capabilities of Blockchain technology in other areas of our core operations and extend it to other market participants in the region”, said Haruna Jalo-Waziri, CEO, CSCS Plc, Nigeria “Standard Bank’s digital strategy focuses on leveraging innovative technology, driving Africa’s growth by building the continent’s digital economy. As Africa’s largest Investor Services provider we are also committed to driving the development of African capital markets. As

Thursday 01 November 2018

C002D5556

BUSINESS DAY

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Interim dividend:

Nestle excites shareholders with N15.85bn pronouncement Stories by IHEANYI NWACHUKWU

he directors of Nestlé Nigeria Plc recently announced the results of the company’s operations for the third-quarter (Q3) period ended September 30, 2018 which shows impressive performance across top-to-bottom line figures. The scorecard In the nine months p e r i o d t o S e p t e m b e r, revenue reached new high of N203.13billion from N185.24billion reported in the corresponding p e r i o d o f 2 0 1 7 . G ro s s profit for the period also g re w t o N 8 6 . 1 4 b i l l i o n , from N75.88billion in the third-quarter of 2017. The c o mpa ny p ro f i t b e f o re income tax increased to N48.08billion from N34.47billion, while profit for the period stood higher

at N33.11billion from N22.97billion in Q3’17. Interim dividend The directors informed the shareholders and the general public of the declaration of an interim dividend of N20 (2017: N15) per share on the issued share capital of 792,656,252 (2016: 792,656,252) ordinary shares of 50k per share amounting to a total interim dividend of N15.853billion. Share trading information With a market cap of about N1.093trillion, Nestle is one of the highly capitalized stocks trading on the Nigerian Stock E xchange (NSE). The company has shares outstanding of 792,656,252 units. Its share price stood at N1,380 as at Monday October 29 having reached 52-week high of N1,615 and a corresponding period low of N1.250. Management comments “Our growth is the result of

our disciplined execution and investments in the expansion of our route to market; our marketing initiatives focused on nutrition awareness, as our consumers continue to trust us to deliver high

quality, affordable, nutritious food products every day. All of this is well supported by the dedication and professionalism of our people. To s u s t a i n o u r performance, we will

continue to focus on creating an environment where our people can grow to their potential while delivering their best performance. Driven by our purpose of enhancing quality of life and

contributing to a healthier future, we continue to create value for all stakeholders across our value chain as we source and deliver products adapted to local preferences”.

StanChart study reveals Nigeria as most entrepreneurial market …Middle East leads when it comes to increasing wealth

igeria’s emerging affluent believe effective wealth management holds the key to greater social mobility. Also, more emerging affluent consumers in Nigeria plan to start a business to increase their wealth than in any other market, according to a new study by Standard Chartered. The Emerging Affluent Study 2018 Climbingthe Prosperity Ladder examinesthe views of11,000 emerging affluent consumers–individuals who are earning enough to save and invest– from 11 markets across Asia, Africa and the Middle East. In Nigeria 41percent of emerging affluent consumers say that starting their own business is a strategy to meet their financial goals and increase their wealth; this compares to an average figure of just 27percent. It is the second most popular strategy to increase wealth among the emerging affluent in Nigeria behind investing in financial

products (55percent); and ahead of career progression and salary increase, which sits in third place (33percent). The study reveals that the number one financial goal for Nigeria’s emerging affluent is saving towards their children’s education, with 14% stating this; it is also the top savings priority across the markets in the study (16%).For more than one in 10 (11%) setting up a business is the top savings goal; this is higher than any other market- the average figure is just 7%. When it comes to meeting their financial goals, more than half (54%) of the emerging affluent in Nigeria say they invest with a target and a strategy to achieve it. Despite this, when describing the financial products they use to meet their goals the most basic savings approaches came out on top: 59percent use savings accounts. By comparison, less than one-fifth use fixed income investments (19%), equity investments (13%)

and mutual funds (12%); h o w e v e r, a q u a r t e r u s e property investment making this the second most popular method for this market. This could explain why currently more than half (54%) of Nigeria’s emerging affluent feel far away from achieving their top financial goal. The emerging affluent in Nigeria recognises that a lack of financial understanding may be stopping them from meeting their financial goals: more than a third (35%) say they feel held back in their aspirations by their lack of financial knowledge; and 58% believe financial education would help them reach their financial goals faster. The study also reveals that more than two-thirds (70%) of Nigeria’s emerging affluent believe effective w ealth management holds the key to greater social mobility, so addressing the financial knowledge gap could play a crucial role in helping them to keep moving up the ladder. Other findings from the study, now in its fourth year,

include: Social mobility booming in Nigeria. More than half (56%) of emerging affluent consumers in Nigeria are experiencing upward social mobility; this compares to an average figure of 59% across the markets in the study. Of these, 6% are enjoying ‘supercharged’ social mobility, not just relative to the previous generation, but compared to the rest of the socially mobile. The socially mobile in Nigeria are scaling the ladder thanks to impressive earnings growth, with nearly half (46%) enjoying a salary increase of 10% or more in the past year- the highest number in the study -and nearly a third (30%) seeing their earnings jump by 50% or more in the past five years. The socially mobile are also better educated and achieving higher levels of employment and home ownership than their parents. 82% went to university, compared to less than half (48%) of their fathers and 41% of their mothers; and nearly three- quarters

(74%) are in management positions or running their own businesses compared to 56%of their fathers and half(50%) of their mothers. 77% of the socially mobile own their own home, compared to 67% of their parents. Digital dividends: technology holds the key to financial success. Nearly two-thirds (64%) of Nigeria’s emerging affluent say their familiarity with digital tools has been vital to their personal success. Almost the same number (65%) say online banking makes them feel that they have more control over their money and investments, and 55% say digital money management has helped them get closer to achieving their financial goals. On-demand advis ors alleviate risk aversion The emerging affluent in Nigeria are comfortable going online for financial advice, with half of them (51%) saying they would invest in financial products online if an ondemand adviser was available. Risk is not a problem for the emerging affluent if strong

rewards are possible: 50% would accept a high level of risk for a high level of return when investing their money in online financial products. Simpa Adaba, Head, Wealth Manag ement, Standard Chartered said, “It is exciting to see that social mobility is booming among the emerging affluent, and that they are out stripping their parents’ success in education, careers and home ownership. These aspiring consumers are determined to continue moving upwards, and know that investing can help them reach their financial goals.” “Although they are eager t o i nve s t, t h e e m e rg i ng a f f l u e n t a re b e i n g h e l d back by a lack of in- depth financial knowledge and may not be aware of all the solutions available to them. Digital financial products are enabling the emerging affluent to achieve their goals, and these tools will be crucial in helping them take their personal financial success to the next level”, Adaba added.

BUSINESS DAY

Thursday 01 November 2018

BUSINESS DAY

Luxury

Malls

Companies

Deals

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Thursday 01 November 2018

Spending Trends

Britain says may ban some cryptoasset consumer products

ritain may ban some retail financial products b a s e d o n b i tcoin and other cryptoassets and widen its regulatory net to capture potentially “illicit activity” that could harm consumers and markets, a governmentbacked taskforce reported on Tuesday. The report from the finance ministry, Bank of England and Financial Conduct Authority begins to thrash out Britain’s policy and regulatory approach to cryptoassets including tokens issued by initial coin offerings (ICOs). “The Taskforce has concluded that strong action should be taken to address the risks associated with cryptoassets that fall within existing regulatory frameworks,” the report said. “Further consultation and international coordination is required for those cryptoassets that pose new chal-

lenges to traditional forms of financial regulation, and fall outside the existing regulatory framework,” it added. The FCA said it has made clear that cryptoassets have

no intrinsic value and investors should therefore be prepared to lose every penny invested. The sector is still tiny, with bitcoin making up just 0.33

percent of daily global trade volumes, the report said. There are an estimated 56 ICO projects in Britain that have been used to raise about $330 million, or just one per-

owns brands such as Frankie & Benny’s and Garfunkel’s, is in advanced talks to acquire noodle bar chain Wagamama a for GBP 600 million. The deal would add 200 restaurants to the former’s portfolio of 509 outlets. Reporting results ▪ Russian retailer Lenta has posted a marginal decline in likefor-like sales in the third quarter of its financial year, claiming economic pressure. Revenue was up 12.5% to EUR 1.35 billion. The group is currently operating 354 stores, comprising 233 hypermarkets and 121 supermarkets. Southeast Asian vent u r e s ▪ F re n c h re t a i l e r Auchan has expanded its partnership with Alibabaowned Lazada (in French) to succeed in the fast-growing market of Vietnam. Chinese

e-commerce powerhouse Alibaba is set to launch an expansion drive in the area to counter regional newcomer Amazon. Details on retail ▪ As part of its USD 44 billion expansion strategy, South Korea’s Lotte Group plans to invest USD 11 billion in its retail business during the next five years. Most of this spending will be outside South Korea, with Vietnam and Indonesia singled out as priorities. Fight for the top Walmart-owned e-commerce platform Flipkart’s concluded its financial year with losses. The Indian company is locked in an intense battle with US giant Amazon with both entities pumping in millions of dollars in their businesses to gain leadership in India. Trials and troubles in

cent of the $24 billion raised globally by ICOs. The report sets out milestones for scrutinizing cryptoassets more closely. The taskforce will publish a consultation paper by the end of the year on draft guidance to clarify which cryptoassets fall within and outside the existing regulatory “perimeter”, and whether the perimeter should be extended. There will be a separate consultation by the first quarter of 2019 on a potential ban on the sale to retail consumers of derivatives, including contracts for differences, options and futures that reference certain types of cryptoasset, the report said. “Given the complexity and new challenges presented to traditional forms of financial regulation, more time is needed to consider how regulation can meaningfully address the risks posed by exchange tokens, such as

bitcoin,” the report said. The government will issue a consultation in early 2019 to further explore whether and how exchange tokens, and related firms such as exchanges and wallet providers, could be regulated effectively,” it added. Ashurst said the report indicated that regulation is coming fast. “The proposal to ban crypto derivatives is like using a sledgehammer to crack a nut,” said Bradley Rice, a senior regulatory associate at the law firm. The report also looked at blockchain or the distributed ledger technology (DLT) that underpins cryptoassets such as bitcoin, saying it has the potential to deliver substantial benefits, both in financial services and other sectors. Other regulators are also studying how to regulate cryptoassets, but so far there is no consensus to go beyond monitoring. Culled from Reuters

Europe ▪ Supermarket major Asda projects that 2,500 jobs are at risk as it undertakes cost-cutting measures ahead of its proposed merger with competitor Sainsbury’s. Meanwhile, Sainsbury’s is partnering with fashion brand Oasis and will open trial concession stands in two of its supermarkets. Strong performance ▪ Russia’s X5 Group is celebrating a 17.6% increase in third quarter revenue, driven by sales growth and strong selling space expansion. In Finland, retail giant Kesko is also enjoying strong quarterly results after posting an all-time-high comparable profit of EUR 113 million. Pure meat ▪ German discount major Kaufland has announced it is increasing its range of GMO-free beef products. The company promises that during production nothing in the fodder or ingredients will contain genetically engineered material. Teaming up in Asia▪ Cartier-owned Richemont has joined forces with Alibaba in an attempt to break into China’s online luxury market, which traditionally has been difficult for international players to tackle when going it alone. Chinese consumers purchase a third of all luxury goods globally. Indian ventures ▪ Food delivery player UberEats is increasing its presence in India by partnering with the country’s largest coffee chain Café Coffee Day to open virtual kitchens. Meanwhile, check out this video

examining why Dunkin’ is struggling to gain traction in the subcontinent. Celebrating success ▪ To commemorate the 40th anniversary of the reforms that transformed China into an economic powerhouse, a list of 100 outstanding entrepreneurs has been published. Jack Ma of Alibaba fame makes the cut, as does Tencent’s Pony Ma and Robin Li Yanhong, CEO of search engine Baidu. Shock drop in United States▪ Following a disappointing quarterly report, Amazon’s shares dropped to their lowest point in three years, allowing Microsoft to leapfrog ahead and regain its spot as the second most valuable US company. Meanwhile, the Bezos-owned juggernaut is furthering its foray into the healthcare sector with the launch of a new brand of consumer medical devices. Beating expectations ▪ Travel tech company Expedia is rejoicing off the back of an 8% soar in shares following better than expected third quarter earnings. Mexican grill chain Chipotle also outperformed the pundit’s predictions and enjoyed a 4% rise in share prices. Out of juice ▪ Major US citrus companies are dealing with a fruit shortage by taking sneaky measures. Big players in the juice game including Tropicana and Minute Maid downsized their bottles, but kept their prices the same. Consumers didn’t appear to notice or mind, with consumption equal to previous years.

Global retail update

hen technology meets creativity - Sam’s Club plans an incubation site for future store concepts and technology. Asian supermarket chain 99 Ranch Market combines a warehouse-style grocery store with a multivendor dining hall, and US pastry chain Dunkin’ has unveiled a cabin that is powered by waste coffee. Also, the quarterly results keep rolling in, with the likes of Expedia, Chipotle, X5 and Kesko all enjoying pleasing gains. If the numbers get too much for you, check out the image galleries showcasing London’s Coal Drop Yard, as well as the quirky and innovative ‘she-shed’ phenomenon taking the world by storm. Below are the updates:Joining forces in Unite d Sta t e s ▪ Bl u e Ap ro n gets a much-needed boost thanks to a partnership with Walmart’s Jet.com. The ecommerce will be the first one to offer a selection of meal kits from the start-up for customers in New York. The kits, which will rotate every six weeks, will be available for same-day or nextday order. High te ch in Texas▪ Walmart’s warehouse unit Sam’s Club is preparing to open the doors at a new Dallas area store that will serve as a testbed for the latest in retail technology. It will pilot technologies such as mobile checkouts, electronic shelf labels, augmented reality and artificial intelligence-

infused shopping. Store debuts ▪ Asian supermarket chain 99 Ranch Market has launched a new format called Cravings in California. The warehousestyle grocery store caters to both households and foodservice businesses. On the other side of the continent, value-retailer Five Below is eyeing New York as the location of its flagship. Tax targets in Europe▪ The British government has announced to introduce dramatic changes to how large technology companies such as Amazon, Facebook and Google are taxed in an attempt to ensure internet giants pay their fair share following a series of controversies in the sector. Takeover bid ▪ Londonheadquartered pub chain The Restaurant Group, which

Thursday 01 November 2018

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BUSINESS DAY

LG customers to benefit from smart home connectivity

ven more LG Electronics (LG) T V customers will be able to use the Google Assistant on their 2018 TVs with AI ThinQ in the fourth quarter. LG will be introducing the Google Assistant in seven more markets – Australia, Canada, France, Germany, South Korea, Spain and the United Kingdom – with support in up to five languages. This expansion is part of LG’s global strategy to raise the bar for voice recognition solutions enabled with LG’s ThinQ platform and the Google Assistant built in. LG first announced that the Google Assistant would be built into its TVs at CES 2018 with the service debuting in the United States in the second quarter. The Google Assistant will be available on all of LG’s webOS-based AI TVs in the new markets, offering a wide range of features and boosted accessibility in multiple languages. With the Google Assistant built in, LG’s 2018 AI ThinQ-enabled TVs offer a streamlined experience that allows users to manage daily tasks, find answers or

control compatible smart home devices. Simply press and hold the mic button and ask for in-formation, such as the weather forecast, a nearby restaurant’s hours, the latest sports scores or to dim the lights without interrupting the viewing experience. Users can also relive their favourite moments by displaying pictures from Google Photos. Wi t h h e l p f ro m t h e Google Assistant, LG’s AI

TVs can serve as the center of the smart home, offering access to numerous devices such as robot vacuum cleaners, thermostats, air purifiers and smart lighting. The Google Assistant is compatible with more than 5,000 smart devices across hundreds of popular brands, making it easier to control speakers and other smart home devices connected via Wi-Fi or Bluetooth. Customers in English-speaking

markets such as the United States, the United Kingdom, Australia and Canada can already connect Google Home devices to LG AIenabled TVs to send voice commands directly from their smart speakers. This feature will become available to cus-tomers in France, Germany, Japan and South Korea by the end of 2018. Compatibility with Amazon Alexa-enabled devices – currently available in

the U.K. and the U.S. – will be expanded to Australia and Canada as well. On top of the Google Assistant integration, LG’s AI TVs use LG’s exclusive deep learning technology which allows viewers to use natural language to quickly and easily connect such TVs to external devices or search for specific information or content simply by issuing a verbal request. Switching TV stations, turning

the volume up or down, turning off when a show is over, reminding you when a favourite show is about to air or finding the best content to watch – whether through cable, over the air or streaming ser-vice – are just a few ways ThinQ helps viewers enjoy their daily watching experience. “LG’s vision is to become a major name in all things AI based on our philosophy of open platform, open partnership and open connectivity,” said Brian Kwon, president of LG Home Entertainment Company. “Beyond the unrivalled picture quality that LG’s premium TVs deliver, the Google Assistant offers even more consumers a new level of intelligence in the home, aligned with LG’s mission to improve the daily lives of its customers through forwardthinking technology.” Visitors to IFA are encouraged to stop by LG’s booth in Hall 18 of Messe Berlin for a hands-on demonstration of LG’s AI ThinQenabled TVs with the Google Assistant while experiencing the best in OLED technology such as the immersive OLED Canyon.

Living under poverty line How Nigerians are struggling to survive

If you want to contact the writer of this story call: +234(0) 803 889 1567, +234(0) 8155184838 chinwe.agbeze@businessdayonline.com

BusinessDay reader donate N40,000 to driver …another pays son’s N110,000 tuition fee

ale Ogungbesan, a driver in Lagos, has received N40,000 donation from a BusinessDay reader to pay for his dialysis. The trader was featured in this section of Thursday October 11, 2018, where he pleaded with Nigerians to assist him fund his dialysis and surgery. ‘‘I beg individuals, corporate organisations and the government to please help me. The only thing that can make me live is dialysis or transplant. The doctor advised I go for transplant. I have seen a donor but I need N10m,’’ Ogungbesan

pleaded. ‘‘Nigerians, please help me so that I can live and take care of my family.’’ According to Odungbesan, he spends N71,000 twice every week on dialysis when he has the money but he could no longer cope with the bills. ‘‘Sometimes when there is no money, I will just stay at home. If it’s up to a week and I don’t do the dialysis, my leg will begin to swell up. I will start vomiting blood and my breathing will be fast. At that point, my family will quickly rush me down to the Lagos from Ogun State for dialysis,’’ Odungbesan told BusinessDay earlier.

L-R:- Stephen Onyekwelu, energy correspondent, BusinessDay Media Ltd (l) presenting cheques to Wale Ogungbesan, kidney patient (r) recently at BusinessDay corporate headquarters in Lagos.

Analysts: Chinwe Agbeze, Graphics: Fifen Eyemisanre Famous

Odungbesan, who was working in an insurance company as a contract staff but had to quit four months ago because of his sickness also listed is inability to pay his children’s school fees as one of his worries. ‘‘My 20-year-old son is in his 300-level studying computer science at Ogun State University, but he has been at home since because I cannot afford to pay his school fees. The money I get from people is what I use for my dialysis. Help me, so I can fulfil the promise of God in my life. Pease, don’t allow me to die,’’ the driver added. The driver also received the sum of N110,000 from Mayowa Igunbor, on behalf

of his son to pay for his tuition fees. A cheque for N40,000 was raised in the driver’s name while N110,000 was raised in his son’s name. Presenting the cheques to the Odungbesan recently, Stephen Onyekwelu, Energy correspondent, advised the driver to use the money wisely. The delighted driver thanked his benevolent donors for their support. Odungbesan said, ‘‘I thank those that gave me and my son this money. I pray that God will bless them richly for their kindness. May they never know pain for the rest of their lives.’’

24 BUSINESS DAY

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Leadership

Thursday 01 November 2018

SHAPING PEOPLE INTO A TEAM

What’s driving superstar companies, industries and cities JAMES MANYIKA

he debate about superstar firms and superstar effects has been intensifying, partly in response to the rapid growth of global U.S. tech companies. However, the superstar phenomenon may not quite be what it seems. Wider dynamics may be at play. In our recent research at the McKinsey Global Institute, we examined the superstar phenomenon across firms, as well as sectors and cities. We define “superstar” to mean a firm, sector or city that has a substantially greater share of income than its peers and is pulling away from those peers over time. Yes, we found that a superstar dynamic is occurring for firms, cities and, to a lesser extent, sectors. We analyzed nearly 6,000 of the world’s largest public and private firms with annual revenues above $1 billion. These firms make up two-thirds of global corporate pretax earnings (EBTDA) and revenues. To analyze the superstar dynamics of firms, our metric was “economic profit,” a measure of a firm’s profit above and beyond opportunity cost. (To do this, we take the firm’s returns, deduct the cost of capital and multiply by the firm’s total invested capital.) We focus on economic profit rather than revenue size, market share or productivity growth because those metrics risk including firms that are simply large and may not create economic value. The top 10% of the firms we analyzed — the superstars by our metric — create 80% of all the economic value in our sample, meaning they account for 80% of the economic profits created by firms above a billion dollars of revenue. The top 1% accounts for 36% of all the economic value created by public and private corporations worldwide in this size

range. The bottom 10% destroys roughly as much economic value as the superstar firms create. The distribution of economic value is also getting more skewed over time, and at both ends. Superstar firms create 1.6 times more economic profit on average today compared to 20 years ago. But this is also mirrored by firms in the bottom 10%, which account for 1.5 times more economic loss today than 20 years ago. Contrary to popular perception, these superstar firms are not just Silicon Valley tech giants. They come from all regions and sectors and include global banks and manufacturing companies, long-standing Western consumer brands and fast-growing U.S. and Chinese tech firms. In fact, the sectoral and geographic diversity of superstar firms is greater today than 20 years ago. The superstars tend to be more involved in global flows of trade and finance, more digitally mature, and they dominate the lists of the most valued companies, the most desirable places to work and the most innovative companies. However, nearly half of superstar firms are displaced from

the superstar top decile in every business cycle. Among the top 1% today, two thirds of firms are new entrants that were not in the top 1% a decade ago. The high degree of churn among superstar firms cuts both ways: When superstar firms fall, 40% of them fall to the bottom decile with large economic losses; at the same time many firms have also risen from the bottom decile, in some cases all the way to the top. The rate of churn at the top has remained the same over the last 20 years. A few key characteristics distinguish superstar firms from the rest. The firms spend 2 to 3 times more on intangible capital such as research and development, have higher shares of foreign revenue, and rely more on acquisitions and inorganic growth than median firms. The greater economic profit and loss at both ends of the distribution is driven by greater scale and invested capital, not by increasing returns to capital. Some bottom-decile firms share many of these characteristics, but what sets superstar firms apart is their ability to execute on their bold investments well.

