BusinessDay 01 Oct 2018 by BusinessDay

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NGUS DEC 26 2018 364.27

Tinubu says Ambode deviated from Lagos development blueprint – See page A2

t initially looked like Lagos State governor, Akinwunmi Ambode was going to be rolled over by the political machinery of the man who made him politically, Bola Ahmed Tinubu, national leader of the APC and the man who, over the last 12 years, has almost solely decided who takes the seat of power in Alausa, the powerhouse of the country’s commercial capital. Lagos is the biggest prize in the country’s political space, with the highest number of voters, the most buoyant state economy and the richest treasury among Nigeria’s 36 states. He who controls Lagos, can

largely decide the political direction of the country. Tinubu had yielded that power for more than 16 years but that control is now

about to face its biggest challenge. The outcome could mar or make his political future and his rumoured ambition to contest

for the Presidency in 2023, at the end of the second term tenure of Continues on page 46

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10 Y 20 Y -0.06 -0.07 15.13

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NGUS SEP 18 2019 365.62

Investors flying blind in 13 stocks on the NSE …Unity Bank, IEI, others trade despite lack of up-to-date results BALA AUGIE, EMEKA UCHEAGA & DAVID IBIDAPO

nvestors buying and selling more than a dozen stocks on the Nigerian Stock Exchange (NSE) are groping in the dark as they are yet to release up to date financial statements, according Continues on page 46

Insight

It is a tough road to Nigeria’s Supreme Court, except you are a politician

Inside Aba shoemakers, others enjoying boom P. 2

Ambode dares Tinubu over political future of Nigeria’s commercial capital JOSHUA BASSEY

fgn bonds

Treasury bills

THE FEDERAL SECRETARIAT, LAGOS. This edifice was built in 1976 and used to be the hub of governance in the country. 42 years after, as the country celebrates 58 years of independence, the former federal secretariat has become a symbol of waste, deterioration and the hallmark of poor governance and everything wrong with us as a country. Pic by Olawale Amoo

ustice comes slowly in Nigeria if you are not a politician. For many seeking justice, it comes after death. And that is because the politicians have skewed the process of getting justice at the Supreme Court in their favour. “As at today, the apex court Continues on page 31

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Evidence mounts on Eni, Shell $1.3bn Nigeria oil field case

Barnabas Bala Bantex (m), deputy governor, Kaduna State, declaring open Power Nigeria Conference 2018 at Landmark Centre, Lagos. He is flanked by: Devakumar Edwin, group executive director, strategy, portfolio development and capital projects, Dangote Group; Ahmed Abdul, informa exhibitions - industrial group; Simon Parker EVP, and others.

…next hearing on October 3 DIPO OLADEHINDE

il multinational executives of Shell and Eni will be fidgeting after three presiding judges in the city of Milan, Italy drilled its executives in an on-going bribery scandal of Nigeria’s OPL-245 offshore oilfield which is one of Africa’s most valuable oil blocks worth about $1.3 billion. Three senior Judges in an Italian court on Friday turned the heat on executives who might provide useful evidence as more precise interrogative questions were done with Vincenzo Armanna, a senior executive in Eni’s sub-Saharan Africa business at the time of the deal while lawyer for Dan Etete, Nigeria’s former oil minister in the mid-1990s during the reign of military dictator Sani Abacha also took questions from the judges. An insider source in the court followed by BusinessDay confirmed how a fairly heated argument took place between Etete’s lawyer and the President of the court (the senior of 3 judges presiding) over the truth facts of evidence and testimonies presented by United States based Federal Bureau of Investigation (FBI) investigator Jonathan Ferris. Also, the lawyer for Eni’s former CEO Paolo Scaroni responded to fiery questions from the judges who admitted that this was the first case where major corporations have been put on trial for corruption not to mention alongside senior execs and former public officials. “The amount of money that allegedly changed hands in the Eni-Shell case could prove to be one of the oil industry’s largest ever bribes,” said Global Witness, a London nonprofit currently keeping an eagle eye on the case. Internal Shell emails seen by Finance Uncovered and Global Witness show how the world’s fifth biggest company took part in a scheme which deprived Nigeria and its increasing poor population of $1.1 billion. Both companies said they had commissioned separate, independent investigations. “No illegal conduct was identified,” Eni has said, claiming that it “concluded the transaction with the Nigerian government, without the involvement of any intermediaries”. Shell said it had shared key find-

ings of its OPL 245 investigation with relevant authorities and that “we do not believe that there is a basis to prosecute Shell”. Shell’s CEO Ben Van Beurden had previously responded to allegations from Global Witness by stating the payments were “morally OK” and “in accordance with the law of Nigeria and international practice.” However what this carefully worded statement doesn’t say is that Shell executives knew the money would go to Malabu and Etete, and would subsequently flow to some of the most powerful people in Nigeria as proof seen by Globalwitness. “Etete can smell the money”, says a leaked email forwarded to then Shell CEO Peter Voser. “If at nearly 70 years old he does turn his nose up at nearly $1.2 billion he is completely certifiable. But I think he knows it’s his for the taking.” Another email to Shell’s exploration chief stated that “the President is motivated to see 245 closed quickly driven by expectations about the proceeds that Malabu will receive and political contributions that will flow as a consequence.” Eni told Global Witness that while proceedings were pending against Eni they did not deem it was appropriate to debate the merits of the new allegations. They noted “inaccurate statements and mischaracterizations of the record, including, for example, description of the structure of the acquisition OPL 245.” “None of the contracts relating to the 2011 transaction was executed secretly or designed to ‘hide’ any party’s transaction,” ENI responded. Nigeria produces over 1.5 million barrels of oil a day but corruption helps explain why a third of citizens live without running water and electricity. Right now, five million Nigerians face starvation in the north and 450,000 children are suffering acute malnutrition, according to the United Nations. Shell and Eni paid $1.1 billion for the block, not including a $210 million signature bonus. The former oil minister, Dan Etete, took possession of the entire $1.1 billion—a sum equivalent to more than Nigeria’s 2016 health care budget. Only a fraction of the money Shell and Eni paid went to the Nigerian state. Next hearing is scheduled for the 3rd October.

Banks’ credit to corporate, small businesses rise in Q3 on improved liquidity

HOPE MOSES-ASHIKE, ENDURANCE OKAFOR

anks available credit to the corporate sector and small businesses increased in the third quarter of 2018, according to the Central Bank of Nigeria’s (CBN)’s `credit conditions survey report. “The overall availability of credit to the corporate sector increased in Q3 2018 and was expected to increase in Q4 2018. This was driven by changing sector-specific risks, favourable economic conditions, improved liquidity conditions, market share objectives and changing appetite for risk,” the apex bank said in the report. Total assets and liabilities of the deposit money banks amounted

to N35.98 trillion at end-July, 2018, showing a 1.0 per cent increase, above the level at end-June, 2018. Aishah Ahmad, deputy governor, CBN, said, in her personal statement at the July Monetary Policy Committee (MPC) meeting that “Half way into the year, the path of growth and other macro-economic indices are more evident, but the effect of the emerging global and domestic economic landscape still bears uncertainty”. However, she noted improvement in the financial condition metrics for the banking system, which she said is gratifying. However, the CBN said in its eco-

Continues on page 46

Monday 01 October 2018

Aba shoemakers, others enjoying boom GODFREY OFURUM, Aba

he Aba finished leather sector (FLS) is enjoying a boom, because of the sudden interest and campaign for made-in-Nigeria goods, by Abia State Government, Ken Anyanwu, national secretary, Association of Leather and Allied Industrialists of Nigeria (ALAIN), told BusinessDay. The Aba FLS, comprising shoe, belt and bag makers, has 14 clusters, situated at the Ariaria business corridor of Aba, the commercial hub of Abia State. Anyanwu, appealed to the Federal Government to include capacity building for artisans, in the real sector policy, as well as the mechanization of their operations. He also called for reintroduction of the Export Expansion Grant (EEG), to encourage non-oil export in the country and especially, Aba. According to him, “people will be willing to document their exports, if the EEG programme is reintroduced. It will also help the federal government to get actual data of exports

from Aba, for policy purposes. “We need to mechanize our production process, by bringing in modern equipment. Once we get the right equipment, then we can produce to meet demand of our patrons,” he said. Abia State Government says it has attracted about N1.6 billion worth of demand for shoes and garments, through its campaign on Made-inAba goods. This includes 50,000 pairs of military boots, ordered by the Nigerian Army, the cost of which is estimated at N300 million, order from the Nigerian Navy, the National Youth Service Corps (NYSC), Police and Civil Defence. Governor Okezie Ikpeazu, who revealed this in an exclusive interview with BusinessDay in Umuahia, the State capital, explained that the vision of the State is to be globally competitive. To make that happen, he said the state government is creating an enabling environment for business to thrive, starting with the establishment of Abia Investment House, known as the One-Stop-Shop. The essence of the one-stop-shop

according to the Governor is to remove bottlenecks in the registration of businesses and processing of documents to improve on the ease of doing business. Ikpeazu also explained that his administration has secured 9,000 hectares of land in Ukwa, for the establishment of Enyimba Industrial Zone, which is seeking recognition as an export free trade zone. According to him, “It is the best location for a free trade zone in the country. It is 30 minutes away from Onne Port, in Rivers State, 30 minutes away from the Port Harcourt Airport and about 40 minutes away from Owerri Airport. “It has a rail line from Rivers State that crosses 13 stations in Abia, to Enugu and to the Northern part of Nigeria. And it has gas for energy. There is no other location anywhere in Nigeria that can compare with what we have, in terms of economic strategy. “And we went to China with this story and seven days after our visit to China, 11 companies came and we are talking with them, including the shoe manufacturing firm that is coming with $1.5 billion investment,” Ikpeazu said.

Primaries chaos, more defections, investors position for earnings season EMEKA UCHEAGA

POLITICS Political Aspirants reject primaries result ree and fair elections are more or less a mirage in Nigeria and the weekend primary elections in Lagos State in APC and PDP won’t be any different. Political aspirants in the race for public office are expected to be fuming over the results of the primaries and threatening legal action. In the end, very little has ever come out of the negative reactions to the results. More Defections to follow after unhappy end to primary elections Unhappy politicians who couldn’t secure the tickets of their party will likely defect to other political party to secure the tickets. Rarely do Nigerian politicians who compete for party nomination throw their arms around their party candidate after losing the fight. Election spending to enter top gear Election spending in Nigeria

THE WEEK AHEAD is expected to hit top gear after the completion of primary elections in majority of the states in the country. Campaign rallies are expected to be more visible in the coming week after some more primary elections are successfully completed in the country. ECONOMY & MARKETS Government may fail to meet union minimum wage hike demand Organised unions declared a seven day strike last Wednesday to show government it means business on the wage hike demand from N18,000 to around N66,000. However, the government is expected to continue to tell labour unions that it will not be able to afford the new wage demand of the unions. We expect the government to offer significantly less to the unions which will be rejected. The unions will insist that the FG should use some of the money recovered from loots to fund the wage hike. We expect another

impasse in the coming week. Investors take position for earnings season Investors are expected to start taking positions in the stock market in anticipation of earnings reports by top companies listed in the Nigerian Stock Exchange. The stock market is expected to be more volatile this week as economic uncertainty from the strike action by the unions continues to have a negative impact on stock price performance. Naira to benefit from continued oil price rally Political and economic uncertainty negatively affected naira in the past week but the continued rally in oil prices is expected to lead to an accretion of the foreign external reserves which will strengthen Naira as investors become more confident in the local currency. The MPC decision to maintain a tight monetary policy will also help the Naira. Other emerging markets may continue to see their currencies decline after United States raised interest rates for the 3rd time this year.

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Apapa Trailer Park: Why facility is not open for use - FG CHUKA UROKO

espite the siege on Apapa and, indeed, the entire Lagos by rampaging trucks, the Trailer Park being constructed opposite Tin Can Island 2nd Gate along the ApapaOshodi Expressway is not open for use even though it has reached over 80 percent completion. Contract for the construction of the park was awarded to Borini Prono, an Italian construction firm, almost the same time as that for the reconstruction of the expressway about eight years ago. Expectation was that, on completion, the park would take about 500 trailers away from the expressway. The Federal Government has explained that the park is not open to trailers yet because it has not been completed. Federal controller of works in Lagos, Adedamola Kuti, told BusinessDay in a phone interview on Wednesday that the major reason the park was still not

opened was because there had to be a shoreline protection for the park. “Contract has been awarded to Borini Prono for the construction of a shoreline protection for the park before it can be put to use. Work is already ongoing at the construction site. But as it is now, because some of the materials needed for the construction will be imported, I cannot categorically tell you when that project will be completed; but I can assure you that by the end of the year, a substantial amount of work shall have been done,” Kuti said. However, when BusinessDay visited the project site Thursday to ascertain the progress of work, there was nothing serious on ground to assure that the shoreline protection will be ready in the next 24 months. The workers on site had nothing dependable to communicate and attempts, through phone calls, to speak with an official of Borini Prono, Borini Franco, was futile as he would not pick his calls. As the Apapa gridlock

got messier and became a serious threat to the Apapa economy which is estimated at N20 billion a day, the federal government ordered that the park should be thrown open to trailers as part of measures to decongest the ports which became literally impenetrable. “As part of efforts to decongest the Oshodi-Apapa Expressway, in the short term, we have directed the immediate deployment of trucks to the trailer park being constructed by our ministry with the capacity to accommodate about 300 trucks while construction works for the shoreline protection continues,” Babatunde Fashola, minister for power, works and housing, said in the statement obtained by BusinessDay. The minister assured that the on-going palliative work on the sections of the Apapa-Oshodi Expressway, the on-going construction of the road leading to the Apapa Port from Ijora would soon be completed while the main exit route through Tincan–

Oshodi–Oworonshoki was under procurement for award. “When completed, the project will enable free flow of traffic in that axis,” he said. This ministerial order, just like the 72-hour presidential order to clear Apapa of gridlock, which followed, was never carried out and, therefore, the madness that defines Apapa traffic has continued with increasing ferocity. The harrowing impact of the Apapa siege on surrounding areas like Festac Town, Mile 2, Olodi Apapa, Okota, Ijesha, etc is better imagined than expressed. It is now over 60 days since Vice President Yemi Osinbajo on Helicopter gyration came to Apapa, saw the frightening situation, the danger stationary trucks on bridges posed to lives on property, and gave an order that, within 72 hours, the bridge should be rid of trucks and sanity returned to the entire port city, yet nothing has happened and the government carries on as though Apapa is part of another country.

R-L: Paul O’Donnell, Ogilvy Global CEO; Seni Adetu, CEO, First Primus Group, and Adenike Ajani, group head, Media Buying-Algorithm , during the visit of First Primus Group team to BusinessDay head office The Brook in Apapa, Lagos. Pic by Pius Okeosisi

FG’s retain revenue falls below monthly target by 45.3% HOPE MOSES-ASHIKE

stimated Federal Government retained revenue at N344.33 billion was below the monthly budget estimate of N629.44 billion by 45.3 percent in the month of August 2018. A breakdown shows that Federation Account constituted 78.4 percent of the total revenue, while exchange gain, FGN independent revenue, VAT and NNPC additional revenue accounted for 8.9 percent, 7.8 percent, 3.3 percent and 1.6 percent, respectively. The Central Bank of Nigeria (CBN) economic report for the month of August shows that the estimated total

expenditure of the Federal Government, which stood at N309.12 billion, was 36.3 percent below N485.38 billion in July, 2018, and 61.0 percent below the monthly budget estimate of N792.31 billion. Total recurrent expenditure, capital expenditure and transfers constituted 92.9 percent, 1.5 percent and 5.6 percent of the total, respectively. A breakdown of the recurrent expenditure showed that non-debt obligation was 34.7 percent, while debt service payments accounted for the balance of 65.3 percent. Consequently, the fiscal operations of the Federal Government resulted in an estimated surplus of N35.21 billion, compared with the monthly budget deficit of

N162.87 billion. The estimated federally collected revenue (gross) stood at N745.52 billion in August 2018. It fell below the 2018 monthly budget estimate of N1.10 trillion by 32.7 percent and below the receipt in the preceding month of N947.62 billion by 21.3 percent. The decline relative to the monthly budget estimate was attributed to a shortfall in both oil and non-oil revenue. Oil receipts at N403.59 billion or 54.1 percent of total revenue was below the monthly budget estimate of N640.21 billion by 37.0 percent as well as below the preceding month’s receipt of N513.54 billion by 21.4 percent.

3 NEWS

BUSINESS DAY

At UNGA, Nigeria canvasses for investments ONYINYE NWACHUKWU, New York

ome key investors have shown interest in scaling up investment in the Nigerian economy as government officials attending the ongoing United Nation’s General Assembly in New York tried to convince them that Africa’s largest economy was open for business. Different meetings were convened on the sidelines of UNGA73 in this regard. During an Investors Roundtable held under the auspices of the Business Council for International Understanding (BCIU), the investors acknowledged that Nigeria remained the investment haven with enormous natural and Human Resources - even though challenges remain. Minister of budget and national planning, Udoma Udo Udoma, told the investors that Nigeria was ready for business and still remained the best investment destination, especially in Africa. Udoma told the investors that government was committed to removing hurdles to business and that Nigeria’s President Mohammadu Buhari has been working to restore peace, fight corruption and grow the economy - his three basic campaign promises. Hr said the economy had emerged from a tough recession and returned to growth following the implementation of the some initiatives, and that the Nigeria’s Economic Recovery and Growth Plan (the ERGP) anchored on partnership with the private sector with the Government was helping to create the needed enabling environment. He said government was focused on improving the country’s infrastructure and creating an environment with improvements in the ease of doing business, to encourage and attract local and global investors. Government is also fo-

cused on social development by increasing investments in education and health so as to improve the quality of the country’s education and health facilities. He emphasised the importance of having a well-educated, healthy and productive nation, he said. Organised by the Nigerian Investment Promotion Commission (NIPC) and moderated by Peter Tichansky, the president/CEO of BCIU, the investors round table was attended by more than 31 international organisations. They organisations include chief executive officers and representatives from Shell Oil Company, Walmart, Motorola Solutions, Coca Cola, Boeing International, United Arab Emirates, Procter and Gamble, AAR Corporation, 3M, APR Energy, Gilead Sciences, SAAB Middle East and Africa, American Tower Corporation, Oliver Wyman Corporation, Rendeavour, IMS Engineers, Credence ID, Abbott Laboratories, Medtronic, Lafarge CIM Nigeria, Flour Mills of Nigeria, Olam Nigeria and ACIOE LLC, among others. “There is no cause for investors to worry about the next year’s general elections, the minister told the gathering, as there will be no slowdown in the implementation of government programmes and policies in the period leading up to the elections; as he explained that the ERGP is a medium term economic blueprint which runs through 2020,” the minister assured the investors. The Minister of Industry, Trade and Investment, Okechukwu Enelamah, who also spoke at the meeting pointed out that the Federal Government has been working with the sub national governments and the National Assembly to introduce measures to improve the enabling environment for doing business.

UBA Foundation, Gavi launch new partnership for Africa

avi, the Vaccine Alliance and the UBA Foundation, the corporate social responsibility (CSR) arm of the United Bank for Africa Group, have joined together to strengthen health systems and raise awareness of immunisation across Africa, starting in 2018 with Nigeria. “We are delighted to work with the UBA Foundation to help protect children across Nigeria against some of the world’s deadliest diseases,” said Seth Berkley, CEO of Gavi the Vaccine Alliance. “Strong, sustainable health systems are key to ensuring no child misses out on lifesaving vaccines which is why this partner-

ship will make a real difference, reducing child mortality and helping to meet the Sustainable Development Goals in 2030.” The partnership with the UBA Foundation aims to raise $1.5 million over the next two years by leveraging UBA’s network of partners to support Gavi’s immunisation programmes in Nigeria. The UBA Foundation will also advocate for immunisation in Nigeria, which has one of the lowest vaccine coverage rates in the world. “The United Bank for Africa and the UBA Foundation have been impacting lives positively in Nigeria and across the African continent for several decades, and this is another opportu-

nity to make a difference in the lives of millions of Africans,” said Kennedy Uzoka, UBA Group CEO/chairman of the UBA Foundation. “We are proud of the partnership with Gavi which will run until the end of 2020, with both institutions focused on the overall aim to provide innovative solutions that can increase the capacity of healthcare systems in Nigeria and across Africa.” In the last five years over 14 million children in Nigeria have been vaccinated against some of the world’s deadliest diseases with support from Gavi. If Nigeria meets its targets for vaccine coverage, it will be able to prevent at least one million deaths by 2028.

BUSINESS DAY

Monday 01 October 2018

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BUSINESS DAY

6 BUSINESS DAY NEWS

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Ship owners initiate probe into alleged missing $300m Cabotage fund AMAKA ANAGOR-EWUZIE

he Nigerian Shipowners Association (NISA) has called for investigation into the more than $300 million accrued into the Cabotage Vessel Financing Fund (CVFF) from 2008 to 2015, claimed to have been missing. The CVFF, derived from 2 percent contribution from contracts awarded to indigenous owned ships under the Cabotage regime, was designed to enable indigenous shipping firms build capacity by acquiring adequate tonnage to be able to participate in coastal trade, currently dominated by foreign owned ships. CVFF, which was set up for the actualisation of the provisions of the Coastal and Inland Shipping Act (Cabotage Act of 2003), is yet to be disbursed to ship owners to enable them invest in ship ac-

quisition and other maritime related projects. Aminu Umar, president of NISA, who spoke with journalists shortly after the association’s annual general meeting held in Lagos recently, said a five-man committee had been set up by NISA to commence investigation into the fund, which had remained unaccounted for. He said the committee was expected to unravel the facts behind the alleged missing fund in order to ensure that those who mismanaged the fund were duly punished. “Cabotage fund has been on for over 10 years. Today, it is said that the CVFF in the bank is the money that was contributed from 2015 till date, meaning that the contributions before 2015 has not been accounted for. We know that there is presently about $150 million in the fund but we need to find out what happened to the ones before 2015,” Umar said.

He said: “We don’t know if what was contributed in the past is more than $300 million; we are just estimating that it will be more than $300 million. If within three years, the CVFF has come up to over $160 million, then we expect 2015 backward, which is nothing less than six or seven years.” According to Umar, NISA has set up a committee to look into the allegation because the association will make a presentation to the management of the Nigerian Maritime Administration and Safety Agency (NIMASA), the custodian of the fund. “We will write to the Minister of Transportation for him to also look into the issue and brief us, because the fund belongs to members. If the fund was not spent according to the provisions of Cabotage Act, then, there are government agencies that will investigate and prosecute those responsible,” he said.

OIC to help Nigeria tackle Boko Haram Baru urges oil workers ONYINYE NWACHUKWU, New York

rganisation of Islamic Cooperation (OIC) pledged on Thursday to help Nigeria tackle the Boko Haram insurgency, particularly through sound education, among others. Meeting with President Muhammadu Buhari on the sidelines of the ongoing 73rd session of the United Nations General Assembly in New York, OIC secretary-general, Youssef Ahmed al-Othaimeen, said his organisation was ready to use its facilities and institutions to correct the wrong narrative that the Boko Haram insurgency was about Islam. The OIC scribe told the Nigerian President that his organisation had passed a resolution com-

mitting member states to support Nigeria in combating extremism. Al-Othaimeen emphasised they considered it quite essential to help Nigerian government address extremism, and would assist as much as they could. Responding during the bilateral meeting, President Buhari underscored the importance of education in purging the mind of wrong indoctrination, particularly on religion. According to Buhari, insurgency in Nigeria was aggravated by climate change and population explosion, and there is the need to recharge the Lake Chad through inter-basin water transfer, “to take care of about 45 million people who depend on the lake for agriculture, animal husbandry, fishing, and many others.”

CBN sells $3.93bn FX to dealers in August HOPE MOSES-ASHIKE

entral Bank of Nigeria (CBN) sold a total of $3.93 billion foreign exchange to authorised dealers in the month of August, which is 7. 96 percent above $3.64 billion sold in the preceding month. The CBN on Friday released its economic report for the month of August, which revealed that aggregate foreign exchange inflow and outflow from the economy were $11.12 billion and $5.60 billion,

respectively, resulting in a net inflow of $5.53 billion. Forex inflow into and outflow from the CBN in August 2018 were $4.42 billion and $5.29 billion, respectively, and resulted in a net outflow of $0.47 billion. The average exchange rate of the naira at the investors and exporters forex window was N362.35 per dollar in the month under review. It stood at N306.10/$, and N359.00/$ at the inter-bank and Bureau De Change (BDC) segment of the foreign exchange, respectively.

to sustain sectoral industrial harmony HARRISON EDEH, Abuja

roup managing director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, has reminded oil and gas workers in the country to sustain the industrial harmony the sector has enjoyed in recent times. NNPC group general manager, group public affairs, Ndu Ughamadu, in a release weekend in Abuja, quoted Baru as saying that the oil and gas sector was central to Nigeria’s overcoming the recent past recession, stressing that oil workers owe the country the duties to ensure that the “nation does not slip back to the slum.” Ughamadu said the GMD thanked the two national industry unions: the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG), for the exceptional maturity they had shown at critical moments on issues affecting the industry. The release explained that the NNPC management under the leadership of the Baru would continue to partner the unions in the interest of the nation and the industry workers, saying the corporation’s doors were open to the union leadership to move the sector forward collaboratively.

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7 NEWS

BUSINESS DAY

Explainer

Why Nigeria’s extreme poverty deserves a global response ISAAC ANYAOGU

overty in Nigeria and Congo DRC is giving the world serious cause for concern - and for good reasons. These two African countries have some of the world’s fastest population growth rates, poorly developed social systems, weak fiscal and governance systems and inability to grow enough of their own food constitute serious problems. Earlier this year, findings by the World Poverty Clock compiled by Brookings Institute show that more than an estimated 87 million Nigerians live on less than $1.90 a day, a situation termed extreme poverty. By the end of 2018, Africa will have about 3.2million more people, than there are today, living in extreme poverty. It is forecasted that as much as 40% of the world’s poor will live in Nigeria and Congo. Currently over 643million people across the world live in extreme poverty with Africans accounting for about two-thirds of the total number. Goalkeepers,

supported by the Bill and Melinda Gates Foundation, who are tracking global progress on the Sustainable Development Goals (SDGs) projects that 40 percent of the world’s extremely poor will live in Nigeria and Congo. Harsh consequences As opportunities become fewer, the vast majority of poor people in these countries, who are mostly young people, will migrate to Europe and other Western countries to seek greener pastures and this will set up a fierce competition for resources in these countries. Already, the world is seeing the deleterious effect of unchecked migration with the rise of populist politicians and governments in the United States and Italy and other European countries preaching protectionist policies and generally pissing off everyone. This has a capacity to offset global order. Brexit found motivation in the growing concern of migrants competing for local jobs. This will continue to fuel global discontent, upset the balance of global

trade and commerce and threaten prospects for relative peace and stability in these countries in the wake of mass hysteria. African nations have been convinced to embrace democracy and in large swaths of the continent, this form of government has largely brought relative economic growth. In Nigeria, the reverse is the case, huge resources are wasted

Edo challenges electorate to demand transparency from political, other leaders

do State governor, Godwin Obaseki, has challenged Nigerian electorate to demand transparency from persons holding leadership positions. Obaseki threw the challenge during the launch of Open Niger Delta (OPENED) Campaign project in collaboration with the Africa Network for Environment and Economic Justice (ANEEJ), in Benin City, the state capital. The governor commended ANEEJ for the OPENED initiative, which he said was in line with the state’s open government policy, and assured of his administration’s readiness to drive the campaign in the Niger Delta region.

The governor, who was represented by his chief of staff, Taiwo Akerele, said the state had put in place institutional framework to ensure due process was followed in the execution of projects, adding that the state government published all contracts above N10 million as well as her annual financial statements. He noted that behavioural change amongst citizens was essential in the fight against corruption in the country and advised the electorates to vote only leaders who are transparent and ready to deliver good governance in the country. David Ugolor, executive director of ANEEJ, said OPENED project was sup-

ported by Bread for the World Protestant Development Service with the goal of mainstreaming Open Government Partnership (OGP) principles in the Niger Delta states. Ugolor explained that OPENED was designed to encourage states within the Niger Delta region to adopt measures that will improve transparency, accountability and good governance in the region. “Edo State has joined the OGP which requires that participating governments enter into a co-creation process with civil society to develop commitment in the fight against corruption, public participation in governance and empowerment of citizens,” he said.

Education reform: Edo, WAEC train teachers to improve learning outcomes

do State commissioner for education, Emmanuel Agbale, says the Governor Godwin Obaseki-led administration will continue to focus on improving the capacity of teachers to improve their competence. The commissioner disclosed this while declaring open a three-day seminar themed: “The 21st Century

Teacher and Pedagogical Shift in Basic and Secondary Education,” held across the three senatorial districts of the state and organised by the Ministry of Education in collaboration with the West Africa Examination Council (WAEC). Agbale charged the participants to demonstrate commitment to the training as it was geared towards

equipping them with upto-date knowledge, adding that participants stand to gain tremendously from the event. In his presentation, Francisca Aladejana, a professor at the Institute of Education, Obafemi Awolowo University, Ile-Ife, said the essence of the training was to ensure improved students’ performance in schools.

on political patronage and governance takes a backseat in favour of politics. Crises in Nigeria, will reverberate across the continent as no African nation has the capacity to take in refuges from Nigeria. It would seem it is in the best interest of Western governments to tone down the rhetoric around Western styled democracy in favour of a domesticat-

ed approach. A generous sprinkling of local content has found a measure of progress in Rwanda. A huge population that is vastly poor has no much benefit for the world. Multinational corporations will be forced to bring down prices by compromising on quality to sell in a country like Nigeria. Brain drain will continue to be a feature in interaction with the

West but sooner than later, the harmful effects will be shared. While a billion people have been lifted out of poverty globally largely through pragmatic reforms, aids have had significant benefits at home but closer monitoring and accountability is now required. China was able to lift millions of its people out of poverty over a decade through bold investments in human capital, health, education and infrastructure. It developed a longterm plan and had the necessary political and social systems that allowed the country to meets objectives. It helps that the leaders were focused and achieved a buy-in from the populace. So has Ethiopia and so should Nigeria. In Nigeria, up to 60 percent of the population is under 25 years, this presents an opportunity to leverage the young population to drive growth hence investments in education, health and agriculture are the best approach to achieve this according to the Goalkeepers.

