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news you can trust I **tuesDAY 02 july 2019 I vol. 15, no 344 I N300

Nigeria’s shadow economy is becoming too big to ignore LOLADE AKINMURELE, ISRAEL ODUBOLA & SEGUN ADAMS

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igeria’s informal economy is becoming too big to ignore for a country struggling with economic growth and job creation.

The informal economy encompasses the broad range of economic activities not captured in a country’s official statistics.

In f o r ma l i t y i n A f r i ca i s highest in Nigeria, according to the World Bank, which values the activities of the sector at $302 billion.

That means the sector accounts for 80 percent of the Continues on page 38

Inside Setting up of committees, legislative agenda top to-do list as Senate resumes today P. 2

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Weak lines, broken transformers top glitches afflicting Nigeria’s power sector T ISAAC ANYAOGU

his may only be the second part of the year, but Nigeria’s national grid has collapsed over half a dozen times, a clear evidence of the rot that denies millions of Nigerians access to regular power.

The latest collapse occurred on June 30, and consumers were first alerted by power distribu-

tion companies, keen on absolving themselves of blame, as they attribute the collapse to a fire outbreak on a 330KV transmission line reactor in Benin.

It was fire this time around, but Nigeria’s fragile grid is susceptible to collapses stemming from both inadequate or too much capacity. Nigeria’s power value chains – generation, transmission and distribution – are deeply troubled and their inad-

equacies are often explained as systemic collapse.

The design of Nigeria’s power sector intends for the bulk of electricity generated through power plants to be transmitted through a transformer which converts low voltage electricity to high voltage for efficient transport.

Transmission lines are meant to carry electricity over long distances to a substation trans-

former which converts high voltage electricity to low voltage for distribution. It is then moved through distribution lines which carry low voltage electricity to consumers’ homes and offices for powering appliances.

This normal flow is often disrupted at every turn. There is often inadequate gas supply to power the turbines which Continues on page 38

L- R: Oscar Onyema, CEO, Nigerian Stock Exchange; Biola Alabi, CEO, Biola Alabi Media; Christian Wessels, MD, Daystar Power; Eme Essien, country manager, International Finance Corporation, Nigeria, and Michael Larbie, CEO, RMB Nigeria/regional head, West Africa, at the annual RMB Nigeria Economic & Business Conference.

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news Iran warns Opec ‘might die’ due to Russia-Saudi domination David Sheppard & Anjli Raval in Vienna

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ran’s oil minister has warned that the future of OPEC is in jeopardy over the growing dominance of Saudi Arabia and Russia in the cartel’s affairs.

The oil group and its allies are on course to extend production cuts of 1.2m barrels per day for at least another six months, after Iran said it would not block a deal struck at the weekend between Russian president Vladimir Putin and Saudi Arabia’s de facto ruler, Crown Prince Mohammed bin Salman.

But Bijan Zanganeh, Iran’s oil minister, warned that the future of the oil producers’ group was in the balance as the Saudi-Russia alliance was increasingly sidelining traditional members. “I have no difficulty with the extension of the cut,” Zanganeh told reporters as he arrived in Vienna on Monday for a meeting between Opec members.

“My problem is unilateralisation”,which was “threatening the existence of Opec . . . Opec might die”. His comments come as Opec and its allies are struggling to support an oil price that is on course to average less this year than in 2018,

despite US sanctions hitting the output of Opec members Venezuela and Iran and the group enacting additional production cuts.

Russia, which is not an Opec member, has allied with the cartel since late 2016 as members try to adjust to growing supply from US shale fields, which ended the $100-a-barrel oil era five years ago. But in forging a close-knit relationship with Saudi Arabia, the largest producer in Opec and Iran’s major rival in the Middle East, Moscow and Riyadh have been accused of mounting in effect a takeover of the group.

Russian president Vladimir Putin announced at the G20 in Japan at the weekend that he and Crown Prince Mohammed bin Salman had agreed the supply deal should be extended by six to nine months, essentially pre-announcing the deal before Opec oil ministers could meet on Monday.

“Discussions this week appear a foregone conclusion, if not a mere formality,” said analysts at JBC Energy in Vienna. Signs the deal would be extended helped Brent crude oil, the international benchmark, rise 2.8 per cent on Monday to $66.56 a barrel, with markets also supported by an easing in trade tensions between the US and China.

L-R: Osaro Eghobamien, vice chairman, Convention of Business Integrity (CBI); Beatrice Kolade, wife of Nigeria’s former High Commissioner to the United Kingdom; her husband, Christopher Kolade; Olusoji Apampa, co-founder, CBI; Bolaji Balogun, chief executive officer, Chapel Hill Denham/chairman, Lafarge Africa, and Olufemi Awoyemi, chief executive officer, Proshare Nigeria Limited, at the 7th Annual Christopher Kolade Lecture on Business Integrity, in Lagos.

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FG says no going back on insurance industry recapitalisation ...urges insurers to cooperate with regulator Modestus Anaesoronye

T Setting up of committees, legislative agenda top to-do list as Senate resumes today OWEDE AGBAJILEKE, Abuja

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arring any unforeseen circumstances, the Ninth Senate will resume plenary today, Tuesday, July 2, 2019 with the constitution of special committees top on its agenda.

The Senate leadership is also expected to set machinery in place for the release of its Legislative Agenda – a policy document that contains the direction of the lawmaking body.

The Senate had adjourned on June 13 after its first sitting and constituted an ad hoc committee to look into the issue of office and seats allocation to senators.

Already, lawmakers are lobbying the Senate leadership for juicy committees, even as pressure is mounting on Senate President Ahmad Lawan to sack the aides of his predecessor, Bukola Saraki, that he retained.

Some of the juicy committees senators are scrambling for include those on Appropriation; Finance; Petroleum (Down and Upstream); Senate Services; Education; Niger Delta; Agriculture; Interior; Anti-Corruption; Banking, Insurance and other Financial Institutions; INEC; Niger Delta; Defence; Army; Communications; Works;

Land Transport and Marine Transport.

Others are Gas Resources; Public Accounts; Tertiary Education and TETFUND; Aviation; Public Accounts; Rules and Business; Judiciary, Human Rights and Legal Matters; Federal Capital Territory; Local and Foreign Debts; Police Affairs; Solid Minerals; Water Resources; Environment and Ecology; Power, Steel Development and Metallurgy, and Primary Health Care.

Findings by BusinessDay also revealed that pressure is being mounted on the embattled aides to either follow the footstep of Olu Onemola, who was also retained by Lawan but rejected the appointment, or get sacked.

Order 96 of the Senate Standing Rule 2015 (as amended) provides that within the first 14 legislative days following the first sitting of the Senate, membership of special committees must be appointed.

It listed the committees to include those on Selection; Rules and Business; Senate Services; Ethics, Privileges and Public Petitions; Public Accounts, as well as National Security and Intelligence.

•Continues online at www.businessday.ng www.businessday.ng

he Federal Government on Monday said there was no going back on the insurance industry recapitalisation as it

was critical to maximising the sector’s potential to enable it contribute meaningfully to economic growth.

The government said the main reason for the recapitalisation was to strengthen the insurance industry to

become competitive, adding that funding was needed to drive the needed penetration, expansion and growth in the industry.

Speaking at the opening ceremony of the 2019 National Insurance Conference taking

place in Abuja, President Muhammadu Buhari, who was represented by Mahmud IsaDutse, permanent secretary, Federal Ministry of Finance, urged the industry operators

Continues on page 38

CBN to roll over N88.9bn at primary market auction on Wednesday …as FG offers July savings bonds for subscription at lowest rates this year HOPE MOSES-ASHIKE & OLUWASEGUN OLAKOYENIKAN

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he Central Bank of Nigeria (CBN) will on Wednesday roll over a total of N88.9 billion at the primary market auction across the short, medium and long-term maturities.

This will consist of N10 billion for 91-day tenor, N20 billion for 182-day, and N58.9 billion for 364-day tenor maturities.

The expected stop rates for the 91-day tenor maturity are put at between 9.6 and 10 percent, while the previous stop rate stood at 9.6 percent.

For the 182-day tenor maturity, the expected stop rates are between 11.7 and 11.9 percent compared to 11.89 percent previously.

The previous stop rates for 364-day tenor action was 12.02 percent but the expected stop rates are between 11.9 and 12.01 percent.

Analysts at Afrinvest Securities Limited maintain a bullish outlook for the secondary market stemming from the sustained buoyant liquidity levels (N343.9bn positive as at Friday) combined with N88.9 billion worth of T-Bills maturities scheduled to hit the financial system on Thursday

and anticipate a resumption of interventions by the apex bank.

“We advise investors to take advantage of the relatively more attractive yields at the longer end of the curve,” the analysts said.

Meanwhile, the Federal Government of Nigeria (FGN) has offered for subscription two Savings Bonds in July, making it the seventh of such offering since the beginning of the year.

FGN Savings Bond is a fixed-income instrument issued monthly to deepen the savings and investment opportunities of the Nigerian populace and diversify funding sources for the government.

The debt instruments comprising two-year and threeyear savings bonds will be offered at interest rates of 11.195 percent and 12.195 percent per annum, respectively, according to a notice released by the Debt Management Office (DMO) on Monday.

Compared with other previously issued savings bonds, the interest rates on the two tenors are the lowest so far in 2019, even as headline inflation accelerated the most this year by 11.40 percent in May. The DMO, which is offering the bonds on behalf of the Federal Government, notes that an

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auctionwindowfor the bond offering would open on Monday, July 1, 2019, and close on Friday, July 5, 2019, while the settlement would be on July 10, 2019.

Interested investors are expected to subscribe for the bonds by sending their applications through any of the 129 stockbroking firms appointed as distribution agents by the debt agency.

The two-year and threeyear tenors would have quarterly coupon payment dates of October 10, January 10, April 10 and July 10, while both instruments would mature on July 10, 2021, and 2022, respectively.

The DMO assures that the bonds are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets ofthecountry.Italsoguaranteed a bullet repayment of the principal on the maturity date.

The bonds are offered at N1,000perunitsubjecttoaminimum subscription of N5,000 andinmultiplesofN1,000thereafter, subject to a maximum subscription of N50 million.

According to the debt office, the bonds would be listed on the Nigerian Stock Exchange, creating an opportunity for investors to sell

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their bonds before maturity.

With the FGN Savings Bond, low-income earners can save and earn more interest than regular bank savings.

The bond is also aimed at enhancing financial inclusion in the country as income earned from it is exempted from taxes.

The Nigerian Treasury Bills last week began on a bullish note as buying interests were witnessed in the medium- to long-tenured bills following robust system liquidity to the tune of N247.3bn as at Monday.

This bullish trend persisted throughout the rest of the week as the CBN remained quiet regarding Open Market Operations (OMO) for the third consecutive week while inflows from maturing T-Bills pushed liquidity levels higher to N548.2 billion positive as at Thursday.

Consequently, yields were further compressed by 0.25 percent Week-on-Week to 12.1 percent from 12.4 percent the previous week. Particularly, strong demand was witnessed in the 03-Oct-19 (-121bps), 30Apr-20 (-94bps) and 11-Jun-20 (-80bps) bills as average yields on medium to long-dated maturities tightened by 0.4 percent apiece W-o-W.

•Continues online at www.businessday.ng

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Nahco’s transformation agenda targets five-fold revenue rise, value optimisation

…targets N3.5bn equipment spend in 2019; N1.5bn already invested Vincent Nwanma

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igerian Aviation Handling Company plc (nacho aviance), which has interests in diverse areas including aviation cargo and aircraft handling, says its transformation agenda aims at achieving a five-fold revenue increase from its 2017 level, and maximising corporate value through a group structure, in five years.

Adoption of the transformation agenda followed a decision by the new Board of the company in October 2018 to undertake a “holistic view and completely business review” of Nahco, to chart a new path for the company, group managing director and chief executive officer, Olatokunbo Fabgemi, told business editors in Lagos over the weekend.

Nahco commissioned international consulting firm, KPMG, last November to undertake the review, and the result was ready

by Decmber, said Fagbemi, who joined the company in December. She arrived there following a period of quick turnover of CEOs of the company.

In the new structure, the group comprises Nahco as a company, with subsidiaries NAHCO Free Zone (NFZ), Nahco Nahco LNG Power Infrastructure, and Mainland Cargo Options Limited (MCO), which has been set up but not operational yet, said Fabgemi.

“If you run as a group, then you can run cost collaborations, have efficiency; you can do cost marketing in such a way that

we can optimise the value of the group. That means we will increase the revenue and we will be able to reduce that cost,” Fabgemi explained.

Nahco, she said, had been experiencing increases in both operating administrative costs.

“We have ageing equipment, which means higher maintenance cost and higher utilisation of fuel,” explained. According to her, the price of diesel, the fuel most used by the company, has risen, adding to the increase in operational cost.

As part of the transformation programme and in response to the rising costs of fuel, Nahco plans to embark on a process of asset renewal, which will mean phasing out the old equipment.

This year, it plans to invest about N3.5 billion in equipment, with N1.5 billion already invested, Fagbemi said. Equipment that have arrived or are expected include a Push Back, Conveyor belts, Forklifts, and those that are already in are being put to effective use, the CEO said.

For instance, when an airliner overshot the runway at the Port Harcourt Airport last week, it was Nahco’s Push Back that was used to retrieve the aircraft, thereby saving the nation from asking for foreign help.

“At that time, they were already calling other people. That was something unusual and if it was not pulled the airport would have been shut longer than it was,” Fabgemi said.

Another aspect of the transformation agenda is cultural renewal in the organisation, which

will change people’s perception of work in the organisation, according to the CEO. “One of the things we are doing is a complete transformation of our culture and building our culture on safety and security,” she explained.

The other aspect of the transformation, according to her, is diversification. As a logistics company, Nahco will be looking at air, land and sea.

Nahco’s share price rose 0.31 percent on Monday to N3.20, from N3.19 where it closed on Friday. Year-to-date, the stock has fallen 12.3 percent, according to data available from the Nigerian Stock Exchange.

But the stock has upside prospects, says Fagbemi. “One thing I can say is that our share will definitely go up,” she declared.

According to her, Nahco’s share is “grossly undervalued.

Even if it’s just the value of the value of the assets that we are putting in, that will ensure that that our price will go up,” she said, adding: “We are putting value into the company.”

Nahco will be presenting its Facts Behind the Figures on its 2018 report today, Tuesday, a programme during which listed companies share with the investment community factors that drove its performance over the period.

Its revenue for the period was N9.8b, according to Fabgemi. By the end of 2019, revenue is expected to rise to N12b, according to her. When this is added to the value of the assets being added to the company now, its share price will rise, she said.

Edo executing robust agric plan that predates Ruga settlement –Osagie

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do State government says it has a well thought out and elaborate plan for agricultural development across all its value chain, both in crop production and animal husbandry in the state.

In a statement by Crusoe Osagie, special adviser to the Governor on Media and Communication Strategy, the state government insisted that its agricultural plans had nothing to do with Ruga Settlement, as these plans were developed long before Ruga Settlement was muted.

According to Osagie, “In all

the agricultural programmes being executed by the Obaseki administration, the safety, security and prosperity of our people are top priority and non-negotiable.

We assure Edo people that Governor Obaseki will not cede their rights and land to anybody, as our programmes as a sovereign state do not run on the back of any external entity.”

He called on Edo people to disregard any contrary information circulated in the state chapter by any individual.

On the Benin Central Hospital, the governor’s aide said

the hospital was up and running and providing tertiary healthcare services which it was set up to provide.

“Its phased opening is in line with the vision of the state government and in the coming weeks and months, other phases will be unveiled to complement the primary and secondary health centres across the state. Governor Obaseki will continue to put the interest of Edo people first in all his policies and programmes, as he has demonstrated in the past two years and seven months,” he said.

PCL roundtable to highlight role of C-Suite in boosting digital intelligence FRANK ELEANYA

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s digital transformation continues to feature prominently in organisational strategy, the focus is shifting to corporate executives to boost awareness in the workplace.

Management consulting firm, Phillips Consulting (PCL), says its upcoming annual digital learning roundtable will highlight the role of organisational leaders in raising digital intelligence in the workplace.

In a statement BusinessDay received, Modupe Thomas

Owoseni, managing consultant in digital learning and technology practice, in PCL, says a people-centric orientation is what every organisation needs to stay relevant in the knowledge economy. The executives in the organisation have the bigger capacity to drive this orientation across board.

“For digital transformation work, organisations need to focus on fostering an environment that allows employees learn in a seamless and borderless manner, effectively embedding learning in their workflow,” says Paul Ayim, senior partner responsible for www.businessday.ng

people transformation and learning. “This will equip employees with the knowledge required to make significant inputs into identified transformation efforts.”

Funke Amobi, country head of Human Capital, Stanbic IBTC, will deliver the keynote address during the roundtable scheduled for July 3, 2019. The statement discloses that address will focus on what CEOs, directors of HR and chief learning officers should do to shift the conversation beyond just talk to actionable steps that will raise the digital intelligence of their workforce, thus getting ready for what lies ahead. https://www.facebook.com/businessdayng

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Tuesday 02 July 2019

BUSINESS DAY

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NEWS Minimum wage: Labour mobilises, accuses FG of derailing implementation JOSHUA BASSEY

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rganised labour has accused the government of working to derail negotiation that will result in consequential adjustment of salaries in the public service to reflect the N30,000 new national minimum wage signed into law April 18, 2019, by President Muhammadu Buhari.

Consequently, labour, operating under the aegis of the Trade Union Side (TUS) of the Joint National Public Service Negotiating Council (JNPSNC), said on Monday it was commencing mobilisation of workers for a showdown to press home their demand for the implementation of the new wage law.

Recall that the TUS led by Anchaver Simon, chairman, and Alade Lawal, secretary, had before now warned that the eight unions in the public services of the federal and 36 state governments might have to embark on an industrial action if, by June 28, the government failed to make any headway with the negotiation to pay the minimum wage.

According to the TUS, since the committee set up early in June by the government to work out the consequential adjustment of the wage started meet-

ing, “the government has been coming up with strange proposals with the intent to scuttle the implementation of the N30,000 new wage.”

According to labour, “all was going on well until the government side came up later with their usual magic all aimed at scuttling the whole exercise.”

The labour leaders stated that the TUS had initially proposed that since the minimum wage was increased by 66.66 percent (from N18,000 to N30,000), salaries for officers on grade levels 01-17 should be adjusted accordingly to maintain the relativity that existed in the salary structure in the public service.

“But when the government side argued that such increase across board would raise the total wage bill too high, the TUS reviewed its demand downward and eventually settled for 30 percent for officers on grade levels 07-14 and 25 percent for those on grade levels 15-17. The government side on its part was insisting on 9.5 percent salary raise for employees on grade levels 07-14 and 5 percent for those on grade levels 15- 17,” the union stated.

The two sides then agreed to capture the two positions in the technical committee’s report, which will now be presented for discussion at the plenary.

CSOs, NGOs commend Obaseki’s commitment to accountability, transparency

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mpressedwithhiscommitmentto transparency, accountability and sustainable development, Civil Society Organisations (CSOs) and Non-Governmental Organisations (NGOs) in Edo State have hailed the Governor Godwin Obaseki-led administration for working to impact lives in the state.

The submission was made at the One-Day Social Accountability Stakeholders’ Conference organised

by Policy House International in commemoration of the Governor’s birthday.

Themed “Social Accountability: Understanding its Challenges, Opportunities and Developing Mechanism for Better Service Delivery” members of the civil society movement in the state said the governor has displayed a keen knack for transparency, which is portrayed by his openness, transparency and accountability to Edo people.

The governor, who was represented by his Chief of Staff, Taiwo Akerele, said the governor had a mandate to work for the people and would continue to prioritise their interest and welfare above other interests.

“We are not afraid to give accounts to the people. We are always ready to deliver on our promises to the people and make life better for them,” he said.

“Governor Obaseki insists that he was elected by the people and will only be accountable to the people. He will be responsible and accountable to them. It is in his best interest to enhance social accountability principles and promote transparency, so that the people will have confidence in the system.”

He called on the citizens to explore existing tools of social accountability to hold government responsible for its decisions and policies, noting that some of the tools include the Freedom of Information Act (FoI); the Public Procurement Law, Fiscal Responsibility Law, and through civil society groups.

Executive director, African Network For Environmental and Economic Justice (ANEEJ), David Ugolor, commended the Edo State government for signing on to the Open Government Partnership (OGP) and inaugurating the steering committee on OGP.

MTN Nigeria gets Aa+ Agusto rating OLUFIKAYO OWOEYE

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gusto & Co, Nigeria’s first credit rating agency, has assigned an Aa+ rating to MTN Nigeria Communications Plc. According to Agusto, the rating assigned to MTN Nigeria Communications Plc was based on the fact that the teleco is the largest mobile operator in Nigeria, with over 60 million subscribers and 20.3 million active data users, controlling about 42 percent of the Nigerian telecommunications industry’s subscribers.

“The firm’s strong financial condition is characterized by very good profitability, strong cash flow, low leverage, experienced and stable management team,” the report said.

Credit rating represents the creditworthiness of corporate or government bonds. The ratings are used by investment

professionals to assess the likelihood the debt will be repaid.

An Aa+ rating for MTN means the teleco has a very strong capacity to meet its financial commitments.

MTN Nigeria is a member of the MTN Group, Africa’s leading telcos with strong presence in 21 countries and over 237 million subscribers.

In May 2019, MTN became a public limited liability company following its listing by introduction of 20,354,513,050 ordinary shares of N0.02 each on the Nigerian Stock Exchange (NSE) to comply with regulatory requirements.

Agusto & Co. is also a leading provider of economic and business information, licensed in 2001 by the Securities & Exchange Commission (SEC) as Nigeria’s First Rating Agency.

It publishes reports on key industries in Nigeria and other countries in sub-Saharan Africa.

Environmental health issues still critical as 61% of Nigerians lack access to toilet CHUKA UROKO

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espite the progress made as reflected in new UNICEF/WHO water, sanitation and hygiene (WASH) data released recently, environmental heath challenges in Nigeria are still dire with 61 percent of Nigerians living without a decent toilet while 29 percent of the population still lacks access to clean water.

The UNICEF/WHO new WASH data reveals that the percentage of people in the country with clean water has increased by 23 percentage points and those with a decent toilet has grown by 9 percentage points since 2000.

But this is very insignificant given the size of the lack.

The data show further that 20 percent of Nigerians (37.8m) practice open defecation. As bad as the data seem, it is an improvement for Nigeria compared to the previous Joint Monitoring Programme (JMP) for water supply, sanitation and hygiene data figures captured in 2015.

The 2015 figures put Nigeria’s population without clean water at 33 percent; 67 percent without basic sanitation and 26 percent practicing open defecation.

WaterAid Nigeria notes that, for the first time, global estimates on hygiene were included, pointing out that, around the world, 3 billion people (40%) lacked basic hand-washing facilities that had soap and water. In Nigeria, 58 percent (110m people) do not have basic hygiene facilities.

Oluseyi Abdulmalik, WaterAid Nigeria’s communication and media manager, in a statement at the weekend, quoted data, which was collected in 2017, as saying that eight out of 10 people who lacked even a basic water services lived in rural areas.

“Only one in three countries with less than 99 percent access to a basic water service was on track to achieve ‘nearly universal’ coverage by 2030. Between 2000 and 2017, the population practising open defecation halved from 1.3 billion to 673 million.

The greatest decrease was seen in Central and Southern Asia,” Abdulmalik said.

She added that, one in four countries with less than 99 percent access to basic sanitation services were on track to achieve ‘nearly universal’ coverage by 2030.

According to her, despite global progress, only 2.1 billion people gained access to a decent toilet between 2000 and 2017.

Over 2 billion people globally still do not have access to even basic sanitation; this is equivalent to 26 percent of the world’s population or one in four people.

“The statistics highlights how vast in scale the water, sanitation and hygiene (WASH) crisis still is. A decent toilet is one that is private, and built in a way that will keep contents separate from water sources, and within a household,” she said.

The global figures on access to water are better but still worrying, with 785 million people (10%) still lacking access to even a basic water service. This is an improvement on the 844 million people who lacked access in 2015, the last time this data was collected.

Abdulmalik pointed out, however, that basic access fell below the ambition of Sustainable Development Goal (SDG6) of everyone having access to a safely managed water supply, which demands that everyone has a household service that is reliable and tested to be safe. www.businessday.ng

L-R: Linda George, head, sales and marketing, SIFAX Group; Victor Olotu, acting head, business development and strategic planning, SIFAX Group; Dakuku Peterside, director-general, Nigerian Maritime Administration and Safety Agency, and Ibikunle Oladimeji, marketing officer, SIFAX Group, at the 2019 International Seafarers Day Celebration where SIFAX Group donated corporate items to the Seafarers and guests in Lagos.

Buhari’s delay in constituting cabinet disrupts NBS’ data release calendar Endurance Okafor

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he Nigerian Bureau of Statistics (NBS) recently rated as one of the best in Africa is at risk of not being able to do its job of gathering and providing data, which usually shows the direction and performance of various sectors of Africa’s largest economy.

This was made known to BusinessDay when it asked a source from the state-funded agency why it failed to publish the labour force statistics earlier scheduled in its calendar to be released on June 25, 2019.

The source said NBS was not able to release the report as intended due to the fact that the president had not appointed

his cabinet, which in return was dragging budget implementation.

“As you know no agency has received capital from this 2019 budget year and our data is under capital,” the source, who prefers anonymity, told BusinessDay. President Muhammadu Buhari was sworn in on May 29, for a second four-year term after emerging winner on a 3.9 million vote difference in a keenly contested election between the country’s main opposition presidential candidate, Atiku Abubakar.

Following the inauguration ceremony, there are high expectations that the 76-year-old Nigerian president would hit the ground running by quickly

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constituting a ministerial team to save the country from the consequences of a delay that occurred in 2015.

After President Buhari was sworn in2015, it took him about six months to set up a ministerial cabinet to drive the policies in the Economic and Growth plan (ERGP). A delay that culminated into dragging the country into a lengthy recession that crippled the oil-dependent nation.

Over one month into his second tenure, the number one citizen of Africa’s most populous nation is yet to constitute his cabinet. Whereas, 96 hours after Cyril Ramaphosa, South Africa’s president was sworn in for a second term, he constituted a team of men and women as members @Businessdayng

of his ministerial cabinet.

“Incidents like the NBS being unable to release key statistics because there is no Minister will increase the longer the President delays naming the Cabinet,” Andrew S. Nevin, Advisory Partner and Chief Economist at PWC told BusinessDay by mail.

According to Gbolahan Ologunro, an equity research analyst at Lagos-based CSL Stockbrokers, the time lag between when policies are implemented and when the impact would be felt in the economy will extended due to the delay in forming the cabinet. According to him, MDAs who are spread across some critical sectors- power, housing will have their Capex plans delayed.

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NEWS

Vehicles wadding through flood, at Agege-Iju Road, Lagos State on Monday.

Blockage of drainage system at Agege-Iju Road, Lagos State. www.businessday.ng

Consumers wading through Flooded Ile-Epo Market, on Agege Motor Road after the downpour on Monday. Pictures by Olawale Amoo and David Apara https://www.facebook.com/businessdayng

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Richard “Dick” Kramer: An epitome of humility STRATEGY & POLICY

MA JOHNSON

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his article is to honour a noble man of grace and candour. An octogenarian, grandfather and a gentleman, who is respected for his character, not for his material success. A lawyer, an astute accountant par excellence, trustworthy businessman, teacher, coach and above all, a great mentor to many outstanding men and women in different fields of endeavour in Nigeria.

He is none other than the industrious Richard “Dick” Kramer, who lived in Nigeria for 41 years (19782019). In 1978, Richard Kramer established Arthur Andersen in Nigeria, an accounting firm, which has since been succeeded by KPMG Nigeria, Accenture Nigeria and Verraki Partners. Dick, as he is fondly called by all, has consistently played an active role in shaping the professional services landscape in Nigeria and mentoring many professionals who are currently leaders in the public and private sectors for the past 41 years.

Dick celebrated his 85th birthday on 20 June 2019. It was also a day to send-forth Dick and his wife, Wanda, by the above-named firms. The crème de la crème of Nigeria’s business community and friends were in attendance to “celebrate a legacy of giving.”

I met Dick almost five years ago

on invitation to the editorial advisory board of BusinessDay Media. Perhaps, I would not have met Dick, who until the time he left Nigeria was the Chairman, BusinessDay Editorial Advisory Board. A position he held for almost 14 years. Dick is an authentic leader and an achiever. The values that define Dick as an authentic leader are reflected in his extreme personal humility and professional will.

For a few decades, I have learnt the mechanics of measuring the worth of a man by his values and the objectives he pursues. Dick’s firm believe in Nigeria convinced him that creating an enabling environment and investment climate for the country were long term keys to success. With these beliefs coupled with the support of some close Nigerian allies, Dick was motivated to start the Harvard Business School Association of Nigeria (HBSAN) and to strengthen the Nigerian-American Chamber of Commerce (NACC). Both institutions, according to Dick, provided the energy for establishing the Lagos Business School/ Pan Atlantic University, Nigerian Economic Summit Group (NESG), American Business Council and the Vision 2010 Project. These are some of the legacies Dick is leaving behind.

At the heart of his legacies was the need to build strong institutions and develop future leaders capable of projecting Nigeria as a great nation in the global arena. In any discourse, Dick will always listen to you but will subtly interrogate whatever you tell him.

Dick never allowed his persona get in the way of his ambition to making change happen positively in Nigeria.

That is why I see Dick as an epitome of humility.

From tributes flowing in from friends and colleagues, one could

say that Dick has an honest relationship with all his mentees and business associates. A relationship based on ethical foundation. When I told an associate about Dick’s departure from Nigeria, he said: “I have known Dick for many years, he is a trustworthy man.” “If Dick was not trustworthy, he would not have been very successful in building professional leaders,” he continued.

As a rookie on the advisory board, I benefitted immensely from Dick’s immeasurable experience and wealth of knowledge as he demonstrates leadership and direction. He was always cool, calm and steady with unperturbed mien. A man of many accolades for his myriad contributions, I see Dickas a father and professor. Indeed, I was his student.

You can never know it all. “What do you think BusinessDay should be focusing on,” Dick will always ask during editorial advisory board meetings. He took notes during meetings and I had to follow my leader as an obedient disciple. So at every editorial advisory board meeting, you will see notebooks on the conference table with most distinguished members of the board taking notes. In addition, Dick will confirm the genuineness of the source of any information during discourse. With listening ears, he graciously allowed distinguished members to purge themselves of necessary arguments. Before meetings come to a close, he will always direct the management of BusinessDay to present facts and “tell the good stories about Nigeria.”

Editorial advisory board meetings were always at his residence. His wife of sixty seven years, Wanda, who everyone calls “mama” would come down the stairs any day the meeting goes beyond the closing time.

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I hope all professional leaders groomed

by Dick will be “oasis of sanity” wherever they find themselves as we continue to build a strong nation

Wanda and Dick were both born in 1934 and they literally grew up together through common interest in schooling, church and multiple youth activities, according to Dick. As teenagers, both Dick and Wanda grew up as good students and were involved in leadership roles in a wide range of activities-church, sports, and scouting among others.

What will I remember Dick for exactly? He will be remembered for his legacy. St Augustine once wrote that thinking and reflecting on legacy is so important because it helps us think maturely about life. It helps us to reflect and reconsider who it is that we most desire to please. We need to realize how the issue of legacy can change the course of our lives individually and collectively if we are only willing to step back and ask two questions: How do I want to be remembered? And what do I want my life to have been about once it is over? Dick says he takes pride in developing nation builders.

All said, Dick has been able to groom at least 2,500 of the best professionals both still in practice and moving on to top leadership positions in public and private sectors in Nigeria. I hope all professional leaders groomed

by Dick will be “oasis of sanity” wherever they find themselves as we continue to build a strong nation. What else can I say? It is my honour and privilege to simply say “thank you” to Dick and Wanda for their truthfulness and friendship. I join all men and women of goodwill to wish Dick and Wanda “Fair wind and following seas” as they leave Nigeria for the United States of America, after 41 years of giving. Thank you!

Johnson is an author and a retired naval engineer who has passion for African development and good governance

Nigerians can beat Hepatitis B & C if we work together

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igeria is Africa’s most populous nation, with 190 million people, and no less than 21 million are carrying hepatitis B (HBV). A further 4 million have hepatitis C (HCV), according to national statistics. These figures indicate a prevalence of 11% for HBV and 2.2% for HCV but the reality on the ground tells us that the situation is even more dire than they reveal.

Where I live, in Taraba state of North-East Nigeria, the prevalence is as high as 15-16% for HBV and 11% for HCV. In fact, in some communities the HCV prevalence seems to be on the increase. The national study which produced the official figures was done many years ago with a cohort of a very small sample of people and is no longer relevant.