Superstar dynamics go beyond firms and can be observed among cities too, and to a lesser extent among sectors. We find that a handful of sectors account for 70% of value added and surplus across the G-20 group of major economies. These superstar sectors include financial services, professional services, internet and software, real estate, and pharmaceuticals and medical products. The disproportionate gains in these sectors is in contrast to the previous 15 to 20 years, when gains in surplus and value added were more widely distributed across sectors of activity. Today’s superstar sectors tend to have higher research and redevelopment intensity, higher skill intensity and lower capital and labor intensity than other sectors. The higher returns in superstar sectors are largely a result of corporate surplus. For cities, we analyzed nearly 3,000 of the world’s largest cities by population that together account for 67% of global GDP. Using our metric of GDP and personal income per capita, we identified 50 top superstar cities. They included cities such

c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate

as New York, London, Manila, Mexico City and Mumbai. These 50 cities account for 8% of global population, 21% of world GDP and 45% of headquarters of firms with more than $1 billion in annual revenue. The average GDP per capita in these cities is 45% higher than that of their peers in the same region and income group. The link between superstar firms, sectors and cities is complex. Some superstar firms benefit from being in “superstar” sectors of activity, particularly those in which value-added gains go to gross operating surplus (an economic measure that represents the income earned by capital). Yet many superstar firms endure even as their sector sees declining shares of value added and surplus. Superstar sectors’ gains tend to be more geographically concentrated, and mostly in large cities, many of which are superstar cities. For instance, gains to internet and software activities are captured by just 10% of U.S. counties, which account for 90% of GDP in that sector. These cities see faster income growth than population growth, resulting in demand for high-skill, high-wage workers. While more research needs to be done to understand the full implications of superstars in the global economy, we believe enough evidence exists to give corporate decision-makers something to think about. Superstar status remains contestable; it’s easy to fall from the top, but also possible to rise to the top. Acquisitions, bold investment in intangible assets and attracting talent can ultimately make the difference.

James Manyika is the chairman of the McKinsey Global Institute. Sree Ramaswamy is a partner at the McKinsey Global Institute. Michael Birshan is a senior partner at McKinsey & Company’s London office.

Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

Bank IT Security

BUSINESS DAY

Thursday 01 November 2018

How evolution of money can explain future of cryptocurrencies FRANK ELEANYA

help better understand the future of cryptocurrencies.

oney has certainly evolved from what many of us used to know and now think about it. Some of the major stages through which money has changed include barter exchange, commodity money, metallic money, paper money, credit money, plastic money and now internet or digital money. Digital currencies are the latest in the evolutionary process and are only possible because of technology. They are designed to work as a medium of exchange which uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency. In a recent blog, Luno, one of the biggest virtual currency companies in Africa identified three factors that are responsible for the transformation in money. These include the collective mindset, consumer demand for money, and technology support. The factors can also

The collective mindset This relates to the notion that money is money simply because people accept to use it as money. This is true for all forms of money that has existed including digital currencies. The value of a dollar or naira or gold or bitcoin is the value it derives from the public’s acceptance and use of it. In many cases, these currency forms may not work as we imagine they do but our willingness to trust in the system or its process is what gives validation. The total value of a cryptocurrency is the value of trust between its users and its network. This is responsible for the high volatility of the market. Being largely unregulated, the market only functions according to the whims and caprices of people who buy and sell cryptocurrencies – the same story of demand and supply. Hence, when the users decide to buy more, supply is affected and price could go up but should they decide otherwise - probably in

response to negative market forces, the price drops. Like cryptocurrencies, fiat currency also does not have an intrinsic value in itself. Unlike cryptocurrencies however, government create scarcity by limiting the amount of fiat currency they print. If they print more banknotes, their real-world value (the amount of items people can buy with them)

drops. In that regard, the value of fiat currency is entirely based on perception. Because banks agree to accept it, people see who use the banks see it as having value and because other people accept it as payment, hence the value.

needs. It has also changed their location and how they want to buy things. Thus, conditioned by their new environment – online – the consumers demand speed, convenience and affordability. It is the same with the way they want to use money while online.

Consumer demand Digital technology has redefined today’s consumers’

Technology support Every stage of evolution in money has been powered by

people’s desire to search for ways to make transactions easier. From the use of precious of metals, paper money to digital money, technology has always acted as a catalyst in all the processes. Watermarking technology for instance paved the way for the transition from heavy coins to issuing paper money. Technology has constantly evolved to satisfy new consumer demand. “The efficiencies people demand typically require huge economies of scale, which forms the backbone of the progress of human civilization, and where technology typically plays a key role,” Luno researchers noted in a blog post. “In the world of money, this would equate to some single, open and completely interoperable currency or payment system. A decade ago the thought of this would be incomprehensible. Now we have global, open and interoperable cryptocurrencies like bitcoin.” What then will digital currencies evolve to? The new technologies of the future will give us a better clue.

Proville targets transforming service-delivery, contracts through technology CALEB OJEWALE

igeria’s unemployment rate may not be improving as fast as many people may want it to, and a solution advocated over time is increasing involvement of young people in entrepreneurship. The digital space offers a lot of opportunity for this, and Adeshina Adewumi, chief operations officer of Proville, an internet-based platform that enables people to provide professional services across the continent, shared some insights with TechTalk on how this can change the future of work and delivery of services. First, we ask Adeshina, what Proville is all about, and what it offers. Excerpts: Proville is a Nigerian based company in Lagos that provides tailored made technology solutions for businesses in Nigeria and Africa. Our solution Proville.net;

an online service market place for professional services, is changing the narrative on how professional services are engaged across Africa and the globe in line with the future of smart work. Our platform offers a fast and secure base for project outsourcing and engaging of quality professionals. So for example, Toke a business owner wants to grow her business. She would typically reach out to friends for a website designer, business consultant, social media consultant etc. Whereas there lies a Ken, Umar and Ade who have the required skill set Toke needs. Proville.net saves Toke the time and stress, as all she needs is to log on to Proville.net, sign up and post a job with a set budget. Ken, Umar and Ade would be notified of the job and in turn, submit proposals to Toke via the platform. Once Toke is satisfied, she accepts one of them, pays using our escrow system and the job commences. Upon completion and satisfaction of the

job by Toke, she clicks on the release button and then payment is credited into Ken, Umar or Ade’s account as the case may be. There is at least one website already popular for this; ‘freelancer.com’, could this be an adaption Proville.net has a similar model to freelancer.com, however with a difference, which is to promote the future of smart work in Africa among African professionals. We took freelancer a step further by adopting an offline hub where professionals can come together, collaborate, learn and build capacity to deliver better services to their prospective customers on Proville.net platform. We plan to replicate our hub across major cities in Nigeria and Africa in other to ensure professionals begin to adopt remote working with the right technical, customer centric and emotional skills to deliver top-notch services globally. What kinds of jobs can be offered/taken up for execu-

tion on the platform? Proville.net offers top professional services ranging but not limited to web and software developers, legal, accounting, sales and marketing, virtual assistants, writers, consultants and other creatives. Is there a quality/assessment mechanism to ensure jobs meet ‘agreed’ standards, and curtail postcontract misunderstandings? Yes, we have an arbitration team that does assessments, and it comprises industry experts in case issues arise from contract misunderstandings. However surprisingly we have completed over 50 jobs since launch 5 months ago without any need to move to arbitration. We however have a robust team of professionals who vet the jobs to ensure quality services are rendered and in line with global standards. What incentives exist for the platform’s users; both the people giving out jobs,

and those taking them up? For clients engaging professionals on our platform, its gives them pool and access to competitive rates from top-notch vetted professionals across Africa to get their jobs done. On the other hand, professionals get access to do side jobs to increase their earnings and also those who enjoy flexible working can now become their own boss by working remotely. Our professionals also get to enjoy free access to our hub twice a week and on other days discounted. Is there a pricing template on the platform? Whether or not it exists, how does it offer an advantage over offline transactions? There is no pricing template on our platform; the service receiver gets to determine at what rate he/she intends to get their jobs done. The advantage over offline transactions is the fact that the client get to receive competitive quotes from a wider range of professionals and payment is carried out using an escrow

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

model that ensures that value is provided before funds are released to the professional. This cannot be found in the regular offline transactions and most times a party usually defaults partially or in full. This is not going to happen if done on our platform as we pride our platform for its fast and secure features for professional service engagements. What are your growth projections in terms of users? We have been able to cross our first thousand-user milestone within the last 5 months comprising users from over 10 African countries. We intend to cut the edge in Africa and grow the community to over 1 billion users by year 2030 with offices across Africa, Europe and USA. We believe the future of work is here and research projections are also in our favour with a projection that over 85 percent of the working population would be millennials by year 2023. This in itself is also a good indication for our projection.

BUSINESS DAY

C002D5556

Thursday 01 November 2018

BUSINESSTRAVEL Beyond the straw: Delta removes single-use plastics on board

IATA forecasts 8.2bn air travellers in 2037 …says protectionism could reduce aviation’s benefits

Stories by IFEOMA OKEKE

elta Air Lines is continuing the removal of a variety of single-use plastic items, including stir sticks, wrappers, utensils and straws from its aircraft and Delta Sky Clubs. The on-going effort comes on the heels of the global airline’s leading move to remove plastic wrap from international Main Cabin cutlery in April, and is expected to eliminate more than 300,000 pounds in plastic waste annually – that’s more than the weight of two Boeing 757 aircraft. Other moves contributing to Delta’s long-time sustainability efforts include the elimination of unnecessary plastic wrapping from Delta One amenity kits, and reducing Styrofoam in the cafeterias at Delta’s Atlanta headquarters in favour of compostable and/or reusable alternatives. Delta’s Minneapolis office campus ditched Styrofoam altogether in 2015. Additionally, Delta has formed a Youth Advisory Council to help guide the airline’s efforts to minimize the use of single-use plastics and support other sustainability initiatives. Initial members include Georgia natives Carter and Olivia Ries, who founded One More Generation, and California resident Shelby O’Neil, who founded Ocean Guardians. Carter, Olivia and Shelby have been instrumental over the past year in driving sustainability efforts on Delta’s campuses, including No-Straw November during which they spoke to employees about the importance of reducing single-use plastics. Emma Kavanaugh, founder and president of a Surfrider Youth Club at St. Thomas Aquinas High School in Florida will join the trio as an initial member, while a partnership with the Captain Planet Foundation will seek additional members through an application process launching in November that seeks diversity in geographic location and eco-passions. The council will complement the airline’s employee-led GreenUp

Award of Honour to Aare Segun Philips in recognition of his tremendious contribution and repositioning of NACCIMA. L-R: President of Lagos Chamber of Commerce, Babatunde Ruwase, the Awardee, Aare Segun Philips, National President of NACCIMA, Iyalode Alaba Lawson, MFR,FIoD,JP and the director general of NACCIMA, Ambassador, Ayoola Olukanni at the executive Meeting held on 25th October 2018 at the NACCIMA House.Ikeja

group that connects with Delta employees to find meaningful ways for the airline to positively impact the environment. “We’re looking broadly at how we can adjust our sourcing and behaviors to have greater impact on the local and global communities where we live, work and serve,” Christine Boucher, managing director – Global Environment, Sustainability & Compliance said. “Reducing single-use plastics is a natural extension of the work we’ve been doing for years to lead the industry in efforts to reduce our impact on the environment, and we’re looking forward to working with young thought leaders like Carter, Emma, Olivia and Shelby to build an even more creative and impactful approach.” Delta customers will already notice red plastic straws and stir sticks being replaced in Delta Sky Clubs with environmentally friendly bamboo drink stirrers and birch stir sticks, and customers on board will see the elimination of red plastic straws and stir sticks in favour of

the same alternatives starting in mid-2019. Together, the changes will eliminate more than 183 million plastic straws and stir sticks from Delta’s aircraft and clubs. Compostable straws will be available in clubs for customers upon request. Delta Sky Clubs have also started moving toward compostable alternatives for service ware. Delta has partnered with the airports in Seattle and Minneapolis since 2016 and 2017, respectively, to help manage those clubs’ compostable waste, and the airline is now identifying the best ways to expand composting at all 51 airports that feature its clubs. Customers are already starting to see these sustainable changes happening at Delta Sky Clubs: Noncompostable plates, utensils, bowls and buffet dishware are currently being replaced with compostable alternatives (started in Seattle in 2016) Plastic stir sticks are currently being replaced with bamboo stirrers for cold beverages, birch wood stirrers for hot beverages. Plastic straws are also being replaced with

Nigerian travellers get opportunity to visit Dubai with Emirates offers

mirates is offering Nigerian travellers the opportunity to visit Dubai, available at a very special offer for Economy and Business Class round-trip, a free third piece of luggage of up to 23 kg, a month’s tourist visa* included in the offer and bonus Skywards miles. Under the special offer, an Economy Class ticket from Lagos (LOS) to Dubai costs 799dollars and Business Class 3,199dollars and from Abuja (ABV) to Dubai an Economy Class ticket costs 599dollars and Business Class 2,799dollars. The special offer is for a limited time only and tickets must be booked between October 24th 2018 and November 7th 2018, while travel must take place between October 24th 2018 and March 31st 2019. The cost of the ticket includes

airport taxes. Emirates is also offering a 3rd piece of luggage of up to 23kg for Economy Class and up to 32kg for Business Class, with a one-month tourist visa included. Dubai provides a great escape for visitors. Its year-round sunshine, world-class shopping and restaurants, stunning beaches and iconic buildings offers something for the whole family. Visitors to Dubai can enjoy some of the city’s must-see places like Global Village - multicultural Festival Park and shopping destination - as well as theme parks such as Wild Wadi Waterpark and IMG World of Adventures. Top experiences for Nigerians to visit while in Dubai are: Gold Souk – Nigerians cherish

Gold. Get long-lasting Gold jewelries at Dubai Gold Souk. The Gold Souk is a traditional market in Dubai, located in Dubai’s commercial business district in Deira. Dubai Malls- Shopping in Dubai is fun for Nigerian Travellers. Dubai Mall is the second-largest mall in the world by total land area, and the 21stlargest shopping mall in the world by gross leasable area. Located in Dubai, United Arab Emirates, it is part of the 20-billion-dollar Downtown complex, and includes 1,200 shops. Safari- Passengers can experience the red and golden sand dunes of the Arabian Desert on a 4x4 safari. They can watch the sunset while dune bashing, camel riding, enjoying a falcon show and a Bedouin style dinner in the desert.

bamboo stirrers for cold beverages, birch wood stirrers for hot beverages (compostable straws are available upon request). Customers can watch for these sustainable improvements coming to their onboard Delta experience starting in mid-2019: Delta One Tumi amenity kits will no longer have outer plastic wrappers. As of April 2018, international Main Cabin plastic-wrapped utensils no longer have an outer plastic wrapper and are rolled in a napkin instead. It positioned Delta as the first U.S. airline to offer carbon offsets to customers and the only airline to voluntarily cap carbon emissions at 2012 levels by purchasing carbon offsets – more than 2.5 million in 2017 alone, and almost 9 million carbon offsets since it started. Delta was the first U.S. airline to recycle aluminum cans, plastic bottles and cups, newspapers and magazines from aircraft and has recycled more than 3 million pounds of aluminium from on board waste – equivalent to 22 Boeing 747s – over 10 years.

he International Air Transport Association (IATA) revealed that present trends in air transport suggest passenger numbers could double to 8.2 billion in 2037. The latest update to IATA’s 20Year Air Passenger Forecast, shows that an increasing shift Eastwards in the center of gravity of the industry is behind the continued strong growth. Over the next two decades, the forecast anticipates a 3.5% Compound Annual Growth Rate (CAGR), leading to a doubling in passenger numbers from today’s levels. The Association warned, however, that growth prospects for air transport, and the economic benefits driven by aviation, could be curtailed if protectionist measures are implemented by governments. “Aviation is growing, and that is generating huge benefits for the world. A doubling of air passengers in the next 20 years could support 100 million jobs globally. There are two important things that stand out about this year’s forecast. “Firstly, we are seeing a geographical reshuffling of world air traffic to the East. And secondly, we foresee a significant negative impact on the growth and benefits of aviation if tough and restrictive protectionist measures are implemented,” said Alexandre de Juniac, IATA’s Director General and CEO Eastward shift in aviation’s center of gravity continues. The Asia-Pacific region will drive the biggest growth with more than half the total number of new passengers over the next 20 years coming from these markets. Growth in this market is being driven by a combination of continued robust economic growth, improvements in household incomes and favourable population and demographic profiles.

Turkish Airlines signs FFP agreement with Brazilian Airlines

urkish Airlines frequentflyer program, Miles and Smiles, one of the most prominent airline loyalty programs with 10 million members, offers its members mileage accrual and redemption opportunities on flights with Turkish Airlines and partner airline flights. In addition to its existing partnerships with 27 Star Alliance member airlines, Miles and Smiles has launched a Frequent Flyer Program (FFP) Partnership with Brazilian carrier Azul Brazilian Airlines by signing an agreement. The signature ceremony of the agreement was held in the Azul Brazilian Airlines Headquarters in Sao

Paulo, with the attendance of Ahmet Olmuştur, Turkish Airlines chief marketing officer (CMO), Azul Brazilian Airlines chief financial officer (CFO), Alexandre Wagner Malfitani, executives from both sides, and representatives from international and local press. Commenting on the agreement Ahmet Olmuştur, Turkish Airlines’ CMO, said; “We are delighted to expand our partnership with Azul Brazilian Airlines. We have a working codeshare cooperation which was established in December last year. And with this Frequent Flyer Program Partnership, we are glad to achieve a higher level of collaboration with Azul.”

BUSINESS DAY

Thursday 01 November 2018

CityFile

Man bags 22 years for $250,000 fraud

Lagos High Court sitting in Igbosere has sentenced an Indian, Sandeep Gogia, to 22 years imprisonment for defrauding Boars Communication Limited of 250,000 dollars. Justice Lateef Lawal-Akapo jailed him after finding him guilty of the fraud charge filed against him and his company, Eastern Metal Limited, by the Economic and Financial Crimes Commission (EFCC). EFCC had arraigned him alongside his company on a three-count charge of conspiracy, theft and obtaining under false pretence and he pleaded not guilty. The anti-graft commission alleged that Gogia alongside one Arun Goswani, who is at large, defrauded Boars Communication Limited by obtaining the amount under the pretence of having naira equivalent of the money. Grogia committed the offence while being the Chief Operating Officer (CEO) of Eastern Metal Limited sometimes in July 2015. The offences contravened the Criminal Law of Lagos State, 2015 and the Advance Fee Fraud and Other related Offences Act No 14, 2006. The judge, while delivering judgment, found him guilty of conspiracy, obtaining under false pretence and freed him on allegation of stealing. Justice Lawal-Akapo, therefore, sentenced him to seven years imprisonment for conspiracy and 15 years on the second count charge of obtaining money by false pretence. He said that the sentence would run concurrently from October 25, 2018. The judge, however, freed him on the third count charge of stealing and ordered him to pay restitution to the victim. He said “the second defendant, Eastern Metals Limited is to wind up and the asset be forfeited to the Federal Government”. NAN

Insecurity: Obaseki seeks monarchs’ support

do State governor, Godwin Obaseki, has urged traditional rulers in the country to support governments’ fight against insecurity as there is a need for a collective effort to tackle the menace. Obaseki made the submission during the courtesy visit by members of the National Council of Traditional Rulers of Nigeria led by the Amanyanabo of Nembe Kingdom, Edmund Daukoru, at Government House, Benin, the Edo State capital. According to Obaseki, “the support of traditional rulers is needed as the nation seeks lasting solution to address security challenges that have been a source of concern to everybody.” The governor linked the high level of insecurity in the country to socioeconomic dislocation and failure to plan appropriately. He urged government at all levels to rise to the challenge to win the war against insecurity in the country. Daukoru while addressing the governor expressed displeasure over the security situation in the country. He said that the traditional rulers were meeting in Edo State to come up with solutions to address the menace. He said a communique would be issued at the end of the meeting.

