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news you can trust I **thursDAY 02 may 2019 I vol. 15, no 301 I N300

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Market I&E FX Window CBN Official Rate Currency Futures

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360.63 306.95

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NGUS jul 24 2019 361.06

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0.13 13.72

NGUS oct 30 2019 361.51

NGUS apr 29 2020 362.41

Pension contributors, retirees get more investment windows As PenCom expands multi-fund structure to 6 Adds micro-pension, non-interest instrument

Modestus Anaesoronye

ension contributors and retirees in Nigeria will now have more choices regarding where their pen-

L-R: Winifred Oyo-Ita, head of the civil service of the federation; Stephen Ocheni, minister of state for labour and employment; Boss Mustapha, secretary to the government of the federation; Vice President Yemi Osinbajo, and Ayuba Wabba, president, Nigeria Labour Congress (NLC), at the 2019 Workers’ Day celebration in Abuja, yesterday. NAN

sion fund assets will be invested, BusinessDay has learnt. This is as National Pension Commission (PenCom), the industry regulator, has expanded the

multi-fund structure from the initial four to six. Whereas the initial m u l t i - f u n d s t r u c t u re which was implemented in July 2018 covered Funds I-IV, the Commission has

added Fund V, which is the micro-pension fund, and Fund VI, which is the noninterest-compliant instrument, also called Continues on page 38

Nigeria-UK to explore naira-denominated financial instruments with the City of London

igeria and the United Kingdom have agreed to fast-track key regulation to deepen the insurance market, expand the digital economy and explore naira-denominated financial instruments in collaboContinues on page 38

Inside Special Report: Overview of the Nigerian Insurance Industry: Unleashing Vast Potential Is the African continental free trade agreement a game changer for the P. 36 continent?

Thursday 02 May 2019

BUSINESS DAY

news Nigeria’s tier-one banks’ customers paid N15.7bn as account maintenance charges in Q1’19 Endurance Okafor

igerians who have bank account in tier-one banks in the country paid a total of N15.65 billion as account maintenance charges in the first quarter of 2019. BusinessDay’s analysis of Q1’19 financials of Nigeria’s biggest banks – Zenith, Access, Guaranty Trust (GTB), United Bank for Africa (UBA) and First Bank – revealed an increase in account maintenance changes as against the year before. The five tier-one banks reported 18.65 percent increase in the collection of account maintenance charges from N13.19 billion paid by the banks’ customers in the previous comparable period to N15.65 billion in Q1’19.

Johnson Chukwu, managing director, Cowry Asset Management Limited, said the increase was a result of the high level of economic activities in Q1 19 compared to the corresponding period of 2018. “We have seen an increase in the level of financial inclusiveness to the extent that a lot more transactions now go through the financial institutions instead of the normal cash transaction,” Chukwu said. “Hardly do you see people do large volume of cash transactions and so it simply means that a lot more economic engagements are now going through the financial system,” he said. Thus, the Lagos-based analyst said, it is only normal that whenever there is general

L-R: Joseph Umembom, producer, Bolanle Austen-Peters (BAP) Productions; Bolanle Austen-Peters, founder/artistic director, BAP Productions; Patrick Akinwuntan, MD, Ecobank Nigeria, and Carol Oyedeji, executive director, commercial banking, at the Memorandum of Understanding (MoU) signing between Ecobank Nigeria and BAP/TerraKulture to promote Africa Theatre in Lagos, yesterday.

N30,000 new minimum wage Widows of Nigerian activists executed in 1995 get favourable ruling in Dutch court implementation resonates on Workers’ Day DIPO OLADEHINDE

sther Kiobel and three other widows of Nigerian activists executed by the Sani Abacha military junta in 1995 have secured an interim ruling in their favour at a District Court of The Hague, allowing the court to have jurisdiction with regard to Shell’s involvement in the alleged unlawful arrest, detention and execution of their husbands by the Nigerian military. After exhausting legal possibilities in Nigeria, Esther Kiobel, Victoria Bera, Blessing Eawo and Charity Levula are suing Shell in a foreign court over what they say is its role in the execution following a brutal crackdown on Ogoni protests against Shell’s devastating pollution of the region. Also, the widows’ legal team demands that Shell hands over internal documents which would provide key evidence of its complicity, an allegation which Shell has denied. Shell challenged the decision of the District Court of The Hague to hear the case, stating it lacked jurisdiction to hear the suit. In a judgment delivered on Wednesday, a three-judge panel at the Hague District Court affirmed that the court had jurisdiction in hearing the suit, though they did not agree with assertions by the widows that Shell should have done more to prevent their husbands’ deaths. “The court considers itself capable of hearing the case. This procedure will continue,” Larissa Alwin, presiding judge, said, reading the decision of the court. According to Reuters, the court also ruled that Shell should hand over some confi-

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dential internal documents to the plaintiffs’ lawyers, and that they would have the opportunity to examine witnesses. Dutch courts do not award large disciplinary damages claims. However, the case has the potential to humiliate Shell and provide a measure of comfort for the activists’ families if it finds the company bears responsibility in their deaths. Shell representative Igo Weli said outside the court that Shell was not responsible for what happened. “Shell actually made an appeal for clemency (in the Ogoni Nine case), but sadly this was not heard. We continue to deny all the allegations in the strongest possible terms,” Weli told Reuters. Weli, who works for Shell’s Nigerian subsidiary, said the company would give the claimants access to internal documents as ordered. Lead plaintiff Esther Kiobel, whose husband Barinem Kiobel was among those executed, said outside the courtroom that she was glad the court has found out it has jurisdiction over the matter. “My husband was killed like a criminal. I want him to be exonerated,” Kiobel said after the court hearing. Reacting to the court ruling on Wednesday, Amnesty International’s Head of Business and Human Rights Mark Dummett said the court decision marks a vital step towards justice for Esther and the other plaintiffs. He added that it will also set an important precedent for other victims around the world who are seeking to hold powerful corporations to account, and who struggle to access justice.

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

…FG pledges full implementation as Labour decries inflation, unemployment INNOCENT ODOH, Abuja, REMI FEYISIPO, Ibadan, ANIEFIOK UDONQUAK, Uyo, IDRIS MOMOH & CHURCHILL OKORO, Benin, SAMUEL ESE, Yenagoa, YOMI AYELESO, Akure, EMMANUEL NDUKUBA, Awka, & NATHANIEL GBAORON, Jalingo

he Federal Government on Wednesday pledged its commitment to fully implement the new minimum wage of N30,000 recently signed into law by President Muhammadu Buhari. Many state governors in the country made a similar commitment, promising to implement the new minimum wage as soon as the National Salaries, Income and Wages Commission worked out the guidelines and modalities. These commitments were made during the celebration of the 2019 International Workers’ Day in Abuja and in state capitals across the country. This is even as labour unions in the country lamented the high rate of inflation and rising unemployment in the country, suggesting that the 67 percent increase in the national minimum wage from

N18,000 to N30,000 may not have achieved much in view of the current economic realities. In his remarks at the Workers’ Day rally at the Eagle Square in Abuja, President Buhari, who was represented by Vice President Yemi Osinbajo, stressed that the Nigerian workers and citizens were the central hub of all economic policies and programmes of his government. “We believe that the Nigerian citizen should be the central hub of all economic policies and programmes of government, their welfare and wellbeing should be the benchmark of our commitment for social justice to all Nigerians,” Buhari said. “The National Minimum Wage which the president signed into law a few days ago shall be fully implemented by this administration. We shall continue to provide enabling environment for high productivity and industrial peace and

harmony,” he said. The president praised the leadership of the labour movement, led by the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC), and also lauded the International Labour Organisation (ILO) for the event, which coincided with the 100 years of the ILO and 60 years of the ILO in Africa. The theme of the day, ‘Another 100 Years of Struggle for Jobs, Dignity and Social Justice in Nigeria’, he said, was apt, even as he lauded the ILO for supporting Nigeria in the implementation of labourrelated policies, programmes and action plans against hard labour, forced labour and modern slavery. He also reiterated the Federal Government’s commitment to job creation and protection of the rights and dignity of workers. Also speaking in Ibadan, the Oyo State capital, Governor Abiola Ajimobi assured workers of his administration’s resolve to pay the N30,000 minimum wage without delay.

The governor, whose speech was read by his deputy, Moses Adeyemo, said as soon as the ongoing negotiations initiated by labour leaders with the government were concluded and documented, the enhanced salaries would be paid to elevate the living condition of the workers. “I wish to restate the commitment of the government of Oyo State to honouring the Minimum Wage Act as soon as ongoing negotiations are concluded and necessary templates and documentation are issued,” Ajimobi said. “I charge all workers to reciprocate the various good gestures of the state government by being more dedicated, proactive and punctual at their duty posts for increased productivity. The public service is no longer a dumping ground for people with mediocre ability. We all must stand up and stand right to reposition the system for better service delivery,” he said.

•Continues online at www.businessday.ng

Nigeria stock investors lost over N600bn in April … buy sentiment subdued despite Q1 earnings season Iheanyi Nwachukwu

espite earlier expectations of portfolio realignment in favour of equities market, it never happened in April at the Nigerian bourse. Rather, the market witnessed increased subdued buy sentiment leading to stocks value erosion in excess of N600

billion, amid influx of first-quarter (Q1) corporate scorecards. “Theequitymarketrecorded more depreciations than appreciations in the last six years between March and April. This is an indication that the chance of depreciation in April 2019 is higher than the chance of an appreciation,” Lagos-based FSDH Research analysts had noted ahead of April month end.

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Validating the analysts’ earlier views on stock market performance in April, the Nigerian Stock Exchange (NSE) All Share Index (ASI) decreased by 6.06 percent in the review month. In four months to April 2019, the stock market decreased by 7.22 percent. The value of listed equities which opened the review month of @Businessdayng

April at N11.600 trillion stood at N10.959 trillion as at April 30, which implies value erosion of about N641 billion. In the same manner, the NSE ASI which was 30,833.5 points as at April 1, 2019 declined to record low of 29,159.74 points as at April 30. BusinessDay checks show

Continues on page 38

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news Obaseki advocates channelling domestic savings to devt financing … lauds Edo workers’ dedication, dexterity HARRISON EDEH, Abuja

do State governor, Godwin Obaseki, has made a case for channelling domestic savings to development financing instruments to spur development. The governor said this when he chaired the session on development financing at the induction of new and returning governors into the Nigeria Governors’ Forum (NGF), in Abuja. The governor argued that the N200 billion investment in agriculture, which contributed to wrestling Nigeria out of recession, was enough testament to the need to deploy development financing to revitalise the Nigerian economy. According to Obaseki, “The Nigerian Sovereign Wealth Fund, which we are investors as governors, has leveraged N5 billion that we have given them to drive development in this country.

It would make sense for us to take much of our domestic savings into our Sovereign Wealth Fund so that we can leverage more investment in our various states. The Central Bank, the Sovereign Wealth Fund and other development institutions have done well in the area of agriculture. “With N200 billion, we have been able to invest in agriculture and move the country out of recession. Does it not make more sense for us to commit more of our resources to develop our states.” Noting that there was a need for states to channel funds to initiatives that guarantee greater returns and impacts for the people, he said, “Why should we be spending $6bn a year importing petroleum products. Does it not make more sense to use some of that money for development financing that would affect more Nigerians? The task is for us, the class of 2019,

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to make the case to get more funding available to development financing institutions so that we, in turn, can get financing to drive projects in our states. Meanwhile, the governor has hailed the immense contribution of workers in the state to the development strides recorded in the last two and half years of his administration, noting that their dedication, dexterity and focus in transforming the state deserve commendation. He restated the state government’s commitment to paying the new minimum wage of N30,000, noting that modalities were already in place to ratify the increase. The governor said this in commemoration of Workers’ Days, a celebration of labourers and the working class promoted by the International Labour Movement, marked every May 1. It is also known as May Day or Labour Day.

CSCS non-traditional products boost earnings amid macroeconomic headwinds David Ibidapo & Gbemi Faminu

mid strong economic headwinds witnessed by businesses in 2018, Central Securities Clearing System plc (CSCS), through non-traditional products, has boosted earnings that translated into profit for the period ended 2018. Analysis of the company’s financials shows that the group’s gross earnings recorded a 4 percent growth having had N9.1 billion in 2018 and N8.7 billion in the corresponding period of 2017. Gross earnings, which comprised of revenue, interest income and other income during the period, recorded remarkable increase in income from depository fees, Federal Government bonds and other incomes. Revenue from FGN bonds amounted to N2.5 billion against N1.8 billion in 2017, representing a 39 percent surge in investment return in the underlined security. Oscar Onyema, chairman of the board, disclosed that, regardless of the various challenges that hit the economic and business environment, CSCS was able to scale through and record profits, which was attributed to the growth of non-traditional

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products and services to drive auxiliary income as part of strategy implementation, sound corporate governance model as well as skilled workforce and use of advanced technology. Speaking on the group’s achievements, he mentioned that the group established an innovation hub, to serve as a platform to nurture new ideas and develop solutions to provide more valued services for its customers, adding that the group is expected to be rated excellent by the Thomas Murray Data Services for sustaining standards. Growth in operating income further translated into improved profit before tax margin for CSCS during the period, also couple with efficiency in cost management. As revealed by its financials, profit before tax grew by 7.5 percent to N6.09 billion in 2018 from N5.66 billion realized in 2017. PBT margins improved to 132 percent from 131 percent recorded in the previous year. However, after tax profit slowed down marginally by 2 percent on a surge by 86 percent in income tax during the period. CSCS was charged in 2018 with an income tax which amounted to N1.26 billion against N683.57 million in the previous corresponding year.

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This was on the back of a 304 percent increase in excess dividend tax which amounted to N595.68 million in 2018 from N147.31 million in 2017. According to report, during the year 2018 the company was liable to excess dividend tax of the above stated amount which represented 30 percent of N3.5 billion dividend paid over the income tax of N459.8 million recognized as tax expense in 2017. In addition to that, the company had to pay a deferred tax of N51.7 million during the period which inhibited growth in bottom line. More so, total assets grew by 12 percent to N35.85 billion in 2018 from N31.91 billion in 2017. Following its successful record, the group’s board of directors proposed a total dividend share of 3.5 billion with 70k per share for its shareholders. Optimistic about the year ahead, Haruna Jalo-Waziri, chief executive officer of the group stated that in 2019, the group is set to achieve more especially with technological advancement. He said “following the rapid digital transformation across industries, we shall be exploring opportunities regarding emerging innovations with the potential of disrupting various aspects of our ecosystem”

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news Unions to shut down NCAA over staff placement dispute IFEOMA OKEKE

nions in the Nigerian aviation industry have threatened to shut down the Nigerian Civil Aviation Authority of Nigeria (NCAA) over what it called ‘obsolete’ organogram in the agency, which has prevented some promoted staff to be rightly placed. The unions also said that there was no going back in their plan to ensure unionisation of workers in the country’s airlines before the end of the year. Illitrus Ahmadu, the president, Air Transport Senior Staff Services Association of Nigeria (ATSSSAN), stated this Wednesday at the Workers’ Day celebration organised by the unions at the Murtala Muhammed Airport (MMA), Lagos. Ahmadu said that some staff of NCAA went through promotion exercise in the agency since 2017, but till date, none of them had been properly placed due to the ‘obsolete’ organogram in the agency. According to him, NCAA was still operating with the 2001 or-

ganogram, which it commenced with when the entire staff of the agency was just at 300, stressing that the management had refused to review it since then. He explained that as at date, 47 positions of Assistant General Managers (AGMs) had been extinguished, while directorates and departments had been merged. Ahmadu emphasised that the unions discussed the issue with the management of NCAA and a ministerial committee set up by Hadi Sirika, the Minister of State for Aviation, only for the entire agreement to be upturned in Abuja by “some people in government.” “As it is, there is lacuna in the organogram of NCAA. The management brought forward an obsolete organogram. Between 2001 till date, the organogram has not been reviewed. At inception, NCAA had only 300 staff, but today, it has grown to 1,200 staff, yet, the organogram has remained unchanged,” he said. “Many people did exams and passed, but till date, they have not been placed. This one is unacceptable to us. If the situation

Oil falls on swelling US stockpiles, Venezuela adds to market uncertainty

il prices fell on Wednesday after a rise in US crude inventories, while an intensifying crisis in Venezuela and tightened US sanctions on Iran added further uncertainty to markets. Brent crude oil futures were at $71.74 per barrel at 0855 GMT, down 32 cents or 0.44 percent from their last close. US crude futures were down 49 cents or 0.77 percent at $63.42 per barrel. Trading was thin as May 1 was a holiday in many markets. US crude stocks rose by 6.8 million barrels to 466.4 million barrels in the week to April 26, the American Petroleum Institute (API), an industry group, said on Tuesday. “US oil stocks are swelling due to an upswing in crude inventories … the glut alarm bells are ringing louder in the US,” PVM Oil Associates strategist Stephen Brennock said. Markets also keenly watched oil producer Venezuela, where opposition leader Juan Guaido called for an uprising against President Nicolas Maduro. Many observers fear this could lead to escalating violence and further disruptions to crude supply. Oil markets have already tightened this year due to supply cuts

led by the Organisation of the Petroleum Exporting Countries (OPEC) as well as U.S. sanctions on Venezuela and Iran. Washington is set to revoke waivers for select countries to import Iranian oil on Wednesday and says it aims to drive down Iran’s crude exports to zero. “The Iran sanctions come on top of already fragile supplies and raise concerns about tightening markets,” said Norbert Ruecker, head of research at Swiss bank Julius Baer. OPEC meets in June to discuss production policy. While Washington has demanded the group increase output to make up for the shortfall from Iran. OPEC’s de facto leader Saudi Arabia said on Tuesday it had no immediate plan to do so. “Recent comments from (Saudi Energy Minister Khalid) al-Falih confirm our view that the kingdom will respond cautiously with other oil producers and not pre-emptively ramp up production,” said Giovanni Staunovo, analyst at UBS in Zurich. Rising US output, which has jumped by around 2 million barrels per day (bpd) over the past year to a record 12.2 million bpd, may ease market tightness.

L-R: Hakeem Muri-Okunola, head of service, Lagos State; Rotimi Ogunleye, representating the governor and commissioner for physical planning and urban development; Kehinde Bamigbetan, commissioner for information and strategy; Akintola Benson, commissioner for establishment, training and pensions, and Nnamdi Simon Enuah, representing the minister for labour and controller, Federal Ministry of Labour and Employment in Lagos, at the 2019 Workers’ Day celebration at the Agege Stadium in Lagos. Pic by David Apara

‘Government needs to improve infrastructure for growth of financial technology’ KELECHI EWUZIE

ndustry experts in the financial sector have urged the Federal Government to create an enabling infrastructure system if she hopes to improve the growth of financial technology in Nigeria. They observe that financial technology (Fintech) is still at its embryonic stage in Nigeria and for it to thrive, there has to be good environment, as the technologies can’t operate in isolation. Adebisi Shonubi, deputy governor (operations), Central Bank of Nigeria (CBN), says the time has come to be biased toward technology rather than the

use, but focusing on its benefit to individuals. Shonubi in a keynote speech at the maiden Accounting Technology summit organised by Institute of Chartered Accountants of Nigeria (ICAN) in Lagos states that Fintech wouldn’t impact and improve financial inclusion until Nigeria sorts its infrastructure and environmental issues. Speaking on the theme: ‘Disruptive technologies: the game changer for businesses,’ he says the best technology in the world may not always be the most appropriate in the environment that we are in. According to Shonubi, “Am hopeful that more of the conversation and discussion would be www.businessday.ng

around how technology can be applicable in our environment and the benefits that could be drawn and use by the people.” Razak Jaiyeola, president of ICAN in his address, says the summit is one of its strategic initiatives at ensuring that chartered accountants and professionals in other disciplines are adequately prepared for the Fourth Industrial Revolution. Jaiyeola opines that blockchain technology is redefining record-keeping roles of accountants in a more efficient and transparent way as well as reducing the costs of maintaining and reconciling ledgers and provides a higher level of assurance on the ownership and history of

assets thereby facilitating loan disbursement decisions. “Presently, we are witnessing unprecedented technological disruptions that are giving new meanings to how businesses should run. Failure to keep pace with the disruptive technological trend portends danger of extinction for any business entity or individual,” he says. On his part, Bisi Sanda, chairman, Board of Consultancy and Information Technology Faculty of ICAN, observes that in developed countries, accounting technology summit has become a yearly event for decades because technology is what everybody leverages on for growth.

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Learnability critical to increasing future-ready workforce in Africa ANTHONIA OBOKOH

he contracting shelf life of skills requires African businesses to focus more on strategies that would enhance employees’ ability to adapt to unfolding global workplace realities, Ivie Imasogie-Adigun, group head, Human Resources, Sahara Group, says. Imasogie-Adigun told Human Capital Professionals at a session on “Strategies to Ensure Workforce Learnability” that public and private organisations in Africa need to respond to growing digital disruptions by creating a process that identifies a candidate’s learning agility right from the hiring process as “a person’s learnability quotient is a great predictor of future success in the work place.” She went further to define ‘Learnability’ as an individual’s ability to acquire new skills efficiently, in the shortest time possible. According to ImasogieAdigun, the impacts of globalisation makes it imperative for employees to vigorously and deliberately pursue selfdirected development initiatives that equip them with new skills beyond their current core areas of expertise. “Today, new skills have emerged that are quite different from what was needed about 5 years ago. LinkedIn’s talent research shows that half of today’s most in-demand skills weren’t even on the list a few years ago. As such, it is imperative that there is a drive towards constant upskilling for continued relevance.” Experts have suggested that by 2030, the Africa continent’s working-age population will increase by two-thirds, from 370 million adults in 2010 to over 600 million. Of this population at least 52 percent

will receive up to a secondary education; a 16 percent increase compared to the existing percentage in 2010 of 36 percent of the population. She noted that this trend should elicit a firm and strategic response from stakeholders across the continent to improve global competitiveness. “As 15 to 20 million increasingly well-educated young people are expected to join the African workforce every year for the next three decades, delivering the ecosystem for quality jobs – and future skills to match – will be imperative to fully leveraging the continent’s demographic dividend.” She explained, urging policy makers, the academia and human capital practitioners to lead the charge of promoting “employability as the impact of the fourth industrial revolution hovers over Africa.” Sharing the Sahara Group experience, she said businesses can enhance the capacity and adaptability of their people by hiring for learnability, making learning a key talent strategy, investing in new technologies, rewarding personal development achievements and creating a sustainable knowledge exchange framework that can be updated periodically. “At Sahara Group where our business traverses the entire energy value chain, learnability is one of our critical employee selection criteria as it speaks to spontaneity and novelty. Employees must be supported to learn either via learning hubs or e-learning platforms to promote knowledge acquisition across all levels in the organisation. It is also imperative for organisations to encourage the creation of an informal social platform where knowledge flows freely and can be accessed seamlessly,” she said.

Paragon Dry Cleaners officially open for business

ew entrant in the Lagos laundry and dry cleaning business, Paragon Dry Cleaners, had its official launch on Wednesday, May 1, 2019, at 91, St. Finbarrs College Road, Akoka, Lagos. The company, described as the new standard in dry cleaning, attracted an engaging crowd of prominent people to the launch. The event featured a speech by the chairman, Dele Aloko, who spoke on the inspiration behind the business, as well as their business model. According to Aloko, the company aims to provide high quality, cost effective laundry and dry cleaning services for urban professionals all over Lagos. The company has four branches at inception, but will extend their reach through a pick-up and @Businessdayng

delivery service covering Lagos, and by expanding their branch network Metropolis . Executive director, Bunmi Aloko, spoke at length on the unique capabilities of Paragon employees and the valuable services the company would offer its customers. Performing the formal launch, Ituah Ighodalo, a pastor, congratulated Paragon Dry Cleaners and urged them to ensure they provide high value services to the satisfaction of their customers. Speaking after the event, Osten Olorunsola, former director of the Department of Petroleum Services, said the entrance of Paragon Dry Cleaners was a welcome development as Lagos was long overdue for a dry cleaning company whose focus was on customer service.

Thursday 02 May 2019

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NEWS

CEOs unhappy at FX, power, lending rates as business confidence stands at 51% Odinaka Anudu & Gbemi Faminu

anufacturers CEOs Confidence Index (MCCI) report released on Tuesday shows that top 200 chief executives of major firms believe they are struggling with power, foreign exchange access, lending rates and regulations. The report, conducted by the Manufacturers Association of Nigeria (MAN), shows that the confidence of the CEOs stands at 51.3 points in the first quarter of 2019. In terms of foreign exchange access, 41 percent of the CEOs did not agree that the rate at which the sector sources forex has improved. While 36 percent agreed that FX access has improved, 23 percent was not sure. “The response therefore suggests the need for continuous fine-tuning of forex policy in the country, particularly as it concerns the

manufacturing sector,” MAN says in the report. Adesola Sotande-Peters, vice president of finance at Unilever Nigeria, recently said during a breakfast meeting that the manufacturing sector was highly dependent on the unfavourable foreign exchange, which makes companies struggle to access materials for production. Presently, under the official foreign exchange, a naira is traded for N305 while it is traded for N360 in the black market, leaving manufacturers bearing huge production costs. Despite the move by the CBN to cut its benchmark interest rate to 13.5 percent from previous 14 percent in March, manufacturers are still not encouraged to borrow, which has reduced the sector’s capacity to reach potential. Sixty-three percent of the CEOs do not agree that the rate at which commercial banks lend to manufacturers encourages productivity in the sector. Manufacturers

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borrow at above 22 percent today. Besides the double-digit interest rate by banks, manufacturers say a policy should be designed to improve the proportion of commercial banks loanable funds that goes to the manufacturing sector. Ninety-three percent of CEOs agreed that multiple/ over-regulation by all tiers of government Ministries, Departments and Agencies (MDAs) depresses productivity in the manufacturing sector. Bab atu n d e Ru wa s e, president, Lagos Chamber of Commerce and Industry (LCCI), said at a breakfast meeting, “Some regulatory agencies are not consistent with the ease of doing business policies, some of which borders on high regulatory compliance cost, lack of clarity in regulatory requirements overlapping regulatory functions among others.” Also, 89 percent of the CEOs agreed that poor ac-

cess to national ports and the associated gridlock negatively affect productivity in the manufacturing sector. “The poor scenario accounts for delay in clearance of manufacturing inputs and machinery as well as high demurrage which increases cost of production in the sector and often times put manufacturing concerns in stock-out situations. It is therefore important that Government urgently addresses the difficulty in accessing the national ports, particularly Lagos ports,” MAN said. The CEOs identified poor electricity and gas supplies/ non-reliability of gas supply/ scarcity of diesel as the biggest issue. “Power came out to be the main concern,” Paul Gbededo, chairman of MAN Economic and Policy Group, said, and explained that manufacturers had found it difficult to rely on public electricity, saying that small industries were the hardest hit.

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Rejected bills now 39, as Buhari withholds yet another bill OWEDE AGBAJILEKE, Abuja he number of bills passed by the eighth National Assembly and rejected by President Muhammadu Buhari since assumption of office in May 2015 has risen to 39. On Tuesday, President Buhari declined assent to the second version of the National Transport Commission Bill. In a letter addressed to the Senate president, Bukola Saraki, and read at plenary, President Buhari said some sections of the National Transport Commission Bill contained safety regulations that would duplicate the functions of existing transport agencies. This is the second time the President is rejecting the proposed legislation, having withheld his assent to the first version of the bill in December 2018. But in February 2019, the Senate passed the Conference Committee Report of the NTC Bill, after giving effect to the observations made by the President. The bill seeks to establish the National Transport Commission as an economic regulator of all activities undertaken in Nigeria’s transport sector. According to the proposed legislation, the Commission

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would replace the Nigerian Shippers’ Council and operate as an independent regulator to promote multimodal transport and boost private sector participation in the provision of transport services. It empowers the NTC to be responsible for creating equitable access to transport services as well as regulating the tariffs, rates and charges paid by transport service users. Last month, the President equally rejected the Nigerian Correctional Service Bill, increasing the number of declined bills from 38 to 39. Similarly, in March, the President had rejected eight new bills passed by the National Assembly. The bills included the controversial National Housing Fund Bill, Ajaokuta Steel Company Completion Fund Bill, Nigerian Aeronautical Search and Rescue Bill, Small and Medium Enterprises Development Agency Bill and National Biotechnology Development Agency Bill. Others were the National Institute of Credit Administration Bill, Federal Mortgage Bank of Nigeria Bill as well as the Chattered Institute of Training and Development of Nigeria (Establishment) Bill.

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cityfile Blue line rail: Lagos opens Orile, Alaba, Mile 2 bridges JOSHUA BASSEY

agos Metropolitan Area Transport Authority (LAMATA) has ordered the opening of pedestrian bridges at Orile, Suru Alaba and Mile 2 train stations to the public. The pedestrian bridges, built as part of the Okokomaiko-CMS Blue Line rail project are designed for commuters to access the stations and for pedestrians to cross the 10-lane Badagry Expressway. The opening of the pedestrian bridges is ex-

Members of Computers Allied Product Dealers Association of Nigeria (CAPDAN) with Phones Allied Product Dealers Association of Nigeria (PAPDAN), protesting against the installation of Iyaloja (Market President) in Computer Village Ikeja, in Lagos on Tuesday. NAN

Estate agent bags 12 months

PLWD seek full implementation A of Lagos disability law JOSHUA BASSEY

ears after the Special Peoples Law 2010, was signed in Lagos State, Persons Living With Disabilities (PLWD) say it is high time government prioritised the full implementation of the law. They stated this during a session with the media to highlight their plights and challenges, insisting that more needed to be done to give them a greater sense of belonging. The disability law which was enacted during the tenure of former Governor Babatunde Fashola, seeks to provide a comprehensive legal and policy framework for empowerment, welfare and protection of the rights of the people with disability in Lagos.

Dare Dairo, chairman, Lagos chapter of the National Association of Persons Living With Disabilities (NAPLWD), who led others in the interaction with the media, Tuesday, in Lagos, equally set an agenda for the incoming administration of Babajide Sanwo-Olu. He stressed that the nonimplementation of the law was limiting their ability to fully contribute their quota towards the development of the state in particular and the nation in general. “Almost a decade after the signing of the disability bill into law in Lagos state, there is much yet to be done in significantly instituting a culture of inclusion in all facets of government planning, policies and programmes. He lamented that most of the local governments in the state were not even

aware of the disability law and its provisions, let alone implementing them. Dairo said there was also the need for the incoming administration to remove the Lagos State Office of Disability Affairs (LASODA) from the supervision of the ministry of youth and social development and place it direct under the governor’s office. According to him, the responsibilities of LASODA transcend the purview of the ministry as presently constituted because its mandate cut across virtually all ministries and planning. “We hereby suggest the removal of LASODA from under the ministry and situated directly under the governor’s office. A similar decision has been taken in the past when the Lagos Aids Control Agency (LSACA)

used to be under the ministry of health but was removed and placed under the governor’s office. LASODA needs this step too.” He knowledge, however, that much investment has been made in the area of empowerment and provision of assistive devices towards enhancing the quality of life for PLWD, but added: “This investment can be improved upon through clearly defined goals with the right monitoring and evaluation parameter to measure effectiveness”. The group commended the outgoing Governor Akinwunmi Ambode and past administrations in the state for tackling poverty among PLWD. “Their vision, compassion and good work sustained the spirit of inclusion in Lagos that is the envy of other states.

Abia: Police seek synergy with residents to fight crime GODFREY OFURUM, Aba

ne Okon, commissioner of Police (CP), Abia State has called for synergy between the police and residents of Aba, to curb criminal activities in the area and Abia State at large. The CP, who was on a familiarisation tour of Aba area command, however, warned police officers in the state to desist from

criminal activities, pointing out that the number of officers involved in crime in the city was alarming. Okon, who said he has a target to return the police to the community, equally urged members of the public to fulfill their own obligations, by obeying laws and providing information to the police. “I have a problem with policemen in Aba. The number of policemen that are involved in criminal www.businessday.ng

activities in Aba is alarming. “Every policeman in Abia wants to be in Aba. Does it mean that police work cannot be done in Nkporo, Arochukwu, Isuikwuato and Uzuakoli? Why must it be Aba? “The bottom line is bribery. For those who have corrupt tendencies that brought them to Aba, to destroy the image of the police, I urge you to get ready, because it will not

work again. “I don’t know whether you’re not ashamed that you, as policemen are involved in crime. Just, because of money. I will not spare you. “ Those that have worked with me know my stand on these dirty and corrupt practices. I know the Nigerian society and especially the Igbos. If you do your work diligently, they’ll appreciate you. “Not when you go and

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pected to bring relief to residents around Orile, Suru Alaba and Mile 2 who have had difficulties crossing the road. ‘We prioritise the safety of our people. The infrastructure is meant for them; so we will open the pedestrian bridges for their use,” said Abiodun Dabiri, managing director of LAMATA. Dabiri, however, appealed to the leaders in the community to help educate their people on the need to keep and maintain the infrastructure so it could serve them very well.

n Abeokuta Magistrate Court sitting in Isabo has sentenced a 25year estate agent, Awesu Saheed, to 12 months imprisonment for defrauding accommodation seekers of N372,000. The convict was arraigned on a nine- count charge bordering on conspiracy, obtaining money under false pretenses and unlawful conversion. The magistrate, Olakulehin Oke, sentenced the convict after he was found guilty of five-count charge of the offences. Oke said the prosecution has proven its case beyond reasonable doubt. He therefore gave him an option of N80,000 fine and also ordered him to refund the sum of N300,000 to two of the complainants. The prosecutor, Olubalogun Lawrence, told the court that Saheed committed the offences between August and De-

cember 2018 at Omida area of Abeokuta. Lawrence said the defendant obtained the sum of N200,000 from one Ganiyu Lolowo, on a pretense of helping him secure two-bedroom apartment which he never did nor refund the money. “The defendant also colle cte d the sum of N100,000 from one Shotayo Joshua, N12,000 from one Sherifat Oyeyemi on a pretense of helping to secure a container. “He also obtained the sum of N60,000 from one Mrs Olufunke Komolafe under false p re t e n s e t o h e l p h e r secure a shop which he never did nor refund the money,” he said. Lawerence, however, denied knowing the complainants nor collected any money from them. According to him, the offences contravened Sections 419, 390(9) and 516 of the Criminal Code Law of Ogun State 2006.

extort money from somebody unjustly, how can you expect something good in your life? He continued: “How can someone employed to fight crime turn to a criminal himself? You may not be happy, but I’ve told you the truth and that is it. “I’m here with stick and small carrot. If I give you first stick and small carrot and you refused to change, I’ll withdraw my carrot”. Okon also admonished the officers to put up selfdiscipline to make them better servants of the so-

ciety. The CP called for utmost rapport and synergy between the police and the public to enable Abia experience full community policing. “I’m here to take the police back to the owners. The police is owned by the community. The old metho d do es not suit our society anymore. There’s now a paradigm shift into community policing that goes with partnership with the community. We partner with them to discharge our duty,” he said.

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comment The ongoing exodus in living colour

David Hundeyin

at t e n d e d my s e c o n d a r y school alumni meeting yesterday and I felt really, really sad about Nigeria. Bear in mind this is Atlantic Hall we’re talking about, so pretty much all of us won the birth lottery to begin with. But everybody is leaving Nigeria. This is not a drill. None of us is struggling. We’re all late 20s to early 40s. By Nigerian

standards, we are balling. Everybody showed up in a nice car, we all have successful businesses and careers. No one would see us and imagine that we are anything but Nigeria’s elite. Then we started talking. First of all, the common theme was “Why did I come back?” None of us could say with a straight face. Every single one of us regretted returning to Nigeria. Without an exception. We all left careers abroad to chase a Nigerian dream that has turned into a Jordan Peele horror flick. Those of us with kids all said the same thing: “I’m leaving because of their secondary school.” None of us can afford to send our kids to the very school we are alumni of. N3.5m per annum? What if you have 2 kids? Totally unrealistic. So, Canada. UK. US. Germany. Australia. Again I should stress that none of us is looking for bread. We’re all suc-

cessful people in our own right. But Nigeria has taken the difficulty bar from where our parents met it and placed it somewhere far out of reach, even for its best and brightest. Now my question is this: If people like us whose parents owned property and did well for themselves before they died can no longer afford to remain in Nigeria because we are getting poorer, then what about everyone else? Mr Political Elite, please what is the plan? I don’t see one. Ordinarily, we are the lucky ones that should be consolidating on what our parents achieved and building legacies. Instead we are disposing of the property they worked for and moving abroad because Nigeria wants to strangulate us. What is the plan? Are you trying to run a country without a middle class? Do you want every kind of successful professional to move to Canada before you are satisfied?

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‘

What is the plan? Are you trying to run a country without a middle class?

Who will fly your jets? Who will give you primary healthcare before you fly abroad? Who will manage your money? What is the plan? I’m just saying, because if people whose parents built houses in VI and Ikoyi are selling them and emigrating, you should know that something unprecedented is coming. These are not Masters degree hustlers. These are Nigeria’s silent elite. Leaving. In a stampede. I don’t have any property to sell thank heavens, because my family is unorthodox so nobody should come after me in my mini-flat in Gbagada. Hustle nimo’n se l’owo. But I’m just saying. I feel like Nigeria is a TV series approaching the final episode. I feel real, actual dread. That’s all I will say sha. As you were. David Hundeyin is a writer, travel addict and journalist majoring in politics, tech and finance. He tweets @DavidHundeyin.