In my own organisation, Chagro-Care Trust (CCT),we run free hepatitis screenings and the prevalence we estimate is quite alarming and far higher than the official national figures. To further compound this problem, less than 4% of the infected population know their status and less than 2% have access to treatment.

In 2016, the government of Nigeria developed a strategic plan to eliminate hepatitis by 2020. In the paper, national goals are for50% of persons infected with Hepatitis B & C virus to know their status and for50% of all eligible persons infected with either virus to receive treatment by 2020.It’s a beautiful policy but it’s not being fully implemented, except for the birth-dose vaccination and screening of blood for donations and blood banks.

Unfortunately, the allocation of healthcare resources, including workforce, is skewed towards secondary and tertiary health insti-

tutions, where only a negligible number of people access services.

Over 65% of the population reside in semi-urban or rural communities where they can only access primary healthcare institutions such as clinics but over 80% of hepatitis healthcare is provided at secondary and tertiary institutions. Even in terms of equipment, there is a need for good diagnostic technology at the primary healthcare centres. There is also a need for highly-trained specialists as these are the people that have the highest level of training and knowledge on hepatitis.

Due to the lack of access to quality healthcare at the primary level, approximately70% of the health spend in Nigeria is through private institutions and the majority of it comes from out of pocket spending. There is no free government testing or treatment for hepatitis, except in a few states, where pregnant women are tested.

Only 4-5% of healthcare spending in Nigeria is covered by health insurance, and there is limited allocation of that to hepatitis.

Advocating for change As an advocate in the fight against hepatitis, I play roles at the state and national levels. At the state level, I engage policy makers on why they need to put their feet on the ground and make hepatitis healthcare a priority. Now, I’m glad to say, out of the 36 states in Nigeria, my state Taraba is the only one that has implemented policy on fighting hepatitis. This was directly influenced by the collective advocacy work we did. It’s the only state in Nigeria where the government has put money into providing testing and treatment for citizens.

At the national level, I am privileged to be the www.businessday.ng

National Coordinator of the Civil Society working group on hepatitis; this consists of all the NGOs working on hepatitis in Nigeria. I’m also privileged to sit on the national working group of the federal ministry of health for the control of hepatitis. That group comprises of clinicians, academia, and civil society groups that produce policy documentation on hepatitis.

We had the honour of hosting the 1st Nigeria Hepatitis Summit in December 2018 in Abuja.

We had over 27 states in attendance and biotechnology company Gilead Sciences was the major sponsor of the event. It was the first time we brought together policy makers, directors of public health, civil society groups and academia to look at the extent of the hepatitis problem in Nigeria so as to drive advocacy at the state level.

We wanted to replicate what we had achieved in Taraba and get other state governments to understand why they should invest in hepatitis care. I am glad to say we had commissioners, permanent secretaries and public directors of health from over 27 states. In May this year, we had a follow-up meeting with the federal minister of health and some state governments are beginning to see the urgent need to act on hepatitis.

Another thing we did at the summit in Abuja was to invite the private sector to discuss the possibility of establishing public-private partnerships. In the past we have been able to engage certain companies in providing hepatitis screening and treatment to employees so the private sector has a huge role to play in investing to stimulate action in the fight against hepatitis through corporate social responsibility.

I lost my mother to hepatitis in 2007 and I am

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Danjuma K. Adda also dealing with hepatitis myself soI know what it means to lose someone close to you to this disease, and I know what it means to be a patient. This is the main reason I am determined to see a hepatitis-free Nigeria within my lifetime.

As CCT, we go out and provide free testing to people in remote areas but there is only so much we can do. I have a register of more than 10,000 people in rural communities who have tested positive for hepatitis B & C but are not able to access treatment.

The disconnect between the communities and where the services are available is the main challenge we need to overcome as Nigerian society if we are to defeat hepatitis B & C. If we work together, the elimination of these diseases can become a reality.

• As part of a Pan-African awareness campaign for viral hepatitis B and C — in partnership with the TOTAL African Cup of Nations — Gilead Sciences has asked leading African experts to share their opinions on the disease. The opinions in this editorial are those of the author and do not necessarily reflect the views of Gilead Sciences.

To learn more about the campaign, visit www. kickthevirus.com.

Adda is the Executive Director and Founder of ChagroCare Trust (CCT), a non-profit dedicated to helping hepatitis patients in Nigeria. He is also a viral hepatitis patient group and CFID HIV/AIDS prevention expert. The views expressed are his own.

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African SEZs & GVCs in the age of automation (1)

Rafiq Raji

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write a monthly research paper series for NTU-SBF Centre for African Studies at Nanyang Business School in Singapore. The following is the first part of the highlights of the issue published in June 2019.

Is the African industrialisation dream still feasible?

Special Economic Zones (SEZs) are “demarcated geographic areas contained within a country’s national boundaries where the rules of business are different from those that prevail in the national territory.” Key success factors for SEZs are cheap labour, large domestic markets, proximity to inputs, and high quality infrastructure. Strong institutions and leadership are also considered crucial. The attraction of industrial parks lies in how they enable “delivery-constrained governments” to provide infrastructure needed for industrial development within a “geographically limited space”; something they would not be able to do otherwise.

Incidentally, almost all African governments could be considered

delivery-constrained.

Global Value Chains (GVCs) involve production over borders – one or more – and now account for two-thirds of global trade. China’s phenomenal industrial revolution was on the back of SEZs and GVCs. When wages in China started to rise, in tandem with the authorities’ desire for higher value-added manufacturing, labour-intensive GVCs moved to neighbouring but less developed Asian countries. Vietnam and Bangladesh account for much of this movement. However, some African countries, especially Ethiopia, have been beneficiaries.

And like China, these countries have been able to participate in GVCs via SEZs. SEZs are not without some controversy. Tax concessions to special economic zones deprive governments of revenue, for instance. And it is yet to be proven that there would not have been development in the absence of these special zones in some cases. Still, it is generally agreed that they have been a success in China and emerging Asian countries like Vietnam and Bangladesh.

African SEZs have not been similarly successful. Bad luck and bad policy have been attributed by some for why. Mauritius led the way on SEZs in Sub-Saharan Africa when it set one up in 1971.

Since then, many African countries have developed “various forms of special economic zones (SEZs)”, ranging from “export processing zones (EPZ), free trade zones (FTZ), and industrial parks.” With a few exceptions, their performance has thus far not been encouraging.

The World Bank categorises the implementation failures of industrial parks into four. The parks may not be built eventually. If they are built, they could enjoy little custom. In the third category, they could be built and highly subscribed but not yield the expected “cluster effects”. For the fourth category, they could be built, enjoy great custom, produce cluster effects, but have “negative spillovers” and “crowding out” effects. In other words, if successful, they could weigh on “investment climate outside the park”. Still, “park and zone programs continue

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Industry 4.0 labour saving technologies – “the Internet of Things, advanced robotics, and 3D printing” – are reducing the differentiation role of wages in the production process

to proliferate, and many continue to under-deliver.”

Industry 4.0 labour saving technologies – “the Internet of Things, advanced robotics, and 3D printing” – are reducing the differentiation role of wages in the production process. Consequently, Africa’s relatively cheap labour, or that of any other jurisdiction for that matter, may cease to be an advantage over time. This is because industry may have advanced beyond the need of much labour by the time emerging Asian countries – which in tandem with China currently dominate labour-intensive GVCs – mature.

Nonetheless, some remain optimistic that African countries would be beneficiaries of the about 100 million labour-intensive manufacturing jobs expected to exit China to lower cost jurisdictions by 2030.

And there is evidence of increased Chinese foreign direct investment (FDI) into African manufacturing. In 2016, China invested in 66 African manufacturing investment projects worth $36 billion. With a 38 percent market share, China is the lead foreign investor in African manufacturing. Only a year before, the highest manufacturing FDI into Africa came from the United States.

Still, labour-intensive GVCs are increasingly facing disruption from automation.

“Dr Raji is chief economist at Macroafricaintel.

He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Promoting better policies in Nigeria’s transportation sector

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ransportation is the gateway to the Nigerian economy. An efficient national transportation system allows businesses to lower transportation costs, which in turn lowers production costs and costs to consumers.This allows businesses to be competitive in the global marketplace and ensures economic prosperity and efficiency.

Nigeria’s national transportation system binds and unify the country together and without the unifying force of transportation we would be a mere alliance of many separate ethnic groups and zones.

The three main responsibilities of government is providing security, preserving justice, erecting and maintaining public works to facilitate businesses. Our founding fathers understood the importance of government in carrying out these fundamental responsibilities and they ensured the smooth running of the affairs of the country from time past This helped remedied the challenges within the system to establish ports, airports, railway tracks, pipelines and roads in order to regulate commerce and businesses across the nation.This was responsible in laying the foundation and groundwork for connecting all the regions and states within the entire nation.

Trade and travel are recognized globally as critical and strategic ways of optimizing an efficient and robust economy in the life of any serious nation. This has necessitated

the call for all arms of governments to synergize and work together for the betterment of the economy of our nation.

The determination of the President Buhari administration through the Minister of Transportation Rotimi Amaechi in improving, developing, maintaining and supporting the vital transportation infrastructures that connects Nigerian consumers is worth mentioning and deserves commendation especially because of the new different rail connectivity across the nation which cut across from the North to the West, the East and to the Southern part of Nigeria.

The call for the National Assembly and State Houses of Assemblies to support the government initiatives will also go a long way in fast tracking development within the transportation sector and the economy at large. This will encourage the executive to invest more within the transportation sector and will bring about a better connectivity within the transportation space of our nation and also support the needs of the Nigerian people and its economy.

The House Committee on Transportation in the senate and house of representatives should as a matter of urgency liaise and organize a legislative stakeholders meeting with all the state houses of Assembly strategically in attendance to reposition, promote and support the new government efforts in ensuring modern global standards across all our transport national structures as obtained in first world economies around

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the world for us to take our rightful position in Africa and the World. This will also promote a better transportation system across our nation’s port, waterways, railways, road, airports and pipeline.

Improving a better transportation management systems will definitely create an optimal economic, business and national security systems which are the fundamentals of improving infrastructures in any nation and will also bring development closer to the citizens of our nation.

The provision of better infrastructures that supports our transportation, railways and maritime transportation systems are very important to a healthy national economy and the contributions of this infrastructures has the potential of creating more employment opportunities, better quality of life for our people and improvement of our economy. The Contribution of the Transport sector to Nigeria’s GDP increased to 288637 NGN Millions in the first quater of 2019 from 277338.67 NGN Millions in the fourth quarter of 2018 as a result of the good job and efforts of the current administration.

Our inland waterways and seaports link our nation directly to the global economy and they are critical components in our transportation network, but this system will only be as effective as the quality of the infrastructure if we are determined and it will remain competitive only if we can get our goods to market through ef-

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Festus Okotie ficient transportation systems and better infrastructural facilities.

Ensuring a sound infrastructural network will need all hands on deck which is a collective responsibility by all and I believe strongly with abetter legislation systems in place and stronger commitment by the Federal Government we can maximize the economic opportunities within the transportation sector and make it more efficient.

And so the need work together in ensuring a better relationship between the legislators and executives will go a long way in promoting prosperity, progress and greater success in our nations transportation systems. This will build and promote the best for our nations transportation network and will promote competition, prosperity and economic growth for our nations transportation sector.

Okotie, a maritime transport specialist, writes via fokotie. bernardhall@gmail.com, Fokotie@bernardhallgroup. com

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Tuesday 02 July 2019

BUSINESS DAY

EDITORIAL Publisher/CEO

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

Bashir Ibrahim Hassan

Reduce the cost of production to generate millions of jobs

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any paradoxes at the heart of Nigeria confound. Their resolution would lead to significant progress in the country and deliver superior value and benefits to its many stakeholders. One of the most confounding is the matter of the cost of production versus the inherent value available for extraction from Nigeria and her resources.

Nigeria today grows more cassava than any other country in the world. Nigeria also grows more maize as well as yams than any other nation. Same Nigeria still imports starch, a by-product of these crops and tubers.

Why is this so? Barriers to value-added production are the main inhibitors to the extraction of higher value. The chief impediment is the high cost of the factors of production in the country. Name the element, and it cost five to ten times more in Nigeria than anywhere else in the world.

Poor infrastructure is number one. We speak of road, rail and waterways networks that are in poor shape or inexistent.

In the Information Age now moving to the age of Artificial

Intelligence, power is a given in any severe economy. Power drives all the technologies and machinery of today. Energy drives the processes and systems of modern production. Nigeria suffers a drought of power.

The cost of production in Nigeria is high due to poor infrastructure, insufficient power and lack of transportation access.

Manufacturers spend excessive amounts to generate energy, build water systems and road networks to their factories, yet pay official and unofficial taxes and levies.

Something must give. Nigeria must now explore all the available options for increasing the stock of infrastructure, starting with power. The Nigerian Electricity Regulatory Commission has unveiled a few changes to their laws allowing greater private sector participation in power generation. They need to do more, and then to create awareness about the regulations so more groups, communities and investors take them up. Power is the oxygen of the modern world without which no one can breathe. We are sub-optimising in Nigeria because of the absence of power.

States and the Federal Government must think drastic

measures to tackle the extreme situation of the poor state of roads and other infrastructures such as rail and waterways. The Infrastructure Concession and Regulatory Commission should do more than wait for prospects who seek to concession facilities.

How about creating awareness about what is available for concession? How about moving for more items to be placed on the agenda including major intraand inter-state roads?

Why are the railways still a federal preserve in this age?

Time is now to consider allowing more significant participation in rail infrastructure provision and running by players other than the federal government.

Consider the state governments and consortia of private firms.

Unbundle. Efficient and effective rail transportation would enable more cost-effective movement of industrial goods and agricultural products. It would open and link more towns in our regions.

News of interest in water transportation in Lagos by better organised private sector operators with deep pockets is heartening. It would make a difference. Nigeria needs more creativity to bring down costs and employ more people.

There are many ways, and we

applaud those working on doing so already. Optimise value chain. In the food supply chain, manufacturers could empower another company (farmer) to grow certain crops needed for production. Example, barley, which is necessary for brewing, is no longer imported because Nigerian Breweries (NB) empowered Psaltry International to grow raw materials (cassava, etc.) needed for brewing.

Finance is imperative. The development finance institutions should review their roles and structure. They certainly would benefit the economy and society better given for the tasks ahead.

Bank of Industry, Bank of Agriculture and the Development Bank of Nigeria all need an infusion of more funds and expertise.

There is also the matter of sundry levies, dues, taxes and all manner of extortionate charges at federal and local government levels. They deter investors. They add so much to the production costs of goods and services.

Stakeholders of all types and descriptions must come together to ensure that we reduce the cost of production in Nigeria. It is not only strategic but imperative for sustainability. Costs must come down to ensure we can produce optimally.

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

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo

Enquiries NEWS ROOM 08169609331 08116759816 Lagos 08033160837 Abuja

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Human Resource Management: The need for robust engagements between academics & practitioners

Jude Adigwe

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efore veering off into the human resource management (HRM) practitioner space, I was an academic researcher -- a job position I got after my postgraduate training (i.e. masters programme) in Industrial-Organizational Psychology. I was into qualitative research -- I designed frameworks and models from analysed transcripts (interviews) and field notes (observations).

Also, I assisted with writing articles for academic journals. It was tough yet mentally rewarding...at the same time it seemed a bit too perfect because it was all on paper. I saw that approach to life as suspect. I say suspect because I constantly wondered if these things held up in real world as perfectly as they were scribbled on paper...I wondered because I realized over time that lots of data used in research works are derived from self-report measures--people tell you what they choose to tell you, right?

Does it always reflect the reality?

Would implementations of recommendations from such yield optimal results? Are the problems on paper really the problems in the real world?

A thousand and one questions, right?

Well, I needed a practice experience in order to have a balanced view of issues in my profession -- I had always craved to stand in that space where I can fully integrate theory and practice because I consider that the real deal, a professional experience second to none.

Upon getting into the practice domain, I experienced a severe shock, a rude awakening of some sort. I saw the divorce between theory and practice. Most of what I read in books were seldom practised (not because they were not practical) but due to an over reliance on experience which is often heavily subjective as I have stated in my opinion editorial on BusinessDay titled A critical look at work experience. Now, this article is not aimed at establishing if theory is superior to practice or vice-versa.

The goal is to make a strong case why academics and practitioners in the HRM space need to have more robust engagements.

On the one hand, HRM practitioners must realize that having lengthy experience does not amount to or serve as a substitute for theories.

To assume that the HRM profession would grow by merely relying on experience without any recourse to theory is illogical. The converse holds true too. Immanuel Kant said: ‘Experience without theory is blind, but theory without experience is mere intellectual play’. It is important that practitioners dismiss the misconception that theories are divorced from reality and embrace the reality that

theories aren’t postulated in abstraction; rather, they are drawn from happenings in our environments… as the world becomes more complex and advanced so do existing theories become less potent in explaining things hence the need for reviews, expansions and updates. Yes, theories aren’t perfect; nonetheless, they serve as descriptive, explanatory and predictive resources for the discharge of professional duties while experiences serve as verifications of those theories. On the other hand, academics in the HRM space (and other domains) need to understand that many of the things they write about in their academic works are inapplicable in the practice domains owing to the fact that outcomes are a function of so many factors not captured in the research -- factors that may never be captured in research owing to their sensitive nature. Furthermore, academics must realize that conducting research to simply publish and rise up the ranks without having robust dialogues with the practice community (in order to obtain feedback on research recommendations) is nothing short of mediocrity. Both domains (i.e. the academic and practice communities) exist to collaborate in the advancement of the profession and by extension, society at large. Theory and practice are inextricably linked. Theories are improved with feedback from experiences (i.e.practice) while practice experiences are deepened and made more meaningful with refinements of theories. To dismiss these is a subtle

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Theory and practice are inextricably linked.

Theories are improved with feedback from experiences (i.e.practice) while practice experiences are deepened and made more meaningful with refinements of theories

endorsement of a fragmented and uncoordinated profession.

HRM scholars and practitioners need to have regular conferences/ symposiums aimed at discussing challenges and opportunities for growth of the profession. Dialogues should be frank, respectful and matter-of-factly. This partnership should extend into areas like curriculum development; writing of books etc that show an integration of practice and scholarly thinking. A partnership of this nature fosters a sense of unity and purpose. It will set the foundation to properly groom upcoming scholars and practitioners.

Academics and practitioners in the HRM space (and by extension, other domains) need not see one another as competitors. rather they should see one another as companions on the journey towards professional advancement. There cannot be a coordinated profession if no recourse is made to theory. There cannot be advancements in theories if experiences are not looked at from time to time. These can only be realized through meaningful and engaging collaborations. Advancing the human resource management profession is a collective responsibility of academics and practitioners.

Both groups with their unique world views are complementary, nothing like inferior or superior.

Adigwe is a certified Human Resource Management (HRM) professional and an IndustrialOrganizational Psychologist. He runs a website www.adigwejude.com on HRM and OB issues

Public Private Partnership: Clustering small projects can boost regional prosperity in Nigeria

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rivate participation in infrastructure is arguably the most reliable approach for alternative infrastructure financing; hence, the upsurge on government collaboration with the private sector to procure public infrastructures through Public Private Partnership (PPP).

While attracting private investors to participate in infrastructure procurement has become notably demanding for frontier markets for reasons well-known, different suggestions have been put forward as the right avenue to gain investors’ confidence.

One such advice underscored the need for Government to look more closely at their activities and strengthen drivers deterring private investments. Though the private sector can help make markets more efficient, it is the Government that provides the structure in which the markets work and the private sector willing to participate.

As aforementioned, the focus is on how frontier markets, in desperate need of infrastructure and GDP growth, can capitalise on the opportunity investment in infrastructure provides to spur regional economic prosperity. To do this, the article supports developing appropriate structural strategies to strengthen the chances of those infrastructures –– critical to the growth of frontier markets –– but are not attractive to investors due to doubt on bankability issues. Structuring, in this context, connotes various strategies and measures Government can utilise to promote regional infrastructure to be attractive to investors for procurement through PPP. This area of discussion has remained vastly

unexplored in research because of limited standard practices or governance design that can fit into frontier market structures, methods and objectives.

Nigeria, with its six geopolitical regions, is not left out of this challenge. Even though the country achieved modest economic growth since 1999 when democratic governance returned after a decade and half of the military rule; its potential to achieve higher growth is limited by lack of adequate economic and social infrastructure; especially in states outside the economic and administrative capital of Lagos and Abuja respectively. Although, the Government is already determined to use PPP model to augment public sector procurements and has shown enough political commitment albeit rhetorically; attracting private capital to develop, upgrade and maintain its ageing large-scale infrastructures, in order to stimulate national economy requires more than rhetorical commitment. It requires establishing appropriate capacities, institutional settings and relevant regulatory frameworks. Of central concern in Nigeria’s regions is the fragmentation of the market with various small projects lined up for PPP adoption in multiple states with different governance structures.

Admittedly, this experience is not limited to Nigeria alone as various developing countries within the frontier market in sub-Saharan Africa, the Middle East and Northern Africa and South-East Asia experience absence of uniformity of approach and governance structure.

For positive results, it is recommended

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that the Federal Government re-structure the PPP settings and embrace uniformity of governance structure as well as develop a regional level approach that mandate regional or provincial clustering of all small projects within the region targeted towards PPP procurement. This will ensure all small infrastructures in one family unable to attract investors independently are grouped as a single large project to improve its chances of attracting investors and optimising good project investment. The idea is similar to bundling procurement –– not the prevailing bundling project stages. The core promises of this clustering would enable the realisation of economies of scale, the expansion of infrastructure development in neglected regions and stimulate regional economic growth.

This is exemplified in the work undertaken by the author and his team of local PPP advisors, with interest in developing regional infrastructures in Nigeria. They met with few state governors’ representative in South-East region of Nigeria at the 3rd Southeast Economic Summit in December 2018 to discuss the potential benefits of regional clustering.

Although, the state governors thought that the projects be executed within their respective states and not across the region due to their diverse PPP governance structures.

Being practical, the team explained to the governors that PPP is a costly procurement option for small projects. Subsequently, we recommended that the state governments within the region come together and consider integrated transport infrastructure projects that will cut across all state capitals and

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J.C. Anago market hubs in the area, as investors would find such projects large and attractive due to its potential to meet required traffic demand that can optimise the return of good investment.

Understandably, this approach has its demerits, such as other states economic infrastructure needs being at variant with that of the project originating State, multidimensional governance structures and reluctance to provide equity contribution in extreme scenario. Providing a well-structured clustering solution to regional infrastructures is an innovative strategy likely to produce higher numbers of PPP modelled projects and solve the severe shortage of economic infrastructure in the region to boost regional economic growth through infrastructure investment.

Currently, the team is on the verge of setting up South-East Council for PublicPrivate Partnerships (SENCPPP) to oversee the structuring of this regional clustering of small projects, harmonise the governance structures and present to South-East Governors by March 2020. Subsequently, we plan to initiate a similar approach in all other geographical zones in Nigeria if the Government at the centre and regions show commitment and political support.

Dr Anago is a UK trained PPP Expert and a Lecturer in Banking and Finance Department, University of Nigeria, Enugu Campus.

@Businessdayng

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Tuesday 02 July 2019

BUSINESS DAY

Media business Story-telling best way to connect with consumers emotionally in 21st century, says Ogbechie … As Marketing Edge rewards outstanding brands Stories by Daniel Obi Media Business Editor

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hris Ogbechie, a Senior Faculty Officer, Lagos Business School (LBS) has assessed marketing practice in contemporary world and said that story-telling was the best way of connecting with consumers emotionally in the 21st century.

Speaking at marketing and advertising magazine, MARKETING EDGE annual National Marketing Stakeholders Summit recently in Lagos, Ogbechie noted that in today’s marketing world, most brands were competing in the same space to win the hearts of the consumers, stressing that it was only those whose stories resonate emotionally that would win consumer loyalty.

“Marketing itself is a fight for the consumer’s mind. The more you get into the mind of the consumer, the greater your chances of being successful with that consumer,” Ogbechie said.

According to him, “In today’s marketing world, the key issue is to create emotional brand attachment with the consumers. Brands need to create relationship and that would further create that emotional attachment between the brand and the consumers.”

Speakers at other forums have also emphasised the importance of story telling as a tool of connecting with the audience. Recently APCON and African market research association held events around the place/ importance of story-telling and the African style of story-telling as tools of developing the African brand story, developing a content marketing story; social media content creation’, among others.

Also speaking at the Marketiging Edge summit, Chairman of the occasion and CEO of Marketing Space told participants at the summit that storytelling has the capacity to help brand owners achieve their growth projections if deployed in a con-

L-R: Arjan K. Mirchandani, chairman, Sona Group of Companies, after presenting Lifetime Achievement Awards in Marketing to the President of National Institute of Marketing of Nigeria (NIMN); Tony Agenmonmen while former President of Association of Advertising Agencies of Nigeria (AAAN) and Bunmi Oke, chief executive officer of Ladybird Communications, look on during the MARKETING EDGE National Marketing Stakeholders Summit and Brands & Advertising Awards of Excellence held recently in Lagos.

sumer-centric manner. The veteran marketer warned that in deploying storytelling, brand owners must be careful to make consumers the hero in the story. “Stories should make the consumer the hero. He should see himself in the story. The philosophy of the story should not overshadow the brand,” he said.

The forum was organised by the magazine to reward outstanding brands and professionals in the integrated marketing communications industry in Nigeria.

The two-in-one event, attracted over 1000 high-profile guests and dignitaries from various segments of the IMC industry, including top brands and government institutions who took advantage of the convergence to drive consumer engagement and deepen brand loyalty.

In his speech, John Ajayi, Man-

aging Director/CEO of MARKETING EDGE said that the theme of this year’s summit “Story Telling as a New Paradigm Shift in Contemporary Brand Building: Convergence of Creativity and Technology” was a reflection of the current mood in the marketplace.

His words: This year’s summit is a reflection of the current mood in the market place which necessitates the need to create a nexus and a positive engagement between the brand and its target audience. With the seller’s market era gone for good, today’s marketer company cannot continue to lord it over the modern consumers. In the words of Seth Gordin, an American author and former dot. com business executive, ‘’marketing is no longer about the stuff that you market, but about the stories you tell’’. His view was further corrobo-

rated by William Robert Baker, also an American and a retired hockey veteran who said ‘’Story telling is the mother of all ‘’pull’’ marketing strategies. It encourages dialogue, engagement and interaction among equals- interaction is an exchange of meaning between people. Yet many companies and brands are still relentlessly pushing messages out, hoping that with enough repetition, something will stick’’.

The highpoint of the day was the award proper where brands, personalities and institutions were recognized for outstanding performances and enduring legacies. Some of the brands that were recognized included Indomie-FMCG Brand of the Year, Airtel, Telecom Brand of the Year, GTBank- Financial Brand of the Year, iProspect- Innovative Digital Agency of the Year and Tom Tom,

Candy Brand of the Decade. Some personalities were also honoured and top of that list if the Keynote Speaker, Prof. Sir Chris OgbechieLifetime Marketing Achievement Award, Lifetime Marketing Achievement award- Tony Agenmonmen and OOH Leadership Personality of the Year Dozie Mbanefo, Chris Wulff-Caesar Marketing Personality of the Year, Lanre Adisa- Advertising Leadership Award and Steve Babaeko, Advertising leadership award.

Other high profile winners include Noah’s ark for Outstanding Creative Agency of the Year, CaratOutstanding Media Agency of the Year, Ideas House Outstanding Experiential Marketing Agency of the Year, Indigo- Outstanding PR Agency of the Year, while New Crystal won the Outstanding OOH Agency of the Year.

NIMN urges marketing professionals to make branding Nigeria priority

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s Nigeria continues its struggle over bad image and stereotyping by Western media, the National Institute of Marketing of Nigeria (NIMN) has urged the marketing professionals in Nigeria to take the lead in marketing and portraying the brand Nigeria in positive lights to the rest of the world.

“We have so much resource, both human and material in this country and I believe it is the responsibility of all of us especially

the marketing people to present these to the world,” said Tony Agenmonmen, the NIMN president and chairman of council, at the recent induction ceremony held by the institute in Lagos.

According to Tony, there is a need to first understand the substance of what Nigeria is and what the nation is blessed with and what makes us Nigerians, which is the starting point of marketing Nigeria as a brand to the rest of the world. “Nigeria is a beautiful country, there is so much we www.businessday.ng

can talk about it – we have so much positive, but it appear to me that we tend to dwell more on the negatives side,” he said.

Addressing the marketing professionals on moving the institute and the profession forward, Tony opined that there is a need to promote the frontiers of integrity across board. “I think more than anything our nation needs integrity, and for marketing people especially because of the kind of job they do, if they are going to be able to move their brand forward and

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be able to make proposers to their marketing director or their MD, it needs to be mentioned that whatever they say – they should be trusted,” Tony stated.

In his charge to the newly inducted members of the NIMN, Tony said they should be shining examples both in their various department and companies, and to represent the institute very well because of its ethical nature.

“We want all our members where they are – no one should be found @Businessdayng

wanting wherever they are”.

Gloria Nwabuike, the head marketing, Nestle waters in her presentation on ‘Marketers take the lead’ urged the newly inducted members of the institute to always stand up for the profession by being good ambassadors of the ethical values of marketing.

During the induction ceremony, a total of 29 members were inducted as full members, while 177 were inducted as associate members of the NIMN.

Tuesday 02 July 2019

BUSINESS DAY

15

Marketing & Pr Media practitioner links future of PR practice to disruptive innovation

BD Brand Talk Revisiting the debate on brand potential

Stories by Daniel Obi

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he Lead Consultant of TPT International, Adetokunbo Modupe has said that disruptive innovation remains the critical life support that will define the future of Public Relations (PR) practice in Nigeria.

Modupe, a key note speaker at the 2019 edition of Brandcomfest in Lagos recently, explained that “the future will be service driven as no one will own anything.”

Modupe who spoke on Digital Disruption and the Future of Public Relations Practice, noted that in no distant future, material possession will have a little significance in today’s global market as real-time lending equips practitioners with the many benefits of ownership.

“Uber doesn’t own any vehicle, Airbnb doesn’t own any real estate.

Facebook, as the world’s most popular social platform, almost creates no content. Ali baba, as the world’s most valuable retailer, has no inventory,” he said. Quoting Clayton Christensen who described disruptive innovation as a technology or concept whose application significantly affects traditional market or industry functions, Modupe maintained that disruptive innovation is like a virus which does not happen suddenly, but surely will change the ways things are done “An example is how the internet as a disruptive innovation has caused

the remodelling of the book selling industry. All the big book selling chains market share have been swallowed by Amazon because without having to own brick and mortar stores, it can display its inventory,” he said.

He also pointed out other dimensions of disruptive innovation to include a process by which a product, service or culture takes root slowly and it is sometimes ignored but relentlessly climb up to displace tradition, citing the local example of Cowbell versus Peak Milk.

According to him, the future of Public Relations practice will be anchored on three C’s of Culture, Concept and Content. While emphasising that the world is now divided into two – The Physical and The Digital, Modupe explained that culture remains the willingness to unlearned traditional ways of doing things, learning to adjust to global culture, which is driven by technology cannot be over emphasized.

He added that Concept can be deliberate, accidental or a fall out of conversation mood. “With the cultural adjustment and alignment, comes the challenge of idea generation. What will differentiate successful practitioners will definitely be how big and compelling your ideas are. If your agency is known for great ideas you will remain relevant,” Modupe noted.

While reminding the gathering that substantial part of PR business is storytelling – creating content, managing content and leveraging content, the TPT Lead strategist emphasised that the world has moved from traditional media to new media and now to every media.

“Until recent times, content consumption was predictably from established media platforms. But not anymore as the number of smart phone users may equal the number of publishers. What will determine who and how your content is received is the content itself,” he told the audience.

Mike Umogun he Longman business dictionary defines potential as the possible future success of a brand in a market. Nigel Hollis a brand and marketing strategist at Kantar once wrote a post about the spurious dichotomy between the short and long-term effects of marketing. In it he argued that the separation between the two-time frames was a spurious one, but how do you predict whether your marketing will have a positive effect in the longerterm? Every marketer is interested in the potential of their brand because it determines how the brand reacts to its marketing environment.

“Long-term effects are generally measured through increased brand awareness, brand equity, increased loyalty or higher price elasticity and I must add increased revenue, better bottom line. Chief Executive Officers would always ask their marketing team what would be the potential and return on investment for the millions of naira you are asking for?

The marketer’s interest in any business is therefore fueled in the short and long run by the potentials and opportunity the business holds.

Where the potentials are not glaring interest in the business is dampened.

One output of the Meaningfully Different Framework by Kantar is an equity summary we call Potential, which is designed to anticipate how likely it is that a brand will grow. We report Potential as a probability of growth because there is no guarantee

that today’s potential will be realized in future.