Shiite Protest: Members of Shiite clashed with Police during their protest, at the Central District of Abuja on third day, calling for release of their leader El ZakZaky. Pic by Tunde Adeniyi

LASG out with measure to tackle viral outbreaks JOSHUA BASSEY

agos State government has developed a framework that provides accurate and timely information on quick research and management of viral outbreaks. Jide Idris, the state commissioner for health disclosed this at the inauguration of a Lagos State Biobank on Tuesday. The biobank is a new biosecurity laboratory funded by Canada, in partnership with Lagos State. The laboratory will serve as a single repository for all high-concentration pathogens in the state. It will also help to mitigate post Ebola virus disease threats and build capacity for prevention, detection and response to future outbreaks in Nigeria and West Africa. “Following the successful containment of the Ebola outbreak in the state in 2014 and lessons learnt from it, the government set up a committee to design and develop a blueprint for our preparedness and control of emerging biological threats of local and international concerns. “This (biobank) is one of the recommendations the committee made. The state ministry of health has constituted a manage-

ment committee to oversee the project and identify relevant staff with requisite skills and experience to constitute the biobank biosecurity team,’’ Idris said. The commissioner added that the biobank would form strategic alliances with key federal institutions such as Nigerian Centre for Disease Control (NCDC), Nigerian Institute of Medical Research, Lagos State University Teaching Hospital, among others. He said:“Throughout our benchmark activities, we will ensure our operations in this facility are up to international standards. We will endeavour to form long and lasting collaborations with strategic African and international partners.’’ Chikwe Ihekweazu, the Chief Executive Officer of NCDC, said that the launch of the facility signified progress for health security in Nigeria and the West African region. Ihekweazu said that establishment of the facility would improve the country’s ownership of research around infectious diseases. According to him, it will also improve national human resource capacity and increase Nigeria’s participation in cutting-edge translational research. “At NCDC, we currently host a national

biorepository at our National Reference Laboratory in Abuja. “This is being used for the National AIDS Indicator and Impact Survey, the largest survey on any infectious disease in the country. Our goal is to collaborate with public health laboratories in Nigeria and ensure that the biobanks that exist are well coordinated toward the improvement of national and global health security,’’ he said. Bamidele Mutiu, a microbiologist, speaking on the development, said that the new facility would help to identify, detect and recognise any organism rapidly, so that effective clinical management could be instituted as soon as possible. Mutiu, who is the director of the newly inaugurated Lagos State Biobank, said: “Before now, for most of the public outbreaks, most often than not, we have to look for different laboratories for the diagnosis. “But, with the inauguration of the state biobank, it means we will be able to diagnose as soon as possible with rapid turnaround time. “Also, we will be able to keep in our archive those samples that were isolated so that in case we have another outbreak later in future, we can easily compare their genomic constituents,’’ he said.

Erosion: Women protest sand excavation in Anambra

omen in Oko, Anambra State have protested against excessive excavation of sand in the area, saying it was one of the major causes of gully erosion in their communities. The women numbering over 200 from Oko community in Orumba North local government area during the protest on Tuesday claimed that the excavation has left them at the mercy of the ravaging erosion. The women carried various placards and barricaded roads leading to Federal Polytechnic, Oko. Maureen Izuegbunam, the women leader, Oko community, who led the protest, said that over 15 houses had caved in as a result of erosion while many others were at the verge of collapse. “The Federal Government through NEWMAP had approved an intervention for the control of erosion but those excavating sands had refused that the project would be carried out because of their financial gain. “We decided to stage a protest against the sand excavators since they refused to heed

our plea to allow construction work go on,” Izuegbunam stressed. “We have appealed to the state government to come to our aid but since the government is not interested in our plight, we may be forced to relocate from the disaster area because most of our houses are already under threats of the erosion. “Already, we are leaving with our children, animals and property but are prevailed upon to stay behind by some of our husbands, who were suddenly released this morning from detention over the disputed excavation site. “We are reliably informed that the state, local governments and the state ministry of environment are involved in the collection of revenue at the excavation site. “If Governor Willie Obiano’s government feels that Oko is still part of the state, he should do the needful because if he fails to intervene, we will definitely relocate to other area with our family with the notion that the state government cares less about us,” she said. Another woman, Akuabata Nwankwo, appealed to the state government to intervene on the

matter, noting that erosion had destroyed many buildings worth millions of naira in the area. “If nothing is done now to tackle the menace not just in Oko but in the entire Orumba North and South local government areas, there may be loss of lives in the next rainy season. “This is because women are mostly affected by the effects of disasters like erosion,” Nwankwo, the candidate of PDP in the 2019 election for Orumba North and South Federal constituency, said. Mike Okonkwo, Anambra State commissioner for environment, while reacting to the protest, said the ministry had a month ago sealed off the excavation site to enable it conduct Environmental Impact Assessment. “From the look of things, it is contributing to erosion but because we wanted things done properly, we decided to conduct an assessment. “However, the youth of the area in collaboration with some persons who had interest in the sand business reopened it without government’s knowledge. We will definitely look into the protesters’ demand,” he said.

BUSINESS DAY

Thursday 01 November 2018

INTERVIEW ‘The potentials in combining health care and technology are enormous’ Abasi Ene-Obong is the CEO and Co-founder of DiagnoseMe Africa, Nigeria and Africa’s leading genetics and personalized medicine company which provides doctors, consumers and patients with life-saving diagnostic solutions that were previously inaccessible in most of Sub-Saharan Africa. In an interview with Ifeoma Okeke, he speaks about the DiagnoseMe Africa platform and its benefits to Africa.

Can you tell about yourself and what you do? y name is Abasi Ene-Obong. I am Nigerian from Cross River State. I grew up in the UNN campus to Professor Parent. I attended University of Calabar where I gained a degree in Genetics and Biotechnology. Afterwards I relocated to the UK and gained an MSc in Human Molecular Genetics from the Imperial College London, then a PhD in Cancer Biology from Barts and the London School of Medicine and Dentistry, University of London. I also studied for a masters in business management with a focus on life science and healthcare industries in the Claremont Colleges in California. I went on to work for the leading global healthcare data and consulting company, IQVIA (formerly QuintilesIMS) as a consultant and as a management consultant for PricewaterhouseCoopers in the US. I have carried out very high-level strategy and operational projects for some of the leading healthcare organisations in the world including Pfizer, Gilead, Abbot, Astellas, Merck and for other organisations such as University of California, Panasonic and the United States Trade Representatives. In Africa, and specifically in Nigeria, I have led projects for a number of governments and leading healthcare NGOs and donors. I am also a published scientist where my seminal work on pancreatic cancer immunology is published in the leading paper of the field of Gastroenterology, called Gastroenterology. I have more than eight years’ experience in the health sector during which he worked in the United Kingdom, United State and Nigeria. I was previously a cancer researcher in the UK and my seminal work on pancreatic cancer immunology is published in the leading journal, Gastroenterology, and has been cited hundreds of times. Afterwards I worked as a management consultant in the US during which he helped Fortune 100 pharmaceutical companies launch oncology and other specialty medicines globally. I have also carried out many projects for these companies that span business development, strategy, marketing and commercial operations amongst others. Some of the organisations he has performed work for include: PricewaterhouseCoopers USA, IQVIA (formerly QuintilesIMS), Panasonic, Abbot, Gilead, Merck, Pfizer, University of California and the US Trade Representatives. In Africa he has consulted for USAID, PharmAccess Foundation, Pathfinder International and a number of African governments. I currently hold four degrees including, a PhD in Cancer Biology which he obtained in two years from Barts and the London School of Medicine and Dentistry of the Queen Mary University of London, a Masters in Human Molecular Genetics from the Imperial College London, a Masters in Bioscience Management from the Claremont Colleges in California, and a Bachelors in Genetics and Biotechnology from the University of Calabar. You spent a significant part of your adult life abroad. At what point did you decide come back to Nigeria to invest in the growth of her

genes can decide to have a mastectomy as Angelina Jolie did. And by so doing significantly reduces the chances of developing breast cancer as there’s no breast tissue for the cancer to occur in. Similarly, a woman who detects HPV early can prevent cervical cancer, and a man or woman who detects hepatitis C virus early can prevent liver cancer. Are there other molecular and genetics diagnostics company that offer these services in Nigeria/ Africa? I believe we are Africa’s leading company doing what we do.

Abasi Ene-Obong

health sector. In 2013 when I was leaving the UK to the US, I knew then I was going to come back to Nigeria to contribute to the health sector. So, in my spare times and at weekends I would study about the health sector in Nigeria and design business models. This eventually birthed DiagnoseMe. What is DiagnoseMe Africa all about? DiagnoseMe is an online platform that makes it possible for anyone to access life-saving tests conveniently from their homes and offices. Most of the tests on the DiagnoseMe platform cannot be found in laboratories around you as the Nigerian medical laboratory sector still has some infrastructural challenges. From testing for allergies to checking for the risk of developing cancers such as breast, prostate, ovarian and cervical cancers, paternity tests and noninvasive pregnancy tests. And all our tests are performed in the leading CLIA-certified laboratories in the world. We also give patients and doctors a secure portal to communicate and manage their health records for free. This is an online platform and you said people can do their tests at the comfort of their homes. How does that work? One of the things we are proud to do is to make it convenient for everyone. We believe you can get tested in a convenient manner. So one of the ways we do this is that for some of our tests, we just send you a kit. Some of our test like, our genetic tests, all you need do is to spit into a tube which was sent to you and so you don’t need to go to a hospital or a lab to do this. And for some tests we need blood samples and for those tests, there are two ways we try to add convenient to that process. We would send you one of our health work

team members who are certified nurses and scientist who come to your house and take your blood sample. Or if you prefer, you can go to one of our partners’ locations which are highly curated good quality hospitals and laboratories and all you need to do Sis to show them that you are from DiagnoseMe and they would take your blood and you don’t have to wait because we take it from there. All these sound interesting but how affordable are you? I keep telling people that affordability is not the same thing as cheap. We are as affordable as you can get any of these tests. So we are very affordable. And of course we are coming up with some innovative tests that help with things like malaria, which would definitely be cheaper but what we tell people is how much can you get these tests anywhere in the world. And what we are giving to you is the ability to get these tests either at the price you get it at any other part of the world or even less. When you consider the fact that you don’t have to travel abroad to do these tests or even send your samples abroad, so we are affordable as much as these tests can be but then our tests are the most innovative tests anywhere in the world and when it comes to your health, give it the best. DiagnoseMe focuses on early detection of major diseases and virus, why is this important? The war on some of these major diseases such as cancers is won when they are detected early. Chances significantly improve when the cancer is detected early, when it is still in only one tissue, or before it has actually become a cancer. For instance, a woman who has a breast cancer causing mutation in the BRCA

What would you say is the current status of the use of technology in advancing healthcare in Nigeria? I think one of the problems when dealing with the application of technology in advancing healthcare is that many times we are not addressing the actual problems. Healthcare is a complex industry with many stakeholders. I think we would do better when we have a confluence of ideas and industries coming together to solve problems. Typically, in Nigeria, healthcare has been left to medically trained doctors to manage. I loved working in healthcare in the US because I worked with people of all sorts of trainings and backgrounds coming together to reimagine healthcare. Of course, the US healthcare system still has its problems but you can’t fault them on innovation. So, I will say people with healthcare backgrounds and experience need to communicate with the people with technological experience and together there is no limit. What part of your job do you find most satisfying? I did a lot in my time outside Nigeria, but they were not as satisfactory as what I am doing now. Nigeria is Fatherland. And together we will improve our challenging healthcare landscape. What is the ultimate goal for DiagnoseMe? Our main goal is that people would not have to travel abroad anymore because they can get tested and treated here. The truth is that what stops person from being properly treated is when they are not properly tested. How can one adequately treat when one does not know what they are treating? And even if some people continue conducting medical tourism, there are others who cannot afford those expenses. They too should receive care. But more importantly, we see people focusing on “easy to treat” diseases in the primary care setting and when you speak to them about complex diseases like cancer they make statements like “let’s finish treating malaria first before we go to cancers.” I believe people who say this may not have lost loved ones. When you have felt the itch, you will scratch! In Nigeria, we sometimes go for the easiest to do, and while that can be a smart strategy for the short term, it leads to longer terms inefficiencies. So DiagnoseMe wants to actually solve healthcare problems in Nigeria, not just by focusing on easy to do things, but by solving the problems people need solved, and sometimes, even before they know they have these problems.

Thursday 01 November 2018

C002D5556

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

INSIDE Towards securitization of intellectual property rights for commercial transactions in Nigeria

30 Forceful entrance: HEDA petitions IGP, seeks prosecution of embattled NHIS boss, others

31 Winners emerge from 2018 Lawyers table Tennis Open

Effective business intercourse OYEYEMI ADERIBIGBE

of the fact that you are a mobile autograph of your organisation, so the stakes are higher, and you should be intentional. Casually tabbing the date and not preparing for the event is the first faux pas! Instead of focusing on the “what nots” I will like to drop a few hints on what you should think of and do, to make it a successful outing and improve your personal credit. Gather your “intel”: It goes without saying that failure to prepare is standing in the line to hug failure. As such, one of the first indicators of preparation is the information you have at your fingertips. You should be clear on the date, the venue, the time, the exact hall, special seating for your boss and yourself (where available), the subject matter of discussion or purpose of the event and more recently, I have learnt that if you can get information on who it is that

de is a third year Associate in a law firm, and he has just been selected to attend a legal awards ceremony where his firm has been nominated alongside his Managing Partner. He is beside himself with excitement as this is the first time he would be asked to attend a formal event on behalf of the firm. In the same breath, he is hit by waves of fear and a lot of questions to which he has few answers. What do I wear? What do I say when I receive questions? What will my boss expect of me? What is the protocol for such events? You may be in Ade’s shoes tomorrow; would you know what to do? It would be helpful if you are prepared for such impromptu events. Whether you are attending in your personal capacity or representing your firm, it is critical that you are conscious

Continues on page 31

DOA once again takes front row seat at the Law Digest Awards THEODORA KIO-LAWSON

t would seem the law firm of Duale, Ovia and Alex-Adedipe (DOA) is on a relentless path to the top of the legal profession, as it yet again bags another round of awards at this year’s Law Digest Awards. The firm which was nominated in six categories: Emerging Law Firm of the Year (1-3 Partners; Young Managing Partner of the Year; Managing Partner of the Year; Property, Infrastructure and Construction Team of the Year; IP and Technology Team of the Year and Power, Energy and Natural Resources Team of the year; came up tops in three out of these categories. DOA won the categories of Young Managing Partner of the Year, Managing Partner of the Year and Emerging Law Firm of the Year. It would be recalled that in 2017, the firm was nominated in several categories at the Law Digest Awards and also won awards in two key practice areas: Telecommunication, Media & Technology (TMT) and Real Estate & Construction at the Nigerian Legal Awards.

Run by the trio of Adeniyi Duale, Soibi Ovia and Adeleke Alex-Adedipe, DOA continues to leave its mark in key areas of practice and the legal industry in Nigeria, taking giant strides and demonstrating capacity as well as a competitive edge in the legal market. The partners have expressed

appreciation at the recognition they have received in the industry, as well as the trust clients continue to place in the firm’s ability to deliver value driven legal services. Commenting on this recent achievement, they reiterated their commitment to delivering worldclass legal services. Recipient of two of the awards, DOA managing partner, Adeniyi

Duale, is recognised as an astute lawyer with more than a decade of experience advising on various aspects of corporate and commercial matters. He specialises and has depth of experience in Energy (Oil and Gas, Power and Infrastructure), Capital Market, Telecommunication, Media and Technology, Real Estate, Aviation law, Mergers and Acquisitions,

Private Equity and Business Regulatory and Advisory. Located in the heart of Lagos at the highbrow Lekki Peninsula, DOA is a bespoke full-service commercial law firm, which offers a wide range of expert legal services to a highly diversified client base both local and international operating in various sectors of the economy.

BUSINESS DAY

C002D5556

LEGALINSIGHT

Thursday 01 November 2018

LegalBusiness

Towards securitization of intellectual property rights for commercial transactions in Nigeria

ntellectual Property (IP) refers to conceptions of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. IP Rights are property rights in something intangible that protect innovations and reward ingenious activity. IP Rights allows people to own their inventiveness and innovations in the same way that they can own physical property and it is indeed the most valued asset owned by a company. Traditional conception of property did not admit of the existence of intangible property. Accordingly, IP rights were largely unrecognized. This was especially so in the commerce and trade industry where investors were anxious for tangible property as collateral for loan grants. However, as the economic base of society shifted, other types of property acquired value, and debtors and creditors began to recognize the worth of IP rights as collateral for commercial transactions. That notwithstanding, the possibility of employing IP rights as security for commerce raises intricate issues of legal concern. This article is an attempt towards examining the employability of intellectual property rights as security for commercial transactions in Nigeria; especially in a developing economy where the relevance and importance of intellectual property rights are almost relegated to the background. The request for loans for funding of companies is as pronounced as ever. Property that a mortgagor has covenanted as security in a transaction is often referred to as security. Up until now, commercial lending was reserved only for companies that had substantial tangible assets and notable accounts receivable. Mortgagors conventionally pledged tangible assets and accounts receivable to secure bank loans, and intellectual property was a mere reflection in the creditor’s credit exploration. However, as the fiscal base of the society shifted, other forms of property attained value, and mortgagors and mortgagees began to recognize the worth of IP as collateral. Ever since Thomas Edison first used his patent on the incandescent electric light bulb as security to secure finance to start his company, the General Electric Company, IP began to gain the deserved recognition in the financial market as security. IP rights are assets that can be used as security for financing one’s enterprise over a secured

transaction. Using IP as collateral is an evolving business alternative that may offer a financing prospect for companies with valued IP assets looking for other sources of capital. Companies, large and small, may possibly need additional capital for a variety of purposes. Startup and smaller companies may need capital for such reasons as starting up or expanding operations, sustaining or increasing their research and development spending, or for complementary acquisitions.Today, mortgagors can give creditors security interests in intangible properties as well as physical assets. Intangible assets include IP rights, such as patents, trademarks and copyrights, and as a country’s economy develops progressively, IP rights are likely to become more and more valuable security. The economies with low interest rates have sparked a revival of securitization of risky assets. Traditionally, creditors secure loans with tangible assets; however, IP assets are becoming increasingly popular with both creditors and debtors now seeing them as veritable leverage to closing a deal. Truly, a person or company’s IP can be its most valuable asset, and one of the best means to take advantage of this asset’s value and monetize it to the company’s benefit is through securitization. Asset securitization is the practice of converting an asset

or a stream of cash flows into marketable security. It is well known in the finance industry but relatively new to the world of IP. Moving into the future, securing funding using IP will be more important as the focus of corporations continues to move towards developing IP. Though it may sound commercially unviable, risky and quite unimaginable to use IP as a source of security especially in Nigeria where little or no regard is paid to IP rights, yet it is a possibility. It is no doubt that we all enjoy the goodness of Facebook and other social media sites. What we enjoy today is nothing but the result of one man’s innovative thought. Facebook’s market capitalization is currently more than $460 billion as at April 2018. In the same light, there are so many software developers with mind blowing innovations like that of Facebook yet lacking in funds to bring their innovation to the limelight. In business world of today, the IP collection of many businesses forms a vital part of the company’s assets. As such, banks and other financial institutions advancing money to companies (in Western Europe, the U.S.A., Canada and other developed countries) are increasingly taking security over debtors’ IP portfolios as part of a security package. Particularly in transactions where the IP held by the debtor is of significant commer-

cial value. Careful consideration is required as to how security interests are to be created. Creditors valuing a debtor’s IP portfolio (in the context of taking security) have tended to focus on registered IP. The trade mark, patent, and registered design registers administrated by the Patent Office provide readily accessible information on registered IP, enabling creditors to easily identify not only the rights in question but also to verify information such as the term and ownership of such rights. These registers also contain information as regards any encumbrance theses IP rights labours under. Furthermore, the Patent Office operates a priority recording system whereby the record of a creditor’s security interest over a particular right means that third parties later acquiring an interest in that right (whether ownership, a license, or a security interest) will take subject to the creditor’s earlier registered rights. Consequently, while a debtor may not have any portfolio of registered IP, creditors may find that the debtor’s unregistered IP is of substantial commercial value. The identification of registered and unregistered IP will be a primary factor in deciding how security interests are to be created. In the bid to secure the interest of the creditor in securitization of IP rights, the following

step is to be taken by the creditor, and they are: Due diligence Taking security over the IP Post-transaction formalities While investors generally acknowledge the importance of IP to a company’s success, they are often not willing to use it as collateral for providing finance. Reasons for this include the intangible nature of IP and difficulty of placing a value on it. The power of commerce is particularly evident in the area of secured credit, where loans and other extensions of credit can have a profound impact on the growth of business, and therefore the growth of economies. Considering the value of IP and its availability, it is our view that IP should be encouraged as a form of security and our laws should be reformed toward this global trend among developed nations. Though IP may be difficult to use as collateral for securing debt, especially in Nigeria where piracy is at its peak and regard for intellectual property is at its lowest ebb, it indeed remains a possible, viable and unexplored form of security. Nwora Ike Obiora, is a Lagos based Intellectual Property and Technology Law lawyer.