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Monday 01 October 2018

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Bending the arc and heart of history BASHORUN J.K RANDLE Randle is Chairman/Chief ExecutiveJK Randle Professional Services Chartered Accountants

Headline “rising debt is entrenching poverty” tatistics on Nigeria’s rising debt profile raise fresh concerns over the direction of the economy on President Muhammadu Buhari’s watch. With the total national debt stock at N23.7tn by March 31 this year and new borrowings underway, the mismatch between infrastructure, productivity and employment on one hand and debt on the other hand, is frightening. Unless Buhari applies the brakes and takes practical measures to grow the economy and create jobs, Nigeria may be headed for another recession and new debt peonage. A report that about N1tn was added to the national debt stock in the first few months of this year is depressing enough. Debt Management Office data reveals that national debt rose from N12.6tn in December 2015 to N22.70tn by March end, this year. This increase of N10.1tn in less than three years suggests that we are headed for a new debt trap. According to the DMO, of the total debt, N6.74tn or $22.07bn is external debt while domestic debt stands at $52.20bn or N15.96tn. In United States dollar terms, the total debt as of March 31 was $74.27bn. In a belated move to curb the borrowing binge, the Federal Gov-

ernment, through the DMO, has instructed deposit money banks not to grant fresh credit, either directly or from the bond market, to the state governments, except with the written approval of the Minister of Finance. Bogged down by debts and dwindling revenues, the states rely on credit to fund their oftenunrealistic budgets and pay salaries. Of the domestic debts, the states and the Federal Capital Territory jointly owe $11.05bn or N3.35tn. But while debt statistics are rising, other figures are moving in the opposite direction. About nine million jobs have been lost in the past three years, according to the National Bureau of Statistics. Between January 2016 and September 2017, NBS said 7.95 million Nigerians had lost their jobs with the number of newly unemployed rising from 8.03 million persons by late 2015 to 15.99 million by the third quarter of 2017. A new report by the Brookings Institution says 87 million Nigerians now live in “extreme poverty.” For the African Development Bank, 80 per cent of Nigerians are actually living below the United Nations poverty threshold of $2 per day. Therefore, how do we justify our borrowing with poverty and joblessness stalking the land or infrastructure in tatters? The answer lies in the profligacy of the previous governments and the cluelessness of Buhari. Inheriting a battered economy laid low by the free-for-all looting under the preceding Goodluck Jonathan administration and crashing oil prices, Buhari needed to come with ingenious initiatives to reduce the debt dependence that had already started before him, direct energy into production and open up the economy to local and foreign direct investment. He has failed on all counts. Refusing to embark on privatisa-

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But while debt statistics are rising, other figures are moving in the opposite direction. About nine million jobs have been lost in the past three years, according to the National Bureau of Statistics

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tion and liberalisation initiatives, and hit by an oil price crash and depleted buffers, his administration has, like his predecessor, had to rely on domestic and foreign borrowings to fund the budget and critical infrastructure. Budget and National Planning Minister, Udoma Udo Udoma, has said that N1.6tn would be borrowed to finance the 2018 budget, made up of N793bn from the domestic market and N849bn in foreign borrowings. Revenue shortfalls and the addition of N508bn by a cavalier National Assembly raises the possibility of higher borrowings. Some N1.3tn was the planned borrowing in 2017. Sadly, most of the borrowings finance consumption, such as salaries, overheads and debt servicing, rather than infrastructure. This template can only deliver job losses, poverty and insecurity. To change the narrative, Buhari should first go for low

hanging fruits, such as immediate privatisation of the four loss-making refineries, Ajaokuta Steel Company; concession the airports and seaports and, most importantly, dismantle the Nigerian National Petroleum Corporation, whose control over the country’s major revenue source has enabled it to hold the economy to ransom. Liberalising the railway sector by repealing the Nigerian Railway Corporation Act of 1955 and working with the states will open the sector to FDI and create jobs. The government should discontinue the self-defeating recourse to loans for building major rail links when it can, by policy and the necessary political will, attract private investors to do so. Inheriting a civil war-ravaged country, President Paul Kagame of Rwanda has restructured the economy that grew by an average eight per cent per year between 2001 and 2014. He has channelled aid, loans and revenues into infrastructure and opened the economy to investment. East European economies that emerged after the fall of communism also took bold initiatives to change the fundamental structure of their economies: they compete for investments and invest in infrastructure, skills and social services while private capital thrives. Nigeria’s federal and state governments do not place emphasis on productivity: ours is a “sharing” economy. All policies should be directed at creating jobs to reduce the over 40 per cent unemployment and underemployment rate among our youths. FDI is critical: rather than go to China for loans for rail, road and power projects, why not simply allow the private sector to move in as India is doing? Dealing more effectively with corruption, blocking revenue leakages, reducing the size and cost of governance, as well as radical overhaul of

revenue-generating agencies are steps that need to be taken to reduce borrowing and boost the economy. Nigeria exited a three decade-old external debt trap in 2005; Buhari should not drive us into a new one” i vii. Front page headline: “Daily Sun” newspaper (July 13, 2018) “Power outage mars Buhari’s address at Abuja railway commissioning” “There was disquiet in Idu, in the Federal Capital Territory, Abuja, yesterday, following power outage when President Muhammad Buhari was about to give his address at the commissioning of the Abuja Light Rail Project. Following the outage, there was anxiety as political aides were seen rushing from one end of the podium to another, in an attempt to rectify the problem. President Buhari simply went ahead with his speech, using the available public address system while participants were seen murmuring and clapping. It was at the end of his speech that power was restored. The outage happened in the presence of the China Ambassador to Nigeria, Zhou Pingjian, Kaduna State Governor, Nasir El-Rufai and serving ministers. Meanwhile, FCT Minister, Muhammad Bello, told the gathering that “the Abuja Rail Mass Transit System is an integral part of the FCT Transportation Masterplan, designed primarily to transport large number of commuters and goods between Satellite Towns into the Metropolitan Public Transport system and the different Phases of the Federal Capital City (FCC).”

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The context of age in leadership

TAJUDEEEN AHMED Tajudeen Ahmed, a strategy expert, with several years of senior management experience in consulting, commercial banking, and FMCG, is the General Manager/Group Head Business Development at BUA Group.

ver a decade ago, one of Nigeria’s biggest and most profitable banks (still is, currently) started the process for its first credit rating. The rating, it turned out, was the first-ever rating issued by a certain top, global rating agency to any financial institution in Nigeria, at that time. There was tension in the top hierarchy of the bank, including members of the Board of Directors and executive management, who were collectively responsible for ensuring that the rating by a leading, well-respected international rating agencywas a huge success. During the pre-engagement process for the rating, emails came forth in a ‘fast and furious’ manner. We had loads of documents to put together and many questions to answer; a

whole lot, regarding: loans/risk management, deposits, treasury, financial reporting/control, strategy/strategic planning, international operations, regulation/regulatory environment, local economy, human resources, etc. I cannot forget the charge from my boss, who is now an elected Governor of a state in the South-South region; he said: “Stanley, TJ, we must not fail on this pioneer project. JO (the popular acronym we used for the Founder/ CEO) will kill all of us should we do otherwise”. The frenetic process began and we started documenting several reports, with long-hour engagements with heads of departments relevant to the rating process. It was a ‘punishing’, grueling process, largely because it was a pioneer project. We did our best at forwarding tons of documents by email and other means to the lead analyst and other employees of the global rating agency at its London and Johannesburg offices. Finally, the time for face-to-face engagement meetings with selected members of Board of Directors, executive management, and heads of relevant departments emerged. We had a series of ‘dry runs’ (a form of likely question and answer sessions) with relevant persons regarding how to respond to potential questions- hard or soft, for which we had to improvise in our own way, as there was no single firm

that provided such service at that time, unlike the current situation. As was expected, the lead rating analyst had to apply for a Nigerian visa, so, he was asked to send the data page of his international passport to us. Seeing his date of birth, some executives were surprised and jokingly retorted that: “ehen, so, it was this small boy who was issuing orders to our top guns, asking for all sorts of things and giving deadlines”. Some of us laughed so hard. The very young European man gave a good account of himself during his one-week stay in thebank’s premises. The way he firmly engaged the Founder/CEO, Board members, and other senior officers belied his age! He was confident, professional, and he never suffered fools gladly. He asked hard questions and demanded- and got- requisite answers. With this background, it is useful to contextualize the place of age in leadership, especially in a corporate environment. Whereas, most companies are still stuck in the ‘he is too young for that role’ mentality, a number of companies in Nigeria are placing their trust in the youth on the relevant bases of competence, emotional intelligence, adequate experience, and self-assuredness. No rule anywhere says a “Methuselah” will/must be more competent than a youth. Don Holley says that there is little empirical evidence to suggest that CEOs, business owners and their man-

agement teams were valuable because of years of experience and wisdom; adding that technological advancement and dynamic business models have conspired to significantly reduce the effect of age, and have placed brilliance, capacity to adapt, and energy as game-changers. I agree with him; the same way I agree with John Baldoni, a globally-recognized executive coach and leadership educator, who wrote against excessive focus on age, but rather, that: ‘experience counts, energy matters, and wisdom prepares’. Further, a 2011 thesis at the University of Queensland School of Psychology found out that there was correlation between wisdom and effective leadership, but there was no link whatsoever between age and wisdom, or between age and leadership skills. In fact, some older leaders, according to the study, are very ineffective! Tamara Jayne, assistant editor and writer at “Leaderonomics”, wrote, in reaction to the appointment of 29-year-old David Knopf as the youngest-ever CFO at American food behemoth Kraft Heinz, in October 2017, that: “suitability, capability, experience, maturity, and performance are what matters more”. In Nigeria, a certain sector of the economy where age never matters is among consulting firms. Owing to their largely uniform, global HR practices, elevations and responsibilities are earned on the twin-bases of com-

Note: the rest of this article continues

petence and experience and not on the basis of tenure- a rather unsavory HR practice that forces employees to remain on a certain grade for a fixed time (say three, four, five years), which is akin to “wait for your time” HR lingo. Any discerning observer of the Nigerian economy may have noticed the influx of well-educated, relatively young Nigerians who relocated from their stellar careers in Europe, Canada, USA, etc to take up executive management roles in diverse sectors of the economy. They are thriving as they lead agile organizations where age is seen as just a number. In the countries they worked previously, career progress was largely about the quantum of work and leadership exposure they had, their demonstrated, proven competence, and their capacity for successful leadership; they did not just attain positions by marking time owing to fixed tenure. For instance, whereas a 35-year old brilliant person, Nigerian or not, could be CEO at a successful corporation abroad, his counterpart in Nigeria might still be grappling with an obscure position in middle management!

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Is it too late for Nigeria to pull back from a fiscal crisis?

ANTHONY OSAE-BROWN Osae-Brown is the editor of BusinessDay @osaeB

igeria is standing on the edge of a financial crisis, and it may be too late for the country to pull back. The 2017 budget implementation report released by the budget office last week has figures that should keep all Nigerians awake and ask critical questions from those who manage the country’s treasury. The report shows federal government revenues of N2.7 trillion in 2017, which was about half its projected revenues for the year and 36 percent or one third of its projected expenditure of N7.44 trillion. Faced with the sharp fall in revenues, the government had to cut its expenditure to N6.5 trillion in 2017. The government spent almost a trillion naira less than it planned to spend in 2017 but the final N6.5 trillion spent was still N3.8 trillion more than the federal government’s total revenues for the year. To fund the deficit, the government had to borrow a total of N2.5 trillion to help fund its financial obligations for the

year. The government borrowed N1.2 trillion from the international capital markets and borrowed the balance of N1.3 trillion from the domestic capital markets, an amount that is more than the net increase in lending to the private sector in 2017 from financial institutions. The government got about three times more money from the banks than the private sector got from the banks. However, the N2.5 trillion that the government borrowed from the banks to fund its deficit was not enough to plug the N3.8 trillion it created spending more than it earned in revenues in the year. This has left the government with a N1.3 trillion hole that it could not close in 2017. This means that there are some contractors sitting out there that have done jobs for the federal government that have not been paid and do not know when they will be paid or if they will ever be paid. The government obviously could not raise the money to pay these contractors. It could have taken on more loans to pay these contractors but apparently felt it was already too over burdened with debts to take on more loans. Contractor debts do not attract interest rates and the government can usually take its time repaying even though the businesses owed tend to suffer, with some collapsing while waiting to be paid for jobs duly executed. But the government has a reason to be concerned about its debts that keep piling up. As at the end of December 2017, the country’s total debt stock stood at N22 trillion, which is the equivalent of US$71 billion, data from the Budget Office show. The debt stock went up by US$4.4 billion or N1.4 trillion

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Sadly, there is indication that the federal government is digging deeper into the debt trap zone that it has fallen into. The government’s N9.1 trillion expenditure plan for 2018 is the first indicator that the government is going to dig into the debt trap zone than find a way out of it

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in 2017. A breakdown of the debt shows that US$18.9 billion is owed to external lenders while the balance of N15.9 trillion is owed to domestic creditors. Already, the federal government has exceeded its own target of ensuring that the country’s total debts does not exceed 19.39 percent of economic output or GDP in any year. When the government closed its books in 2017, country’s total debt stood at 20.12 percent of GDP. However, what would have given the government more concern is the rising debt service burden which is beginning to eat up two thirds of government revenues. Debt service consumed a total of N1.8 trillion in 2017. This represents 75 percent of the government actual revenues in

2017. The government is spending an average of eighty kobo of every one naira it earns servicing the debts it is accumulating. The amount spent on debt service is higher than the N1.6 trillion released for capital expenditure in 2017, of which N1.4 trillion was the amount actually utilized. The country is now spending more money servicing debts than putting in place the infrastructure that will help grow the economy to repay those debts. There is a further reason to be concerned about the country’s financial stability. The federal government’s total non-debt recurrent expenditure of N2.8 trillion in 2017 was more than its total revenues of N2.71 trillion. This implies that all the revenues that the government earned in 2017 was just enough to run its operations, that is pay staff and cover the cost of overheads. To cover the cost of capital expenditure, the government had to borrow. The government also had to borrow to repay the interest on borrowed funds. Effectively, the federal government has entered the debt trap zone where revenues are no longer enough to cover the cost of its operations and repay its debts. Sadly, there is indication that the federal government is digging deeper into the debt trap zone that it has fallen into. The government’s N9.1 trillion expenditure plan for 2018 is the first indicator that the government is going to dig into the debt trap zone than find a way out of it. Even though oil prices have been higher in 2018, oil production struggled in the first half of 2018. There is no indication that there would be a significant jump in revenues in 2018 to justify the higher planned expenditure. What we are likely to see is a significant jump in the 2018

budget deficit if the federal government sticks to its 2018 expenditure plan. To fund the higher deficit in the 2018 budget, the government would have to borrow at a time of rising interest rates in the international capital markets, and very low economic growth back home. Raising money internationally will come at a higher cost, translating into an increase in debt service payments, and a deterioration in the debt service to revenue ratios while raising money domestically will crowd out an already squeezed private sector from the domestic capital markets. This is not ignoring the fact that the government has been making significant efforts at boosting tax revenues. However, the challenge remains the fragile economic growth which limits the upside potential of any tax revenue drive. The government tax drive will therefore not yield the required revenue surge to significantly reduce the debt surge and the plunge into a debt trap. To drive debt service to revenue ratio below a more accommodating 50 percent, based on 2017 debt levels, the government would have to almost double revenues. This means raising an additional N2.7 trillion in revenues into the federal government treasury while ensuring that debt levels do not spike further. Achieving this for now, looks like a steep call, unless the government moves to take some difficult economic decisions to cut down expenditure or raise revenues. The hard decisions will have to be made urgently for the country to pull back from what is definitely a potential financial crisis.

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Succession planning and the role of the board

BISI ADEYEMI Bisi Adeyemi is the Managing Director, DCSL Corporate Services Limited. Kindly forward comments and reactions to badeyemi@dcsl.com.ng.

recurrent challenge with many businesses globally is the failure to adequately plan for succession. Whilst the reasons for this may vary from one institution to another, there is no gainsaying that failure of leadership to plan for the future has far-reaching consequences that go beyond the organization itself and impacts on economic sustainability and the society. Succession Planning entails devising a systematic process for ensuring leadership availability, continuity and the development of an organization’s leadership talent. • Systematic Process – there must be a conscious, docu-

mented and pro-active process in place for defining and implementing an organization’s approach to succession planning. • Availability – the process must identify suitable ‘ready now’ successors for the critical roles and leadership positions within the organization at any material time. • Continuity – succession planning must be linked with business continuity to ensure that the available human capital is sufficiently cross-trained to assume diverse responsibilities and be able to step in and fill critical positions even if on a temporary basis to ensure continuity. • Development – as the saying goes, “success occurs when opportunity meets preparation”. Management must take advantage of every opportunity to develop existing talent and prepare them to assume future, challenging leadership roles within the organization or elsewhere. The Board has the primary responsibility for ensuring that an organization has a practical and implementable succession planning process in place which is applicable throughout the organization. Typically, the Board would delegate such respon-

sibilities to a Board Committee (usually the Governance/Remuneration/HR Committee) which would receive and deliberate on reports from Management on employee-related and succession matters. The importance of the Board taking direct responsibility for the succession planning process, particularly as it pertains to the succession to the position of CEO/MD and other key executive roles, cannot be overemphasized. To this end, it is advisable that the Board periodically reviews the company’s leadership development program to ensure that the succession planning program is indeed being implemented. In preparing its Succession Planning Policy, an organization should give careful consideration to existing talent. To enable the Board undertake an assessment of middle management capacity, this cadre of staff should have periodic interaction with the Board – reporting responsibilities at Board and Committee meetings. The responsible Board Committee should periodically review internal capacity and plans to bridge identified gaps. Adequate training, coaching and mentoring programmes should be put in place and carefully executed. Where the requisite capacity

is lacking, the Board should not shy away from looking outside the organization to fill specific roles in the event of unanticipated exit. Whatever option is expedient, an organization’s policy on succession planning must be clearly defined, transparent and properly managed to avoid disgruntled employees sabotaging the process. As organizations are typically established to subsist in perpetuity, the process for implementing the succession planning is a continuous, ongoing one. The process is therefore not timebound. A good Succession Planning process gives assurance to the organization’s stakeholders that their interests will not be negatively impacted in the event of sudden exits and that the going concern status of the organization will not be derailed. Whether at the Board or at Management level, the talent development and management process is incomplete without opportunities for evaluation. Retaining non-performers in the system will ultimately prove detrimental to an organization’s health. A proactive organization will therefore structure its performance evaluation system

around the attainment of set goals and objectives and ensure that periodic performance evaluation is undertaken to enable Management and the Board identify areas of improvement and note the star performers within the organization both for reward and to optimize the execution of the organization’s strategy. Ownership of the succession planning process by the Board has been proven to enhance both organizational process and outcomes. Increased awareness at the Board level about the significance of succession to organizational sustainability will encourage Board members to focus on their own individual and collective professional development to be positioned to identify potential successors to key roles more easily which will foster smoother transition to leadership roles. On Thursday, 4th October 2018, DCSL will be hosting a Masterclass themed “Enthroning Good Corporate Governance for Microfinance Banks”. Kindly contact ntaiwo@dcsl.com.ng or 08037699347 for registration and further details.

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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 GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Monday 01 October 2018

The limits of governance by helicopter

ovember last year, the Vice President, Yemi Osinbajo took a helicopter ride to inspect the Apapa traffic gridlock. Thereafter, he presided over a government/ private sector meeting on how to resolve the Apapa gridlock. Since then, nothing happened and the traffic situation deteriorate to such an extent that many businesses and companies, unable to cope with the terrible traffic gridlock, closed shop and moved to other parts of town. When the situation became unbearable, Vice President Osinbajo again returned to Apapa, July this year, via helicopter, at the peak of the gridlock, to inspect the damage the gridlock was causing. Again, he directed relevant government agencies to immediately embark on the decongestion of the bridges and roads on which trailers and tankers were indiscriminately and mindlessly parked to allow for free flow of traffic. He specifically directed that the operation should be carried out by collaborative efforts of the Police, Nigeria Navy, Nigeria Army, the Nigeria Air Force,

FRSC and the NSCDC, LASTMA, LASEMA, Container truck drivers, National Association of Road Transport Owners, NUPENG, Road Transport Employers Association of Nigeria. Five days later, on July 26, 2018, he returned again, this time, in company of the Lagos state governor, Akinwunmi Ambode, minister of transportation, Rotimi Amaechi, and managing director of the Nigeria Ports Authority (NPA), Hadiza Bala Usman and held a meeting with maritime unions, businesses, residents and other stakeholders at the Western Naval Command, Apapa. By this time, his 72 hour directives to the agencies to clear the traffic has failed and virtually all the roads were still impassable blocked, as usual, by rampaging trailers and tankers. At the meeting the Vice President assured that the anticipated reconstruction of the Apapa-Oshodi Expressway would commence within two weeks as part of the federal government’s resolve to finding a permanent solution to the chaos in the area. To be fair to the agencies, over 1600 operatives were deployed to Apapa to enforce the vice president’s orders. However, the same government agencies or ministry

blocked the outbound lane of the Apapa-Ijora bride, ostensibly for repairs, restricting trucks to the very narrow and pot-holed Leventis exit lane. One would expect that efforts would be done to finish repair works on the bridge and open it up to ensure free flow of traffic. But no, the top layers of the bridge were removed and the job abandoned for more than three months now. Despite all the promises by the Vice President, nothing has happened on the roads and they continue to deteriorate, stressing out motorists, suffocating resilient businesses and emasculating residents in a degraded environment. Many now fear that the federal government has no solution to the traffic jigsaw in Apapa, fueling the thinking in some quarters that there are too many vested interests in this truck business that are bent on frustrating efforts at finding sustainable solution to the Apapa problem. Then came the recent flood disasters across the country and the Vice President, once again, embarked on helicopter trips to inspect the level of damage done to communities. For instance, at Umueze Anam, in Anambra West local government area,

an emotionally distressed Vice President witnessed as affected families evacuate their property from their flooded homes. He similarly directed the National Emergency Management Agency to continue to deploy relief materials to the IDP Camps and some homes, where residents have refused to leave. In Delta state also, the Vice President designated four states, including Anambra and Delta, national disaster zones due to the flooding and said the federal government will work with the affected states to compensate victims who had lost their farmlands and properties to the floods. Despite the visits and promises, most affected communities continue to suffer the effects of the flood without any form of government assistance. Both in the Apapa case and the flood disasters, it appears the government is incapable of decisive action beyond mere words and platitudes. But maybe we should be satisfied that the Vice President visited affected areas in the first place, because, like a former president once said, victims should be grateful to him that he visited them because he was not even supposed to be there.

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Monday 01 October 2018

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Monday 01 October 2018

CityFile

NAPTIP seals hotel, arrests 3 in Abuja

he National Agency for the Prohibition of Trafficking in Persons (NAPTIP) has raided and sealed a hotel, Thales Guest House in Kubwa, Abuja, rescued 12 young girls and arrested three suspects over alleged forced prostitution. The team of NAPTIP caught the suspects unaware at a hotspot known as Pipeline in Kubwa village in Abuja. Some of the under aged girls were caught with men in some rooms while some were seen only on panties and bras in the premises of the hotel. Speaking after the raid, Josiah Emerole, NAPTIP director of investigation and monitoring, described the hotel as notorious. Emerole explained that the guest house had been under surveillance and watch list of his agency as several complains and reports had been received from the neighbourhood. “The hotel has been on our watch list because people living in that area brought complaints on how teenagers are being used for forced prostitution. We investigated and decided to strike and we chose a time that we will meet the suspects and victims right there at the hotel,” he said. Theofficialdisclosedthatthreesuspects,who were mainly women and the manager of the hotel, were arrested while 12 girls were rescued. “We will interrogate the young girls, so that we will be able to separate the adult from minors,” he said. Emerole said that investigation was ongoing, adding that the suspects, if culpable, would be prosecuted accordingly.

Gunmen wipe out family of 9 in Jos

nidentified gunmen have killed family of nine in Rukuba road community in Jos North local government area. The sad incident has created tension in the community and other parts of Jos metropolis. A resident of the area, who prefers anonymity, said on Friday that the attack took place Thursday night. “Last night, some gunmen invaded this area shooting sporadically and in the cause wiped out nine members of a family. I cannot exactly say what caused the ugly incident but I heard some gunshots and some persons were also injured,” he said. Terna Tyopev, the police public relations officer of the Plateau command confirmed the incident on Friday. Tyopev who could not confirm the accurate number of deaths, said that lives were lost, while many others were injured. He explained that the assailants took advantage of the night rains to perpetrate the “evil” act. “At about 10:p.m, our Plateau Control Room received a distress call that there were sporadic gunshots at Rukuba road, a community opposite Kowa Hotel, Jos. “We immediately mobilised our patrol team to the scene of crime. The gunmen, who took advantage of the night rains to attack the residents, were later chased away from the area by the combined team of the police and men Operation Safe Haven (STF), a military task force. “Some people were rescued while some persons lost their lives as a result of the attack and others sustained injuries of various degrees,” he said. Tyopev added that the injured were rushed to Bingham University Teaching Hospital, Jos, where they were receiving treatment, adding that a combined team of security personnel had been dispatched to flash points to avert breakdown of law and order.

Sympathizers at the scene of an Airforce fighter jet which crashed during a military show of force in the air on Katampe hill in Abuja on Friday. One occupant is feared dead. NAN

1,000 children die of diarrhea daily from poor sanitation related diseases MIKE ABANG, Calabar

anku Agbor, secretary to Cross River State government, has said that no fewer than 1,000 children die daily worldwide due to preventable diarrhea. She stated this on Friday at the celebration of the Validation and Confirmation of Open Defecation Free (ODF) Status for Bekwarra local government area, held at the council headquarters. According to her, the validation of the local government as ODF will bring improved health to women and children less than five years old. “There is going to be a reduction in incidences of diarrhea, especially among

children under five years. Also, we are going to experience a cleaner and fresher environment, which promotes healthy living in our communities. “Each day, nearly 1000 children die all over the world due to preventable water and sanitation related diarrhea diseases,” she said. Also speaking, Ita Ikpeme, directorgeneral of the state’s Rural Urban Water Supply and Sanitation Agency (RUWATSSA), said the attainment of ODF in 235 communities of the local government area was worth celebrating. Ikpeme commended the efforts of the federal ministry of water resources, the donor partners, international organisations and the state government for the success. “Again we celebrate not only Bekwarra but all the efforts that had been put in over

the years to attain this worthy status. “Particularly, the state is grateful to the Federal Ministry of Water Resources, and the UN Global Sanitation Fund and United Purpose. It’s been a long journey but today we celebrate the success that all of us have collectively put in towards this achievement,” he said. Ikpeme added that with the validation and confirmation of ODF status in Bekwarra by the national group of sanitation, Cross River now had three local government areas that had been validated -the earlier ones being Obanliku and Yakurr. “This is the third local government area to be declared ODF and many more will soon follow. This is a feat that has not been achieved by any other state in Nigeria,” he said.

Flood: 4 die in Anambra community, more displaced

rinze Awogu, chairman, of Ogbaru local government area in Anambra State says death toll in the flood ravaging Obolo village has risen to four. Awogu said the latest was one Ojike Ajanwu, a father of nine children, drowned in the flood that submerged houses and displaced residents. He said that Ajanwu drowned while attempting to evacuate his harvested cassava from his farm on Thursday. The chairman said that the wife of the deceased, who is nursing a one month old baby, and her eight children were at the Internally Displaced Persons (IDPs) centre in Ogwuaniocha. “The deceased left behind a young wife, Chinasa, who hails from Ossomala and nine children, the oldest of the children is 13 years old. Our hearts go out to the family, and we assure them of government’s support and sincere condolences, we shall inform the governor about the incident. We are still counting the number of deaths but as at it stood at four,” he said. Awogu said there was no sign that the flood was receding as all the 16 communities in the council area have been submerged and more people displaced from their homes. He said most notable sons and daughters

of Ogbaru have been sacked by the flooding and called for more support to enable them overcome the challenge. “I must tell you that all the prominent persons we have in Ogbaru local government including elected and political office holders are now IDPs. “It’s a real emergency, none of the 16 communities in Ogbaru is left out, the upland is congested, the IDPs camps are overstretched so we are now moving them to Ihiala and Onitsha. “I do not know the basis for the impression that this flood is receding, for us down here in Ogbaru, we are still at the middle of this emergency, and flood level is still rising,” he said. The council boss thanked the Anambra government for the assistance they have received and called on the National Emergency Management Agency to show more presence. “This situation is a national disaster, we want to see more national intervention; it is far beyond what the state can handle. We thank Anambra government for all the assistance we have been getting the through the State Emergency Management Agency (SEMA), we have not seen the National

Emergency Management (NEMA) on ground “What I do not know is if what the SEMA is bringing include what NEMA has given them, but at the moment we are only seeing SEMA,” he said. Speaking on their interventions, NEMA said they were aware of the challenges and were responding accordingly. Walsom Ibarakumo, coordinator of Enugu office of NEMA said that they have handed over quantity of relief materials to Anambra SEMA for onward distribution to the affected persons. Ibarakumo said NEMA could not handover directly because of inadequate number of staff to go round the IDPs camps across the state, adding that it had to rely on the synergy with SEMA. He said the items so far handed over to Anambra SEMA were food and non-food items including 600 bags of rice, 300 bags of Garri, 600 bags of cement, 200 cartons of Milo, 300 bags of beans, 1,000 cartons of detergent and 300 cartons of tin tomato. Other were 2,000 pieces of treated mosquito nets, 1,000 pieces of toilet soap, 1,500 pieces of printed wax, 150 kegs of vegetable oil, 150 bags of salts, 150 bags of sugar and 150 kegs of red oil. NAN

Monday 01 October 2018

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BUSINESS DAY

Live @ The Exchanges Top Gainers/Losers as at Friday 28 September 2018 GAINERS Company

LOSERS Opening

Closing

Change

SEPLAT

N622

N630

OKOMUOIL

N70.1

N77

6.9

STANBIC

N43.3

N46

2.7

CCNN CAP

Market Statistics as at Friday 28 September 2018

Company

Opening

Closing

Change

NESTLE

N1432.5

N1400

-32.5

GUINNESS

N86.15

N80

-6.15

UACN

N11.85

N10.7

-1.15

N23

N25.3

2.3

JBERGER

N25

N23.9

-1.1

N27.2

N28.45

1.25

NASCON

N19

N18.5

-0.5

ASI (Points)

32,766.37

DEALS (Numbers)

2,269.00

VOLUME (Numbers)

184,534,577.00

VALUE (N billion)

2.822

MARKET CAP (N Trn

Stock investors’ year-to-date loss moderates to N600bn

Richter to replace Goetsch as Julius Berger new Managing Director

…Sunu Assurance, Cornerstone, Sovereign Trust, Forte, others worst hit Stories by Iheanyi Nwachukwu

nvestors at the Nigerian Bourse are now caught in the web of just N600billion loss year-to-date (ytd), following slight recovery from record sell-off which had impacted negatively on equities value. This record level of loss represents a remarkable improvement from a record loss of N1.3trillion as at September 10. A look at the price list of stocks on the Nigerian Stock Exchange (NSE) as at close of trading session on Friday September 28 showed Sunu Assurance Plc, Cornerstone Insurance Plc, DN Tyre & Rubber Plc, Sovereign Trust Insurance Plc and Forte Oil Plc have declined by over 50percent, underperforming the NSE ASI with negative return of 14.32percent yearto-date. Sunu Assurance Plc stock price at 20kobo has declined by 60 percent this year; Cornerstone Insurance Plc at

L – R: Taji Ogbe, executive secretary, Nigerian Gas Association; Favour Femi-Oyewole, head, information Security, The Nigerian Stock Exchange (NSE); Bola Adeeko, head, Shared Services Division, NSE; Dada Thomas, president, Nigerian Gas Association; Audrey Joe-Ezigbo, first vice president, Nigerian Gas Association and Ibimina Abiodun, secretary general, Nigerian Gas Association during a Closing Gong Ceremony at the Exchange.

20kobo represents year-todate decline of 60percent; DN Tyre & Rubber Plc at 20kobo has declined by 60 percent; Sovereign Trust Insurance Plc at 23kobo has declined by 54percent this year; while Forte Oil Plc

N20.05 represents Ytd loss of 53.9percent. Other stocks that have lost over 50percent of their share price this year include Regency Alliance Plc at 24kobo (-52 percent); Royal Exchange Plc at 22kobo has declined by

56percent; Universal Insurance Plc at 23kobo has lost 54percent of its value as well while Lafarge Africa Plc at N22.2kobo has declined by 50.5percent. The NSE ASI appreciated marginally by 0.01percent

NSE retains ISO 27001:2013 certification

he Nigerian Stock Exchange (NSE) has retained the ISO 27001:2013 certification for its Information Security Management System (ISMS) for the third year consecutively. The re-certification followed a rigorous independent audit of NSE’s Information Security Management System (ISMS) by the British Standard Institute (BSI), to ensure that the principles of the International Organisation for Standardisation (ISO) on ISMS standard are being upheld at the Exchange and controls are working as intended. Commenting on the

development, Oscar N. Onyema, CEO, NSE said that “We are delighted to retain this ISO certification from the British Standard Institute. It demonstrates our continual commitment to data protection and a clear indication of the robustness of our systems and processes in managing sensitive stakeholders’ information. Since first attaining the ISO 27001:2013 certification in August 2015, we have continued to evolve and improve our security management processes to ensure that our information security controls remain safe and effective in light of emerging busi-

ness needs and the changing security landscape”. “NSE takes a proactive approach to security as we recognize the importance of protecting our data and stakeholders’ information assets. With our recertification, our clients and stakeholders can be confident

Oscar Onyema, NSE CEO

that we follow information security best practices in managing our risk exposure”, said Favour Femi-Oyewole, Head, Information Security, NSE. International Organisation for Standardisation is an independent, standard-setting body which promotes worldwide proprietary, industrial and commercial standards. These standards provide world-class specifications for products, services and systems, to ensure quality, safety and efficiency. ISO 27001:2013, (ISMS) is the international standard of best practice for managing confidentiality, integrity and availabil-

11.962

to close at 32,766.37 points at the close of trading on Friday. Trend watch shows the value of listed stocks which opened this year at a high of N13.609trillion decreased to N11.962billion at the close of trading on Friday.

he Board of Directors of Julius Berger Nigeria Plc met on September 25, 2018 and appointed new directors, according to a notice released Thursday September 27, 2018 on the Nigerian Stock Exchange for the investing public. The following organisational changes to the Board and the Company were made: Wolfgang Goetsch, the current Managing Director would exit the Board of Directors of Julius Berger on October 15, 2018; a new Managing Director, Lars Richter would assume responsibility on October 16, 2018. A new Directorate, Corporate Development would be established to be headed by Tobias Meletschus. He will assume his responsibilities from October 16, 2018. The new Directors will bring to bear on their functions as Executive Directors and the future directions of the Group, the wealth of their experience and expertise, according to the notice at the NSE.

eTranzact says stock guarantees exciting return

Tranzact International Plc has assured stock brokers at the Nigerian Stock Exchange (NSE) of a bright future, saying investment in the stock will yield exciting returns. This was disclosed by the Managing Director and Chief Executive Officer, Niyi Toluwalope at the recent closing gong ceremony on the Nigerian Bourse. “We are very experienced in processing electronic payment and we are sure that all our aspirations will be realised,” Toluwalope said. Tinuade Awe, Executive Director, Regulation, NSE who represented

Oscar Onyema, Chief Executive Officer of the NSE appealed to the management of eTranzact come for “Facts BehindThe Figures” presentation, saying it would further boost the confidence of investors in the shares of the company. Also present at the meeting were senior members of the management of eTranzact which include Olayimika Philips, Non-Executive Director; Olufemi Aminu, Chief Risk Officer; Adebunmi Wellington-Ogunlewe, Group Head, Product Development and Emmanuel Ogunji, Chief Financial Officer.