Potential is exactly what the name implies; it is a latent strength. To realize a brand’s potential the marketer must extend the reach of the brand to new customers and do so in a way that is more compelling than the competition’s marketing efforts.

According to Kantar a brand that intends to achieve its full potential must always act quickly to gain competitive advantage , ensure it’s the first to come to mind at the point of truth in the front of shelves , understand what drive sales now and in the future and must understand where to and how to invest in the near future.

The only other way to anticipate whether a brand is likely to grow is to look at trends over time and assume that they will continue (which is a risky assumption if the brand does something different or the context changes). But what trends should we look at? Overall sales may increase simply because of price discounting which could undermine the future strength of the brand. Far better to look at the trend in base sales – the proportion of sales not dependent on short-term marketing activities – and see whether that is increasing or decreasing.

To my mind a brand that is growing base sales faster than total (provided the total is growing) is one that is becoming stronger over time. And a brand that was lowering price elasticity over time at the same time it was growing sales would be even stronger.

But what do you think? Please share your thoughts. Michael Umogun (michael.umogun@kantar.com)

When politics trumps merit

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lot of reasons could be offered for the underdevelopment of Africa. Let’s excuse the lack of infrastructure and abundant resources or mismanagement of them but concentrate on skewed appointments that promote tribal or political party affiliations against merit. When appointments are based on these two factors, merit is sometimes undermined. Whenever merit is undermined, it becomes difficult to achieve efficiency and effectiveness.

In business or governance, each time favouritism or nepotism is promoted against merit, common good is undermined. Simply said, when an individual is given a job based on connection instead of capability, various huge mistakes and incompetence are overlooked and the job rendered will likely to be poor, but concealed.

This plays out more in road contracts and other jobs and the company or nation suffers for it. This explains why some projects such as roads go bad few months after construction. Take a mental picture of when girl or boy friends are offered jobs in offices and their attitudes to work.

Employment based on tribal lines or political party connection is similar to employing relatives, a prickly condition which does not give you some leverage and latitude to act in the best interest of the work, like asking for overtime to work and pay cut.

Sometimes emotion is involved and there is little communication and all

these do not help the work.

When building a company or nation, appointments based on professionalism can come from all quarters, even from critics and loyalists to bring their knowledge and expertise to bear on the work. When all loyalists are appointed, it will become ‘yes’ member staff and it will be difficult to interrogate suggestions.

Recently, Senate President, Ahmed Lawan, after careful consideration and interest of Nigeria appointed Festus Adedayo, a professional journalist as his Special Adviser on Media and Publicity. Lawan is Nigeria’s senate president and Adedayo is also a Nigerian. Two of them have common interest to build Nigeria but they may not agree on certain strategies.

The appointment according to a statement by the Special Adviser to the Senate President on Administration, Betty Okoroh, was based on merit, experience, track record and competency of Adedayo. The Senate president needs Adedayo in execut-

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ing his planned legislative agenda for the nation.

Adebayo is a holder of PhD in Political Communication from University of Ibadan, and a member of Editorial Board of Tribune newspapers.

Few hours after the appointment, there was outcry over the appointment. The outcry was not predicated on issues around WAEC Certificate, professionalism and competence of Adedayo, or whether he is a Nigerian or not but on pedestrian excuse that he sometimes points at loopholes in government programmes and offers suggestions.

Most of the critics of his appointment argued that Adedayo did not deserve the position because of his critical views on the APC government of President Muhammadu Buhari, as regularly expressed in his articles in the media. Adedayo is said to have also replied the politician critics that he had no apologies over his actions because he was merely doing his job as a professional journalist.

Following this outcry from, may be those who think they should have been appointed instead of Adedayo, the Senate President bowed to the pressure and rescinded the appointment. A statement by the Special Assistant to the Senate President on Media and Publicity, Mohammed Isa explained that the appointment was rescinded in Adedayo’s best interest.

Reacting to this development, Frank Uzuegbunam, a frontline media communication expert wonders why Lawan acted this way saying that

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“Lawan is Senate President of Nigeria and not senate president of APC.” He said Adedayo’s appointment was based on merit and the appointment should have stood because Adedayo was going to serve the nation.

Goddie Ofose, an analyst believed that the reversal of the appointment was a great error. “It is an error to mention party blocs in appointment so far the individual has something to offer to build the nation” In a report published in Daily Post, the Coalition of United Political Parties CUPP, lambasted the Senate President, Ahmed Lawan, for “sacrificing competence” by withdrawing the appointment of Festus Adedayo as his Special Adviser on Media and Publicity hours after the appointment was announced.

Ikenga Imo Ugochinyere, CUPP spokesman, in a statement condemned how Buhari government kitchen members, supporters and social media warriors allegedly on the payroll of the ruling APC and the presidency opposed the appointment.

“Their grouse was that the celebrated columnist has many times penned pieces that were critical of President Muhammadu Buhari who is the head of the Executive Arm of government and cannot be allowed to work with the head of the parliament who is a stooge of the Buhari government,” he said.

“It is surprising, to say the least, that the head of another arm of govt/ Senate President Ahmed Lawan succumbed to the pressure from Aso @Businessdayng

Rock and quickly withdrew Adedayo’s nomination just for not being a stooge of the Executive arm of government.

“Opposition political parties view this development as primitive, show of intolerance and sacrifice of competence on the altar of Halleluyah politics.

“Senator Lawan has, by this singular act, proved Nigerians right that the Senate under his leadership will be an annex of the President Muhammadu Buhari-led executive arm of government.

It is common sense that all appointments cannot be based on tribal and political party lines in order to avoid same of same. The challenge with some of us in Africa is that we still consider appointments as settlement for help rendered.

If not, why should there be furore over Adedayo’s offer of job to work to improve his fatherland.

As citizen, one can make remarks and suggestions about government programmes. In Nigeria we see criticism as negative. When the government or society sees those remarks as valid, they can give those individuals appointments to execute their thinking. Prof Tai Solarin was a government critique and he was given a job at Peoples Bank to bring his knowledge.

Wole Soyinka too made valid suggestions; he was given a job to manage road safety. So, why shouldn’t Festus Adedayo be given a job to bring his knowledge. To analysts, Lawan should have allowed Adedayo to work than succumbing to public pressure.

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Tuesday 02 July 2019

BUSINESS DAY

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@Businessdayng

Tuesday 02 July 2019

BUSINESS DAY

COMPANIES & MARKETS

17

How Airtel’s share price compares with MTN Nigeria

COMPANY NEWS ANALYSIS INSIGHT

Pg. 18

SERVICES

Daar Communications records first Q1 profit in 4 years, but owes N1.4bn salaries Stories By

OLUWASEGUN OLAKOYENIKAN

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fter three straight first quar ters of losses, Daar Communications Plc, owners of African Independent Television (AIT) and RayPower FM, came out of the woods with a N2.43 million after-tax profit in the first three months of 2019.

The media firm grew its net income by more than 100 percent in the first quarter of this year from a N199.63 million loss recorded in the corresponding period of 2018. The unimpressive performance followed N691.98 million and N691.17 million losses posted in the first quarters of 2017 and 2016, respectively.

An analysis of the company’s financial results for the three months to March 2019 reveals that the impressive performance recorded by the media firm for the period was driven by increased sales in its television and radio services as well as lower cost of goods

sold.

As a result, the gross margin, which is the amount of sales revenue retained by the firm after incurring the cost of production, surged

to 42 percent from 20 percent recorded in the same period in 2018. This implies the firm had more money from sales to cover its operating expenses after taking

into account the cost of goods sold.

Daar Communications saw some increases in its operating activities within the first quarter of this year.

Selling expenses rose by 16.5 percent to N26.39 million from N22.66 million, administrative expenses increased by 30.9 percent to N443.78 million as against

N338.98 million recorded in the first quarter of 2018.

However, a 24 percent reduction in the company finance charges to N13.34 million was not enough to offset the costs expended on operating activities, bringing both its pre-tax and after-tax profits to N2.43 million as there was no tax deduction for the period.

But in spite of this, Daar Communications Plc still had more than N1.4 billion in accrued salaries yet unsettled, and N246.65 million to pay as charges to the National Broadcasting Commission (NBS). The accrued salaries represent a N98.6 million increase from its level in the first quarter of 2018.

After the close of business on the Nigerian Stock Exchange for the first half of the year, shares of Daar C o m m u n i c a t i o n s, t h e only listed media firm at the bourse, remained unchanged at 40 kobo. This indicates the firm delivered no value for investors who bought into the company at the start of the year.

CONSUMER GOODS

Honeywell full-year profit dips by 98% as raw material cost spikes

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igher cost of raw and packaging materials incurred

by Honeywell Flour Mills Plc in the fullyear ended March 2019 has plunged the net income of the flour miller to its lowest level since 2016, the company’s 2019 audited financial results have shown.

The company’s profit for the year slumped by 98 percent to N68.37 million as against an after-tax profit of N4.43 billion garnered a year earlier, no thanks to a 13.5 percent increase in its cost of production.

Despite the cost of goods sold rising to N62.9 billion in 2019 from N55.4 billion in the previous year, the company’s sales, which were all made in Nigeria, only witnessed a 4 percent growth to N74.4 billion from N71.5 billion, according to the results filed at the Nigerian Stock Exchange (NSE).

This further attests to the tough operating environment impacting negatively on the profitability of Nigerian consumer goods firms, particularly with the Apapa gridlock and epileptic power supply.

Checks by BusinessDay revealed that the company spent more than triple of its profit in the year on power supply and maintenance.

The amount spent on plant maintenance and power cost surged 10.6 percent in 2019 to N2.62 billion compared with N2.37 billion expended in 2018.

Besides the power challenges which weighed on the firm’s income, the decline in its revenue was largely driven by lower demand for noodles in the year.

The company’s business operating segment in Ikeja primarily manufactures noodles.

While consumers requested for less of the product, sales of flour, semo,

wheat meal, brown flour and composite flour produced by Honeywell’s Apapa factory continued to boom.

The company sold N12.27 billion worth of noodles in full-year 2019 compared with N12.34 billion realised from the sale of the goods in the previous year.

For the Apapa factory, revenue rose to N62.14 billion from N59.13 billion in the preceding year.

On the back of the sharp drop in the company profit after tax, the directors of the firm did not “recommend the declaration of any dividend in order to conserve fund,” Honeywell said in the reports of directors contained in the financial results.

Following the release of results, the flour miller notified the investing public of its 10th Annual General Meeting slated to hold on Thursday, September 26, 2019 in Lagos.

The firm said it would seek re-election of retiring directors,

the election of members of the audit committee, and authorization of directors to appoint new independent auditors for the replacement of the retiring auditors Messrs BBC Professional at the meeting.

Shares of Honeywell Flour Mills closed unchanged at

N1.01 per share for the first half of the year, the stock lowest price since the start of this year.

Honeywell Flour Mills plc was initially registered as Gateway Honeywell Flour Mills Limited on June 21, 1983. But in June 1995,

the company underwent a change in its ownership structure which led to a change of the name to Honeywell Flour Mills Limited.

The firm was converted to a public liability company in 2008, while its shares were listed on the NSE in 2009.

L-R: Brooks Entwistle, chief business officer, Uber Inc, and Babajide Sanwo-Olu, governor of Lagos State, at a courtesy visit of Brooks Entwistle to the State house.

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

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Tuesday 02 July 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

TELECOMMUNICATION

How Airtel’s share price compares with MTN Nigeria DAVID IBIDAPO

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hile we await the introduction of Airtel’s shares on the Nigerian Stock Exchange (NSE) market through an Initial Public Offering (IPO), concerns have been raised to whether or not we could compare the valuation of Airtel to that of MTN Nigeria (MTNN) upon listing.

Recently, Airtel Africa, a unit of India’s Bharti Airtel Ltd, last week set a price range of N363-N454 per share for its IPO on the NSE where it aims to issue 501 million to 716 million new shares and selling about 500 million shares on the London stock exchange (LSE) market with 10 percent over-allotment option.

The proposed listing of Airtel is said to imply a TTM EV/EBITDA multiple of 6.3x – 6.8x, implying that for every N1 EBITDA made investors

are willing to pay between N6.3 to N6.8 own the shares.

MTNN, on the other hand, works out an enterprise value that is 5 times of EBITDA and 9 times of earnings.

MTNN shares according to BusinessDay analysis when adjusted to reflect that of its frontier market peers revealed MTNN should be pricing around N150 percent which implied that the stock upon listing was trading at a discount of over 60 percent.

The big question is whether MTNN is a better comparison with Airtel in terms of valuation.

“MTNN Nigeria is still in a stock in price discovery mode, so you can’t trust the current pricing of MTN Nigeria as a fair price for the stock,” Ayorinde Akinloye, equity research analyst at CSL Stockbrokers explained.

According to Akinloye, the best option is to compare Airtel

with African peers like Vodacom and Safaricom. MTNN is not included because the company has a poor ROE and just recovered from a price battering of the past years.

While Vodacom and Safari according to analysis currently trades at a TTM EV/EBITDA of 7.8x and 8.6x respectively, “Airtel valuation of 6.3x-6.8x implies possible upside for the stock after listing,” Ayorinde stated.

While the valuation may appear Airtel, as being undervalued, Ayorinde explains that there is a need to consider critically some important factors which may rule out this fact.

As at the close of trading on Friday, Airtel Africa upon listing on the London stock exchange market, Airtel share price slumped steeply by 16 percent on its first day of trading, hence joining the list of worst debuting stocks in Europe.

L-R: Chinedu Oranuba, legal adviser, Tropical Arctic Logistic (TAL); Femi Adeniyi, chief operating officer, and Ine Wiche, company secretary, at a press conference on activities of Tropical Arctic Logistic in Lagos, yesterday.

Pic by Olawale Amoo

LOGISTICS

Red Star Express posts biggest profit in 10 years on debt recovery OLUWASEGUN OLAKOYENIKAN

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ed Star Express Plc, Nigeria’s licensee of Federal Express Corporation, recorded its biggest profit in 10 years bolstered by its recovery of bad debt and insurance claims in the year ended March 2019.

The logistics firm grew its net income for the year by 34.1 percent – the most in 8 years – to N466.2 million, making it the company’s most profitable year since 2009 when BusinessDay started collating the data.

Although the company recorded increased sales across all its services comprising courier, warehousing and chain distribution, clearing and forwarding of goods, and support services, an upsurge in the costs of rendering these services by 29.6 percent weighed on its revenue for the year, according to its audited financial statements filed at the Nigerian Stock Ex-

change. This led to a marginal decline in its gross profit to N2.77 billion from N2.78 billion.

Other operating income ballooned to N119.4 million in the review year as against a paltry of N11 million generated last year, thanks to sundry income which accounts for more than 98 percent of the generated income. “Sundry income relates to recovery of bad debt and insurance claims received,” Red Star Express said in a note attached to the statements.

Besides this, the administrative expenses of the logistics firm took haircut to N2.13 billion from N2.17 billion on the back of reduced employee benefit as well as repairs and maintenance expenses, leading to a 24 percent growth in its operating profit to N764.58 million for the year.

Consequently, this impacted positively on the financial health of Red Star Express as the firm’s cost-costing approach

for the year yielded some results evident in its margins.

The company’s operating margin, a measure of profitability which shows its return on sales after accounting for cost of goods sold and operating expenses, improved to 7.6 percent as against 7.3 percent achieved a year earlier.

Similarly, profit margin recorded an impressive growth, reaching 4.63 percent in the year ended March 2019 from 4.13 percent booked in the previous year.

An analysis of the company’s shares on the Nigerian Stock Exchange shows the company has delivered 30.95 percent value for its shareholders since the beginning of this year, thereby outperforming the market which has lost as much as 4.66 percent this year.

However, the stock has continued to trade unchanged at N5.50 per share at the local bourse.

L-R: Fela Ibidapo, head, corporate communications, Heritage Bank; Mide Kunle-Akinlaja, executive producer, The Next Titan; Jumoke Oduwole, senior special assistant to the president of Nigeria on Industry, Trade and Investment; Adekunle Oyinloye, GMD, SIFAX Group, and Kyari Bukar, judge, The Next Titan at The Next Titan milestone evening and unveiling of the show’s Season 6.

L-R: Olubunmi Popoola –Mordi, company secretary; Stanislas Mittelman, chairman, and Imrane Barry, MD, all of Total Nigeria Plc, at the 41st annual general meeting of the company in Lagos, Pic by Pius Okeosisi

COMPANY RELEASE

FBNQuest Asset Management renames FBN Heritage Fund to FBN Balanced Fund

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BNQuest Asset Management, a subsidiary of FBNQuest Merchant Bank and part of the FBN Holdings Plc group, has proposed a change in the name of the ‘FBN Heritage Fund’ to the ‘FBN Balanced Fund’. The proposed change of name was approved by unitholders of the Fund at an Extraordinary General Meeting (EGM) of the Fund which held on 20th June 2019.

The investment strategy of the FBN Balanced Fund, which was established in 2008, is designed to provide investors with portfolio exposure to a mutual fund that invests across multiple asset

classes. This asset mix ensures that investors profiled in the medium-risk category can consider this Fund, given its implicit portfolio diversification strategy, an appropriate tool for achieving their financial objectives.

The FBN Balanced Fund invests in a mixed portfolio of instruments such as Stocks of high quality Nigerian companies, Long-term debt instruments of Nigerian federal and state governments, Long-term debt instruments of Nigerian Corporates and High quality money market securities such as Treasury Bills, and Commercial Paper.

The Fund is designed

to deliver measured gains, when compared to a high risk strategy comprising an all equity portfolio, but provide significant potential return, when stocks are bullish, when compared to a low risk strategy comprising an all money market portfolio.

Indeed, over the past 10 years, the FBN Balanced Fund has appreciated by over 140%, outperforming its benchmark. Indeed, an investment of N10m will have appreciated to over N24m over the 10 year period. In addition to the change in the Fund’s name, there has been a change of the asset allocation ranges of the Fund.

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L-R: Bethel Obioma, head, corporate communications, Sahara Group; Pearl Uzokwe, director, governance and sustainability, Sahara Group; Tajudeen Igbalaye, Baale of Olojowon Oke-oja, Ijora; Moroti Adedoyin-Adeyinka, MD, Asharami Synergy; Abdulraheem Abiodun Ariyo, Baale Tokosi, Orile Iganmu; Lekan Ogundowole, head, special project, Asharami Synergy, and Iyabo Okedele, member, CDA, Ijora Oloye, Lagos, at the launch of Sahara Group’s project Green Life targeted at galvanising action towards environmental protection across the globe in Lagos.

Pic by Pius Okeosisi

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Tuesday 02 July 2019

BUSINESS DAY

19

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

POLICY

How opening contracts could avert loss of billions in oil revenue STEPHEN ONYEKWELU

T

here has been sustained global effort to make public, oil and gas contracts involving governments of oil-rich nations and oil companies through the open contracting data standards (OCDS), in order to drive accountability and transparency, preventing oil block OPL-245-type situations.

Governments around the world spend an estimated US$9.50 trillion through contracts every year. Yet, contracting information is often unavailable for public scrutiny.

The OCDS enables disclosure of data and documents at all stages of the contracting process by defining a common data model. It was created to support organisations to increase contracting transparency, and allow deeper analysis of contracting data by a wide range of users.

Emmanuel Ibe Kachikwu, former minister of state for petroleum resources, said: “contracts will be made open to the public.” In 2017, Nigeria formally joined the Open Government Partnership, a multilateral initiative to strengthen governance. But in President Muhammadu Buhari’s first four years in office, Nigeria was yet to publish its petroleum contracts. This is a critical requirement to promote transparency and end corruption in the sector.

In Nigeria, the rules governing

petroleum projects are contained in a range of official documents including the constitution, legislation, regulations, and contracts. But while the constitution and laws are publicly available, petroleum contracts and some regulations are not.

Petroleum contracts are fundamental documents that set out the legal framework for oil and gas projects.

Rob Pitman and Anne Chinweze, analysts at the Natural Resource Governance Institute’s review of 23 upstream and downstream contracts in Nigeria, including 10 model contracts, shows

that contracts in Nigeria contain several terms for which a strong public interest case can be made for disclosure.

To drive the point home, oil prospecting licence (OPL) 245, oil block, has attracted contentious attention in the last three years after the Milan Public Prosecutor office notified Shell, Eni, 11 other defendants and the Federal Republic of Nigeria, the victim as to the completion of its investigations and possible charges thereof. This resurfaced June 25 as parties to the case re-appeared in court, in Milan, Italy.

Italian prosecutors allege that

the $1.1bn paid by Shell and Eni for the OPL 245 licence was used to pay former Nigerian oil minister Dan Etete and “intended for payment to President Jonathan, members of the government, and other Nigerian public officials.” Shell, Eni and some of their senior managers are now standing trial, charged with international corruption, with prosecution pending in other countries.

The Nigerian Department of Petroleum Resources currently lists the OPL 245 license as a Sole Risk type contract in its annual report. Sole risk contracts are another alternative to the PSC in Nigeria. Under these arrangements, the government and company involved do not share physical production according to an agreed formula.

Rather, the company assumes all the risk of exploration and production, keeps all of the oil produced for itself and is responsible for making statutory payments, including royalties and taxes to the government in cash.

Nigeria’s most senior civil servant in the DPR objected strongly to the terms of the deal at the time, calling it “highly prejudicial to the interests of the Federal Government”, a Global Witness report stated. But Nigerian ministers appeared to have ignored or overruled these concerns. Shell managers had been briefed that the ministers who overruled civil servants to approve the deal were likely to

receive bribes.

An analysis carried out by Resources for Development an expert oil consultancy firm commissioned by non-governmental organisations Global Witness, HEDA, Re:Common and The Corner House using publicly available documents including Shell and Eni’s valuations of the oil block has shown that the terms of the contract could reduce the Nigerian Government’s revenue from the fields by $5.86bn over the lifetime of the project when compared to the standard Production Sharing Contract (PSC) terms in place in Nigeria since 2005, assuming an oil price of $70 per barrel.

The International Monetary Fund (IMF) recommends that mature oil producing countries should receive 65 percent to 85 percent of oil revenues with the remainder going to oil companies. The current OPL 245 deal is projected to result in Nigeria receiving just 41 percent of revenues, while Nigeria’s standard PSC terms or the terms Shell agreed with Nigeria in 2003 would earn Nigeria 65 or 60 percent of revenues respectively.

Publishing these contracts will create space for rigorous public scrutiny of deals that can be worth billions of dollars to the people of Nigeria. It also provides an important opportunity for the government and companies to build public trust in the petroleum industry.

MARKET

Indian probe agency seizes businessmen’s Nigerian oil assets DIPO OLADEHINDE

I

ndia’s Enforcement Directorate has seized the oil assets of Sandesaras group of companies by issuing a court order on the group’s oil assets in Nigeria which include four oil rigs, an oil field ships and aircraft.

Sandesaras group, the company in question is owned by two brothers Nitan and Chetan Sandesara. Its Nigerian arm Sterling Global Oil Resources Ltd is active in five wells and currently produces about 25,000 barrels of oil per day from two fields; Okwuibome and Anieze, both in the Oil Mining Lease (OML) 143.

“The attached properties include four oil rigs and oil field namely OML 143, located in Nigeria, in the name of Sterling Energy Exploration Pvt Co Ltd, Nigeria; ships Tulja Bhawani, Varinda, Bhavya, Brahmani etc registered in Panama and held in the name of Atlantic Blue Water Services; an aircraft Gulfstream 200 registered in the US and in the name of SAIB LLC; besides a residential flat in London,” the India’s Enforcement Agency told India Times said.

OML 143 is located in thickly forested terrain in the northern Niger Delta. It

contains two producing fields, Okwuibome - discovered by Shell in 1979 - and the smaller Anieze field.

India’s Enforcement Agency claimed the Sandesara group have not only siphoned off bank loans to finance their Nigeria oil business but also for their personal purposes.

“It was revealed during investigations www.businessday.ng

that funds were rotated through various structures and ultimately parked in Nigeria to cater to the personal interests of the main promoters,” India’s Enforcement Agency said in a statement.

Sandesara brothers allegedly adopted various strategies such as incorporating multiple shell companies, conducting circular transactions to artificially inflate

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turnover of the flagship firms, claiming higher depreciation on non-existing machinery to avoid tax liabilities, artificial share trading with the shell firms, layering and laundering of the proceeds of crime within India and abroad.

The probing agency said the brothers used their employees’ names and incorporated 249 domestic and 96 offshore @Businessdayng

shell companies.

With this order, the total attachment against Sandesara group has exceeded $210 million (Rs 14,500). Last year, the ED had attached over $68.1 million (Rs 4,700) crore of assets belonging to group company Sterling Biotech Ltd and its subsidiaries.

Its promoters Chetan Sandesara and Nitin Sandesara are suspected to be in Nigeria.

Recall, in November 2011, the company celebrated the production of one million barrels of Brent crude from Nigeria at its Vadodara headquarters. The company had set an ambitious target of ramping up production from 10,000 barrels per day to 100,000 barrels in a period of five years.

“When we decided we get into oil business in early 2001- 2002, we wanted to make it big and not remain on the fringe,” Nitin Sandesara, the group’s chairman said in an interview.

When contacted, Chetan Sandesara told live mint publication in March last year that with their oil and gas business in Nigeria growing strongly, they aimed to be a “debt –free group in the next few months.”

“These planned systems show a significant shift from diesel to solar-hybrid systems using the latest technologies,” World Bank said

20

Tuesday 02 July 2019

BUSINESS DAY

Tuesday 02 July 2019

BUSINESS DAY

21

Guests at the BusinessDAY Real Estate Roundtable and Exhibition 2019 theme “Scaling up Responsible Land Governance to Ease Affordable Housing Delivery” in Abuja.

L-R: Babajide Odusolu, GCEO, Legacy Holding Limited with Kehinde Ogundimu, CEO NMRC.

John Osadolor, director, BusinessDAY Media Limited.

L-R: Lekwa Ezutah, national president, Nigeria Institute of Town Planners, Aliyu Wamako, president, Real Estate Developers Association of Nigeria and Francis Olorunfemi, GM, corporate services, Urban Shelter Nigeria Limited.

L-R: Suleiman Usman, Turnkey contractor, John Osadolor, director, BusinessDAY Media Limited and Bashir Hassan Ibrahim, GM, business development north, BusinessDAY Media Limited.

Evelyn Chukwuemeka, First Generation Mortgage Bank, Chinelo Ojukwu, Federal Mortgage Bank of Nigeria, Austine Musa, Urban Shelter Nigeria Limited, Akinkuowo Yetunde, Leggen By Subunban, Osayi Maureen, Wiser Estates and Investment Limited, and Emetomo Elo, Infinity Trust Mortgage Bank plc (ITMB).

Oghenevwoke Ighure, executive director, strategy, innovation and partnership, BusinessDAY Media Limited; John Osadolor, director, BusinessDAY Media Limited and Bashir Hassan Ibrahim, GM, business development north, BusinessDAY Media Limited.

L-R: Nasiru Suleiman, MD/CEO, Wiser Estates and Investment Limited with a guest.

L-R: Nwankwo KI, deputy director, lands, Ministry of Housing with Great-Edereka Angela, acting director, lands

L-R: Daniel Rose, head Height Limited with Oduola Funmilayo, Newsdirect Newspaper.

L-R: Cyprian Konkwo, managing partner with Osakwe Olisa, director, project management services, both of Ora Egbunike and Associates.

L-R: Grace Wilcox, Amonia Ubogu, director, Duke Ubogu, all of BGM Atlanta Services.

L-R: Musa Otse, City Walk, Samuel Omawumi, City Walk and Anyokozo Franklin.

L-R: Babajide Odusolu, GCEO, Legacy Holding Limited with Ese Stephen Owie, CEO, (Sub-Saharan Africa) Numelec SA Geneva Switzerland

L-R: Suleiman Azika, COO, Suburban Fiber Company with Onyinye Nwanchukwu, bureau chief, Abuja, BusinessDAY Media Limited.

L-R: Ese Stephen Owie, CEO, (Sub-Saharan Africa) Numelec SA Geneva Switzerland with Nasiru Suleiman, MD/ CEO, Wiser Estates and Investment Limited.

Cross section of participants.

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Pictures by Tunde Adeniyi

22

Tuesday 02 July 2019

BUSINESS DAY

ENERGY INTELLIGENCE ANALYSIS

LEKOIL positions for growth with ambitious plan

lenge that I faced since I returned to Nigeria to start Lekoil. The single biggest challenge we have faced as a company has not been technical, it has not been money, it has been regulatory approvals.” Akinyanmi said.

Wood Mackenzie, a leading energy research organisation said the Ogo field which lies in the KetaTogo-Benin Basin discovered in 2013, yielded a P50 reserves estimate of 770 mmboe, well in excess of the predrill 200 mmboe estimate. The field was the third largest oil discovery in the world in 2013 and the largest discovery in Nigeria within the past ten years.

However, a Federal High Court ruled that the acquisition still requires consent from the Minister of Petroleum Resources. Based on the judgement, OPL 310 interest is still held by the seller, Afren Investments Oil and Gas Nigeria Limited. Lekoil still holds a 17.14 per cent participating interest in the block.

In response LEKOIL has withdrawn its lawsuit and continues engagement with its partner, Optimum Petroleum Development Limited, and the regulator, to conclude agreements and resolve all outstanding issues.

Meanwhile OPL 310 licence has

Strong financial position Lekoil reported a loss of US$7.8 million for the 2018 financial year as against a record profit of US$6.5 million in 2017. The company alluded to huge investments it made in developing its fields as dragging down its profits.

The company’s fundamentals appear strong. It recorded US$48.7 million as proceeds from equity crude sales. The Group lifted 1,305,888 barrels of its entitlement, realising an average sales price of approximately US$66 per barrel. Total entitlement crude consisted of 1,346,525 total barrels net to LEKOIL Analysis of its financials indicate that it has cash and bank balances of US$10.4 million as at 31 December 2018 as against US$6.9 million in the same in the preceding year. Cash at 31 May 2019 was US$13.1 million. As at 31 December 2018, total outstanding debt financing, net of cash, was US$10.1 million as against US$22.6 million in the same period in 2017.

To keep its finances stronger, the company targets a 25% reduction of general and administrative costs annually, including Board remuneration. In June 2018 Lekoil and its bankers re-denominated approximately N3.1 billion of debt facilities into one new US$8.55 million facility which reduced the high financing costs of local currency debt. The documentation to complete this was finalised in March 2019.

The company reported that it made concerted effort during the year to pay off vendor financing from prior periods, as can be seen by the improved gearing position and reduction in liabilities.

The Board and Management regularly monitor the company’s cashflow projections. The cash balance as at the end of May 2019 was US$13.1 million. “In the light of delays with progressing key assets, we have decided to take action in order to

Lekoil applied for Ministerial Consent to acquire 23% participating interest in OPL 310 block, in Ogo fields, from Afren Nigeria Holdings in 2016, but the consent was neither given nor denied.

So in May 2017, Acting president Yemi Osinbajo, issued an executive order which among other things provided that any application not approved or rejected by a government agency or official within the agency’s specified timeline shall be assumed to have been approved. Relying on this provision, the company proceeded to complete the acquisition.

lapsed, but Optimum in its capacity as operator has begun the extension process and whereas there is no guarantee that the licence will be renewed, LEKOIL is hopeful for a favourable response from the regulators in this regard.

The company reports that it has completed technical evaluation on OPL 325 in January 2018 by consultants Lumina identified and recorded 11 prospects and leads which were estimated to contain potential gross aggregate Oil-in-Place volumes of over 5,700 mmbbls (un-risked, Best Estimate case)

reduce our overheads. Management has created a project team to review costs with the aim to decrease general and administrative costs by 25 per cent. This includes a 25 per cent reduction in Board remuneration,” the company said.

This perhaps informs the company’s optimism that it will soon bounce back to winning ways. “The next year should therefore provide key catalysts for value appreciation for shareholders as we move forward in building a leading Africa-focused exploration and production business,” Akinyanmi said.

ISAAC ANYAOGU

T

he preceding year is perhaps one Lekoil will quickly love to put behind it.

The ambitious, oil and gas exploration and development company with a focus on Nigeria and West Africa more generally, saw its profits dip and lost a lingering court case but its optimism remains infectious.

“The priority for 2019 is to grow production volumes at Otakikpo through Phase Two development (subject to funding) to reach gross volumes of 15,000 to 20,000 bopd,” says Olalekan Akinyanmi, the company’s CEO in a note to investors.

Akinyanmi also said that the first step has already occurred, with 3D seismic data acquisition and interpretation now completed.

“We also continue to advance toward the start of the appraisal drilling programme on Ogo in OPL 310. We will work with our joint venture partner, Optimum to negotiate agreements that will allow us to make progress on the block, after securing all relevant regulatory extensions and approvals.