Thursday 01 November 2018

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RIGHTSWATCH

“The Force Public Relation Officer subsequently dissociated the force from that action and those officers involved in the illegal act of brigandage and harassment of public officers on official duty at the NHIS head office. Mr. Yusuf refused to adhere to the suspension order of the council and forcefully gained access to his office while being guarded by police officers. “ HEDA noted that, “It is worth noting that Mr. Yusuf was previously suspended by the Minister of Health, Isaac Adewole, in July 2017 over alleged gross misconduct and fraud but was in February controversially reinstated by President Muhammadu Bu-

BDLegalBusiness

Forceful entrance: HEDA petitions IGP, seeks prosecution of embattled NHIS boss, others

he Human and Env i ro n m e n t a l D e velopment Agenda (HEDA) Resource Centre, has urged the Inspector General of Police, Ibrahim Idris, to investigate, arrest and prosecute the embattled Executive Secretary of the National Health Insurance Scheme (NHIS), Usman Yusuf over the forceful entrance into the scheme’s head office in Abuja on the 22ndOctober, 2018 with the aid of security operatives. In a petition signed by HEDA’s chairman, Olanrewaju Suraju, the Resource Centre said the situation is one that can cause chaos and a breakdown of law and order in the scheme’s office and as such requires the arrest of anyone found wanting or trying to jeopardize the security of the institution. The petition read: “We hereby write to request for the investigation, arrest and prosecution of the suspended Executive Secretary of the National Health Insurance Scheme (NHIS) and officers of the force for the forceful entrance into the scheme’s head office in Abuja on the 22nd October, 2018 with the aid of security operatives. “According to reports from an online news medium dated the 22nd October, 2018 the suspended Executive Secretary; Yusuf in a flagrant display of high handedness and disregard for official protocols, used unknown police officers in his entourage to overpower workers, staff, union and security officials at the head office while trying to gain access in spite of his suspension by the governing council of the scheme, who had set up a panel to probe allegations of fraud and infractions against the Executive Secretary. There are also allegations of the use of tear gas on workers by these officers of the police force.

BUSINESS DAY

hari. This was before his second suspension by the Governing Council over similar allegations of fraud and infractions. “The above is quite devastating and alarming as it suggests that an individual can make attempts to sabotage an entire system with the cooperation of the police as against the existing structure of an agency of the federal government. “This situation is one that can cause chaos and a breakdown of law and order in the scheme’s office and as such requires the arrest of anyone found wanting or trying to jeopardize the security of the institution,” the petition said.

PHOTOFILE

Dr Uju Agomoh Executive Director of PRAWA ( L ) with Dr Mary Maboreke Secretary of the African Commission on Human and Peoples’ Rights at the 63rd Ordinary Session of the African Commission on Human and Peoples’ Rights, Banjul - The Gambia on October 25th, 2018.

Effective business intercourse Continues on page 29

would be attending the event then you should. In Ade’s case, it is an awards ceremony and the firm has been nominated, that is a big deal. In your case, it may be simply a business meeting to touch base with an old friend or client, even then, that is a big deal. Every time is a big deal! Why? You are representing the firm and whether casual, formal, trivial or important, you wear a brand and you should put your best foot forward. More importantly, you should get a sense of the personality and the inclinations of your boss in such settings. This is very crucial when you have not had significant interactions with your boss. Ask senior colleagues for information tactfully. I would give an example, knowing that your boss prefers that you appear in traditional black suits for such events will prevent you from wearing a GQ like cobalt blue suit which in some other context would have been acceptable. Some may call this extra, but this is one way to differentiate yourself. You should understand who it is that you would be dealing with and be clear on his/her expectations. Show up on time: I need not flog this much, timeliness is like fragrance, it enhances you. Your choice in this regard should be to get there before or alongside your boss. Getting there after should not be an option. Fix your get-up: How you look is critical. You must dress well and do not take risks. Risqué dressing such as plunging necklines and exaggerated slits are totally outlawed. Be conservative, clean and formal. Again, you have to get your information right about the event and align yourself as such. Sometimes, being the centre of attraction may be detrimental. Your smile is part of your get-up, use it. Your business cards (where applicable) must not be left at home, they are still conventional in formal settings so make sure to keep them at hand. Also, knowing something about the subject of the event (where it is themed on a specific subject matter) helps a lot. The ability to display some knowledge about the theme is always an add-on and y0u get the benefit of it where your boss witnesses you display such knowledge. Please note

that this is not a call to outwit yourself or speculate on things on which you have no clue, in such instances, just listen, you probably would learn a lot. Tactful and concise engagement: Loud laughter, loud chattering with a friend you accidentally meet, butting into conversations, longwinded responses, unwarranted arguments with strangers take away from you. Conscious determination of when to speak and what to say comes with time but, you should start by listening carefully and responding with tact. Where it is a question of knowledge, engage when you know what is being said, speculating just because you want to have a say could be destructive for your career, check your data. Also, pay attention to conversations, it is a learning opportunity. Be confident and attentive: Such experiences can be daunting especially at the first try, but this should not make one avoid such situations. If you have done your homework well and gathered your intelligence appropriately, you should have nothing to fear. If seated at a table of notable seniors along with your boss, do not have a fearful posture. Listen, nod your head and maintain an open posture to show you’re absorbing what is being said. Where in doubt, keep your questions and ask your boss after the event. You need not directly engage if you are unsure about the propriety of your queries. Be yourself: Finally, be yourself. Forged accents, contrived facial expressions and inflections are unsuitable. Also, some of us resort to our phones like comfort food. No! Avoid using your phone as a face guard, it is impolite and except the circumstances are exigent, you should put it away. These rules are not exhaustive, clarity comes with time and you sure will find your voice. These tips aid instalmental progression and you sure will be better for it. OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Vice-Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ Committee Liaison Officer of the African Regional Forum of the International Bar Association. Feedback – Oyeyemi.aderibigbe@templars-law.com; yemiimmanuel@yahoo.com.

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INDUSTRY FILE Practice administrators forum holds seminar in collaboration with NBA-SBL

he Practice Administrators Forum in collaboration with the NBA Section on Business Law holds a one-day seminar today, Thursday November 1st, 2018 at the Lagos Court of Arbitration (LCA) in Lekki Phase 1. T h e s e m i n a r, themed ‘Mastering the Generational Diversity in Law Offices’, will examine key drivers impacting the future of legal services, with critical focus on the rapid changes in the workplace and how the legal profession can effectively adapt to these changes. Revealing a survey, which states that in the next 4 years, 75% of the workforce will be millennials, the organisers have disclosed that the conversation would touch on technology, innovation, globalisation, commoditisation; how demography is altering the face of law practice

and how all of these will impact the traditional business model of law practice. The Association of Law firm administrators in September hosted over 50 Legal Administrators and professionals at a similar event, where it highlighted the role and valuable contributions of legal management professionals to the business of law.

PHOTOFILE NBA-SBL Chairman, Seni Adio, SAN and Irene RobinsonAyanwale of the Nigerian Stock Exchange, Co-chairpersons of the Nigerian Coalition of Services Industry (NCSI) were in the office of the Director General, Nigerian Office for Trade Negotiations (NOTN) to validate the Nigerian Draft Market Access Offer for Trade in Services (Schedule of Specific Commitment). In the photo is the DG, Ambassador Osakwe, who witnessed the signing.

Thursday 01 November 2018

BDLegalBusiness

Hong Kong highlights IP as priority with move toward specialist court

ong Kong is to hire intellectual property judges as it seeks to manage a growing caseload of IP disputes, taking the lead from jurisdictions that already have specialist courts – including mainland China and the UK. The special administrative region’s judiciary is in the process of taking steps to appoint specialist judges. Cases involving IP disputes would then be listed and directed to those judges. Charmaine Koo, partner at Deacons in Hong Kong and co-head of the firm’s IP department, said a specialist court was ’very much needed’ to cope with an increasing amount of IP litigation in Hong Kong. Having specialist judges will help ’streamline cases and minimize time and costs for both the parties and the courts’, she said. It is not known yet if the recruitment exercise will be open to foreign judges. The proportion of foreign judges in Hong Kong’s courts has declined since China took back sovereignty in 1997. However its highest court – the Court of Final Appeal - has 12 non-permanent justices from common law jurisdictions including the UK and Australia. Former Supreme Court President Lord Neuberger is among those to have sat in the court. The Gazette understands that practitioners are being consulted about the plans with a further announcement expected early next year. The move comes as China’s government seeks to champion its ‘Greater Bay Area’ project,

an ambitious ‘technology hub’ linking the special administrative regions of Hong Kong and Macao with cities on the Chinese mainland. Earlier this year, Hong Kong’s justice secretary Teresa Cheng visited London where she said the development of the area will ‘naturally result in a lot of IP rights that will be generated and disputed.’ She added that despite China’s history of ‘not dealing with IP in the most mature way’, protection is becoming essential. A similar system has also been implemented in China. In 2014, IP courts in Beijing, Shanghai and Guangzhou were opened and this month, the National People’s Congress was reported to be considering legislation that would create an IP tribunal within the Supreme People’s Court that would act as a national IP appeal court. Xun Yang, partner at LlinksLaw in Shanghai, said: ‘IP laws continue to be an emerging legal regime given the fast-developing technologies. The establishment

of the specialised IP courts facilitate the gathering of IP experts, jointly improving IP judicial practice.’ In the England and Wales, what was the Patents County Court was reformulated as a specialist list of the High Court as the Intellectual Property Enterprise Court in 2013. Earlier this month it was also revealed that UK judges are being recruited to help establish an IP court in Ukraine. At a launch event in London Lord Neuberger – one of the judges who will be advising on the implementation of the Ukraine court - said he hoped to help establish an ‘independent and reliable’ justice system in the country. The pilot scheme for the new IP court – which is being funded with £850,000 of UK overseas aid - will discuss the legislative framework, advice on best practice and help launch a training programme for newly appointed judges. -Culled From Law Society Gazette

Winners emerge from 2018 Lawyers table Tennis Open

winner has emerged from the 2018 Lawyers table Tennis Open, The known as the Mfon Usoro Cup. At the tournament, which is in its 10TH year (since 2009), Titilayo Osagie won the women category of Lawyers Table Tennis Open (Mfon Usoro cup) 2018 after defeating the defending Champion Yetunde Martins in the keenly contested finals that ended 11- 6; 11-5 and 12-10 in favour of Osagie. Osagie has won the tournament seven times previously before Yetunde Martins beat her in the 2017 games to emerge the 2017 Champion. Titilayo Osagie bounced back in 2018 to defeat Yetunde Martins in the 2018 finals making it the 8th time she will be winning the trophy. Zainab Olabode Shodunke beat Queenette Hogan to win the third place prize. The match ended 5-11; 11-6; 12-10; 12-14; 8-11 in favour of Zainab. In the men’s category, first time players in the competition took the first, second and third positions kicking Tunji Abdulhameed the defending champion to a position of obscurity. Yahaya Olarewaju,a first time

competitor from Lokoja took the trophy away after beating Seye Oki is a fierce finals which ended 11-5; 11-6; 11-6. Joshua Nyengierefaka took the third place position after beating Kabir Adeleke 5-11; 11-8; 6-11; 11-9; 4 -11. Among the dignitaries present were the President of the Nigerian Bar Association, Paul Usoro SAN, the sponsor, Mfon Usoro; the chairman of the NBA Lagos Branch, Chukwuka Ikwuazom; the Vice Chair Bola Animashaun; Alex Mouka, former chairman, NBA Lagos; and Martin Ogunleye, former chair-

man, NBA, Lagos. Others were, Aisha Ado Abdullahi, former national treasurer Nigerian Bar Association and Efe Etomi wife, of pioneer Chair of the Nigerian Bar Association Section on Business Law. Lawyers also came from Jalingo, Abuja, Kano, Port Harcourt, Kaduna, Lokoja, Ibadan, Abeokuta, Lagos, etc. The winners of the event took home N250, 000 .00 N150, 000 .00 and N100, 000 .00 respectively. The winner of the women prize also went home with the ‘Efe Etomi prize’ worth a hundred thousand Naira.

Thursday 01 November 2018

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BUSINESS DAY

GARDEN CITY BUSINESS DIGEST Port Harcourt gets Graduate Business School IGNATIUS CHUKWU

ort Harcourt has become the first city in Nigeria to get two business schools. This follows the birthing of the Graduate School of Business by the Ignatius Ajuru University of Education, IAUE, (formerly the Rivers State University of Education, UOE). The IAUE was a college of education that produced most of the manpower in the education industry in the Niger Delta which began at the heart of the Garden City today called the Saint John campus near Garrison on Aba Road. The college was for many years affiliated to the University of Ibadan (UI) for degree courses before it was weaned off the UI few years back during the era of the first vice chancellor, Rosemund Green Osahogulu, the first education professor in the Niger Delta. By the decision of the IAUE to float a second business school in the South-South also in Port Harcourt, many believe that the university has put it foot forward in the ambition of venturing into entrepreneurial exploration. The decision not to pursue all branches of study but to narrow to business/economics as well as maritime has been interpreted to mean that the school wants to play in the regions of area of strength and maximize the maritime resources through deeper studies. The region has shown eagerness to compete in the area of entrepreneurship and for a university to offer to lead the charge in that direction is indication that gown and town may be ready to explore opportunities in the unique sector where the Niger Delta is said to have lagged behind for decades. This seems to be at a time that the region seeks life after oil in sustainable ventures for job

...Business/Economic Studies to groom entrepreneurs and economic hit-men ...Maritime Studies to exploit the aquatic resources of the oil region ...Industry partners helped to design the syllabuses and courses ...Foreign universities to partner with the PH-2 experiment

Abia State Governor, Okezie Ikpeazu (r), presenting the gong to Rivers State Governor, Nyesom Wike (2nd L). With them are: Ebonyi State Governor, Dave Umahi (l) and Director General of The National Council for Arts and Culture, Otunba Segun Runsewe.

creation and wealth maximization, probably leveraging on oil. The School of Business & Economics Studies would focus on human capital development in areas of oil and gas management, human resource management, security, peace/ conflict studies, public administration, taxation & finance management, communication and media arts, and corporate finance & governance. Others include strategic management, and agro business management. The School of Maritime Studies would focus on three critical branches; Executive MSC in Maritime Administration, Ports Administration & Management, and MBA or MSC in

Transport, Shipping, and Logistics Managemen. The attractions or sweetners laced on the offering includes steady power supply (the bane of public sector education in Nigeria at the moment), conducive learning environment, link up to the New York Stock Exchange, and the e-Library. A fairly large crowd of eggheads gathered at the downhill side of St John’s on the Saturday morning of October 20, 2018, where the Rivers State Government was represented by the Commissioner of Education, Tamunosisi Gogo Jaja to flag off the new venture, supported by the ProChancellor/Chairman, a top monarch

and king, Aaron Miller Ikuru and the pro-chancellor, Ozo-Mekuri Ndimele, who opened the speeches by letting the world know that this is Nigeria’s fourth business school and second in Port Harcourt, a sign that Port Harcourt is growing in leaps and bounds again. The registrar/secretary of the council of the new school is Hope Kue-Ikoro. The professor and chairman of the board of the ‘Graduate School of Business School’, Kinanee, said admission was ongoing. He however revealed that the programme is designed to be modular in nature so that each student can work out his/her schedule and duration because most of them would come from the industry.

NAFEST 2018 ends on a high-note in Port Harcourt as 25 states get N125m IGNATIUS CHUKWU & FAVOUR ICHEMATI

ort Harcourt remained the cynosure of all eyes away from bloodshed and killings in other faraway states as the colourful display of the nation’s culture and tradition rigned for one week. This ended on a high-note in Port Harcourt on Saturday as 25 participating states showcased the diversity of the nation at the National Festival of Arts and Culture (NAFEST 2018), and went home with N125m. NAFEST 2018 which was described as a masterstroke saw Rivers State emerging as the overall best state of the festival. Bayelsa State emerged second place, Ondo State took third place, Federal Capital Territory (FCT) emerged fourth place and overall fifth place went to Delta State. Traditional musicians, cultural dancers, traditional acrobats and masquerades displayed during the closing ceremony at the Sharks Stadium in Port Harcourt. Speaking at the closing ceremony, Gov Wike said that NAFEST was not just a competition, but a platform to promote the culture of Nigeria. He said: “Let us use culture to unite this country. The entire country is here and we are celebrating in unity. Apart from sports, culture is the uniting factor in Nigeria”. Meanwhile, Gov Wike offered farewell packages of N5million each to the 25 participating states in the 2018 National Festival of Arts and Culture (NAFEST), including Rivers State. Speaking during the closing ceremony at the Sharks Stadium, Port Harcourt, last Saturday, Wike said that no one would come to Rivers State and go back empty handed.

Why Fruit Garden families earnestly want to vote for Wike

Port Harcourt by Boat With

IGNATIUS CHUKWU

f voting should start right now in the governorship election in Rivers State, votes from families of the Fruit Garden Market traders would go straight to Gov Nyesom Wike, as most of them have vowed. Let’s see their reason. Smarting from total loss suffered in the evening of September 27, 2018, the over 213 direct shop-owners out of the 600 shops in the famous elite market felt the ground sink below their feet. The Fruit Garden Market, formerly called European Foods Market, occupies a critical position in the Niger Delta market system, being the place Europeans and other elitist enclaves

hope to source their food supplies. Fruits and canned stuffs form an important part of this supply. There were 600 shops there before the fire that consumed about 200. The market has in stock European foods such as canned foods, standard cooking oils, baking beans, rice, corn, vegetables, carrots, cabbage, onions, green pepper, tomatoes, and frozen foods. It is also a centre of supply to the many hotels in the Garden City and entire Niger Delta region especially to the rigs, estates, expatriate homes, super markets, etc. where European meals and veggies rule the diet schedule. Most of the merchants had done or were doing their Christmas stocking because of expected boost in demand at festive seasons. The traders therefore strive to raise funds to meet this surge especially as most dealers do not come to Port Harcourt at the heat of the Christmas. Just as most of them did so, fire broke out at about 7.30pm when the last of the traders had just left for the day, leaving only the guards. The fire disaster left many hearts broken, and many business careers shattered. Their dependants were devastated. Now, that shock is

being heavily reduced by the actions of the leaders of the two top political parties in the state, the APC and PDP. But, the governor seems to have surpassed all. People belong to different trades and professions. That also is how they have different challenges. The Fruit Garden traders have theirs, which is how to start businesses again; how to grapple with the sudden end by fire to their businesses. They did not have to mourn for long. The governor has made good his pledge to help them re-start their businesses. Last Saturday, he came down himself and began handing out N400,000 drafts to those whose shops were directly involved and N300,000 to those without shops but were on attachment. Also, the company that would handle the construction of a modern Fruit Garden Market or European Foods Market was brought along together with equipment and construction machinery. In fact, work has started and the traders are hailing. A week earlier, the APC flagbearer in the state, Tonye Cole, had visited the scene and released N15m

cheque which went N80,000 each. The governor came and said such amounts would not do much and did better, being the man in charge of the exchequer. When both Cole and Wike came to sympathise earlier and made promises, most of the victims may have been miffed over the pledges, believing they were the smokescreen of political promises. Now, there is quiet in their stomachs as they wonder if politicians truly do honour promises. They are now new converts to politics of help. Interactions with families of some of the traders showed fresh zeal and a positive opinion of political leaders, at least in Rivers State. They now ask to know if truly politicians have sympathy and could care about the plight of victims or sufferings of the poor. This seems a new narrative to them. Some of them said their votes have been reserved for Gov Wike for restoring hope and reviving lives. It is from these shops that people pay school fees, house rents, medical bills, fuel their vehicles, move about, and do what lives says they should do. Whoever has made them to live lives again would sure get their votes, as they have stated in private conver-

sations with each other. Traders and ordinary people are apolitical or apathetic but the fire disaster brought them face to face with elimination. Now, political action has restored them. They will now understand the true link between politics and a citizen’s life. It has also proved that politics can be positive and the masses can understand it beyond fraud and corruption’ broken hearts and failed hopes. The APC is not in power in the state but the candidate still managed to cough out N15m. A PDP lawmaker had earlier dropped 100 big umbrellas just to provide shed to them. These tokens have touched hearts in no small measure. It is a pointer to the fact that politicians can connect with the masses if they stooped low enough to listen to the vibes and pains of the common man and make policies that can address their pains. What if the FG or a state created a ‘Victims Compensation Scheme’ that rescues victims of natural disasters and those harmed by unidentified persons. The remedy can bring the victims or their families back to status quo (as if the harm did not happen).