BUSINESS DAY

Monday October 2018

C002D5556

In Association With

Bench-warming

What to look for in the Supreme Court’s 2018-2019 term Frogs, executions, graveyards and a few other things, too

N OCTOBER 1st, for the second time in three terms, the Supreme Court will begin its term a justice short. In 2016, with Senate Republicans stonewalling Barack Obama’s choice to succeed Antonin Scalia, the justices plodded along as a court of eight until Neil Gorsuch took his seat in April 2017. This autumn the court will not remain shorthanded for nearly as long. Allegations of sexual assault have spurred a political firestorm over Brett Kavanaugh, President Donald Trump’s second nominee. But with Republicans commanding a 51-to-49 majority in the Senate until at least January, the Supreme Court will probably return to full strength—with a solidly conservative five-justice majority—within days or weeks. The only question is whether the person filling Justice Anthony Kennedy’s seat will be his former clerk (Mr Kavanaugh) or somebody else. The 38 cases awaiting the justices (with more on the way) may not grab headlines quite like last term’s tiffs over gay-wedding cakes, gerrymandering and Mr Trump’s Muslim travel ban. But important questions loom. In their first week back the justices will hear arguments on the fate of an endangered amphibian, the separation of powers and whether a man with a mental illness can be executed. Weyerhaeuser v United States Fish and Wildlife Service, the opening argument of the term, pits logging companies against the three-inch-long creature, the dusky gopher frog. With fewer than 200 believed to be still hopping in America, the amphibian is listed as one of the 100 most endangered species in the world. Habitats for the dusky gopher frog are in short supply. They breed in fishless “ephemeral ponds” that dry up in the summer. Other than a single pond in Mississippi, only one area in Louisiana seems suited to the frog. But the owners of those 1,544 acres include two timber companies. The justices will consider whether the Endangered Species Act authorises the federal government to preserve these tracts for the dusky gopher, costing the companies $34m over 20 years.

Sex and power

#MeToo, one year on A movement sparked by an alleged rapist could be the most powerful force for equality since women’s suffrage

YEAR ago Harvey Weinstein was exposed as a sexual predator. Until then his treatment of women was an open secret among some of the film industry’s publicists, lawyers and journalists. Mr Weinstein had been protected by an unspoken assumption that in some situations powerful men can set their own rules. Over the past year that assumption has unravelled with welcome speed. In every walk of life powerful men have been forced out, and not just in America. Now Brett Kavanaugh

Another case probing the limits of executive power, Gundy v United States, will be heard on October 2nd. Gundy asks whether an ambiguity in the Sex Offender Registration and Notification Act (SORNA) falls foul of the “non-delegation doctrine”, an old, seldom-enforced rule that one branch of government may not hand over its constitutionally prescribed duties to another. When Congress drafted SORNA in 2006, lawmakers remained mum on whether the requirements apply to people convicted of sex offences before the law was passed; the attorney-general, SORNA provided, can sort that out. Based on previous rulings and a left-right coalition of amicus briefs, there may be interest on both ends of the Supreme Court’s ideological spectrum for policing abdication of the legislative role to the executive branch. And the implications may reach beyond sex offenders. Tom Goldstein, a frequent Supreme Court litigator, points out that a judgment reviving the non-delegation doctrine may cast doubt on the feeble legislative hook presidents often cite when imposing tariffs, purportedly to protect America from threats to its national security. Mr Trump’s aggressive trade policy, grounded in this pretence, may eventually face resistance. The first of two death-penalty cases this term will also be heard on October 2nd. Madison v Alabama asks whether executing a prisoner

whose dementia has erased all memory of the murder he committed in 1985 violates the Eighth Amendment’s ban on cruel and unusual punishment. Another case coming up later in the term, Bucklew v Precythe, considers the same constitutional standard in light of Russell Bucklew’s claim that his rare medical condition, cavernous hemangioma, could make lethal injection monstrously painful. Mr Bucklew says he would prefer to die in a Missouri gas chamber, where his “unstable, blood-filled tumours” would not be at risk of rupturing and choking him. Capital punishment typically fractures the Supreme Court along ideological lines. A few other cases in the pipeline may do so too, if the justices opt to take them up. One petition asks whether Title VII of the Civil Rights Act, which bars gender discrimination, should be read to prohibit discrimination based on sexual orientation. Another involves a 40-foot-high cross in Maryland that has stood as a first-world-war memorial on public land for 90 years; plaintiffs say the cross violates America’s separation of church and state. The most contentious matter the justices are likely to confront this term is whether Mr Trump acted legally when, a year ago, he rescinded DACA, Mr Obama’s executive action of 2012 shielding undocumented immigrants who arrived in America as children.

Two other cases look juicy. One asks if federal and state prosecution for the same crime could be a violation of the double- jeopardy clause; this has implications for Paul Manafort, Mr Trump’s convicted former campaign chairman. The other involves a rule that owners of land containing old cemeteries must provide public access. Relatively few cases slated for argument this term seem likely to produce 4-4—or, once the ninth justice arrives, 5-4—splits. This is by design. In the wake of Justice Kennedy’s departure, a sordid confirmation battle and a term that saw losses for public-sector unions alongside wins for a gay-weddingaverse Christian baker, gerrymanderers and pro-life pregnancy centres, lowering the temperature is a wise course. The chief justice, John Roberts, encouraged compromise during the court’s shorthanded stint and, according to Justice Elena Kagan, deserves credit for pushing his colleagues to “keep on talking” until, in all but a handful of cases, consensus came. Chances of civility and modesty may be high in the short run, but Stephen Vladeck of the University of Texas warns that the new conservative majority may soon enjoy ample opportunity to assert itself on the Supreme Court. There will be plenty of time, Mr Vladeck says, and plenty of cases, for the fivejustice conservative bloc to flex its muscles.

may be denied a seat on America’s highest court following a series of accusations that he committed sexual assaults decades ago as a student. What began on the casting couch has made its way to the Supreme Court bench. That is progress. And yet the fate of the #MeToo movement still hangs in the balance in America, the country where it began and where it has had the greatest effect. To see why, only look at the case of Mr Kavanaugh—who, as we went to press, was due to give testimony to the Senate Judiciary Committee along with Christine Blasey Ford, his main accuser. The good news is that the appetite for change is profound; the bad news is that men’s predation of women risks becoming yet one more battlefield in America’s all-consuming culture wars. Thanks to #MeToo, women’s testimony is at last being taken more seriously. For too long, when a woman spoke out against a man, the suspicion was turned back on her. In 1991 when Anita Hill accused Clarence Thomas, now a Supreme Court judge, of Continues on page 17

Monday 01 October 2018

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BUSINESS DAY

In Association With

#MeToo, one year on

Behind closed doors

American business and #MeToo

Continued from page 16

Some of them have a Mitteleuropa flavour

“

DIDN’ T wait for a pay cheque. I didn’t tell anyone. I was scared, ashamed and just ran,” is how Daniela Contreras recalls sexual harassment—as she now knows to call it—by her employer when working as a nanny in her teens. Twenty years later she feels able to say “This happened to me”, and works with the National Domestic Workers Alliance in New York to ensure others can do so sooner. Over the past year she has seen a big increase in women phoning, almost daily, for legal advice. #MeToo catalysed this rise, she says. “The hashtag helped start the conversation by writing it, saying it and sharing it: ‘This happened to me.’” It is almost a year since revelations emerged about the behaviour of Harvey Weinstein, a film-studio boss charged with multiple counts of rape and sexual assault. In response Alyssa Milano, an actor, invited anyone who had been harassed or assaulted to tweet #MeToo. The hashtag has since been shared over 15m times. Victims of harassment in workplaces of all sorts, from S&P 500 companies to small-and medium-sized firms to startups, have come forward in unprecedented numbers to share their harrowing experiences. Many powerful men have been forced out. Earlier this month one of the most-praised bosses in media, Les Moonves, the chief executive of CBS, was forced to leave following accusations of sexual harassment (which he denies). A handful, including Mr Weinstein, await trial. This week Bill Cosby, an actor once known as America’s Dad, became the first post-MeToo A-lister to be sentenced to prison. Firms are under growing pressure to change how women are treated at work. Not a week goes by without a fresh example of an organisation finding itself in the spotlight. Earlier this month workers at McDonald’s, one of several firms being sued by workers, protested against a culture of harassment, replacing the “M” on their MeToo banners with the golden arches. In the same week the board of the New York Review of Books, under pressure from advertisers, pushed out its editor, Ian Buruma, after he published a controversial essay by

Jian Ghomeshi, a Canadian broadcaster and alleged abuser. Some people worry that the movement has gone too far, warning of a “witch hunt”, “trial by Twitter,” and the end of innocent office romance. Others fret about a backlash for women at work, where senior male executives may no longer want to mentor them or travel or dine with them alone (a code of conduct sometimes referred to as “the Pence rule”). Some responses have felt kneejerk: Netflix, a media company, was mocked when in training it reportedly suggested a rule against people gazing into each other’s eyes for more than five seconds on film sets. Yet the occasional overreaction may be part of the messy process of changing norms across society, business and politics. Although the majority of those over 65 say it has become harder for men to interact professionally with women in the wake of MeToo, a minority of those under 30 say the same. Indeed, the real question is not whether the pendulum has swung too far but whether it has swung far enough. The answer to that is clearly “no”. It is true that some notorious sexual predators are now facing justice; Mr Weinstein’s next court appearance is in November. But most of those accused of harassment or assault have faced the court of public opinion, not the law itself. In America the Equal Employment Opportunity Commission, a federal agency, has noted in preliminary findings just a modest,

3% uptick in sexual-harassment complaints filed by employees this year. Their day in court This is in part because few victims report abuse, let alone press charges. Those who do rarely manage to get their complaints heard in court. In America the Time’s Up movement set up a $21m legaldefence fund to try to change this. Since January it has had 3,500 applications, two-thirds of them from low-income workers. Many American states are reviewing their laws. Washington now bars employers from mandatory non-disclosure agreements for employees, which stop workers from speaking out publicly about their experiences. Several are exploring extending or ending statutes of limitations, spurred on by revelations of child abuse in the Catholic church in America. California is in the process of passing several “#MeToo bills”, including banning forced-arbitration clauses in contracts, which require workers to waive the right to take an employer to court in the event of a dispute. Meanwhile, the number of shareholder class-action lawsuits based on gender claims has risen, says Kathleen McKenna, an employment lawyer at Proskauer in New York. Last November, 21st Century Fox reached a $90m settlement with shareholders over losses related to two harassment scandals. Employees are taking firms to court too—including Google, where a plaintiff cites a “bro culture” that allegedly allowed harassment to go unpunished, and Ford, which faces a class action by workers claiming they were sexually harassed and their complaints obstructed. Yet the uptick in workers’ class actions has been modest, partly because in May the Supreme Court upheld employers’ rights to block employees from bringing them. What the law can do is in any case only part of the picture. Many, if not most, of the accounts of harassment that have emerged in

the past year point less to a failure of lawmakers than to one on the part of employers. Big companies in America are keen to be seen to “do something”: the number of public declarations about zero tolerance of harassment has gone up. Yet whether or not their actions are meaningful, or whether they are still dodging deeper problems around power imbalances in the workplace, is very much in question. Customers, investors, boards, employees, stock analysts and even insurers increasingly ask for information on what a company does for women, including the protection it affords against harassment. Equileap, which ranks firms on gender-equality criteria, now includes sexual-harassment policies. It is seeing strong demand for such data. That is partly because the headline costs of a scandal are clear: shares of several big firms have fallen sharply after executive departures (see chart). But less obvious costs, such as to productivity, turnover and reputation, are also becoming harder to ignore. In a recent survey by Deloitte, a consultancy, business leaders cited the #MeToo movement as the news story that had most affected what they call “inclusive growth initiatives”. “As with the first cyber-risk incidents, #MeToo is helping make boards realise ‘this could happen to us’,” says Jane Stevenson from Korn Ferry, a consultancy. Even so, few firms want to talk publicly about what they are doing inside the organisation. Those that do often have reputations sorely in need of burnishing. Uber, a ridehailing firm, replaced much of its top management and claims to have prioritised culture and safety; it is adding a safety function to its app, has ended forced arbitration for harassment and assault and will start publishing data on assault reports. The Old Vic, a London theatre tainted by a scandal involving Kevin Spacey, its former director, will next week announce a “Guardians network” to better protect workers in the performing arts.

sexual harassment, his defenders smeared her as “a little bit nutty and a little bit slutty”. The machine backing Mr Kavanaugh is equally determined. However, it has refrained from questioning either Ms Blasey Ford’s sanity or her morals. In 2018 voters would find that unacceptable. Abuse by men is being taken more seriously, too. Mr Weinstein allegedly committed dozens of sexual assaults, including rape. The contrast between his brutality and his impunity shook the world out of its complacency. This week Bill Cosby, once America’s highest-paid actor, was jailed for being a sexually violent predator. But women in colleges and workplaces all over America are harmed by abuse that falls short of rape. Thanks to #MeToo, this is more likely to be punished. Most defences of Mr Kavanaugh have focused on his presumed innocence; 30 years ago they would have insisted that the drunken fumblings of a 17-year-old are a fuss about nothing. These shifts reflect a broad social change. Before the elections of 2016, 920 women sought the advice of EMILY’s List, which promotes the candidacy of pro-choice Democratic women. Since Donald Trump was elected president, it has been contacted by 42,000 (see article). Outside politics, companies are keen for their staff and their customers to think that they buy in to #MeToo. One worry is that there may be a gap between corporate rhetoric and reality (see article). Another is uncertainty about what counts as proof. That is largely because evidence of an instance of abuse often consists of something that happened behind a closed door, sometimes long ago. Striking a balance between accuser and accused is hard. Ms Blasey Ford has the right to be heard, yet so does Mr Kavanaugh. Mr Kavanaugh’s reputation is at stake, but so is the Supreme Court’s. In weighing these competing claims, the burden of proof must be reasonable. Mr Kavanaugh is not facing a trial that could cost him his liberty, but interviewing for a job. The standard of proof should be correspondingly lower. Neither the court nor natural justice is served by haste.

BUSINESS DAY

C002D5556

Monday 01 October 2018 In Association With

Missiles with a message

What Russia’s upgrade of Syria’s air defences means for Israel Israel has hit Syria from the air—and will continue to do so

T WAS “a chain of tragic circumstances” that led to the downing of a Russian spy plane by Syria on September 17th, said Vladimir Putin, Russia’s president. With those words, Mr Putin seemed to accept the episode as an accident and absolve Israel of any blame. Israeli jets had earlier carried out air strikes on Syria’s territory and appeared to be the intended target of its air defences. But, as the days passed, Russia grew more belligerent. Its generals claimed that Israeli jets used the Russian plane as a shield (Israel has denied this). Then, on September 24th, Russia announced plans to supply the Syrians with advanced S-300 air-defence batteries, signalling a shift in its regional strategy. Since Russia intervened in Syria’s civil war on the side of Bashar al-Assad, the country’s dictator, in 2015, it has sought to avoid clashes with Israel. In the past 18 months Israel has

carried out more than 200 air strikes on Iranian-affiliated targets in Syria. A “deconfliction” hot-line connecting Israel’s air force headquarters in Tel Aviv with Russia’s operations centre at Khmeimim, in western Syria, has prevented mishaps in the air. The military procedures were backed by a tacit agreement between Mr Putin and Binyamin Netanyahu, Israel’s prime minister. Israel would not hamper Russia’s campaign

to save Mr Assad, and Russia would not prevent Israel from attacking Iranian targets in Syria. Russia’s planned upgrade of Syria’s air defences complicates that understanding. The S-300 is a formidable system with a radar capable of tracking more than 100 targets simultaneously, at ranges of up to 300km. It would make Israel’s missions riskier, which is why Mr Netanyahu has long op-

posed transfer of the weapon to the Syrian government. (Russia already operates the S-300 in Syria, but it has not used it against Israel.) Still, Israel says it will continue striking targets in Syria. Its F-35 stealth bombers are capable of evading the S-300 system, and destroying it. But if Russian operators are working alongside ill-trained Syrian ones, there is a risk of escalation. Russia’s defence minister, Sergei Shoigu, said the S-300 would be transferred to the Syrian army within two weeks. Some analysts doubt that will happen. Under pressure from America and Israel, Russia took nine years to send a promised S-300 to Iran. It may see the threat of the transfer as a way to pressure Israel to limit its intervention in Syria. Russia has sought a balance between Israel and its foes in the Middle East. Mr Putin was the first Russian leader to make an official visit to Is-

rael (twice) and Mr Netanyahu stood shoulder to shoulder with Mr Putin at a Russian military parade this year. But the friendship did not stop Russia inviting Hamas to Moscow, helping Iran with its nuclear programme or arming Syria. As Russia has become increasingly isolated from the West, the importance of Israel as a source of technology and political support has grown. The Kremlin has been careful to limit anti-Israeli rhetoric in its denunciations of the West. After the downing of its plane in Syria, Russia struck the tone of betrayed trust and regret; Russia did everything to help and accommodate Israel, but was repaid with treachery, its commentators implied. Mr Netanyahu has made two calls to Mr Putin and sent his air force chief to Moscow, but the Kremlin might be looking for more favours from Israel to defuse the situation.

Long walk to growth

There are no quick fixes for South Africa’s economy The government is struggling to undo years of neglect

F EMIGRATION is a barometer of confidence in a country’s future, then South Africa, where a growing number of people are upping sticks, is in trouble. Private schools complain about losing students as families move abroad. More people are selling their homes in preparation for leaving (see chart). “Emigration sales” are a fixture of neighbourhood Facebook groups, with leavers peddling their patio furniture and braais. But unlike previous waves, this is not just white flight. There has been a big increase in black, coloured (mixed-race) and Indian people who are looking to go. Many cite declining opportunities. There was a burst of optimism among South Africans when Cyril Ramaphosa (pictured) took over as president seven months ago, after nine ruinous years under Jacob Zuma, who is due to stand trial for corruption. But South Africa’s long-term fortunes are looking ever gloomier. The country entered a recession earlier this month—the first since 2009. Weak growth is expected next year. Joblessness is over 37%, if one includes people who have

given up looking for work. The murder rate is also rising. The country’s sovereign debt has been downgraded to junk by all of the big credit-rating agencies except Moody’s, which has it a notch above sub-investment grade and will review it in October. The rand has fallen nearly 20% this year. When announcing his recovery plan on September 21st, Mr Ramaphosa admitted that “our economic challenges are huge, and our difficulties are severe.” But his solutions are meagre. There will be no fiscal injection—because there is no money for it. Instead,

about 3% of the budget, which totals 1.67trn rand ($120bn), will be reallocated to create jobs and fuel growth. This will include support for black commercial farmers and small entrepreneurs. A 400bn rand infrastructure fund, drawn mainly from the existing budget and spread over three years, hopes to attract private investment. Details will be filled in when Mr Ramaphosa’s finance minister, Nhlanhla Nene, delivers the government’s mid-term budget statement on October 24th. Fitch, a ratings agency, doubts the plan will do much for growth.

An ill-educated workforce, inflexible labour laws and corruption will continue to hold South Africa back. But Mr Ramaphosa is at least moving ahead with reforms. He has announced a review of electricity, port and rail tariffs to reduce the cost of doing business; and he promised to change confusing visa regulations, which hinder tourism. He will also make it easier for skilled foreigners to work in South Africa. New rules on mining aim to provide more certainty to industry. Efforts by Mr Ramaphosa’s party, the African National Congress, to change the constitution to allow the expropriation of land without compensation have added to the economic uncertainty. A panel to advise the government on land reform includes some sober academics and agriculture experts, but it will take more than that to reassure investors. The president is stepping up his efforts over the next month, mindful of elections due between May and August next year. A jobs summit in early October will bring together government, labour and business representatives; an

investment summit will follow later in the month. Meanwhile, many well-to-do South Africans seek second passports, the first step towards emigration. Whether they stay or go may depend on Mr Ramaphosa’s ability to jump-start the economy.

Monday 01 October 2018

BUSINESS

COMPANIES & MARKETS

DAY

RIVTAF deploys customerfocused strategies as property market lull persists

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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

Fidelity Bank sustains growth as profits rose 27% David Ibidapo

idelity Bank Plc’s half year result for 2018, revealed that the bank recorded a double-digit growth in vital revenue lines and achieving significant traction in her chosen business segments. Details of the audited half year results, for the period ended June 30, 2018, released at the Nigerian Stock Exchange (NSE) shows that Profit before Tax (PBT) increased by 27.3 percent from N10.2 billion in the previous period to N13 billion in the reporting period. BusinessDay analysis revealed that this was largely due to a surge in commission on traveler’s cheque and foreign bills which led to spike in bank’s fee and commission income during the period. Fee and commission income increased by 45 percent from N7.4 billion in H1 2017 to N11.9 billion. Commission on traveler’s cheque increased by 30 percent from N870 million to N1.13 billion. Profit after Tax (PAT) rose

by 31 percent to close at N11.8 billion from N9.03 billion recorded in 2017, whilst gross earnings rose by 3.6 percent from N85.8bn to N88.9bn. In other indices, total assets grew by 13.7 percent to N1.56 trillion from N1.37 trillion in the previous period. Total Deposits a measure of customer confidence, increased by 19.7 percent to close at N927.9bn from N775.3bn in 2017. Nnamdi Okonkwo, Fidelity Bank CEO attributed the impressive performance to the disciplined approach in managing the balance sheet growth of the bank, its strategic cost containment initiatives; focused attention to chosen business segments and determined execution of its retail and digital banking strategy. He stated that “Gross earnings, net fee and commission income all grew primarily due to the increase in transactional activities. Our digital banking initiative continues to gain traction with almost 40 percent of our customers now enrolled on our mobile/internet bank-

L-R Olufunmi Adegbuyi, general manager commercial, Kwikfit; Olutunde Olakunle, enterprise Agile coach, Accenture; Abiodun Osoba, CEO, The Agile Advisor Nigeria; Ady Dike, website and CRM consultant, Agile Business Consortium, and Tunde Giwa, head, DevOps, The Agile Advisor Nigeria, during the Agile Nigeria conference in Lagos. Pic by Pius Okeosisi

ing products and over 80 percent of total transactions now done on our digital platforms”. Savings deposits of fidelity bank increased by 10.6% to N197.5 billion from

sahi Brands limited, the exclusive distributor of Bridgestone and Firestone Tyres in Nigeria, in their aim to enhance customer satisfaction and increase its market share has announced plans to launch a mobile tyre maintenance service scheme which would meet the needs of customers at their door steps. This was announced by Victor Eburajol, group deputy managing director during the inauguration of the new company’s branded retail outlet at Ikeja, Lagos. He said “the mobile service offered would help not only in improving customer relations by providing first-hand technicians who would educate you on how best to manage your tyres, but also reinforce the brands presence”

We are trying to be pace setters in this business, this service would be the first of its kind in Nigeria, and we intend to carry out a test drive before opening it to the public. We would have our own trucks, equipment’s and our own teams and we would move around from estate to another, offering our services, change the tyres and work on them. We are trying to bring our services to the doorstep of our valuable customers.” He added. Eburajolo went on to say that “unless you know tyres you would not know if you are buying a fake one or an original one. Bridgestone and firestone are recognisable brands, and this has made a lot of people copy their style to produce fake ones. This has made us come up with innovative ways to curb this problem and ensure that their customers get the best

Okonkwo explained further. However, total operating expenses for the period H1 2018 grew by 5.7 percent to N32.7 billion. In response to this, Okonkwo maintained that “the bank’s cost to in-

come ratio remained relatively stable at 67.7 percent when compared to 67.5 percent reported in the previous year. This is in spite of the double-digit inflationary environment in Nigeria”.

Google slashes 20% off Pixel 2, 2 XL & smart home devices

Asahi Brands set to launch mobile tyre maintenance system Endurance okafor

N178.5 billion in 2017. “The bank is on track to achieving a 5th consecutive year of double-digit savings growth. Low cost deposits now account for 73.8 percent of total deposits” Nnamdi

Jonathan Aderoju

quality out of any of their product and one of the ways to ensure this was through the mobile maintenance services.” The opening of the new shop at Ikeja is also another means by which the company intends to reach out and be closer to its customers. The company plans to open new stores all around Nigeria and Lagos especially every quarter to achieve this. Commenting at the inauguration, Anil Sahgal, director Auto Division, Afriventures said, “The growing passenger vehicle segment of Lagos, along with entire Nigeria, has a lot of potential for us. The long partnership with Bridgestone has enabled us to secure a strong customer acknowledgement for our products. We aim to have a larger space with the customers in the premium tyre market in Nigeria.”

oogle just turned 20 years and to celebrate her anniversary, it is slashing 20 percent off its Pixel 2 and 2XL phones, Home devices, Chrome cast Ultra and its wireless mesh system, the Google Wi-Fi. If you’re after a SIM-free Google Pixel 2 phone or after Google’s various smart home devices at a steep discount, now is your chance. The 5in Pixel 2, usually £629 that is N 266,000 for the 64GB model is now £503.20 which is N 213,000 while the 128GB model, usually £729 which is N 309,000 is now £583.20 which is N247, 000. The 6in Pixel 2 XL is on offer too: the 64GB model has been reduced to £639.20 which is N271, 000 from £799 which is N339, 000, while the 128GB model sees its price drop to £719 which is N305, 000 from £899 which is N381, 000. The Google Home Mini

has been reduced from £49 which is N20, 000 to £39.20 which is N 16,000, while its larger counterpart the Google Home is now £103.20 which is N 43,000 reduced from £129 which is N 54,000. The 20-percent off discount also applies to the Chrome cast Ultra, which has been reduced to £55.20 which is N 23,000 from £69 which is N 29,000 Google’s wireless mesh network, the Wi-Fi, which is now £103.20 which is N 43,000 instead of £129 which is N 54,000 for the single pack. currency conversion according to bloomberg conversion. The Pixel 2 XL is Google’s latest plus-sized flagship. The second-generation Pixel XL is a smartphone that’s meant to pave the way for the next wave of Android smartphones, with top-end specs and a camera that’s best in its class. Released a month after the regular-sized Pixel 2, the 2 XL is a 6in smartphone with a P-OLED screen and a 20-megapixel rear camera

that, according to DxOMark, is unbeatable. The latest Snapdragon 835 processor runs the show, complete with 4GB of RAM and a choice of either 64GB or 128GB of non-expandable storage. Google Wi-Fi has been a long time in the making. First conceived in 2013, it has taken the Google’s Wi-Fi experts some four years to bring the system to market, and its appearance in 2017 is significant. Back when the Google’s engineers first dreamed it up, the market was dominated by single routers; today a new standard is emerging mesh networking. Consisting of not one, but a series of compact cylindrical router devices, Google Wi-Fi attempts to blanket your home with a reliable, consistent wireless signal. Most importantly, though, it aims to take the pain out of running your home network by using cloudbased analysis, machine learning and a series of other clever technologies.

BUSINESS DAY

Monday 01 October 2018

BUSINESS DAY

C002D5556

Monday 01 October 2018

COMPANIES & MARKETS

RIVTAF deploys customer-focused strategies as property market lull persists CHUKA UROKO

s the lull in the Nigeria property market persists with low falling demand which is over 20 percent, depending on location and market segment, product suppliers are devising various customer-focused and friendly strategies of selling what they have put on the market. The Nigerian economy may have exited recession and said to be recovering, but the real estate sector is still in recession. The sector was badly hit by the recession which weakened consumer buying power, reduced household income and also posed further barriers on the availability of financing for the sector. As a key player in the sector, RIVTAF Nigeria Limited is not insulated from this situation in the sector and therefore,in a bid to navigate these storms and continue to provide quality products and services to its growing clientele while remaining profitable, the company has deployed more creative

strategies. RIVTAF Nigeria is a special purpose vehicle for the development of the RIVTAF Estate— a joint venture project between the Rivers State government and Taf Nigeria Homes. The estate has delivered about 750 housing units of different configurations. The second phase, which is nearing completion, will deliver over 200 housing units plus a golf course and a retail facility. Among the strategies which, in the opinion of the company, are value adding services to its existing customer service experience, are the redesigning its products to smaller units in order to make them more affordable and the introduction of new products like serviced plots. The company has also evaluated ongoing construction work on defaulting clients’ property and has renegotiated sales agreement with a view to handing over such properties as it is at the moment. A major strategy which the company has adopted is the strategic engagements of its marketing agents by providing incentives to existing clients

L-R: Foluso Gbadamosi, director, Prime Atlantic; Olakunle Olude, co-founder, Jobberman; Bunmi Adeniba, marketing director, home care, Unilever Ghana-Nigeria; Yaw Nsarkoh, managing director, Unilever GhanaNigeria, and Eniola Onimole, director, human resources, Unilever Ghana Nigeria, at the 2018 Unilever Ideatrophy competition in Lagos.

who make referrals to them, and ultimately introducing a contractor/vendor/supplierfinancing (C/V/S-F) system. “The C/V/S-F system is one in which certain aspects of the development and infrastructure within the RIVTAF Golf

Estate was financed by the contractors, vendors and suppliers themselves. So, rather than paying them for the services they provide, the company issues them with some properties for the contract sum and at negotiated prices. They, in

ICS rebrands to offer better services to clients ODINAKA ANUDU

CS Outsourcing (Nigeria) Limited has rebranded to offer better services to clients and become more relevant in the global outsourcing industry. Speaking to journalists in Lagos, Peter Akindeju, managing director/CEO of ICS Outsourcing (Nigeria) Limited, said the organisation has come a long way in redefining the trajectory of the outsourcing industry. Akindeju said like an eagle, the company is re-growing its feathers and talons in order to fly higher. “There is a lesson in that (the eagle) for every organisation and

business entity. It is important to renew or rebrand ourselves from time to time in order to remain relevant and valuable to our customers. “Secondly, time is ripe for us to deliberately distinguish ourselves from the pack. As we move into the future, it is important for us to clear every possible doubt about who we are and what we represent. “You will find that our new brand depicts a ‘new contemporary us’. It also shows that our core has not changed. We hold firmly to our core-values. These values have seen us through the last 24 years and we intend to continue to stay true to them. However, we are positioning ourselves into the future. This is the New

ICS,” he said. Akindeju disclosed that over the years, the firm has been able to outsource for a number of financial institutions, manufacturing companies, Fast-Moving Consumer Goods (FMCGs) and hospitality firms, among others. He also addressed the misconception about outsourcing. The ICS boss said outsourcing is not the same as casualisation as understood in some quarters, explaining that outsourced personnel enjoy all the benefits of permanent staff members. Akindeju, who spoke in Lagos while unveiling a new logo and name of ICS Outsourcing (Nigeria) Limited, said: “We continue to explain that we do not do casualisation. Every employee

outsourced is a full employee, entitled to medical insurance, contributory pension and annual leave. They also pay their taxes. All the benefits that you expect a full-time employee to enjoy is what they enjoy. They all receive full benefits.” Akindeju stated that many outsourced personnel, in many instances, earn more than permanent staff members, stating that what often determines salaries is the perceived value of the personnel. The CEO stated that some charlatans have infiltrated the industry, conducting the business in an unprofessional way, but added that ICS is different, having won many awards for statutory compliance.

CHI celebrates Nigeria at Independence, promises greater value, innovation

hi Limited, Nigeria’s leading fruit juice manufacturer, has encouraged a growing culture of creativity and innovation driven by a sense of purpose among Nigerians as the country marks its 58th independence anniversary, saying that these virtues are critical to creating value, engendering development and promoting excellence in the pursuit of greatness.