An analysis of the company’s results tells the story of inevitable pain

Lekan Akinyanmi, CEO Lekoil

of positioning for long-term growth.

In its Otakikpo field, sited in a coastal swamp location in oil mining lease (OML) 11, adjacent to the shoreline in the south-eastern part of the Niger Delta, production levels averaged approximately around 5,345 bopd in 2018 even though it only started drilling in the first quarter of 2017.

During the course of the year, the company began the second phase of preparations for development with acquisition of 3D seismic in February, with an updated conditional prepayment rate being finalised ahead of publication.

Subject to agreement on funding with one or more industry partners, the company in a note to investors said plans are underway for a three to five well drilling programme, targeting to increase production levels to approximately 15,000 to 20,000 bopd.

In its OPL 310 located in the Nigeria Dahomey basin, the company has advanced plans for the appraisal drilling programme with well loca-

tions selected. It has also began funding discussions with certain industry partners until the Federal High Court ruling nullifying its acquisition of Afren Oil and Gas (Nigeria) Limited (and its 22.86% interest in OPL 310) inchoate and invalid given the failure to obtain Ministerial consent.

It is easy to see how these investments will impact the bottom-line in the short term but the company stands to benefit in the long-term if oil prices rise as fallout of geopolitical tensions.

For Lekoil and other exploration companies in Nigeria, navigating through the maze of regulatory approvals in Nigeria represents the biggest challenge in operating in Nigeria. This also largely accounts for why the company has not taken the Ogo fields, offshore Lagos to production even after spending $200m along with its partners to develop it.

“Slow pace of regulatory approvals has been the single biggest chalwww.businessday.ng

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Tuesday 02 July 2019

BUSINESS DAY

OFFGRID BUSINESS

23

ANALYSIS

Advances in renewables gather steam amidst local investor apathy ISAAC ANYAOGU

L

ast week, renewable energy start-up Arnergy attracted $9million in financing for expansion from Breakthrough Energy Ventures with participation from the Norwegian Investment Fund for Developing Countries (Norfund), ElectriFI (EDFI Management Company) and Shellfunded off-grid impact investor, All On the only local investor participating in the arrangement.

As a matter of fact, All On, is the only true local investor in the sector as commercial banks and other financing institutions continue to misread the tea leaves when it comes to the renewable energy sector.

Analysts say over 80 percent of investments flowing into the Nigerian off-grid sector are coming from outside the country. Ify Malo, Nigeria Campaign Manager for Power For All, a decentralised renewable energy advocacy, said foreign interest in Nigeria’s off-grid energy space must mean there is value to be had. So local investors who get in the game when the market has become saturated would only play catch up.

So if renewables are the future, why have local investors continue to shy away from it? The answer lies somewhere along the spectrum

of an inability to predict trends, a mulish aversion to risks and an unwillingness to be part of building an industry from the ground up.

For many Nigerians, they are yet to be weaned from the false narrative about renewable s like solar being unreliable and unable to power heavy equipment. There is also the concern that solar is too expensive.

But current leaps in innovation made with solar energy technology demands careful introspection.

According to a Forbes report, alternatives to the most common type of solar cell today – the crystalline silicon (c-Si) are now becoming widespread.

There are other materials that can be layered in thin films like cop-

per indium gallium selenide (CIGS) and cadmium telluride (CdTe), which have not made a splash in the market because they are more expensive and difficult to produce.

But innovations such as thin-film photovoltaics where microscopically thin coatings of semiconductor material onto an underlying material will result in better incorporations of photovoltaics into buildings are on the rise.

Recently, the innovation of perovskite solar cells - third-generation solar cells, composed of a calcium titanium oxide mineral which is composed of calcium titanate (CaTiO3) – are leaving the labotary rooms for the market. Their high absorption coefficient enables ultra-thin films

of around 500 nm (one nanometer equals one billionth of a meter, or 0.000000001 m) to absorb the complete visible solar spectrum.

This means that the future of architecture is that every building could feasibly be covered in these cells without disrupting the aesthetic form, colour, texture and style – solar energy that essentially blends in rather than stand out for twice the output of current panels. Basically, solar panels are being reinvented and recast through thinner materials where the tensile strength can meet architectural and engineering standards while also improving the energy output.

The report said that this newer technology does not invalidate the old as solar farms necessitate sturdy constructions that thinner cell technologies might not be robust enough to meet at present. But given the versatility of perovskite solar cells, it may be possible to soon see architecture whose exterior is entirely incorporated of perovskite cell technology eliminating the need for solar cells on uniquely flat roofs. Perovskites are stand-alonecells which means that they can be applied to windows as well as walls and roofs of all buildings.

These advances are not limited to solar energy. In the past, the focus of the industry was increasing the total nameplate capacity of wind turbines, now the focus has shifted

to ramping capacity, which helps to keep energy cost low by providing the most possible power.

Technology feats achieved by GE has led to an increase in the size of the rotors used on wind turbines thus raising their capacity. Turbine rotors are affected by two different forces: torque, which turns the rotors and creates energy, and thrust, which pushes against the turbine.

Breakthroughs on turbine controls led to being able to handle the additional thrust generated by wind.

As advances in technology leads to breakthroughs in renewable energy, attention is gradually shifting from fossil fuels despite the grandstanding from OPEC. Recently, General Electric announced it would close a California gas plant 20 years ahead of schedule because it was now uneconomical to support it further.

It wasn’t that the United States ran out of gas, but California’s aggressive clean energy goals and commitment to using renewable energy played a key role in GE’s decision to take the plant offline.

For all its breakthrough innovation, GE misread the tea leaves on clean energy. It lost hundreds of billions of dollars of investor money as its stock plummeted.

Investors in Nigeria who keep ignoring the off-grid sector now may find themselves rushing to join when the ship is almost sailed.

Nigeria, Senegal will develop over half of planned mini grids in Africa by 2030- World Bank DIPO OLADEHINDE

A

recently released technical report by the World Bank has revealed that more than half of the planned mini grids in Africa will be developed in Senegal and Nigeria by 2030.

According to the Bank’s 2019 report titled “Mini Grids for Half a Billion People,” Africa has the largest share of planned mini grids which means that mini grid deployment will grow predominantly as more than 4,000 mini grids are being planned for development in Africa.

“More than half of the planned mini grids in Africa will be developed in Senegal which will develop over 1,217 minigrids while Nigeria will develop over 879 mini grids,” the report said.

The report noted that Nigeria is one of the frontier countries were

the regulator has adopted one of the most comprehensive sets of mini grid regulations in Africa covering issues like licensing, retail tariff setting, and what happens when the main grid arrives as well as a comprehensive national electrification strategy and implementation plan.

In some of the largest economies in the region, such as Nigeria, Ghana, and Angola, more than 25 percent of businesses lose more than 10 percent in sales because of power outages, with individual firms reporting losing more than 70 percent, the report said.

Nearly 80 million people in Nigeria lack access to electricity.

To address this challenge, Nigeria’s Rural Electrification Agency (REA) is implementing the World Bank– supported Nigeria Electrification Project (NEP), which aims to scale up investment in mini grid and off-

grid solutions.

On April 15, 2019, the REA launched the mini grid and solar home system components of the NEP. The mini grid component aims to extend electricity services to 300,000 households and 30,000 enterprises in rural areas by 2023.

This private-sector–led component provides viability gap subsidies to mini grid developers under two funding windows.

“Mini grids are now one of the core solutions for closing the energy access gap. We see great potential for mini grid development at scale and are working with countries to actively mobilize public and private investment,” said Riccardo Puliti, senior director of Energy and Extractives at the World Bank.

Globally, the World Bank noted that mini grids, previously viewed as a niche solution, can provide

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

electricity to as many as 500 million people by 2030, helping close the energy access gap.

“The combination of falling costs, dramatic increase in quality of service, and enabling policies has made mini grids a scalable option to complement grid extension and solar home systems,” World Bank noted.

Figures from World Bank revealed 47 million people are connected to 19,000 mini grids, mostly hydro and diesel-powered, at an investment cost of $28 billion. “Plus: 7,500 mini grids planned, mostly in Africa, mostly solar-hybrid, connecting more than 27 million people at an investment cost of $12 billion.”

The report which was funded by the World Bank’s Energy Sector Management Assistance Program (ESMAP) noted there are more than

26,000 installed and planned mini grid projects around the world while globally, at least 19,000 mini grids are already installed in 134 countries and territories, representing a total investment of $28 billion, providing electricity to around 47 million people.

“Most of these mini grids are dieselfuelled, followed by hydro-powered and solar-hybrid systems. Between 2014 and 2018, twice as many solarhybrid mini grids were built compared with the period between 2009 and 2013,” World Bank said.

In Africa and South Asia only, investment figure drops to $5 billion for 11,000 mini grids covering 31 million people while another over 7,500 mini grids are planned to go online over the next couple of years, mostly in Africa, connecting more than 27 million people for an investment cost of $12 billion.

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

24

Tuesday 02 July 2019

BUSINESS DAY

What to wear at work: the new rules High heels or sandals? Suit or shirtsleeves? Why office dress codes are suddenly in flux Shahidha Bari he wears her clothes as if they were thrown on her with a pitchfork”.

This is my favourite insult hurled by a character in Jonathan Swift’s 1738 satire Polite Conversation — and also a reasonable description of me on an average day as an academic, slumped over student essays at my desk at home.

Though I make more of an effort when venturing out into the world, removing visible coffee stains and ink blots, I also struggle to remember the last time I wore a suit at work.

Academics, admittedly, are a motley crew at the best of times, but their sartorial confusion speaks of a much wider trend.

In d e e d , o f f i c e c u l t u re s and working conditions have changed so dramatically in the past couple of decades that many of our dress codes now seem utterly perplexing.

As freelancing and outsourcing have spread through the economy and ever more of us “hot desk” or work from home, the once well-established and mutually understood relationships between managers and employees are being recalibrated.

Meanwhile, the flourishing landscape of tech start-ups and creative design companies seem to have initiated a tieless revolution.

Seldom is the new uncertainty more apparent than during the summer, which arrived in earnest this week in London to prompt a sudden uptick in half-sleeve shirts and crumpled linen suits.

In sweltering temperatures, when we’re stuck at our desks in shoes and socks, tailored dresses and ties, the absurdity of the old office dress code becomes apparent.

How could there be one mode fit for all weathers? And glancing down a commuter train carriage on a hot day at the loosened collars, open-toe sandals and (God forfend) shorts, you might well think that formal office wear, even for bankers and lawyers, is on its way out.

Is this increased informality of dress also changing the way we engage with one another?

When it comes to the treatment of women in the workplace, you have to hope so.

Recently in Japan, actor and writer Yumi Ishikawa launched a petition protesting against

“S

the high heels that are apparently compulsory for women in some Japanese offices, amassing 30,000 signatures.

Asked to comment on this, the Japanese health and labour minister, Takumi Nemoto, reasoned that heels were “necessary and appropriate”. Who knew that bunions were integral to business?

A thousand women waved an angry stiletto in despair. Ishikawa’s campaign has also generated international attention.

Its hashtag #KuToo (a play on the Japanese words for shoe, kutsu, and pain, kutsuu), nicely echoes the #MeToo campaign, and many women, I suspect, feel her pain quite literally.

Haven’t we all been there, at some point or another, hastily swapping out functional footwear for something more appropriate for the office?

If you’ve ever seen Mike Nichols’ go-getting 1988 romcom Working Girl, you’ll remember that Melanie Griffith’s character Tess does something similar in the film’s opening sequence.

Elbowing for room on the Staten Island Ferry, she hurries into Manhattan along with hundreds of others starting their working day.

Once in the office, she peels off her trainers and pulls on a pair of heels.

Thirty-one years after Working Girl, it’s depressing to be circling the same old questions about what women are supposed to wear in a workplace.

The question of clothes is so often a double bind for women www.businessday.ng

who might want to be judged on professional attributes rather than mere appearances, but who also know there are unspoken rules that make workplace dress a minefield.

(Anyone preparing for the onslaught of office summer parties and considering bare sleeves rather than a blazer will tell you so.)

If you love clothes, then it’s harder still, since being seen to care about what you wear can be taken as a sign of superficiality.

Perhaps our recurring debates about dress codes reveal something else: a deeper anxiety about never feeling at ease, either in the clothes we wear or the skin we are in. Dress is one of the ways in which some of our most serious concerns about power, authority and freedom are expressed.

There is more to our clothes than meets the eye. Women in the workplace, especially, know all about self-consciousness.

It comes as a consequence of the status of women’s bodies in life more generally: the various ways in which they are observed and evaluated for their appearance, often against their will.

At worst, this takes root in us as an unflinching internal supervision. We imagine how we might be watched and we keep ourselves in check.

We dress to solicit approbation, desire and respect, but also to keep criticism, rejection and assault at bay.

Behind the question of what women wear is this anxiety, recognisable in those moments

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when a woman catches herself and thinks twice at the mirror by the front door, tugging at the hem of a skirt or pulling up a low-cut blouse, silently slipping off a formal jacket at a party, or smoothing down a T-shirt in a meeting.

And that sense of anxiety is not always misplaced. In the workplace, we are bodies as well as suits, although we don’t often want to admit it.

Dress codes present us as uniform and inoffensive, but we don’t always engage with each other dispassionately and without discrimination.

Isn’t this one of the hard-won insights of the #MeToo movement and the sexual reckoning that has come of it?

We meet and work in our offices, conferences and boardrooms, in navy suits and polished shoes, reassured by the veneer of respectability — but there’s no guarantee that a code of conduct will keep us safe.

The suit — sturdy, respectable, dignified — has dominated the history of menswear since 1666, when Charles II issued an edict prescribing a uniform of shirt and waistcoat for noblemen.

Samuel Pepys even records it in his diary entry of October 8, noting the king’s “resolution of setting a fashion for clothes, which he will never alter.

It will be a vest, I know not well how; but it is to teach the nobility thrift, and will do good.”

It is a mark of its power that the suit should have endured. A good suit will endure.

They can be timeless, and @Businessdayng

they also impart an authority that will survive any manner of indignity.

They promise their wearers that they will emerge from any encounter unscathed. At its most exaggerated, we see this as James Bond gracefully dusts off after his brush with death and saunters into the sunset.

Or take Keanu Reeves, miraculously slick-suited in the John Wick films even when splattered in blood and sprinkled with gunshots.

You can get a suit wrong, of course. Think only of the schlubby polyester worn by Ricky Gervais’s cringeworthy David Brent in The Office.

The right suit suggests composure, just as the badly fitted one betrays ineptitude beyond matters of clothes. How does an item of clothing acquire this kind of power?

In his 1975 study Discipline and Punish, the French philosopher Michel Foucault described the obedient citizen as a “docile body”.

This docile body, he asserted, is the product of schools, hospitals, the military and the workplace, a human being marshalled and trained to be useful to a modern capitalist economy.

The docile body obeys laws, heeds instructions, never deviates, and so the suit — along with the formal uniforms worn in schools, hospitals and courts of law — is one way in which this disciplinary society makes itself manifest.

It seizes the smallest quirk of individuality as a flashing warning, a signal of dissent to be quashed.

But Foucault’s disciplinarian society also works more unobtrusively, cultivating in each subject an internalised sense of self-judgment.

We watchfully self-regulate for fear of reproof. The ways that we apparently “choose” to dress can betray that inward vigilance.

In the workplace, many of us dress cautiously, wary of digressions from specified regulations and accusations of unprofessionalism.

The question at the heart of the disciplined society is that of what exactly we are regulating.

What do we fear will surface from beneath the sobriety of the suit? It’s a curious paradox that as office culture looks more and more relaxed, the codes of conduct have grown stricter.

The modern suit has a certain totality and robustness, an Continues on page 27

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Start-ups are hunting valuable MBA hires New businesses want to take on people who can run the company while CEOs secure funding

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ew Age Meats is not a conventional MBA recruiter.

The San Francisco food start-up, which is developing a technique to grow meat from animal cells, has yet to close its first funding round and has just four people on the payroll.

But its first hire was MBA student John Pattison, a former management consultant and US army officer, who joined fresh from his graduation ceremony from NYU’s Stern School of Business in May. B r i a n Sp e a r s, Ne w A g e Meats’ co-founder and chief executive, was sure that an MBA graduate would provide what he needed.

He wanted someone who could think and act like him, and lead day-to-day operations while he focused on closing the company’s $3m seed funding round.

“My full-time job at the moment is fundraising,” Mr Spears says. “I need help to do all the other things to run the business, and someone like John, with an MBA, is ideal for that.”

This year’s annual global MBA recruitment survey by business school entrance exam administrator the Graduate Management Admission Council, found that 62 per cent of those defining themselves as start-ups planned to hire MBA graduates in the coming 12 months, up from 45 per cent in 2018.

This mirrors an increase in MBA hiring by the more established technology companies, such as Microsoft and Amazon.

These Big Tech groups are now the largest (by numbers of people hired) recruiters at several leading business schools, having overtaken management consultancies and investment banks.

Today’s tech start-ups are in many ways just aping their peers, according to Sangeet Chowfla,

GMAC’s president and chief executive.

“In this hypercompetitive environment, rapidly scaling a business requires world-class management intellect and skills, attributes associated with MBA graduates,” Mr Chowfla says.

For the MBA students, the attraction of start-ups is the ability to see their skills making an immediate impact.

“It creates a win for both sides,” Mr Chowfla says. For MBA students looking to get hired by a start-up, timing is crucial.

Unlike investment banks and management consultants, early stage businesses do not have long, well-structured processes for MBA recruitment involving campus visits and multi-stage interviews.

They tend to hire on demand and need potential recruits to be able to start immediately, so success involves a high degree of luck and obsessiveness to get a foot in the door.

Christian Keil, who completed his MBA at Berkeley’s Haas School of Business in May, was initially rejected when he ap-

plied for the role of “supply chain specialist” at Astranis, a designer of low-cost satellites.

The company is so young that it only secured its first customer at the beginning of the year.

“I was patently unqualified,” admits Mr Keil, whose experience prior to Haas had been in management consulting. However, having found a company that interested him — Mr Keil had tried developing a blockchain-based billing business for mobile roaming contracts while at Haas — he began following the jobs board on the Astranis website and applied again when an operations manager role was posted.

This time he got the job. “I was lucky to reapply at the perfect time,” Mr Keil says.

“It turned out they had changed their recruiting strategy to find generalists over specialists.”

Mr Keil was also lucky in that Astranis decided to take a chance on hiring a business school graduate, something it had not done before, according to Miki Heller, the company’s

vice-president of business operations and strategy.

The decision to hire him had more to do with his start-up experience than his degree, however, she notes.

“We don’t spend too much time worrying about credentials,” Ms Heller says. “Instead [we] look at what people have actually accomplished.”

Mr Keil did take a pay cut. He estimates that his base salary at Astranis is three quarters of what he could have earned at a consultancy or bank with his MBA. But at Astranis he gains an equity stake in the business.

“People who come to work for us usually agree our compensation package is going to be incredibly valuable,” Ms Heller says.

“They are usually more motivated by our mission and the work they’d get to do here than the money.” Working for a startup might seem risky, but it is more secure than taking all the risk yourself, according to Mr Keil.

His student venture was offered a term sheet outlining

the terms and conditions of a funding offer from a private equity group, but Mr Keil turned it down in favour of his salaried role and an offer of an equity stake at Astranis.

“My idea was good but not truly great,” he says. “I wasn’t ready to bet the next seven to 10 years on it given what I had learnt about the market.”

Chris McKee, senior commercial manager at Paws.com, is an MBA start-up hire now looking to hire other business school graduates like him for his employer, a London-based venture providing dog food deliveries to animal owners. “We cannot offer high salaries, but we can provide purpose,” Mr McKee says.

“We want to make a commercially viable business to enable us to make a difference in the pet ownership business, which I think is a much more motivating factor for an MBA.” Despite a rise in the number of MBA graduates hired by startup owners, there are plenty of businesses which remain wary of hiring from a business school.

Jeff Lynn and Carlos Silva met as MBA students at Oxford’s Saïd Business School and founded equity crowdfunding site Seedrs in 2009 straight after graduating.

More than £620m has been invested through the platform, which employs 90 people at offices in London, Berlin, Amsterdam and Lisbon.

But the company has never hired an MBA graduate and Mr Lynn says he cannot foresee them doing this, unless the firm grows significantly.

Most Seedrs hires are specialist roles, in particular software engineers, lawyers and product experts, he notes.

“MBAs are very good at strategy and analysis,” Mr Lynn says.

“But Carlos and I said the one thing we don’t need is more theoretical insight.”

place, asking the wrong question.

(I started with: What companies and leaders have I learned from the most? But I should have asked: Who do today’s diverse leaders most want to learn from?)

It was a classic example of why I’m always telling others to spend more time framing the question before pushing on to their answer.

It’s never easy to have to practice what you preach. One of my major pieces of advice to people who want to arrive at better questions is to not run away from uncomfortable moments.

In fact, I tell them to seek out conditions in which they’ll be a little more uncomfortable—because that’s usually a sign that their deep-seated assumptions or unexamined

mental models are being challenged.

Consider me freshly reminded how simple that sounds, and how hard it really is! But I stand by the advice, because I also think I’m likely a better teacher today than I was when I sent last month’s newsletter.

•Professor Gregersen teaches at MIT’s Business school and is pioneering the concept “Questions are the answer.”

Thanks for asking

By Hal Gregersen

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have a question for you, friends: If you were teaching leaders how to build a sustainably innovative enterprise, what practitioner-authored books or articles would you suggest as readings?

It’s not a casual question—I really want your recommendations! And that’s because, this month, I was really knocked for

a loop by not coming up with an acceptable set of my own.

I faced a group of leaders boycotting suggested pre-reads for a workshop and voicing serious concerns directly to me along with venting them indirectly and intensely on Slack. It was attention-getting.

And guess what I realized as the whole thing followed its own path? I had been blindsided because I had been, in the first www.businessday.ng

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EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Why Nigerian universities must address industry-academia disconnect KELECHI EWUZIE

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takeholders in the education space have expressed concerns over the increasing inability of the labour market in Nigeria to absorb fresh graduates and have called on tertiary institutions in the country to concentrate on delivering quality education with marketable skills and not just on expanding enrolment figures.

They observed that with national education policies and priorities geared towards enrolment increases, commensurate efforts are not being made to expand facilities. Enrolment challenges might thus easily eclipse others that face most educational institutions graduates in Nigeria.

Those familiar with the subject matter in the education sector told BusinessDay that for the achievement of Sustainable Development Goal Four, the provision of an inclusive and quality education for all systems must improve upon the quality of education and ensure that graduates attain measurable learning outcomes, including the acquisition of skills required by the labour market.

They maintain that a paradigm shift from increasing pupils’ basic skills at primary school, to expanding access to secondary and higher education, in order to ensure the skills attainment required by the labour market must be prioritised.

Reports show that the over 176 universities approved by the National Universities Com-

L-R; Enase Okonedo, Dean, Lagos Business School; Abimbola Olashore, Chairman, Board of Governors Olashore International School; Felix Fagbohungbe (SAN) Christopher Kolade, chairman of the occasion and Fred Swaniker, keynote Speaker during the 25th Anniversary Lecture of Olashore International School in Lagos.

mission (NUC) are annually under intense pressure to produce employable graduates with a broader set of both hard and soft skills.

Industry experts however, have observed that university curricula especially public universities are rarely reviewed or changed to incorporate current labour market requirements, adding that the high unemployment rate among Nigerian graduates is attributed to

a widening gap between university curricula and industry requirements.

Abimbola Olashore, chairman board of governors, Olashore international school, Osun State said it is quite unfortunate that many Nigeria still experience a disconnect between her institutions of higher learning and the skills industry wants.

He said that the country needs graduates

who are flexible, not fixated with formal employment, and who will “selflessly serve community and contribute to positive transformation.

Analysts opine that Universities are important institutions in that they teach graduates skills to meet economic demands adding that the link between a university and labour market can be explained by a university’s core function, which is teaching, in order to: transmit and advance knowledge; generate new knowledge and train skilled manpower for society.

Duru Chinedu, managing consultant, Hamilton Lloyd and Associates said that there is a skills shortage among university graduates, with most employers indicating that expertise in verbal and written communication is an important factor in employability.

“Apart from academic qualifications, employers also require applicants to have analytical, investigative, entrepreneurial, managerial, teamwork, time management and computer skills”, he said.

Industry experts are of the views that in a highly competitive labour market, emphasis is often placed on skills that university students acquire during their studies, beyond cognitive knowledge and academic proficiency.

They therefore insist that growing concern about the need to assess the impact of students acquiring broader skills and raises serious questions about the standards and skills offered by universities to students, with growing incompatibility between theoretical learning and employer skill requirements.

GE Nigeria, UKF partner to deepen literacy for primary school pupils

NIPCO upscale social investment in education sector with computer laboratory donation

…Launch- Mobile Library

Olusola Bello

KELECHI EWUZIE

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eneral Electric (NYSE: GE) in continuation of its commitment towards empowering, equipping and elevating communities in its areas of operation, has partnered with United for Kids Foundation (UKF) a non-profit organisation to set up a Mobile Library that will be used to run a literacy development programme called ‘Read To Me’ for primary school pupils in Lagos State.

Patricia Obozuwa, chief communications and public affairs officer, GE Africa while speaking during the launch of the Mobile Library at Akowonjo Primary School, Lagos said the idea for GE to sponsor the Mobile Library was borne out of the interactions and experiences the company has had from years of partnering with the United for Kids Foundation to run the Read-To-Me programme in conventional libraries set up in other government primary schools across Lagos State.

Obozuwa opines that this initiative is ingenious because the library is mobile library, which means it can serve several schools simultaneously, adding that the project is one of many that GE has supported as part of its continent-wide Corporate Social Responsibility platform, GE Kujenga.

According to her, “GE Kujenga focuses on empowering people by building valuable skills,

equipping communities with new tools and technology and elevating innovative ideas that are helping solve Africa’s challenges. Not many skills are as valuable for the child as the ability to read. This programme fits naturally into the ‘empower’ bucket of GE Kujenga”.

Speaking on the journey so far, Aameenah Yunus-Ali, programmes manager for UKF said the foundation has been running the ReadTo-Me literacy programme for kids in various schools for eight years.

Yunus-Ali said the foundation decided to use primary schools in Alimosho Local Government Area as pioneers for the Mobile Library because of its large population of primary school children and because it is easily accessible.

“The programme runs basically by us first assessing the kids to identify their literacy levels, and this is what the volunteers would be doing today. We identify kids who are easily passed over in their classrooms in primary four and primary five. What we do is, first we have a reading assessment that we do to know how well the kids can read. We then measure this assessment based on the standardized word count per minute, “she said.

On her part, Remi Erinle, a member of the GE Volunteers Council said that the staff of the company are excited about volunteering on projects like this where they can help the kids develop their reading abilities.

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IPCO Plc, a downstream operators in the nation’s oil and gas industry has upscale its social investment in the education sector with the inauguration of modern computer laboratory for pupils in Lagos state public schools.

The feat is part of the company’s broad CSR policy aimed at improving its intervention in the area of health, education and infrastructure upgrade in its host communities amongst others.

Sanjay Teotia, managing director, NIPCO while speaking at the inauguration of the lab said that part of the vision of the project is to make the centre a major hub of computer education in the area and serve as bond with the community as one of the company’s stakeholders.

Teotia listed the facilities and infrastructure upgrade embarked upon to include: Refurbishment of one of the classroom in Apapa Nursery & Primary School – Screening of walls, painting, electrical, flooring, provision of sliding windows, enhanced illumination of the centre etc Other includes: Provision of 12 Dell Desktop computers, printers, furniture’s and other ancillary facilities Two HP air conditioners, 7.6KVA generator to ensure constant electricity to power the gadgets in case of public power supply challenges.

He further said that a maintenance plan to ensure that all the facilities provided are service-

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able all the time, personnel from the company’s IT department would undertake regular check on the computers.

The urged that the facilities be put to good use in the overall interest of steady growth in the education sector of the state economy.

Fausat Olawepo, Education Secretary Apapa who represented Lagos State Universal Basic Education Board (SUBEB) lauded the management of NIPCO for all the consequential support for education in the state.

She said the numerous support of the company would definitely go a long way in improving the standard of education in the state aside from positioning NIPCO as a socially responsible organisation conscious of impacting positively on its host communities.

A parent of one of the pupils, Uwazuruonye Chinyere said “NIPCO Plc is a good company which is committed to giving back to its host communities as we can see today, the company had fulfilled another promise by establishing a well furnished computer laboratory for the school “ .

Uwazuruonye who represented the school parent forum said she was astonished seeing the refurbished building and the computers donated by the company as well as other items provided to ensure hitch free operation of the center.

One of the pupils, Dansu Alexander commended the efforts of the company in the past including sponsoring inter house sports, supplying of books and refurbishing of classrooms et cetera.

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EDUCATION

Isaac Osae-Brown

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re your students using technology to be consumers for information and knowledge or are they using technology to be producers of knowledge?

Research reveals that the term Project Based Learning is a model that engages students in learning important knowledge and 21st Century skills by creating an object or artifact to present evidence of learning. Project based learning is a dynamic classroom approach in which students actively explore real-world problems and challenges and acquire a deeper knowledge.

This model of learning helps students develop skills for living in a knowledge-based and highly technological society.

The old-school model of passively learning facts and reciting them out of context is no longer sufficient to prepare students to survive in today’s world. Solving highly complex problems requires that students have both fundamental skills (reading, writing, and math) and 21st century skills (teamwork, problem solving, research gathering, time management and utilizing high tech tools). With this combination of skills, students become directors and managers of their learning process, guided and mentored by a skilled teacher.

Focus on special education: PBL -A model for inclusive learning

Dynamism, pressures of today’s educational, societal environments

By bringing real-life context and technology to the curriculum through a PBL approach, students are encouraged to become independent workers, critical thinkers, and lifelong learners.

All students with disabilities need motivation at home and at school to learn how to socialize and collaborate with other typical children. Project Based Learning (PBL), is not just a way of learning; it’s a way of working together. If atypical students learn to take responsibility for their own learning, they will form the basis for the way they will work with others in their adult lives. The U.S. Department of Labor highlights the trends and challenges for Work in the 21st Century and states the following: “We are living in a new economy powered by technology, fueled by information, and driven by knowledge.”

Students with disabilities stand to face these challenges and therefore need to be prepared through PBL activities to ensure success in inclusive classroom settings. In the U.S, a growing body of research supports the use of Project Based Learning (PBL). Schools where PBL is practiced find a decline in absenteeism, an increase in cooperative learning skills, and improvement in student achievement. Project Based Learning is a powerful tool for the inclusive classroom. Even if a student or students spend part of their day in a resource or self-contained classroom, the time they spend in projectbased collaboration will be a time when typically develop-

formed on the back of the demands of our current environment. So it sometimes becomes very difficult to keep up with doing what we need to do to ensure that we eventually figure out what works for us or what might be best for us.

Given this, there seems to be a strong tendency for people to want to try anything and everything in a bid to find their one true talent or calling. However, in doing so, people just end up becoming so busy being busy doing all these things, such that being busy has become our new way of life. We are continuously moving faster and faster to keep up with the pace of this dynamic world.

Additionally, with technology and digital media coming in, one would think that our lives would be made easier through the ease of connectivity and instant availability of information. Rather, we only seem to get busier and busier every day, again another element of our new way of life.

The new mentality is that we must always be actively engaged in something; otherwise we start to suffer from that internal anxiety of feeling inadequate or lazy. Another school of thought is that our peers and society may even look down on us for not being “fully booked”. So there are elements of personal guilt and societal pressure when it comes to this issue of being busy. In fact, some people look at it as a thing of pride; whereas, we actually don’t even remember to give our bodies a break every now and then and we end up doing ourselves more harm than good.

So for children, the days of going to school, learning the very basic subjects in class, returning from school to complete homework on these subjects, and then spending the remainder of the day relaxing, reading a storybook or playing outdoors seem to be moving closer and closer to extinction. These days our children are involved in one extracurricular activity or the other in line with the demands of our environment. While the inclusion of extracurricular activities in the school curriculum adds that robustness, which prepares our children for the dynamic world, it seems as though some parents might be subtly and unknowingly passing down this “busyness mentality” to their children.

Some children participate in so many activities, that they are constantly engaged and have no quiet time. This sometimes takes away the opportunity for them to “simply be children”, interact with their natural environment, set some time aside to think, meditate and literally just be….like what systems like those in countries such as Finland and Norway are beginning to adopt now in Early Years.

This is really not to take away the importance of building a variety of skills in our children through their various activities. But what happens during the period when children find a gap in their busy schedules.

Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

weight of a wedge heel.