BUSINESS DAY

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Thursday 01 November 2018

Investing in Rivers State Citizens Trust advocacy:

Ogoni communities want lawmakers from their area to render effective representation henceforth Ignatius Chukwu & Innocent Eteng

elestine Bodo Nvindubari and Pius Duko, two Ogoni community spokesmen, have revealed what the average Ogoni community person expects from his or her legislative representatives at all levels. At the moment, they said those they laboured to elect so far have carried on as if they were representing anybody. It was against this backdrop that on October 19, 2018, when Nvindubari and others heard that Citizens Trust Advocacy and Development Centre (CITADEC) - a nonprofit advocating for local development - was organizing a one day dialogue that could afford them opportunity to express their displeasure over their lawmakers’ lack of effective leadership, they all gathered at the headquarters of Gokana Local Government Area - venue of the event where they also learnt how to better engage their representatives. At the even, stakeholders zeroed in on the theme; “Legislative Accountability and Inclusive Legislation in Ogoni.” “What inspired us (to organise the dialogue) was that, we found out that the legislative arm of government is one of the arms of government that has the opportunity for realization of the wishes of the people about how government should work. But for the most part, people are not connected with governance the way it should

Governor Nyesom Wike

be,” said Lawrence Dube, executive director of CITADEC. “They (lawmakers) are not taking custody of the issues in their constituencies. Whether it is development issue, social issue, security issue or conflict issue, the people cannot connect with them. So, it appears that government is not working the way it should work because the lawmakers are the ones that

should connect to their people, get feedbacks from them and strengthen the institutions of the state and their oversight functions and their lawmaking rules so that government can work for the good of the people.” Stakeholders at the meeting highlighted specific issues they feel elected lawmakers have failed to legislate on. For example, Kennedy Nuta abhors the manner violence

against women and the girl child has ravaged his community in Gokana. “Women are violated all round domestic violence, rape and many others. You see the (women and the girls) infected with diseases,” he said. For Nvindubari: “What is happening in my community is insecurity. That is the major root of any prevention of development. Cultists are terrorizing everywhere and the authorities are not doing anything about it, even when they are called.” The Rivers State House of Assembly has twice in the past 15 years passed more stringent laws against cultism, but the input of the community people and awareness campaigns may not have been sought. Nvindubari, Nuta and Duko feel that such issues in local communities can be brought to a halt through inclusive and accountable representation from the likes of Magnus Abe at the Senate, Maurice Pronen at the House of Representatives and Innocent Barikor at the Rivers State House of Assembly. “It is high time these legislators began to pass laws because over time, I have passed through their activities. They don’t make laws that protect the right of the women and girls. We have a whole lot of obnoxious practices that do not meet twenty first century expectations if we must move forward from mundane things,” Nuta said. “Their lack of inclusiveness and accountability has affected my local community immensely and negatively. I can tell you that it was during

the electioneering campaign that we saw them in our community. Since after then, you cannot hear from them again. Even when you try to access their constituency office, their PAs (personal assistants) sometimes would be asking you to fill a form. You fill a form today, you fill a form tomorrow, for a good one month you cannot have access to them so as to make a suggestion,” Nvindubai lamented. Duko, who described the dialogue as apt and critical since local people were sensitized on how to engage their lawmakers, said: “When laws are made, we expect that they should tell the people how to come and be part of that, like it is done in the state house. Create that awareness so people can be part of it and make suggestions.” Moving forward, Dube, the CITADEC director, said: “After this stakeholder engagement where we want to aggregate opinions and feelings of the people, we are going to put up certain trainings for them that will build their capacity in terms of legislature and bureaucracy. “How they can engage their people constructively and positively without creating chaos and confusion in the way that will further create the division between them and their legislators. We are putting those trainings together and, subsequently, from those trainings, we (would) organise advocacy districts. We would also organize issues that can actually anchor their advocacy from.”

Garden fire disaster:

Gov Wike restarts stranded traders with about N82m, flags off construction of new complex Fruit Ignatius Chukwu

ov Nyesom Wike of Rivers State shook the D-Line vicinity in Port Harcourt on Saturday when he handed out between N300,000 and N400,000 to about 213 traders whose shops were burnt on September 27, 2018. BusinessDay gathered that the governor gave N400,000 to owners of shops and N300,000 to other traders without shops but alo affected. The funds were to help them restart their businesses. The governor followed this up by flagging off reconstruction of a new Fruit Garden Market with modern designs and facilities with a beautiful model that has won the hearts of the over 600 listed traders in the market. He caused huge applause when he announced that when completed, the shops would be allocated first to those whose shops were burnt. This convinced the traders that the governor was truly a grassroots man who knew what usually caused problems wherever government rebuilt burnt markets; handing the new shops to ghost traders who turn round to exploit the real traders. Gov Wike redeemed his pledge

Saturday morning to compensate traders of the burnt Fruit Garden Market Port Harcourt as he handed over bank drafts to some of them. Others were told to go to the Govt House and meet the Chief of Staff with proper identification to collect theirs. Those who went rushed back to tell others that it was real. This seemed to be the first time government’s promises proved real to common people, they said. Those with some issues were asked to return on Monday, October 29, 2018. Also on Saturday, the Rivers State Government flagged off the reconstruction of the burnt section of the Fruit Garden Market. The foundation

stone was laid by the Ebonyi State Governor, Engineer Dave Umahi. Wike said; “Today, Government will compensate you, so that you can pick up your lives. We have the bank drafts because we don’t want you to be targeted by criminals. Go to the banks, open accounts and expand your businesses”. The governor charged the contractors to ensure that the market is completed within the next three months. “We have paid 60percent of the contract sum. So, this market must be completed in three months. We have the funds to complete the market in record time. “We are building a bigger and

more beautiful market. All the affected traders must have their shops back, before the remaining shops are allocated to others “, he said. He said that governance is about trust and keeping to promises. He said that the Mile One Market was burnt under the Amaechi administration, but that the administration failed to rebuild the market, despite promising the traders. He said during the campaign, he pledged to reconstruct the Mile One Market, pointing out that the market will be ready by December. He joked with the traders, saying the donation of N80,000 to each trader by leaders of a rival political party would hardly help any

trader. “They said they will rebuild this place when they win, I am rebuilding it now”, huge applause followed. Ebonyi State Governor, Engineer Dave Umahi praised Governor Wike for his commitment to the rapid development of the state. He said that Governor Wike has proved to be a lover of his people through unending roll out of projects. “Wike has continued to plan projects for his people. He is building up treasure for himself in heaven and touching the lives of his people. You may not understand what Wike is doing until you visit other states. In Rivers State, the people are filled with gratitude for the good works”, Umahi said. Special Adviser to the Rivers State Governor on Special Projects,Daks George Kerley, stated that market would have open and lock-up shops. He said that the market will have a perimeter fence, a car park, warehouses and security features for the protection of the market. Mayor of Port Harcourt City Local Government Area, Mr Victor Ihunwo Nyeche thanked the Rivers State Governor for coming to the aid of the affected. He stated that the traders will repay the Rivers State Governor in 2019 by overwhelming re-electing him.

Politics & Policy Thursday 01 November 2018

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BUSINESS DAY

Selling of public assets to fund 2019 budget is fiscally irresponsible, Atiku tells Buhari INNOCENT ODOH, Abuja

he Atiku Presidential Campaign Organisation has denounced the policy statement by the Muhammadu Buhari administration evincing a plan to sell National Assets to fund the 2019 budget, describing it as “fiscally irresponsible”. A statement issued on Wednesday by the Atiku Campaign Organisation averred that this action by the Buhari administration has the effect of ridiculing the President. “It will be recalled that on Monday the 29th of October, 2018, President Buhari accused past leaders of the People’s Democratic Party of not building public infrastructure, while delivering the 75th Anniversary Business Lecture of the Island Club, Lagos. “However, some of the assets listed for sale in the policy document of the Buhari Administration, were assets built or established under the PDP administrations that governed Nigeria between 1999 and 2007. Some of them were the brain child of the Presidential candidate of the People’s Demo-

Atiku

cratic Party, Atiku Abubakar,” the statement said. Atiku then asked in the statement that if the PDP did not build infrastructure, as alleged by President Muhammadu Buhari, “who then built these assets that this administration wants to sell to fund their 2019 Budget?”

The statement said that as head of the Economic Management Committee during the Obasanjo administration, Atiku Abubakar, supervised the successful policy of privatisation. “Privatisation works because it is a long-term strategy to engender efficiency in the economic system

Akinola, APC chieftain, blames Amosun for party problems in Ogun AMAKA ANAGOR-EWUZIE

olaji Akinola, a chieftain of All Progressives Congress (APC) in Wasinmi, Ewekoro Local Government Area of Ogun State, has blamed the State Governor, Ibikunle Amosun for the problems of the party in the state. In a statement made available to journalists in Abeokuta, Akinola said Amosun willfully imposes candidates on the party without recourse to democratic processes. “The way and manner Governor Amosun carries on in Ogun State should concern any well-meaning party member. The governor neither consults nor allows the popular will to prevail. He imposes whomever he wants on the party,” he said. During the APC ward, local government and state congresses, Akinola said that only those handpicked by Amosun were returned to office. “I fully participated in all the congresses and I can tell you authoritatively that there was no voting anywhere except in Ifo Constituency 1 and that was because Taiwo Oluomo, the deputy speaker of Ogun Assembly, who is the state lawmaker from Ifo constituency,

defied Amosun and insisted that the right thing be done. “During the state congress in May also, there were no elections. No party member can come out and say they voted for any one candidate. All the party executives that emerged, from the chairman, Derin Adebiyi to the lowest position, were all handpicked by Amosun the night before. They just announced their names to us and that was it,” he said. Akinola accused the Ogun State Governor of non-performance during his second tenure, which led to impoverishing the people

Amosun

of the state. He said Ogun State indigenes have had enough of the embattled governor and would resist attempts to impose an unpopular candidate as his successor. “The real primary in Ogun State APC was the one that produced Dapo Abiodun as our governorship candidate. Every other one including the so-called primaries conducted by the Derin-led executive that purportedly produced Abdulkadri Akinlade, is nothing but a sham. “Forget the propaganda dished out daily by the apparatus of the state government; people are unhappy with Amosun administration and that is why he is afraid of popular votes. He will rather write results than subject his candidates to popular votes. “But we are at the point where we are saying ‘enough is enough’ to Amosun and his co-travellers. Our people have been subjugated and held in bondage for too long and the time for their liberation is now. “Akinlade is not a popular candidate and any attempt to impose him on the state will backfire against the party, but with someone like Dapo Abiodun, who was chosen by the popular will of the people, victory is sure,” he added.

and expand the frontiers of private sector activity. Its primary goal is not to raise money for short term stabilisation of what is clearly a fragile fiscal system. The government’s planned sale of assets will cause long term pains and only provide short term gains,” the statement said. The Atiku Campaign Organisation pointed out that it makes no sense to sell public assets simply to fund a ‘business-as-usual’ budget that is essentially 70percent recurrent. It added that it is irresponsible to part with valuable assets simply to consume the proceeds (Like selling your family house to take a trip overseas on holiday). “We knew that such a day would come, which is why His Excellency Atiku Abubakar has on various occasions made it clear that what is needed at this time is fundamentally fiscal restructuring to eliminate our addiction to oil revenues and strengthen our internal revenue generating capacity and a restructuring of the budget in favour of capital spending. “For instance, last month, the PDP Presidential candidate questioned the wisdom behind the

Federal Government sharing $322 million Abacha loot to certain Nigerians, only to obtain a $328 million loan from China, allegedly for ICT development. “Rather than share that money, the Buhari administration ought to have put that $322 million in an escrow account to be used for funding the 2019 budget,” the statement said. Atiku noted further that that $43 million was found in an Ikoyi apartment, saying “while we note the failed promise of the Buhari administration to come clean on who was behind those monies, we make bold to say that those funds should equally have been placed in escrow for use in funding the 2019 budget. “It is a testament to our candidate that he helped build and develop national assets that are now so valuable that they can be sold. Creating more of such assets is at the core of his agenda to Get Nigeria Working Again. “It is our hope that the Buhari government will accept this patriotic pro bono advice and retrace its step accordingly,” the statement added.

Exam malpractices: Adeleke arraigned, granted bail FELIX OMOHOMHION, Abuja

enator Ademola Adeleke, the People’s Democratic Party’s candidate in the September 22, 2018 Osun State governorship election, was Wednesday granted bail on self recognition by a Federal High Court, Abuja. Senator Adeleke, alongside his brother, Sikiru Adeleke and Aregbesola Mufutau, Principal, Ojo-Aro Community Grammar School, Ojo-Aro Osun State, Gbadamosi Thomas Ojo, school registrar and Dare Samuel Olutope, a teacher in the school, were arraigned on a four-count charge of examination malpractices. In the charge marked: FHC/ABJ/ CR/156/2018, the defendants were accused of fraudulently, through impersonation, registering as students of Ojo-Aro Community Grammar School, Ojo-Aro Osun State to enable them sit for the National Examination Council (NECO) examination of June/July 2017. In the first count preferred against the defendants, the prosecution alleged that the five defendants “conspired to commit felony, to wit: examination malpractices, and thereby committed an offence contrary to section 10 of the Examination Malpractices Act Cap E15 LFN 2004”.

In count 2, the prosecution alleged that the three members of staff of the school acted in concert by aiding and abetting “the commission of examination malpractice by impersonation” when they alleged “registered Senator Ademola Adeleke and Sikiru Adeleke” while knowing or having “reasons to believe that they are not students of the school”. The alleged offence was said to be contrary to Section 9(1) of the Examination Malpractices Act Cap E15 LFN 2004. In count three, the two Adelekes were accused of acting in concert, and “personated as students of OjoAro Community Grammar School when you fraudulently registered as students of the school in the June/ July, 2017 NECO”. The offence is said to be contrary to Section 3(2) of the Examination Malpractices Act Cap E15 LFN 2004. The fourth count accused the three members of staff of the school of “acting in concert” and while “saddled with the responsibilities of registering students of your school in the June/July 2017 NECO examination, breached that duty by registering Senator Ademola Adeleke and Sikiru Adeleke as students of your school in the June/July 2017 NECO examination when you know or had reasons to believe that they are not students of the school”.

36 BUSINESS DAY NEWS AFC announces completion of tenure of pioneer general counsel

frica Finance Corporation (AFC) has announced the departure of Adesegun Akin-Olugbade at the end of his contractual term on December 31, 2018, after 11 years of service to AFC, as pioneer general counsel and corporate secretary (2007-2008), executive director corporate services and general counsel (20092014) and executive director chief operating officer and general counsel (2015-2018). A decade after its establishment, AFC has earned an enviable reputation in the infrastructure space internationally. As a member of AFC’s executive committee, Akin-Olugbade, played a key role in the Corporation’s adoption of strong corporate governance principles, systems and structures; expansion of AFC’s country membership; contribution to the growth of the Balance Sheet from $1.1 billion to $4.3 billion with operations in 28 African countries and the attainment of AFC’s investment grade credit rating - all of which have contributed to the success of the institution. He has served over 30 years in the legal profession and financial services sector, having worked at both the technical and management levels, in the public and private sector, for leading commercial law firms, development banks and international financial institutions. He was previously General Counsel and Director at the African Development Bank (AfDB) and the first Chief Legal Officer and Head of the Legal Services Department of the African Export-Import Bank (Afriexim Bank). AFC’s CEO, Samaila D. Zubairu, said, “We thank Adesegun for the key role he played in the evolution and growth of AFC to a leading Multilateral financial institution on the continent and wish him every success in his future endeavours.”

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Buhari may not assent to PIGB before March 2019 ...US report warns of declining production without investment OLUSOLA BELLO

resident Muhammadu Buhari may not assent to the Petroleum Industry Governance Bill (PIGB) until next year’s general elections amid political infighting between the Presidency and National Assembly. This has also been alluded to by a United States of America Energy Report, which warns that Nigeria needs investment to keep production from falling. The US-based Rystad Energy says in a new report the Federal Government should enhance investment in exploration and development of existing oil fields in the upstream sector so as to prevent decline in crude oil production output. A highly placed oil and gas industry source told BusinessDay that the reasons for not signing the bill into law by the Presidency

were actually not true, but that the President failed to assent to the bill because he wanted to get at the lawmakers whom the Presidency had tagged unfriendly to its course. The lawmakers have been at the vanguard of the need to kick-start the much needed reforms in the oil and gas industry, and because of this had been very active trying to put in place laws that would enhance this. Senior special assistant to the President on National Assembly Matters (Senate), Ita Enang, had identified the provision of the Petroleum Industry Governance Bill permitting the Petroleum Regulatory Commission to retain as much as 10 percent of the revenue generated as one of the reasons President Buhari declined assent to the bill. He said the President’s position was that the provision unduly increased the funds accruing to the com-

irector-general of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dakuku Peterside, has stressed the importance of the Gulf of Guinea to food security in the West and Central African subregion, stating that the region must be properly secured to avert illegal activities that may hamper food supply. Peterside said this at a seminar on the Blue Economy in the Interest of Food Security in the Gulf of Guinea Commission

US Consulate supports robotics workshop for 303 teachers, 187 students SEYI JOHN SALAU

or the second consecutive year, the United States Consulate General in collaboration with RoboRave International, a USbased tech academy, has concluded a weeklong robotics workshop for 303 teachers and 187 students. The participating students and teachers were from 29 public and private schools across Lagos, Ogun and Edo states as well as the Federal Capital Territory. Throughout the training, students were taught the basics of programming a robot to perform various tasks while teachers learned various aspects of implementing an integrated approach to Science,

(GGC) organised by NIMASA in conjunction with the GGC in Lagos, recently. Peterside, who was represented by the Agency’s executive director, finance and administration, Bashir Jamoh, said the Gulf of Guinea, a major shipping route, must be properly guarded if the countries in the region were to properly harness the blue economy for economic growth. According to Peterside, “the Gulf of Guinea, aside being a major shipping route, is also home to many aquatic species and so the countries in the region must do everything to safeguard the region from

illegal fishing, piracy and other activities that may affect the food chain,” NIMASA knows the importance of the region to the African continent and that is the major reason the Agency has continuously championed collaborations among member states to develop the continent’s blue economy through sustainable shipping, he said. He believed that the seminar would also assist participating countries to better understand the blue economy and how to properly harness the inherent potentials of the African maritime sector.

Technology, Engineering, and Mathematics (STEM) education. Russell Brooks, the US Consulate public affairs officer, while speaking at the grand finale of the workshop held at the Zone Tech Park in Gbagada, Lagos, explained that the workshop was designed to stimulate the interest of the participating students in math and science, as well as careers in the STEM fields. Brooks discussed the importance of STEM education to Nigeria’s future prosperity and economic competitiveness. According to him, developing robotics skills can place students on a track to future careers in computer science and artificial intelligence.

Winners of 2018 African Fact-Checking Awards emerge

ournalists from Nigeria and Senegal took the top prizes in this year’s African Fact-Checking Awards, held in Johannesburg on Tuesday. Chikezie Omeje of the International Centre for Investigative Reporting (ICIR) won the top fact-checking award for African media for a piece that checked if Nigeria recorded a drastic reduction in pre-school enrolment. The runner-up was Jason Norwood-Young of South Africa’s Daily Maverick for a report that checked how much water Cape Town residents were saving in light of a crippling drought. The winner of the student category was Moussa Ngom, a previous winner and who attends CESTI in Senegal, for a report refuting a claim that Dakar was the second most polluted city in the world. L-R: Amine Mati, mission chief/senior resident representative; Teju Somorin, immediate past The runner-up was Ibrapresident, Chartered Institute of Taxation of Nigeria; Doyin Salami, co-chair/resident commissioner, Fiscal Policy Roundtable; Salamatu Isah, representing governor of Kaduna State; Sarah Alade, heem Alawode, a student chairman, NESG Fiscal Policy Roundtable; Neil McCulloch, principal, The Policy Practice, and of the University of Ibadan Olufemi Awoyemi, CEO, Proshare, at the panel discussion on Leveraging Domestic Resource and intern at Dubawa (PreMobilisation for Sustainable Development by the FIScal Policy Commision of the NESG. mium Times) in Nigeria, for

Gulf of Guinea strategic to food security - Peterside AMAKA ANAGOR-EWUZIE

mission to the detriment of the revenue available to the federal, states, Federal Capital Territory and local governments in the country. It would be recalled that Nigeria had set a production target of 4 million barrels per day (mbpd) and 4mbpd by 2010 before the target deadline was adjusted upward to 2020 as a result of the non-passage of the Petroleum Industry Bill (PIB) launched in 2007. The version of the PIB passed by the seventh session of the National Assembly was not signed into law by the immediate past President Goodluck Jonathan. The report however stated that President Muhammadu Buhari refused to sign the Petroleum Industry Governance Bill (PIGB) passed by the eighth session of the National Assembly following the removal of the discretionary power of the President in allocating crude oil blocs.

Thursday 01 November 2018

his fact-check on whether Nigeria has the highest number of out-of-school children in the world. The winner of the best fact-check picked up a first prize of $2,000 and the runner-up $1,000. The winner of the student category takes home $1,000 and the runner-up will take $500. The awards, co-hosted this year with the African Investigative Journalism Conference (AIJC), were sponsored by the AFP news agency and Absa bank. Africa Check’s deputy director Noko Makgato thanked the sponsors and the six-person jury led by Head of Wits Journalism Franz Kruger, and said: “We are encouraged by the continued interest in the awards and the quality of entries. This is our fifth year running the African FactChecking Awards - the only awards that each year honour journalism by Africabased media in the growing field of fact-checking.”