Leaders who trained more leaders-the Aquipris’s theory Positive Growth with Babs

Babs OlugbemI

know you will want to search for Aquipris’s theory as you read the headline. Don’t stress Google! You won’t find it anywhere. I was telling one of the readers of the column from London that I write based on intuition most of the time and no extensive research except for my past voracious reading and training as a leadership coach. Aquipris’s theory is one of my writing innovations. Trust me. You will know the origin and how I coined the word Aquipris at the end of this article. Last week, we agreed that leadership is behaving in a certain way to influence people to achieve the result with respect and without denying them the self-fulfilment from being part of the team. It is also delivering a sustainable result without damaging the brand essence of the organisation, the team’s commitment to one another and the process created to support the company strive to achieve its objectives. Below is the analogy of two leadership behaviours that builds or destroys more leaders. Barbara Bamidele was attending the strategic meeting of her company for the first time because of her appointment as a regional sales manager. Her company is into retail services playing the catch-up game with two leading competitors in the industry. Barbara as a passionate and an eloquent person was keen on making an impact in her new role and knows that a paradigm shift at the top will help in realising her personal and professional objectives. She was allowed to speak at the strategy session. Believing in the words of the moderator, the chief strategy officer of the company, Barbara took advantage of the proclaimed amnesty for the staff to speak their minds in

the interest of moving the company forward. As she took the microphone, her body was radiating with passion and love for her job. She eloquently made her points. Barbara took the lane less travelled by being courageous instead of the usual conformity of the staff not to say things that might be considered outrageous by the executive staff irrespective of the motives and the relevance of the comments. She opinioned that the company should looked into the revenue and the profit figures of the two leading industry leaders holistically and matched them with its strategies for sales, advertising, customer service, people management and the culture of the organisation. She was pushing for a shift in the way results are compared without adequate consideration and working on factors like products, brand awareness, leadership support and policies that affect the perception and performance of the company in building loyal customers and sustainable market leadership in sales volume, revenue growth and deepening product penetration. Barbara received resounding applause and ovation from her colleagues for her honest opinion, eloquence and vigorous articulation of her turn-around points. She, however, entered into the ‘red book’ of Kate Osumba, the deputy chief executive officer, the most powerful iron lady and personality in the company. Kate never liked Barbara’s audacity despite the acknowledgement of the truthfulness and fairness in her comments. This experience marks the beginning of Barbara’s ordeal in the company and ended in her resignation despite being one of the top performing regional sales managers. The contrast to Barbara’s story was the experience of Apollos, a Christian Jew from Alexandria, Egypt. Apollos was an eloquent speaker who was preaching the gospel based on his little exposure to the truth. He was teaching the gospel with vigour. When Aquila and his wife, Priscilla who have hosted Paul and learn the full story of the gospel of Jesus from Paul, heard the teaching of Apollos, they knew he hadn’t heard the complete message. Aquila and Priscilla (the forerunners of my Acquipris theory) took Apollos aside and explained the gospel more in full to him. Pris-

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cilla and Aquila’s action made Apollos preach with greater effectiveness and accomplish his call for the early church. Imagine if Priscilla and her husband, Aquila have behaved Kate’s way. They would have condemned Apollos instead of being leaders who trained more others. Apollos vigour and eloquence would have been limited or wasted by Aquila and Priscilla’s criticisms just like Barbara’s passion was weakened. Leaders who do not want to be criticised are leaders who will in their triviality destroy other leaders. The primary duty of leaders is to identify and train others to be able to lead. Level 5 leaders are transformational. They do not think in terms of bottom-line performance only but think ahead on strategy for business survival in different economic and regulatory climates, and most importantly is the going concern of the organisations they are leading with an emphasis on leadership succession. Kate as a top-level leader has the responsibility to identify the right people for her company. She is to equip the right people to be the ambassadors of the company thereby making them believers in the vision and culture of the entity. By making them the voice of the brand, she would be aligning personal objectives with the professional aspirations before involving them in the wider business. The foundational behaviour for the leadership succession process is to be objective and transparent. Kate’s lack of objectivity allows her emotions to override her thinking by interpreting Barbara’s comment as an assault on leadership. A behaviour where leaders want to hear things that are soothing to them will limit initiative and frustrate the attitude of ownership thinking from the employees. Such behaviour turns the office meetings which are platforms where ideas are incubated into a one-person show where the employees make selective statements for fear of not being marked for subsequent castration. Whereas free flow of real ideas is stiffed, people who are good at praise-singing prospered from the culture by giving accolades to the executive officers even when it is not necessary. I have seen where demand for questions at a meeting

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led to the showering of praises on the chief executive officer by a top management staff that had stayed longer with the company and have mastered the sycophancy culture of the environment. Another case I witnessed in 2001 was the reward of ‘gut’ by a leader. Akin, an assistant general manager in one of the banks was frustrated by the show of sycophancy by the senior officers at the weekly executive meeting of the bank. On a particular day, his effort to cause a paradigm shift was rewarded handsomely. As the custom was in the bank, the chief executive officer and the chairman will introduce the purpose of the meeting and make his suggestions. It is usual for all other comments to start with the word ‘I agree with the position of the CEO’ followed by repeated comments or information that is out of relevance to the issue at hand. Five officers of the ranks of deputy general managers and general managers made comments before it was Akin’s turn and they all started with the norm, ‘I believe or support the CEO’s position. Akin, took his chance to make a transformational change by asking people not to start their contributions by supporting the previous comments. He noted that his comment is not in agreement with the earlier comments including that of the CEO. Alas, his comment was superior, and the Chairman accepted that as the decision taken at the meeting. Akin got a new perception of the CEO and was given more responsibility which led to his redeployment to the subsidiary of the bank (another bank) as the managing director. What Akin’s boss did was to reward his gut. Any behaviour rewarded will be massively repeated. As a leader, you are to reward courageous action that moves the company toward its objective. One of the best ways to identify and train more leaders is to reward courage and be less favourite to the conformists who are mostly acting for self and not necessarily in the broader interest of the business. Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

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Empathising with corruption Remi Adekoya

ew things have been condemned as regularly as corruption in Nigerian debate. Chinua Achebe wrote about it in the 1960s, Fela sang about it in the1970s, every politician has vowed to fight it. Going by public statements, there is not a single Nigerian who supports corruption. Yet here we are, in a reality at odds with decades of declarations. How can something everybody says they oppose be so widespread? To counter a social practise, it is important to understand the motivations of those who engage in it. It is also important to discuss things honestly; disingenuous debate leads nowhere. Personally, I can easily understand why Nigerians in a position to do so, engage in corruption. Frankly speaking, by the time I finished secondary school in Abacha-era Nigeria, I was as corrupt-minded as any crooked Nigerian politician. If you had put me in charge of public funds then, I would probably have embezzled as much as I could. Why? Well, apart from a banal desire for material comfort and an assumption I could likely get away with it, I would have done so because I had observed that the people most esteemed in my environment were those with money, irrespective of its source. What my parents had told me about

the value of honesty was not reflected in the reality around me. The most esteemed of my peers were not the most brilliant or most honest ones, but the sons and daughters of the Generals and their friends who we all knew were looting the country. They stood atop our teenage social hierarchy. They enjoyed a commodity that is very valuable in Nigeria because it is carefully rationed:respect. Anthropologists suggest most societies fall into one of two broad cultural categories: dignity cultures and honour cultures.The starting emphasis of dignity cultures is on all individuals possessing an intrinsic worth independent the opinions of others. While the practise may vary, in principle, the key idea is that every human being, for the mere fact of being human, is inherently valuable, and this value cannot be taken away by others in society. It is inalienable, even when your actions are socially unacceptable. Hence, in contemporary Western societies, which are generally dignity cultures, it is expected even prisoners convicted of the most heinous crimes, including murder and paedophilia, are entitled to a basic level of dignity. The concept of “human rights” derives from this idea that every human possesses inherent value irrespective the context of their circumstance. In dignity cultures, social interactions are expected to be an exchange between equals while good behaviour is incentivised via arule of lawapplicable to all. Honour cultures, on the other hand, emphasize the importance of reputation and esteem. Your value is not derived automatically from your status as a human being but is socially-conferred. It is thus strongly dependent on the opinions of others in society who can grant or withdraw their esteem at any time. In honour cultures, you must thus constantly strive to earn and maintain your esteem in

society. Things like insults and personal affronts cannot be taken lightly as they are public tests of who can do what to whom. Each honour culture adopts its own criteria for granting or denying esteem. I think it safe to say present-day Nigeria is significantly more an honour culture than a dignity culture with the main qualification for esteem being wealth. This is no coincidence. Honour cultures thrive where the state is too weak to settle disputes between citizens, protect them from predatory exploitation and generally enforce the rule of law. Consequently, who can do what is determined by the esteem conferred on them by society rather than any standardized system of rules. Aside desiring material comfort, the desperation for esteem is a major driving force pushing many Nigerians into all sorts of illegalities just to become wealthy. The emergence of my generational peers as“Yahoo-Yahoo boys” in the early 2000s reflected - alongside a lack of job opportunities -a response by young men from non-affluent backgrounds who craved the respect society accorded their peers from privileged (often corrupt) homes. “We may not be from rich or well-known families, but we have made money, so show us respect too,” was their general demand. The point is not to justify such actions or to blame society for all those who engage in illegalities, the point is to understand the fundamental emotions that often drive such behaviour. In the corruption debate, we often hear about the need to “build strong institutions” that can implement preventative measures. Indeed, strong laws and institutions are indispensable. But in the end, what are institutions but buildings with people in them? It is what the flesh-andblood people working in courthouses, ministries and police-stations do on a

‘

Clearly, an economic transformation is indispensable to any realistic dreams of reducing corruption in Nigeria, particularly its lower-level manifestations

daily basis that shapes institutions. You can introduce the most sophisticated anti-corruption rules in the world, but if people in institution X are determined to render them ineffective, they will find creative ways to do so as current reality shows us. The key lies in combining strong anti-corruption measures with an environment where people are not so desperate to “hammer” and willing to do so at any cost to wider society. In my view, this requires a twopronged approach. Clearly, an economic transformation is indispensable to any realistic dreams of reducing corruption in Nigeria, particularly its lower-level manifestations.Expecting people to cease practises they consider necessary to their everyday survival - like the bus driver who “settles” poorly-paid policemen on his route to avoid unnecessary delays - is asking a bit much. Meanwhile, getting to the point where corruption isn’t necessary for survival would require not just headline GDP growth but a wholesale transformation of Nigeria’s crony capitalist system with its in-built lack of opportunities for the majority. The other step, much easier than the first, would be to offer Nigerians dignity free of charge. It costs me nothing to treat everyone I encounter respectfully, so why should I hoard my respect like a supply of yams that may one day run out? Why should a hard-working plumber not be esteemed by society? If people are made to feel valuable in of themselves, they will feel less of a need to try and command respect via external possessions. Deep down, all most people want is to be treated fairly, like equals. Surely that’s not too much to ask, is it? Dr Adekoya is a journalist and political scientist. He has written for the UK Guardian, Foreign Policy, Foreign Affairs,Washington Post and Politico among others.

Playing politics with everything in Nigeria

OSA VICTOR OBAYAGBONA

his week’s write-up will centre on the choices of some Nigerians, whose decisions were timely, appropriate and reasonable to the shaping of the future of this nation positively, rather than playing to the gallery. The sudden death in 1998 of the then military head of state, late Sani Abacha, brought Abdulsalami Abubakar as the military head of state. In Abdulsalami’s reluctance, he tried his best to make his colleagues understand the issue at hand (the annulment of June 12, 1993, election) as the major problem that Nigeria was facing. With his colleagues, they tried to negotiate with the winner of the annulled June 12 election, late MKO Abiola. Following the unfortunate death of MKO Abiola, the military under Abdulsalami Abubakar resolved to hand over power the following year to a democratically elected government. To many then, the idea was not real. They never believed the military after several years of rough dealings with Nigerians would be really serious to hand over. With our nascent democracy, Anyim Pius Anyim became a circumstantial Senate president out of a situation he himself could not understand. In his acceptance speech after the impeachment of Adolphus Wabara, he made Nigerians and his colleagues understand that he knew when the

ovation was loudest, he knew when to bow out of office should there be any need for it. A recent story on April 29, 2019, with the headline ‘Five soldiers killed, 30 missing in Boko Haram battle’ left me with bitter taste through the rest of the day. According to the report, at least five Nigerian soldiers were killed and some 30 missing three days after Boko Haram jihadists overran an army base, security sources said on Monday, April 29. The report went further that gunmen from the Islamic State West Africa Province, the IS-linked faction of Boko Haram, attacked the base in Nigeria’s northeastern Borno State on Friday. “We have recovered five bodies of soldiers who paid the supreme price fighting the terrorists,” a military officer told AFP, giving the first reports of casualty numbers. “Search and rescue teams are still looking for around 30 more soldiers who have gone missing since the attack,” the officer said. ISWAP fighters on Friday (April 26, 2019) launched an assault on the base at Mararrabar Kimba, 135 kilometres (85 miles) from the state capital Maiduguri. The fighters, reportedly driving over a dozen pickup trucks with heavy machine guns welded onto the back, were accompanied by three armoured personnel carriers and flanked by a fleet of gunmen firing from motorbikes. Some soldiers scattered into the bush to escape. A second officer confirmed the toll of five dead, an eyewitness narrated. My sadness comes from the fact that this is an area that the military has several times claimed to have control over, and that somebody is paid to protect and provide strategies for these soldiers who are constantly being slaughtered because someone has failed to do his job well. Remember too this is not the first time such incident is occur-

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ring, unfortunately, the same set of people have been the managers of the military. In an ideal situation, the military hierarchy should resign because they have failed for too long to curtail the insurgents who are believed to have less equipment than the Nigerian military. The sad aspect is, the Federal Government has recently acquired military wares to make the army perform optimally, but still the tales of failure and carnages on the part of the Nigerian soldiers have not stopped to upset Nigerians. The question is, are the Boko Haram fighters, who are struggling for survival stronger than Nigerian soldiers once believed to be African best? Or is it a case of misplaced priority, or the military hierarchy is now totally clueless of the next move to defeating these bandits? For me, I believe it is the case of cluelessness, which therefore calls for resignation of those who are suppose to protect the slain soldiers. However, it is no longer new that incumbents and public officeholders no longer resign when they are found wanting in Nigeria, but the case at hand calls for somebody to bow out. It’s unfortunate that most public servants would not want to leave office, even when they know their relevance has been outlived; staying in office is their only source of livelihood. No idea of doing personal business even with the wealth they have ‘accumulated from racketeering’ (I am not insinuating anything here, I just want the readers to understand). This is so because they are destitute of ideas out of government circle. This set of people who do not know when the ovation is loudest will eventually be humiliated out of office. I am very sure President Muhammadu Buhari will tell them to take a bow after May 29 inauguration; I am sure. Late Abraham Lincoln and Bob Marley once said, “You can fool some people sometimes, but you can’t fool all the people all the time.” One day

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they will see the light and come for your neck. Bow out now before it is too late. Just like Abdulsalami Abubakar and Pius Anyim, this decision will go a long way in soothing a lot of strained relationships and making you relevant in the polity. Abubakar’s decision made Nigeria to regain her position in the comity of nations. Anyim set a standard for the National Assembly to maintain, which brought legislation fairly closer to the people, then. These public officials instead of telling themselves they have failed they try to justify their actions, which often to the ordinary Nigerian they are just buying time, until either, he that appoints them tells them to go or age and retirement force them out. Often, they give excuse for every of their failure, instead of waking up to their responsibility. The words of late Archbishop Benson Idahosa come to mind: “He that refuses to take responsibility for his/her actions becomes inconsequential.” Also, Frederick the Great once said: “He that defends everything (including his/her action) defends nothing.” Remember, Ngozi Okojo-Iweala resigned her appointment as minister of foreign affairs when she saw she could not contain the happenings in the country then. Even Oby Ezekwesili, that same period, resigned her appointment as a minister because she could no longer cope with the situation in that ministry. Both of them went down as public officeholders who resigned their appointments in Nigeria. No wonder they are still respected till date, both within and outside the country. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Osa Victor Obayagbona is assistant News Editor, BusinessDay

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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

The ghost of 2016 economic lull

cross the country, from Alaba, the largest electronics market in West Africa to outlets of Shoprite, the South African supermarket chain, the story is the same: consumer demand is weakening. Businesses that make bread, alcoholic and non-alcoholic beverages, soap, cereals, seasonings, electronics are struggling to keep costs from outrunning their profit. Income per capita, which was $3,268 in 2014, has shrunk to $1,994 in 2018. As a result, Nigerian consumers, afflicted by the twin enemies of weak purchasing power and a slow economic recovery, now buy less of the same, buy cheaper brands or don’t buy at all. Goods sit on store shelves and discounts, which used to woo customers, don’t work their magic anymore. Throngs of people seen at the malls today are either window shopping or shopping for the perfect selfie backgrounds. Those long queues for bread at Shoprite have dwindled. The price of

bread, a beloved Nigerian staple is set to rise. Flour prices have gone up five percent as millers struggle to stay in business. In 2018, cost of sales grew faster than revenues for four flour millers quoted on the stock market. Even the newly approved minimum wage, however welcome, is in real terms lower than the previous N18,000. It can’t buy the same amount of goods today as it could eight years ago when inflation was benign and N160 exchanged for a dollar; today it’s N360. Full year revenues (for 2018) of the eight quoted Fa s t- M o v i n g C o n s u m e r Goods (FMCGs) listed on the Nigerian Stock Exchange (NSE) further paints a dismal picture. Their combined revenue shrunk by 4%, the lowest in 5 years. Profits dropped by 26.74% from N94.28 million to N69.07 million. The combined operating costs of five of them soared by 7 percent. Data from the National Bureau of Statistics (NBS) backs Alaba traders’ lament about the drop in patronage; the electrical electronics sector declined in five years to 3.75% in 2018 from 6.47%. We’ve been here before; not

25 years but three years ago. When Nigeria hobbled out of the recession, it was despite government policies. Oil prices and relative peace in the Niger Delta gave the Central Bank of Nigeria (CBN) a sizable foreign reserve with which to maintain multiple exchange rates while barring 41 items from getting dollars. According to the Manufacturers Association of Nigeria (MAN), a trade body representing 2,500 companies, “The confidence level of CEOs in the sector, though not negative, is dwindling.” Though capacity utilisation rose by almost 2 percent in the first six months of 2018 compared to the same period in 2017, current business condition and employment prospects are limiting manufacturers’’ ability to operate at full capacity. In its maiden MAN CEO Confidence Index, a quarterly survey that measures the sector’s pulse, CEOs of manufacturing companies say it’s easier to source for raw materials locally but access to foreign exchange has not improved. One-quarter of the 200 CEOs surveyed agree that getting local raw materials

has improved while onequarter disagree that access to foreign exchange has improved. A little over threefifth say bank lending rates discourage productivity (the combined loans of Nigeria’s 12-largest banks dipped in the past year). More than over half aren’t i m p re s s e d w i t h g o v e r n ment’s capital expenditure on infrastructure (particularly power & roads); majority say excessive regulation, multiple taxes, and inaccessible ports, are major deterrents to productivity. Overall, the sector is struggling. Data on manufacturers’ and consumers’ confidence are long overdue in Nigeria. The MAN CEO Confidence Index is most welcome. In Kenya, for example, mSurvey, a start-up and Africa’s integrated customer experience company, has help track consumer feedback and experience trends. For the willing and able, current or prospective, CBN Governor, Ministers of Finance; Industry, Trade and Investment, and Works, Power and Housing, the MAN CEO Confidence Index is handy guide for exorcizing the ghost of recessions past.

GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

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

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Thursday 02 May 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

Rand Merchant Bank’s digital banking platform to enhance customers’ experience

Pg. 18

BANKING

Nigeria’s tier-1 banks collect N16.9 trn deposits from customers in Q1 ISRAEL ODUBOLA

igeria’s big banks received a combined N16.9 trillion from customers through deposits across various account types in the quarter one of 2019, which is 12.5 percent above N15.1 trillion collected in the previous comparable period. Analysis of total deposits received from customers based on account type for the tier-one lenders revealed that 44 percent, equivalent to N7.54 trillion, were paid into current account. According to Yinka Ademuwagu, research analyst at Lagosbased investment advisory firm, United Capital Plc, this points to

the fact that banks are leveraging financial technology (Fintech) to grow their customer deposits. “Most banks are seen to be exploiting Fintech such as Chatbot, USSD and Internet Banking to penetrate into the economy and

bank the unbanked”, Ademuwagu claimed, adding that overall, it connotes betterment in economic activities. Customers deposited N4.05 trillion in term account; N3.82 trillion in savings account, N1.53 trillion in domiciliary account and N11.08 billion in electronic purse account, on the aggregate, in Access Bank, Zenith Bank, United Bank for Africa, Guaranty Trust Bank and First Bank. The five account types recorded an uptick year-on-year in the review period. Customers’ deposits to term account were N392.79 billion higher than N3.66 trillion reported in the first quarter of 2018.

Current and savings account increased by N518.76 billion and N696.85 billion respectively in the quarter review, from N7.02 trillion and N3.12 trillion, while deposits paid to domiciliary account up 22.19 percent from N1.25 trillion,

and that of electronic purse account dipped by N25 million. The five banks registered positive growth in customer deposits, with Access Bank leading the pack with 53.37 percent increase to N3.91 trillion, partly attributable

to the fact that the lender merged with the defunct Diamond Bank to leverage the former’s expansive retail customer base. Nigeria’s biggest lender by market capitalization, Guaranty Trust Bank, grew customer deposits at a single-digit rate of 6 percent from N2.27 trillion in the previous comparable period to N2.24 trillion in the first three months of 2019. United Bank for Africa’s customer deposits increased to N3.53 trillion in the review period, indicating 5.43 percent rise over N3.35 trillion reported in the previous period. Zenith Bank, biggest lender by assets, up customer deposits by 5.16 percent to N3.57 trillion, and First Bank reported the least growth of 0.82 percent to N3.52 trillion. Analysing the figures for individual banks based on account types showed that Access Bank recorded positive growth all-around. Customer deposits paid to term

account grew by N401.86 billion, current account (N415.76bn) and savings deposit (N546.39bn). For Guaranty Trust Bank, sum paid by customers to term accounts increased by N33.5 billion; current account (N82.52bn) and savings account (N20.47 bn), while in UBA, customers deposits into term accounts dipped N34.87 billion, current account dipped N191.21 billion and savings rose by N25.44 billion. Nigeria’s largest lender by assets, Zenith Bank reported elevation in customers’ deposits into term account (N34.87bn), savings (N112.68bn) and domiciliary account (N82.11bn), and decline in current account (N135.69bn). On the other hand, First Bank recorded an increase of N95.54 billion in deposits into domiciliary account, and drop in deposit in term account (N23.78bn), current account (N35.04bn) and savings (N8.12bn).

CONSUMER GOODS

Dangote Sugar grows net profit by 17% on prudent resource management OLUWASEGUN OLAKOYENIKAN

igeria’s biggest sugar refiner, Dangote Sugar Refinery Plc, kicked off the year 2019 on a positive note as its management showed efficiency in utilizing the company’s limited resources for increased profitability. After-tax profit of the sugar refiner rose to N7 billion in the first three months of 2019, representing a 32.7 percent increase from N5.28 billion in the same period a year earlier, while pre-tax profit surged more than a quarter to N10.7 billion from N8.4 billion. Margins of the company were impressive for the period. Net profit margin improved to 18.4

percent from 12.8 percent, implying the company gained more than N18 from every N100 revenue it generated from sales between January and March 2019. Despite a 17.2 percent cut in the cost of goods sold by the sugar giant to N25.56 billion, gross profit surged 22.4 percent to N12.59 billion, this could have been more if revenue, which dropped to N38.15 billion, had rebounded from its downward spree. Sales of Nigeria’s major sugar producers came under severe pressure in 2018 owing to the persistent gridlock in and around Apapa port environment and the high rate of smuggling

of cheap unlicensed sugar into the country with the Nigeria’s biggest sugar refiner getting the worst hit. Although Dangote Sugar’s gross earnings were impacted negatively by declined revenue proceeds from the sale of 50kg sugar and molasses in the review period, it was augmented by lower cost of raw material, direct labour cost, depreciation and other overheads. The prudent management of the company’s resources was not limited to the cost of production, it was extended to its operating activities as selling and distribution expenses were slashed by 42.7 percent to N178.3 million, while administrative expenses

witnessed 2.8 percent decline to N1.58 billion in the review quarter. Consequently, operating profit enjoyed a N2.4 billion boost to N10.9 billion. Net finance expenses declined to N41.4 million from N47.5 million, while the company’s investment income, which stood at N314 million, was 64 percent lower from N872 million, and was supported by lower fair value adjustment. Shareholders’ funds of Dangote Sugar fell to N105.98 billion from N107.43 billion on the back of a 4.9 percent decrease in its total assets to N185.2 billion as against N194.8 billion recorded as at the end of Q1 2018, even

as liabilities dropped to N79.22 billion from N87.4 billion. The decline in its total assets value was as a result of lower cash and cash equivalents including cash on hand and in banks, and short term deposits with 30 days tenure. Dangote Sugar’s cash and cash equivalents as at the end of the reporting period was halved to N21.8 billion from N44 billion. Shares of Dangote Sugar Refinery on the Nigerian Stock Exchange (NSE) fell for the second straight day on Monday, April 29, by 1.75 percent to close at N14, worsening its year-to-date loss to 8.20 percent. The stock’s current price is 55 kobo close to its year-low of N13.45.

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

Thursday 02 May 2019

BUSINESS DAY

COMPANIES&MARKETS BANKING

Rand Merchant Bank’s digital banking platform to enhance customers’ experience HOPE MOSES-ASHIKE & SEYI JOHN SALAU

and Merchant Bank Nigeria (RMBN) has unveiled the RMBN Digital, a banking solution aimed at enhancing the transactional banking experience of clients. The newly launched digital platform of the Merchant banker is aimed at efficient cash management through adequate and accurate financial reporting as well as the timely processing of transactions. Ta i w o S h o t e, h e a d of corporate banking at RMBN said the bank is working to ensure clients enjoy a seamless and secure digital banking experience. “We understand the desires of our clients, top of which is to be able to access and activate banking transactions on the go while having a full view of transactions as they do business across different sectors and markets,” said Shote. According to Shote, “Understanding the needs of our clients enables us to

partner with them across the entire value chain, enabling us to provide the appropriate corporate banking, advisory, financing, trading and risk management solutions”. Michael Larbie, CEO of RMBN says the bank aims to offer clients significant value by providing the best user experience through a simple and secure channel. “By integrating traditional banking with the online banking experience, we will build and foster a stronger connection with our clients and have a deeper level of customer engagement,” said Larbie. According to him, RMBN Digital meets all international standards of encryption and user authentication, which assures clients of the security and confidentiality of their information and transactions. RMBN Digital platform can be accessed via desktop, tablets, smart phones and integrated businessto-business (B2B) systems. These channels may be configured by businesses to match the processing and reconciliation of bank-

ing transactions on their enterprise systems to ease administration and comply with reporting requirements. The platform enables bulk payments in both local and foreign currencies; and allows for viewing and downloading of realtime account balances and statements with loan and fixed deposits. In addition, funds may be transferred internally or across borders, beneficiary advisories may be sent to third parties; while payment advisories may be generated on all transactions, and instant payments could be processed. RMBN Digital offers multiple account structures; the benefit of interest on all operational local currency accounts; simplified end-to-end reconciliation and monitoring; remote authorization, and multitransactional capabilities. The RMBN online platform is yet another offering that lives up to RMBN’s vision of continuously creating sustainable value, unique solutions and superior economic returns for clients and shareholders.

L-R: Samuel Kolawole, president/ chairman of council, Institute of Chartered Secretaries and Administrators of Nigeria, [ICSAN]; Muhammed Dele Belgore, chairman occasion, Ini Abimbola, keynote speaker, and Muideen Adebayo Ibrahim, discussant, at the 2019 Public Lecture of Institute of Chartered Secretaries and Administrators of Nigeria, [ICSAN],Theme’’ Understanding Environmental, Social and Governance [ESG] as a Strategy for Corporate Sustainability’’ at Nigerian Institute of International Affair, [NIIA], in Lagos

TECHNOLOGY

SEC Challenges Fintech firms to disrupt capital market with innovation ISRAEL ODUBOLA

he Director-General of Securities and Exchange Commission (SEC), Mary Etuk, has challenged the Fintech firms in Nigeria to come up with innovative products that would disrupt the capital market. “We urge innovators to identify areas of concern or practices and this could be addressed or improved with technology. We need to collaborate”, she said this while speaking at the Lagos Fintech Week in a paper titled Enabling Inclusive Fintech in the Nigerian Capital Market: A Regulator’s Perspective. Lagos Fintech Week is an invigorating week of distinct Fintech events that delivers exciting discussions, stimulating demos and insightful debates. Etuk listed steps taken by SEC to prepare it for the Fintech regulation and these include recognizing the potentials of Fintech and the attendant benefits it can bring to the Nigerian capital market.

The apex regulator of the capital market said the commission has whole-heartedly embraced the Fintech concept and have rolled out series of initiatives to ensure the market maximizes the full potentials of the fast-paced innovation. Some of the actions taken by the commission involved the setting up of internal Fintech working and advisory group as well as market-wide committee to draw a Fintech roadmap for the Nigerian capital market. According to her, the commission has also established a Fintech division, which would serve as an innovation office; set up internal capacity development in the area of Fintech and emerging innovations, and the development of a sandbox assessment form. The commission has reviewed the existing legal framework to identify its sufficiency and propose amendments and “We are interacting with the Nigerian Fintech community to grow

the industry within the Nigerian capital market as well as review ICOs and white papers to ensure they comply with existing laws”, she said. Specifically, she solicited the support of the Fintech community while asking the ecosystem to identify the challenges in the capital market, innovate around the challenges and move beyond experimentation stage. “A number of innovations in the capital market are yet to reach the go-live stage. We expect innovators to move beyond the experimentation stage and introduce products, which could be deployed to the market. “We need the innovators to interface with the regulators in developing their products. We are willing and ready to constantly interface with innovators. This interaction would improve capacity and make available adequate resources that would ensure the deployment of innovations that would satisfy the interest of all stakeholders”, she said.

TECHNOLOGY

Microsoft sees $1 trillion market capitalisation on Cloud Growth prediction JONATHAN ADEROJU

icrosoft momentarily topped $1 trillion (N 306 trillion at 306/$) in value for the first time on Thursday April, 25, after executives predicted continued growth for its cloud computing business. The Redmond, a Washington-based company beat Wall Street estimates for quarterly profit and revenue, powered by an unexpected boost in Windows revenue and brisk growth in its cloud business which has reached tens of billions of dollars in sales. Current market capitalisation as at Tuesday stands at $999.156 billion (N305.74 trillion). Microsoft shares rose 4.4 percent to $130.54 (N39, 945) in late trading after the forecast issued on a conference call with investors,

pushing the company ahead of Apple’s $980 billion (N 299 trillion) market capitalisation. The companies and Amazon.com have taken turns in recent months to rank as the world’s most valuable US-listed company. Microsoft’s stock has gained about 23 percent gain so far this year, after hitting a record high of $125.85 (N 38,510) during regular trading hours. Under Chief Executive Satya Nadella, the company has spent the past five years shifting from reliance on its once-dominant Windows operating system to selling cloud-based services. Azure, Microsoft’s flagship cloud product, competes with market leader Amazon Web Services (AWS) to provide computing power to businesses. Chief Financial Officer Amy Hood told investors that Microsoft expects to see

growth in the fiscal fourth quarter in the business divisions in charge of Azure and Office 365, an online version of its long time productivity software. For the third quarter ended March 31, Azure’s growth slowed slightly to 73 percent, down from 76 percent in the second quarter. Mike Spencer, Microsoft’s head of investor relations, said the decline was roughly in line with the company’s estimate. Christopher Eberle, a senior equity analyst with Nomura, said that with Azure, “one should assume a slower rate of growth as we move forward, simply due to the law of large numbers.” Still, Azure will bring in $13.5 billion (N 5 trillion) in sales in fiscal 2019 with an overall growth rate of 75 percent, he estimated. “I can’t name another company of that scale growing at these rates.” Microsoft tops tech rivals

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such as Amazon in market capitalisation on some days despite having less revenue, partly because most of its sales go to businesses, which tend to be steadier customers than consumers. A growing proportion of Microsoft’s software sales are billed as recurring subscription purchases, which are more reliable than one-time purchases. Microsoft’s earnings per share of $1.14(N 348.84) beat expectations of $1 (N306), according to IBES data from Refinitiv. Windows licensing revenue from computer makers grew 9 percent year over year, beating expectations after a 5percent decline in the previous quarter. Spencer said a shortage of Intel Corp processor chips for PCs that many analysts expected to last into this summer had been resolved earlier than expected, allowing PC makers to ship more machines.

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Microsoft’s “commercial cloud” revenue - which includes business use of Azure, Office 365 and LinkedIn was $9.6 billion this quarter, up 41 percent from the previous year but down slightly from the 48 percent growth rate the previous quarter. Microsoft’s so-called “intelligent cloud” unit, which contains its Azure services, posted revenue of $9.65 billion, above Wall Street estimates of $9.28 billion, according to IBES data from Refinitiv. Microsoft’s Hood said that unit could reach $11.05 billion in revenue in the fiscal fourth quarter. The “productivity and business process” unit that includes both Office as well as social network LinkedIn had $10.2 billion revenue versus expectations of $10.05 billion Hood forecast up to $10.75 billion in revenue for the unit for the fourth quarter. @Businessdayng

Microsoft’s latest results contained two weak spots. Its gaming revenue was up only 5 percent versus 8 percent the quarter before, which Spencer attributed to less revenue from thirdparty game developers and the fact that many gamers are delaying purchases of Microsoft’s Xbox console because a new model is expected soon. Sales of the company’s Surface hardware grew 21 percent versus 39 percent the quarter before, also because customers waited for updated hardware they expected to be released soon. Total revenue rose 14 percent to $30.57 billion, beating analysts’ average estimate of $29.84 billion, according to IBES data from Refinitiv. Net income rose to $8.81 billion, or $1.15 per share, from $7.42 billion or 96 cents per share, a year earlier

Thursday 02 May 2019

COMPANIES&MARKETS

BUSINESS DAY

Business Event

OIL & GAS

TOTAL Global CEO visits Osinbajo, restates long term commitment to Nigeria FRANK UZUEGBUNAM

he TOTAL Group has restated its commitment to the long ter m development of Nigeria’s oil and gas industry and the improvement of the lives of Nigerians through the provision of clean, affordable energy. Total’s Chairman and CEO, Patrick Pouyanne made the disclosure at a courtesy visit to Nigeria’s Vice President, Yemi Osinbajo, on Tuesday April 30, 2019, in Abuja, using the opportunity to congratulate the President and the VP for their recent victory at the polls. While reviewing the TOTAL Group’s 60-year sojourn in Nigeria, Pouyanne expressed delight at the recent launch of the Egina field which at peak will add 200,000barrels of oil per day to Nigeria’s production apart from the Nigerian content landmarks which have become a game changer in Nigeria’s oil and gas industry. “Nigeria is important to the TOTAL Group as the country now represents about 10 percent of the

group’s global production. Nigeria has a lot of prolific oil fields and Total would gladly carry out exploration activities if the government grants the licence,” Pouyanne said. Pouyanne identified solar technology as “a cheap way to provide electricity”, while expressing the company’s readiness to work with Nigeria in the area of renewal energy especially solar in addressing the country’s electricity needs. “After Egina, Total is launching two other projects-Ikike and Prowei. Total is actively involved in the expansion of NLNG capacity through the Train 7+project for which a Final Investment Decision is planned in 2019,” Pouyanne. In his response, Osinbajo thanked Total for its demonstrated commitment to the development of Nigeria’s oil and gas industry expressing delight at Total’s Nigerian content feat with the Egina FPSO. He implored Total and its other partners to quickly bring the NLNG train 7 into operation. “The supply of gas to the domestic market is impor-

tant to government. We are pleased with Total for its initiatives in the area of renewable energy and would want Total to take some pioneering steps in helping meet the energy needs of the teeming population. Nigeria considers Total a strategic partner. We would like the relationship to continue,” Osinbajo said. Ibe Kachikwu, Nigeria’s Minister of State for Petroleum, commended Total for Egina which he said “renewed hope in the oil and gas industry” and promised to work with the office of the VP in order to address concerns regarding exploration adding that Total should “explore the need for siting a refinery in Nigeria as a way of consolidating its foothold on the downstream sector where it is a dominant player. Pouyanne had earlier paid a visit to Maikanti Baru, Group Managing Director, NNPC who commended Total for its vast contributions to Nigeria, describing the company as “the most integrated oil and gas company in Nigeria.”

L-R: Segun Ajayi-Kadir, director-general, Manufacturers Association of Nigeria (MAN); Timothy Okon, technical senior adviser to honorable minister of state for petroleum; Paul Gbededo, chairman, economic policy committee, MAN, and Michael Adebayo, chairman, gas user group, MAN, during a MAN an interactive session on the national gas policy and regulations with the office of the honourable minister of state for petroleum resources in Lagos. Pic by Olawale Amoo

L-R: Ebenezer Adeleye, projects coordinator, Sickle Cell Foundation, Nigeria; Akaoma Onyeonoru, CSI specialist, MultiChoice Nigeria; Olu Akinyanju, chairman, Sickle Cell Foundation, Nigeria; Timothy Okwu, PR specialist, corporate affairs, MultiChoice Nigeria, and Ayo Otaigbe, resource consultant, Sickle Cell Foundation, Nigeria, at the opening of the 18th edition of the Sickle Cell Genetic Counselling Workshop Sponsor by MultiChoice Nigeria being at the Sickle Cell Foundation, Nigeria Center, in Idi Araba, Lagos.

COMPANY RELEASE

UPS foundation supports Ghana’s vaccine drone delivery network

he UPS Foundation, which leads the global citizenship programs for UPS (NYSE: UPS), and Gavi, the Vaccine Alliance, have announced support for the expansion of a medical drone network into Ghana. Zipline, a California-based automated logistics company, will use drones to make on-demand, emergency deliveries of 148 high priority products including emergency and routine vaccines, blood products and life-saving medications. The service will operate 24 hours a day, seven days a week, from four distribution centers—each equipped with 30 drones—and deliver to over 2,000 health facilities serving 12 million people across the country. The partnership between the Government of Rwanda and Zipline, supported by philanthropic grants and in-kind support from The UPS Foundation and Gavi, pioneered just-in-time drone delivery of blood products to hard-to-reach clinics in Rwanda. The Government of Ghana is building on that success with expanded Zipline services, supported again by Gavi and the UPS Foundation and joined this time by the Gates Foundation and Pfizer. The Zipline drone network will be integrated into the national healthcare supply chain in Ghana and will help prevent vaccine stockouts

in health facilities as well as during national immunization campaigns. “The ability of the Government to supplement routine immunization on demand will allow us to make sure that there will always be enough life-saving vaccines for every child in Ghana,” said Dr Seth Berkley, CEO of Gavi, the Vaccine Alliance. “This is an exciting development for Gavi that is ultimately going to ensure we leave no one behind and help us protect more children living in remote areas against vaccine preventable diseases,” he added. Logistics will be managed through Zipline’s hardware and software systems in each of the distribution centers, and deliveries will take place at hospitals and health clinics. The UPS Foundation will provide $3 million, including $2.4 million in funding and UPS will provide $600,000 of in-kind shipping services. Separately, UPS has already begun an analysis of Ghana’s healthcare supply chain, providing expertise designed to complement the government’s vision to continually optimize the delivery of healthcare products. “The program’s ongoing success in Rwanda demonstrates that the collective effort of a public-private partnership focused on advanced supply chain technologies can www.businessday.ng

enhance access to life-saving medical commodities throughout Africa,” said Eduardo Martinez, president of The UPS Foundation and UPS chief diversity and inclusion officer. “We are inspired to see technology and supply chain expertise used to help save lives and honored to be part of this public-private collaboration. It is with deepest gratitude we acknowledge the visionary Ghana government, Gavi, for their dedication to helping improve the health of communities in Ghana and around the world, and Zipline, for their leading-edge technology and passion to advance community health systems.” UPS will provide technical guidance and consultancy services as needed, in consultation with Gavi and collaboratively with Zipline. The program is an expansion of the groundbreaking collaboration between The UPS Foundation, Gavi, and Zipline which began in Rwanda in 2016 by supporting the Government of Rwanda to provide access to life-saving medical supplies in minutes rather than hours for millions of Rwandan citizens in remote communities. The Government of Rwanda has since expanded the program across all of Rwanda, making more than 13,000 deliveries to date. Zipline drones now deliver more than 65% of Rwanda’s blood supply outside of the capital, Kigali.