Mobility is central to the language of woman’s emancipation — the glass ceilings through which we can break, the kitchens in which we are no longer expected to stay, the children we leave behind at home, the career ladders we struggle to climb.

How women move in shoes matters. Mobility is a feminist question and a metaphor too about where women want to get to and how they are enabled do so.

It’s a curious paradox, then, that as office culture looks more and more relaxed, the codes of conduct by which we seek to ensure equality and freedom from harassment seem to have grown stricter.

Some men might be foxed by the question of what is appropriate behaviour in a place of work, but women have always had to consider the question of how they might present themselves and what it means to appear seemly, proper and safe.

It’s a mark of our progress that we’re all — women and men — having to reflect on

how we comport ourselves at work.

We’re remembering that beneath the suits, we are real bodies with a responsibility to engage decently with others.

You might think that the retreat of the physical workplace — all those virtual conferences and kitchen tables masquerading as meeting rooms — would help us sidestep such conflicts.

I’m not so sure. In the end, I can’t help but feel a certain nostalgia for offices and the clutter they accumulate: the lopsided coats languishing on the back of chairs, the spare tights stored in the top drawer, the abandoned trainers just peeping out from under the desk. Thankfully, not everything can happen in cloud techno¬logy and via online file-sharing. At some point, we all have to dress for work and put our actual best foot forward.

ing peers will model both good classroom and academic behavior. Project Based Learning is an excellent way to differentiate instruction in a full inclusion classroom especially when that class includes students of widely different abilities, from the cognitively or developmental disabled to the gifted children.

Many children with disabilities benefit from sensory input, and students who have Autism or are Dyslexic benefit from being able to move as they process information with their peers. When students are excited about what they are doing in school, they will behave better, participate more fully and benefit the most.

Project Based Learning is a powerful tool for the inclusive classroom. This model of learning has proven, in research, to improve concept retention in a range of students. Students, not just students with disabilities, all come with different learning styles. Some are strongly visual learners, auditory and kinetic who all collaborate to learn best when they can move.PBL approach suits children with learning difficulties because it allows them to work at their own levels of differentiated learning.

Isaac Osae-Brown works for the Compton Unified School District in California as an Education Specialist and a beginning Teacher Mentor. He is a resource person, an advocate and a speaker for Special Education services in the United States and abroad. www.facebook.com/inclusivemindset

OYIN EGBEYEMI

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ducation is an area that is continuously evolving. And why wouldn’t it? The world itself has become so dynamic in nature that it is increasingly imperative to ensure that we and our children are very much aware of the ongoing changes; and then adapt to suit our environment such that we do not lose out on various opportunities that would generate great advantages for us.

In today’s world, education by theory, as it was done in the past, would simply not suffice.

It is no longer enough to go to school, learn subjects in class and not apply practical learning to the real world. It is no longer enough to limit learning to the classrooms when there are so many skills and talents to explore beyond the borders of the classroom; when people are making a living from some of the most alternative talents; when mainstream jobs such as banking and engineering are no longer the only career options available in order to attain wealth, fulfilment and overall success.

Education has now taken a whole new dimension with so many options for activities and learning experiences

What to wear at work: the new...

Continued from page 24

“irritating perfect¬ion”, as dress historian Anne Hollander once wrote, noticing in it a completeness at odds with the jagged edges of life.

The solidity of the suit sits awkwardly, she writes, when “current millennial impulses tend towards disintegration”.

When all around is fragmented and deconstructed, the suit remains, largely, the same.

Even the language around it is freighted with power: think of the implicit force in the words buttons, braces, zips, cuffs and ties. Even in its verb forms — the “collaring” and “buttonholing”, for instance, that mean to entrap or corner — the language of the suit suppresses and restrains.

Power is a part of the suit like no other item of dress, audible in its language and visible in its form.

The suit emanates power, channelled through managers, bankers, lawyers, the police and politicians, all outwardly imparting their authority.

This power can be self-

effacing, so ordinary and ubiquitous that it is invisible. But the suit isn’t invisible. It’s a piece of complex geometry and skilled engineering.

A tailored jacket consists of 45-50 component parts and its fabrication can require up to 75 separate operations.

It is one of those habitable structures — like homes, schools and temples — that we build and in which life takes place.

At our most testing times, at weddings and funerals, job interviews and court hearings, we wear the suit as though it might imbue us with something we seem not to possess without it.

This is its greatest illusion — the strength and rectitude it can signal even where there is none.

And the moments when the façade of the suit’s impenetrability falls away can be powerfully illuminating: think of shamefaced traders exiting a fallen investment bank, clutching their possessions in cardboard boxes.

For women, of course, the rules are very different.

In 1966, Yves Saint Laurent www.businessday.ng

designed “Le Smoking”, a trouser suit for his vision of experimental womenswear.

Redolent of the Hollywood androgyny of Marlene Dietrich, it chimed, too, with modernity and the increasingly unfixed lines of sexual difference.

In Helmut Newton’s photograph for Paris Vogue in 1975, a woman, cool and slender, stands in a night-lit street, cropped hair slicked back and a cigarette in hand.

She is her own man, more than a brilliant simulation or a masquerading pretender to the crown. She gamely seizes for herself all their privilege without a flicker of doubt.

In reality, the woman at work in her suit can be subject to derision, parodied and demeaned.

But perhaps it is fear that lies behind the often contemptuous attitudes to women in power who are routinely mocked for what they choose to wear in public life: the sneers about Hillary Clinton’s “pantsuits” or the jibes when Theresa May takes to prime minister’s questions in leopard-print heels.

Masculinity does not escape this encounter unscathed either. A woman in a suit reframes what it means to be a man, performing it askew or exposing it as a fantasy.

I think of the musician Janelle Monáe in her uniform of choice: tuxedos made glossy in satin, jazzed up with embellished lapels, cool, urbane and beautiful.

What is it that women want from the suit? Not necessarily to be a man, entitled to his authority and immunity.

Perhaps they want to be more than a man, to prove just how flimsy his power, how carelessly appropriated and easily discarded it can be.

The Japanese furore over high heels is just the latest iteration of an ongoing battle for workplace equality.

High heels can be beautiful — is there anything lovelier than the curved finesse of an instep? — but there is no innocence or accident to that fact that free movement is not a prerequisite of women’s shoe design.

This is disclosed in the sharpness of the stiletto heel and the badly distributed

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Shahidha Bari is a professor at the London College of Fashion (University of the Arts London). ‘Dressed: The Secret Life of Clothes’ is published by Jonathan Cape

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E-mail: jumoke.akiyode@businessdayonline.com

Five students to represent Nigeria at the 2019 Global Robotics Olympics Stories by Jumoke Akiyode Lawanson

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ive Nigerian students drawn from secondary schools across the country have been selected to represent Nigeria at the next First Global Robotics Olympics in Dubai this October. The students; Kosi Ugoji, Isaac Ibidun, Gbemileke Ogunrayewa, Sonia Bendrewere and Toluwaniyin OjoOsagie were selected from a tryout session with over 50 secondary schools in attendance.

Founded by philanthropic inventor Dean Kamen to inspire a passion for science and technology leadership and innovation among the world’s more than two billion youths, First Global Challenge provides the framework for an Olympics-style robotics event that drives home the importance of obtaining the science, technology, engineering, and mathematics (STEM) skills needed by future leaders to overcome the greatest challenges facing the world.

This year’s theme ‘Ocean Opportunity’ draws attention to the critical issue of ocean pollution to educate everyone on the need to take action to preserve oceans and wildlife. The

Ayotunde Coker, managing director of Rack Centre receiving the award for Excellence in Regional Data Centre Middle East and Africa at the 2019 Datacloud Awards in held in Monaco France, recently.

theme promotes collaboration and cooperation among teams, to solve some of the world greatest problems.

Each team will be required to build a robot that will join forces with other robots from other teams to take out pollution from the ocean.

Faisal Jarmakani, managing director, Aramex Nigeria and cosponsor of the First Global Olympics

said, “Our continued sponsorship of the First Global competition is a testimonial of our believe in Nigeria and the Nigerian youth. As a nation with a growing youth population, this platform will further catalyse our potential to solve our own problems and some of the world’s greatest challenges using technology.”

Describing the opportunity as

“life changing” Jarmakani said, “This is the third consecutive year we are sponsoring Team Nigeria and we have seen remarkable outcomes in the lives of these students and champions. Majority of them have received scholarship opportunities to top universities in Nigeria and abroad. We believe they will use the knowledge acquired to shift the

needle on economic technological advancement.”

Remi Willoughby, CEO, Roboglobal Educational Consulting and national coordinator of the programme, said; “In Africa, we need children than can think and collectively find solutions to their problems. By guiding these children to develop the skills to be critical thinkers and problem solvers, Africa and indeed Nigeria, will learn to solve its own problems by itself. This is the only way we can compete evenly in a technology driven world.”

Jarmakani hinted that the decision to co-sponsor the project with his brother Omar Jarmakani, was based on the need to encourage Nigerian youth to embrace technology and robotics.

Pending when the competition will commence in October, select students will be taught the rudiments of robot design through tutorials in maths, physics and engineering including programming especially using Java, carried out by competent instructors.

Nigeria placed 25th of the 163 teams from 157 countries, and 3rd from the 41 African countries in attendance at the first-ever First Global Olympics in Washington DC, USA in 2017.

Skyroam Simo partners Smile telecom for improved mobile data services in Africa

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mile Telecoms, a Pan-African 4GLTE telecommunications group with operations in Nigeria, Uganda, Tanzania and the Democratic Republic of the Congo, has formally entered into a partnership with Skyroam Simo, the world’s leading mobile Platform as a Service (PaaS) company providing global data access services.

This strategic partnership will enable more Africa mobile users to seamlessly connect to 4GLTE mobile network with improved coverage, faster speed, and more flexible plans.

Explaining what informed the

partnership, Ahmad Farroukh, Smile’s Group CEO, stated that “Smile is a leading 4GLTE carrier in Africa and we are always open to new and innovative technologies to bring continued value add and benefits to our users. Our partnership with Skyroam Simo will leverage its leading position in global virtual SIM platform and together bring the best service and value to our pan-African users.”

Indeed, Simo App emerges at the right time to bring access and affordability to mobile data for millions of Africans struggling today with expensive internet prices that keep them out of the market en-

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tirely. Skyroam Simo and its unique Virtual-eSIM™ technology can deliver seamless 4G data connection to any user.

In addition to creating a new way to access data for consumers, Skyroam Simo helps carriers to develop their market at nearly “zero” cost by improving the efficiency of acquiring new customers, to ease the hassle of traditional sales channels, and to drive more value by improving the relationship with their customers.

The partnership between Smile and Simo will enable more Smile users to leverage Skyroam’s platform of over 135 countries and 200 mobile networks with best coverage and

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speed. The development is a big leap forward amongst Africa operators.

Jing Liu, founder and CEO of Skyroam, said that “Skyroam Simo will work with Smile Telecom, a great partner who continues to believe in bringing value to its users as a long term strategy. Together, we will meet the needs of more people in Africa and bring explosive growth in mobile data usage. We will continue to innovate together with leading partners around the world to meet the demands of users where mobile data is becoming a must-have that impact our daily lives.”

The partnership also gives Iinternational customers from vari-

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ous countries in the world who use Skyroam devices the opportunity to roam on Smile 4GLTE network in all countries where Smile is present.

While most mobile phone brands in the market are trying to solve this core problem through complicated dual SIM dual Standby technology, Skyroam Simo was developed on the belief that the best solution is through simplicity and strong partnerships. Simo has invested in long-term R&D with leading manufacturer of mobile chip company MediaTek, to have the patented Virtual-eSIM™ technology embedded in all MediaTek 4G chips used by manufacturers.

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Tuesday 02 July 2019

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Smartphone review: Big battery meets AI technology in Tecno Pouvoir 3 done itself and taken the Pouvoir experience to a whole new level by equipping it with the latest in AI technology, in addition to its monster-large, ultra long-lasting battery.

Stories by JUMOKE AKIYODE-LAWANSON

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ince the launch of Tecno’s Pouvoir 3 smartphone with 5000mAh ultra long-lasting battery and Artificial Intelligence (AI) technology, smartphone enthusiasts are curious to know more about the unique features of the new device and the distinctive advantages of such cutting edge technology embedded in a hand-held device.

Well, one distinction is that the latest device, which combines software and hardware innovation with ultra-long lasting battery, gives users an uninterrupted four days of usage on just one single charge. With the issue of unstable electricity supply in this part of the world, it is no surprise that Tecno is regarded as Africa’s most preferred smartphone maker.

Meeting on demand needs of the Nigerian market, the Tecno Pouvoir series have been quite popular in the smartphone

market owing to their longlasting battery capacity,

advanced security set-up, and smooth performance.

Still, with the new Pouvoir 3, Tecno seems to have out-

Microsoft reinforces cybersecurity commitment to drive business

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lobal technology company, Microsoft has moved to protect the cyberspace by intensifying its investments and commitment to providing a safer and more trusted platform to organisations and businesses in the Middle East and African region.

The company which hosted a media roundtable in Lagos recently said it was prompted to focus more on cyber security after seeing shocking revelations on damaging online threats to businesses in its recently published Security Intelligence Report, which delved into the cybersecurity events that took place in the last one year.

With increase in trends of crypto-currency mining, phishing, ransomware and malware attacks, Microsoft says it is building better security with AI used to detect anomalies and protect against that.

The report identified four key trends that have

risen to the forefront in the fight against cyber threats.

“From our ongoing research, we found that in the past year ransomware attacks as a vector declined, software supply chains have become a risk, cryptocurrency mining is prevalent, and phishing still remains the preferred attack method,” says Daniel Adeyemo, digital advisor for Microsoft Middle East & Africa.

“While this may indicate progress in blocking ransomware attacks against organisations, it also draws our attention to new avenues now being identified for attacks. These new avenues are very easily ignored by organisations but are a recognisable ‘pathway’ for penetration.”

Although security has always been a focus for Microsoft, the organisation recognises that the digital world requires a new approach on how to protect, detect and respond to security threats.

Analysts estimate that in www.businessday.ng

Nigeria, ministries, departments and agencies continue to lose over N127 billion annually to cybercrime - this amounts to 0.08 per cent of the country’s annual Gross Domestic Product (GDP).

“While there will always be new threats, attacks and technologies, organisations and companies can begin to take action today to address security concerns and improve their security postures. It is critical for companies to strengthen their core security hygiene (across areas like monitoring, antivirus, patch and operating systems), adopt modern platforms and comprehensive identity, security and management solutions, and to leverage features offered within cloud services. It is just as important to create education and awareness across employee populations in order to build and sustain a pervasive security culture,” said Akin Banuso, country manager for Nige-

ria and Ghana at Microsoft.

“We believe that security is a journey and not a destination. This must be addressed holistically by everyone and not by a single vendor. By working closely with our partners, governments, industry, and the security ecosystem our aim is to ensure consumers and businesses can trust the technology they make use of - not viewing these solutions as barriers to technology adoption,” Adeyemo said.

It is also important that the world starts to prepare in terms of security, for the over 20billion interconnected devices that we would have by the year 2020.

Microsoft’s recently published Security Intelligence Report, which delved into the cybersecurity events that took place over the past year includes an overview of the threat landscape, lessons learned from the field and recommended best practices – this was also unpacked at the event.

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Features: It is smarter: Compared to Tecno Pouvoir 2, its predecessor, the new device – Tecno Pouvoir 3 – spots a 13MP front camera +13MP back camera enhanced by Artifical Intelligence (AI).

The camera’s interface can detect a subject in the frame whether it’s an outdoor landscape, an object indoors or a live subject, and automatically adjusts the settings to produce the most beautiful version of the subject.

It also has a wide-angle lens and an adjustable LED flash. The new device further combines AI technology with High Dynamic Range (HDR) technology to improve image quality in environments where there is poor lighting as well as environments with strong backlight. The AI-based al-

gorithm is also useful for its Face ID unlocking system that ensures bank-level security within the smartphone. To further boost security, there is a fingerprint reader at the back.

It is faster: With a Quadcore MT6739 processor, the high-performance Android 8.1, a smart HiOS 4.1 user interface plus a 32GB ROM + 2GB RAM, this smartphone has everything it needs to run smoothly for a long period of time, even when two or more apps are running at the same time.

The sizable random access memory (RAM) and read only memory (ROM) also help it run faster while creating plenty of space for videos, pictures and other files. The Tecno Pouvoir 3 flaunts a 6.2 inch super bright display and is encased in a glossy cover, with colour options such as city blue, midnight black and champagne gold available.

In all, it’s a great device and it comes at a price that doesn’t hurt at all. No wonder they say that Tecno is for Nigerians.

Samsung launches QLED 8K TV in Nigeria

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amsung Electronics has paved the way in innovative television technology with its launch of the first ever 8K QLED TV made available in the Nigerian market.

The company which launched this top of the range innovation of Friday 28, June 2019 at its office in Ikoyi Lagos, also announced that its 2019 TV line- up which features more screen size options, stunning picture quality enhancements, sharp colours from every angle, new design elements and intuitive smart TV upgrades is now available to purchase at selected stores in Nigeria.

“Our 2019 QLED line is designed for users who want the best combination of picture quality, smart TV capabilities and design,” said Dudu Mokholo, chief marketing officer at Samsung Central Africa. “This year’s line-up represents our largest screen size offering ever.

It brings together innovative feature enhancements and exciting content and service partnerships to deliver a truly ground-breaking viewing experience and unprecedented value,” he said.

The 2019 Q80 feature ‘Ul@Businessdayng

tra Viewing Angle’ technology, which restructures the TV’s panels so the backlight passes through the panel with lights evenly onto the screen. Engineered to reduce glare and enhance colour, Ultra Viewing Angle provides a vibrant picture regardless of where you’re sitting.

Q900 Series 8K TVs incorporate Samsung’s proprietary Quantum Processor 8K, which up-scales lower resolution content. Depending on the content, it can allow for playback close to crystal clear 8K resolution. This year’s models also utilise the Quantum Processor 8K that optimises audio and video to the specific content on the screen. It can create an even more detailed sound experience by tailoring the audio settings to the specific layout of the room. Samsung’s new QLED 4K models also feature their own proprietary Quantum Processor 4K, which can use AI upscaling to deliver improved brightness, picture quality and sound optimised for each scene.

Samsung’s 2019 QLED range takes the user experience to the next level by offering iTunes Movies and TV Shows and Apple AirPlay 2 support.

Tuesday 02 July 2019

BUSINESS DAY

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property&lifestyle Proptech

How technology is connecting people and property, disrupting market Endurance Okafor

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igerians are getting smarter ; thanks to technology, which is shaping the way people live, communicate, work, play, interact and transact business in Nigeria.

Although there are still some sectors that are yet to catch up with technological advancements, many have however evolved with technology resulting in ease of operations and better customer service.

The real estate industry is one of such sectors that have grown at an exceptional rate. The birth of online property platforms in Africa’s most populous nation is making transactions among developers, property owners, prospective buyers, and potential tenants easier, compared to the cumbersome processes witnessed a few years ago.

At one of the West Africa Property Investment Summits (WAPI), industry players were of the opinion that the deployment of technology would make Nigeria’s real estate sector more investable, increase liquidity and drive greater home ownership.

“Think back to the 80s and 90s, if you were going to purchase a property, you would

spend many days trying to find a decent agent who will charge you high fees to take you from property to property in only a few locations -meaning he was limited,” Yemi Johnson, the Chief Operating Office of Hotels.ng, said.

Statistics have shown that 7 out of 10 Nigerians feel that house hunting is painful, as it usually starts with calling friends or walking long distances with a road side agent who, more often than not, does have direct access to landlord, thereby making one pay multiple ‘agent’ fees.

“With my mobile phone, I was able to connect with a landlord online and in few days I got an apartment without having to meet up with any agent and paying for any extra charges,” Arua Nnamdi told BusinessDay. According to Nnamdi Chineme, CEO of Nigeria Property Centre, an online platform that advertises real estate properties, his experience in renting a flat in Nigeria in 2008 and the UK in 2009 was the reason he decided to set up his company. He said it took about six months to find a flat in Lagos while in the UK he found one in just a week.

The difference, he added, was down to the use of technology.

“Historically, in Nigeria, the speed of finding a property to rent or buy was mostly de-

pendent on the estate agents the person knew and the network of those estate agents.

Today, with the use of technology in the form of Property Portals, people can find a property as much as ten times faster,” Chineme explained.

Technology based (online) property platforms like Propertypro.ng (formerly ToLet.ng), Hotels.ng, myPadi. ng, Nigeria Property Centre, Lamudi which has now rebranded to Jumia Houses, Real Estate Market, estate intel, etc have brought technology to bear on real estate transactions, making listing,

leases and sales a lot easier “The adoption of Proptech is increasingly becoming a boon for the real estate sector in Nigeria,” Abdulhakeem Sadiq, chief executive officer of ZAMA, said in a statement.

“Now, a student could seamlessly find and rent an accommodation in no time whenever and wherever he/ she may be as we provide critical information such as photographs, reviews & ratings, pricing, etc about available spaces for rent,” Joel Amawhe ,CEO of myPadi.ng said.

As it happens in other sectors of the economy, technolo-

gy has penetrated the real estate sector and has disrupted the status quo, contracting jobs and creating new opportunities, especially for the millennial.

Checks by BusinessDay revealed that even though technology has positively impacted the property industry in Nigeria, it has also caused disruption for traditional players in the industry. Going forward, real estate agents, developers, landlords and investors who are not open to embrace technology or become innovative over time will lag in the growth of the sector, industry experts have said.

Chattel Estate in ambitious devt to leverage opportunities in Sagamu corridor

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he existence of many companies and factories including International Breweries Plc, Nestle Plc, Olam International, Eterna Plc, Jubaili Bros Engineering Limited, Witchtech Industries Limited, etc in the Sagamu axis of Ogun State have created opportunities for investors in both residential and commercial real

estate developments.

Besides the natives, the staff of these companies also need decentaccommodationandleisure facilities that will save them the cost and trouble of travelling to Abeokuta, the state capital, or Lagos to meet their needs.

These and more explain the reason for the coming of Chattel Estate with its Century Palms—an ambitious mixed use development designed to offer live, work and play

CHUKA UROKO

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Housing Development

CHUKA UROKO

New impetus for student housing as developer raises fund for expansion, infrastructure

opportunities.

“We are here to solve identified accommodation problem of both the natives and those who work in the companies in this axis. With Century Palms, we are creating a serene environment that offers residential and commercial opportunities,” explained Ifeanyi Okafor, CEO, Chattel Estate, at a groundbreaking event to signal commencement of construction work on

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the estate.

Okafor added that the estate which sits on 100 acres of land in Afiyeke Village, a few metres away from the LagosAbeokuta Expressway, offers a great opportunity to investors, workers and residents because of its good location, pocket-friendly pricing and serenity.

For investor who nursed fear of losing their investment to land grabbers, the chief executive assured that their firm has history of integrity and problem solving, adding that they were poised to ensure good returns on investment for prospective off-takers and investors.

“Off takers and investors have nothing to worry about as we exist to tackle the problem of trust and provide succour for those who had lost their investment in the real estate sector before; we protect investors money by building confidence and delivering on time and budget,” he revealed.

Even before the groundbreaking, the company had started providing infrastructure, believing that infrastructure was key. According to the CEO, gate house and

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perimeter fencing were now a priority and would be completed before the end of this year while the first set of landlords were expected next year.

“We are keen to protect our investors’ money because we thrive on trust going by our past products in Claire Avenue, Maple Greens and Chattel Estate in Ikorodu; we are motivated to grow as a solution provider with Century Palms for the accommodation need of this environment”, he said.

Continuing, Okafor disclosed, “we want to create a modern development to suit construction activities and factories springing up in this environment; so, it is not just an estate but a mixed use development addresses different needs of prospective residents.”

In line with the slowdown in the economy which has crimped consumer purchasing power, the CEO said the firm was operating off-plan structured sales in order to cater to different classes of people in society. This is why, he explained, the payment structure was done with everybody in mind. @Businessdayng

t was new impetus and boost for student housing in Nigeria recently as frontline developer in this space, Student Accommod8, raised fund from Nigeria Infrastructure Debt Fund (NIDF) managed by Chapel Hill Denham for the purposes of expansion.

Student Accommod8 is the owner and manager of high-quality and PurposeBuilt Student Accommodation (PBSA).

The debt financing is to be used for expansion of the developer’s two existing PBSAs, serving Pan Atlantic University and Olabisi Onabanjo University, which have been designed, built and managed to the highest standards, providing value added services including minimarts, cafeterias, laundry services and many more to not only the residents but also to the wider student community in the respective universities.

In the last decade, there has been a 12 percent annual average growth of student enrolment in Nigerian tertiary institutions while the provision of purpose-built student accommodation is less than 30 percent of the demand.

With the ever-growing demand for student housing in Nigeria, Student Accommod8 plans to develop and/ or acquire 15,000 bed-spaces in the next 3-5 years.

NIDF is Africa’s and Nigeria’s first listed infrastructure debt fund. The fund is structured to enable domestic long-term savings such as pension and retirement assets to be safely channeled into productive infrastructure assets in the country.

While supporting commercially attractive projects, NIDF enables its investors to benefit from the predictable returns available from long dated infrastructure debt investments.

“We are very excited to have a partner in the caliber of NIDF come on board and we look forward to a long and mutually beneficial relationship which will impact the lives of Nigerian students positively.

“Our goal is simply to continuously deliver the best experience for students across the country. Nigeria’s students are the future and we intend to serve them the best way possible,” said Abayomi Onasanya, Founder/CEO of Student Accommod8.

On his part, Anshul Rai, CEO, Nigeria Infrastructure Deft Fund, noted that financing of social infrastructure, particularly in education and healthcare, was central to NIDF’s investment objective as well as their broader mission to drive positive development outcomes.

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Tuesday 02 July 2019

BUSINESS DAY

property&lifestyle Housing Deficit

South Africa, Namibia templates indicate possibility of bridging Nigeria’s housing gap HARRISON EDEH & INNOCENT ODOH, Abuja

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igeria’s population currently put at about N200 million and growing certainly puts more pressure on the available resources to be shared by an ever increasing population.

To worsen the concern, inappropriate policy direction, albeit policy inconsistency, has been the bane of Nigeria’s dwindling fortunes with regard to maximising it’s economic potential as the Africa’s largest economy.

Nigeria has an ever increasing housing deficit of more than 17 million. President Muhammadu Buhari’s first tenure promised to build one million houses per annum to address the huge housing deficit and was even re-emphasised by Boss Mustapha, Secretary to the Government of the Federation just last year.

The ruling party, the All Progressive Congress (APC) said it would review the Land Use Act and provide the infrastructure to realise the plan of addressing Nigeria’s housing deficit.

In 2015, Lai Mohammed, the former Minister of Information and Culture said at an inter-party debate organised by the Centre for Democracy

and Development, and Open Society Initiative for West Africa said, “We would use the Land Use Act reform in a manner that will encourage all states to computerised their lands. That is why we said we would create a mortgage market that can build one million houses per annum.”

A lot of these promises down the line have not been fulfilled within the last four years, which compounds Nigeria’s housing problem, amidst concerns of ever increasing population growth rate of almost 3 percent.

Fact check shows that not up to 5000 houses were built by the government at the first tenure of the APC led federal government which has not embarked on the needed reforms which ought to attract private capital into the housing sector.

But how can a government with a paltry budget of about N9 trillion naira, albeit borrowing to fund a greater percentage of its budget, amidst concerns of also a huge chunk of subnational government’s struggling to pay salaries of workers be able to close the housing deficit gap on its own without the support of private capital?

In turning around the situation, Nigeria has so much to learn from countries like South Africa and Namibia,

experts submitted at the BusinessDay real estate summit in Abuja recently.

In South Africa, for instance, the government has introduced a policy of broadbased black economic empowerment, which requires foreign companies to go into partnership with local business, shifting company ownership patterns.

Specifically in 2006, South Africa’s Public Investment

Commission (PIC) announced plans to create a continent-wide 25-year equity funds to mobilise local and international investment for infrastructure development in Africa. PIC includes the government’s employees pension fund and has about R600 -billion in assets under management, making this the largest fund management initiative in the country.

In Namibia and Mozam-

Financing & Investment

LBS, Fine & Country partnership promises insights into real estate finance, investment CHUKA UROKO

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etermined to advance the cause of real estate sector in Nigeria by providing market direction and analysis, Lagos Business School (LBS) and Fine and Country West Africa International have entered into strategic partnership aimed to offer insights into financing and investment in the sector.

The partnership is also out to address one of the biggest misconceptions about real estate investing which is that the investor needs to have a lot of money to get started.

The secret that many professionals don’t understand, however, is the fact that there is a multitude of different real estate financing options available to fund every investment and, according to Udo Okonjo, CEO, Fine and Country, the method in which a specific deal is funded can greatly impact its outcome, making understanding of the financing aspect very

important.

Okonjo pointed out, in a statement at the weekend, that, as an investor, there was a number of ways to go about financing real estate investment. “Each one will have its own set of pros and cons, and the financing approach will depend on the property and the situation.

For beginner-investors, it’s important to remember that not all financing options are created equal”, she said.

In real estate financing and investment, what works for one person may not necessarily work for another, but the trick is knowing which real estate financing option will complement one’s business strategy.

By taking time to research the various real estate financing options out there, new investors are sure to realize how accessible investing can be.

Broadening one’s toolkit of financing options is simply a matter of being knowledgeable about what strategies exist, as well as proper www.businessday.ng

ways to leverage the Okonjo encouraged prospective investors to speak with a professional real estate advisory firm before making a decision to invest in real estate, noting that there were three financial options prospective investors could leverage for wise investment.

One of such options is cash financing which is good for investors who have access to a significant amount of capital, either personally or through their network, and wish to purchase properties free and clear.

The second option is hard money lenders which are accessible to investors who have less-than-perfect credit or financial history, and are in need of a shortterm loan. The third option, Okonjo pointed out, are the private money lenders. She explained that investors who are well-connected can often tap into capital from personal connections, borrowing money at a specified interest rate and payback period.

The LBS-Fine and Country Real Estate Leadership Programme is a 4-module programme launched in 2018. This year’s module, which is slated for July 17-19, 2019, is the third in the series. In its first module, the focus was on Real Estate Development while the second was Real Estate Marketing.

This year ’s module which focuses on Real Estate Finance and Investment Programme, is designed to equip participants with the essential skills needed to evaluate investments in property through sound financial analysis with the view to making well-informed investment decisions.

Expected at the event are notable players in the real estate industry including Hakeem Ogunniran, CEO of Exemia Realty; Paul Onwanibe of Landmark Africa, Ogechi Adeola of LBS Faculty, Charles Otudor, Femi Akintunde, CEO of Alpha Mead Group; Andrea Gedag, MD of Elalan, among others.

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bique, private equity funds are moving in there to scale up housing projects, on the back of laid out template to attract such funds into its sector unlike the unattractive land use act which bestows on the governors absolute rights on the land with several impediments in encouraging private equity due to several encumbrances.

Industry watchers suggest that commercial mortgage credit facility interest rate

should be less than 10 percent per annum. “There should be sectoral allocation policy

by CBN, mandating banks to lend particular percentages of credit facility to certain critical sectors including housing.

“Government should simplify Property Rights and make it accessible and affordable,” Chijioke Ekechukwu, a former director general of Abuja Chamber of Commerce and Industry, told BusinessDay.

Everything is not money, but integrity and professionalism, Architects warned CHUKA UROKO

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ewly registered architects have been warned that everything in life is not money, but integrity and professionalism, hence the need for them to to think out of the box in order to make a difference The new architects have also been charged not to breach their professional ethics, but to uplift professionalism in all their undertakings.

Dipo Ajayi, President of Architects Registration Council of Nigeria (ARCON) who gave the charge in Abuja last week while licensing hundreds of the newly registered architects also told them that “life is not how long you live, but the fulfillment you derive from it.”

“Don’t ever think that your licence can give you all you want in life, but, fulfillment should be your drive,” he advised, noting that Nigeria was going quietly through a revolution which was enterprenuership. He called on them to be dynamic and think out of the box to make impact.

Warning against misconduct, the ARCON president reminded the new entrants that the regulatory body had in place both Architects Investigative Panel (AIP) and Architects Disciplinary Tribunal (ADT) that would deal with cases of infraction without fear or favour. @Businessdayng

Umaru Aliu, ARCON immediate past president, who lamented over quackery in the profession, urged the architects to uplift the code of professional conduct and ethics.

“We have the code of professional conduct and ethics to guide all our undertakings as architects. Unfortunately, we are where we are today due to lawlessness that has pervaded the land; foreigners don’t come and take the job all by themselves. They hide behind those who front for them,” he said.

He charged the new architects to do the right always and memorise the code to avoid temptation.