The company acknowledges that in the pursuit of greatness, every individual or institution has a role to play, emphasizing that this has to be pursued with patriotic zeal in order to be able to reap the successes of meaningful development. “Nigeria’s Independence Day Anniversary offers Nigerians an opportunity to collectively reflect on the journey so far in the pursuit of excellence in various endeavours”, noted Deepanjan

Roy, managing director of Chi Limited, in a statement obtained by BusinessDay in Lagos at the weekend. “As a company, we recognize this important day and reiterate our optimistic belief in Nigeria’s potentials and opportunities. Chi Limited will continue to play a vital role in the country’s economy through investment in initiatives that boost productivity, as well as in the provision of high quality products that impact positively

on the lives of millions of consumers across the country,” he added. As a key player in the fast moving consumer goods (FMCG) sector, Chi Limited over the years, has remained committed to building a healthy nation by primarily catering to the needs of millions of health conscious Nigerian consumers with high quality and healthy fruit drinks, fruit juices, dairy products and snacks.

turn, sell off these properties or collateralise the properties to finance the contract”, explained Mustapha Njie, Taf Nigeria Homes CEO. According to him, this strategy is not limited to new contracts, it is extended to existing

contracts that have been partly paid for as well as to contracts that have been fully performed but with outstanding debts to the contractors, vendors and suppliers. “As a result of the C/V/S-F system adopted in the marketing of RIVTAF Golf Estate, the estate is nearing completion; work has significantly progressed on our shopping mall and completion is now in view; liabilities have been reduced thereby freeing up funds for other operations and commitments of the company”, he stated.The C/V/S-F system has allowed the company to continue to create value and deliver on the promises made to its clients while its contractors, vendors and suppliers remained in business and continued to make profit. Njie however pointed out that the the C/V/S-F system is not without challenges, explaining that it has a potential of becoming a parallel market, but this has been well managed as the structure of the system already anticipated this challenge and so, had ready preventive solutions for such potential challenge.

Legend Hotel raises bar in hospitality market FRANK ELEANYA

he hospitality market in Lagos is set for interesting times as Legend Hotel Lagos Airport launches in the commercial capital of Africa’s most populous nation. The latest entrant in the market is a Curio Collection by Hilton, an upscale hotel brand within Hilton’s portfolio. Curio Collection is a soft brand. Hilton selects independent hotels and resorts to be part of Curio Collection. Situated at Ikeja, Legend Hotel is in close proximity – 3 minutes - with the Lagos international airport and the local airport – 5 minutes away. It is also 15 minutes from Ikeja’s city centre and for high-level dealings with the Lagos State government, the hotel is just 25 minutes away from the main government offices at Alausa. However, its major attraction for travellers is the provision of an exclusive immigration and customs desk for private jet passengers. The service also comes with a private terminal featuring one maintenance and parking hangars for private jets,

making it the first of its kind in the market for corporate and leisure travellers in Nigeria. “Lagos has never seen this level of custom convenience, with these services, the Legend has transformed travel for its guests,” a statement from the company to BusinessDay noted. The hotel also living spaces that are tailored the special needs of high and upwardly mobile clientele. The 54 elegantly appointed rooms and suites come with exciting value-adds like Wi-Fi, state of the art technology, ergonomic workspaces, expresso machines and well-fitted bathrooms. The Presidential Suite features a private terrace with bar and whirlpool, and incredible airfield views. All rooms are fitted with multiplugs, which are essential for international business travellers. For outdoor lovers and those returning from a long day of adventure, the Legend Hotel Lagos has a steakhouse, De Bull Restaurant and a wellfurnished bar with wide range of fine wine. The space are also ideal for hosting lunch or dinner meeting, or just people indulging in pre-drinks before heading out for the night.

Monday 01 October 2018

BUSINESS

COMPANIES & MARKETS

DAY

Business Event

Chevron/NNPC JV inaugurates drainage system in Warri community Francis Sadhere, Warri

djeba Community in Warri South Local Government Area of Delta State has expressed excitement following the inauguration of a drainage system constructed to avert perennial flooding in the community. The 500-meter-long drainage project, funded by Chevron Nigeria Ltd/Nigeria National Petroleum Company Joint Venture (CNL/NNPC JV), was the choice of the community between solar-powered borehole and the drainage system to address persistent flooding of the Edjeba road and homes during rainy seasons. The project was executed under CNL’s Project Specific Ageement (PSA) and awarded by the Edjeba community to one of its own, Pyrammidt Company Nigeria Ltd in December 2017. Beneficiaries of the drainage project include not only mem-

bers of the community, but over 15, 000 users of the Edjeba road linking the NPA Express way. CNL’s general manager, Policy, Government and Public Affairs (PGPA), Esimaje Brikinn, during his address, said the project was meant to show CNL/NNPC JV’s efforts to improve the welfare of the people in its area of operations and beyond. He thanked the Edjeba community and the Delta State government for approval, managing and creating the enabling atmosphere for the successful execution of the project. Brikinn, who was represented by CNL PGPA Superintendent, Tony Emegere, stated that “through partnership with the government of Delta State as well as community stakeholders, we have been adding significant values to people’s lives through our Corporate Responsibility and Community Engagement initiatives. “This is the trail of goodness we leave behind in every

community where we operate and we congratulate the Edjeba community for successfully completing this Drainage System Project. He urged members of the community to maintain the facility, adding that “the effectiveness of a drainage system is dependent on the maintenance of the system. “It is our hope that the drains would be kept clear of silt and dirt at all times so as to ensure that the excess water is always carried away.” Representative of the Delta State government at the occasion, S. O. Okujere, who’s the Director, Governor’s Office Annexe in Warri, described as heartwarming the commencement and eventual completion of the project. He appreciated CNL/NNPC JV’s commitment to its social responsibility to host communities by giving back through projects which are targeted at improving the social condition of members.

Shamsideen Fashola, group head, consumer liability products of First City Monument Bank (FCMB), (r), receiving the award of “Excellence in Retail Banking” on behalf of the Bank from Mohammed Suleiman, director, Financial System Strategy, during the 2018 edition of the New Age Banking Summit & Awards held on September 26, 2018 in Lagos

MainOne extends CSR to Ogombo High School

est Africa’s connectivity and data centre solutions provider, MainOne as part of its corporate social responsibility programme(CSR) has completed the renovation of 12 classrooms at the Ogombo Junior High School, Ogombo, Ajah, Lagos State. Focused on improving the standard and access to education by addressing gaps in infrastructure and providing academic support through its CSR initiative themed “Changing Lives, Impacting the Future’, MainOne, refurbished 12 classroom block and donated learning materials and furniture to the school. Speaking at the launch of the newly refurbished classroom blocks, the company’s head, support services, Temitope Orija, spoke on the importance

of education as an instrument for effecting national development and MainOne’s continued commitment to engaging with schools in its operational areas to provide support towards better educational outcomes. “MainOne prides itself on being a relevant and integral member of its host communities. We will continue to give back to our community by working with them and providing support as required,” she said. In her response, the school’s principal, Beatrice Olubisi applauded the efforts of the company, saying, “We take pride in molding the moral and academic lives of the students entrusted to our care at Ogombo Junior High School. It is our dream that one day, this School would produce future leaders to stir the ship of the state and nation and we thank MainOne for their

immense contributions towards the improvement of our school’s standard of education which is very critical for nation-building.” Congratulating the company on a job well done, representative of District 3 Tutor General Permanent Secretary, Ololade commended the company’s CSR initiative, which he noted, would greatly impact the students, school and Ogombo community. Since 2011, MainOne has made supporting educational institutions in Nigeria a priority through yearly donations of learning materials including text and exercise books, writing materials as well as renovation of critical infrastructure facilities. The contributions of the company towards the development of these learning institutions forms a part of its CSR focus on education and information and communications technology.

Expert advises balance between health and work for business survival DIPO OLADEHINDE

he Franco-Nigerian Chambers of Commerce and Industry (FNCCI) has advised business executives to have a balance between health and work life, as crucial for business survival. “I strongly believe that if you can take care of your health, then you can take care of your Business,” Laurent Polonceaux Consulate General of France said at the Breakfast event. The consulate general noted that Nigeria remains a strong point of reference for French Business as the consulate will continue to promote strong business environment as only a

health body can do health body can do healthy business. Also at the event, Folake Odediran, general manager Sanofi-Aventis Nigeria Limited said good health remains a priceless resource as the saying goes health is wealth, but unfortunately many people neglect their health as they work very hard to grow enterprises and corporations. “Intricately related to personal health is the need to safeguard the health of the nation, which will allow for perspectives to be shared and enlightenment on the subject of counterfeit medicines,” Odediran, general manager Sanofi-Aventis Nigeria Limited said. Director General of National Agency for Food and Drug Administration and Control

(NAFDAC), Christianah Adeyeye who was ably represented by Edosa Ogbeide, director of Veterinary medicines and Allied products directorate said counterfeiting is a crime involving the manufacturing or distribution of regulated goods under someone else’s name and without their permission as counterfeit goods are generally made from lower quality components to sell a cheap imitation of similar goods produced by brands consumers know and trust. “The fight against counterfeiting activities in this country is not the agency’s responsibilities alone, but requires interagency collaboration and stakeholder engagement as well as a wellinformed populace,” NAFDAC DG said.

L-R: John Ugbe, managing director, MultiChoice Nigeria presenting a brand new SUV to winner of AMVCA Trailblazer Award Bisola Aiyeola and Caroline Oghuma, executive head of corporate affairs, MultiChoice Nigeria, at MultiChoice Head Office, Tiamiyu Savage in Lagos.

L-R: Frank Jacobs, outgoing president, Manufacturers Association of Nigeria (MAN); Segun Apata, chairman, Nigerian Bottling Company(NBC) Limited, and Mansur Ahmed, incoming president, MAN, at the 46th Annual General Meeting of the association in Lagos.

L-R: Shopade, vice principal, Ogombo Junior High School; Temitope Orija, head, support services, MainOne; Ololade, representing, district 3 Tutor General Permanent Secretary; Olubusi, principal, Ogombo Junior High School, and Ajia, vice principal, Ogombo Junior High School at the launch of the refurbished classrooms.

BUSINESS DAY

Monday 01 October 2018

BUSINESS DAY

C002D5556

This is M NEY A daily guide to your Personal Finance

Monday 01 October 2018

• Savings • Travel • Debt & Borrowing • Utilities • Managing your Tax

How to raise a super sales team Iyore Ogbuigwe

n basic terms when we talk about setting up a structure for your sales team, we’re referring to the activities, coordination and supervision aimed at achieving and sustaining organizational sales goals. Leadership: Who is leading the sales team? Has the person grown up the ranks or was appointed without the necessary sales experience? The base line for anyone to lead your sales team should be sales competence. Leadership is both a skill and an attitude. With sales competence being the foundation, we then need to hire or appoint the team lead first based on attitude then secondly we look for leadership competence (skill). This is because leadership competence in terms of casting the vision, team organisation and so forth can be taught (hence the need to invest in training). We should therefore ensure we have someone leading the team with the right attitude or character in terms of Integrity, patience or whatever core values the organisations has. The team will always ‘smell’ like the leader so this is to me the most important step in setting up the sales team. Tracking & Reporting system Whatever gets measured gets done. There should be a daily sales tracking and reporting mechanism. Selling is not a game of luck even though there could be some luck in it. Selling is simply scientific so we shouldn’t mystify it. There is a minimum amount of activities daily that should take place for sales numbers to look good at the end of the month. Find these activities and ensure everyone follows through. It could be a certain number of emails, phone calls or visits; it just must be measured with numbers at first. Make sure at the beginning of the month they come up with a prospect list which becomes like a thread to

guide them and monitor activities for the month. Frequent reviews or assessments If you review the sales team’s performance quarterly, by the middle of the year the business could have gone bankrupt. However, if it is often e.g. monthly, a lot of adjustments could be made before things get out of control. The fundamental truth is, there are things that could be holding salespeople back from performing. Your role during these reviews isn’t just to look at the numbers but to look for what could be holding them back so it can be fixed. This could mean changing the leader of the team, boosting investments in marketing for more leads, giving them the right sales training e.t.c. Rewards Napoleon Bonaparte who was a French military leader in the 1800s said, “A soldier will fight long and hard for a bit of coloured ribbon.” Different things motivate people so depending on the size of your sales team you may need to employ different ways to keep them motivated. The importance of such rewards is to reinforce great performance and it should be done quickly. This could be commission of sales made, public recognition, gifts or even a pat on the back. The key is to find what keeps them mo-

Every feature of a product should be understood in depth. The product designers don’t create features for nothing, each one solves a problem and needs to be clearly understood with no assumptions tivated and to keep doing it immediately after targets are met because the results of the reward is the activation of Dopamine in the brain which causes us to crave for more rewards which will ultimately mean increased performance. Training & Personal growth plan A lot of business owners think like,” what if we train them and they leave?” Well, what if you train them and they stay? Then they will be paid salaries monthly with no results. A plan for intensive and shorts trainings spread out all through the year keeps them well equipped to handle the emotional, psychological and practical challenges they will face when selling. The strength of a sales team will be in the strength of their morning meetings so there should be morning motivation meetings daily in person or via any

other means. This is important because the more followers hear from their leaders the more they become like their leaders, the more they understand the vision, sense the urgency of the goal at hand and are likely to be inspired by what they hear their colleagues did the day before. Role playing should also be done daily to ensure the team perfects their skills in prospecting, rapport building, listening, objection handling and sales closing techniques. Product knowledge It is so surprising that a lot of salespeople don’t understand their product. When I worked in an organization selling financial services year ago, it was amazing how I could meet some really high targets in record time. It was possible because I knew the product we were told to sell far more then my col-

leagues. Every feature of a product should be understood in depth. The product designers don’t create features for nothing, each one solves a problem and needs to be clearly understood with no assumptions. This is why as a sales consulting company, we encourage our corporate clients to have a means of assessing product knowledge depth e.g. Some would have their salespeople write a written assessment on the product daily for 30 days, just to ensure product knowledge is second nature to them Marketing budget and plan Marketing and selling are not the same thing. Marketing increases your brand awareness while sales converts that awareness to leads then to money in the bank. A significant budget should go into driving the organization’s brand both offline and online because this makes the work easier for the salespeople. Operational resources Here we’re talking about logistics in terms of pool cars, computers, internet access, recharge cards, clothings and other things to help your salespeople represent the brand properly. You want to also ensure there are caps on all these to control organisational costs. This could be done by having the team go out in pairs, having call logs

for the salespeople to fill indicating where they are going and who they will be visiting. Then, when they return updating the feedback on the log. Back end support Feedback should be gotten continually from the sales team on how the back end operational support could be slowing down their sales. Sales is the revenue generating part of any organization so all other parts should realize this and constantly come up with ways to make their work seamless so that transactions can move through quickly. Data storage Invest in CRM applications (or for a start, basic excel spread sheets) to track daily activities, store prospects data and ensure business continuity in case staff leave the organization. The CRM will ensure every lead the salespeople get are stored and easily retrieved on demand. Accurate data storage would also help make cross selling and up selling for increased business revenue easy because at a glance you will see those who have specific products and could get more. Relationship management will also be enhanced as customers have the salespeople celebrate them on their anniversaries, birthdays or other special days. Business decisions could also be made on how to reward loyal customers, encouraging them to do more. With these in place irrespective of the industry or economy, organisational sales goals will be met. Contact us to help you set up a structure for your sales team or to strengthen the existing structures.

Iyore Ogbuigwe is a highly sought after sales and persuasion expert for local, international and multinational corporations. Iyore is the CEO of Ultravantage& Founder of the IyoreOgbuigwe Sales Academy (IOSA). He holds sales seminars in Nigeria, Ghana and the USA and has written 5 books on selling. Connect with Iyore: Website: www.iyoreogbuigwe.com Email: admin@iyoreogbuigwe.com Instagram & Twitter: @ iyoreogbuigwe

BUSINESS DAY

Monday 01 October 2018

Live @ the Stock exchange Prices for Securities Traded as of Friday 28 September 2018

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Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 235,762.97 8.15 0.62 101 19,345,299 UNITED BANK FOR AFRICA PLC 287,275.14 8.40 1.20 99 44,485,010 675,024.62 21.50 -0.23 189 11,351,512 ZENITH BANK PLC 389 75,181,821 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 319,468.11 8.90 3.49 169 8,945,369 169 8,945,369 558 84,127,190 BUILDING MATERIALS DANGOTE CEMENT PLC 3,493,304.02 205.00 - 27 62,982 LAFARGE AFRICA PLC. 192,550.11 22.20 -1.33 22 207,011 49 269,993 49 269,993 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 370,720.07 630.00 1.29 4 21,909 4 21,909 4 21,909 611 84,419,092 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 73,451.07 77.00 9.84 10 161,275 OKOMU OIL PALM PLC. PRESCO PLC 56,550.00 56.55 - 16 49,627 26 210,902 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,710.00 0.57 9.62 4 304,000 4 304,000 30 514,902 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 1,085.39 0.41 - 9 99,627 206.25 0.53 - 2 50,150 JOHN HOLT PLC. S C O A NIG. PLC. 2,111.93 3.25 - 0 0 51,622.95 1.27 -0.79 40 2,451,482 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 30,829.87 10.70 -9.70 37 625,295 88 3,226,554 88 3,226,554 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 31,548.00 23.90 -4.40 11 93,675 165.00 6.60 - 0 0 ROADS NIG PLC. 11 93,675 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 5,066.87 1.95 4.28 15 614,821 15 614,821 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 1 500 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0 24,014.43 9.00 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 1 500 27 708,996 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 7 20,181 7 20,181 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 13,310.14 1.70 -2.86 5 328,400 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 175,230.63 80.00 -7.14 48 1,182,759 INTERNATIONAL BREWERIES PLC. 279,365.51 32.50 - 16 133,226 NIGERIAN BREW. PLC. 731,716.54 91.50 0.11 124 1,769,525 193 3,413,910 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 36,000.00 7.20 -1.37 20 323,409 DANGOTE SUGAR REFINERY PLC 170,400.00 14.20 - 22 1,329,731 FLOUR MILLS NIG. PLC. 82,007.59 20.00 1.78 45 1,003,223 HONEYWELL FLOUR MILL PLC 11,498.79 1.45 3.57 9 279,760 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 1,158.30 6.50 - 0 0 NASCON ALLIED INDUSTRIES PLC 49,014.61 18.50 -2.63 28 888,679 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 124 3,824,802 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 17,091.64 9.10 -1.09 26 1,594,443 NESTLE NIGERIA PLC. 1,109,718.75 1,400.00 -2.27 51 269,284 77 1,863,727 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 3,648.30 3.50 - 9 310,351 9 310,351 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 49,829.49 12.55 -2.33 33 290,982 UNILEVER NIGERIA PLC. 258,525.24 45.00 - 26 216,020 59 507,002 469 9,939,973 BANKING DIAMOND BANK PLC 27,329.26 1.18 0.85 30 8,649,448 ECOBANK TRANSNATIONAL INCORPORATED 328,456.97 17.90 -0.56 21 897,226 FIDELITY BANK PLC 49,257.15 1.70 -1.73 109 12,830,093 GUARANTY TRUST BANK PLC. 1,075,709.60 36.55 -0.41 138 25,927,750 JAIZ BANK PLC 15,321.41 0.52 - 6 75,980 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 43,185.63 1.50 - 47 2,730,962 UNION BANK NIG.PLC. 148,515.84 5.10 6.86 19 353,827 UNITY BANK PLC 10,169.72 0.87 3.57 20 577,294 WEMA BANK PLC. 21,987.45 0.57 3.64 14 490,697 404 52,533,277 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 5,336.26 0.77 - 13 337,442 AXAMANSARD INSURANCE PLC 20,475.00 1.95 - 3 13,185 CONSOLIDATED HALLMARK INSURANCE PLC 2,030.00 0.29 -3.33 1 455,000 CONTINENTAL REINSURANCE PLC 14,625.57 1.41 2.17 7 982,322 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 2 200 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 1,964.80 0.32 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 -3.23 5 443,759 LAW UNION AND ROCK INS. PLC. 2,792.61 0.65 -7.69 9 830,000 LINKAGE ASSURANCE PLC 5,600.00 0.70 - 5 62,900 MUTUAL BENEFITS ASSURANCE PLC. 2,240.00 0.28 - 6 138,430 NEM INSURANCE PLC 15,841.51 3.00 - 4 210,149 NIGER INSURANCE PLC 2,863.61 0.37 - 7 195,367 PRESTIGE ASSURANCE PLC 2,061.40 0.54 8.00 10 1,637,124 REGENCY ASSURANCE PLC 1,600.50 0.24 -8.33 12 1,536,000 SOVEREIGN TRUST INSURANCE PLC 1,918.39 0.23 -8.00 13 2,590,500 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 5.00 8 1,709,134 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,680.00 0.23 - 1 3,000 VERITAS KAPITAL ASSURANCE PLC 4,160.00 0.30 - 4 107,292 WAPIC INSURANCE PLC 5,085.44 0.38 -9.52 19 2,377,246 129 13,629,050 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,384.22 1.48 0.68 4 212,238

4 212,238 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,914.00 1.17 - 0 0 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 RESORT SAVINGS & LOANS PLC 5,664.87 0.50 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,980.00 3.99 - 18 99,059 CUSTODIAN INVESTMENT PLC 30,468.06 5.18 -1.89 13 456,722 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 35,248.83 1.78 - 26 242,993 411.91 552.20 - 0 0 NIGERIA ENERYGY SECTOR FUND 1,131.98 0.22 - 4 118,540 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 465,229.02 46.00 6.24 28 1,116,668 17,400.00 2.90 3.57 44 1,843,430 UNITED CAPITAL PLC VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 133 3,877,412 670 70,251,977 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 1,208.07 0.34 9.68 12 1,113,411 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 12 1,113,411 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 9,000.00 6.00 - 7 14,215 16,742.27 14.00 2.56 10 93,036 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 2,254.00 2.30 - 1 10,238 1,139.49 0.66 - 2 51,500 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 411.96 1.90 - 0 0 20 168,989 32 1,282,400 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 1 100 NCR (NIGERIA) PLC. 680.40 6.30 - 0 0 381.11 0.77 - 1 200 TRIPPLE GEE AND COMPANY PLC. 2 300 PROCESSING SYSTEMS CHAMS PLC 1,314.90 0.28 - 0 0 E-TRANZACT INTERNATIONAL PLC 16,590.00 3.95 - 0 0 0 0 2 300 BUILDING MATERIALS BERGER PAINTS PLC 1,825.89 6.30 - 22 71,665 19,915.00 28.45 4.60 14 353,911 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 31,793.95 25.30 10.00 23 417,829 FIRST ALUMINIUM NIGERIA PLC 865.25 0.41 -6.82 4 170,000 361.24 0.68 - 2 1,700 MEYER PLC. PORTLAND PAINTS & PRODUCTS NIGERIA PLC 2,221.56 2.80 - 0 0 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 65 1,015,105 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,610.71 4.10 - 14 82,100 14 82,100 PACKAGING/CONTAINERS BETA GLASS PLC. 38,997.82 78.00 - 1 705,831 GREIF NIGERIA PLC 388.02 9.10 - 0 0 1 705,831 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 80 1,803,036 CHEMICALS B.O.C. GASES PLC. 1,752.39 4.21 - 1 12,096 1 12,096 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 55.00 0.25 - 0 0 0 0 1 12,096 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,377.79 0.22 4.55 20 2,476,734 20 2,476,734 INTEGRATED OIL AND GAS SERVICES OANDO PLC 62,157.06 5.00 -3.85 54 1,359,695 54 1,359,695 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 63,176.29 175.20 - 12 6,739 CONOIL PLC 15,197.55 21.90 - 24 202,923 ETERNA PLC. 8,150.90 6.25 4.17 8 106,331 FORTE OIL PLC. 26,114.75 20.05 - 21 107,183 MRS OIL NIGERIA PLC. 8,701.65 28.55 - 0 0 TOTAL NIGERIA PLC. 62,132.50 183.00 - 14 19,244 79 442,420 153 4,278,849 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 18,818.75 1.93 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 541.12 0.46 - 1 500 1 500 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,652.74 4.50 2.27 6 63,086 TRANS-NATIONWIDE EXPRESS PLC. 365.70 0.78 - 0 0 6 63,086 HOSPITALITY TANTALIZERS PLC 674.44 0.21 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 4,718.87 2.27 - 3 1,711 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 1 100 TRANSCORP HOTELS PLC 51,302.73 6.75 - 1 1,000 5 2,811 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 5,280.00 0.44 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 302.40 0.50 - 0 0 LEARN AFRICA PLC 848.60 1.10 - 7 83,722

BUSINESS DAY

Monday 01 October 2018

BUSINESS DAY

Monday 01 October 2018

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BUSINESS DAY

LegalPerspectives With Odunayo Oyasiji It is a tough road to Nigeria’s Supreme Court except... Continued from page 1 of the land is processing appeals from 2006-2007 and assigning hearing dates in 2020-2021” Chidi Odinkalu, former Chairman of the National Human Rights Commission tweeted on September 26, 2018. He cited the popular case of Mojekwu –V- Mojekwu [1997] 7 N.W.L.R 283 which was decided at the Court of Appeal in 1997 after 31 years in court. The matter was to do with Ili-Ekpe customs and tradition of some parts of South-East Nigeria. The custom has to do with the right of inheritance of a female child. The deceased died without a male child and according to the tradition the deceased’s closest male relative is to inherit his properties. The appellant, being the deceased’s nephew instituted the action against the deceased’s wife. The same matter went on appeal to the Supreme Court and judgement was delivered in 2004 - Mojekwu v. Iwuchukwu [2004] 4. S.C. (Pt.II). 1. By the time judgement came, the original respondent (deceased’s wife) had died. In fact, by the time the matter got to the Supreme Court, she was already dead and she was substituted by her daughter. Odinkalu also raised the case of a widow whose husband died in 1981 and the matter was only decided at the Supreme Court in 2017, which was 36 years after the case was first filed. This how slow the wheels of justice winds in Nigeria. The issue of delay is not peculiar to customary matters, it cuts across commercial, land, matrimonial and chieftaincy mattersin fact, all matters except electoral matters. Examples of corporate litigations that dragged for years include General Electric –v- Harry Akande and ors SC.337/2008. The case was filed at the trial court in 1990 and judgement delivered in 2002 (12 years after), the court of Appeal delivered its judgement in 2008 and the Supreme Court in 2012. The whole process took 22 years. The problem seems to have been with us for long. A more painful scenario is where it took years for a matter to reach the apex court and yet the court order trial de novo. This means that the matter should start all over again at the trial court. Example of such instance can be found in the case of ARIORI V. MURAIMO ELEMO (1983) 1 SCNLR 1-the matter was filed at the High Court of Lagos State in 1960 and it reached the Supreme Court 23 years after. Painfully, the court ordered that the matter should start all over at the trial court. The delay in the judicial process also impacts the housing sector negatively as investment in this area is often tagged as high risk investment. It takes several years for land matters to be decided. This is something developers dread as nobody wants to get stuck in prolonged litigation. An

example of this situation is the legal battle between the Lagos State Government and the landlords of Magodo Shangisha Estate Scheme over the land ownership in the area. The matter was in court for 27 years. Another prominent land matter that dragged for years is the matter between the Registered Trustee of Anglican Church and the Iwaya Community in Lagos. The matter started in 1984. The matter was at the High Court for 14 years, 4 years at the Court of Appeal and 15 years at the Supreme Court (33 years altogether). The Central Bank Governor, Godwin Emefiele, speaking at a workshop for judicial officers on mortgage noted said that the slow determination of land disputes is one of the impediments to housing sector financing in the country. “it is generally acknowledged that one of the modern-day determinants of development in any environment is the effective protection of property and contract rights, and that this in itself requires a modest legal infrastructure embedding precise rules that are easily enforceable” Emefiele said. This has not been the situation in the country even for matters that would have considered insignificant. Take the case of Chief V.C Obumseli V. Chief Chinyelugo Amechi Uwakwe CA/E/36/2006. The subject of dispute in the case was a vehicle. The matter started before the Anambra State High Court in 1989 and only got to be heard at the Supreme Court in December, 2018. No final decision was reached after 29 years of legal battle. The appeal to the Supreme Court was in 2008. The chieftaincy matter over the stool of Akire of Ikire in Osun state dragged from 1987 and the Supreme Court delivered judgement in 2014- 27 years after the action was filed in court. It must be pointed out that the matter was first filed at the apex court in 2001. Obono- Obla, former Special assistant to the president on pros-

ecutions and former chairman of the presidential panel for the recovery of public property, was reported to have decried the state of things at the Supreme Court through his facebook page when he stated that he filed several appeals at the Supreme Court since 2007 and has had no date for hearing ten years after. But after his facebook post, he returned with another facebook post five days after that said he got a letter from the Supreme Court requesting that he should send a list of his cases pending at the Court of Appeal and Supreme Court. This has given fuel to allegations that registrars at the country’s apex court ask for gratification from those seeking to have a date at the Supreme Court, a grave allegation by all standards, which the apex court must seek to dismiss by introducing a high level of transparency into how dates are fixed for cases coming to the court. A former Chief Justice of Nigeria spoke about the difficult pathway to the Supreme Court while delivering a speech at the 2013 legal year on September 23. 2013- She noted that “exhausting complete remedy in a case – from trial court to Supreme Court could take up to 20 years with the original litigants dead and substituted and in some cases the substitutes also dead and substituted”. This simply means it may take up to three generations of litigants to pursue a matter to the end in Nigeria. But for Nigeria’s privileged political class, the road to the country’s Supreme Court has been made easy, especially when it concerns settling their legal right to rule the country. They have ensured that political cases take precedence over all other matters. Election related disputes are treated as different from ordinary civil and criminal matters and governed mainly by the provisions of the Constitution and the Electoral Act. The provisions of the Electoral Act have been written by the National Assembly in a way as

to favour quick and easy dispensation of justice. There are special tribunals established to hear election matters only. Furthermore, the provisions of the Act outline how the whole process should go i.e. Section 134(1) of the Act states that “an election petition shall be filed within 21 days after the date of the declaration of the election result”. Also, section 134(2) provides that “an election petition tribunal shall deliver its judgement in writing within 180 days from the date the petition was filed”. The Act further provides for how an appeal is to be treated in its section 134(3) when it stated that “An appeal from a decision of an election tribunal or court shall be heard and disposed off within 90 days from the date of the delivery of judgment of the tribunal”. Another interesting provision is in the section 134(4) of the Act, where it gives appellate courts hearing an election matter the right to first give judgement and reserve the reason for the judgement to a later date. The provisions have been inserted to ensure that election disputes are treated with utmost urgency and this is a major reason why election matters move from Election Petition Tribunals to the Supreme Court speedily. Appeals on Governorship and Presidential matters ends at the Supreme Court while that of National Assembly and States Houses of Assemblies ends at the Court of Appeal. This also lends credence to the argument put forward by some legal practitioners that not all cases should end up at the Supreme Court. Explaining why the National Assembly found it necessary to make create a special pathway for political justice, Deputy Senate President, Ike Ekweremadu said the inclusion of time frame in election matters was deliberate so that election petition matters can be speedily resolved. “I recall after the election in 2003 when one of my colleagues in the 5th Senate victory was challenged. He had already finished

his tenure and was in the 6th Senate when the tribunal ruled that he did not win the initial election into the 5th Senate. Therefore, what we did in 2010 was to amend the Constitution to set a timeframe for filing, hearing and delivery of judgment on election petitions”. Before the 2010 amendment of the electoral act, significant delays exist in the process of determining a winner of an election in court. There were delays in Ondo, Edo, Ekiti, Sokoto and Kogi state election matters after the 2007 general election. It took 42 months to determine former president Yar Adua’s election petition matter. In th e ca s e o f Bu ha r i V. Obasanjo (2005) 13 NWLR (part 941) 1, Justice Pats Acholonu said “a situation where an election petition lasted more than two years for a 4-year presidential term leaves very much to be desired. It is an affront to the rule of law”. In fact, the then governors of Anambra, Osun and Ekiti; Chris Ngige, Olagunsoye Oyinlola and Olusegun Oni all stayed as governors of their respective states for three years before their election was nullified. After 2010 Electoral Act amendment, the court’s approach to electoral matters changed as speed became an important part of the process. The election petition on the 2011 presidential election was determined the same year. Jimi Agbaje’s election petition on 2015 gubernatorial election against Akinwunmi Ambode was determined in the same year. Analysts are now asking why are other priority matters like corporate litigations, corruption not given similar treatment- especially ones that obviously requires urgency. Various reforms to our administration of justice system have been suggested by scholars and legal practitioners. These suggestions are aimed towards reducing the time it takes to get justice. Some of the reforms suggested are –that the windows of stay of proceedings in civil matters should be shut. This is because majority of appeals to higher courts are based on interlocutory applications and not from final decision. The implication of this is that the lower court will stop hearing the matter till the interlocutory application is determined. It has also been suggested that the number of appellate judges be increased as the few judges in the appellate courts tend to be over burdened by the load of appeals before them. There should also be a way of quickly doing away with matters and applications that are frivolous in nature and targeted at delaying or clogging the wheel of progress in a case. No doubt, there is need for a general overhaul of our judicial system to ensure quick dispensation of justice for all Nigerians and not just for the politicians. What is good for the political class, should be good enough for the people they seek to govern.