L-R: Gbenga Adebayo, chairman, Association of Licensed Telecom Operators of Nigeria (ALTON); Wale Odeyemi, MD, Vodacom Business Nigeria; Ken Nwogbo, CEO, Communication Week Media; Solomon Ogufere, commercial director, Vodacom Business Nigeria, and Olusola Teniola, chairman, Association of Telecommunications Companies of Nigeria (ATCON), at the 2019 Beacon of ICT Awards held in Lagos

L-R: Imose Osar-Emokpae, finance director, Havilah Open Door Limited Group; Richard Oloidi, pastor, Foursquare Gospel Church, Riverdale, Atlanta/chairman, Omecom Security Limited; Lucia Okogwu – deputy group managing director, Havilah Open Door Limited Group; Osaren Emokpae, chairman, Havilah Open Door Limited Group; Theophilus Ihejirika, group managing director, Havilah Open Door Limited Group, at the unveiling of St. Micheal Aruoma clinic in Lagos. Pic by Pius Okeosisi

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Thursday 02 May 2019

BUSINESS DAY

Thursday 02 May 2019

BUSINESS DAY

SPECIAL FOCUS Emefiele’s five years at CBN: Riding the headwinds, restoring stability

GODFREY OBIOMA

he Central Bank of Nigeria (CBN), under the leadership of its governor, Godwin Emefiele, has largely restored price and financial industry stability in the last five years. This is in spite of the headwinds that have pervaded the macroeconomic landscape during the period. Emefiele took over mantle of leadership at the apex bank at a time the economy, especially the financial market was beset with gross uncertainty marked by capital market meltdown, conflict between the then President, Goodluck Jonathan and Sanusi Lamido Sanusi, the former Governor of the Bank. Further fueling the concern was the need to sustain the fragile sanity in the banking sector following the cleanup of the toxic assets in the banking sector by the Asset Management Corporation of Nigeria (AMCON) after years of banking distress. Compounding Emefiele’s woes was the task of directing the economy during the ‘pause’ period between the assumption of office of President Muhammadu Buhari and the constitution of his cabinet. The CBN Governor had to ensure the Bank plays its traditional role of monetary policy direction while the fiscal policy reserved for the Federal Ministry of Finance was not left unguided. One of his greatest challenges was the management of the Naira exchange value. A believer in defending the local currency, the CBN Governor received the backing of President Buhari against currency devaluation. Confronted by the myriads of problems in the economy, Emefiele brought his experience and successes in the local and global market place to bear. At his first world press conference, he unfolded his agenda to ride the storm. These included creating a CBN that is professional, apolitical, people –oriented; building a resilient financial system that would drive growth and development, creating effective price and financial stability, promoting sustainable economic development and creating

an environment for Nigerians to live better and be fulfilled. Emefiele’s dream came under attack, when in the first quarter of 2016, the economy slipped into recession due to a decline in price of crude oil, Nigeria’s main foreign exchange earning source; declining output following attacks on oil facilities by Niger Delta militants; fall in foreign exchange supply and decline in foreign investment. The economy recorded negative GDP growth in four successive quarters. The GDP at constant basic prices contracted by 2.06 per cent from 0.36 percent in the first quarter of 2016. The country could only attract $647.1 million capital in the second quarter of 2016, a 76 per cent fall year-on-year and 9 per cent down from the first quarter. Manufacturing output was only 48 percent of Industry GDP. Foreign portfolio investment (FPI) declined 88 percent while Foreign Direct Investment (FDI) declined quarter-on-quarter by 24 percent. Emefiele and his team knew that a drastic measure was imperative. The CBN closed the rDAS and wDAS foreign exchange market and left only the inter-bank window open. Yet, the pressure on the Naira remained unabated. The local currency depreciated from N155/$ to N197/$. The CBN Governor was put on the spot. In reaction, the Bank cleared settlement of outstanding foreign exchange commitment with the commencement of spot/futures contract on June 27, 2016. This was accompanied by trading of foreign exchange in interbank through Financial Market Derivative Quotation (FMDQ). The Bank also introduced non- deliverable OTC Naira-settled futures with daily rates on the CBN-approved FMDQ trading report system to stabilise the rate and moved non-urgent forex demand from spot to futures market. But due to the currency speculations, the Naira depreciated to N520/ US$. Not deterred, the CBN, under Emefiele, in February 2017 designed a new policy aimed at increasing the availability of foreign exchange in the market, particularly ensuring access to retail end-users, in obtaining funds for foreign exchange transactions for Personal and Business Travel, Medical needs, and School fees. To ensure success, it also

directed all retail transactions to be settled at a rate not exceeding 20 percent above the inter-bank market rate. To ease travelers’ challenges and ensure that transactions are settled at market exchange rates, the CBN directed all banks to open FX retail outlets at major airports. To further ensure availability to end-users, it reduced the tenor of its forward sales from the then maximum cycle of 180 days to not more than 60 days from the date of transaction. Between February and May 2017, the CBN intervened in the wholesale and retail segments of the forex market with over $3 billion, and re-admitted operators in the Bureau de Change (BDC) segment, which received $20,000 each for onward sale to low-end users. It introduced a special forex window for Small and Medium Enterprises (SMEs) to enable SMEs import eligible finished and semi-finished items, and another Forex widow for investors and exporters called, “Investors’ & Exporters’ FX Window”.

programme, meetings were held with government officials, anchors, participating financial institutions, input suppliers, commodity associations and other stakeholders across the country. These included engagement with RIFAN on 2018 wet season which allowed the ABP to appraise performance of the 2017 farming season, to address challenges and strategies. Following on this was the engagement with RIFAN on the effects of 2018 flooding which assessed the impact of flood on rice farms, how to minimise future occurrence and management of the risk of loan default. To monitor input distribution, cash disbursement and field visits to the farms, the relevant CBN office has so far conducted several monitoring and evaluation visits to states like Kebbi, Benue, Sokoto, Kano, Cross River, Enugu, Kaduna, Kwara, Nasarawa, Edo, Oyo, Adamawa, Anambra, Enugu, Kano States. 68.65% financial inclusion achieved In its determination to achieve 80 percent financial inclusion rate in 2020, the CBN, in 2018 succeeded in ensuring that 68.6 percent of Nigerian adults have access to financial services. The 2018 EFInA report revealed that only 36.6 million Nigerians are financially excluded against 56.3 million in the 2016 report, a development that is attributed to the Bank’s agent banking guideline and Shared Agent Network Facilities (SANEF). These have deepened Agent Network Penetration in underserved locations across the country through the launch of payment service banking in October 2018. This was intended to leverage on distribution network of non-bank bodies like fast-moving consumer goods, Fintech, Mobile Network operators to reach underserved population.

Development Financing As an agent of economic development, the CBN plays development finance function aimed at self-sufficiency, and this has had far-reaching impact on growth through entrepreneur and farmer support. Such supports include Anchor Borrowers’ Programme; Nigeria Incentive-based Risk Sharing System for Agricultural Lending and the Real Sector Support Fund. The Real Sector Support Fund is aimed at providing cheap funding at less than 9% interest rate for the funding of new agricultural and manufacturing projects to boost output and job creation. Anchor Borrowers’ Programme (ABP) The Anchor Borrowers’ Programme was initiated by the CBN to create linkage between Anchor companies that are involved in the processing of agricultural produce and small holder farmers of key agricultural commodities. Launched on November 17, 2015 by President Mohammed Buhari, the thrust of the Anchor Borrowers’ programme was to provide farm inputs in kind and cash to small farmers with a view to boosting production of these key commodities, stabilise Godwin Emefiele, CBN governor

input supply by agro processors and to correct the balance of payment deficit on food. The intention was for farmers to supply their produce after harvest, to agro processors (Anchors), who pay cash equivalent to farmers’ account, involve stakeholders (the Federal Ministry of Agriculture and Rural Development, States, millers of agricultural produce and small holders farmers) to boost agricultural produce and non-oil export to grow revenue of processors. The programme was also meant to expand banks’ financing to the agricultural sector, reduce agricultural product importation, conserve external reserves, create new generation of farmers and create jobs. Other objectives include deepening of cash-less policies and financial inclusion, reduction of poverty level among farmers, and assisting rural smallholder farmers to grow from subsistence to commercial production levels. To reduce cost of funds for small holder farmers, the Micro, Small and Medium Enterprises Development Fund, under the APB, allows famers to access funds at single interest rate of 9.0 percent per annum.

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Since its inception, a total of N174.48 billion has been disbursed to 902,518 farmers covering the 36 states of the federation and Abuja. As at December 31, 2018, 194 anchors and 902,518 farmers had participated in the Anchor Borrowers’ Programme with direct and indirect jobs of 2,807,775 and 8,423,325 respectively created. In 2018, 65.67 percent of total disbursement went to rice; maize 17.17%, cashew 5.39%, sorghum 3.49%, soya 2.79%,cocoa 2.10%, cotton 0.90%, fish 0.80%, poultry 0.40%, wheat 0.20% & tomatoes 0.10%. Among the new products introduced by the bank, a total of N3.52b was disbursed in 2018 with cocoa receiving the highest fund disbursement of N2. 45billion, followed by castor seed with N542.6 million; sesame N320.42 million; ginger N121.58 million; tomatoes N72.74 million and oil palm N9.71 million. To ensure that the programme is all-inclusive, associations like MAAN, RIFAN; NECAS with 10 financial institutions were involved, resulting in 37,929 farmers participating. ABP and Stakeholders’ meeting To sustain effective implementation of the

‘‘

As an agent of economic development, the CBN plays development finance function aimed at self-sufficiency, and this has had far-reaching impact on growth through entrepreneur and farmer support

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Policy results The Bank’s efforts to reverse the negative economic trend has paid off in a number of ways. The restriction of foreign exchange access to importers of 41 items created opportunity for local production of these items and helped to moderate value of imports. Following CB well-targeted policies, the nation has experienced reduction in import bills from $665.4 million in January 2015 to $16.04 million in October 2018 and $21 billion or 75.91 savings on imports. Rice importation declined by 97.3%, fish 99.61%; milk 81.3%; sugar 63.7% and wheat 60.51%. The introduction of investors and exporters foreign exchange window led to foreign exchange inflows. The supply of foreign exchange to manufacturers resulted in increased production, foreign exchange inflow and growth of external reserves to $48 billion in May 2018 from $23billion in October 2016. Subsequently the Naira exchange value has appreciated to the current N361 to the US$1. After four quarters of steady GDP fall, the country exited recession in the second quarter of 2017 while inflation dropped from 18.7 % in January 2017 to 11.1% in July 2018. Manufacturing activities increased with primary manufacturing index rising from 42 in August 2016 to 57 in 2018 due to the steady supply of foreign exchange and stability of the Naira. The effort of the CBN, in conjunction with Presidential Enabling

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Business Environment Council (PEBEC) set up to unlock bureaucratic bottlenecks in business transaction paid off. Recovery edge Compared with its peers like South Africa, Brazil and Argentina, the Nigerian economy had staged a stronger recovery. Some of these countries were either still in recession or just emerging from the crisis. The South Africa economy slid back into recession with GDP fall of 2.6% and 0.7% in the first and second quarter of 2018, respectively. Argentina which was in recession for the whole of 2016 came out of the crisis in 2017 but suffered a 4% GDP decline in 2018. Brazil, another emerging market economy had been in recession since 2015 and came out of it in the first quarter of 2017 with GDP growth of 1%. Following increase in yields in matured markets, emerging market are suffering from capital outflow with Argentina recording 25.2% fall in external reserves, Turkey 9.6% and South Africa 2.1%. Argentina has recorded 101% currency depreciation; Brazil 19% and Russia 19%. But Nigeria has exited recession with current GDP of 1.81 percent growth. And international organisations are rating the country high on return from fixed-income assets. A Bloomberg recent study shows that investors in Nigeria’s bond posted 3.2% returns in dollar terms, toping other markets. Expectations There were inherent risk factors associated with the Nigerian economy. Part of the reasons for Nigeria’s poor macro-economic fundamentals was the rising interest rates across the globe. For example, the U.S Federal Reserve increased interest rate to 2.25%. For the first time in 10 years, the Bank of England increased interest rates, leading to rise in yields in matured markets and capital outflows from emerging markets. These had generated preassure on the external reserves of countries like Brazil, South Africa, and Argentina. The global trade wars between the U.S and China; Russia and Europe, had not helped matters. In the case of Nigeria, the act of protectionism had led to the fall in global demand for the country’s crude and decline in the price of oil. A major threat to the country’s foreign exchange earnings was the increase in the U.S oil stock, currently at 11.7 million barrel per day and expected to hit 14 million bpd in 2020. Between 2015 and 2016, oil price had collapsed by 60 percent with drastic negative impact on the economy. But the CBN was upbeat on the economy as it expected GDP to remain on the growth path due to expected oil price stability and sustained drive to increase local production of manufacturing and agriculture products. One of the major concerns of local and international investors was how to enhance liquidity in the economy and drive economic activities. But Emefiele doused this fear. At the 2018 Annual Bankers’ dinner in November, 2018, he hinted that the bank would work hard to give credit to critical sectors like agriculture and manufacturing, and sustain the policy of returning cash reserve ratio to banks that finance new projects or expand existing ones. This was intended to create jobs and correct imbalances in the economy.

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Thursday 02 May 2019

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

SPENDING TRENDS

Avengers’ Premier rakes N188m in debut week as Nigerians rush to see movie BUNMI BAILEY

he new “Avengers: Endgame” movie earned a whooping N188.2 million in ticket sales, last weekend, figures from the Cinema Exhibitors Association of Nigeria (CEAN) has showed. The movie sales in its debut weekend which started from Friday 26th, 2019 exceeded the rest of the top four movies shown which are N6.2 million from Little, N3.4 million from Knockout, N3.1million from Shazam and N1.0 million from Capitan Marvel. It also accounted for about 94 percent of the total of N207.4 million from the top 20 movies seen in that weekend. Nigerians could not hide their excitement over the movie as the cinemas all over the country were crowded.

“People were struggling for tickets. Even to book it online was tough as tickets were sold out even before the scheduled time for d movie,” Olumide Akintoye, a web designer said. But others who were opportune to see the movie said that it was thrilling and worth the money they spent to see it. “It was thrilling due to the action and special effects and sad due to the storyline but also funny because of the characters, comments and gestures.” Ruth Udembal, a writer said. Recently seeing movies in cinemas seemed to be the new ‘thing in town’ and this is aside from its entertainment values, movie-going is quickly becoming a lifestyle in which people go to the cinemas with their loved ones and friends to see movies and relax. Movie ticket prices usually range from N1, 000- N3,

000 across cinemas depending on the packages that come with it such as complimentary drinks and popcorn among others. The major film distributors across cinemas in Nigeria are FilmOne, Silver-

bird Film, Geneis Deluxe cinemas and Metro Classic. A new cinema era began in 2004 with the launch of a series of modern cinema houses by the Silverbird Group and since then launch of the group, new

cinemas like Ozone, Filmhouse and Genesis Deluxe have launched and are playing important roles in the evolution of the Nigerian film industry. A l s o t h e Av e n g e r s : Endgame movie made box

office history by taking a record-breaking $1.2billion in global ticket sales in its opening run. The Disney movie became the fastest film ever to break the $1billion barrier in just five days. Endgame is the 22nd offering in the Marvel Studios superhero franchise. Its opening takings smashed the previous global debut record of $640million set by last year’s Avengers: Infinity War. In the United States of America alone, it brought in a record $350million, and also enjoyed the United Kingdom and Ireland’s biggest opening ever with takings of £43.7million. CEAN is an association of cinema owners, operators and managers incorporated by the Corporate Affairs Commission of Nigeria on February 13, 2018, and is meant to promote and protect the value of cinema exhibition in Nigeria.

fee in 2020, 23% higher than last year. Interestingly, small coffee outlets are now competing with multinational giants, whose local subsidiaries help them enter the Nigerian market quickly. According to Emeka Nwachukwu, owner of one of the coffee outlets on the Island, the coffee culture is growing and this can be attributed to increasing health awareness and lifestyle changes. Nestlé is currently the giant player in the coffee market and has the largest market share in the country’s coffee sales; about 75percent of Nigerian coffee-drinkers drink Nescafé. Nestlé is also paying for mobile coffee carts on the streets of Lagos, and

plans to spend more cash over the next three years. Capitalizing on residents’ growing taste for coffee, the company aims to promote its instant brew as the fuel of choice for the upwardly mobile. According to Nwachukwu, there are still huge opportunities in the market as seen in the number of small coffee outlets springing up daily on the highbrow, Victoria Island. “Fast-paced lifestyle along with an aspiration to stay fit attracts people to ready to drink tea and ready to drink coffee,” he said If Coca-Cola decides to include Nigeria on the list of 25 markets where the coffee drink will be launched later this year, this may stir up competition in the Readyto-drink coffee market.

COMPANY

Coca-Cola set to ignite competition in ready-to-drink coffee market OLUFIKAYO OWOEYE

oft drink giant, Coca-Cola has announced plans to make a push into the coffee market with the launch of Coca-Cola coffee later this year. The company said it will unveil the new drink in more than 25 markets around the world. According to Coca-Cola, the new drink blends Coke soda with coffee to appeal to consumers who want less sugar in their drinks but more caffeine. James Quincey, CocaCola CEO said the drink was designed to reach consumers during specific occasions and channels like the mid-afternoon energy slump at work. In recent times there has

been a paradigm shift by consumers from soda drinks to less sugary drinks. According to Mintel, a global market research company, ready-to-drink coffee is the fastest growing segment in the coffee category, growing 31% in 2016 and 2017, Chilled coffee drinks such as cold brew are also growing in popularity with consumers. In Nigeria, there has been a growing demand for coffee drinks particularly among young middle class and well-traveled. Although the consumption is still very low, According to Euromonitor, coffee consumption grew by more than 2percent between 2010 and 2015 with a prediction that Nigerians will drink more than 1,000 tons of cofwww.businessday.ng

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Thursday 02 May 2019

BUSINESS DAY

Retail &

consumer business

CONSUMER SPENDING

Ahead of its listing, ride-hailing platform, Uber lists risk factors to operations OLUFIKAYO OWOEYE

ide-sharing platform, Uber, has filed documents with the Securities and Exchange Commission to become a public company in what is expected to be the biggest tech IPOs in history. In its filing prospectus, the company said since its launch in 2012, over 10billion trips had been carried out on its platform in over 700 cities across the globe with $78billion paid to its drivers. Uber said it incurred significant operating losses of $4.0 billion and $3.0 billion in the years ended December 31, 2017, and 2018, and as of December 31, 2018, it has an accumulated deficit of $7.9 billion underscoring the precarious nature of its business. According to Uber, it has made substantial investments to develop new offerings and technologies, such as autonomous vehicle technologies, dockless e-bikes and e-scooters, Uber Freight, and Uber Elevate, noting that autonomous vehicles will form an important part of its offerings over the long term. Uber says it will continue to bleed cash as it seeks to recruit more drivers, find new

customers, and generally, grow its share of the ride-share market in its paperwork: “Many of our efforts to generate revenue is new and unproven, and any failure to adequately increase revenue or contain the related

costs could prevent us from attaining or increasing profitability,” the statement said According to Uber, there have many numerous instances over the years of Uber drivers assaulting their passengers and the company

warns there is likely to be more in the future. Riders also can engage in criminal activity and Uber admits there’s little it can do about it. Even reporting on these incidents can hurt Uber’s brand, the company says, which is why Uber is compiling its own “transparency report” on sexual assault and harassment in an effort to get ahead of the story. The company, which got its start as an appbased luxury car service in San Francisco in 2009, is now one of the most dominant transportation services in the world, controlling over 60 percent of the US market and logging billions of rides all over the world. Uber is now in the process of trying to build itself into a one-stop shop for many different modes of transportation, including bikes, scooters, car sharing, and public transportation. In the future, Uber aims to also have autonomous vehicles and electric aircraft available on its platform. Travis Kalanick, who was ousted as CEO in 2017 but still owns 8.3 percent of the company’s pre-IPO shares valued at roughly $9 billion, will likely see his wealth grow by billions of dollars. But the company said it is trying to put the Kalanick era behind it, and that is clear in the filing. Uber says it is on a “new path forward” under the leadership of CEO, Dara Khosrowshahi

CONSUMER SPENDING

Food prices decline in Q1 2019 on weaker purchasing power, natural conditions BUNMI BAILEY

rices of twenty-four commodities including rice, tomato, yam tuber and maize, declined marginally for two straight months to March 2019, on weaker purchasing power and natural factors. For instance, the one dozen of mediumsized Agric eggs trended southwards from N469.8 in January to N459.8 in March. 1Kg of Brown Beans declined to N368.1 from N382.7 Also, 1Kg of fresh Catfish (Obokun) declined from N1073.5 to N1065.1, 1Kg of Irish potato fell from N290.6 to N278.9 and 1Kg of Onion bulb inched lower from N257.9 to N231.9. Mogaji African Farmer, Consultant Farmer, X-ray Farms consulting agreed with the NBS data and attributed it to low demand from consumers and low food production. “Prices are reducing but marginally and I guess that people are not buying because the purchasing power of people is dropping. One of the things I noticed during Easter was that prices of food items did not really go up,” “There were fears of political unrest and crises as a result of elections that made farmers feel that they may not sell, and most microfinance banks did not give out loans to them because they did not want to take that risk. Every election year, there is always a de-

Food Prices Months

cline in production and productivity,” Mogaji further said. The country’s per capita income has been on a decline since 2014. According to the International Monetary Fund (IMF), per capita income data in Nigeria declined to $1,994 in 2017 from $3,268 in 2014. “There has been a lot of investment in agriculture, in the Northern part of the country which has made a lot of irrigation systems to be revived so there is a lot of supply of food and it is coming down here. And also purchasing power has been weak, so people have not been able to buy as much and the wholesalers and retailers had to cut down their cost,” Abiodun Olorundenro, Operations Manger, Aquashoots Nigeria said. Usually, the early planting season starts between early March and April. Farmers use that time to prepare their farm for the planting season Emmanuel Ijewere, vice president of the Nigerian AgriBusiness Group (NABG) in his own opinion attributed it to the usual natural phenomenal “The downward trend in prices that you are seeing is not unusual; it is created by natural phenomena. We are still benefitting from the harvest of last year but they will soon be dried up. I expect prices to start going up very soon let’s say around May-July,” Ijewere

Analyst: Bunmi Bailey Graphics: Fifen Eyemisanre Famous www.businessday.ng

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24 BUSINESS DAY

Thursday 02 May 2019

MADE in aba

Inadequate power supply hurts businesses in Aba GODFREY OFURUM

ndustrialists in Aba, the commercial hub of Abia State, have attributed closure of industries in the area to inadequate power supply. Consequently, they urged the Enugu Electricity Distr ibution Company (EEDC) to increase electricity supply to the area, to enable industries in the commercial city to operate optimally. Aba Chamber of Commerce, Industr y, Mines and Agriculture (ACCIMA), a city chamber, said that small and medium industries in the commercial city are shutting down, due to inadequate power supply. The chamber, in a recent publication in ACCIMA Bulletin, noted that few industries are managing to survive, because they are providing their own power supply, an indication that their targeted high capacity utilisation is far from being realised, hence making the economy more unstable,

which in turn results in socioeconomic insecurity. According to ACCIMA, Aba is a city made from sheer self-help efforts and enterprise. Aba is a town known for her numerous hubs of micro, small and medium enterprises (MSME). It is a city bubbling with the abundance of human potentials in various areas of interest, contributing its quota to the revival of Nigeria’s economy. “ D e s p i t e Ab a’s contribution to the economy, the area receives an allocation of 10-15 megawatts of electricity from the national grid, against the required 110-120 megawatts,” the chamber said. The chamber called for more allocation of power from the national grid to Aba, at least 50-80 megawatts of uninterrupted power supply as is done in other cities of the country that is below Aba in economic activities, saying it shall enable the rehabilitation of some industrial concerns that have shut down, thereby

ensuring societal security. Godwin Iheme, managing director, ICI Garment Limited, affirmed that with adequate power supply, Aba industrialists can contribute meaningfully to Nigeria’s gross domestic

product (GDP). According to him, inade quate ele ctr icity supply has become a nightmare to all of us in Aba. “EEDC rations electricity here. Our factory runs on generator and we spend

an average of N10,000 daily on diesel. And recently to help the big diesel engine, we acquired a small petrol generator, but the problem now is that the capacity is low for our equipment, which has forced us to

reduce our daily output.” BusinessDay checks showed that some areas of the town have been disconnected from the national grid for between three to five years. Jude Nwosu, managing director, Crunchies Fried Chicken Limited, a fast food firm, urged government to do more in the power sector, noting that the funds firms put into providing their own power deplete their profits that would have been reinvested in the business to create employment. He said generating his own power and water cuts investable funds. “If we are to save these funds, we will be able to open more branches and for each branch we open, we employ about 50 people. “Therefore we urge the government to do more, by providing some of these much needed amenities that will help us do more. If we do more, we pay more taxes and Government will have more funds to provide infrastructure to the people”.

Improving local input sourcing for Aba entrepreneurs Gbemi Faminu

ba remains one of Nigeria’s largest industrial hubs, producing bags, shoes, belts, boots, cosmetics, plastics, and paints. It has its major markets such as Ariaria Market, New Market and Cemetery Market, where some of these products are made and sold. Despite various challenges those in the industry encounter, they are still able to make products that meet global standards. The industry encounters many challenges, especially high production cost, caused by inability to easily access raw materials such as leather, animal skin, and glue, among others, for production purposes. Although, some of these materials are available locally, artisans have to source for inputs abroad, as most of the hides and skin in Nigeria are being exported to other countries. The shoemakers will then n e e d t o i mp o r t t h e s e products back at a higher

rate, with naira being weak against the dollar. This causes an increase in the cost of production Furthermore, Aba artisans face infrastructural problems, especially power, transportation, and industrial machines, which cause setbacks for the industry, An example is the inability to meet market demand in terms of the quantity and quality of

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items produced. Unlike the Aba a r t i sa n s, f o re ig n s h o e and bag producers have programmes that encourage partnership with those that provide raw materials needed for production locally and internationally. Ethiopia, even as an emerging market, is making waves in the shoemaking industry locally and internationally. Since 2000, it has emerged as a shoemaking hub and has

got better overtime to get recognition from foreign i nv e s t o r s l i k e C h i na’s Huajian. “There is a need to have a local value chain that will support Aba,” James Eze, a financial analyst, said. “This will include healthy partnerships with local herdsmen,” he said. Ethiopia has 56 million cattle and with its wellorganised and formalised leather industry. It is able to provide raw materials

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to its shoemakers easily. Si m i la r ly , Nig e r i a ha s 131 million cattle, goats and sheep, according to the Federal Ministry of Agriculture (2011 figures). Despite the similarities between them, they are far apart in terms of development because while Ethiopia makes its raw materials readily available for further production, Nigerians prefer to export their raw materials for higher profits in foreign currency. The result of this is that producers have to source for these materials internationally and pay a higher price for it, coupled with the transfer of these materials down to the local factories. “Once the tanneries are through with production, they export the entire finished leather to the detriment of local leather works manufacturers. This is affecting the finished leather sector in Lagos, Onitsha and especially the Aba cluster,” Ken Anyanwu, national secretary, Association of Leather and Allied Industrialists

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of Nigeria (ALAIN) told BusinessDay. This means that local shoemakers must begin to think of partnering with herdsmen to supply them with sufficient hides and skin. The effect of this partnership is that it establishes a friendly business relationship. Stakeholders in the industry need to liaise with local partners in order to access the raw materials, especially for leather, which is the major material used. This can be obtained from cattle rearers or butchers, conveniently and at a cheaper rate. Furthermore, the industry can partner with farmers in states such as Kano, Kaduna and Oyo for raw materials that could be obtained from farm products such as cotton and glue, among others. The government should also help in establishing infrastructure and factories like the Nigerian Institute Of Leather and Science Technology (NILEST) to increase the quantity of local leather produced.

Thursday 02 May 2019

BUSINESS DAY

Investor

In association with

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

Market capitalisation

NSE Premium Index

N11.721 trillion

Week open 18 – 04–19)

31,924.51 30,086.31

N11.301trillion

2,163.63

Week close (26 – 04–19)

29,740.41

N11.177 trillion

2,149.97

Year Open

2,241.37

The NSE-Main Board

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

426.64

1,368.51

809.63

120.26

690.82

278.43

2,202.13

1,156.66

1,144.89

808.61

1,351.59 1,332.75

386.23

1,348.90

385.87

119.18

673.00

279.64

2,153.09

1,148.47

1,113.76

-0.71

-2.72

-7.22

-5.77

1,456.29

Percentage change (WoW)

-1.15

-0.63

-1.43

-0.13

Percentage change (YTD)

-5.38

-2.05

-6.31

1.86

-1.39 -5.96

-0.09 -3.28

-0.90 -5.77

-2.58

-2.12

-10.13

-7.47

-2.23 -3.62

Fidelity Bank: Revisiting the Q1 scorecards …key indicators show bank on track to achieve full year target Iheanyi Nwachukwu

arlier this week (Monday April 29, 2019), Fidelity Bank Plc held its firstquarter (Q1) 2019 Investors and Analyst Conference Call with a presentation on its unaudited financial results for the three months ended March 31, 2019. The results were recently released at the Nigerian Stock Exchange (NSE). Overview Fidelity, a commercial bank with international authorisation was established in 1987 and licensed by the Central Bank of Nigeria (CBN). The bank currently has over 400,000 diverse shareholders. Fidelity Bank Plc has consistently paid dividends annually since being listed on the Nigerian Stock Exchange (NSE) in May 2005. The bank issued a 5 year $300million Eurobond in May 2013 which was listed on the Irish Stock Exchange, the bond was fully redeemed in May 2018. It also issued a N30billion local currency bond in May 2015. Fidelity issued a $400million Eurobond in Oct 2017, which is also listed on the Irish Stock Exchange. The bank’s strategic business focus is on Niche Corporate Banking, SMEs, Retail and Electronic Banking. Currently, it has 240 business offices, 808 ATMs and 5,923 POSes. First-quarter 2019 performance highlights

Nnamdi Okonkwo, managing director Fidelity Bank Plc

In the review Q1’19 period to March 31, Fidelity Bank recorded gross earnings of N43.33billion against N48.44billion in Q1’2018 which represents an increase of about 11.8percent. To t a l I n t e re s t I n c o m e o f N37.6billion in Q1’19 against N38.6billion in Q1’18 represents an

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increase of 2.6percent. Operating Expenses went up by 10.4percent to N16.7 billion in Q1 2019 (Q1 2018: N15.1 billion).Cost to Income Ratio (CIR) dropped to 68.4percent in Q1 2019 from 72.7percent in Q1 2018. Profit Before Tax (PBT) was also up by 34percent to N6.7 billion in Q1 2019 from N4.98billion in Q1’18;

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while profit after tax (PAT) came in at N5.9 billion in Q1’19, from N4.62billion n Q1’18. Stock performance At N1.94kobo per share at the beginning of stock trading this week on the Nigerian Bourse, the bank’s share price looks pretty good on its way to a reported 52week high of N2.90kobo as against a 52-week low of N1.51kobo. Its market capitalisation stands a t N 5 5 . 6 3 b i l l i o n o n s h a re s outstanding of 28,974,797,023 units. The stock price had as at Monday April 29 lost 5.4percent of its year-open value, outperforming the NSE All Share Index (ASI) which on same day was also down by 6.07percent year-to-date. Key takeaways from Q1’19 results presentation PBT increased by 34percent year-on-year (YoY) to N6.7 billion from N5.0 billion in Q1 2018 due to N2.3 billion increase in FX Income, interest income on liquid assets (N0.9 billion), and digital banking income (N0.6 billion), and moderate increase in total expenses by N1.6 billion. Cost-to-income ratio declined to 68.4percent on account of the bank’s digital transformation initiatives. Net Interest Margin (NIM) came in at 5.1percent due to lower yields on earning assets and an increase in funding costs. Fidelity Bank Plc’s average yield on earning assets in Q1’19 stood at 12.6percent compared to an average funding cost of 6.6percent.

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Total deposits grew by 3.8percent year-to-date (YtD) or by N37.6 billion to N1.017trillion from N979.4 billion in December 2018 driven by savings, domiciliary and time deposit products. Savings deposits grew by 6.2percent YtD to N242.1 billion from December 2018. Savings deposits contribution to total deposits also improved to 23.8percent, an attestation of the bank’s increasing market share in the retail segment. R i s k a s s e t s i n c re a s e d by 13.7percent YtD to N966.3 billion from N849.9 billion in December 2018 with cost of risk at 0.5percent and coverage ratio at 115.5percent. Non-performing loan (NPL) ratio declined to 4.9ercent due to a combination of decline in absolute NPL numbers and increase in total loan book size. Other takeaways Looking at the notes to the Q1’19 financial statement released at the Nigerian Stock Exchange (NSE), the bank’s management made an assessment of its ability to continue as a going concern and is satisfied that Fidelity Bank has the resources to continue in the business for the foreseeable future. The bank has consistent growth in savings deposits anchored on increasing customer growth and improved digital penetration at 43percent. Over 81percent of the bank’s customers transactions are Continues on Page 19

Thursday 02 May 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Investment View

Investor’s Square

United Capital expects buying interests in stocks to continue Domestic financial markets review and outlook lam Group makes N130bn enterprise value bid for Dangote Flour The local bourse drew the curtain on the holidayshortened week on a bearish note as investors took profits on stocks that recorded gains in the prior week. Notably, the market recorded losses on all trading sessions during the week save for a mild gain recorded on Thursday. Overall, the NSEASI shed 1.2percent week-on-week (w/w) to close at 29,740.4 points while market capitalisation declined by N123.7billion to settle at 11.2trillion which predicated a further downtrend in year-to-date (YtD) return to -5.4percent.

lone gainer, buoyed by price appreciation in FO (+8.4percent) and OANDO (+10.4percent). The peripheral Agriculture Index closed flattish w/w. In terms of earnings release, Nigerian Breweries Plc (Revenue up 0.4percent to N83.2billion; PAT down -21.3percent to 8billion) and Fidelity Bank Plc (Revenue up 11.8percent to N48.4billion; PAT up 28.4percent to N5.9billion) released their Q1-19 earnings result. A major event that dominated the equity market last week was the disclosure of an offer from Olam International to acquire existing outstanding shares of Dangote Flour Mills Plc for an enterprise value (EV) consideration of N130billion. Our rough estimate

Meanwhile, activity levels for the week were mixed as average value traded ebbed 30.2percent to N2billion while average volume traded rose 44.1percent to 356.7million units. On a week-on-week (w/w) basis, performance across sector indices was broadly bearish as four of the six sectors under our coverage closed in the red territory. The Consumer Goods (-2.6percent) sector led the laggards owing to price declines in NESTLE (-1.9percent), UNILEVER (-8.8percent), and GUINNESS (-19percent). The Insurance (-0.9percent), Industrial Goods (-0.7percent) and Banking (-0.1percent) sectors also trended southwards w/w as profit-taking in AIICO (-1.3percent), DANGCEM (-1.1percent), and GUARANTY (-1.7percent) weighed. The Oil & Gas (+0.4percent) sector emerged as the

puts the value of equity (EV less net debt) above a N100billion, making this a very attractive offer, roughly N20/share. The Ticker surged +45.3percent w/w in the past week on the back of the information. Considering the ticker was on a full bid for the better part of the past week, we expect the buying interests to continue. Investors’ sentiment as gauged by market breadth was upbeat, closing at 1.3x as 47 stocks advanced w/w as against 37 decliners. Looking into the new week, we expect the inflow of first-quarter earnings releases to continue to guide sentiments as investors sustain speculation the next market moving piece of information. Money Market: Improved liquidity spurs CBN mop-up action The money market opened the holiday-shortened week to 26th of April very liquid at N306.2billion long, on the

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back of inflows from OMO maturities and bonds coupon payment of about N140billion that hit the system, the week before. However, the improved liquidity status prompted the Central Bank of Nigeria (CBN) to float its first OMO auction in more than 2-week, at the start of the prior week. –thus, mopping-up a total sum of circa N166.6billion from the system across three maturities. Notably, the demand at the auction was positively tilted towards the long-dated 359day bill with a bid-to-cover ratio of 2.8x, while the demand for the short- and mediumterm bills was underwhelming (bid-to-cover: 93-day-1.4x and 184-day-0.03x). Overall, stop rates at the auction though still attractive compared to that of Treasury bills, were marginally lower than the previous auction; 91-day rose from 11.78percent to 11.80percent, mid-tenor bill eased from 13percent to 12.90percent and long-tenor bill eased from 13.04percent to 13.03percent. The primary inflow into the system was from OMO maturity, worth c. N34billion, JV calls payment and retail FX refunds to Banks. Meanwhile, the major outflow was from the April-19 Bond auction that held during the week and FX funding sales on Friday. Consequently, average interbank funding rates (Open Buy Back and Overnight rates) inched higher from 10.2percent from last Friday to close the week at 16.9percent, having previously reached a low of 6.7percent during the week. In the secondary NTB market, sentiments were largely bullish throughout the week on the back of the improved system liquidity status. Thus, average TBill yields declined w/w by 19bps to close at 13.1percent. This week, we expect market sentiments to remain guided by the level of liquidity in the system. Also, with sizable inflows scheduled to hit the system in the form of FAAC inflow, OMO (N109.7billion) and NTB (N62.8bn) maturities, we expect the CBN to pace-up its liquidity tightening stance compared to that of the prior week.

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

SEC wants beneficiaries of deceased investors to claim their dividends Iheanyi Nwachukwu

n a bid to further reduce the quantum of unclaimed dividends in the Nigerian capital market, the Securities and Exchange Commission (SEC) has asked beneficiaries of deceased investors to step up efforts to claim such dividends. This was stated by the Acting Director General of the SEC, Mary Uduk in her welcome remarks at the enlightenment programme for Lagos State Probate Registry in Lagos, Tuesday. Uduk who was represented by Acting Executive Commissioner Operations of the SEC, Isyaku Tilde, said the purpose of the enlightenment programme is to give participants an understanding of the operations of the capital market, especially in the area concerning transmission of shares and administration of estate, areas in which the Probate Registry is a key stakeholder. Uduk stated that one category of investors whose i nv e s t m e nt y i e l d s hav e contributed to the growth of unclaimed dividends are deceased investors, whose beneficiaries as indicated in the

will or letter of administration are yet to claim the investments and accrued dividends through the share transmission process. According to her, “The capital market is a market for raising medium to long term capital via a number of instruments. The most popular of the instruments are shared and bonds with resultant yields of dividends and interests respectively. “However, the quantum of unclaimed dividends in the Nigerian capital market has been on the increase as investors fail to claim the dividends from their investment in shares. Uduk also congratulated the Probate Registry on the recent commissioning of the e-filing probate registry saying it will guarantee integrity of data, provide for online tracking of applications, simplify and shorten the application process

of Letter of Administration and grants. She therefore restated the readiness of the SEC to collaborate with the Probate Registry staff so that together the Nigerian capital market can become a desirable investment destination. In a keynote address, Justice A.A. Oyebanji who represented the Chief Judge of Lagos state, commended the SEC on the enlightens programme which she said will go a long way in aiding the staff of the probate registry on the discharge of their duties. Oyebanji said the Registry processed legal instruments for the administration of the real and personal estate of a deceased person who was resident in Lagos state and who owned landed properties in Lagos state. She disclosed that the Probate Registry in Lagos state is now fully. Computerised and all applications must be made online. “This e-Probate system was introduced primarily to ensure a more efficient delivery of services to elements of the public. It is aimed at reducing significantly the length of time required to obtain a Grant, whether in the Ikeja of the Lagos Division” she added.