Umoru Karaye, who spoke on ‘Condition of Engagement, Charges and Agreement by ProfessionalArchitects”,urgedthearchitectstofamiliarisethemselves with the document, which he said was developed for the protection of architecture in Nigeria.

He urged them to be good ambassadors of the profession, adding that, those ahead of them in the profession would be available to assist them where and when possible.

On his part, Umar Murnai, Registrar, ARCON, who hinted that the regulatory had come up withArchitectsProjectsRegistration Number (APRN), to prevent incursion into their profession, tasked the newly inducted architectstovangaurdtheinitiative.

Tuesday 02 July 2019

BUSINESS DAY

33

Markets + Finance

‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

As Kyari set to revolutionise NNPC BALA AUGIE

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he recent appointment of Mr. Mele Kolo Kyari as the Group Managing Director of the Nigerian National Petroleum Company (NNPC) by President Muhammadu Buhari has continued to receive the commendation from operators and industry stakeholders.

To a lot of analysts, the new NNPC boss, who has been described as a thorough professional, is expected to steer the corporation to its next level of growth. In fact, some operators in the sector have expressed optimism that the new NNPC boss would carry out reforms that would deregulate the sector and resolve the problems of the refineries.

Kyari, who was appointed recently, replaces Maikanti Baru who retires later this month. The new Group Managing Director of the NNPC, hails from Borno state. Kyari, a Geophysicist, is an expert in crude oil marketing and currently Nigeria’s Representative at the Organisation of Petroleum Exporting Countries (OPEC) where he provides leadership and participates in engagements relating to Crude oil, Gas production and associated market issues.

Kyari is considered by many at the NNPC towers as a model servant leader whose actions inspire, serve, and empower others to produce the best. He is credited with the transformation of the management of the complex Crude oil Marketing of the nation’s crude oil through the establishment of world class systems and processes.

Kyari, who shares the same surname with President Buhari’s Chief of Staff is not related to Abba Kyari with those in contact with him during his 27 years at the corporation describing him as results-driven leader.

Kyari, led a team that proposed and managed the Direct Sales and Direct Purchase (DSDP) arrangement of Petroleum products from 2016 to date a process that saved the nation $1 million in 2016 when compared with the previous crude SWAP arrangement with products.

He also led various work teams in developing the Petroleum Industry Bill which

ensured that Government’s take in the Production Sharing Contract Arrangement is greatly enhanced, and contributed immensely in resolving the disputes with International Oil Companies (IOCs) arising from the various interpretation issues with the PSCs averting claims of $9 billion dollars filed by the IOCs. Aside his vast experience in the management of both Upstream and Downstream activities, he is said to possess “a rare ability” in commercial decision making and his equally outstanding in his ability to manage International Oil Companies (IOCs), which had all been demonstrated in the course of his over 28 years illustrious career in the oil and gas sector.

He started his carrier as a Field Geologist with the Department of Geological Survey of Nigeria. He joined NNPC in 1991 as a Processing Geophysicist with Integrated Data Services Limited (IDSL). In 1998 he was deployed to National Petroleum Investment Management Services (NAPIMS) and worked as an Exploration Geophysicist.

In 2007, Mr. Kyari was given the role to head Production Sharing Contracts Management in Crude Oil Marketing Division (COMD).

While in COMD, he displayed exceptional management qualities that led to his appointment in 2014 as General Manager, Crude Oil Stock Management and in 2015 he became Group General Manager, COMD, a position he held till date. Mr. Kyari has attended several high- level leadership training both at home and overseas.

His knowledge of the industry had projected positive image for Nigeria at various international fora where he presented papers that highlighted the enhanced and transparent National dealings in petroleum trades by the NNPC. Besides his professional accomplishments, Kyari has also been quietly working to make operations of the NNPC more transparent and accountable as the Corporation’s Focal person for the Open Government Initiative- a drive aimed at making governance more open and participatory.

The procurement process he put in place for the DSDP (Direct Sale of Crude Oil and Direct Purchase of Petroleum Product) resulted in saving of over $1 billion every year since 2016.

Mele Kolo Kyari, group managing director, Nigerian National Petroleum Corporation (NNPC)

In addition, he is the Focal Person for NNPC’s Commodity Trading Initiative. This initiative makes it possible for Government to know those who are buying the country’s crude and at what prices, and how much has been made.He created effective systems to ensure maximum transparency and accountability of crude oil and gas sales in the industry. He has also restored sanity to the operations of Crude Oil & Gas Terminals owing to his leadership supervision.

He is also a unionist, and many have cited his activism as a trade unionist as likely reason why he is an advocate for transparency. He is fondly called by other unionists as “grand chairman.”

Kyari was born on the 8th of January 1965 in Maiduguri, Borno State. He attended Government Community Secondary School Biu in Borno State between 1977 to 1982. Mr. Kyari graduated from University of Maiduguri in 1987 with a Bachelor of Science in Geology.

He was NNPC’s former General Manager, Crude Oil Stock Management, 2014-2015.

Kyari has also participated in various deepwater projects across the globe.

Kyari was appointed by President Muhammadu Buhari to take over from Baru on July 7, as the 19th Group Managing Director of the national oil company.

Having served for three years since July 2016, Baru has become the third longest serving group managing director of NNPC, after Dr. Jackson Gaius-Obaseki, and Dr. Funsho Kupolokun, since the return to civilian rule in 1999.

With the appointment, the NNPC has produced 10 group

managing directors since 2008 and none, except Baru, stayed in office for up to two and a half years. NNPC’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, who disclosed the appointment of Kyari, added that Buhari also appointed alongside Kyari, seven new Chief Operating Officers (COOs) for the corporation.

Chairman of the Petroleum Technology Association of Nigeria (PETAN), Mazi Bank-Anthony Okoroafor, said that Kyari’s background as a geologists would be a plus in governments plan to achieve and exceed 40 billion barrel reserves and daily production of four million barrels.

According to Okoroafor, how the new NNPC boss drives the industry and his vision for the industry would determine if he would actualise the government aspirations.

He advised Kyari to in the first 100 days make Local Content a national agenda, get a team to brainstorm how to use oil and gas as engine for economic transformation of Nigeria, lobby Mr President to sign PIGB as amended, get a team to brainstorm and set road map for 40m barrels reserve and 4m bopd, work with the ministry/ dpr to accelerate the renewal of soon-to-expire licenses for oil blocks, and also create new concessions for the unallocated 53 deepwater blocks, since the last bid round was 12 years ago, among others.

“Mele should clear uncertainties around commercial frameworks and make room for attractive fiscals and regulatory regimes to pull investors.

The NNPC should approve and escalate to other projects, the proposed framework between itself and operators on OML118.

Government should assent to and speedily sign the PIGB (Petroleum Industry Governance Bill), PIFB (Petroleum Industry Fiscal Bill), PIAB (Petroleum Industry Administration Bill) and the PHICDB (Petroleum Host and Impacted Community Development Bill),” he said.

Also, the Niger Delta Oil Monitoring body, South South Reawakening Group (SSRG) commended the president over th appointment.

The group, in a statement signed by its Convener, Mr. Joseph Ambakederimo, noted that the appointment of Kyari was well thought out by President Buhari to bring transparency into the nation’s oil company.

“As President Buhari begins his second tenure in office we make bold to say that the future looks good and it is becoming glaring that he has opened the floodgate of appointments with professionals and incorruptible persons to occupy key positions of critical institutions that are core to the economic mainstay of the nation,” said Ambakederimo.

“This is manifest in the just appointed Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Mele Kolo Kyari.

We want to applaud the President for his foresight in picking Mr Mele Kyari whom we would describe as a “round peg in a round hole”. The SSRG however urged the new GMD to live up to the expectations of Nigerians and the President for giving him the opportunity to showcase the skills that he brought to bear in the transformation of the crude oil marketing department noting that “his output in the crude oil marketing department was extraordinary, said Ambakederimo.

“He brought an age long experience to bear and turn around the crude oil marketing division. The crude oil marketing division was made possible

by Mr Mele kyari who embraced modern technology and transparency. We believe the same strategy would be employed to reposition the NNPC and it’s subsidiaries to the path of profit making like it’s counterparts in other countries”, he added.

The Executive Secretary of Depot and Petroleum Products Marketers Association of Nigeria (DAPPMA), Mr. Femi Adewole, said NNPC under Kyari should provide a level-playing field for all the marketers to

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compete. According to him, Kyari, as the representative of the federal government in the oil and gas industry should also ensure quick deregulation of the downstream sector.

“Since he represents the federal government in this industry, he should create a levelplaying field for all the marketers to compete. What do I mean by that? The NNPC gives major marketers petroleum products on credit. I am not saying that all DAPPMA members deserve to be given on credit but many DAPPMA members have the capacity and should also be given on credit. When NNPC deliver cargoes to the major marketers, they should also deliver to the DAPPMA members.

He should also ensure that the sector is quickly deregulated,” said Adewole.

Some other operators in the downstream sector, have also urged the new NNPC boss to introduce reforms that will deregulate the sector and resolve the problems of the refineries.

“Downstream operators are bleeding because of the monopolistic market. If he continues as the sole supplier of petroleum products, the sector will continue to suffer. Deregulation is the answer to the challenges facing the sector,” said a CEO of one of the oil marketing companies.

Also, the Nigeria Extractive Industries Transparency Initiative (NEITI) welcomed the appointment of Kyari, describing the choice as a well-deserved appointment and an intimation of more openness and reforms in the national oil company.

Waziri Adio, the head of NEITI said Kyari is a well-known transparency champion and one who enthusiastically shares the principles, which underline the work of NEITI and the global EITI on good governance of the oil and gas industry.

The NEITI executive secretary explained that as a member of the global EITI working group on commodity trading transparency, Kyari’s appointment has placed him in a vantage position to push the frontiers of openness and reforms and to work more closely with NEITI and the global EITI to implement remedial issues in NEITI’s reports.

He added that the implementation of the findings of NEITI’s reports will not just be effective for operations of NNPC but also for optimisation of benefits of the oil and gas sector to Nigeria and Nigerians.

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Tuesday 02 July 2019

BUSINESS DAY

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

Top Gainers/Losers as at Monday 01 July 2019 LOSERS

GAINERS Company

Closing

Change

N63

N60

-3

DANGCEM

N184

N181

-3

0.3

GUARANTY

N32.9

N30.6

-2.3

VOLUME (Numbers)

N27

0.2

UNILEVER

N33

N30.7

-2.3

VALUE (N billion)

1.138.

N6.65

0.15

N11

N10

-1

MARKET CAP (N Trn)

13.050

Closing

Change

N170

N175

5

MTNN

N129.05

N129.5

0.45

N12

N12.3

N26.8 N6.5

WAPCO FO ACCESS

29,614.61

Opening

Opening

MOBIL

Company

ASI (Points)

NB

ETI

DEALS (Numbers)

3,067.00 107,438,598.00

Global market indicators FTSE 100 Index 7,497.50GBP +71.87+0.97% S&P 500 Index 2,963.12USD +21.36+0.73% Generic 1st ‘DM’ Future 26,727.00USD +134.00+0.50%

Deutsche Boerse AG German Stock Index DAX 12,521.38EUR +122.58+0.99% Nikkei 225 21,729.97JPY +454.05+2.13% Shanghai Stock Exchange Composite Index 3,044.90CNY +66.03+2.22%

NSE reviews market indices …Custodian Investment replaces Dangote Flour in NSE 30 index Stories by Iheanyi Nwachukwu

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he Nigerian Stock Exchange (NSE) has released the results of the biannual review for the NSE and cobranded indices.

The composition of the indices after the review became effective on Monday July 1, 2019.

The result shows that Custodian Investment Plc has replaced Dangote Flour Mills Plc in NSE 30 index, while in the NSE Consumer Goods Index, Mcnichols Plc replaced Dangote Flour Mills Plc. The NSE had on July 1, 2008 developed four sectoral indices with a base value of 1,000 points, designed to provide investable benchmarks to capture the performance of specific sectors.

In the first half (H1) of 2019, the NSE 30 index decreased by 11.39percent, NSE Banking (-8.08percent), NSE Consumer Goods (-16.89percent), NSE Indus-

trial Goods (-12.12percent), NSE Insurance (-2.16percent), NSE Oil & Gas (-16.21percent), and NSE Pension (-12.36percent).

Result of the review shows that while there were no changes in the NSE Banking and NSE Oil & Gas indices, NSE Insurance Index has Veritas Kapital Assurance Plc replace Sunu Assurances Nigeria Plc. The Insurance and Consumer Goods Indices are

composed of the top fifteen most capitalized and liquid companies in their specific sector.

The Banking and Industrial Goods Indices are composed of the top ten most capitalized and liquid companies in their respective sectors, while the Oil & Gas Index is made up of the top seven most capitalized and liquid companies in the sector.

In the NSE Industrial

Investors lose N156bn on first trading day in July

N

igeria’s stock market took-off into the second-half (H2) of 2019 on a negative note as investors maintained their bearish stance on equities.

This developments comes despite market watchers expectations that investors will begin to take positions in attractive stocks ahead of first-half (H1) earnings releases in the coming weeks.

On Monday July 1, the Nigerian Stock Exchange (NSE) All Share Index decreased by 1.18percent, which pushed the yearto-date (ytd) negative return further by -5.78percent.

As a result, the value of stocks lost on the first trading day in July 2019 stood at about N156billion.

Analysts at Lagos-based Cordros Research had said their outlook for equities in the short to medium term remains conservative, “amidst the absence of a positive catalyst”.

The NSE All Share Index closed at 29,614.61, while the value of listed stocks decreased to N 13.050trillion, compared with preceding trading day’s 29,966.87 points and N13.206 trillion respectively.

Nigerian Breweries Plc led the losers table after its share price decreased from N63 to N60, losing N3 or www.businessday.ng

Index, Notore Chemical Industries Plc has replaced First Aluminum Plc, while there was no change in the NSE Pension Index.

In the NSE Lotus Islamic Index, Nigerian Aviation Handling Company Plc replaced Total Nigeria Plc, while there was no change in the Corporate Governance Index.

The Nigerian bourse began publishing the NSE 30 Index in February 2009 with

index values available from January 1, 2007.

In July 2012, the Nigerian bourse launched The NSE Lotus Islamic Index (NSE LII) which consists of companies whose business practices are in conformity with Shari’ah Investment Principles, with the aim of increasing the breadth of the market and creating an important benchmark for investments as the alternative ethical and noninterest investment space widened.

The companies that appear on the Islamic Index have been thoroughly screened by Lotus Capital Halal Investment, in accordance with a methodology approved by an internationally recognized Shari’ah Advisory Board comprising of renowned Islamic scholars.

The NSE in collaboration with Afrinvest Securities Limited launched the NSEAfrinvest Banking Value Index and NSE-Afrinvest High Dividend Yield Index in January 2019.

They were designed in response to requests for ap-

plicable benchmarks for measuring value in banking stocks and high dividend stocks listed on the Exchange.

In March 2019, NSE also collaborated with Meristem Securities Limited, to launch the NSE-Meristem Growth Index and NSEMeristem Value Index.

These indices provide a benchmark for the market to gauge the performances of value stocks and growth stocks listed on the Exchange.

The composition of Afrinvest Bank Value Index remains the same, according to the released result.

Afrinvest Div Yield Index has new entrant -Africa Prudential Plc while there was no exit.

Africa Prudential Plc has made the Meristem Growth Index, while Sterling Bank Plc, Zenith Bank Plc, and Nigerian Aviation Handling Company Plc exited. Access Bank Plc, Presco Plc and United Capital Plc are new entrants in the Meristem Value Index while no company left.

Total Nigeria pays N5.77bn dividend

4.76percent, followed by Dangote Cement plc which decreased from N184 to N181, after losing N3 or 1.63percent.

Mobil Oil Nigeria Plc recorded the highest gain on the Exchange from N170 to N175, after gaining N5 or 2.94percent, followed by MTN N which advanced from N129.05 to N129.5, adding 45kobo or 0.35percent.

In 3,067 deals, equity traders exchanged 107,438,598 units of shares valued at N1.138billion.

Transcorp Plc, FBN Holdings, Zenith Bank, Access Bank and GTBank Plc were actively traded stocks on Monday at the Nigerian Bourse.

T

otal Nigeria Plc has paid final dividend of N4.75billion representing N14 per share for the year ended December 31, 2018. The company had earlier in the review financial year paid N1.02billion as interim dividends, representing N3 per share. Both the interim and final dividends amounted to N5.77billion.

Total Nigeria Plc turnover increased from N288billion in 2017 to N307billion at the end of 2018. Profit after tax (PAT) remained stable at N7.96billion compared to N8.01billion in 2017.

The Board of Directors of Total Nigeria Plc got the approval of shareholders to pay the final dividend at its 41st annual general meeting (AGM) held in Lagos on Thursday June 27.

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At the annual general meeting, the shareholders also received and approved the financial statements for the year ended December 31, 2018 and received the reports of the directors, auditors and statutory audit committee thereon.

The reelected directors, ratified the appointment of directors, authorized the directors to fix the remuneration of the external auditors, and elected members of the statutory audit committee.

The company has continued to experience sus-

@Businessdayng

tained pressure on its cashflows due to late payment of subsidies resulting in huge financial expenses (high and unanticipated interest charges).

“All of these add significant costs to doing business, had negative impact on our sales and affected our profitability. In spite of the difficult terrain, our results are indicative of the commitment of the board and management to growing shareholders values irrespective of operating challenges,” said Stanislas Mittelman, chairman, Total Nigeria Plc. “We remain a brand of reference and leading energy solutions provider. We hope to progress with the undiminished support of all our stakeholders and the unwavering commitment of our people.

Tuesday 02 July 2019

BUSINESS DAY

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Tuesday 02 July 2019

BUSINESS DAY

NEWS Buratai reiterates army’s resolve to tackle insecurity JOSHUA BASSEY

N

igeria’s army chief, Tukur Burutai, a lieutenant general, has pledged that army will continue to play its role of protecting the territorial integrity of the nation as well as give backing to securing lives and property of Nigerians.

Burutai gave the assurance on Monday during a visit to the Lagos State governor, Babajide Sanwo-Olu, at Lagos House, Ikeja.

The army chief, who was accompanied by the top military high command, including General Officer Commanding (GOC), 81 Division, Sanni Yusuf, a major general, said he was in Lagos for the Combat Support Arms Training week and Nigeria Army Day Celebration 2019.

He promised that the Nigerian Army would support the Lagos government in the provision of security, as there could be no peace and development without adequate security.

“We will work with you to ensure security, we will work together to ensure security in the state.”

Burutai thanked Sanwo-Olu

for his support on the celebration of the Nigeria Army Day and congratulated him on his emergence and inauguration as Lagos State governor.

He solicited for the state patronage of the Nigerian Army Engineer Corps, saying they could do a lot for the state in the area of infrastructure, roads and other construction works.

“Our engineers have a lot of capabilities, they have been engaged by some state governments and other corporate organisations, we are available,” he said.

On his part, Sanwo-Olu said the army chief had demonstrated capability, loyalty to the country and dedication to work since taking over as the army chief.

He said he was excited and happy to have the army chose Lagos for the celebration of the 2019 Army Day, he wished the Army a successful celebration.

“The Nigerian military is a very disciplined profession with high level of ethics and professionalism in its operations,” adding, “We are willing to support you in whatever way we can,” he said.

Business outlook for July shows greater confidence at 63.2 index points HOPE MOSES-ASHIKE

N

igerian companies are showing optimism on the macro economy in the month of July as the overall confidence index stands at 63.2 points compared to 27.3 index point last months, according to a Central Bank of Nigeria (CBN) report.

The major drivers of the optimism for this month are sectors like services 36.0 index points, industrial 20.5 points, wholesale/retail trade 5.1 points and construction 1.6 points.

The June 2019 Business Expectations Survey (BES) was conducted by the CBN from June 10 - 14, 2019, with a sample size of 1050 businesses nationwide. A response rate of 97.0 percent was achieved, and the sample covered the services, industrial, wholesale/retail trade, and construction sectors.

The respondent firms were made up of small, medium and large corporations covering both import- and export-oriented businesses.

Optimism on the macro economy in the current month was driven by the opinion of respondents from services 14.9 points, industrial 9.8 points, wholesale/retail trade 2.0 points and construction 0.7 points sectors.

The positive outlook by type of

business in June 2019 were driven by businesses that are neither importnor export-oriented (19.3points), both import- and export-oriented (4.3 points), import-oriented (3.5 points), and those that are export-related (0.3 points).

On financial conditions and access to credit, respondents’ outlook on the volume of total order and business activity in June 2019 remained positive, as their indices stood at 13.8 and 14.9 points. Similarly, respondents were optimistic in their outlook on financial conditions (working capital) and average capacity utilization as the indices stood at 12.8 and 18.8 index points, respectively.

According to the report, respondents expressed optimism on access to credit in the review month, with an index of 2.3 points.

Respondent firms’ opinions on the volume of business activities (64.7 points) and employment (24.9 points) indicated a favourable business outlook in next month.

The employment outlook index by sector showed that the services sector indicates higher employment expansion plans in the next month, with an index of (27.3 points) followed by wholesale/retail trade (26.4 points), industrial sector (21.8 points) and construction sector.

Corporate governance evaluation will deepen sustainability in organisational growth - ICSAN ANTHONIA OBOKOH

E

xperts from the Institute of Chartered Secretaries and Administration of Nigeria (ICSAN) say corporate governance evaluation is a critical factor as a tool for sustainable development that will make or mar organisational growth “Corporate governance evaluation will improve effectiveness and maximise strength in organisations, and would promote individual company and the economy of the country,” says ICSAN. Speaking at a business meeting with the theme ‘The requirement for corporate governance evaluation,’ held in Lagos recently, Nelson Anumaka, deputy director of corporate governance, Financial Reporting Council of Nigeria (FRCN), said the objective was sustenance and the quality of governance should continuously be improved upon and promoted.

Anumaka said companies should engage in evaluation to discover areas of strength, weaknesses and make changes.

“The meeting is to indicate to practitioner and that of their clients what should be done to improve practice of corporate governance, and this will help organisations

identify where they are making mistakes,” said Nosike Agokei, chairman, Planet Governance Advisory Limited.

However, the National Code of Corporate Governance 2016 was sponsored by the FRC, and had become effective from October 17, 2016.

The Code comes in three parts, which are, Code of Corporate Governance for the Private Sector, Code of Governance for Not-for-Profit entities and the Code of Governance for the Public Sector. They all collectively combine to form “National Code of Corporate Governance 2016.”

According to Francis Olawale, chairman, ICSAN, Lagos chapter, National Code of Corporate Governance 2018 is out, noting that the FRC has introduced evaluation of procedures of practice policies, which is new in the code.

Olawale observed that ICSAN had the greatest representation in drafting the new corporate governance code and company secretaries were best suited for firm evaluation.

“The new code has about 28 principles and one key aspect is corporate governance evaluation, and we are the most qualified professionals to handle it.

Respite for cooking gas consumers as prices fall in 3 consecutive months BUNMI BAILEY

T

hereisasignofreliefforconsumers as the average price for refilling a 5kg cylinder of Liquefied Petroleum Gas (LPG), popularly known as cooking gas, steadily declines since February this year, a BusinessDay analysis shows.

According to the cooking gas price watch for May 2019 by the NationalBureauofStatistics(NBS), thepricesdeclinedatanaverageof 6 percent in the last four months.

Cooking gas in May showed a decline by 2 percent to N2,028 from N2,067.7 in February and a marginal decline by 1 percent month-on-month from N2,046.5 in April.

Stakeholders in the gas industry have attributed the steady declinetotheavailabilityofgasand theeffortofgovernmentintackling the challenges in the gas sector.

AyodeleOni,anenergypartner at Bloomfield Law Practice, said, “The gas is more available that is why the price has been dropping.

Before, people used to hoard it thereby creating artificial scarcity, and there were issues in the port as there was only one functional terminal then.

“But now there is a lot of focus on gas by the government. They have been doing a lot of sensitisations, promotions and making sure that the problems, with the terminals are being reduced, so the thermals are now available for gas production.

“Atthemoment,wedon’texpect thatitwillincrease,althoughitmight notdroppedsubstantiallybutIdon’t expect it will increase substantially too, unless something goes wrong intheinternationalmarket,” The present administration has been trying to create an enabling environment in a bid to increase domestic consumption of LPG by various homes across the country.

Vice President Yemi Osinbajo recently stated in 2016 that Nigeria spent $1 billion as subsidy on kerosenein2015,andstressedthat this was because of the massive dependence on kerosene and firewoodbymillionsofhouseholds in the country.

“Thegovernmenthaddecided to unlock the domestic LPG value chain as this was one policy that the current administration was passionate about since Nigeria had one of the largest gas reserves in the world,” Osinbajo said at a Domestic Liquefied Petroleum GasStakeholders’ForuminAbuja.

The challenges being faced by the gas sector are production, limited thermals, inadequate finance, poor policy implementation, professional knowledge gaps and low capacity building.

“Typically, the domestic market such as the Nigerian Liquefied National Gas (NLNG) and some otherportionsofgasareimported.

In the past, sometimes gas productsfromNLNGandothersources were hoarded because of limited storage capacity at the thermals.

When people hoard the products they created scarcity and panic in the market, which leads to an increase in prices,” an anonymous quote said.

“Butwhathashappenisthatso far in the last 12 months, there has beenaseamlessefficiencyinterms of the supply chain. So now you have gases coming from NLNG and other sources being stored on time and made available to the domestic market, transported and shipped to consumers,” the anonymous person further said.

He also added that there was a push for the domestic supply of NLNG, as it was currently taking shape in the market and some sources of new domestic supply production of LPG were coming forth making the market to react positively to it. www.businessday.ng

L-R: John Malu; Babajide Sanwo-Olu, Lagos State governor; Tukur Buratai, chief of army staff; Obafemi Hamzat, deputy governor, and Musa Yusuf, at a courtesy visit by the Army Chief to the governor at Lagos House, yesterday.

NSE reviews composition of sectoral indices …Custodian Investment replaces Dangote Flour in NSE 30 index Iheanyi Nwachukwu

T

he Nigerian Stock Exchange (NSE) has released the results of the biannual review for the NSE and co-branded indices.

The composition of the indices after the review became effective on Monday July 1, 2019.

BusinessDay checks show that Custodian Investment plc has replaced Dangote Flour Mills plc in NSE 30 Index, while in the NSE Consumer Goods Index, Mcnichols plc replaced Dangote Flour Mills plc.

On July 1, 2008, the NSE developed four sectoral indices with a base value of 1,000 points, designed to provide investable benchmarks to capture the performance of specific sectors.

These are in addition to the All-

Share Index, which measures the overall performance of the local market.

While there were no changes in the NSE Banking and NSE Oil & Gas indices, NSE Insurance Index had Veritas Kapital Assurance plc replace Sunu Assurances Nigeria plc.

The Insurance and Consumer Goods Indices are composed of the top 15 most capitalised and liquid companies in their specific sector.

The Banking and Industrial Goods Indices are composed of the top ten most capitalized and liquid companies in their respective sectors, while the Oil & Gas Index is made up of the top seven most capitalized and liquid companies in the sector.

In the NSE Industrial Index, Notore Chemical Industries Plc

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has replaced First Aluminum Plc, while there was no change in the NSE Pension Index.

In the NSE Lotus Islamic Index, Nigerian Aviation Handling Company Plc replaced Total Nigeria Plc, while there was no change in the Corporate Governance Index.

The Nigerian bourse began publishing the NSE 30 Index in February 2009 with index values available from January 1, 2007.

In July 2012, the Nigerian bourse launched The NSE Lotus Islamic Index (NSE LII) which consists of companies whose business practices are in conformity with Shari’ah Investment Principles, with the aim of increasing the breadth of the market and creating an important benchmark for investments @Businessdayng

as the alternative ethical and noninterest investment space widened.

The companies that appear on the Islamic Index have been thoroughly screened by Lotus Capital Halal Investment, in accordance with a methodology approved by an internationally recognized Shari’ah Advisory Board comprising of renowned Islamic scholars.

The NSE in collaboration with Afrinvest Securities Limited launched the NSE-Afrinvest Banking Value Index and NSEAfrinvest High Dividend Yield Index in January 2019.

They were designed in response to requests for applicable benchmarks for measuring value in banking stocks and high dividend stocks listed on the Exchange.

Tuesday 02 July 2019

BUSINESS DAY

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Tuesday 02 July 2019

BUSINESS DAY

news Weak lines, broken transformers top...

Continued from page 1

generate electricity. Pipelines that move gas from

the Niger Delta to plants outside the region are often inadequate and prone to attacks by militants. Worse still, the Federal Government fixes gas prices sold to power plants, making the venture commercially unviable. Gas plants in Nigeria require at least 3 billion cubic feet per day of gas to operate at full capacity but they often get around 900 million standard cubic feet per day or about a third of what they actually require, which is grossly inadequate.

Power generation companies could produce over 12,000MW of electricity but the most they can generate is around 7,000MW due to difficulties in getting gas supply. The Federal Government has signed a power

purchase agreement (PPA) with only Azura Power, the rest have no bankable PPA and could not access foreign capital. Stringent take-orpay condition for gas supply agreements compels the power generation companies to take barely enough to keep only a third of the turbines running.

The Transmission Company of Nigeria (TCN) says the transmission lines are capable of wheeling 8,000MW but the most they do in reality is less than 5,000MW. When TCN successfully wheeled 5,375MW on February 7, it said, “This is the first time that the nation’s power grid had generated, transmitted and distributed this quantum of power which is clearly an evidence of the success of this administration’s policy on incremen-

Nigeria’s shadow economy is becoming...

Continued from page 1

country’s Gross Domestic Product and is as big as Qatar and Angola combined.

If viewed as a standalone economy, Nigeria’s informal sector would also be the second fastest growing in Africa behind Ethiopia, going by estimates from consulting firm FDC Ltd, which shows the informal economy has expanded by an average of 8.5 percent over the last three years.

The impact of sucking in the informal economy could be telling for a country that has been struggling for growth since the 2016 recession.

While the formal economy grew a paltry 1 percent between 2016 and 2018, the informal sector has expanded eight times faster.

Merging the informal economy with its formal counterpart would value the economy at $678 billion, almost double the official size of GDP which was $376 billion in 2017.

“There are certainly benefits to bringing more people into formal structures, but people can’t be forced into formal structures,” said Andrew S. Nevin, chief economist at consulting firm PricewaterhouseCoopers (PwC).

“The formal structure has

to be better than the informal or self-organised structure,” Nevin told BusinessDay. Other factors that contribute to keeping the informal sector away are regulatory bottlenecks in setting up formal enterprises, multiple taxation, and rigorous business registration processes.

Though the ease of doing business has somewhat improved, analysts say more work needs to be done by the government to incentivise informal sector players to be officially captured.

Giving tax breaks and providing infrastructure have worked magic in other climes where the government sought to draw informal activities into the formal fold.

Businesses in the informal sector, as do their formal counterparts, suffer limited growth, constrainingincomegeneration and ability to hire more people.

This takes a toll on the economy and even public revenue.

“It would be a win-win for all parties if government recognises existing corporatives in informal sector, support them to have skills required to transit to formal economy,” Ayo Teriba, CEOEconomicAssociates,said.

The high incidence of informality, whilst a major chal-

FG says no going back on insurance...

Continued from page 2

to cooperate with the regulator and bring the needed growth in the industry.

He also emphasised the need for professionalism in the industry as another important element to achieving consumer trust for growth.

The conference has the theme ‘Distribution, Innovation and Business Growth’.

Mohammed Kari, commissioner for insurance/ CEO, National Insurance

Commission (NAICOM), said in his welcome speech that the conference provided a veritable platform for top government functionaries, investors, insurance practitioners and other stakeholders to discuss contemporary issues affecting the development of the insurance industry in Nigeria.

He noted that the theme of this year’s conference was pertinent against the backdrop of the need for the Nigerian insurance industry www.businessday.ng

tal power.”

Lack of funds has constrained plans to replace weak transmission lines resulting in high transmission losses. Of the three basic distribution system designs – Radial, Loop and Network – Nigeria uses the radial system which is cheapest to build, widely used in sparsely-populated areas but highly unreliable.

The radial system has only one power source for a group of customers so a power failure, short-circuit, or a downed power line would interrupt power in the entire line which must be fixed before power can be restored.

This is not the same with the loop system which loops electricity through the service area and returns to the original point since it is tied into an alternate power source. If one source of power fails, switches are

61%

a former engineer with the Power Holding Company of Nigeria (PHCN), in an article for BusinessDay. Distribution lines often fall with fatal consequences on consumers. Abuja DisCo was ordered to pay N300 million in fines over cases of electrocution in its franchise areas and to conduct a detailed safety audit of its network to prevent further infractions.

These technical challenges complicate energy access for millions of Nigeria. According to the Power Sector Performance Report of the Presidential Task Force on Power, in September 2018, the power sector witnessed a power loss of 107,340MW (about N51.519 billion in monetary terms) due to insufficient gas supply, distribution and transmission infrastructure.