BUSINESS DAY

Monday 01 October 2018

BUSINESS DAY

REAL SECTOR WATCH BUSINESS DAY

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Monday 01 October 2018

Manufacturing still bedevilled by high excise duties, unsold inventory — MAN

ODINAKA ANUDU

rank Udemba Jacobs, outgone president of the Manufacturers Association of Nigeria (MAN), has said that manufacturing challenges still manifest in the form of high inventory of unsold finished products, inadequate electricity supply, frequent increases in electricity tariff in the face of poor services from distribution companies and abnormally high interest rates. Jacobs, who spoke at the 46th annual general meeting held by the association in Lagos last Thursday, pointed out that the sector was still bedevilled by high excise duties on some products, inadequate trade facilitation infrastructure, expensive price of natural gas, unfriendly port environment, multiplicity of taxes/levies/ fees, and exorbitant cost of haulage. Unsold inventory captures the monetary value of unsold products. Total value of unsold inventory by members of MAN in the first half of 2017 was N159.59 billion, rising to N161.53 billion in the second half. On the Economic Partnership Agreement (EPA), which is a trade treaty between the European Union and Africa, Jacobs, who has vehemently opposed it, said Buhari deserved an applause for maintaining

L-R: Osita Oparaugo, CEO, Footprint to Africa, and Oluwatoyin Akomolafe, president of Nigerian American Chamber of Commerce (NACC) during the unveiling of Independence Investment Forum (TIIF) in Lagos recently.

the position of most private sector stakeholders by not signing the EPA. “As has been rightly established, EPA runs counter to our industrial aspirations as a nation, as clearly enshrined in the Nigeria Industrial Revolution Plan (NIRP) and the Economic Recovery and Growth Plan (ERGP) and will dismantle the industrialisation headways already made in Nigeria. We hereby recommend that this stance be maintained in the best interest of our economy and the over one hundred and eighty million Nigerians,” he counselled, at his farewell speech.

The EPA is a free trade agreement between the 15 countries of the Economic Community of West African States (ECOWAS) and the Europe, seeking to enable West African countries access the European market and vice versa, without paying tariffs. Europe is committing £ 6.5 billion every five years beginning from 2015 to 2019, including during the 20-year transition period that will end in 2035. Similarly, Nigeria is yet to sign the African Continental Free Trade Area (AfCFTA) owing to the opposition by MAN and labour unions. It

is a treaty targeted at removing barriers to trade on the continent. Jacobs commended Nigeria’s president for not signing this trade treaty in March 2018 in order to have a wider consultation on issues involved in the AfCFTA. “With the conclusion of the Nigerian Office for Trade Negotiations nationwide, sensitisation programme on AfCFTA and the ongoing consultations with stakeholders, we are looking forward to a robust study that will empirically reveal the potential impact of the Agreement on the Nigerian economy, guide

the negotiating team in the negotiation of the protocols and annexures to the Agreement and generally reveal its compatibility with our industrial aspirations and overall economic development agenda.” Na n a Ad d o D a n kw a Akufo-Addo, president of Ghana, who was the keynote speaker, said Africa’s biggest challenge had been its inability to transform the abundant natural resources into opportunities for creation of jobs and wealth. “The continent boasts of young, determined and highly educated people across all sectors and yet we have not been able to get the right mix of policies to fully unearth and develop the entrepreneurial talents that abound in Nigeria in particular and on the continent,” Akufo-Addo, who was represented by Yaw OsafoMaafo, senior minister in Ghana, said. “We need to ensure that we have the capacity to support effective value- addition to enhance our revenues position on the international market. This calls for policy harmonisation, coordination, and effective collaboration between the public and private sectors to drive effective and time tested industrial framework to fully utilise our natural resource to the best of international expectations.” He said there was no way the continent could achieve

this if economies were not fully integrated and connected with each other and operating on the same platform with the same voice. “Why should Ghana and Cote D-Ivoire produce 60 percent or more of world annual cocoa beans and yet earn less than six percent of the global value chain activities of the cocoa industry? Ghana and Cote D’Ivoire with their collection production of 60 percent of global cocoa beans earned only about $6.0 billion in 2016 but the chocolate in industry earned at the same time about $120 billion,” he lamented. He wondered why Nigeria found it difficult to maximise the fruit of its oil industry for the benefit of her people, pointing out that policies must, of necessity, move in the direction of value addition, which was processing of our raw materials. He urged Nigeria to stop export of raw materials and pay closer attention to finished goods. Aisha Abubakar, minister of state for industry, state and investment, said the federal government would continue to provide the right environment for the private sector to thrive. The event ushered in Ahmed Mansur of the Dangote Group as the new president of MAN. A memorandum of understanding was also signed between MAN and Association of Ghana Industries (AGI).

Nigerian products are competitive, should be patronised— Vitafoam

…as FG commends company for donating laboratory to UNILAG ODINAKA ANUDU

overnment ministries, departments and agencies (MDAs) must patronise made-in-Nigeria products because they are good enough and competitive. Taiwo Adeniyi, group managing director and chief executive officer of Vitafoam Nigeria Plc, who stated this during the company’s donation of polyurethane laboratory to the University of Lagos, appealed to the Federal Government to continually evolve policies

that engender ease of doing business in Nigeria in order to enhance performance of the private sector. Adeniyi said the donation of the polyurethane laboratory to the University of Lagos was in fulfilment of the promise made to its authority by Dele Makanjuola,, chairman of Vitafoam, at the 2016 Scientific Conference of the University where he initiated the need for such in Nigeria. “We make bold to say that the equipment in this polyurethane laboratory is at par with any similar laboratory anywhere in the world. The choice of polyurethane laboratory as a CSR project was

not merely for Vitafoam’s interest in the polyurethane industry. It was to honour and promote the efforts of Nigerian researchers and ensure their work is able to both compete well on the global stage and find relevance in industry,” he said. “Among the key government agencies and parastatals that will find use for the services of this polyurethane laboratory include the Standards Organisation of Nigeria (SON), the Nigerian Automotive Design and Development Council (NADDC) – though they are currently working on one that will serve for different types of auto parts.”

The Vitafoam boss said it would also be beneficial to the Federal Ministry of Environment, the National Environmental and Enforcement Agency (NESREA), and the National Agency for Food and Drugs Administration and Control (NAFDAC). “It is expected that this specialised laboratory will be run as a commercial enterprise to generate revenue to fund other projects within the university. This polyurethane laboratory has a significant role to play in the federal government’s Nigeria Industrial Revolution Plan (NIRP), and recently the Medium-Term Plan for Economic Recovery and Growth

Plan (ERGP),” Adeniyi said. Reacting to the donation, Ogbonnaya Onu, minister of science and technology, commended the company’s management for the gesture, saying it was done in the spirit of nation-building. He said for the first time in the history of Nigeria, the Federal Government had issued Executive Order Five, which henceforth made it mandatory for all government parastatals and agencies to patronise madein-Nigeria products without compromising standards. Onu also announced the decision to give priority to Nigerian professionals either in the country or Diaspora

before considering an expatriate in award of contracts. Onu explained that the bane of Nigeria’s economy was over-dependence on importation of goods, which weakened currency, created unemployment and consistently reduced the Gross Domestic Products (GDP). Earlier in his address of welcome, Oluwatoyin Ogundipe, vice chancellor, University of Lagos, commended Vitafoam for the donation, explaining that the laboratory would be fully utilised by the students and would be a major research instrument for other Nigerians and the international community.

Monday 01 October 2018

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BUSINESS DAY

REAL SECTOR WATCH Chinese manufacturing model in SA holds lessons for Nigeria ODINAKA ANUDU

t a Pretoriabound train in Rosebank, north of central Johannesburg, e conomic capital of South Africa on November 12, a middleaged man and a woman were haggling over the cost of repairing some set of electronic gadgets. “You know I am going to take the television and the phones from your home to my shop,” the man said. “I know, but the best I can do is to do is R300. No more, no less,” the woman replied. “Ok, let’s cut it short. Just make it R400. I will give you the best service and you won’t come back looking for someone to repair them in another year,” the man said. The conversation caught my attention as I was interested in knowing how South Africa works, having come from Nigeria, a country which prides itself as the largest economy in Africa in terms of gross domestic product (GDP). I sat and watched as they concluded their negotiation, which ended up with the man agreeing to accept R350. The middle-aged man sat close to me on the train and as we got to the Centurion Station, I decided to engage him in a discussion. “Are you an electrician?” I asked. “Yes, I am an engineer. I repair electrical and electronics faults,” the man, who introduced himself as Emmanuel, replied. Emmanuel told me that there was no kind of electronics fault he couldn’t correct or repair. I engaged him in a discussion and later learnt that he spent three years working at Hisense, a Chinese appliance and electronics maker, which entered South Africa in 1996. “I learnt a few things there and I have my own shop now,” he told me. “I am no more working there but I know electronics inside and out,” he said. Chinese manufacturers in South Africa are creating jobs for South Africans and transferring vital skills. I undertook an investigation into Chinese manufacturing companies in South Africa to understand how they transfer skills and create jobs. The investigation was informed by my findings in Nigeria, which showed that

some Chinese and Indian manufacturing firms were restricting local workers from key production departments. I wanted to find out if that was the case in South Africa. I investigated four Chinese-owned manufacturing companies in South Africa-New Hope, located at Klipriver Business Park ; First Automotive Works (FAW), situated at Coega Development Corporation (CDC), Eastern Cape; Harvest Group at Babelegi Industrial Park, Western Cape and Hammanskraal, and Hisense at Atlantis. All together, the four firms employ 1,119 workers, out of which 1,053 are South Africans and only 66, Chinese. FAW has 149 workers, out of which 142 are South African and seven, Chinese. The car maker has four departments: Production, administration, quality& technical as well as maintenance. The production departments consist of five sub departments: Adjustment line, assembly, body shop, warehouse, and paint shop. The total number of employees within the production department is 108 employees, out of which two are managers-- a South African and a Chinese. The administration department has four sub-departments: General administration, human resources, finance, as well as health & safety. In total, these departments have 21 employees; 17 South Africans and four Chinese. I found that South African employees are in the human resources, finance, and health & safety positions, as these require advanced knowledge of South African legislation, standards and best practices. The quality and technical department consists of 15

employees, led by a Chinese. Also, the maintenance department comprises five South Africans, and one Chinese, which heads it. Four South Africans are at the management level, and are part of the leadership of health & safety, finance, human resources and production departments. My findings show that there is no South African manager in the quality and the maintenance departments, two major manufacturing departments. I found that South Africans working in FAW understand car-making process but struggle when it comes to issues around standards. However, Ayanda Vilakazi, head of marketing & communication at Coega Development Corporation, faulted my position. “South Africans have years of experience in manufacturing and vehicle assembly (over 60yrs). A number of Original Equipment Manufacturers (OEMs) have been in South Africa, employing South Africans, who are now very well vast with manufacturing process, technology and market trends,” Vilakazi said. Vilakazi said multinationals such as Volkswagen SA, BMW SA, Nissan SA, GMSA, and many first-tier suppliers linked to these OEMs, have all been teaching South Africans how to make cars. However, FAW understands that it won’t just be easy for South Africans to make cars owing to skills gap. “There may be skills shortages in specialised departments, but we are committed to continuous improvement and transfer of skills processes to ensure that both South African and Chinese employees learn from each other,” Cheng Zhang, FAW’s general manager in charge of

sales and marketing, told me. Zhang said the techniques and processes South Africans used in applying their skills to their work functions were different when compared with their Chinese counterparts. He also said that communication gap sometimes posed a barrier to skills shortages. New Hope was my next port of call. It is the second biggest privately-owned animal feeds manufacturer in South Africa and has established eight retail depots in Guateng, Kwazulu-Natal, the Free State, Limpopo and North-West. It has seven departments such as technical, marketing, production, and HR, among others. It employs 70 workers, nine of whom are Chinese. Angelique Gu, company representative, told me that there was lack of technical skills among the South Africans. She said this was why the company ran internship programmes for workers and gave them increases according to their performances. She said the company often shared knowledge with small-scale farmers on good feeding practices, farming operations and animal husbandry. I found that like in FAW, Chinese firms were also managers here, even though South Africans were not allowed into all departments. The firm believes that South Africans are lazy, citing frequent excuses given by workers to buttress its position. “They want six months maternity leave, funeral funds and can walk away without excuses,” Gu said. However, I observed that South African workers do not trust the Chinese. They believe that the Chinese want them to work 20 hours in a day, including weekends,

which is contrary to African work ethics. “We used to support them with loans for studies, but we discovered that some of them would not go for such studies but would rather use the money to do other things. When we discovered that, we stopped the programme,” she said. New Hope complains that the minimum wage in South Africa is too high. “Labour is becoming expensive in South Africa and workers are prone to strike,” she said, adding that New Hope keeps Chinese managers because they have to report to the head office. “Visa extension is getting more difficult. Sometimes our managers do not get visas and we send them to other countries,” the company representative added. Harvest Group is next. A manufacturer of knitted vegetable bags, woven vegetable bags, mono vegetable bags and circular polypropylene bags, the group has been in operation for 10 years. The company employs 400 workers, 20 of whom are Chinese. Many of these Chinese work on the machines, whose language of operation is Chinese. Machines are imported from China and the welding is done by the people Deon Van Wyk, marketing director, described as ‘the effective Chinese’. Van Wyk said South Africans were in all the departments such as yarn, weaving, bags and printing but did not believe they could produce the packaging materials themselves if left alone ‘because of history’. Wyk said the company was always on training programmes with workers updating their skills and knowledge. However, he pointed out that, “they work for us for one year, two years and all of a sudden the opposition purchases them and they go away. Last year, we had a major unpredicted strike.” Like Gu, Wyk said there was lack of knowledge among South Africans, saying that government backed workers than investors. “One union instigated that they should go on strike last year. We gave them four- time opportunity to come back but they didn’t. So we had to retrench them, but we were asked to re-employ them,” he said. One major thing I found is the need to upgrade technical education in South

Africa to make local workers employable. “The biggest problem is the minimum wage, the Employment Equity Act. It is against manufacturers. It is not worthwhile manufacturing in South Africa anymore,” he concluded. Hisense, located at Atlantis, which is battered by poverty and is known for unemployment, drugs and hooliganism. The company employs 500 workers directly and 3,000 indirectly. Workers leave the factory with capacity to repair electronics. An official of the company told this writer that televisions and fridges are manufactured locally. The official said others such as smart phones and washing machines are made in China and imported into South Africa due to skills-related issues. “Items that are produced by South Africans in all the stages of production,” he said. Lessons for Nigeria South Africa has strong labour laws that compel firms—especially Chinese companies—to pay what is known as a living wage. This is not happening in Nigeria, where Chinese firms pay below-par wages. Two, South Africans are not restricted to certain departments by Chinese manufacturers in their country. But Nigerian workers are barred by some Chinese and Indian firms from coming close to certain departments. BusinessDay reported a related case recently. This shows why the labour force in SA to be better equipped than its Nigerian counterpart. Here in Nigeria, local workers are not allowed entrance to certain production departments, meaning that Nigerians can never learn the full manufacture of products made by such companies. South African government takes strong measures against this type of behaviour, but will Nigerian counterpart ever do that? Also, energy is taken for granted by SA manufacturers, unlike in Nigeria where 40 percent of manufacturers’ expenditure is spent on alternative energy sources, caused by poor power supply by DisCos. This shows why SA manufacturers are more competitive than their Nigerian counterparts—despite the challenges of the manufacturing sector in SA.

BUSINESS DAY

Monday 01 October 2018

BUSINESS DAY

Monday 01 October 2018

Start-Up Digest

In association with

How Chika Daniel makes money from bead-making JOSEPHINE OKOJIE

he dream of ever y fashion designer is to see their designs worn by celebrities and photographed on the red carpet. For Chika Daniel, creative director of Chikabonita Fashion, that dream is on the verge of becoming a reality. Chikabonita Fashion is a brand that prides itself in the preservation of the culture of handmade accessories manufactured from locally sourced materials. The brand provides affordable jewellery brand that promotes style. Chika started her business as a hobby while still an undergraduate. She learnt the skills involved in bead-making from her friend, who is also a fashion designer. To further equip herself with the needed skills, she took some training on designs and beadmaking before establishing Chikabonita Fashion in 2016. Chika started her business with N1, 000, which she spent on buying some accessories. This is a testament that those seeking to set up business in Nigeria can start with any amount of money. “I started my business with N1, 000, which I used in purchasing some accessories. My friends and family members started patronising me and recommending me to others,” Chika says. The young entrepreneur tells Start-Up Digest that her business, which started as a hobby in 2016, has now grown into a full-fledged

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Chika Daniel

enterprise. “When I started, it was purely as a hobby, but it has now grown into a full business,” she says. Chika sources her raw material locally and from neighbouring African countries. “My products are locally sourced in Nigeria and other African countries,” she says. On expansion plans for the business, the Psychology gradu-

ate of the University of Nigeria, Nsukka says that she plans to delve into mass production of Africanmade jewellery and accessories in the nearest future. She notes that the plan will help earn foreign exchange for her while providing more jobs for Nigerians. She explains that Chikabonita Fashion has been recognised as

one of the fashion brands to watch by 360 Creative Fashion Acceleration Program and also awarded one of the ‘Top Emerging Brands in Africa’ by Made to Order. On challenges facing her business, Chika says access to the market has been the major issue. Chika notes that she is now addressing the issue of market access

through online digital marketing, trade shows and exhibition. “A major part of our marketing takes place online, trade shows and exhibitions, which are great platforms for start-ups like us. We recently got signed onto two international platforms to showcase our brand to the global market,” she discloses. The young entrepreneur calls on the government to improve the ease of doing business in the country to drive down production cost. She also urges the government and well-to-do individuals to provide funds for start-ups with wonderful business ideas to establish their businesses. Chika notes that the fashion industry has the potential to diversify the country’s economy away from oil and earn huge foreign exchange for Nigeria. She adds that the country has what it takes in terms of raw materials and the needed skills to be a fashion hub in Africa. Chika reveals that the business has commenced a student scholarship programme as part of its plan to impact the society in which it operates. “We are also working on starting our merchandiser’s programme, where people who need extra cash or love handmade jewelleries but do not have time to make them can either choose to sell some of our pieces with a profit margin of 30 percent or order for customised designs,” she says. On his advice to her younger self, she says, “Keep your head up and trust the process.”

Rosemary Osuma: The astute fashionpreneur BUNMI BAILEY

osemary Omonivie Osuma is the CEO of Ivies_ apparel, which she founded in 2015. Rosemary is a trained Industrial and Organisational Psychologist with a bachelor’s degree from the University of Benin (UNIBEN) and master’s degree from Covenant University. The entrepreneur tells BusinessDay that Ivies_ apparel is a clothing line that creates a positive lasting impact on designs through services. She developed passion for fashion while growing up. Her firm has produced a number of fashionpreneurs who are doing well in many parts of the country. “My passion for fashion developed while I was growing up. I have always loved to mix patterns and colours. I have always loved to look fashionable. In 2015, I knew it was time to develop the skill so I had to go for necessary trainings. Here we are today and I give God the praise,” she recalls. Rosemary currently has men and women clients across Nigeria, Canada, the USA, the UK and also

looks forward to building more clients across other countries. She explains that being highly creative, having strong drawing skills, paying attention to details, team spirit as well as excellent communication and interpersonal skills are prerequisites for successful fashion and design business.

Rosemary Osuma

“Undergoing basic training in the business of fashion is very key,” she says. Many people may not see the fashion industry as lucrative but Rosemary views in differently. “The fashion design is a thriving industry, not just limited to Nigeria but across the globe. Clothing

line happens to be a subset in the industry. This business involves creation of the modern age and fashion style and, in some cases, people re-introduce ‘old fashion,” she explains. “Again, the need to cover our body and look great for different occasions makes fashion industry super exciting. Successful fashion designers have a thorough grasp of the market and they know how to meet their clients’ needs by being creative and flexible. Above all, when God is involved, he will always make a crooked part straight. Ivies_ apparel, is a living testimony to this truth,” the entrepreneur says. The Edo State native has mentors who have helped shape her creativity in the industry. “I strongly admire Pastor Faith Oyedepo, my ‘mama’, for her mode of dressing, which brings to light that decency is gold. Secondly, Nkechi Harry Ngonadi, CEO of NHN Couture, is a woman of God focused on bringing decency back to the Church. I respect her a lot for this.” She also shares her opinion on why most start-ups fail within a period of two to five years. “For me, the major reason

should be foundation. Psalms 11 verse 3 says, “If the foundation be destroyed what can the righteous do?” The foundation of any building will determine how tall or strong the building will get, and that is very key. A start-up built on God cannot be moved, trails notwithstanding. Secondly, diligence is important. As an entrepreneur, the place of diligence cannot be overemphasised. Diligence, yields good results,” he adds.

Start-Up Digest Team ODINAKA ANUDU Editor

odinaka.anudu@businessdayonline.com 08067478413

Reporters Josephine Okojie Angel James Joel Samson Graphics

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Start-Up Digest

When should the founder leave?

uring the Easter holiday in 2016, I got a strange and challenging call from a friend that had been running a particular business in the previous 12 years. He called to seek my opinion about an important issue – he wanted to exit his role as the CEO of his business by appointing one of his managers to run the business without any interference from him. Since I was aware that he owned over 75 percent of the business along with his spouse, I was confident that it was not an issue of board politics from other investors in the business, since he could easily vote out the minority investors. Definitely, this was not the type of advisory that I was ready for, so I requested that we meet over lunch the following day. The lunch meeting started with a general discussion as to when was the appropriate time for a founder to leave a business. We wanted to ensure that we eliminated any emotional sentiments and bias in the discussion of his own peculiar situation. We agreed that an entrepreneur should leave a business anytime someone else could do a better job. We also agreed, based on several leading thoughts from experienced scholars and managers, that the managerial skills required for a start-up or growing business are usually not the

Wole Oluyemi

same as the required managerial skills for a matured or plateaued business. The key take-away from me from that meeting was that the entrepreneur could easily get bored when the excitement and the unpredictable nature of is-

sues surrounding a start-up or growing business starts to decline once the business reaches maturity stage. This boredom could also possibly lead to unnecessary frustration with self and sometimes, with the team. This boredom could even lead

Start-ups need apprenticeship to upscale their businesses, experts say JOSEPHINE OKOJIE

xperts in the micro, small and medium enterprises (MSMEs) space in the country have called on start-ups in Nigeria to leverage apprenticeship and training to upscale their businesses. The experts spoke at the Fate Foundation annual alumni conference held in Lagos recently, saying that start-up owners need to learn as apprentices before starting to grow and scale their businesses. “Apprenticeship is a fantastic model of knowledge and learning

to building businesses for scale. It also allows connection between learning and the industry,” Adenike Adeyemi, executive director, Fate Foundation, said. “Start-ups need to undergo an incubation or apprenticeship programme to learn the practical aspect of their business from people that have already established similar business if they want to build for scale,” she added. She noted that despite the difficult operating business environment in the country, start-ups that undergo apprenticeship programmes can position themselves with the skills and experience learnt

to build their business sustainably. Cosmos Maduka, founder of Cosharis Group, urged start-ups to undergo apprenticeship programmes to gain practical knowledge to build their businesses. “Start-ups must understand that enduring businesses are not products of chance, they are characterised by clear vision and growth strategies actualised through prepared, structured and efficient leadership,” Maduka said. “People will only invest in your business when they know where you are coming from and how you intend to scale up your business,” he added. He noted that start-ups can do a lot with the little finance they have if they equip themselves with the right knowledge and practical skills by learning from people that are running the kind of business they intend to run “You need to build your practical skills front-end on how you develop your products, how to market the products, how to manage your financials, the challenges involved and how to resolve them to scale your business sustainably,” he added.

to damaging behaviours such as ‘trying to fix things that are not broken’. As the business grows, the founder might be unable to keep pace with the various ongoing activities across all the functional units – operations, HR, finance, and sales, in addition to managing relationships with stakeholders such as customers, vendors, banks and shareholders. Therefore, the continued involvement of the founder may even slow down the decision making process of the company as most, if not all, the key decisions might still require the consent of the founder. I have heard of a founder and CEO of a company with annual revenues exceeding N1 billion, that still insists on reviewing expenditure of N50,000. This causes vendor payments to be delayed for several months and thus leads to loss of key vendors. The continued involvement of the founder in routine and insignificant tasks and activities will obviously also has a negative impact on the founder’s ability to lead innovations and formulate business strategy – the real role of a CEO. Let me get back to my friend’s story. We agreed that the critical issue is the selection and appointment of his successor. He then agreed to go and clearly document the key job responsibilities (KJR), the overall corpo-

rate objectives, key success factors (KSFs) and key performance indicators (KPIs) based on his own experience over the years, so that the successor’s performance can be easily monitored and assessed, while he takes a somewhat uncomfortable back-seat in the day-to-day management of the business. The process took about seven months, but one of the senior managers was selected and appointed as the CEO. Fast forward to almost two years after that change of guards at the company, there has been a significant growth in sales and profitability of the business. Guess what? My friend confessed that some decisions that the new CEO took, which were primarily responsible for the amazing business performance, were decisions he would have rejected if he was still the CEO. So, exiting the CEO role as an entrepreneur could be the best decision for a business venture. The above article was written by Wole Oluyemi. Wole Oluyemi is a chartered accountant and business advisor, with special interests in SME businesses, strategy, finance and tax. He is also a doctoral researcher at Cranfield University (UK) with research focus on corporate political strategy. He can be reached at @ WoleOluyemiCo on Instagram, Twitter and FaceBook.

Private sector pushes for 5% interest rate for SMEs ODINAKA ANUDU

he private sector players (OPS) wants five percent lending rate to small businesses to enable them unleash growth in the economy. “Five percent interest rate would further stimulate the productive sectors of the economy, create jobs and provide new opportunities for the micro, small and medium enterprises (MSME) operators,” said Iyalode Alaba Lawson, president of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) . Frank Jacobs, immediate past president, Manufacturers Association of Nigeria (MAN), had earlier said that what Nigeria needs now to recover fully is a single-digit rate of five percent. “What we need is an interest rate of five percent. We believe that this is what can stimulate SMEs and manufacturing,” Jacobs said recently in Lagos. Interest rates have continued to head north as the CBN retains the

MPR at 14 percent. The average borrowing rate by real sector players in 2017 was 22.8 percent, representing 0.4 percentage point increase from 22.4 percent recorded in 2016, according to MAN. Tony Elumelu, founder of Tony Elumelu Foundation, recently said that every $1 spent on SMEs generates $5. “It is important to fast-track the recapitalisation of the Bank of Industry (BoI) to enable it to meet up with huge credit demands of the industrial sector,” Jacobs had said. “It is critical to intensify the implementation of the Moveable Collateral Registry and Credit Reporting system which were recently passed into law,” he added. According to him, government now needs to open up access to various development funds created by the Central Bank of Nigeria (CBN) such as the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) and the N300 billion Real Sector Support Facility (RSSF) by relaxing stringent conditions denying SMEs and manufacturers access to these funding windows.

BUSINESS DAY

Monday 01 October 2018

Start-Up Digest

Top 12 Instagram accounts that promote entrepreneurship, SMEs OLUWATOSIN DOKUNMU

s a small business owner or start-up, one major challenge is getting one’s brand out there for people to get to know of its existence. In order to get your brand seen, social media is the way to go. Luckily, there are some Instagram accounts that have dedicated their time to helping small business owners to not only push their brands but also raise sales. Here is a little brief about them. @triciabiz @triciabiz caters to the needs of entrepreneurs in the Instagram community. The owner of the handle— Tricia Ikponmwonba-Yusuf—is a trainer, speaker and author. She has trained over eight thousand entrepreneurs and still counting. She has worked with a lot of brands some of which include Unilever, Glaxosmithkline, Nigerian Breweries, British American Tobacco (BAT), MasterCard and Emirates. She has a wide range of business services, which include one-on-one coaching, online courses, trainings and keynote speeches.

L-R: Oluwatoyin Ogundipe, vice chancellor, University of Lagos; Ogbonnaya Onu, minister of science and technology; Taiwo Adeniyi, managing director/CEO, Vitafoam Nigeria Plc and Bamidele Makanjuola, company’s chairman, at the commissioning of Vitafoam’s polyurethane laboratory by Onu at University of Lagos recently

@_ezim @_ezim is a consulting agency that helps startups grow their business to a profitable stage. It helps them implement strategies that will attract paying and returning customers/ clients. @_ezim_believes that if you ask the right questions, you will get the right answers. There are also a lot of personalised coaching courses that take place on the handle, where business owners can learn in a period of 30/60 days. @hustlersquare

@hustlersquare features business pages and believes that every woman deser ves equal opportunity to make her own money, be independent and empowered. @_ezim believes that social media is a great tool and you can meet great minds via this tool, while making unlimited positive impact worldwide because it is without boundaries. @naijabrandchick @naijabrandchick is an Instagram brand influencer. If you are looking for a handle which is passionate

about helping you grow your brand on Instagram, then visit @naijabrandchick. The handle does a lot of live broadcasts, educating followers on how to efficiently and effectively run their business with assured returns. @woleoluyemico @woleoluyemico is run by Wole Oluyemi, a marketplace evangelist. He is a chartered accountant and business advisor, with a passion for street, food & travel photography. Through his handle, he

Ola Brown proffers solution to ‘evil forces’ fighting start-ups ODINAKA ANUDU

la Orekunrin is a medical doctor, helicopter pilot and the healthcare entrepreneur. Brown founded Flying Doctors Nigeria, West Africa’s first Air Ambulance Service, after her younger sister died while traveling in Nigeria. Today, the 32-year-old entrepreneur, who graduated from the University of York, UK, at the age of 21, speaks in various fora. Her firm has over 20 aircraft, which have airlifted more than 500 air travellers. At the September Breakfast Meeting of the NigerianAmerican Chamber of Commerce held in Lagos, Brown said there were two forces militating against small businesses and start-ups. She called one ‘market

forces’ and the other ‘evil forces’. “ The real issues are around evil forces. I have helped smaller companies to wage ‘spiritual warfare’ against these forces,” she said, to the amusement of the audience. “The first of the evil forces and the biggest one is multiple taxation. If you look at how much tax small businesses are supposed to pay, you will see why they are not competitive. “You pay 30 percent of your profit. If you do it the way it is supposed to be done, maybe 50 percent of your revenue can go to tax. But then you now forget you owe the banks and you have to pay 20 percent interest. You also pay to Lagos Inland Revenue Service (LIRS). These are the kind of things that affect our competitiveness and stop us from reach-

ing these standards.” Brown said the second force was the structure of the banking industry. “Because the Monetary Policy Rate (MPR) is high,

Ola Brown

the interest rate is high. From the accessible commercial banks, the least you can get is 18 percent, that is if someone wants to help. At the micro level, maybe it is difficult to

educates followers, especially start-ups and small businesses, on strategy, finance & tax related issues. The handle is one of the fastest growing IG pages in Nigeria that is devoted to businesses and business management issues. @WoleOluyemiCo is gradually developing a community of followers and mentees, especially professionals, business leaders and entrepreneurs through regular posting on topics such as SME businesses, business management, market entry strategy, corporate political strategy, financial strategy and tax strategy. @ifedurosinmietti @ifedurosinmietti is operated by an entrepreneur & author, Ife Durosinmi Etti, who is a Tony Elumelu entrepreneur. She is also the co-founder of @parliamobambini, an interior design & lifestyle company that is child centred. Her Instagram features motivational and innovational posts as well as business opportunities. Her advice to budding entrepreneurs is that they should own their truth, focus on their strengths and outsource the rest.

in helping businesses drive sales through paid ads. So, if you are looking to run ads on your social media platform as an SME, then follow him. @ibrandyourbiz @ibrandyourbiz specialises in the growth of startu p s / s ma l l bu s i n e s s e s, helping them to gain visibility on social media. The owner of the handle has an avid passion for driving sales on small business Instagram accounts, giving webinars and masterclasses on the platform. @dacheo_media @dacheo_media is a media company, which is proactive and passionate about small business. It takes business owners on digital trainings.