Institutional reform: Edo Civil Service commits to continuous staff training

ead of Service, Edo State, Gladys Idahor, has commended the Godwin Obaseki-led administration for making staff training and re-training and prompt payment of salaries and allowances in the state civil service a cardinal objective of his government. Idahor said this at a day seminar on “Preparation of Establishment Proposals” for Senior and Middle-Level Officers in the State Public Service, at the Imaguero College Hall, Sapele Road, in Benin City. She said the seminar was conceived to equip participants with relevant skills and tools required for the preparation of important

documents and to further enhance on-the-job effectiveness and efficiency. She stated that government was determined to ensure that staff at all levels are equipped with relevant skills for effective and efficient performance, urging participants to apply the skills garnered at the training in their various offices. She reminded the participants of the need to conduct themselves in a civil manner as any act of indiscipline will be viewed as a bid to truncate the good wishes of the state government. Earlier, Deborah Enakhimion, permanent secretary, Directorate of Establishments, Training and Man-

power Services, whose office organised the training, urged participants to make the best of it, as the skills were essential in their day-to-day operations. She stated that an establishment proposal is an essential planning document for personnel budgeting, staff promotion, transfers and advancement in the service, which requires keen administrative skill and techniques in its preparation. She said it was necessary that schedule officers in Government Ministries, Agencies and Extra-Ministerial Departments be exposed to the technicalities in preparing establishment proposals, taking into consideration.

Thursday 01 November 2018

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Nigeria, Morocco launch first edition of strategic dialogues DANIEL OBI

igeria Economic Summit Group (NESG), the Africa Economic Development Policy Initiative (AEDPI) and OCP Policy Centre of Morocco have announced the launch of the first edition of the “Morocco-Nigeria Strategic Dialogues: Focusing on Enhancing Opportunities for Growth and Development. This partnership, according to a statement, aims to play a pivotal role in bridging the gap between the two countries, and catalysing debate and new ideas related to the future economic and other relationships between both countries. “The objective of this joint initiative is to provide a platform for comparative analysis of the challenges and potentials of the two economies as well as possible actions to promote complementary exchanges and synergies between them,” according to the

statement. The statement attributes to Karim el Aynaoui, managing director, the OCP Policy Centre, Morocco, saying this first edition will focus on a number of identified themes, including: Fiscal and Monetary Policies in Times of Uncertainty, The Complementarities between Nigeria and Morocco in the Energy Sector; The Role of Financial markets and the Mobilisation of Local Resources, as well as the Role of Youth and Diaspora at the Regional and Continental levels. It will also explore the roles of Morocco and Nigeria as two strategic players within the African continent. These two emerging countries, the statement states, have considerably leveraged relevant experience in multiple sectors. “When it comes to the role of fiscal and monetary policies, it is worth noting that price stability is important in avoiding prolonged inflation and deflation, and represents a significant objective of monetary policy.

“Monetary and fiscal policies are both very important in ensuring a stable economy, and Central Banks and Ministries of Finance have an important role to play in mitigating the impact of commodity prices fluctuation on the economic activity and how they can work to provide price stability,” the statement states. The statement further recognises that in the energy sector, there is very great value in highlighting the complementarities between Nigeria and Morocco, Nigeria being the first producer of Oil and Gas on the African Continent, and Morocco being a significant player in renewable energy. With regards to the mobilisation of local resources, the statement said that a large majority of African countries are subjected to crippling foreign debts, which could, ultimately, paralyse the economic capacities of the country if the foreign debt to GDP ratio remains dangerously high.

NHIS: SGF encouraging corruption, Nosak Group partners impunity in public service - Labour Edo on jobs creation JOSHUA BASSEY

rganised labour under the platform of Association of Senior Civil Servants of Nigeria (ASCSN) says the position by Boss Mustapha, Secretary to the Government of Federation (SGF), that members of boards of government agencies and parastatals cannot sanction the chief executives of such organisations, is a licence for impunity, lawlessness and corruption by such public officers. Alade Lawal, secretarygeneral of ASCSN, who stated this, also urged President Muhammadu Buhari to call the SGF to order. Lawal was reacting to the resumption in office twice by Usman Yusuf, executive secretary of National Health Insurance Scheme (NHIS), after his suspension, first by the minister of health, and second by the governing board of the NHIS. He quoted Section 8(3) of the National Health Insurance Scheme, which states, “the executive secretary shall, subject to the general direction of the council, be responsible for the day-today administration of the scheme.” Section 13(1) also stipulates that, “The council shall cause to be prepared, not later than 30 September in each year, an estimate of the expenditure and income of

the Scheme during the next succeeding year and when prepared, they shall be submitted to the minister for approval. “The council shall cause to be kept proper accounts of the scheme and proper records in relation thereto and when certified by the council, the accounts shall be audited by auditors appointed by the council from the list and in accordance with the guidelines supplied by the auditor-general for the federation. “Where then did Mustapha get the idea from that the NHIS executive secretary, UsmanYusuf, should run the agency like a sole administrator, breaking all rules and norms, indulging in all manner of financial recklessness without the governing council questioning him and suspending him where necessary.” The union further said: “Where in the world do board members of government agencies and parastatals stand arms akimbo as mere spectators while the chief executives under them turn such organisations into private estates running them as slave camps, indulging in financial recklessness without the supervisory boards calling them to order. “Mr. Mustapha’s announcement is an invitation for unbridled corruption to continue to thrive under President Buhari who has

osak Group, a Nigerian industrial conglomerate with diversified interests in the Nigerian economy, over the weekend, hosted a team of Edo State government officials led by the secretary to Edo State government, Osarodion Ogie. Chairman of Nosak Group, Toni Ogunbor, took the officials of the state on a facility tour of the company’s business outlets in Apapa and Amuwo Odofin Local Government. The facilities include Nosak Farm Produce, Nosak Distillers and Grand Petroleum. The company offers services in various sectors of the economy, which include: retails, manufacturing, logistics, finance, agriculture, haulage, real estate and petroleum. Speaking during the tour, Ogunbor said the company was seeking partnership with the state in the area of investment. The company intends to open some business offices in Edo State as a way of supporting the Edo State Govt in the area of job creation. With unemployment rate rising in the country, Nosak Group hopes to play its own part by replicating its successful business venture in Lagos to Edo. Speaking further, Ogunbor stated that Nosak Group has a total direct investment of about N30 billion, mostly in Lagos and partly in Edo state. In his words “In the past three years, the Group has fine-tuned its investment strategy and wants to focus more on the agro allied sector”.

37 NEWS

BUSINESS DAY

2019 election: S/South, S/East traditional rulers express concern over security

s preparations for the 2019 general elections heightened, traditional rulers from the Southern part of Nigeria have deemed it fit to draw a roadmap for elections that would be free, fair and violence free. Most importantly, their concerns are for the safety and security of lives of members of their communities during the forthcoming elections. Arising from the second Consultation Meeting of National Council of Traditional Rulers of Nigeria (NCTRN) South-South, South East chapter held on October 30 in Benin City, Edo State, the monarchs arrived at a common ground that “if our local community is saved, the whole Nigeria is saved.” Edmund Daukoru, chairman of the second consultation meeting of the Sothern monarchs, the Mingi XII Amanayanabo of Nember Kingdom, said, “The meeting was particular convened to consider the security situation in the country par-

ticularly at a time when the elections are just round the corner as this period is usually tensed and as traditional fathers, we felt we should get together and look at the matter from the grassroots[point of view. “Being that we have at many times look at it from the holistic national point of view but we felt that such brand of skills required quite some injection of money to get implemented. “So, this time we changed the tactic and said we should look at it from a practical and local point of view because if our local community is saved, Nigeria is saved. So this is a complete departure from the past when we always focused on the problems from a very high level. But now we are talking about community security at the local government level, at the level of our respective kingdoms and the senatorial districts that is where our concern rest now.” He noted however that the royal fathers were not overlooking the larger is-

sues. Appolus Chu, chief sponsor of event, the Ebere Emere Okori, Eleme of Eleme Kingdom, Rivers State; said the meeting was a platform where the traditional rulers from the Southsouth and South East part of Nigeria will come together and speak with on the voice on the policies that would be made in the interest of the nation. “For today’s consultation, the main issue will be looking at ways of ensuring a violence-free 2019 general elections. Aside that, we are going to look at other areas of common interest and grounds where the traditional rulers from the Southern part of Nigeria would come together. “This is just a consultation meeting and not a formation of a group nor club. It is a consultation of like minds of traditional rulers that would be looking at how to bring together royal fathers from the Southern part of Nigeria to have a common ground,” he noted.

38 BUSINESS DAY NEWS FG shifts TSA transaction costs to businesses... Continued from page 1

and the participating deposit money banks up to 24 months in

service charges. Dolapo Ashiru, a Lagos-based analyst while responding to the latest development said government cannot keep on subsidising everything. “Although it will be a burden on the payers but the government does have a point in spreading the cost and not wanting to pay it anymore,” Ashiru said. In 2012, the pilot TSA scheme commenced using a unified structure of accounting for the 217 MDAs for accountability and transparency in public fund management. InAugust2015,theinitiativewasful-

ly implemented and covered over 1000 MDAs after a presidential directive. At commencement, all players, including all commercial banks, SystemSpecs and the Central Bank of Nigeria (CBN), agreed that a fee of one percent of funds collected is payable. It is not yet clearifthisthefeethatwillnowbeborne by individuals and businesses doing transactions with the government. Ayo Akinwunmi, Head of research at FSDH Merchant bank believes the new tariff could help the government to increase its revenue as it takes out a major cost of operating the TSA. “I think it is a way to lower cost on the part of the government and by achieving that the government decided to spread the cost to Nigeri-

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ans. Most especially at a point when they are running low on revenue,” Akinwunmi said by phone. The TSA has enabled the government to keep track of all its revenues across its MDAs. So far it is estimated that N8.9 trillion has gone through the TSA powered by SystemSpecs Remita platform. One percent of this transaction amount is N89 billion which will not be borne by payers into the federation accounts for any services required from the government. Since the government forcefully enforced TSA in 2015, it has had trouble paying its technology partners and the CBN recently signaled it wanted to increase competition and reduce transaction costs for the TSA. The CBN in a circular dated April 26, 2018 had announced that all

licensed Payment Solution Service Providers (PSSP) would be eligible to participate in the sweeping of Federal Government collections to the CBN under the TSA e-collection framework via Nigeria Inter-Bank Settlement System (NIBSS) without direct integration with the CBN. This circular effectively broke the monopoly that Remita, a product created by Systemspecs has had on the federal government TSA operations in the country and replaces it with a NIBSS monopoly. “Accordingly, we advise all PSSPs to work on their various front end solutions to ensure that they conform to the new standard and also establish connectivity with NIBSS before the go-live date,” the circular signed by Dipo Fatokun, director, banking and payments system department read. The implication is that PSSP and other players who have been left out of the massive TSA payments, which total about N8.9 trillion a year, can now favourably compete. Banks could also bypass PSSP and make payments to the CBN directly through NIBSS. “There are no problems with Remita, just allowing room for more

Thursday 01 November 2018

players and engendering competition,” Fatokun had said. BusinessDay gathered that the go-live date was supposed to be at the end of second quarter or early third quarter. But there is no indication that this has been implement. Sources say it is likely that the introduction of the new TSA tariff model could have been the reason for the delay. With the introduction of TSA, Remita was integrated into CBN, OAGF, and the banks such that payments made to the FGN and its MDAs reflect in their CBN accounts instantly. Remita also helps the government to make payments of salary, vendors, and other local payments directly from a single platform. “Introducing other PSSPs will not degrade payment. It will give government options and drive down costs,” Johnson Chukwu, MD/CEO, Cowry Asset Management limited said. Sources at Systemspecs, which created Remita and is reportedly owed billions since making the system available to the government, said then they were not worried about the new development as they have always put the national interest first.

NLC discloses what each state proposed to... Continued from page 1

L-R: Folashade Adeloye, managing director, ARM Trustees; Michael Thomas, team lead, commercial trust; Janet Akinwale, trust advisor, and Tolu’ Odupe, commercial trust advisor, during their visit to BusinessDay head office in Lagos, yesterday. Pic by Olawale Amoo

Nigeria falls to 146 on ease of doing... Continued from page 1

tively assesses prevailing busi-

ness climate conditions across 190 countries based on 10 ease of doing business indicators. The index captures ease of doing business reforms that have been validated by the organized private sector, and offers comparative insights based on private sector validation in the two largest commercial cities in countries with a population higher than 100 million. The report consequently features Lagos and Kano for Nigeria. “Governments have the enormous task of fostering an environment where entrepreneurs and small and medium enterprises can thrive,” said Jim Yong Kim, World Bank Group president. “Sound and efficient business regulations are critical for entrepreneurship and a thriving private sector. Without them, we have no chance to end extreme poverty and boost shared prosperity around the world.” In July 2016, the Nigerian government inaugurated the Presidential Enabling Business Environment Council (PEBEC), as the administration’s flagship initiative to reform the business environment. The PEBEC, chaired by Vice President Yemi Osinbajo was also to attract investment and diversify the economy to reduce the nation’s reliance on oil. The big picture was to make it easier for micro, small and medium enterprises to do business, grow and contribute to sustainable economic activity, and provide the jobs essential to improving social inclusion. Ayodeji Ebo, MD/CEO, at Lagos based Afrinvest said the drop may not be a surprise because some of those gains are being reversed due

to poor monitoring on some of the policies that were earlier introduced. “Things like the visa on arrival, are not as effective as they were when they were introduced which has affected our ranking,” Ebo said. Data from the National Bureau of statistics showed that the total value of capital importation into Nigeria stood at $ 5.5 billion in the second quarter of 2018. This is a decrease of 12.53 percent when compared to Q1 2018. The decline recorded in the second quarter was as a result of a decline in Portfolio and Other Investments, which fell by 9.76 percent and 24.07 percent respectively “This ranking would continue to limit the extent to which we can attract investment into the country while smaller African countries would generate more. We have also seen this on corporate earnings with most of them loosing revenue like Dangote sugar as a result of the complexity in the Apapa port,” Ebo said on phone. The economies that ranked the highest in the ease of doing business were New Zealand, Singapore and Denmark. According to the report, these economies have consistently well designed business regulation with friendly business environment. Meanwhile, Mauritius, the United Arab Emirates and Malaysia joined the top 20 economies this year. Sub-Saharan Africa recorded onethird (about 36) of all business regulatory reforms with a total of 107 reforms while the BRIC economies- Brazil, Russia, India and China- introduced 21 reforms with getting electricity and trading across borders as the most common areas of improvement. More so, the report stated some benefits of improved business regulation, “for companies, greater access to new equipment and a larger scale

of operations, which can lead to increased competitiveness and productivity; clearly defined regulation and equal access to property rights are essential for enabling businesses to expand their operations.” Also, protection of small investors is important as greater protection helps promotes trust and confidence and in turn spurs greater access to finance for entrepreneurs. Commenting on the Report, Jumoke Oduwole, the Secretary of the Presidential Enabling Business Environment Council (PEBEC) and Senior Special Assistant to the Vice President on Industry, Trade & Investment, said: “The feedback from the World Bank has reaffirmed the commitment of the PEBEC to remove bureaucratic bottlenecks faced by businesses in Nigeria as we work towards improving the country’s competitiveness.” “The response from the private sector has also underscored the need for increased engagement between reform-implementing organs of government and the private sector players to ensure we are able to record sustainable progress. We strongly believe that while Nigeria did not increase in the rankings, the country has indeed witnessed an improvement in the enabling business environment in the past year. This will be reflected as more reforms are accepted for Nigeria by the World Bank Index in subsequent years” she further stated. Earlier this month, the World Bank had separately released its 2018 report on the ease of doing business reforms across the 36 states of the federation and the Federal Capital Territory based on four indicators. A major highlight of the report was that 32 out of 36 states recorded improvements in their ease of doing business scores, recognizing that states are increasingly working towards removing the constraints faced by businesses.

The NLC President alleged that the letter purportedly credited to Muheeba Dankaka, President, Kaduna Chamber of Commerce, Industry, Mines and Agriculture(NACCIMA)thattheChamber proposedN22,000wasfalsifiedbythose trying to truncate the exercise. Wabba who described the Nigeria Governors’ Forum as alien to the 1999 Constitution (as amended), argued that all the parties involved in the negotiation, including six representatives of the 36 State Governors and Organised Private Sector (OPS) after robust engagement unanimously agreed to the N30,000. According to the document seen by BusinessDay, Kano which has the biggest workforce and pays monthly wage of N9.2 billion offered to pay N30,600; Abia proposed N42,000; Jigawa proposed N32,000; Plateau proposed three figures (N25,000, N30,000 and N57,000, Nasarawa, proposed N24,750, N31,348.30 while Borno proposed N27,000). Also, Gombe proposed N28,000; Bauchi proposed N25,200; Adamawa proposed N23,000; Taraba proposed N20,000; Ondo proposed N22,000 while Imo Ekiti, AkwaIbom, Kogi, Katsina and Oyo states did not specify any amount in the memoranda submitted. The report further stated that Lagos offered that it will be bound by State Governors Forum, while Enugu offered to implement anything agreed at the Tripartite Committee. According to Wabba, the organized labour in a letter sent to President Muhammadu Buhari proffered a solution to the lingering crisis trailing the N30,000 agreed as the new minimum wage. He disclosed that Ama Pepple, chairman of the Tripartite Committee on Minimum Wage has not debunked the N30,000 which the tripartite committee agreed to. “We have said severally that Ama Peppleisawomanofhonour.Awoman that has been the head of Service of the Federation, she was also at one time Minister of the Federal Republic. Those are the qualifications that gave her the pedigree to be appointed as chairperson of the Tripartite Committee.” “The demand of organized labour is not N30,000. Our demand is N66, 500. N30, 000 is the compromise figure arrived at the end of negotiations by the tripartite partners – Government, Employers and Organized Labour. The new minimum wage

was a product of intense negotiations that lasted for almost one year.” Meanwhile it appears that core members of the Organised Private Sector (OPS) have towed different positions on the controversy trailing the national minimum wage. This comes as organised labour intensifies mobilisation ahead of November 6 nationwide strike that may further shake Nigeria’s fragile economy if allowed to commence. Amid rising tampers, Nigeria Employers’ Consultative Association (NECA) has carpeted the Nigeria Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA) over the latter’s position on what the 30-man tripartite national minimum wage committee agreed on during its concluding sittings in Abuja on September 4 and 5, 2018. Olusegun Oshionowo, the director general of NECA, who took on Muheeba Dankaka, the president of Kaduna Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA) in a statement on Wednesday, expressed NECA’s utter disappointment in the earlier statement by NACCIMA’s representative on the outcome of the works of the tripartite committee on the national minimum wage. Dankaka had in a letter to Ama Pepple, chairperson of the tripartite committee on the new national minimum wage, dissociated NACCIMA from the position of the OPS. But Oshinowo said: “Muheeba Dankaka was indeed absent from the sitting of the tripartite committee on the 4th and 5th September, 2018 when conclusions were reached. How then could she have been part of the discussions that led to the agreement? The NECA DG further said: “The OPS representatives had consulted among themselves and were in touch with their primary constituencies through the process of negotiation which culminated in the agreement of N30, 000 as the National Minimum Wage (NMW)” Oshinowo added that “Dankaka’s letter to the committee chairperson smirks, not only of mischief, but of utter ignorance on many fundamental issues and processes of the NMW fixing mechanism”. He noted that: “at no time did NACCIMA propose a contrary figure to that of the entire OPS which includes NECA, Manufacturers Association of Nigeria (MAN) and National Association of Small and Medium Enterprises (NASME), all through the works of the committee.”

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Nigerian troops not hungry, starving or begging in Northeast - FG OYIN AMINU, Abuja

ederal Government said on Tuesday that there was no case of hunger, starvation or begging among troops deployed to fight insurgents in the North East. The government’s position followed outcome of an investigation ordered by President Muhammadu Buhari in September to determine the veracity or otherwise of an online report that alleged deplorable conditions of the troops fighting Boko Haram in the North East. The publication had alleged that the troops deployed, in particular along Gubio Road and the Brigadier General Maimalari Secondary School, were begging for food to survive, poorly kitted with some wearing slippers and were facing irregular/short pay-

ment of their allowances. The publication also reported non-serviceable equipment in the theatre. “The troops in question, deployed at Brigadier General Maimalari Secondary School along Gubio Road, are being fed centrally three times a day, and are kitted immediately after their training before they are deployed in the theatre,” Lai Mohammed, minister of information and culture, said while speaking with journalists on the outcome of the investigation in Abuja. On the allegation of poor equipment and inadequate kitting, Mohammed said there was the inflow of logistics into the theatre in the past six months and that the investigation showed an enormous quantity of material distributed to troops in the theatre. “Needless to say that no army in the world

has all the requisite equipment to prosecute a counter-insurgency operation,” he stated however. “How then can soldiers who are fed centrally be starving or begging for food,” the minister queried. He said the monthly allowances of troops of the AFSF Battalion were being paid directly into their various accounts from the Defence Headquarters, “hence they cannot be short changed.” The minister said the allegations had grave implications for the security of the nation; hence the allegations were taken seriously by the President, who subsequently ordered an investigation to determine the veracity or otherwise of the claims in the publication. “Let me recap: There is no issue of hunger, improper kitting of soldiers, non-payment or shortpayment of soldiers’ allow-

ances and poor equipment at the AFSF Battalion or in any other units within Operation Lafiya Dole theatre,” he insisted. “There is also no irregular/short payment of allowances, while claims of poor equipment, inadequate kitting and accommodation are found to be ill conceived and unfounded,” he said. The minister again reemphasised that Boko Haram had been decapitated, compared to the past when they launched attacks at will, adding that as of today Boko Haram had no strong hold like they use to. “We are confident that we have contained Book Haram. It is not like before when they have their own territories in the states, they only launch their attacks on soft targets and run back to the boundaries like Lake Chad where they are hiding,” he said.