Stockbrokers identify quick wins for market rebound

tockbrokers under the aegis of past presidents of the Chartered Institute of Stockbrokers (CIS) have identified critical issues that should be addressed for prompt rebound. Besides, they have underscored the need to intensify advocacy in order to draw the governments’ and other regulators’ attention to the benefits of investment through the capital market. Addressing stockbrokers at a recent dinner organised by the CIS in honour of the past presidents in Lagos at the weekend, Tola Mobolurin, Chairman, NASD Plc explained that the crash of Nigeria’s stock market from 2007-2008 was largely due to complacency of the government, capital market regulators, stockbrokers and investors. Mobolurin who is also the Vice Chairman of Capital

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Bancorp Plc noted that if each stakeholder had played by the rules of the game, there would not have been laxity that led to regulatory failures with attendant market crash in the past. He however, expressed optimism that the market can bounce back if the entire financial system is overhauled without further delay. “We must create savings institutions immediately. We are in dire need of Private Equity Fund and Hedge Fund in Naira in the national interest. We need institutions that have deep pockets. There should be an end to dichotomy between banks with capital market operations and banks with non-capital market operations. We must reactivate the bond market which w e pushed away because of lack of interest. Thriving capital market is @Businessdayng

needed to build the economy”, Mobolurin said. Also speaking, Adedapo Adekoje, president and Chairman of Council, CIS explained the need for unity of purpose among stockbrokers In order to strengthen advocacy role. He specifically noted the relevance of the pending bill that would reflect the enormous functions of stockbrokers and urged the members at various levels, including other trade groups to co-operate in making the bill a reality. “I would like to remind us that we still have the Chartered Institute of Securities and Investment (CISI) bill pending with the national assembly, and this also requires substantial resources to push through. Our plan therefore is to urge all of us to support, both financial and otherwise, to pursue these noble causes of our Institute”. said Adekoje.

Thursday 02 May 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

‘Stock investors should not take panicky decisions’

Fidelity Bank: Revisiting... Continued from Page 25

Patrick Ezeagu, chairman, Association of Stockbroking Houses of Nigeria (ASHON) speaks in this interview. Excerpts What is the significance of the approval-in-principal for Lagos Commodities and Futures Exchange (LCFE) by the Securities and Exchange Commission (SEC)…then the next line of action? he Approval-In-Principle means SEC believes that we are on course and we can start to set up for operations. That is, do those things that erstwhile regulatory requirements hindered us from doing. We were given the window to prepare for Final Approval. This endorsement by SEC signifies that we are very close to the commencement of full operations. Is ASHON the soul promoter of LCFE? How prepared are stockbrokers to fully trade in commodities and derivatives? Yes. At the inception, ASHON as the promoter of the Commodity Exchange did a feasibility study which has now become the roadmap for the project. In it, we have made provision in conjunction with the Chartered Institute of Stockbrokers (CIS) to train all our members on the workings of the New Commodity Exchange. Indeed, we had done some initial training and others will follow soon before we fully roll out. Is ASHON considering holistic training for its members to help them build capacity for the takeoff of The Commodity Exchange? What about the financial press? The training of our members is to be handled by our Institute which is CIS that is empowered by law to train professionals in the capital market in Nigeria. The financial press is also a member of the capital market community and as partners we shall look into a collaborative effort to ensure that they are trained with support coming from some of our other partners. Stockbrokers are calling for the privatisation of all moribund government enterprises through the Capital Market, against the background of the future privatisation programme, how would you advise the government? The government should always patronise the capital market to make it more viable. The professionals in the sector should be involved in policy making to make this privatization initiative a success. Consequently, and to ensure transparency, all future privatisation processes should be done through

Patrick Ezeagu

the capital market. ASHON is believed to have restructured its board. What informed this development and does it have to do with the birth of LCFE? The restructuring of the Governing Council of ASHON is in keeping with the provisions of the Constitution of the Association. What happened was that we wanted to ensure that our Secretariat is empowered to become more visible in the scheme of things. We changed the nomenclature of our principal officers to reflect world best practices Can you avail the investing public of the benefits of Mutual Funds Trading Platform recently launched by The Nigerian Stock Exchange of which ASHON was involved? There are so many advantages of trading in Mutual Funds to which the recently launched Trading Platform will bring to the fore. It is the simplest way to achieve a reduction in risk by way of diversification of one’s portfolio. Investors will enjoy the expertise of a professional Fund Manager without paying extra for the service. It affords them the opportunity to enjoy economies of scale which is achieved through the pooling of other peoples funds to increase bargaining power. They have the opportunity of easy entry and exit which this platform furwww.businessday.ng

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The bank expects the trend in savings deposits to continue in 2019FY as it deepens its digital drive and increase its retail products bouquet/offerings

ther provides. It also encourages the financial inclusion of the retail investors. ASHON is preparing for its National Capital Market Summit and Awards Ceremony. What will make this year’s event unique? The uniqueness of this year’s Capital Market Summit and Awards ceremony stems from the fact that ASHON has undergone a lot of realignment of values. The Association has been registered with SEC and we are making various efforts in diversifying the income streams of our members through the creation of other trading areas like Commodities with the

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birth of the LCFE and the recently launched Mutual Funds Trading Platform of NSE. Who are those considered for the awards and why? The awards list will be made up of those who have contributed immensely to the development of the capital market in Nigeria. The list will be made available by the Planning Committee soon after due consultations with the shortlisted awardees. The Nigerian stock market has been wobbling in recent months as it took a beating from uncertainty prior to the general election. What would you like to advise potential and existing investors in this respect? The advice to potential and existing investors is to continue to have hope in the market. What the elections had done to the market, it did to all other sectors of the economy. The elections have come and gone. Investors should not take panicky decisions. They should also always use the services of Stockbrokers who are professionals in accessing the market. How would you advise the government to protect the Stock Market and the Economy, knowing fully well that the market is very sensitive to uncertainties? There are a lot that the government should do but basic of which is to provide the enabling environment, ensure economic stability of the economy and intervene where necessary. Example is the case of Contract Stamp contentions between NIPOST and FIRS, waiver of VAT for Capital Market transactions and granting incentives for Companies quoted on the Stock Exchange. Others include need to: provide basic infrastructure like power to boost the economy, reintroduce margin trading, constitute the Board of SEC, provide direct incentives to capital market, and review of the effects of Minimum Tax on our members, etc. Do you have other comments for the investing public? We need to discuss with the regulatory authorities the issue of funding of Trade Groups/Associations/Institutes like ASHON and Chartered Institute of Stockbrokers (CIS) to include a percentage of transaction charges as is the case with other associations in Nigeria outside the capital market. We are proposing a 0.1percent of transaction cost shared between ASHON and CIS. @Businessdayng

now done on electronic banking channels. The management noted that Fidelity Bank’s virtual assistant, Iv y i s i m p ro v i n g c u s t o m e r engagements and insights have been very positive, adding that retail lending is starting to gradually pick up. Q1 2019 actual versus 2019FY guidance A look at the bank’s growth expectations on key indicators shows it is largely on track to achieving set targets for full year 2019. Except for its Net Interest Margin (NIM) at 5.1percent which is behind the set target of 6percent– 6.5percent in 2019FY, other indicators are in the green. In Q1’19, the bank’s loan growth (YtD) was 13.7percent against 2019 FY target of 7.5percent- 10percent. Other positive key indicators include: Deposit Growth (3.8percent) a s aga i n st 2 0 1 9 F Y t a rg e t o f 7.5percent – 10percent ; Cost to Income Ratio of 68.4percent in Q1’19 is reasonably below 70percent set target for 2019FY. The bank is also on track in checking its Non-Performing Loan (NPL). Its NPL ratio of 4.9percent in Q1’ 19 is below 6percent it set as target for 2019FY. Cost of Risk (CoR) is 0.5percent against 1.25percent for 2019 FY; while return on average equity (ROAE) – Post Tax at 12.2percent in Q1’19 shows Fidelity Bank is also on track to achieving a set target of 13percent in 2019FY. Re ta i l B a n ki n g A n a ly s i s (Personal Banking) Fidelity is on course to achieving the 6th consecutive year of doubledigit savings deposits growth. The bank expects the trend in savings deposits to continue in 2019FY as it deepens its digital drive and increase its retail products bouquet/offerings. Digital lending and improving macros are driving the gradual growth in retail loans, it said. Liquid assets position Improved liquidity is changing the structure of Fidelity Bank funding base. The bank’s loans to deposits is now 79.4percent, from 73.1percent in 2018F Y excluding other funding sources example debts. In Q1’19, loans to interest bearing liabilities stood at 66.8percent compared to 62.8percent in 2018FY. Loan book analysis Ne t l o a n s a n d a d v a n c e s increased by 13.7percent YtD to N966.3 billion, with 87.6percent of total loan book in term loans. Growth in loans was driven by four sectors: Manufacturing, Transport, A g r i c u l t u re a n d O i l & G a s Downstream etc. The four sectors were responsible for 75.7percent of the increase in the loan book.

Thursday 02 May 2019

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

OPEC+ still committed to crude production agreement ...higher crude prices means higher products importation cost for Nigeria Olusola Bello with agency report

f the news emanating from Russia, a leading member of OPEC + is anything to go bye, then Nigeria and other countries who are major importers of refined petroleum products are in trouble. This because the cartel and it alliances are not prepared to added more crude to the market soon. It also means that the desire of America to keep the price of crude oil at a reasonable price will meet a brick wall as the waivers granted those who were given concession to lift Iran crude oil would have been stopped by yesterday by the United States of America. This action by USA is set to create a supply gap at the international market which will affect the price of crude oil. Already the price of Brent which is the equivalent of Nigerian Bonny light is $ 72.31 per barrel, while the WTI is $62.22 per barrel . The OPEC basket is put at $72.38 per barrel. Recently, the Minister of State for Petroleum Resourc-

es Emmanuel Kachikwu has said the country is in support of a six-month extension of the current quota restriction in oil production by OPEC and its allies. He said OPEC would maintain production quotas after June if other suppliers boost output and the market remains as it is, though the group is likely to scale

back cuts if supply tightens, Kachikwu said. “There definitely will be some quotas” after June, he said. Slower growth in oil demand is “worrisome,” the minister told Bloomberg Television in Saudi Arabia just as the United States of America has vowed to enforce sanctions on Iran and would not extend the

waivers given to those lifting its crude oil come May 1st, 2019. What this means is that if the production cut extends by six months the price of crude oil would continue to increase at the international market and thereby putting pressure on Nigeria which is a net importer of petroleum products, despite the fact

L-R: Folake Marcus-Bello, company Secretary Crown Refinery and Petrochemicals (CRP) Limited; Kassim Adeleke, Chief Executive Officer, CRP Limited, and Governor Oluwarotimi Akeredolu of Ondo State, during a partnership signing agreement by CRP Limited and Ondo State Government for the construction of a Refinery at the governors office in Akure.

that it is a major oil producer. Russian president Vladimir Putin had said in China that Russia was meeting its obligations under the OPEC/ non-OPEC crude production agreement, and participants remained committed to the arrangement, despite on-going uncertainty over world energy market developments. He said: “As far as we know, all our partners in OPEC, including Saudi Arabia, are not giving up on the agreements that we reached within OPEC+,” Putin said Saturday during a press conference in Beijing, according to a transcript posted on the Kremlin website. “We have no news, no information from our Saudi counterparts or from any other OPEC members that they are ready to withdraw from these agreements,” Putin said. “Nobody has come to us with this question. Moreover it seems unlikely as Saudi Arabia initiated the OPEC+ agreement and Saudi Arabia brought Russia to these agreements.” Under the latest production cut agreement, Russia agreed to gradually cut output in the first half of 2019 by around 230,000 b/d from

October 2018 levels of 11.421 million b/d. Russia is set to release output data for April. Full-month figures for March indicated that Russia’s crude oil and condensate production stood at 47.782 million mt, or around 11.298 million b/d. This indicated that output in March was on average 123,000 b/d down from the October level of 11.421 mil b/d. So far Putin, and Russian energy minister Alexander Novak, have given no clear indication of what approach Russia will take on output volumes in the second half of 2019, citing on-going uncertainty on the market. This includes output in Iran, which is expected to fall on the US decision to end sanctions waivers for buyers of Iranian crude. “US decisions related to Iran sanctions, should come into force, if I remember correctly, at the beginning of May,” Putin said. “I can’t imagine how the global energy market will respond to these events.” Putin said he did not discuss this in detail with his Chinese counterpart Xi Jiping during his visit to China, but said Russia is ready to meet demand from China and other countries.

Oil prices to be lower in 2019 on slower-than-expected Waltersmith HSE week harps on safety as personal responsibility mitted to full implementation said adding that in March FRANK UZUEGBUNAM global growth, rising non-OPEC supply of our safety policies. We will 2019, Waltersmith clocked two

he World Bank has said that crude oil prices are expected to average $66 a barrel in 2019 and $65 a barrel in 2020, a downward revision from the October forecast due to the weaker-than-expected global growth outlook and greater-than-anticipated U.S. production, the World Bank said. But this is at variance with the general forecast by experts who feel that with current sanctions against Iran and crisis in Venezuela there is bound to be supply gap in the market which would influence the price of the commodity upward. The bank in its April Commodity Markets Outlook however said metal prices are expected to continue on a recovery in 2019 that follows a sharp drop in the second half of 2018. The recovery has been spurred by stabilisation of activity in China after Olusola Bello, Team lead,

weakness around the turn of the year, as well as various supply shortfalls. “It has become clear that the commodity price cycle has come to an end, which is causing strains for exporters but may offer opportunities for importers,” said Ceyla Pazarbasioglu, World Bank Equitable Growth, Finance & Institutions Vice President. “Exporters may have to adapt to slower gains in commodity revenues with economic diversification, while importers could take advantage of lower commodity prices for increased investment.” “The outlook for commodity prices is sensitive to policyrelated risks, especially for oil,” said Ayhan Kose, Director of the World Bank’s Prospects Group. “The outlook for oil could be swayed by a range of policy outcomes, including whether the Organization of the Petroleum Exporting Countries (OPEC) and partners extend production

Graphics: Joel Samson.

cuts, the impact of the removal of waivers to the U.S. sanctions on Iran, and looming changes in marine fuel emissions regulations.” After a drop in late 2018, oil prices have risen steadily since the start of the year, as OPEC and partners have cut production, and output has declined in Venezuela and Iran. U.S. shale production is expected to remain robust after surging in 2018. Energy prices overall – which also include natural gas and coal ‒ are expected to average 5.4 percent lower in 2019 than in 2018. A special focus section shows that when countries intervene to dampen the effect of food price fluctuations on their citizens, the collective intervention of many countries can produce the opposite of the intended effect and amplify movements in world prices – to the detriment of the most vulnerable populations.

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altersmith Petroman Oil Limited, operator of Ibigwe field located in Oil Mining Lease (OML) 16, has reiterated its commitment to the safety of its staff, host communities and their environment as it hopes to achieve its target of “goal zero” incident in years. With a stringent safety regime in place to bring the risk of any accident associated with oil and gas operations down to the absolute minimum and/or prevent major incidents that could result in multiple fatalities or injuries, or loss of infrastructure critical to the economy, Waltersmith in its 2019 HSE Week, with the theme “Safety- my responsibility”, said the weeklong activity is to further emphasize the need to remind all staff/support staff and contractors to take safety as personal responsibility. “As a company, we are com-

support all staff/support staff and contractors in taking time to work safely. We will address every safety concern promptly,” said Abdulrazaq Isa, chairman/chief executive officer, Waltersmith Petroman. “If you stop a job for safety reasons, we will back you up. If there is an incidence, we will fully investigate and share the lessons learnt to prevent re–occurrence. We will recognize any staff that reports the highest number of near misses,” Isa added. The genesis of the HSE week can be traced to 2011 when the company had a blowout incident on a drilling project. No life was lost but 6 people sustained injuries and millions of dollars went up in flames. “We have learnt that accidents are caused by human or equipment failure in one form or another. We have also learnt that all accidents are preventable, subsequently we have safely drilled 6 wells from the lessons learnt,” Isa

Email: energyreport@businessdayonline.com, Tel: +234-8023020011

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million-man hours without lost time incidence (LTI). This year’s HSE week witnessed the participation of the industry regulator Department of Petroleum Resources (DPR), Imo state Government Fire Fighters, Federal Road Safety Corps (FRSC), Shell Petroleum and Development Corporation (SPDC), Seplat Petroleum and other service providers. “Together, we must demonstrate a strong safety culture for others to emulate and stand firm on zero tolerance to any unsafe act. Only by this firm commitment, can we successfully deliver all our projects in a cost effective, safe and timely manner”, Waltersmith’s chief executive said. The event also witnessed recognition of Ethelbert Nwadike who was presented with a prize by Peter Ekhaesombi, executive director/ vice president, Waltersmith, for reporting the highest number of unsafe act.

Thursday 02 May 2019

BUSINESS DAY

ENERGYREPORT

What gas can do for Nigeria’s economy if given priority Olusola Bello

ery often the importance of gas to the nation’s economic growth is being harped upon by experts who feel Nigeria should wake up and seize the advantage of having the resource in abundance and maximize it optimally. The world is gradually turning away from crude oil to gas to drive their economies. Countries like Norway and Saudi Arabia just to mention a few are doing well because they have made gas a critical catalyst to their economic development . In recent times the Oil Producers Trade Section (OPTS) of the Lagos Chambers of Commerce and industries (LCCI ) has become an advocate of the need for the country to optimse it gas resource Gas has a leading role as a key enabler to the diversification and growth of Nigeria’s broader economy through adequate power generation, provision of feedstock for value-adding manufacturing, and increased government revenue from LNG. Therefore,the development of Nigeria’s vast gas resources and strengthening of the gas value chain should be a national priority. Nigeria is endowed with

vast natural gas resources, which can play a leading role in diversifying the economy by stimulating the development of various sectors. For example, gas can be used for electricity generation, to provide feedstock for valueadding manufacturing, and to increase FGN revenue from LNG sold in international markets. Iwill briefly examine these key uses to which Nigeria’s natural gas reserves could be deployed. According to Paul McGrath, the managing director of ExxonMobil who is also the chairman of OPTS, for Nigeria, gas provides a unique opportunity to provide steady, widely-available, cost-effective and generally affordable power to everyone. A shift to gas-fueled power generation would represent significant savings opportunities over sources such as diesel which is multiple times more expensive than gas at the current price of USD 2.5 /mmbtu. This saving can then be redeployed by power consumers (individuals and businesses) to other goods & services and to new investments. Additional opportunity exists in leveraging gas to develop industries that use gas as feedstock, to produce methanol and ammonia used in fertilizer production. Trinidad and Tobago is a good

Paul McGrath

example of a country that has accomplished much with its gas resources. With a small population of 1.4 million and only 11 TCF of proven gas reserves, the country has developed a globally competitive petrochemicals industry. Today, Trinidad and Tobago is the world’s largest exporter of ammonia and second largest exporter of methanol leading to this industry contributingsignificantly to thecountry’s GDP. Nigeria, with significantly larger gas reserves, has the potential to achieve even bigger success.

Also, the Chief Operating Officer, IBEDC, John Ayodele said that in response to the appeal from the governor and the people of Ilesha that the company would commence initial preparations required to restore service this week. Ayodele said IBEDC has committed to send an advance party comprising of its technical and administrative staff to critically assess and see what could be salvaged for gradual restoration of power. He said the administrative staff would also commence the clean up and tidying of the office facilities for resumption. Ayodele said along with this was the replacement of some staff in Ilesha and recruitment

led by government. Active government support will help enable a stable investment climate, acceptable commercial terms and contractual risks. The above elements will help in attracting the required private investments which would strengthen existing off-takers and ultimately lead to emergence of new buyers and suppliers. To date, Nigeria’s domestic gas prices are kept at a regulated low price, which does not cover the cost required to fully develop its gas resources. Of the 162 TCF reported gas reserves, about 75% will require the building of new infrastructure to deliver these gas resources to the domestic market.The current regulated gas price of USD 2.50/mmbtu falls short of the price required to attract investment for these new gas developments. The gas sector should transition into a liberalized market based on the ‘willing buyer, willing seller’ principle and ensure the existence of a competitive fiscal regime to support upstream gas development. The commercial and financial structures of the gas-to-power commercial value chainremain weak with growing arrears and uncertainty in the payment system which disincentivizes gas investors.

Aiteo announces senior leadership appointments

IBEDC To Restore Power to Ilesha

he Ibadan Electric Distribution Company (IBEDC) says it is committed to restoring power to Ilesha as soon as possible. The company said in a statement signed by Angela Olanrewaju ,head of Branding and Communications have said. The company said the decision was sequel to the intervention meeting hosted by the Executive Governor of Osun State, Gboyega Adetola, and with the Oba’s Committee constituted by Ijesaland to facilitate the restoration of power. “The Board and Management of IBEDC as a customer centric organization have committed to restoring power to Ilesha as soon as possible.

The Nigerian agricultural sector, the largest GDP contributor to our economy, would benefit immensely from greater availability of fertilizer. Considering the low nitrate concentration in our soil and gas being the key feedstock for nitrate-based fertilizer, developing the gas industry could contribute to enhancing food security. The Nigeria LNG (NLNG) maintains 70-80 thousand jobs in the economyand contributes ~USD 1.3 billion each year in revenue to the Federal Government, providing much needed revenue

for the government to deploy for the benefit of Nigeria, such as development of infrastructure and diversifying the economy. Other areas where gas can benefit the economy include alternative fuel for transportation, residential and commercial utilization etc. To realize the full benefits of gas as a catalyst for economic growth and diversification, several challenges across the entire gas value chain need to be resolved. I will focus on only four of these challenges related to the development and production of gas, these are; inadequate infrastructure along the value chain; regulated low prices;legacy debt related to gas and power supply and thechallenging business environment. It is no longer news that infrastructure along the gas and power value chain remains inadequate. Particularly, Nigeria lacks sufficient pipelines to deliver gas from the fields where it is produced to the current and potential off-takers (e.g., power plants, manufacturers, etc.). In addition, the transmission and distribution systems lack the capacity to deliver the generated electricity to businesses and other consumers. Building infrastructure requires a sustained joint effort of the stakeholders

of qualified indigenes of Ilesha to ensure better service to customers and engender confidence from the community. “In resolving one of the major issues that led to the crisis, which is metering and estimated billing. “IBEDC will within the next few weeks clear the backlog of meters as all customers that paid under the previous metering schemes that show evidence of payment will be metered. Also unmetered customers that are willing to pay can take advantage of the new metering scheme, Meter Asset Provider (MAP), introduced by NERC to bridge the metering gap , as we have contracted seven vendors under this scheme.

ollowing a review of its operational and investment objectives and in reaction to prevailing business environment, Aiteo has restructured its executive management, naming a number of critical appointments and reassignments In confirming the appointments, Benedict Peters, chief executive officer and executive vice chairman, explained that the organisation had undertaken the exercise driven by the necessity to realign its considerable interests across the various sectors within which it currently operates, to make the investment arms of the various businesses more effective; gal-

vanise and enhance collective productivity to demonstrate visibly profitable outcomes for the ultimate benefit of its considerable stakeholders. He said: “The uniqueness of the Group demands that an infusion of important impetus is given the necessary momentum by recognising as well as empowering key positions within the Group and realigning its considerable person-capacity to fit operational demands”. Replacing the outgoing managing director, Chike Onyejekwe, is Victor Okoknkwo who is currently Senior Vice President, Commercial & Gas for Aiteo E & P Limited, Okoronkwo brings over 30

years of Oil and Gas experience to this position. Prior to joining Aiteo, he worked in various leadership capacities with the Shell Group in Nigeria and abroad as General Manager. Emmanuel Ukegbu the Chief Operating Officer of Aiteo E & P Limited will also be retiring from the company. In related moves, Emmanuel Ogagarue currently general manager, Assets becomes Director in charge of Asset Development and Engineering, James Iwoh,Director in charge of Production and Operations, Mitchell Uchegbulam now Group Head, Planning, Budget and Implementation and will report to the Group Office.

and practical. “Participants asked questions and engaged in a practical session during which they performed CPR on special mannequins used in this training. Folake Soyannwo, director of Business Development, Falck Prime Atlantic, who spoke also on theobjectives of the training programme said the training was made free for participants as a Corporate Social Responsibility programme of the company. She noted that participants

at the maiden edition of the training were those who reside in homes as personal assistants and drivers and who need to know what to do in case of an emergency. “It makes sense to Falck Prime Atlantic to try and train as many people as possible in various parts of the workforce, including those who are in private companies, in the market place, hospitals, restaurants, and wherever it is that we could possibly find ourselves in an emergency situation,” she said.

Falck Prime Atlantic kicks off free training in Basic First Aid & CPR

alck Prime Atlantic (FPA), a subsidiary of Prime Atlantic Limited, has kicked off its 2019 CSR initiative with the aim to train 400 Nigerians in Basic First Aid and Cardiopulmonary Resuscitation (CPR). The tagline of the CSR campaign is Saving Lives…One Nigerian at a Time!, which captures the essence of the project. The company says CPR is a life-saving technique that is useful in many emergencies including a heart attack or

near drowning during which someone’s breathing or heart has stopped. “It is evident that most Nigerians lack the necessary skills required to respond to medical emergencies and this has resulted in many preventable deaths”, the company said. Aderonke Adebanjo ,marketing and communications manager, Falck Prime Atlantic, said the company has set out to change this narrative and ensure that over time, as many Nigerians as possible are www.businessday.ng

equipped with live-saving skills that they can use at any time to save lives. During the CSR program, she disclosed that the company will train individuals from different walks of life, including market traders,Danfo drivers, students, celebrities, NYSC members , Government officials, and more for free. “This will ensure that across the city of Lagos, a variety of individuals are able to potentially save lives when faced with medical emergencies,” she assured.

According to Adebanjo: “The hashtag for the campaign is #FPAFirstAidCPR2019 and it will be used to engage the online community and keep them up to date on all the sessions that will be held across Lagos and its environs. Detailed information will also be shared on Falck Prime Atlantic’s Instagram page, @ falckprimenig”. Narrating the experience of participants during the training, Adebanjo explained that it was engaging, informative,

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@Businessdayng

Thursday 02 May 2019

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

The Meter Asset Provider Regulation: A Game Changer? TOLULOPE ADEREMI

narguably the largest economy in subSaharan Africa, Nigeria is constrained in its growth by inadequate power generation, distribution and consumption. This is notwithstanding its endowment with large oil, gas, hydro and solar resources. With an installed capacity of 13,496Mw, the absence of cost-reflective tariffs, a huge metering gap and a host of other challenges have continued to plague the sector. According to the Sector Regulator, the Nigerian Electricity Regulatory Commission (NERC), about 4.7 million (approximately 57 per cent) of its registered electricity customers have not been metered. This has led to about $29.3 billion in annual loss(es) due to low supply of electricity resulting from load shedding or in most cases, dilapidated infrastructure. To reduce this monumental commercial loss, the NERC recently issued the Meter Asset Provider Regulations 2018 (‘The MAP Regulation’). The key regulatory objectives of the MAP Regulation are to encourage the development of independent and competitive metering services in the Nigerian Electricity Supply Industry (‘NESI’) and to attract private investment into the sub-sector. Suffice to add that the MAP Regulation effectively unbundles Nigeria’s electricity distribution sector, and re-allocates

ers may now directly approach a MAP or its designated bank for the purchase of single and threephased meters. According to the Regulation, once payment is made, the MAP must have the meters installed within a maximum period of 10 (ten) days. Payment for the meters could either be upfront or through a credit financing arrangement with individual MAPS and Banks. As this is a new regulation with potentially far reaching implications, a careful understanding of its salient parts is crucial; particularly the rights of customers under the MAP arrangement as well as the MAPs’ obligations.

Tolulope Aderemi

the responsibility for providing metering services, thereby creating a new class of market participants; – Meter Asset Providers (‘MAPs’). An ingenious innovation of the MAP structure is that the Regulation has now effectively shifted the burden of liquidity (or the absence thereof) as it relates to the provision of metering services

from the Distribution Companies to the MAPS; entities perceived to have the wherewithal to manufacture, supply and install electricity meters. The NERC has commenced issuing MAP permits to successful MAPs and has directed full implementation of the meter roll-out by May 1, 2019. Essentially, custom-

Meter Acquisition under MAP: (a) Upfront Payment: The Regulation allows customers to either make up-front payment of the sum of N36,000+ for a single-phased meter or about N67,000+ for a three-phased meter. In other words, a customer may simply apply to a MAP, pay the total cost of the meter and have the same delivered and installed in the premises within a period of 10 (ten) working days. (b) Payment by Installment: Customers may also purchase meters and make payment over a period of time. In other words, where a customer is not able to make an upfront meter cost payment, the Regulation also provides

for these customers to pay over a period of time. This is through what is known as the Meter Service Charge (MSC). The subtle challenge to this arrangement may be the security of this credit. Partner Banks have however reiterated their commitment to a more transparent and less cumbersome structure, such that a customer may not have to provide any security to access this loan. Repair/Replacement of Damaged Meters: (a) Where a meter is damaged and upon notification to the MAP, the MAP must within a period of 2 (two) working days repair or replace the damaged meter. Where a MAP fails to repair or replace a damaged meter within two (2) working days of a report by the customer or Distribution Licensee, the customer shall not be liable for the payment of metering service charge for the billing period unless such delays were as a result of inaccessibility to the customer’s premises. It must be noted however that it is the MAP’s responsibility to establish the nature of the damage; whether damage resulting from a manufacturer’s defect or damage as a result of customer use. (b) Where a customer is dissatisfied with the decision of a MAP regarding the cause of meter damage; i.e. due to manufacturer’s Continues on page 31

NSE pledges support for 13th Annual Business Law Conference Confident that existing partnership will strengthen Nigeria’s capital market

he Nigerian Stock Exchange (NSE) has pledged support for the 13th Annual Business Law Conference organised by the Nigerian Bar Association Section on Business Law (NBASBL), scheduled to hold in Lagos from June 26-28, 2019; with the theme, ‘Growth, Investment and Employment: Beyond Rhetoric’. Speaking at a meeting with the Council of the NBA-SBL, the Chief Executive Officer (CEO) of the Nigerian Stock Exchange (NSE), Oscar Onyema commended the support received so far from the association, and the section on business law, with specific reference to the NSE’s X-Academy - a specialised learning centre which offers bespoke capital market business courses to help individuals who lead businesses transform and grow their busi-

L-R, Theodora Kio-Lawson, Babasola Alokolaro, Fola Akande, Adeoye Adefulu, Oscar Onyema, Seni Adio, Justina Oscar Onyema, CEO, Nigerian Stock Exchange (L) and Seni Adio, SAN Lewa, Ozofu Ogiemudia, Enduance Uhumuavbi and Yinka Edu

nesses. He said, “The Exchange has had an interest in the affairs of the Nigerian Bar association for a long time and thus have shared an affinity towards to development of our economy. www.businessday.ng

“We appreciate the support you have given to us at the XAcademy, with the training capital market lawyers and we are glad to return the support, towards the achievement of our shared goals and objectives,” Onyema said.

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The NSE Chief further expressed hope that the relationship between both institutions would grow deeper and yield greater achievements for Nigeria’s growing economy. He thus urged the NBA-SBL Council to lend its @Businessdayng

voice to the signing of the CAM (Company and allied Matters) Bill, since the section as a group had made significant contributions to the bill itself. Responding to the CEO’s calls, Continues on page 32

Thursday 02 May 2019

BUSINESS DAY

GLOBALREPORT

Law firm partner seeks to have sexual misconduct charges dismissed …Faces Solicitors Disciplinary Tribunal

partner at UK’s magic jurisdiction. wine and Jaegerbombs later’. circle firm, Freshfields Williamson challenged evidence Williamson drew attention to anBruckhaus Deringer on submitted by a former SRA inves- other witness statement claiming Monday April 29, 2019 tigations lead, Hazel Padmore. This that ‘person A’ would ‘have been all sought to have charges included a transcript of an interview right’ after drinking that amount. relating to contact with a more ju- with a witness claiming that ‘person He told the tribunal that ‘person nior member of staff after a drinks A’ had drunk ‘six or seven glasses of A’ had already resigned from the event dismissed as an abuse of firm and had never referred to process. Beckwith’s senior position in any At a day-long case management of her complaints. Williamson told hearing the Solicitors Disciplinary the tribunal that ‘person A’ had Tribunal (SDT) heard that Ryan referred to the incident to Beckwith Beckwith, admitted in 2004, had and said: ‘you’re my married boss, been buying drinks for colleagues it’s so cliche’. before he shared a taxi with his juThe case management hearing will nior colleague, identified as ‘person continue in June. A substantive A’, to her home. hearing is scheduled for September. The full list of charges has not been published but the Solicitors Regulation Authority alleges sexual contact took place between the pair when the complainant was Magic circle law firms: 29% of new partners are women not in a position to consent. The SRA alleges lifford Chance last week that Beckwith’s conduct was unbecoming of completed this year’s magic a solicitor and that Beckwith misused his circle partnership round by position of power. announcing it was making up 30 Counsel for Beckwith, Alisdair Williamson QC, argued that the proceedings are lawyers, with a gender mix in line an abuse of process and that the charges with its long-term diversity goals. against Beckwith are outside the SRA’s One-third of the new cohorts, are

PHOTOFILE

Deputy Director/Lagos Liaison Officer, Federal Ministry of Youth and Sports Development, Alhaji Bode Durotoye presenting an award of Outstanding contributions to sports development in Nigeria to Beverly Agbakoba-Onyejianya at a Public Lecture & Special awards to mark World Intellectual

women. The firm has said it is working towards raising the percentage of female partners from the current 20% to 30%. Clifford Chance’s announcement means all of the five magic circle firms have revealed their partner intake for 2019. At Linklaters, 33 lawyers were given the nod this time around, including 11 women. In London, one of the 11 promoted lawyers was female. The firm had pledged that at least 30% of new partners will be female. Of the 34 promotions at Allen & Overy, eight were women (24%), including four in London. By 2021 the firm wants 30% of its partnership candidates to be women. However, when the Gazette asked how many candidates in this round were women the firm was unable to say.

At the moment, the London partnership is 20% female and globally the figure is 18%, but those figures do not take into account the latest round of promotions. Freshfields Bruckhaus Deringer elected 22 new partners (eight in London). Six of the 22 lawyers are women, including one from London. The remaining magic circle firm, Slaughter and May, has promoted two men. In total, just under a third of 121 new magic circle partners in this round are women. LAW SOCIETY GAZETTE

Banks as collecting agents for FIRS – a conundrum Continued from last week

BANKS AS COLLECTING AGENTS FOR FIRS – POSSIBLE SAFEGUARDS In light of the foregoing, where a bank is faced with tax substitution directives from FIRS, the bank may rely on Section 31(5) FIRS Establishment Actto protect itself. The bank ought to take into consideration that as with all tax assessments and notices, a tax payer has the right to object or appeal. Banks rather than rushing to comply with FIRS’ directives, should ensure that adequate inquiries are made, to confirm that the notice in respect of a tax payer relates to a tax liability that is final, due and outstanding. A tax payer’s liability is payable when a tax payer defaults in paying its tax liability on a tax assessment that is undisputed, either on the basis of a self-assessment, or upon the tax payer’s specific agreement to FIRS’ assessment. Where an assessment is disputed, the tax liability is payable when the assessment has become final and conclusive. This may either be uponexpiration of statutory time for objection or payment, and the tax payer fails to object to the assess-

ment, or upon determination by the Tax Appeal Tribunalor the Courts, in the absence of an appeal of decision of the Tribunal or Court. FINAL WORD Pending the interpretation of the Courts on the constitutionality of FIRS’ powers to appoint a tax payer’s banker as its agent to collect outstanding tax liabilities from the tax payer’s bank account, tax payers are best advised to take steps to comply with statutory requirements to compute and remit their outstanding tax obligations. Where however the tax payer has already had its bank accounts restricted under FIRS’ directives, it would be prudent to seek professional counsel to explore resolution mechanisms best suited to the peculiar circumstances. FIRS’appointment of banks as collecting agents in respect of the banks’ customers’ outstanding tax liability, places the banks in the precarious position of potentially impairing the confidentiality obligation owed to customers. Banks are also exposed to legal action, particularly where the tax liability is disputed. It is the writer’s view that a bankshould consider all possible options to secure its position, in addressing the mandatory obligawww.businessday.ng

tion imposed by FIRS’ appointment to act as collecting agents from its customer’s bank accounts. The banks are also at liberty to test their appointment by FIRS, as collecting agents, pursuant to the provisions of the Federal Inland Revenue Service (Establishment) Act 2007 and Section 49 of the Companies and Income Tax Act, 2007. A determination by the Courts would certainly bring welcome development to our jurisprudence. Besides, there is the danger of taking the now largely banked economy a few steps back. Individuals and business organizations may refuse to bank, for fear of having their funds subjected to seizure without recourse to them, or to avoid having their financial activities monitored, or to maintain their financial privacy. Tax evasion is a criminal offence under the law. FIRS may choose to lay more emphasis on prosecuting offenders as a deterrent to intending tax evaders.It is quite commendable that FIRS is actively widening the tax net, particularly with the proposed imposition of 5% value added tax on lottery and gambling activities.