@thekenndubisi @thekenndubisi is run by Ken Ndubisi, a Facebook ad consultant, specialising

@identitycoach Instagram account i s o w n e d b y Ye t u n d e Bankole-Bernard, a pers o na l i t y a n d p e r s o na l branding expert. When you visit her page, what will grab your attention is the effective and efficient use of colours which help to sustain her followers’ attention. She is the boss & lifestyle travel curator at Travelden (@traveldenng), where travel & vacation destination are featured. She is the brain behind

access,” she said. The MPR is often set by the Central Bank of Nigeria and is currently 14 percent. It is the benchmark interest rate, meaning that it determines that trajectory of interest rates in an economy. Brown stressed the need to cut this to enable entrepreneurs have access to cheap funds. She further proffered solution for MSMEs and start-ups facing multiple taxation. “What we did in relation to taxes was to move to free trade zones. It enabled us to cut down on these taxes. Small businesses should look at moving to such zones,” she disclosed. Brown stressed the need for entrepreneurs to better engage and manage people, stressing the need to have access to information. She said in high income countries, the number of

micro businesses and large enterprisers was often small, while that of SMEs would always be large. “But in Nigeria, you see a huge number of micro enterprises, low number of SMEs, which are coming up around large companies when you see them. These big companies do not create the bulk of employment. “The big companies can never create the amount of jobs we need. In fact, the S&P in the USA shows that these large enterprises have created no net new jobs in the past 20 years. So, we need to grow our MSMEs to lift the entire country out of poverty. Nigeria has the highest number of poor people in the world. One of the reasons why we have problems in the North-East—Boko Haram, the new wing of Boko Haram—is because people do not have anything doing.”

BUSINESS DAY Harvard Business Review

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Monday 01 October 2018

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You have to stop canceling and rescheduling things. Really WHITNEY JOHNSON

hy do any of us say we will do things and then fail to

do them? We overcommit ourselves. We don’t like to disappoint people, so we tell them what we think they want to hear. We feel pressure in the moment and don’t stop to consider how much pressure we’ll feel later. We don’t think through how much time things will actually take. Up until a few years ago, I canceled or postponed meetings a lot. Then I read Stephen M.R. Covey’s book “The Speed of Trust.” It’s about being trustworthy. I had always thought that I was, but the author explains that when you make

appointments and then cancel them, trustworthy you aren’t. When you fail to fulfill commitments that you freely make, trust is not the result. There are consequences for our personal lives, and there are certainly consequences in the workplace. Keeping commitments is a sign of maturity. Employees who don’t finish assignments, for instance, or finish them late or poorly, or are themselves routinely late, miss meetings and cancel appointments, are an imposition on other team members and a liability to their employers. Last year I decided I would stop rescheduling my commitments and treat them as just that: commitments. And what I found is that when I committed to do the things I said I’d do, I actually felt much

less stressed by them. As I kept more and more commitments, I got more and more confident. And I learned how long things really take. If you really mean no when you say yes, then say no in the first place. Ask for time to think things over if you’re unsure. Don’t overschedule yourself. You may require a transition period to weed some obligations out; after that, once you say yes to something, stick to the yes. If the commitment seemed like a good idea at the time, it still is — even if the value is found not in the activity itself but in being trustworthy and following through.

(Whitney Johnson is an executive coach, speaker and innovation thinker.)

How to tell if you’re delegating too much — and what to do about it ANNE SUGAR

veryone knows leaders should delegate. But if you find yourself frequently miscommunicating with your team, hearing about issues at the last minute and misunderstanding how your team has set their priorities, it may be a sign you’ve delegated too much, leaving employees feeling abandoned and unmotivated. At that point, it’s important to take back responsibility for certain tasks to ensure you’re providing your team the guidance and structure they need. Here are three steps you can take.

TAKE ON A SYMBOLIC PROJECT. Obviously, you don’t want to overcorrect and start doing a myriad of low-level tasks in order to reconnect with your team. But taking on a symbolic project or task can be a visible way of demonstrating your

re-engagement, as well as helping the company and advancing your own learning goals. RESET WITH YOUR TEAM. One chief technology officer I coached realized he’d been delegating too much. He’d been frustrated that

departmental projects he had delegated got lost and forgotten amid looming client deadlines. To combat this, he scheduled an offsite meeting to get everyone on the same page again about goals and expectations. He realized through the pro-

cess that his team hadn’t understood the rationale or urgency behind the projects. Afterward, he could follow up more effectively and make smarter determinations about where he could delegate without going too far, and his team was much more willing to focus on internal projects, as well. RECOMMUNICATE THE VISION. The biggest overdelegation risk for leaders is leaving the vision or culture of the company to others. If you’re noticing that output on projects has stalled, that there’s excessive disagreement on tasks and process, or unexpected and inconsistent behavior among

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team members, it may be a sign that you’ve overdelegated the vision to the point where team members feel they’re interpreting it or making it up on their own. Make sure you’re using every public communication opportunity you have to stress and reinforce the message. Without this approach, there can be a cascading effect of morale issues, loss of creativity and a lack of teamwork. But most, importantly, there is a loss of credibility for the leader.

(Anne Sugar is an executive coach and speaker.)

Monday 01 October 2018

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ECONOMY

Banks’ interest expense up 7.75 % to N556 bn in HI BALA AUGIE

leven largest banks in Africa’s largest economy incurred a cumulative interest expense of N556.20 billion as at June 2018, which represents a 7.75 percent increase from the N516.07 billion recorded the previous year. Intense competition for deposits among banks and other financial institutions and continued customer appetite for treasury bills are responsible for growth in interest expense. The Banks are: First Bank Holdings Plc, Access Bank Nigeria Plc, United Bank for Africa (UBA) Plc, Zenith Bank Plc, Guaranty Trust Bank (GT-

Bank), Fidelity Bank Plc, Stanbic IBTC Holdings Plc, Sterling Bank Plc, First City Monument Bank Plc, Diamond Bank Nigeria Plc, and Union Bank Nigeria Plc. A breakdown of the cumulative figure shows GTBank’s interest expense increase by 20.91 percent to N43.95 billion in June 2018 from N36.34 billion the previous year. The largest lender by market value said that improved low cost mix of 83.4 percent helped curtail interest expense growth and helped moderate 60 bps rise in Cost of Fund from 2.5 percent in June 2018 in H1-2017 to 3.1 percent the previous year. FirstBank Holdings’ interest expenses were up 10.93 percent to N75.76 billion in the period under review, from

Wall Street has, overall, managed to advance despite escalating trade tension between the US and China and the Federal Reserve’s decision this week to raise interest rates for the third time this year, and with one more to come. Apple on August 3 became the first company to reach a market capitalisation of $1tn, and has added a further 10 per cent since then. About a month later, Amazon became the second company to achieve the trillion-dollar valuation in intraday trade, but it was unable to maintain the level. Oil has been a strong performer as the supply outlook looks to remain on the tight side. Global producers this

P.E

SHORT TAKES $22.1 bn

The National Bureau of Statistics (NBS), yesterday, said that Nigeria’s foreign debt at the end of the first half of 2018 (H1’18) stood at $22.08 billion. This represents a 17 percent rise over the $18.9 billion recorded at the end of 2017. The breakdown, according to NBS foreign and domestic debt report for second quarter 2018 (Q2’18), shows that foreign borrowings amounting to $10.88 billion were from multilateral agencies, $274.98 million from bilateral (AFD) and another $2.12 billion bilateral from the Exim Bank of China, JICA, India and KFW, while $8.80 billion was commercial debt.

N17.16bn

N68.29 billion the previous year. Zenith Bank’s interest expense however dropped by 39.41 percent to N74.71 billion in the period under review from N123.29 billion the previous year. Cost of Funds decreased from 6.4 percent recorded in June 2017 to 3.4 percent as at June of 2018 as the bank continues to focus on its drive for low cost deposit mix. Access Bank’s interest expense increased by 28.56 percent to N101.38 billion in June 2018 from N78.86 billion as

June 2017.The lender said Cost of Funds remained stable q/q at 5.8 percentin Jun’18. “The Bank continues its retail drive to significantly improve its deposit structure to bring funding costs lower,” said the lender. UBA’s interest expense grew increased by 42.22 percent to N76.21 billion in the period under review from N53.57 billion the previous year. Fidelity Bank’s interest expense was up 10.05 percent to N41.98 billion in the period under review from N38.15 bil-

lion as at June 2017. The increase in interest expense can be attributed largely to a marked increase in the interest paid on debts issued as well as other borrowed funds (+64%y/y), according to analysts at CSL Stock Brokers Ltd in a recent note to clients. “Consequently, net interest income declined by 6% y/y in H1 2018 to N30.9bn (H1 2017; N32.9bn) coming in below our 2018 estimate of N65.4bn on an annualised basis,” said analysts at CSL Stock Brokers.

US stocks among the big winners as sun sets on September quarter

he month of September is drawing to a close, and with it a quarter that has been particularly kind to stocks in the US and Japan and oil. Not only has it been a time of reflection with the 10-year anniversary of the collapse of Lehman Brothers, but around these parts it marks the end of an era as the venerable John Authers calls time on his decadeslong career at the Financial Times. Among key milestones, both the S&P 500 and Dow Jones Industrial Average last week simultaneously closed at record high for the first time since January. The Nasdaq Composite and small-cap focused Russell 2000 reached peaks in August.

month decided against further output increases despite demands from US President Donald Trump for action to cool prices. Also, buyers have been reducing purchases of oil from Iran ahead of the US sanctions against the country coming into effect in November. Here are a few fun facts about some of key asset classes so far in the month of September and quarter. Wall Street The S&P 500 is up 0.6 per cent this month, and up 7.4 per cent for the quarter, which would be its best since the March quarter of 2013. The Dow is up 2.1 per cent this month and on track for its first three-month winning

streak since January. Up 9.1 per cent, this is set to be the Dow’s best quarter since December 2017. The Nasdaq Composite is down 0.7 per cent in September and heading for its first monthly drop since March. A 7.3 per cent gain for the quarter is likely to be its best since the first quarter of 2017, as well as its ninth consecutive quarterly gain, which will be the longest streak since a two-and-a-half-year run to the end of June 2015. The Russell 2000 is down 2.4 per cent in September and on track to end a six-month winning streak. Global stocks The FTSE All World is up 0.5 per cent so far this month and

The Nigerian National Petroleum Corporation (NNPC), has recorded trading surplus of N17.16billion in April, 2018. NNPC Group General Manager, Group Public Affairs Division, Ndu Ughamadu, who made this known in a statement, yesterday said the development was part of the highlight of the Corporation’s Monthly Financial and Operations Report for the review period. The report, which is the 33rd edition since NNPC commenced the monthly publication of its financial and operations data as part of efforts to instill a culture of transparency and keep stakeholders, and the general public informed of its activities, indicated a N5.43billion improvement representing 46.29 per cent on the trading surplus recorded in the previous month of March, 2018.

N714.81 bn

eyeing its first hat-trick since December. It is ahead 3.9 per The Federation Account cent this month after back-toAllocation Committee back quarterly declines. (FAAC) disbursed the sum of Japan’s Topix benchmark is N714.81bn to the three tiers up 4.7 per cent in September, of government in August 2018 which would be its best month from the revenue generated in since October 2017. A quarterly July 2018. gain of 5 per cent would be its The amount disbursed combest this year. prised of N597.97bn from the Treasuries Statutory Account, N79.81bn The yield on the benchmark from Valued Added Tax (VAT), 10-year US Treasury has risen N12bn additional distribuby about the same amount so tion funds from NNPC and far this month as this quarter, N25.03bn FOREX distribution. about 19.4 basis points to more Federal government received than 3 per cent. That is the biga total of N298.29bn from the gest monthly rise in the 10-year N714.81bn. States received yield since April, and the biggest a total of N183.77bn and quarterly rise since the first Local governments received three months of this year. Bond N138.96bn. prices fall as yields rise.

BusinessDay MARKETS INTELLIGENCE (Team lead: BALA AUGIE - Analyst: DIPO OLADEHINDE, ENDURANCE OKAFOR, BUNMI BAILEY Graphics: SAMUEL IDUH ) Oil

BMI provides in-depth analysis and data on industries, companies, stocks, currencies, fixed income/credit, economics, regulation and factors influence Brentthat crude, the investor’s global decision-making Email the BMI team patrick.atuanya@businessdayonline.com

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Monday 01 October 2018

Markets Intelligence ECONOMY

Downstream oil and gas firms’ Debt to Equity ratio falls as margins improve BALA AUGIE

irms operating in the downstream oil and gas industry have seen debt to equity ratio reduce as higher margins gave them the leeway to pay off debt. There has also been record improvement in return on common equity (ROCE), which means these firms have used shareholders’ investment in generating higher profit. Total Nigeria Plc’s has reduced the proportion of debts in its capital structure as debt to equity (D/E) ratio improved to 42.90 percent in June 2018, from 58.90 percent recorded the previous year, according to data gathered from Bloomberg Terminal. The D/E ratio is however lower than the Oil and gas Index 38.72 percent, data from the Bloomberg Terminal shows is. Total Nigeria’s gross margin increased to 16.02 percent as at June 2018, the higher than the 11.17 percent recorded in the first quarter of 2017, according to data gathered from the Bloomberg Terminal. The downstream oil and gas giant’s return on common equity (ROCE) stood at 33.06 percent in the period under review, higher than the 25 percent recorded in the first quarter of 2017. Mobil Nigeria Plc has a gearless balance sheet, because it has no debt in its capital structure. Little wonder its ROCE increased to 40.18 percent in June 2018 as against 31.82 percent it recorded in the first quarter of 2017. Conoil Nigeria Plc’s ROCE however fell to 37.25 percent in June 2018 as against 42.35 percent as at June 2017. Eternal Oil Nigeria Plc’s debt to equity

ratio fell to 50.48 percent in the period under review from 49.07 percent the previous year. Its ROCE moved to 15.76 percent in June 2018, this compared to 14.99 percent recorded in the fourth quarter of 2017. Eternal has an attractive valuation compared to peers. The stock is currently trading at 4.06 times earnings, much lower than the average of 4.16 times earnings of the Oil and Gas Index. The stock has a year to date of 53.92 percent, outperforming NSE ASI Of 14.36 percent. Forte Oil’s debt to equity ratio fell to 37.69 percent in the period under review, a remarkable improvement from 109.93 percent figure of the first quarter of 2017. Interestingly, the company’s ROCE grew to 29.37 percent as at June 2018, from 26.15 percent as at first quarter of 2017 and 6.43 percent as at the third quarter of 2017. Analysts attribute the improvement in margins and reduction in debt to the decision of Federal Government (FG) to allow the Nigerian National Petroleum Corporation (NNPC) to be the sole importer of petroleum products. The move to the current model has allowed the downstream oil and gas firm leverage on their brand and wide service stations to distribute product while at the same time increasing volumes and growing profit. “Since the change of template, NNPC dictates your margins, and the only way to make money is to increase your volume,” said Jubril Kareem - Acting Head of Energy Research – Ecobank “These two firms have high number of service stations pushing out volumes,” said Kareem.

Stocks to watch: Serco, RSA, AA, Tesla, H&M, Thomas Cook

erco rebounded from a six-month low after it raised full-year guidance. In an unscheduled trading update, the outsourcer said a combination of a strong operating performance, one-offs and cost savings had resulted in stronger secondhalf trading than anticipated, resulting in a year-end trading profit of £90m to £95m on revenue of £2.8bn. Management, which had previously guided for earnings of £80m, also flagged up that net debt would be at the lower end of its £200m to £250m guidance range. Citigroup said the boost to earnings should more than offset a looming contract repricing at Serco’s Atomic Weapons Establishment joint venture, the UK’s nuclear warhead programme that provides about a third of group earnings. It took Serco off its “sell” list in response. Games Workshop dropped after former chairman Tom Kirby sold a 1.7 per cent stake at £36.50 apiece, a 5.1 per cent discount to Thursday’s close. A profit warning left RSA Insurance the FTSE 100’s sharpest faller. RSA said weather losses had held back its UK performance by more than expected, due in part to subsidence claims during the hot summer. It flagged up a £70m underwriting loss for the London and UK market segment, against

market expectations of a £30m profit. Deutsche Bank was particularly concerned by losses in RSA’s UK motor and marine portfolios, which management put down to volatility rather than weather. “We are inclined to see the UK domestic weather losses as exceptional, but feel there is less evidence when it comes to the group’s London market book,” Deutsche said. “Even if this [losses are] addressed through higher rates, there is likely to be a price to pay in terms of lower premiums - and potentially an ensuing expense-ratio impact.” AA, the roadside repairs specialist, tumbled to a five-month low after Citizens Advice said it had issued a “ super complaint” to the Competition and Markets Authority over loyalty penalties. Though the charity did not specifically identify breakdown services among its key areas of concern, its complaint drew fresh scrutiny to AA’s business model of charging lower rates to newer customers. Tesla slumped in response to news overnight that US securities regulators had sued chief executive Elon Musk for securities fraud. The Securities and Exchange Commission is alleging that Mr Musk had made a false statement about plans to take the carmaker private and it is seeking to bar him from serving as a director of a public company.

Citigroup downgraded Tesla to “sell” with a $225 target. Analyst Itay Michaeli cited the lasting damage to Tesla’s reputation if Mr Musk stays and the “spiral risk” if he goes, irrespective of whether the change of management is smooth. Sellside stories Barclays cut hospital operator Spire Healthcare from “neutral” to “underweight” with a 130p price target. Its downgrade came as part of a review of IFRS 16, the new reporting standards for lease obligations that will come into force next year. Despite a 40 per cent slump in the year to date, Spire shares are still not cheap, said Barclays. On the possibility of a another bid for Spire from Mediclinic, its 29.9 per cent shareholder, Barclays argued that the South African group was unlikely to want the trouble. “Selling its stake in Spire looks to be the most strategically sensible option and could mitigate further risks to the Mediclinic business, allowing the accompany to move on to restoring market confidence in its medium-term prospects,” it said. HSBC and Société Générale both upgraded Hennes & Mauritz to “hold” on the back of Thursday’s third-quarter update from the retailer, which showed an unexpected improvement in like-for-like sales.

But Kepler Cheuvreux downgraded H&M from “buy” to “hold”, saying the stock was due a breather following a 30 per centplus rally during the past nine trading days. “We need better visibility before giving H&M the benefit of the doubt,” it said. HSBC downgraded Thomas Cook from “buy” to “hold” with a 70p target as part of a European sector review. The diverging performance of Thomas Cook and Tui over the summer demonstrated “the need for scale and flexibility in the tour operator model, as well as the benefits of having a diverse holiday offering that leverages the tour operator base”, HSBC said. Its downgrade reflected “volatility in Thomas Cook’s trading and weakness going into the 2018/19 winter season, as well as uncertainty following management changes”. Tui’s “higher quality, diverse earnings” meant it was left on a “buy” rating with a price target cut to £17.20 from £19.10. In brief: Adecco cut to “underperform” at Merrill Lynch; Burberry downgraded to “underperform” at MainFirst; Direct Line upgraded to “overweight” at JPMorgan Cazenove; Informa raised to “buy” at Citigroup; Mediaset upgraded to “equalweight” at Barclays; Telefónica Deutschland raised to “overweight” at Morgan Stanley; Ten Entertainment rated “buy” at Liberum; Eon cut to “hold” at SocGen.

Politics & Policy Monday 01 October 2018

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BUSINESS DAY

Nigeria @ 58th: Our youth gives us hope of a better tomorrow - Atiku INNOCENT ODOH, Abuja

ormer Vice President and Presidential aspirant on the platform of the People’s Democratic Party (PDP), Atiku Abubakar, has said that despite the myriad of challenges facing Nigeria at the moment, the youth of the country are a beacon of hope of better things to come in the future. Atiku expressed this optimism in his message to the nation on the occasion of the 58th Independence Anniversary of the country, made available to BusinessDay by his Adviser on Media, Paul Ibe. Atiku also expressed sadness about the state of the nation today even as he blamed the President Muhammadu Buhari-led All Progressives Congress (APC) Federal Government for allegedly bringing untold hardship on the people of Nigeria in the last

three years. “You may ask why I am not glad. It should be obvious. A mere three years ago, we were the third fastest growing economy in the world. As I write this to you today, our fortunes have reversed to the point where we are now the world headquarters for extreme poverty, according to the World Poverty Clock and the World Economic Forum,” he said. He added that the promise of change, which many Nigerians, including himself, celebrated three years ago, has been seen for what it is, a hollow and empty promise devoid of meaning and the incapacity of the promisor to deliver on his promises. “Yet, I am hopeful, as you and your family should be. The indomitable Nigerian spirit gives me hope. Our youth, like the five girls from Regina Pacis Secondary School Onitsha, Anambra State, who won the 2018 World Technovation Challenge in the Silicon Valley, give us hope.

Atiku

“Bright Nigerian youth, like Israel Zakari Galadima from Borno State, who emerged the best overall student in the 2018 Joint Admissions and Matriculation Board’s University Matriculation Examinations (UME) after scoring 364, make us hopeful for the future,” Atiku said.

s the People’s Democratic Party (PDP) gears up to elect its candidate for the 2019 presidential election, Governor Henry Seriake Dickson of Bayelsa State and former Senate President, David Mark have called on all aspirants to display the spirit of sportsmanship. Making the call at the weekend when Mark and his presidential campaign team paid a consultative visit to the governor in the Government House, Yenagoa, they also stressed the need for all the aspirants to close ranks and work for the overall success of the party.

A statement by Dickson’s Special Adviser on Media Relations, Fidelis Soriwei said the governor pointed out that PDP could not afford to disappoint Nigerians as they look up to the party to effect the desired political change in 2019. Acknowledging Mark’s contributions towards nation building, Dickson described him as a true patriot who played a pivotal role in stabilising the polity especially during the administration of former President Goodluck Jonathan. “You are one of the most qualified Nigerians to run for the Presidency of this country. You know this country very well as somebody who has gone through the en-

Apparently referring to President Buhari’s recent insinuation that Nigerian youth are lazy, Atiku countered that Nigerian youths are not lazy; stressing that the youth are desirous of working, but there is a dearth of jobs. “This is why I have committed personal resources to open multiple businesses in 2018 to get as many unemployed Nigerians working again. This is why I set up animal feed plants to provide an alternative to animal grazing so that lives may be saved just as jobs are created. Our people should not have to give up their lands to save their lives,” he said. The Wazirin Adamawa called on people who have entrepreneurial ability, to use such abilities to help assuage the chronic unemployment in the land, adding that Nigerians owe it as a duty to God and the founding fathers of the nation. He prayed God to bless Nigeria and wished the people a fruitful independence anniversary.

Abdulwahab, ThisDay editorial staff, emerges Kwara APC governorship candidate

Dickson, Mark task PDP presidential aspirants on sportsmanship SAMUEL ESE, Yenagoa

He lamented that at the beginning of the year Nigerians were shocked by news from the National Bureau of Statistics, that 7.9 million Nigerians had lost their jobs in just 21 months, adding that Nigerians were further shaken by the fact that Nigeria had overtaken India as the nation with the largest out-of-school

children population in the world, even though India has seven times our population. “We were further warned by one of the world’s largest banks, HSBC, that our economy faces challenges if we do not make certain personnel changes in the near future. These warnings were also corroborated by the world’s foremost economic magazine, The Economist. “Indeed, this was not the Nigeria our founding fathers visualised. What they visualised was a Nigeria founded on unity, faith, peace and love. We owe it as a duty to keep faith with their vision. “That is why today, I make bold to pledge that I will devote the rest of my life to building bridges across Nigeria in order that the founding fathers’ vision of unity, faith, peace and love, is materialise in my lifetime, so help me God. Those of us, who God has blessed with ability, also have a corresponding responsibility to use that ability for the common good of the collective,” he said.

tire mill. Let me therefore, once again commend you for throwing your hat into the ring because our country is currently in dire need of experienced, tested and broadminded leaders like you. “I want to also commend you for standing with and for us the Ijaws at very difficult and trying times. When we needed support, in your characteristic manner, you never let us down throughout the tenure of our brother. I saw how you deepened our democracy and stabilised the National Assembly by mobilising support for former President Goodluck Jonathan. And as a people who are known for rewarding those who stand by us, you will never find us wanting.

SIKIRAT SHEHU, Ilorin

former senior journalist with THISDAY newspaper, Kayode AbdulWahab, has emerged the gubernatorial candidate of the All Progressives Congress (APC) in Kwara State. AbdulWahab, who is also a former majority leader at Kwara State House of Assembly polled 891 votes to beat other 12 contestants for the APC gubernatorial ticket. A total number of 1007 delegates participated in the governorship primary held at the state party secretariat, Onikanga road, GRA, Ilorin. S e r i k i Ya haya s c o re d 16, abdulrahaman Abdulrazaq,3, Garba Gobir 2, Akeem Oladimeji Lawal 27, Lukman

Mustapha, 11, Mashood Mustapha 5, Modibo Kawu 2, Mohammed Belgore, SAN, 6, Professor Shuaib Abdulraheem 5, Mallam Saliu Mustapha 12 , Yaman Abdullahi 7 andcAlh Tajudeen Makama 4. There were 12 invalid 12 votes. The returning officer for the primary,Christoper Ayeni declared that Kayode Abdulwahab winner of the peaceful primary amidst jubilation from party supporters and admirers. Speaking at the event, the APC chairman in the state, Ishola Balogun-Fulani said that the party is the winning party in the state. “It is our own congress and primaries that will be approved because we are the authentic APC and we have

the legal and constitutional backing. “Following directive of the national leadership of the APC to all state chapters of the party, except Lagos and Imo states, we are conducting our primaries today (yesterday). “Court has given us injunction to operate as authentic executive and the injuction is with the INEC and the party and they will have to obey legal pronouncement. The other executive parading themselves illegally can’t select anyone yet as their differences mount daily,” Balogun- Fulani declared. In his acceptance speech, the APC governorship candidate, Kayode AbdulWahab thanked the delegates, promising not to betray the confidence repose in him.

that there had been a significant upgrade in rural infrastructure and transformation of the education sector. The campaign DG, said that the governor was being persecuted by leaders of the party in the state because he refused to give in to their selfish demands which according to him would put the wealth of the state in the hands of few individuals.

He said the national leader of the party was being misadvised by few individuals, saying that they expect the party to conduct a free and fair primaries. “He is being persecuted my selfish leaders who are only after their pocket; they are misadvising Tinubu. But we would not give in to them in the primaries,” Omoyele added.

Ambode will win Lagos APC guber primary - Campaign DG ...says selfish leaders misadvising Tinubu INIOBONG IWOK

he Director General of Akinwunmi Ambode Campaign Organisation, Hakeem Omoyele, has vowed that the incumbent Governor of the State would win the gubernatorial primary of the party slated for today. Ambode is contesting the

governorship primary against a former Commissioner in the State, Babatunde SanwoOlu, who is presumed to be the anointed candidate of the national leader of the party, Bola Ahmed Tinubu. But speaking in an interview with newsmen at Ambode 2019 campaign office in Ikeja yesterday, the DG said that the governor was ready for the “antics of the Tinubu-

backed All Progressives Congress (APC) leadership in the state” and was mobilising its supporters across the state. “We are ready for the primaries tomorrow and we are sure we are going to win. We are mobilising our members and we are ready for their antics. The governor has done well; go round the state and see the upgrade of infrastructure.

“The governor unlike other states across the country pay salaries on the 23rd of every month. Look at the rural roads he is doing. He should have a first refusal of the governorship ticket,” Omoyele said. Speaking further, Omoyele stressed that Ambode had performed excellently well across the state to deserve a second term in office, adding

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Monday 01 October 2018

BUSINESS DAY

46 BUSINESS DAY NEWS

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Ambode dares Tinubu over political future... Continued from page 1

President Muhammadu Buhari. What looked like a minor fight between Tinubu and his political protégé’ Ambode has snowballed into a full blown political war that could easily end the iron clad control the All Progressives Congress (APC) has had over the state. After being put under pressure to drop his second term ambitions, Ambode came out firing on Sunday against his party, the APC, its national leadership and opponents in the party primary that takes place today, October 1.

Ambode did not mention any name in the several allegations that he made against his opponent in today’s primary contest across the 245 wards and 20 local government areas of the state. But he is standing against Babajide Sanwo-Olu, for whom a third aspirant, Obafemi Hamzat, has stepped down for. Ambode has also been put under pressure, allegedly from Tinubu to step down for Sanwo-Olu who now looks like the party’s anointed candidate. At what he called a ‘World Press Conference’ yesterday Ambode not only expressed his determination to contest for the primary, waving aside pressure from party leaders to step down, but also insisted that the aspirant the party is pushing is not a fit

and proper person to govern Lagos. ‘This aspirant was rehabilitated at Gbagada General Hospital; the records are there” Ambode said. Apparently angered by the pressure put on him in the last few days, the governor said he has so far refrained from replying to campaign of calumny and disparaging of his person on the social media by those opposed to his second term ambition, since the last two to three weeks, in the belief that it was a family affair which could be resolved. “Fortheotheraspirants,wewelcome competition but again, we will not, on good assurance allow us to fritter away opportunities that our great party has and then allow the opposition to win Lagos in next year’s poll. If we allow the opportunity before our party to fritter away, we will be jeopardising the Buhari/Osinbajo ticket on which I am 100 percent standing for. But other aspirants cannot deliver the ticket for the party.” There are reports, which we were unable to confirm, that Ambode is being encouraged by the Presidency to take on the Tinubu political machinery in Lagos state. Sources have told the mediathatthePresidencyisnotbehind the attempts to deny a second term ticket to Ambode fearing that such a denialwouldhaveanegativeimpacton Buhari’s chances in Lagos state during February 2019 presidential elections. Ambode said that the party leaders and party members have been misled

to understand that his opponent in APC primary is a better candidate. “I have done everything in the last three years and half to serve people selflessly. This particular aspirant has been arrested for spending fake American Dollar in a night club and was detained for months.” “He also knows that he does not have the competence to do what he is being propelled to do. We know our leadership should have a rethink because the truth is this. I will not stand here, on the mandate of Lagos State residents and allow our great party, APC to fritter away that opportunity to put in somebody that opposition will easily kick-out because of credibility. So I appeal to all our leaders, they should have a rethink.” But Ambode also went on to express doubts about the credibility of the party’s primaries that holds today. “As we speak, the APC national secretariat has already sent in Electoral Committee to Lagos. But I am yet to receive the guideline. I am an aspirant in tomorrow’s (today) competition. I believe strongly that preparation is ongoing. There are two things we need to iron out. I believe the APC chairman will be able to correct some of these things that we have noticed. We are committed progressives. We are committed to the outcome of the primaries. We are committed to the tenets and principles of our great party. But what we will not accept is to disenfranchise millions of people we have been able to bring into the fold of the APC in the last three and

L-R: Brian Hammond, MD, IMC Limited; Solape Hammond, co-founder, Impact Hub Lagos; Emily Sheldon, director, health innovation, Impact Hub Lagos; Ebi Ofrey, co-founder/CEO, Gerocare; Abimbola Adebakin, CEO, Advantage Health Africa (my-medicines.com), and Segun Akintemi, MD, Page International Financial Services Limited, at the health innovation roundtable in Lagos, at the weekend. Pic by Olawale Amoo

Investors flying blind in 13 stocks on the... Continued from page 1

to BusinessDay’s analysis of NSE trading data.