L-R: Innocent Ike, executive director, technology and services, Polaris Bank; Muhammed K. Ahmad, chairman; Tokunbo Abiru, group managing director/CEO, and Abdullahi Muhammed, executive director, Abuja/Northern region, at the investiture ceremony where Polaris Bank GMD/CEO was awarded a honorary Fellow by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.

2019: Party primaries fail to comply with Constitution, Electoral Act OWEDE AGBAJILEKE, Abuja

he Nigeria Civil Society Situation Room says the justconcluded primaries of political parties in Nigeria fail to comply with the 1999 Constitution and the Electoral Act. Situation Room also expresses concern that the primaries were characterised by vote buying, intimidation, imposition of candidates and violence. Addressing a press conference in Abuja on Wednesday, convener of the group, Clement Nwankwo, described the exercises across the country as a sham.

The group therefore called on political parties to respect their internal processes and provide avenue for credible redress of grievances of their members. It also tasked political parties to commit to free, fair and credible elections in February 2019. “The Situation Room is also deeply concerned about the brazen disregard of democratic principles by most of the political parties. The outrageous numbers bandied by one of the major political parties as figures for electing its Presidential Candidate is very worrying. The exceedingly inflated number of millions of votes an-

nounced for the affirmation of their presidential candidate has no basis in facts or reality. “Some other of the major parties conducted their primaries in ways that raise significant credibility questions, including the use of money. “Across the political parties, women have been complaining about how the process undermined their prospects of competing on level grounds. There are allegation of intimidation and hostility against some female candidates. The fact that there is no progressive affirmative action for women in political parties is worrying.

39 NEWS

BUSINESS DAY

We are not afraid of Atiku - Tinubu … backs Oshiomohole on party crises ... I won’t mortgage my conscience - Oshiomohole TONY AILEMEN, Abuja

he All Progressives Congress (APC) national leader, Ahmed Tinubu, has declared that the party was not afraid of the presidential candidate of the Peoples Democratic Party (PDP), Atiku Abubakar. Tinubu, who stated this after meeting with President Muhamamdu Buhari alongside the party’s national chairman, Adams Oshiomhole, said he was at the villa to “discuss issues affecting the nation, the country, our people, peace, stability and economic progress.” Asked if the party was jittery over Atiku meeting in Dubai to unseat President Buhari, he said, “We don’t fear, whether it is in the jungle, or is in Dubai or is in Abu Dhabi,” adding that “people are free to meet and strategies in anyway they form but we are not going back to the illusion of the PDP. It is not possible, Nigerians will not do that.” The APC national leader said, “Slow and steady wins the race.” He vowed that the nation cannot go back to the pit that it inherited for 16 years, adding that “they can strategies from anywhere but a leopard cannot change it skin.” Speaking on the crises rocking the party in the aftermath of the nationwide Congress, Tinubu asked party members to respect the party supremacy. “You were all here when we had the Congress, we elected the new executives, the convention we had it, the NEC was formed and we surrendered to avoid conflict, to avoid domination, to avoid abuses of power, we surrendered our rights, all rights to the National Working Committee headed by Adams Oshiomohole. “We agreed that the National Working Committee

should set up electoral bodies to supervise various state congresses and elections. ‘We signed off for it’. So, if it is not in our individual favour, so be it. We gave three options, consensus, where there is no consensus because if you are more than two or three and you cannot agree to one candidate, you go to the next level. “The next level is the stakeholders delegate and you have to be supervised by the National Working Committee of the party, national election committee of the party. That, according to him, shows party supremacy or the freest option, adding that “the less cumbersome is to open direct primary, line up and count the number, 1,2,3. If you win, you win and if you fail, go home. He noted that the party had also set up appeal committee to listen to all appeals, internal mechanism for conflict resolution. “It was there, you cannot turn round against that, you cannot turn against all of that. No. Party is supreme, party must be respected, abuses will not do it and anger will not do it. It is party politics, somebody will win and somebody will lose, too bad.” Also speaking after the meeting with the President, the APC chairman, Adams Oshiomhole, said he had no illusions, that he was “doing a pensionable job. “I did promised myself that of I am going to be on this job for one day, I will do according to the rules and according to my conscience; I will be fair and just to all and God will give me the courage and the wisdom to do his will.” Oshiomohole declared that despite the crises in the party and his current travails, Governors Ibikunle Amosun of Ogun State, Rochas Okorocha of Imo State and Ahmed Yari of Zamfara State remain his close friends.

Mortgage bank loses bid to regain forfeited property THEODORA KIO-LAWSON

egal moves by Safetrust Mortgage Bank to regain its high-rise property called, Safetower Estate located at Ikate Lekki, Lagos, still under construction, failed following the dismissal of its application by a Federal High Court, Lagos. The said property located on a parcel of land measuring 50027, 147 square metres, and particularly described as Block 116, Plot III, Ikate Ancient City, Etiosa local council Lagos State in Survey Plan No BAS258/2013/130-1, was being investigated by the Economic and Financial Crimes

Commission (EFCC). Safetower Estate promoted by Safetrust Mortgage Bank Limited and Macbosh Properties Limited ran into controversy following contractual disagreements between the developers and an investor. In an application filed before Justice Sule Hassan of the Federal High Court Lagos, the developer had urged the court to vacate its earlier order of forfeiture of Safetower to EFCC pending the completion of the investigation by the commission on the said property development. The bank had alleged that the judgment was obtained by fraudulent facts presented by EFCC to the court to

obtain the judgment. But Justice Hassan, in his ruling delivered obtained from the court, dismissed the application of Safetrust on the ground that the applicant counsel, James Oyetunde did not provide any proof to show that EFCC deceived the court to obtain the forfeiture order. EFCC through its counsel, Nkereuwem Anana, had earlier in a deposed affidavit presented before the court stated that the property in question was a subject of grand fraud, which was under investigation by the commission and should therefore remain forfeited to the commission until investigation was completed.

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BUSINESS DAY

FINANCIAL TIMES Mexico airport bondholders handed lesson in direct democracy

Private equity: Apollo’s lucrative but controversial bet on insurance

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World Business Newspaper

Global stocks rebound after worst month since 2012 Rally spurred by good earnings, taking major indices off the worst of October lows ADAM SAMSON, MICHAEL HUNTER AND JOE RENNISON

lobal stocks are ending a torrid October on a brighter note, as corporate earnings on both side of the Atlantic tempted investors back into a market that has been beset by worries over rising interest rates and a slowing global economy. The Stoxx Europe 600, a broad benchmark for the region, gained about 1.5 per cent as good earnings from companies such as cosmetics maker L’Oreal, Spanish bank Santander and UK-listed bank Standard Chartered improved sentiment. Wall Street is expected to open higher, helped by third-quarter results from Facebook that went some way to reassuring investors about the company’s outlook and better than expected earnings from carmaker GM on Wednesday morning. The S&P 500 is set to open up almost 1 per cent higher, according to pre-market trading. After a tumultuous month, the stock market had found a foothold on Tuesday, with the S&P 500 rising 1.6 per cent. The gains were replicated across Asia with the CSI 300, a gauge of Chinese stocks, ending the day up 1.4 per cent while Ja-

pan’s Topix finished 2.2 per cent higher. Treasury yields, which move inversely to prices, rose on Wednesday, with the benchmark 10-year note up 4 basis points to 3.16 per cent. Gold, which has benefited as a haven for investors over the course of the month, fell 0.5 per cent — it’s third consecutive down day for the first time since August. The dollar traded flat. Analysts at Barclays said that with about half US and European companies having reported thirdquarter results, a majority beat earnings expectations and “only a small number of companies have cut full-year guidance, which indicates no material cautious turn in business confidence”. But even after the gains on Wednesday, global stocks are still on track for their worst month since 2012 owing to the slowdown of the previously high-flying US market. Triggered by a rise in interest rates at the start of the month, October’s sell-off gathered pace as hedge funds exited positions and earnings from the US industrial bellwethers Caterpillar and 3M showed that weaker growth outside the US was beginning to dent their profits. Although few investors are declaring that the decade-long US bull market is over, a chastening month has left many cautious.

Donald Trump with Leah Vukmir, a Wisconsin Republican running for the US Senate. She has received an endorsement from the US Chamber of Commerce despite supporting the president’s anti-China stance © AP

“We believe the uncertainty around future earnings growth has increased and will likely remain high, reinforcing our call for adding resilience to equity portfolios via exposures to quality companies,” noted Richard Turnill, chief investment strategist at BlackRock, the world’s largest asset manager. Lilia Peytavin, a strategist at Goldman Sachs, added that Euro-

pean equities had already priced in a “fair amount” of weaker global growth. The Stoxx Europe 600 fell almost 6 per cent in October and, unlike the US, European equities were unable to recapture the highs for the year set in January. On Wednesday, gains for Europe’s major bourses were evenly spread, with France’s CAC 40 up 2.2 per cent and Italy’s FTSE MIB

advancing 1.2 per cent. L’Oreal stood out with a 5 per cent gain, Repsol shares were up almost 5 per cent and Standard Chartered gained 4 per cent. Ms Peytavin added that “returns are likely to be driven by earnings at this stage of the cycle and profit growth is poised to slow (but not turn negative) as economic growth decelerates”.

Corporate America sticks to Republicans despite tariff worries

Stand-off between India’s central bank and government worsens

Close ties withstand disruption caused by Donald Trump’s trade war with China

AMY KAZMIN

JAMES POLITI AND ANDREW EDGECLIFFE-JOHNSON

hen asked by a television reporter about her views on Donald Trump’s tariffs on Chinese imports last week, Leah Vukmir, a Wisconsin Republican running for the Senate in the US midterm elections, was unabashedly supportive. “What the president is doing is already showing signs of . . . making a change or a difference in China because their [gross domestic product] is already down,” she told the local TV station. “They are starting to crumble,” she added. Her remarks were at odds with the prevailing view of US business groups that have warned that the Trump administration’s trade war with China could backfire on American companies and consumers, by raising prices and hurting exports. The US Chamber of Commerce has been among the most vocal critics of the use of tariffs. But this did not stop the largest American business group from endorsing Ms Vukmir in her uphill struggle to unseat Tammy Baldwin, the incumbent Democrat, just a few days later.

“She will do what it takes to enact a pro-jobs agenda that will help industry innovate and grow for generations to come,” said Rob Engstrom, the chamber’s vicepresident for political affairs. The chamber’s support for Ms Vukmir highlights the extent to which the close ties that have bound Republicans to corporate America for decades have withstood the disruption to the relationship triggered by Mr Trump’s tenure in the White House. Despite concerns about the damage of a protracted trade war with China, commercial tensions with the US’s western partners and curbs on immigration, Washington’s business lobbyists — and the companies that fund them — are still mostly hoping that Mr Trump’s party retains control of Congress. Among their goals is to preserve Mr Trump’s tax cuts and his deregulation agenda, which were pushed through with strong support from business. Both could be threatened in a Democratic takeover of the House of Representatives, which is forecast by many pollsters, and even Continues on page A2

Urjit Patel faces growing pressure from Modi administration to ease monetary policy

ndia’s finance ministry on Wednesday intervened in a worsening dispute between the government of Narendra Modi and the Reserve Bank of India, insisting on the right to make its views known to the central bank, in a statement that suggested it was taking seriously a reported threat by the bank’s governor Urjit Patel to resign over government interference. The speculation comes days after Mr Patel’s deputy, Viral Acharya, delivered a hard-hitting public lecture in which he warned of “potentially catastrophic” consequences of the government’s intensifying efforts to influence the Reserve Bank of India’s policies. In an unusual statement on Wednesday, India’s finance ministry acknowledged that central bank autonomy was “an essential and accepted governance requirement”. But it insisted that the elected government was entitled to hold “extensive consultations” with the regulator “through which it places its assessment on issues and suggests possible solutions”, with an eye on both the “public

interest and the requirements of the Indian economy”. “The government will continue to do so,” it concluded. Analysts said the statement suggested that Mr Modi’s government was unwilling to back down from the escalating public confrontation. “The government is digging its heels in and saying we are going to be firm in taking stances which we believe are in the national interest,” said Saurabh Mukherjea, founder of Marcellus Investment Managers. Tensions between Mr Patel and Arun Jaitley, finance minister, have been mounting since February, when the two men appeared to indulge in a mutual blame game in the aftermath of an alleged $2bn fraud at stateowned Punjab National Bank. Analysts said the two appeared to have reached a breaking point over the government’s desire to access what it considers some of the RBI’s “excess” reserves, and how the RBI has handled a liquidity crisis stemming from the debt default by IL&FS, a high-profile infrastructure lender. The default has roiled India’s many non-banking financial companies (NBFCs) — or “shadow banks” — which rely

on short-term, one-year bonds as a major source of funding but which issue long-term loans for housing and other infrastructure projects. Following the IL&FS default, corporate investors have been withdrawing from mutual funds that have invested heavily in the NBFCs, putting them under pressure and causing a liquidity squeeze. To help the NBFCs tide over their difficulties, the government is believed to have asked the RBI to ease restrictions to allow the state-owned banks to provide loans to the sector. At present, bank lending to NBFCs is limited to 15 per cent of their total assets. However, analysts said the RBI had declined to ease the restrictions, angering the government. “The government needs the public sector banks to bail out the NBFCs, and the RBI seems to have an issue,” said Mr Mukherjea. “If they don’t get bailed out in the next couple of weeks, then there is trouble ahead for the financial system. And that seems to be the crux of the spat.” The rupee was off 0.4 per cent at Rs73.95 against the dollar, after earlier dropping to Rs74.13.

BUSINESS DAY

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NATIONAL NEWS

FT Corporate America sticks to Republicans despite...

US raises pressure on Saudi Arabia with call for Yemen peace talks

Continued from page A1

more so if the opposition wins the Senate, which is seen as less likely. “Tariffs are the issue du jour, but whether it’s regulatory reform or tax reform, there’s a pretty clear record of success with a Republican Congress and with the president,” said one senior business lobbyist. “Not a single Democrat voted for the tax reform legislation, which for many business groups was one of if not the most important achievement of the past decade or more”, he added. This does not mean that Republicans have a fundraising edge heading into the vote, in fact the opposite is true. According to the Center for Responsive Politics, $5.2bn will be spent on this year’s election, making it the most expensive midterm contest on record, propelled by a flood of cash from individual Democratic donors hoping to deliver a blow to Mr Trump. Democrats have raised more than Republicans in House and Senate races. The defence and energy and agricultural sectors still overwhelmingly favour conservative candidates, while lawyers and labour unions have remained loyal to liberals, but this year has seen some industries and individual companies shift allegiances. Wall Street, as measured by donations from the securities and investment industry, has given more to Democrats than Republicans for the first time since 2008, the CRP found. The pharmaceutical sector, under pressure from President Trump over drug pricing, is giving more to Republicans than Democrats this year, but by a narrower margin than in the past three elections. And at Silicon Valley’s largest companies, from Apple to Alphabet, Democrats are pulling in a far larger majority of donations from employees than in 2016. Finance, insurance, real estate and Mid-terms Yet many individual companies are being more cautious about sticking their necks out politically than in previous years. “Politics has become so polarised that you as the executive of a company have such a risk of blowback,” said Maria Patterson, clinical associate professor at the NYU Stern School of Business. “You need to be really sure the candidate you’re supporting is not also speaking for positions that are going to upset your customers, your employees and your stockholders.” On K Street — home of Washington’s lobbying industry — there is still a familiar sense that Republicans on Capitol Hill are more aligned with business interests than their Democratic opponents, and even farmers’ trade groups are sticking with the Republicans, despite bearing the brunt of China’s retaliatory tariffs against the US. Another senior business lobbyist said that trade was an important issue but the “totality” of candidates’ positions needed to be taken into consideration — and the Democratic party had been “lurching far to the left” in recent years following the growing influence of Bernie Sanders, the senator from Vermont, and Elizabeth Warren, the senator from Massachusetts, within its ranks.

Thursday 01 November 2018

Mattis and Pompeo push for negotiations to end conflict involving Riyadh-led coalition MONIKA PRONCZUK AND ANDREW

Mexico president-elect Andrés Manuel López Obrador is causing consternation for bondholders

Mexico airport bondholders handed lesson in direct democracy Investors’ $6bn investment backing project in nation’s capital hangs in the balance COLBY SMITH AND ROBERT SMITH

hen Andrés Manuel López Obrador won Mexico’s presidential election in July, the leftwing populist promised “a government by the people and with the people”. Now some of the largest asset managers in the world are learning about the president-elect’s commitment to direct democracy first-hand, as the fate of their investment in $6bn of bonds backing a new airport in Mexico City hangs in the balance. Following a “people’s poll” on the future of a $13bn Norman Fosterdesigned airport, Mr López Obrador declared on Monday that he would abandon the project after nearly 70 per cent of the votes were in favour of scrapping the project. The outcome rattled Mexico’s financial markets, knocking the peso to its weakest level in four months, but there is even more at stake for the owners of the bonds issued by the Mexico City Airport Trust to pay for the project. While a $3bn bond due in 2047 fell as low as 79 cents on the dollar on the news, having been issued close to face value little over a year ago, several bondholders said they were holding their nerve. “I’m happy to hold the bonds at this point and let this play out a little

bit more, as there is a huge question about the viability of the other options,” said Michael Conelius, a portfolio manager at T Rowe Price, one the largest international investors in the bonds. “This is Mr López Obrador’s first feedback from the market and it’s an important learning process. Let him process the currency volatility and bond sell-off and then we’ll see if he walks this back.” As populist governments have taken power across the world, investors in the usually safe and sleepy world of infrastructure debt have faced a growing number of similar dilemmas. After Italian politicians threatened to nationalise Autostrade’s motorway concessions in the wake of the Genoa bridge disaster in August, the roll road operator’s bondholders were left second-guessing what would become of their investment. Many Autostrade bondholders ultimately took comfort in clauses that said the government would still have to honour their debt. And plenty holders of Mexico City Airport’s bonds are putting their faith in similar terms. “The structure of the bonds is very investor-friendly,” says Michael Leithead, a portfolio manager at EFG Asset Management. “So long

as there is no change to legislation that threatens the legal standing of the bonds, then in terms of financing it is secure.” The bonds are secured by the taxes that passengers pay when flying into the existing airport, as well as the concessions to operate both the current Mexico City airport and the new one. If Mr López Obrador makes good on his word and officially cancels the concession to operate the new airport, it would trigger a clause forcing the bonds to be repaid at face value. Should the Mexico City Airport Trust fail to honour this, the bonds would fall into default. If that happens, the bondholders have a direct claim on the money raised by the bonds but not yet spent, said Eric Ollom, the head of emerging markets corporate debt strategy at Citigroup. Others are less convinced about these assurances. One London-based hedge fund manager, who holds a short position in the airport bonds, points out that Mr López Obrador could avoid the mandatory redemption by not revoking the concession outright. As the government sets the passenger tax that secures the bonds, he could then change the terms to bondholders’ detriment.

Banks agree cut-price fees for SoftBank mobile IPO Underwriters accept 1.5% level to take part in what could be the largest offering ever LEO LEWIS AND KANA INAGAKI

nvestment banks underwriting the initial public offering of SoftBank’s mobile phone business have agreed to fees of about 1.5 per cent to participate in what could be the largest IPO in history, people close to the deal say. The low fee level, which applies to the institutional portion of the share sale, has emerged as SoftBank and its lead co-ordinators — soon to be formally named as Nomura, Goldman Sachs and Deutsche Bank — enter final discussions on the structure of the IPO, which is planned for December 19. Underwriting fees for the retail tranche are also expected to be low, with some analysts taking as guidance the $11.6bn share sale by Japan Post and its two listed subsidiaries in 2015, which had an average fee of 1.6 per cent across both the retail and institutional portions of the offer, according to Refinitiv data. Such low fees, however, are rare in Japan, and have previously been

applied only to state privatisations such as Japan Post and Kyushu Railway. Among recent large IPOs, messaging app Line and flea market app Mercari both had average fees of 4.5 per cent. The formal announcement of the SoftBank IPO schedule is contingent upon a go-ahead from the Tokyo Stock Exchange, expected in early November. As part of the offering, SoftBank has made an unusual request for the underwriters to commit to loans for its Saudi-backed $100bn Vision Fund, also at a relatively low fee and using the fund’s holdings as collateral, according to two people with knowledge of the discussions. Current discussions centre on whether SoftBank’s founder, Masayoshi Son, could attempt to sell more than $25bn worth of shares in the mobile business — a huge cash generator that was built around the former Japan operations of Vodafone. Some advisers have said that the IPO, which has been structured so

that the SoftBank parent maintains overall control, could seek to value the mobile business at about $90bn — a level that analysts say could potentially be justified but also aggressive. Until recently, discussions were based around Mr Son’s intention to sell 30-35 per cent of the business at the IPO, but people close to the situation say that could now be raised to more than 40 per cent. If it gets close to $90bn and sells the mooted proportion of the company, the IPO would become the world’s largest, surpassing the 2014 flotation of Alibaba which raised $25bn. According to bankers, about 90 per cent of the shares on offer at the SoftBank IPO are to be pitched at Japanese retail investors, with the rest shared between domestic and foreign institutions. The sale is likely to push ahead despite the recent sell-off that has battered global technology stocks and caused Japan’s benchmark Nikkei 225 index to shed almost 11.5 per cent since October 1.

he US has called for peace talks to begin over the conflict in Yemen within a month to end hostilities that have pitted a Saudi-led coalition against Houthi rebels. Jim Mattis, US defence secretary, and Mike Pompeo, US secretary of state, on Tuesday said in separate statements that they wanted the warring parties to start peace negotiations “within 30 days”. Scrutiny of the Riyadh’s role in the war has intensified in the wake of the crisis triggered by the killing of Saudi journalist Jamal Khashoggi at the kingdom’s consulate in Istanbul this month. The US has no direct combat role in the Yemen conflict, but is a key backer and supplier of arms to the Saudi-led coalition, which supports the exiled Yemeni government in its more than three-year battle with Houthis. In a statement, Mr Pompeo said “it is time to end this conflict”, including air, drone and missile strikes by both the Saudi-led coalition and Houthi rebels. The conflict has morphed into a proxy war, with Washington and Riyadh accusing Iran of providing arms to the rebels to stoke a conflict on Saudi Arabia’s doorstep. But the Saudi-led coalition has come under mounting international pressure as it has drawn widespread condemnation for the high civilian death toll caused by its air strikes. Saudi Arabia’s intervention in Yemen has been overseen by Crown Prince Mohammed bin Salman, the kingdom’s de facto leader, who has led the kingdom’s more assertive foreign policy. Western politicians also believe any Saudi operation against Khashoggi was unlikely to have been authorised without Prince Mohammed’s knowledge. Riyadh has said the journalist was killed by rogue Saudi operatives. In Yemen, Saudi Arabia has been criticised for exacerbating what aid workers describe as the world’s worst humanitarian disaster. Mr Pompeo insisted that peace negotiations must start in November to address the underlying causes of the conflict and subject all large weapons in the region to international monitoring. The UN, which has been leading diplomatic efforts to end the war, had sought to host peace negotiations between the Yemeni government and the Houthis in Geneva last month. The talks would have been the first since 2016, but the Houthi delegation failed to turn up, blaming the Saudi-led coalition for blocking its travel. After the talks failed, the coalition relaunched an offensive to take Hodeidah, a vital Red Sea port, despite warnings that the operation risked creating a humanitarian disaster. The coalition says the Houthis use the port to earn revenue and smuggle weapons in from Iran. Tehran denies arming the rebels. The war in Yemen has been dragging on since March 2015, when Saudi-led coalition intervened to reinstall in office Yemen’s president Abd Rabbuh Mansur Hadi after the Houthis seized Sana’a, the Yemeni capital.