Ifeatu Medidem Senior Associate/Practice Manager Olisa Agbakoba Legal

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LegalBusiness

The Meter Asset Provider Regulation... Continued from page 30

defect or otherwise, such customer has the right to fair resolution in line with the Metering Code and other applicable Regulations and the MAP shall provide a meter pending the resolution of the dispute. (b) Where the MAP is unable to provide a replacement meter within a billing period, an average of the last three (3) months’ billing shall be applied for the purpose of determining the customer’s energy consumption. Relocation/Maintenance of Meters: (a) Pursuant to the Regulation, a tenant/customer is unable to relocate his/her meter on account of a change of address. This is because meters are associated with feeders and distribution transformers. Where a customer relocates within a franchise area, the customer shall apply to the Distribution Company/Distribution Licensee (DISCO) for the transfer of services; including applicable credits for energy. However, the Regulation is silent on what happens if the customer relocates outside the franchise area. It is therefore advisable that only property owners should apply for the installation of meters. (b) According to the MAP Regulation, it shall be the MAP’s responsibility to periodically inspect and maintain all installed meters in the franchise area to ensure their integrity and reading accuracy. Where required, the MAP shall arrange for the testing and calibration of customer meters in line with the provisions of the Metering Code. The Customer’s Payment Obligations: A customer who intends to acquire meters pursuant to the credit financing scheme, shall be obliged to pay a Metering Service Charge (MSC). A Metering Service Charge is the periodic payment made by a customer to cover the cost of metering services (which includes the cost of the meter asset). The payment for the MSC by the customer shall cease upon full amortization of the meter asset over its technical life. Where a customer fails to pay for the MSC in any given month, the cumulative MSC shall be deducted upon the subsequent payment. Payment Security for the MAP The Regulations place a mandatory obligation on DisCos to provide payment security within 30 days of executing a Meter Service Agreement (MSA) with a MAP. This includes: An irrevocable direct pay letter of credit. The payment assurance is essential in that it addresses the liquidity difficulty in the NESI. Quite naturally, DisCos will have to be creative in @Businessdayng

complying with this requirement in view of existing financing and security arrangements. The Regulation also places an obligation on DisCos to ring fence payments for metering services by customers to a dedicated account. Already, this option appears to be a more attractive option for the DisCos. Although it appears attractive to the DisCos, this option places no significant security on the exposure of the MAP. The Regulation introduces what is described as a ‘securitization framework developed in collaboration with DFIs, the Central Bank of Nigeria (CBN), Infrastructure Banks’ etc. It is not clear whether the Regulation intends to sell the MAP’s receivable to long-term financiers on the back of raising long-term funding. In addition to the above, the Regulation places a responsibility on the DisCos to create a variance account for the purpose of levelising payments to MAPs arising from bulk or irregular purchase of energy credits by customers. Conflict Resolution It is important to note that in the event of a conflict between the MAP Regulation and any other laws in force, such conflict(s) is to be resolved in favour of the MAP Regulation. This provisioning provides some good comfort for investors and MAPs in the context of an increasingly overregulated industry. Conclusion The commencement of the meter roll-out by May 1, 2019 is a welcome development in that, if effectively implemented, it will significantly close the metering gap, reduce the financial losses suffered by DisCos and attract more investments to the NESI. This will result in a win-win situation as customers will have improved access to electricity whilst the DisCos will be in a much better financial situation than they currently are. Overall, the increased foreign investment participation in the sector is expected to be the gamechanger for the industry. As at the time of this publication, this writer’s law firm has been inundated with inquiries from foreign and local investors alike, as to the modus operandi of participation in the MAP structure. Finally, whilst the Regulation covers a significant portion of the market, it will benefit from additional review to capture certain realities which may have emerged in the course of negotiations by the MAPs.

Tolu Aderemi Partner, Perchstone & Graeys

Thursday 02 May 2019

BUSINESS DAY

YOUNG BUSINESS LAWYER

LegalBusiness

Resilience M

eaning: the capacity to recover quickly from difficulties; toughness. the ability of a substance or object to spring back into shape; elasticity. Resilience is a commonly used word which is often misinterpreted. In many cases, it is used as a synonym of perseverance. It is slightly different. In today’s world of work, resilience (as defined and emphasised above) is probably the most important trait to acquire. The ability to adjust to change and adapt in a world whose technology spans an average of two years per time (or even less) is not just recommended but necessary. Everything is changing, including the way law is done and it is our responsibility as the baton carriers of the industry to ensure that we are prepared for the vagaries that development will bring. Personally, I have learnt that resilience is that secret magic wand that tips the scale in favour of those who appear to advance quite quickly in their careers. Thinking outside the box, bouncing back from failure like it never happened and innovating processes are not things that are restricted to senior lawyers and for many young lawyers such conversations are staved off for a tomorrow that is already here. Staying “awake” As you do the daily drill, you

conscious of our positional advancement, but we are not assessing the value accrued over time. Being in a firm for 10 years is not equivalent to 10 years’ experience as such, we must be conscious that we are indeed learning and that our opportunity is improved with additional time and expense of effort. More importantly, if it is not working, it is important to be honest about it and resolve quickly before one gets stuck. YOLO (as used colloquially, “You Only Live Once) is not just a phrase, it is a call to action. The 8-22 hours spent at the desk or on the field in the name of work must count personally and even for the organisation. If it does not, especially on the personal side, it is career paralysis.

must be conscious that things will not always remain the same and staying aware is critical. Are you conscious of the trends? Can you spot changes or looming innovations using this information as a platform for you or your organisation? Are you ready if your office changes its structure? What is your exit or revitalisation plan when change happens to you? Resilience is largely dependent on foresight and this is a skill that can

be developed. However, the ability to spot trends or be prepared when changes occur does not just happen, there is a foundation required for this and it comes with significant mental exertion. I would say that as young lawyers, we are often unaware of the substance of our career growth and this contributes to the issues we face when tough circumstances arise and why career paralysis easily seeps in. Often, we are

Taking stock Career paralysis creeps on and that is why periodic stock taking is the lawyer’s best friend. Journaling your journey helps and taking time out to ask critical questions and adjust with nimbleness creates even better understanding of the growth process and quicker recovery from hurdles and falls. The prospect of opportunity or a new job should not be the primary trigger for career stock taking. For good evaluation, it is useful to get insights from other individuals and do a “SWOT” analysis on yourself. Where hiccups arise, you would understand how to manage

crises or even leverage and utilise your opportunities better. Fortifying networks The daily grind can insulate you so much you forget to stay in touch with colleagues and nothing beats a strong and reliable network in hard times and the value you can derive from your networks is largely correlative with the value that you have provided. Habits like having a schedule for calling your contemporaries in another organisation may make all the difference in dealing with the various challenges work throws up. How far can you go using your current work strategy? More importantly, if things tumble out, are you able to stick it through and bounce back effectively.

OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Vice-Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ Committee Liaison Officer of the African Regional Forum of the International Bar Association. Feedback – Oyeyemi.aderibigbe@ templars-law.com; yemiimmanuel@yahoo.com.

NSE pledges support for 13th Annual Business... Continues from page 30

the Chairman of the NBA-SBL, Seni Adio, SAN, assured the management of the NSE of the Section’s continued support in the realisation of all its objectives. “As you rightly said, we have had a long and profitable relationship with the stock exchange and assure you that we would continue to work with you to ensure that quality legal service is being provided for the market. “We are an integral part of the business market in Nigeria. One of the key things that we do is to build capacity within business environment. We have not only come to show our support for the work you do, but to explore more collaborative ways to develop the capital market and enhance commercial law practice in Nigeria.” The NBA-SBL Chairman further sort the support of the NSE for the upcoming annual business law conference, which according to him would require the collaboration of institutions like the NSE to drive the message of growth. Affirming this, NBA-SBL Secretary and Chair of the 2019 Conference Planning Committee, Dr Adeoye Adefulu, explained that a significant part of the visit to the NSE was also to create awareness for the 13th annual business law Conference amongst the NSE legal team and others. He said, “The conference will

open on the 26th through to the 28th of June at the Eko Hotel in Lagos and we would like the team at the Exchange to be a significant part of the engagement at the conference.” After the meeting, the NBASBL delegation was invited to the trading floor by the CEO of the NSE for the closing gong ceremony. T The Chairman of the NBASBL, Seni Adio, SAN, accomp a n i e d by t h e S e c re t a r y o f www.businessday.ng

Council/Conference Planning Committee Chair, Adeoye Adefulu; Chairman, Conference Programme Sub-committee, Ozofu Ogiemudia ; Fundraising Committee Chair, Babasola Alokolaro; Council Member/ Company Secretary, Sterling Bank, Justina Lewa ; Council Member/Company Secretary, Cadbury, Fola Akande; Chair, Media & Communications, Theodora Kio-Lawson; and the Section’s Administrative Officer,

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Endurance Uhumuavbi, rang the closing bell for the day - signifying the end of trading. The Nigerian Bar Association Section on Business Law (NBA-SBL) has 20 committees bordering on various sectors of the economy, one of which is the capital market committee, hence the continued collaboration with institutions like the NSE, SEC and others to enhance and build capacity of commercial lawyers. The section currently has a @Businessdayng

programme at the Nigerian law School called the Knowledge Impact Series (KIS) where members of the Capital Market Committee go to the law school to teach Young Nigerian lawyers about capital market practice. It is part of the mandate and objectives, the NB-SBL to build capacity for young and mid-level lawyers across the country. It engenders the development of commercial law and specialised commercial law practice in Nigeria.

Thursday 03 May 2019

BUSINESS DAY

BUSINESS TRAVEL Caverton Helicopters Ltd partners Ramco Aviation on digital transformation Stories By IFEOMA OKEKE

lobal aviation software prov i d e r Ra m c o Systems has announced that it has secured an order to digitise the maintenance and engineering (M&E) operations of Caverton Helicopters Limited, a leading aviation and marine logistics player in Nigeria. Part of the Caverton Offshore Support Group Plc, Caverton Helicopters handles Emergency Medical Evacuation and Search & Rescue operations as well as provides logistics services to support Nigeria’s offshore oil and gas sector. Ramco will deploy its advanced modules for flight operations, safety compliance and reporting, inventory management, and MRO (Maintenance, Repair & Overhaul) Sales for Caverton which operates a fleet of 30 helicopters out of Murtala Muhammad International Airport in Lagos, Port Harcourt Airforce Base, Warri and Douala, Cameroon. Ramco will implement its Aviation M&E MRO Solution V5.8. with advanced applications, Caverton’s operations team will now be able to view multiple indicators and pro-

cesses on a single dashboard. Apart from reducing manpower and human error, the suite will also improve maintenance schedules, fleet forecasting, planning and management of logistics, thereby improving overall safety and efficiency. Rotimi Makanjuola, chief operating officer, Caverton Offshore Support Group said, “We have been looking for a solution provider to pave the way for the company’s digital transformation. With its strong track record, Ramco Aviation Software will be able to cater to our end-to-end operational needs. We look forward to

advancing our digital strategy with Ramco.” Josiah Choms, managing director, Caverton Helicopters Limited, said, “Time is of immense importance during an emergency medical evacuation. By having Ramco’s integrated system, Caverton will now be able to coordinate flight and maintenance schedules efficiently, assist automation and optimize productivity thereby ensuring we respond to emergencies in the region with greater speed.” Virender Aggarwal, CEO, Ramco Systems, said, “We at Ramco continuously strive to offer next-gen, innovative

solutions that can help resolve major challenges in the aviation industry. Our partnership with Caverton underscores our track record in the helicopter segment where we count 7 of the Top 10 Heli Operators in the U.S. (by fleet size) as clients. We are confident that with Ramco’s one stop solution, Caverton will now harness the software’s innovative features to cut out inefficiencies, and optimize aircraft and customer management.” Ramco Aviation Software is trusted by 22,000+ users to manage 4,000+ aircraft globally. Accessible on cloud and mobile, Ramco Aviation Software continues to innovate with ‘Anywhere Apps’, significantly reducing transaction time both during aircraft-onground (AOG) conditions and critical aircraft turnarounds. Ramco is changing the paradigm of enterprise software with Artificial Intelligence and Machine Learning based solutions, powered by cool new features such as voicebased transactions on Google Assistant or Alexa, chatbots, mail bots, HUBs and cognitive solutions. With 75+ Aviation leaders onboard, Ramco is the solution of choice for several large airlines and top heli-operators and multiple MROs around the world.

Emirates unveils its Pavilion for Expo 2020 Dubai focusing on future of commercial aviation …Rich visitor experience planned around future of air travel

mirates, premier partner and the official airline of Expo 2020 Dubai has unveiled the design and visitor experience concepts of its ultramodern pavilion for the six months mega-event. The Emirates Pavilion’s design and visitor experience will utilize interactive technologies and design-thinking focusing on the future of commercial aviation. Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline & Group said: “We are incredibly proud to unveil the first details of the Emirates Pavilion today, which celebrates the themes of Expo 2020 Dubai. The aim for our pavilion is very much in line with that of Expo 2020 Dubai, to stimulate connections, create experiences and foster creativity and innovation, inspiring a commitment for a better future. “The forward-thinking ex-

periences will highlight the best that is yet to come in aviation, and will be a platform to showcase how important mobility is for the world today and in the future. “Emirates and the wider transportation ecosystem here in the UAE will play a key role in providing connectivity for a successful Expo 2020, and the economic impact of the transport, hospitality and tourism sector will contribute AED 16.4 billion to the UAE economy,

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underscoring the vital role these industries play in generating economic value by bringing people together and breaking down barriers.” Reem Al Hashimy, UAE Minister of State for International Cooperation and Director General of Bureau Expo Dubai 2020 said: “We are excited to be bringing the whole world together to experience this incredible mega event. For almost 170 years, World Expos have united people in a spirit of

inspiration and excitement for the future, and have amazed them with innovation, culture, art, food and fun. “Air travel has transformed the ability of people to experience everything that the world has to offer. Expo 2020, and Emirates as our Official Airline Partner, will be bringing all of that together in one place, Dubai, in 2020. And the Emirates Pavilion will tell the incredible story of the role that air travel will continue to play in transforming mobility and shaping our futures.” Taking place from 20 October 2020 to 10 April 2021, Expo 2020 Dubai is a must-attend event for visitors with an array of unique experiences at 190 country pavilions, and a packed entertainment programme with daily live events, parades, music and cultural festivals, inspiring talks and workshops and more.

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SAA extends support for emerging businesses at NewBrandsXPO 2019

outh African Airways has confirmed it is extending its partnership with the organisers of NewBrandsXPO – the premier Launchpad for new and emerging product and services in Nigeria – and offering “Exhibition Support’ to three emerging travel-related brands to showcase their business at this year’s event holding at the MUSON Centre, Onikan, Lagos on 19th and 20th July. Promoted by Heventin, a corporate event and brands activation company, and Uburu, an integrated marketing communications consultancy, NewBrandsXPO is a one-stop shop for established brands as well as emerging businesses seeking to launch new products & services into the market, and get instant consumer feedback. Exhibitors cut across different sectors including travel, financial services, IT & Telecom, consumer electronics & kitchenware, FMCG, health & wellness, personal care, apparel & fashion accessories, food & drinks, and several others. This year’s event will also include free workshops on subjects ranging from branding to financing options, the organisers announced in a recent statement. Recall that at the maiden edition of NewBrandsXPO held last June, South African Airways had offered support to five local com-

panies namely GreaterView Travels, Apeiron Global, Saffron Travels, Crew Training Institute (CTI) and Vecta Travels, as part of activities to mark twenty years of successful operations in Nigeria, and in fulfillment of the airline’s corporate social responsibility. Commenting on the partnership extension, Ohis Ehimiaghe, Regional Manager, West, North and Central Africa, South African Airways, said: “Given how the SAA NewBrandsXPO Exhibition Support has greatly impacted the businesses of last year’s beneficiaries, it was an easy decision for us to carry on our partnership for the 2019 event, so that more emerging travel businesses can benefit from the opportunities that the platform provides.” On how beneficiaries world be selected, Lanre Samson, Activation Director of Heventin and co-promoter of NewBrandsXPO said: “To be considered for one of the three free exhibition slots at the South African Airways pavilion, duly registered travel product or service companies that have been in operation for not more than three years, and have online presence, can apply through the website before 31st April 2019 introducing their business.” Envisioned as an annual experiential marketing event, NewBrandsXPO offers exciting benefits not only to exhibitors but visitors as well.

SAHCO wins best Ground Handling Company award

kyway Aviation Handling Company PLC (SAHCO) has been awarded the best Aviation Ground Handling Company by the Nigeria Transport Awards. Nigeria Transport Award (NTA) is an initiative of TransportDay Newspaper. The 2018 award was presented to SAHCO PLC during a dinner to mark the 7th edition of the award series, at the Radisson Blu Hotel, GRA, Ikeja, Lagos. According to the organiser, SAHCO PLC won the award out of many shortlisted rival companies because of its unmatched track records in providing quality, safe and speedy Ground Handling services in the Aviation industry over the years. SAHCO was incorporated as an Aviation Ground Handling services provider under the Nigerian Company & Allied Matters Act of 1990. @Businessdayng

The company, which was formerly known as Skypower Aviation Handling Company Limited before it was privatized and handed over to the SIFAX Group on December 23, 2009 handles many prestigious airlines both foreign and local, recently signed five years contract with Virgin Atlantic Cargo to handle the company’s cargo operations in Nigeria to improve the airline’s service offering for customers and to provide growth capacity following an improvement in the demand from the pharmaceuticals and courier sectors. Also, SAHCO which became officially listed on the Nigerian Stock Exchange on the 21st of April 2019, is the first company under the Bureau of Public Enterprises (BPE) privatization programme to successfully finalize an Initial Public Offering, listed 1.35 billion shares worth N6.29 billion on the Exchange at N4.65 per shares.

Thursday 02 May 2019

BUSINESS DAY

TECHTALK Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

Bank IT Security

How DoctorCare247 wants to transform access to healthcare delivery in Nigeria FRANK ELEANYA

ith half of the world’s 7 billion population projected to be online in the nearest future, health practitioners have joined the league of industries scaling up digital innovations in a bid to address the evolving needs of the end-users in terms of access to health services. DoctorCare247, a platform that provides immediate virtual health services to patients anywhere and anytime believes that the future of healthcare will focus more on patients craving for greater convenience and speed. The company which kicked off business operations on Wednesday, 24 April is tapping into the opportunities that telehealth presents globally. Telehealth

refers to the use of digital information and communication technologies, such as computers and mobile devices, to access health care services remotely and manage health care. “In Nigeria, telehealth as a means of delivering healthcare is an entirely new process,” says Chuks Melville Chibundu, CEO. But elsewhere in the world, like in the United States it is already becoming a phenomenon. A recent survey by Mhealth intelligence showed that 77 per cent of US respondents preferred health care practitioners who provide telehealth services. Currently, 50 million US consumers would switch providers to one that offers telehealth and the willingness to switch is highest among parents of children under 18 and 35 to 44-yearolds. With the poor state of access to quality healthcare in

Nigeria, particularly for people living in the rural areas,

one opportunity telehealth could offer is bring quali-

fied medical practitioners closer to patients without access. In that it becomes possible for any patient to access quality healthcare at any time they need from the best professionals. Medical professionals on Doctorcare247 are subjected through a thorough vetting process during which they are tested to determine whether they have what it takes to give the best care. On Doctorcare247, patients are provided with round-the-clock e-health consultations through doctors and specialists certified by the Nigerian Medical and Dental Council, the regulatory body for the professions of medicine and dentistry in Nigeria. Patients can easily consult their doctor via audio, video calls and text, instead of going to the hospital. Patients can schedule consultation sessions at their convenience through

their computer, laptop or mobile devices. One of the advantages is the guarantee of privacy. Most patients may not be comfortable to go to the hospital to address a particular symptom they have noticed, but with a telehealth platform like Doctorcare247, they are able to do that now. The platform also eliminates the time they waste on a queue in the hospital. On Doctorcare247 there are several doctors on queue to respond to patients complaints. They can also get their prescription from the doctor and route it immediately to their pharmacists to make available. The platform already has a partnership with reputable pharmaceutical companies like HealthPlus and laboratories like Echo Labs all of whom are on the platform. Hence, it is easier to quickly get a doctor to give a prescription and the pharmacist to deliver.

OPPO F11 Pro sets new camera quality standards for smartphone users

Innovators invited to pitch solutions for Nigeria’s malaria drugs supply chain

…as OPPO speeds up deployment of 5G technology to end-users

CALEB OJEWALE

FRANK ELEANYA

he race for the sleekest, brightest and most professional camera on a mobile phone is narrowing and the latest OPPO F11 Pro has everything it needs to win. The smartphone which was launched in Nigeria last week, is in a league of its in terms of camera details and output. For selfie and portrait photo lovers, it is the ideal phone to have. OPPO is also gunning for the 5G technology market share. 5G technology is seen as the main catalyst for connectivity revolution across the world powering the full roll out of internet of

things as well as transforming consumers’ smartphone experience. OPPO took the lead in testing 5G internet signalling and data links based on commercially available mobile phones in August 2018. The company also conducted the world’s first mobile live broadcast on a 5G network with an OPPO smartphone in February, 2019. It is already working with telecommunication carriers across the world to deliver a seamless 5G experience to users, while speeding up the commercial process of 5G mobile phones. OPPO F11 Pro flaunts a 6.5 (16.51 cm) panoramic display with a screen resolution of 1080 x 2340 pixels and runs on Android v9.0 (Pie) operat-

ing system. This ensures that users enjoy the experience on their device without any bezels, notch or water drop obstructions. The entire device is powered by Octa core (2.1 GHz. Quad core, CortexA73 + 2 GHz, Quad care, CortexA53) process paired with 6GB of RAM. The phone has a unified 48 MP camera unit design, a centralised rising front camera and special attention to 3D back cover ergonomics. There is an ultra-node feature that helps in getting clearer images or rather brilliant portraits during the night. Users also will not need to worry much about their battery running down quickly. There is a 4000 mAh capacity that guarantees at least 72 hours of power before the next charge. Additionally, the phone has the upgraded version of VOOC 3.0 Flash charge that ensures battery charges is done within a few minutes. The price of the OPPO F11 Pro in Nigeria is N139,000. The OPPO Marvel Avengers Limited edition is N149,000. Pre-order for the limited edition starts on May 1, 2019.

inova, a global market network of innovators, technology providers and investors from over 100 countries, has announced a project to identify breakthrough approaches to improve the timeliness, quality and visibility of data for the malaria supply chain in Northern Nigeria. With support from the Bill & Melinda Gates Foundation, Xinova is seeking innovators to reduce the 54 million cases and 82,000 deaths annually from malaria in Nigeria. The firm says it is seeking innovators to participate in a collaboration to identify new approaches to improve the ability to track malarial supplies. The top ideas will be pitched directly to the foundation for follow-on funding. The ultimate goal is to deploy and test one or more concepts in the field and measurably improve the supply chain. Partnering with Xinova will allow the foundation to discover new solutions to this problem, noting in a statement, that many technologies already exist, but are not suitable due to specific cultural,

political and socio-economic factors in Nigeria. After understanding and defining the problem itself, a team of innovators who are adept at crafting breakthrough solutions to address both technical and economic requirements will be assembled. These outside experts will bring broad technical capability and are free to challenge existing assumptions. Innovators will work alongside domain experts to quickly iterate ideas and develop them into robust solutions to address this problem. “This partnership signifies a serious intent to engage worldwide resources toward solving the Nigerian malaria crisis and underscores the importance of interdisciplinary collaboration to address some of today’s biggest problems,” said Edward Jung, founder and CEO of Xinova. According to Jung, people want innovation that is more meaningful and purposeful: Innovators seek better ways to use their expertise; technology seeks meaningful application; corporations desire more efficient deployment; markets want improved ways to reward solutions that address problems of great value and impact. “At Xinova, we align

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

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these intentions to amplify the impact of innovation for everyone, so we can build a better world,” he said. Jung is described in a statement by the company, as one of the top 15 inventors in history, holding more than 1,000 patents worldwide across healthcare, computing, networking, energy, and material sciences and a co-founder of Global Good, a provider of innovative R&D to organizations such as the Gates Foundation. Furthermore, with more than a dozen startups under his belt, many focused on addressing some of the most prominent issues facing humanity, the partnership with the Foundation is a natural extension of his life’s pursuit. In n ovat o r s a n d o t h ers driven to help solve this pressing problem are encouraged to apply through https://www.xinova.com/ fight-malaria/#participate and application closes on May 13. All participants are to be paid for their time and travel. The top two concepts will each be awarded $10,000 for further project development and will be given the opportunity to pitch the Gates Foundation for a grant to test and deploy the solution.

Thursday 02 May 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday 30 April 2019

Top Gainers/Losers as at Tuesday 30 April 2019 LOSERS

GAINERS Company

Opening

Closing

Change

SEPLAT

N568

N575

N32.1

N35.3

3.2

JBERGER

N24.7

N26.95

2.25

MOBIL

N175

N177

DANGFLOUR

N17.1

N18.8

1.7

Company

ASI (Points)

Opening

Closing

Change

N1550

N1520

-30

DANGCEM

N186

N180

-6

STANBIC

N45.1

N43.4

-1.7

N15.35

N14

-1.35

VALUE (N billion)

N19

N18.1

-0.9

MARKET CAP (N Trn)

NESTLE

CCNN NASCON

DEALS (Numbers) VOLUME (Numbers)

29,159.74 4,682.00 543,924,121.00 8.199 10.958

Provide sufficient proof, regularise your accounts - SEC asks investors Stories by Iheanyi Nwachukwu

n a bid to reduce the growing quantum of unclaimed dividends in the market, investors have again been urged to provide sufficient proof of ownership to regularise their accounts into one. This advise was given by the Acting Director General of the Securities and Exchange Commission (SEC) Mary Uduk at a One day National Seminar on reducing incidence of unclaimed Dividends held in Ibadan. Represented by Stephen Falomo, the Director, Lagos Zonal Office of SEC, Uduk said there were enormous benefits for multiple accounts regularisation and e-dividends registration for investors. Uduk disclosed that the Capital Market Community has opened a forbearance window to allow investors with multiple subscriptions/ applications to public offers to regularize these subscriptions under a single account name. “Investors who provide sufficient proof of ownership will be permitted to regularize their accounts into one. The forbearance window

Mary Uduk, acting director general, SEC

closes on December 31, 2019. She lamented that Continuous retention of dividends by Companies has a great potential of distorting the true financial position of Companies and misleading investors and other members of the public. “The huge amount of unclaimed dividends could discourage foreign investment as well as discourage members of the public from staking their funds in the market. “Non-receipt of dividends discourages investors in stock market and encourages them to search for alternative investment

outlets such as the real sector and money market. Consequently, Public Companies are denied the opportunity of cheaper source of finance. Uduk further disclosed that e-Dividend (otherwise known as Electronic Dividend) is a secure on-line means of paying dividends directly to the Shareholder’s account instead of printing and mailing dividend warrants, as was the case before now. “It entails a shareholder who has a bank account (Savings or Current Account) with any bank, to give his/ her accurate account details, including Biometric Verifica-

tion Number (BVN), to the Registrar of the Company and his/her dividend would be paid directly into that account. “Each investor is required to enroll for the e-dividend regime by completing an e-Dividend ‘Mandate Form’ and submitting same at the nearest branch of his/her Bank or Registrar’s office, for identity validation leveraging the BVN platform of the NIBSS. Successfully BVN validated mandates are approved and passed to Registrars for dividend payment.” She added In his remarks, Eric Akinduro, the Chairman of Ibadan Zone of Shareholders’ Association, urged the SEC to intensify efforts at enticing investors to embrace the e-dividends registration. “SEC must intensify activities to entice investors to embrace the e-dividends registration for the volume of unclaimed dividends to reduce within the shortest time frame. “I want to appeal to the SEC that Multiple account regulariation which was extended to December 2019 should be an on-going process; for many accounts are under processing, particularly deceased shareholders.

Notore posts N4.6bn half year operating profit

otore Chemical Industries Plc has reported an operating profit of N4.63 billion for the half year (H1) ended March 31, 2019, up 4,251 percent from N0.11 billion posted in the corresponding period of 2018. The unaudited six months performance showed that Notore recorded revenues of N12.68billion in 2019, compared to N15.17 billion in the corresponding period in H1 2018, indicating a decline of 16.03 percent. The decline was mainly due to plant downtime during the period under review as a re result of

the Turn-around maintenance (TAM) programme activities. However, the TAM programme is expected to be completed by first quarter(Q1) of 2020, after which the plant will operate at its nameplate capacity. Cost of sales was reduced from N11.404 billion in 2018 to N9.636 billion in 2019, while cost of sales margin variation over the two periods, H1 2019 and H1 2018 financial year was minimal at 0.80 per cent increase, because natural gas, which constitutes 90 per cent of the input cost, excluding plant depreciation, has www.businessday.ng

a fixed unit price under a 20 year gas contract. Despite the growth of 4,251 per cent in operating profit, Notore ended the H1 2019 with a loss of N1.942 billion due to net finance its net finance cost of N6.57 billion, compared with N5.144 billion in 2018. But market analysts said the N1.942 billion loss is an improvement on the loss of N4.517 billion recorded in the corresponding period of 2018. Reviewing the operational and market developments in the H1, Notore said Nigerian fertilizer demand is quite robust and is expected to continue to grow because of the fed-

eral government’s agenda to use agriculture as one of the keys to unlock the diversification of the Nigerian economy. “The domestic fertilizer market is yet to reach its full potential as the consumption of fertilizer per hectare of arable land in Nigeria is below 10kg compared to the 200kg recommended by Food & Agriculture Organisation. Furthermore, the demand for urea and compound fertilizers, such as NPK, from the West African markets and Sahel African states is also quite significant.Notore sold all the urea that it produced during the period under review,” the company said.

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Global market indicators FTSE 100 Index 7,418.22GBP -22.44-0.30% S&P 500 Index 2,937.51USD -5.52-0.19% Generic 1st ‘DM’ Future 26,511.00USD -37.00-0.14%

Deutsche Boerse AG German Stock Index DAX 12,344.08EUR +16.06+0.13% Nikkei 225 22,258.73JPY -48.85-0.22% Shanghai Stock Exchange Composite Index 3,078.34CNY +15.84+0.52%

United Capital earnings update

Nigerian Breweries: Cost pressures erode marginal revenue gain

arlier, Nigerian Breweries (NB) published its firstquarter (Q1) 2019 earnings, showing Gross Revenue grew marginally. However, pressures from the graduated excise duty which most subsector players are yet to pass on to final consumers erased the marginal growth in gross revenue. Thus, Net Revenue came in flat at N83.3billion. Meanwhile, profit before tax (PBT) and Profit After Tax (PAT) fell sharply by 24.9percent and 21.3percent year-on-year (y/y) to N11.5billion and N8billion respectively. This was on the back of faster appreciation in overall expenditure incurred during the period. Difficult operating environment left Management sweating: Despite intense competitions, NB was able to wrestle away some market share from its competitors in Q119 as it grew Gross Revenue by 3.3percent y/y to N91.4billion.According to the parent company – Heineken N.V. – NB grew beer volume by mid-single digit in Q1-19, adding also that the prior year performance was affected by some destocking. However, NB’s efforts to grow volumes were undermined by the spike in Excise Duty Expense (up 48percent y/y to N8.1billion) which dragged Net Revenue (up 0.4percent to N83.3billion). Additionally, a faster rise in Cost of Sales (up 7.3percent y/y to N48.2billion) as raw material and consumables cost increased (+8.7percent y/y), further pressured Gross Profit (down 7.8percent y/y). Consequently, Gross margin moderated to 42.1percent from 45.8percent. Operating Expenses (OPEX) rose 2.8percent

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y/y to N21.2billion, driven by Marketing & Distribution Expenses which expanded 7.9percent y/y to N16.6billion while Administrative Expenses declined 13.9percent y/y to N4.6billion. The rise in the Marketing & Distribution costs can be attributed to NB’s drive to recover lost market share while the decline in Administrative Expenses were on the back of the rightsizing activity carried out in 2018 that led to 10.4percent decline in total headcounts on the company’s book. Thus, Operating profit fell sharply by 20.4percent y/y to N14.1billion. Net Finance Cost in-

creased by 7.6percent y/y to N2.6billion as Interest Expense rose sharply by 79.4percent y/y to N1.6billion. Overall, PBT and PAT fell by 24.9percent y/y and 21.3percent y/y to N11.5billion and N8billion respectively and net margin deteriorated by 2.7percentage points (ppts) to 9.6prcent. NB rated a HOLD at current price: In As expressed in our FY-18 earnings analysis, our outlook for the Brewer remain modestly positive. 1.) The 2018 rightsizing activity, as seen in Q1-19 performance, remain positive for bottom-line numbers over 2019 2.) Implementation of the new national minimum wage is positive for discretionary consumption spending 3.) Continued drive towards local sourcing of raw materials, especially sorghum, is positive for Cost of Sales.

Thursday 02 May 2019

BUSINESS DAY

FEATURE Is the African continental free trade agreement a game changer for the continent? ABEBE AEMRO SELASSIE

he African Continental Free Trade Agreement has the potential to establish a market of 1.2 billion people with a combined economic production of US$2.5 trillion. This is an exciting prospect for a region that has been striving for greater integration for a long time. Trade integration can help propel development and has prompted success stories in other regions. The momentum for the agreement to become a reality has been strong. About a year since its launch in Kigali in March 2018, 52 out of 55 countries on the continent have signed the agreement and 22 have already ratified it which means that the threshold for the agreement to take effect has been met. What does this mean for the countries that are part of the agreement? The promise of closer trade integration is that it is a driver of economic transformation, delivering higher growth and more jobs. A large free trade area in Africa would provide a single market for goods and services, help spread knowledge and technology and facilitate the development

of regional supply chains. It would also better position African countries to be part of global supply chains and offer large opportunities for companies from other regions to invest in domestic markets. Intraregional trade in Africa has expanded rapidly, particularly between countries in sub-regional economic communities which essentially have near-zero preferential tariffs. For example, three quarters of African intraregional trade took place within these sub-regional communities. In the process, regional trade hubs emerged such as Cote dâ&#x20AC;&#x2122;Ivoire, Kenya, Senegal and

South Africa. Unlike exports to the rest of the world, intraregional trade is more diversified and contains higher value-added goods, including a sizable share of manufactured products. The data is quite striking. 75 percent of Africaâ&#x20AC;&#x2122;s total exports to the rest of the world are minerals such as crude oil, while 40 percent of intra-regional trade is accounted for by manufactured goods. Removing barriers to trade will impact countries and people within countries differently. Opportunities to expand regional trade are sizable across all sectors of the economy including agriculture-related commodities, manufacturing, and services. It is important to acknowledge that these potential benefits also come with costs. Inequality may increase, particularly in countries with more diversified economies and large shares of skilled labor. However, these effects can be offset through active labor market programs such as training and job-search assistance, and measures that bolster safety nets (income support and social insurance programs). As with all policies, the overall impact needs to be assessed on a country by country basis and complementary poli-

cies will be needed to maximize the benefits. This requires giving adequate time to consult with the key players affected and devising suitable supportive policies as needed. An important set of supportive policies for countries to benefit more fully from the trade agreement includes investing in infrastructure to better connect internal markets and improving trade logistics. In addition, lowering trade tariffs will also lower fiscal revenues. The impact appears to be limited in most countries, but a few countries that still apply high import tariffs will have to look for alternative revenue sources. Overall, while some details such as rules of origin or local content still need to be worked out, the African Continental Free Trade Agreement could be an important catalyst for growth and structural transformation across the continent. At a time when the youth population is growing rapidly and the pressure to create jobs is high, boosting intra-regional trade is a valuable opportunity that should not be missed. Abebe Aemro Selassie, Director, African Department, International Monetary Fund (IMF)

Thursday 02 May 2019

BUSINESS DAY

news Imperatives of green bonds to funding climate change activities Josephine Okojie

ssues of climate change as again come to the fore as experts advocate that Nigeria needs green bond issuance to fund climate change activities. The recent Cyclone Idai and Kenneth that hit Malawi, Zimbabwe and Mozambique are direct consequences from devastation of the environment and as such issue of climate change should be overemphasise at this point in time, the experts say.

This was the sum up at the maiden edition of the Access Bank Sustainability Summit (TABSS) held in Lagos, recently. “Climate change has the potential to create physical, social and economic destruction on an unprecedented extent. Therefore, it is important that we are able to mobilise low carbon finance,” A’isha Usman Mahmood, special adviser to the CBN governor on Sustainable Banking, said. “Green bond issuance is one of the pathways we need to follow to ensure that we have the ability

to generate a model for financing our climate change activities,” Mahmood said. She stated that the country had initially issued a $10.69 billion bonds and would be issuing another $15 billion bond at the later part of the year by Access Bank. The CBN will continue to work with Access Bank and other financial institutions to move sustainability agenda and ensure that the country reduce its greenhouse gas emission, she said. In his keynote address, Herbert Wigwe, group managing director/

CEO of Access Bank, said the summit was timely as industry leaders were now recognising the impact of sustainability as a key driver to accelerating development Wigwe, who was represented by Amaechi Michael Okobi, head of communications of the bank, said the overarching aim of the summit was to provide a platform for consultation on the UNEP-FI Global Responsible Banking Principles in an African context, as well as to discuss the role and responsibility of financial institutions and their impact on the achievement of the

SDGs. “Growing debt issuance across Africa opens the door to introducing ‘use of proceeds’ features, such as green bonds and associated certification and oversight processes, as a means of attracting new sources of finance,” he said. Kenneth Amaeshi, the chair in business and sustainable development and director of the sustainable business initiative, University of Edinburg, advised the country to domesticate its sustainability focused on environmental and social needs in such a way to project the

Lagos rolls out new buses with free wi-fi JOSHUA BASSEY

xactly one week after President Muhammadu Buhari unveiled 820 buses acquired by the Lagos State government under its Bus Reform Initiative (BRI), outgoing governor, Akinwunmi Ambode, on Wednesday ordered the roll out of the buses on five routes to offer free services to residents on Workers’ Day. Ambode said the high capacity buses would redefine public transportation and make the state globally competitive. The free bus services transport service were available on Berger to Tafawa Balewa Square (TBS), Berger to Oshodi, Oshodi to TBS, Ikeja to Alausa and Ikeja to Oshodi to commemorate the Workers’ Days, after which normal service is to start on May 2, 2019. Speaking at the Ikeja Bus Terminal, one of the terminals constructed as part of the BRI, an official of the Lagos Bus Services Limited, the operator of the buses, Timi Olajide, said it was a good thing that the buses had been finally launched for the use. Out of the 5,000 buses planned for the initiative, the government was launching the scheme with 820 high and medium capacity buses, he said, adding that aside the intelligent transport system component of the initiative, which will aid Lagosians to plan their journeys, comfort and safety of the people have also been factored into the whole process. “In each of the buses, we have six emergency exits and First Aid Box, while every seat has a dedicated USB port for charging of phones, free Wi-fi, television and CCTV cameras which are linked to our control centre to monitor everything going on in the buses, among other features. “We have also taken the issue of people with disabilities specially and there are seats reserved for them in the buses,” Olajide said. At the Oshodi Transport Interchange, a cross section of Lagos residents who enjoyed the free service, lauded the state government for the initiative and the infrastructure provided to support the transport reforms. www.businessday.ng

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current reality. “We have a weak manufacturing base and our contribution to climate change is very minimal. The opportunity for us is to pursue manufacturing in a way that is sustainable and we have a clean slate not to make the mistake of the west,” Amaeshi said. In her speech, Omobolanle Victor-Laniyan, head, sustainability at Access Bank, said as the achievement of the SDGs progresses, the importance of finance and the role of financial organisations have become increasingly crucial.