The companies are Anino International Plc, Deap Capital Management Ltd, DN Tyre and Rubber Plc, Ellah Lakes Plc, Fortis Microfinance Bank, FTN Cocoa Processor, Juli Plc, Multi trek Integrated Foods, Smart Products Nigeria Plc, Thomas Wyatt Nig Plc, Unic Diversified Holding Plc, Union Dicon Salt Plc and Unity Bank. Out of these companies, Anino, Multitrek and Unic are yet to release any results since 2014, while D&N Tyre and Juli have delayed filing their results since 2015. International Energy Insurance has not released results since 2016 while investors still await to see the financial performance results of Ellah, Fortis, FTN Cocoa, Smart Products, Thomas Wyatt, Unic and Union Dicon whose most recent results are for the Full Year 2017 period, 9 months into 2018. It is particularly shocking that five companies, Anino, Multitrex, Unic, D&N Tyre, IEI and Juli, yet to have re-

leased their results in the last 2 years are still trading on the exchange. BusinessDays analysis of Bloomberg data shows that 77,035 shares of Multitrex last traded on 21st September 2018, at a price of N0.36. Similarly 25,000 shares of Unic exchanged hands on 21th September, 2018 at N0.2 per share, 10,000 shares of IEI last traded on 19th September 2018 at N0.35 per share, while 1,000 shares of Juli changed hands on 11th September 2018, at N1.67 per share. Fortis Microfinance Bank and Union Dicon Salt both had their shares suspended from trading in July 2017 by the NSE before the suspension was later lifted after their results were released, but they are now delaying to file returns for Q1, and Q2, 2018. An investor uses financial statements to make informed decisions such as buying or selling a stock, but a delay in filing accounts by these firms could cloud their investment judgements. “We should improve on our governance and disclosure requirement, and institutions should disclose fi-

nancial information as at when due,” said Bismarck Rewane, managing director and CEO of economic consulting firm, Financial Derivatives Company Limited. “For Unity Bank, the audited financial statement has to be approved by the Central Bank of Nigeria (CBN). I don’t think there is any case for concern,” said Rewane. It will be recalled that Nigerians woke up to the rude shock that Skye Bank’s licence was revoked by the central bank, and its assets transferred to a bridge bank - Polaris Bank. Skye Bank, which emerged one of the eight Systematically Important Banks (SIB) in Nigeria three years ago- last filed its financial statement in December 2015. Before trading on its shares was suspended by the NSE it had gained 48.08 percent year to date, as investors were overly optimistic that the restructuring strategies of the Apex bank would yield fruit. Hadthemid-sizedbanknotdelayed filings, market participants would have gotwindofitsfinancialhealth,andmost likely dumped its shares. “NSE needs to be more firm to

half years. What we hear is that there is a register that is being brought to the state. Theregisteronlyincludesmembersthat registeredin2014.Whataboutmillionsof supportersthatwehavebroughtinfrom 2015 to date?” The governor queried. Ambodechosetofightafterhefailed to get the backing of the Governor’s Advisory Council (GAC), the highest decision making organ of Lagos State chapteroftheAllProgressivesCongress (APC) to stand as the party’s candidate in the 2019 governorship elections. The GAC, which is chaired by Tinubu, instead asked the governor to step down and went ahead to endorse Sanwo-Olu at a meeting held on Saturday, 22 September. The 12-member GAC met in Tinubu’s house in Ikoyi with Osinbajo in attendance, where they took the decision to adopt Sanwo-Olu in Monday’s primary election. The primaries has already by shifted twice, first from Saturday, September 29, to Sunday, September 30, and finally Monday, October 1, 2018. Announcing the outcome of the GAC meeting to anxious party faithful at the APC secretariat, Ikeja, Anthony Adefuye, secretary to the GAC said that the meeting which

Monday 01 October 2018

commenced at 10am, ended after several hours of deliberation. “There was a GAC meeting, which was attended by the Vice President, Osinbajo, majority leader of the House of representatives, Femi Gbajabiamila, Speaker, House of Assembly, Mudasiru Obasa, and others were at the meeting. “This meeting was chaired by our national leader, Tinubu. This is a meeting that we started at 10am. And we couldn’t finish early. After the meeting, I have been mandated by the GAC to announce to you that the gubernatorial primary earlier scheduled for September 30th, has been shifted to Monday October 1st. “Also, the GAC was informed by Obafemi Hamzat of his decision to graciously stepped down and endorsed Jide Sanwo-Olu.” “GAC has endorsed Babajide Sanwo-Olu as its preferred candidate ahead of the primaries,” he added. Adefuye said that Tinubu had earlier planned to address the members but couldn’t leave his resident “because various organs of the party had decided to meet him on other issues.”

•Continues online at www.businessdayonline.com

Banks’ credit to corporate, small businesses... Continued from page 2

nomic report for the month of August that Banks’ credit to the domestic economy fell marginally by 0.4 per cent to N19.04 trillion at end-July, 2018, in contrast with the level at end-June, 2018. This was attributed to the decline in claims on both the Federal Government and the private sector in the review month. The lender of last resort also explained that the survey conducted to generate the report asked lenders to reportdevelopmentsinthecorporatesector by large and medium-size firms and smallbusinesses,andthedatagathered was used to produce the report. Total specified liquid assets of banks stood at N11.75 trillion at endJuly, 2018, representing 77.12 per cent of their total current liabilities. At that level, the liquidity ratio was 0.99 percentage point above the level at end-June, 2018, and was 29.12 percentage points above the stipulated minimum liquidity ratio of 30.0 per cent. The loans-to-deposit ratio, at 64.30 per cent, was 0.3 percentage point below the level at the end of the preceding month, and was 15.70 percentage points below the maximum ratio of 80.0 per cent. “Lenders expect the same trend

in the next quarter. Spreads between bank rates and MPR on approved new loan applications for all business sizes narrowed in Q3 2018, but were expected to widen for all business sizes in Q4 2018,” the report said. Meanwhile, the Monetary Policy Committee (MPC) has decided to leave its key interest rate at 14 percent to fight inflation which it said its beginning to threaten the country for the twelfth time since 2016. Seven members of the MPC voted to retain the interest rates at 14 per cent. Before, the MPC meeting, figures from the National Bureau of Statistics (NBS) had shown that the the consumer price index, (CPI) which measures inflation increased by 11.23 percent (year-on-year) in August 2018. The Nigeria apex bank in its current report disclosed that the proportion of loan applications approved for all business sizes increased in the current quarter, and are expected to further increase in Q4 2018. “Lenders required stronger loan covenants from all firm sized businesses in the current and next quarters. Fees/commissions on approved new loan applications fell for all firm sized businesses,” it said.

suspend some of these firms. If Skye Bank had been suspended, some investors wouldn’t have invested in the stock,” said Ayodeji Ebo managing director and CEO of Afrinvest Securities Ltd. International Energy Insurance (IEI) Plc last audited financial statements released in December 2016, shows the insurer had total liabilities of N14.33 billion, which exceeded total assets of N8.95 billion, resulting in negative shareholders’ fund of N5.34 billion for the period. Negative retained earnings of N17.70 billion means IEI have been recording more losses than profits since its existence, while the loss of N3.66 billion (for the period) exceeded gross premium income of N1.94 billion. Unity Bank Nigeria Plc last released its financial statement in the third quarter of 2017, which shows net income of N2.44 billion. A trend analysis of Unity Bank’s 5 year financial statement shows its cost to income ratio of 93.50 percent as at December 2016 is the highest in among the 13 largest lenders tracked by BusinessDay. What’s more, the small and mid-sized bank had a Non

Performing Loans (NPLs) ratio of 35.23 percent as at December 2015. FTN Cocoa Nigeria Plc last filed its financial statement in September 2017; showing debt to equity ratio of 422.93 percent in the period. Its interest expense of N174.32 million exceeded total revenue of N22.65 million, and a loss of N419.37 billion was inevitable. “The NSE guidelines state that every quoted company must publish its financial statement three months after each financial year. Each firm must render quarterly, half yearly and yearly returns. The directors of every company must inform the SEC of any material event that may affect the stock,” said Johnson Chukwu, managing director and CEO of Cowry Assets Management Ltd. “If these regulations are adhered to, it will make it possible to for investors to have live information on the company they trade in,” said Chukwu. “It is surprising that there are a number of firms that failed to file their accounts to the exchange and their shares are not suspended,” Chukwu concluded.

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AbujACitybusiness COMPREHENSIVE COVERAGE OF NATION’S CAPITAL

Navy boost operations with 300 patrol boats in 3 years

FG approves 120 patrol vehicles as FRSC set to deploy special patrol ahead of Christmas celebration

...vows to crush threats from militants

ederal Government has concluded arrangements for the release of 120 patrol vehicles as part of efforts aimed at boosting operations of Federal Road Safety Commission (FRSC) ahead of the Christmas celebration. Boboye Oyeyemi, FRSC Corps Marshal who disclosed this during a sensitization programme for some of the Commission staff who were deployed to participate in the Osun State gubernatorial election, also unveiled plans for deployment of special patrol across the country in the bid to ensure safety of motorists and travellers. While urging staff to prepare well for the ember months and end of year special patrols, he expressed optimism that the Federal Government would release additional 120 patrol vehicles to the Corps

STELLA ENENCHE, Abuja

o fewer than 300 patrol boats have been acquired by authorities of Nigerian Navy over the past three years. The Navy further boasted that threats from militants groups, under whatever guise, will not materialise, owing to its repositioning strategies. These disclosures were made at an interactive session organised by the Directorate of Information, Naval headquarters. The Director of Information, Commodore Ayo Olugbode, who anchored the session that had other senior officers in attendance, said, apart from the 300 boats, about 200 locallyconstructed craft, had been added to the operational capability of the Navy. “We have about 300 bottom boats that can comb our creeks. When you talk of preparedness, it encompasses logistics arrangements, training. As it is the Navy is one organisation that is so ready in terms of logistics to sustain the ships at sea. “The Navy is spread throughout our coastline starting from Lagos to Bonni in Port Harcourt, Calabar and some off shore locations. Nigeria is not as bad

as they want us to believe. “Our major threat in the Maritime world is crude oil theft, pipeline vandalism and activities in the Niger delta area. In the Niger Delta, Bayelsa alone has over 3,000 creeks. And the only way we can track is using bottom boats and I will like to say that this present Chief of Naval Staff, Vice Admiral Ibok-Ete Ekwe Ibas, has done a lot. “He has purchased over 300 boats to patrol the creeks, and with this, there is reduction in crude

oil theft in those corridors.” On threats by one of the militant groups in the oilrich region, the Navy said: “Don’t think there is any militants in whatever way they will come that will dare the Navy to the extent that they will give a date to strike, and then come and get away with it. Never in this time, if it happened then, that must be some years back; not this current Navy you are talking of. “The Nigerian Navy is resolute in achieving its set objectives as enshrined

in our Constitution. It is recognised that the sea is (primed) to both internal and external threats which can sabotage some sensitive economic and maritime assets and this threats portend danger to the nation’s well being and security if is not stopped. “The Nigerian Navy has made stringent efforts to mitigate the threats but constraints by some factors which you are aware including the issue of finance which is never enough in any organization.”

ederal Government has said it will continue create an enabling environment for domestic and foreign direct investment by ensuring effective participation of all Nigerians in the management of the economy. Ogbonnaya Onu, Minister of Science and Technology, said this at the SouthEast dialogue on the Presidential Excusive Order 5 at the Project Development institute (PRODA), held in Enugu state. The Minister noted that the Executive Order 5 initiated by the Muhammadu Buhari’s administration was geared toward redirecting the country’s economy from being resourced-based to an inclusive path of knowledge and innovation-driven economy. He further said, the Executive order will also pro-

before December to boost the operations. He restated the stand of the Management on indiscipline and corrupt practices, stating that the signing of the new Regulations on the Maintenance of Discipline by the Board Chairman, Bukhari Bello penultimate week was to harmonise all issues relating to acts of indiscipline and reward system in the Corps. He observed that every staff must brace up to the new realities to avoid falling victims of the disciplinary codes. Oyeyemi also enjoined staff to take their health serious by engaging in regular physical fitness exercise and do medical checkups on themselves, noting that while the Corps would not abandon any medically challenged staff to regain their good health, those that are no more physically fit to continue with the job should not hide their conditions.

Abuja community to benefit from CCSI water, sanitation programme OYIN AMINU, Abuja

Executive Order 5 to boost Nigerian Economy – Minister OYIN AMINU, Abuja

KEHINDE AKINTOLA, Abuja

mote patriotism, love of the country and economic nationalism as a potent tool for a new social engineering of Nigeria. “In the next 10 to 30 years, Nigeria companies and firms will hopefully be competing with the very best in other parts of the world for projects and contracts in International tenders,” said Onu. The Minister assured that indigenous companies would be given preference in the award of contracts in line with the Public Procurement Act, 2017 as the aim of the Order was to give indigenous firms the opportunity to participate in national development like never before. “In furtherance to the implementation of the Executive Order, the Federal Government will give preference to indigenous professionals and firms in the design and execution of projects involving national

security,” he said. Onu explained that the Order would allow foreign experts to operate on such occasion of non-availability of such expertise, with an attached Nigerian professional to understudy them. The Minister therefore enjoined all Ministries, Departments and Agencies (MDAs) to take steps to encourage Nigerian professionals in the Diaspora to return home and use their expertise to develop Nigeria. In his remarks, Bitrus Nabasu, Permanent Secretary, observed that the Executive 0rder 5 will usher in a new dawn in Nigeria. Nabasu who was represented by Yveonne OduThomas, Director, Legal Services of the Ministry added that the Executive order will enable Nigerian professionals to participate and contribute to the growth and development of the nation. ‘’This Executive order

showcases the commitment of government in the promotion of domestic and foreign investments creation of employment and the stimulation of the national economy. “The order will build the capacity of Nigerian professionals and contractors, especially those involved in Science, Engineering and Technological programmes, adding that it will guarantee home grown capability and capacity to maintain, redesign, reproduce, domesticate and duplicate any infrastructure that is built in Nigeria for self-reliance and development.” He also reaffirmed Federal Government’s resolve to achieve the objectives of the Executive Order through effective sensitization of the citizenry and appealed to the entire staff of the Ministry and chief Executives of the agencies to apprise their staff of its contents.

he Centre for Communication and Social Impact (CCSI) has unveiled plans for the implementation of Water, Sanitation and Hygiene (WASH) programme in Rugan Hardo Community located at Idu District of Abuja. Ike Osakwe, CCSI’s Chairperson Board of Trustee, who disclosed this at the press briefing to commemorate the 10th year anniversary of the Centre, explained that the Centre will construct a borehole and toilets as part of efforts geared toward boosting WASH practices in the community. According to him, the programme was aimed at improving hygiene, sanitation as well as address other

related health challenges within the community. “CCSI is embarking on this program as part of our corporate social responsibility and in such a way to make sustainable impact in the community,” said Osakwe. According to him, the Centre’s first contact with the community was in 2017 while in search of a community to carry out a modest malaria enlightenment campaign. On her part, Babafunke Fagbemi, CCSI Founder & Executive Director who spoke on the partnership with Rugan Hardo Community partnership, observed that the partnership marks the commencement of WASH program in the community aimed at addressing some of the developmental challenges faced by the community.

75,589 inmates in Nigerian prisons STELLA ENENCHE, Abuja

o fewer than 7 5 , 5 8 9 Ni g e rians are currently locked up in various prisons across the country, according to the information obtained on the website of Nigerian Prisons Service (NPS). The information was contained in the summary of inmate population by convict and awaiting trial persons as at 17th September, 2018.

According to the statistics computed by the Service, 74,087 (or 98 percent) of the inmates are male, while 1,502 (2 percent) inmates are female. Of the total of 24,450 (32 percent of the total inmate population) convicted inmates so far, 24,111 are male while 339 are female. So far, 51,139 prisoners (68 percent of the total inmate population) are awaiting trial, out of which 49,976 are male while 1,163 are female.

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2019: Buhari remains best man to lead Nigeria - Umohinyang INIOBONG IWOK

L-R: Ichie Nnaeto Orazulike, chairman, Genesis Group; Aku Odinkemelu, executive director, South; Ndibe Obi, chief executive officer, Next Cash and Carry Shopping Mall, and Nnamdi Okonkwo, managing director/chief executive officer, Fidelity Bank plc, at the formal opening ceremony of Next Cash and Carry Shopping Mall in Port Harcourt, Rivers State.

At 58, Nigerians unimpressed with country’s economic progress TONY AILEMAN & UDOKA MOKWUNYE

t 58, many Nigerians do not think the country has made much progress economically even though the federal government has urged people remain hopeful. “Nigeria has not done well, judging from some of its basic parameters; in terms of infrastructure, the country has a significant deficit. Take the case of expanding our sea ports; we have actually contracted because up to the 70s we had vibrant seaports in Port Harcourt. Today eastern seaports are not functioning and we are left with only Apapa and Tin can,” Johnson Chuwku, MD of Cowry Asset Limited said. The country needs to spend an estimated N3 trillion annually to expand it debilitating infrastructure base

which has actually deteriorated over the years. “There is no major expansion of our infrastructure. We used to have an airline that flew international. Today our education is so poor that people are sending their children abroad. We had a great manufacturing sector before independence; most of the manufacturing industries have collapsed. We had the most vibrant textile industry in Africa but they are no longer functioning. Look at the issues of housing, we have not improved in our housing sector,” Chukwu said. Things were not always this bad for the country. “When I was in primary school exchange rate was better than it is now. When I was in university the best students were given jobs immediately they left school but now people graduate with first class and do not have jobs. So, what

have we achieved in our 58 years of existence? Not much, the only thing is that we are free. What have we achieved as a nation? We achieved independence on what ground? We were better off under our colonial masters. When you have a high level of unemployment there is bound to be insecurity,” Ayo Akinwunmi, an analyst told BusinessDay. Earlier this year the World Data Lab stated that the number of Nigerians living in extreme poverty is now higher than that of India in 2018. This is despite the fact that India has five times the population of the country. Nigerians living in extreme poverty crossed the 83 million mark in 2018, surpassing India’s number of extremely poor at 73 million. This means that one out of every two persons living in Africa’s largest economy is now living in

extreme poverty. While Nigerians were lamenting their economic conditions 58 years after independence, Vice President Yemi Osinbajo was holding special prayers and declaring a new beginning for the country. Osinbajo prayed for Nigeria and declared that the “anniversary celebration presents an opportunity to declare blessings upon our nation”. Osinbajo who took his prayers from Psalm 75:6-7, declared “a great new beginning for Nigeria, adding that God will be exalted. “This is the season of your renewal” Taking another payer from 2Timothy 4;6. The Vice President declare that “death and destruction has failed over Nigeria. I declare life upon Nigeria, season of promotion upon Nigeria, and a season of great favour upon her.”

Tinubu says Ambode deviated from Lagos development blueprint JOSHUA BASSEY

n an apparent response to the outburst of Lagos State governor, Akinwunmi Ambode, former Lagos State governor and national leader of the All Progressives Congress (APC), BolaTinubu, has accused him of having deviated from the blueprint laid out for the development of the state. Tinubu in a statement lamented that Ambode tactically ignored blueprint for progress in order to replace it with ad-hoc schemes that were materially inferior in quality and contravened the spirit of progressive governance in the state. He said the narrow development perspective adopted by the governor would not bring the state closer to its appointed destination. “For reasons unknown to me and most Lagosians, we have experienced such de-

viations from enlightened governance recently,” Tinubu said in statement issued yesterday. “We must arrest this trend before irreparable harm is committed against the people and their future. For the record, let it be known that I shall vote in this primary because I see it as one of extreme import to our state and our party. Just as I shall vote, I equally urge all party members to do so.” Tinubu added that with the holding of direct primaries to elect governorship candidates in Lagos and other states, the APC takes a groundbreaking step toward greater internal democracy and progressive governance for the benefit of all people. “While our party is young, it has grown fast and has travelled far in a short time. This speaks well of the character of you, the party’s rank-and-file members. What, in other nations, has taken political par-

ties generations to achieve, we have done in a few brief years. No other party in Nigeria dare attempt what we have already dedicated ourselves to do.” “I thank and commend all APC members and all Lagosians who have lent their support to this historic and humane mission upon which our party has embarked. “We are democrats in the truest sense of the word. As such, we forever search for what is good and right for the people. With this ideal as our guide, tomorrow’s primary cannot be shaded by selfish ambition or the perceived personal grievance between this or that person. Something much greater waits in the balance. What is at stake is nothing less than the future of the people of this state and how we can best maximise our collective destiny, he added.” He said by resorting to direct primaries, the party places the people’s future soundly

in their hands. “As democracy would have it, you shall be the authors of the party’s nomination and hopefully our next state government. “I trust in the wisdom of the people and will abide it. However, as a leader of the party and as a former governor of our beloved and excellent Lagos, I would be remiss if I did not make a few observations regarding the primary.”

onvener of Re-elect Buhari Movement (RBM), Emmanuel Umohinyang, says incumbent President Muhammadu Buhari remains the best man to lead the country to attain its potentials. Umohinyang stated this in an interview with BusinessDay yesterday in Ikeja, noting that the country had made significant progress since the advent of the current administration in all sectors, stressing that the re-election of Buhari for a second term in office was necessary for the consolidation of such gains. Umohinyang urged Nigerians to be patient with the Buhari administration, stressing that several peoplecentred policies and projects initiated by the administration were yielding fruits. “We have seen 16 years of PDP what they did and the difference with the Buhari’s administration, we can not say we have arrived. But we are seeing that signs that if things continue the way they are now, we would not go back to where we were before.

‘The second term would help him do more and consolidate on these achievements in the country and I want to believe he has the support of Nigerians,” he said. Speaking further, the RBM convener said it was impossible for the Buhari administration to correct all the anomalies perpetrated by the PDP for 16 years, adding that opposition to the second term bid of the President was from individuals who had been denied access to the nation’s treasury. “The President cannot solve all the problems but you saw the rot the President met, and what the country was at that time. The President cannot solve all the problems in four years. Nigerians need to be patient; there is a season for planting; there is a season for harvesting, and you can see things are getting better. “Those oppose to the second term bid of Buhari is because they had been denied access to loot the nation’s treasury, he has stopped them from stealing; you saw them defecting from one party to another recently,” he said.

Submit final report on minimum wage to President immediately, otherwise ..., Labour tells FG KEHINDE AKINTOLA, Abuja

eadership of Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) on Sunday vowed to resume the suspended nationwide strike if government’s team failed to submit the final report on the new Minimum Wage to President Muhammadu Buhari immediately. The tripartite committee concludes its work on Friday, October 5, 2018. The Committee, chaired by Amma Pepple, is expected to reconvene on Thursday, October 4, to further deliberation on the new national minimum wage, as provided in the Labour Act, which provides for 5-year review of minimum wage. Ayuba Wabba, NLC president, who conveyed the resolved of all the labour centres to suspend the warning strike at a press briefing held in Abuja, observed that the resolution was sequel

to the assurance from the Presidency to ensure that the Tripartite Committee on the new Minimum Wage reconvene on Thursday, October 4, to finalise its deliberation and submit the report to the Presidency immediately. He explained that the organised labour “received a firm and formal invitation to a reconvened meeting of the Tripartite Committee scheduled for October 4 and 5. “We demand that this shall be the final session of the committee and that a final report will be submitted to Mr. President immediately. “In order to avail the committee the necessary conducive environment to hold its crucial meeting and conclude its work, organised labour has, after obtaining the mandate of their necessary organs, decided to suspend the strike action with effect from today, Sunday, September 30, 2018.”

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Mobile apps can help boost insurers profitability, low penetration rate BALA AUGIE

nalysts see improvement in mobile technology, applications, and telecommunication infrastructure, boosting insurers’ profitability and helping overcome the country’s low penetration rate. Realising the prolifera-

tion of smart phones, insurance companies around the globe are using mobile apps as a tool for interacting with clients, reducing the overall turnaround time for claims collection. Also, policy holders can pay premium for existing insurance policies, or buy new policies using application. Analysts who spoke to BusinessDay are of the view

BusinessDay MTN Financial Inclusion Article #1: All Hands on Deck

ccording to the Human Development Index (HDI), of the world’s least developed countries (LDC), 69% are in sub-Saharan Africa. The factors that earn countries the label of ‘developed’ or ‘underdeveloped’ relate to the level at which a nation is contributing to the standard of living and well-being of its citizens – factors like healthcare, schooling, GDP and income distribution. In these developing countries however, the scale and complexity of these issues are often of such great magnitude that solving the problem requires the participation and contributions of multiple groups of people, organizations, industries, or in some cases, nations. This is not a theoretical proposition; practical applications which have been implemented in developing countries across the world have proven the capability of an ‘all hands on deck’ approach to improve such countries. In many developing countries, poor populations have difficulty gaining access to clean water, or access to water at all. In India alone, 21% of the nation’s communicable diseases are linked to unsafe water. Since 2005, a partnership of up to 21 organisations in the banking and finance, government, and development industries, have collaborated to supply knowledge, funding and infrastructure to solve this problem; as a result, there has been increased access to safe water and sanitation for over 7 million of India’s citizens. Another example was implemented in East Africa, where the rate of youth unemployment in 2013 was so high that up to two-thirds of citizens aged between 15 and 24 were either unemployed or in irregular employment. By 2017, a development industry organization, working in partnership with an organization in the professional and technology services industry, had begun to address this. In Uganda, in fact, the partnership extended to include local businesses from a myriad of industries – together, they provided for these youths, skill-building classes, improved access to financial services, and links to work opportunities. Since then, over 12,000 youths have seen a 621% increase in income. When industries collabo-

Usoro Usoro is MTN’s general manager, Mobile Financial Services.

rate, innovation is encouraged and accelerated, and the customer benefits from an improved service; this boils down to one thing – differing strengths combined for the greater good. In Nigeria, this approach has been particularly prominent in public and private sector partnerships, with numerous organisations collaborating to leverage each other’s strengths and expertise. Some examples of this can be found in the Nigerian transportation sector, where multiple road and rail development projects have been implemented across the country, thus reviving a sector that had preciously stalled. The same can certainly be applied to the problem of financial inclusion. Despite policies and commitments to address the problem, according to recent reports by the World Bank’s Global Findex Database, our inclusion rates are dropping – from 44% in 2014 to 40% in 2017 – and are nowhere near the goal of 80% by 2020 . Certainly, a new approach to solving the problem needs to be adopted, but even more so, one which leverages the competencies of industries whose expertise, infrastructure, processes, could play a critical role in increasing inclusion levels in an impactful way. The continued development of nations is extremely essential for their continued growth and sustenance. When diverse groups of industries, organizations, and institutions collaborate to share resources, activities and their capabilities, there is an inevitable increase in the capacity to contribute effectively to solving problems, improving the lives of citizens, and ultimately to bettering the state of a nation. All hands, where willing, should be welcomed and enabled to participate in our continued national development.

that investment in the acquisition of latest technology will place insurers in a better position to serve a particular set of people they have not been serving. They added that if firms increase the sale of insurance to customers through mobile phones, it will reduce the time spent on documentation, eliminate errors, improve custom-

er satisfaction, and boost profit. “It’s going to increase the number of policy holders which will lead to increased premium and profitability,” said Moronfola Monsuru, an Actuarial Analyst at Wapic Insurance Plc. “For instance if you are doing 5 policy holders in 2 hours, with a mobile app you could process 20 policy-

holders in 2 hours, and that will increase your productivity,” said Monsuru. Insurers can leverage on the country’s growing mobile penetration to sell more products to customers and deliver higher return on investment to shareholders as they are grapple with increased competition. The cumulative net income of the 20 largest listed

insurance companies that have released 2018 half year results fell by 6.27 percent to N11.65 billion from N12.43 billion the previous year. Firms have not utilized each naira of premium income in generating higher profit as combined average aggregate profitability ratio declined to 4.80 percent in June 2018 from 5.23 percent the previous year.

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Donald Trump speaks of his ‘love’ for Kim Jong Un North Korea’s leader has praised US president but taken few steps on denuclearisation BRYAN HARRIS

onald Trump has declared his “love” for North Korean leader Kim Jong Un, even as Pyongyang emphasised its hard line on scrapping nuclear weapons. The US president’s remarks, which came the same day as a top North Korean official blamed the US’s “coercive” sanctions policy for the deadlock in nuclear talks, may add to fears that Mr Trump is being played by the repressive regime. “I was really being tough — and so was he. And we would go back and forth,” the president told a rally on Saturday, referring to a period last year when he exchanged personal insults with Mr Kim, such as “Little Rocket Man” and “mentally deranged dotard”. “And then we fell in love, OK? No, really — he wrote me beautiful letters, and they’re great letters,” Mr Trump continued. The comments underscore how far relations between the two nations have developed in the past year and the strengthening personal bond between Mr Trump and Mr Kim since the two leaders’ Singapore summit in June. Mr Kim has repeatedly praised Mr Trump’s style of diplomacy this year — as has South Korean President Moon Jae-in. But North Korea has made little if any evident progress towards denuclearisation. Robert Kelly, a North Korea expert at South Korea’s Pusan National University, said Mr Trump’s remarks raised concerns about the state of US

diplomacy ahead of a slated second summit between the US president and the North Korean dictator. “This is how easy it is to con him. The president is a bubbly highschooler talking about love letters,” Prof Kelly said. “That’s US diplomacy now.” Hours before Mr Trump’s comments, Ri Yong Ho, North Korea’s foreign minister, told the UN general assembly that Pyongyang would not abandon its nuclear arsenal unless it could “trust” the US. “Without any trust in the US, there will be no confidence in our national security, and under such circumstances, there is no way we will unilaterally disarm ourselves first,” Mr Ri said, as he denounced “coercive measures which are lethal to trust-building”. The foreign minister also dismissed “the perception that sanctions can bring us to our knees” as an “ignorant” pipe dream. North Korea has never clearly defined how the US could earn its “trust” and what exact concessions Washington would need to offer Pyongyang. In recent months, North Korea has demanded that the US make a declaration ending the officially unfinished Korean war. The regime is also known to want an official peace treaty with Washington, a move that could open the door to US troops departing the Korean peninsula. During a summit with Mr Moon in September, Mr Kim said his regime would dismantle its sprawling Yongbyon nuclear complex if the US took “corresponding measures”. However, he did not specify what those measures were.

UK companies more vulnerable to activist investors, data show ATTRACTA MOONEY

ctivist investors are flocking to the UK after the weak pound, strong shareholder rights and Brexit left British companies more susceptible to their campaigns. British companies were 39 per cent more likely to be targeted by an activist than businesses across seven other European countries and regions in the 12 months to June, according to data from Alvarez & Marsal, the consultancy. It predicts that UK companies will face even more activist campaigns in the next 12 months. Separate figures from Activist Insight, the data provider, found that the rate of foreign-led activist campaigns in the UK is the highest on record. Twenty-one of the 35 UK companies that have been subject to activist demands this year were targeted by non-British investors. Josh Black, editor-in-chief of Activist Insight, said: “Suggesting that the weaker pound and rally in US markets has made the UK a more attractive destination for investment,

the numbers indicate that Brexit may have stimulated rather than deterred inbound activist interest.” Activist investors typically take positions in underperforming businesses, using their shareholding to push for change. Trian Partners, the asset manager founded by activist investor Nelson Peltz, recently raised a £270m special purpose vehicle listed in the UK, which could take a stake in a British company. Among the British companies targeted by activists this year were Whitbread, the business that owns Beefeater and Premier Inn brands, and Barclays, the bank. How activist investing is changing Paul Kinrade, managing director of A&M, said the key drivers behind the increase in activist activity in the UK included the “underlying performance of UK corporates and the increased potential for wolf-pack approaches of like-minded investors pooling their strength to force debates with management”. Jamie Carter, chairman of New City Initiative, an association of

boutique asset managers, said activist investors often found it easier to advance their campaign in the UK compared with other parts of Europe, which often still backed company management. “The UK, like the US, is slightly different to Europe in terms of governance and that makes it easier for activists,” he said. Many big British shareholders say they are more willing than ever to listen to and back activist demands if they believe they have merit. A senior governance figure at a large UK asset manager said an activist “is only effective if he can get other shareholders on board”. “UK institutional shareholders are very engaged and separated from management. The activist will have to make a decent case, but the UK market is conducive to listening,” he said. According to Activist Insight, the number of activist campaigns in the UK looks set to outstrip the total for 2017 and could break the record of 43 targeted companies that was set in 2016.