In 2018, the number of

thrown (automatically or manually), and power can be fed to customers from the other source.

The network systems, on the other hand, are the most complicated and are interlocking loop systems allowing a customer to be supplied from two, three, four, or more different power supplies. It is the most expensive and also the most reliable.

DisCos’ distribution infrastructure is seriously challenged as they have consistently failed to meet actual capacity of 5371MW. DisCos record high levels of technical losses on account of the age of the distribution assets, lack of maintenance and poor investment to improve the network.

“The current distribution network is no longer applicable in this modern age as many are over 70 years,” says Edward Ajagbe,

idle power plants increased from seven to 15 as a result of gas limitations, resulting in a revenue shortfall of N52.45 billion in October last year.

Ajagbe said that the skill set of engineers who manage the systems needs to be updated.

“They should begin to replan the system with the aid of global positioning system (GPS) to create a new system that is highly efficient,” he said.

Analysts say the technical issues in the power sector worsened because the current technical personnel in the DisCos are still used to the old civil service structures. They wait on customers to report faults and respond with speed a snail can relate with. Preventive maintenance is uncommon rather than frequent and broken transformers are abandoned.

of World's

Employment Is Informal

Global Informal Employment

68.2%

25.1%

Asia and the Pacific

Europe and Central Asia

40%

%

Americas

68.6% 85.8%

Arab States

Africa

Top Af rican Economies - GDP vs Informal Employment

400

350

90 77.1

80.4

83.1

58.5

250 200 150

376

100

58.7

South Africa

BusinessDay Research and Intelligence Unit (BRIU)

80 60 50

US dollar(billions) Informal employment % 235 122

Nigeria

55.5

349 28.1

50

0

84.8

70

300

Egypt,

Angola

40 30 20

110 Morocco

81 Ethiopia

79 Kenya

59 Ghana

Informality is highest in Africa biggest economy

NIGERIA

10 0

Arab Rep.

Source – ILO 2017, 2018 World Bank 2017 GDP data

Infographics: David Ibemere

lenge, presents opportunity for achieving “decent work for all and sustainable and inclusive development”, Rafael Diez de Medina, director, International Labour Organisation (ILO) Department of Statistics, said.

Nigeria’s government is struggling to generate more revenue to finance its growing budget amid unreliable oil revenue. The country’s debt has grown more than

160 percent to N24 trillion in the last five years. Tax to GDP remains low at 6 percent, one of the lowest globally.

Integrating more people into the formal sector would translate to higher tax revenues for the government and harnessing the potentials inherent would boost the economy The gains might not be realisable in the near term, said Boniface Chizea, MD BIC

Consultancy Services.

“The government has to movecloserandunderstandthe operationsoftheinformalsector, then mobilise them through corporative, create business hubs and improve business environment,” Chizea said.

The dilemma is that while the government has become more intent on improving its tax revenue, the informal sector is shying away from the ex-

tra costs that come with that.

“Most SMEs won’t participate in the formal sector unless it can significantly improve their business. Most of them are tax averse,” he added.

Improving business registration process, credit to businesses, restructuring tax policy to be supportive of business growths as well as broader economic reforms remain essential.

to remain relevant in an era of dynamism where operating in the same way was an assured route to irrelevance.

Eddie Efekoha, chairman, Insurance Industry Consultative Council, organisers of the conference, pleaded with NAICOM to give favourable consideration to the suggestions made by the Nigerian Insurers Association in their ongoing engagements so that the necessary guidelines when released will ensure that the objectives of the reform are fully realised.

He noted that the recapitalisation exercise, like every past reform, presented both opportunities and challenges.

“As operators, we must begin now and not later to address our minds to the following questions: How do we maximise the use of the additional capital to generate superior returns to investors? How does technology help the industry to deliver superior service and deepen insurance penetration? How do we develop a data pool that supports improved pricing of risks

underwritten and innovative products driven by consumer insights?” he said.

Efekoha said other questions that needed to be asked included what to do to develop and attract the right skills and talents that can match the fast pace of technology revolution; how to harness the values inherent in partnering with other industries like telecoms and banks to deepen insurance penetration; how to partner with various arms of government like the Nigeria Police Force, Customs and Fire

Service to ensure compulsory insurances are enforced, and how to cooperate better than currently for the good of all stakeholders.

Ben Akabueze, former director general, Budget Office, in a goodwill message at the event gave his support to the ongoing consolidation in the insurance industry, saying recapitalisation would make the insurance companies stronger and credible.

He noted that the sector must move away from becoming the small cousin of the banking industry.

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BUSINESS DAY

Tuesday 02 July 2019

39

NEWS Education policies, curriculum in Africa must meet demands of future jobs - Okonjo-Iweala HARRISON EDEH, Abuja

I

n the wave of the rising economic problems confronting the African continent, Nigeria’s former minister of finance and the coordinating minister of the economy, Ngozi Okonjo-Iweala, onMondaycalledonAfricanleaders to evolve policies that would ensure that its curriculum prepare young Africans according to the demands of the job of the future.

The former Nigerian minister, who doubles as the chairman of the Board of the African University of Science and Technology, Abuja, made the submission during the eighthgraduationceremonyofthe university.

Iweala, who noted that Africa’s demographic advantage of young people was a key head-start, however, observed that young Africans must be prepared with the right analytical skills to adapt and embrace the job of the future.

“First of all, the demographics of Africa where in contrast to Asia, where 25% or more of the population is 65 years and older is an advantage. Conversely, in Africa, 6%ofourpopulationonlywouldbe 65yearsandolder.Theimplication isthatwehaveyoungdemography, the productivity and the capability to be more productive than we are.

“What kind of education and skills are we giving to our young people, to enable them compete?

Are they being trained to be analytical - not just memorising and repeating what they learnt in the book but to think critically and analytically? This is currently what wearedoingintheAfricanUniversity of Science and Technology,” she said.

The former minister, on the other hand, noted, “Having high demography is not enough, they must be trained, have the right skills in Science and Technology.

You see, we are educating them incomputerscience,datascience, artificial intelligence, which is the wave of the future. If we have peopleliketheseeverywhere,they would propel Africa forward.”

Affirming further her stance that Africa is the continent for the future, she said, “Currently, six out of the 10 fastest growing economies in the world are in Africa. Ethiopia, Rwanda, Ghana, Cote d’Ivore, Senegal are doing very well. Hopefully, Nigeria and South Africa would soon join them because they are the biggest economies of the continent.”

Making key suggestions on the way forward, she said: “Before I talk of government policies let me mention, Silicon Valley. It started in a Valley with a few universities like Stamford, and others comprising of a few brainy people starting Microsoft, Apple and so on.

“African University of Science and Technology is a centre of excellence and an incubator, and wehavetosupportthat.Ofcourse, we need the right policies to run.

Oneoftheencouragementswhen I speak African wise is that some governments are actually pursuing the right policies. If you go to for instance to Rwanda, you will be amazed with what you see. A wholeinfrastructurehasbeenlaid for technology and for the African of the future.”

Charles Ejike Chidume, a professor and acting president of theuniversityinhisearlierremark, noted that the African University of Science and Technology was established by the Nelson MandelaInstitution(NMI)asoneofthe universitieslocatedinsub-Saharan African region where young talentedAfricansfromthesub-region cancometoobtainoneofthefinest education in the continent.

EFCC to go after defaulting oil/gas firms over 1% statutory contribution to NCDF Olusola Bello & Frank Uzuegbunam

T

ough time awaits oil and gas companies that have defaulted in the remittance of the statutory 1 percent of the value of contract won by them to Nigerian Content Development Fund (NCDF).

The Nigerian Content Development Monitoring Board (NCDMB) said they would be handed over to the Economic and Financial Crimes Commission (EFCC) for necessary prosecution as soon as the current forensic audit about the companies was completed.

The statutory contribution is meant to be used to deepen local content development in the oil and gas industry and reduce financial challenges most of the companies are facing because of high interest rates from banks. The institutionalisation of the contributory fund has helped to increase to 30 percent from 5 percent before the Act came to place.

Local companies have been able to access $160 million of the $200 million of the fund at about 8 percent interest rate, while more applications are still being processed to enable more companies have access to the fund.

Simbi Wabote, executive secretary, Nigeria Content Development and Monitoring Board,

who disclosed this at the Nigerian Content Seminar organised by CWC, organiser of Nigeria Oil and Gas Conference and Exhibition in Abuja, said the board was determined to fully recovered all outstanding obligations and ensure compliance by companies operating in the country.

He said a lot of things had been achieved by the agency through the contribution of the 1 percent of contract sums by some companies.

“Non deductions of the statutory fees, non remittance of the amount deducted at source amounts to misinterpretation of Section 104 of the Nigerian Content Act,” he said.

He said the essence of the conference was to use it as opportunity to zero in on key provisions of the Nigerian Oil and Gas Content Development Act to reinforce understanding, provides clarifications and use them to serve as additional training outlet for those that are new to the industry or ignorant of the provisions of the law.

He said he had instances where things he thought were very simple and clear in terms of understanding were usually not as clear, or that some people just deliberately don’t want to understand it and try to do anything to circumvent the Act itself. www.businessday.ng

L-R: Moshood Olajide, chief financial officer, Forte Oil plc; Olumide Adeosun, chief executive officer, Forte Oil; AbdulWasiu Sowami, chairman, Forte Oil; Olumide Bolumole, divisional head, listings business, Nigerian Stock Exchange, and Aniola Durosinmi-Etti, independent non-executive director, Forte Oil, at Forte Oil’s closing gong ceremony at the Nigerian Stock Exchange in Lagos.

FG orders CBN, NIMC to release citizens’ data to Joint Tax Board …as FIRS targets 45m tax base this 3rd quarter

CYNTHIA EGBOBOH, Abuja

N

igeria’s Vice President Yemi Osinbajo on Monday announced that the Presidency has directed the Central Bank of Nigeria (CBN), National Identity Management Commission (NIMC) and other government agencies to release citizens’ identity data to the Joint Tax Board to enable efforts at expanding tax net and generating more revenues.

Osinbajo, speaking at the official flag-off of the new National Taxpayer Identification Number (TIN) Registration System in Abuja, said access to accurate data was essential for proper tax administration system and that the acceptance of the new tax identification number system would enhance increased revenue for the government as well as promote the ease of doing business in the country.

“All agencies critical to the optimum success of this initiative, such as the central bank and National

Identity Management Commission, have been directed by the President to cooperate with the Joint Tax Board to ensure release of relevant data for this purpose,” he said.

Nigeria has a low tax base currently put at about 20 million with its tax to GDP one of the world’s lowest at 7 percent, according to official figures.

Osinbajo said the automated tax system would help both small and big businesses to strive as it would coordinate all needed data relevant to promote the ease of doing business and social investment programmes across the country.

“There is need for the tax administration system to evolve with the increase recorded in financial and economic activities in the country,” he said.

Tunde Fowler, chairman, Federal Inland Revenue Service (FIRS), in his remark said the new tax revenue administration system entails deliberate and strategic planning initiatives with the potential for an increase of up to

GPTW gives 96 awards to outstanding women, companies

A

bout 96 firms and women who have distinguished themselves in industry and top management received certification and awards at the 2019 Great Place To Work (GPTW) 6th Annual Awards held at the Landmark Event Centre, Lagos. The awards went to outstanding personalities and companies in various categories.

The awardees bagged the awards after a rigorous selection process. It attracted entries from over six African countries including Kenya, Cote d’ Ivoire, Senegal and South Africa, Namibia and Egypt.

Group managing director/ CEO, GPTW, Kunle Malomo, said the awards were not aimed at recognising only winners, but also to instil good work practices in work places. He the company’s vision entails expanding the good work place culture across Africa, adding that the coming editions would feature about 300 companies and over 100 persons.

Malomo said the awards that started six years ago has become a huge success, stressing that the company is aiming at taking it to all states of the country, as it would be

expanded to 100 award categories.

He said; “We are in 22 countries across the world. We decided to expand our scope as most multinationals whose subsidiaries worn the awards in Nigeria requested that the certification should be carried out in their sister companies domiciled outside Nigeria.

“The Managing Director of a company in the USA who is also our client that was listed for the award few years back, said after winning the awards, that his company was rated high which helped them to win compensation of $68 million as compensation packages for senior executives, which is bigger than the company’s annual profit.”.

Women Leaders Awards category, Temitope Balogun said; “I am excited, this moment is bigger than me and kudos to the organisers for recognising the achievements of women in the workplace. My emergence is an encouragement to continuously contribute as well as give my best wherever I find myself.

My sincere appreciation goes to my leader Dr Adebola Akindele for giving me the platform to thrive in Courteville.

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45 million before the end of the third quarter of 2019.

“The role that data plays in today’s world cannot be overemphasised, and for the revenue potential of the country to be maximally harnessed, it is also essential to facilitate the ease of doing business and for the nation to achieve its overarching economic objectives in line with the Economic Recovery and Growth Plan (ERGP),” Fowler said.

He explained that the new reality drives the desire by the Joint Tax Board to ensure that the identification of individuals and corporate bodies in Nigeria was achievable, adding that access to credible and reliable data was essential to ensuring that the revenue potential of the country was maximally harnessed.

“We are confident that the new system will add immense value to taxrevenue administration in the country, not only in terms of processes and procedures, but in terms of efficiency and ensuring a coordinated and sys-

tematic approach towards managing revenue generation as well as tax information sharing between and among tax authorities both within and outside the country,” he added.

Fowler further stressed that the new system also held immense benefits for the taxpayers as it provides consolidated database as well as facilitates ease of compliance and limits the incidence of double taxation and is a prerequisite for a number of transactions such as sale and purchase of immovable property, registration of vehicles’ applications for plot of land.

“While we are yet to take delivery of taxpayer data from some of the organisations such as the Central Bank of Nigeria (CBN) via the Nigeria InterBank Settlement System (NIBBS), and the National Identity Management Commission (NIMC), we believe that today’s ceremony will reinforce the need for us to work together as one to promote the Economic and Recovery Growth Plan of the President,” he said.

Kramer decries Nigeria’s poor implementation to policies Gbemi Faminu

D

ick Kramer, an early pioneer of Nigeria’s professional services, at the weekend said Nigeria had plans and policies that would foster growth and development but lacked proper implementation of those policies.

He said the West Africa’s biggest oil producer had prospects and would be successful eventually but poor leadership and corruptionweremajorcankerworms hindering the country’s growth and development.

Speaking at the send-off cocktail organised by KPMG Alumni held in Lagos, Kramer alluded that Nigerian’s successes in other countries showed that they were not the problem of the country rather they were the solution.

HisexperienceinNigeriagives him the confidence that Nigeria will definitely be great, as there were opportunities and prospects in Nigerians.

“Do your part to build Nigeria, encourageandbuildpeople;there is no way you are going to have a suitable country without building @Businessdayng

the right people in Nigeria and letting them be the ones that actually end up leading,” he said.

Wanda Kramer, Dick’s wife in her remark, said, “Do your best to help your country instead of running away from the country to someplace else. If you are a Nigerian, do things for Nigeria.”

Kunle Elebute, chairman, KPMG Africa, in his welcome remark, stated that the impact of Kramer was visible in all organisations that provide professional consulting and accountancy services, saying, “Dick will be missed by everyone and his impact will continually be felt by everyone.”

Alex Taiwo, Dick’s associate in Arthur Andersen, described him as an energetic optimist who always saw the good in everything and everyone and was able to impactthelivesofeveryonewhowas opportune to have an encounter with him.

Celebrating the Kramers, the KPMG alumni launched the 2019 edition of its magazine at the cocktail dedicated to Dick and Wanda.Thealumniatthecocktail also announced executives of the association.

40

Tuesday 02 July 2019

BUSINESS DAY

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Tuesday 02 July 2019

FT

BUSINESS DAY

FINANCIAL TIMES

41

World Business Newspaper

F

rench president Emmanuel Macron led recriminations after EU leaders failed to reach a deal on the bloc’s top jobs after 20 hours of talks.

Heads of EU governments will reconvene on Tuesday to try again after the impasse at a marathon summit exposed multiple rifts.

It underlined how deciding the union’s most powerful posts has become harder in a more fragmented European Parliament after May’s elections.

“We give an image of a Europe that is not serious,” Mr Macron said, adding that a failure to reach agreement after such protracted discussions had left the EU’s credibility “profoundly stained”.

“What lacked around the table was the spirit and determination to defend the general European interest,” Mr Macron said. “There were too many hidden agendas. Voilà, that’s it.”

German chancellor Angela Merkel was more emollient, saying: “I know this is complicated, but with good will it is possible.”

One senior diplomat branded the situation “chaotic” as Donald Tusk, European Council president, suspended the summit at lunchtime on Monday after a marathon overnight session that ended in deadlock.

For more than 12 hours, the leaders had cycled through names for the top jobs, with the talks splitting off into bilateral and multilateral groups in an effort to broker a compromise.

A plan to install Frans Timmermans, a Dutch social democrat, as president of the European Commission, came back into play on Monday morning after running into stiff

EU summit ends in deadlock over filling top jobs Leaders will try again on Tuesday amid anger over failure of marathon overnight talks resistance from centre-right leaders and a group of central European countries on Sunday night.

Negotiations turned to appointing the head of the European Council of EU leaders, and the bloc’s foreign policy chief to make up a balanced package.

Manfred Weber, a German MEP and the centre-right European People’s party lead candidate for commission president, appeared destined to instead take the European Parliament presidency.

Kristalina Georgieva, the Bulgarian former commissioner and now chief executive of the World Bank, was lined up as a possible European Council president, while Charles Michel, the Belgian prime minister, was put forward for the job of foreign policy chief.

However, the prospect of Ms Georgieva as an eastern European for a big job did not appear to outweigh concerns in Poland, Slovakia, Hungary and the Czech Republic about Mr Timmermans, who has been a tough critic of rule of law breaches in some capitals.

A plan to hold indicative votes by the 28 EU leaders was shelved after Mr Tusk concluded no combination of candidates would prevail. He suspended the meeting until 11am

French president Emmanuel Macron said a failure to reach agreement after such protracted discussions had left the EU’s credibility ‘profoundly stained’

on Tuesday.

“No package had a majority,” said a senior EU official. “Tomorrow we will have sharper heads.”

Other names that have entered the frame for different roles are Leo Varadkar, Ireland’s prime minister, and Margrethe Vestager, the EU competition commissioner and a leading candidate for the liberals.

The deadlock reflects the messy struggle between the EU’s main political groups after the historically dominant mainstream centre-right and centre-left parties lost ground in the EU parliament elections to liberals and greens.

Other tensions are over the need to find a geographical and gender balance in the overall ticket of ap-

pointments to the big five jobs.

“We cannot discuss with world leaders, in an ever more violent world . . . to have emerging liberal democracies and to be a club that meets at 28 without ever deciding anything,” Mr Macron said. “We cannot be hostage to one or another little group that forms. We need a real governmental reform.”

US bond ETFs attract record $25bn inflows in June How Boris Johnson’s Brussels years helped pave the way to Brexit Global growth and trade worries send investors hunting for safety RICHARD HENDERSON AND JOE RENNISON

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ixed income exchange-traded funds in the US attracted $25.4bn in June, the biggest monthly inflows on record, as investors piled into bonds amid an uncertain growth outlook.

The record haul for US bond ETFs surpassed the previous monthly milestone set in October 2014 by 45 per cent and brings the annual net inflows for fixed income ETFs to $73.5bn, according to Bloomberg data.

Investors have turned to bond funds to reduce risk as doubts over the health of the global economy dominated markets in June. China and the US have failed to strike a trade deal, while central banks around the world have shifted toward more dovish monetary policies.

“Investors are looking to bonds to mitigate equity risk,” said Matthew Bartolini, head of Americas research for SPDR, State Street Global Advisors’ ETF business.

“Weak economic data presents a tangible risk to the market as we go into the summer, when there will be fewer traders in front of their trading screens.”

A slowing growth outlook in the US has led the Federal Reserve to change tack after raising rates four times last year. Fed fund futures have now priced in a 76 per

cent chance that interest rates will drop by 25 basis points when the central bank’s committee charged with setting rates meets later this month.

“The economic environment has been driven by the Fed’s increasingly dovish stance — that is driving these inflows,” said Stephen Laipply, head of the US fixed income strategy for iShares, BlackRock’s ETF business. The fund manager represents around half of the global fixed income ETF market, which hit $1tn in assets earlier this year.

The inflows also reflect the rising use of ETFs by investors to buy and sell bonds. The exchangetraded vehicle typically bundles hundreds of bonds together with the promise of greater liquidity compared to trading bonds individually.

“We think fixed income ETFs will hit $2tn within five years as you continue to see institutional investors adopt these products to manage risk,” Mr Laipply said.

Government bond ETFs have proven most popular this year.

The iShares 7-10 year Treasury bond ETF has attracted $5.5bn so far this year, the largest total for an individual bond ETF, followed by the iShares 20+ year Treasury bond ETF with $4.5bn and the Vanguard total international bond ETF with $4.5bn. www.businessday.ng

EU officials during Telegraph posting say dispatches changed perceptions of bloc JIM BRUNSDEN

W

hen Boris Johnson worked in Brussels a quarter of a century ago, the EU officials whom he ridiculed almost every day saw the future champion of Brexit as more of an entertainer than a threat.

Pascal Lamy, chief adviser to then-European Commission president Jacques Delors, remembers that Mr Johnson’s press coverage of the EU — which regularly involved telling tall stories about Brussels’ plans — “looked so jokey, so silly, so fake”.

For Bruno Dethomas, the commission’s chief spokesman at the time, Mr Johnson was “funny, he was open, he was interested. Even if he was sometimes hostile it was never systematic.”

But in retrospect, officials who had dealings with Mr Johnson — now the favourite to become Britain’s next prime minister — say he played a central role in changing perceptions about the bloc.

Indeed during his 1989-94 stint as the Daily Telegraph’s Brussels correspondent, he may have swayed a historic Danish referendum on the EU 24 years before the UK’s Brexit vote.

Mr Lamy, who went on to become France’s EU commissioner and director-general of the World Trade Organization, told the Financial

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Times that the bloc “underestimated the long-term and deep impact” of Mr Johnson’s writing on everything from non-existent EU plans to regulate condom sizes to fictional EU diktats on crisp flavours.

“He did what people 30 years later would call fake news and provocation,” Mr Lamy said. “He was a precursor.”

“We did not think it would be dangerous,” Mr Lamy said. “Nor, by the way, did our interlocutors on the British side . . . If we make a contemporary comparison, many of us also thought Donald Trump was silly.”

Through his coverage of Brussels, which often ventured into caricature, the future Conservative MP made a name for himself and increased public hostility towards the EU, in Britain and beyond.

Now, as he works on his plans to enter Downing Street this month and take Britain out of the EU in October, with or without a deal, his years in the Belgian capital highlight how, without being known for firm political views, he discovered the power of populist Euroscepticism.

Mr Johnson’s years in Brussels for the Telegraph were the making of his journalistic career, which in turn led to the political frontline.

In a biography Just Boris: A Tale of Blond Ambition, Sonia Purnell writes that “when he finally packed his bags for London in 1994, he was leaving as @Businessdayng

a star”. What next to no one realised is that he had also fuelled a sense of disenchantment that would eventually lead Britain to opt out of the EU. Mr Johnson’s stock in trade was a playful take on the sort of Brussels bashing that was already rampant in the rightwing UK tabloid press.

It was reporting that struck a chord with an audience that was uneasy about the breathtaking pace of integration under Mr Delors — who had already laid the foundations of the EU’s single market and was moving on to even more far-reaching plans.

The commission chief had once even boasted, in what some saw as a fit of hubris, that 80 per cent of member states’ legislation relating to economic policy would come from Brussels within a decade.

In perhaps his best-known Brussels article, headlined “Delors plan to rule Europe”, Mr Johnson recounted a supposed commission plot to go far beyond the 1992 Maastricht treaty on political and economic union and create a permanent European president.

Journalists who worked alongside him say the story was an exaggerated version of wishful thinking by a Delors team that was unhappy with the complex compromises of Maastricht.

But, ahead of a crucial referendum in Denmark on the treaty, the puffed-up tale was latched on to by No campaigners as evidence of Brussels’ hidden integrationist ambitions.

42

Tuesday 02 July 2019

BUSINESS DAY

FT

NATIONAL NEWS

Fashion label Orange Culture defies clichés of Nigerian masculinity Company has battled through business, infrastructure and cultural challenges NEIL MUNSHI

N

igeria is one of the few countries in the world where fashion designers like Adebayo Oke-Lawal must consider the price of diesel in addition to fabric, labour and equipment.

But with electricity accounting for 45 per cent of manufacturing costs because of a dysfunctional power sector, the price of fuel for the generators that power his workshop and design studio is always on Mr Oke-Lawal’s mind.

“Every day we use a generator, because . . . we do a lot of orders every day — and that really cuts down your profitability, puts a strain on how you work,” says the designer behind Orange Culture, one of the most popular menswear brands to have emerged from Africa in the past decade.

“Every time you’re thinking about pricing, you’re actually factoring in a generator and diesel — things you wouldn’t have to if you were in another country.

It’s a crazy thing to have to think about.”

Shoddy electricity access is just one of the many challenges Mr Oke-Lawal has faced since he launched Orange Culture in 2011. His challenges are emblematic of the forces working against designers across the continent — particularly those who, like Mr Oke-Lawal, want to keep their companies as indigenous as possible, from sourcing and staffing, to production and sales.

As they seek to develop local industries, designers in many African countries must also contend with deficient infrastructure, a lack of financing, high costs and governments uninterested in developing their industry, even as they are celebrated abroad.

The first obstacle Mr OkeLawal faced when he launched Orange Culture as an untrained 20-year-old — still working in corporate finance at an oil company — was cultural.

“A lot of the menswear that existed was very much in a box of the way men have dressed in the past, this idea of masculinity and suits,” he recalls. “When I started the brand I was trying to push to create something that I hadn’t seen before.”

The idea behind a gender-fluid brand that appeals to all was to question a traditional vision of manhood in conservative Nigeria, where same-sex marriage is still illegal and LGBT organisations are criminalised. “I wanted to challenge this cliché about the African man,” he says.

Mr Oke-Lawal’s collections,

then and now, incorporate bold colours and elements of traditionally feminine designs, fabrics and silhouettes, such as wide cuts and plunging necks. He began setting up his own small pop-ups — “I didn’t have access to stores, they weren’t interested in stocking the brand” — but the reaction, even in fashionable Lagos, was revulsion.

“People were telling me it was trash, that it was unforgettable, that it was demonic.” But he also received messages from customers “who said they needed this kind of clothing”, he continues.

“Now it’s all changing, but then it was extremely conservative, especially for menswear.”

Then came Instagram, which transformed Mr Oke-Lawal’s business. “We started getting interest from people all around the world, which helped build a consumer base,” he says, as well as provoking interest back home in Nigeria.

With global interest has come global recognition — including a nomination for the prestigious LVMH Prize for young fashion designers in 2014. Orange Culture has sold clothes to clients in more than a dozen countries, throwing up an entirely new obstacle to a company operating from a country with really high shipping costs.

“So when you have customers who are abroad, sometimes the shipping is just as high as the [cost of ] the garments,” he explains. “We as a brand take on half the cost of shipping — which is what we have to do . . . because we don’t want our customers to run away when they see the price of [delivery].”

As the company has grown, Mr Oke-Lawal has had to hire more staff — including technicians to operate machines that are far older than those in more developed countries.

“A lot of our work here is very labour intensive, a lot is done by hand, or done by human manufacturing, not just pressing a button,” he adds. “When people take it upon themselves to actually produce here, you know they’re really dedicated to it because it’s much harder to do it here than anywhere else.”

Dedication is the point, he adds, both for his company and many of his contemporaries across the continent.

“We really try to work hard to make our clothes ‘made in Lagos’ and nowhere else,” he affirms, “the only way to develop our industry here is to do all the work here.” www.businessday.ng

Protesters smash a glass door at the government headquarters © AFP

Hong Kong protesters force their way into legislature Demonstrators smash through security barriers on anniversary of British handover SUE-LIN WONG AND NICOLLE LIU

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rotesters broke into Hong Kong’s legislative building on the anniversary of the territory’s handover from the UK to China, in the latest sign of the anger over the government’s handling of a controversial extradition bill.

Scores of demonstrators forced open a metal security shutter that protected one of the entrances after protesters smashed through the glass doors. The police, many of whom had been holed up inside the home of the Hong Kong’s semi-autonomous government, did not respond immediately.

The break-in came as thousands of Hong Kongers marched peacefully nearby as part of the annual commemoration.

Earlier in the day, police fired pepper spray at demonstrators, some of whom were throwing bricks, at a flag-raising ceremony to mark the 22nd anniversary of the handover.

Hong Kong has been hit by weeks of protests over a proposed

extradition law that would have allowed criminal suspects to be sent to mainland China to stand trial for the first time. Carrie Lam, the city’s chief executive who championed the bill, suspended it almost two weeks ago after millions of demonstrators closed down major roads in the Asian financial centre in a series of rallies.

The protests have plunged Hong Kong’s government into its deepest political crisis since the handover, with much of the anger directed at Ms Lam. Some have called her response inadequate and demanded the complete withdrawal of the legislation as well as her resignation.

“The government did not respond to peaceful protests so maybe we need to change tactics,” said one 26-year-old activist, who only identified themselves as Tiger, and advocated a more aggressive approach.

Ms Lam said in a conciliatory speech at the flag-raising ceremony — which was moved indoors at the last minute and for the first time had no public seating

— that the government would be more open and receptive to how it engages with the public.

“The incident that happened in recent months has led to controversies and disputes between the public and the government,” Ms Lam said, in her first public appearance since she apologised for her handling of the extradition law.

“This has made me fully realise that I, as a politician, have to remind myself all the time of the need to grasp public sentiments accurately.”

The disturbance at the legislature was in marked contrast to the peaceful rally. Local residents marched through nearby streets as part of the annual July 1 protest to demand full democratic reforms in a city where the chief executive is elected by 1,200 mostly proBeijing lawmakers.

Derek Yuen, a 50-year-old accountant who was at the rally with his wife, said he hoped the protests could bring small changes but said the overall situation was “depressing”.

Iran warns Opec ‘might die’ due to Russia-Saudi domination Oil group to extend cuts but Tehran laments growing influence of Moscow and Riyadh DAVID SHEPPARD AND ANJLI RAVAL

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ran’s oil minister has warned that the future of Opec is in jeopardy over the growing dominance of Saudi Arabia and Russia in the cartel’s affairs.

The oil group and its allies are on course to extend production cuts of 1.2m barrels per day for at least another six months, after Iran said it would not block a deal struck at the weekend between Russian president Vladimir Putin and Saudi Arabia’s de facto ruler, Crown Prince Mohammed bin Salman.

But Bijan Zanganeh, Iran’s oil minister, warned that the future of the oil producers’ group was in the balance as the Saudi-Russia alliance was increasingly sidelining traditional members.

“I have no difficulty with the extension of the cut,” Mr Zanganeh told reporters as he arrived in Vienna on Monday for a meeting between Opec members. “My

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problem is unilateralisation”, which was “threatening the existence of Opec . . . Opec might die”.

His comments come as Opec and its allies are struggling to support an oil price that is on course to average less this year than in 2018, despite US sanctions hitting the output of Opec members Venezuela and Iran and the group enacting additional production cuts.

Russia, which is not an Opec member, has allied with the cartel since late 2016 as members try to adjust to growing supply from US shale fields, which ended the $100-a-barrel oil era five years ago.

But in forging a close-knit relationship with Saudi Arabia, the largest producer in Opec and Iran’s major rival in the Middle East, Moscow and Riyadh have been accused of mounting in effect a takeover of the group.

Russian president Vladimir Putin announced at the G20 in Japan at the weekend that he and Crown Prince Mohammed bin Salman had agreed the supply deal should @Businessdayng

be extended by six to nine months, essentially pre-announcing the deal before Opec oil ministers could meet on Monday.

“Discussions this week appear a foregone conclusion, if not a mere formality,” said analysts at JBC Energy in Vienna.

Signs the deal would be extended helped Brent crude oil, the international benchmark, rise 2.8 per cent on Monday to $66.56 a barrel, with markets also supported by an easing in trade tensions between the US and China.

But oil continues to face significant headwinds, including fears of a demand-crimping global slowdown and the continued growth of output from the US, which has become the world’s largest producer with output more than doubling in the past decade to above 12m barrels a day.

Oil has been supported this year by the Saudi and Russian-led production cuts of more than 1.2m b/d and growing tensions in the Gulf, but has struggled to gain traction above $70 a barrel.