Thursday 02 May 2019

BUSINESS DAY

news Pension contributors, retirees get more... Continued from page 1

Sharia-compliant or ethical funds. The inclusion of micro pension and noninterestbearing funds as part of the multi-fund structure is expected to enhance earnings growth of pension fund assets, said Ronke Adedeji, president, Pension Fund Operators Association of Nigerian (PenOp), who confirmed the development. Pension fund assets under management rose to N8.74 trillion as at the end of February

2019, while the number of retirement savings account (RSA) holders stood at 8.55 million. “The expectation is that practically every Nigerian adult will have somewhere to fit in,” said Adedeji, who is also managing director/CEO of Leadway Pensure, a pension fund administrator. She added that the noninterest-bearing funds would take care of the Muslim faithful and Sharia-compliant citizens who prefer that their contributions are invested in a particular way that aligns with their belief.

Noninterest-compliant instruments are financial securities and specialist investment funds that comply with the provisions of Islamic Commercial Jurisprudence (Shariah) and any other established noninterest principles as approved by the Advisory Council of Experts, or any other body, constituted by the Securities and Exchange Commission (SEC) and/or the Central Bank of Nigeria (CBN) from time to time. In a new circular to PFAs titled ‘Regulation on Investment of Pension Fund Assets’, which was seen exclusively by BusinessDay, PenCom

said the multi-fund structure would comprise Fund I, Fund II, Fund III and Fund IV (retiree fund), and they would differ among themselves according to the overall exposure to variable instruments. The regulator added that there would be additional two funds – Fund V (micro pension fund)whichwillbeforcontributors under the Micro Pension Scheme, and while Fund VI (noninterest fund) for contributors who choose to have their pension contributions invested in noninterest money and capital market products. The Commission also mandated the PFAs, effective

from the date of implementation of the multi-fund structure, to allocate contributors to various fund types. According to PenCom, membership of Fund I shall strictly be by formal request by a contributor; Fund II shall comprise active contributors who are 49 years and below as at their last birthdays; active contributors who are 50 years and above as at their last birthdays shall be assigned to Fund III; while Fund IV shall strictly be for RSA retirees only. In the same vein, the Commission said Fund V shall strictly be for contributors under the Micro Pension

Scheme, while Fund VI shall be for those that choose to have their contributions invested in noninterest money and capital market products. PenCom also stated that where the investment is in a noninterest-compliant money market instrument, it shall be in compliance with the CBN’s guidelines for the regulation and supervision of institutions offering noninterest financial services. There are 274,000 retirees currently receiving their monthly pensions, either through the programmed withdrawal (PW) or insurance annuity, according PenOp.

Nigeria-UK to explore naira... Continued from page 1

ration with the City of Lon-

don. Both countries are also to endeavour to accelerate progress on franchise regulation to facilitate British brands positioning and investments that deliver sustainable new jobs in Nigeria. These are part of the communique signed at the First Economic Development Forum (EDF) of both countries in Abuja on Tuesday by the Minister of Industry, Trade and Investment, Okechukwu Enelamah, and Foreign Secretary Jeremy Hunt, who led the UK delegation. The Forum was launched in August 2018 by President Muhammadu Buhari and Prime Minister Theresa May as a platform to foster economic and development ties between Nigeria and the United Kingdom. Tuesday’s event was to take stock of progress against the joint commitments made and celebrate the successes achieved so far. Other areas agreed in the communique include the acknowledgment of sustained improvements in the efficiency of Nigeria’s international airports, the Government of the United Kingdom’s ability to increase airfreight capacity of its national carriers, and enable Nigeria’s non-oil exporters to reach third market destinations via London. This joint effort supports Nigeria’s export diversification drive, pending critical trade facilitation improvements in the Nigerian ports. The agreement also in-

cludes extensive work to consult the Nigerian and British business community and identify critical joint workstreams and key actions needed to boost bilateral trade and investment; the commitment of UK to provide more technical assistance in support of the Government of Nigeria’s efforts to diversify exports, attract investment and create jobs by improving the business environment; and the need for opportunities to showcase high quality Nigerian and British goods and services in their respective markets, and for more Nigerian exports to comply with global standards for better bilateral trade and investment. Others are Nigeria’s commitment to continue the reforms and improvements in making the country’s operating environment conducive for businesses and investments; and collaboration to achieve a successful Africa Investment Summit in the United Kingdom in 2020 and to use the opportunity to present a strong pipeline of investable projects in Nigeria that seek partnership with British investors. Towards this end, senior ministers shall meet in London before the end of 2019 for the second meeting of the EDF as an important step towards an Africa Investment Summit to create the conditions for more British investment in Nigeria, including in manufacturing and services. Speaking at the Forum, Vice President Yemi Osinbajo, who supervised the signing of

Nigeria stock investors lost over N600bn... Continued from page 2

that the record loss in April was largely felt by investors in equities like Berger Paints plc which has lost 14.5 percent of its value this year. Beta Glass plc lost -18 percent; Cement Company of

Northern Nigeria (-27.8 percent); Champion Breweries plc (-28.1 percent); Conoil plc (-10.5 percent); Dangote Cement (-5.1 percent); Dangote Sugar Refinery (-8.9 percent); and Eterna plc (-6.4 percent). “Given the sluggish recov-

Nigeria’s tier-one banks’ customers paid... Continued from page 2

improvement in economic activities, tier-one banks will be the first beneficiaries considering they are the dominant players in the market. He added that the surge in the account maintenance charges may not be due to increase in

the charges but increase in the volume of transactions. Account maintenance charges are fees charged to current accounts. One naira on every N1,000 in respect of all customer-induced debit transactions is charged on these accounts. These fees are www.businessday.ng

Akeem Lawal (l), deputy chief executive officer, Interswitch Group, handing over documents to Jack Dangoor (r), director of Bekoz, a British firm, after signing a £56 million deal with Bekoz in Abuja. With them is Jeremy Hunt, UK foreign secretary. NAN

the communique, expressed his pleasure at the progress achieved in implementing the EDF since President Buhari and Prime Minister May initiated it in 2018. He observed that despite the deep and long-standing relationship between Nigeria and United Kingdom, the current level of trade and investments between the two countries is materially below the potential the relationship suggests, given that Africa represents only 2 percent of the UK’s trade relationships, and Nigeria represents only a tenth of that. He called for all hands to be on deck to ensure that “we foster the right environment to grow the level of bilateral

trade and investment between our great countries”. He said the Federal Government is not unmindful of the challenges that have hindered the business and investment environment in Nigeria, but it has taken these challenges as opportunities and have made the extensive build-out of modern infrastructure (both hard and soft) as the main thrust of the Buhari administration. Recalling some of the achievements so far made, he said, “In the last three years, the government has allocated and disbursed over N3.5 trillion from the national budgets to infrastructure. We are committed to improving Nigeria’s competitiveness and making

our country one of the easiest places to do business globally. The Presidential Enabling Business Environment Council (PEBEC) under my leadership has made significant progress in reducing bottlenecks, eliminating redundancies and increasing transparency across government ministries department and agencies. “There is undeniable evidence that this administration is repositioning the Nigerian economy for true growth and shared prosperity. We have seen increased investor interest in Nigeria by the investment announcements that we track, with $90.9 billion of investment announcements in 2018, a 37 percent increase over the $66.4 billion tracked

in 2017. We are interested in these announcements, because we know that if we nurture them correctly, we can turn them into actual investments.” Osinbajo expressed the hope that by leveraging the EDF, both countries will continue to build on the existing foundation and work together on recording increased trade and investment flows, particularly in the areas where we have comparative advantages. “The relationship with the United Kingdom is of strategic importance to Nigeria and we will continue to foster it,” he said.

ery of the economy, we anticipate that the lingering bearish sentiments will remain in the near term as foreign investors continue to stay on the sidelines,” said Afrinvest Research analysts in their April 29 note. Other stocks that their investors have lost huge sums this year are Ecobank Trans-

national plc (-25.4 percent); FBN Holdings (-8.2 percent); Fidelity Bank plc (-6.4 percent); Fidson Healthcare plc (-15.2 percent); Flourmills Nigeria plc (-29.7 percent); GlaxoSmithKline Consumer Nigeria plc (-37.9 percent); Guaranty Trust Bank plc (-4.2 percent); Guinness (-32.5 percent); Honey-

well Flourmills plc (-13.3 percent); International Breweries plc (-34.4 percent); and May & Baker plc (-8.2 percent). Stock investors in Medview Airlines have lost 12.2 percent of their year-open value; Mobil Oil Nigeria plc (-4.6 percent); MRS plc (-18.9 percent); NAHCO plc (-11 per-

cent); Nigerian Breweries plc (-24 percent); NEM Insurance plc (-20 percent); Okomu Oil plc (-5.5 percent); PZ Cussons plc (-24.4 percent); and Seplat Petroleum Development Company plc (-10.2 percent).

earned by the bank at the time of each transaction and the bank recognises its income accordingly, according to the Central Bank of Nigeria’s guide to charges by banks released on April 21, 2017. Thus, the current account maintenance fee (CAMF) should be charged at a negotiable rate but subject to

a maximum of N1 per mille when a customer initiates a transfer out of their account. Ayodeji Ebo, managing director, Afrinvest Securities Limited, agreed that the increase in the banks’ account maintenance charges was due to the surge in the volume of bank transactions in Q1 2019. “We see there is now in-

crease in financial inclusion, as there is reduction in cash transactions. You can see this in the adoption of POS coupled with the fact that businesses now resort to carrying out financial transactions through the banks relative to conventional cash transactions,” Ebo told BusinessDay. BusinessDay analysis of the

big banks’ financials revealed that they received a combined N16.9 trillion from customers through deposits across various account types in Q1 of 2019, which is 12.5 percent above N15.1 trillion collected in the previous comparable period.

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Thursday 02 May 2019

BUSINESS DAY

news Labour tasks FG on rising unemployment JOSHUA BASSEY

rganised labour has deplored Nigeria’s increasing unemployment rate, describing the trend as worrisome and needing urgent measures to reverse. Labour is also worried over the nation’s rising debt profile, resulting from the government’s unsaturated appetite for borrowing, especially foreign loans, and warned against the ugly implications on the economy, as this could leave the country in perpetual struggle to repay the principal sums and the piling interests. While statistics from the National Bureau of Statistics (NBS) put the country’s unemployment rate at 23.1 percent, the highest in recent history, with persons between 18 and 35 years, mostly affected, the country’s debt profile, according to the Debt Management Office (DMO) is about N24.3 trillion. Joe Ajaero, president, United Labour Congress (ULC), who led hundreds of workers to mark the May Day at the National Stadium, Surulere, Lagos, with the theme “reflect, organise and engage,” said the high unemployment rate was unacceptable. “Our economic managers seem ill-equipped to handle the situation. While they beat their chests about exiting recession, growing foreign reserve and stabilising ex-

change rate, the economy presently lacks capacity to create new jobs. As such, youth unemployment remains high; a time bomb waiting to explode,” Ajaero said. Labour also asked the Federal Government to halt the killings across Nigeria, as the situation, according them, had reached an alarming rate. According to Ajaero, “the President of Nigeria must show that the lives of Nigerians matter by taking drastic actions to call officers responsible for security but failed to account.” Akinwunmi Ambode, Lagos State governor, represented by Rotimi Ogunleye, commissioner for physical planning and urban development, while addressing workers at the Agege Stadium, said his administration since inception prioritised workers’ welfare and worked closely with union leaders to ensure industrial harmony in the state. “I am proud of what we have accomplished together. I am pleased that together, we have given the people of Lagos State four productive years of sustained industrial harmony. This is, perhaps, the longest period of such in the modern history of our state and this was made possible by the culture of mutual respect and understanding we nurtured and deployed,” Ambode said.

Senate begins move to override Buhari on Industrial Development Bill OWEDE AGBAJILEKE, Abuja

enate has commenced the process of overriding President Muhammadu Buhari’s veto on the Industrial Development Act (Income Tax Relief) Amendment Bill. The bill, which was earlier rejected by President Buhari, seeks to provide for additional incentives for some categories of investments and increase the value of the minimum qualifying capital expenditure (QCE) required from companies applying for Pioneer Certificate. The proposal, which was earlier passed by the two chambers of the National Assembly but rejected by Buhari, seeks to amend Sections 1, 2, 3, 11 and 25 of the Industrial Development (Income Tax Relief) Act. It also provides that companies that are in the process of expanding their operations to cover Pioneer Industries and/or

Products will be eligible for the issuance of the Pioneer Certificate, even as companies whose applications were previously denied on the grounds of expansion will be able to reapply for fresh consideration. BusinessDay reports that the Pioneer Certificate grants tax holiday to companies making investments in designated industries for an initial period of three years, extendable for one or two additional years. Tagged: ‘Industrial Development Act (Income Tax Relief ) Amendment Bill, 2019 (SB. 734), the proposal which passed First Reading during Tuesday plenary is sponsored by Sabo Mohammed (APC, Jigawa State). It would be recalled that President Buhari had in 2018 declined assent to the bill on the grounds that the Ministry of Industry, Trade and Investment was consulting with other Ministries, Departments and Agen-

cies (MDAs) on the ‘tax holidays incentive regime for Expansion Projects’. This, the President explained, would pave the way for Presidential Orders and executive bills for approval by the National Assembly. However, on April 10, the Senate adopted the report of its Technical Committee on Declined Assent to Bills by the President. In rejecting the President’s submission, the David Umaruled panel had argued that the President was at liberty to either propose an amendment to the law or repeal same. “There is nowhere in the world where the President can propose to stop the lawmaking process by an Executive Fiat or Order. The President cannot withhold assent to a bill on the mere fact that consultations are ongoing, which would enable him come up with a new bill. “It should be reiterated that

the procedure adopted by the Senate in passing the bill was all-inclusive. Needless to say that a well advertised Public Hearing was conducted, which provided the needed platform for all interested stakeholders to present their submissions on the bill. “Mr President’s reason(s) for withholding assent to this bill are far-fetched. Accordingly, it is the Committee’s view that the Senate and indeed the National Assembly should override the veto,” the report read. According to the 1999 Constitution, for the bill to become law, it will require two-thirds approval of the Senate and the House of Representatives. Specifically, Section 58 (5) of the 1999 Constitution provides that two-third of both legislative chambers of the National Assembly (73 senators and 240 members of House of Representatives) are required to override the President’s veto.

BDCs show support for CBN’s clean note policy, banknote fitness guidelines HOPE MOSES-ASHIKE

ureau De Change operators have given their support to the Central Bank of Nigeria’s (CBN) Clean Note Policy and Banknote Fitness Guidelines meant to remove dirty, mutilated and unfit naira notes in circulation from the financial system. Speaking Tuesday with financial journalists in Lagos, Aminu Gwadabe, president, Association of Bureau De Change Operators of Nigeria (ABCON), said the launch of the CBN Clean and Banknote Fitness Policy was not only apt, but timely giving the high volume of unfit and dirty notes in circulation across Nigeria. He said the policy would discourage the attitude of the public in stashing naira notes in their homes and farms as witnessed recently. The policy will also increase the level of money supply in the economy, and subsequently deepen the volume and value of credit available to real sector operators and other major segments of the economy, he said. The policy entails diverse currency management plans geared towards the efficient circulation of premium quality banknotes and withdrawal of unfit/soiled banknotes. This, he said, will guarantee public confidence and usage of the naira banknotes as a medium of exchange. According to Gwadabe,

the move by the apex bank to sanitise the estimated N7.9 trillion pieces in circulation will enhance transparent currency management system, promote financial inclusion and enhance confidence of the informal sector in the financial system. The ABCON boss said the CBN had through the new policy plans, demonstrated its commitment to seamless payment system, adding that the regulator had the obligation of providing adequate supply of clean banknotes to facilitate efficient payment and settlement of transactions by the public, government and banks. The policy remains the first step in its bid to address the sorry state of the notes in circulation and create a new culture for better handling of the local currency, he said. He explained that the clean note policy provides a uniform standard for the circulation of only clean and fit banknotes in the economy adding that the banknote fitness guidelines provide the industry with clear and acceptable criteria for determining the quality of notes in circulation. He said the policy guidelines is backed by the Sections 18, 20 & 21 of the CBN Act 2007 which prohibits the counterfeiting, sale and abuse of the naira. Gwadabe said ABCON, and its over 4,500 members will collaborate with the CBN to make the new policy a success. www.businessday.ng

L-R: Ben Langat, MD, FrieslandCampina WAMCO Nigeria; Moyo Ajekigbe, chairman, FrieslandCampina WAMCO Nigeria plc, and Roel van Neerbos, president, consumer dairy, Royal FrieslandCampina, The Netherlands, at the official commissioning of FC WAMCO Academy in Lagos. Pic by Pius Okeosisi

Air Peace to deploy B777 on Kano, Abuja, Port Harcourt routes ahead Sharjah launch

…to launch flights to Dubai, London, Houston, Mumbai, others soon IFEOMA OKEKE

est and Central Africa’s biggest airline, Air Peace, will on Friday give travellers on the KanoAbuja-Kano route a feel of its soon-to-launch international flight service. The airline said it had scheduled its Boeing 777 aircraft to service its Kano-Abuja and Abuja-Kano operations on Friday. A statement issued by Chris Iwarah, Air Peace corporate communications manager, said the carrier would also repeat its Boeing 777 operations on the Abuja-Port Harcourt and Port Harcourt-Abuja routes on Friday. The carrier pulled a big

surprise on the travelling public with the deployment of its widebody Boeing 777 aircraft for its domestic operations on the Port Harcourt-Abuja and Abuja-Port Harcourt routes on Good Friday and Easter Monday. Surprised members of the public praised the airline for giving its domestic passengers a foretaste of its long-haul service, saying the carrier was on the right track to provide an exceptional international travel experience. The airline had assured that the showpiece flights on Good Friday and Easter Monday were the first of a series of domestic flights it intended to operate with its Boeing 777 aircraft ahead of the launch of its international flights starting with Sharjah, United Arab

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Emirates. Air Peace says it will also operate long-haul flights to Dubai, Johannesburg, Guangzhou, London, Houston and Mumbai. The airline has so far acquired four Boeing 777 aircraft for its long-haul operations. Three of the wide-body aircraft have already been delivered to the carrier. Iwarah said the flights planned for Friday were in fulfilment of the airline’s promise to “give Nigerians and the travelling public a taste of the luxury to expect on our international routes launching soon.” He added: “The deployment of our beautiful big birds, the Boeing 777 on our Port Harcourt-Abuja and AbujaPort Harcourt routes on Good Friday and Easter Monday @Businessdayng

was received with enthusiasm by members of the public. We are riding on the huge success of the Good Friday and Easter Monday operations to give many more members of the flying public the exceptional experience we delivered on the Port Harcourt-Abuja route. “This time we are moving up North to give our esteemed customers on the Kano-AbujaKano route an opportunity to experience the wonderful service we plan for our longhaul operations. As an airline that listens to its customers, we are repeating our Boeing 777 operations on the Abuja-Port Harcourt route in response to the pieces of feedback we received after our hugely successful Good Friday and Easter Monday operations.

Thursday 02 May 2019

BUSINESS DAY

RESEARCH&INSIGHT

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

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How Nigeria compares on some global indexes Chart 1: Corruption perception Index

ISAAC ESOWE

ness dynamism, and innovation capability. In all, Nigeria was ranked 115 out of a 140 countries. Comparatively, Nigeria moved only three places downward from 112 out of 135 countries under review in the preceding year, 2017. However, there were fair improvements in four out of the twelve pillars earlier mentioned. These improvements were seen in Infrastructure, Health, Business Dynamism and Innovation Capability.

igeria, the Sub-Saharan largest economy; with no fewer than 200 million people is figure is estimated to grow by 3 per cent annually. Nigerian economic growth has been driven by growth in mainly the oil and gas sector while others includes services, agricultural and the telecommunication sector. Similarly, a decline trend in inflationary rate from 11.31 per cent to 11.25 per cent with 12 month average amounting to 11.40 per cent and an improved Gross Domestic product (GDP) – all these did not translate into significant decline in poverty levels and unemployment rate which currently stood at 20.3 per cent as at the last quarter 2018. According to World Bank projection, over 62 per cent of Nigeria still live in extreme poverty (people living below USD 1.9o a day). By 2030 almost all the people in extreme poverty will live in sub-Saharan Africa, while Nigeria will lead the world to become the poverty capital of the world. In the same way, Nigeria is currently seating on the 6th position of first 10 miserable countries of the world behind turkey, Brazil, Iran and Venezuela, according to a report by Steve Hanke, an economist from John Hopkins University in Baltimore, United States. This implies that while the cost of living is rising, the standing of living is deteriorating at a much faster rate. The common livelihood strategies of subsistent living are becoming less sustaining.

Fastest growing economies in Africa The recent International Monetary Fund (IMF) projections on the world fastest growing economies are in Africa. The report also predicted 6 per cent increase across the continent with the North-African nation, Libya leading Chart 1: Corruption perception Index

Source: Transparency International, BRIU (Chart 1) This has had a carry-over effect on the incidence of corruption. The Corruption perceptions index (CPI) 2018, which ranks 180 countries and territories by their apparent levels of public sector corruption on the scale of 0 to 100, where 0 is highly corrupt and 100, is zero corruption (or severely less institutional corruption in practical terms). On the CPI 2018, Nigeria scored 27 and ranked 144 out of 180 countries. Nigeria is compares very poorly in almost all negative indicators and this is contributing to the nation’s political stability and growth. From the above (chart 2), Nigeria has always been ranked above 100 from the year

Chart 2: Transparency International Corruption Ranking (Historical)

Source: IMF, BRIU. with 10.8 per cent followed by Ethiopia (8.5 per cent), Rwanda (7.8 per cent), Ghana (7.6 per cent), Ivory Coast (7 per cent), Senegal (6.7 per cent), Tanzania (6.6 per cent), Benin (6 per cent), Uganda (6 per cent) and Kenya (6 per cent). Nigeria the giant of Africa is found wanting on this list. Nigeria, like South Africa, has been staggering its way of a recession since the second quarter of 2017. Now, the elections, given the structure of the political economy would take its toll on growth trajectory in the coming months. Again, the level of unemployment at 20.3 percent is suggestive of the limits of output growth. So much has to be done to create jobs and build in a multiplier process for output. Going forward, the development of industry on an extensive scale should be of great essence having considered its positive impact on the development of the nation’s economy. 12734BDN

Source: Transparency International, BRIU

under review. Nigeria reached an all time high of 148 out of 180 countries and scored 26 on the scale of 1 to 100 in 2017, and slightly declined by 4 points to 144 in 2018 – out of a 175 countries. From the historical trend; Nigeria was ranked 136 positions in three consecutive years – 2014, 2015 and 2011. This is due to the anti-corruption mantra on which the current administration rode in the early stages. The expectation of an anti-corrupt regime soon faded after many political events described as nepotistic occurred. It is important to note that in skirmishing corruption, it is not about being an emerging or a frontier economy or rather wealthiest or bigger economy, it is about having a strong political will and transparent institutions that can cause a complete reversal of the circumstances against corruption, and also put into practice a framework that reduces the incidence of corruption to the barest minimum The 2018 edition of Global Competitiveness Index (GCI) assesses 140 economies based on new parameters introduced by the World Economic Forum. These parameters emphasize more on the role of human capital, innovation, buoyancy and dexterity as the major drivers and also defining features of economic success in the 4th Industrial Revolution. Similar to the Corruption Perspective Index, the GCI is scaled on 1 to 100, wherein higher average score means higher degree of competitiveness. These variables are built on 12 pillars which include institutions, infrastructure, ICT adoption, macroeconomic stability, health, skills, product market, labour market, financial system, market size, busi-

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Thursday 02 May 2019

BUSINESS DAY

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

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High unemployment rates in Q3 2018: What other states can learn from South West States having least unemployment rates in Nigeria

TELIAT SULE

nemployment rate in Nigeria rose from 14.4 percent at the end of the first quarter of 2017 to 23.1 percent by the end of the third quarter of 2018, based on the data provided by the National Bureau of Statistics (NBS). If you haven’t understood the implication of that, the next statement should remove any ambiguity on the monster called unemployment and its implication for Nigerians. In March 2017, Nigeria’s labour force, that is, Nigerians who were able and willing to work were 82.59 million. In that period, those who could get jobs were 70.67 million individuals leaving 11.93 million Nigerians jobless. Back then, the percentage of those who were willing and able but could not get jobs was 14.4 percent. Fast forward to the end of the third quarter of 2018, the nation’s labour force stood at 90.47 million individuals, out of which 69.54 million were employed leaving 20.93 million Nigerians out of jobs. This leaves the nation’s unemployment rate at 23.1 percent. The direction of this article stemmed from the trend among the 36 states in the country, where states in a particular geopolitical zone have repeatedly maintained low unemployment rates within the reference period which is from Q1 2017 to Q3 2018. At the end of the first quarter 2017 when the national unemployment rate was 14.4 percent, eighteen Nigerian states had their unemployment rates lower than the national average, while 16 states had their unemployment rates higher than the national average. The five states with the least unemployment rates in that quarter were Katsina, 2.5 percent; Osun, 4.1 percent; Adamawa, 5.3 percent; Taraba, 5.5 percent and Zamfara, 5.8 percent. Oyo and Ogun made the list of the ten states with the least unemployment rates in Q1 2017. In Q2 2017, Osun, 4.5 percent; Oyo, 7.9 percent and Ogun, 8.5 percent were among the ten states with the least unemployment rates in the country. No south west state was in the bottom 20 states with the highest unemployment rates in the second quarter of 2017. In Q3 2017, the list remained the same as Osun, Oyo and Ogun were among the states with the least unemployment rates in the country and no south west states were among the bottom fifteen states. In the last quarter of 2017, five south west states, excluding Ekiti State, made the ten states with the least unemployment rates in the country. Ekiti State’s unemployment rate was 17.7 percent to rank 13th in the country. From the first to the third quarter of 2018, four out of the six states in the South West geopolitical zone, particularly Osun, Oyo, Ondo and Ogun, were among the ten states with the lowest unemployment rates in the country. What are the factors responsible for low unemployment rates in

South West? The consistency in maintaining low unemployment rates by two-thirds of the states in south west could not have been by happenstance, it is a sign that the fiscal models employed by the state governments in that region are delivering better results than others elsewhere. And if we all agree that the million unemployed youths are time bomb, the ideal thing is to learn from one another for the good of everyone. Osun State for instance, has consistently maintained a low unemployment rate for six years running. This has been attributed to quite a number of factors such as the engagement of youths through the various programs initiated by the immediate past administration of Ogbeni Rauf Aregbesola. Through its youth empowerment schemes, many unemployed residents of the state were engaged directly and indirectly. Under the umbrella of Osun Youths Empowerment Scheme (O’YES), many of the youths were in one employment or supported to be self-employed. What made the O’YES programs to be that successful whose results have minimized unemployment scourge was because they were nonpolitical and non religious. Employment of the youths was based on the need to attend to all and sundry, and to get everyone busy because an idle hand is the devil’s workshop. The school feeding program brings together farmers, wholesalers, retailers and the final consumers thereby creating the maximum values for all those who are involved in its value chain. The location factor in the design and implementation of some of the programs in the sub region was also helpful. A job opening that pays N4000 per day which is located close to employee’s residence will make more positive impact than others where workers will have to spend sizable portions of their daily wages on transport.

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This method in particular, was the driving force for some of projects implemented in Lagos State in the last four years. “The idea was that I did not want anybody to travel all the way from Badagry to come and look for job in CMS. So, whether the project was going to be paid on schedule or not, give jobs to people in Badagry; don’t let them go to Epe to look for jobs. Create jobs in Epe and give the contract there and if you are just paying just N5,000 to that bricklayer, you are creating a multiplying effect on the household economy; that was the whole idea about the massive projects. When you talk about 114 local government roads by local government contractors, the idea was to keep them busy and spread income across board and stabilize security”, Akinwunmi Ambode, Lagos State Governor said. “Our main vision was just on the bedrock of three issues: job creation, renewal of infrastructure and then security. So, if any of those projects could just fall within the context of those three items and it has positive impact on the people, we would do it irrespective of the location. So, there was no dichotomy as par elitist projects or mass oriented projects. It was more about: “Does it meet security issue? Does it create jobs? Does it actually have impact on the people? Those were the factors that informed the projects we started at that early stage by going into the hinterland”, Ambode added. In addition, what other states can learn is to cultivate the habit attracting investment that will create jobs for their residents. Some states might have attracted so many investments so far, but with high unemployment rates, those investments only benefit the state government by boosting their IGR generation and not creating jobs for the common man. Ogun State is a case in point. By show-

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casing the potential of the state, Ogun metamorphosed into the nation’s manufacturing base. It should be recalled that since Governor Amosun was swornin in 2011, he made it a tradition to organise investors’ forum every two years. The result was that the state is now the manufacturing and mining headquarters of the nation. “The present administration in Ogun State opened the business landscape by establishing a one-stop shop in order to streamline the process of setting up business. The massive infrastructural transformation of the state was geared towards catering for the good people of the state and creating a sustainable conducive environment for the business community. “This government believed that the more conducive and secure environment, the better for industrial growth and industry replication to take place. We believe that any discerning investor will recognise that these are the essential ingredients for successful and sustainable investment,” Bimbo Ashiru, former commissioner for commerce and industry in Ogun State said few months ago. From the foregoing, the factors that have separated the South West from other regions include the creation of job opportunities that take idle people of the street immediately, using fiscal models that allow daily wages to have more multiplier effects on household economy, and by creating one-stop shop that attracted investments that benefited the state economies, not only in terms of IGR generation, but which created jobs for the locals. If other states have done all these and yet the unemployment rates are still high, then there is an urgent need for the evaluation of the specialised institutions set up to help government create jobs to know where and how they deviated from the goals they were set up to achieve.

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Thursday 02 May 2019

BUSINESS DAY

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Thursday 02 May 2019

BUSINESS DAY

SPECIALREPORT on

THE NIGERIAN INSURANCE INDUSTRY

Overview of the Nigerian Insurance Industry

he Nigerian insurance industry is considered as one that is yearning for reckoning and relevance because its challenges, which are manageable, hold great opportunities for the sector. Efforts by the Nigeria government to ensure the country has an insurance industry that will rank among the twenty largest markets in the world by the year 2020 (though Nigeria is currently ranked 60 in the world) is one that gives hope to the industry. The Government has however taken certain steps and measures towards actualising this objective, particularly the strengthening of the Nigerian Insurance Commission (NAICOM) which derives

Unleashing vast potential its regulatory powers from the National Insurance Commission Act, 1997 and the Insurance Act of 2003. Section 86 of the Insurance Act empowers NAICOM amongst other numerous powers to be responsible for the administration and enforcement of the provisions of the Act, as well as empowering it to register insurance companies and to increase the amount of minimum share capital requirement as circumstances may demand. This is coupled with the growth potential of the industry and the collective effort of the 59 insurance firms underwriting non-life and life businesses in Nigeria. A 2018 survey by the Chartered Insurance Institute of Nigeria (CIIN) revealed that out of the adult

population of about 100 million in Nigeria, about 86.6 million of them do not have any form of insurance cover. This is considered a market opportunity for the insurance companies The penetration ratio of the Nigerian insurance industry stands at 0.5 percent in 2018, one of the lowest in Africa compared with countries like South Africa (17%), Kenya (2.8%) and Ghana (1.1%). According to industry sources, the low penetration ratio presents a huge opportunity for growth and as such the sector is tagged as one in a growth phase. Although the challenges that drag the industry still remain, lack of tailored products to reach the low-income earners is one that

ranks the top of this list. Lack of information technology and standardisation of insurance data (including lack of local expertise in the field of insurance IT solutions), meaning manual operations is still prevalent in the industry, is another issue traced by industry experts to be dragging insurance penetration in Nigeria. Leveraging technology to reduce cost and provide seamless access to products for Nigerians is an opportunity that has not been fully utilised by the insurance companies. Lack of trust on the insurance companies to pay claims and on time is one of the reasons some Nigerians are not encouraged to take up insurance policies.

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Linkage Assurance strong, and delivering efficient services to customers

inkage Assurance Plc, a leading general insurance company with focus on service excellence has continued to deliver value to its numerous clients across various sectors in the Nigerian economy. Its strong capacity to underwrite big ticket risks in oil and gas, energy, power sectors among others places the company in a strong position as one of the most capitalized firms in its area of specialization. With penchant for prompt settlement of claims and service excellence, Linkage is broker friendly company, underscoring why its patronage has continued to gain momentum despite the harsh economic environment. Daniel Braie, managing director/CEO of the company at a recent interactive session with insurance brokers in the country stressed its continued commitment to prompt claims obligation, assuring that the company is financially strong and able to deliver qualitative insurance services that meet the expectation of customers. Braie said Linkage Assurance has strengthened its internal structures to deliver quality and efficient services. “We have strengthened our internal structures to ensure that claims are handled with speed, because we realise that this is the main reason we are in business, and we will ensure it is sustained” According to Braie, the human capital of the company has also been beefed up with the recent appointment of the Executive Director, Technical (subject to the approval of NAICOM) among others who are already adding value to the operations and systems, for the benefit of its esteemed customers, he said. The underwriter believes that with increased investment in technological infrastructure and as well as quality manpower,

Daniel Braie, MD/CEO, Linkage Assurance Plc.

which the company has been attracting the future is bright for the company. “We have been able to attract quality staff, better infrastructures to enable us deliver quality service in the coming years, and we are hopeful that we will do better in our performance indices. “We have also increased our capacity to do more volume businesses as evidenced by the increase in our reinsurance treaty across all classes of insurance”. The company total assets stood at N23.31 billion at the end of 2017, moving up by 15 percent from N20.33 billion in the previous year. To ensure also that the company meets the needs of its cuswww.businessday.ng

tomers, Linkage has developed array of retail products targeted at deepening penetration and

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We have strengthened our internal structures to ensure that claims are handled with speed, because we realise that this is the main reason we are in business, and we will ensure it is sustained

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increase revenue. These include the Linkage Third Party Plus, which is a budget friendly motor insurance product that provides not only the compulsory Third party protection but an additional Own damage protection to the tune of N250, 000, and is only available in the company”. The premium for the policy is N10, 000.00 per annum, just an additional N5, 000.00 to the third party cover. It covers all the benefits under the compulsory third party insurance such as third party property damage, bodily injury and death liabilities, plus the additional benefit of own damage protection. Third Party Motor Cover is a compulsory insurance policy under the 2003 Insurance Act for all vehicles plying @Businessdayng

the Nigerian roads against third party damage or loss. Premium is N5, 000.00 for cars and N7, 500.00 for commercial vehicles. “This is an invaluable, budget friendly product for all Nigerians particularly in this period of when money is hard to come-by, the company said. According to the management, the product has been developed with Nigerians in mind, having realized that many may not have the fund to take comprehensive insurance for their vehicles at this time. Other products offered by the Company to increase retail penetration are the Linkage SME Comprehensive, Citadel Shield (which provides compensation as a result of injuries from accident for pupils and students in recognized academic establishments); Linkage Events Xclusive Insurance, Linkage Shop Insurance, Purple Motor Plan (comprehensive motor cover exclusively for women), and the Linkage Estate Insurance. According to the company, Linkage Assurance Plc is repositioning itself to tap into the retail space by designing appropriate and competitive new insurance products that will meet the needs of its customers. The company has also deployed ts online portal to make its products and services available to customers especially the digital savvy customers and enterprises. “We have developed our IT infrastructure in to put the company in competitive position in line with our peers. To improve our operational efficiency, we have deployed the Virtual Private Network (VPN) to all our branches nationwide to ensure seamless operational link and/or fully integrated with Head office.” Linkage Assurance Plc was incorporated on 26th March, 1991 and was licensed to cover and transact non-life insurance businesses on 7th October, 1993.

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THE NIGERIAN INSURANCE INDUSTRY Growth performance of the insurance industry

he asset base of the Nigerian insurance industry stood at N1.3 trillion as at 31 December 2018, reflecting a compounded annual growth rate of 17 percent in the last three years. In 2018, the century-old underwriting industry generated Gross Premium Income (GPI) of N448.6 billion, which reflects a 12 percent growth year-on- year, Agusto & Co’s data analysed by BusinessDay show.

However, total assets, GPI and profits are controlled by a few players in the industry. Top five players account for 45 percent of GPI, 42 percent of total assets and 61 percent of after-tax profits. The credit rating agency, Agusto & Co, projects that in 2019, Nigerian insurance industry will record a 10 percent growth in its GPI to about N493.4billion. The growth is expected to be driven by a slightly better operat-

ing environment from an improved operating climate as well as opportunities in oil & gas (particularly refinery) and engineering, considering the Dangote projects that are on-going - the refinery and fertilizer manufacturing plant. In addition, there is the potential to deepen market share of the pockets of the already insured populace. There are over 12 million registered vehicles in Nigeria for motor insurance; fire insurance for

households and manufacturing companies; annuities as more people retire and life insurance policies for individuals. There are also opportunities in the agriculture value chain as the government continues to diversify its earnings away from oil. Insurance companies in Nigeria are still largely under-capitalised and this limits their ability to take on ‘big ticket’ and highly profitable transactions in the Oil & Gas, Marine

and Aviation sectors of the economy. If they shore up their capital base, they will be able to take on heavy risks which are currently being taken abroad. Globally the insurance sector is going digital and technology-driven (InsurTech), thus, Nigerian insurers need to leverage more on digital platforms to increase insurance penetration, eliminate brokers and fasten claim verification processes and payment, industry sources say.