Thursday 01 November 2018

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BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Wall Street looks to end torrid month with a bounce MAMTA BADKAR

ctober has been a frightful month for investors so far, but Wall Street rebounded on Halloween as investors digested a strong batch of results from General Motors and Facebook and tech stocks once again found favour with investors. The S&P 500 was up 1.3 per cent to 2,716.94 on Wednesday. However it remains down 6.86 per cent for October, putting it on track for its worst month since September 2011. The benchmark index has closed lower in 16 of the last 21 sessions, which is the highest proportion of down days in a month since April 1970. The Nasdaq Composite was up nearly 2 per cent to 7,305.61 but a walloping for tech stocks has left the index down 9.2 per cent month-todate and on track for its worst month since November 2008 Meanwhile, the Dow Jones Industrial Average was up 1.1 per cent to 25,157.26, while the Russell 2000 index of small-cap stocks climbed 0.9 per cent to 1,521.23. Wednesday’s advance was fuelled by a strong batch of earnings from General Motors, which bucked pressures in China to top earnings estimates and Facebook, which late on Tuesday said it beat earnings expectations by almost 20 per cent. Communication services and technology led the way on the S&P

500 with gains of 2.5 per cent and 2.3 per cent respectively, while utilities was the worst performer, down 1.5 per cent. The moves come after data this morning showed private payrolls jump by the most in eight months in October, signalling strength of the labour market. Investors also appeared to shrug off data that showed Chicago PMI falling to a six-month low. A confluence of factors including fears of peak earnings, concerns about the health of the global economy, uncertainty around the upcoming midterm US elections and a trade war with China rattled investors. It also resulted in a month of choppy trade that variously saw the S&P, Nasdaq and Dow dip in and out of correction territory — defined as a 10 per cent drop from a recent high. “It still isn’t totally clear if we are at an inflection point in the economic cycle, and the fact that the forecasting community is so complacent, if not strident, on this score is a source of concern to me,” David Rosenberg, strategist at Gluskin Sheff. Elsewhere in markets, the dollar index hit a fresh high since June 2017 rising 0.2 per cent to 97.18. Meanwhile the yield on the US 10-year rose 2.3 basis points to 3.145 per cent, while that on the two-year climbed 2.4 basis points to 2.875 per cent. Yields move inversely to price.

Job fears as Jaguar Land Rover unveils £2.5bn turnround plan UK carmaker acts after sales drop in key markets

PETER CAMPBELL

aguar Land Rover has launched a £2.5bn turnround programme, will see it cut costs and planned investment, after falling sales in all main markets, including the China, US and UK, pushed it into a second consecutive quarterly loss. The UK’s largest carmaker plans to cut costs by £1bn over the next 18 months, a move that is likely to lead to job losses among its British workforce, and will reduce its investment budget by £1bn over the same period. The company said it would also strip out £500m from inventory and working capital. The lcompany reported a loss of £90m in the three months to the end of September, compared to a profit of £382m in same period in 2017, as sales fell 13 per cent to 130,000 vehicles. It is the first time the company has notched up six months of losses since being bought by India’s Tata Motors in 2008. Britain’s largest carmaker is facing the “perfect storm” of issues from its reliance on diesel in its home market, to slowing growth in China, and the impact of Brexit, which is causing uncertainties over its operations and driving up the price of its imported components. Earlier this year the company cut 1,000 jobs at its flagship Solihull plant because of the decline of diesel, and in September moved its Jaguar plant at Castle Bromwich to a three-day week because of poor

sales. It also imposed a two-week shutdown at Solihull, the home of its high-margin Range Rover products, because of poor sales in China. The core of its problems in the last quarter came from China, where sales halved as the market slowed and consumers delayed purchases, particularly of imported luxury vehicles, because of uncertainties stemming from the trade war with the US. The US, its largest market, suffered a 4.6 per cent fall in sales, while in the UK the drop was 0.6 per cent. In the rest of Europe sales slumped 11.9 per cent, in part because of a new vehicle testing regime called WLTP that has hit all carmakers. Other costs came from opening its Slovakia plant, a new facility that gives the company its first largescale, production facility outside the UK. The group will already produce all future Land Rover Discovery vehicles at the site, but may move future products to the facility as well. It has launched two turnround programmes — “Project Charge”, which will strip out costs and reassess investment spending, and “Project Accelerate”, which aims to fix long term structural issues with the company. Chief executive Ralf Speth said: “Our results were undermined by slowing demand in China, along with continued uncertainty in Europe over diesel, Brexit and the WLTP changeover.

Jamie Miller, GE’s chief financial officer, said the group would contribute ‘at least’ $3bn to support GE Capital © FT montage / AFP / Bloomberg

GE warns financial services arm could need more support CFO says more than $3bn may be required for group’s former growth engine ED CROOKS

eneral Electric has warned that it might have to put more capital into its financial services division than it had previously suggested, reminding investors that what was once a growth engine for the company has become a drag on its performance. GE had already said in June that it expected to put about $3bn into GE Capital next year to strengthen its balance sheet. As the company reported disappointing earnings and slashed its dividend on Tuesday, Jamie Miller, the group’s chief financial officer, said it now expected to contribute “at least” that amount. Ms Miller added, in a call with analysts: “GE may need to support GE Capital further, if necessary, either to achieve desired capital levels or to execute strategic options around its portfolio.” GE Capital is facing immediate strains, including its regular assessment of the expected cost of

its legacy insurance liabilities from businesses that it offloaded in the mid-2000s. Last year it concluded that it would have to pay an extra $15bn to meet those liabilities, and this year it is possible that the figure will be higher again. The business is also still working through the impact of the US tax reform passed at the end of last year, and has a looming bill for the US Department of Justice over an investigation into its now-defunct mortgage unit WMC, also dating back to the mid-2000s. Beyond those immediate issues, Ms Miller suggested that there might also be a greater need for GE to support its financial services division because “GE Capital’s resources are just more limited as it shrinks”. On the call, Larry Culp, GE’s chief executive, said the group had “no plans” to sell shares to strengthen its balance sheet. Some analysts, however, still see it as a possibility.

John Inch of Gordon Haskett argued in a note on Wednesday: “We continue to believe the GE Capital balance sheet to be burdened with substantial excess debt . . . that could still require a future equity capital raise.” Jack Welch, chief executive in the 1980s and 1990s, led GE deeper into financial services beyond the original functions of supporting the sales of its products. Under Jeff Immelt, chief executive from 2001 to last year, financial services including consumer credit and mortgage lending at times generated more than half the group’s profits. After the crisis of 2007-09, however, investors were nervous about the scale of GE’s exposure to financial services, and US regulators proposed more stringent restrictions on its operations. In 2015 Mr Immelt announced a widely praised plan to sell off the great bulk of GE Capital, and most of the sales were completed in the subsequent two years.

Airbus warns disruptions stretch delivery targets Aerospace group says it is frustrated over engine production issues at Rolls-Royce SYLVIA PFEIFER

irbus has warned that disruptions following problems with engine suppliers are making its target to deliver 800 aircraft by the end of this year “a greater stretch” and expressed its frustration about recent production issues at RollsRoyce. The European aircraft maker said it would deliver about 20 fewer planes but hoped to meet its target by including 18 A220 jets, the model acquired through its purchase of the Bombardier C series and which had previously been excluded from the 800 figure. Harald Wilhelm, Airbus chief financial officer, said the company was “frustrated” that it had to reduce its plans for the A330neo widebody aircraft after Rolls-Royce, the British aero-engine group, last week revealed it was running into production hurdles on the Trent 7000 engines. “We are frustrated at our end,” Mr Wilhelm told analysts. “We have taken the plan down for the A330neo quite substantially.” Airbus said it would deliver about 10 fewer of the

aircraft this year as a result. Airbus and Boeing are enjoying record order backlogs but the unprecedented ramp-up in production has been frustrated by problems in the supply chain, in particular at engine manufacturers. Airbus delivered 503 aircraft for the first nine months — some 300 short of its end of year target. Delays at Airbus this year have been primarily linked to problems with the Pratt & Whitney geared engine powering the A320neo singleaisle jet, although the engine company has pledged to meet its 2018 delivery commitments. The RollsRoyce issues, while comparatively much smaller, have compounded Airbus’s predicament. In addition, Airbus has been dealing with what it described as “internal industrial challenges” on the A320neo. The company said the introduction of automation equipment in its factories had proved more challenging than expected. The longrange A321 version had required a high level of customisation work on the cabin. Asked about strains on manu-

facturers’ production systems, Mr Wilhelm said: “We are really looking at deficiencies here on the engine side . . . The introduction of new engine platforms requires a lot of effort.” The group remains in talks with the government launch customers on the A400m military transport programme about renegotiating terms and conditions of the contract. It said the talks were “advancing” but “a bit slower than planned”. Despite the production hurdles Airbus reported surging profits for the first nine months of the year ahead of analyst expectations. Reported earnings before interest and tax (ebit) — adjusted for foreign currency movements, provisions and restructuring charges — were €2.68bn, up from €1.67bn, driven by a strong performance of the A350 jet and higher deliveries compared with the previous year. The reported ebit included a €105m charge on the A400m programme, an increase of €7m from the €98m charge taken in the first half of the year. Consolidated revenues for the nine month period were €40.4bn, up from €38bn the previous year.

BUSINESS DAY

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Thursday 01 November 2018

BUSINESS DAY

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NEWS YOU CAN TRUST I THURSDAY 01 NOVEMBER 2018

Opinion

A nation that has lost its soul CHRISTOPHER AKOR Chris Akor, a First Class graduate of Political Science, holds an MSc in African Studies from the University of Oxford and is BusinessDay’s Op-Ed Editor christopher.akor@businessdayonline.com

n December 12, 2015, some members of the Islamic Movement of Nigeria (IMN) were doing their normal procession in Zaira and blocked the convoy of the Chief of Army Staff, Lt. Gen. Tukur Burutai. After some altercations, the army promptly mowed them down and for added measure, levelled their Hussainiyya centre, brutalised and arrested the leader of the group, Ibraheem Zakzaky and his wife. To cover up the gruesome killings, the army took away the corpses of those killed, set fire on them and buried them in mass graves. When the news broke, the military attempted to lie its way through, accusing the sect of trying to assassinate the Chief of Army Staff and denying that the army massacred a large number of the group’s members. However, a panel set up by the Kaduna state

THE PUBLIC SPHERE

CHIDO NWAKANMA Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@gmail.com.

am very disappointed in the Nigerian press. Theydid not give this government the credit of the “Go back to the land” programme. We have cut down the importation of rice by at least 90 per cent.” President Muhammadu Buhari reverted to first base recently when he picked on the press as responsible for the disbelief people hold about the various claims of his administration. He did so with one more whopper that the Federal Government of Nigeria under him has tried in vain to sell to the country. It is unfortunate that in trying to discredit the

government to investigate the killings finally indicted the Nigerian army for the Zaria massacre. The Kaduna state government confirmed to the panel that 347 IMN members were killed and buried in secret mass graves. Specifically, the panel indicted Maj. General Adeniyi Oyebade, the General Officer Commanding the Nigerian Army’s 1st Devision in Kaduna for authorising the operation. The Panel stopped short of indicting the Chief of Army Staff General Burutai who also bears responsibility for, and has defended, the killings on several occasions. From the videos of the encounter between the army Chief’s convoy and the sect members, it was clear the situation does not require the use of lethal force. Teargas, at worse, could have been used to dislodge them. But the army chose to massacre them, destroyed their centre and have continued to detain its leader illegally for having the effrontery to stand in its way. As the Panel rightly found out, the killings are a crime against humanity and those responsible should be brought to justice. However, in a bizarre twist, the Kaduna state government banned the IMN from operating in Kaduna instead of pushing for the punishment of all those indicted. Also security agencies began a systematic clampdown on the group in major states in Northern Nigeria. Conse-

quently, the group’s members have been brutally maimed and killed in Jos, Abuja, Kano,

‘

But a greater concern – and one that should worry every Nigerian - is the fact that the Nigerian army is gradually losing its fighting capability and now seems to win only wars fought with unarmed and defenceless civilians while failing spectacularly to route armed groups who have confronted it

and Katsina while protesting government’s actions against the group and the continued unlawful detention of their leader, his wife and other members of the group since their arrest in 2015. The Inspector General of Police was even quoted as justifying the killings of IMN’s members

in Kano. The brutal killing of members of the group on Tuesday and Wednesday, while in procession from Niger state to Abuja by the military and later in Wuse in Abuja, is a continuation of the clampdown on the group. Also, in May 2017, Amnesty International released a report, backed by videos, photographs and eye witness accounts showing that between August 2015 and August 2016, “the Nigerian security forces, led by the military, embarked on a chilling campaign of extrajudicial executions and violence resulting in the deaths of at least 150 peaceful pro-Biafra protesters in the south east of the country.” The report, “a product of intense investigation comprising analysis of 87 videos, 122 photographs and 146 eye witness testimonies relating to demonstrations and other gatherings between August 2015 and August 2016 consistently shows that the military fired live ammunition with little or no warning to disperse crowds. It also finds evidence of mass extrajudicial executions by security forces, including at least 60 people shot dead in the space of two days in connection with events to mark Biafra Remembrance Day.” According to the report, “this deadly repression of pro-Biafra activists is further stoking tensions in the south east of Nigeria. This reckless and trigger-happy approach

to crowd control has caused at least 150 deaths and we fear the actual total might be far higher.” Expectedly, the President has kept mum on the killings. His famous body language shows that he approves of the killings and, in fact, may have authorised them. If we are to accept the definition of terrorism as the use of violence or threat of violence in order to purport a political, religious, or ideological change, what is the difference then between, say Boko Haram and the Nigerian Army or state? Many Nigerian Sunnis are also silently or even publicly supporting the massacre of the Shiites. Of course, many Nigerians do not see the danger in a terrorist state and army. Neither did Germans under the Nazis. But the eternal words of Martin Niemoller rings true even today: “First they came for the Socialists, and I did not speak out— Because I was not a Socialist. Then they came for the Trade Unionists, and I did not speak out—Because I was not a Trade Unionist. Then they came for the Jews, and I did not speak out— Because I was not a Jew. Then they came for me—and there was no one left to speak for me.” But a greater concern – and one that should worry every Nigerian - is the fact that the Nigerian army is gradually losing its fighting capability and now seems to win only wars fought with unarmed

and defenceless civilians while failing spectacularly to route armed groups who have confronted it. While the army kill unarmed civilians with glee in Odi in Bayelsa, Zaki Biam in Benue, Zaria in Kaduna, Zuba and Wuse in Abuja, Aba and other places where they have been deployed to keep the peace, they have been helpless against the Boko Haram insurgents who have determinedly challenged the legitimacy of the Nigerian state now for upwards of ten years. So far, the army has only been able to technically defeated Boko Haram while the casualty figure in its ranks have continued to rise daily to the extent that the army and the government no longer acknowledge or report the casualties. The same thing happened with the more violent groups in the Niger Delta who vowed to and successfully disrupted oil exploration in the Niger Delta despite the presence of the army until the government negotiated a solution that cost the country billions of dollars in Amnesty payments. The military is trained to face armed opponents and even in war, soldiers are prohibited from executing o t h e r s o l d i e r s w h o s u rrenders or even enemies rounded up. It is shocking that an entire nation will be just fine with its armed forces daily committing war crimes, not even against foreign enemies but against its own people. God help us!

As PMB reverts to DNA in press bashing press, the president reverted to a falsehood for which his Minister of Agriculture earned so much opprobrium only a few months back. Dislike of the media is a principal characteristic of the Buhari DNA. There is nothing new, therefore, in his latest rant. PMB as GMB enacted Decree 4 of 1984 that made truthtelling a criminal offence. Buhari’s latest lamentation and battle cry evoke only déjà vu. It is incredible how in Buhari Nigerian history has been a series of repeated scenes in a long-running drama. Following the coup of December 31, 1983, by middle-ranking officers, they appointed General Muhammadu Buhari as Head of State. The press hailed General Buhari on his assumption of office as some in the medialacking sense of history did 30 years later in May 2015. The press, however, was in for a shocker with Buhari. In one of his first interviews, the new Head of State declared his intention to tamper with the freedom of the press. Later he w ould state, “Yes, I told (slain editor of Newswatch)Dele Giwa that I

wouldtamper with the press freedom and I fulfilled my promise, didn’t I?”He acted quickly. The Buhari military government (junta in Soyinka’s disparagement) enacted Decree 4, the Public Officers Protection Against False Accusation Decree 1984. Decree 4 claimed its first and only victims in Tunde Thompson and Nduka Irabor of The Guardian newspapers. Their offence was revealing plans by the Government to implement changes in diplomatic postings, a story that was accurate. It only misplaced some names and postings. The background to Decree 4 in Buhari’s words was his “disappointment” with the press. He claimed: “I was disappointed with the press. I was disappointed because some things are not supposed to be published. For example, if some illiterate brought toyou something very sensational and unbelievable, you must have the integrity to resist it if it is against national interest. If we were going to do any meaningful work, the situation of things in Nigeria in 1984 demanded that the press be

dealt with”. Now we are back again to a Buhari who is “disappointed” with the press. The basis of his beef this time is similar. He thinks the media have reported matters that he holds dear in a manner that displeases him. An examination of the various claims of the federal government on this rice matter is very instructive. Buhari claims that under his leadership the Federal Government has so performed on the agriculture

‘

Buhari’s latest lamentation and battle cry evoke only déjà vu. It is incredible how in Buhari Nigerian history has been a series of repeated scenes in a longrunning drama

sector that rice imports are now down up to 90 percent. The evidence of our eyes says otherwise. The rice stalls in our markets point to the dominance of imported rice by the same 90 percent that Mr President cites. The data also says otherwise. In making this claim, PMB cites Agriculture Minister AuduOgbeh. One can imagine the minister’s embarrassment. Earlier this year, Minister Ogbeh claimed that rice imports had so declined because of this so-called backto-the-land scheme that rice mills in Thailand were closing. He even cited the ambassador of that country. It was a big fat lie, as records would show. The Thais rebutted to show that no rice mill in their country closed down. Other records showed increased export of Thai rice to our neighbours Benin Republic and Cameroun. The Thais and their Nigerian importers were using the encirclement strategy to get the rice to Nigeria. More importantly, the North is supposed to be the place where this agricultural revolution has happened the most. On March 24, 2018, a

meeting of 16 Northern political groups put the lie to this claim. In their communique, they stated, “Agriculture shows limited glimpses of recovery, but almost entirely through efforts of peasants and antiquated processes. The North is completelydeindustrialised, while the rest of the nation moves towards sustainable growth and development. There is no evidence of bold thinking, strong political will and/orserious concern by any leadership at any level to reverse the alarming decline of the Northern economy.” In other words, the government had not done anything to move agriculture forward one jot. The media should pay particular attention to the expressed disappointment of President Buhari. It follows a familiar pattern. In this age when an American President preaches hate for the media, leaders of other nations with a tendency to dictatorship and thus inherent dislike of the media for questioning them feel a sense of entitlement in speaking and acting against the press. Watch President Buhari closely. The leopard spot remains.

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