Tuesday 02 July 2019

BUSINESS DAY

43

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

S&P at record high on renewed hope of US-China

Global rally Wall Street’s S&P 500 set to break records in opening trade, renminbi strengthens

MICHAEL HUNTER AND HUDSON LOCKETT

W

all Street opened at a record high on Monday on renewed hopes of a US-China trade deal after the leaders of the world’s two biggest economies agreed to resume negotiations.

The S&P 500 rose 1.2 per cent, enough to touch a fresh high in opening trade, with technology stocks in demand after the US reversed policies preventing American groups from selling software and equipment to Huawei.

The Wall Street surge followed a brisk rally in Asia and Europe, and after China’s renminbi strengthened and haven assets weakened on Monday on hopes of a US-China deal. The softer stance towards China’s telecommunications hardware maker added to the optimistic reaction to the outcome of the talks between US president Donald Trump and his Chinese counterpart Xi Jinping.

The tech-heavy Nasdaq Composite made an opening gain of 1.8 per cent. The Stoxx index tracking the sector in Europe was up 2 per cent. China’s CSI 300 index of major Shanghai and Shenzhen-listed stocks rallied 2.9 per cent.

Haven assets lost some lustre, with gold falling 1.1 per cent, on course for its biggest single-session fall since April. The yield on 10-year US Treasuries rose 1.2 basis points as investors continued to move out of the debt, taking it to 2.0119 per cent, but the extent of the selling eased, having lifted the yield by almost 5 basis points during Europes morning.

Trading followed a meeting between Mr Trump and Mr Xi on the sidelines of the G20 summit in Osaka

on Saturday, where Mr Trump also pledged not to introduce more tariffs on Chinese goods.

“The biggest driver of investor relief is that the much feared 25 per cent tariff on an additional $300bn in Chinese imports has been put on hold as trade negotiations resume,” said Alec Young, managing director of global markets research, FTSE Russell.

“Had those tariffs gone into place, they had the potential to do significant damage to second-half consensus economic and earnings growth prospects.”

Sectors sensitive to the outlook for global trade posted robust gains as the Europe-wide Stoxx 600 added 1 per cent overall. The index tracking industrial metals stocks was up almost 3 per cent.

Frankfurt’s Xetra Dax 30, home to a range of exporters, was up 1.4 per cent and on course to return to bull market territory, with the rally leaving it on course to rise 20 per cent above its December closing low.

But analysts were also warning that a trade deal resolving the longstanding tension between the US and China remained elusive, and that recent economic indicators were still weak.

Frances Cheung, a strategist at Westpac said: “Expectations were quite low running into G20, that’s why the weekend’s developments are still providing some lift.”

Andrew Milligan, head of global strategy at Aberdeen Standard Investments, said “the devil will be in the detail”, which left “a Damocles sword hanging” over the markets. “[Mr] Trump has indicated that he is in no hurry to finish a deal, and Huawei remains on a short rope as permission to operate in the US could be withdrawn at any time.”

Electric car start-up Nio hit by management departures Chinese group suffers software problems and plunging shares since NY debut last year LOUISE LUCAS, TOM HANCOCK AND ARCHIE ZHANG

N

io, the Chinese electric vehicle maker that raised $1bn in a New York listing last year, has been dealt a blow by the departure of two senior executives.

The company’s former head of software Li Zhang, and Angelika Sodian, who headed Nio’s operations in Britain, have both left the company, a spokesman confirmed.

The departures come after the recall of 4,800 sport utility vehicles following reports of three vehicles catching fire and amid fears that the company has lost its way since its debut on the New York Stock Exchange in September.

Since then, shares of one of China’s biggest offerings in the US last year have plummeted 75 per cent.

Nio sold just under 4,000 of the vehicles in the first quarter, when it

made an operating loss of $390m. It has cut it staff numbers by about 3 per cent, or 300 jobs, over the past few months, a spokesman said.

“In our view, Nio’s costs are too high, and its price points too low, for its products to be sold profitably at realistic levels of demand,” Robin Zhu, an analyst at Bernstein said.

China’s EV sector has come under pressure because of cuts in government subsidies and slowing sales growth.

Ms Li, head of software in China, was “squeezed out of Nio because the software has been so bad,” according to one person familiar with the matter.

A Nio car was stranded on a Chinese highway in January after the driver triggered a software update.

Software is one of Nio’s weakest points and a major source of customer complaints, according to a person briefed on the company’s operations. www.businessday.ng

Chinese president Xi Jinping and US president Donald Trump agreed on the sidelines of the G20 summit to resume trade negotiations © FT montage/Getty

Central banks should issue digital currencies of their own They need to protect financial stability, monetary policy and access to public money JEAN-PIERRE LANDAU

D

igitalisation has reshaped how we communicate, organise, interact, move and trade. It is now changing money.

Mobile-phone based electronic payments are becoming just like cash: contactless, cheap and easy to make on a peer to peer basis, including across borders. Life without a bank account becomes possible, which helps financial inclusion in places with no banks and high mobile penetration.

Many companies are seeking to exploit the synergies between money and platforms in a digital economy. In China, Tencent a n d A nt Fi na n c i a l a g g re gat e payments with social and commercial activities for millions of users. Facebook and 27 partners have announced plans for a Libra digital coin.

For governments and central banks, the digitalisation of money raises new challenges and the Bank for International Settlements warned this week that they are coming “sooner than we think”. First, physical cash may be disappearing as a medium of exchange. Trust in banks has depended on the perceived convertibility of deposits to cash. In a cashless society, there would be

no direct access by citizens to sovereign money. Deposits would no longer be convertible with possible detrimental effects on financial stability.

Second, the monetary system may become more fragmented.

The economic logic of networks and platforms means they have an incentive to maximise user numbers and a tendency to evolve into closed systems. They may create “digital currency areas” where participants are kept together because they share and exchange the same type of digital money.

Third, because digital money is naturally cross-border, it opens the way to new forms of currency competition, from Libra among others. Some governments may try to use digital payment networks to internationalise their currencies, while others will face a risk of “digital dollarisation” through the penetration of foreign currencies in their domestic economy. This has the potential to significantly reshape the international monetary system.

Sovereign governments have the power to protect their currencies. They can decide which money serves as legal tender and in which currency taxes must be paid. They can force private payment systems to be open through

technical interoperability. They can require the acceptance of cash. And they can strictly regulate e-money issuers, as China began doing in 2018.

They should do more. The general public is entitled to keep access to central bank money as technology changes. If cash is eliminated, it should be replaced by a digital equivalent, known as Central Bank Digital Currency.

The Swedish Riksbank and others are already considering the merits and dangers of CBDCs for monetary policy and financial stability. On the one hand, CBDCs may strengthen the transmission mechanism of monetary policy by allowing interest (including at negative rates), to be paid on the currency. On the other, they could imperil financial stability by offering an attractive (riskless) substitute to bank deposits and increase the risk of runs.

However, there is a more fundamental argument to be had about the balance between private and public money in our societies. A CBDC would protect the pre-eminence of public money in a digitalised economy. It would maintain effective convertibility of private into public money and provide a defence against digital dollarisation.

Equities rise and havens fall on G20 trade relief MICHAEL HUNTER AND SIDDARTH SHRIKANTH

G

lobal equities rose on Monday as the G20 summit in Osaka fuelled optimism that trade tensions will ease, while havens fell out of favour and oil rallied on an extension of production cuts by Opec+ countries.

The agreement between the US and China to resume trade talks and halt the imposition of further tariffs, fed hopes that the trade war may be easing up.

Wall Street’s S&P 500 touched a fresh record high in opening trade, up 1.2 per cent, and the tech-heavy Nasdaq Composite added almost 2 per cent European stock indices followed their Asian peers higher,

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with the international Stoxx 600 up 1 per cent to a two-month peak, led by sectors sensitive to the outlook for trade relations. The Stoxx index tracking carmakers rose 0.9 per cent and Frankfurt’s Xetra Dax 30, home to a range of exporters, was up 1.4 per cent. London’s FTSE 100 gained 1.3 per cent.

The CSI 300 of Shanghai and Shenzhen-listed stocks was up 2.9 per cent, while the Topix in Tokyo rose 2.2 per cent.

The move out of havens was at its most brisk for gold, with the precious metal on course for its biggest single fall since April, down 1.1 per cent to $1,393.24.

Japan’s yen weakened by 0.3 per cent to ¥108.24 per dollar. The yield on 10-year US Treasuries rose by 1.2 basis points as inves@Businessdayng

tors moved out of the debt, taking it to 2.0119 per cent.

Analysts were looking ahead with caution, however, even as risk appetite improved on Monday.

Chris Jeffery, asset allocation strategist at Legal & General Investment Management, said: “Over the second half of the year, markets face the prospect of yet another front opening up in the trade war with autos imports from Japan and the European Union in the firing line.”

Meanwhile, oil rallied after Russia and Saudi Arabia agreed to extend production cuts for at least another six months, with Brent crude and West Texas Intermediate both rising by over 2 per cent.

44

Tuesday 02 July 2019

BUSINESS DAY

FT

ANALYSIS

Vladimir Putin: friendship with China, ‘Donald’ and the rise of national populism The Russian leader believes he is back at the top table with history on his side LIONEL BARBER AND HENRY FOY

J

ust before midnight, Vladimir Putin perks up at the mention of the word “risk”. It encapsulates the man and his 20 years in power.

Latterly, Russia has embarked on a growing number of foreign policy gambles, from the military intervention in Syria, the annexation of Crimea and the attempted meddling in the US presidential election. Is his appetite for risk increasing with each passing year?

“It did not increase or decrease.

Risk must always be well-justified,” he replies. “But this is not the case when one can use the popular Russian phrase: ‘He who doesn’t take risks, never drinks champagne’.”

His response is classic Putin: elusive and teasing. But on one

issue, he is certain he made the right choice: Syria. “I believe that it has been a good and positive return. We have accomplished even more than I had expected.”

Aside from the killing of “several thousands” of Islamist militants and the shoring up of Bashar al-Assad’s regime, he cites the reemergence of Russia as a power in the Middle East uniquely able to talk to all parties from Israel to Saudi Arabia and Iran.

“Besides, I would like to openly speak of the mobilisation of the Russian Armed Forces,” he adds. “Our armed forces have received such practical experience that they could not have obtained during any peacetime exercises.”

This matter of fact — some would say cynical — summation of an eight-year civil war that has led to the deaths of half a million people and caused 5.6m to become refugees and millions more to be internally displaced highlights the self-assurance of Mr Putin. Here is a man who believes Russia is back at the top table and that history is on his side.

Ever since the 2014 Crimea annexation, Mr Putin has faced a concerted attempt to isolate him internationally. But on the eve of the G20 meeting in Osaka, Japan and at a time when the US role in the world has never seemed more uncertain, the Russian leader is still very much at centre stage.

During a 90-minute interview in the Kremlin’s cabinet office, with statues of four of Imperial Russia’s most revered rulers

looking on from each corner, the former KGB officer turned statesman took on all subjects. He ranged from the breakdown of the international rules-based order, the rise of China and the end of liberal ideology to the prospect of improved relations with the UK. Ahead of the G20, Mr Putin highlights multiple risks to global stability. He singles out American unilateralism, starting with the tariff war against China and the threat of conflict in the Gulf. “To put it bluntly, the situation has definitely become more dramatic and explosive,” he says.

The Russian leader detects a shift in the political balance of power from traditional western liberalism to national populism, fuelled by public resentment about immigration, multiculturalism and secular values at the expense of religion.

“Have we forgotten that all of us live in a world based on biblical values?” asks Mr Putin, dismissing Karl Marx’s dictum that religion is the opium of the masses. Similarly, in the Russian president’s view, liberal ideology has “outlived its purpose”.

Fragmentation characterises the world of 2019. In response, Mr Putin casts himself as a cheerleader of globalisation alongside his increasingly close ally, President Xi Jinping of China. It is an improbable role for Russia and China, but one vacated by the US under President Donald Trump, who has made “America First” his mantra.

Mr Trump’s trade conflict with China, alongside US-led sanctions against Russia, have brought Beijing and Moscow closer together.

Once wary neighbours, the two Eurasian powers have formed a strategic partnership based on energy investment, trade and defence co-operation.

Mr Putin has met Mr Xi 28 times since the latter took office in 2012. Is Russia — which has few friends left in the west — putting too many eggs in the Chinese basket?

“We have sufficient eggs but there are not too many baskets to put those eggs in,” he replies. “We always assess the risks . . . Russia and China are not directing their policy against anyone.”

Later he praises China for “showing loyalty and flexibility to both its partners and opponents” — an endorsement not extended to the US. www.businessday.ng

Currency warrior: why Trump is weaponising the dollar

Businesses in countries such as Russia are testing the power of the reserve currency but it could benefit from any global instability SAM FLEMING

I

n an industry long dominated by the dollar, it was a move that carried obvious symbolic weight.

Last summer Russian diamond miner Alrosa tested a new system for selling its rocks in roubles to clients in countries such as China and India, as an alternative to the US currency.

Since then the company has conducted about 50 transactions under the mechanism, using a range of currencies, says Evgeny Agureev, Alrosa’s director of sales, who says avoiding dollar conversion allows transactions to be conducted more speedily.

“The number and volume of these transactions is relatively small . . . but we think it is valuable for our clients to have a variety of options for settlement to choose from,” he says in an email, adding that the “world changes and we need to respond”.

Though under consideration for several years, the initiative by the partly state-owned miner is a sign of a growing appetite to find ways of shaking off the stranglehold the US dollar has long held on global commerce and finance. Those efforts have taken on high urgency given Donald Trump’s increasingly aggressive use of US economic and financial weaponry to get his way in foreign affairs.

The president has thus far engaged in minimal military conflict, but he has proved an unusually pugnacious currency warrior, as he pairs a tendency to talk down the dollar’s value in his quest for a smaller trade deficit with an unusual willingness to use the currency’s global heft as a tool of foreign policy.

Critically, sanctions, which can block foreign officials or corporations from accessing vast swaths of dollar-dominated commerce and finance, are being deployed against Russia, Iran, North Korea, Venezuela and a host of other countries, alongside tariffs and other restrictions on key companies such as telecoms manufacturer Huawei. As a result, economies including China and Russia are examining mechanisms to curtail their reliance on the dollar, while European capitals are seeking ways of circumventing America’s new barriers on dealings with Iran.

To date the initiatives amount to less than a pinprick in the US

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currency’s hegemonic status, as underscored by the modest scale of Alrosa’s foreign exchange innovation. But Mr Trump’s unilateralist approach has unquestionably unleashed a phase of experimentation elsewhere, prompting some analysts to ask whether, in the longer term, the US dollar’s supreme position in the global financial system could be shaken as other nations revolt against what they see as Mr Trump’s arbitrary use of American power.

Adam M Smith, a former Treasury and White House official who is now a partner at law firm Gibson, Dunn & Crutcher, says the manner in which Mr Trump is wielding America’s economic power is unprecedented, as he uses sanctions, tariffs, trade negotiations and export controls interchangeably.

“He is using the importance and attractiveness of the US market to the rest of the world as a coercive tool to get others to bend to his will,” says Mr Smith. “Does the very aggressive use of these economic tools make it more urgent for countries to find ways to avoid the US market? Probably.

However, the urgency may not mean that most countries will be successful in finding effective workarounds.”

America has long enjoyed a singular economic arsenal thanks to the ubiquity of the dollar and the centrality of its economy and financial system to global commerce.

Although America’s share of global gross domestic product may have declined, its currency still accounts for over 60 per cent of international debt, according to a speech by European Central Bank official Benoît Cœuré in February, and leads the euro both as a global payment currency and in foreign exchange turnover. It dominates pricing of commodities such as oil and metals and accounts for about 40 per cent of cross-border financial transactions.

The dollar’s share of global foreign exchange reserves has slipped in the 10 years since the financial crisis, but at 62 per cent of the total it still dwarfs all rivals. The euro has lost greater ground over the same time, now standing at just over 20 per cent. The Chinese renminbi is just a few per cent of global reserves, and a mere 2 per cent of international payments, according to the global transfer network, Swift.

This unique place at the heart of the global economic system gives the US government enormous power.

Using the dollar almost invariably @Businessdayng

means touching a US financial institution, says Eswar Prasad, a professor of economics at Cornell University.

This immediately puts you within the reach of US government and regulators.

The US toolkit is particularly potent thanks to the use of “secondary” sanctions. Normal US sanctions aim to prevent American citizens from dealing with a given country or party, but secondary measures allow the government to penalise third parties that do business with a sanctioned country.

The consequences for non-US institutions of failing to comply with US rules can be severe. In 2014, for example, BNP Paribas was hit by a penalty of nearly $9bn by the US authorities in connection with sanctions violations, as well as being forced to temporarily suspend part of its US dollar clearing work.

While Washington’s use of sanctions has been on the rise for decades, Mr Trump has emerged as a particular enthusiast. Data compiled by Gibson Dunn show 1,474 entities were subject to sanctions designations in 2018 — 50 per cent higher than in any previous year for which it has kept records.

The power of these tools has been felt across markets. The Treasury’s decision to sanction metal groups Rusal and parent company En+ led to a surge in aluminium prices, before it agreed to ease its stance if its major shareholder, Oleg Deripaska, gave up control. Sanctions were lifted in January.

L a s t A u g u s t Tu r k e y w a s plunged into a currency crisis as the US imposed swingeing tariffs on its steel and aluminium exports, on top of sanctions on senior ministers.

The US Congress has equally been aggressive in pushing sanctions. In April a cross-party group of senators led by Republican Marco Rubio and Democrat Bob Menendez demanded sanctions against senior Chinese Communist party officials in response to alleged human rights abuses against Uighurs and other Muslim minorities in the northwestern province of Xinjiang.

This month senators demanded the more rigorous enforcement of US regulations against Chinese companies that seek access to US markets.

Hawks such as Mr Rubio want to take matters further and more closely examine China’s ready access to US finance.

Tuesday 02 July 2019

BUSINESS DAY

45

Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 01 July 2019

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 236,375.75 6.65 2.31 197 7,636,609 UNITED BANK FOR AFRICA PLC 213,746.38 6.25 0.81 153 5,205,066 ZENITH BANK PLC 615,371.28 19.60 -1.01 335 8,545,313 685 21,386,988 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 236,908.93 6.60 0.76 179 12,359,301 179 12,359,301 864 33,746,289 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,635,909.44 129.50 0.35 86 589,560 86 589,560 86 589,560 BUILDING MATERIALS DANGOTE CEMENT PLC 3,084,331.84 181.00 -1.63 74 239,695 LAFARGE AFRICA PLC. 198,125.88 12.30 2.50 70 1,139,789 144 1,379,484 144 1,379,484 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 311,875.62 530.00 - 9 7,665 9 7,665 9 7,665 1,103 35,722,998 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 1 25 1 25 1 25 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 1 25 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 61,050.24 64.00 - 4 220 PRESCO PLC 52,000.00 52.00 - 3 6,730 7 6,950 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 1 10 1 10 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,590.00 0.53 - 10 496,414 10 496,414 18 503,374 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 794.19 0.30 - 3 19,748 JOHN HOLT PLC. 182.90 0.47 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 41,460.95 1.02 -9.73 92 21,859,316 U A C N PLC. 18,872.49 6.55 -1.50 56 1,349,431 151 23,228,495 151 23,228,495 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 28,908.00 21.90 - 11 4,370 ROADS NIG PLC. 165.00 6.60 - 0 0 11 4,370 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,027.51 1.55 3.33 10 659,150 10 659,150 21 663,520

AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 13,231.85 1.69 - 29 1,150,300 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 104,700.30 47.80 0.31 23 1,773,859 INTERNATIONAL BREWERIES PLC. 157,304.27 18.30 - 4 65,400 NIGERIAN BREW. PLC. 479,814.12 60.00 -4.76 94 959,768 150 3,949,327 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 86,750.00 17.35 -0.86 32 310,236 DANGOTE SUGAR REFINERY PLC 136,200.00 11.35 - 51 247,530 FLOUR MILLS NIG. PLC. 57,405.31 14.00 - 43 1,242,481 HONEYWELL FLOUR MILL PLC 7,930.20 1.00 -0.99 57 2,621,760 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 3 33,200 NASCON ALLIED INDUSTRIES PLC 38,681.80 14.60 -2.67 23 157,672 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 209 4,612,879 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 19,721.12 10.50 - 31 451,118 NESTLE NIGERIA PLC. 1,101,792.19 1,390.00 - 61 25,074 92 476,192 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,803.24 3.84 - 3 34,054 3 34,054 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 26,800.72 6.75 -4.93 35 181,313 UNILEVER NIGERIA PLC. 176,371.67 30.70 -6.97 25 152,471 60 333,784 514 9,406,236 BANKING ECOBANK TRANSNATIONAL INCORPORATED 183,495.51 10.00 -9.09 36 2,895,150 FIDELITY BANK PLC 51,864.89 1.79 5.29 61 4,039,173 GUARANTY TRUST BANK PLC. 900,594.08 30.60 -6.99 224 7,502,316 JAIZ BANK PLC 13,848.20 0.47 -6.38 6 1,011,200 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 67,081.67 2.33 5.91 11 1,145,167 UNION BANK NIG.PLC. 199,477.16 6.85 - 18 119,062 UNITY BANK PLC 7,598.07 0.65 - 8 7,149 WEMA BANK PLC. 25,459.15 0.66 - 21 548,591 385 17,267,808 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 1,000 AIICO INSURANCE PLC. 4,573.93 0.66 - 15 212,386 AXAMANSARD INSURANCE PLC 21,000.00 2.00 - 5 245,200 CONSOLIDATED HALLMARK INSURANCE PLC 2,276.40 0.28 7.69 11 632,500 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 3,240.49 0.22 10.00 9 445,000 GOLDLINK INSURANCE PLC 909.99 0.20 - 1 20 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,123.80 0.29 - 3 100,950 LAW UNION AND ROCK INS. PLC. 2,320.02 0.54 3.85 6 107,300 LINKAGE ASSURANCE PLC 5,680.00 0.71 - 2 51,500 MUTUAL BENEFITS ASSURANCE PLC. 2,681.46 0.24 4.35 8 423,010 NEM INSURANCE PLC 11,986.74 2.27 - 3 10,200 NIGER INSURANCE PLC 1,547.90 0.20 - 1 100,000 PRESTIGE ASSURANCE PLC 2,691.28 0.50 - 8 8,467 REGENCY ASSURANCE PLC 1,333.75 0.20 - 2 207,548 SOVEREIGN TRUST INSURANCE PLC 1,918.39 0.23 - 13 185,638 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 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 1 1,000 WAPIC INSURANCE PLC 5,754.58 0.43 - 13 37,176 102 2,768,895

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MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 2,606.77 1.14 8.57 13 895,055 13 895,055 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 6 2,400 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 2 1,050 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 8 3,450 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 6,980.00 3.49 0.29 53 404,206 CUSTODIAN INVESTMENT PLC 35,585.28 6.05 - 13 135,731 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 31,684.34 1.60 -1.84 53 2,841,215 ROYAL EXCHANGE PLC. 1,131.98 0.22 - 0 0 STANBIC IBTC HOLDINGS PLC 412,182.26 40.25 - 20 56,308 UNITED CAPITAL PLC 13,860.00 2.31 -1.70 60 1,158,694 199 4,596,154 707 25,531,362 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 - 1 148,000 1 148,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,575.00 5.05 - 0 0 GLAXO SMITHKLINE CONSUMER NIG. PLC. 12,197.94 10.20 - 9 92,037 MAY & BAKER NIGERIA PLC. 4,123.31 2.39 - 6 31,989 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 987.56 0.52 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 15 124,026 16 272,026 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 816.96 0.23 - 9 1,482,247 9 1,482,247 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 3 327 NCR (NIGERIA) PLC. 648.00 6.00 - 1 10 TRIPPLE GEE AND COMPANY PLC. 346.47 0.70 - 3 3,000 7 3,337 PROCESSING SYSTEMS CHAMS PLC 1,455.78 0.31 6.90 11 853,718 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 1 150 12 853,868 28 2,339,452 BUILDING MATERIALS BERGER PAINTS PLC 2,028.76 7.00 - 15 1,076,272 CAP PLC 19,250.00 27.50 - 17 26,494 CEMENT CO. OF NORTH.NIG. PLC 175,465.74 13.35 1.14 28 281,509 FIRST ALUMINIUM NIGERIA PLC 844.14 0.40 - 0 0 MEYER PLC. 313.43 0.59 - 1 100 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 2 3,000 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 63 1,387,375 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,465.85 1.40 - 19 1,225,834 19 1,225,834 PACKAGING/CONTAINERS BETA GLASS PLC. 33,173.14 66.35 - 5 704 GREIF NIGERIA PLC 388.02 9.10 - 0 0 5 704 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 87 2,613,913 CHEMICALS B.O.C. GASES PLC. 1,719.09 4.13 - 2 500 2 500 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 2 50 2 50 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 20 1 20 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 92.40 0.42 - 0 0 0 0 5 570 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,440.42 0.23 -4.17 28 2,416,561 28 2,416,561 INTEGRATED OIL AND GAS SERVICES OANDO PLC 49,725.65 4.00 - 29 88,987 29 88,987 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 63,104.17 175.00 2.94 22 407,414 CONOIL PLC 15,024.06 21.65 - 37 217,839 ETERNA PLC. 5,151.37 3.95 - 9 77,529 FORTE OIL PLC. 35,166.99 27.00 0.75 62 896,504 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 0 0 TOTAL NIGERIA PLC. 50,928.28 150.00 - 32 25,571 162 1,624,857 219 4,130,405 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 1 100 1 100 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 341.14 0.29 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,918.01 4.95 -10.00 15 1,015,450 TRANS-NATIONWIDE EXPRESS PLC. 342.26 0.73 - 3 1,100 18 1,016,550 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 2 120 2 120 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 1 630 IKEJA HOTEL PLC 2,972.68 1.43 - 93 20,601 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 7 310 TRANSCORP HOTELS PLC 41,042.18 5.40 - 1 345 102 21,886 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 175.39 0.29 7.41 3 481,507 LEARN AFRICA PLC 1,033.74 1.34 0.75 22 785,387 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 3 240 UNIVERSITY PRESS PLC. 798.11 1.85 - 11 299,255 39 1,566,389 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 497.31 0.30 - 9 127,466

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BUSINESS DAY Tuesday 02 July 2019 www.businessday.ng

CEO in focus

Wiebe Boer – leading the charge to light up Nigeria from the ground up in the environment, are the high points.

The low points, he says are those “deals were we have gone quite far but for one reason or the other, we or they have to walk away and so to does the potential for more low income Nigerian households and small business to have access to electricity.”

ISAAC ANYAOGU

I

n March 2017, before becoming CEO at All On, the Shell Nigeria funded off-grid energy investment firm, Wiebe Boer was one of the founders of Boston Consulting Group’s Lagos office. Prior to this he had spent five years setting up the Tony Elumelu Foundation and directing strategy for Heirs Holdings after three years in Kenya with the Rockefeller Foundation. In these institutions, he either helped in building them or run with the blueprint of others.

But Wiebe likes to build – from the ground up. The consequence of being raised by missionaries who abandoned the comfort of Europe to help build up a church community in Taraba State.

This upbringing with his father’s keen focus on social economic development and poverty eradication influenced his education and career. He studied history up to PhD level and acquired two masters from Yale and Bachelor’s degree from Calvin College. Boer spent one year studying political science at the University of Jos, after completing his primary and secondary education in Jos, where he was born and raised.

His ivy-league education gave him credibility even though he had limited work experience, setting him up for a leadership position early in life. Fresh out of graduate school, he had his first job running a USAID funded development programme in the Islamic Republic of Mauritania for World Vision. “I was a 28 year old kid who was set to run a $30million programme with 70 people reporting through me in French and Hassaniya Arabic.”

He wanted to have an impact on development in Africa and found he needed training in management and strategy because he didn’t have these in his formal education. On the strength of both degrees, and armed with leadership experience in the Mauritanian desert, he joined McKinsey, the assembly line of corporate strategy.

Wiebe speaks fluent Hausa and knows hustle as intimately as an Nnewi businessman knows his containers yet retains all the finesse of Wall Street. I imagine people with a PhD in History don horn-rimmed glasses, over a face of bushy beard, stuffed in an oversized tweed jacket, looking like a living trope to antiquity. But Wiebe has all the manner of the suave, swashbuckling CEO with a corner office in Manhattan.

He has managed to live true to his academic pursuit by writing a book. But even in that, he takes the unconventional route. You would think that someone put through the corporate cauldron at McKinsey will emerge with a book on strategy or corporate governance or any other highsounding concepts. Instead, Boer wrote about the history of football in Nigeria after spending months raiding British and Nigerian archives for material.

He thinks this is an asset. “Some people think that if you are going to be a CEO in business you have to be an engineer or

Wiebe Boer

study management, I think people like me who studied something completely different and then come into business, have a completely different mindset and it gives you an edge.”

Management style This reflects in the way he runs All On, preferring to be the motivator in chief rather than the enforcer-in-chief.

“I pick good people and I give them a lot of freedom,” he says. “The expectation is really high but I lead by example.”

Boer says he is often the first one in and the last one out, and when there are big projects, he is always with the team.

“I don’t want an employee of mine to say they are afraid to come to my office, even if they are an intern. Some might say I am too lenient, but I think you bring the best out of people when you allow them to make decisions and make their own mistakes. Sometimes I need to learn from my managers and I empower them to solve problems without coming to me.”

“The typical younger generation are as much concerned about the impact you are making and not just the money you are paying, so the CEO role is evolving from being keenly focused on the financial position of the company, to a CEO who is a thought leader, who can articulate what the company means to society while also driving strategy,” says Boer.

Wiebe is an avid networker. As a CEO in a relatively small organisation, he sees this as key.

“If you are building a company in a bubble, when the time comes and you need customers, investors or even regulators to be on your side and no one has ever met you or heard of you, how can they do

business with you? If you are putting up a big event and you don’t attend the event of others, nobody will come to yours. So networking is incredibly important.”

Boer has learnt to appreciate the value of maintaining a work/life balance. When he sent a work e-mail to the country chair of Shell Nigeria, a company who elevates this to the status of policy, he was told to enjoy his rest as the company will not end because he was away on leave.

This impressed upon him the importance of this balance in keeping the homefront stable. He says his first son would probably think of him as an enforcer and motivator as he tries to instil in him values such as hard work and dedication. “But he also knows I will always be there for him.”

“If you are the richest man in the world, the CEO of the best company and at the end of the day, your children don’t know you, then it really doesn’t mean anything because you may be passing billions of dollars to people who hate you. So what’s the point?”

“If the institution you built collapses or goes bankrupt and the family that is supposed to love you unconditionally doesn’t support you, then it doesn’t really matter.

We all have to understand that it is not easy but I do think it is important. I had to move on from a previous role because the balance was missing.”

Yet there are occasions when even the CEO has to cut short his leave or take time away from work in a period of crises. “Your family must understand they will have to make a sacrifice but don’t make that the norm.”

Two years at All On, Wiebe has had his fair share of highs and lows. “Every time, we close a deal despite layers of complexity

All On strategy All On is Shell’s efforts to catalyse marketbased energy solutions that are attractive, affordable and sustainable for small businesses and households in Nigeria, through the establishment of an independent, impact investing fund focused on improving energy access in the Niger Delta.

The company’s strategy is to unlock energy access for these communities through a multi-faceted approach that combines investment, technical support and ideas on market development. All On primarily operates as an impact investor, making direct investments in companies providing power to low income communities and SMEs. The company has awarded millions of dollars to early stage off-grid energy companies and start-ups in Nigeria. It was involved in the funding for Lumos, Green Village Electricity and recently partnered with foreign investors to finance Arnergy, a Lagos-based start-up to the tune of $9milion.

There are over 80 million people in rural areas without access to power and over 40 million people in semi urban areas with limited supply from a failing national grid. The scale of this problem should scare anyone.

“It doesn’t scare me,” Boer says. “The entire off-grid industry cannot solve the massive problem tomorrow, there is the concern that we are not doing it quick enough but this is a problem that was created over decades of lack of investment, so it will take a long time to fix, but the good thing is that we are taking it step by step.”

Lessons Wiebe says the various institutions he has either built or helped build have taught him that in the early days, it won’t be perfect but put your stick in the ground, make it plain that you are here to work.

“If you wait too long to deliver something, people will think you are not serious and your own team will become uncertain.

In the early stages, it takes a long time to set up systems and policies but don’t wait forever to put something in place to make people know what you about.

“Your initial team is important, so the CEO should build the team. It is very difficult if the team is already there and now you are trying to jive with the team, they may not share your vision or your style.

Even if it is just the first two people you hire, hire your first team,” counsels Wiebe.

Wiebe says start-ups should build for the long-term, put up proper structures, governance systems - essentially run that start-up as if it were a million dollar company, then perhaps it may just become one.

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