NAICOM: A key driver for growth in the insurance sector

igerian insurance industry has passed through several phases of reforms in the past without significant achievements in terms of insurance awareness and penetration. To ensure the success of its major priorities for 2017 to 2020, the Nigerian government through NAICOM, the apex regulator of the industry which is responsible for ensuring the effective administration, supervision and control of insurance business in Nigeria amongst other things, initiated a growth strategy for the industry. The first phase of the growth strategy saw the industry consoli-

dation which is aimed at growing the companies’ financial capabilities, solvency margin to ensure that these companies are able to play a significant role within its internal capacity, pay claims promptly and pick high-ticket risks to grow their bottom and top lines. If implemented successfully, this could solve the issues of late payment of claims by the insurance companies, through which confidence and trust in the industry can be further restored, industry sources have said. The second phase focuses on developmental initiatives such as Market Development and Restructuring Initiatives (MDRI) launched

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in 2009, Risk-Based Supervision, International Finance Reporting Standard (IFRS), Insurance Industry Rebranding and lately, the Seven Point Harmonised Goals 2017-2027, all aimed at developing the insurance market space. Part of NAICOM’s mandate among others include establishing standards for the conduct of insurance business in Nigeria, to approve rates of insurance premiums to be paid in respect of all classes of insurance business, ensure adequate protection of strategic Government assets and other properties. As part of its oversights, NAICOM has over the years drafted

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capital requirement for insurance operators in the country. In 2005, NAICOM introduced new capital requirements for insurance companies; life insurance companies were directed to recapitalise from N150 million to N2 billion while the composite insurance firms were required to jack up their minimum capital base from N350 million to N5 billion. Also, non-life-underwriting companies were given a minimum capital base of N3 billion, up from N200 million. Reinsurance companies were to raise N10 billion as the new capital base as against N350 million Last year, it introduced the tier-

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based solvency capital policy for insurance companies in Nigeria. This was later withdrawn by NAICOM following complaints from stakeholders in the industry. However, some of the reforms that have been successfully implemented include: The issuance of Nigeria’s first Micro-insurance guidelines, which established a distinctive framework for the distribution of insurance products tailored for low income population, low-valued policies and small scale enterprises; The issuance of Nigeria’s first Bancassurance guidelines which specifically establish and regulate collaborations between bankers and insurance firms on the marketing of insurance products; The issuance of Nigeria’s first comprehensive sector-specific code of corporate governance for the insurance sector; The issuance of Takaful/sharia-complaint insurance guidelines, which established regulatesTakaful insurance models and specifies governance, management and capital requirements for Takaful insurance operators; The implementation of the Market Development and Restructuring Initiative (MDRI) (now in its second phase) which focuses on addressing issues around the enforcement of compulsory insurance products, insurance agency system and fake insurance institutions; Employers’ Liability Policy (Group Life), Employers’ Liability Policy (Workmen’s Compensation Act 1987 – Now repealed), Healthcare Professional Indemnity Policy (The NHIS Act 1999) and Motor Third Party Liability Policy (The Insurance Act 2003). The aforementioned reforms have been a catalyst to the recorded improvement in the sector, although industry experts say there is more to be done to achieve the target of being one of the twenty largest markets by 2020.

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THE NIGERIAN INSURANCE INDUSTRY Swot analysis of the Nigerian insurance sector Strength • Largest population in Africa • The second-largest economy in Africa • Under-developed insurance market with a very low insurance penetration indicates vast potential for growth if proper structures are put in place Weakness • Lack of a robust portfolio of insurance products • Lack of Capital and Capacity in the Insurance sector means large risks particularly in the Oil & Gas sector need to be re-insured outside the country • Widespread poverty means there is very little capacity for spending on Insurance products

Opportunities • Fragmented market indicates

opportunity for foreign insurers to gain market share via local acquisitions • Group life insurance is now compulsory for employers • Innovative distribution channels like mobile payments could improve awareness and access to insurance products & services • Micro-insurance products catering for low-income households offer enormous growth potential • Health insurance has the potential of being an important longterm growth area Threat • Low level of transparency across the Insurance sector

Types of insurance companies in Nigeria Composite Insurance A Composite Insurance company provides both Life and Non-Life insurance policies.

Life Insurance These insurance companies sell life insurance policies, annuities, and pension products. It mainly deals with long and short-term

monetary investments, college plans and plans that mature and benefit surviving family at the time of death.

Non-Life/General Insurance These are insurance companies which sell non-life types of in-

surance. These companies are mainly concerned with protecting/indemnifying policyholders against loss of or damage to property or asset from many kinds of risks and natural acts like fire, lightning, typhoon, flood, and earthquakes in exchange for a fee called Premium. Re-insurance Re-insurance companies sell insurance policies to other insurance companies in order to help reduce their risks and protect them from incurring huge losses in the event of an insurance claim. Continental Re-Insurance Plc Continental Re-insurance stands out as the major local player in the Re-insurance space accounting for about 97% of the market share. It has established itself in Nigeria’s oil and gas re-insurance market were the bulk of premiums are realised. There are a total of 59 companies operating in the Nigerian insurance industry • Life – 14 companies • Non-life – 28 companies • Composite – 13 companies • Re-insurers- 2 companies • Takaful – 2 companies

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CHI delivering quality service and enhanced consumer experience

onsolidated Hallmark Insurance (CHI Plc), as leader in the nation’s insurance industry has continued to redefine its place in the market with quality service delivery and enhanced customer service. This is clearly evident in the volume of claims it is paying to its numerous customers, which has not only endeared them to the brand but has also made a large number the institution’s brand ambassador. The company, a leading general insurance company in Nigeria with over 10 years underwriting experience is built on integrity and driven by a passion to serve its customers and deliver efficient service. A recent experience of a CHI customer, who had an accident with his insured car and got his claims paid in less than two days, was unbelievable, indicating a major transformation that has taken place in the Nigerian insurance industry, which should not go unmentioned. The customer had taken out a comprehensive motor cover with CHI for his Toyota Camry, and has paid premium for the year before his car had the accident. Uchenna, the customer tells his story. “I had an insurance policy with CHI and I had paid my premium for the year. I was driving my car two weeks ago on a Saturday evening after visiting a friend at his office at about 7pm. There was some traffic at Ilepo Round About, along Iyana-Ejigbo Ikotun Road, and my lane was directed to move by people controlling traffic there. To my surprise, a jeep came from behind and hit my car damaging the boot, back rear light and the bumper, while I also hit a Sienna Car right in my front. Before we knew what happened, the jeep escaped and we were left to our faith.” “I took photograph of my car, showing the damages, and on Monday at about 11am I contacted CHI, my insurance company and reported the incident. I thought they were going to feel bad because I have brought problems to them, but surprisingly, they were very sympathetic, and more concerned about my safety, asking “hope you did not sustain injuries.” “They asked me to send the photograph of the accident car, and also contact my mechanic to send a quotation, while they also sent me a claims form to fill and submit immediately. As soon as my mechanic sent me a quotation and I forwarded to them, they called him on the telephone number in the invoice he sent,

Eddie Efekoha, MD/CEO, Consolidated Hallmark Insurance Plc.

agreed with him the cost of repairs and purchase of damaged parts. Before 4 pm on that same Monday, they sent me discharge voucher and their offer, and I completed the form and returned same”. “The most exciting thing about this interaction was the promptness, and the eagerness to ensure I was settled very quickly, so the chain of

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The new website has been designed to present an utmost user-friendly experience alongside hassle-free navigation and improved functionalities. It enables users, with a click, access to information on various products of the company

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email communication was unbelievable, far from the impression so many people have about insurance.” According to Uchenna, before the close of work on Tuesday, his claim was paid into his account, and before then, he was receiving regular mails that his cheque was being processed; that his payment will be made soon and this came to pass, the insurance customer said. Insurance companies in Nigeria have proven in recent times that they are liquid and have the required capacity to meet claims obligation when losses crystallise. This is evident in quantum of claims paid in major losses that have hit the industry in the past few years. Consolidated Hallmark Insurance (CHI Plc), in a move to ensure that its service offerings are within the reach of its rapidly growing clientele and potential customers has unveiled a new website -www. chiplc.com. The new website has been designed to present an utmost user-friendly experience alongside hassle-free navigation and improved functionalities. It enables users, with a click, access to information on various classes of general insurance business to take decisions based on available options and forms of protection desired.

With a very easy and friendly on boarding process, the website enhances the purchase of insurance products online through the aid of premium calculators. It also facilitates payments with Bank Debit Cards and online payments via specified bank accounts with several tier one and two banks. Also, through a Unique Customer Dashboard available for new and existing customers of the foremost insurance firm, they can view onlinereal-time the status of their policies, and transactions. The functionality of the new website is further evident in the provision for clients to report and lodge in their claims, send supporting claims documents by uploading pictures and relevant forms as well as track the status of their claims. Built for the digital age, the website is easy to navigate and very suitable for the multi-device social networking customer. Managing Director of CHI Plc, who is also the sitting president of the Chartered Insurance Institute of Nigeria, Eddie Efekoha attributed the painstaking efforts of several weeks deployed in building the website to the determination of the company in ensuring insurance services are made available with ease to the end users. According to him, the closer insurance services are to the end users, particularly via desktops and mobile devices, the better for higher insurance penetration with the attendant positive effects on revenue growth. Deployment of latest technology is an integral part of the strategic plan of CHI Plc in its quest to remain a major player in the Nigerian insurance industry. In the 2018 financial year ended 31st December, CHI Plc reported a ...percent leap in profit. In its results, which were submitted within the regulatory timelines and recently approved by all regulators, including the Capital Market, the company posted a profit after tax of N406.21 million when compared with the N194.99 million of the 2016 financial year. Also, profit before tax grew by 74 percent from N368.13 million 2016 to N641.05 million in 2017. Further details of the results made available to shareholders of the company show appreciable progress in investment activities as well. Income from this arena grew from N472.3 million to N796.2 million in 2017. Meanwhile the total assets of the company have risen by 27 percent from the N7.44 billion of 2016 to N9.49 billion. Revenue reported for the period

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through gross premium written was N5.68 billion, while a net underwriting income of N4.05 billion was recorded. The company continues to fulfil its obligations through prompt claims settlement as gross amount paid out in this regard during the year under review was N3.35 billion. The positive result is an affirmation of the recent assurance by the Managing Director of the company, Eddie Efekoha to shareholders that they should expect more returns in the nearest future from Consolidated Hallmark Insurance even as recent capacity expansion and growth initiatives will help to grow revenue. Plans are already afoot to hold the Annual General Meeting, where in line with its policy of rewarding shareholders for their steadfastness, dividend payment will be proposed to shareholders for approval. CHI Plc has paid dividends seven times in the last ten years. While also ensuring that its customers who take insurance go home to sleep and do their business without fear, CHI has put in place simple and seamless claims structure. In the last five years, the Company paid claims totalling over N8 billion. An analysis of the claims payment from the company’s published financials show a movement from N1.08 billion paid in 2013 financial year to N3.35 billion at the end of December 2017, indicating an 800 percent increase. A further analysis of claims expenses trend of the company from the five year financial summary shows that claims payment increased to N1.23 billion in 2014; increased to N1.34 billion in 2015; and in 2016 it rose to N1.73 billion. Following a merger in 2007, Consolidated Hallmark Insurance Plc is one of the top ten General Business and Special Risk Insurance underwriters in Nigeria. “In the last ten years, we have carved a niche for ourselves through big-ticket transactions in the Aviation, Oil and Gas, Marine Cargo and Hull Business as well as our motor insurance business.” “We have built a reputation on professionalism, integrity and excellent service delivery, leveraging on the capabilities and unique skills of the entire group, we provide premium risk management solutions to our clients.” Our commitment to serving you better has seen us make key investments in our people, technology and processes, having become the second insurance company in Nigeria to obtain the prestigious ISO 9001:2015 (Quality management systems), the company said.

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List of Composite Insurance Companies in Nigeria as of 23 January 2019, according to NAICOM: AIICO Insurance Plc Allianz Nigeria Insurance Plc AXA Mansard Insurance Plc Cornerstone Insurance Plc Goldlink Insurance Plc Great Nigeria Insurance Plc Industrial and General Insurance Company Plc Lasaco Assurance Plc Leadway Assurance Company Plc NICON Insurance Plc Niger Insurance Plc NSIA Insurance Plc Standard Alliance Insurance Plc

NAICOM-recognised general insurers as at 23 January 2019 include: Alliance and General Insurance Company limited Anchor Insurance Company limited Consolidated Hallmark insurance Plc Custodian and Allied Insurance limited FBN General Insurance limited Fin Insurance company limited Guinea Insurance Plc International Energy Insurance Plc Investments and Allied Assurance Plc KBL Insurance Limited Law Union and Rock Insurance Plc Linkage Assurance Plc Mutual Benefits Assurance Plc NEM Insurance Plc Nigeria Agricultural Insurance Cor-

Companies that offer Takaful insurance as at 23 January 2019 according to NAICOM are: Jaiz Takaful Insurance Plc Noor Takaful Plc Companies that offer Reinsurance as at 23 January 2019 according to NAICOM are: Continental Reinsurance Plc Nigeria Reinsurance Corporation

or fake insurance certificates.

Insurance products under Non-life Insurance Companies Motor Insurance The motor insurance dominates the non-life business in terms of gross premium written. This growth has been largely driven by NAICOM’s compulsory third-party insurance policy which makes it compulsory for all vehicles to be insured against damages caused by third-parties in case of accidents. We are of the opinion that the motor vehicle segment is still largely untapped as many motor vehicles either have no insurance

poration Old Mutual Nigeria General Insurance Company limited Prestige Assurance limited Regency Alliance Insurance Plc Royal Exchange General Insurance Company limited Saham Unitrust Insurance Nigeria limited Sovereign Trust Insurance Plc STACO Insurance Plc Sterling Assurance Nigeria limited SUNU Assurance Plc Universal Insurance Plc Veritas Kapital Assurance Plc Wapic insurance Plc Zenith General Insurance Company limited Companies that offer life in-

Femi Oyetunji, MD/CEO, Continental Reinsurance Plc

surance as at 23 January 2019 according to NAICOM are: Alliance & General Insurance Life Assurance A.R.M Life PLC African Alliance Insurance Company Ltd Capital Express Assurance Limited Custodian Life Assurance Limited FBN Insurance Limited Metropolitan Nigeria Life Insurance

Limited Mutual Benefits Life Assurance Ltd Old Mutual Nigeria Life Assurance Company Limited Prudential Zenith Life Insurance Company Limited Royal Exchange Prudential Life Plc Spring Life Assurance Plc UNIC Insurance Plc Wapic Life Assurance Ltd

Oil & Gas Insurance The Oil & Gas sector is the third largest contributor to Gross Premium Written in the Non-life segment of the Insurance industry. The NAICOM guideline makes it compulsory that Oil & Gas companies seeking to insure their Oil & Gas assets must exhaust local capacity before insuring abroad. The NAICOM guideline has helped in growing this segment of the Insurance industry. Fire & General Insurance Even though it is compulsory for public buildings in Nigeria to be insured against fire, the enforcement has been very lax hence the weak growth of this segment. Meanwhile there is no regulation covering General accident insurance. Marine Insurance This segment is grossly hindered by insufficient under-writing capacity of local insurers along with incidents of forged marine insurance certificates. www.businessday.ng

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Leadway Assurance competitively strong and giving value to customers

eadway Assurance Company Limited (‘LEADWAY’) is one of Nigeria’s foremost insurance companies, with a reputation for service efficiency and customers’ reliability. Leadway was established in 1970 and commenced business in 1971 and started out as a direct Motor Insurer with a passion for customer service. The business expanded into other areas of general business until it became a composite company underwriting both life and general insurance business. From a modest capital base, the company’s financial capacity grew over time and now, it can boast of an ability to underwrite risks of very high magnitude as regards heavy industries, such as Oil and Gas and big manufacturing concerns. It also offers subsidiary financial services like Bond, Secured Credit, Miscellaneous financial losses and Fund/Portfolio management. Presently, it is an active player in providing good local security under the local content arrangement of the Oil and Gas Industry. For almost 5 decades, LEADWAY has honored its underwriting commitments and has earned its reputation of excellence in claims handling. The reputation enjoyed today by LEADWAY has been attained by the continuing pursuit of improvements, as regards its financial, underwriting and service profiles. The evolution of LEADWAY since 1970 has mirrored the dramatic expansion of indigenous insurance service providers, with LEADWAY remaining in the forefront as an insurer of repute. Our core values are iSCORE meaning; integrity, service, costumer-

Oye Hassan-Odukale, MD/CEO, Leadway Assurance Company Ltd.

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focus, Openness, respect-forthe-individual and excellence. The reputation enjoyed by LEADWAY has been attained by the continuing pursuit of improvements to maintain competitive advantage. Presently, LEADWAY has a Shareholders Fund of N45.27 billion. To reposition and take advantage of opportunities in the changing environment, LEADWAY has a policy of increasing its paid-up capital steadily. Over the years, the company has recorded steady growth in its business op-

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erations. As at 31st December 2018 the company had a total asset base of over N312.77 billion and a premium income of about N 87.74 billion. It has no loan stock and internally generates funds for capital projects. The Company holds a sizeable number of blue chip stocks spread across banking, insurance, manufacturing, finance etc. Within the money market, it has an average of N30billion deposit placement and leases in reputable banks and discount houses. Leadway also has a remark@Businessdayng

able claims paid record of over N109billion naira claims paid in 5 years, with N33billion paid in 2018 alone, the highest figure of claims paid in the industry. Leadway is aware of its customers’ financial security. It ensures that its insurance risks are carefully backed up with world-class reinsurance arrangements. For over two decades, the company has maintained a good business relationship with Swiss Reinsurance Company and Munich Reinsurance Company. These two widely known international reinsurance companies lead on the company’s major Treaties. Other participating companies are Africa Reinsurance Corporation, Continental Reinsurance Company Limited, GIC Reinsurance and Scor Reinsurance Company Limited The Company has a highly computerized work environment with major offices online. This enables a timely dissemination of information to clients on any risk assumed. The Company’s decision to invest heavily on computerization is part of its corporate strategy to take advantage of the benefits offered by technology as a service enhancement tool and the Company’s preparedness to follow the trails of e-commerce into the next century. Leadway’s Registered and Corporate Offices are located in Kaduna and Lagos respectively with 23 Branches spread all over the country. Gen. Martin Luther Agwai is the Chairman of the current Board of Directors while Oye HassanOdukale, MFR is the Managing Director of the company. If you would like to have more information about our products and services, please call +234 1 2700700, email insure@leadway.com or visit www.leadway.com.

Thursday 02 May 2019

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Thursday 02 May 2019

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THE NIGERIAN INSURANCE INDUSTRY Reasons why Nigerians don’t buy insurance products • Lack of Trust • Lack of Awareness • Affordability of Insurance products & services • Lack of easy access to Insurance products. Negative perceptions of Nigerians about the Insurance sector • Dishonesty amongst Insurance practitioners • Late payment of claims • Refusal to settle genuine claims • Ambiguous description of product details Key Initiatives towards driving growth in the Nigerian Insurance Sector Product development • Development of new and unique insurance products • More emphasis on building customer trust and product awareness • Micro-insurance penetration to drive growth in the sector Regulation • NAICOM should continue initiatives on strengthening the Insurance market whilst increasing regulatory over-sight • Insurance companies should be encouraged to meet international best practices/standards

• Higher capital requirement is needed in order to boost Insurers’ capacity to take on bigger transactions Competition • There should be drive to eliminate weak players via a number of policies like forced mergers & acquisition or increasing the minimum capital requirement of Insurance companies • The Insurance market should be driven by innovation especially via technology Human Resources • Conscious effort towards building Human Capital and retaining those talents within the industry • Greater use of mobile/digital platforms • There is a need to attract new customers via alternative channels Reasons for the under-performance of the Nigerian Insurance Sector Public Perception • Cultural and religious beliefs hinder individuals from taking Life insurance • Low level of innovation in product development • Lack of trust as regards Claim settlement

Distribution • Heavy dependency on Insurance brokers and agents for product distribution • Limited take-off of Micro-insurance, Bancassurance and Takaful insurance • Weak distribution channels

Financial Capacity • Current Capital requirements mean that Nigerian Insurers will have to partner with foreign re-insurance firms on big ticket transactions especially in the upstream Oil & Gas sector Technical & Operational Inefficiencies • There is a partial and ineffective deployment of technology platforms

(online, mobile and digital platforms ) and software applications in running day-to-day operations of insurance companies Lack of transparency & Accountability • High incidence of Insurance fraud • Low level of disclosure • Prevalent unethical practices • Inadequate industry data base

Steps that can be taken by Stakeholders to make Insurance more widely acceptable • Greater enforcement of Compulsory Insurance • Improving our mortgage culture would revolutionise the Insurance sector via property insurance as financiers of housing projects will need to insure the underlying asset for the period of the mortgage • Blocking premium leakages and proliferation of fake insurance documents mainly in motor and marine insurance is still a hindrance to growth of insurance • Improve public trust and perception • Customer protection • Drive awareness of Insurance policies and products • Training & Capacity building • Easier access to Insurance (Mobile, Bancassurance & Agency)

the banking platform. The insurer is positioned to grow revenue through referrals which may not be captured through its existing sales channels.

Key drivers of future growth in the Insurance Industry Micro insurance is insurance with low premium that provides cover for low income earners. In other words, this type of insurance is designed to indemnify lowincome earners from risks they want to insure against whilst taking into consideration their financial status to protect them from unnecessary financial burden. This type of insurance involves pooling resources from people within the same income bracket, for example, villagers, community or a cooperative society, and sharing the risk among the beneficiaries. Micro insurance is an element of social

protection. Micro insurance penetration has the capability to drive growth in the insurance industry because it will serve as a mechanism to help cover the informal sector of the economy. It is a key determinant in increasing market penetration. NAICOM has already introduced guidelines for and issued Micro insurance licences to stand-alone companies as well as micro insurance window licences to existing mainstream insurance companies.

Bancassurance is a partnership between an insurance company and a banking institution that allows the bank to refer its clients to the insurance company for a fee. In such a way that both the banking and insurance institution mutually benefit. According to the Bancassurance approved guideline 2017 by NAICOM, it is “the collaboration between a bank and an insurance company to market insurance products to the customers of the bank” The underlying basis is to enable penetration of insurance through

Takaful Insurance Takaful insurance is a type of Islamic insurance, where members contribute money into a pool system in order to guarantee each other against loss or damage. Takaful-branded insurance is based on Sharia, Islamic religious law, which prohibits interest (riba), forbids gambling (al-maisir) and provides guidelines for dealing with uncertainty (al-gharar) Takaful insurance incorporates certain elements of mutuality and ethical finance in its operations. This type of insurance makes it possible for certain segments of the Nigerian population to comfortably participate in the insurance sector hence driving financial inclusion. The fund is managed by a Takaful operator who is allowed to charge an agreed upon fee and compensate any policyholder for any loss insured against. The fund is managed for a specified period after which any remainder after accounting for future claims and reserve may be returned to the policyholders as cash dividend or in form or reduction in future contributions. InsurTech - The future of Insurance Insurance technology (InsurTech), a sub-sector of financial technology

(Fintech), is aimed at simplifying and further improving Insurance processes via technology. InsurTech has the potential of disrupting all processes in the Insurance Valuechain, from policy creation to claims management and product distribution. Insurance companies can now leverage on high mobile phone/ internet penetration in Nigeria and run their operations using a combination of mobile technology and agents. As a result, customers can purchase and pay for insurance products and services without walking into a physical office. There is an urgent need for Insurance companies in Nigeria to review existing models and align with fast changing technological solutions. Insurers need to innovate via technological solutions in order to leverage on key business opportunities in trying to meet and anticipate customer needs while improving core insurance functions. • Applying new approaches to under-writing risk and predicting loss • Leveraging on existing data and analytics in generating risk insight • Meet ever-changing customer needs with need product offerings • Enhance client inter-action and build trusted relationships • Enhance the business with sophisticated operational and technical capabilities

BusinessDay SPECIAL REPORT Editor (OLUDOLAPO ASHIRU) - Others MODESTUS ANAESORONYE, OLUFIKAYO OWOEYE, ENDURANCE OKAFOR , SEGUN ADAMS... Graphics: OGAR DAIVD OJIE www.businessday.ng

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Thursday 02 May 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

David Cameron falls short of target for $1bn China fund Office of former UK prime minister hopes first fundraising round will be concluded soon JIM PICKARD

avid Cameron has failed to raise the cash he was targeting for his planned $1bn China investment fund 16 months after it was announced, with one person who was asked to invest describing the project as “moribund”. People close to the former UK prime minister’s initiative, which has been endorsed by both the British and Chinese governments, acknowledged it had not yet completed a first round of fundraising, which would typically amount to up to half the targeted size. They said they hoped to make a breakthrough soon and had commitments of “substantial funds”, while declining to be specific. But investors have been unenthusiastic, said the person who has been asked to participate in the project: “It’s completely moribund . . . They approached all the big banks and other serious investors. And I don’t know of anyone that’s put money up.” Named the UK-China Fund, the private sector initiative is intended to seek opportunities for co-operation between the two countries in technology, healthcare, energy and manufacturing. It is Mr Cameron’s most ambitious commercial undertaking since he left office in the summer of 2016 after losing the EU refer-

endum. He and other backers had previously hoped to reach the “first closing” — the point when a fund has attained enough capital to begin making investments — by last autumn. One person close to the fund said announcements were now likely within three weeks — and blamed uncertainty caused by Brexit for the delay. “Work on the UK-China Fund is progressing very well,” said Mr Cameron’s office. “Positive discussions with potential investors have been ongoing both in the UK and China and substantial funds [are] already committed.” Mr Cameron’s office added that it hoped the initiative would mark up its first closing shortly. It is unclear whether Mr Cameron is aiming for a first closing of half the original target of $1bn because the former UK prime minister is likely to be tapping into sources not usually targeted by traditional buyout funds, according to private equity insiders. Standard Chartered had been touted as a likely anchor investor but is understood to have made no firm commitment. It is unclear whether China Investment Corporation, the Chinese sovereign wealth group cited as another potential backer, will support the fund either. Mr Cameron, who has hailed the initiative as the product of a

CtW raises conflict of interest concerns over ex-Merrill chief’s links to Uber head of finance

n investor group has called for Uber to remove John Thain, the former Merrill Lynch chief executive, from its board ahead of its initial public offering in New York. CtW Investment Group, which works with union-sponsored pension funds with more than $250bn in assets under management, said in a letter to Uber’s chairman, Ronald Sugar, that Mr Thain has a “reputation of poor business judgment on financial matters.” It added that there was a potential conflict of interest in his role as head of Uber’s audit committee given his close relationship with Nelson Chai, Uber’s chief financial officer. Mr Chai held the same role at both Merrill Lynch and NYSE Euronext when Mr Thain was chief executive. They also worked together at CIT Group, where Mr Thain hired Mr Chai after becoming chief. It was Mr Thain who helped broker Mr Chai’s introduction to Dara Khosrowshahi, Uber’s chief executive, last year. The relationship “could impede Thain’s ability as Audit Committee Chair to exercise independent judgment over the accuracy, credibility, and integrity of the company’s financial statements,” CtW wrote.

“We feel like this relationship really taints Thain’s independent view of Chai,” said Dieter Waizenegger, CtW’s executive director. “If there’s even the appearance of a conflict of interest with who is overseeing the financial reporting, that is a concern for investors,” he said. CtW added that Mr Thain was in charge during the sale of Merrill Lynch to Bank of America in 2008 at the height of the financial crisis and an ensuing controversy over billions of dollars in bonuses paid to Merrill staff. CtW also pointed to CIT’s acquisition of OneWest Bank under Mr Thain, which eventually resulted in a multimillion-dollar writedown. “Based on his past record of poor decision-making, Thain is an unsuitable steward of shareholder funds,” the letter said. CtW said the funds it works with intend to become “substantial Uber shareholders”. The letter came as Uber pitches to investors ahead of its imminent IPO, which is aiming to raise $9bn at a market valuation of up to $91.5bn. It urged Uber commit to a “refreshment plan” to make the board “more representative of its potential investor base” by September. It also called on Mr Sugar to reduce his board commitments at other companies including Apple and Chevron. www.businessday.ng

“golden era” in UK-Chinese relations, first discussed it with the Beijing authorities in September 2017 and was named as its vice-chair in December that year. But little more than a month later there were indications that big banks were reluctant to get involved in the fund, despite his courting of potential backers. London and Beijing have said the project will “create employment and boost trade links, supporting the Belt and Road Initiative”, China’s flagship infrastructurebuilding programme. Philip Hammond, the UK chan-

cellor of the exchequer, last week attended the annual Belt and Road Forum in Beijing, along with the leaders from dozens of other countries. However, one China expert said there had long been widespread industry doubts about Mr Cameron’s proposed fund because it was in competition with more established operators. “It never made a lot of sense,” he said. HSBC recently announced it was working on a separate initiative with CIC to raise £1bn to invest in British companies with Chinese links. There has also been greater ten-

sion between London and Beijing under Theresa May, the prime minister, than under Mr Cameron — despite the government’s decision last week to allow Huawei, the Chinese telecoms operator, access to some parts of the UK’s 5G infrastructure. The fund is an initiative of Lord Chadlington, a prominent Tory donor and public relations veteran who was president of the Witney Conservative association in Oxfordshire when Mr Cameron successfully sought selection to be the party’s candidate for the constituency in 2000.

McGraw-Hill Education and Cengage plan merger

Investor group calls for Uber to sack John Thain from board SHANNON BOND

Then prime minister David Cameron and Xi Jinping drink a pint of beer at a pub near Chequers during the Chinese president’s visit to the UK in 2015 © AFP

College textbook publishers seek deal as online competition intensifies NAOMI ROVNICK AND JAMES FONTANELLA-KHAN

S college textbook publishers McGraw-Hill Education and Cengage are planning to merge as a shift to online education materials reshapes their businesses, according to a person briefed on the plans. The planned all-stock merger would create a combined group to be renamed McGraw-Hill and led by Cengage chief executive Michael Hansen, according to the Wall Street Journal, which first reported the plans. A deal would provide some cost-cutting opportunities for the private equity-owned groups which both reported net losses in their most recently published annual results. The US higher education textbook industry is in a “vicious cycle” of losing business to online resale or book rental services and then raising the prices of new books in response, according to an investor presentation published on Cengage’s website last October. This motivates more students to seek out low cost alternatives. Ian Whittaker of stockbroker Liberum said the combination

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would create a “major headache” for London-listed Pearson in its core higher education market. He said the merged McGraw-Hill and Cengage business would match Pearson in terms of market share and also brought “the risk of significant price deflation” in the college course material sector. Cengage was acquired by Apax Partners for $7.8bn in the frothy buyout market of 2007, but filed for Chapter 11 bankruptcy protection six years later. After eliminating around $4bn of debt, the publisher, which is also backed by private-equity firms KKR and Searchlight Capital Partners, revamped its sales and marketing processes and put more focus on its digital business. Cengage, which made a net loss of $2m on $1.5bn of revenues in the year to March 2018, has addressed industry challenges with the launch of a subscription-based service called Cengage Unlimited, which charges students $179.99 a year for access to online textbooks and study aids. McGraw-Hill Education, which was purchased by Apollo Global Management for $2.3bn in 2013, scrapped a $250m bond sale in 2017 after it failed to attract @Businessdayng

enough investor interest. Apollo had also sought to exit its investment via an initial public offering, which did not materialise. McGraw Hill Education reported total billings, its preferred measure of revenues, of $1.7bn in the year to December 2018. It lost $160m after paying $181m of interest on its debts. Almost half of its billings, at $800m, came from digital products while the proportion was higher, at 67 per cent, in its higher education division. If the merger goes through, McGraw-Hill’s chief executive Nana Banerjee will leave the combined company, which could then try to go public via an initial public offering, the WSJ said. Roddy Davidson, of Shore Capital, said that Pearson’s own revamped digital offering for US college students was showing enough signs of positive growth that the combination of its smaller rivals, which still needs to be approved by regulators, “would not represent a strong increase in competitive activity in the short term”. He said this was particularly because McGraw Hill Education and Cengage would likely need many months to bed down their merger.

Thursday 02 May 2019

BUSINESS DAY

NATIONAL NEWS

Climate change not top environment priority, says Trump official New EPA head says clean water and affordable energy are bigger challenges LESLIE HOOK AND KIRAN STACEY

lean drinking water is a higher priority for the Trump administration than climate change, according to Andrew Wheeler, the top US environment regulator, who called for scientific debate about the models used to assess global warming. In an interview with the Financial Times, Mr Wheeler expressed concern that the focus on climate change and the need to limit warming were detrimental to other big environmental challenges, such as potable water and affordable electricity. “We cannot lose sight of the other environmental issues facing the world,” said Mr Wheeler, confirmed in March as head of the Environmental Protection Agency. “Water issues are the number one environment crisis.” Mr Wheeler, whose agency regulates US carbon dioxide emissions, said climate change was a “big priority” for the agency, and that the US should cut its CO2 emissions. A former coal lobbyist and prominent critic of green legislation, Mr Wheeler is trying to restore order at the EPA following a turbulent period under his predecessor Scott Pruitt, who was dogged by a series of ethics controversies.

“We need to be decreasing our CO2 and greenhouse gas emissions,” he said. “But we are not going to focus on that to the detriment of other environmental indicators.” He continued: “Is there climate change? Yes. Does CO2 contribute to climate change? Yes. Does man contribute to CO2? Yes. What’s going to happen 50 years from now? There’s a lot of divergent views on the models, and the inputs to the models and how we calculate them.” The Trump administration has been criticised by Democrats and environmentalists for its approach to climate change. The president, who has said he believes climate change is not caused by humans, is set to pull the US from the Paris climate deal that aims to limit temperature rises to less than 2C from pre-industrial levels. “For all intents and purposes, we have left the Paris climate accord,” said Mr Wheeler. “It’s not a treaty that benefits us.” A surge of interest among Democrats and young Republicans has put climate change firmly in the spotlight. The Green New Deal, a proposal for a clean energy investment plan backed by New York congresswoman Alexandria Ocasio-Cortez, has become a rallying call for the Democratic presidential candidates running for election next year.

Venezuelan coup attempt stalls as military digs in Opposition leader Guaidó is blocked by security forces from marching on presidential palace

JOHN PAUL RATHBONE AND GIDEON LONG

he dramatic call to arms by two of Venezuela’s most important opposition figures for the military to oust the regime of Nicolás Maduro started at dawn outside the Carlota military air base in Caracas. By midafternoon, the putsch appeared to have failed. One of the leaders, Leopoldo López, took refuge in the Spanish embassy with his family. The other, Juan Guaidó, was blocked by security forces from marching on the presidential palace. Nor were there concrete signs of defections by the army’s top leadership. The unrest was the latest manifestation of a three-month bid for the presidency by Mr Guaidó, who is backed by the US and more than 50 other countries. John Bolton, US national security adviser, told reporters that the US’s “primary objective was a peaceful transfer of power”. But he added: “All options remain on the table.” Mr Guaidó, 35, bases his claim to the presidency on being head of the National Assembly, and says that the constitution has been usurped by Mr Maduro following elections last year that many countries consider a sham. Tear gas wafted through the largely empty streets of Caracas late on Tuesday, and witnesses said the country’s largest military barracks remained quiet. Major opposition marches were still planned for May 1 after protesters took to the streets in 22 of the country’s 24 states. Late on Tuesday evening, Mr Guaidó appeared in a video posted on social media, recorded in a bare

office, and confirmed Wednesday’s marches would go ahead as planned. He called Mr Maduro a coward “who has remained hidden behind four walls out of fear” and said “he’s not going to appear because he doesn’t have the backing of the armed forces”. Shortly afterwards, Mr Maduro, whose whereabouts had been unknown for most of the day, appeared on state television from the presidential palace to deliver a combative hour-long speech in which he said the “coup-like skirmish” had been defeated. Flanked by key ministers and generals, he said he had appointed three prosecutors to investigate the day’s events. “They cannot go unpunished,” he said, describing Mr López as “a fascist”. Seated in front of the Venezuelan flag, he chastised European nations for supporting Mr Guaidó. “Is this what you call democracy. Is this what you call the rules of play?” he asked, before lashing out at the Trump administration, saying that “in the US there has never been a crazier government than this one”. He ended by calling his supporters out on to the streets to celebrate May Day, setting the scene for more potential clashes. If the uprising has stalled, that may be because Mr Guaidó, fearing for his arrest, jumped the gun on plans that would have seen senior officials defect the day after the scheduled May Day opposition marches. Mike Pompeo, US secretary of state, told CNN that “as we understand it” Mr Maduro had been ready to depart but had been persuaded to stay at the last moment by Russia, a key ally. www.businessday.ng

Workers at a garment factory in Antananarivo, Madagascar. The label “Made in Africa” may soon be as common as “Made in China” on clothing and other goods sold in Europe © Bloomberg

Africa will be the new China

Investment, co-operation and strategic advantage will boost the continent’s exports to Europe BASIL EL-BAZ

’d like to make a prediction. It’s a bold one: within 50 years, the label “Made in Africa” will be as ubiquitous as “Made in China” is today on everyday items sold in Britain such as clothing, towels and televisions. In fact, I’ll go even further: African products will actually displace many such items that today are made by Chinese companies. Admittedly, this does seem an unlikely scenario when, beyond perhaps a diamond in their jewellery box, a bag of Kenyan coffee or a bottle of South African Cabernet, many Britons would struggle to find a “Made in Africa” product in their homes. But Africa, with its chequered history of industrial development, is on the cusp of real and dramatic economic growth. Much progress has already been made. Over the past 15 years, most African countries have enjoyed sustained economic growth, in some cases at annual rates above 5 per cent, buoyed by rising commodity prices, budget surpluses, foreign investment and fewer conflicts. Services sectors are blossoming across the continent, while a telecommunications boom — driven by mobile phone usage, in a region where land lines were few, and internet penetration — is also playing a role, as is a vibrant financial services sector. Yet 28 of the world’s poorest countries are in Africa. Half of its people live in poverty, without access to basic human rights such as food, clean water and housing, while two in five are illiterate. Economic growth, while fast, has come from a low base: gross

domestic product per head is just $1,770, about a quarter that of Asia. Sustainable transformation requires a radical new approach. It is not a services economy that will lift half a billion people out of poverty or create 100m jobs, but an industrial one. Export-led manufacturing will be the key to Africa’s success, just as it transformed the fortunes of Asian countries, particularly China, in past decades. Today, the manufacturing sector contributes just 9 per cent to Africa’s gross domestic product, against 17 per cent for the agricultural sector. It also represents less than 2 per cent of global manufacturing, suggesting huge scope for improvement. The African Union has put the manufacturing sector at the heart of its “Agenda 2063”, a strategic framework for the socio-economic transformation of the continent over the next 50 years, which has the agreement and full support of all 55 countries. It is an agenda that, in its own words, has been driven by the “voices of the African people indicating the Africa they want”. Similarly, the launch of the African Continental Free Trade Area last year provides for a single market for goods and services. It allows African-owned companies to enter new markets, expanding their customer bases and, potentially, product ranges. Many predict it will also act as an impetus for investment in much-needed cross-border infrastructure, creating employment and developing local experience in engineering projects. The prospect of larger marketplaces will spur investment. But African governments must play their role: new policies are necessary to

help build the capabilities of domestic firms and foster industrial clusters. (For example, Asian governments offered tax breaks, subsidies and bespoke contracts to top-performing businesses.) Today, much of Africa’s industry is focused on low value-added assembly because the requisite raw materials are not produced or available locally. My company, Carbon Holdings, an Egypt-based petrochemicals business, is currently finalising the financing for an $11bn petrochemicals plant in the Suez economic zone. It will be the largest downstream plant in Africa, with the potential to create thousands and thousands of direct and indirect jobs and will, I predict, help to double Egyptian exports within one year of coming online. For the first time, Egypt will have essential feed for its basic industries, such as plastic, packaging, building materials and automotive parts, allowing for production as opposed to assembly to take place locally. It will make the country more attractive to overseas manufacturers, keen to avoid costly import duties, who can produce items as diverse as tyres and nappies locally, further boosting employment. It is projects such as our Suez plant, funded in part by development institutions like the Africa Finance Corporation, alongside leading export credit agencies Euler Hermes of Germany and UK Export Finance, that will be instrumental in helping Africa’s manufacturing sector to fulfil its true potential. African governments must create economic zones around such developments to encourage global players to enter the marketplace.