The global struggle to halt Donald Trump’s trade offensive May stands by Brexit blueprint after fresh Johnson attack US president has claimed success in demanding concessions from partners Prime minister refuses to rule out further compromise with EU

ALAN BEATTIE

onald Trump’s campaign to remake the world’s trading system is gathering speed. The US president claimed two successes last week in his push to negotiate new one-on-one deals with big trade partners. South Korea agreed to revise its accord with Washington under the threat of punitive tariffs, and Japan gave in to pressure to start bilateral talks on a new deal. Mr Trump has also heaped pressure on Canada to sign up to a new North American Free Trade Agreement and pushed the EU to the negotiating table while slapping record duties on more than $200bn of Chinese imports to the US. So how far is he reshaping the realities of world trade with his shift to aggressive bilateralism? And now that the US no longer wants its traditional role of anchoring the world trade system,

how successful are other big countries’ efforts to replace it? Having abandoned the US’s flagship regional deal, the 12-nation Trans-Pacific Partnership, Mr Trump has sought to pick off trading partners across the world one by one, demanding concessions as he imposes tariffs with threats of more to come. The US can claim some success. South Korea’s decision to tweak its trade deal with the US to limit steel exports and import more cars made the country one of the first to buckle under the pressure. In return, Seoul was granted exemptions from steel and aluminium import tariffs. Mexico has also broken a promise to Canada that it would maintain a common front with Ottawa in the Nafta renegotiation, agreeing concessions in direct talks with the US. Those changes allowed Mr Trump to raise the pressure on Canada also to agree to alterations or be Continues on page A15

LAURA HUGHES

heresa May has insisted her Brexit blueprint is “not dead” and that she “believes in Brexit,” after Boris Johnson launched a fresh attack against her so-called Chequers plan on the first day of the Conservatives’ annual conference. The UK prime minister sought to take back control of the headlines on Sunday, announcing a crackdown on overseas investors buying homes in Britain. Under the proposals, international buyers who do not pay tax in the UK will face a new levy of up to 3 per cent when they buy a property. “Currently foreign buyers can purchase homes in the UK as easily as people who live here but there is evidence this is inflating house prices,” the government said. Mrs May also announced plans for a nationwide post-Brexit festival in 2022, telling the Sunday Times newspaper: “We want to showcase what makes our country great today.” “We want to capture that spirit for a

new generation, celebrate our nation’s diversity and talent, and mark this moment of national renewal with a once-in-a-generation celebration.” Asked if her Brexit plan was dead, Mrs May told BBC1’s Andrew Marr Show on Sunday: “No, it isn’t.” However, she also refused to rule out making further concessions in order to broker a deal with the EU. It came after Mr Johnson attacked Mrs May’s Chequers plan on Sunday, describing her call for a facilitated customs arrangement “entirely preposterous”. The former foreign secretary told the Sunday Times newspaper: “Unlike the Prime Minister, I campaigned for Brexit . . . Unlike the Prime Minister, I fought for this, I believe in it.” Some sceptics believe that Mr Johnson, who has branded Mrs May’s plan a “moral and intellectual humiliation”, is trying to build up his support base for a widely expected leadership contest. Mrs May is under increasing pressure to show leadership and the Tory

conference is likely to become a platform for ministers and MPs who have ambitions to succeed her to project themselves. “I do believe in Brexit,” Mrs May said. “Crucially, I believe in delivering Brexit in a way that respects the vote and delivers on the vote of the British people while also protecting our union, protecting jobs and ensuring we make a success of Brexit for the future.” Quizzed on whether she would make substantial changes to her Chequers proposals, she told the BBC: “What I have said to the European Union is very clear. They have said they have some concerns with the proposals we have put together, let’s hear what those detailed concerns are.” “If they have got counter-proposals, let’s hear what those counter-proposals are.” Questioned on whether there would be a hard border in Ireland in the event of a no-deal, Mrs May said: “We, as a UK government are still committed to doing everything we can to ensure there is no hard border.”

Monday 01 October 2018

C002D5556

BUSINESS DAY

NATIONAL NEWS

Taiwan increases its US soyabean imports in Washington overture

The global struggle to halt Donald Trump’s trade... Continued from page A14 excluded from a US-Mexico deal. Even the EU, which frequently touts its multilateralist credentials, abandoned its pledge to require steel and aluminium tariffs to be lifted before negotiating directly with the US. It is now working towards a deal that would violate both its own and World Trade Organization rules, so that it can prevent tariffs being levied on its precious car industry. Japan has tried to keep the multilateral spirit alive, leading the successful push to revive and complete the TPP without the US. But Tokyo now also finds itself pushed down the bilateral route. Of the big trading powers, only China, whose talks with Washington have started and collapsed several times, has declined to make concessions despite huge and expanding unilateral US tariffs. What does Trump have to show for it? The changes to the South Korea deal are so minimal that they can be agreed by the Trump administration. But, for any substantial negotiations within Nafta or with the EU, Congress will have a say and may block an agreement it does not like. If Brussels continues to refuse to discuss agriculture, for example, the US farm lobby will press Congress hard to refuse any deal. Equally, if Mr Trump’s patience runs out with the Nafta countries and the EU, he may well go back to imposing punitive tariffs. The changes the US president seeks are quite simple, if unlikely to win favour with many trade economists. In striking its deals with Korea and Mexico, the US has sought to repatriate goods supply chains to the US. By contrast, in the case of the talks with the EU, Washington’s proposals would lower tariffs and could boost transatlantic trade. EU and Mexican officials privately argue that the concessions they are offering are relatively minimal and give Mr Trump mainly a symbolic victory. In China’s case, though, the US is demanding such deep and fundamental changes to the country’s state interventionist strategy that it will be politically extremely painful for Beijing to accept them. The EU and Japan have finalised a bilateral trade deal and sought to co-ordinate with each other while coaxing the US and China into greater co-operation. Yet both are acutely aware that if they ally too closely with either Washington or Beijing, they risk getting caught in crossfire from the bilateral trade war. The EU is traditionally less combative than the US in dealing with Chinese trade practices — Germany in particular has big export and investment interests in the country. Shinzo Abe, the Japanese prime minister, will also visit Beijing next month as part of an attempt to reach common ground on trade.

A15

Deal timed to help farmers hit by China trade war ahead of US midterm elections EDWARD WHITE

T Demonstration against far-right presidential candidate comes ahead of October election

Brazilian women lead mass protests against Bolsonaro ANDRES SCHIPANI AND JOE LEAHY

razilian women led one of the biggest protests yet against the country`s farright presidential candidate Jair Bolsonaro, even as the former army captain said he would not “passively” accept any defeat in next month’s election. Saturday’s protests, which reportedly spread through 114 cities throughout Brazil and others overseas including New York, London and Sydney, were in repudiation of a candidate known for disparaging women, blacks and gays and who yearns for Brazil`s former military dictatorship. “He’s a person who is homophobic, a person who is prejudiced . . . he is a person who supports violence and dictatorship,” said Maiana Viana, a chef who was at the protest with her mother, who lived through the former dictatorship. The election, which is turning into a contest between populists from the far left and right, follows corruption scandals that have devastated much of the traditional political class, and comes as the country is struggling to emerge

from a deep recession. Investors are hoping the next president will be able to implement tough fiscal reforms to revive Latin America`s largest economy, but many analysts doubt the leading candidates have the will or ability to do so. The first round of the election is next Sunday followed by a second round on October 28. Mr Bolsonaro, a paratrooperturned-congressman, is leading in the latest Datafolha poll with 28 per cent support against 22 per cent for his nearest rival Fernando Haddad of the disgraced leftist Workers` Party, or PT. The poll is published by the Folha de S.Paulo newspaper. In spite of the PT’s deep involvement in graft — its founder, former Brazilian president Luiz Inácio Lula da Silva is in jail for corruption — support for Mr Haddad has been growing rapidly. Lower income earners welcome the PT’s record on social welfare programmes. For his part Mr Bolsonaro, who left hospital on Saturday after being knifed during September campaigning, has built a strong base among wealthier voters for championing tougher action

against crime and “traditional” family values. However, his remarks on women — he once told a PT legislator she did not “deserve” to be raped — led women critics to launch an online group under the hashtag @elenão, or @nothim, that has nearly 3m members. That group hit the streets on Saturday with protests reaching 150,000 people in São Paulo and 200,000 in Rio de Janeiro, according to estimates by the Valor Economico newspaper. In São Paulo, protesters gathered in a square to hear speeches and drink beer with participating politicians, including presidential candidate Marina Silva, the only woman in the leadership contest. Protesters included a strong gay and lesbian contingent. Mr Bolsonaro has frequently made negative remarks about homosexuality, once saying he would rather his son die than turn out to be gay. “He has been growing in his hate and in his efforts to undermine everything we have achieved, principally our democracy,” said Flavia, another protester in São Paulo, who did not give her surname.

Elon Musk to step down as Tesla chairman in SEC settlement Head of electric carmaker will remain CEO and pay fine after controversial tweets RICHARD WATERS

lon Musk has bowed to pressure from US regulators to step down from the chairmanship of Tesla, heading off a legal threat that could have seen him forced out of the electric carmaker completely. The capitulation came two days after the Tesla chief executive set up a dramatic confrontation with the Securities and Exchange Commission by rejecting a settlement of fraud charges against him. The charges were prompted by Mr Musk’s series of tweets last month claiming he was close to a $70bn buyout. With his refusal to settle, the SEC went ahead and filed the charges late on Thursday, accusing him of making false and misleading statements. The lawsuit sought a ban that would have prevented him serving as a senior executive or director of any public company. The threat appeared to lift on Saturday, as the SEC announced the terms of a settlement that will see Mr Musk bow to even more stringent terms that he was reported to have rejected on Thursday. They include him stepping down as chairman of

Tesla for at least three years — a year longer than the penalty he was facing previously. SEC chairman Jay Clayton said the settlement was in the best interest of markets and investors, including Tesla shareholders. It affirmed the principle that “when companies and corporate insiders make statements, they must act responsibly, including endeavouring to ensure the statements are not false or misleading and do not omit information a reasonable investor would consider important in making an investment decision.” Mr Musk and Tesla have also agreed to pay fines of $20m each. The SEC charged the company with failing to maintain adequate controls that would have prevented Mr Musk’s tweets. Mr Musk and Tesla did not admit or deny the SEC allegations. The regulators have also used the crisis caused by Mr Musk’s controversial tweets to force through governance changes at the company — something that many Tesla shareholders have called for in recent days. Tesla will be required to hire two additional directors and set up a new committee of independent directors, as well as adopting controls over Mr Musk’s communications.

Mr Musk’s earlier refusal to settle — which was quickly followed by a public statement of support for him from Tesla’s board — was condemned by corporate governance and legal experts, who said he and the company had triggered an unnecessary crisis by confronting the regulators. John Coffee, a professor at Columbia University law school, said the episode demonstrated a characteristic wilfulness on Mr Musk’s part, as well as weakness by the company’s board in failing to force him into a settlement. Tesla’s shares fell by more than 12 per cent on fears that he might be forced out of the company entirely. Mr Musk appeared at the end of the week to be digging in for a fight with the SEC, perhaps even including a trial over the charges, after he walked away from the earlier settlement and appointed a high-profile defence lawyer. The episode has emboldened critics who have criticised the Tesla boss for acting increasingly erratically this year, and even Mr Musk’s supporters have said that it has revealed the need for a board-level overhaul.

aiwan is boosting its soyabean purchases to support US farmers hit by new Chinese tariffs and to strengthen ties with Washington amid the fallout from Donald Trump’s trade dispute with Beijing. A Taiwanese trade mission has pledged to lift the country’s purchases of US soyabeans by almost one-third to $1.6bn until the end of 2019. The deal is in part intended to assist Midwestern producers hit by lower prices and seeking alternative markets in the wake of China’s higher tariffs on imports of the commodity from the US. China’s retaliatory tariffs are hurting the US agricultural sector, particularly in Midwestern states including Iowa and Minnesota. Iowa’s $5.2bn soyabean industry alone faces near-term economic losses of up to $891m from the new tariffs, according to an Iowa State University study. The move by Taiwan, the sixthbiggest buyer of US soyabeans, follows a sharp increase in EU imports of US soyabeans in recent months, as Brussels seeks to improve its own trade relations with Washington. Taiwan, which China claims as its own territory, had not been scheduled to agree a new soyabean purchase with the US until next year. A person familiar with the matter said its decision to bring forward the soyabean purchasing delegation’s visit to the US was “being noticed” in Washington. “They stepped up the timeline of [the delegation] to send it now, so that our soyabean farmers would hurt less as a result of the trade friction between the US and China; that is what friends do,” the person said. In a further sign of the improving ties between Taipei and Washington, the US approved a $330m arms sale to Taiwan last week, despite Beijing’s opposition. The soyabean deal, which covers up to 3.9m tonnes worth up to $1.59bn over 2018 and 2019, marked a 33 per cent increase in value from a 2017 agreement covering the same period. It was part of Taiwan’s “resolute intent to ‘buy American’”, Taiwanese trade officials said. Minnesota governor Mark Dayton said export opportunities were “vitally important” given forecasts for the largest US soyabean crop on record. The Taiwan deal was also timed ahead of the US midterm elections on November 6. The polls are a bellwether for support of President Donald Trump’s leadership and the Republican party. Mr Trump last week alleged that Beijing was attempting to meddle in the November polls. China’s state-run media has in recent months taken out local newspaper adverts in vitally important farming states, including Iowa, criticising Mr Trump’s tariff policy. Minnesota and Iowa are among the heartland states in which Democrats stand to make gains at the midterms. While Democrats may be widely favoured by analysts to take the House in November, they will need still need every victory they can muster to overcome their current deficit of 43 seats.

A16 BUSINESS DAY

Monday 01 October 2018

Access Bank Rateswatch Market Analysis and Outlook: September 28 - October 5, 2018

KEY MACROECONOMIC INDICATORS Indicators

Current Figures

Comments

GDP Growth (%)

1.50

Q2 2018 — lower by 0.45% compared to 1.95% in Q1 2018

Broad Money Supply (M2) (N’ trillion)

24.97

Increased by 0.63% in July 2018 from N24.81 trillion in June’ 2018

Credit to Private Sector (N’ trillion) Currency in Circulation (N’ trillion) Inflation rate (%) (y-o-y) Monetary Policy Rate (%) Interest Rate (Asymmetrical Corridor) External Reserves (US$ million) Oil Price (US$/Barrel) Oil Production mbpd (OPEC)

22.26 1.82 11.23 14 14 (+2/-5) 44.46 80.41 1.73

Decreased by 0.09% in July 2018 from N22.28 trillion in June’ 2018 Decreased by 3.99% in July 2018 from N1.90 trillion in June’ 2018 Increased to 11.23% in August’ 2018 from 11.14% in July’ 2018 Raised to 14% in July ’2016 from 12% Lending rate changed to 16% & Deposit rate 9% September 26, 2018 figure — a decrease of 2.56% from September start September 28, 2018 figure— an increase of 2.80% from the prior week August 2018 figure — an increase of 4.48% from July 2018 figure

COMMODITIES MARKET

STOCK MARKET Indicators

NSE ASI Market Cap(N’tr)

Friday

28/09/18

21/09/18

32,766.37 11.96

32,540.17 11.88

Volume (bn)

0.18

0.52

Value (N’bn)

2.82

10.58

MONEY MARKET NIBOR Tenor

Friday Rate

Change(%)

Indicators

28/09/18

Energy 0.70 Crude Oil $/bbl) 0.70 Natural Gas ($/MMBtu) Agriculture (64.75) Cocoa ($/MT) Coffee ($/lb.) (73.33) Cotton ($/lb.) Sugar ($/lb.) Wheat ($/bu.) Metals Gold ($/t oz.) Change Silver ($/t oz.) (Basis Point) Copper ($/lb.)

1-week Change

YTD Change

(%)

80.41 3.03

2.80 2.71

24.74 (0.85)

2132.00 99.40 77.44 10.98 511.50

(3.18) (0.40) (1.00) (6.23) (1.92)

10.12 (23.66) (0.08) (28.38) 17.99

1182.97 14.29 277.60

(1.87) (0.42) (0.45)

(10.22) (16.87) (15.31)

(%)

28/09/18

21/09/18

6.00

4.00

200.0

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS

O/N CALL 30 Days

7.17 5.75 13.04

4.75 5.00 11.88

242 75.0 116

Tenor

90 Days

13.50

13.62

(12.1)

1 Mnth 3 Mnths

12.57 12.69

11.02 12.97

155 (28)

Friday

1 Month

(N/$)

Rate (N/$)

6 Mnths 9 Mnths 12 Mnths

13.37 14.52 14.95

13.36 14.55 14.79

1 (2) 16

28/09/18

21/09/18

28/08/18

OBB

FOREIGN EXCHANGE MARKET Market

Official (N) Inter-Bank (N)

306.35 361.05

306.30 360.37

306.15 355.78

BDC (N) Parallel (N)

362.99 361.00

362.50 361.00

360.00 361.00

Friday

Change

(%)

(Basis Point)

28/09/18

21/09/18

3-Year 5-Year

0.00 14.62

0.00 14.75

0.0 (13.3)

7-Year 10-Year 20-Year

14.97 15.14 15.13

15.16 15.00 15.36

(19.2) 13.9 (23.7)

Indicators

Index

21/09/18

Friday

Change

(%)

(Basis Point)

28/09/18

21/09/18

2636.05

2619.89

0.62

8.52 5.37

8.47 5.33

0.61 0.69

YTD return (%) YTD return (%)(US $)

7.31 -48.20

6.65 -48.83

0.66 0.63

TREASURY BILLS (MATURITIES)

Disclaimer

Sources: CBN, Financial Market Dealers Association of Nigeria, NSE and Access Bank Economic Intelligence Group computation.

(Basis Point)

Mkt Cap Gross (N'tr) Mkt Cap Net (N'tr)

Tenor This report is based on information obtained from various sources believed to be reliable and no representation is made that it is accurate or complete. Reasonable care has been taken in preparing this document. Access Bank Plc shall not take responsibility or liability for errors or fact or for any opinion expressed herein .This document is for information purposes and private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of Access Bank Plc.

Change

(%)

ACCESS BANK NIGERIAN GOV’T BOND INDEX

AVERAGE YIELDS Friday

Friday

(%) 28/09/18

BOND MARKET Tenor

Friday

91 Day 182 Day 364 Day

Amount (N' million)

Rate (%)

5395.7 8385.2

11 12.2

168361.35

Date 19-Sept-2018 19-Sept-2018

13.475 19-Sept-2018

Global In the US, the Federal Open Market Committee of the Federal Reserve hiked interest rate at its last 2-day meeting concluded on 26th September 2018. The target range for the federal funds rate was raised by 25 basis point (bps) to 2% - 2.25%. The decision came on the back of stronger macroeconomic indicators, notably; strengthened labour market, growth in household spending and business fixed investment and inflation remaining near the targeted 2% benchmark. The policy makers hinted at another hike this year, 3 increases in 2019 and 1 increase in 2020 in line with previous expectation. Elsewhere in the United Kingdom, the gross domestic product (GDP) growth rate has been revised to 1.2% from its initial estimate of 1.3%. The Office for National Statistics (ONS) reported that growth was driven by household consumption and net external demand while business investment shrank. In a separate development, Japan's unemployment rate declined to 2.4% in August from 2.5% the prior month. Jobs-to-applicants ratio remained unchanged at 1.63%, same as last month. There were 1.67 million unemployed persons in August, fifty thousand less than in July, employment also increased by 260 thousand to 66.62 million. The labour force rose by 220 thousand to 68.29 million while those detached from the labour force went down 240 thousand to 42.59 million as reported by the official statistic of Japan. Domestic The Central Bank of Nigeria (CBN) concluded its 2-day Monetary Policy Committee (MPC) meeting on September 25. The apex bank decided to maintain the Monetary Policy Rate (MPR) at 14%, while the MPC also retained the cash reserve requirement (CRR) ratio at 22.5%, the liquidity ratio at 30% and the asymmetric corridor around the MPR at +200 bps/-500 bps. The MPC highlighted that, as identified at the July meeting, a certain level of macroeconomic stability has been achieved. Nonetheless, the MPC called on the government to fast track the implementation of the 2018 budget to help jumpstart the process of sustainable economic recovery. In another development, Standard and Poor's (S&P) Global Ratings has affirmed has affirmed its 'B/B' long- and short-term sovereign credit ratings on Nigeria with a stable outlook. According to the agency, the country's credit rating remains supported by relatively low government debt levels. It noted that the liberalisation of the exchange rate framework, improved FX liquidity conditions and “moderate exchange rate flexibility” have also served to ease credit rating pressures over the past year. The rating body also sees external pressures easing off further with higher oil prices projected to contribute to a wider current account surplus in 2018. On the other hand, the credit rating remains constrained by low economic wealth, weak institutional capacity and slow GDP growth relative to peers. Stock Market The local bourse remained bullish for the second consecutive week as bargain hunters took advantage of attractive valuations to purchase bellwether stocks. At the close of trading last week, the All share Index, ASI, appreciated by 0.7% to 32766.37 points from 32540.17 points a week prior. Similarly, Market Capitalization rose by 0.9% to N11.96 trillion from N11.88 trillion the previous week. This week we expect that market might be

volatile as investors take position ahead of Q3 earnings scorecards releases. Money Market Cost of borrowing rose at the money market across most tenor bucket last week. This was caused by CBN instruction to banks to reverse the Paris fund that they got last week, therefore causing tight liquidity. Short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates rose to 6% and 7.17% from 4% and 4.75% respectively the previous week. Longer dated placements did likewise as the Call and 30-day NIBOR closed higher at 5.75% and 13.04% from 5% and 11.88% the previous week. This week, we expect rates to trend lower due to OMO maturity and Federation Account Allocation Committee (FAAC). Foreign Exchange Market The local currency weakened across most market segments monitored last week. At the interbank window the naira lost 0.19% to close at N361.05/$ compared to N360.37/$ the previous week. The official rate also trended higher, settling at N306.35/$ last week relative to N306.30/$ the week before. This is despite the apex bank's foreign currency liquidity injection during the week. At the parallel market, the Naira remained unchanged week on week. This week, we envisage the naira will oscillate around current levels. Bond Market Bond yields on the average declined across most maturities last week. This was largely due increased demands caused by the oversubscription during the bond auction. Some of the unfilled demand at the auction filtered into the bond market, resulting in decline in yields. Yields on the five-, seven-, and twenty-year debt papers dropped to 14.62%, 14.97% and 15.136% from 14.75%, 15.16% and 15.36% respectively for the corresponding maturities the previous week. The Access Bank Bond index increased by 16.16 points to close at 2636.05 points from 2619.89 points the prior week. This week, we expect yields to move upwards as the markets settles on the aftermath of the oversubscription from the bond auction. Commodities Oil prices rose as supply outages in Iran combined with the decision by OPEC not to take further action to offset the declines pushed prices to multi-year highs last week. Accordingly, Nigeria's benchmark crude, Bonny light, rose $2.19 or 2.8% to $80.41 per barrel. In contrast, Precious metals declined further as the dollar firmed after upbeat US economic data supported the Federal Reserve's resolve for steady interest rate hikes. Gold dropped 1.87% to $1182.97 an ounce, Silver also closed lower 0.4% to settle at $14.29 an ounce. This week, oil prices are likely continue their upward trend due to ongoing supply concerns. For precious metals, prices are likely to remain bearish as investors turn towards higher yielding securities in the US brought on by the hike in interest rate. MONTHLY MACRO ECONOMIC FORECASTS Variables

Oct’18 Nov’18

Dec’18

Exchange Rate (Official) (N/$)

362

363

Inflation Rate (%)

11.30

11.32

11.45

Crude Oil Price (US$/Barrel)

77.00

78.00

For enquiries, contact: Rotimi Peters (Team Lead, Economic Intelligence) (01) 2712123 rotimi.peters@accessbankplc.com

BUSINESS DAY

C002D5556

NEWS YOU CAN TRUST I MONDAY 01 OCTOBER 2018

Insight

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Free trade is bad if not fair. Nigeria must tackle unfair trade GLOBAL PERSPECTIVES

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Last week, I responded to the call by the Nigerian Office for Trade Negotiations (NOTN) for inputs into its preparation of a trade policy for Nigeria. This week, I want to return to the same theme, but my focus is on the issue that could give free trade a bad name and which Nigeria, if it embraces greater trade openness, as I advocated last week, must tackle in tandem. I am talking about unfair competition or trade practices, and their legal mitigation in the forms of safeguards and trade remedies. The truth, letâ&#x20AC;&#x2122;s be clear, is that free trade is not bad in itself. It cannot be! However, certain trade practices can be unfair and injurious to domestic industries, thereby giving free trade an undeserved bad name or reputation. Which is why any independent and rounded trade policy must include legal and institutional frameworks for tackling unfair trade practices. But I am too much of an unrepentant and unapologetic free trade advocate not to make the point, very strongly, that the benefits of trade are so immense and tangible that no politician or government official should hide behind unfair trade practices, real or imaginary, to resist or roll back open trade. We have seen how trade openness has transformed lives; how, as I pointed out last week, the combination of choice, value and quality, resulting from free trade, has ensured that consumers have access to a wider choice of quality goods at lower cost, thereby stretching household incomes. Furthermore, as businesses become more efficient and productive due to exposure to international trade, they contribute to the growth of the economy, create more jobs and boost wages, all of which increase prosperity and living standards. Yet, we canâ&#x20AC;&#x2122;t have a blinkered attitude to free trade: it creates losers too. Although the winners are significantly more than the losers, the fact is that there are still losers. As long ago as the 19th century, John Stuart Mill recognised the distributional effects of free trade and introduced the â&#x20AC;&#x153;compensation principleâ&#x20AC;?. Today, that principle takes the form of social security support and retraining programmes in many countries. But a more systemic response to the adjustment effects of trade is embedded in trade negotiations. While the

international law principles of good faith fulfilment and pacta sunt servanda require nations to honour their international commitments, the principle of rebus sic stantibus allows them to terminate or suspend those commitments when they face a fundamental change of circumstances. In international trade, it is recognised that most nations would not accept binding commitments, or secure domestic support for such commitments, if they cannot suspend the implementation of an obligation in the event of significant unforeseen adverse side effects. Thus, in order to sustain trade liberalisation, trade agreements usually contain â&#x20AC;&#x153;escape clausesâ&#x20AC;? and safeguard provisions. For instance, the WTO agreement contains several escape clauses, ranging from trade restrictions to safeguard the balance of payments and protection for infant industry purposes to general exception to protect public morals, human, animal or plant life or health as well as national security exception to protect a nationâ&#x20AC;&#x2122;s essential security interest. Of course, to prevent the abuse of these provisions, particularly in circumstances that might constitute â&#x20AC;&#x153;arbitrary or unjustified discriminationâ&#x20AC;? or â&#x20AC;&#x153;a disguised restriction on international tradeâ&#x20AC;?, strict conditions are attached to their use. For instance, several years ago, Nigeriaâ&#x20AC;&#x2122;s attempt to invoke the balance of payments exemption to justify its import restrictions was declared by a WTO committee to be inconsistent with WTO rules. The fact, however, is that the escape clauses are there to give countries policy space, provided they can invoke them legitimately. Then, there are safeguards provisions that specifically deal

with the adjustment effects of trade. If as a result of being part of a trade agreement, a country experiences an unexpected surge of imports, it is allowed under WTO rules, and under most trade agreements, to impose temporary trade restrictions to address the surge if it is causing serious injury to its domestic industries. Well, you will not be surprised that the conditions for invoking the safeguard provisions are also stringent. In a study that I did for the CUTS International (Consumer Unity & Trust Society) some years ago, I found that even few developed countries invoked the safeguard provisions because of the stringent conditions. But, again, the provisions are there for countries that can use

them in a rules-based way. Which brings me to trade remedies. While safeguard provisions addressâ&#x20AC;&#x153;fair but injuriousâ&#x20AC;? imports, trade remedies deal with â&#x20AC;&#x153;unfair and injuriousâ&#x20AC;? trade practices. International trade is based on the principle of comparative advantage, the principle that countries should compete fairly on the basis of their relative strengths. But if some countries can gain unfair

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advantage over others, as China does, by distorting competition, through dumping (i.e. setting products abroad at below their domestic price or production costs) or flooding foreign markets with subsidised goods, thereby unfairly undercutting other countriesâ&#x20AC;&#x2122; manufacturers, then the principles upon which free trade is based are undermined. Thus, the WTO agreement describes dumping and

subsidised exports as practices that are â&#x20AC;&#x153;to be condemnedâ&#x20AC;?and provides anti-dumping and subsidy-countervailing measures to deal, respectively, with them. Of course, the trade remedy measures must be imposed in a rulesbased manner, including having independent national authority that must thoroughly investigate allegations of dumping or subsidised exports and establish injury to domestic industries as well as causation before imposing any measures on imports of specific products. Now, the point of all the above is that international trade law creates several mechanisms â&#x20AC;&#x201C; escape clauses, safeguard provisions and trade remedies â&#x20AC;&#x201C; designed to tackle

unfair trade practices and, generally, make free trade more politically acceptable. Responsive provisions and flexibilities are embedded in all trade agreements, and, therefore, there is no reason why any country should not enter into free trade agreements knowing that it could invoke, if necessary, their flexibilities. But what is the situation in Nigeria? To what extent has Nigeria been able to use the safeguard and trade remedy provisions to address its trade concerns? The truth is that Nigeria has huge concerns about smuggling, dumping and surge of imports, the last being the main reason it is reluctant to sign potentially beneficial trade agreements. Yet, Nigeriaâ&#x20AC;&#x2122;s concerns about smuggling, dumping and import-surge only exist because of chronic policy failure and institutional weaknesses, including the lack of capacity to use rules-based trade remedies mechanisms Take smuggling. A World Bank report states that â&#x20AC;&#x153;The total amount of potential smuggling from Benin is estimated at close to $5bn, nearly 10% of Nigeriaâ&#x20AC;&#x2122;s official importsâ&#x20AC;?, adding that: â&#x20AC;&#x153;Tackling this would lead to an estimated gain of $1.2bn in government revenueâ&#x20AC;?. But smuggling is rampant in Nigeria because of a restrictive trade policy, such as unnecessary import bans, as well as the massive corruption and inefficiency of the customs service. As the former finance minister, Ngozi Okonjo-Iweala, wrote in her book Reforming the Unreformable, â&#x20AC;&#x153;Nigeria must be one of the few countries in the world where smugglers are known and talked about openly, and where big-time smugglers walk around freely in the corridors of powerâ&#x20AC;?. Surely, no trade or industrial policy would be successful in Nigeria unless there is a rootand-branch reform of the customs service. Then, what about dumping? Well, Nigeria does not have a trade remedies regime. During its WTO Trade Policy Review (TPR) in 1998, Nigeria said that it did not have the institutional and regulatory capacity to investigate anti-dumping issues. Twenty years later, during its TRP in 2017, Nigeria was still citing â&#x20AC;&#x153;the difficulty in the domesticationâ&#x20AC;? of its WTO commitments as a reason for not having a trade remedy legislation. While South Africa is a major user of antidumping measures, Nigeria has not imposed any antidumping or countervailing duty since 1998. Of course, the same is true about safeguard measures, which is the legitimate way of dealing with Nigeriaâ&#x20AC;&#x2122;s concern about import-surge. As the WTO puts it, â&#x20AC;&#x153;Nigeriaâ&#x20AC;&#x2122;s law covering contingency measures is outdatedâ&#x20AC;?, still governed by the Customs Duties (Dumped and Subsidised Goods) Act 1958. Note: the rest of this article continues in the online edition of Business Day @https:// businessdayonline.com/

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Fascinating business facts $82.78 Oil has gained its longest string of quarterly gains in more than a decade as impending supply disruptions threaten to fracture a global market with little margin for error. Futures rose as much as 1.8 percent in New York on Friday while London-traded crude was on track for a fifth quarterly advance, a streak not seen since the first half of 2008. Brent for November delivery rose $1.06 to $82.78 a barrel while West Texas Intermediate for November delivery advanced $1.04 to $73.16 on the New York Mercantile Exchange.

$100 Trading houses such as Trafigura Group Pte Ltd and Mercuria Energy Group Ltd have predicted oil prices will exceed $100 a barrel. Banks including Bank of America Corp. and JPMorgan Chase & Co. arenâ&#x20AC;&#x2122;t quite that bullish, but are lifting their forecasts. BP Plc and Total SA whivh also forecast oil price rise have, however, cautioned that such a rally would hurt demand, especially as U.S.-China trade tensions escalate. Investors are now watching to see what US President Donald Trump will do next after U.S. Energy Secretary Rick Perry ruled out the release of oil from the Strategic Petroleum Reserve, saying the move would have â&#x20AC;&#x153;a fairly minor and short-term impact.â&#x20AC;? Earlier this week, the president accused the Organization of Petroleum Exporting Countries of â&#x20AC;&#x153;ripping off the rest of the world.â&#x20AC;?

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14% The prospect that Elon Musk could lose his job as Tesla Inc. CEO over tweets may cost the carkmakerâ&#x20AC;&#x2122;s shareholders close to $20 billion. Tesla plunged as much as 14 percent in early trading Friday after the U.S. Securities and Exchange Commission allegedthat Musk committed fraud by tweeting last month that heâ&#x20AC;&#x2122;d secured funding to take the company private. The regulator is seeking to bar Musk from serving as an officer or director of a public company.

$500m Egypt has received the third and last $500 million tranche of a $1.5 billion African Development Bank loan which will support the governmentâ&#x20AC;&#x2122;s development programmes, the investment ministry said on Friday. The loan was agreed in 2015 amid an acute foreign currency shortage that crippled import activity and had the country scrambling to find new sources of dollars as shipments piled up at ports and manufacturing slowed. Egypt has since implemented tough reforms under a $12 billion IMF loan program agreed in late 2016 that involved deep cuts to energy subsidies, new taxes and a floated currency in a bid to draw back investors who fled after its 2011 uprising.

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