Warren Buffett’s Occidental deal is no ‘elephant’ but it helps Berkshire Hathaway’s $10bn move is straight out of the investor’s playbook ERIC PLATT AND JOE RENNISON

arren Buffett is no longer waiting for Godot. After sitting on the sidelines for the better part of three years, the Oracle of Omaha has finally found a multibillion-dollar investment to plough some of Berkshire Hathaway’s $112bn cash into. Berkshire on Tuesday agreed to bankroll part of oil and gas producer Occidental Petroleum’s $55bn hostile takeover of rival Anadarko Petroleum in the first major investment by the $700bn conglomerate since it bought Precision Castparts in 2016.

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The deal was seen as a coup for the billionaire investor and is expected to pay off handsomely for Berkshire. In return for $10bn, Occidental will issue Berkshire preferred shares paying interest of $800m a year for at least the next decade. The capital injection could give Occidental the means to win the backing of the Anadarko board by increasing the cash component of its bid, people familiar with the transaction said, finally seeing off its rival Chevron, which had tendered a lower offer. Another potential advantage: if Occidental switches the offer significantly to cash it will have to issue fewer new shares. That would allow @Businessdayng

it to avoid having to put the takeover to a vote of its shareholders. With at least one major Occidental shareholder, T Rowe Price, already objecting to the deal, and because its shares have slid since news of its interest in Anadarko was revealed, securing shareholder approval may not be straightforward. Companies are required to hold a vote when they issue more than 20 per cent of their outstanding shares to fund a takeover. The Anadarko board wants to know with certainty that the takeover would not run into resistance. Chevron was able to provide that confidence; its stockholders are not entitled to a vote on the matter.

Thursday 02 May 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Arki Busson’s hedge fund LumX posts $8.7m loss Firm also delays its annual report and warns on value of goodwill JENNIFER THOMPSON AND LAURENCE FLETCHER

he investment firm run by Arpad “Arki” Busson, once one of the hedge fund industry’s most influential figures, has revealed a large loss and delayed publishing its annual report in the latest sign of its fading fortunes. Swiss-listed LumX Group reported unaudited figures stating it had made a net loss of $8.7m — a ninth consecutive year of losses — on gross revenues of $8.2m in 2018. The group has a market capitalisation of SFr11.4m ($11.2m). The firm, citing “planned recapitalisation measures”, said the Swiss stock exchange had granted it an extension until the end of May to publish its audited results. If it fails to do so, it will risk its shares being suspended. LumX added that its audited financial statements would be available “when the agreements relating to this restructuring have been concluded”. It provided no additional detail. Mr Busson, LumX’s executive chairman, co-founded the children’s charity Ark and is well known for his philanthropic work and previous relationships with Hollywood actor Uma Thurman and model Elle Macpherson. LumX also warned that it could not confirm the value of goodwill — the amount one company pays for another over and above the value of the target’s assets — and said there was “a risk of full or partial impairment, which would have a further impact” on its net results. In its last semi-annual report, which related to the first

six months of last year, the firm reported goodwill of $21.1m and said it had not seen any signs of impairment from the acquisition of Mr Busson’s former business EIM Group. Disclosure rules on the Swiss stock exchange require listed companies to present results within four months of the end of their annual reporting period. LumX was originally expected to report annual results on April 29 according to its own website. It said it would confirm the date of its annual meeting with shareholders “in due course”. LumX, which has offices in London and Switzerland, has been cutting staff in recent years as its assets have shrunk. In March it announced further job reductions, citing “investor trends and headwinds” and gave up its mutual fund licence in Switzerland. It remains regulated by the UK Financial Conduct Authority. The group provided no update on its assets under management. It had $7.1bn in feeearning assets at the end of June last year, compared with the $18bn it managed when it was known as Gottex at the end of 2007. The group provides risk analysis services and a managed account platform as well as investment management. LumX declined to provide additional comment. Its 2018 loss and the delay to the publication of its financial results were first reported by Financial News. The firm’s shares have fallen 65 per cent during the past two years and closed at SFr0.105 on Tuesday. The Swiss exchange is closed for a national holiday on Wednesday.

FCA begins review of financial advice market UK financial watchdog to take fresh look at rules amid concerns investors are overpaying SIOBHAN RIDING

he Financial Conduct Authority has begun to review the rules that govern the retail market amid concerns that investors are struggling to assess the cost of advice and may be overpaying for unnecessary services. The UK’s retail distribution review, which came into effect in 2013, aimed to make the retail investment market more robust by introducing professional requirements for advisers and banning the use of commissions to pay for advice. But it led to some retail investors being priced out of the market because of high fees charged by advisers. The financial watchdog, which four years ago recommended

making the provision of advice to retail investors more cost effective and took steps to monitor the market, said on Wednesday it would consider the success of these initiatives and whether advisers were delivering what consumers needed. It will also consider how market developments might affect the advice and guidance services. The FCA this year highlighted concerns about potential “conflicts of interest, poor treatment of consumers and misleading or confusing communications”. “Consumers can struggle to assess the cost of advice and may overpay for services which they do not need,” the regulator said. The FCA, which is inviting industry feedback by June 3, will publish its final report in 2020. www.businessday.ng

UK to cancel final 2 no-deal Brexit ferry contracts Transport secretary Chris Grayling’s decisions to cost taxpayer more than £80m JIM PICKARD

hris Grayling will on Thursday confirm the cancellation of the two remaining ferry contracts signed for a no-deal Brexit — bringing their cost to taxpayers so far to more than £80m. But the UK transport secretary will not rule out spending millions more on further ferry deals if the House of Commons continues to reject the government’s Brexit deal. Mr Grayling has been beset by criticism for months over his decision to award £103m in contracts to three companies for ferry services to maintain essential supplies, such as medicines, if Britain leaves the EU without a deal. The contracts were designed to relieve pressure on the main DoverCalais route, amid expectations of delays from extra border checks. The smallest of the three deals, a £14m arrangement with Seaborne Freight, was cancelled after it emerged that the company did not have any ferries. The two remaining deals — totalling £89m — were with DFDS of Denmark and Brittany Ferries of France. Mr Grayling was expected to

confirm that those deals have been cancelled after the EU delayed the date of Brexit from late March to the end of October. The National Audit Office, which has issued a report on the preparations, estimated that cancelling the deals would cost £56.6m. One person close to the government indicated that the cost would probably be slightly less at about £50m. In March, Eurotunnel, the owner of the Channel tunnel, dropped a legal claim over the ferry contracts — which alleged “distortionary and anti-competitive” behaviour — in return for a payment of £33m. Meanwhile, the FT revealed last week that P&O Ferries, a competitor, is challenging that award — seeking either a reduction in the payment or equivalent compensation for itself. Andy McDonald, shadow transport secretary, said Mr Grayling’s contracts would forever be a “case study in ministerial incompetence”. “The transport secretary’s approach to procurement and planning has cost taxpayers tens, if not, hundreds of millions of pounds,” he said. “His career as a minister has left a trail of scorched earth and billions of pounds of public money

wasted.” However, the announcement may not spell the end of the saga, government figures have admitted. Theresa May, the prime minister, has toned down her rhetoric that no-deal Brexit is “better than a bad deal” but officials insist that the ferry announcement does not mean preparations for leaving without a deal had been dropped. Instead, they warned that if MPs rejected the Brexit deal again the DfT might have to sign fresh contingency deals for ferry services, again at the cost of tens of millions pounds. “If we have got a deal through we won’t need to do no-deal Brexit preparations,” said one. “If we haven’t we would have to look at this all over again. We can’t risk the security of vital medical supplies coming into the UK.” Virendra Sharma, a Labour MP, said Mr Grayling was “the man with the reverse Midas touch”. “When you mix an intractable problem like Brexit with an incompetent secretary of state, you’re setting yourself up for a big fall. Millions of pounds have been wasted as a result,” he said.

Lex letter from New York: A better mousetrap

Disney believes it has both the quantity and quality of programming for which people will pay

SUJEET INDAP Dear readers, arning a bigger market valuation from ever larger losses is not just for the likes of Uber and Lyft these days. It works for blue-chip companies, too. Disney held a highly anticipated investor day last month to provide details on its plan to take on Netflix. Wall Street knew that its shift to streaming television programming would not be cheap, starting with the $70bn needed to acquire much of 20th Century Fox. And when it came to red ink, Disney did not disappoint. It revealed that operating losses from its portfolio of direct-to-consumer products, such as Hulu, ESPN+ and Disney+, would reach several billions of dollars annually in upcoming years. These sums would go to building out the technology, gaining market share and acquiring content. And, oddly enough, sharehold-

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ers ate it up. Disney’s market cap has jumped a fifth, about $40bn dollars, in recent weeks after the media titan convincingly did what no other media group has done — articulated a credible challenge to Netflix. Disney believes it has both the quantity and quality of programming from its vast historical library of TV and films for which people, around the world, will pay. At a cost of more than $70 a year for Disney+, it believes it could have as many as 90m subscribers in five years. But its future does not depend just on what is already in the Disney library. By having bought Fox, Pixar, Marvel, and Lucasfilm, the media titan has secured huge “tentpole” franchises that should lead to dozens of film sequels, theme park rides and toys. As evidence, witness the amazing box office results from Marvel’s Avengers: Endgame. This film has just grossed more than $1bn on its opening weekend, a record, and much of that outside @Businessdayng

of the US. And so unlike Netflix, Disney’s streaming ambitions do not require expensive funding with junk bonds, but rather from a core business cash machine. Even so, analysts are adjusting to the new Disney. Here is the chart of the consensus earnings per share estimate over the next year: The decline in the past year indicates how expensive Disney streaming investments should be. And as Disney’s share price has jumped, its near-term valuation multiples have exploded as investors willingly trust that years down the road Disney will reap the benefits of a huge, loyal subscriber base. At the investor day, Disney forecast that its streaming efforts would turn profitable post 2023. The question is will longtime chief executive Bob Iger still be around to be accountable for that pledge after repeatedly extending his contract and waving off potential internal successors.

Thursday 02 May 2019

BUSINESS DAY

ANALYSIS

Why the Fed changed direction but the dollar did not US currency buoyed by strong economy, relatively high rates and copycat policy moves

ast week Zach Pandl threw in the towel. For months, Goldman Sachs’ top currency strategist had maintained a bearish forecast on the US dollar, in the expectation that the mix of global growth “would turn less dollar-friendly” this year as other economies rebounded. But in a mea culpa last Friday he switched tack, saying the euro should continue to “grind lower” against a resurgent US currency. Goldman’s co-head of global FX is not the only specialist on Wall Street to have been wrongfooted by the greenback’s renaissance, which has come in spite of an abrupt policy shift from the Federal Reserve. Spooked by last year’s market turmoil, the US central bank made a U-turn in January, and in March went as far as shelving plans to raise interest rates at all this year. Few expect a change in tone at this

year, analysts argue that this looks premature. Employment data due on Friday, they say, could ease concerns over an imminent cut in US rates, which remain the highest in the developed world. “There’s no other currency anyone wants to buy — even if the Fed is on hold it’s still the highest yielding G10 currency,” says Kit Juckes, global head of FX strategy for Société Générale. Derivatives markets reflect this. Investor bets on a weaker euro now stand at their highest level since December 2015, according to the latest data from the Commodity Futures Trading Commission. In contrast, positive bets on the dollar by fund managers now outstrip bearish ones by the biggest ratio since late 2016. Plenty of analysts are continuing to question all this dollar optimism. Morgan Stanley’s chief currency strategist, for example, is sticking to his guns, with a prediction that by the end of the year, one euro will buy $1.20, marking a large decline for the dollar from

week’s meeting on Wednesday. The ebb and flow of global growth and monetary policy typically influences exchange rates, and normally such a shift would sap a currency of its vigour. But the dollar has been resurgent — thanks, analysts say, to the resiliency of the US economy, still-high interest rates relative to the rest of the world and a scramble by other central banks to match the Fed’s sudden dovishness. The DXY index, which measures the dollar’s strength against a basket of other major currencies, last week powered to its highest level since May 2017. The euro, its most-traded counterpart, has slipped to a two-year low. “The dollar is the best house in a bad neighbourhood,” says Brad Bechtel, global head of FX for Jefferies. “It seems like the Fed was the first to shift and the rest of the world is trying to keep up.” The most prominent move beyond US borders has been from the European Central Bank, which in March signalled that the prospect of higher rates remains a long way off, even as growth has showed signs of picking up. The ECB’s deposit rate still sits in negative territory, at minus 0.4 per cent, compared to the 2.5 per cent top band of the Fed’s short-term interest rate. Some traders have been betting that the next move in interest rates from the Fed may be down rather than up, given weak inflation data. But with the economic growth rate coming in at a forecast-beating 3.2 per cent in the first three months of the

the current exchange rate of $1.12. Similarly, Goldman’s Mr Pandl might have revised his short term euro target to $1.10, but he kept his one-year prediction of $1.20 per euro untouched, arguing that a broader bounce in global growth should cap the greenback’s rise. Ulrich Leuchtmann, a strategist with Commerzbank, points out that the squeeze the euro is facing on the back of the ECB’s dovish tack, was not seen in the dollar when the Fed first signalled a similar shift late last year — an anomaly that should spook investors, he argues. The current “dollar euphoria” is “excessive”, Mr Leuchtmann says. For now, however, the resurgent US currency is posing a threat to emerging markets, many of which depend on dollar funding and remain sensitive to shifting exchange rates. The perennial weak links — Argentina and Turkey — have been particularly badly hit since the turn of the year. The Argentine peso and Turkish lira are now the worst performing major currencies of 2019, losing 13 per cent and 11 per cent, respectively, against the dollar. A persistently strong greenback could also begin to weigh on the effervescent US stock market, where many big companies with international operations could see their foreign earnings translate into fewer dollars. “Overall, the past week has been dominated by higher US equity prices and . . . a dollar outperformance story. In our view, this week should see a test of that new trend,” says Jordan Rochester, an FX strategist at Nomura.

RICHARD HENDERSON, EVA SZALAY AND ROBIN WIGGLESWORTH

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Why Boris Johnson looms large over the Brexit endgame

The prospect of the former foreign secretary becoming prime minister permeates all debates on what comes next GEORGE PARKER

t was just after 11am on March 12 that hope died in Downing Street. Several hours earlier a relieved Theresa May had arrived back in Number 10 bleary-eyed, believing “clarifications” she had secured in Strasbourg from European Commission president Jean-Claude Juncker would finally help her get her Brexit deal through the House of Commons. “The mood was upbeat in cabinet,” recalls one minister. “It really felt like it was going to happen.” Mrs May’s minority government partners, the Democratic Unionist party, seemed ready to end their blockade of the deal; Eurosceptics in the Conservative party were coming into line. Then came the bombshell legal advice from Geoffrey Cox, the UK’s attorneygeneral, which sunk the deal, perhaps for good. Mr Cox concluded that for all the diplomatic niceties, the legal risk remained “unchanged” that Mrs May’s deal could leave Britain stuck in a permanent customs union with the EU. “We’ve got a selling job to do,” sighed one ally of the UK prime minister. Hours later Mrs May’s deal was crushed by 149 votes. Since then, the Tory leader and her government have been trapped in what one cabinet minister calls simply “the Brexit vortex of shit”. It is a vortex that threatens to consume Mrs May and her party. Those working in the prime minister’s Downing Street bunker can see no clear means of escape; a moment of reckoning with the voters lies around the corner; the prime minister’s tenure in Number 10 is measured in months or even weeks; and a brutal leadership contest awaits amid expectations of an early general election. And all the while, the man seen by some as the principal architect of this chaos — Boris Johnson — surveys the unfolding disaster, waiting for his moment to strike. The prospect of the former foreign secretary becoming prime minister now hangs over all discussions about what happens next to Brexit. At Westminster and in ministerial offices across Europe, people are holding their breath. Mr Johnson, an outspoken Eurosceptic who in 2016 compared the drive for European unity to the visions of Napoleon and Hitler, is seen as beyond the pale by many European leaders. Donald Tusk, European Council president, said at the time his remarks had “crossed the boundaries of rational discourse”.

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Allies of Labour leader Jeremy Corbyn say the party’s overwhelmingly pro-European activists would never forgive him if he helped take Britain out of the EU © PA A surreal mood has descended on Westminster. After months of attritional political warfare on Brexit, the cycle of late-night votes has subsided, thanks to the EU27’s decision to push the Brexit deadline back to October 31. Mrs May’s Brexit deal is still technically alive, but only just. “Does the prime minister worry she might be leading a zombie government?” she was asked at a Westminster briefing this week. French president Emmanuel Macron is not alone in losing patience with Mrs May’s repeated failed attempts — three and counting — to ratify her Brexit deal. But since Mrs May won her Brexit extension at the EU summit in April, virtually nothing has happened. That sense of paralysis is acute. Mrs May’s latest plan for resuscitating her exit deal, a process of crossparty talks with the opposition Labour party, has been limping along for weeks amid official bulletins of “progress” and private briefings that the exercise is doomed to failure. “They are stringing us along,” admits another cabinet minister. Mrs May is keen to wrap up the talks — with or without an agreement — next week. Allies of Labour leader Jeremy Corbyn say the party’s overwhelmingly pro-European activists would never forgive him if he helped Mrs May take Britain out of the EU. They want a commitment to a second referendum to reverse Brexit. “The talks are a façade,” says a member of Labour’s shadow cabinet in spite of more positive noises emerging from Tuesday’s talks. “There is no way the party will help May out of this mess. It would destroy Jeremy’s leadership.” Even in the unlikely event that Mrs May and Mr Corbyn could strike a deal — for example, to guarantee to uphold EU standards on workers’ rights and the environment — Labour negotiators fear that it might be ripped up by a new Eurosceptic prime minister. Martin Vickers, a Conservative Eurosceptic MP, says: “Labour MPs have indicated to me that they fear Boris, or another Tory they regard as an extreme Brexiter, taking over and not honouring any pledges that the current leadership makes to them.” Neither Mr Johnson nor other Tory Eurosceptics would accept Labour’s principal demand that Britain stays in a permanent customs union with the EU. If Mrs May’s Brexit deal is para@Businessdayng

lysed, so too is the rest of government. Little legislation is being passed, ministerial jobs go unfilled for weeks, secrets leak from national security meetings. “There’s sometimes nothing at all in the grid at weekends,” says one senior Tory staffer, referring to Number’s 10 media schedule. “It’s like they have given up.” Gavin Barwell, Mrs May’s chief of staff, tells ministers of his plan for a summer of domestic policy action, but with no Commons majority one senior government figure says the idea is “a fiction”. As part of the bargaining to win support for her Brexit deal in March, Mrs May has said she will step down once it is agreed, further reducing her authority. Last week, Downing Street floated the idea of bringing forward the legislation needed to ratify Mrs May’s exit deal, only to shelve the plan because it faced certain defeat. A fallback move, should talks with Labour fail, is for a series of Commons votes to test support for different Brexit options, but such an exercise has failed to generate a majority for any scenario before. On Thursday some voters will have their chance to cast their verdict on the Brexit shambles in a series of local elections in England and Northern Ireland. Mrs May’s party is braced for the loss of up to 1,000 council seats, largely to the pro-Remain Liberal Democrats and to a lesser extent to Labour. While those elections will be bad for Mrs May, much worse lies ahead if — as expected — Britain holds European Parliament elections on May 23. A YouGov poll puts the Conservatives on 13 per cent for those elections, putting the party on course for perhaps its worst result in living memory. Mrs May’s nightmare is compounded by the return of Nigel Farage, the former Ukip leader, whose new Brexit party is running at 28 per cent in the polls for that contest. Ministers speak of an impending “tsunami”, but the question is whether it will sweep Mrs May out of power and pave the way for a “true Brexiter” to arrive in Number 10 to lead Britain out of the EU, with or without a deal. Mr Johnson — who did not have enough support in 2016 to contest the leadership with Mrs May — is the 3-1 bookies’ favourite for the Tory succession and the activists’ choice according to surveys. Even those close to Mrs May do not know if she would call it quits at that point. “Her silo of advisers is so small that on the really big decisions it’s just her and Philip,” says one longtime ally, referring to the prime minister’s husband. Others say she will dig in. “She is resigned to the fact she is going, but really wants to deliver the withdrawal agreement,” says one close colleague.

Thursday 02 May 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Tuesday 30 April 2019

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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 215,048.62 6.05 0.83 118 4,095,607 UNITED BANK FOR AFRICA PLC 222,296.24 6.50 4.84 164 11,302,494 ZENITH BANK PLC 656,186.72 20.90 1.95 288 6,097,626 570 21,495,727 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 267,419.93 7.45 2.76 165 6,872,646 165 6,872,646 735 28,368,373 BUILDING MATERIALS DANGOTE CEMENT PLC 3,169,534.38 186.00 - 118 1,740,180 LAFARGE AFRICA PLC. 193,293.55 12.00 - 39 153,142 157 1,893,322 157 1,893,322 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 347,182.29 590.00 - 7 842 7 842 7 842 899 30,262,537 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 2 300 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 5 40,500 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 1 4,000 8 44,800 8 44,800 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 8 44,800 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 76,312.80 80.00 - 35 495,347 PRESCO PLC 62,750.00 62.75 - 10 63,950 45 559,297 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,650.00 0.55 - 10 223,550 10 223,550 55 782,847 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 688.30 0.26 -7.14 6 440,121 JOHN HOLT PLC. 182.90 0.47 -9.62 8 504,671 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 47,964.63 1.18 -1.67 84 5,058,624 U A C N PLC. 20,169.08 7.00 - 32 202,609 130 6,206,025 130 6,206,025 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 1 150 1 150 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 36,300.00 27.50 - 9 13,355 ROADS NIG PLC. 165.00 6.60 - 0 0 9 13,355 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,313.34 1.66 - 3 2,100 3 2,100 13 15,605 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 10,334.94 1.32 - 4 10,000 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 131,422.97 60.00 - 59 110,009 INTERNATIONAL BREWERIES PLC. 197,704.82 23.00 -2.13 26 1,345,605 NIGERIAN BREW. PLC. 511,801.73 64.00 - 96 267,695 185 1,733,309 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 50,500.00 10.10 9.78 112 2,617,741 DANGOTE SUGAR REFINERY PLC 167,400.00 13.95 1.45 53 840,032 FLOUR MILLS NIG. PLC. 67,246.23 16.40 - 63 610,308 HONEYWELL FLOUR MILL PLC 9,278.33 1.17 -0.85 20 582,910 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 50,471.80 19.05 - 5 175 UNION DICON SALT PLC. 3,676.41 13.45 - 1 100 254 4,651,266 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 20,660.22 11.00 - 20 125,867 NESTLE NIGERIA PLC. 1,189,222.17 1,500.30 3.31 52 145,761 72 271,628 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,815.75 3.85 - 10 82,800 10 82,800 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 37,521.01 9.45 - 46 413,249 UNILEVER NIGERIA PLC. 192,457.68 33.50 1.49 65 9,587,162 111 10,000,411 632 16,739,414 BANKING ECOBANK TRANSNATIONAL INCORPORATED 192,670.29 10.50 1.45 45 8,122,473 FIDELITY BANK PLC 55,631.61 1.92 -0.52 72 2,040,615 GUARANTY TRUST BANK PLC. 1,047,749.98 35.60 1.42 192 61,050,779 JAIZ BANK PLC 14,437.48 0.49 - 8 211,293 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 78,885.75 2.74 5.38 33 3,753,875 UNION BANK NIG.PLC. 198,021.12 6.80 -0.73 39 134,139,573 UNITY BANK PLC 9,234.58 0.79 - 9 90,115 WEMA BANK PLC. 27,773.62 0.72 - 33 1,716,507 431 211,125,230 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 15,000,000 AIICO INSURANCE PLC. 4,989.75 0.72 2.86 27 622,402 AXAMANSARD INSURANCE PLC 19,950.00 1.90 - 6 2,050 CONSOLIDATED HALLMARK INSURANCE PLC 2,113.80 0.26 - 4 74,200 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 3 1,300 GOLDLINK INSURANCE PLC 2,001.98 0.44 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 - 7 672,000 LAW UNION AND ROCK INS. PLC. 2,320.02 0.54 - 1 10,000 LINKAGE ASSURANCE PLC 4,160.00 0.52 4.00 7 348,590 MUTUAL BENEFITS ASSURANCE PLC. 1,680.00 0.21 - 4 165,000 NEM INSURANCE PLC 10,613.81 2.01 - 14 383,200 NIGER INSURANCE PLC 1,547.90 0.20 - 2 5,133 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 1 100 REGENCY ASSURANCE PLC 1,733.88 0.26 - 8 309,067 SOVEREIGN TRUST INSURANCE PLC 2,001.80 0.24 -4.17 17 2,538,600 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 5 10,680 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 3,189.33 0.23 - 0 0 WAPIC INSURANCE PLC 5,486.92 0.41 2.50 21 435,802 128 20,578,124 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,361.36 1.47 - 8 125,000

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8 125,000 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 1 1,000 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 1 20 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 2 1,020 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,360.00 4.18 8.01 48 1,284,058 CUSTODIAN INVESTMENT PLC 37,349.84 6.35 2.42 15 377,090 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 36,833.04 1.86 2.76 47 9,685,046 ROYAL EXCHANGE PLC. 1,080.53 0.21 -8.70 10 501,584 STANBIC IBTC HOLDINGS PLC 473,113.55 46.20 -0.43 33 2,813,928 UNITED CAPITAL PLC 17,100.00 2.85 1.79 62 1,102,730 215 15,764,436 784 247,593,810 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 1 20 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 817.22 0.23 - 4 570,824 5 570,844 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 6,450.00 4.30 - 11 63,951 GLAXO SMITHKLINE CONSUMER NIG. PLC. 11,002.06 9.20 - 23 93,452 MAY & BAKER NIGERIA PLC. 4,658.13 2.70 -5.26 28 688,072 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,063.53 0.56 - 11 411,550 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 3 2,285 76 1,259,310 81 1,830,154 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 648.00 6.00 - 4 330 TRIPPLE GEE AND COMPANY PLC. 346.47 0.70 - 0 0 4 330 PROCESSING SYSTEMS CHAMS PLC 1,549.70 0.33 10.00 47 14,020,683 E-TRANZACT INTERNATIONAL PLC 11,088.00 2.64 - 0 0 47 14,020,683 51 14,021,013 BUILDING MATERIALS BERGER PAINTS PLC 2,680.87 9.25 2.21 24 125,647 CAP PLC 23,625.00 33.75 - 2 9,561 CEMENT CO. OF NORTH.NIG. PLC 222,125.17 16.90 - 12 79,654 FIRST ALUMINIUM NIGERIA PLC 738.63 0.35 - 1 35,704 MEYER PLC. 313.43 0.59 - 3 100,000 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 6 45,787 PREMIER PAINTS PLC. 1,279.20 10.40 - 2 120 50 396,473 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,747.66 1.56 - 17 325,398 17 325,398 PACKAGING/CONTAINERS BETA GLASS PLC. 29,173.37 58.35 - 4 1,191 GREIF NIGERIA PLC 388.02 9.10 - 1 20 5 1,211 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 2 25 2 25 74 723,107 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 1 3,560 1 3,560 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 55.00 0.25 - 3 61,808 3 61,808 4 65,368 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 5 57,825 5 57,825 INTEGRATED OIL AND GAS SERVICES OANDO PLC 59,670.78 4.80 -1.03 74 766,806 74 766,806 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 64,149.90 177.90 - 15 6,687 CONOIL PLC 15,960.90 23.00 - 18 34,227 ETERNA PLC. 5,607.82 4.30 4.88 21 340,732 FORTE OIL PLC. 35,101.87 26.95 - 20 25,908 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 0 0 TOTAL NIGERIA PLC. 66,546.28 196.00 - 21 16,576 95 424,130 174 1,248,761 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 2 520 2 520 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 376.43 0.32 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 2 3,000 TRANS-NATIONWIDE EXPRESS PLC. 384.45 0.82 9.33 1 950,485 3 953,485 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 1 350 1 350 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 3,471.59 1.67 - 1 600 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 3 292 TRANSCORP HOTELS PLC 41,042.18 5.40 - 1 402 5 1,294 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 199.58 0.33 - 1 100 LEARN AFRICA PLC 1,126.32 1.46 - 10 214,940 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 6 2,700 UNIVERSITY PRESS PLC. 780.85 1.81 - 2 51,277 19 269,017 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 596.77 0.36 - 5 81,500 5 81,500 SPECIALTY INTERLINKED TECHNOLOGIES PLC 766.91 3.24 - 0 0

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Modify the self-help paradigm for community development in the South East The Public Sphere

CHIDO NWAKANMA

he Umukabia community in Umuahia rejoiced Tuesday, April 23, 2019, as their solar-powered streetlights came on. They added illumination and changed the look of the city at night. All thanks to their son, Emeka Nwosu, an Abuja-based technocrat who worked to bring it about pushing through the appropriation process at the National Assembly. In December 1987, Umuode-Nsulu community was the star attraction in the 22 villages of Nsulu, in Isiala Ngwa North LGA. The village attracted the then governors of Imo State, Amadi Ikwechegh and Anambra State, Emeka Omeruah, to commission their electricity project. The community initiated the project and funded it through levies and donations by their sons and daughters. This column reported last year the efforts of old pupils of College of The Immaculate Conception, Enugu to provide infrastructure in their school. In three years, they committed N360m to build a 540-bed hostel, a 2, 200 capacity multipurpose hall and an alumni

centre. Citizen Joe Attueyi shelled out N52m to build a primary school for his community in Nnewi in replacement of the one that gave him his foundation. Across Igboland, self-help has been the model for community development. Through it, communities in the region have erected schools, hospitals, electricity projects, water schemes (mainly boreholes) and earth roads. It dates to the return of the Argonauts from America, the first set of graduates in Igboland that included Dr Nnamdi Azikiwe. They proselytised for education and convinced our people to build schools and other infrastructure for themselves. The results have been outstanding. Igboland stands out today as the exemplar in community development based on the selfhelp model. Town unions drive the efforts, and they have in turn become a case study in community development. Many have registered as community development associations in line with the paradigm of the UN system and their agencies. There are more self-help infrastructure projects in Igboland than those provided by the governments, federal, state and local. We speak of projects that affect the grassroots and have a direct impact on the lives of citizens. Water. Light. Education. Access roads. Health. This good practice has had an unintended obnoxious consequence for governance in the region. It has provided a cover for the failures of governments. Governors and high office holders shamelessly strut their stuff to commission projects built by communities because of government’s abdication. They come and make bold statements and promises of deliverance that never translate to the

deliverance of promises. It is time to modify this hugely successful model. Community development should be the forte of local and state governments working with the communities. Unfortunately, the Grund Norm did not fully empower LGs. It made them an administrative unit of state governments. Even so, the 1999 constitution charges LGs with some responsibilities. They include provision and maintenance of health services; agricultural and national resource development; provision and maintenance of primary, adult and vocational education. Many state assemblies conferred other functions. Unfortunately, the Local Governments have collapsed thanks to rapacious State Governors. -9 Whatever their current status under various governors and governments, the LGs must perform their obligations. We have excused them long enough. So what model would serve best? It has to be one that involves and not allows the governments to abdicate their responsibilities. It should be one that borrows from current best practices. Let’s try the Government Counterpart Funding for Community Projects. Firms in the extractive industry commenced this practice. Nigeria LNG calls its version the community stakeholding principle. Various players in the oil and gas sector have theirs. Each community beneficiary of NLNG support would have a stake in the project by contributing something such as community land which they assign a market value as part of the total project cost. The Anambra State Government of Willie Obiano has run such a scheme for three years now. It gives each of the 181 communities

‘

Across Igboland, self-help has been the model for community development

listed in its register N20m to implement a community project of their choice. In three years, the government says each of those communities has received N60m. The communities execute the projects with close supervision of the State Government. Labour and supplies come from within so that it impacts the immediate area. After three years, the Anambra Scheme for Community Development deserves interrogation. Has it achieved the objectives? Were the objectives in sync with the desires of the communities? Did the communities lead in choice and execution of their projects as intended? What are the highpoints and low points? How can it be better? Is it replicable and scalable to bigger and high impact projects such as the 1m KVA power autonomous power projects of the FG? Government Counterpart Funding for Community Projects is a bottom-up approach. Communities identify their projects. They could come together as groups of communities to envision larger projects. They cost it. Then approach government, local or state, for approval and counterpart funding. For one, projects would directly address community needs. The costs would be realistic, given the awareness of the communities that they would bear part of it. It would significantly help to reduce project cost inflation. We will continue this conversation.

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

Flashback 1:Our ministers; saints, sinners and noise-makers

ik MUO

our years ago when the Buhari government came into power, the greatest issue of the day was the delay in the appointment of ministers and the quality of people that eventually made the list. The general understanding was that PMB spent that long time searching for people with saintly dispositions who would perfectly fit into his incoming saintly/messianic administration. Not long after their appointments, the president himself referred to them as noisemakers. As the government winds down its activities (even if it would restart the car on 29/5/19), I intend to review the performance of these ministers with speciall emphasis on how saintly they operated and how well they actually performed. In the beginning, I had two interventions questioning their saint-ness and doubting if they would perform. Today and next week, I will represent these views and then see how far they had gone in the past four years. Kindly read on The unnecessary drama and suspense is over. I can now settle down and lick my wounds. I had believed that as a saint, my name will be there ‘when the roll is called up yonder’. But my name was conspicuously missing in action; I was not even mentioned in the several fake lists! I have cancelled all my anticipatory appointments (like SSA on stomach iasnfrastructure) and discontinued with the ministerial carriage I had acquired. I have put the whole episode behind me while awaiting the next political season. I am now in a mood to examine the long wait, the list, and the entire confirmation process. When someone dies in Igboukwu and the

funeral is immediate, we ‘manage’ whatever ‘level’ at which the funeral is pitched. However, if the funeral is postponed, our expectations would rise and we would anticipate a higher ‘level’ affair. From that perspective, PMBs ministerial outing was disappointing; the list could have been unveiled on 29/5/15! In addition to the petroleum ministry, he should also have taken over the civil service, works, health and education, which are now all on life support. But the key question is: are these the saints who are to come or shall we wait for another (Mt,11:3)? If these are all saints, then who are the sinners? The various justifications for the delayed constitution of his cabinet are neither here nor there. Obama was a teenager when PMB ruled Nigeria before and it should be unfortunate if he really decided to learn from Obama. In any case, the claim has been punctured. Secondly, for somebody who sought this presidency for 16 straight years, a handover note should not have adversely affected this process. Furthermore, this delay did not yield any better outcome; it signals unpreparedness, lack of political sagacity (remember Okadigbo?) and poor horse-trading skills. Also, the consultations were not fruitful because APC stakeholders protested loudly over the list. The delay may also be a part of his infamous body-language but I am amazed that whenever he is abroad, he speaks too much of the normal language. As a Catholic, I believe that saints are people who lived extraordinarily righteous lives on earth. But, all have sinned (Rom,3:2) and whoever denies his sinfulness is a liar (1st John, 1:8). In effect, we are all sinners- those searching, those screening, those screened and those who walked out ! After all, there is not much difference between senators and sinators! So, it was a shadow-chasing Ultimate Search for saints! Anyway, let me not judge so as not to be judged. But how can we be talking about saints when one of the most decent among them was accused of ‘stealing more than the one they call a thief’ or when another paid a tax of N50000 on N60m income evidenced by questionable tax clearance certificates? Well, let’s leave the

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The ministerial fiasco has created avoidable reputational damage/brand erosion for PMB... Why ...is PMB hobnobbing with the shining lights of PDP, including one of its former chairmen?

matter of sainthood to the anointer and the anointed. But if PMB had not announced that he was looking for saints, I would not have had problems with the list. This is another incident of communication what one cannot or will not to deliver, thereby raising public expectations unnecessarily. The declaration that they are noisemakers shows his disdain for the ministers. But this appellation is less contentious because some of them are actually noise-makers. Lai Mohammed is a full-time noise-maker while Amaechi is an indirect noise-maker who generates noise anywhere he goes as evidenced by the noise emanating from his confirmation, his tenure at the NGF, or his war with the NJC or Rivers legislature. Will ministers add value? It depends on whether PMB wants them to add value. By the way, why should he appoint ministers if civil servants could do the job, and with less noise? The ministerial fiasco has created avoidable reputational damage/brand erosion for PMB. I perceive PMB as disciplined and austere, but he is not a saint. He promised change and a clean break from the iniquitous past. His presidency is built on change and anti corruption. We have been told repeatedly that PDP ruined Nigeria. Why then is PMB hobnobbing with the shining lights of PDP, including one of its former chairmen? We now come to the issue of people overladen with baggage. The most prominent of these is Amaechi who had ‘never taken a bribe’ but whom the vengeful Nwike, had accused of monumental corruption. Why wouldn’t PMB allow him to be judicially sanctified before anointing him, especially when Amaechi had taken the matter to court? During Abacha’s era, one of his friends was alleged to be corrupt. Major Al-Mustapha, advised that ‘the Vila should severe all contacts with the Chief pending when he is cleared. We should not be seen dealing with a character of this nature’ (Kukah: Witness to justice; p164). If a military despot distanced himself from a friend over allegations of corruption, why is it difficult for a born again PMB? Looking at the entire process, nothing has changed: same people, washy screening,

horse-trading , and influence of godfathers (though to a less extent), as before. The recycling is not justifiable unless we agree with Tunde Bakare that he might have made do with what is available. Probably, we have now hired butchers because we couldn’t find surgeons! Indeed, there were no surprises both with list and the screening process in the’ hollowed chamber’. It is another comeand- chop affair and settlement of IOUs to political investors. The defense by APCians that PDP acted similarly, is asinine because they have come to change, not to sustain. And when one recalls the emergence of baggage ridden candidates in Bayelsa and Kogi states, this becomes more worrisome. So what happened? I tend to agree Solana Olumense that PMB is mellowing down and with Femi Aribisala that PMB got his fingers burnt in his bid to dine with political ‘devils’ whom he had hitherto despised. PMB came on board on the basis of a given reputation. It will be unfortunate if this is destroyed at this stage and age. It is over for now, but both the president and the party will bear the consequential moral burden. Saraki, who is fighting for his life and his colleagues are guilty of sacrificing national interest on the alter of political expediency; they did not do the proper thing. But there is one good news. Our association, Academics Against Moral Impunity and Immunity(AAMII) has adopted the most outstanding of them, Saint Amaechi , to be its patron Saint. Meanwhile, let the saints go to work; there is much to be done and they are already 6 months behind. Nigerians are very forgiving and have short attention span. The whole noise will soon ebb, especially, if the ministers perform or pretend to performance. Furthermore, a comprehensive reorientation programme should be arranged for Lai Mohammed before he talks us into trouble! It is well with Nigeria. Continues online at www.businessday.ng

Ik Muo, PhD. Department of Business Administration, OOU, Ago-Iwoye, Ogun State muoigbo@yahoo.com ;muo.ik@ oouagoiwoye.edu.ng ; 08033026625

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